July 26, 2017

Archives for June 2006

Typical Pre-Holiday Trading Day

Today was a typical pre-holiday trading day. After a sharp rally the market decided to consolidate today on low volume. The low volume was anticipated as traders always leave early on an extended holiday weekend.  During the latter part of next week volume should pick up and this will certainly give us a better indication as to which direction the market is headed over the short-term. The Russell (IWM) was the standout index today. The broad small-cap index is nearing overbought levels that usually precede a short-term decline. There is still a little room to move higher, so if it does be on the lookout for a short-term reversal. I must point out that trading off of overbought levels is not as accurate as oversold levels but given the … [Read more...]

Will the rally last?

As I have stated over the past few days any directional move after the a Fed release has often been reversed within one to two days. Will it happen again? Given the current overbought state of three out of the four major indices coupled with the post-Fed reversal tendency, it looks like a short-term reversal is probable. As we all know nothing is definite, but we have to go with the probabilties and in the past this scenario has led to a short-term reprieve. Another bearish indicator is the VIX and it took an enormous hit today as it is once again nearing historic lows. It is still a few points away but after losing 45% since its high two weeks ago a bounce in the near future could be in the cards. I must point out that we are entering a … [Read more...]

The day has finally come!

The long awaited Fed release is due out tomorrow and traders are looking forward to moving past this piece of important inflationary data. I must remind you that the direction that the market trends immediately following the release is often reversed in one to two days so be very careful. If the market is not pleased with the report I would imagine the lows established two weeks ago will be tested and from there, well, we will have to address that scenario when and if the time comes. The market has traded in a range for the last week few weeks so tomorrow could be the start of something big. One thing is for certain, the range bound state that the market has been in over the last few weeks should end very soon.  RSI Wilder (5) for … [Read more...]

Sideways Trading Persists

The market tumbled today as inflationary concerns continue to plague the bulls. We are still well within the range that has been carved out over the last few weeks but I would imagine after Thursday's Fed annoucement that will change immediately. As I have stated before, we should expect to see some highly volatile trading immediately following the Fed release. However, do not be fooled by the intial direction because it is often a head fake. Volume is extremely low as traders eagerly await Thursday's meeting and many have taken off for an extended July 4th vacation. Must be nice! I am continuing to work out the details of our new strategy and I might have to delay the information for one more week. Either way the strategy looks very … [Read more...]

Sitting in Limbo

The wait is on! A trading range mentality usually sets in the week leading up to a fed release. Over the past few years any directional move before or immediately following a Fed meeting has been quickly reversed. Will it happen this time around? It truly depends on the verbage within the fed release. If the message is hawkish, which is expected, we could be in for more oversold conditions in the near future. Currently the market is in a neutral state, although it is inching its way towards an overbought condition with the Russell 200 leading the charge.  I am leaning more towards a hawkish scenario, but it truly depends on how the market reacts to some strong support areas that are currently in place that should give me insight as to … [Read more...]

Sideways trading

The market continued to trade sideways today and will most likely do much of the same until the FOMC meeting on Thursday at 2:15 PM. All of the major indices are sitting in neutral territory and if they do indeed reach an oversold/overbought state over the coming days look for a possible contrarian move.  I should have all of the details regarding our new strategy QQQQ GAp Fade strategy next week and some other interesting information. Until then, have a wonderful weekend!  RSI Wilder (5) for June 23, 2006 SPY - 46.8 (neutral) DIA - 52.2 (neutral) IWM - 51.8 (neutral) QQQQ - 46.8 (neutral) … [Read more...]

Is this the beginning of another move lower?

Many of you have posed this question over the past few days. Obviously, I have no definitive answers, but I can tell you that the major indices did not act kindly to the move higher. Each rally attempt has been stifled one to two days later. This type of action normally does not bode well for the bulls over the short term. In addition, there are several technical indicators that are fairly close to reaching an extreme status. The next week should be interesting to say the least. RSI Wilder (5) for June 22, 2006 SPY - 47.1 (neutral) DIA - 55.9 (neutral) QQQQ - 47.9 (neutral) IWM - 46.2 (neutral) … [Read more...]

Nice way to start the Summer

The market moved decisively higher today on very little economic news. Tomorrow is lacking any sort of important market moving events as well so it could be tricky over the short-term. It must be noted (as a have stated numnerous times) that the period following June options expiration is particularly bearish, especially Mondays and Thursday. Well, we know how Monday turned out. Will Thursday also live up to its historical billing? On another note, I have been going over the new QQQQ and its looks very promising. I should have the research, back-testing, and trading guidelines very soon. Hopefully, the beginning of summer will be kind to all of our strategies.  RSi Wilder (5) for June 21, 2006 SPY - 53.1 (neutral) DIA - 64.2 … [Read more...]

Short Post Tonight

I will be back tomorrow with a full post. Have a good night!  RSI Wilder (5) for June 20, 2006 SPY - 43.3 (neutral) DIA - 47.0 (neutral) QQQQ - 44.9 (neutral) IWM - 36.1 (neutral) … [Read more...]

Post Expiration Blues Strikes Again

As I have mentioned countless times over the past few months, the day following options expiration is historically bearish. Today's trading certainly lived up to the historical billing as all of the major indices closed lower on the day. SPY nearly clsoed the gap that was established last Thursday and I would guess that fully closed by weeks end. The period following June options expiration has been weaker than the average post-expiration week so be aware of this situatiopn going forward. Mondays and Thursdays are particularly weak. I go into further detail in the June options expiration report. Unfortunately, I have to keep it short tonight and a post tomorrow is questionable. I will post the RSI numbers tomorrow and I will be back to … [Read more...]