The markets finished up today on strong economic reports. The Financials (XLF) showed relative weakness as they barely participated in the rally. The Russell 2000 (IWM) showed slight relative strength today. It is important to note that on a daily 3-month chart, both the Russell 2000 and the financials are relatively weak compared to the Dow Jones Industrial Average (DIA), the S&P 500 (SPY), and the Nasdaq (QQQQ). This rally cannot be sustained if the financials and Russell 2000 continue to show weakness. The S&P tracking ETF, SPY, tested the highs for 2009, but was unable to break above the 111.7 mark. The Dow Jones Industrial Average punched out new highs for the year today. The Dollar dropped .65% today and Gold finished up 1.5%. The TICK, TRIN, and VIX all corroborated today’s move higher with a comfortable degree of certainty. The VIX dropped 10.5%!
If you caught my Post Market Analysis yesterday, you will notice that the monthly chart of SPY has broken out of its down trend. Technical analysis marks that as bullish, but it is hard to get excited about the breakout at this point in time. I might consider going long here with a tight stop on the monthly time frame. However, I have been sitting on my hands for the past two weeks and am currently unsure as to when I will step back in. I need to see cleaner price action with confirming volume. Otherwise, without those criteria and with no clear patterns developing on the daily chart, I cannot bring myself to trade the markets in either direction.
Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately. Your questions and comments are more than welcome, so please feel free to provide me with some feedback on the site.
Happy Trading,
Jason
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The markets are chopping sideways today. It is tough to even call this consolidation action on the daily charts because it is so choppy and full of gaps. The broader market indexes are all fractionally lower today. The VIX, TICK, and TRIN are giving mixed readings, which is expected on a sideways day. The dollar is barely moving. On SPY, 110 and 111 are proving to be significant support and resistance points.
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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Big up move in the markets today. The dollar is showing significant weakness, down .75%. The weakness in the dollar is giving equities support to the upside. Also, gold is a big beneficiary of a weak dollar (GLD up 1.3%). The Financials (XLF, RIFIN, BANK) and Russell 2000 (IWM) are showing relative strength today which supports today’s move higher. The VIX is down almost 5%. The TICK is corroborating the pop up this morning as well as the pull back we are seeing intraday. The TRIN has been bullish all day, hanging out well under the .8 mark.
SPY gapped up above resistance at 110 and 110.35, broke out above resistance at 111 and tested the highs for the year around the 111.6 area. Now SPY has pulled back and is testing support at the 111 mark. It will be important to see how these broken resistance lines hold as support.
This market is VERY choppy and difficult to trade. I should have closed my positions going into the week end, but I did not. That came back to hurt me this morning when I had to close most of my bear positions for a loss. I will probably sit out for the rest of the week and see what the markets do. Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately. I may not be able to do the Post Market Analysis tonight. I am on break and have sporadic plans throughout the week. I will do my best to update Swing-High as often as I can.
Happy Trading,
Jason
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The markets sold off hard this morning, but calmed down and chopped higher into the close. SPY is still below that key resistance line at 110. The VIX finished up about 4.5%, retracing from its intraday high of up over 10% early in the session. The TICK drifted back towards neutral to close out the session. The TRIN stayed very bearish all day. The Dollar was strong today, which helped push stocks lower.
There are no economic reports scheduled to be announced tomorrow. However, tomorrow is options expiration day, so the markets can do some pretty wild things tomorrow. We could very well gap up and re-test the highs for 2009 tomorrow. You never know…
Also, look out for how Dell’s earnings affect the markets tomorrow morning. DELL is down hard after hours.
I added to short positions today, but will lighten up on those positions if the markets show serious strength tomorrow. I will not be able to do the Halftime Report or the Post Market Analysis tomorrow because I will be traveling to and playing in a racquetball tournament this weekend. 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 broad market is breaking down hard today. We are seeing incredible deterioration in stocks with confirmation from volume and breadth. The TRIN is pretty much a breadth indicator, meaning that it measures volume flowing into stocks on the rise and compares it to volume flowing into stocks on the decline. The TRIN is looking very bearish today. The TICK has been negative almost all day. The VIX is skyrocketing, up 10%+ so far for the session.
SPY cut through some crucial support at 110. If the markets can hold these low levels, expect a down leg to start here. One thing I forgot to mention is that the dollar is showing strength today, which fits with the inverse correlation theory we have seen for most of this year.
I added to my short positions when the markets shattered support this morning. I will hold them for the down leg if it happens. Otherwise, I will lighten up on my shorts if SPY breaks back above 110. 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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Three economic reports came out this morning and so far, Housing Starts is the most bearish of the reports. The other reports came in more or less in line with expectations. Pre-Market, stocks are selling off a little bit. If stocks were to open right now, we would see a slight gap down or a neutral open across the board. Since burning my video, the Dollar has sold off and stocks popped up.
Today could very well be another sideways trading day. Look for SPY to hold up in its high base formation. If it breaks out to the upside, that will be bullish, but weaker than if it consolidated first. If SPY breaks down, we will mark a swing high here. Check back later today for your Halftime Report. 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 sideways for the most part. Some of the major indexes managed very small gains with a slight end of day rally. The TICK corroborated the choppy action. The TRIN and VIX dropped significantly this afternoon, which is a very bullish sign. The bullish reading in the TRIN and VIX probably came from increased comfort that the markets would hold these levels (at least for the day). On the daily chart we have an inside trading day which also marks the beginning of a high base formation. High Base formations occur when stocks (or anything you are trading) run up in price and then trade flat for a period of time to create, quite literally, a high base on the charts. High Base formations are statistically bullish and tend to break out to the upside.
One thing I forgot to mention in my video is that markets held up today despite the dollar (UUP) showing significant strength. Take note of that.
I might not get my analysis up at the usual times tomorrow because I will be traveling. Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.
~ Take it easy
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Stocks are up big today on the back of weaker than expected Retail Sales numbers, lower than expected Empire State Manufacturing Survey data, and a decline in Business Inventories. Despite all the mediocre news, stocks are rallying across the board so far today. Ben Bernanke is speaking right now, so be careful (markets are beginning to pull back).
SPY is breaking out of a high base formation so far today on the daily chart. The TICK and TRIN are almost overly bullish, but showing strength nonetheless. The VIX, however, is only down about 1.5% today. Normally, the VIX should move 3x the inverse of the markets in order to confirm the move, but we are not seeing that so far today. All of the broader market indexes are participating in the rally today. The dollar (DXY, UUP) is down today, which is providing for support to the upside in equities. Also, it is interesting to note that bonds are increasing today (take a look at TLT). Bonds are normally a flight-to-safety type investment.
As for my personal trading account, I am setting up to go short again on the next down leg, so at the next reversal pattern I will add to short positions. I personally feel the need to re-evaluate my strategy. Expect a personal reflection post next week.
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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