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Monday, October 22, 2012

Daily update 10/22

Quite the bounce going into the close.  Here is the daily SPX chart.

SPX closed below its 50 SMA for the second day in a row.  However, it is just barely below.  We have a bullish hammer candle today because of a pretty big bounce going into the close.  SPX tested the last swing low and bounced back up out of the support zone.  I believe this will be a short lived bounce, not the start of another swing up.  Notice the big drop in volume today.  After such a big down move yesterday, closing positive is not a surprise.  However, barely closing positive and having to work hard to make that happen would seem to indicate the bulls are not all that ambitious to buy here.  Lets zoom in to the 60 minute SSO chart.

Price is still below the 18 SMA which is sloped down very sharply.  Price got pretty extended from that 18 SMA before the bounce.  That leads me to believe the bounce is just a short term move to correct the over extended price.  There is more room for the bounce to continue tomorrow morning.  It should be pretty short lived though.

Chart practice has been updated with VRSN the stock for today.



Anonymous said...

I believe the market bounced on this... article released at 15:03. Immediate upward movement into close. Too many are hooked on QE.


Traderbob58 said...

Thank you for that information. It did line up well with the move.



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