A lot of indecision and divergences in the markets today. The S&P 500 (SPY) had an inside trading day, showing no directional movement on the daily chart. The Nasdaq (QQQQ) was relatively strong, closing up .5% while the other indexes sold off .5%-1%. Gold (GLD) pulled back slightly and the dollar (UUP) broke above resistance at the 200 day moving average. The VIX popped ever so slightly, up .5%. The TRIN was very bearish today while the TRIN/Q remained bullish.
Based on earnings alone (so far they have been good after hours), I would expect the markets to trade higher tomorrow. However, things can turn on a dime as it is earnings season. Also, we have Jobless Claims and Productivity & Costs numbers coming out pre-market tomorrow. Always check earnings dates for stocks you are watching and/or trading. It is not prudent to hold positions or trade into earnings. Also, it is important to always define your risk and trade with a stop loss.
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Happy Trading,
Jason
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The markets popped today, putting a temporary end to the recent sell off. All of the major indexes have put in a swing low now, however, the Nasdaq (QQQQ) and Russell 2000 (IWM) are relatively weak to the S&P 500 (SPY), Financials (XLF), and Dow Jones Industrial Average (DIA) on the daily time frame. If the bulls want any hope of continuing the March 2009 rally past March 2010, the next swing high better not be lower than the last. That would be bearish to see and would provide more confirmation for the markets rolling over here.
The dollar (UUP) appeared to be breaking above a resistance line as well as the 200 day moving average on Friday, but has pulled back under the resistance this week, therefore registering it a failed break out. Gold (GLD) has marked an equal swing low to the last swing low and may form a double bottom formation here. It is not a confirmed double bottom yet, on gold, and there is a bit of resistance to fight through on the upside. If gold continues to rise and the dollar continues to drop, that will help push stocks higher.
The VIX dropped 5% today, which is more than enough to confirm the 1% pop in the general markets. The TRIN and TRIN/Q were both very bullish today. The TICK and TICK/Q corroborated the move nicely.
Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately! Also, be sure to check earnings dates for stocks you are trading and/or watching. It is prudent not to hold over earnings. Finally, it is a good idea to regularly check the Bloomberg Economic Calendar and sites like Yahoo finance so that you know the major headlines that may move the markets.
Happy Trading,
Jason
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The markets pulled back today on worse than expected earnings from Alcoa (AA). In fact, AA put in a nice Hanging Man Reversal Pattern. The VIX, TICK, and TRIN all confirmed the move. The Nasdaq (QQQQ), Russell 2000 (IWM), and Financials (XLF) were the weakest indexes today, which is a bearish sign as they are considered leading indexes. Stocks did finish the day with some strength, so I would not be surprised if this is just a temporary pull back in the making.
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 showed strength this morning, but pulled back nicely from the early highs of the session. The Russells (IWM) and Nasdaq (QQQQ) showed relative weakness today. The VIX behaved as expected and finished with a slight pull back. The TICK and the TRIN were neutral/mixed today. All things considered, today’s action was unconvincing and supportive of the bear case. It is very tough to gauge where the market wants to go from here. I would like to see a consolidation here or at least a better pattern set up before I take any major positions.
Looks like we will just have to wait and see, but the markets still look like they want to go lower from here. Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately. Capital preservation comes before profits.
Happy Trading,
Jason
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Hello Traders,
The markets are higher today on news reports. CIT Group (CIT) filed for bankruptcy over the weekend, which had the potential to act as a Lehman Brothers type catalyst leading to a “Black Monday”-type drop in the markets. However, Ford (F) beat earnings expectations by posting a $1 billion profit and providing positive guidance. Keep in mind, much of Ford’s earnings can be attributed to Cash for Clunkers, so weigh that with a grain of salt. ISM Manufacturing Index data came out better than expected this morning as well. Pending Home Sales also beat expectations. That makes it three to one for news supporting the bull side today.
The VIX has a healthy pullback in the making today at about -7%. The VIX is finding support at the 50% Fibonacci Retracement Line. The TICK is surprisingly neutral and the TRIN is reading slightly bearish. With the divergent action in the market internals, this pop today looks like a sympathy bounce.
The SPY is finding resistance at the 50% Fib line of a recent sell off which also happens to be the round number of 105 and the bottom of Thursday’s candle. The Russells (IWM) are still in a confirmed double top. The Financials (XLF) are relatively strong today, which might be attributed to CIT Group’s (CIT) bankruptcy. The Nasdaq (QQQQ) and Russells (IWM) are showing relative weakness intraday.
In general, I am picking up short positions and will continue to do so if the markets stay bullish. Today’s action is looking a lot like a sympathy bounce (much like last Thursday). I plan to play the downside with a basket of inverse ETFs (most likely: TZA, SPXU, FAZ, EDZ).
Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately. Check back this evening for your Post Market Analysis.
Happy Trading,
Jason
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The markets are higher today which comes as no surprise after the good economic reports this morning and the short term over-sold nature. This morning, Jobless Claims and GDP reports beat expectations and certainly acted as a catalyst sending us higher today. The VIX is bleeding out nicely as fear is leaving the market today. The TICK and TRIN are obviously bullish.
So is this a sympathy bounce or a swing low? There is no confirmation either way at this point in time, but confirmation may come tomorrow or early next week.
Last night I dumped SPXU for a healthy profit on the day (in at $44.02 out at $46.22 for a 5%+ gain). I thought it would be prudent not to hold that position over such big economic news. I was proven right today and my “insurance” paid well. This morning I traded TNA long from $38.27. I was stopped out at $38.75 on a healthy bull pull back which leads me to believe that my stop may have been a bit too tight. The reasons behind my stop decision are under consideration.
Thanks for being a part of Swing-High.com! Always trade for a stop loss (even if you get stopped out) and manage your risk appropriately. Check back this evening for your post market analysis.
Happy Trading,
Jason
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I thought we were going to finish the day with a doji and mark a swing low here tomorrow, but it does not look like that will be the case. The Dow was the only major index to finish in positive territory today and it was only up .14%. The Dow was up mainly because of IBM. The Nasdaq, Russells, and Bank all showed relative weakness to SPY and DIA today which is a very bearish sign as those three indexes are often considered leaders. We are in a down leg for sure. Expect support at 104 and 102 on SPY with smaller support around 106. I am curious to see where we will mark the next swing low on SPY. I may pick up some SPXU until the markets show more strength. I will keep you posted on that.
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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There is no other way to say it, the markets showed real weakness in the last hour of trading. The VIX was down about 3% for most of the day and finished up 6.3%… that’s a huge move in the VIX, definitely corroborating the drop we saw. The TICK behaved all day and supported the market action. The TRIN, however, did not corroborate the move, which takes some validity away from the bear argument. The TRIN tells us that there was not a significant increase in volume flowing into stocks on the decline. Volume is one of the biggest sources of confirmation a trader seeks, and it did not confirm today’s move. On the daily chart of SPY, we are still holding up in the high base formation. $110 has proven to be serious resistance as expected and it seems like the markets simply cannot gather enough strength to cross it. The gap from last Wednesday remains unfilled.
Look out for upcoming earnings the rest of this week. Here are some of the big ones to name a few: Today- BA, WFC, MS, AMGN; Thursday- MMM, MRK, T, TRV, MCD, AXP; Friday- MSFT, HON, SLB. We also have jobless claims coming out tomorrow morning as well as home sales on Friday morning. Keep your head down and trade smart the rest of this week. Be very careful how you go long in this environment, but also keep in mind that the general trend is bullish right now. We have major resistance to fight through after a multi-bar run-up. I would like to see more consolidation in this high base or a bull pull back going forward.
Thanks for being a part of Swing-High.com! Remember to always trade with a stop loss and manage your risk appropriately.
Take it easy,
Jason
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