Tuesday, March 3, 2009

Today's Trade

Trading was very different than yesterday.  It is important to reset and get back to ground zero no matter how good or bad the previous day's trade was.  You just never know what the market will give you.   The low of the day, 691.25, was one of the support levels that TradingRM had on the morning worksheet. (You can register for free and print out the morning worksheets before the market open at www.tradingrm.com) At that low, the shorts were working really well, but it became prudent to ring the register on a few things at this level.  The market then rallied 19 handles from that low.  Below you can see the 691.25 level and the rally out of it.  I also drew a nice little triangle pattern, wedge, or whatever name you have for it.  Once the upper band of the triangle was breached, the rally ensued with basically no heat to the downside.  Today we had a 19 handle range on the S&P.  This is below the average for the last 5,50,100 days.  However, technicals can be important during sideways action.