Amazing all the Bulls screaming about 10 points

Discussion in 'Trading' started by Kendall, Feb 7, 2010.

  1. Kendall

    Kendall

    in the market on Friday. I can remember many hammers on the way down in 2008 that failed. You may get a bounce but reality is, something has changed. During the fall it was the Bears screaming about 10 points down. Look at the volume folks, this wouldn't have came off the tops like this if it was just a correction.
     
  2. NoDoji

    NoDoji

    That hammer Friday was formed right off the 200-day EMA. Technically that leaves the longer term trend still intact (the up trend that was confirmed in mid July when price broke up through the 200 EMA and stayed above it ever since), but Friday was the first visit back to the rising 200 EMA since mid-July.
     
  3. I have been noticing the same, NoDoji. It is the first visit after a long time, therefore a more potent bound is likely. A similar bounce can be observed in the weekly SPY chart, where it jumped off the 50 EMA.

    This market is now trapped in between the 200 EMA and 50 EMA (weekly), which is why I can envision it going back and forth, before it decides for a final direction.

    I might sound very negative, but I wish markets would experience another giant leg down to give everyone a lesson, especially those at Washington. Going higher and higher is as if nothing has happened and all investors get their money back. This whole Keynesian thinking needs to be put where it belongs: in the trash! Let's start fresh. With a sold off market in which we can pick up some jewels at depressed prices.
     
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  4. just21

    just21

    The two day pattern and the news is very similar to late november when dubai defaulted, range is slightly greater than then though.
     
  5. Kendall

    Kendall

    Have you ever noticed how easy it is to find a technical indicator to support your case, whether it's bullish or bearish?

    200 EMA bounce I guess could be significant if that's what your system is based on...But take a look at resistance 200 EMA provided on way up off bottom in March last year. It wasn't much at all, there was short correction and then market went right through it like a knife through butter. ...and that was on no volume.

    I can support Bearish case with Edwards and Mcgee trend analysis. If you draw trend line off lows in March 03, it has been broken with volume. That would indicate we go to March lows, although I'm not in that camp.

    All I know is we did 400MM on SPY's down all day and then rallied into close. Maybe there is a bounce, but this 484MM is getting tested.
     
  6. we were significantly down over the course of 3 weeks. We hit a technical milestone on big down volume giving large position traders a good opportunity to stop and reverse or close out shorts for the short term.

    The weekly spy shows weakness and we are likely next week to range from 1050 to 1075 with 1100 and 1040 as the larger range.

    We have some consolidation in order at this lower level off the highs of 1150. PIGS sovereign debt, the USD and EURO, and a shaky economy all point toward sideways at best and possibly more downside in March.
     
  7. this hammer means nothing unless the price action monday confirms it the formation is beautiful but unless the high is taken out and we are confirmed no real use discussing it :)
     
  8. spinn

    spinn

    if you draw enough lines there is always support somewhere.
     
  9. Actually and interestingly the hammer is on the daily. It happened on a Friday after a long slide down and the more powerful weekly and monthly charts do not point out such a rosy technical picture.
     
  10. #10     Feb 7, 2010