If you would like an email sent to you when I update the blog please send an email with "subscribe" in the subject line to traderbob58@gmail.com. To be removed use "unsubscribe".

Search This Blog or Web

Friday, September 21, 2012

Daily update 9/21

I said yesterday that an upside break out would probably not carry real far.  Well I guess they could hardly wait to get the market open so they could see the gap up, LOL.  This is a clear indication that profit takers are a larger group then rally chasers at the moment.  That has been evident all week.  Can you blame them.  The market is extended.  How do you put large amounts of money to work here?  Here is the daily SPX chart.

We have multiple shooting star and hanging man candles.  If you take these candles at face value there is a plethora of bearish bars here.  Check out the weekly chart.

The weekly chart has a blue bar indicating it was outside the upper Bollinger band and extended in price followed by a bearish hanging man candle.  Lets zoom in to the 60 minute SPY chart.

With the help of SPY going ex dividend today the upper trend line was never violated.  Of course that gap down causes everything to be screwy for a while.  It broke the 50 SMA, but only because of the gap down. Looking at SSO (2x SPY ETF)  shows it closed right at the 50 SMA.  If we continue down on Monday, we should be in pullback mode. 

With the market very extended and a lot of bearish looking price bars a pullback seems pretty likely.  As I outlined in Daily update 9/19   "We could have a normal pullback to the daily 18 SMA.  We could go down and test the green support line around 1420.  We could go down enough to hit the daily lower trend line or maybe even the 50 SMA."

 If a pullback does materialize we will just have to wait and see where the bulls step in and what they do with it.

Chart practice has been updated.  Today's stock is LMT. 


No comments:


The information in this blog is provided for educational purposes only and is not to be construed as investment advice.