Market commentary

Market commentary for 10/08/2007

Good day!
NR7= high possibility for a trend day. That is exactly what we saw on Friday. With the pre-market news, the indices gapped up. The SPY and the QQQQ opened at their daily high resistance areas, while the DIA was the weakest and opened between the highs and Thursday's close. If you remember from Thursday's commentary, after the NR7 day the possibility for a trend day is higher and that is exactly what we saw on Friday. After the morning consolidation and indecision, the indices picked their direction and we saw a trend day up. The QQQQ was the strongest as was the pace. Unfortunately we didn’t have the typical last hour's trend day action with a strong move up and close at highs. Instead, traders decided to take some profits and we had profit taking during the last hour. On the 60 min charts, we can see Friday’s action and we can also notice that the DIA was the weakest, because pace was the weakest. Also it didn’t have enough strength to break to new highs and formed a double top pattern. Since the pace was weaker then the pace before the consolidation, then it is expected that the equal move would be too much for the DIA. On the SPY chart, we can see that when we have the same pace before and after the consolidation, we can expect to see an equal move target area. Because of that I always note that we must follow pace and volume.

http://www.ivicacharts.com/diagrams/2007/10082007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10082007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10082007qqqq60.jpg

The week is over and let’s sees what the charts are telling us for future possibilities and risk level. Third buying waves are in line and on first glance we can see that this buying wave (third) is strong, much stronger than the first buying wave (blue lines). The red lines show the equal move, and we can see that the DIA still have room to reach it. The SPY and the QQQQ are already there. Since the DIA still has room for an equal move resistance and since the QQQQ 3rd buying wave pace is much stronger then the wave before, my bias is on the long side. Those who follow my work for some time will remember that I expected an exhaustion move up with heavy volume to signal the end of the second buying wave. We saw how that finished, with a strong reversal (much stronger then buying pace). But the market is strong and has come back from that pullback even stronger and stronger. I will look again for an exhaustion possibility, especially on the QQQQ weekly chart. This is not a call for new swing trades right now. This is a possibility for open swing trades.

http://www.ivicacharts.com/diagrams/2007/10082007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/10852007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/18052007qqqqweekly.jpg

When the pace is stronger then the pace before the consolidation, usually we can expect more then an equal move and that is the situation that I will look for on the QQQQ. We can see that possibility on the daily QQQQ chart. For now the SPY and the DIA don’t share the same enthusiasm. The DIA Friday bar is small (despite the trend day) and closed near highs which formed a double top possibility. We still have room for one more push up to the equal move resistance area and the same situation applies to the SPY. The problem is that the SPY and the DIA's daily buying pace after the FED rate cut is weaker and slowing down. This can call for caution on the long side. But that does not mean we can’t see another push up to exhaustion.

http://www.ivicacharts.com/diagrams/2007/10082007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10852007spy.jpg
http://www.ivicacharts.com/diagrams/2007/18052007qqqq.jpg

Now what? When we look at the weekly chart, it is obvious that the market is on the move, and that is good for new swing trades. I know that can be frustrating because when we look back we can say: ohhh what did I miss, what a nice swing move up. But if you remember there was a lot of tricky action during that period (strong move down, big selling volume, summer trading, FED decision, previous highs etc). It wasn’t easy to predict the strong recovery and new highs. The only thing we can do is to follow the market action, and the market is strong and we must respect that. Because of that my focus will be on the long side, but that does not mean I will take a lot of swings and just hold on to them. The safest trades will be with the intraday moves and also possibly 1-3 day swings. We must continue to watch the market action because a top can occur at anytime and in my opinion it is not far. The focus will be the same here. I will continue to look at the strongest charts for long trades, and the weakest charts for short trades. On the market's last pullback, shorts did very well, but not for more then for a maximum of overnight. Please feel free to contact me with any questions you may have.

Good luck trading today!!!!
Ivica Juracic
 
Market commentary for 10/10/2007

Good day!
The market continued its climb up. The day started with a small gap up, which we expected to fill in the morning. After that the indices went back to the area they opened at and stayed in a range until the 14:00 pm EST FOMC minutes. During that period the action was very choppy and only good for scalps. The real move was seen after the FOMC minutes where the indices broke out to new highs. The breakout pace was very strong which we can see on the 60 min charts. The DIA was the strongest and its' breakout volume was the greatest, while the QQQQ break was the weakest with the weakest volume.

http://www.ivicacharts.com/diagrams/2007/10102007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10102007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10102007qqqq60.jpg

Anyway, the indices closed at highs which suggest that this direction will continue on Wednesday morning. We could see a gap up and possibly an exhaustion move on the daily charts. For that possibility we must follow pace and volume and both must be strong. On the daily charts we can see that the DIA and the SPY still have room for a move up to meet their equal move resistance areas (blue line)

http://www.ivicacharts.com/diagrams/2007/10102007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10102007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10102007qqqq.jpg

Pace and volume are very important now, because if we don't see that then we could see flushing intraday reversals anytime, which will shake weak hands. Since the market is coming into an extended daily area, we must be very careful on the long side. I will only look for longs on the intraday (day and scalp trade) action. New swing long trades are high risk now and are only good for “own way” charts. Swing short setups aren't plausible yet because the market is too strong. In summary, swing traders will still have a difficult time and must wait for signals. My focus will again be on the strongest and weakest names and for that I will use intraday scanning (% gainer and % losers list) for possible gap setups. If you have any questions, please feel free to contact me

Good luck trading today!!!!
Ivica Juracic
 
Market commentary for 10/11/2007

Good day!
Wednesday's chop fest is behind us. We saw another day with strong divergences. On the 60 min charts, we can clearly see Wednesday's action. The DIA was weak all day and lost all of Tuesday's gains, and after strong selling pressure met support at its' previous 60 min low (10sma daily). The SPY is forming a triangle and is still moving above its' 20sma support area, while the QQQQ was strongest but barely broke to new highs. On the 60 min chart, we can see that the QQQQ's buying pace continues to weaken, and after three buying waves every new breakup is more and more risky.

http://www.ivicacharts.com/diagrams/2007/10112007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10112007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10112007qqqq60.jpg

Because of the intraday divergence and the choppy action, Wednesday’s activity was good only for scalpers. Traders using longer timeframes had a difficult time finding good low risk setups. On the daily charts we don’t see much of a difference. The SPY and the DIA are still in their third buying waves, but on the DIA chart we can see that the buying pace is very weak and the long direction remains suspect. The QQQQ still can see a strong exhaustion move, but if the other Indices don't support that we could once again see an intraday divergence that will keep risk at a high level. Of course, that is just one possibility. We can’t know what the market will bring tomorrow, but we can read risk. Right is high right now and that is very important information for new trades.

http://www.ivicacharts.com/diagrams/2007/11102007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11102007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11102007qqqq.jpg

We must trade with smaller lots than usual and use much more patience. Also it is important to note that we are entering the earning season which add risk for overnight trades. Overall, nothing has changed over the last few days. My focus is the same, trades that are faster and faster. I am following several swing possibilities and “own way“ charts and on every setup I will take small lots. If the trade improves then I will add on the next intraday setup. That is the only way to keep risk in check. Scalp trades are another way, however, I’m not a good scalper, so I tend to avoid those possibilities. Before any swing trade, it is important to check the company's earning's report date because it is too risky (for me) to stay in a swing before the report. We can’t change the market action, but we can use proper risk. During the course of my trading, I have seen this kind of market action and I know that easier days will come. So the key word is PATIENCE. Trade small and trade smart. Should you have any questions, please feel free to contact me.

Good luck trading today!!!!
Ivica Juracic
 
Market commentary for 10/12/2007

Good day!
Has the market reached its' top? On Thursday we saw the reaction that we have been expecting for several days, a strong reversal. The buying pace was weak and choppy with light volume over the last few days, and consequently the move was suspect. If you remember my commentary from Wednesday I mentioned that we must use smaller time frame for fast trades because a strong reversal and flush could come at anytime. Thursday's action proved our concern for the long side was correct and I believe that everyone who read the commentary and used it for their trading stayed out of trouble. The day started with a nice gap up which brought the SPY and the QQQQ to new highs, but again volume was not heavy and follow thru was questionable. The DIA gapped to its' previous high and during the morning pressure barely made a new high. At that point we had several long trades, but all were faster setups. I didn’t want to take any large stops because risk was too high and the buying pace was weak with choppy action. We can see that on the 60 min charts. The blue line shows you Thursday's buying pace. The SPY reached its' daily equal move resistance area, the QQQQ its' number resistance area ($54) and the DIA its' equal move resistance area.

http://www.ivicacharts.com/diagrams/2007/1012007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/1012007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/1012007qqqq60.jpg

During market hours it is important to pay attention to reversal periods. On Thursday 14:00 pm EST's reversal period brought sellers and for the rest of the day we saw very strong selling pressure with heavy volume and a strong pace. Another blue line on the 60 min chart shows you the selling pace. Obviously it is much stronger then the buying pace and we saw quite a flush. Lots of profit taking brought the indices to their daily support area (10sma). On the QQQQ daily chart, we can see that Thursday's bar was the largest in quite a while, larger then the green bar after the FED rate cut with heavier volume. That kind of action suggests to us, that it will be very hard for the market to get back to highs over the next few days. It is very possible that this is the correction that I have been looking for over the last few days and I expect that this correction will last several days.

http://www.ivicacharts.com/diagrams/2007/11122007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11122007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11122007qqqq.jpg

Unfortunately this is not a swing signal yet. We can’t go for them right away. If we look back on the 60 min charts, we can see extremely strong moves, and after every move we expect to see rest. That is what I will expect for Friday’s action. The type of action we see helps predict the future move. If we see more selling, then we could use that action only for faster trades, because without rest, risk is again too high for low risk setups. If we see consolidations at lows, that will be an opportunity for continuation next week. If we should see a strong bounce, then we could expect daily/60 min triangle action over the next few days. So, all depends on tomorrow's action. Because of that I don’t expect a very active day. We took IIIN http://www.ivicacharts.com/diagrams/2007/10112007iiin.jpg
yesterday and that is very good example of an “own way” chart. That kind of chart is always my focus and I took that despite the market action. Thursday's selling helped, but IIIN had a setup in the morning and did very nicely all day. For other possibilities I will use intraday scanning and that will be primarily for day trades. Maybe we will see a trend reversal, maybe the market will come back strongly... we just can’t know that. But we know that after yesterday's reversal, we still don’t have a swing signal and swing traders must respect that. IIIN is a good example that there will always be good swing setups, just the number of them is not always the same.

Ivica Juracic
 
Market commentary for 10/15/2007

Good day!
The bulls are still alive!!! Friday’s action brought more strength then was expected, but that was not unusual. For me, as a trader, it is very important to read risk on the charts and despite the surprise I had with Friday’s strength, we had an ok day. The day started with an average gap up which I expected to fill right at the open. That was the case with the SPY and the DIA but the QQQQ was the strongest again and after the gap continued with its' up direction. Until midday the market gave us opportunities for intraday trades, but after that the day was over. We saw the type of range action that is worthless for trading because there were no low risk setups. On the 60 min charts, we can see a “v” bottom and a cup and handle pattern which could bring the indices back to their daily high areas.

http://www.ivicacharts.com/diagrams/2007/1015007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/1015007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/1015007qqqq60.jpg

We can see that the indices had a fight with the 20sma all day and broke it before the end of the day, however it was too late for low risk trades. Let’s take a look at the weekly charts before calling any expectations for Monday. The SPY and the DIA formed a doji bar, which suggests indecision. Also there is still the possibility for a double top pattern. Both charts say proceed with caution. The QQQQ looks healthier and continued its' third buying wave with a strong pace which suggests the possibility of continuation. Last week the QQQQ reached its' number resistance area and equal move resistance area.

http://www.ivicacharts.com/diagrams/2007/11152007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/11152007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/11152007qqqqweekly.jpg

To have a clearer picture, it is best to look at the daily charts. I believe that you all remember Thursday's strong intraday reversal and that is the action that marked last week. That action resulted in a weekly doji bar on the DIA and the SPY charts. Also volume was very strong which brought a lot of caution to an already extended long sided market. When we add the double top possibility and the QQQQ's equal move, we have reasons to be very cautious on the long side.

http://www.ivicacharts.com/diagrams/2007/11152007dia.jpg
http://www.ivicacharts.com/diagrams/2007/11152007spy.jpg
http://www.ivicacharts.com/diagrams/2007/11152007qqqq.jpg

It is expected that the bulls won’t give up easily. Maybe the indices marked their tops, but that does not mean that the bears will take control. First we must see a much needed consolidation (correction) after the strong weekly move up. I won’t be surprised if the indices will reach their high areas or even slightly new highs. That action will form a 60 min double top pattern. That possibility will be a chance for long traders to close open trades and get back Thursday's losses. I believe that the market is near its' highs, maybe saw highs or will see slightly higher highs. I also think that it is very close to starting a weekly correction. That is not a swing short setup, that is just a possible top. That does not mean an automatic trend reversal. The earning season is coming and that will bring lots of moves on earning's news. For now I’m staying with the same focus. That means: “own way charts” and intraday strongest and weakest names for intraday setups. Please feel free to contact me if you have any questions. Have a safe and wonderful weekend.
 
Market commentary for 10/16/2007

Good day!
Monday started flat, without any significant change at the open. Right after the open, however, the bears took control and we saw strong intraday selling pressure. The DIA and the SPY were weaker than the QQQQ and found support at Thursday's low. That didn’t hold and the next support area that we saw was the 20sma daily area which is always a strong support area especially after the nice daily trend up that we had over the last few weeks. The QQQQ was the strongest and is still holding above its' 10sma support area which isn’t unusual because its' daily trend was the strongest and the 10sma is its' first trend test. Usually after a trend up, the first attempt at breaking the 20sma will fail and that is the situation we had on the DIA and the SPY daily charts. Since the indices reached their strong daily support areas, a bounce during the last 30 min was not unusual. The bounce pace was stronger then the selling into support and I will therefore expect that Monday's low will hold on Tuesday morning.

http://www.ivicacharts.com/diagrams/2007/1016007dia.jpg
http://www.ivicacharts.com/diagrams/2007/1016007spy.jpg
http://www.ivicacharts.com/diagrams/2007/1016007qqqq.jpg

On the 60 in charts we can see that the selling pressure was strong. The SPY and the DIA did an equal move down compared to Thursday’s move down. We can’t say the same for the QQQ because with the bounce before the close, the QQQQ formed a higher low which could lead to a triangle formation. Because Thursday's move down was as strong as it was it will be hard for the QQQQ to see new highs on the late bounce.

http://www.ivicacharts.com/diagrams/2007/11162007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/11162007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/11152007qqqq60.jpg

When we look at the action from Thursday's move down to Friday’s bounce and again Monday’s move down, that leads us to the conclusion that a daily correction has started and is under sway. On the DIA daily chart that action is clear. Rounding highs are quite visible. As I mentioned before, that doesn't mean the DIA will go straight down (that possibility is always open), that means more up and down bouncing without a clear daily direction. Usually this is the kind of action we can expect from a correction when a trend move is over and the daily charts suggest that possibility. All possibilities are always open, and with earning season underway we can expect gaps in both directions. We cannot know what kind of correction we will have. During a correction the safest place is with intraday moves and that again means scalp/day trades, especially for long trades. For swing possibilities, I’m more focused on the short side because I think that the market is looking like we have seen a daily high and the long side is too risky for me right now We took several swing short trades, and it is important to use proper risk (small risk for start). If the trades improve we can always add on intraday setups. My bias is more on the short side right now, however, because earnings can change everything, I will continue to use proper risk/reward.

Good luck trading today!!!!
Ivica Juracic
 
Market commentary for 10/17/2007

Good day!
Tuesday's market action was definitely high risk. In other words it was quite a worthless trading day. Even scalp traders had a difficult day. The open didn’t signal a lackluster day because the indices opened lower and selling pressure after the open brought new intraday lows. This suggested more of an intraday trend action type day. After the new lows on the indices, however, we were back in a range and stayed there for the rest of the day. The range action was very choppy without low risk opportunities for good r/r trades. On the daily charts we can see that the indices are holding their support areas and the QQQQ's 10sma support area is still holding. Volume was higher than usual which suggests the possibility for a Wednesday move. Options expiration on Friday and earnings from some of the large cap stocks such as INTC and YHOO add to that possibility.

http://www.ivicacharts.com/diagrams/2007/10172007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10172007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10172007qqqq.jpg

The range action after the open's weakness can be seen clearly on the 60 min charts. Also we can see that the DIA and the SPY met their equal move support areas. Another important thing is the selling pace. Obviously the selling pace into Tuesday's low was much weaker then the selling paces on the first move down on Thursday of last week. This action suggests a bounce possibility for Wednesday's open.

http://www.ivicacharts.com/diagrams/2007/10172007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10172007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10172007qqqq60.jpg

Good earnings from INTC can help with Wednesday's bounce. The indices are already trading higher and I will expect that we will see a gap up in the morning. The QQQQ is still the strongest and the INTC news could bring it to its' daily high resistance area. This is all part of the consolidation process and I don’t expect a daily move up continuation. We might see a slightly higher high, but not a strong daily breakup. We can see more gaps in the morning during earning season in reaction to good or bad earnings. My focus will continue to be intraday moves and lower time frames (5/15/30 min).
 
Market commentary for 10/18/2007

Good day!
What a day!!! We saw wild intraday swings in the market. The day started with a strong gap up, especially for the QQQQ. The previous 60 min high resistance was too strong for buying continuation and after the strong open, the indices began a strong reversal. The DIA and the SPY were weaker (as usual lately) and they filled their gaps first. But Tuesday's close didn’t stop the morning selling pressure and both indices saw new lows until they found their support around the 200sma (red line). The QQQQ was the strongest but couldn’t hold and reached Tuesday's low with a strong exhaustion 60 min bar. The morning volume was strong and with a strong selling pace, not the expected consolidation or gradual correction.

http://www.ivicacharts.com/diagrams/2007/10182007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/10182007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/10182007qqqq60.jpg

After the 14:00 pm EST reversal period, the QQQQ took that reversal word very seriously and bounced back to its' open area. The bounce pace was as strong as the morning selling pace. The DIA and the SPY stayed in their 60 min trading channel. The DIA closed under its' 20sma resistance area which is another resistance level. If we take another look at the QQQQ 60 min chart, we can see a wild range action with strong moves from the resistance areas to the support areas and back. That kind of action will increase risk and make it more difficult for swing trades. I expect this same action will continue until the end of this week, especially with Friday's option expiration. On the daily charts we have a mixed situation. The QQQQ is staying near highs and the 10sma is still a very strong support area. On the other side, the DIA closed under its' 20sma which is now its' resistance area along with its' 10sma.

http://www.ivicacharts.com/diagrams/2007/10182007dia.jpg
http://www.ivicacharts.com/diagrams/2007/10182007spy.jpg
http://www.ivicacharts.com/diagrams/2007/10182007qqqq.jpg

Wednesday's volume was high which is another sign of indecision. The Indices' action is very whippy without clear direction and right now we can’t know what will happen. This is the usual action we see in the beginning of a correction and really the only sure thing that we can read now is our risk level. I expect that we will have the same type of market action for the next two days and risk will remain high. My focus will be on intraday moves and not on swing trades. The reason for that is the whippy market action, no daily direction, daily divergence between the DIA and the QQQQ and the earning season. For those who use it, partials should be protected before the close and it is best to trade small lots. Because of that my main focus is on smaller time frames and I expect that to continue thru the week's end. I will be out of the trading room on Friday (option expiration day) and my recommendation is to trade small and use PATIENCE. Don’t forget that cash is a position too. If anyone has any questions, please feel free to contact me
 
Thanks Ivica for this amazing daily insight and information...thank you very much on behalf of me and the many others who are thinking it but never said it... :)
 
Quote from increasenow:

Thanks Ivica for this amazing daily insight and information...thank you very much on behalf of me and the many others who are thinking it but never said it... :)
More...

Thank you very much. Glad you like it. I try to explain market action from TA view and what we can expect and what risk we must use. Thanks again.:)
 
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