So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
September 2003 Archives
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
So much for all those bullish candles that popped up yesterday. Today was a great example of why you wait for confirmation before initiating positions. The selling accelerated again today, creating another distribution day. I think we can safely say that the rally is done now, given all the distribution days in the last few weeks. Not to mention the simple facts that September was a down month or that the Dow & S&P 500's 50-day moving averages were breached. Earnings season is right around the corner and that will likely drive the next significant move. I'm still expecting a bit of a bounce in the short term but that may turn out to be a shorting opportunity.
Th reversal candles I've been waiting for showed up yesterday. There were a lot of hammers and bullish harami made yesterday and most of them were right at the lower Bollinger Band. To give an even stronger buy signal, the stochastic indicator on many of those stocks are flashing a buy signal by turning upward in oversold territory. So it looks like a good set-up to make some buys. The futures are weak this morning, which I actually like. That means that I won't have to chase anything out of the gate. I'll simply wait for stocks to take out yesterday's high before making any moves. The way it looks now that's not likely, but you never know.
There's only one word to describe Wednesday's action -- Fugly! All the indices sold off in higher volume. That makes the 4th, 3rd, and 2nd distribution day for the Dow, S&P 500, and NASDAQ, respectively, since September 8th. IBD preaches that you don't want to see more than a couple of distribution days within a couple of weeks (if you're a bull). Even with all the selling, the charts don't look too bad. The S&P has slipped back into its June - August trading range and the Dow is very close to doing the same. My stochastic indicator is quickly approaching oversold levels and price support appears to be nearby. It's looking like we may be setting up for a try at a bounce around 1,000 on the S&P and 1,820 on the NASDAQ. But I won't try to be a hero and blindly buy at those levels. I want to see some bullish reversal candles before I start looking for any buys.
Pretty amazing strength today given how ugly the market was yesterday. I was real surprised to see the NASDAQ almost close yesterday's gap, and on increasing volume. Like I said this morning, the uptrend must still be respected, and it wouldn't surprise me to see the market levitate through quarter-end on the backs of underperforming portfolio managers playing catch up.
I was starting to feel a little silly for getting cautious last week when I pointed out the potential double top on the indices. The day after I made that observation the market pushed above the resistance of that potential double top. Well, after yesterday's gap down it's looking like that push higher may have been a head fake. We're now just below that has-been double top but still in overbought territory. The uptrend is still intact and must be respected but I still think there will be a better point (lower) to buy in the near future. There's a lot of talk about the dollar's weakness being the cause of yesterday's drop. I've already said how I feel about that, and I really don't care what the reasons were. All I know is we've run a long way (almost straight up) since early August and there are a lot of traders sitting on big profits. They'll book those profits sooner or later and I'd rather look to jump back in on the long side after a bit of a dip.
Let me be very clear with what I'm saying. I'm pretty short-term focused -- about 5 days. Longer term traders could and should probably just ride these little dips out until they see a (more major) trend change. But for me, I'm trying to game these little cycles and turn over my inventory (my money) so I can keep finding new opportunities. So I'm not calling a major top, just looking for the point where it makes sense for me to jump back in.
It looks like the post-Fed related nuttiness I expected yesterday showed up today. The bottom fell out of the market intraday after a couple of tries at last week's highs. So we've hit a bit of resistance and are setting up for yet another potential double-top in this rally. The strong uptrend is still intact, but moving up stops would be prudent for the shorter-term traders.
The market has worked off the overbought condition of last week by basically going sideways. The gap down openings on 9/9 and especially the one on 9/10 are a bit of a concern to me. That second gap has been a resistance level over the last three days. Yet and still, the trend is clearly up and once today's Fed meeting is out of the way we'll likely see what the market really wants to do. The charts argue strongly that the next move will be upward.
Two of my trading rules should keep me out of the market this week. I'll remain in cash for at least today due to the Fed meeting. I never open new positions on Fed decision days because the action is always so nutty, even when no change in rates is expected. The other rule keeps me from opening new positions near options expiration, which is this Friday. I used to hate being out of the market so much, but now I look forward to weeks like this just to give me a sort of forced vacation from watching the charts all day, every day. Depending on what the charts look like tonight, I may jump back into the fray tomorrow.
The selling that started yesterday intensified today on the Dow and S&P 500. Both indices notched their second distribution day in a row. The S&P has now slipped back under its breakout point, and the Dow is closing in on its breakout level. There's talk of this sell-off being related to terrorism fears on the anniversary of 9/11. Assuming tomorrow passes without incident we may be setting up for a bounce on Friday. That scenario seems a bit too obvious to me, but sometimes the obvious works. Regardless, I have some other commitments that will keep me out of the market until next week. I'll post again over the weekend. Let's hope tomorrow is uneventful.
I've pretty much given up on trying to make any sense out of what the movement of the USD means to the stock market. All spring the dollar was getting crushed and everyone was saying that was a good thing for the stock market. Then once the stock rally started going, the dollar caught fire too. During that period many of the pundits cited a stronger dollar as fueling the stock rally. (go figure) Well over the last 3 days the dollar has broken its June - September uptrend. I won't attempt to say what that means, but it may be worth watching.
I mentioned yesterday that I didn't like the volume action on the S&P 500. It was up on lighter volume than the previous down day. Well the volume action today was even worse across all the major indices. Each of them had a distribution day today. There's still not much reason to be overly concerned about any coming dips, but today's increased volume should be noted. Investor's Business Daily always warns when there are a couple of distribution days within a week or two, so that bears watching. It's probably best to me, with my time-frame, to stand aside for a few days and let the market work off this extended condition.
Essential Reading
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