Indecision in the markets today after a huge up move yesterday comes as no surprise. SPY (The S&P tracking ETF) finished unchanged to make a doji formation on the daily chart. The Financials (XLF) and Russells (IWM) showed significant relative weakness today, down .34% and .62% respectively. The Dow (DIA) and Nasdaq (QQQQ) were relatively strong today, both up about .25%.
The VIX did not really corroborate todays move as it finished down 1.34%. The TICK and TRIN did corroborate today’s action with some fidelity.
From here, I would not be surprised with a reversal or a pull back of some sort. 110 proved to be significant resistance for SPY. This was proven today as SPY failed to really challenge that resistance level. If SPY does pull back from here, that would be the beginning of a Double Top formation, which is a bearish reversal pattern. Keep in mind that the Double Top is not confirmed until SPY closes below 103.08. After such a strong up leg, a consolidation or pull back would be healthy for the markets in either the bull or bear case. Of course stocks can continue to run from here. Such a scenario would be unnatural, but considering the market we have been trading since March, it would not come as much of a surprise.
Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.
Happy Trading,
Jason
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The SPY tested the 110 mark early in the session, getting as high as 109.93. As expected, 110 acted as major resistance and SPY has pulled back significantly from those highs. The Financials (XLF) and Russell 2000 (IWM) are leading the markets lower today showing relative weakness. The VIX is down .8%, the TRIN is definitively bearish, and the TICK is bearish as well.
I almost made a trade in EDZ this morning at 5.51, but price took off without me so my order did not fill. No big deal. Depending on how we finish the day, I may pick up some shorts after hours anyway, for a swing trade (swing trades last anywhere from 2 days to 2 months on average). My goal with the swing trades in inverse ETFs would be to capitalize on the next down leg.
If we close at this level, we will have a shooting star reversal pattern on SPY. That would be the beginning of a double top formation which is very bearish. Be careful going long today as things look a bit dicey so far to the long side. Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.
Happy Trading,
Jason
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The markets finished up big today after a nice gap up and continuation today. Volume was light and the VIX only dropped 2x the move up in the broader market. I am hesitant to go long here in the face of the 110 mark on SPY. However, the trend can heal itself and become more bullish if we break above the UPPER line of our big orange rising wedge with confirming volume.
Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.
Talk to you tomorrow,
Jason
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The markets gapped up pretty big today on positive statements from the G-20 meeting. The world governments made a pledge to aid economies, whatever that means. I guess they are promising to print more money… fantastic.
Anyway, all the major indexes (SPY, DIA, QQQQ, and IWM) are up about 1.5% today and the Financials (XLF) are up 2.5%. The markets gapped up across the board and made practically no attempt to fill the gaps, which is bullish. The TICK is obviously bullish. The TRIN is a little overly-bullish under 0.4. The VIX is down almost 3% which is a little bit of a red flag. The VIX should be down much more on such a bullish day (in terms of price action at least), but the fact that the VIX is not down more says to me that options traders do not believe in this up move completely.
Unless we somehow close in negative territory on SPY today, the Head and Shoulders formation I was looking for will not be a possibility any more. SPY gapped above 108 which should now act as support and is finding some resistance here at 109. On a break above 109, expect a run to 110 which should prove to be major resistance. The SPY could turn around at 110 and make the beginnings of a Double Top formation. That would be incredibly bearish. The IWM double top will remain confirmed, though weakened, if the index makes a lower swing high here. The IWM could even make a Triple Top formation in the near future.
Check back this evening for your Post Market Analysis. Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.
Happy Trading,
Jason
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What a week we had in the markets today. On Monday and Tuesday it looked like we were seeing the beginnings of a double top formation. Instead, good earnings led to the markets punching out new highs for 2009. Friday was bearish, however, and we did close under some major resistance on the daily, weekly, and monthly time frames. On the daily, we closed under our rising wedge formation. On the weekly, we have an unfilled gap in the 110 area on the SPY that goes back to October of 2008. On the monthly we have a major bearish trend line that we are sitting under at this point.
Some of my recent trades include: SPXU, UPRO, BEE, CVM, EDAP, FBC, MESA, MPG, and WAVE. These are all reviewed in the Weekend Review videos to follow.
We are in Earnings Season, so be careful! Over 500 companies are due to report this week. It is not prudent to hold your position through earnings. You can check your stocks’ earnings dates and times on FINVIZ.com. Also, be wary of some major Economic Reports coming out this week. Those can be checked on Bloomberg’s Economic Calendar.
Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage risk appropriately.
Happy Trading,
Jason
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