Wednesday, August 19, 2009

Surprises everywhere; big gap down and then a hard rally, some opportunities were there if traders were nimble.

  • The “Trading RM" oscillator is still trying to break the downtrend line. It got above it on the open, then fell back below. A big down move will likely see the oscillator stay above the downtrend line, which is a definite sign the market is loosening and might be time to get more aggressive.
  • “Future(s)” gapped down, which was slightly unexpected in last nights post, then the market tried to sell off, but buyers stepped in at 979 again. Tomorrow will likely be mixed action now that it is option expiration week.
  • “Range” was above the recent moving average including overnight futures. Market had a slow grind up on decent S&P volume, but very light in other indices. The range oscillator suggests the downside may take a bit to come, possible push to upside again. Regardless, market is loosening a bit.
  • “Going Big” was almost 3:1 weighted to the upside percentage when compared to downside. This suggests market is again pushing higher. Possible continuation to the upside, but indecision seems to be the name of the game right now. No real clear direction.
  • “Gap DaP” was looking for the flat to slightly up open followed by a sell-off, but market gapped down hard then rallied hard… unexpected given yesterdays oscillations. Market is looking for more of a rally to defy all those thinking a correction is due. History doesn’t repeat, but it can mimic, see the DJIA charts from 1937 bear market for a possible scenario.

Still August trading, which is usually slower, and expiration week, be nimble.

Good luck and Great Trading.