Today was the final day of the first quarter of 2012. It was a fantastic three months for equities in terms of percentage movement and it is unlikely that the market will be able to continue the blistering pace. Our job as traders is not to predict but to anticipate various scenarios, wait for price confirmation before we participate and then manage risk. The primary trend remains higher, it is innocent until proven guilty. The video takes a look at key technical levels in $SPY $QQQ $IWM $XLF $SMH Have a good weekend.
Markets are pulling back towards their rising 20 day moving averages; $SPY 139.02 $IWM 82.09 $SMH 34.90 and the $XLF (not shown) has its 20 dma at 1538 which is just below the key level of support found near 1545. The $QQQ remains the most resilient and its 20 dma is further away at 66.20 and that is just below key support near 66.40.
There is no magic support found at moving averages, the value is to watch for potential shift in pressure at the widely watched averages as they often do become support (in an uptrend) for the simple reason that many participants are watching the action around them. Shorts will often cover near an important moving average, long profit takers will discontinue selling and sideline cash will start to nibble long. This process
Markets were mixed this week (I don’t like that saying but couldn’t think of something more clever) The video below takes a look at trends and key levels to watch for the $SPY $AAPL $XLF $IWM $QQQ $IWM
The support in the $SPY has been broken and that market is now below the declining 5 DMA which suggests caution. Fibonacci levels are drawn on all of the charts below and they should be viewed only for “potential levels of support” not a level to buy at. The failure of the $IWM to hold its breakout past the resistance at 83.00 gives us reason for most concern at this time (failed move, fast move?) but the large 81.00 level is still a safe distance away before real trouble might begin.
There is nothing to suggest damage to the trends on the dailyor longer timeframes, however buying blindly into a selloff has never been my preferred approach, we need to let the market establish support on shorter timeframes so we have levels against which to establish stops on new
