Wednesday, July 29, 2009

Day Recap 7/28

Recognizing the intraday trend or range in real time is something I am
always working on as a day trader. There were some good clues today
that could have helped a trader to pick up on the action. The market
gapped down, opening up at 972.25 (the overnight low) and attempted to
retrace back to Monday’s close of 980. The market was able to rally
back to 979.25 before the second straight decline in Consumer
Confidence number came out. As unemployment approaches 10%, consumers
seem more likely to save then spend. Traders recognized this, with
the market being on high levels they began to take profits. As the
market sold off we broke through the overnight low (972.25) and then
continued to sell through yesterday’s low (969). The low for the day
was 966. As we have been in an up trending market, this is the first
time since July 13th that the market was able to break through the
previous day’s low. Further we had GS selling off all morning which
seemed to help lead the market down, and the VIX was able to rip
through the 25.00 level with ease. Today something changed. Although
we rallied in the afternoon, the market was unable to make higher
highs, at no point was the market positive, and we made lower lows on
a daily chart. This could be the start of consolidation or market
correction. I will look to see if we can again make lower lows
tomorrow.

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