Monday, June 26, 2017

Worrying Last Hour of Trading

After a bright start from markets with decent gaps higher, bears came in heavy in morning and end-of-day trading to beat markets back below yesterday's close.

The Nasdaq closed with bearish cloud cover, a pattern which frequently leads to lower prices the next day. Despite this, the breakout hasn't been violated. The MACD is working to a new 'buy' trigger and rising channel support should offer support if there is some follow through lower - helped by the convergence with horizontal support at 6,170. Don't be surprised if there is a quick push lower to test 6,170 before rallying back to 6,170 by the close of business.


The S&P attempted to challenge its 'bull trap' but found itself finishing with a spike-high-bear-black-candlestick. This index looks more vulnerable to a series loss with support not likely to kick in until the 50-day MA at 2,403 is tested. There was some consolation with a new On-Balance-Volume 'buy' trigger but this is unlikely to last if there is another day of selling.


The index which has set up for shorts yesterday played to form today. The Semiconductor Index offered a decent gap high short entry point this morning before reversing hard into a significant bearish engulfing pattern. Even tentative shorts may find enough to hold on for a test of the 50-day MA.


The one exception was the Russell 2000. While it wasn't able to hold the early gains it did do enough to register a breakout from the 'bull flag'. Bulls may have had a rough day but the Russell 2000 continues to deliver under the cover of its horizontal trading range.


For tomorrow, bears have the Semiconductor Index to look too while bulls can stick with the ever improving Russell 2000. The Nasdaq also gives shorts an opportunity but the risk:reward is not as attractive as the Semiconductor Index.

You've now read my opinion, next read Douglas' blog.

I trade a small account on eToro, and invest using Ameritrade. If you would like to join me on eToro, register through the banner link and search for "fallond".

If you are new to spread betting, here is a guide on position size based on eToro's system.


Share on StockTwits

---
Accepting KIVA gift certificates to help support the work on this blog. All certificates gifted are converted into loans for those who need the help more.

Follow Me on Twitter




Dr. Declan Fallon is a blogger who trades for fun on eToro and can be copied for free.
. I invest in my pension fund as a buy-and-hold.
 
f9229fcfd1b1390be00cfccc86c90349c93a4179bf4227457c