We got the pullback and now markets are getting to levels which will be critical to form support if the market is going to be able to sustain a rally. I will be out for the rest of the week but may have a wrapup video on Friday.
We were hoping for a pullback as the markets were extended in the short term and now key levels are being tested. There are no signs of stability yet, but the levels we were watching – $SPY 125 $QQQ 55.60 $XLF 1295 are being probed and we have the rising 5 day moving averages (which often act as support) in these area as well. If the markets are going to break the downtrend lines and horizontal resistance on the charts below to begin a larger bullish move, this is the area we want to see a higher low established.
click charts to enlarge
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It was a constructive week for the markets as higher lows were formed and some key levels were taken out ($SPY 200 day moving average, $QQQ resistance at 56.00, $XLF resistance at 12.80, $SMH 30.50) The video takes a look at these markets and some possible scenarios for what is ahead including the potential for taking out the highs of 2011 in the $SPY…
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The $QQQ is still the weaker market and remains under the downtrend line as well as below the larger level of 56.00 but markets are showing improvement today. The higher low has clearly been formed in the $SPY $XLF and $IWM and we will now look for the prior resistance levels of 124 (SPY) 1280 (XLF) and 74 (IWM) to become support. In the intermediate term, we can now consider the market “innocent til proven guilty” as long as these levels hold. If the QQQ could make it up through 56 it would make the long side easier to trust.
click the chart to expand
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At 2:20 PM Eastern on Thursday December 22 (tomorrow), I will be joining Barbara Cohen and Geof Smith for “Traders Talk” which is hosted by DIVERSIFIED TRADING INSTITUTE (DTI) for a live talk/interview on topics such as
-What is the setup that you’ll jump into unhesitatingly…knowing that the odds are stack in your favor?
-Did you ever “over-trade?” If so, how did you overcome it?
…and more!
You can REGISTER HERE
As a bonus, attendees will also receive a powerful white paper by professional trader Jim Neihart entitled: “This simple idea enabled this trader to go full time.” You’ll learn about a simple practice that transformed Jim from a struggling part-time trader to a professional full time
Continue readingAt 2:20 PM Eastern on Thursday December 22 (tomorrow), I will be joining Barbara Cohen and Geof Smith for “Traders Talk” which is hosted by DIVERSIFIED TRADING INSTITUTE (DTI) for a live talk/interview on topics such as
-What is the setup that you’ll jump into unhesitatingly…knowing that the odds are stack in your favor?
-Did you ever “over-trade?” If so, how did you overcome it?
…and more!
You can REGISTER HERE
As a bonus, attendees will also receive a powerful white paper by professional trader Jim Neihart entitled: “This simple idea enabled this trader to go full time.” You’ll learn about a simple practice that transformed Jim from a struggling part-time trader to a professional full time trader
Continue readingThe larger levels we were watching as potential resistance did in fact prove too difficult for the market to overcome. Yesterday we noted $SPY 123.50-124 $QQQ 56.00 $XLF 12.80 and those numbers were never exceeded, in fact the high print on the $QQQ was 56.00 . The Nasdaq is the weaker market today as its larger percentage drop has brought it back below the 5 DMA, whikd the other markets remain above the 5 DMA and give us slight hope that this is a pullback which creates a short term higher low. The environment is still very tricky and difficult to have conviction in either direction.
click the chart to enlarge
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