Thursday, June 10, 2010

Learnings from Past

SPX to day did one of its famous cloud walks.  SPX moved quickly to 1083 by 7.00 and then a 7.30 low at 1076 and a final low of 1072.5 at 10am.  SPX then rallied all the way to close at 1086.84 only one point lower from the high of the day.   On a day like this the only time to buy is around 7.30.  
I did take a short at around 9 and got out around 11 with a few pennies loss.  FAS was little more wobbly than SPX
The chart on left shows inside days and outside days.  SPX hasn't had an outside day in a long time like since the decline started.  I will be on the look out for one.  The chart on right is TNA hourly with DOMA 103.  That is a formidable resistance for it.  For this rally to continue SPX will have to go over its resistance and TNA over DOMA 103.
Today was a HH and HL that is positive.  After a huge day like today the odds are tomorrow would be flat inside day.  That is neutral  Advancing issues were 6.25:1 over declining that is positive. Advacing volume to declining volume was 45:1.  That is positive.  Percentage of issues over 200 day mvg avg is 55.6 mildly positive.
SPX hasn't been able to put two positive days in a row. That is a negative. Top of the channel for FAS 30 min envelope is at 23.22.  if we go above it and come back in that would be A sign to short.  Other than that there isn't a whole lot of negative to report.
As we move to the rally side bears will come out swinging  with words ( low volume, below mvg. avg., Indicator x hasn't turned and this is a 2 wait till you see the 3 of 3 etc.. etc..) and with resources after all if things go right they could be kicked out of the house they occupied and enjoyed for 6 weeks.  It is important to have the focus on the trading system and not be drawn into the bull/bear fight. I remember what happened in June 2009, Sep. 2009, Feb 2010 all rallies were supposed to end and a 3 of 3 of 3 was to commence and that never happened.  This time I will behave differently and ignore all the chatter and aim the goal. 

I will be looking to go long when I get an opening. 

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