Wednesday, May 24, 2017

Rally Keeps Going But New Highs Await

The S&P is only a short step away from confirming new highs, but today's action will have kept shorts wary with the risk of whipsaw high. A simple push above 2,406 could deliver an acceleration higher. The one disappointment is the light volume.

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Market Rallies Slow Down

For the fourth day in a row, markets generated gains to leave markets on the verge of new highs - erasing the losses of last week. However, today's gains were small leaving markets vulnerable to attack from shorts.

The Nasdaq and Nasdaq 100 finished with bearish black candlesticks; black candlesticks at swing highs are often associated with market tops. Shorts can look to take advantage with stops above the recent highs with a target of last weeks lows (for starters).

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Monday, May 22, 2017

Gains Push Into Breakdown Gap

While today's gains were modest they were significant in generating clean pushes inside last week's breakdown gaps. This brings indices back to challenge 'bull traps'

The S&P experienced lighter volume trading as On-Balance-Volume moved to a 'buy' trigger. Today's action opens up for a challenge of 2,405, although shorts may see this as opportunity to go aggressive with a tight stop once markets makes all-time highs.

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Sunday, May 21, 2017

Relief Rally Approaches Resistance

Wednesday's gap created a significant reversal, stalling the mini-rallies kicked off in April. Thursday and Friday generated some come back against last week's loss, bringing many of the markets back to the highs of the gap down.

The S&P is in a position where shorts may look to attack the gap. Friday's spike high put itself inside the gap, recovering the 50-day MA in the process. This gain was supported by a 'buy' trigger in On-Balance-Volume. While shorts might have the better risk:reward option, a move above 2,389 opens up for a retest of 2,405.

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