Market commentary

ivica · Apr 8, 2007

Market commentary for 04/09/2007

Good day!
Thursday's action was in line with expectations. After Wednesday's NR7 bar we got trend day. Since Thursday was last trading day before the holiday weekend we got what we expected as I explained in the market commentary Thursday. The pace and volume were lighter than what we would like to see in a normal trend day. All the Indices closed higher on the daily/weekly charts which could lead to the possibility of closing 02/27 gap and back to the weekly highs. On the weekly charts we can easily see that. The light volume on this reversal is still a concern. We could see a double top or lower weekly high which still can move the market down. What we know for sure is we will not see new weekly lows very easily next week.

http://www.ivicacharts.com/diagrams/2007/04092007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04092007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04092007qqqqweekly.jpg

On the daily charts we can see that Indices have room for a continued move up during the few next days, possibly to the previous high resistance area. The QQQQ has the most room for that. Right now we donât have clear setup for that possibility because Indices are already on the move the last several days and for low risk we could expect only intraday possibilities. That leads us to the situation where we can recognize risk.

http://www.ivicacharts.com/diagrams/2007/04092007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04092007spy.jpg
http://www.ivicacharts.com/diagrams/2007/0402007qqqq.jpg

Intraday charts (60 min and smaller) just confirms the above mention. After three up days we can expect a correction but on the other hand the Indices still have room for a further move up. On the 60 min charts, the 20sma is first important support area and it is also important to follow morning pace in any direction. Pace with volume is good combination for success.

http://www.ivicacharts.com/diagrams/2007/04092007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04092007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/0402007qqqq60.jpg

There are several things which we must pay attention to. First is volume. The decrease on the daily move up which isnât unusual during a holiday week, but its still lighter. A continued move up will bring higher risk unless the volume increases. Second is pace. It is slower than the selling pace which is normal after the strong selling that we got on 02/27. But it is still a slower pace. A lower daily high possibility is another scenario which we can expect and that can happen anytime since we already have a few up days on light volume.
Those are the reasons to know we can expect higher risk market for swing traders at the open of the new week. Friday the monthly job data is reported and that is another reason. We will see the reaction to that lon Monday. My biggest concern is still the possibility of a big weekly range action what can be our trading market during the next several months. I hope Iâm wrong.
Hope you all had nice weekend and a great holiday. I wish you all a nice profitable week

Good luck trading today!!!!
Ivica Juracic

ivica · Apr 9, 2007

Market commentary for 04/10/2007

Good day!
Today was a mixed trading day. We got a gap up on the jobs data and that gap filled right from the open. Key support area continues to be the 20sma on the 15 min charts. During the day the indices went back to the daily high area but again couldnât stay strong and around 13:00 reversal period we saw another reversal.

http://www.ivicacharts.com/diagrams/2007/04102007dia15.jpg
http://www.ivicacharts.com/diagrams/2007/04102007spy15.jpg
http://www.ivicacharts.com/diagrams/2007/04102007qqqq15.jpg

From the 14:00 reversal period the Indices tried to go back up to the daily high, but this time 20sma 15 min resistance area was too strong and they all closed under it.
After several up days, this isnât an unusual market because on the 60 min chart we can see the buying pace is slowing and needs to rest (consolidation, correction). This is not automatically a short signal because we must see what kind of a consolidation (correction) the Indices give us today. For this consolidation the 20sma on the 60 min chart is very important support area. If the Indices break under that support area we can easily see more daily correction to the 10 or 20sma daily support area which are the first daily support areas.

http://www.ivicacharts.com/diagrams/2007/04102007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04102007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04102007qqqq60.jpg

Despite yesterday's 15 min range action we got some nice intraday moves on DNDN as day trade and NBIX, FCX, ICOC, SWN and JRCC as swing trades. I expect the same kind of action today. The market remains a higher risk for swing trades because the Indices on the daily charts donât have clear swing setup.

http://www.ivicacharts.com/diagrams/2007/04102007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04102007spy.jpg
http://www.ivicacharts.com/diagrams/2007/0410007qqqq.jpg

It is important to compare stock action with market action and that way we will choose relatively strong and weak charts. I found number of swing long and short trades for today, but I first would like to see the market open and to see the market direction and compare that action with stocks actions.

Ivica Juracic

ivica · Apr 10, 2007

Market commentary for 04/11/2007

Good day!
We got another range trading day, a total of 38 points movement in the dow. This is very difficult for equity traders because of a narrow range and intraday action without a trend is always higher risk. On the other side, stock traders had a very nice day Individual names gave us nice moves (JRCC, THQI, NBIX, ESLR, SONE, AMAT, MAC etc). Risk for today will stay the same as yesterday.
On the daily chart we didn't see any real change. The DIA started with the daily correction and the SPY and the QQQQ stayed in Monday range.

http://www.ivicacharts.com/diagrams/2007/04112007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04112007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04112007qqqq.jpg

Yesterday's action can easy be seen on the 60 min charts. You can see how the QQQQ held the trend line and 20sma support area and at the end stayed strong enough for a possible break up today. The SPY stayed strong also, but the daily gap area is still a strong resistance area for now. There is also the 145 number resistance area and for healthy break up it needs more rest. The DIA was the weakest index and continued with rounding highs on the 60 min chart.

http://www.ivicacharts.com/diagrams/2007/04102007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04102007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04102007qqqq60.jpg

What we got was a divergence between weak DIA and the stronger QQQQ. That will increase the risk for today with already mixed daily signals. I donât have clear bias for today. We can see another intraday move up in the morning, but we can start with the daily correction also. My focus now will be on the correction side but the charts are not ready to give a short signal. The only signal is to use patience and wait for a good opportunity. On the long side Iâm more interested for day trades and âown wayâ swing trades which has been doing well for us. Those who follow what Iâm doing can see that after several good trading days which we have had, we can expect a time when patience is our best friend. Today is a day which I expect to be less active than usual. Risk is high for swing traders and best is to stick with smaller time frame trades.

Yesterday officially started the earnings season with AA reporting better than expected numbers. Earnings can and usually cause gaps in the morning indices making trading at the open risky whether the indices will consolidate and continue or correct and fill the gap. Be careful with overnight trades not only with companies that are reporting but sectors that could influence your positions.

Good luck trading today!!!!
Ivica Juracic

ivica · Apr 12, 2007

Market commentary for 04/12/2007

Good day!
The indices started their daily correction. It was a bit stronger than I would like to see because it makes a move up move difficult in the future. I expect choppy daily action in the coming days. Yesterday started with gap up on the DIA and the SPY 60 min charts. It wasnât a significant gap up and from the open we saw selling pressure and gap was filled very quickly. The market continued with selling pressure and 20sma on 60 min did not hold. On the 60 min chart we can see the selling pace from highs is stronger than the buying pace in to the highs. We can also see the volume increase. Those two signals are enough to see that bears controlled market action yesterday. I will mention the Fed minutes were considered hawkish toward future rate cuts and you can see the market accelerate the selling at 2pm edt.

http://www.ivicacharts.com/diagrams/2007/04122007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04122007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04122007qqqq60.jpg

Previous resistance area becomes the new support area that easily can be seen on 60 min charts. On the daily charts we can see the 10sma (brown line) was the first support area. On the daily charts we can see the selling pace is stronger and selling volume is higher.

http://www.ivicacharts.com/diagrams/2007/04122007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04122007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04122007qqqq.jpg

We still didnât get a clear swing short signal. Most of time the stronger pace with higher volume will be enough for a selling continuation, but if we look at the daily charts we can see that lots of moving average support areas are very close. That shows we donât have enough room for a continued move down without support and for good risk/reward. On the short side we can see the selling pace was strong with higher volume and that is not good sign for a bullish bias. When we add earning season I will expect choppy daily action. That action will bring a difficult time for stock traders too, because we always like to see market action as support. In the morning I will look for continuation of the selling pressure and I donât expect a ton. I think the Indices will start with bounce from the daily support area. That will be my focus. My focus today will be on the smaller time frame trades and âown wayâ swing possibilities. Unfortunately, if we take a look on the weekly charts we can see that Indices started with bigger range action for now and we can see tough trading period. That does not mean we won't have chances for trading, it mean we will must include extra work to find good names and that is always period when experienced traders stay above water and new traders lose their accounts. Please use proper risk.

Good luck trading today!!!!
Ivica Juracic

ivica · Apr 22, 2007

Market commentary for 04/23/2007

Good day!
GOOG, CAT, HON and AXP powered the DIA and the SPY to a large opening gap. The QQQQ had an opening gap primarily due to GOOG. Those DIA and SPY components kept those indices from filling the gap and despite a choppy consolidation they closed at new highs. The QQQQ was the weakest again and the weekly high was too strong a resistance for continuation. The SPY and the DIA donât have much resistance because they are already at new weekly highs.

http://www.ivicacharts.com/diagrams/2007/04232007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04232007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04232007qqqq.jpg

The morning saw a slight correction for the SPY and the DIA, while the QQQQ almost completely filled the gap.

On the 15 min charts we can see why is 20sma important support/resistance area on every time frame charts. That area stopped the QQQQ correction and brought strong support for the DIA and the SPY too. Over noon the Indices consolidated for 14:00 reversal period. On charts we can see the afternoon move started at this time. The QQQQ didnât have much strength for a stronger reversal but the DIA and the SPY came back to the highs and even made new highs for the day before the close and finished on new weekly highs

http://www.ivicacharts.com/diagrams/2007/04232007dia15.jpg
http://www.ivicacharts.com/diagrams/2007/04232007spy15.jpg
http://www.ivicacharts.com/diagrams/2007/04232007qqqq15.jpg

At the end of the week I always like to look at the weekly charts to see what I can expect for the coming week. We can see impressive action there. The DIA and the SPY made new highs and there finally was a volume increase on that action. That can lead us to bullish mode for the new week. The only problem is with the QQQQ. It is almost back to February highs but with average volume and that area is still huge resistance area for now.

http://www.ivicacharts.com/diagrams/2007/04232007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04232007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04232007qqqqweekly.jpg

The weekly charts still suggest the QQQQ might still form a double top pattern, but the DIA and the SPY closed at highs with increase volume and that possibility for them is fading away. We are still in earning season and anything can happen so we need to stay in a cautious mode. The QQQQ action is important now since it can follow the other indices or eventually bring them down. That action can bring a divergence possibility this week and I will stay with same action as last week. That means I will follow the market action day by day. The SPY and the DIA can easily give us more buying action and they have enough room for that without strong resistance. That possibility isnât a swing setup and because of that we must use caution. For now my bias is on the long side. I will not go with full risk because of above reasons.
Good luck trading today!!!!
Ivica Juracic

ivica · Apr 26, 2007

Market commentary for 04/26/2007

Good day!
We started Tuesday with another small gap up and it was quickly filled right at the open. From that point forward we saw a nice move up and a trend day. During a trend move it is very important to follow the 20sma support area on the 5 min chart. The action must be above that support area in the trend day definition. The result yesterday was all the Indices made new highs and the DIA did it on stronger volume. Number resistance area (130.00) was broken and right now that is going to be the new support area. The SPY still has room to see its number resistance area (150.00) so we can expect to see that move in the morning. Of course it all depends the on market open.

http://www.ivicacharts.com/diagrams/2007/04262007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04262007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04262007qqqq.jpg

We are still in the earning season and news can be reflected on the open so we must still pay attention to that possibility. AAPL reported blow out numbers yesterday after the close and the NQ will definitely gap the morning. On the 60 min charts we can see the Indices are already on the move and as for low risk setups we need a consolidation (pattern). Right now it is very hard to find a new trading possibility. Most charts are extended or already on the move. Since intraday charts are extended, it is hard to find new day trade also.

http://www.ivicacharts.com/diagrams/2007/04262007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04262007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04262007qqqq60.jpg

Right now it is a good time to manage open swing trades and try to find âown wayâ charts. That is only chance for swing traders right now. For those who donât like swing trading the only option is faster trades. The market can start an intraday correction at any time. It is also important to know that when market is already on the move we can expect to see whippy intraday action which can cause problems for day traders. The situation we had yesterday after gap was filled was a whippy market that brought problems for day traders.

For today my bias is staying on the long side since we donât have any other signal. I think that we could see exhaustion action with bigger volume which could bring us to the top of this daily move up. That is one possibility but during earnings season anything is possible. So letâs trail open swing trades and follow the market action. Attention will be on the 20sma 15 min since that area usually is the start of an intraday correction (consolidation).

Good luck trading today!!!!
Ivica Juracic

ivica · Apr 29, 2007

Market commentary for 04/30/2007

Good day!
Friday's action was pretty much as expected. Not expected was we did not see profit taking before the end of the day. After two weeks of going up the Indices need rest and consolidation for low risk setups and a continuation possibility. On the weekly charts we can see nice continuation for the SPY and the DIA and this time the QQQQ made new highs and a nice clear breakout. One worry now is the CCI on the QQQQ charts. It is above 200 and that telling us it's in an overbought situation. As I said yesterday an overbought can become more overbought. That is not a situation for a short signal.

http://www.ivicacharts.com/diagrams/2007/04302007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04302007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/04302007qqqqweekly.jpg

The daily chart gave us a second day of consolidation which is good for future action. Indices need more than two consolidation days for a swing setup. Previous daily resistance is now the support area and after the 10sma is the first support area in case the Indices start with a correction. Right now it is too early to predict that action because the last several days we expected a correction and all we saw were new highs.

http://www.ivicacharts.com/diagrams/2007/04302007dia.jpg
http://www.ivicacharts.com/diagrams/2007/04302007spy.jpg
http://www.ivicacharts.com/diagrams/2007/04302007qqqq.jpg

The situation on the 60 min charts is telling us more about the consolidation at highs. After 2 days coming to the 20sma support area and very easily we can see bounce from that support area and buying continuation.

http://www.ivicacharts.com/diagrams/2007/04302007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/04302007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/04302007qqqq60.jpg

The daily correction is still a possibility but since we donât have CCI overbought charts on the SPY and the DIA. A strong exhaustion move up is something I will look for this week. Right now all options are open. It is very hard to predict the market action. We can only follow market action and use individual charts for making trades. I will look for âown wayâ charts as the only possibility for swing trades because most charts are extended or already on the move. With that situation we donât have many chances for a low risk setup and that is my primary focus in trading.

Good luck trading today!!!!
Ivica Juracic

ivica · May 4, 2007

Market commentary for 05/042007

Good day!
We had another slow trading day that did not have much intraday direction. This pattern is becoming familiar in which we have a small gap that is quickly filled. Yesterday the SPY was the strongest index finishing at multi-year highs. The DIA and SPY ended having a nice consolidation day at the highs which we call a CP pattern (continuation pattern). This is a bullish pattern and suggests a continuation from Wednesday's move up.

http://www.ivicacharts.com/diagrams/2007/05042007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05042007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05042007qqqq.jpg

On the 60 min charts we can easily see the DIA and the QQQQ consolidation that continued after Wednesday's high. This is one of my favor patterns and in this case the 20sma is very important area. It must hold or I will cancel that possibility. When we trade CP pattern, which means the buy is above the small bar and the stop is under the small bar and target is an equal move. Of course this is the general trading plan. We have the monthly job report in the morning and a gap in any direction can easily change this idea.

http://www.ivicacharts.com/diagrams/2007/0504007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05042007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05042007qqqq60.jpg

From the explanation above you can see my bias is on the long side and for now there is no reason to change that. The market is in a nice daily uptrend and it doesn't want to give it up. We also got a daily CP trading pattern and the CCI isnât overbought. That correction can start at any moment and for a low risk setup we need to see more consolidation. Until that situation presents itself we can only follow the market action. Continuation pattern's are usually day trade patterns and I will look predominantly for day trades and of course own way charts. This is the situation that we have now and after a possible gap in the morning will adjust our morning activity
Good luck trading today!!!!
Ivica Juracic

ivica · May 6, 2007

Market commentary for 05/07/2007

Good day!
Looking at the weekly charts we can definitely say we have strong market action to the upside. After the weekly bottom the market continues to new highs week by week without rest. At start of last week we thought a correction might get started, but after one afternoon and one morning that was history and Indices quickly went back to new highs. When I look weekly charts I just see nice trend move up and CCI is not in overbought area. Every resistance, like the SPY 150 area, or the DIA 130 area are being pierced like a hot knife through butter.

http://www.ivicacharts.com/diagrams/2007/05072007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05072007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05072007qqqqweekly.jpg

On the daily charts we have the same situation. We can see early last week the correction possibility and that is all. Those who follow my work know that in the âmoving averageâ class I talked about trends and how moving averages help us to determine the trend. If we have a move above the 10sma and every try to break that support area finishes with a new high that is a sign of a strong uptrend move. If you look at the daily charts that is exactly the situation we have. We canât predict the future with 100% assurance, but we have high odds to finish this kind of trend with strong a extended daily bar and strong volume. That kind of strong trend (above 10sma) usually finishes that way. This is not rule, just a high probability and something that I will pay attention too.

http://www.ivicacharts.com/diagrams/2007/05072007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05072007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05072007qqqq.jpg

That not mean we will not have some daily corrections before that, but we must stay above 10sma and especially above the 20sma.

http://www.ivicacharts.com/diagrams/2007/05072007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05072007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05072007qqqq60.jpg

Intraday actions are mostly the same last week. We had a gap up in the morning, reversal to close area and then a move up to new highs. Friday action wasnât exception. Important for an uptrend is the 20sma holding on the 60 min charts. We didnât see a continuation pattern on Friday that we expected. We had a choppy market that produced several great day trades (CRAY, FSLR, BBB). It was a bettor day for stock traders than future traders.
Right now we canât change the bullish bias for this week. Unfortunately this type of market isnât good time to enter new trades for swing traders. The market is already on the move. We will continue to have specific "own way" and day trade opportunities. I will just follow market action day by day and I will look for the situation as explained above. That not mean I will not be prepared for possible correction, but we canât try to sell top without a reversal pattern and right now we donât have one.
Good luck trading today!!!!
Ivica Juracic

ivica · May 8, 2007

Market commentary for 05/08/2007

Good day!
After Monday's trading day it is hard to tell if anything new happened. We got a very slow range day without any changes of any consequence. Whatever we do this week is we need to remember the FED is meeting on Wednesday. It is also important to note the the M&A activity with AA probably had the greatest impact in the DIA outperforming the other indices.

http://www.ivicacharts.com/diagrams/2007/05082007dia.jpg
http://www.ivicacharts.com/diagrams/2007/050872007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05082007qqqq.jpg

After open I waited on the 20sma 5 min for some activity and then the 20sma 15 min. I looked for the 13:00 reversal period and 14:00 reversal period and the same result was the day we just saw tight range action.
The last reversal period at 15:00 brought a small intraday correction, especially for the QQQQ but that really didnât change overall bias for today. On the 60 min charts we can see that weakest index is the QQQQ and it closed under 20sma what isnât good For now that the intraday selling pace isnât very strong. Lets see if that is the start of a bigger correction we can see today. The SPY is forming a nice 60 min cup and handle pattern, while the DIA spent the day basing at highs after it made a new daily high.

http://www.ivicacharts.com/diagrams/2007/05082007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05082007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05082007qqqq60.jpg

For today I donât have any big revelation and the my bias is the same, I will look for the long side and I will just follow market action. All options are open since market is already on the run.
Good luck trading today!!!!