Market commentary

ivica · Mar 19, 2007

Market commentary for 03/19/2007

Good day!
Friday was a difficult trading day with whippy selling pressure that ended up being a consolidation day. While the market was in line with expectations what concerns me now is what I see on the daily charts. This is after a strong Wednesday reversal move and a consolidation day we didnât see any continuation. The DIA is weakest index and continued on Friday. On the 60 min charts resistance and support area are now very important areas and which ever breaks first that could prove to be the swing direction.

http://www.ivicacharts.com/diagrams/2007/03192007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03192007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03192007dia60.jpg

The same situation is with the SPY which again is in the middle of the 20sma 60 min resistance and the first problem for Monday. You can see the slight pullback continued on Friday

http://www.ivicacharts.com/diagrams/2007/03192007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03192007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03192007spy60.jpg

The QQQQ was strongest on Friday but it still lacked intraday direction. We can see that the QQQQ stayed all day in range and gave us second consolidation day in row.

http://www.ivicacharts.com/diagrams/2007/03192007qqqqweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03192007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03192007qqqq60.jpg

The daily range is coming to an important area because we could see a 3rd try to break down and we all know that 3rd try is often the charm. In that case I think we could see another leg down to 200sma daily support area. The Indices donât have much time for that option because the 200sma is coming up and if they will stay in that daily range for too long we will come to a situation that risk/reward for that possibility will be limited. Also when we have strong close at support we can often see a slightly lower low on 3rd try and then a strong reversal. That means the Indices donât have much time for lower risk break down. If the Indices break up from the daily range we could see them back up above the 20sma daily. Those are just two options that we could have. Today is important to see if the DIA and SPY can finish day above 10sma daily resistance area (brown line) or could lead to daily 3rd try to break down. Since we donât have clear a direction the risk remains high. ARXT gave us nice profit after halted. Those situations are part of luck and this time was on our side.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 20, 2007

Market commentary for 03/20/2007

Good day!
We started the day with a nice gap up. After morning weakness around the 10:00ET reversal time the Indices found a support area and continued on to new intraday highs.
For the DIA that meant a slightly higher high on the 60 min chart, but still above 10sma daily resistance area. On the 5 min chart we can easily see that 200sma was bounce area and after three buying waves DIA saw yesterday high of day. The rest of the day stayed in very nice consolidation area which could lead the DIA to a new 60 min buying wave.

http://www.ivicacharts.com/diagrams/2007/03202007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03202007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/03202007dia5.jpg

The SPY showed similar action and it brought two buying waves on the 5 min chart after bounce from 200sma. The rest of day it consolidated which can easily be seen on the 5 min chart.

http://www.ivicacharts.com/diagrams/2007/03202007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03202007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/03202007spy5.jpg

The QQQQ morning action touched the 20sma daily resistance area. Most of time it will be hard to break that area on the first try. The rest of day QQQQ stayed in consolidation with more of a flag action and showed the most weakness during the afternoon.

http://www.ivicacharts.com/diagrams/2007/03202007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03202007qqqq60.jpg
http://www.ivicacharts.com/diagrams/2007/03202007qqqq5.jpg

Overall we had slow day after the morning. The rest of day was mostly high risk for trading, with lower than average volume and lack of an intraday trend. The QQQQ 60 min bull flag, the SPY and the DIA base give me a bias that today will be bullish. The SPY and the DIA both have enough room for a move up to the 20sma daily resistance area and that will be my focus for today. The next two days the FED meets with the announcement Wednesday at 2:15pm. I expect market strength going into that announcement. The QQQQ will have harder time because it already has touched the 20sma and that is still a resistance area. I think the QQQQ will lag the other indices because of that reason. A move today to the 20sma on the 60 min is an important support area and that is what I will follow on the intraday action.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 22, 2007

Market commentary for 03/22/2007

Good day!
Morning started with weak action after the QQQQ gap up. That gap was filled very quickly after open. Morning selling found bottom around 10:00 ET reversal period. Rest of day before FED announcement we saw very slow range action, what is usual activity. Obviously market like FED news and we saw strong reaction. Volumes pick up and Indices broke strong from intraday range. Rest of day we saw just buying, buying, buying.
Important is that we have stronger volume then days before what telling us about market interest. The INDU was weakest and only one who closed under 50sma daily resistance area, and that will be focus for next day. That is very strong and important resistance area. Also little wore on the DIA yesterday action is volume. It is inch higher then days before, so I will closely pay attention on action there.

http://www.ivicacharts.com/diagrams/2007/03222007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03222007dia60.jpg

The SPY was much stronger and closed above all daily moving averages, what is very positive, because all those resistance now become to be support area. Same is with weekly 10 and 20sma areas.

http://www.ivicacharts.com/diagrams/2007/03222007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03222007spy60.jpg

The QQQQ was strongest and finished day in overbought area measured by daily CCI. Volume was higher then days before and closed above all moving averages. Also important to see that after FED announcement, 60 min chart brought 4th buying wave, with strong pace, but still 4th wave. With overbought chart, extended chart, and chart on resistance area only what we can expect today is consolidation day.

http://www.ivicacharts.com/diagrams/2007/03222007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03222007qqqq60.jpg

In the other words that mean: it will be very hard to find good long setup with lower risk. Maybe some fast trades, but swing traders need to wait few days to see market action. Bias is now on long side, but we need to see rest after several long days and from that consolidation, we could expect future action. Because of that my activity will be smaller then usual and I will be focused on intraday action and âown wayâ stocks.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 23, 2007

Market commentary for 03/23/2007

Good day!
After the strong move on Wednesday we had an unexpected but welcome consolidation day. It was a difficult day for trading since we had very little action. The best trades were individual names like MLHR which was a daily bull trap.

http://www.ivicacharts.com/diagrams/2007/03232007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03232007dia30.jpg

All the Indices had similar action and on the 30 min charts was a nice consolidation (base) pattern. The SPY made book cp pattern and has a nice 200sma 60 min support under yesterday base. This is one of my favorite setups. I was really happy when I saw the daily patterns and now I am very cautious.

http://www.ivicacharts.com/diagrams/2007/03232007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03232007spy30.jpg

When everything is too perfect I start to ask myself where is the trap or perhaps we could see a false breakout today. I haven't completed my scanning, but I am willing to bet I will find a lot continuation patterns.

http://www.ivicacharts.com/diagrams/2007/03232007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03232007qqqq30.jpg

When we have continuation pattern it is easy to trade them. Setup is above the small range high and stop is under small range low. That is exactly what I will do today. The Indices on the daily charts the morning bias is definitely on the long side. We will see what of day that will bring us. Donât forget today is Friday and that isnât best day for trading. If we will see a strong pace breakout in the morning with volume confirmation we could easily see trend day. It is very important today to see a reaction from 20sma on the 30 min chart. For a continuation pattern I expect a bounce from that support area.
Yesterday we had a NR7 bar (narrowest bar in last 7 days). That means we have an increased possibility for a trend day. When everything sounds perfect that starts to worry me. Because of that I will start with smaller risk and after the 60 min confirmation I will add to my positions. In the trend class we talked about that 60 min mark and I will use that today, just in case we get reversal trend day.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 27, 2007

Market commentary for 03/27/2007

Good day!
We ended up having another consolidation day. With the housing starts number, way below expectation the market sold off immediately after it was reported at 10am. Weak handed bulls were shaken from the market and the indices spent the rest of the day coming back to close at break even. I do believe technical damage was done with the 60 min pennants of the DIA and SPY breaking down.
http://www.ivicacharts.com/diagrams/2007/03262007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03262007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03262007dia60.jpg

The breakdown was strong and there was a volume confirmation. We can see that the support area was very strong yesterday. My focus was on the short side because the bounce wasnât strong and it started as most consolidations. I was looking for possible continuation around 13:00 area. But slowly but surely the indices regained most of the morning loss with the QQQQ finishing the day in green territory.

http://www.ivicacharts.com/diagrams/2007/03262007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03262007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03262007spy60.jpg

As stated earlier the market shook the weak hands and day finished near Fridayâs close. The daily 50sma is very important area now. For the SPY and the QQQQ at support area and the DIA is at resistance area (green line on the daily chart).

http://www.ivicacharts.com/diagrams/2007/03262007qqqqweekly.jpg
http://www.ivicacharts.com/diagrams/2007/03262007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03262007qqqq60.jpg

For today I expect a similar day as yesterday. Swing traders still have a higher risk market. We had some nice open swings that are own way stocks. We will continue today looking for the same type intraday setups like FCX, PEG and PLCM yesterday. For a swing move the market needs to rest next couple of days. The longer the better. Until then I will not expect to see risk change for swing traders. If open swing trades will improve then I will add to my positions on next intraday setup possibility. If I will must take a guess which way the market will go short term it will be on the short side but that is only guessing.

Yesterday was good day for intraday moves. PEG is good example. This is setup chart:
http://www.ivicacharts.com/diagrams/2007/03262007peg.jpg

This is good example why is risk/reward most important for me. Setup was above 82, with stop under 81.90. That was do or die situation. PEG held strong all day and 10sma 15 min was nice intraday support area. Because of that, I was move stop with that support. Final target area was 83 areas, but PEG didn't see that. Exit was at 82.75. Here is exit chart:
http://www.ivicacharts.com/diagrams/2007/03272007peg.jpg

Risk was 15 cents and gain is 70 cents, and at the end that was 0.85% gain what is small. Risk/reward is 4.67 what is great. PEG trade will cover several negative trades and because of that i don't count success with points. Risk/reward is best for that.

Wish you all good trading today
Ivica

ivica · Mar 28, 2007

Market commentary for 03/28/2007

Good day!
We got another consolidation range day. The DIA still has problems with the 50sma daily resistance area, while the SPY and the QQQQ are using the same resistance area for support. Again it was hard day for trading because of the range day. We did not see an intraday trend. We were still able to get a few nice trades such as MIR and AMLN. A few swings such as VNO and BXP did very well also.

http://www.ivicacharts.com/diagrams/2007/03282007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03282007dia60.jpg

On the 60 min chart you can see that Indices continue to have problems with the 20sma. That is difference between selling and buying bias. Depend on that support/resistance area the Indices will choose the direction

http://www.ivicacharts.com/diagrams/2007/03282007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03282007spy60.jpg

Right now, it is very hard to predict direction in the coming days. It will be best if the market will stay in consolidation for the rest of week since that will lead the indices in a weekly continuation pattern.

http://www.ivicacharts.com/diagrams/2007/03282007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03282007qqqq60.jpg

While the Indices stay between the 60 min 20sma and the 200sma risk will stay high. We can only count on fast intraday opportunities as low risk trades. That will be my main focus for now. Every swing trade I will take I will start with small position if the market improves on the next 30/60 min opportunity I will add my position. This is very dangerous time because most of inexperienced traders fall in an overtrading trap and lose money. A good trader must recognize the risk. If he/she can do that everything else is in his/her hands. Right now patience is our best friend. Because of that I will wait and I will trade small with smaller risk until market will decides on a direction.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 29, 2007

Market commentary for 03/29/2007

Good day!
If we look 60 min charts, you will see that we didnât saw much of intraday action. Looking from that side, we didnât saw good low risk opportunities. After the morning gap down, Indices started with whippy 5/15 min action. The QQQQ was strongest and only one filled morning gap down.

http://www.ivicacharts.com/diagrams/2007/03292007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03292007dia60.jpg

The DIA was weakest and took every chance to make new lows. Because of that divergence we had high risk market action, because we didnât know at that time what direction market will make. The SPY didnât help any side because on the 60 min chart we can see range action and the SPY stayed in same formation whole day.

http://www.ivicacharts.com/diagrams/2007/03292007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03292007spy60.jpg

The SPY and the DIA reach daily support areas. The SPY is at 1000and 100sma on the daily chart, while the DIA at 20sma daily support area. Those are strong daily support areas and it will be harder to break that support areas after three selling ways on the 60 min chart.

http://www.ivicacharts.com/diagrams/2007/03292007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03292007qqqq60.jpg

The QQQQ have room to reach 20sma daily chart support area and I will expect more weakness there today. If those areas will be broken today Indices will have open room to back to the previous daily support area. But since we donât have daily consolidations on those support areas right now is hard to predict that move. Unfortunately, right now look that Indices wonât gave us handle formation and that bring us to wild daily range possibility, what will bring more whippy action on the daily chart. My bias for this morning is more weakness, but since Indices are already at support areas or close to support areas it is hard to predict selling pace possibility. That mixed situation bringing high risk for new setups, especially for swing trades. Because of that I will follow market action at open (despite of open) and I will focus on intraday moves. For now open short trades doing well, and we will move our stop despite of market action in the morning. Use caution on new setups before market decides what direction will take. Until Indices will stay in that wild daily range we can expect higher risk and lots of indecisions.

Good luck trading today!!!!
Ivica Juracic

ivica · Mar 30, 2007

Market commentary for 03/30/2007

Good day!
The final 4th quarter GDP number is better than expected and the market gaps at the open, then the price of oil tops 66 dollars a barrel and the market comes tumbling down.

We got exactly what I predicted yesterday. Look at the 60 min charts. The DIA and the SPY donât give us any intraday trend action. We had 5 min trend action, but that was choppy action with a slow pace and without a larger time frame support. That is good only for faster trades (scalp trades). The QQQQ was weakest index as we expected and gave us the best intraday action. As mention yesterday it had enough room to fall to the daily 20sma support area.

http://www.ivicacharts.com/diagrams/2007/03302007dia.jpg
http://www.ivicacharts.com/diagrams/2007/03302007dia60.jpg

It is interesting to follow the key reversal periods. We always can expect some action and we had some yesterday. This time the 14:00 ET reversal period was key the for move down and exactly at 14:00 the Indices saw the bottom. Of course it isnât only enough to watch reversal periods. The whole picture is very important. The daily support area reversal period gave us some nice results.

http://www.ivicacharts.com/diagrams/2007/03302007spy.jpg
http://www.ivicacharts.com/diagrams/2007/03302007spy60.jpg

After the 14:00 bottom the Indices started with a bounce. It was stronger than expected and put us into positive territory. The daily consolidation continues. We have a possibility to see a cup and handle pattern on the daily chart. After last week strong move up, we had that handle possibility. We just didnât know what pattern that will be. Base and bull flag are not possible, so we can expect triangle possibility. Of course in case that will be the handle.

http://www.ivicacharts.com/diagrams/2007/03302007qqqq.jpg
http://www.ivicacharts.com/diagrams/2007/03302007qqqq60.jpg

All that means we have two possible scenarios now. One is daily cup with triangle handle, and second is back to daily lows and wild daily range action. We probably will see again mixed action again today, because we still donât have a daily trend. That mean we must trade with intraday trends and that means smaller time frame trades without whole picture support. Risk will stay higher. Also we must be aware that this is Friday and the last trading day of the first quarter. typically that will bring window dressing activity. That also will increase risk and I expect to see another very slow trading day with small number of low risk setups. Stay patient the market can remain like this for some time. We must recognize this and use patience and wait for our new opportunities.
Good luck trading today!!!!

Ivica Juracic

ivica · Apr 2, 2007

Market commentary for 04/02/2007

Good day!
Friday was more whippy then expected, but reason for that was Iran Oil news. Without that we would had usually Friday choppy action. After all day finished without many changes. Indices gave us daily doji bar. Now what? End of month, and of quarter. Always good time for bigger time frame scanning (monthly) to see what we can expect. End of this analyze will be high risk mixed market action, and hope after this everyone will understand why.
Lets start with monthly charts. The DIA touched 10sma support area and after several months long uptrend that is first support area. With monthly high and 10sma support that could very easily lead to monthly consolidation, what is usual action after the trend. Volume was higher then usual what is good sign that support area could hold for some time. Same situation we can see on the SPY monthly chart. Volume is here more expressed then on the DIA chart. That lead to possibility that 10sma will hold for next month.
The QQQQ is in monthly range for some time and touched same support area but without much higher volume. It is inch higher. From Monthly chart we can expect from Indices that will stay for some time in range what just started, range what the QQQQ already have. This is not good sign for future months because range action is hardest time for trading. Since most of us are trend trades, without trend risk will increase.

http://www.ivicacharts.com/diagrams/2007/04022007diamonthly.jpg
http://www.ivicacharts.com/diagrams/2007/04022007spymonthly.jpg
http://www.ivicacharts.com/diagrams/2007/04022007qqqqmonthly.jpg

Lets go on the weekly charts. We can see same range but now we can see reaction after from strong selling at 02/27/2007. All Indices bounced from support area, but not that strong as selling pace in to support. At same time volume decrease, what isnât reaction what we like to see for long continuation. All are around 10 and 20sma resistance area. From that action, I will expect to see two possibilities. One is back to daily high resistance area what will bring us weekly double top. Everything more will be, right now, big surprise for me. Second is weekly bear flag and back to support area. Remember monthly charts; from them, I expect that 10sma monthly will hold. If we will connect that with weekly chart, in selling case range support area will be reasonable target area.

http://www.ivicacharts.com/diagrams/2007/04022007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04022007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04022007qqqqweekly.jpg

Lets go future on the daily charts. To see what we can expect at Monday. After daily double bottom, we got strong bounce in to the gap resistance area. That is good for long side, unfortunately that wasnât with some extra big volume and because of that Iâm suspicion. Last week on the daily chart we can see consolidation days (correction, pullback). That could lead to the daily cup and handle pattern. On the QQQQ for now that is bull flag, same action is with the SPY too. The DIA us more unclear action, I will say range action between daily 50sma resistance area and support area (blue line). Right now I donât see clear direction there, because weekly and monthly charts donât help us with that decision. The QQQQ daily bull flag (blue lines) can break up), but the DIA range can easily break down. If will break up we can say, well it is expectable from monthly chart. Obviously, 10sma monthly holding nice. If will break down we can say; it is logical if we look weekly bear flag.

http://www.ivicacharts.com/diagrams/2007/04022007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04022007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04022007qqqq.jpg

Look like we can say with high % future direction. At least weekly or monthly direction. It is hard to predict this week prediction, because daily handle can be broken and Indices could back to monthly/weekly/daily support area. Since it isnât clear daily handle consolidation, only we can say is to follow 60 min charts and see where will go first.

http://www.ivicacharts.com/diagrams/2007/04022007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04022007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04022007qqqq60.jpg

When we have that mixes situation without clear direction best way is to wait main move, main break and then wait consolidation and see if can see continuation or not. When action is mixed risk of false breakout is higher. So my plan is to see where will 60 min QQQQ triangle break, or SPY channel, or the DIA range. I wonât go with main breakout (because of false breakouts risk). I will wait consolidation after breakout and that will be my focus. Right now patience is big friend and it is very important to use it. Hope that is now more clear why is risk higher, why need to be less active then usual and why is important to protects our capital until market will decide for direction. I will not wait monthly range breakout, because I can wait on that way for months, but I will wait at least daily situation for increase my trading risk.

Good luck trading today!!!!
Ivica Juracic

ivica · Apr 4, 2007

Market commentary for 04/04/2007

Good day!
After several consolidation days the indices finally started to move yesterday. They opened with a gap up and continued without correction. The DIA was the strongest and it came into previous daily resistance area and started to consolidate.

http://www.ivicacharts.com/diagrams/2007/04042007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04042007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04042007qqqq.jpg

During midday, all the indices formed a very nice base at the highs which was nice sign of strength. Unfortunately the DIA and the SPY broke the afternoon base to early (before 14:00 reversal period) and gave slightly higher high which can easily see on the 60 min chart. That action increased risk for a healthy move up.

http://www.ivicacharts.com/diagrams/2007/04042007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04042007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04042007qqqq60.jpg

For an ideal situation the Indices must stay in the base until the 14:00 reversal period and 20sma support area on the 15 min chart. On charts we can see that early DIA and SPY breakout destroyed 20sma bounce possibility and for the rest of day we didnât get opportunity for low risk setups. Indices stayed in range action until end of day.

http://www.ivicacharts.com/diagrams/2007/04042007dia15.jpg
http://www.ivicacharts.com/diagrams/2007/04042007spy15.jpg
http://www.ivicacharts.com/diagrams/2007/04042007qqqq15.jpg

On the daily charts, we can see that the DIA has the most room before the 02/27 resistance area and I will expect to see that today for a possible move up. That is my bias for today. I will look for the long side in the morning and I will expect the DIA to lead that possibility. Important intraday support area now is 20sma on the 30 min chart. Depends on the open in the morning how we react, but until indices stay in an intraday range action risk will be high and best is to wait for a market move. Also it is important to watch volume as proof of a breakout. Another good situation for the long side is that all indices finished day above all moving averages and all them will become support areas now. The next few days in this Holiday week, I will look for the bullish side.

Good luck trading today!!!!
Ivica Juracic