Friday, January 22, 2010
January 22nd, 2010
The last two trading days were very encouraging for the bears. The question is the market at the beginning stage of correction or is it just a minor dip for buying opportunity. How do we detect what will happpened? We can't tell by looking at one trading day. Look for stocks that broke out the last couple months. If those stocks pull back to the broke out line and it treats it as a support level, then it is a buying opportunity of the dip. If it breaks below the broke out line, then the market will correct itself.
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Finally, QQQQ had hit my target at 45.
ReplyDeletehey GCL - basic gap fill Q's
ReplyDeleteWhen playing the gap fill game, should i be looking at the low or the close? or something in between?
yesterday low was 111.56
yesterday close was 111.70
barchart shows 111.57 as today high
td showed 111.62 as today high
i was trying to hold out for 111.70+ before re-entering SPXU... and of course it reversed pretty quickly..and then fell apart today.
I don't want to be too stringent when I don't need to be. I know a lot of this is about 'feeling' what the market is giving to you..
seloy
BAS, I am glad you mentioned about filling the gaps. Based on technical books, the books mentioned about different types of gaps, "runaway", "exhaustion" and others. To me, there are only two types of gaps.
ReplyDeleteFor example, if yesterday trading looked like this.
SPY high was at 112.00.
SPY low was at 111.00.
SPY opened at 111.50.
SPY closed at 111.25.
If today SPY opened at 111.10, then this gap between 111.10 and 111.25 is withing the daily range of yesterday.
If today SPY opened at 110.50, the this gap opened outside of the daily range of yesterday. This gap will likely to be fill.
The gold stocks are at a critical point. If GLD bounces of from 105 to 106 area, you could gold stocks reverse back up.
ReplyDeleteok..So since we opened outside yesterdays close, closing the LOW of the previous day is probably 'good enough' since it was very close to the close.
ReplyDeleteThat was a pretty wild stop run they did to test the waters.... SPXU went a whole $1. probably would have only captured .50 to .75.. (would have bailed on at S1 110.75)..
meeting at 1 pm.. no trades today here..
Hi What are you seeing as the next move for the QQQQ's? 44 or 46?
ReplyDeleteMouth, the market at this point is very tricky to analyze. Here are my points on both sides of the market.
ReplyDeleteBears cases:
1. The VIX increases dramatically from the bottom.
2. This week the market traded exceeding over 100 points. Today action is very close to 100 points.
3. Lots of individual stocks had false break out.
4. Lots of individual stocks are changing trend to downside.
5. Volume pick up this week.
Bull cases:
1. There are still some stocks remain above the breakout points
2. There was no climatic top during the false breakout.
3. The market, SPY and QQQQ, are still in uptrend in the intermediate term.
4. This last item is very important. If you look back last year around June and July timeframe, it seemed like the market topple out and ready to roll over. Guess what, it fooled everyone. In July the market continued its second leg up. Why? Because in June it made a false breakout, but there was no climatic top during that timeframe.
Thanks so much...my feeling is that this is a trick in order to get shorts really in the game so that they will scramble to cover and get us to our next leg higher....
ReplyDeleteI also think that holiday weeks tend to trick the masses...this was a holiday week which is known to be countertrend. I may not post often but look at your blog everyday.
Mouth, I have make two bad trades on CLF. It cost me 34% loss. If I haven't make these two trades, I will be up 32%. As you can see, trading individual stocks are trickier than the indexes. This year, 2010, I have been trading just indexes, SPXU. So far so good.
ReplyDeletei'm back and my jaw is dropping.
ReplyDeletei got out of my meeting at 110.25. thinking it would be crazy to enter a position here.
and now we are hitting 109.66.
SPXU finally closer to 40! (37.75)
holex
those last several weeks have been tough with us hitting new highs everyday. but momentum was dying.
i'll try not to worry too much about this over the weekend and come back refreshed monday.
Have you noticed today the market dropped alots, yet the gold stocks didn't.
ReplyDeleteNext week, watch for U.S. dollars, Natural Gas and gold stocks play.
5 days in a row the market exceeded 100 point daily range.
ReplyDelete3 days in a row the market exceeded 200 point daily range.
back to our nov 2nd break out now.. 3 days to wipe out 3 months of slow gains.
ReplyDeleteytoom
Have a great weekend!
ReplyDelete