The last two days of 2008 saw a support bounce and a technical move towards resistance. The market was much easier to manipulate, last week, by fewer large financial institutions. That won't be the case going forward, so watch for volatility to increase early this month. I think we will see three "consensus" moves. The first will be during the first week of January, which will be part of earnings warning season and also anticipated fund inflows (or lack of inflows.....). The second will be in the middle of the month, after the first week of earnings is in the books and traders react to the catastrophic or less than catastrophic reports. The third will be at the end of the month, carrying over into February, as traders start to react to anticipated moves by the new Presidency.
Here is a chart of the SPX showing the technical move:
(click on image to enlarge)
(click on image to enlarge)
Perhaps traders will finish out the technical move to resistance. Big Money will be happy to sit back and let this ride as long as they dare while Fast Money continues the momentum move from last week's light volume trading. Either the end of last week was crafty manipulation, or it was real.....we shall soon find out.....
12:25 pm MT: Intra-day update: Traders have broken the Naz through resistance. The SPX and Dow are pushing to follow along with the Naz and stage their own breakouts. This is not that unusual for the first trading day of January, or the early part of January. I don't think the market has come to a big volume consensus, but the current swing looks like it's still in play for today and maybe Monday and Tuesday.
Here is a chart of the Naz showing the breakout:
(click on image to enlarge)
(click on image to enlarge)
Here is a chart of the SPX following along with a breakout:
(click on image to enlarge)
(click on image to enlarge)
The charts are still bullish for now.....
Thanks Dwight and Happy New Year again to all!
ReplyDeleteSo with the breakout of the 92 area for the SPY ( SPX) what does everyone see as initial target? 99 or am I being too optimistic? Wondering if the SPY is worth a quick play into next week.
Francis
Hey Dwight,
ReplyDeletePicked up some SPY calls when the gap held up and we broke 90.70. But sold those soon later for a good gain. With days like these when we're right at resistance and still going strong, I get confused on what to do. So even though we had some nice bull flags, would have you played them or waited for the resistance break?
Francis,
As you can see from above I'm on the same page as you!
Joe
Glad to have you on my wavelength joe!
ReplyDeleteFeel like I may have missed a good entry on the SPY so will wait and see next week.
Nibbled couple of contracts SU Feb $20 Calls with a short term target of $22 which if broken leads to $27 First Fib Support line from 52wk high.
Francis
Wow!!
ReplyDeleteI haven't made that much money in a year!! 30% swing trading NOV and 25% GILD. It's nice to see the intra-day charts play out like they should (or at least one would expect them to). Thanks Dwight!!
I wonder if Dwight is retiring today?
Good on you Gary!
ReplyDeleteNOV is very interesting.
From what I'm reading Oil overall is having a technical bounce; hence my entry into SU as well.
All the best
Francis
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ReplyDeleteNice work, traders! Glad you all got to begin the new year positively!
ReplyDeleteSounds like I missed a good day. I had to go to Dallas for a funeral this a.m. and didn't get back until this evening - missed VC, too. Ah well, missed this one... but something tells me that there will be more opportunities.
Laurie,
ReplyDeleteDwight was kind of low key today.I think he's just rolling with the market but isn't overly excited about it. He mentioned keeping an eye on oil it's moved 35% in a week. If the market goes up and oil goes follows (or leads) it may get a little sticky again ($4+/gal gas). There may be some follow through next week but all the "news hype" is call for a 3-4 month bull market? I don't think Dwight is buying it and just playing the charts as usual. Happy New Year and welcome back.
Oh BTW, we're (bloggers) are going to try to post our trades here every day and our strategy behind the trade. Hopefully Dwight will be able to post on his lunch hour!
Happy New everybody. I'm almost embarressed(?) to comment among you, because of being so new, however, in the spirit of "wanting to get this", here goes...
ReplyDeleteMy Papermoney acct, today, "vanished" a 2 contract trade that filled on 12/26 on SPY; Bull Put Jan 09 81/79..? huh?
Moreover, since I don't know how to backtest (pls forgive my lack of correct terminology), I think, all nine of my current trades all "deleted/vanished/disappeared" their gains/losses dating between 12/26 thru yesterday.
I keep good trade entry records, so hopefully, one day I'll be able reconstruct... Sorry for being wordy.
Scott L
Happy New Year Scott!
ReplyDeleteGood to have you on board!
Rest easy here, no rules, no expectations or criticisms here.
For my part, I share my trades,wins and losses and my 2 cents in the hope that it benefits all and certainly not for self-aggrandisement.
I learn from everyone here as well as Dwight and am most grateful.
So enjoy and contribute!
Francis
( the token Cannuck from the North!)
Hey Scott,
ReplyDeleteDon't be embarrassed, we're all here to learn. I don't know why your trade was messed up, maybe something to do with papermoney and the new year? Hmm... Anyways, it's good to have you here and keep posting!!
Gary,
That's a good idea with the posting of all of our trades. That way we can see what others are seeing and why they are playing what they are. Great!
Joe
Thanks very much, Gary and Happy New Year to you!
ReplyDeleteI appreciate the VC overview. Reading what charts say is what Dwight does best, regardless of the perceived market buzz. The more we trade like him, the better traders we will be! Good idea on the trade sharing, too. We'll see what the first full week of the new year holds.
Scott,
We are a supportive bunch here, and all just grateful to Dwight for his willingness to share his knowledge and experience, time, and the family blog. Since you want to learn, you'll fit right in. No apologies necessary.
There are so many nuances to trading - Dwight just makes it look easy. Lots of analysis goes in to what he does. Watch, listen, and learn. AND, don't forget to share what you learn right here! We can get pretty excited sometimes.
P.S. My guest user Papermoney account has been known to give wrong info. If you try signing in multiple times it may eventually give you the correct data. The situation can really try one's patience. Our main Paper account's been okay(thus far).