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Tuesday, January 13, 2015

Daily update 1/13 What an intraday reversal

The bulls were all happy on TV early in the day, but the market took it all away.  Here is the SPX chart.

That is one heck of a wide range bar there.  All indexes were up well over 1% before going red in the afternoon.  I don't think we have had that big of an intraday reversal since 2011.  More proof  that the price pattern is unstable.  Breadth ended at 53% negative after being up over 73% early in the day.  There was widespread selling into strength for sure.  Anybody that covered shorts on the rapid rally in the morning was probably dropping F bombs in the afternoon.  There were 226 new highs and 124 new lows.  The high numbers in both categories continued today.   Lets have a look at the futures chart.

The futures had quite a run up this morning and quite the meltdown after 11:00.  They found support once again at the 200 SMA.  I don't know if that is lasting or not.  The bulls have run the futures up overnight three days in a row, but could not hold them there during the day.  That seems very bearish, but I have seen similar action get resolved with a big rally.  The futures seem to be ping ponging between the 100 and 200 SMAs.  Whichever one breaks should lead to the next big move.  With the market acting in an unpredictable manner I am not going to try to predict which it will be. 

Day trading is pretty good right now, swing trading not so much.  Be careful if you can only do the latter and cannot monitor your positions during the day.  We have not seen earnings season volatility in years.  I can remember past times with big gaps up and down and wild swings from day to day all based on who reported what.  Between the oil crash and the dollar rally there could be something similar.  Be nimble or be flat.


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