Market commentary

ivica · Feb 15, 2007

Market commentary for 02/15/2007

Good day!
From a short term bearish bias to a short term bullish bias in few days. That pretty much explains the market action this week. The FED chairman says things are ok and that gives everyone the ok to buy. Don't you wish it was that easy?? After the gap up in the morning we saw a continued strong move up the rest of the day. The previous daily high and range area stopped yesterdays QQQQ action. The DIA again stopped at daily channel resistance while the SPY made new weekly high. All these reasons are telling us that we can be more on the bullish side right now. We still don't have a low risk swing setup pattern I will stay in the same mode about risk. Looking at the 60 min charts I will like to see consolidations first and then possible continuations. That is what why I will wait for a longer time. On the 60 min charts we saw two buying waves and we still have room for another move up. This without rest will increase risk because of past action. In the morning I will wait to see the market action and I will follow it. This is the same as I have done the last several weeks.
Individual names we have traded are going well for now in both directions. Risk for swing traders remain higher and I will stick with intraday moves. Longer term the Indices can break up from weekly consolidations and the action today can help us to achieve that. Best is to stay with strongest names for long side and weakest names for short side which is exactly what I do all the time.
I will go over the gainers lists to see if there will be some traps and bigger gaps for intraday action.
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02152007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02152007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02152007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02152007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/02152007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02152007dia60.jpg

powerofpride · Feb 15, 2007

Quote from ivica:

Nice commentary. Agree with that text. Problem is that is hard to take new swing trade right now. Most of open swing trades going well, but this market action is good for faster traders, or position traders. But it is high risk for 1-3 days swing traders. My opinion for longer term market is 50/50 and I really don't see technical reason for better%. Just my opinion.

Agreed. That's also pretty much what I got out of that text. Stay in current positions, and only initiate new ones if all the signals are strong. The author seems to be on the fence too. The next 4 days should clarify things a bit more as far as direction.

ivica · Feb 16, 2007

Market commentary for 02/16/2007

Good day!
We got a narrow range day which I was hoping for. Unfortunately not exactly the type of NR day we wanted to see. For a continuation pattern we need to see consolidations at the highs but we donât want see a new high. That is what happened yesterday. The consolidation we saw yesterday had aslightly higher high and the continuation of previous resistance areas that eventually stopped yesterday activity. For the QQQQ that is upper daily range resistance area, the SPY number resistance area (146.00) and for the DIA the daily channel resistance line. Without a healthy consolidation which we did not see and today being options expiration I expect to see whippy intraday action today. Most option expiration days are whippy which add to risk. Iâm a conservative trader and when I see a high risk market my activity slows down. It wouldn't be unusual for me not to take any trades today. The way to trade a whippy market is to use smaller lots and a larger stop amount. That way you will avoid false moves and fast reversals. In a whippy market you can see a trading pattern that can stop you out by just a couple of cents and then a fast reversal to new highs/lows. Being less active is also good on whippy days because overtrading is a trap most inexperienced traders fall. Another point in a whippy market is for the trader to be fast with exits to assure profits since it is logical not to expect the same risk/reward as usual.
I donât have strong bias for the morning so I will wait open and I will follow market action.
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02162007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02162007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02162007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02162007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/02162007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02162007dia60.jpg

Ivica Juracic

ivica · Feb 18, 2007

Market commentary for 02/20/2007

Good day!
We had a typical options expiration day. A whippy day with action that was not worth trading. Friday was a very high risk market with perhaps scalp trade possibilities. I found a number of interesting charts but there wasn't any momentum after the setup and they moved back to their consolidation areas. I believe that one of most important aspects to be successful trader is to recognize risk. Capital preservation is important and Friday was day to do something else.
I expect to see more action today. The charts are telling us the bulls are in favor and they look like they want break above daily/weekly resistances. For now only the SPY has the room until the daily equal move resistance area (blue line). The QQQQ coming to the weekly previous high resistance and DIA still have problems with daily channel resistance. Also, DIA finished under 20sma 60 min resistance area. If we look in the past this isnât first try for DIA and QQQQ to break above resistance lines. The last time they attempted to move forward they finished with a reversal and came back into the range/channel support area. This isnât a reason to be pessimistic but it is enough reason to be careful. For a possible breakout on the daily/weekly charts I would like to see a stronger pace and heavier volume. That would be a healthy breakout.
Our open positions continue to do well and my bias for next week is on the long side but with caution for the reasons mentioned above. Generally that means: The DIA break above daily/weekly channel, the QQQQ 20sma weekly bounce and the SPY weekly continuation (10sma hold very nice for now).
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02202007qqqqweekly.jpg
http://www.ivicacharts.com/diagrams/2007/02202007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02202007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02202007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/02202007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02202007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/02202007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/02202007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02202007dia60.jpg

Ivica

ivica · Feb 22, 2007

Market commentary for 02/22/2007

Good day!
I guess this week the QQQQ's will show some strength and the DIA will be the weak index. The SPY is in the middle, but on the daily and weekly charts it looks the best for the long side. We saw a very whippy day that brought us high risk trading. After the morning gap down and whippy start the QQQQ first filled the gap. The SPY for most of the morning had problems with 200sma 5 min resistance area. The DIA was the weakest index and after morning gap to the previous day low support area the rest of the day it tried to fill the gap, but the 20sma 60 min yesterday was to strong for that and finished day in negative territory under the 60 min resistance. On the 60 min chart we can see that DIA starting to have rounding highs and forming cup pattern. On the daily chart consolidations at highs and channel resistance slowly losing the battle. Blue lines showing action in the past and very easily we could see the same in the coming days. For the DIA 60 min support area (today and yesterday lows) are very important. On the other side, the QQQQ buying pace isnât strong and with intraday whippy action look like to go to the previous daily resistance area (45.40 areas). That kind of action is not giving me faith for the swing move up to new highs. We have a situation when DIA is losing steam with rounding highs, the QQQQ buying pace is slow and without strong volume and SPY staying in the 60 min consolidation and finished day in negative area. Right now we donât have a short setup and the action explained above does not give me any faith to the long side. Being conservative the reasons given above are enough for me to stay in a caution mode for today.
I will continue to monitor the market after the open. I will wait for a healthy intraday breakout in any direction and then after consolidation I will look for a continuation. I will miss first move but I will take the continuation and that way I will try to protect myself from any false breakouts.
Swing traders still have harder time for new setups right now and it is best to stay with open positions and follow the action. If open positions are doing well you can always add. Right now I will take swing possibility only with small risk. Safest side is with intraday moves and faster trades and those who are not good with that (like me) need to use patience until market will show us direction.
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02222007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02222007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02222007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02222007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/02222007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02222007dia60.jpg

Ivica Juracic

ivica · Feb 23, 2007

Market commentary for 02/23/2007

Good day!
Not much to write about yesterday. A weak gap up in the QQQQ to the daily/weekly previous high resistance area (45.40), the SPY new daily high and small DIA gap up. Unfortunately, there wasn't any follow through to bring the indices to new highs. The DIA weakness took control of the market and after morning consolidation, we saw an intraday move down. The rest of day, we saw whippy action without any direction. The DIA weakness stalled at the daily channel low support area (also 20sma daily support area). On the daily DIA chart history repeated and after few consolidation days (blue line on the daily chart) we saw a pullback. The SPY after morning gap up went back to the 60 min consolidation area and stayed there for the rest of day (under 20sma 60 min) while the QQQQ tried to go back morning highs. We ended up seeing another whippy day without clear direction. The QQQQ buying pace is still poor without any real volume. The SPY closed neutral and DIA is back to its support area. Maybe we will see the DIA bounce today from the daily support area and maybe that will provide enough steam for QQQQ and SPY. Perhaps we will see some continuation selling of the DIA. I do think that we donât have a clear signal right now and my bias is neutral. That means I will stay with the same tactic that I have been using the last several days.
I will follow market action and then I will see. It is most important to trade light without full risk and reduce your number of trades. If I see some nice long trades I will start with small lots and if we see the market breakup then I will add to my positions.
Remember today is Friday so don't expect much after the market opening action.
Good luck trading today!!!!

http://www.ivicacharts.com/diagrams/2007/02232007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02232007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/02232007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02232007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/02232007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02232007dia60.jpg

Ivica Juracic

ivica · Feb 26, 2007

Market commentary for 02/26/2007

Good day!

Friday started with selling right at the open. Most of the day brought range action which brought higher risk. Indices finished Fridayâs action in the negative area with the DIA being the weakest. Selling pace was not strong and after slightly new low the rest of the day daily the channel support line held and we saw consolidation action.

http://www.ivicacharts.com/diagrams/2007/02262007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/02262007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02262007dia60.jpg

The SPY made slightly lower low too, and daily 20sma support area held very well. We didnât see much of change from day before. Also on the 60 min chart we can see that consolidation area is holding for now.

http://www.ivicacharts.com/diagrams/2007/02262007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/02262007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02262007spy60.jpg

The QQQQ was strongest index again and Thursday lows held very well. All day the QQQQ stayed in range action and above 20sma 60 min support line (blue line). On the daily chart we still have double top pattern possibility and without daily consolidation every breakup will be high risk for a daily breakout.

http://www.ivicacharts.com/diagrams/2007/02262007qqqqweekly.jpg
http://www.ivicacharts.com/diagrams/2007/02262007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02262007qqqq60.jpg

We are entering this week without a clear direction and the weekly charts signals are mixed. The QQQQ is strongest but still in dangerous of a double top resistance. The SPY made doji bar which is telling us that we can see a move in either direction. If the SPY breaks up it has room for a larger gain but if it breaks down it will bring us to several daily/weekly support areas.

If we look at DIA daily chart we can see that last several times the channel line held very nice and if we count on past activity then we can expect a bounce at the start of this week. That is one scenario that we can get and in that case, the DIA could help the other Indices to break up on new weekly highs which will be signal for the bulls. Another possibility is this time the DIA channel support area doesn't hold and that could be the trigger for the bears and a swing move down possibility. Perhaps even strong enough for a longer correction. From a technical analyst viewpoint we have the same % for both scenarios. Right now we are in the middle of those possibilities and overall risk will remain higher until market decides what to do. I like the weekly chart of the SPY and QQQQ for long direction, but after several months of an uptrend to see a low risk setup we need to see a longer direction. That is for a low risk setup and market the doesnât care about that. From the market action we can decide what risk we want to use in this situation. Right now we are in high risk market and for new swing setups and the best risk now is going with intraday moves. For swing traders we have several ways how to trade this market. One is to wait and manage open swing positions and until market shows us direction we must wait in cash. Another way I use is to take new swing trades with smaller risk and only after the market shows its direction I add to my positions.

I donât have strong bias for today for the reasons explained above. I think that we have same chance for a move in either direction. I will just follow the market action and I will limit my risk for new setups.

It is also important is to cut the number of trades, because right now there is a high risk of overtrading.

ivica · Feb 27, 2007

Market commentary for 02/27/2007

Good day!
The market gapped up yesterday and that was it. We filled the gap and continued with selling pressure the rest of the morning. On the DIA 60 min chart we can see how important the 200sma area is. The DIA hasn't closed under the 200sma during its entire uptrend and you can see the support it holds. The daily channel was a support area too.

http://www.ivicacharts.com/diagrams/2007/02272007dia.jpg
http://www.ivicacharts.com/diagrams/2007/02272007dia60.jpg

The SPY had similar kind of action as DIA. It made a slightly lower low but was still the strongest index. The 60 min range area and daily channel (blue lines) support areas were still strong enough and held all selling pressures.

http://www.ivicacharts.com/diagrams/2007/02272007spy.jpg
http://www.ivicacharts.com/diagrams/2007/02272007spy60.jpg

Yesterday the QQQQ wasnât as strong as last week and the 60 min triangle broke down. Daily double top hold last week QQQQ tried to see new highs and right now first daily support is 10sma and 44.75 support area (previous resistance now is support)

http://www.ivicacharts.com/diagrams/2007/02272007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/02272007qqqq60.jpg

Overall, we didnât see any real change on the daily chart. All indices closed almost at the same area as Fridayâs close. This time QQQQ was weakest index unlike last week when it was the strongest and needed more activity for correction. If anyone read my commentary yesterday then I can just copy/past rest of it. We still donât have clear signal. The QQQQ daily resistance is still holding and SPY/DIA daily support area is holding. That is frustrating because we have longer time frame that is whippy without a healthy trend. Despite the poor market our swings are doing well since there always will be opportunities.
Right now it is much harder to find new ideas and that is telling us something about the market. Each night scanning and preparing the watch list and the market action we can feel the market pulse. My watch list is small and that tells me we donât have a predictable direction. I will use patience and I will wait, especially right at market open. Since DIA and SPY are at support areas I will favor a short direction, but because of my past experience I wonât bet heavily on that.
Risk remains high the same as yesterday. Cash is a position also and patience is your friend.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 1, 2007

Market commentary for 03/01/2007

Good day!
February is over and the Indices finished right at the December 2006 start. In other words, in one day, the market lost everything what made in three months. Yesterday's action didn't bring any big changes and we saw a consolidation day. Since today is the beginning of a new month, it is always good to look at the monthly charts to see the bigger picture. On all three charts, we can see a nice move up from May 2006. Those who have followed me from the beginning can remember that I have been looking for a correction for the last several weeks. Looking on the monthly chart nothing terrible happened and the market is just entering a monthly correction. Key word is monthly, and that means we can have that kind of action for several months. The QQQQ has already been consolidating for three months and we can see that the support area is still holding, while the DIA and the SPY (with Tuesday's action ) just started that process. We can't tell after one bar, what kind of a correction we will have, but if the support area will not hold, (red line) I believe that we a have higher possibility to see more of a correction and that the Indices will see the 10/20sma monthly support areas. Because of that action, the future days will be very important. I have read many comments on the reasons why we had that strong selling as well as what to expect from here. Some say that this is just temporary and others say that it is just the start of a recession and a bigger move down. From my chart analysis, I can say that both directions are very possible; from a bounce to highs to more selling, A quick move up to daily highs isn't the usual action and that is not what I will expect for the next few days. Maybe after a daily consolidation, but I will not expect that for this week. My basic prediction came from the consolidation and the action prior to that consolidation. Right now, it is impossible to predict the future from the chart action (at least for me) because Tuesday selling was unusual. Because of that, I will keep my trading small and with small risk. This is not the usual market action and so I will act accordingly.
With yesterday's action, the QQQQ stayed under the 100sma resistance area and above the price support area. Both areas are important for the next day activity. Breaking under the support area could bring more panic in the market, but it is also very possible could have a trap and bounce up. Intraday action wasn't interesting. We saw a consolidation day, which is quite normal after the strong moves we saw on Tuesday.

http://www.ivicacharts.com/diagrams/2007/03012007qqqqmonthly.jpg
http://www.ivicacharts.com/diagrams/2007/03012007qqqq.jpg

The SPY showed us similar action. It was the strongest and part of day it traded above the 100sma (brown line), but finished under it, as did the other indices.

http://www.ivicacharts.com/diagrams/2007/03012007spymonthly.jpg
http://www.ivicacharts.com/diagrams/2007/03012007spy.jpg

The DIA brought the biggest panic on Tuesday and resistance is the same on the daily chart, 100sma. After the morning bounce of the day finished near the open, so saw little change.

http://www.ivicacharts.com/diagrams/2007/03012007diamonthly.jpg
http://www.ivicacharts.com/diagrams/2007/03012007dia.jpg

It is possible that many are frustrated because we didn't see a big bounce and capitalize on recouping some losses, but this is normal action and I think that we will see more back and forth action this week. Because of that, I will expect that risk will remain high until the market is back into usual trading activity without extremely large bars.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 2, 2007

Market commentary for 03/02/2007

Good day!
Unfortunately, on Thursday we saw very exaggerated market action which led to a high risk, choppy environment. After a stronger gap down in the morning, the 5 min QQQQ chart made a false breakdown and trapped quite a number of traders. That was all the morning weakness we saw. After the 15 min reversal period, the market bounced and with the help of the 10:00am economic report the gap filled very quickly. Unfortunately, that was all the market action that we got. The rest of day the 60 min resistance held and with consolidation, the indices came up to the 20sma 60 min resistance area. Yesterday that resistance area was too strong for a breakout. Since Tuesday's selling was extremely strong, we still must wait to see what daily and intraday resistance area the market activity will bring. . For now, the market looks confused and because of that risk will remain high. My bias was with the bulls today, and it will be the same for the next few days. I will look for a bounce from the strong daily/monthly support area. That will be my focus, but I will follow the market action as usual. Right now, it is best to stick with intraday moves because risk is lower there. The main problem for the daily charts right now is the 100sma resistance area (brown line). The reason for my bullish bias is Thursday's action. With a gap down and new daily lows, I would expect that the market did what it likes to do and that is to trap the short traders who missed all this selling and were inpatient to wait for a new move down. We could also see profit taking and that could bring some buyers back, because they donât want miss the possible bottom. This is just a possible scenario and bias. The important thing, as always in this kind of environment, is to stay with low risk trading .

http://www.ivicacharts.com/diagrams/2007/03022007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03022007qqqq60.jpg

http://www.ivicacharts.com/diagrams/2007/03022007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03022007spy60.jpg

http://www.ivicacharts.com/diagrams/2007/03022007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03022007dia60.jpg

Good luck trading today!!!!
Ivica Juracic