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Friday, November 7, 2014

Daily update 11/7

Another mixed day.  The futures actually opened exactly at yesterday's 4 PM close.  Now that is a  rare event.  I can't recall that ever happening before.  It was a rather narrow range day as volatility dried up.  Lets have a look at the SPX chart.

I added an upper trend line that seems to capture the price action pretty well.  We are in the area of that line.  Will it stop the advance?  Time will tell.  SPY had another doji bar.  That is now four out of the last five days.  Despite a little bit of buying interest yesterday spurred by talk of ECB QE the market seems pretty hesitant.  Not that I blame it.  Look at that price pattern.  If there ever was a high risk time to put new money to work this it.  Best to keep holding times short on new index trades.  Here is a look at the futures chart.

The 18 SMA is getting ever closer since we are barely moving up now.  I  mentioned the -DI line last night indicating very over bought.  That played out today as the upside was difficult to come by.  However, people still rushed in to buy the dip.  No dip is too small to buy. 

At the last low the institutional traders panicked while the retail investors were calm, cool and collected.  How odd is that?  Retail investors have finally gotten over their fear of the market.  I am having trouble seeing how that is a good thing given the weak technical condition of this market.  So far that weak technical condition is not improving much.  Nothing to worry about though.  We know nothing can go wrong.


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