US market commentary

Market commentary for 04/22/2008

Good day!
The market action today was consolidation once again. There is not much to say about it and if we take a look at the 60 min charts we can see that Friday's consolidation continued into the new week. Trading risk was high all day. The main reason for that was the trundles range action and the divergences in the indices, which we can see on the charts. The DIA and the SPY are forming possible reversal patterns with a possible lower high and an avalanche, however, the QQQQ looks strong and ready for buying continuation on Tuesday, The daily gap is holding very well for now. If I draw lines on the QQQQ chart the odds for a break up increase. That will be the 3rd buying Wave.

http://www.ivicacharts.com/diagrams/2008/04222008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/04222008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/04222008qqqq60.jpg

Volume is again lower and lately that is normal. I don’t like that kind of action, but that does not mean I won't follow it for possible ideas As I said above, I will look for a daily continuation. My bias is long but cautious. Risk will stay higher because of volume and in that kind of action we can expect to see chart reversals. We can also see on the daily charts that the indices are already on the move and for low risk setups we will need several consolidation days.

http://www.ivicacharts.com/diagrams/2008/04212008dia.jpg
http://www.ivicacharts.com/diagrams/2008/04212008spy.jpg
http://www.ivicacharts.com/diagrams/2008/04212008qqqq.jpg

My focus will stay the same and o/n trades will be higher risk due to the market action and earning season. Monday's low is now a strong support area and resistance areas are also drawn on the charts in case we see market strength.


Wish you all good trading!!!
Kind regards.
Ivica
 
Market commentary for 04/28/2008

Good day!
The market digested a whole lot of bad news and pretty much ignored it. First MSFT came out with a soft outlook and the stock weighed on the indices all day. Next came the consumer confidence report and it was the worse reading in 25 years. This took the indices even lower. Then came the rumor that an Iranian ship was fired upon and that took oil back over $119 a barrel. The one bright spot was the Dollar continued to rally into the Fed meeting next week. The markets ignored all the bad news and continued to rally from the lows and finish in the positive side. While that is positive for the markets going forward the volume was very low so basically Fridays action had little conviction and little confidence moving forward.

Friday session brought the same action as several days before. The sellers took control and we saw strong an intraday move down. After three 15 min selling waves indices started to consolidate and as we have seen before we didn’t see any continuation. Instead we saw a reversal. This time the DIA and the SPY were the strongest and reversal was strong enough for take out Thursday's high. The SPY even reached a slightly higher high. On the other side the QQQQ was the weakest and only got back half of morning move down. On the 60 min charts we can see that action is very whippy with very slow buying pace.

http://www.ivicacharts.com/diagrams/2008/04282008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/04282008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/04282008qqqq60.jpg

Intraday we had whippy action resulting in big dally bars without much result. The SPY and the DIA closed at previous week high while the QQQQ reached slight higher high. Indices have room for another move up on the daily charts but if intraday action will stay same trading risk will stay higher. Reason why indices are so whippy we can see on the weekly charts. After Thursday volume, higher the average, Friday volume was again at average amount. Support areas are staying the same and that area is the 100sma plus coming 10/20sma and closest resistance area is 200sma.

http://www.ivicacharts.com/diagrams/2008/04282008dia.jpg
http://www.ivicacharts.com/diagrams/2008/04282008spy.jpg
http://www.ivicacharts.com/diagrams/2008/04282008qqqq.jpg

Right now, to determine the future bias, the weekly charts are the most important. We can see the indices continue move up from the weekly low on low volume. Previous low is now the resistance area. This is still over head for the DIA and the SPY. Both formed continuation patterns which will increase the odds for a break up. Negative is the volume, but with a break up volume can increase and the break up is still an open scenario. The QQQQ closed under 50sma which is strong a resistance area and the volume is light also.

http://www.ivicacharts.com/diagrams/2008/04282008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/04282008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/04282008qqqqweekly.jpg

Generally I think that situation is very mixed. I see the odds for move up, but I also see odds for a reversal. Resistances over head are strong and volume is light and those are odds for a reversal. On the other hand the daily consolidation (even wild) and weekly small range bar are odds for continuation. Conclusion is risk is high and that is most important for us to be concern of as traders. If I must bet, I will say that we have more chance for reversal but all that can change with one strong up day on bigger volume. I will follow market day by day and then will see where that will bring us. I can see us moving up to the daily 200sma at start of the week and then a reversal during second part of the week which could result with a weekly pivot and weak close. Of course that is just guessing. Reason why we can see that “guessing” scenario is that our shorts have not worked lately and all look like indices want break up. Since the daily 200sma is strong a resistance area that could be the trigger for pullback. More important is to recognize risk and it is higher and every overnight trade is risky and that is reason why we don’t have many it lately. Patience is also very important because market will come back and swing risk will decrease and then we will use them as we did before.

If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 05/01/2008

Good day!

We saw the usual pre FED action and that was a move up in front of the FED decision at 2:15pm ET. On the 60 min charts we can see that the indices reached new daily highs. It was on light volume and everyone waited to see what the FED announcement would bring. The FED cut interest rates by 0.25 points and the action after the announcement was unusual. We didn’t see a very strong reaction. It was more of a range action without direction. The move down started at 15:00 pm reversal period. It was a strong move down on higher volume and reached Tuesday's low support area. For the rest of the day, the indices consolidated and closed at lows.

http://www.ivicacharts.com/diagrams/2008/05012008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/05012008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/05012008qqqq60.jpg

On the daily charts we can see that the volume was higher (above average amount) and maybe this is the start of a new direction. But right now it is hard to say, because lately we have seen the true direction the day after the FED announcement and we will see what Thursday will bring. Earning season is still here and changes are common. The daily 10sma are the first support areas and no matter how choppy the daily action was it is still is in an uptrend and we must respect that. Also the daily uptrend is still part of weekly correction and the weekly trend is a down trend and we must keep that in mind too.

http://www.ivicacharts.com/diagrams/2008/05012008dia.jpg
http://www.ivicacharts.com/diagrams/2008/05012008spy.jpg
http://www.ivicacharts.com/diagrams/2008/005012008qqqq.jpg

If you remember my Monday commentary and the scenario that I mentioned, we can see that that scenario is still possible. We saw strength in front of the FED on light volume and choppy action. That kind of action can result in a sharp breakdown on strong volume. Is Wednesday after the FED action the trigger... we will see. The charts for now suggest a move down for Thursday, but again I need to repeat that earning news can change that. The market is still high risk and lately we haven't seen much continuation in any direction. Before that risk will remain high. We took two swing shorts hoping that will happen and I will look for that possibility in my scanning for a watch list but I will also be prepared for any change if the choppy action returns. Caution and patience are still very important.

If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!
Kind regards.
Ivica
 
Market commentary for 05/05/2008

Good day!
The day started with strong gaps up into weekly resistance areas. The Indices didn’t have the strength to hold their morning gaps and we saw selling pressure for most of Friday's session. The morning gap was filled and around the 14:00 pm ET's reversal period and after 15 min double bottoms, the indices started with a recovery and closed the day in positive territory. For the QQQQ that was more or less a flat close, while the DIA, as the strongest of Friday's session, traded back half of its' gain and closed in the middle of its' daily range. Overall we can say that the market closed strongly at new weekly highs.

http://www.ivicacharts.com/diagrams/2008/05052008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/05052008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/05052008qqqq60.jpg

The DIA closed above its' daily 200sma resistance area as did the QQQQ, while the SPY still has some room to reach it. Friday's volume was average and that supported the bullish action that we have had over the last few weeks and we can see that on the daily charts. Thursday's breakup and Friday's continuation is part of the 4th daily buying wave after March's lows. The start was choppy and we can see that the last breakout was strong which is more clear on the weekly charts. Usually after three waves we can expect a correction and any new wave is more and more risky for new swing trades. Honestly, the market strength surprised me after the strong weekly move down, but the only thing that we can do is follow the market action. Is this all part of a full recovery or is the market just taking a breathe before more weakness. We will see, but on the weekly charts we can say that the possibility for the short continuation is cancelled for now. The reversal is too strong for that.

http://www.ivicacharts.com/diagrams/2008/05052008dia.jpg
http://www.ivicacharts.com/diagrams/2008/05052008spy.jpg
http://www.ivicacharts.com/diagrams/2008/05052008qqqq.jpg

As we can see on the weekly charts, the indices reached their strong resistance areas. The previous support area becomes resistance and after four daily buying waves the charts suggest that the odds for a correction are higher. The volume on the recovery from weekly lows decreased which is another argument for that. That is a possibility, but also we can see a strong break up with higher volume which will bring the indices to previous weekly highs and will form weekly double top patterns. Right now that scenario is open too because even though the indices reached stronger resistance areas, they closed strongly and next week's action will be very important for that possibility.

http://www.ivicacharts.com/diagrams/2008/05052008diaweekly2.jpg
http://www.ivicacharts.com/diagrams/2008/05052008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05052008qqqqweekly.jpg

If the indices consolidate at highs, or if their daily bull trend continues next week, then the odds for a weekly/monthly double top will increase. If the indices see a sharp correction from their resistance areas, then the odds for a weekly correction after four daily buying waves will increase. Right now, with the weekly charts on the move, and without consolidation, it is hard to say which direction is more possible. For that I need to see the behavior of the consolidation and from that I can make more clear conclusions.

If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!
Kind regards.
Ivica
 
Market moment

NOTE:; apologies for every grammar mistakes

I like write few words about actual market moment. Lately trading was difficult and trades didn’t work well as usual. There are several reasons for that. I think that market is at important moment when we could see reversal on the daily charts what can result with swing daily move down. If we will staying in line and trying to find lower risk setups, for that possibility we need to see daily reversal pattern. That mean sharp break down on bigger volume and strong selling pace. That will be daily initial move for swing move down possibility. Something what should look like this:

http://www.ivicacharts.com/diagrams/2008/05082008diad.jpg

I used DIA daily chart, but can use SPY or QQQQ it is same. Without those action indices will very possible just jump around on daily chart without trend what will result with daily range and could look like this:

http://www.ivicacharts.com/diagrams/2008/05082008diad1.jpg

On the daily chart indices already saw four buying waves; no matter how choppy they was it was daily up trend. Reason why trading is more difficult lately is daily choppy or whippy action with many open gaps at the open what ask to us to use bigger stops to not be stopped by inch and then see how chart back to main direction. That is one way how to trade when action is choppy. It means using bigger stops. That will result with less risk/reward trades and higher risk. Another way is to not to trade or be very very fast scalper and don’t expect great r/r result. Unfortunately I can’t change market action; I just can give open options.

Why market act on this way lately? Reason is sharp move down what we had on weekly charts, also you can use monthly charts for that:

http://www.ivicacharts.com/diagrams/2008/05082008diaweekly.jpg

http://www.ivicacharts.com/diagrams/2008/05082008spyweekly.jpg

http://www.ivicacharts.com/diagrams/2008/05082008qqqqweekly.jpg

We can see that after double bottom, the DIA and the SPY break above previous high what destroyed possibility for weekly continuation pattern. Right now, what we present is fight between previous high (now support area) and resistance area what we can see on the chart. The QQQQ weekly chart right now just staled on resistance area (previous support) and as I mention several times we will see what action this week will bring. Problem on weekly move up from lows is decrease volume what all make more tricky. For swing move down possibility there are several close support areas (10/20sma) and all will server support areas.

Summary of all this is that right now (unfortunately) I don’t see big change in market action from trading risk view. I hope that indices will start with daily trend down because that will be opportunity for continuations. If charts will start with range (no trend action) then risk will remain higher.

I hope that this market view helping a little to see market moment right now.
If anyone have any comment or any question please feel free to contact me

Kind regards
Ivica
 
Market commentary for 05/12/2008

Good day!

Friday started with a gap down and stayed in a range once again. It was the same as Thursday's action. The move we expected to see on the DIA and the SPY's 60 min charts was gone with the morning gap down. We can see that all three indices stayed in range. The market looked weak all day but intraday long trades did much better than short trades. I kept expecting Wednesday's continuation to start, but that never happened. The DIA found support at it’s' 200sma 60 min.

http://www.ivicacharts.com/diagrams/2008/05122008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/05122008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/05122008qqqq60.jpg

The SPY is at its' daily 20sma support area, while the QQQQ found support area at its' daily 10/200sma support area. For the SPY and the DIA we saw a leg down on the daily charts. I still think that we could see a weekly reversal, but that can happen with more daily jumpy action and in that case we could see a head and shoulder pattern, but for now that is just guessing. The Indices haven’t formed any low risk patterns on the daily charts and we can expect that this type of action with gaps and range action could continue next week too.

http://www.ivicacharts.com/diagrams/2008/05122008dia.jpg
http://www.ivicacharts.com/diagrams/2008/05122008spy.jpg
http://www.ivicacharts.com/diagrams/2008/05122008qqqq.jpg

After the market opens we can start with fast trades (scalps) which work best in this kind of market action. Since continuations aren't working well lately, my focus will be on swings with larger stops and scalp trades. Scalps are not my favorite type of trading but for now that is what market giving us.

In my opinion, volume is the main market problem. Without volume we can’t see “healthy” moves in any direction which can result in the same kind of jumpy action we have been seeing without strong direction and pace. On the weekly charts we can see that the indices made a red bar and the DIA was the weakest and broke down, under its' previous weekly low. The QQQQ was the strongest and closed above its' 20sma support area. The DIA and the SPY reached their support areas (previous resistance is now support). Last week's volume was light and it was just the first correction week after the indices reached resistance last week.

http://www.ivicacharts.com/diagrams/2008/05122008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05122008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05122008qqqqweekly.jpg

For the longer term, I’m staying with the same opinion that I have repeated several times in last week's commentaries. We have seen only the start of a correction from the weekly/daily trend up. I didn’t like the daily uptrend on decreased volume and I didn’t trust it much. But also I don’t like last week light volume on the correction start. The DIA broke under its' previous bar’s low (weekly chart) but on very light volume. The SPY and the QQQQ's volume was slightly higher. We can see many support areas in case the indices go down but we can also see resistance overhead. I know this all sound messy, but I am just trying to explain why we can continue to see the kind of choppy action we had over the last few weeks. My focus will stay the same until the market action changes.

If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!
Kind regards.
Ivica
 
Market commentary for 05/13/2008

Good day!

Symbol Last Net Net% Symbol Last Net Net%
INDU 12876.31 +130.43 1.02 DIA 128.76 1.26 0.99
S&P 500 1403.58 +15.30 1.10 SPY 140.46 1.56 1.12
COMPX 2488.49 +42.97 1.76 QQQQ 49.09 0.88 1.83






Monday opened a little higher and didn’t bring much weakness, especially after the 10:00 am reversal period. Obviously the 60 min continuation consolidations didn’t work. In spite of that we saw a strong intraday reversal on light volume. The QQQQ was the strongest again and traded back to its' daily highs, while the DIA and the SPY's previous 60 min highs were too strong for Monday. Unfortunately, the continuation didn’t work again, but I’m not ready to trust the bull side for more than just fast trades just because of Monday's action. Traders who know me know that that is not my style, but right now that is the only safe area for lower risk trades because continuations aren't working lately.

http://www.ivicacharts.com/diagrams/2008/05132008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/05132008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/05132008qqqq60.jpg

Lets look at the daily charts to see why I’m still not a fan of the long side, at least not yet. The daily volume was light. On the SPY and DIA charts I drew a scenario that is possible right now. The QQQQ's action is too strong, however, $50 is strong number resistance and it is close and we could see a correction after that. I’m still not a fan of that scenario either, but I mention it because right now the odds for that look reasonable to me. After four daily buying waves and with strong resistance area overhead I am not comfortable with the long side for more than fast intraday trades. The DIA and the SPY will have strong resistance around their previous daily highs and if they won’t form lower highs and H&S patterns, than double tops will be another open pattern possibility.

http://www.ivicacharts.com/diagrams/2008/05132008dia.jpg
http://www.ivicacharts.com/diagrams/2008/05132008spy.jpg
http://www.ivicacharts.com/diagrams/2008/05132008qqqq.jpg

I don’t know what will be, but I just know that tomorrow's action will help us to determine future direction. I mentioned in the trading rooms several times that lately setups have been working on the weekly charts and on the 5 min charts. That means swing trades with larger stops and scalp trades. Since I’m not a fan of larger stops I have been trading faster trades. If we use the same scenario for the indices charts, than I would like to see patterns on the weekly charts and that means we could see jumpy action on the daily charts which will result again with difficulty with overnight trades. Generally, I want to say that for lower risk setups it is better to follow a setup on the weekly charts than on the daily charts, for swing trades. Because of that for tomorrow my focus is the same. ..fast intraday moves. I truly hope that the market will change soon and will once again support swing trading.

If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!
Kind regards.
Ivica
 
Market commentary for 05/19/2008

Good day!

After mixed intraday action, the indices closed barely flat on Friday's session. During this session we saw similar action to what we saw on Wednesday and Thursday. The day started with strong selling pressure and during the morning the indices lost most of Thursday's gains with the DIA found support at Thursday's low. On the 60 min charts we can see that the selling pace was the same strength as it was on Wednesday and the reversal after lows was again similar to Thursday's buying pace. The only difference was on the DIA's action because it wasn’t strong enough to close at Thursday's high. We can see that the DIA stayed in a 60 min range with the same support and resistance areas. The SPY stayed in trading channel, while the QQQQ forming a 60 min pennant what is usually a bearish pattern.

http://www.ivicacharts.com/diagrams/2008/05192008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/05192008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/05192008qqqq60.jpg

On the daily charts we can see that the DIA closed at the same area and that is under its' 200sma resistance area, which is the same as the SPY. Both have room for another daily move up to reached their previous resistance areas. For the SPY that is its' gap area from 01/03/2008 (blue arrow) and for the DIA that is its' previous high (red arrow). We can all see that the QQQQ is showing the strongest daily uptrend and every touch of its' daily 10sma finished with new highs. From our moving averages class we know that this is a sign of a strong trend. Also we can see that the QQQQ already filled its' 01/03/2008 gap and reached its' strong resistance area. With a strong close at highs and with the DIA/SPY's room for a move up, the odds for another move up on Monday are quite possible.

http://www.ivicacharts.com/diagrams/2008/05192008dia.jpg
http://www.ivicacharts.com/diagrams/2008/05192008spy.jpg
http://www.ivicacharts.com/diagrams/2008/05192008qqqq.jpg

Now, let’s take a look at the weekly charts. We can see that the DIA and the SPY are at their resistance areas, as is the QQQQ. From the weekly charts I don’t see room for another swing move up without resistance. There is a bit of room and that move could happen on Monday. On the DIA and the SPY charts the bounce from lows is strong, not as strong as the selling pressure into lows, but much stronger than we like to see for any possible continuation. The primary trend is still down and we must respect that. On the other side, when we look at the QQQQ chart, it is hard to talk about trend because the bounce is very strong and it is on lower volume, but it’s gone too far for any downtrend continuation.

http://www.ivicacharts.com/diagrams/2008/05192008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05192008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05192008qqqqweekly.jpg

Now what is the general conclusion? The weekly trend is down, but bounces from lows are too strong for us to expect a move down into new weekly lows. The daily trends are all up and all are near or at strong resistance areas. The indices have a bit of room for a move up in the first part of the week and that is what I will look for. We all know that after a trend is done, and I think that the indices have come to that point on the daily charts, we never know if we will we see a pullback or if we will see range action before any new trend. So, we don’t have any new swing signals right now. My focus will be on individual names (strongest and weakest) and for now I will look at both sides with a slightly stronger focus on the short side (weakest charts), something like XLV's weekly bear flag. Also I will scan for intraday setups after the market opens.

If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 05/27/2008

Good day!

A quick view of the indices' table shows us a lot about the divergence that we had during Friday’s session. I expected selling pressure and the DIA filled those expectations and reached the support area that was marked on Thursday's commentary chart. That was the 3rd selling wave on the 60 min chart. Also the DIA closed at lows and I think that it will still have room for weakness on Tuesday morning. The QQQQ had the strongest action with the SPY being between the weakest DIA and strongest QQQQ. We can see a third selling wave there too, and the SPY has room for another move down until it’s' 50 or 100sma on the daily chart. After the open the move down was the same as the DIA, a consolidation at lows, which suggests for another move down. When we carefully look at the 60 min charts we can see that every new selling wave is shorter, which can result with a gap down or weakness at the open on Tuesday but not with a stronger selling wave. The QQQQ was strongest and with the DIA formed a divergence all day. We can see on the 60 min chart that it barely broke under Thursday's low and traded back into a range, above its' 200sma support area.

http://www.ivicacharts.com/diagrams/2008/05272008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/05272008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/05272008qqqq60.jpg

On all three 60 min charts we can see that the brown line (10sma) is the key resistance area for trends. The SPY and the DIA are still under that level, while the QQQQ closed above which resulted with a divergence continuation into Tuesday's open. On the daily charts we can see the same story about weakness and strength. The QQQQ is still holding above its' 200sma, while the DIA is already under all of its' moving averages and the SPY (again in the middle) closed above its' 50/100sma. Another important thing is volume. Wednesday's selling pressure increased volume and with obviously stronger selling than buying pace we can expect more of a correction in the future.

http://www.ivicacharts.com/diagrams/2008/05272008dia.jpg
http://www.ivicacharts.com/diagrams/2008/05272008spy.jpg
http://www.ivicacharts.com/diagrams/2008/05272008qqqq.jpg

Weekly volume supports that possibility. The DIA formed a large red selling bar and closed right at its' 20sma support area, the last support area before its' previous low (red line on the chart). The SPY closed near its' 10sma and its' 20sma is not that far, so with weakness in the early part of the week, that area can be reached. The QQQQ is holding its' 50sma (green line) and if that doesn’t hold than the next strong support area is its' 10sma. Obviously the DIA has the best chance to see its' previous lows again.

http://www.ivicacharts.com/diagrams/2008/05272008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05272008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/05272008qqqqweekly.jpg

OK, now what are the expectations for this short upcoming week? I think that the indices have room for weakness in the morning, but I won’t be interested in new short trades. That weakness will be a good chance for exits on open trades. The reason why new short trades are too risky is we have already had three selling waves, we have a small amount of room until support areas, and the daily has extended action. I will look for a selling correction on the daily charts. Possibly a correction until we reach the 10/20sma, now resistance areas, which could be a new opportunity for swing trades. Of course that is guessing for now, but for sure new short trades are high risk and odds for a daily correction are probable. For that I will look for possible 15/30/60 min reversal patterns.

If anyone has any questions or comments, please feel free to contact me

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 06/02/2008

Good day!

Friday's action was more or less range type action. Trading risk was higher because of this range action and we once again had divergences between the weaker DIA and the stronger QQQQ. We can see that on the 60 min charts. The DIA formed a kind of bull flag; the SPY stayed in a range without any intraday trend, while the QQQQ broke up to new intraday highs but barely closed in positive territory. If we look at the above table, we can see that the changes were very small and that is another reason why trading risk was higher. After the 4th QQQQ buying wave, I will look for a reversal. We can see that the last buying wave was very slow which also suggests a correction. The DIA broke down from its' consolidation before the close and the SPY stayed in it’s range without changes.

http://www.ivicacharts.com/diagrams/2008/06022008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/06022008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/06022008qqqq60.jpg

On the daily charts we can see that the DIA stayed under its' 10/50sma resistance areas, the SPY closed right at its' 10/20sma crossover try and the QQQQ is get closer to its' previous daily high and forming a possible double top pattern. After Thursday's move up, Friday's volume was low. Since the QQQQ didn't form the H&S possibility we had been looking at, it is now possible it might form a 2T pattern. The SPY H&S pattern is still in line, while the DIA is forming bear flag. When I look at all three charts, I will expect more weakness next week, because if those daily pattern will work all three will have short signals.

http://www.ivicacharts.com/diagrams/2008/06022008dia.jpg
http://www.ivicacharts.com/diagrams/2008/06022008spy.jpg
http://www.ivicacharts.com/diagrams/2008/06022008qqqq.jpg

Let’s take a look at the weekly charts. First what I look at is volume. Last week's volume was low on the reversal, while the week before had strong volume with the selling pressure. This is a signal that we have more sellers than buyers right now, and more short interest. We can also note how the DIA's reversal was much weaker than the QQQQ's reversal.

http://www.ivicacharts.com/diagrams/2008/06022008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/06022008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/06022008qqqqweekly.jpg

When we include the possible daily patterns and volume, I will expect more weakness than strength in the future. Volume will be very important. It will tell us about interest. If the market will decide to go up and if volume will increase than it will be a signal for more of a recovery, but if volume will be light as it was last week then trading risk will increase and my focus will be on intraday setups and fast trades. Since the charts suggest that volume is stronger on the short side, my focus will be on short setups during my weekend scanning. Note that the month is over and it is great opportunity for scanning over monthly charts which can give us a list of what we can follow longer time for all kind of trades.

If anyone has any questions or comments, please feel free to contact me

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 06/03/2008

Good day!
As we expected, the week started with selling pressure which was the result of daily patterns. The DIA bear flag, the SPY H&S and the QQQQ double top. The morning selling pressure was strong with higher volume. We can see that the indices reached their daily support area which was too strong to be broken on the first try. We can see those support areas on the 60 min charts as previous support areas and we can see them on the daily charts as moving averages support areas.

http://www.ivicacharts.com/diagrams/2008/06032008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/06032008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/06032008qqqq60.jpg

For the DIA that was its' previous low support area (this bar is not correct and we can see that on the 60 min chart. The DIA reached its previous low and bounced). The SPY reached its 50sma daily support area, while the QQQQ reached its 10/20sma support areas. Since intraday action was extended with the morning selling pressure, trading risk on new short setups during the afternoon increased. On the other side, the correction was slow but still enough for a good fast long trade (WNR).

http://www.ivicacharts.com/diagrams/2008/06032008dia.jpg
http://www.ivicacharts.com/diagrams/2008/06032008spy.jpg
http://www.ivicacharts.com/diagrams/2008/06032008qqqq.jpg

You know that I look at the market action this way: move-rest-move. We got a move and the rest started and I won’t be surprised if this rest period will continue during the Tuesday session. Because of that I think that trading risk will increase and that it will be higher than on Monday when we expected a break down from the daily patterns. Now the move is behind of us and for low risk setups we need a good rest and for that we need time. The best case scenario will be if we will see a small range type action near Monday's lows which will lead to a continuation pattern. But that is just speculation at this point. We will see what the market brings us, but this time I will be focused on faster trades and “own way” charts. I think that we will see more selling pressure in the future and I think that the weekly correction isn’t over. If anyone took PAYX, from the chart of the week session, you can look to move your stop on it. I missed that one but I will look for an intraday setup based on the 15/30 min base.

If anyone has any questions or comments, please feel free to contact me

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 06/09/2008

Good day!

What a day. I am very rarely trapped in stocks but I must admit that Friday's action surprised me. I think that we don’t need to explain much about Friday's action because it is obvious. After some bad news, the indices opened with large gaps down and for the rest of the day we saw continuation with a strong selling pace and extremely heavy volume. This bad news with the trap helped to see large red selling bars on the daily charts. From a technical view we can now say that Thursday's action was a false break up from the daily bearish mode and weakness. Thursday's action stopped many short traders and brought them into long mode and then Friday did the opposite. After all we can see that the indices followed thru with the expectations that we had from the start of the week. On the 60 min chart, I drew blue lines which will explain why this week's trading risk was very high. We can see that the move-rest-move scenario didn’t work. Continuations didn’t work. There were many sharp moves in both directions which was a result of the large weekly divergences, which we can see on the weekly charts.

http://www.ivicacharts.com/diagrams/2008/06092008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/06092008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/06092008qqqq60.jpg

We can also see it on the daily charts. After Thursday's action and the nice bear trap, Friday’s bull trap brought the DIA's 3rd selling wave. It was the strongest one. Usually when we have that strong of a move down we can expect more selling pressure and that is what I will look for over the next few days. The DIA reached its' previous support area, the SPY reached its' 100sma daily support area while the QQQQ traded back to its 200sma 60 min support area. I believe that this is not the end and that the QQQQ will reach the bottom of its range support area. The DIA the SPY have good odds to see their previous weekly lows.

http://www.ivicacharts.com/diagrams/2008/06092008dia.jpg
http://www.ivicacharts.com/diagrams/2008/06092008spy.jpg
http://www.ivicacharts.com/diagrams/2008/06092008qqqq.jpg

I don’t want to go too far but the correction on the weekly charts can be the start of a larger weekly/monthly selling wave. Of course that is for the DIA and the SPY. For now the QQQQ has its' own way and is basing at highs which we can see on the weekly chart. It is sitting at its' 50sma support area and since the bounce from lows was much stronger, the odds for the weekly divergence continuation is very high. I believe that because of that trading risk will remain higher for some period, but that will be something that we can measure in weeks, not days.

http://www.ivicacharts.com/diagrams/2008/06092008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/06092008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/06092008qqqqweekly.jpg

Unfortunately my view on the market action is not optimistic, but our job is to find a way to work with that. Some things have changed from last year. Some patterns aren't working as they did before etc etc. But that is not unusual. Some patterns work in this market action some work in others. On the 60 min chart I illustrated how we didn’t see much follow thru over the few last days and how that made trading with the 60 min charts very hard and high risk. But technical analysis doesn't change. It remains the same. We just must find timeframes where trading works best for us. Since we have a large weekly divergence for now that means the smaller timeframes will be the safest place. Should the QQQQ loses its' daily range and start have confluence with the SPY and the DIA, than risk on weekly setups will decrease. My opinion is that this weekly divergence is something that is killing the market right now. Since I am a technical reader and I translate bad or good economic news into a technical view, I trade reactions .... I don’t trade news, just their reaction and then trying to go with the market. Of course that all can change with good news, because it is much easier to make money in a bull market. For now, however, with oil, the weak dollar and other bad news around the world, this translates through my TA to give me a bias down and that is what I will be looking for. My mentoring course staring at Monday and my activity will be more focused there but remember that for low risk setups we need rest (consolidation, pattern) and after Friday's huge move down, I don’t see much of a chances for new low risk setups (unless they will be scalp trades).

If anyone has any questions or comments, please feel free to contact me

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 06/16/2008

Good day!

Friday morning's action was similar to Thursday. The Indices opened with a gap up. This time we saw more weakness right after the open and the SPY/QQQQ filled their gaps. After that we saw strong moves up above the previous highs, which broke the 60 min trend lines. The buying pace was very strong with heavy volume which suggests that the daily lows will hold this time. After the morning run, the indices started with corrections and until the last 30 minutes there was not much action and trading risk was too high for new setups. On the 60 min charts we can see that the indices formed reversal patterns (phoenixes). I was hoping that the phoenix would hold until Monday, but the strength before the closed brought the Indices to new daily highs and their previous resistance areas.

http://www.ivicacharts.com/diagrams/2008/06162008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/06162008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/06162008qqqq60.jpg

The DIA was the strongest and closed under its' 10sma on the daily chart, the SPY closed at its 100sma, while the QQQQ closed at its' 200sma daily resistance area. With Friday's strength, the indices broke their intraday downtrends lines and set the stage for possible reversals from daily lows next week. There are plenty of resistance areas and for that possibility, daily volume and pace must increase. For now we can expect that the daily lows will hold for some time. The weekly charts will show us more clearly what we can expect for next week.

http://www.ivicacharts.com/diagrams/2008/06162008dia.jpg
http://www.ivicacharts.com/diagrams/2008/06162008spy.jpg
http://www.ivicacharts.com/diagrams/2008/06162008qqqq.jpg

The DIA support area held and formed a pivot bar on the weekly chart with heavier volume. We can see the same situation on the SPY and QQQQ weekly charts. Obviously the QQQQ is still the strongest and its weekly pullback was the smallest. It closed above its 10/50sma support area, while the SPY closed above its 20sma support area. The same applies to the daily charts.... there are several resistance areas, especially for the SPY/DIA weekly charts (10/20/100sma).

http://www.ivicacharts.com/diagrams/2008/06162008diaw.jpg
http://www.ivicacharts.com/diagrams/2008/06162008spyw.jpg
http://www.ivicacharts.com/diagrams/2008/06162008qqqqw.jpg

Now what can we expect for next week? It is option expiration week which usually brings whippy market action and this time the charts support that scenario. The weekly volume is higher, the support areas have been reached and we have several resistance areas very close. We can also see that the selling volume is heavier than the buying volume which leads us to the conclusion that we still have more sellers than buyers. My opinion after all is that is we can expect a consolidation (correction) week with lots of whippy action. I don’t expect strong bounces on the SPY/DIA charts. The weekly divergence can continue, between the stronger QQQQ and the weaker DIA. On the weekly charts, the trend is still down. Generally I will expect that the indices will take a break from the selling pressure continuation, without a strong reversal, but with more choppy daily action.
If anyone has any questions or comments, please feel free to contact me.

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/02/2008

Good day!

Tuesday's action indicates the possibility for a daily reversal and that is something that I will focus on. The day started with a gap down and after the open consolidation on the intraday charts, the good news at the 10:00 am ET reversal period saw the indices bounce and filled their gaps with strong intraday runs. But that strength was not enough for consolidations at highs and after the indices reached their 60 min 10/20sma, they all traded back to lows and formed double bottom patterns. For the DIA that was a lower low, for the SPY it was a slightly lower low, while for the QQQQ that was exactly the open low support area. We can also see on the 60 min charts that volume was higher than on previous days. The strength of the afternoon reversal is a sign of a possible daily correction after last week's move down.

http://www.ivicacharts.com/diagrams/2008/07022008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07022008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07022008qqqq60.jpg

On the daily charts we can see that volume was heavy and we finally had a green bar. Is that the bottom??? We can’t know right now, but the charts suggest that. After a move, for new low risk setups, we need rest and that is exactly what I will watch for now. It will be important to see the correction pace and action and after that we will see if this is a longer term bottom or just the market taking a breathe before a downtrend continuation. After the DIA's 4 selling waves it won’t be unusual to see a longer daily/weekly correction.

http://www.ivicacharts.com/diagrams/2008/07022008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07022008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07022008qqqq.jpg

My focus over the next few days will be on the long side and I will expect to see a daily/weekly correction. For now the safest place will be with intraday setups and with “own way” charts like SII. I will use those charts for swing setups while intraday setups will be used for day trades. Also, right now I’m not interested in new swing short setups, because the market charts are too extended for that.

If anyone has any questions or comments, please feel free to contact me
Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/03/2008

Good day!

Oil was up and the indices were down. That is the short explanation of Wednesday's action. From a technical analysis view that means the indices retested Tuesday's low and formed 60 min double bottom patterns. We saw very choppy market action for most of the day. Every try to break up after the strong close on Tuesday failed and brought the indices lower. The day started with a small gap up, enough for a 60 min double top and at the end of day we got a double bottom. We can clearly see that on the 60 min charts.

http://www.ivicacharts.com/diagrams/2008/07032008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07032008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07032008qqqq60.jpg

The daily charts are showing us the same action which is back to the previous lows. The only difference is volume. Wednesday's volume was lower which suggests that this support area could hold. Right now it impossible to predict that, because with the market weakness over the last few weeks, we could easily see a gap down at the open and some panic action, but we could also see a bounce from the double bottom patterns. Remember that a double bottom can bounce after slightly lower lows and because of that a break to new lows will not be automatically give us low risk short setup. Since my focus is on low risk setups, I won’t take it.

http://www.ivicacharts.com/diagrams/2008/07032008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07032008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07032008qqqq.jpg

The market will close at 1:00pm ET on Thursday and that will be the start of a long holiday weekend. With a very uncertain world situation and the rise of oil, I don’t expect that many traders will be happy holding trades over the weekend. I will expect some action in the morning after the open, possibly for the first 2 hours. I will therefore be focused on intraday setups only and again only on a possible bounce.

If anyone has any questions or comments, please feel free to contact me
Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/08/2008

Good day!

We had quite a ride Monday. The Dow had a 250 point move from the high to the low and back up again. Oil opened the day down almost 5 bucks and it stayed lower all day finishing the day down 4 dollars. The dollar was stronger and a couple of bearish remarks by a couple of fed presidents took the financials and the markets to new lows. The QQQQ did rally back and finish plus for the day. From a fundamental basis I will just say lets wait and see with the official earnings season which starts today with AA reporting after the bell.

From a technical basis the Indices held support for now. Did we see the bottom or not? That is the $64,000 dollar question because Monday brought the indices down to new lows and the same strong reversal. The QQQQ's reversal was back to the morning high, while the DIA and the SPY gave back half the reversal. So the result of Monday's market action is a big daily bar with whippy intraday action and without direction signs. After Monday I don’t have any new bias or opinion about market action. I still think that all scenarios are open.

http://www.ivicacharts.com/diagrams/2008/07082008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07082008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07082008qqqq60.jpg

On the daily charts we can see that support area held and we still don’t have extreme volume. I truly think that we must wait market reaction first and that trading risk is very high. Obviously selling pressure is slowing and with extended charts without enough rest a new low risk short setup is impossible. On the other side we still don’t see any real buying interest and we can't see that pattern forming on the daily charts.

http://www.ivicacharts.com/diagrams/2008/07082008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07082008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07082008qqqq.jpg

I can talk now about trading risk and it is very high for swing trades. On the daily charts we can see that support holding for now and low risk short setups are now out of the question. For the long side it will be nice if we will see a strong intraday initial move and the continuation patterns. But for now we don’t have that and with very choppy daily action all that can easily turn to is a rounding bottom pattern which will remain high trading risk for swing trades and then we will look for opportunities on small time frames and fast trades. Right now I TRULY think that cash is best position and that patience is very important. I know that can be very frustrated, but market action will come back and we must be patient and wait for that. We can’t or shouldn't fight it, so let’s be smart and wait for the market to come to us.

If anyone has any questions or comments, please feel free to contact me
Wish you all good trading!!!

Kind regards.
Ivica
 
the market is not that tough and it is superb for short time play. We need to know we are in bear market and short on rebound. Follow the trend and watch the market closely will bring you decent profit in this "tough" market.
 
Market commentary for 07/16/2008

Good day!
Interesting day for sure!!!! The PPI came out way hotter than expected, retail sales fell off a cliff, European and Asia markets were crashing, oil was up and the dollar fell to all time lows against the Euro. Not surprising the market fell and fell hard down almost 250 points. Bernanke testifying made matters worse saying the economy was going to be worse than previous thought and inflation is a bigger problem. Just as the bottom was coming out, oil started to fall, financials started to rally and the markets rallied all the way back. The markets held support and rallied, Is this the bottom or just a Dead Cat Bounce? We shall see. INTC reported after the bell and beat on both the revenue and earnings, JAVA also reported well. Perhaps these numbers will provide a gap at the open that might be sustained.

Tuesday didn’t give anything new. Weakness in the morning with a move up and move down before close. On the 60 min charts we can see the scenario that was predicted for the day worked and equal move support area held. Indices bounced but trading channel is still holding and indices closed in the middle of it. On the daily chart we got another doji bar and we can see that volume still increasing which suggests uncertainly for the future direction. I don't really have an expectation for tomorrow I don’t have much to say since the last two weeks nothing new has happened and the odds for strong break down increase every day. Because of that my focus will stay same. As traders we can’t know for sure what tomorrow will bring. Chart action can suggest that and right now market action is not helping us. As traders, it is very important to recognize risk and we can know that. It remains high and I will say it is higher and higher. Because of that it is important to trade with very small risk and don’t forget that cash is very good position these days. Let’s wait for the market to move first and then we will follow it.

http://www.ivicacharts.com/diagrams/2008/07162008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07162008dia.jpg

http://www.ivicacharts.com/diagrams/2008/07162008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07162008spy.jpg

http://www.ivicacharts.com/diagrams/2008/07162008qqqq60.jpg
http://www.ivicacharts.com/diagrams/2008/07162008qqqq.jpg

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/21/2008

Good day!

Poor earnings and outlook from GOOG and MSFT resulted in a weak QQQQ which resulted in a daily trap. The financials and the DIA were helped by positive results from C. Even the poor results from MER did not rain on the financials parade from lows earlier this week. Those were the reasons Friday's trading risk was very high and the divergence was very large. We can see that on the 60 min charts. The DIA and the SPY consolidated at the highs which suggests a buying continuation, while the QQQQ consolidation at low suggest a break down. I believe that the DIA will win in that battle, but since 60 min rest period is too small we can’t expect an equal move. I think that we will see a move to the 200sma resistance area and the SPY will see a move to the previous high which is also the daily 20sma resistance area. If that is the case the trading risk for longer than one day will be higher because obviously we saw the initial move from the lows and when a bounce stalls it usually is time for a rest period and I think we can expect s correction next week after the daily bounce. From the corrective action we monitor future expectations. The DIA's first resistance is 200sma on the 60 min chart and 200sma on the weekly chart. The SPY has its first resistance at the daily 20sma, while the QQQQ after Friday's bad news lost most of bounce from lows. For a long continuation it is important from indices to form a higher low which will be a sign for possible weekly correction. My bias for next week will be on the long side and I think that we will see more weekly correction, but many resistance areas are overhead and I think the buying pace will be weaker than the selling pace. That will result in choppy daily action and a higher trading risk. If that is the case I will use larger stops in my trading plan to avoid false stops.

Earnings and oil price changes are dominating our daily trading. With all trades monitor the earnings calendar if you are holding stocks overnight. Monday AAPL reports which can change the mood of technology and the smaller regional banks report all week. If their earnings are poor we probably will lose the entire bounce we had this past week.

http://www.ivicacharts.com/diagrams/2008/07212008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07212008dia.jpg
http://www.ivicacharts.com/diagrams/2008/07212008diaw.jpg

http://www.ivicacharts.com/diagrams/2008/07212008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07212008spy.jpg
http://www.ivicacharts.com/diagrams/2008/07212008spyw.jpg

http://www.ivicacharts.com/diagrams/2008/07212008qqqq60.jpg
http://www.ivicacharts.com/diagrams/2008/07212008qqqq.jpg
http://www.ivicacharts.com/diagrams/2008/07212008qqqqw.jpg

Wish you all good trading!!!

Kind regards.
Ivica
 
Market commentary for 07/24/2008

Good day!
Earnings season, OIL and the dollars strength are the fundamental reasons the market is moving the way it is. If your earnings are good (ISRG) you are rewarded and if they miss(COST) you are punished. Oil breaking down has had a positive impact on stocks whether its good for them or just psychologically making people feel good.

The morning strength of the indices reached exactly the resistance area that we where looking for. That was the DIA daily resistance and $117 number resistance area, 200sma 60 min for the SPY and the QQQQ both were stronger than expected and made their way back to the previous bounce high. The resistance held very nice and we saw a correction. For the QQQQ it was a stronger intraday pullback to 60 min support area while the DIA and the SPY correction pace was much weaker and both fell in the 15 min range. For the rest of the day we didn’t see much action as the range area held which increased the trading risk for new setups.

On the 60 min chart the DIA and the SPY chart I see a possible scenario if when we see another 60 min buying wave. It is interesting that the equal move resistance area is the same as the daily equal move resistance area. Since we are in earning season that scenario is very possible, but also we must know that indices reached daily resistances and all pulled back from the high. That action can continue tomorrow. Right now my focus will be the 60 min consolidation (range) which can break in either direction quite easily so I will be careful watching intraday action for a breakout pace.
For those who are interested for Forex market I like to announce that you can see all uptakes on my site (soon I will open the trading room) and if you will have any question please feel free to contact me.
For stock setups focus will be again on intraday setups and smaller time frames, unless I find an “own way” chart. As I write this AMZN and BIDU had good earnings which are propelling the indices higher. This will probably lead us to a morning gap.
.

http://www.ivicacharts.com/diagrams/2008/07242008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/07242008dia.jpg

http://www.ivicacharts.com/diagrams/2008/07242008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/07242008spy.jpg

http://www.ivicacharts.com/diagrams/2008/07242008qqqq60.jpg
http://www.ivicacharts.com/diagrams/2008/07242008qqqq.jpg

Wish you all good trading!!!

Kind regards.
Ivica
 
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