AI
Thursday, May 21, 2009 8:30:55 AM
Example of "SwingTrader" Daily Alert from Briefing.com:
Wednesday Reversal Suggests Further Weakness Before Memorial Weekend
Wednesday started off strong with the SPX running up over Tuesday's 916 high, but after the first hour (10:30am EST) the momentum slowed off the 924 area and we saw a correction down to 908 into midday. A minor bounce to 915 during the early afternoon led to some aggressive selling pressure during the final hour. The Dow closed -52, SPX -4.6, Nasdaq -6.7, and Russell down -3.9. Financials, Computer Hardware, Utilities and Retailers paced the way lower while strength was maintained among Gold, Commodities, and Healthcare Providers.
The SPX chart below shows price leaving a key reversal day after Tuesday's "doji" rest day upon Monday's rally. The underlying bias remains positive as long as price stays above its rising 20-day ema. The neutral RSI-5 and A/D line readings suggest we could go in either direction, so look to just "go with the flow."
The only thing that bothers me as a trader is following an "obvious" technical signal, as it tends to "trap" more often than not. What I mean is when "everyone" sees that Wednesday was a clear "reversal day," then "the trade" is to be Short. However, you just can't rule out the possibility of morning weakness reversing during the afternoon, or a gap up that maybe squeezes higher, or even an "inside day" that just sits there. The "neutral" readings in the RSI-5 and A/D lines suggest we could really go either way ahead of the 3-day Memorial Day weekend (Market closed on Monday). My guess is to lean bearish into early weakness, but be prepared for a bounce attempt off key support levels especially if the selling very aggressive.
First resistance zone lies in the 910/911 area, followed by the 916 area. Above that and I'd expect a squeeze back up to 925 or higher into the weekend. Look for initial support around the "psychological" 900/901 area, followed by the 896/898 area. Below that watch the 20-ema near 888, followed by last week's lows around 878/882.
SECTORS: GOLD stocks and CRUDE breakout as the US Dollar breaks down. SEMIS appear to have a Head & Shoulder Top in play. RETAILERS could be starting to roll-over. FINANCIALS are teetering along 2-month uptrend line.
Wednesday Reversal Suggests Further Weakness Before Memorial Weekend
Wednesday started off strong with the SPX running up over Tuesday's 916 high, but after the first hour (10:30am EST) the momentum slowed off the 924 area and we saw a correction down to 908 into midday. A minor bounce to 915 during the early afternoon led to some aggressive selling pressure during the final hour. The Dow closed -52, SPX -4.6, Nasdaq -6.7, and Russell down -3.9. Financials, Computer Hardware, Utilities and Retailers paced the way lower while strength was maintained among Gold, Commodities, and Healthcare Providers.
The SPX chart below shows price leaving a key reversal day after Tuesday's "doji" rest day upon Monday's rally. The underlying bias remains positive as long as price stays above its rising 20-day ema. The neutral RSI-5 and A/D line readings suggest we could go in either direction, so look to just "go with the flow."
The only thing that bothers me as a trader is following an "obvious" technical signal, as it tends to "trap" more often than not. What I mean is when "everyone" sees that Wednesday was a clear "reversal day," then "the trade" is to be Short. However, you just can't rule out the possibility of morning weakness reversing during the afternoon, or a gap up that maybe squeezes higher, or even an "inside day" that just sits there. The "neutral" readings in the RSI-5 and A/D lines suggest we could really go either way ahead of the 3-day Memorial Day weekend (Market closed on Monday). My guess is to lean bearish into early weakness, but be prepared for a bounce attempt off key support levels especially if the selling very aggressive.
First resistance zone lies in the 910/911 area, followed by the 916 area. Above that and I'd expect a squeeze back up to 925 or higher into the weekend. Look for initial support around the "psychological" 900/901 area, followed by the 896/898 area. Below that watch the 20-ema near 888, followed by last week's lows around 878/882.
SECTORS: GOLD stocks and CRUDE breakout as the US Dollar breaks down. SEMIS appear to have a Head & Shoulder Top in play. RETAILERS could be starting to roll-over. FINANCIALS are teetering along 2-month uptrend line.
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