US market commentary

[xpertstocktrader]

Market commentary for 09/20/2007

Good day!
The DIA and the QQQQ touched their previous highs. After a strong close on Tuesday, Wednesday opened with a gap up, which was in line with expectations. Unfortunately that was it for the market action. The rest of the day we saw a correction from highs which finished with a pivot bar on the daily charts. The QQQQ and the DIA touched their previous high resistance areas after their big moves, and I expect that this area will hold for now. The SPY and the DIA daily CCI is above 200, what suggests an overbought market. This coupled with the extended move makes the market ready for rest (consolidation). On the weekly charts, we can see that the Indices formed a cup, so right now we must wait for the consolidation to see where the market will go. That means, again, patience for swing traders. I know that sounds frustrating, because we all waited for a day and half for market action, but there is no other option for healthy low-risk setups.

http://www.ivicacharts.com/diagrams/2007/09202007dia.jpg
http://www.ivicacharts.com/diagrams/2007/09202007spy.jpg
http://www.ivicacharts.com/diagrams/2007/09202007qqqq.jpg

We don't know what the market will do, but we can still recognize risk. For low risk setups, the key is consolidation, rest, and patterns. For that (on the daily/weekly charts), we need time. Our open swing trades are already going very well, but right now new swing setups remain risky. On the 60 min charts, we can see that the Indices started with a correction. Wednesday's high is resistance and the first supports area is Tuesday's close and the 20sma 60 min. For Thursday, I will expect to see market action between those two areas.

http://www.ivicacharts.com/diagrams/2007/09202007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/09202007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/09202007qqqq60.jpg

The extended daily and intraday action does not mean that we won’t have opportunities, but for low risk setups we must focus on smaller time frames (5/15 min charts). I will look for the strongest and weakest names for both intraday directions. For long possibilities, I will pay attention to consolidations near highs and 15/30 min 20sma. When the chart comes to the 20sma I would like to see a bounce and the setup is above the consolidation high with a stop under the 20sma. For low risk setups and good risk/reward possibilities, the 20sma is a very good tool and it is always important to pay attention to it. Since charts are always better than a thousand words, I will show you an example.

http://www.ivicacharts.com/diagrams/2007/09202007cree.jpg

We can see a nice consolidation (triangle) and bounce from the 20sma on the 60 min chart. The setup is above the previous bar's high and the stop under the 20sma. Of course it is important to see other time frames (whole picture), to see if CREE has room for a possible move. If there is strong resistance close to the breakout area, then the setup is too risky and not a good risk/reward trade. I use a lot of this kind of setups, so I think it is worth paying attention to. Since the Indices are extended and need rest for low risk moves, my focus will stay the same, but this time it will be on smaller time frames.

If you have any questions, please email me or ask me in the trading room

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 09/21/2007

Good day!
Well another consolidation day!!! That pretty much sums up yesterday's action. Wednesday's resistance area held and the market continued its’ correction from highs. We can also see that volume is decreasing during the consolidation. Thursday's action was very choppy and slow with a downward pace. But because the action was so slow, the only tradeable patterns were with individual names. The market action didn’t bring support in any direction. On the smaller time frames, we can see that during this consolidation risk is higher and really only good for scalp traders.

http://www.ivicacharts.com/diagrams/2007/09212007dia.jpg
http://www.ivicacharts.com/diagrams/2007/09212007spy.jpg
http://www.ivicacharts.com/diagrams/2007/09212007qqqq.jpg

On the 60 min charts, we can clearly see Thursday's action. Yesterday I explained that the 20sma is a strong support area, and Thursday's action closed exactly on it. The SPY and the DIA are forming 60 min bull flags, while the QQQQ is forming a triangle pattern. For Friday, I will look for a bounce possibility from the 20sma. The correction is with a weak pace, much weaker then the buying into the daily highs. This volume decrease coupled with the fact that the Indices are at strong support, indicate that we could see a bounce.

http://www.ivicacharts.com/diagrams/2007/09212007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/09212007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/09212007qqqq60.jpg

Since the rest period isn’t long enough for an equal move, I will look for Thursday's high or even for Wednesday's high as a good target area. If we see a bounce, I would like to see a stronger bounce with higher volume then the consolidation volume. If that is not the case, we could see whippy intraday action without clear direction. It will be important to follow the action in the morning. If the Indices 20sma 60 min support area doesn't hold, then we could see more of a correction from highs. I know most of us waited on the FED announcement with hope that market would bring more healthy action. After the strong reaction we had, we again have a slow market with which to contend. Another important thing to remember for Friday is that it is option expiration day. Usually that is a whippy day and risk is higher. We will see more stops and false breakouts then usual. One way to avoid that possibility is to use larger stops and be faster taking profit. To stay with reasonable risk, we must take smaller lots that will bring less risk/reward possibilities. Another way is to be patient and wait until next week. This, of course, applies to day traders.

If you have any questions, please email me or ask me in the trading room

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 09/24/2007

Good day!
The Indices moved back to their previous highs. That is a summary of last week's action. Of course, the FED rate cut helped a lot. I had a bullish bias for Friday, but the morning gap up destroyed that idea and most of the move that I expected from the 20sma 60 min bounce possibility was gone right at the open. The rest of the day was a classic option expiration Friday: choppy without any true direction. The DIA and the QQQQ opened with a nice gap up, while the SPY showed weakness right at the open and filled its' gap right away. Let’s look at the weekly charts. The QQQQ is the strongest and closed at its' previous high forming a double top. The DIA's situation is similar because it closed near its' resistance area. The SPY is the weakest because it touched its' resistance area, but also closed much lower which could result in a lower high. All the Indices are forming a “v” or kind of cup pattern and all three are extended. This is not good news for new swing trades.

http://www.ivicacharts.com/diagrams/2007/09242007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/09242007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/09242007qqqqweekly.jpg

On the daily charts we can clearly see the situation from last week's action. We can see that the DIA and the QQQQ started with consolidations near their highs, while the SPY's correction was stronger and could result in a possible weekly lower high. Volume during the last three day consolidation decreased. For now the correction looks good for possible future strength, but for low risk setups we need to see more consolidation days and the pace needs to stay weak. Any strong pace pullback will decrease the breakup possibility. This is a classic situation when we must see a consolidation after a move. All who follow my work know that the basic rule for me is move-rest-move, and right now the Indices are in a rest period. The pattern during the rest period can help to predict the future action. If it is a strong pullback, then we could see triangle action or a reversal pattern for more of a downside move. If the Indices will stay in the formation as the DIA and the QQQQ right now, then we will look for another move up.

http://www.ivicacharts.com/diagrams/2007/09242007dia.jpg
http://www.ivicacharts.com/diagrams/2007/09242007spy.jpg
http://www.ivicacharts.com/diagrams/2007/09242007qqqq.jpg

The rest period if easily seen on the 60 min charts. The DIA and the QQQQ touched their upper range line after Friday's gap up, while the SPY stayed in a bull flag pattern and is slowly moving down. This chart proves again the SPY's weakest action as it broke under its' 20sma 60 min and its whole number is its' next support area. The DIA lost its' 20sma 60 min at the close, but it is still in a range. On the chart we can see that the DIA has already tried to break up twice. If the pullback that started on Friday after the high stays in a range, the next try for highs will be the third try. We all know this will be a good opportunity for more upside. That is one scenario that I will follow for an upside move. The QQQQ 60 min chart is the strongest and after Friday's gap up touched its' previous high and stayed in that range for the rest of the day. For any upside possibility, it is important to stay above its' 20sma.

http://www.ivicacharts.com/diagrams/2007/09242007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/09242007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/09242007qqqq60.jpg

I hope that from all the charts above you all can see the situation that we have now. Several things are important to know. If the Indices will break to new highs, that will be a higher risk breakout because the rest period didn’t hold long enough. The ideal situation will be to see a whole week of consolidation near highs, which will form a weekly continuation pattern. But can we expect an ideal situation? We can only follow the market action. In the case that the Indices break to new highs, then we can’t expect to see an equal move (60 min charts), because that is not enough rest. If Indices will break down, we have many support areas and for swing moves that will be a difficult time. The best cases scenario is the second one and that is the weekly continuation pattern. In that case, next week will be very hard for trading, as is always the case when the market is in a range. All this is telling us that swing trades still don’t have a clear situation, and focus will continue to be on intraday moves, and trades with one to three day maximum holds.
If you have any questions, please email me or ask me in the trading room

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 09/25/2007

Good day!
Monday brought us another consolidation day for the SPY and the DIA. Most of the day had divergences between the weaker DIA and the stronger QQQQ. The day started with a small size gap up and usually gaps that size will be filled right at the open. Mondays wasn’t as expected. The QQQQ bounced strongly to new daily highs and pulled up the DIA and the SPY. Unfortunately they couldn't keep up with the QQQQ and lost all their morning gains. On the daily charts we can see that the DIA and the SPY continued with their consolidations post the rate cut.

http://www.ivicacharts.com/diagrams/2007/09252007dia.jpg
http://www.ivicacharts.com/diagrams/2007/09252007spy.jpg
http://www.ivicacharts.com/diagrams/2007/09252007qqqq.jpg

Intraday selling volume was stronger and that suggests further correction on Tuesday. The SPY and the DIA still have time to reach their first moving average support areas (10sma) and I will expect they will do so before any possible bounce up. On the 60 min chart, we can see that the DIA stayed in a range and closed at its' lower support line. The 20sma is resistance now. The SPY continued with a bull flag, while the QQQQ doesn’t have as clear a situation after Monday's break to new highs. The QQQQ didn’t rest enough for a larger move up and because of that the 60 min equal move was too strong of a resistance. $51 is the number resistance area.

http://www.ivicacharts.com/diagrams/2007/09252007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/09252007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/09252007qqqq60.jpg

On the SPY daily chart one scenario that we could expect is a few more consolidations days, especially if this correction continues with the same volume and pace. For that possibility I would like to see a bounce from the 10sma on the daily chart as trend strength measure. The DIA is consolidating at highs and for a low risk setup needs more consolidation days. It will be best if will stay in this range for the rest of the week. In that case we will have the possibility of a continuation pattern on the weekly chart. I don’t have a strong bias for Tuesday, but will expect more weakness than strength. I will expect that the SPY will continue with this correction until its' 10sma support area. If the correction pace gets stronger with higher volume, then this idea on the SPY chart will be history and the focus will be on a longer correction on the weekly charts. Risk reminds high and intraday moves are still the safest place for making profits.

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 09/26/2007

Good day!
The QQQQ closed at new highs. On Tuesday, the indices opened with a strong divergence. The SPY and the DIA gapped down, while the QQQQ held Monday's low. The problem with the intraday action was the divergence that continued all day, which we can see by looking at the 60 min charts. Over the last few days, the QQQQ has been much stronger than the DIA and the SPY. From the small morning gap down to Monday’s low, the QQQQ showed a trend move to new yearly highs. The daily volume is not that strong and consequently does not confirm the action, bringing concern to the long side. As we expected, the SPY held its' 10sma support area, but for now we didn’t see a strong reaction from this support.

http://www.ivicacharts.com/diagrams/2007/09262007dia.jpg
http://www.ivicacharts.com/diagrams/2007/09262007spy.jpg
http://www.ivicacharts.com/diagrams/2007/09262007qqqq.jpg

The 60 min charts show the SPY and the DIA's buying pace after the gap down was choppy and weaker then the selling pace into the lows. This is not what we like to see for bullish action. Both are still under their 20sma support areas, which are very important areas on the 60 min charts. On the other side we can see that the QQQQ's action is much stronger, which resulted in the intraday divergence. Risk is always higher then usual with these divergences because we don’t have synergy in the market action.

http://www.ivicacharts.com/diagrams/2007/09262007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/09262007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/09262007qqqq60.jpg

Despite the QQQQ closing at new highs, I don’t have a strong bias for Wednesday. On one side we have the strong QQQQ daily action without strong volume. On the other side we have the weak action of the SPY and the DIA. I will wait to see the action at the open and the market breath before taking any new trades. It will be interesting to see if the QQQQ can take control and bring buyers into the market and pull the other indices along. Don’t forget that on the weekly charts the Indices are still in double top patterns and right now swing traders still don’t have support from the market action. My focus is still on intraday moves and that will stay the same until we will see market synergy in any direction. I don’t trust the long side right now, but all that can change if the volume increases and the SPY and the DIA decide to follow the QQQQ action. One more note is that the COMPX still didn’t reach its' previous high, and this action can result in a weekly QQQQ slightly higher high.

Good luck trading today!!!!
Ivica Juracic

 

[xpertstocktrader]

Market commentary for 10/01/2007

Good day!
There is not much to say about Friday’s action. It was the last day of the quarter and I didn’t expect any different action then the last few days. On the 60 min charts we can see that all the Indices stayed in their consolidation areas. The DIA closed the strongest near highs and the triangle pattern looks very nice for a possible breakup. The QQQQ was the weakest and closed under its' 20sma. We had a difficult market last week and that is always the case when the direction is not supported by volume and pace.

http://www.ivicacharts.com/diagrams/2007/10012007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10012007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10012007qqqq60.jpg

The end of the month/week is always a good time to look at the larger time frame charts. If we look at the monthly charts, we can see that the market held strong and looks like the July trend break didn’t hurt the direction. Despite that the QQQQ closed at new yearly highs. The DIA and the SPY closed near highs. Looking only at charts, I would say that Friday's close and last week's action ended very nicely for the potential of new highs and a continuation of the long direction. The DIA weekly continuation pattern is one of my favorites. The nice small bar after the extended bar can bring great risk/reward opportunities. The SPY has a similar kind of continuation pattern, but not quite as nice. The possible double top and previous highs are still strong resistances for the DIA and the SPY. For any future swing direction, volume will be the key and my primary focus.

http://www.ivicacharts.com/diagrams/2007/10012007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/10012007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/10012007qqqqweekly.jpg

On the daily charts we can see this much better. After the FED’s rate cut, the Indices continued to new high without much rest and with volume declines. This is not the best situation for a swing long direction breakup. On the daily charts, the Indices look (the DIA and the SPY) extended and ready for corrections. But the weekly charts suggest that we could see another move up. We could break up to new highs with a strong buying pace and strong volume. However, volume will be the key next week. If the pace will be strong but without strong volume, then risk will increase and we will have to focus on smaller time frames (same as last weeks).

http://www.ivicacharts.com/diagrams/2007/10012007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10012007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10012007qqqq.jpg

Of course, there is an absolute real possibility that the previous highs will hold and the Indices will start a longer consolidation (cup and handle pattern). In that case we could see a handle consolidation which means several weeks without a trend (range action). That scenario could bring some great trading, but until we have that situation, we will have range action and that is always a difficult time for traders. Of course, there is a third possible scenario and that is a strong reversal from the resistance areas. In the second case (handle formation) I will expect to see low volume, but with any of the other 2 scenarios, I want to see the volume pick up. That will be a healthy reaction. If we don't see that, swing traders will have to stay in patience mode, because risk will remain high. If anyone has any questions, please email me and I will be happy to help if I can.

Good luck trading today!!!!
Ivica Juracic

 

[xpertstocktrader]

Market commentary for 10/02/2007

Good day!
NEW QUARTER, NEW RECORD HIGHS!!! The Dow hit a new record high (14115.51), the COMPX closed at new highs (2740.99) and the S&P 500 came close to its' previous highs. The day started flat near Friday’s close. Right after the open, the Indices started their strong move up. The DIA was the strongest and lead the market to new highs. The breakout pace was very strong with higher volume. Since we had synergy in the market everything moved in the same direction. The initial breakout was the strongest, with the highest volume and strongest pace. We had a higher percentage for a strong trend day up which resulted in new highs. If we look more closely, we can see that the big caps were the leaders and market movers, while the small caps failed and didn’t follow along with the market strength.

http://www.ivicacharts.com/diagrams/2007/10022007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10022007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10022007qqqq.jpg

Usually when the market has a trend day, we can expect a strong close with extended moves and increased volume. But since the volume decreased after the morning move up, that was questionable. On the DIA 60 min chart, we can see that the equal move resistance area was reached before the last hour. Volume decreased after the morning run and $141 was number resistance there as well. The SPY had the same situation as well as previous high resistance. The QQQQ didn’t reach its' equal move resistance (still have half point), but $52 served as number resistance during Monday’s action.

http://www.ivicacharts.com/diagrams/2007/10022007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10022007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10022007qqqq60.jpg

If you remember my Monday commentary, you can see that the DIA had its' weekly continuation pattern setup. That was one of the scenarios we expected, however I’m not satisfied with the daily volume. The breakout pace was very strong and I will expect to see continuation with a volume increase. That means that my bias in on the long side, but we must remember that after a strong trend day, usually we will see a consolidation day. So, we can expect back and forth action. In case we see strong continuation, which is always possible, I will use that action only for intraday setups. Unfortunately swing traders still don’t have a clear situation. It is always easier when the day is over, and yesterday's intraday decrease in volume made additional swing trade setups risky , so I stayed in RDEN only overnight. Lack of volume is still a problem for me, but we can only follow the market action. My primary focus is still on smaller time frame moves. “Own way” charts will be the ones to watch. Makes sure not to fall into the overtrade trap if Tuesday brings a consolidation day.

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/03/2007

Good day!
The consolidation day is behind us. As expected, after the strong rally on Monday, Tuesday brought a correction and rest. This is the usual action we would expect after a run like we had on Monday. Nothing goes up or down without rest. The day started flat without much change and for most of the day the Indices showed a gradual pullback from Monday's high. The DIA was the weakest while the QQQQ was the strongest. We can see that on the 60 min charts. On the DIA chart, we can see that the correction was gradual and the selling pace is much weaker then the buying pace into the new highs. Volume decreased all day and this is the kind of action that we like to see for a possible bounce from the 20sma back to highs, and possibly even new highs. I have drawn a line for the scenario we could possibly see in case the DIA bounces from the 20sma. For that possibility, we should see volume increase and a stronger pace then we saw in the correction. In case we see a slower pace, then Monday's high will serve as strong resistance and the likelihood for a triangle pattern increases. On the other side, if the 20sma doesn't hold, then I will look for a stronger correction from highs to the daily 10sma as the first support area. The same situation applies to the SPY and the QQQQ. If we look at the 60 min charts, we can see that the QQQQ was the strongest and the last hour's bounce brought it back nearly to its' highs.

http://www.ivicacharts.com/diagrams/2007/10032007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10032007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10032007qqqq60.jpg

Today's action resulted in a daily continuation pattern, which is one of my favorite patterns. I have spoken in class about the continuation pattern. The setup is above the previous day's high and the stop is under the previous day's low. That is one way. I always like to look at the smaller time frames to see the better risk/reward possibilities. I would like to see the QQQQ consolidate during the morning before it sets up. That way the 20sma 60 min will pick up and it will bring us nice support for the breakout possibility. If it sets up right at the open that will be high risk for me and I will leave it alone. In that case I will follow the action for another setup. The same situation applies to the DIA chart. The QQQQ must stay above its' 20sma 60 min for a long possibility. Otherwise, I will start to watch short setups.

http://www.ivicacharts.com/diagrams/2007/10032007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10032007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10032007qqqq.jpg

We must be very careful at the open. I always like to wait at least 5-10 min before any setup. The SPY still has room to meet its' previous high and a double top pattern is still possible. That is the situation we must watch. My bias is on the bullish side, but I must say, that the intraday action is very important. The market can easily turn and we can see a longer correction. We must pay particular attention to the previous pace and volume. Focus will continue to be on "own way" charts like TUP yesterday. Those kinds of swing trades are always useful, because the market doesn’t have as much of an influence on those kinds of charts. I will also pay special attention to the strongest and weakest names (%gainers and % losers lists). If anyone has any questions, please feel free to contact me.

Good luck trading today!!!!
Ivica Juracic

 

[xpertstocktrader]

Market commentary for 10/04/2007

Good day!
The correction from highs continued. Wednesday's session started flat and without much change at the open. There is not much to say because the correction from Tuesday continued into Wednesday. We can easily see that on the 60 min charts. The DIA stayed in a channel and the correction pace stayed the same. We saw lower lows, and the Indices broke under their 20sma 60 min support area. I explained in yesterday's commentary that the 20sma 60 min is an important support area and if the indices don’t hold it then we can expect more of a correction. That is exactly what we saw. The previous high for the QQQQ is the support area now and we can see the reaction on the chart to that area.

http://www.ivicacharts.com/diagrams/2007/10042007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10042007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10042007qqqq60.jpg

The \correction is still gradual and the reversal volume was not strong. That suggests the possibility for a bounce on Thursday. But, before that, I will expect to see more of a correction, possibly until the 10sma support areas on the daily charts. Should downside volume and pace increase, this possibility could change. For now the action suggests a possible bounce and this time we can expect to see the previous high hold on the first try. That means, if the indices bounce, I will use that situation for a maximum move to the previous high, and that will be the target area. Again, all depends on pace and volume.

http://www.ivicacharts.com/diagrams/2007/10042007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10042007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10042007qqqq.jpg

I took a few short trades like EME and MINI in case we see a stronger reversal, but is it important to note that every overnight trade is higher risk now and I will continue to use small risk. That is very important now. The market is still strong and the 10sma is the first trend test. If we look to the past, the daily move up is above the 10sma (brown line). On the daily SPY we can see that very easily. Every time after the FED rate cut, when the SPY starts to correct from highs, the 10sma is the bounce area into new highs. Because of that it is important for now to follow that support line. Unfortunately I must repeat again that the situation for swing traders isn’t good. I’m focused on "own way" stocks like NST, and again, it is important to use proper risk on them. I will watch for a bounce from the support areas. If we don't see a bounce, that will be good for our open short trades. If anyone has any questions, please feel free to contact me.

Good luck trading today!!!!
Ivica Juracic

 

[xpertstocktrader]

Market commentary for 10/05/2007

Good day!
The consolidation continued on Thursday. The SPY and the DIA formed NR7 bars (narrowest bar in last seven days). There is not much to tell about Thursday's action because if we look at the table above the intraday action produced this very narrow day. On the 60 min charts, this is quite clear. The QQQQ tried to break lower in the morning, but the daily 10sma (brown line) brought it back during the afternoon session and the indices closed above that daily support area. Right now we can expect a fight between the 10sma daily support area and the 20sma 60 min resistance area (blue line). Both are important areas for future direction.

http://www.ivicacharts.com/diagrams/2007/10052007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10052007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10052007qqqq60.jpg

On the daily charts, we can see that the indices are holding very well for now with the resistance and gradual correction suggesting another possible move up. I think that the Indices have room for that. The QQQQ touched its' daily 10sma and bounced from that area. We can see that in the past this has resulted in new highs. After the NR7 bars, I will look for long possibilities and that will be my bias for Friday. But, as always, we will need to follow the market action. In the morning we have the job’s data and that news can move the market in any direction. Jobs data comes out before the market opens and because of that I suggest members be careful with overnight trades. Open shorts did well, and we protected them. TUP is still strong and looks quite nice.

http://www.ivicacharts.com/diagrams/2007/10052007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10052007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10052007qqqq.jpg

For Friday one thing is important and that is the NR7 bar. When we see an NR7 bar on the chart that situation increases the possibility for a trend day. Since we have news right before the open it is hard to predict the direction, but for now, the charts suggest a move up and that will be my focus. When we have the possibility for a trend day it is important to mark the 60 min high/low and very often when that is broken that direction will continue for the rest of the day. If we have a trend day, it will be important to follow the 10/20sma on the 5 min charts, because those two lines are the measure of a trend day. I will repeat from yesterday's commentary something that we can see on the daily charts. If you look at the daily SPY chart, you will see a bounce from the 10sma every time and that is what we want to see on the 5 min charts. Focus is on the long side, but with caution. Also I will pay attention to the 20sma 60 min and the daily 10sma. Both are very important areas for direction. As usual, if anyone has any questions, please contact me

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/08/2007

Good day!
NR7= high possibility for a trend day. That is exactly what we saw on Friday. With the pre-market news, the indices gapped up. The SPY and the QQQQ opened at their daily high resistance areas, while the DIA was the weakest and opened between the highs and Thursday's close. If you remember from Thursday's commentary, after the NR7 day the possibility for a trend day is higher and that is exactly what we saw on Friday. After the morning consolidation and indecision, the indices picked their direction and we saw a trend day up. The QQQQ was the strongest as was the pace. Unfortunately we didn’t have the typical last hour's trend day action with a strong move up and close at highs. Instead, traders decided to take some profits and we had profit taking during the last hour. On the 60 min charts, we can see Friday’s action and we can also notice that the DIA was the weakest, because pace was the weakest. Also it didn’t have enough strength to break to new highs and formed a double top pattern. Since the pace was weaker then the pace before the consolidation, then it is expected that the equal move would be too much for the DIA. On the SPY chart, we can see that when we have the same pace before and after the consolidation, we can expect to see an equal move target area. Because of that I always note that we must follow pace and volume.

http://www.ivicacharts.com/diagrams/2007/10082007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10082007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10082007qqqq60.jpg

The week is over and let’s sees what the charts are telling us for future possibilities and risk level. Third buying waves are in line and on first glance we can see that this buying wave (third) is strong, much stronger than the first buying wave (blue lines). The red lines show the equal move, and we can see that the DIA still have room to reach it. The SPY and the QQQQ are already there. Since the DIA still has room for an equal move resistance and since the QQQQ 3rd buying wave pace is much stronger then the wave before, my bias is on the long side. Those who follow my work for some time will remember that I expected an exhaustion move up with heavy volume to signal the end of the second buying wave. We saw how that finished, with a strong reversal (much stronger then buying pace). But the market is strong and has come back from that pullback even stronger and stronger. I will look again for an exhaustion possibility, especially on the QQQQ weekly chart. This is not a call for new swing trades right now. This is a possibility for open swing trades.

http://www.ivicacharts.com/diagrams/2007/10082007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/10852007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/18052007qqqqweekly.jpg

When the pace is stronger then the pace before the consolidation, usually we can expect more then an equal move and that is the situation that I will look for on the QQQQ. We can see that possibility on the daily QQQQ chart. For now the SPY and the DIA don’t share the same enthusiasm. The DIA Friday bar is small (despite the trend day) and closed near highs which formed a double top possibility. We still have room for one more push up to the equal move resistance area and the same situation applies to the SPY. The problem is that the SPY and the DIA's daily buying pace after the FED rate cut is weaker and slowing down. This can call for caution on the long side. But that does not mean we can’t see another push up to exhaustion.

http://www.ivicacharts.com/diagrams/2007/10082007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10852007spy.jpg
http://www.ivicacharts.com/diagrams/2007/18052007qqqq.jpg

Now what? When we look at the weekly chart, it is obvious that the market is on the move, and that is good for new swing trades. I know that can be frustrating because when we look back we can say: ohhh what did I miss, what a nice swing move up. But if you remember there was a lot of tricky action during that period (strong move down, big selling volume, summer trading, FED decision, previous highs etc). It wasn’t easy to predict the strong recovery and new highs. The only thing we can do is to follow the market action, and the market is strong and we must respect that. Because of that my focus will be on the long side, but that does not mean I will take a lot of swings and just hold on to them. The safest trades will be with the intraday moves and also possibly 1-3 day swings. We must continue to watch the market action because a top can occur at anytime and in my opinion it is not far. The focus will be the same here. I will continue to look at the strongest charts for long trades, and the weakest charts for short trades. On the market's last pullback, shorts did very well, but not for more then for a maximum of overnight. Please feel free to contact me with any questions you may have.

Good luck trading today!!!!
Ivica Juracic

 

[xpertstocktrader]

Market commentary for 10/10/2007

Market commentary for 10/10/2007

Good day!
The market continued its climb up. The day started with a small gap up, which we expected to fill in the morning. After that the indices went back to the area they opened at and stayed in a range until the 14:00 pm EST FOMC minutes. During that period the action was very choppy and only good for scalps. The real move was seen after the FOMC minutes where the indices broke out to new highs. The breakout pace was very strong which we can see on the 60 min charts. The DIA was the strongest and its' breakout volume was the greatest, while the QQQQ break was the weakest with the weakest volume.

http://www.ivicacharts.com/diagrams/2007/10102007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10102007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10102007qqqq60.jpg

Anyway, the indices closed at highs which suggest that this direction will continue on Wednesday morning. We could see a gap up and possibly an exhaustion move on the daily charts. For that possibility we must follow pace and volume and both must be strong. On the daily charts we can see that the DIA and the SPY still have room for a move up to meet their equal move resistance areas (blue line)

http://www.ivicacharts.com/diagrams/2007/10102007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10102007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10102007qqqq.jpg

Pace and volume are very important now, because if we don't see that then we could see flushing intraday reversals anytime, which will shake weak hands. Since the market is coming into an extended daily area, we must be very careful on the long side. I will only look for longs on the intraday (day and scalp trade) action. New swing long trades are high risk now and are only good for “own way” charts. Swing short setups aren't plausible yet because the market is too strong. In summary, swing traders will still have a difficult time and must wait for signals. My focus will again be on the strongest and weakest names and for that I will use intraday scanning (% gainer and % losers list) for possible gap setups. If you have any questions, please feel free to contact me

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/11/2007

Good day!
Wednesday's chop fest is behind us. We saw another day with strong divergences. On the 60 min charts, we can clearly see Wednesday's action. The DIA was weak all day and lost all of Tuesday's gains, and after strong selling pressure met support at its' previous 60 min low (10sma daily). The SPY is forming a triangle and is still moving above its' 20sma support area, while the QQQQ was strongest but barely broke to new highs. On the 60 min chart, we can see that the QQQQ's buying pace continues to weaken, and after three buying waves every new breakup is more and more risky.

http://www.ivicacharts.com/diagrams/2007/10112007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10112007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10112007qqqq60.jpg

Because of the intraday divergence and the choppy action, Wednesday’s activity was good only for scalpers. Traders using longer timeframes had a difficult time finding good low risk setups. On the daily charts we don’t see much of a difference. The SPY and the DIA are still in their third buying waves, but on the DIA chart we can see that the buying pace is very weak and the long direction remains suspect. The QQQQ still can see a strong exhaustion move, but if the other Indices don't support that we could once again see an intraday divergence that will keep risk at a high level. Of course, that is just one possibility. We can’t know what the market will bring tomorrow, but we can read risk. Right is high right now and that is very important information for new trades.

http://www.ivicacharts.com/diagrams/2007/11102007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11102007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11102007qqqq.jpg

We must trade with smaller lots than usual and use much more patience. Also it is important to note that we are entering the earning season which add risk for overnight trades. Overall, nothing has changed over the last few days. My focus is the same, trades that are faster and faster. I am following several swing possibilities and “own way“ charts and on every setup I will take small lots. If the trade improves then I will add on the next intraday setup. That is the only way to keep risk in check. Scalp trades are another way, however, I’m not a good scalper, so I tend to avoid those possibilities. Before any swing trade, it is important to check the company's earning's report date because it is too risky (for me) to stay in a swing before the report. We can’t change the market action, but we can use proper risk. During the course of my trading, I have seen this kind of market action and I know that easier days will come. So the key word is PATIENCE. Trade small and trade smart. Should you have any questions, please feel free to contact me.

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/12/2007

Good day!
Has the market reached its' top? On Thursday we saw the reaction that we have been expecting for several days, a strong reversal. The buying pace was weak and choppy with light volume over the last few days, and consequently the move was suspect. If you remember my commentary from Wednesday I mentioned that we must use smaller time frame for fast trades because a strong reversal and flush could come at anytime. Thursday's action proved our concern for the long side was correct and I believe that everyone who read the commentary and used it for their trading stayed out of trouble. The day started with a nice gap up which brought the SPY and the QQQQ to new highs, but again volume was not heavy and follow thru was questionable. The DIA gapped to its' previous high and during the morning pressure barely made a new high. At that point we had several long trades, but all were faster setups. I didn’t want to take any large stops because risk was too high and the buying pace was weak with choppy action. We can see that on the 60 min charts. The blue line shows you Thursday's buying pace. The SPY reached its' daily equal move resistance area, the QQQQ its' number resistance area ($54) and the DIA its' equal move resistance area.

http://www.ivicacharts.com/diagrams/2007/1012007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/1012007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/1012007qqqq60.jpg

During market hours it is important to pay attention to reversal periods. On Thursday 14:00 pm EST's reversal period brought sellers and for the rest of the day we saw very strong selling pressure with heavy volume and a strong pace. Another blue line on the 60 min chart shows you the selling pace. Obviously it is much stronger then the buying pace and we saw quite a flush. Lots of profit taking brought the indices to their daily support area (10sma). On the QQQQ daily chart, we can see that Thursday's bar was the largest in quite a while, larger then the green bar after the FED rate cut with heavier volume. That kind of action suggests to us, that it will be very hard for the market to get back to highs over the next few days. It is very possible that this is the correction that I have been looking for over the last few days and I expect that this correction will last several days.

http://www.ivicacharts.com/diagrams/2007/11122007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11122007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11122007qqqq.jpg

Unfortunately this is not a swing signal yet. We can’t go for them right away. If we look back on the 60 min charts, we can see extremely strong moves, and after every move we expect to see rest. That is what I will expect for Friday’s action. The type of action we see helps predict the future move. If we see more selling, then we could use that action only for faster trades, because without rest, risk is again too high for low risk setups. If we see consolidations at lows, that will be an opportunity for continuation next week. If we should see a strong bounce, then we could expect daily/60 min triangle action over the next few days. So, all depends on tomorrow's action. Because of that I don’t expect a very active day. We took IIIN yesterday and that is very good example of an “own way” chart. That kind of chart is always my focus and I took that despite the market action. Thursday's selling helped, but IIIN had a setup in the morning and did very nicely all day. For other possibilities I will use intraday scanning and that will be primarily for day trades. Maybe we will see a trend reversal, maybe the market will come back strongly... we just can’t know that. But we know that after yesterday's reversal, we still don’t have a swing signal and swing traders must respect that. IIIN is a good example that there will always be good swing setups, just the number of them is not always the same.

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/15/2007

Good day!
The bulls are still alive!!! Friday’s action brought more strength then was expected, but that was not unusual. For me, as a trader, it is very important to read risk on the charts and despite the surprise I had with Friday’s strength, we had an ok day. The day started with an average gap up which I expected to fill right at the open. That was the case with the SPY and the DIA but the QQQQ was the strongest again and after the gap continued with its' up direction. Until midday the market gave us opportunities for intraday trades, but after that the day was over. We saw the type of range action that is worthless for trading because there were no low risk setups. On the 60 min charts, we can see a “v” bottom and a cup and handle pattern which could bring the indices back to their daily high areas.

http://www.ivicacharts.com/diagrams/2007/1015007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/1015007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/1015007qqqq60.jpg

We can see that the indices had a fight with the 20sma all day and broke it before the end of the day, however it was too late for low risk trades. Let’s take a look at the weekly charts before calling any expectations for Monday. The SPY and the DIA formed a doji bar, which suggests indecision. Also there is still the possibility for a double top pattern. Both charts say proceed with caution. The QQQQ looks healthier and continued its' third buying wave with a strong pace which suggests the possibility of continuation. Last week the QQQQ reached its' number resistance area and equal move resistance area.

http://www.ivicacharts.com/diagrams/2007/11152007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/11152007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/11152007qqqqweekly.jpg

To have a clearer picture, it is best to look at the daily charts. I believe that you all remember Thursday's strong intraday reversal and that is the action that marked last week. That action resulted in a weekly doji bar on the DIA and the SPY charts. Also volume was very strong which brought a lot of caution to an already extended long sided market. When we add the double top possibility and the QQQQ's equal move, we have reasons to be very cautious on the long side.

http://www.ivicacharts.com/diagrams/2007/11152007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11152007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11152007qqqq.jpg

It is expected that the bulls won’t give up easily. Maybe the indices marked their tops, but that does not mean that the bears will take control. First we must see a much needed consolidation (correction) after the strong weekly move up. I won’t be surprised if the indices will reach their high areas or even slightly new highs. That action will form a 60 min double top pattern. That possibility will be a chance for long traders to close open trades and get back Thursday's losses. I believe that the market is near its' highs, maybe saw highs or will see slightly higher highs. I also think that it is very close to starting a weekly correction. That is not a swing short setup, that is just a possible top. That does not mean an automatic trend reversal. The earning season is coming and that will bring lots of moves on earning's news. For now I’m staying with the same focus. That means: “own way charts” and intraday strongest and weakest names for intraday setups. Please feel free to contact me if you have any questions. Have a safe and wonderful weekend.

Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/16/2007

Good day!
Monday started flat, without any significant change at the open. Right after the open, however, the bears took control and we saw strong intraday selling pressure. The DIA and the SPY were weaker than the QQQQ and found support at Thursday's low. That didn’t hold and the next support area that we saw was the 20sma daily area which is always a strong support area especially after the nice daily trend up that we had over the last few weeks. The QQQQ was the strongest and is still holding above its' 10sma support area which isn’t unusual because its' daily trend was the strongest and the 10sma is its' first trend test. Usually after a trend up, the first attempt at breaking the 20sma will fail and that is the situation we had on the DIA and the SPY daily charts. Since the indices reached their strong daily support areas, a bounce during the last 30 min was not unusual. The bounce pace was stronger then the selling into support and I will therefore expect that Monday's low will hold on Tuesday morning.

http://www.ivicacharts.com/diagrams/2007/1016007dia.jpg
http://www.ivicacharts.com/diagrams/2007/1016007spy.jpg
http://www.ivicacharts.com/diagrams/2007/1016007qqqq.jpg

On the 60 in charts we can see that the selling pressure was strong. The SPY and the DIA did an equal move down compared to Thursday’s move down. We can’t say the same for the QQQ because with the bounce before the close, the QQQQ formed a higher low which could lead to a triangle formation. Because Thursday's move down was as strong as it was it will be hard for the QQQQ to see new highs on the late bounce.

http://www.ivicacharts.com/diagrams/2007/11162007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11162007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11152007qqqq60.jpg

When we look at the action from Thursday's move down to Friday’s bounce and again Monday’s move down, that leads us to the conclusion that a daily correction has started and is under sway. On the DIA daily chart that action is clear. Rounding highs are quite visible. As I mentioned before, that doesn't mean the DIA will go straight down (that possibility is always open), that means more up and down bouncing without a clear daily direction. Usually this is the kind of action we can expect from a correction when a trend move is over and the daily charts suggest that possibility. All possibilities are always open, and with earning season underway we can expect gaps in both directions. We cannot know what kind of correction we will have. During a correction the safest place is with intraday moves and that again means scalp/day trades, especially for long trades. For swing possibilities, I’m more focused on the short side because I think that the market is looking like we have seen a daily high and the long side is too risky for me right now We took several swing short trades, and it is important to use proper risk (small risk for start). If the trades improve we can always add on intraday setups. My bias is more on the short side right now, however, because earnings can change everything, I will continue to use proper risk/reward.

 

[xpertstocktrader]

Market commentary for 10/17/2007

Good day!
Tuesday's market action was definitely high risk. In other words it was quite a worthless trading day. Even scalp traders had a difficult day. The open didn’t signal a lackluster day because the indices opened lower and selling pressure after the open brought new intraday lows. This suggested more of an intraday trend action type day. After the new lows on the indices, however, we were back in a range and stayed there for the rest of the day. The range action was very choppy without low risk opportunities for good r/r trades. On the daily charts we can see that the indices are holding their support areas and the QQQQ's 10sma support area is still holding. Volume was higher than usual which suggests the possibility for a Wednesday move. Options expiration on Friday and earnings from some of the large cap stocks such as INTC and YHOO add to that possibility.

http://www.ivicacharts.com/diagrams/2007/10172007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10172007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10172007qqqq.jpg

The range action after the open's weakness can be seen clearly on the 60 min charts. Also we can see that the DIA and the SPY met their equal move support areas. Another important thing is the selling pace. Obviously the selling pace into Tuesday's low was much weaker then the selling paces on the first move down on Thursday of last week. This action suggests a bounce possibility for Wednesday's open.

http://www.ivicacharts.com/diagrams/2007/10172007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10172007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10172007qqqq60.jpg

Good earnings from INTC can help with Wednesday's bounce. The indices are already trading higher and I will expect that we will see a gap up in the morning. The QQQQ is still the strongest and the INTC news could bring it to its' daily high resistance area. This is all part of the consolidation process and I don’t expect a daily move up continuation. We might see a slightly higher high, but not a strong daily breakup. We can see more gaps in the morning during earning season in reaction to good or bad earnings. My focus will continue to be intraday moves and lower time frames (5/15/30 min).

Good luck trading today!!!!
Ivica Juracic
[email protected]

 

[xpertstocktrader]

Market commentary for 10/18/2007

Good day!
What a day!!! We saw wild intraday swings in the market. The day started with a strong gap up, especially for the QQQQ. The previous 60 min high resistance was too strong for buying continuation and after the strong open, the indices began a strong reversal. The DIA and the SPY were weaker (as usual lately) and they filled their gaps first. But Tuesday's close didn’t stop the morning selling pressure and both indices saw new lows until they found their support around the 200sma (red line). The QQQQ was the strongest but couldn’t hold and reached Tuesday's low with a strong exhaustion 60 min bar. The morning volume was strong and with a strong selling pace, not the expected consolidation or gradual correction.

http://www.ivicacharts.com/diagrams/2007/10182007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10182007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10182007qqqq60.jpg

After the 14:00 pm EST reversal period, the QQQQ took that reversal word very seriously and bounced back to its' open area. The bounce pace was as strong as the morning selling pace. The DIA and the SPY stayed in their 60 min trading channel. The DIA closed under its' 20sma resistance area which is another resistance level. If we take another look at the QQQQ 60 min chart, we can see a wild range action with strong moves from the resistance areas to the support areas and back. That kind of action will increase risk and make it more difficult for swing trades. I expect this same action will continue until the end of this week, especially with Friday's option expiration. On the daily charts we have a mixed situation. The QQQQ is staying near highs and the 10sma is still a very strong support area. On the other side, the DIA closed under its' 20sma which is now its' resistance area along with its' 10sma.

http://www.ivicacharts.com/diagrams/2007/10182007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10182007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10182007qqqq.jpg

Wednesday's volume was high which is another sign of indecision. The Indices' action is very whippy without clear direction and right now we can’t know what will happen. This is the usual action we see in the beginning of a correction and really the only sure thing that we can read now is our risk level. I expect that we will have the same type of market action for the next two days and risk will remain high. My focus will be on intraday moves and not on swing trades. The reason for that is the whippy market action, no daily direction, daily divergence between the DIA and the QQQQ and the earning season. For those who use it, partials should be protected before the close and it is best to trade small lots. Because of that my main focus is on smaller time frames and I expect that to continue thru the week's end. I will be out of the trading room on Friday (option expiration day) and my recommendation is to trade small and use PATIENCE. Don’t forget that cash is a position too. If anyone has any questions, please feel free to contact me

 

[xpertstocktrader]

Market commentary for 10/19/2007

Good day!
Things can always be worse. That is the summary of Thursday's market action. Also remember that with Friday being option expiration day we could be in for some more choppy trading. On the 60 min charts we can see the kind of action we had on Thursday. The DIA and the SPY stayed in their trading channels and after a wild Wednesday, Thursday’s action brought a tight small daily bar. The QQQQ was again a different story and showed the strongest action and closed at its' daily high resistance area. Also we can see a 60 min triangle break up which resulted in its reaching its' previous high resistance.

http://www.ivicacharts.com/diagrams/2007/10192007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10192007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10192007qqqq60.jpg

The daily divergence continued. The QQQQ looks like it could break up, however the SPY and the DIA stayed under their 20sma and look like they have more weakness ahead. Again that will result in a high risk market action and with the addition of option expiration day we can expect a choppy Friday.

http://www.ivicacharts.com/diagrams/2007/10192007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10192007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10192007qqqq.jpg

It will not be unexpected to see the indices explode up, and in another second explode down. Since GOOG reported Thursday after the close, it is very possible we will see a gap in the morning. I don’t have a strong bias with the direction of the gap and I don’t have great expectations for trading on Friday (I’m out of market anyway). If I had to take a guess I would say the long side is more probable. The QQQQ could see new highs with choppy intraday action. There are two ways to trade a choppy market. One is to stay away and the second way is to trade with less risk and use bigger stops. This will help you to avoid false moves which can results with many stops. Also we must be faster with profit taking. This will result with less good risk/reward opportunities, but it also will prevent being stopped many times. Also I expect that the risk of overtrading will be higher then usual. We had good day on Thursday, HANS, PCP, FTBK were good to us. Use the same patience on Friday. Less trades and waits for the right moment to enter and exit. I will be back on Monday and I wish you all a nice weekend and a super trading day.
Thursday, HANS, PCP, FTBK where good to us. Use same receipt for Friday. Less trades and waits to right moment. I will be back at Monday and I wish you all nice weekend and best trading day.

 

[xpertstocktrader]

Market commentary for 10/22/2007

Good day!
I guess Google didn't save the planet. While GOOG beat earnings the rest of the market got spooked with large multi-nationals like CAT, MMM, and HON saying that internationally they are doing great but the US economy is slowing and their US business is poor. Those comments brought the "R" word back and with the market fearing recession, credit problems still lingering and the largest financials in this country continuing to disappoint and the sellers just kept on selling leading to a strong trend day down.

http://www.ivicacharts.com/diagrams/2007/10222007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/10222007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/10222007qqqqweekly.jpg

Looking at the daily and weekly charts of the SPY and the DIA you can see the 20sma is support on the daily and the 200sma is the support on the weekly. If those supports don't hold the market can be in for a larger correction to perhaps to the April lows. The QQQQ is the strongest index but that also sold off hard Friday. It too is at the 20sma on the daily with the weekly well above the 200sma.

http://www.ivicacharts.com/diagrams/2007/10222007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10222007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10222007qqqq.jpg

While today is the 20th anniversary of Black Monday, the market would have to be down 3100 points to match that day. It is interesting to note that oil and energy stocks took a big fall Friday, with the OIH falling 6 percent and SLB falling 11 percent.

http://www.ivicacharts.com/diagrams/2007/10222007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10222007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10222007qqqq60.jpg

While I remain bearish on the markets in the longer term (one month) it is unusual for them to break the 20sma and the 200sma averages on the first try and continue lower, that leaves the markets to either consolidate prior to continuing down or we can have a dead cat bounce. Either way new swing shorts are high risk.

Earnings will again determine the short term market direction with AAPL being the big one after the bell to today. That will impact the QQQQ while the SPY and DIA will be dependent on what the large multinational companies report.

I will monitor the intraday market and find some "own way" stocks and some scalps or day trades. I will see you all in the trading room.

Good luck and let’s have a great trading day.

Ivica
[email protected]