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发表于 2009-3-23 15:15
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taking place ahead of the open at 1522.5. It took awhile, however, for the bears to really take hold. The market fell into a range out of the open and it was not until the third test of intraday lows on the 5 minute time frame that the selling finally began to take over. This corresponded to the 10:45 ET - 11:00 ET reversal zones.
The Dow and S&Ps led the sellers into mid-day. They barely paused at the support from the gap closure and continued into a very strong test of their 15 minute 20 simple moving averages. At 11:30 ET the selling slowed and at 11:33 ET I had my first buy setup of the day in the NQ (EMini Nasdaq 100). The Dow and S&Ps rallied strong into the 5 minute 20 sma into noon, while the Nasdaq moved all the way back into the prior breakdown price level before stalling.
The market became very choppy once again into the early afternoon as volume dropped off a great deal. The indices crept higher until 14:00 ET. At that point the RIMM news hit. Since by this point the market had held the support for too long to favor a strong break lower, the bulls were given the freedom to rally once again. The S&Ps and Dow quickly moved back into the morning highs, while the Nasdaq was soon retesting last weeks highs. The Nasdaq hugged those highs while the S&Ps and Dow pulled back off 14:30 ET. When the last reversal period of the day hit at 15:30 ET it pushed the Nasdaq to new yearly highs and took the S&Ps and Dow to new intraday highs. The market was rounding off on the smaller time frames into the close, however, and, as I mentioned earlier, the sellers again took over afterhours.
For intraday updates, come join us in my free trading chatroom on Othernet. You can access the room using mIRC or http://www.icechat.net. The room name is #mainstreet.
posted by Toni Hansen @ 11:20 PM 0 Comments  
Monday, October 22, 2007Market Shrugs Off Concerns, at Least Temporarily
Good morning! The market established a wide trading range in Monday's session after a sharp decline on Friday marked the 20th anniversary of Black Monday when the Dow fell 508 points in a single day. For those of you who checked out my Market Action Video in yesterday's newsletter, this response was not unexpected since the market had been selling off into Friday's decline and in the past such a move is typically unable to continue with a second strong day of selling. Some continuation early in the morning is not uncommon, however, and the market had sold off a great deal in afterhours trading. Even though the indices opened higher off those premarket lows, they still experienced a fairly strong downside gap to kick off the new week.
The gap in the market took it smack into the upper end of the congestion area from the price range of late August and early September. These upper price levels were also whole number support levels in the DIA and QQQQ, which are the index exchange traded funds for the Dow Jones Industrial Average and the Nasdaq Composite. It was the $134 level in the DIA and $52 level in the QQQQ. The selling into the previous day's close and the gap into Monday morning extended the trend move enough to allow the market to pull back up into the range from Friday, just as it had in nearly every single one of the examples covered in my video.
The morning gap filled very quickly in the indices and that zone served as resistance in both the S&P 500 and the Dow Jones Industrial Average. It hit at the same time as the 5 minute 20 simple moving average as well, providing additional resistance. The Nasdaq Composite, on the other hand, regained its relative strength lead and, while it stalled for a few minutes at its own 5 minute 20 sma, it was not long before it was at new intraday highs and back to testing the price resistance from Friday's mid-day congestion zone. These resistance levels struck with the onset of the 10:15 ET reversal period and selling once again took over. Most of the best short setups in individual stocks took place at this time.
While the mid-morning downside was decent and on the strong side, the rounded lows in the premarket and sharp upside out of the open were more significant and the market was pushed into a trading range with a second low coming out of the 11:00 ET reversal period. As the market initially moved off the 11:00 lows I was not certain we were going to actually end up holding our range very well without another wave of selling intraday first. The correction began gradually and with declining volume, but the momentum soon began to build and turn over before finally holding at 12:30 ET and again kicking off another wave of buying on the 5 minute time frames. The buying accelerated into 13:00 ET, creating an equal move on the 5 minute time frame which took the Nasdaq into the zone of the prior highs intraday as well.
After hitting resistance, the indices began to round off at the highs, establishing slightly higher highs, but without really breaking the resistance zone. The bulls finally gave way off 13:30 ET highs and fell into the 5 minute 20 sma support with the onset of the 14:00 ET reversal period. At this point the market based along the support zone on declining volume. This creased a strong Avalanche short pattern, which in this case was also an inverted cup-with-handle pattern. The selloff which followed too the market back into the mid-day congestion at 15:00 ET. It again slowed at this support, but it was not until around 15:30 ET that the buyers truly returned once again. This late day buy setup took the indices higher well into the closing bell and then beyond on afterhours trading.
By the closing bell the Dow Jones Industrial Average ($DJI) had gained 44.95 points (+0.3%) and closed at 13,567.0. The S&P 500 rose 5.70 points (+0.4%) anc closed at 1,506.33. The Nasdaq Composite experienced the strongest percentage gain by rising 1.1% (+28.77 points). It closed at 2,753.93. Apple Inc. (AAPL) was once again at the forefront of the gainers list, rising $3.94/share on Monday. Another gainer, Wynn Resorts (WYNN), will remain of upside interest throughout this week and has potential for an upside swingtrade. In the indices themselves, key resistance levels to watch for in the S&P 500 Emini futures contract will be the 1,528 zone. The 1540 level will also be strong resistance. In terms of support, look for the 1497 zone and then 1593.5. The chances are higher now, however, that the market will continue to react somewhat off this support and congest before it decides to either gain momentum or fall through the support and back into the congestion from mid-August.
For intraday updates, come join us in my free trading chatroom on Othernet. You can access the room using mIRC or http://www.icechat.net. The room name is #mainstreet.
posted by Toni Hansen @ 8:55 PM 2 Comments
Market Panics and the Anniversary of Black Monday
NEW ADDITION: TONI'S MARKET OUTLOOK VIDEO OF THE WEEK:
Good morning!!! Beginning this week I will be adding a new feature to my site: an audio/video look at the market focusing on several aspects of the current market's development and upcoming expectations based upon the market's current action. You can view today's video at http://www.tonihansen.com/marketactionvideo/
I hope that you enjoy it!!!!
All my best,
Toni Hansen
_____________________________________________________________________
Market Panics and the Anniversary of Black Monday
Good morning! The market took quite a plunge on Friday on the 20th anniversary of Black Monday after teasing about such a move for several weeks. On both Wednesday and the previous Thursday the markets had experienced sharp intraday selloffs, but in both cases the indices managed to recover rather well. On Friday, however, the downside pace increased dramatically and key daily support levels gave way. The Dow Jones Industrial Average led the decliners by rounding off at the daily highs over the course of the past several weeks and then slowly beginning to sell off with last Thursday's steep reversal. At the same time, the Nasdaq Composite had managed to hang onto most of its gains and base at highs, but it was unable to sustain any of the intraday momentum on the upside. Even though it continued to hold the 20 day simple moving average support into Friday, it has broken the uptrend channel line from the buying which had been in place since mid-August.
Heading into Friday's session, things became rather dismal early on. The 1540 level in the ES, which was the initial 15 minute support zone, broke around 9:00 am ET, just prior to the open. Then it fell into the 1536 zone, which was the second support level we were looking for heading into the day. This zone held initially for a couple of minutes, but the momentum into the support level was simply too strong and it soon gave way to more selling. The continuation pushed the Dow and S&Ps through Wednesday's lows to trigger a larger short setup on the daily time frame. The Nasdaq, which had held up a lot better overall had found initial support at Thursday's lows, but as the Dow and S&Ps moved to new lows on the week, the Nasdaq fell into the lows made earlier in the week and that support helped stall the price decline into noon.
It was 11:00 ET when the market pivoted off mid-day support initially. The Nasdaq held this level, but the weaker S&Ps and Dow managed a very slightly lower low into 11:30 ET. A pull off those lows created a form of double bottom trap called a 2B. The Nasdaq also formed a bullish pattern on the 5 minute time frame. In this case it is a pattern I termed the Phoenix, although in this case it didn't rise very far from the ashes before it got a bit scorched again! The market rounded off at mid-day highs, just under the 15 minute 20 simple moving average, and by 13:00 ET the bears had already begun taking charge once again. The afternoon trading was smooth to begin with, but as panic set in the action became a lot more choppy and volatile.
Although the Dow did not quite hit the -508 point loss of Black Monday, it gave it a shot in terms of the absolute point value of Friday's decline. Alll 30 of its index components closed in the red. The Dow closed lower by -366.94 points (-2.6%) on Friday at 13,500.02. It's biggest loser was 3M (MMM), which lost 8.6%. Of course, in today's market, the drop of 20 years ago would have had to have been about 3,000 points to truly compare, so we still faired well in that regard! Meanwhile, the S&P 500 fell 39.45 points (-2.6%) and closed at 1,500.63 on Friday and the Nasdaq Composite also lost 2.6%. In terms of points, this amounted to a 74.15 point drop. It ended the day at 2,725.16.
As we head into the new week, this bearish phase of the market looms. In the past, most days which are led by selling and then experience a sharp decline such as this will recover to some extent into the next session. There are exceptions though, such as July 13th and 14th of 2006 where the Dow had begun to sell off just over a week earlier but then accelerated coming out of a downside gap on the 13th. The session closed nearly lows and then went on into the prior daily low in the next session. In the Dow Jones mini-futures this amounts to the 13200 to 13400 zone and 1450 to 1475 in the S&Ps, which is a rather large range. The lower end of that support zone will tend to be the strongest. I believe that we can see one more wave of upside on the weekly time frame, however, before this larger uptrend really reverses. Should the market correct off support, the 1525 level would be S&P Emini resistance. Right now that is not looking too likely though!
For intraday updates, come join us in my free trading chatroom on Othernet. You can access the room using mIRC or |
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