Reversal Day?
Well, given that calling the short-term bottom as
been an act in futility, I will still hesitate, even after today’s
miraculous afternoon session, from saying that we have put in a short-term
bottom. HVT, on the other hand, could care
less about picking tops and bottoms, and the afternoon was very conducive to
HVT. That being said, I hope the rally continues. I have come across far more
setups on the 15- and 60-minute charts to the longside, so now may be the time
when we can start considering entry points.
I suspect that this rally will seep into foreign markets and we may continue
the party on the opening. That being said, nothing else has really changed
economically, politically or on the corporate accounting front. Again, this does
not really matter for the time frame we are discussing, just know that bear
market rallies can be vicious, so do not fight them.
After running some scans last night for potential
setups, I came across these:
IDEC Pharmaceuticals
(
IDPH |
Quote |
Chart |
News |
PowerRating)
— 60-minute chart forming nice consolidation pattern with support seen at
yesterday’s low. A move above 36.90 would be bullish.
Marvel Technology Group
(
MRVL |
Quote |
Chart |
News |
PowerRating) — 60-minute also forming a nice consolidation pattern with a move
above 24.60 seen as bullish.
If you feel as though the rally yesterday may have been
fleeting in nature, keep an eye on this stock as a potential short:
Beazer Homes
(
BZH |
Quote |
Chart |
News |
PowerRating) — 15-minute chart is in a clear downtrend, looks like it is failing
at the top of the channel, and pressure on the market could send this stock
lower.
For the morning part of yesterday’s session, I have to
say I thought the trading was lousy. Despite posting some real ugly net changes,
stocks as well as the indices appeared to be in more of a drip lower formation
than any sense of urgency to unload shares. It is not important to know why that
was the case, just important to know that it was not conducive to HVT.
If you go back and look at a one-minute chart of the
morning session, the distance between the troughs and valley’s was far less than
3 points. Without a range on each rally or selloff of 3 points or better, you
stand a very good chance of negative slippage. While there is no way to tell
when the next move will exceed this minimum, the best course of action is to sit
on the sidelines until the market starts to exhibit it, as it does in the above
chart.
Notice that in between each blue line, which denotes
the trough and peak, the distance is a minimum of almost 4 points or greater.
This type of range over the span of three to five minutes will give you a far
better chance of entering and exiting a trade without slippage.
Well, as quickly as the bulls brought out the party
hats, and with good reason, the party appears to have been crashed. As of 5:30
AM PST, the S&P and Nasdaq futures are under pressure yet again. So, it
appears as though it will be another slugfest. Provided the intraday moves on
the futures exceed 3 points, we have the making of another solid trading day.
For the first time in recent memory, the Nasdaq futures
are holding up much better that the S&P futures. For all of you Elliot Wave
followers, it appears as though the September Nasdaq 100 futures have completed
a Wave 5 formation on the daily chart.
Key Technical
Numbers (futures):
S&Ps |
Nasdaq |
| 935-36 | 1070 |
| 929.16 | 1056 (confluence) |
| 916 | 1032 |
| 898-905 (So much congestion here. Beware of choppy trading.) |
1014 |
| 891 | 1007 |
| 880.70 | 994 |
| 867-73 | 975-80 (choppy and confluence) |
As always, feel free to send me your comments and
questions. See you in TradersWire.