Market commentary

ivica · May 10, 2007

Market commentary for 05/10/2007

Good day!
The FED decision has come and gone and as predicted nothing new. The entire world knew that and we still had the typical irrational whippy market after it. I think they changed a comma in the statement on their position. Just imagine what would happen if they move moved the rate a 1/4 point. The day started with sharp gap down for the QQQQ and less severe move for the SPY and the DIA. The morning action tried to fill the gap and after that they stayed in a range before FED announcement.

http://www.ivicacharts.com/diagrams/2007/05102007dia.jpg
http://www.ivicacharts.com/diagrams/2007/051072007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05102007qqqq.jpg

After FED announcement the indices first reaction was down and typically we had a strong reversal to the upside to new highs. They sold off again to a higher low and reversed again to close strong which indicates a continuation for today.

http://www.ivicacharts.com/diagrams/2007/05102007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05102007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05102007qqqq60.jpg

The QQQQ held the 10sma daily support area and the trend is still in line with the SPY and the DIA. On the 60 min charts we can see that range area is broken and my bias for today is again on the long side. Right now there is no reason for another bias because we donât have any other signal. All three options are open and because of that it is smart to trade with full lots. A reversal can start anytime, but the market can also consolidation or form a continuation.
Focus will be on intraday action and âown wayâ trades
If anyone has any questions feel free to contact me.
Good luck trading today!!!!
Ivica Juracic

ivica · May 14, 2007

Market commentary for 05/14/2007

Good day!
The morning selling I expected, I didn't expect the strong move up we experienced. The market consolidated during midday and after the 2 pm reversal period the indices broke up for the rest of day and they finished at the highs.
On the weekly charts the DIA and the QQQQ gave another green bar and from there we can say that nothing changed and the uptrend continued. The SPY showed a doji bar which means indecision, and a sign of consolidation The doji bar suggests a possibility for either direction and it depends which will be broken first, the low or high of that bar.

http://www.ivicacharts.com/diagrams/2007/05142007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05142007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05142007qqqqweekly.jpg

The daily charts give us a clearer picture. Thursday's selling and Friday's buying moved out of the daily trend and suggests a range (consolidation) possibility. Daily support areas (10 and 20sma) held very well and are very strong which suggests that will hold for some time. Thursday's move down with big volume suggests that it will be harder to break to new highs. Market is still very strong and we donât have a sign for a larger correction now, however range action is what I will expect from charts which we have right now.

http://www.ivicacharts.com/diagrams/2007/05142007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05142007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05142007qqqq.jpg

The 60 min charts we can see clearer intraday pattern. I will mark Thursday's low and Wednesday's high and I will look for action between those two areas the next few days. Anything can happen, but for right now those two areas look very strong and for future action and most possible action will be between them.

http://www.ivicacharts.com/diagrams/2007/05142007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05142007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05142007qqqq60.jpg

From the charts we can expect daily range action and that means we can expect days which will have less opportunities than before when market was in a clear uptrend. That not mean we wonât have opportunities and âown wayâ charts, that means it will be harder to find them. From traders who follow market action we must expect less and we must be faster with profits. I will expect less activity during this possible range action until market shows direction again. Of course this is just one picture the charts are telling us right now. As usual it is best to stay with the market action and just follow it. It is very important is to compare market action and open trades because from there we can read relative weakness and strength. Our focus will be to trade by buying strong charts and shorting weak charts

Good luck trading today!!!!
Ivica Juracic

ivica · May 15, 2007

Market commentary for 05/15/2007

Good day!
Unfortunately, we want this or not, market act yesterday in line with expectations for possible daily range. Day started with small gap up, but also at previous resistance areas what can easily see on the 60 min charts. Since we had strong selling last week at Thursday and same strong bounce to resistance area it was very hard to expect that Indices will go easily on new daily highs and continued. Thursday selling pace made that possibility very small. Result is on the 60 min charts and it is reversal from highs. The QQQQ was weakest again, while the DIA was strongest what brought divergence out in part of the day.

http://www.ivicacharts.com/diagrams/2007/05152007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05152007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05152007qqqq60.jpg

Since Indices started with range action on the daily charts and 60 min charts, it will be hard to see any continuation while will stay in that range. For that we must come in smaller time frames. Because of that range action is better for faster trades, because pattern will develop easier and we could see continuations much more then on bigger time frames. Same case was yesterday and we can see that on the 15 min charts. It was very familiar move-rest-move, and that was only low risk setup yesterday. Maybe we will find some more on 1 min charts, but that is not my interest and I donât follow any chart under 5 min.

http://www.ivicacharts.com/diagrams/2007/05152007dia15.jpg
http://www.ivicacharts.com/diagrams/2007/05152007spy15.jpg
http://www.ivicacharts.com/diagrams/2007/05152007qqqq15.jpg

Daily chart didnât saw bigger change, more announcement of possible daily divergence, because right now the DIA closed in the upper part of 60 min range with breakup tendency, while the QQQQ look like want struggle 20sma on the daily chart with down tendency.

http://www.ivicacharts.com/diagrams/2007/05152007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05152007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05152007qqqq.jpg

Of course this is just scenario what we could see, but much more important right now for traders is to recognize risk. Every successful trader must recognize risk and must know what level risk will use in any market action. Right now with range possibility risk will increase, as always when we lost trend. Of course, I talk with swing trader aspect. Scalp traders donât care about that and they have different philosophy. But if you are swing and day trader, you will care about risk. âown wayâ stocks are always welcome in every kind of market, and right now I will look for 5/15 min continuations, until Indices will pick direction.
If anyone has any questions feel free to ask.
Good luck trading today!!!!
Ivica Juracic

ivica · May 19, 2007

Market commentary for 05/21/2007

Good day!
Friday is a textbook example of a day NOT to trade. Finally, option expiration week is over. I hope that next week will offer more activity.
Despite the fact that the QQQQ started with consolidation, the market continued with its' weekly uptrend. We can easily see that on the charts. The CCI still isn't overbought and I will continue to look for a possible upward exhaustion move with strong volume.

http://www.ivicacharts.com/diagrams/2007/05212007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05212007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05212007qqqqweekly.jpg

The daily chart more clearly shows the QQQQ consolidation (triangle) as well as the SPY and the DIA trend continuation (channel). An upward exhaustion move looks more possible because the SPY and the DIA already bounced off the 10sma support area.

http://www.ivicacharts.com/diagrams/2007/05212007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05212007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05212007qqqq.jpg

If you look at the intraday charts, the SPY shows a stronger pace for that possibility. This is not the only possible scenario. It is just one possibility, but from the charts it is looking even more plausible. The DIA 60 min pennant could destroy that possibility, but the daily and weekly pace is still in line

http://www.ivicacharts.com/diagrams/2007/05212007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05212007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05212007qqqq60.jpg

The SPY is close to an all time high (155.75), and that can act as a magnet and push it to that larger resistance area. If we look at the SPY weekly chart, after the February sell off, the SPY came back to its previous high and continued without any rest. That is the kind of scenario that we could see in the next few days. Of course, this is just one scenario. If the market starts with correction action immediately on Monday, that too would not be a surprise. For now, we can only follow the market action, and as we are currently in an uptrend, that is where my attention will be. I will, however, keep my eyes open for all possibilities. New swings short are more and more risky, and the smaller time frame are more and more favorable for low risk setups. I will pay attention again to charts that have their "own way"as the safest way for swing trading.
If anyone has any questions feel free to contact me.
Good luck trading today!!!!
Ivica Juracic

ivica · May 21, 2007

Market commentary for 05/22/2007

Good day!
The market continued to go up today, however the difference is that the QQQQ was
the leader and the DIA were the weakest, even giving up all of its gains in just minutes.
The sell off that we saw around the 15:00 reversal period destroyed the possibility of a trend day which is what was expected after the intraday QQQQ action. The new QQQQ highs couldn't give enough of a push for the SPY and the DIA to get out of their daily channel and so that continued to be the resistance area for today

http://www.ivicacharts.com/diagrams/2007/05222007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05222007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05222007qqqq.jpg

On the Intraday charts, we can see the divergence between the strong QQQQ and the weaker DIA. Also we can see that the DIA 60 min pennant broke down with a stronger pace then the buying to its highs which is not a good signal for today. That action suggests a better possibility for more intraday correction. If we look to the past, we can see on the chart just how important the 20sma support area (blue line) is and also we can see that the buying pace was slower and slower. All that, with the pennant action, suggest for the possibility of a correction. However, on the other side, the 60 min QQQQ range broke up with a nice pace, and the 20sma on the daily chart helped with that action. So, we have two different signals (the divergence) which can be added risk for today.

http://www.ivicacharts.com/diagrams/2007/05222007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05222007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05222007qqqq60.jpg

So what should we expect for today? The market is still in uptrend on the daily/weekly charts and we must respect that. A correction or consolidation can start anytime, but that said, continuation is still in the game, and we can really just follow the market action and go with it. Yesterday we had a number of setups and we must compare them with the market action and be selective. Focus on the strongest names and weakest names with reasonable small stops.

Good luck trading today!!!!
Ivica Juracic

ivica · May 22, 2007

Market commentary for 05/23/2007

Good day!
Yesterday's market closed at the same area as Monday and consequently we do not have big changes on the daily charts. We can still see a daily uptrend, but this time the Indices look ready for some daily/intraday correction. The pace of the market will help determine the correction possibility and that is something we will have to wait and see. We can see that the DIA and the SPY daily channel resistance area is holding for now. The QQQQâs doji candlestick yesterday would suggest the potential for a reversal or possibly for a continuation of the uptrend

http://www.ivicacharts.com/diagrams/2007/05232007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05232007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05232007qqqq.jpg

To see the situation more clearly, let's take a look at the smaller time frames. On the 60 min chart, we can see the correction possibility more clearly. On the QQQQ chart we can see a double top possibility, while the SPY and the DIA are forming 60 min avalanche patterns. Both broke under the 20sma 60 min support area and have room for more selling in the morning, so that will be my focus for the open action. Previous resistances are now support areas and on the daily chart that is the 10sma support areas (brown line).

http://www.ivicacharts.com/diagrams/2007/05232007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05232007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05232007qqqq60.jpg

We canât forget on the larger time frames (daily/weekly), we still show a lot of strength so right now we canât predict the pace of the possible correction. For me, this is not a short signal. This can be the start of a market break before new highs, but it can also be the start of a longer correction. Before I see a good signal, I will use patience and I will follow the market action. That means the focus will be on the smaller time frame action and faster trades like 5/15/30 min moves. Risk for new swing trades increase before a new signal. Of course, charts that have their âown wayâ are certainly worth focusing on. It is very important for traders to recognize risk because that is a big part of risk management. Not every market action is good for the same risk and the same activity. Today will be a day to use patience and wait for the right opportunities. There will always be opportunities, but not the same number of them.
If anyone has any questions feel free to contact me.

Good luck trading today!!!!
Ivica Juracic

ivica · May 23, 2007

Market commentary for 05/24/2007

Good day!
Today we saw a situation where the former FED Chairman, Alan Greenspan, discussed his opinion about the market during a speech. His concerns about China and some upcoming economic data was all the market needed as an excuse to start seeing profit taking.
The day started with a gap up and the morning gap held very nicely. We had a strong intraday move up to new highs. With the divergences now gone, and all the indices on the same track, there was a possibility we could see a continuation of the strong move up. Despite that, the Indices choose to consolidate at highs (triangle).

http://www.ivicacharts.com/diagrams/2007/05242007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05242007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05242007qqqq.jpg

Everything was in line for a continuation breakout until Mr. Greenspan expressed concerns about upcoming economic data. That was a signal for profit taking. We can see this reaction on the 60 min charts. We had a strong pace on the selling pressure. Indices closed at lows and despite the small changes from yesterday close, the indication is for more selling in the morning.

http://www.ivicacharts.com/diagrams/2007/05242007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05242007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05242007qqqq60.jpg

This is really still not a short signal. We still have daily/weekly uptrend, so I donât recommend jumping into shorts right away with full risk. For me, this means caution for swing long trades, but caution for swing short trades as well. It is important not to panic and very carefully compare open trades with market action. The first hour's action will give us some answers. We will see if we can look for more of a correction, or if the market will stay in a range near highs on the 60 min charts. Thus for the first 60 min, I will just look for market breathe and go with that.

Good luck trading today!!!!
Ivica Juracic

ivica · May 24, 2007

Market commentary for 05/25/2007

Good day!
The Bears came out in force yesterday and chased the bulls out of the market. The beginning of the day didn't start out with that scenario, because after the opening of the market we saw a strong move up and the DIA even saw a slightly higher new daily. This was a false breakout and trapped the bulls with that activity. Unfortunately, that was all we saw from the bulls and for the rest of day we had a strong intraday trend down, which is quite visible on the smaller time frames. This action creates a big selling bar which closed at lows with huge volume, much more so than what we have seen in the past. This is a signal for long traders that new highs will be hard to see in the near future. The QQQQ lost its 20sma support area and finished at a trend line support area. The SPY closed at its 20sma support area on the daily chart, while the DIA found support near 134 (whole number support) but it still has some room for more selling to its 20sma.

http://www.ivicacharts.com/diagrams/2007/05252007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05252007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05252007qqqq.jpg

On the 60 min chart we can clearer see yesterday's action and it is important to notice the selling pace. This pace is stronger then the buying pace was to highs, and the selling volume was stronger then the buying volume as well. Usually this is a signal that the up trend is over.

http://www.ivicacharts.com/diagrams/2007/05252007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05252007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05252007qqqq60.jpg

However, we still canât exclude the larger time frames. Yesterday's action is a signal that the market found a resistance area and that it is ready for a correction. One thing to remember is that this is not a signal for a trend change. This is a signal that the uptrend is possibly over for now and that we could see a correction. What kind of correction we will see is still to be determined. It can be a strong reversal, or, possibly range action or flag action. It is too early to say that we must focus on swing shorts and the the market will go down after just one day of selling. After a strong intraday trend usually we will see a consolidation day. Because of that, I will not expect many low risk opportunities today. We know that is hard to trade when we donât have an intraday trend and we have a high possibility to see that kind of action. Fast trades will be favorable now, and traders must take profits quickly and expect less then the last few days. Also this is the last day before an extended holiday weekend. The market is closed on Monday and consequently that will affect today's volume. I therefore expect to see a high risk market. We must see what kind of correction (consolidation) occurs after yesterdays strong move down, My focus will be on the strongest and weakest names for the intraday moves. I will scan the % lists for that because that is best way to find them.

Good luck trading today!!!!
Ivica Juracic

ivica · May 26, 2007

Market commentary for 05/29/2007

Good day!
After a large trend day move, we will usually see a consolidation day. Friday, however, was quite unusual. With an extended weekend and the expectation of a consolidation day, along with the typical light volume, I expected to not be very active. However, Friday was a surprisingly profitable and active day with a number of daytrades in some strong individual stocks. (RIMM, ELN, CLF, FCX).

When we look at the weekly charts after last week's trading, we will notice the following: The QQQQ continued with its consolidation. The SPY stayed in its trend line but finished negative and also gave us the first red bar in seven weeks. The DIA formed a doji bar which indicates uncertainly for the upcoming week. After a doji bar, we can expect either a reversal or the possibility of a continuation of the trend.

http://www.ivicacharts.com/diagrams/2007/05292007diaweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05292007spyweekly.jpg
http://www.ivicacharts.com/diagrams/2007/05292007qqqqweekly.jpg

The daily chart will show us more clearly the situation for this week. While it is true that Thursday's low held, we also did not see a bounce to highs on Friday. In addition, we saw a consolidation in the lower part of Thursday's big selling bar. With the light volume on Friday and its intraday action, it will be harder for the Indices to see new highs. This does not mean the beginning of a downtrend, as we can still see the possibility of a daily double top. This is a signal for long swing trades that indicates that we can't count on market support for swing moves up to new highs.

http://www.ivicacharts.com/diagrams/2007/05292007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05292007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05292007qqqq.jpg

If we go lower, the picture will be more clear. The 60 min chart shows us Friday's consolidation. The Indices stayed under their 20sma which acted as the larger resistance area for right now. The QQQQ especially has quite a bit of larger resistance with its 10 and 20 sma overhead. In addition, those moving averages look like they want to crossover, which is usually a signal that the trend is over. Again, this is not signaling that a new trend is here, but it is a signal for long continuation. Right now, it is important to see if the Indices will break under Fridays low. If they do, it is very important to recognize the selling pace. Another consolidation day in Friday's range will increase the possibility for a healthy breakdown with lower risk opportunities. Should we breakdown right in the morning, this will increase the risk of a 60 min double bottom possibility. In other words, the consolidation would not have held to provide for healthy low risk setups.

http://www.ivicacharts.com/diagrams/2007/05292007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05292007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05292007qqqq60.jpg

Because of that, I will focus on âown wayâ charts and will look to find excellent intraday setups, like we saw on Friday. Until we see daily support for swing trades, I will expect more day trades then swing trades opportunities. There will, of course, always be opportunities, but my job is to find good low-risk setups. Swing traders who are not familiar with faster trades like day and scalp trades, can expect less activity in the future days. Patience is our friend and letâs use it.

Good luck trading today!!!!
Ivica Juracic

ivica · May 29, 2007

Market commentary for 05/30/2007

Good day!
Yesterday we saw a textbook consolidation day. The market was up, then down and then up again near the close. After all that back and forth action, the Indices closed slightly positively. On the daily charts, we donât see much of a change. A double top or lower /higher high is still possible. The only thing we can say for sure is that we didnât get a continuation pattern after yesterday's action.

http://www.ivicacharts.com/diagrams/2007/05302007dia.jpg
http://www.ivicacharts.com/diagrams/2007/05302007spy.jpg
http://www.ivicacharts.com/diagrams/2007/05302007qqqq.jpg

On the 60 min charts, we can see that the previous intraday resistance area held very well. After yesterday's range action, it is hard to predict today's opening and morning activity. I donât have much more to add after yesterday's commentary. I think that the Market will start with a consolidation (correction) on the daily/weekly charts. Although this is not 100% guaranteed, we have a higher possibility for that kind of action.

http://www.ivicacharts.com/diagrams/2007/05302007dia60.jpg
http://www.ivicacharts.com/diagrams/2007/05302007spy60.jpg
http://www.ivicacharts.com/diagrams/2007/05302007qqqq60.jpg

I expect that the SPY and the DIA will follow the kind of action that the QQQQ started several weeks ago .We can easily see the potential of that kind of range action on the weekly charts. Right now, the only thing we can do is to follow the market action and be focused on âown wayâ stocks and intraday movers. For example - the action we had on GOOG yesterday.

http://www.ivicacharts.com/diagrams/2007/05292007goog.jpg
http://www.ivicacharts.com/diagrams/2007/05292007goog30.jpg

My primary focus will be to find intraday charts that give us lower risk setups. If we look at the larger time frames, and the possibility for consolidation (correction), I would not be surprised to see a slower, summer-like week. This is, of course, just a possibility, but usually summer is the slower part of the year. This, in combination with the market consolidation possibility, leads me to believe that this summer could even be slower. That doesn't mean that we wonât have any opportunities, it just means we could be less active. We will, however, continue to find charts that have their "own way".

Good luck trading today!!!!
Ivica Juracic