Swing High » Low Base

Post Market Analysis, Monday February 8

Jason B Gordon — Mon, 08 Feb 2010 21:36:16 +0000

The markets sold off on light volume today. The Dow Jones Industrial Average (DIA), Russell 2000 (IWM), Financials (XLF), and Nasdaq (QQQQ) all showed relative weakness to the S&P 500 (SPY) today. The VIX only rose 1.5%, which is not really enough to confirm the move lower. The TRIN and TRIN/Q both finished the day in bearish territory, indicating more volume flowing into stocks on the decline than stocks on the rise. That is a bearish sign. The TICK and TICK/Q were fairly neutral with some bearish bias, especially into the close.

On the daily chart of SPY we made a higher high and a higher low today, which is technically bullish, but in reality, today’s move was a little more bearish than bullish. We really need to see a close higher than today’s highs in order to mark a swing low here.

There are a bunch of potentially market moving earnings reports coming out before tomorrow’s trading session, so keep your eye out for any big surprises there. There are also some minor economic reports coming out tomorrow, but they are not heavy hitters. Wednesday, Thursday and Friday are going to be big days in terms of economic reports that have the potential to really move the markets. Keep your eye on the economic calender as well as earnings dates for particular stocks you might be trading/watching.

Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.

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Happy Trading,

Jason

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Halftime Report: Thursday February 4

Jason B Gordon — Thu, 04 Feb 2010 17:44:37 +0000

The markets look incredibly bearish today. The broader market indexes are all down 2% or more. Volume is strong so far for the day. The TRIN and TRIN/Q are both bearish. The VIX is incredibly bearish, up about 17%! Gold (GLD) is down 4% and the dollar (UUP) is up .65%. Across the board, stocks are selling off with serious conviction from the internal indicators.

Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.

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Happy trading,

Jason

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Post Market Analysis, Wednesday February 3

Jason B Gordon — Wed, 03 Feb 2010 21:35:45 +0000

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.

Thanks for being a part of Swing-High.com!

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Happy Trading,

Jason

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Post Market Analysis, Monday February 1

Jason B Gordon — Mon, 01 Feb 2010 21:34:54 +0000

The major indexes rose more than 1% today. Volume was average, which certainly takes away from the move. The VIX dropped more than 8% today, which is pretty significant. A 3-4% drop in the VIX would have been enough confirmation for today. The TRIN was certainly bullish and the TRIN/Q was almost overly bullish, hovering around .4 all day. The TICK and TICK/Q corroborated the sideways chop that we saw for most of the session.

Gold (GLD) spiked up 2.26% today which is good for the markets. Also, the dollar (UUP) dropped .43% and that also helped push stocks higher today.

The S&P 500 (SPY) could be marking a swing low here, but it is certainly not confirmed yet. A break above 110 would be strong confirmation of a swing low here. Otherwise, the daily chart is still showing the makings of a weak low base consolidation.

Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.

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Happy Trading,

Jason

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Post Market Analysis, Friday January 29

Jason B Gordon — Fri, 29 Jan 2010 21:29:29 +0000

The markets are looking extremely bearish. The most important news today is the fact that GDP and Consumer Sentiment reports both came out better than expected, and the markets sold off. Remember, how the market reacts to the news is more important than the news itself. If you will recall, back in March and April of 2009, the market responded to negative news with buying pressure. Right now, the markets are responding to positive news with selling pressure.

The S&P 500 (SPY) broke down out of a rising wedge on the daily chart and formed a high base. Today (and yesterday), SPY broke down out of the high base formation. All of this selling pressure occurred with increasing volume. That is significant confirmation of the bearish formations. Gold (GLD) has put in a short term top and the dollar (UUP) just broke out of a falling wedge and today broke above the 200 day moving average. Recently, the correlation has been that when the markets are up, gold is up and the dollar is down. These are all indicating bearish activity and probably more selling pressure to come.

The Nasdaq (QQQQ) was the leader to the downside today, followed by the Russell 2000 (IWM). These are leading indexes and they are adding to the selling pressure. The VIX popped about 3.75% today and tested the 25 mark. The TRIN, TRIN/Q, TICK, and TICK/Q each corroborated the moves in their respective indexes nicely today.

This is the worst pull back we have seen in a very long time. Unlike the head and shoulders break down we saw in July 2009, this sell off is being confirmed by extreme increases in volume. This is serious folks. I always say it, but I hope my repetition has not detracted from its value… Always trade with a stop loss and manage your risk appropriately! Capital preservation is a traders number one priority.

Have a great weekend. Thanks for being a part of Swing-High.com!

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Happy Trading,

Jason

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Halftime Report, Thursday January 28

Jason B Gordon — Thu, 28 Jan 2010 18:44:04 +0000

Things looked very bearish for the first half of the trading session today. The S&P 500 tracking ETF (SPY) crashed down through 110 and 109, ultimately testing 108 (with a slight break below the 108 mark). The TRIN was reading bullish during the sell off, which took some validity away from it. The TICK and VIX were both reading quite bearish during the sell off. Right now, the VIX is pulling back and the TICK and TRIN are corroborating a move higher. Intraday I am seeing a bounce off of support at 108 and the beginnings of a cup and handle formation. If we do get a cup and handle here, expect 109 to act as resistance. If SPY closes at its current levels, the daily chart would show a bearish engulfing pattern. Right now it looks like SPY will continue to consolidate in its low base.

Thanks for being a part of Swing-High.com. Always trade with a stop loss and manage your risk appropriately.

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Happy Trading,

Jason

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Post Market Analysis, Wednesday January 27

Jason B Gordon — Wed, 27 Jan 2010 21:35:31 +0000

The FOMC Minutes moved the markets higher today. Today was a fairly common Fed announcement day as the markets chopped sideways on low volume until 2:15, at which time volume, volatility, and in this case prices picked up into the close. If you caught yesterday’s Post Market Analysis, I warned everyone to look out for this announcement.

The S&P 500 (SPY) is still consolidating in a low base formation, trading under 110 and above 109 for the most part today (with the exception of the brief run down to 108.3 around 2:15). The TICK, TICK/Q, TRIN, and TRIN/Q corroborated today’s action nicely. Keep in mind that the TICK/Q and TRIN/Q correspond with the Nasdaq. I forgot to mention the VIX in my video, but it dropped 5.75% today, holding up above 23. The Financials (XLF) and Russell 2000 (IWM) were clearly the strongest of the five major sectors I cover on this site. That is certainly bullish, but on the daily charts, things still look pretty weak across the board. If SPY does put in a swing low here, I expect a lower swing high around 112 or 111. If SPY consolidates here and breaks down past 108, the next support areas are 105 and 103.7.

I want to briefly mention AAPL here. It looked like AAPL was going to have a classic “buy on the rumor, sell on the news” type day today with the release of the iPad (terrible name by the way). However, it rallied back and closed higher for the session. Right not it is not showing a buy signal on the daily chart. I would like to see it continue to consolidate here, putting in a high base or ascending triangle. From there, a break above 115.55 on convincing volume would be a buy. If not, playing a pull back buy could be an option in the future.

Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately, especially on days like today and as volatility is increasing.

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Happy Trading,

Jason

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Post Market Analysis, Tuesday January 26

Jason B Gordon — Tue, 26 Jan 2010 21:41:15 +0000

Interesting day in the markets as most major indexes were up about .5% mid-day, but all of them pulled back and finished in the red. The Financials (XLF) and Russell 2000 (IWM) were relative weak today. The VIX dropped about 3.5%. The TRIN, TICK, and TICK/Q all corroborated today’s action pretty well. However, the TRIN/Q stayed bullish all day. SPY is still in the process of consolidating at these levels. I would like to see a low base or a lower swing high going forward to support the bear case.

The FOMC meeting at 2:15 will probably be the highlight of the trading day tomorrow. Also watch the New Home Sales and EIA Petroleum Status Reports. Thanks for being a part of Swing-High.com! Always trade with a stop loss and manage your risk appropriately.

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Happy Trading,

Jason

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Post Market Analysis, Monday January 25

Jason B Gordon — Mon, 25 Jan 2010 21:27:12 +0000

The markets are stalling out here after a significant 3 day slide. In fact, last week we saw the biggest 3 day slide in about 10 months! Naturally, the markets need a breather. SPY is hovering around support at 110, but closed under it today, which is bearish. The market internals showed some divergences, but that is expected on a sideways day. On the daily chart of SPY I expect to see some consolidation at these levels, whether it is a low base or a bearish pennant formation. After which, I expect continuation to the down side. More confirmation is needed to call this a reversal for the broader market indexes. In fact, I probably will not be comfortable calling a change in the trend for another month or two.

I spent most of the day adding to bearish positions as well as tightening stops on my long positions. This is just a precautionary measure as I expect more downside. When the trend is confirmed as bearish, I will probably short the market with a basket of inverse ETFs.

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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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Halftime Report, Thursday November 19: Very Bearish

Jason B Gordon — Thu, 19 Nov 2009 17:03:34 +0000

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.

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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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