US market commentary

[xpertstocktrader]

Market commentary for 11/23/2007

Good day!
The market didn’t want to send relief to long traders. In the past we have seen a pre Thanksgiving Day rally, but Wednesday didn't continue that tradition. We didn’t see a strong intraday move, but from the gap down at the open, the indices showed weakness and the bounce attempt failed. Yes, after the morning move down, the indices tried to trade higher and the QQQQ led that enthusiasm, but there was no volume or true buying pace for a significant bounce. We can easily see that on the 60 min charts. The QQQQ filled its' gap and after that quickly gave back all of it’s' midday rally, with strong intraday selling pace. The DIA and the SPY couldn’t fill their gap and the 20sma area still served as too great of a resistance. On the 60 min charts we can see that every try to break the 20sma resistance finished with a new low and that resulted in the downtrend move.

http://www.ivicacharts.com/diagrams/2007/11232007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11232007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11232007qqqq60.jpg

The QQQQ is still holding its' range area and is somewhat resistant to the SPY/DIA selling pressure, but the triangle consolidation is getting tighter and tighter and we could see it break soon. On the daily charts we can see that the double bottom possibility of the SPY/DIA didn’t hold and both made new lows and are close to their daily equal moves and August low support areas. For both indices this is the 3rd selling wave on the daily charts.

http://www.ivicacharts.com/diagrams/2007/11232007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11232007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11232007qqqq.jpg

On Friday the markets will be open for half a day and it is hard to predict what we will see, but if the last days weakness continues I expect the QQQQ to make another daily leg down into its' 200sma (stronger) support area. My job will be to see the synergy on that leg down. I believe that with this weakness the SPY/DIA will see their August lows support area. On the daily charts we can see that the SPY/DIA are already on the move and not far from their previous support area, so a new swing setup will be higher risk, because a bounce possibility increases as they trade into their support. I know I waited for that over the last few days but we still followed the market action and took several shorts. It is good to have an opinion, and an expectation, but it is always more important to follow the market action. For now the charts suggest another move down (QQQQ to 200sma daily chart, SPY to 140 number supports and the DIA to August low support area). It is important to not overtrade on Friday, because volume will be light and the market is open just half of the day.
I wish you all a peaceful Thanksgiving day and I will see you on Friday.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 11/26/2007

Good day!
Since we didn’t have a pre Thanksgiving Day rally, we saw that rally during the short session on Friday. The Indices opened with a gap up (middle of Wednesday's range) and the open of the trading session held in a range action without direction and with light volume (which is expectable on a short session day). Around 11:00 am EST the reversal period woke up the indices and for the rest of the day we saw a nice uptrend move. I was not happy with trading because I don’t like when volume is low and when reversals can show anytime with a strong reaction. The SPY was the strongest and broke above Wednesday's high, while that area was too strong for the DIA and the SPY and both closed under. Another thing to note is that all the indices closed above their 20sma which will be the support area in case we see selling pressure.

http://www.ivicacharts.com/diagrams/2007/11262007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11262007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11262007qqqq60.jpg

I don’t think that Friday showed any significant direction and I don’t think that we can count on Friday's move as a reversal move. Maybe that can happen next week, but for sure that won't be because of Friday's action, because the big players weren't involved in it. We have a very indecisive situation and the weekly QQQQ chart will show that most clearly.

http://www.ivicacharts.com/diagrams/2007/11262007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/11262007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/11262007qqqqweekly.jpg

Another weekly doji bar on the QQQQ chart is the reason for this indecision. The SPY and the DIA made another leg down and on the DIA weekly chart we can see that the last bar is an NR7bar (short weekend helped a lot in that). The DIA has room for another move down into the August lows without much support, and also the small NR7bar closed near highs which formed a pivot bar. If we look at the daily charts they will confirm this indecision. After three selling waves it won’t be uncommon for the SPY/DIA to start with a daily correction. For low risk setups it will be good if the QQQQ can stay in a consolidation area (after first move down) for another week. On the other side the daily triangle can break down into the 200sma support area (red line).

http://www.ivicacharts.com/diagrams/2007/11262007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11262007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11262007qqqq.jpg

It is important to follow the daily 10sma as an important resistance area in case of a reversal. If the SPY/DIA will break their 10sma (daily chart) with good intraday volume and pace, then it is very possible we can expect to see more of a daily correction after the three selling waves. For the QQQQ it is important to follow the daily 10sma and 100sma. If that area doesn't hold I believe that the indices will bounce into their 20sma resistance area. On the other side, if the selling pressure continues, then the 200sma is the 1st support area for the QQQQ and $125 for the DIA and $140 for the SPY as number support areas. I believe that Monday's action will give us an answer on direction, because we can’t count on Friday's activity. Intraday volume and pace on the intraday charts will be indicators to recognize direction and I will be focused on that. After the initial move, I will look for continuation. Intraday charts are very important for me, because reversal patterns on the 5/15 min can get me into the start of a daily move. I wish you all a great trading week. If you have any questions, please feel free to ask me.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 11/27/2007

Good day!
Well, so much for an after holiday bounce. Again the 10sma on the daily chart shows the strong resistance in the trend move. The market is in a downtrend on the daily charts. The day started with a small gap up and as usual small gaps have a tendency to be filled right at the open. Monday was no exception. Right after the gap filled the indices bounced and broke their 60 min 20sma resistance areas. All looked ready for a daily correction, but the previous resistances for the DIA/SPY and the channel resistance for the QQQQ was too strong and we saw a sharp move back to the 20sma on the 60 min charts. But the indices didn’t consolidate near lows for continuation. They bounced from the 20sma 60 min area and made intraday lower highs which was a signal for sellers to come back and bring the indices down. The DIA and the SPY made new daily lows and the QQQQ moved back to its' daily triangle support area.

http://www.ivicacharts.com/diagrams/2007/11272007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11272007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11272007qqqq60.jpg

After all the indices made large red bars and closed at support, which is not a good sign for new short setups, especially when we see how extended the move down is on the intraday charts. Because of that every new short setup in the morning will be high risk, and I will just follow our current open swing short trades. Usually after a large extended daily bar we can expect a smaller bar which will have an intraday correction. The daily support area is also another reason for high risk new short setups in the morning.

http://www.ivicacharts.com/diagrams/2007/11272007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11272007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11272007qqqq.jpg

With the close at lows we have a higher possibility for a gap down and a daily trend continuation. One scenario is more selling pressure in the morning which could bring the QQQQ into its' daily 200sma support area (red line) and the DIA/SPY into their number support areas. This will be good for our open trades. The second scenario is a gap up with intraday whippy action which will increase risk and bring us into a scalp market. My bias is for more selling and I think that the market has room for that. The situation will be more clear after the open and I will continue to update you in the trading room.
If anyone has any questions, please feel free to contact me.
Wish you all a good Tuesday trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 11/28/2007

Good day!
It was a very dangerous market for trading. One day everything suggests a down market and the next day everything looks more like a bounce possibility. A short explanation for Tuesday's market action is up-down-up-down. I can feel the fight between the bulls and bears for direction. The market opened with a gap up and after the morning try to fill the gaps, the indices all had a strong bounce. The DIA was the strongest and traded back to Monday's high resistance area, while the SPY was the weakest and its' previous intraday resistance was just too strong. During the afternoon the indices' correction was strong and gave back the morning's gains, and formed a higher low on the 60 min charts. At the end of the day we saw another bounce and a strong close at highs. When we see the 60 min charts we can see the higher lows and channel resistance areas for the DIA and the SPY. The same applies to the QQQ, but we can also see the rounding lows on the 60 min charts.

http://www.ivicacharts.com/diagrams/2007/11282007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11282007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11282007qqqq60.jpg

After all the intraday charts suggest a reversal from the daily lows. Lots of resistance remains overhead and if we do have a reversal, pace and volume will be the main indicators to measure whether we do have a reversal or more of a daily consolidation. On the daily charts we can see that the 10sma is still strong resistance for the DIA and the QQQQ, while the SPY has more room to reach this resistance area. For now that is the main resistance area for the indices, plus the 100sma on the QQQQ chart. Tuesday's volume was stronger than Mondays, which is another indicator for a possible bounce and daily reversal.

http://www.ivicacharts.com/diagrams/2007/11282007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11282007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11282007qqqq.jpg

Because the market action is very whippy and skittish, I’m not afraid to miss the possible main bounce. If the bounce is strong enough with volume to prove its validity, we can always take longs on a healthy consolidation breakout. But if the bounce will have weak pace and light volume, then risk will increase and we could continue to see a whippy market. Since risk is already high, and the market continues to look for direction is it important to use proper risk... and that is now the key word: proper risk. I don’t have a bias and I will just follow the market action and wait. Remember that cash is also a position. The market was tough over the last few months, but we must be patient and wait for better times. On the larger timeframes I still think that we will see more selling, but will that be soon or after a bounce...no one can tell that now. Even though the charts suggest a bounce, a possible gap down under the previous 60 min low will change that situation, and because of that i will use patience. If you do trade, please do it with very small risk. We can always catch a continuation if the main move shows promise.
Wish you all a good Wednesday trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 11/29/2007

Good day!
The indices had a strong move up after a Federal Reserve official hinted that the central bank may lower interest rates. That was enough to signal a strong bounce in the morning above the 10sma daily resistance area. That scared the short traders and with short covering we finished with a strong trend day. For me the problem in this situation is that after a strong move down, when the market try to reverse we can see a number of resistances and every one can hold. Because of that my activity yesterday was small but positive. When we have a situation like yesterday, several indicators can help. First are the 10sma/20sma 5 min charts for trend determination, and those worked perfectly. Second is an afternoon consolidation, and that one worked perfectly as well (indices consolidated at highs). Another is volume, and that was the part that I didn’t like. The volume was not bad, but if we look at the indices daily charts it was lower than on Tuesday and I expected much stronger volume compared to the buying pace.

http://www.ivicacharts.com/diagrams/2007/11292007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11292007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11292007qqqq60.jpg

In spite of that, all of the intraday resistance areas (previous highs) gave way like they wasn’t there and the indices climbed without much rest. Before the close we saw one try for an intraday correction and profit taking which brought the indices under their 20sma on the daily chart. The market was too strong and on the daily charts we can see that all the indices broke their 20sma on their first try and closed above. That is a very strong signal. If we look back again on the 60 min charts we can see that all the indices have room for another move into their next strong resistance areas and that is the 200sma (red line).

http://www.ivicacharts.com/diagrams/2007/11292007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11292007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11292007qqqq.jpg

Also on the daily charts we can see that all the indices have room for that. The DIA has room for a move up to its' previous highs (red line), the SPY until it’s' 200sma and the QQQQ until it’s' 50sma. Because of that and Wednesday's strong move, I will expect that we will see more buying in the morning. After that, as usual after strong moves, we can look for a correction (consolidation). Trading during a market consolidation is always higher risk. I know that it can be frustrating when traders miss a move like yesterday, but the worst thing we can do is to be to active the day after a trend day and finish negative. I will look for own ways charts and that will be my main focus. Longer term I still think that we are done with the weekly bull trend, but before that the market can still trade back up into its' previous highs and form a double top pattern. That is an educated guess. For now let’s see how Wednesday's gains hold, for a possible continuation or the beginning of a new move down.
Wish you all a good trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/03/2007

Good day!
I think that Friday's action was very interesting. We know that the market opened much higher based on Bernanke's mention of another possible interest rate cut. It look likes, however, that was not enough for continuation after the strong open. During the day the indices filled their gap and the previous daily highs were too strong for now. I don’t like to give any predictions based on the economy but I think that right now the expectations for the FED meeting on 12/11 are very clear. If the FED cuts rates then we could see selling the news, or maybe buying the news, but if the FED doesn't cut rates then we can expect a huge reversal. I’m not a trader who will trade right after the FED decision, but for me the expectations are clear after Bernanke's words. For now we can say that Friday's action basically gave us just a gap up. Since the market is entering the last month of the year this is a good time for more of a review. Let’s start with the monthly charts. In spite of the daily weakness and downtrend, on the monthly charts we can see that the indices are still in an uptrend move. Also we can say that the DIA and the SPY formed double top patterns and a strong reversal after with strong selling volume. The QQQQ, after an explosive move up had the same strong move down on strong volume. From that my conclusion is that the indices are done with new highs for some time, which is what the monthly charts suggest. The reason for that is the strong move down after new highs on strong volume. (larger then green bars)

http://www.ivicacharts.com/diagrams/2007/12032007diamonthly.jpg
http://www.ivicacharts.com/diagrams/2007/12032007spymonthly.jpg
http://www.ivicacharts.com/diagrams/2007/12032007qqqqmonthly.jpg

On the weekly charts we can the situation more clearly. The DIA and the SPY already started with a weekly consolidation (range action) and we can see that the selling moves are stronger than the buying recovery. Also we can see how the selling volume is stronger than the recovery volume. In addition, we can see how the slightly higher highs were made and after that the strong move down on strong volume. All that suggests that it will be very hard to see a breakout to new highs and a trend continuation. The QQQQ's move down is obvious and its' selling volume is strong. The red bar is the largest bar in quite a while.

http://www.ivicacharts.com/diagrams/2007/12032007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12032007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12032007qqqqweekly.jpg

For larger time frame expectations we can expect that the DIA and the SPY could see a bounce continuation into their upper range lines, while the QQQQ could form a weekly double top. That is one scenario. For now we can’t expect selling continuation into new lows because the bounce from the support area was too strong. For continuation we like to see consolidation near the lows or a gradual pullback and that is not the case. During the next few days we will see if the resistance areas hold or if the indices will start with a correction. Now, what kind of correction occurs will build our expectations for the future move. Always after a move it is important to follow the reaction on the support/resistance areas, and right now the indices are on the move up (bounce from support). The resistance is Friday’s high and the supports are the 200/20sma for the DIA/SPY and 20sma for the QQQQ

http://www.ivicacharts.com/diagrams/2007/12032007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12032007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12032007qqqq.jpg

And finally the 60 min charts for Friday’s action. For the SPY/DIA supports are 200/20sma and the resistances are Friday’s high. The QQQQ is the weakest and closed under its' 20sma what could bring problems, but the low is the daily 20sma and the QQQQ can be stuck between those areas.

http://www.ivicacharts.com/diagrams/2007/12032007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12032007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12032007qqqq60..jpg

Now what? What can we expect for future action. The monthly charts are still in an uptrend, with a double top pattern. On the weekly charts the DIA/SPY are in a range action (rest after move). On the daily charts with the last week's bounce, the indices broke their downtrend move. Right now it is very important to see the indices reaction to Friday’s resistance. If the indices will consolidate near highs or start with a gradual correction then we can expect another move up into the SPY/DIA weekly upper range resistance area and for the QQQQ into its' previous high area which will form a weekly double top pattern. If the indices will pullback strongly then we could expect a daily triangle or daily range action and that will reflect as a weekly consolidation near weekly lows and in the future will result in another move down. So, it is important to see what the next days will bring. Since Bernanke announced the rate cut possibility I will expect a gradual move up (after daily/60 min rest). It will probably be much weaker than the bounce pace from lows. For now the first scenario with a possible move back to high is what I expect, however, I don't anticipate easy trading days. I believe we will see more of a choppy move up. It is very hard to say right now exactly what will happen. We must follow the market action and then the expectations will be clear. I will continue to bring updates in my future commentary and I think then we will have a more clear situation. Right now, what is for sure is we have a higher trading risk. Since the indices are already on the move up on the daily charts, new swing trades will be higher risk (except “own way” charts) and the safer place will be with intraday moves and smaller timeframe trades. If anyone has any question about my commentary or any trades, please feel free to contact me

Wish you all a good trading day.

Ivica
[email protected]

 

[ammo]

ivica, thanks for the charts as always, if the dollar firms up and foriegn banks and brokerage houses need to protect t hier money,they put thier money in us banks(wall st}and us mrkts hold up ,im bearish but confused ,good luck

 

[xpertstocktrader]

Market commentary for 12/11/2007

Market commentary for 12/11/2007

Good day!
Not much can be said about Monday. We had another very choppy trading day with divergences in the morning and range action for the rest of the day. Even scalp traders had a hard time. This market action is very good for overtrading and losing money. Because of that I will wait to see the reaction after the FED announcement. Even though the DIA had an NR7 bar on Friday, we didn’t see much trend action there. After the open we got an initial move and that was it for the rest of the day. Now the QQQQ formed an NR7 bar, but I won’t count on a trend day for Tuesday.

http://www.ivicacharts.com/diagrams/2007/12112007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12112007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12112007qqqq60.jpg

On the daily charts we can see that volume is still decreasing and that makes the indices move up unhealthy and ready for a stronger correction. Because of that trading risk is high and my advice is that it is best to wait to see the reaction after the FED and then decide. Usually on a FED day we have an up market in the morning and then consolidation and range action until the announcement.

http://www.ivicacharts.com/diagrams/2007/12112007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12112007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12112007qqqq.jpg

Also it is important to know that staying in a trade (day or scalp trade) during the announcement is high risk, because we can expect strong reactions after the announcement. I think that if the FED gives us unexpected news that we will see a huge move, and possibly even the start for a new swing direction. But if we will hear expected news then I think the reaction will be only short term and that the indices will stay in the weekly range which will continue this higher risk trading environment. As the Fed announcement nears, look to close down extra market minders and level II screens to avoid a system lock up from the surge in volume following the announcement. Trading at this time is high risk due to data delays and rapid price movement.
Three waves of activity tend to follow a Fed announcement. There is an initial reactionary move, followed by a correction. This correction can be stronger than the initial reaction. A third wave follows, heading back in the initial post-announcement direction.

Wish you all a good trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/12/2007

Good day!
It sure looks like investors expected more than a 0.25 percent rate cut and the disappointment was enough to bring the markets down. The DIA lost 3 points and traded back to its' 10sma daily support area. On the daily charts we can see that the 50sma and 100sma support areas were not strong enough to hold after the announcement's selling pressure. The SPY lost around 4 points and closed under its' 10/50/100/and 200sma daily support areas. On the daily chart we can see that the SPY opened the day above all its' daily moving averages. The QQQQ wasn’t different and closed under its' 10/50sma on the daily chart. Another important indicator is volume. We can see that the volume on the move up was much less than the volume on the moves down, which is something I have mentioned often in my commentary.

http://www.ivicacharts.com/diagrams/2007/12122007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12122007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12122007qqqq.jpg

On the 60 min charts we can clearly see the difference between the buying and selling pace, and the same applies to the selling volume. Also we can see that the indices hit their support areas. Additionally, the indices closed at support areas and the next support levels are not far. These levels are important to note in case of a gap down, or selling pressure in the morning.

http://www.ivicacharts.com/diagrams/2007/12122007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12122007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12122007qqqq60.jpg

So, one scenario that we can expect is selling pressure in the morning with a gap down at the open. In that case I will look for a correction after the opening weakness. Another scenario is a gap up and a correction right at the open, and, in that case, I will look for a continuation of the selling pressure during the doldrums. Right now those are just possibilities. We must see what kind of correction we get, the pace, volume etc. I will update the room during market hours, but one thing we know. After a move we need to see rest (trading pattern), and this rest action will bring a higher risk environment. On the 60 min charts we can see that the indices are extended, and now we must see what kind of correction (consolidation) we will see. With the reaction after the FED announcement, my bias is on the short side for now, but we must keep in mind that the indices are in a weekly range and we don’t have a trend on the weekly charts yet. If anyone has any questions, please feel free to contact me.

Wish you all good trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/13/2007

Good day!
We certainly had erratic market action on Wednesday!!! I must say, I can’t remember action quite this crazy. The day started with a strong gap up in spite of the sell off from the disappointing FED rate cut. With the gap up the indices covered all of the Tuesday move down after the FED announcement. But that strong open was not strong enough for buyers to take control and it looks like long traders used Wednesday's strong open to cover Tuesday's losses. The indices took most of the day to do it but they still managed to fill the gap up. It is unusual for a gap of this size to fill the same day, especially when the open is above all daily moving average areas.

http://www.ivicacharts.com/diagrams/2007/12132007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12132007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12132007qqqq60.jpg

But that was not the end of the surprises. The indices didn’t just filled their gaps, they all made new daily lows. and Then, when everyone expected a weak close, or a small correction from the afternoon strong selling pressure, the indices covered all of the afternoon's move down and closed in positive territory. The bounce in the last 15 minutes was very strong with the same pace as the selling into lows and with strong reversal volume. On the daily charts we can see that all the indices closed above their 10sma which serves as their support areas once again. Volume was again high and we had another very big daily bar.

http://www.ivicacharts.com/diagrams/2007/12132007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12132007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12132007qqqq.jpg

Now what? It is rare when I don't have a bias or expectations (for tomorrow). This time, however, I do not. The Indices are in the middle of the weekly range. On the daily charts we had two extended bars with strong volume and after all of that we still have no real direction. I see a great deal of indecision out there. On the 60 min charts we can see very extended moves after the FED announcement. Risk is extremely high for new trades (unless they are scalps). I will try to find possible setups for tomorrow, but like I have said: risk is high and it is best to wait and see what happens and how the dust settles. Without any consolidation or trading patterns, there are no low-risk setups. In addition, right now we don’t have any trends on any timeframes and we don’t have any patterns. It is time for patience.

Wish you all good trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/14/2007

Good day!
Prior to Thursday's open we had a hot PPI number which was considerably above consensus which makes it harder for the FED to move, we had a good retail number which means the economy isn't imminently falling into recession. We also had decent earnings from LEH and COST. All that put together and we had a modest gap down and little direction which continued throughout the day.

Thursday brought range action between Wednesday's low and high. We saw additional weakness and action near Wednesday's low, but it is important to notice that the low support area held. If we look at the 15 min charts we can see the 20sma was the key resistance area and during the day the 15 min triangle is getting tighter and tighter. At the 14:00pm ET reversal period the indices decided which direction to take. On the 60 min chart we can clearly see that Wednesday's low was too strong and the reversal came after 14:00 pm ET reversal period. The SPY/DIA were the strongest but finished under the 20sma resistance area and the previous 60 min high.

http://www.ivicacharts.com/diagrams/2007/12142007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12142007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12142007qqqq60.jpg

When we look at the daily charts we can see the indices are stuck between the support and resistance areas. The DIA/SPY closed under 50sma and 10/100sma is also around while the QQQQ closed under 10sma with 20sma as support area at lows. We basically have a big mess on the daily charts. When we exclude the moving averages the charts are clearer and most important for Friday is that low support held and on the bounce from low we saw an increase in volume which suggests that Thursday's low will hold for now.

http://www.ivicacharts.com/diagrams/2007/12142007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12142007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12142007qqqq.jpg

Of course this also depends on the open, but for now I expect the lows will hold. Unfortunately that does not mean we automatically we will see a strong bounce (which is always possible). I expect to see a choppy intraday move up or range continuation. Anyway the point is I think that we will see a continued high risk market action and a poor environment for swing traders. Since we have messy daily charts it is best to stick with intraday moves and not fall into an over trading trap. In the future I will look for more selling but right now we don’t have clear signal and until that time I will stay with the same risk management. Thursday's low is an important area for a future move down and I will pay attention to it. If that is broken I will start looking for swing short setups. For now the key word is PATIENCE.

Wish you all good trading.

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/17/2007

Good day!
Friday brought more weakness than I expected, but since we are in the middle of several support and resistance areas, any direction would not have been a big surprise. On the 60 min charts we can see that the 20sma resistance area was too strong and every try to break above it failed. That resulted in lower highs and in the last hour a pullback to Thursday's low. The QQQQ is the weakest over the last several days and Friday's action finished with a 60 min triangle with a potential for a breakdown. The blue lines are equal moves and that is one scenario that we can expect on Monday. The problem is that the DIA (strongest one) has strong support areas very close by (daily 20/200sma) and that can result in a 60 min double bottom pattern. On the other hand the DIA can also move down to a 60 min equal move and back above support areas and in that case both sides will be satisfied. The shorts will get their 60 min equal move down and the daily support area will hold for long traders. That is another possible scenario.

http://www.ivicacharts.com/diagrams/2007/12172007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12172007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12172007qqqq60.jpg

The problem with the market situation at the moment is there are lots of possible scenarios which bring us into a high risk area for trading. Let’s look at the weekly charts. We can see clearly that the indices are in the middle of the range. Volume is average and right now we don’t have a trend. Maybe the QQQQ will form a kind of whippy phoenix, but right now it is hard to predict that because we need more consolidation bars for that possibility. The weekly charts are telling us that we don’t have a trend and we all know that trading during range action (consolidation) is always much harder than when we have a trend.

http://www.ivicacharts.com/diagrams/2007/12172007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12172007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12172007qqqqweekly.jpg

The daily charts show us clearly the kind of mess we have. The Indices are moving around all moving averages and previous support/resistance areas are everywhere. Right now I don’t have a strong bias and I can see either direction for a day or two moves. If the indices will break down, I believe that the 60 min equal move will be the support area that will hold for some time. However, if the 60 min 20sma will be broken, we could easily see a move up to the previous daily resistance areas. Lately we can notice that the moves down have a stronger pace than the moves up, and in the case of a move up, I will expect more choppy and slower action.

http://www.ivicacharts.com/diagrams/2007/12172007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12172007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12172007qqqq.jpg

For the bigger picture, my bias is still down and I will expect more selling in future weeks, but right now we could see choppy action on the daily charts for the rest of the year. Right now I will go day by day and I will wait for a sign for a possible new trend on the daily/weekly charts. This is the last full trading week this year and I wish you all a great one!

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/18/2007

Good day!
Monday gave us a trend day. The scenario that I drew on the 60 min charts did perfectly. The QQQQ was the weakest, while the DIA was the strongest and all hit their equal move support areas. With downtrend days, the indices usually close at lows which was the situation on Monday. Even though we are at the support areas, I think that the indices still have room for a small move down in the morning. Maybe that move will be done with a gap down, or possibly a move down in the morning. Right now, however, that is not important for new setups.

http://www.ivicacharts.com/diagrams/2007/12182007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12182007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12182007qqqq60.jpg

It is more important to know that new swing short trades are now higher risk and I will avoid them. Depending on the open and the morning action, I will look for a possible intraday move (day/scalp trade). There were two things I didn’t like about Monday's trend day. One was the slow selling pace and choppy intraday action which brought indecision and some distrust to the trend action and another thing was the volume. On the DIA daily chart we can see that the volume decreased, which is not the case when we have healthy moves. Also on the QQQQ daily chart, we can see Monday's volume was lighter then the usual red bars we have had lately.

http://www.ivicacharts.com/diagrams/2007/12182007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12182007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12182007qqqq.jpg

This kind of action usually has one of two scenarios. One is an exhaustion move down with stronger volume, and another is a strong reversal. Since those scenarios are opposite that will bring indecision and some nervousness during trading hours. I don’t have a strong bias for any scenario, but for now I will look for weakness in the morning and a possible reversal during the doldrums hours. Another important thing to note is that after a trend day usually we will see a consolidation day and because of that my focus will mostly be on intraday moves.

Wish you all good trading!!!

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/20/2007

Good day!
A view of the daily charts tells us all about Wednesday's market action. On all three charts we can see a doji bar which means indecision. In other words both directions are possible for Thursday. The Indices opened flat and after the open the SPY and the DIA showed a weak buying pace until Tuesday's high which was too strong a resistance area. The QQQQ was weaker and Tuesday's close was too strong. On the 60 min charts, I drew one possible scenario and that is a breakout after Wednesday's consolidation day. It is a whippy consolidation and if we do see a breakout it will be important to see the breakout pace and volume. If it is strong than we can expect more than an equal move, but if it is choppy and has a weak pace than the previous resistance area for the DIA will be huge. For the SPY and the QQQQ they have resistance at their 200sma 60 min.

http://www.ivicacharts.com/diagrams/2007/12202007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12202007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12202007qqqq60.jpg

On the daily charts we can see that Wednesday's volume was light with a doji bar. For the SPY and the DIA the 20sma is still the first resistance area, and the DIA also has its' 200sma, so we can say we have plenty of resistance areas. The QQQQ still has resistance at Wednesday/Tuesday's high and after that the 100sma is very close. Because of all this resistances it is important to see how strong the breakout pace and volume is.

http://www.ivicacharts.com/diagrams/2007/12202007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12202007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12202007qqqq.jpg

Since we had a doji bar on the daily charts, we could just as likely see a breakdown and Tuesday's low will be the first support area. If that doesn't hold, very possibly the QQQQ could see selling continuation to its' 200sma daily support area, and the SPY/DIA to their previous daily low support areas. For that scenario the breakdown pace and volume are very important too. Of course the third scenario of a 60 min consolidation continuation is always open. Since we have several possibilities it is important to trade with small risk and wait to see the market's first move, pace, volume and the type of consolidation. Before that we could see a false breakout and because of that patience is important right now.

Wish you all good trading!!!

Ivica

 

[xpertstocktrader]

Market commentary for 12/21/2007

Good day!
As we expected we saw whippy intraday market action. I had mentioned that it would be important to see if the morning gap would hold and that would give us answers for a possible move up. But that was not case, and after the gap up in the morning, the SPY and the DIA filled their gaps. We saw divergences between the stronger QQQQ and the weaker DIA all day long and that increased trading risk. I explained in yesterday's commentary that pace and volume will be the key for future expectations. Since the indices didn’t have strength for a breakout and they fell back to their 60 min range (the SPY/DIA) they lost the opportunity for a healthy break up. During the doldrums, we waited for direction. Yesterday the QQQQ won and pushed the indices up, but the divergences remained and risk stayed high. We can see that on the 60 min charts. The DIA closed under their morning high, the SPY closed at its' morning high while the QQQQ was the strongest and reached its' previous support area (now resistance area).

http://www.ivicacharts.com/diagrams/2007/12212007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12212007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12212007qqqq60.jpg

On the daily charts we can see that the QQQQ closed under its' 20sma and in the middle of its' daily range. The SPY and the DIA stayed in their 60 min range which resulted in their closing under all their resistance areas. After all there was not too much change. The possible try for a move up on the daily charts will be hard and choppy without volume.

http://www.ivicacharts.com/diagrams/2007/12212007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12212007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12212007qqqq.jpg

Nothing has changed for Friday's expectation. Without stronger volume it will be hard to expect to see a healthy move up, and if the SPY/DIA stays under their 20sma (daily chart) we could expect another move down. I don’t have a strong bias, and it is hard to predict future action, but for now I will expect that the choppy move up will continue. If the indices had only their 20sma as resistance on the daily charts, I would expect that would be broken. However with all the resistance areas overhead the move up most probably will be more difficult. Again the open will be important. RIMM's report can bring a gap up in the morning (depend on results) and that could move the market as ORCL did during Thursday's session. Anyway, everything stays the same for us. It will be best to stay with intraday moves and swing trades are still high risk. Also, Friday is the last day before the Holiday week as well as options expiration. I will expect that volume will decrease after the morning since most of traders will close this week and start the holidays.

Wish you all good trading!!!

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/24/2007

Good day!
RIMM's good earning report brought the market higher and we had a strong gap up on Friday. That was in line with expectations of seeing a daily move up, but as I mentioned yesterday, I expected that most of the move up would be the result of a gap. We had the same situation on Friday. After a strong open, the indices fell right into a range and only the DIA continued in its' same direction. We can see that the move up was slow on light volume. Until 14:00 pm EST we had a very slow pace with range action, which continued until the reversal period which gave more upside action before the close. The problem with Friday's action was very light volume which increases trading risk.

http://www.ivicacharts.com/diagrams/2007/12242007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12242007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12242007qqqq60.jpg

On the daily charts, we can see that the SPY and the DIA closed right in the middle of their daily ranges. The SPY has a small amount of room for another move up on Monday, but the QQQQ and the DIA closed right under their resistance areas. There is not much to say when the indices just jump around between range areas and do so on very light volume.

http://www.ivicacharts.com/diagrams/2007/12242007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12242007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12242007qqqq.jpg

Since it is the end of the week, it is always good to take a look at the weekly charts. We can see that all the indices closed right in the middle of their ranges and since we are entering a holiday week, it is very hard to expect that we will see any significant move on Monday. There is not much to say about the weekly charts, because we don’t have much of a difference from last week. But I can now draw one scenario which I will follow over the next several weeks. For the SPY and the DIA that is a head and shoulder pattern possibility, and for the QQQQ that is a lower high and equal move with short pressure continuation. Again I don’t expect to see that action next week, but it is always good to consider potential scenarios.

http://www.ivicacharts.com/diagrams/2007/12242007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12242007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12242007qqqqweekly.jpg

I will expect to see slow buying pressure on Monday, very possible with a choppy move up on light volume. The market will be closed at 1:00 pm and most traders will take off. I’m one of them because I think that it is a good opportunity to spend time with family and friends. I will recommend the same to all, but for those who want to trade it is important to recognize that risk will be high and the best low risk opportunities will be fast (scalp) trades. Don’t be greedy and be fast with exits. Also don’t fall into the overtrade trap. Monday probably won't be a good trading day, so use caution when trading.

I want to take this opportunity to wish you all a Merry Christmas, and for you who don’t celebrate a happy day off. I wish you all peace and a great time with family and friends. I will back after Christmas and I will spend time with you for the rest of the year.

Wish you all good trading!!!

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 12/31/2007

Good day!
Unfortunately the expectation for a slow Friday came true. The Indices moved between their 20sma 60 min (open gap) and their previous support areas. We can see that clearly on the 60 min charts. It is really hard to talk much about Friday’s action. Just a few points. Lately you all can see that the indices have opened almost every day with a gap. So far all those gaps have filled on the same day and Friday’s action was no exception. The move down was very strong and very fast and that was the only really healthy market move. The rest of the day was in line with the last days action and that means... slow, low volume and choppy action.

http://www.ivicacharts.com/diagrams/2007/12312007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/12312007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/12312007qqqq60.jpg

On the weekly charts we can see that the indices stayed in the same area as the week before. That means the possibility for a weekly short setup is still in line. Of course this is just one scenario. I don’t expect that trigger will come on Monday. But it is something worth watching next year.
http://www.ivicacharts.com/diagrams/2007/12312007dia.jpg
http://www.ivicacharts.com/diagrams/2007/12312007spy.jpg
http://www.ivicacharts.com/diagrams/2007/12312007qqqq.jpg

The daily charts show us range action. The last three days didn’t bring any change and no matter what Monday's action brings we can expect the true action after New Years. I will expect that volume will come back, but will the swing direction trigger... that is hard to know right now. When we are in a range market the safest way is to leave the first (initial) move and then look to trade after the consolidation pattern. That way we do not take false breakouts and fast pullbacks. If the initial move is the start of a new swing direction, than we will have opportunities for low risk trades. Before that risk remains high.

http://www.ivicacharts.com/diagrams/2007/12312007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12312007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/12312007qqqqweekly.jpg

For Monday I don’t have a bias. It is still hard to predict intraday direction with a range chart without volume. Because of that the best way will be to stay with intraday moves and trade small. Volume will remain small and I expect the same type of action we have seen over the last three days.
Maybe it will be best to stay away and prepare for a New Year's party, have a great time and prepare for a new year. I will use this opportunity to wish you all a healthy and profitable new year.

Wish you all good trading!!!

Ivica
[email protected]

 

[bottomleyp]

weekly chart

Hi
What is significant about the purple line on the weekly chart.
Also what is the points "H" and "S"

Peter

 

[xpertstocktrader]

Market commentary for 01/03/2008

Good day!
The New Year started with strong selling pressure and Oil reaching new highs ($100 per barrel). We have a saying here in Croatia: The start of the New Year is what we can expect the rest of the year. I hope that isn't true because in that case we can expect more selling in the future. But if we look at the weekly charts which I drew on Monday than we can expect more selling and possibly a monthly market downtrend. It is too early to be sure but certainly good to have that in mind.

http://www.ivicacharts.com/diagrams/2008/01032008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/01032008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/01032008qqqqweekly.jpg

Let’s take a look at Wednesday’s action. The day started flat and in the first 30 minutes the indices formed a wild 5 min range with whippy moves from the high to the lows and back. At the 10:00 am EST reversal, the selling pressure started and continued until 14:00 pm EST reversal period. It was a strong move down which we can see on the 60 min charts. Also, as I mentioned several times, on the 15 min charts we can see that the 10sma resistance area was key which is quite usual on strong trend action. At the 14:00 pm EST reversal, the indices bounced and it was strong with higher intraday volume, but the 20sma 15 min second intraday resistance area was too strong. The Indices couldn’t hold and traded back to lows finishing in the low area. On the 60 min charts, we can see that this was the second selling way and the selling pace was strong with higher volume. This indicates the probability of another move down which I will expect in future days. Since the selling pace was strong, I will expect that the 10/20sma resistances areas will be very important for that possibility.

http://www.ivicacharts.com/diagrams/2008/01032008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/01032008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/01032008qqqq60.jpg

The Indices have room for another move down and we can also see that on the daily charts. That will bring them to their previous daily lows. Also we can see that the extended red bar's volume is again stronger than the extended volume on the green bars. This tells us about market breathe over the last weeks. When we include the weekly scenario possibility, Wednesday's strong selling pace, heavier volume and room for another 60 min 3rd selling wave, we have enough reason to expect more selling in the future

http://www.ivicacharts.com/diagrams/2008/01032008dia.jpg
http://www.ivicacharts.com/diagrams/2008/01032008spy.jpg
http://www.ivicacharts.com/diagrams/2008/01032008qqqq.jpg

My expectation for Thursday is a consolidation day which we typically get after an extended day. That means a small range day. It will be more of a day trade day than a swing trade day. The open swings did great on Wednesday and they are all protected. It will be wise to not use the same risk for Thursday and give back all of our profit. I will pay attention to the 60 min 10/20sma resistance areas and the indices behavior there. On the 60 min charts, we can see that for low risk continuation setups, the indices need rest and earlier continuation will be higher risk for new short setups. If anyone has any questions about this commentary or any particular setup please feels free to contact me.

Wish you all good trading!!!

Ivica
[email protected]

 

[xpertstocktrader]

Market commentary for 01/04/2008

Good day!
Thursday's market action went exactly as expected. After a large range bar we can expect to see consolidation and that is exactly what the market gave us on Thursday. I mentioned that the 10sma and 20sma on the 60 min charts will be important resistance areas. We can see that on the charts. Remember that I mentioned several times that pace and volume is important for direction confirmation. On the SPY/DIA 60 min charts we can see how weak the breakup was above the 10sma (brown line) and that volume on that breakup was light. That was the main reason why I was not euphoric with the long side today. On the chart we can see the strong possibility of a continuation of selling on Friday and the blue lines are the equal move which will bring the indices to the daily support areas that I explained in yesterday's commentary.

http://www.ivicacharts.com/diagrams/2008/01042008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/01042008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/01042008qqqq60.jpg

The Indices are still under their 20sma 60 min resistance area and that is the key resistance for the possibility of a Friday selling continuation. The Indices need to stay under their 20sma 60 min or a correction after Wednesday's move down will very possibly continue. On the daily charts we can see that the indices formed a range bar. I was hoping all day for a classic textbook continuation pattern as a Friday possibility. But unfortunately the late reversal brought the indices to their open areas and all formed a doji bar which is still a continuation pattern but not as clear as a close at lows.

http://www.ivicacharts.com/diagrams/2008/01042008dia.jpg
http://www.ivicacharts.com/diagrams/2008/01042008spy.jpg
http://www.ivicacharts.com/diagrams/2008/01042008qqqq.jpg

Now what? Very simple. We have a doji continuation pattern situation. Doji mean indecision. If the indices will break under Thursday's low we can look for a 60 min chart scenario and another 60 min selling wave. If the Indices will break above Thursday's high we can expect that the correction will continue and possibly a bounce on the daily charts. I still have a bear bias, depending on the doji break and I will look for that possibility on Friday or Monday. I’m not interested in the long side right now, but if the indices will break above Thursday's high I will use that strength possibility for an intraday move up. Remember, pace and volume will help us to determine direction. If anyone has any questions, please feel free to contact me.

Wish you all good trading!!!

Ivica
[email protected]