Day of Consolidation

Not a whole lot to say about today. Small loses didn't erode prior gains but the tight action offers swing traders the best chance for gain; trading the narrow range coil offers an attractive risk:reward. Long-term traders need to wait for an oversold condition before building their positions.

The S&P is at channel resistance suggesting shorts have the edge. Stops go around 2,560.

The Nasdaq is caught in the middle ground of its rising channel. Again, swing trade for a target of upper/lower range of the same channel.

The Russell 2000 continued to drift off highs with the 20-day MA the first downward target and a chance for buyers waiting to buy the pullback.

The Nasdaq volatility index is also playing for a bounce which is bad news for the Nasdaq index and a key top could be just weeks away.

Watch for reactions from the tight coiling action of recent days. There isn't a whole lot of room for a move without consequence, so the next tradable leg may only be 1 or 2 days away.

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.

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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.

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