Tuesday, August 23, 2011 10:59:49 PM
XLF 6-Month Daily:
Chart Pattern: Slope & Fall (as opposed to bump & run) (sarcasm)
Resistance: At Gaps
Support: Not Yet Existing
A noteable divergence exists between the StochRSI and volume denoting uncertainty in market sentiment, confirmed by ADX/-DI and CMF; all 3 gaps will offer resistance, the majority of which will be felt between 12.58 & 13.00 due to the wide sloppy base formed from August 5 through the 17th which is laden with emotion and uncertainty; 5MA suggests a waning in downward pressure as seen in its slight deviation from its prior angle.
Today's earthquake gave us a good peak under the market's skirt revealing a skittish, uncertain, emotionally-laced attitude. Play this one with caution, use the gaps as sell points if price stalls occur, then re-take position upon upward violation. I always recommend ignoring candle wicks (spikes) when interpreting charts as they can occur at any time during the trading day and usually represent only one trade, whereas the candle body more certainly expresses market majority. We need to see one more candle body to establish reliable support at 12.00. Again, very skittish market. Any bad news will wreak havoc. The anticipation of Jacksonhole appears to currently be the driving force, at least for the time being. Wouldn't hurt to place a short-term 10% OTM put hedge on this play.
Chart Pattern: Slope & Fall (as opposed to bump & run) (sarcasm)
Resistance: At Gaps
Support: Not Yet Existing
A noteable divergence exists between the StochRSI and volume denoting uncertainty in market sentiment, confirmed by ADX/-DI and CMF; all 3 gaps will offer resistance, the majority of which will be felt between 12.58 & 13.00 due to the wide sloppy base formed from August 5 through the 17th which is laden with emotion and uncertainty; 5MA suggests a waning in downward pressure as seen in its slight deviation from its prior angle.
Today's earthquake gave us a good peak under the market's skirt revealing a skittish, uncertain, emotionally-laced attitude. Play this one with caution, use the gaps as sell points if price stalls occur, then re-take position upon upward violation. I always recommend ignoring candle wicks (spikes) when interpreting charts as they can occur at any time during the trading day and usually represent only one trade, whereas the candle body more certainly expresses market majority. We need to see one more candle body to establish reliable support at 12.00. Again, very skittish market. Any bad news will wreak havoc. The anticipation of Jacksonhole appears to currently be the driving force, at least for the time being. Wouldn't hurt to place a short-term 10% OTM put hedge on this play.
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