Wednesday, April 18, 2012

Wednesday Evening

Naz Futures Daily
I deleted all the trend lines to get a clean image of the action around the 20day WMA. The bears have been putting up quite a fight over it as you can see. Today was another rejection, and tomorrow's number is about 2721ish. Those two big volume days suggest a lot of positions are changing hands.... and since we know the commercials are still heavy on shorts, I'm guessing this Friday's COT report will show they have been reducing short positions into this decline.

Wednesday Afternoon Thread

ADY daily chart (11:35AM)
Another demonstration of the power of the volatility squeeze.  Very good volume on the breakout.  If you buy put a trailing stop on some of it as the typical pattern is the stock will top out and pull back to test the breakout.  I have no position because options are not an option.

Wednesday Morning Thread

Gator's Chart of the Day: SPY
The daily chart of the SPY has three arrows; green, white and red.  The colors have no significance other than differentiation.  The green arrow points to the vertical line that marks the beginning of the January earnings season and the red arrow points to the beginning of the current season.  The white arrow marks 2 months from the green arrow where momentum from the good earnings reports died.

So far earnings have been very good this season.  Even AA and C surprised to the upside.  GOOG was not bad but the stock split has traders confused and wary of what Eric has up his sleeve.  INTC was good and CSX had great numbers too.  So we have materials, financials, social media and semiconductors represented.  The home builders have been decent lately and reports of improved housing demand from Florida suggest we could be near a bottom in at least some of the worst parts of the county.

Could the red arrow mark the beginning of another 2 month run and new multi-year highs?  Maybe, but it could also be pointing to a developing right shoulder.  Europe is in focus Thursday with Spain's bond auction and we have not managed two consecutive up days since the market peaked a couple of weeks ago.

I may be missing the beginning of the coming run (if it is to be) but I cannot build positions in a choppy market.  I'll continue to be very selective and mostly day trade until I see a trend.