US market commentary

Market commentary for 02/05/2007

Good day!

That was a typical Friday. The good news for traders that are bullish is that market held up the last few days. For a continued move up the market must see a longer consolidation (rest) for low risk setups. That is particularly true on the SPY daily/60 min chart. That is not true for the QQQQ and if you look at 60 min chart you can see a cup and handle pattern and the handle is ready to move up. With this pattern the QQQQ could finally cooperate. The question remains can we expect more from the SPY and DIA now when both are in an overbought area? Absolutely yes, because overbought can be more overbought. That not mean I will take that setup. I will watch the action and that move up can be good for our open swing trades. On the SPY 60 min chart you can see that whole number resistance area was exactly place where SPY stopped Friday move up and from that move up you can see it will be best to see a longer consolidation under that resistance. On the weekly SPY chart we saw breakout from consolidation That is not that good of a situation since we have not had a consolidation in that area. Bottom line is that isn’t enough time for low a risk breakout.

I always try to bring low risk setups in trading room and watch list for stocks. The indices are different so I try to show you that SPY weekly breakout isn’t low risk and ideally we will like to see longer rest. This is the SPY since it bounced from 10sma we could easily see another trend move there especially if QQQQ has new weekly highs. That is definitely good news but we must be aware of danger or bad news. Since SPY broke weekly consolidation in my opinion way to early it is still in an area of a double top pattern possibility. You can see that a lot on stock charts every day and in all time frames. Top, small rest and slightly new high and then sell off. Because of that I can’t go with full risk. The DIA made new weekly high also and in still in a trending channel. You can see in the past that every time when touched the channel line we saw a pullback.

I hope all this make sense to all and after all said and done the market can go either way very easily. With earning seasons and the possibility of stronger gaps I don't think we can predict market action for the longer term. This makes swing trading high risk. Can be SPY weekly 2T, SPY reversal from channel line and QQQQ move down from daily range. Also SPY can move up on 10sma weekly bounce (what always show strong pace), SPY can break above channel line and QQQQ can break up from daily range. Right now, both scenarios are very logical. For me that means same old same old.

I will follow market and I will go with individual names as usual. Like HANS, SFI, PCP, ETR, MTD etc. We have a number swing trades currently from last week. Most of them look good while market is strong. I look for bull traps, so we had several short trades. I look for the same this week. Perhaps a little less volatility with much less important news coming out this week.

I will just follow market action.

Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02052007qqqqweekly.jpg
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http://www.ivicacharts.com/diagrams/2007/02052007dia60.jpg

I am always available via email and in the trading room if you have any questions.

Ivica Juracic

resistance

Hook Shot said:

DWL I don't think we can predict market action for the longer term. [/QUOTE said:

Interesting commentary... I too need to see the sp500 prove it's breakout..

I've taken your quote out of context a bit - to make the point that I think we can predict the stock market in the Long Term... :cheesy: Look at any 10, 15, 20, 30 year chart of the Dow, India, Hong Kong, Australian, Spain, Brazilian ............ etc and we might notice a clear trend in place :cheesy:

Have a good day

Click to expand...

if you connect may and th 2 previous his on the one year chart you come up with 1460 res on sp5oo cash

Click to expand...

Agree with you. I was look for next few days, didn' mean for that long period. Agree with you, we have nice uptrend last several months

Wish you nice trading day
Ivica

Market commentary for 02/06/2007

Good day!

We saw a range day yesterday which makes it difficult for trading in any direction. The good news is the indices stayed in a 60 min consolidation area which brings a higher possibility to see another move up. The QQQQ is still in 60 min cup and handle pattern while the DIA and the SPY are above 20sma and 60 min support area. That is an important support area if we are to look for a move up. Since we had range day the odds to see more activity today increase. Most of yesterday commentary is still valid and right now it is still hard to predict a direction. If we want to see a move up we want the Indices to stay in a 60 min consolidation which yesterday did. For a low risk setup it is best to see another day like Monday. In other words the SPY and DIA need more rest on the daily chart for more consolidation. Since we still don’t have scenario we have a 50/50 chance to move up on the intraday charts. I will treat any move up as a day trade because we still need further consolidation. if we see move a down then I will look for the 10sma on the daily chart as support area. In the meantime we will follow open trades and for smaller time frame setups (15-60 min). We are still in earning season and that can bring some whippy action with the morning gaps. It is best to find “own way” charts like ETR and AKAM yesterday. For swing trades risk is still higher and please keeps that in mind.

Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02062007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02062007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02062007spy.jpg
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http://www.ivicacharts.com/diagrams/2007/02062007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02062007dia60.jpg

I am always available via email and in the trading room if you have any questions.

Ivica Juracic
[email protected]

Market commentary for 02/07/2007

Good day!
As expected, we had a consolidation day. The market was also whippy which makes trading (day or swing) very high risk. The indices need more consolidation for a low risk setup. They did pull back on the 60 min charts. The QQQQ again was the weakest and the DIA and SPY much stronger. This can easily be seen on the 60 min charts.
This pullback is as we expected, honestly, I thought that move down would hold for another 15/30 min wave down. We really didn't see a change on the daily charts and that bodes well for traders on the long side. The SPY and DIA are strong enough to hold market up and QQQQ range action can break in any direction now. With that action, the possibilities for daily move up increase and with another consolidation day and we will be ready for that.
I will expect another whippy day. Earnings could bring some action tomorrow in the morning especially with CSCO earnings being just ok. For now, the risk for swing traders is the same. It is recommended to stay with intraday moves. For those who read my commentary regularly notice that nothing really has changed since Monday. Not to repeat myself with the same commentaries please go on the site and under archive you can see all market commentaries.
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02072007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02072007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02072007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02072007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/02072007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02072007dia60.jpg

I am always available via email and in the trading room if you have any questions.

Ivica Juracic
[email protected]

Market commentary for 02/08/2007

Good day!
The market jumped to news highs yesterday morning. The day started with small QQQQ gap up and the Indices held the morning strength. After the 14:00ET reversal period we saw intraday reversal. That action again brought uncertainty for longs in this market. As usual, these reversals are short lived and the markets like yesterday recover almost back to the highs of the day. It is way to risky to play these short cover rallies. Unfortunately, this kind of action is whippy and that is what I will expect for today. We still don’t have clear daily signal and it isn’t unusual that after to short consolidation (SPY and DIA 60 min) we saw intraday strong reversals. The QQQQ is back to high area of daily range and SPY and DIA made slightly new daily highs.
I don’t have strong bias for today. If I must make a choice, I am leaning more to the long side than the short side. We have been going with intraday moves and that is probably best for now. Whippy market action suggest bigger stop so we can avoid being whip sawed out of a position by false moves. I still think that market needs a longer correction for a low risk setup. In the mean time, we will go with it and trade with less risk than usual. A reversal can come at anytime and it can be strong like yesterday. Since every move down reverses, we haven't seen continuations for short side trades.
For day traders trading gaps is good way to increase profit. So I always look for gaps in the morning, especially traps like FRX yesterday.
Trading small, trading smart and following market is what I will do today
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02082007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02082007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02082007spy.jpg
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http://www.ivicacharts.com/diagrams/2007/02082007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02082007dia60.jpg

I am always available via email and in the trading room if you have any questions.
Ivica Juracic

Market commentary for 02/12/2007

Good day!
Perhaps we are getting that break from consolidation. Remember it can break either way. This could be the start of a weekly correction. I do know it is too early to say after just one weak day regardless how strong it was. After several choppy days the market started a correction yesterday right at 12:00 pm. I don’t know if that is significant but 15 min avalanche hit strong and we saw correction from daily high for the DIA and the SPY and the QQQQ is back in the middle of the daily range. The QQQQ continued its weekly consolidation and the SPY went back to the previous high support area. You can see how the previous resistance area become the support area now. It is important area for SPY because if it goes back under that support the SPY will not see any new daily highs for a while. In that case, the SPY will go back to its weekly consolidation area (base). It is interesting how channel lines hold every DIA try to break up or break down. Take a look on the daily chart how the DIA made new daily/weekly highs the last few days and that it was slightly a higher high and was enough to touch the channel resistance. After all this the DIA Friday went back to channel support line and we have same action as from December 2006. if we break the channel line we can see a great correction and that is what I expect the next few days.
Those who follow my commentary know that I was expecting a longer weekly correction several weeks ago. The market has been very strong so after one weak day I can't say this is a weekly correction. That will continue to be my focus and I will look for that possibility during the week. I will look for a weekly pullback to the 20sma support area for SPY and DIA and the QQQQ range support line (red line and previous high support area). That is my expectation but I will follow market and we will see. For now open Friday shorts look great, however, we shall see if the sell continues the first part of the week.
For the very near term we can expect after strong intraday move (big bar on the daily chart) the next day to see a consolidation day. The possibility of another trend day is not high. If that would happen that will be a sign of real weakness in the market. We rarely see this. I will look for the usual action and that will be 30/60 min correction. We need that time frame correction (consolidation), because Friday move down was so strong the 5/15 min correction will not be enough for a low risk setup. Shorter time frames will be good for faster trades only. Everything before the 30/60 min consolidation will be good for faster trades only. If we look 30/60 min chart and if we like to see low risk a setup then we need few days of consolidation. If we will get daily a continuation pattern (we need to see consolidation at lows).
If we expect a consolidation day then we can expect high risk market for swing traders, and mostly “sell high, buy low day”, and since I’m not that kind of trader since I look for breakouts and continuations. I expect a slow day and my activity will not be same as Friday activity. It is important to recognize what is happening in the market and follow it. If there is a change I will just go with it. But from charts that are in front of me that is what I will look for Monday.
In case we see more selling and another trend day down, great, I will follow open short positions. Trade smart.
Good luck trading today!!!!

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http://www.ivicacharts.com/diagrams/2007/02122007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02122007dia60.jpg

I am always available via email and in the trading room if you have any questions.

Ivica Juracic
[email protected]

Market commentary for 02/13/2007

Good day!
There is something to the song that says you know when to hold em and when to fold em. Yesterday as expected was one of those days. After the strong move on Friday it is normal to see a high risk consolidation day. On the 15 min charts, you can see that every new 5 min selling wave was slower and slower with weaker pace. That is sign that the market need a longer correction on the 30/60 min chart. A lower risk probability will not happen until we see another day or two of consolidation. That means we can expect a higher risk market today. I expect a bounce in the morning. It will be nothing as strong as Fridays move down but more as a correction from yesterdays low. If that is the case then we can use that possibility to enter long day trades.
The 200sma is always a stronger support area on any time frame. The DIA and the SPY are at 200sma on the 60 min chart. Usually on the first try at that support area it will hold and we can see bounce. That is the possibility which I will look for this morning. Right now, we can't expect any longer bounce that can be used for faster intraday moves. There is a difference is with “own way” stock, like traps, gaps etc.
For the longer term, my bias is on the short side as I look for a daily/weekly correction. In the case we see weak open or a gap down which is always a possibility during earning season it will be to early to have a low risk short setup.
During consolidation days important is to not trade with same risk as when we have trend, so please keep that in mind.
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02132007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02132007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02132007spy.jpg
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http://www.ivicacharts.com/diagrams/2007/02132007dia.jpg
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The markets seem to be in pivotal pressure condition today,

I will watch (mer) and few other leading stocks, a breach of either the high or the low of yesterdays range
can decide the trend of the next few days in the SP500

Market commentary for 02/14/2007

Good day!
History does repeat. Just look at the market and that is what we got. After Friday’s strong move down and Monday’s consolidation yesterday we saw a reversal. Today started with a gap up and we saw exactly the action that I expected during the morning. Unfortunately, the rest of the day I was on the wrong side of market. The major reason was I didn't expect the morning continuation. The QQQQ was the weakest index while the SPY and the DIA made nice recovery and back again above daily 20sma area. The DIA daily channel support line held again and we are back in the middle of daily range. Since Friday’s selling was strong, I will not expect the DIA or the SPY will see new daily highs anytime soon. Especially since the QQQQ still remains under the daily 10/20/50sma resistance areas. But that action could bring divergence which is the same as we had yesterday. Until the QQQQ or technology sees some strength we can continue to see the SPY and DIA outperform the QQQQ.
This is the reason I expect high risk, whippy trading action today and until the market decides what direction it will take I will trade with small risk and number of my trades will be less than usual.
I don’t have strong bias for the morning, earning news can gap the market in the morning, and I think that market can flip around without revealing its daily direction. I will wait to see market does at the open and monitor its breath and then I will go with the market action. Risk for swing traders will remain high and it is best is to start will a small position and then add if trade improves.
Good luck trading today!!!!

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Market commentary for 02/15/2007

Good day!
From a short term bearish bias to a short term bullish bias in few days. That pretty much explains the market action this week. The FED chairman says things are ok and that gives everyone the ok to buy. Don't you wish it was that easy?? After the gap up in the morning we saw a continued strong move up the rest of the day. The previous daily high and range area stopped yesterdays QQQQ action. The DIA again stopped at daily channel resistance while the SPY made new weekly high. All these reasons are telling us that we can be more on the bullish side right now. We still don't have a low risk swing setup pattern I will stay in the same mode about risk. Looking at the 60 min charts I will like to see consolidations first and then possible continuations. That is what why I will wait for a longer time. On the 60 min charts we saw two buying waves and we still have room for another move up. This without rest will increase risk because of past action. In the morning I will wait to see the market action and I will follow it. This is the same as I have done the last several weeks.
Individual names we have traded are going well for now in both directions. Risk for swing traders remain higher and I will stick with intraday moves. Longer term the Indices can break up from weekly consolidations and the action today can help us to achieve that. Best is to stay with strongest names for long side and weakest names for short side which is exactly what I do all the time.
I will go over the gainers lists to see if there will be some traps and bigger gaps for intraday action.
Good luck trading today!!!!

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DWL said:

The FED chairman says things are ok and that gives everyone the ok to buy. Don't you wish it was that easy??

Click to expand...

Gee... I listened to him and I didn't hear him say anything about whether I should buy or sell. Do you subscribe to his for-pay newsletter?

Well, I don't know how you understand Ben Bemanke speech, but when he talks about easing inflation for me that is good sign for bulls and in my opinion we saw that reaction. Maybe I understand something wrong, who know, but still think that his speech helped market to staying strong.

Ivica

Bernanke learnt his lesson when he first came into the job...an off cuff quip to a journalist got out & the markets tanked....highly embarrassing.

Now he chooses his wording very VERY carefully ....& now splurts out typical FED speak, ie don't say too much new (& if you do counteract it with a "however if..."), change the odd word here & there, let the markets react how they want to react, but don't, repeat DON'T be the one who was so clear & lucid with his statement that any major market reaction can be attributed to what you said!

We're talking about central bankers after all!

My apologies if someone understand wrong. I'm not lucid one, or smartest trader. In my commentary, I just told how market reacted and I'm just trader who follows market action. However, definitely we can say that market liked his speech, no matter how we understand it, reaction is up and that is what I follow. I'm TA trader and charts are my tools, but again, my opinion is that market like his speech and market reacted with strong intraday move up. Definitely, I'm not reason for that reaction. Here I just try to bring my expectations for the market possibilities for the next day and near future from charts view, nothing else.
Regards
Ivica

Market commentary for 02/16/2007

Good day!
We got a narrow range day which I was hoping for. Unfortunately not exactly the type of NR day we wanted to see. For a continuation pattern we need to see consolidations at the highs but we don’t want see a new high. That is what happened yesterday. The consolidation we saw yesterday had aslightly higher high and the continuation of previous resistance areas that eventually stopped yesterday activity. For the QQQQ that is upper daily range resistance area, the SPY number resistance area (146.00) and for the DIA the daily channel resistance line. Without a healthy consolidation which we did not see and today being options expiration I expect to see whippy intraday action today. Most option expiration days are whippy which add to risk. I’m a conservative trader and when I see a high risk market my activity slows down. It wouldn't be unusual for me not to take any trades today. The way to trade a whippy market is to use smaller lots and a larger stop amount. That way you will avoid false moves and fast reversals. In a whippy market you can see a trading pattern that can stop you out by just a couple of cents and then a fast reversal to new highs/lows. Being less active is also good on whippy days because overtrading is a trap most inexperienced traders fall. Another point in a whippy market is for the trader to be fast with exits to assure profits since it is logical not to expect the same risk/reward as usual.
I don’t have strong bias for the morning so I will wait open and I will follow market action.
Good luck trading today!!!!

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http://www.ivicacharts.com/diagrams/2007/02162007spy.jpg
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http://www.ivicacharts.com/diagrams/2007/02162007dia.jpg
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Ivica Juracic

DWL said:

Well, I don't know how you understand Ben Bemanke speech, but when he talks about easing inflation for me that is good sign for bulls and in my opinion we saw that reaction. Maybe I understand something wrong, who know, but still think that his speech helped market to staying strong.

Ivica

Click to expand...

I think you got what Bernanke said correct. But that doesn't translate into buying/selling equities. If the market anticipated this news then maybe stocks have already moved. If the market has still not accepted this (and it turns out to be true) then the markets will go up.

I expect the markets to go up, but one cannot draw a direct relationship of the future economy direction and magnitude with the future market direction and magnitude. Sometimes the market moves early and sometimes it moves late.

ajaskey said:

I think you got what Bernanke said correct. But that doesn't translate into buying/selling equities. If the market anticipated this news then maybe stocks have already moved. If the market has still not accepted this (and it turns out to be true) then the markets will go up.

I expect the markets to go up, but one cannot draw a direct relationship of the future economy direction and magnitude with the future market direction and magnitude. Sometimes the market moves early and sometimes it moves late.

Click to expand...

andy,are you still looking for a swing up first part of march?

ammo said:

andy,are you still looking for a swing up first part of march?

Click to expand...

I was looking for a blow-off starting in late January. Since we are at mid-February now, I am leaning toward more basing until around March 9th. Even though the "market" is making new highs, the COMPQ and SOX are lagging. I think they both will move up strong when the SOX hits the next time line.

http://stockcharts.com/c-sc/sc?s=$SOX&p=W&yr=5&mn=0&dy=0&i=p16843744108&a=80395635&r=110