Market commentary for 10/05/2009
Good day,
We gapped down Friday started right to the support area which I mentioned in the previous commentary. It was nice for open short trades because it was opportunity to take more profit out or close open trades. But there was not much opportunity for new short setups, even on small time frames because indices were already on support area so it was too risky for new entries. On the other side, indices were too weak to be bullish so Friday became a day of patience without many new opportunities. We can see on the DIA 60 min chart it was 3d CCI setup. Actually it was long setup, but if we go back and look at 5/15 min charts we can see the pace and action was not good. Choppy action with slow pace was not a reason to be very bullish and after we had several really nice swing moves I think it was better to be patient and keep our profit than to give it back. The question is now what? Since the week is over I will add the weekly charts in this commentary.
Good day,
We gapped down Friday started right to the support area which I mentioned in the previous commentary. It was nice for open short trades because it was opportunity to take more profit out or close open trades. But there was not much opportunity for new short setups, even on small time frames because indices were already on support area so it was too risky for new entries. On the other side, indices were too weak to be bullish so Friday became a day of patience without many new opportunities. We can see on the DIA 60 min chart it was 3d CCI setup. Actually it was long setup, but if we go back and look at 5/15 min charts we can see the pace and action was not good. Choppy action with slow pace was not a reason to be very bullish and after we had several really nice swing moves I think it was better to be patient and keep our profit than to give it back. The question is now what? Since the week is over I will add the weekly charts in this commentary.
On the 60 min charts the indices reached an equal move and daily support area. The bounce pace is weak for now without good news we can see another move down which will form a double bottom. Looking for low risk setup we need to see a longer 60 min rest for a selling continuation which will turn into a third daily selling wave. If I find a short setup for Monday it will be on the 5/15 min time frame or “own way” chart, everything else will be risky.
On the daily charts I see the CCI under -200. That is an oversold area and enough reason to be very careful with new short setups. We can see the 50sma is still the support area and in bull trend many times that will be a trigger for a bounce. The problem is the pull back was too strong so charts don’t suggest a swing bounce. If you remember my MOVE-REST-MOVE, the MOVE was the second selling wave and now it is time for rest. For a selling continuation it is very important. If it is weaker than the selling pace it will form a base, triangle or flag then I will look for a third selling wave. With selling pace now the odds for that scenario are strong. Lets see weekly charts.
First I see is the 3d CCI short setup was triggered. Usually we can expect to see the 20sma as the target area for that kind of setup. Note that is usually not a rule. The indices are still above the 10sma and still in an uptrend. That will add caution but the CCI and selling volume support more selling pressure in the future and my conclusion is that I will look for a daily correction in hopes to find a good continuation pattern which will turn into a third selling wave on the daily time frame. Right now the charts suggest that scenario, but note, first we must see the daily correction and that will be the focus on Monday. Swing short setups Monday morning will be higher risk, unless it is an own way chart.
Wish you all good trading!!!
Kind regards.
http://www.ivicatradingcharts.com/
Ivica
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