Market commentary for 07/08/2009
Good day,
I expected more strength on Tuesday, but the day closed very weak and we had another trend day. Some strong daily support areas were broken. We can see that on daily charts (SPY daily 200sma, QQQQ daily 50sma and DIA previous low). It is hard to see the bounce because there are new supports very close and the DIA/SPY and closed right at another that we can see on the daily charts. Since the selling pace was strong, especially on QQQQ daily chart and if Wednesday does not bring some a stronger 60 min bounce, then indices have room to see the weekly 20sma support area on this daily trend move. It is just the question whether we see a bounce or after. My bias is bearish, but since the move down is already on the way without intraday consolidation it is hard to find low a risk setup and if selling pressure continues without rest, then the risk for new short setups will increase.
Good day,
I expected more strength on Tuesday, but the day closed very weak and we had another trend day. Some strong daily support areas were broken. We can see that on daily charts (SPY daily 200sma, QQQQ daily 50sma and DIA previous low). It is hard to see the bounce because there are new supports very close and the DIA/SPY and closed right at another that we can see on the daily charts. Since the selling pace was strong, especially on QQQQ daily chart and if Wednesday does not bring some a stronger 60 min bounce, then indices have room to see the weekly 20sma support area on this daily trend move. It is just the question whether we see a bounce or after. My bias is bearish, but since the move down is already on the way without intraday consolidation it is hard to find low a risk setup and if selling pressure continues without rest, then the risk for new short setups will increase.
Selling continuation is good for open swing short trades and I will just put a trailing stop on them. New setups I will look for 60 min and smaller time frames. At the same time I’m scanning for strong charts in case the market will start a correction and I will look for long opportunities. On the 60 min charts we can see three selling waves and that is another reason to be very cautious with new short setups. Without the market open it is hard to tell what we see tomorrow. After the weak close the indices have good odds for gap down. Generally my bias is still down and I mentioned that several times. Selling pace is good and daily equal move is a reasonable target for DIA/SPY. On daily QQQQ chart we can see the second wave selling pace is stronger than the first, which suggests for more than an equal move. I will look for morning weakness and then a correction. I will wait for the market to open and I will tell you in the live trading room. If you are still not with us I invite you to visit my site and use trail period to see what you are missing.
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