I started this post early so you can comment to one another even if I haven't posted any market content yet. I will pop in from time to time and post my usual information.
One quick note: I didn't realize that the site was set to Pacific Time. I changed it to Mountain Time. So all the headers before this one were created on a Pacific Time Zone stamp. Now they will all be MT. Not a big deal, and it doesn't affect the times on all my post entries, but I just wanted to make the note.
12:00 pm MT: Here is my assessment of today's price action: It's pretty obvious to me that Big Institutions planned to punch out early and then head for the door. The first two hours saw heavy volume selling, and then everything has trailed off since then. We may still get a little light volume floating at the end of the day, and we are definitely into a lighter volume drift right now. I just don't like to do a whole lot in these kind of conditions myself.
Another observation, which I was anticipating yesterday, was another pullback day in Energy and Commodity stocks. Big Money made a lot of money in those areas the past several months, and they locked a lot of it down and walked away. What it means is that I will start looking at those areas by the beginning to middle of next week. For now, there isn't much to do in a lot of areas except nibble on some Day Swings. Other than the fact that the drift is down a little harder early, this is going about how I though it would. I am still looking for 12,300 on the Dow, so I'm not getting super jiggy with calls until we get closer to those areas and the 3-day weekend is over.
7:15 pm MT: Market Wrap: the market faded off again today. The majority of selling was done in the first two hours, and then it drifted for the rest of the day. As for support levels, here is what to probably expect: If the Dow doesn't hold a minor support at 12,425 then look for the support level I have posted previously of 12,300. If the SPX doesn't hold 1,370 then look for 1,350. And if the Naz doesn't hold 2,425 - 2,429 then look for 2,400. It's a toss of the coin as to whether or not the market will bounce Tuesday. If it does bounce, I will look at Tech, Energy, and Commodity stocks in that order. I will do a Weekly Watchlist this weekend, as usual.
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Thank you Dwight!
ReplyDeleter.e. your notes about AAPL and the 30dma.
I closed 2 minutes into the open for a 33% gain in about 2 hrs of market time.
I'll be playing at the Jazz Jubilee in Sacto this weekend but will try to find a wifi spot to catch VC.
Hi everyone,
ReplyDeleteFor those of you using only support/resistance, volume and the 20 day moving average, do you look at MACD or stochastics at all ? I guess those have been so engrained in my taking posotions that I am a little hesittant on entering a call if the macd is going down or put if it's going up and I see Dwight and you guys enteri ng positions at times despite of this.
Hope everyone has a safe, fun weekend - Just watching today.....
Hey Claudia,
ReplyDeleteThe only reason I use the MACD is for divergences and to see how overbought/underbought a stock is. I use the stochastics and bollingers sometimes as part of my exit strategy.
Joe
Hi Claudia,
ReplyDeleteI do not use MACD or Sto for my entries and exits. The only time I use MACD or Sto is to look for divergences. I find that looking at too many indicators give contradictory signals. I have been getting better results with only using support/resistance, price, volume, candlestick patterns at support/resistance. Less is better for me.
Claudia,
ReplyDeleteI think MACD and Stoch are both built on a variety of moving averages. Since a moving average is a lagging indicator and we are in a 1-3 day trading market those indicators are not on my radar.
Hey Guys,
ReplyDeleteJust entered MER at 43.68 for a quick intraday trade. Expecting it to drop to around 42.50..we'll see.
Joe
Joe,Christina and Bob,
ReplyDeleteThanks much for your feedback. When putting it all together, it makes sense to use MACD for divergences.I was trying to figure out why Joe and Christina used the MACD for this. Bob's comment tied it all together . Because the market is only a 2-3 day trading-kind-of marjet at this point, one would want to use the MACD only in terms of noting divergences as it is composed of a multiple of lagging moving averages - Got it - thanks!!!!!!!!!
Bob: excellent on AAPL, just how you draw it up.
ReplyDeleteClaudia: I'll let you in on a little secret. When you use Technical Indicators for the most popular, well known analysis, they are the least effective. In addition, your fellow traders also gave some very good insights into the strengths and limitations of MACD and Stochastics.
Joe: that was a perfect entry on MER on the 5m or 10m charts if you got in where I think you did. I'm assuming you locked a little on the ensuing intra-day downswing. Nice job.
I've got ACGY pegged right at horizontal and diagonal support, but, like Dwight, I'm not so pumped up about entering anything (especially calls) before the weekend.
ReplyDeleteWow, what a weird market!
Anyone else see what may be the beginning of a rotation out of energy/commodities into tech? The $compq looks like it wants to hammer, AAPL is at the high of the day, RIMM, SIGM, GRMN all turning green.
ReplyDeleteBob
ReplyDeleteCheck out $CRX it looks like it is finding some support around 970? level on the 60 minute chart. Tech looks like its coming down on the 5 min chat ( ie qqqq ) on high volume
Bob: you're right, I did track that. Look at the Naz vs. the SPX or Dow and you can see that Tech is the strongest area. Maybe some rotating is going on, although I don't think Big Money is going to let Energy stocks fall too far before they pick them up again, at least a little bit.
ReplyDeleteI have been looking at the MACD on intra-day charts for divergences. This are based on moving averages so lag the marketby minutes or hours depending on the bar size. However, divergences show up earlier on these charts than on a day chart. Sometimes a divergence shows up for two cycles before a price swing occures and sometimes the swing occures on the next cycle. It depends on the stock and perhaps on how major the swing will be when it developes.
ReplyDeleteHi Dwight
ReplyDeleteYou gave some very nice definitions of momentum the noun and momentum the verb in your coaching Friday. Could you give a definition of 'Cherry Pick'
Thanks, Ken B
Ken: a Cherry Pick trade is my own personal name for an entry technique of getting in to a trade before the confirmed bounce. I start nibbling in an area that I think a stock will turn and confirm. But remember that a Cherry Picker can turn into a Nose Picker if you nibble a booger instead of something sweet. So, like with any entry technique, you have to have your exit technique set up ahead of time based on good risk management.
ReplyDelete