Wk29: Market Recap

We have an inverted head and shoulders forming on the daily chart of the S&P. This week we broke out above the inverted hammer formed on a weekly bar during week 28. There has been more balanced environment of buyers and sellers, and the VIX remains in the low 20s. We are expecting this to continue, but remember that earnings announcements are still popping up all week long.

Wk28: Market Recap

An Inverted hammer on the weekly top line figures, once again on stronger volume. The trend thus far this year has been lighter volume on the rallies as compared to the declines.

The general daily trend channel can be seen below. Chop between the upper and lower support and resistance level is possible, we’ve been seeing nice conditions for swing trade setups and great intraday trading.

Wk25: Market Recap

We saw a stream of selling this past week; however volume did not jump up by that much. The chart is semi-broken and choppy looking. We will continue to go with what is working, buying pullbacks in strong up trending names like SNDK, NFLX, and GLD, hedging with the QQQQs, SPY, or DIA.

Wk24: Market Recap

The market, while bullish this week, is in the midst of a possible head and shoulders pattern on the weekly timeframe. We will be watching for a break below the low of the prior week’s bar on the move up to get short.

Wk23: Market Recap

The weekly chart is extremely choppy. Doji’s and opposing tail hammers make for a difficult trading environment across all timeframes.

Wk21: Market Recap

“Sell in May and go away” holds true for investors once more as heavy selling continued last week, the biggest monthly loss since February of 2009. Volume was well above average on this past months selling and with all the news overseas, investors are shaken.

Why do we care about the “investors” if we are short term traders? Investors are the ones that move the market on a month to month basis, while certain day trading and high frequency firms have the power to move the markets intraday, the longer term trend is established by the longer timeframe investor.

As short term traders, the first thing we want to do when starting a new day, week, or month, is to identify what trend we are currently in on the longer timeframes and work our way down to the timeframe in which we trade.

Wk16: Market Recap

A little triangle at highs broke out on Friday sending the market upwards once again. For those looking to jump on board I would caution and wait for the talking heads on CNBC to use the verbiage, “This market cannot be stopped,” or “Everyone needs to jump on board.” Then go short.

Wk15: Market Recap

A nice rally was quickly erased last week on the Goldman Sach’s alleged fraud. In the larger picture we have not broken any trend line support and continue in a nice uptrend. However, the extremely large volume on Friday is concerning. We must remember that it is not the news itself that is important; it is the market’s reaction to the news that matters. The DOW remains over 11,000 and we remain in our trend, no need to overreact.

Wk14: Market Recap

We saw similar price action in the markets this week as compared to last week, only instead of doji bars, we had large body candles. The lower volume is a concern, but we will continue to trade the setups in the market until they fail and the trend reverses.

Wk13: Market Recap

Another week of daily doji candles, however we are moving slowly higher. Look to the support/resistance levels as actionable points. Use Monday (or the first day of the week) to establish the mood/trend for the week.

Wk12: Market Recap

A sideways and choppy market last week as we closed slightly up for the week. After the amazing 14-days up in a row on the SPY it could be assumed that bulls would like to take some profits and await the next move. Remain patient and objective. Choppy weeks can decimate an account so if you’ve stuck to your plan for the week then pat yourself on the back.

Wk07: Market Recap

Last week’s write-up pretty much sums up this past week’s action. We broke above the 61.8% on the prior retracement so if we were to reverse lower it should happen on Monday or Tuesday. If we move higher this week we would be looking for move to prior highs over the next few weeks.

Wk06: Market Recap

Looking at the markets in terms of supply and demand is one of the most common and simplified ways of analysis. Identifying where the market is “valued” describes balance. Looking at the weekly chart of the S&P500 we notice two very important things.

1. The prior week’s candle is a doji bar or spinning top as talked about in Japanese Candlestick Charting Techniques by Steve Nison. This is a potential reversal bar, with confirmation, in this case, a close above the high of that bar.

2. We also notice that the current weekly candle’s body engulfs the prior week’s body, bullish engulfment. Volume on the SPY during this decline has increased, giving weight to the bears.

We will watch for a break above or below week 6’s candle to confirm that the market is moving into a new area of value. This value concept can been further explained using The Auction Market Process aka. Market Profile.

Wk05: Market Recap

In last week’s market forecast we talked about a target for the S&P of $1030. We came down to the $1045 level and while Friday’s price action resulted in a large bottoming tail hammer, we feel that after a small bounce we should continue lower. We also saw the Vix spike above the prior swing highs, which we talked about last week as well.

Wk04: Market Recap

With mixed earnings, positive GDP growth, the President’s State of the Union Address and a slew of other economic data the markets continue to grind lower. The Vix remains at the top of its channel poised to breakout in the next few weeks.

Wk03: Market Recap

Week 3 produced a huge increase in volume on the movement to the downside. Pulling out to a weekly timeframe and looking once again at a Fibonacci retracement we remain at the 50% retracement level with a bearish weekly candle.

We broke down below the 20-MA and 50-MA, a bearish sign. We would be looking for a lower high to be put in on the daily’s which would indicate the end of the uptrend.

The VIX jumped up to the 27 level from down in the upper teens. It would make sense to see a move up into the 30s before pulling back.

Wk02: Market Recap

Week 2 produced sideways action, however we are starting to see volume and intraday playable price swings come back into the markets. We are still in a clear uptrend and see a flood of stocks making new 52-wk highs, are hardly any stocks making 52-wk lows. A subtle mix of economic news and earnings leaves us in a holding pattern looking to continue on higher.

Wk01: Market Recap

The markets started off the year on a bullish note. Could this be setting the tone for 2010? We have some room to move higher before hitting some major resistance (prior support). The S&P was the strongest of the top line figures in week 1, but all four indices moved higher. The VIX has broke down to new 52-wk lows and we are looking for volatility to remain low throughout 2010 (at least relative to 2009).

Wk47: Market Recap

The shortened holiday week was not short of surprises. With the news about Dubai World’s asset woes, downward revision to 3rd quarter GDP, rise in new home sales, and a slew of other economic data, left the markets slightly lower on the week.

We have been chopping between the 1114 and 1085 level on the S&P500 and a break outside of these levels will be key in the week ahead. The chop has produced two inverted hammers on the weekly chart of the S&P.

The dollar spiked lower on Wednesday, but immediately snapped back to the $75 area. We will continue to monitor the price action in the coming weeks. As the markets have been acting inversely to the dollar a breakdown in the dollar should lead to higher stock prices.

Wk45: Market Recap