Market commentary

ivica · Mar 4, 2007

Market commentary for 03/05/2007

Good day!
Friday was very slow day that continued very weak. Thursdayâs low is holding and on the other side 100sma daily resistance is very strong. The DIA opened with small gap down and most of the time small gaps are filled right at the open which did happen. On the 30 min chart you can see that DIA has a problem with 20sma (blue line) last several days. The 20sma on the 60 min is very close and until we will see DIA under that resistance area it will be very hard to expect any real bounce possibility. On the daily/weekly chart we can see that December 2006 low area holding. On the 60 min charts we can see that volume decline and for now with that action I expect a rounding bottom action this week. Since we saw extremely strong move on the daily chart I will expect that kind of bottom (rounding lows) will be acting on the same time frame. I continue to expect the same action the next several days

http://www.ivicacharts.com/diagrams/2007/03052007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03052007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03052007dia30.jpg

The SPY had similar action on Friday with small gap down at the open. On the 30 min chart we can see similar action and the daily/weekly charts look almost the same. From a technical analyst daily view everything for the QQQQ looks the same for the SPY too. Fridayâs finished under Tuesday low support area.

http://www.ivicacharts.com/diagrams/2007/03052007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03052007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03052007spy30.jpg

The QQQQ was weakest index Friday and had biggest morning gap but it was still small enough to be filled right at the open. The QQQQ has problems with 20sma on the 30 min too. Every try for now finished with move down. On the daily chart the QQQQ is right now on the strong weekly support area. On the 60 min chart we can see that volume decline too. I have concern for a rounding bottom possibility on the QQQQ.

http://www.ivicacharts.com/diagrams/2007/03052007qqqqweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03052007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03052007qqqq30.jpg

I donât have a strong bias for this week and I think that we will need more time perhaps weeks for the market to decide where it wants to go. If weekly support areas do not hold I expect a continued correction until 50sma support area. In addition, we can see rounding lows on the daily charts and bounce back to lower daily high which will bring more daily whippy action. I think it will be guessing to predict market direction as a technical analyst right now. The one thing I do know is risk and swing traders have very high risk. There are always opportunities and there will be "own way" stocks like OEH, but in this market it will not be easy to find them. Swing traders need to use patience and wait for better market action. Limiting risk being fast traders (scalp traders) is where I will be focused until market will improves. Right now Iâm not interested for new short trades and if there are some, it will be only for day trade purposes. I think the market is extended for swing shorts and needs more consolidation for that opportunity.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 6, 2007

Market commentary for 03/06/2007

Good day!
We had a trading day that at best can be described as difficult. High risk setups and choppy action suitable for scalp trading only.
The DIA was weak and closed under Fridayâs low, but still above Thursday low and for now is support. Intraday action was the same on all three Indices. The 30 min chart we can see that the 20sma is still a resistance area and every try to break above that resistance area failed. After the morning gap down at daily low support area the DIA bounced to 30 min resistance area. The rest of the day was consolidation with two attempts to break 20sma. But since DIA didnât have the strength, last 30 min we saw a move down to the low support area.

http://www.ivicacharts.com/diagrams/2007/03062007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03062007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/03062007dia30.jpg

The SPY showed us similar intraday action and we saw that the 20sma on the 30 min is the same strong support area that has held the last few days. The difference is the SPY closed on new daily lows.

http://www.ivicacharts.com/diagrams/2007/03062007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03062007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/03062007spy30.jpg

The QQQQ closed on a new daily low also. Intraday action was the same. After the morning gap, the QQQQ filled gap very soon and hit 20sma 30 min resistance area. With choppy intraday action, it tried one more time and in the last 30 min we saw selling to the morning low support area.

http://www.ivicacharts.com/diagrams/2007/03062007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03062007qqqq60.jpg
http://www.ivicacharts.com/diagrams/2007/03062007qqqq30.jpg

The indices closed very weak. The SPY and the QQQQ made (and closed) at new daily lows, while DIA closed barely above its daily low. We didn't have a strong intraday selling pace but without strength all Indices closed at lows and that indicates to us the 30/60 min pennants/triangle will break lower. Unfortunately I donât see and new LOW RISK short setups, but market bias in on short side. I see the Indices have more room for another daily move down to the 200sma support area on the daily chart. That is also 50sma weekly support areas. Without enough intraday/daily consolidation, time always is harder to find good swing setup, but right now day traders have higher risk market also. Bias is definitely on short side, but since market is extended we can see bounce and stronger 30/60 min correction any time.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 7, 2007

Market commentary for 03/07/2007

Good day!
With the lack of volume yesterday a large part of the rally was probably short covering verses a reversal of the trend. The indices gapped up in the morning above the 20sma 30 min resistance area, which was a strong area the last few days. With the gap up that resistance area, become support. Yesterday was strong enough to hold market action and for rest of day we saw intraday uptrend move. The DIA was strongest index yesterday. On the 60 min chart we can see that triangle was broken right at open with the gap up and 20sma 60 min wasnât a big resistance for the DIA. All day pace was strong but the lack of volume concerned me. On the 60 min chart the volume is still declining and that is what I expected if the DIA was in a downtrend. With the morning gap and continued uptrend I expected stronger volume to confirm the possibility that the bears are history for now.

http://www.ivicacharts.com/diagrams/2007/03072007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03072007dia60.jpg

The SPY showed similar action as DIA. The 60 min triangle (pennant) was different. Both indices finished the day above the daily support area, which is important support area for this week.

http://www.ivicacharts.com/diagrams/2007/03072007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03072007spy60.jpg

The QQQQ was weakest again and on the 60 min chart, we can see similar action. Pace was much weaker and despite yesterdays trend day we stayed with a bad feeling. On the 60 min chart, the open we saw a kind of trap yesterday, because the Indices opened above triangles and Mondayâs close suggested that we could see gap down yesterday. Since the Indices opened outside of 60 min triangle in a different direction that brought some panic for short traders.

http://www.ivicacharts.com/diagrams/2007/03072007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03072007qqqq60.jpg

Right now, the biggest problem is volume. I will stay with caution in today trading. In addition, the buying pace is weaker than the selling pace on the QQQQ charts. All that indicates the Market is just in a process of consolidation, which is relief from the strong selling the last few days. That does not mean the trend is changing on the daily chart. Daily/weekly support area is still strong and it will be interesting to see if it can hold for rest of week. Risk will remain higher and I will stay with intraday action. To stay bullish right now the 20sma 60 min is very important support area for Indices. If it holds we could see more upward correction the next few days. Some swing trades possibilities on the horizon but I would like to see todayâs open before I will bring any setup. I think we saw the daily low for next few days and that we will see more of a correction. I will follow the market as usual and bring opportunities as they present themselves.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 8, 2007

Market commentary for 03/08/2007

Good day!
Very choppy slow day. Good news is the indices are still above the 20sma 60 min support area. If the selling from the 15:00ET reversal time continues today at the open they will slip below that support.
The DIA started with weakness at the open, but 20sma 30 min held that opening weakness and bounced to new highs. That was a slightly higher high and we call that a double top pattern. Pace was slow all day and the volume is still declining. The 30 min double top did very nice and after 15:00ET reversal time started to move down. On the 30 min charts, we can see that selling pace was much stronger than the move up. That is something that suggests more correction at the open today. The DIA finished the day basically flat.

http://www.ivicacharts.com/diagrams/2007/03082007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03082007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/03082007dia30.jpg

The SPY showed again very similar action as DIA. Same support and resistance areas.

http://www.ivicacharts.com/diagrams/2007/03072007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03072007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/03072007spy30.jpg

The QQQQ continued to be the weakest index. On the 30 min chart, we can clearly see a double top pattern. On the daily chart QQQQ started with range action in the support area (red lines) and it will be interesting today if that range area will hold.

http://www.ivicacharts.com/diagrams/2007/03072007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03072007qqqq60.jpg
http://www.ivicacharts.com/diagrams/2007/03072007qqqq30.jpg

Iâm still worried about volume on long side. After 15:00 ET, we can see that volume started to increase and the selling brought a much stronger pace than Tuesday and yesterdays move up. Those are signs that bears are still here and for now still holding market action in their hands. After a choppy move up the indices gave back all the gains in last hour and finished the day flat. I think that we have room for more selling today especially in the morning. For that to happen we need to break the 20sma 60 min stronger support area. The next couple of days I expect the Indices to remain in a daily range action and that action reflects a higher risk.
The bulls and the bears each a strong story for their position but personally no one can predict which direction we are going in. I will wait for the daily consolidation first and then we will see. I will stick with intraday moves and open swings like SYMC, FLR and NX with smaller risk. Don't overtrade, it is easy to do. Risk is high and we will always have opportunities.
Remember we have the jobs report before the market opens on Friday so take that into consideration with any overnight holds today.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 9, 2007

Market commentary for 03/09/2007

Good day!
That was nice gap in the morning and crap after 14:00 ET reversal time. Indices opened above Wednesday high and that should have brought some buyers because we basically saw a daily bear trap. That did not happen. We saw a small move up after morning gap and consolidation until 14:00ET reversal period and did it crap out.
The DIA opened above 10sma daily resistance area and brought a small run at the open until it hit the strong daily resistance which was the 100sma. The index didnât have strength to move further up. The 20sma 60 min support area again was key for the afternoon move down. That is always an important support/resistance area.

http://www.ivicacharts.com/diagrams/2007/03092007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03092007dia60.jpg

What to say about SPY action? When I look daily and intraday charts I must be careful because the action is identical with DIA. The SPY finished day slightly under the 10sma on the daily chart.

http://www.ivicacharts.com/diagrams/2007/03092007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03092007spy60.jpg

The QQQQ was the weakest again. It is far away from the 100sma on the daily chart and 10sma is stronger resistance. Despite the nice gap in the morning and the afternoon weakness the QQQQ closed above the 20sma 60 min.

http://www.ivicacharts.com/diagrams/2007/03092007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03092007qqqq60.jpg

Volume is still light and that continues to worry me. I donât feel this daily bounce is a new direction. It might be but without an increase in volume I doubt it. I believe the daily low will hold this week, and I believe that 100sma daily resistance area will hold this week also. That is the area where I expect to see a possible daily consolidation. Market is still affected by last weeks panic selling and it is having difficulty finding a direction. The 100sma daily is a strong resistance area and that is also the weekly 20sma resistance area. You all know that the 20sma is an important support/resistance area for me on any time frame chart.
I donât have strong bias for today. I will be more on the short side at the open and I will expect the Indices will end up back in the middle of daily range. I will follow the volume and see if it improves. That will tell us about the market breadth. Remember today is Friday and usually we can expect tradable morning. After that things calm down and for the rest of day volume is usually light and that is not where Iâm active. Of course I will follow the market action and bring possible day trades to the trading room. Open swing longs are doing well for now. For open swings now I want to have âown wayâ. That means that will not react with market action. Risk remains higher for swing traders and still best to stick with intraday action.
Remember this morning is the jobs report and that usually is a market mover. We also might get some resolution from the sub prime lending fiasco with NEW filing for chapter 11.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 12, 2007

Market commentary for 03/12/2007

Good day!
Friday we saw an intraday continuation after strong gap up in the morning due to the favorable job report. The market liked it but unfortunately seller sold into the rally. The QQQQ was the weakest index and filled the gap quickly. The DIA and the SPY filled their gaps shortly after the QQQQ. We saw continued chop after midday consolidation and finished in the middle of the day action.
The DIA finished the week under the 100sma on the daily chart and more important under the 20sma weekly resistance area. Those areas will be a strong challenge in the coming days.The 10sma is now the support area on the daily chart.

http://www.ivicacharts.com/diagrams/2007/03122007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03122007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03122007dia60.jpg

The SPY is strongest on the daily chart. On Friday the SPY spent some time above the 100sma resistance area, but the whole market was to weak to stay above that area since that is the 20sma weekly area too. On the 60 min chart we can see that last two days was just consolidation the same range as the 29th February. Identical situation is with DIA 60 min chart.

http://www.ivicacharts.com/diagrams/2007/03122007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03122007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03122007spy60.jpg

The QQQQ has the most volatility right now and brings more intraday action (opportunity) for faster traders (scalp, day). In addition, it is the weakest index right now. Since Fridays continuation was enough for Thursday low for the DIA and the SPY the QQQQ wasnât satisfied with that area and touched Wednesday low which can see easily be seen on the 60 min red support line. On the weekly chart the green bar is the smallest which is telling us that trades on the short side can be counted for more action if we will stick with the SPY.

http://www.ivicacharts.com/diagrams/2007/03122007qqqqweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03122007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03122007qqqq60.jpg
http://www.ivicacharts.com/diagrams/2007/03122007qqqq30.jpg

It is now a week after the climatic selling and we saw a correction from the weekly low. The SPY was strongest index and closed under the 20sma. Weekly volumes are still above average. I expect the weekly low will hold for some time. Two cases can be made. The first is consolidation on the daily chart between 100sma and daily low area. That is a wild range area and will need more time for the indices to calm down. We can expect whippy daily action with back and forth action. Second case is a bounce and continuation above the 20sma weekly resistance area and trying to see daily/weekly high area. That can be 20sma daily resistance (blue line) or more, but in that case we can expect longer term (several weeks) daily/weekly action without clear trend. Right now, I donât see clear picture for swing traders since I donât see a clear daily trend. For a continued move down, we need more daily rest since the bounce last week was strong. This is especially true for the DIA and the SPY. In addition, the QQQQ needs at least few more days for a daily bear flag possibility. I am ready for another consolidation week. Risk remains higher and I will again stay more with intraday action plus "own way" swing possibilities like several we took last week. They all doing ok for now, and only reason why I love them is they are "own way" and they donât react to market activity for now.
Good luck trading today!!!!
Ivica Juracic

ivica · Mar 13, 2007

Market commentary for 03/13/2007

Good day!
We saw range day action with a bounce after the 14:00 ET reversal period. That was about it from the market action yesterday. The 100sma daily is still too big of a resistance. The 14:00 ET intraday bounce was strong and that suggested a possible continuation which did not materialize. The DIA was the strongest again and made new high. It was not strong enough to break the 100sma daily and 200sma on the 30 min chart.

http://www.ivicacharts.com/diagrams/2007/03132007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03132007dia60.jpg

The SPY wasnât that strong and all day stayed in Friday's range. On the daily chart we can see that brown line (100sma) is still above.

http://www.ivicacharts.com/diagrams/2007/03132007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03132007spy60.jpg

The QQQQ is the weakest index on the daily chart and yesterday had similar intraday action like the SPY. Fridays high was too strong. Right now we can see a 60 min double top possibility and with SPY daily resistance I will use caution for the long side today

http://www.ivicacharts.com/diagrams/2007/03132007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03132007qqqq60.jpg

Yesterday we had light trading volume and that continues to be a big problem. On the daily chart we can see that volume decline which is normal after a huge market move. We can see that during the volume decline we had several up days. In the classic down trend action we like to see light volume on a correction (base, triangle, base), and bigger volume on the move down. Because of that the 100sma will still be a problem today for a move up, I will start to look for a possible swing short on the daily chart. We have a number of possible swing opportunities like: FO, CI, KMB, SKM CAL etc, and I will start with less risk and then I will add my positions when I will see market support. I will not expect to see a daily equal move because I still think that daily lows are still strong supports for Indices. However if the market starts with a move down today that will be my focus target area. Of course I will follow market action. In the case the Indices bounce to intraday highs I will use that strength only for day trade opportunities. For more on the long side with a low risk breakout the Indices still need to have a daily/60 min consolidation (base, triangle, flag)

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 13, 2007

Market commentary for 03/14/2007

Good day!
After several slightly positive days on light volume, yesterday we had a trend day down with an increase in volume. That was the expectation as we saw on the daily charts. Usually when the market has a strong intraday move the 20sma on the 5 min is very important support/resistance area. Yesterday the 20sma on the 5 min was resistance and we can see that every try to break down didnât finish well. The DIA and the SPY were weaker than the QQQQ and on the 5 min charts that was very clear.
After gap down the DIA couldnât fill the gap and the 20sma on the 60 min was the key resistance area. The bounce from there was the signal for the move down. The previous daily low is now the support area.

http://www.ivicacharts.com/diagrams/2007/03142007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03142007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/03142007dia5.jpg

The SPY again had similar action and on the 60 min chart we can see the second try to break up is always a high risk possibility. The reason is a double top pattern possibility and on 60 min charts, we can see that action. Because of that my favorite pattern is a 3rd try triangle.

http://www.ivicacharts.com/diagrams/2007/03142007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03142007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/03142007spy5.jpg

The QQQQ was strongest index yesterday, but that is only relative in the whole scheme of things. This time the double top did very nice and the QQQQ finished at its daily low support area

http://www.ivicacharts.com/diagrams/2007/03142007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03142007qqqq60.jpg
http://www.ivicacharts.com/diagrams/2007/03142007qqqq5.jpg

Now what? We saw what we expected and that was a daily move down. Can market continue this move down or not? Yesterday was good day to catch swing short trades and we took number of them (AV, FO, ADM, PNK, LINTA, GPN) and since we already have open swing shorts we can say that we are already in a short position. That was yesterday. Usually after a trend day we can expect to see a consolidation day. That means a correction after a move (base, triangle, and flag). That is normal. Nothing can go straight down without rest. Because of that swing setups will be high risk trades. âOwn wayâ stocks donât care much about market action and I will look for those setups. If selling pressure is high again we could see another strong move down. That is because if the daily lows (From March 1) don't hold we could see more panic and that always brings sellers in to move the market down. Those are the possibilities we can expect today. A third possibility is panic selling at the open and a strong reversal up or a V bottom. The charts in my opinion are not pointing to that possibility. In this business anything can always happen so I will follow the market and plan from there. I will focus more on intraday moves and faster trades. My focus will be on the strongest and weakest names for intraday moves.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 15, 2007

Market commentary for 03/15/2007

Good day!
Yesterday's intraday action was very strong in both directions. The day started with selling pressure to the previous daily support area. At that time Indices forming a double bottom and starting panic selling reversed and started a strong move up forming a V bottom with increased volume. This was a sign that the daily lows will hold this time.
The daily was weakest in the morning and came in to new daily low. When we talk about support, that isnât exactly price, it is an area. The same situation was with DIA. After it hit bottom at 13:00 ET buyers came and take control for rest of day. This time volume was stronger and finished day in positive area. On the daily chart we got pivot with higher volume what indicate that we saw daily lows for now.

http://www.ivicacharts.com/diagrams/2007/03152007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03152007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/03152007dia5.jpg

On the 5 min SPY chart we can see double bottom more clearly and rest of day was similar to the DIA action. We can see on the 60 min charts that the 20sma is again the resistance area. It is significant resistance area and if it is broken today that will be sign for market strength. That is same area as 10sma on the daily chart (brown line)

http://www.ivicacharts.com/diagrams/2007/03152007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03152007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/03152007spy5.jpg

The QQQQ was strongest again. We can see the double bottom pattern on the daily and 5 min chart. Also the QQQQ finished above 10sma and 20sma 60 min.

http://www.ivicacharts.com/diagrams/2007/03152007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03152007qqqq60.jpg
http://www.ivicacharts.com/diagrams/2007/03142007qqqq5.jpg

One of yesterdays possibilities was selling in the morning and a strong bounce. That is exactly what we saw. We saw more than 3 buying waves on the 5 min chart which is telling us the Indices need to see 30/60 min consolidation for a low risk pattern. That is usual after V bottoms and because of that I will expect a high risk market. This time my focus will be on the long side since I believe the market has put in a bottom. It is best to stay with intraday moves and I expect more back and forth action (consolidation action). I will look for the strongest and weakest names to trade that will be least affected by a whippy market. It is important to note that quadruple option expiration is Friday and that will bring more whippy action, especially on Friday.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 16, 2007

Market commentary for 03/16/2007

Good day!
We finally had a consolidation day after two big range days. Generally, before the market can move in either direction it needs to rest. That is important to always remember in your trading. Note on the daily the 10sma resistance area is still a problem for DIA and the SPY.

http://www.ivicacharts.com/diagrams/2007/0316007dia.jpg
http://www.ivicacharts.com/diagrams/2007/0316007dia60.jpg

Despite breaking the 20sma 60 min area that move did not bring more strength to the market. Note the SPY stayed in the previous resistance area on the 60 min chart (red lines).

http://www.ivicacharts.com/diagrams/2007/0316007spy.jpg
http://www.ivicacharts.com/diagrams/2007/0316007spy60.jpg

It was hard to tell which index was the strongest yesterday but that isnât very important after range action. For a lower risk setup, we like to see a longer 60 min consolidation. Perhaps that can bring us to the daily area from where Tuesday's selling started.

http://www.ivicacharts.com/diagrams/2007/0316007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/0316007qqqq60.jpg

There is one problem to be very aware of this morning and that quadruple expiration today. I doubt that we will see nice a consolidation today and then break up in the afternoon. Anything can happen but I can't remember that kind action on a Friday. But you never know that is the reason we watch the market. I expect a more difficult day for trading than yesterday. With heavy expiration volume, we can see a very whippy day. Including false breakouts, stops and then strong bounces back. I usually donât trade on these type of days but if I do that only way to avoid false moves is to use bigger stop amounts and less profit expectations. It will be harder to see good r/r possibilities.

Good luck trading today!!!!
Ivica Juracic