Market commentary

Market commentary for 01/29/2008

Good day!
I was expecting more selling pressure in the morning. But the market was just not feeling the same way and after a small morning selling period, it bounced back into a range (QQQQ) or a choppy move up (SPY/DIA). The view on the 60 min charts will tell us everything about Monday's slow high risk trading action. The DIA was strongest and we can technically say that it brought us a trend day, and the same applies to the SPY. But the buying pace was really weak and very choppy with low volume. This was not an example of low risk trading action. Because of that I was patient and mostly watched Monday's action after the morning activity. Looking at the QQQQ 60 min chart will show us that a divergence was also a factor in the high risk action of Monday. The QQQQ stayed in a range all day and now looks like it could have a possible short break down opportunity.

http://www.ivicacharts.com/diagrams/2008/01292008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/01292008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/01292008qqqq60.jpg

The daily chart will show us that the support area is holding for now and the SPY and the DIA are forming higher daily lows which is another bottom sign. The QQQQ daily bar is very small which is proof of the intraday tight range action. The SPY/DIA are still fighting with their 10sma resistance areas, but now looks more and more like it will break it and then have room to trade towards the 20sma resistance area (blue line). The QQQQ is again the weakest and first must deal with its' 10sma on the daily chart and its' $45 number resistance area. It will need more strength to catch the DIA and the SPY.

http://www.ivicacharts.com/diagrams/2008/01292008dia.jpg
http://www.ivicacharts.com/diagrams/2008/01292008spy.jpg
http://www.ivicacharts.com/diagrams/2008/01292008qqqq.jpg

Unfortunately Monday's indice action didn’t remove the direction dilemma. The divergence, between the stronger DIA and the weaker QQQQ, is not helping us with our expectations for Tuesday. If the QQQQ 60 min consolidation will break down, then the DIA and the SPY 60 min double top possibility could support the short side and selling pressure. On the other hand, if the DIA and the SPY will break above Friday's high then we could see a move up into the 20sma resistance which will be the 60 min double top for the QQQQ. Right now I think that both directions are open with the same probability. Also we can expect that low volume will continue until Wednesday at 2:15 pm EST when the FED will come out with rate news. From Monday's action it looks like all eyes are turned towards the FED and are waiting for the news. Because of that I will expect choppy action for the next two days with low volume and a high trading risk continuation.

Wish you all good trading!!!

Ivica
 
Market commentary for 01/30/2008

Good day!
If anyone thought that Monday's action was tight, well, Tuesday proved that there can be tighter and choppier intraday action. The Indices opened with a gap up. For the SPY/DIA that was Friday's high resistance area and for the QQQQ that was the 200sma 15 min resistance area. The gap was not too big and our expectation that it would be filled at the open came true. Unfortunately that was all for healthy market action on Tuesday. The rest of the day we saw choppy intraday action as we did on Monday. It is always harder and more risky to trade when the market is without intraday action. Also, Tuesday had even lighter volume than Monday and that was another reason for the higher risk trading action. On the 60 min charts we can see that the indices stayed in range action all day. For the DIA and the SPY that is a handle, part of the cup and handle pattern possibility and for the QQQQ that is a 60 min triangle. The DIA and the SPY have room for another move up until their daily 20sma resistance area and that is something that I will look for in the morning.

http://www.ivicacharts.com/diagrams/2008/01302008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/01302008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/01302008qqqq60.jpg

The QQQQ triangle can break in both directions and since Wednesday afternoon is the FED announcement (at 14:15 pm ET), I will expect the “usual” pre FED market strength. The Indices have room for that action and I will expect it, unless a gap up destroys that idea. On the daily charts we can see that all the indices have room for another intraday move up before their strong resistance areas (10/20sma). One of main reasons why the indices are trading like this is because of the FED decision. Everyone waits to see what the FED will do and if it will help the market to recover.

http://www.ivicacharts.com/diagrams/2008/01302008dia.jpg
http://www.ivicacharts.com/diagrams/2008/01302008spy.jpg
http://www.ivicacharts.com/diagrams/2008/01302008qqqq.jpg

It is impossible to know how the market will react to the FED announcement, but it is very possible to cut risk. That means: staying in the trade during the FED decision is high risk, unless it is a longer swing or position trade. Usually after the announcement we will see three moves: Initial move, counter move and then back to the initial direction. But remember that is usually what happens, not the rule. I never trade right after the FED and I wait at least an hour before I take new trades. Lots of time I don’t trade at all and the reason for that is that lately the market shows its true direction the day after the FED and may open with a stronger gap the next day in the morning. Because of that I will expect some action in the morning and after that very possibly I’m done for the day. I know that can be boring but remember that cash is sometime the best position. In the morning focus will be on intraday moves, if the market action will allow that.

Wish you all good trading!!!

Ivica
 
Market commentary for 01/31/2008

Good day!
The FED’s rate cut was not enough to bring buyers into the market and after an initial pop, the day closed with a strong pull back into negative territory. Let's take a look from the beginning. The action before the FED announcement was in line with expectations. It was choppy, range action, but this time without much of a move. Volume was very low and risk was high. Individual names had some moves but most of the patterns brought false breakouts and then moved back into a range. Because of that risk was too high and my main objective is to find low risk set ups. On the 60 min charts we can see that the DIA and the SPY made equal moves which we expected, but that action occurred after the FED announcement and it was too high risk for trading. Since the 20sma daily resistance was close there was not much room for low risk setups (unless they were scalps). Breakup volume was strong, which is usual after the FED announcement, and buying pace was very strong.

http://www.ivicacharts.com/diagrams/2008/01312008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/01312008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/01312008qqqq60.jpg

But since I don’t trade after the FED it was interesting to see if the bounce would hold because the daily 20sma for the SPY/DIA and the 10sma for the QQQQ is a big test after last weeks downtrend, I decided to wait for a consolidation before I looked for long trades. That was the right decision because we can see that the indices didn’t have strength to hold that run and a reversal from the daily resistance areas was even stronger with heavier volume. Now we can say that it was a trap for buyers, but if you follow my commentaries you know that action was expected. Of course now it is easy to say, but after strong moves (look at daily charts), the 10/20sma is always a strong test and big resistance.

http://www.ivicacharts.com/diagrams/2008/01312008dia.jpg
http://www.ivicacharts.com/diagrams/2008/01312008spy.jpg
http://www.ivicacharts.com/diagrams/2008/01312008qqqq.jpg

We can see that the FED rate cut didn’t help and the worry about recession is still strong. Will that lead the market to new daily /weekly/yearly lows? I don’t know now, it is possible, but from a technical analysis point of view, I will expect that the previous daily low is still a very strong support area and for now I will expect that will hold. Future days will bring a clearer picture. The SPY and the DIA now have their 10sma on the daily charts as their first support area and also several others supports areas and we must see now if they hold or not. For me the first question is: will the indices make a higher low or a double bottom on the daily charts. I still think that the weekly consolidation will continue and that will reflect with jumpy daily action. Additionally with the ongoing earning season we will continue to have a difficult time for swing trades. My focus is on individual charts finding the strongest and weakest names. For Thursday morning, my bias is down and after that we will see. Worst case scenario, I expect that the indices will hold their previous lows.

Wish you all good trading!!!

Ivica
 
Market commentary for 02/01/2008

Good day!
After a gap down, the market again showed its true direction the day after the FED announcement. I mentioned that possibility in my previous commentary because that has been the case of late. Truly I didn’t expect as strong a recovery, and after the morning losses on short setups, late longs brought us back to a breakeven day. After all we can say that Thursday was a nice trend day and the indices traded back to Wednesday's high. The SPY and the DIA formed 60 min double top patterns and now seem to indicate that the previous daily lows will hold for some time. We can now continue to look for a weekly correction from lows.

http://www.ivicacharts.com/diagrams/2008/02012008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/02012008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/02012008qqqq60.jpg

On the daily charts the SPY closed at its' 20sma resistance area while the DIA and the QQQQ broke their resistances and closed above their moving averages. Volume was higher and I’m expecting a long continuation for Friday morning. GOOG's bad report pulled the indices back after hours, but that was temporary, and right now as I write this commentary, it looks like the GOOG report didn’t influence the market recovery. Unfortunately on the daily charts we can see that the indices don’t have much room until their next resistance area for swing moves, but should have enough room for possible strength in the morning.

http://www.ivicacharts.com/diagrams/2008/02012008dia.jpg
http://www.ivicacharts.com/diagrams/2008/02012008spy.jpg
http://www.ivicacharts.com/diagrams/2008/02012008qqqq.jpg

For the DIA that is the $127.50 area, for the SPY that is the $14 area and for the QQQQ that is the 20sma daily resistance. We can see that on the charts above. Right now I don’t have a bias for the future direction and I think that we have high odds for back and forth daily action. Earning's reports will continue to influence the market action and morning gaps. My focus will be on intraday moves and smaller time frame trades. I will look for the strongest and weakest names (%gainers and % loser’s lists) and depending on market action I will bring possible new setups. January is over and it is always a good opportunity at the end of the month to scan monthly charts. I will be doing so over the next few days.

Wish you all good trading!!!

Ivica
 
Market commentary for 02/11/2008

Good day!
The consolidation continued. The DIA reached a slightly lower low on the 60 min charts. We saw very whippy intraday action and that is something that we expected. It was not good market action for trading, unless you are scalp trader. There is not much to talk about Friday action. We saw very significant divergences which resulted in difficult trading. The QQQQ was strongest all day, while the DIA was weakest and a fight between those two indices held all of Friday. We can easily see that on the 60 min charts. If you remember my last commentary you will see that the 20sma held as the strong resistance area for the SPY and the DIA (blue line), The QQQQ held best and closed above it, and after breaking in the morning didn’t want to leave it for the rest of the day. One more note, the QQQQ closed at highs and that is now the third try to break higher and that is something that I will keep in mind for Monday. The triangles on the 60 min charts for the DIA and the SPY's show the indecision.

http://www.ivicacharts.com/diagrams/2008/02112008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/02112008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/02112008qqqq60.jpg

Also if we look at the daily charts we can see the same situation. The DIA and the SPY formed doji bars and doji bars mean indecision. The QQQQ closed under its' resistance and still has room for a move up to reach its' 10sma resistance area and the same applies to the other indices. Nothing changed from Friday's opinion. For now we can say that the previous low support area held for the QQQQ and that the double bottom worked, but the bounce is very choppy and still under the 10sma resistance area. I won’t be surprised at all if this is not the end of the selling pressure. That possibility will stay until the indices make a higher high on the daily charts. Everything is in line for a triangle formation and if the QQQQ bounces from its' 20sma on the daily chart, as it did last time, than we will have higher odds for a third try triangle breakout and usually that can be the charm.

http://www.ivicacharts.com/diagrams/2008/02112008dia.jpg
http://www.ivicacharts.com/diagrams/2008/02112008spy.jpg
http://www.ivicacharts.com/diagrams/2008/02112008qqqq.jpg

Because of that I’m not sure that the selling pressure is over and I see that the indices have room for another selling round which will bring the SPY and the DIA to their previous lows and the QQQQ to new daily lows. On the weekly charts we can see that the indices traded back very strongly from their previous resistance areas and will need more time to calm down after the strong move down. All have strong support areas, but after very strong moves in one direction, we rarely see a “V” bottom or top. Because of that I will be very cautious next week.

http://www.ivicacharts.com/diagrams/2008/02112008diaweekly.jpg
http://www.ivicacharts.com/diagrams/2008/02112008spyweekly.jpg
http://www.ivicacharts.com/diagrams/2008/02112008qqqqweekly.jpg

In front of us is another consolidation week and every overnight trade will be higher risk. I explained why and that is the uncertainty in the market action. I believe that a weekly bottom area has been reached, but please note the word area. That means the indices could see another selling round on the daily chart, but also could break higher. Previous daily highs and lows are important resistance and support areas and until the indices trade away from them, risk for swing trades will be high and focus will stay on intraday action and smaller time frames. I will bring future updates about my market commentary every day in the room. Should you have any questions and need more informations, please feel free to contact me.

Wish you all good trading!!!

Ivica
 
Market commentary for 02/13/2008

Good day!
Divergences marked Tuesday’s action. We saw a divergence all day between the DIA and the QQQQ. The day started with a gap up and the indices held the gap in the morning. The DIA and the SPY had more room to reach their resistance areas than the QQQQ. We can see on the 60 min charts that the 02/05/2008 high is the resistance area which also served as the gap resistance area. The buying pace in the morning was very strong and promising, but the volume was light and that concerned me all day. I posted the QQQQ daily chart in the room before the open: http://www.ivicacharts.com/diagrams/2008/02122008qqqqd.jpg . We can see why I have said we must pay attention to light volume on a bounce from lows. Also we can see that the last time the QQQQ reached its' 20sma selling pressure began and that was the reason why I repeated several times that we must be careful on the morning strength. The DIA/SPY broke above their 10/20sma on the daily charts but lack of volume continued.

http://www.ivicacharts.com/diagrams/2008/02132008dia60.jpg
http://www.ivicacharts.com/diagrams/2008/02132008spy60.jpg
http://www.ivicacharts.com/diagrams/2008/02132008qqqq60.jpg

During the doldrums time my focus was on the consolidation which started with the 11:00 am EST reversal period, because it was very important to see if the consolidation would hold for a possible buying continuation or not. Unfortunately that was not case and around the 12.00 reversal period, the indices started to lose their consolidations and the selling pace started to be stronger and stronger. That was the signal to close open trades because the odds for a daily reversal possibility increased and the bias turned to the short side. All day the daily QQQQ scenario possibility was in our minds and we saw that our decision was right. Selling pressure got stronger and we can see that the downside pace finished with a strong intraday move down. Intraday selling volume was strong too which was confirmation that the resistance areas will hold for now. One more note: look at the QQQQ 60 min chart. The buying volume decreased and when the QQQQ broke its' uptrend channel, the selling pace was stronger than the buying pace, and the selling volume increased. It is proof that sellers are still around and the indices are not ready for a healthy strong bounce from previous daily lows.

http://www.ivicacharts.com/diagrams/2008/02132008dia.jpg
http://www.ivicacharts.com/diagrams/2008/02132008spy.jpg
http://www.ivicacharts.com/diagrams/2008/02132008qqqq.jpg

Odds for another move down are still here, especially on the QQQQ. The SPY formed a daily doji bar which means indecision, while the DIA closed under its' 10sma resistance area. We still can say that is a strong trigger for a swing move down. Focus will stay on intraday moves and we must be faster with our profits as well as continuing to monitor volume and pace. Those two tools with support and resistance areas will be the key for recognition if we are in the right or wrong direction with our trades. For swing trades risk remains high. For Wednesday morning, my bias is short but a morning gap caused by an earnings report can change the bias so we must pay attention to the market action after the open. If anyone has any questions about this commentary, please feel free to contact me.

Wish you all good trading!!!

Ivica
 
Quote from Forex54:

What are you selling?
:D
More...

Not sure that I understand. But I gave just my market commenatry, but if you are interested for more, just tell.:)

regards .:)
 
Quote from Forex54:

What are you selling?
:D
More...

He's not selling anything that he forces anyone to buy.

Ivica runs a chatroom on othernet, one of the better one's IMHO and he charges a small fee to join (I think its about $100 a month). Ivica worked for Toni and I for six years co-moderating Mainstreet with us. He is one of the most honest, upfront and talented chart readers you will find in this business.
 
Quote from ivica:

Not sure that I understand. But I gave just my market commenatry, but if you are interested for more, just tell.:)

regards .:)
More...

I guess you are doing this for fun.
Your market commentary has been posted all over the internet.
You must have a lot a free time.

Good luck on your hunt.

:D
 
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