April 1 2015
We had 3 days of extreme volatility in the markets. It is quite normal for the market to do so when it is undecided where it want to go. Reading columns on financial sites, we can see some strategists mentioning that it is very bad for the markets. Well, the jury is still out but what we do know is that we are at a decision point for the SPY, DIA and QQQ.
Looking at the daily charts of SPY we can see that this is a crucial moment for SPY as it is at support. Breaking below the support will be bad for stocks but not as bad as it seems since the 200 MA support is just below.
Looking at the daily charts of SPY we can see that this is a crucial moment for SPY as it is at support. Breaking below the support will be bad for stocks but not as bad as it seems since the 200 MA support is just below.
Looking at the indicators, we can see that there is a slight bullish divergence in the stochastics and MACD histogram. While it is no means a bullish signal to buy, it does show us that there may be internal strength in the market. My bias is slightly bullish but we would need to look at the 60 min chart to establish that there is a bottom formed.
Looking at the 60 min chart, I thought the gap up a few days ago has establish a short term bottom. But the gap down the next day after the gap up proves us wrong. Although that short brief period still enabled me to earn some money through hit and run trades. The market is not trending so hit and run (go in and out within 1-2 days) trading is the best way to make money now.
I do not see any bottom now in the 60 min chart. Maybe in a day or two and we certainly do not want SPY to drop below support.
I do not see any bottom now in the 60 min chart. Maybe in a day or two and we certainly do not want SPY to drop below support.
The QQQ representing Nasdaq pretty much paints a similar picture.
IWM representing the Russell 2000 shows us it is much stronger than SPY and DIA and QQQ. It is nearing its 50 MA.
Meanwhile, Apple which is one of the most followed stocks is meandering around support area. Price support is at around $120 but at the moment it is touching its 50 MA support. If the 50 MA support holds, this signals that Apple stock is still very strong. Breaking out of the downtrendline will be bullish for this stock so I'm watching AAPL closely.
Im tracking the buying and selling pressure for AAPL and the other index etf.
AAPL = 16965 Buying Pressure to 12000 Selling Pressure
SPY = 690 BP to 338 SP
QQQ = 2640 BP to 856 SP
DIA = 217 BP to 135 SP
IWM = 262 BP to 271 SP
Ideally a bullish environment will have 2 or more times buying pressure to selling pressure. QQQ currently has 3 times more buying pressure than selling pressure. In the days and week to come if we see a rise or fall in buying pressure to selling pressure, that may hint at what market participants are thinking and give us a clue whether the stock or market is about to rise or fall.
AAPL = 16965 Buying Pressure to 12000 Selling Pressure
SPY = 690 BP to 338 SP
QQQ = 2640 BP to 856 SP
DIA = 217 BP to 135 SP
IWM = 262 BP to 271 SP
Ideally a bullish environment will have 2 or more times buying pressure to selling pressure. QQQ currently has 3 times more buying pressure than selling pressure. In the days and week to come if we see a rise or fall in buying pressure to selling pressure, that may hint at what market participants are thinking and give us a clue whether the stock or market is about to rise or fall.
March 31 2015
Updates
The market opened gapped down as expected. The 15 Min chart of SPY below show that the stock found a temporary support at the 15 min 50 MA. The first area of price support is around $206 and second support is $204.50. I'm looking to see if SPY can trade above the resistance area. Once it does going to look for short term entries and I think the short term uptrend will resume.
The QQQ pictured below looks stronger than SPY. Lets see if it can find support there and move above the resistance.
Its amazing how quickly a gain can be wipe out in just one day. The market is quite choppy and gap ups and downs can be quite disastrous for swing traders and buy and hold traders. Anyway, I think the market is gonna gap lower today and lets hope it closes the gap. Will be monitoring for any setups for swing trading but until then its wise to stay out at the moment. We will see in the next 1-2 hours after the opening whether this gap down gives us an opportunity to buy at a lower price or a cause for concern. Support area to watch is $204.50. Things will look nasty if SPY drops below that.
March 30 2015
Update
Turns out that SPY gaps up after forming a bottom and many traders would have bought the open and put a stop below the recent lows. The SPY has begin a short term uptrend and I would expect not much resistance overhead perhaps till it reaches the 60 min 200 MA pictured below. Then it may rise further till around the price resistance of 210-211. If SPY drops and forms a buy pattern then will be going in to ride the short term uptrend.
As we go into the first week of April 2015, the stock market is currently at support level. The last two trading session had a smaller trading range and this shows us that downward momentum has slowed down. The question is, is a reversal around the corner?
Looking at the chart of SPY above, we can see that the SPY has traded in a smaller range the last two trading days. This is somewhat good news for the bulls as it shows that downward momentum has slowed somewhat. SPY is at support and the stochastics indicator is at oversold level. However the daily stochastics has not shown us any buy signals yet. But its always a good thing to prepare ourself for a possible reversal. The MACD Histogram is somewhat showing us a divergence which may indicate that SPY is about to reverse to the upside.
To get a clearer picture, we now zoom into the 15 min chart of SPY. This chart tells us that SPY is trying to form a bottom. We do not want to see it fall below the uptrendline as this will signify that the bears will win. We want to see SPY go above the resistance to start buying again. That way it is much safer.
