B"H
Disclaimer: This is for educational purposes only. Full Disclaimer below. Comments & Suggestions Are Always Appreciated.
Please Remember Profit Protecting "Option Strategies" & Stop-Loss Orders May Help Protect Profits & Cap Losses Quickly.
Messages/Posts Will Be Updated As Time Permits-With Additional Information & Links
Real Time At Twitter: http://twitter.com/chartingstock
*Intra Day Price Swings Are Increasing-Important For Traders To Adjust Accordingly
*Overall Technicals Have Deteriorated BUT POPS HIGHER ARE POSSIBLE Especially Close To "Market Moving Events" Like Todays Oil Inventories at 10:30-35am, The Federal Reserve Announcement At Approximately 2:15pm, Tomorrows 8:30am Jobless Claims & Ben Bernanke Testimony.
*Continued Increased Probability SPY Reaches $87.53 As Written About Since June 2 When The SPY Was Trading At $95.37
*Key Exponential Moving Averages Have Been Broken To The Downside Including 21, 50 & 200. The 100 Day EMA Is Acting As Support-Barely.
*From April 29th-Now the S&P 500 has trade in a range from 856.85 to 956.23. Watch To See If This Range Continues To Hold Or Whether Support Levels Give Way To The Downside.
*S&P 500 Tested 889 Support Yesterday & Technicals Suggest A Drop Towards At Least 850-880 Remains Likely. Worth Repeating IntraDay Price Swings Are Increasing & One Cannot Rule Out A Continuation Of The Rally. This Point is Most Important For Those Currently Short The Market. Technicals Have Been Favoring Short Side Trades Since June 2 As Posted On This Blog Then. Overall Risk Management Techniques As Market Develops Up Or Down Continues To Be Key.
*Continues To Be Wise To Reduce Overall Market Risk Exposure For Both Long & Short Positions
The S&P 500 tested 889 yesterday & was able to make a weak bounce higher. The S&P 500 traded in a tight range yesterday featuring large volume sell blocks & buying programs throughout the day. Technicals have deteriorated since June 2 & while one cannot rule out a strong bounce higher or even a continuation of the rally, it is absolutely essential that traders have overall risk management measures in place for both long & short positions. The S&P 500 has dropped below all but 1 of the key exponential moving averages including the 200, 21 & 50 which should act as support. The 1 EMA which is holding is the 100 day. Many traders are looking for a possible bounce higher around the 850-880 level & one cannot rule out that bounce developing around one of the many market moving events this week including:
10:30am-10:35am Oil inventories
Federal Reserve FOMC Release At Approximately 2:15pm
Thursday 8:30am Initial Jobless Claims
Thursday Ben Bernanke Testimony
For A Full List of Economic Events This Week: http://biz.yahoo.com/c/e.html
That being said, Technical Patterns & Bearish Market Internals including Volume & Negative Advance Decline ratios currently favor Bears. This can change in an instant but realizing the overall current technical situation can assist traders greatly. There is a famous adage many traders concerning "Catching A Falling Knife". The idea is that many traders mistakenly try to buy into a falling market too early. Art Cashin referred to this possibility last week when he said that one scenario could be the market falling to the much expected levels of support which correspond to the approximate 850-880 level on the S&P 500 & then continuing to drop below those levels.
As overall market volatility & weekly IntraDay price swings increase, it is wise for traders to tighten risk management techniques for both long & short positions. New traders especially should spend time learning to use options & stop-loss orders to reduce portfolio risk:
SEASONAL MARKET TRENDS SUGGEST VOLATILITY MAY RAISE FROM NOW-MID JULY
ADJUSTING OVERALL MARKET RISK ACCORDINGLY MAY BE WISE.
Seasonal Market trends suggests their is an increased probability IntraDay volatility swings may continue to increase from now through mid July & again from mid August through late October. Since April 29th the S&P 500 has trade in a range from 856.85 to 956.23. This range may hold but many investors continue to underestimate the possibility that the range may also be broken to the downside. The complacency continues to put them at risk to a market which is technically very weak. This is not to say the rally cannot continue. It simply points out that most investors do not have risk management measures in place in case downside levels of support are broken. Near term, one can expect large intraday swings to be more commonplace. Blog posts since the the June 2 peak have detailed increased probabilities of a move towards the $87.53 level for the SPY. Technicals continue to suggest the intermediate term trend very well may have shifted to Bearish. Further proof is needed in the form of downside support levels being broken to confirm a change in intermediate trend from Bullish to Bearish. Managing risk for long & short positions will very likely differentiate those who trade the likely volatile summer successfully & those that don't.
Good Trading
-------------------------------------------------------
Posts Available at My Blog: http://chartingstock.blogspot.com/
Follow in Real Time on Twitter: http://twitter.com/chartingstock
@chartingstock
Comments & Suggestions Are Appreciated.
The Proper Use of Protective "Hedging" Options, Stop-Loss & Trailing Stop-Loss Orders May Be Helpful & Can Save You Thousands
If You Are Reading This Post On A Secondary Web-Site--Please Be Aware That Things Often Change
Very Rapidly In A Trading Day. Real Time Updates on Twitter Are Most Up To Date:
The Main Site Will Be Updated As Time Permits & Is Most Useful: http://chartingstock.blogspot.com/
-------------------------------------------------------
Disclaimer--The Above is For Educational Purposes Only, Please read the full Disclaimer below. STOP-LOSS ORDERS MAY BE A HELPFUL TOOL TO LIMITING LOSSES EARLY.
This is neither a solicitation nor an offer to Buy/Sell futures, options, commodities, stocks or any investment vehicle whatsoever. Futures, Options, Stock, Currencies, Commodities and all trading HAS LARGE POTENTIAL RISK.must be aware of the risks and be willing to accept them in order to invest in the futures and options markets (and all equity, currency, commodity markets). DON'T TRADE WITH MONEY YOU CAN'T AFFORD TO LOSE. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. All trades, patterns, charts, systems, etc., discussed herein and the product materials are for illustrative purposes only and not to be construed as specific advisory recommendations.
Stock market investments are risky. They don't provide fixed returns and past performance doesn't guarantee future results. All securities investments entail the risk of great and sudden financial loss. Returns vary and you may have a gain or loss when you sell your securities. No assurance is given that anything described here will be successful. The message contains neither recommendations nor solicitations to buy or sell securities. Documents are published solely for information and educational purposes and do not form the basis of any contract or commitment whatsoever. Nothing in the above should be construed as investment advice, either on behalf of particular stocks or in regard to overall investment strategies.
No representation or warranty, expressed or implied, is made as to the fairness, or correctness of the information contained in the above. Projections and opinions expressed constitute the personal opinions of the authors and are set forth for informational and educational purposes only. I am not liable for damages caused by actions taken as a result of the information in the above sites, guides, newsletters and e-books or any of their following pages, ads and links. The expressed analysis and projections are subject to change without notice. No information above constitutes a recommendation to buy, sell or hold any security, financial product or instrument discussed therein. We do not offer or provide any investment advice or opinion regarding the nature, potential, value, suitability or profitability of any particular security, portfolio of securities, transaction or investment strategy, and you shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.
Real Time At Twitter: http://twitter.com/chartingstock
Stop-Losses Can Save You Thousands-Please Read:
BELOW MY POSTS & INTERNAL "http://chartingstock.blogspot.com/" LINKS ARE "SPONSORED ADVERTISEMENT LINKS" I HAVE NO CONNECTION WITH THESE SPONSORED ADVERTISEMENTS. PLEASE FOLLOW IN REAL TIME ON TWITTER AT: @CHARTINGSTOCK http://twitter.com/chartingstock Good Trading
© 2009 chartingstock All Rights Reserved
