Good morning. Happy Thursday.
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Let’s review this week….
Monday – gap up and huge rally all day
Tuesday – gap down, rallied to fill the gap and test the highs, sell off and close at the lows
Wednesday – gap up, rally to a new high, huge sell off followed by solid buying that recaptures about two-thirds of the sell off
Thursday – as of an hour before the open, we’ll get a big gap up that puts us right near yesterday’s highs
Fun stuff. This action is a day traders’ paradise but a swing traders’ nightmare (that is unless you are absolutely sure the market is going higher and you’re committed to holding long regardless of the intraday noise).
The Taylor Trading Technique (I don’t recommend it because it’s so poorly written, it’s almost unreadable) discuss the ying and the yan of the market…how prices are brought up so the pros can sell…then they’re brought up again to offer an opportunity to sell short….then they’re brought down to allow them to cover…and then brought down a little further so they can buy. When the market is rolling around, the sequence of events plays out nicely, but right now, the market is strong enough, the downside action isn’t fully maturing. Take away yesterday’s late-day move and today would have been a great day to open up a little, sell off to make a new low, and then rally all day. Oh well. I’m rambling.
Here’s the ES (SPX emini futures) 45-min chart. We still have two unfilled gaps below. I don’t expect the first to fill until the market rolls over and falls part, but that second one still lingers.
As I’ve noted before, there’s lots of unknown event risk out there. The normal forces of supply and demand are not at work. Regardless of strong the market gets, news out of Washington can pull the floor out at any time, and regardless of how weak it looks, you never know, maybe the up-tick rule is reinstated. The market would fly. The short term trend is up, but anything goes. Don’t bet the house on any move.
headlines at Yahoo Finance
stocks to watch from MarketWatch
today’s upgrades/downgrades
this week’s earnings & economic releases