Bank of America currently trading at $17.63 has formed a hammer and closed below support on 78.6% fibonacci retracement. The Dow Jones is trading at a major resistance level at 10,000 and Bank of America is a component of the Dow. The stock is currently overbought on Fast Stochastic and it has not been able to break previous highs made at $18.10 Foreign markets are mixed with uncertainty and mostly down. The Dow Jones will most likely follow suit tomorrow. Bank of America being a DOW component will most likely follow suit. Time to load up on some shorts *bang*
Let's see if my analysis is right! If it is which I'm pretty sure it will be I'll give myself a big pat on the back
Ok, looks like I was correct...but now the DOW has formed a hammer near the top. Will this market continue to go down? Most likely, but I'll have to find out more details on upcoming economic reports and see how the foreign markets react tonight. Until then I can't give an accurate analysis based upon the hammer alone. I'll update you guys 6 hrs or so before the market open. Till then I'm out
Tonight, I'm going to do some research, and general market analysis to determine where BAC will be on Monday. So I'll check in a little later, until then I'd suggest you don't jump the gun.
Market news has been disappointing and foreign markets have gone down even further. The market conditions are still suitable to bears. Key market levels to watch is the DJI 9,500 level. Watch that level cover your shorts when the DJI is at around 9,550 and if the market has a 100 pt penetration to 9,400 you can enter another short position. The key level on BAC is currently $16, and I expect a quick snap up towards the end of the day when professional traders, and institutions start buying up BAC. The major institutions might buy towards the end of the day most professionals have been dumping their positions out of lack of confidence and extra information that we the small individual traders don't have access to since we don't have lobbyists, bribe big whigs in government, and etc. So trade with pros not schmucks the same pros that make money never leave wall street and theirs a good reason for that. The money is always transferred to the same pros and each cycle that goes by the pro's become more and more powerful in capital, backing, and information resource. Wait for the markets to rally towards the end of the day and position your trades with professionals willing to take their trades overnight. The big wall street players will buy towards the end of the day, they always have better data and insider info we won't have access to. They, will be our leading indicator. YOU SHOULD BUY in this circumstance: If BAC goes near the $16 level towards the last 3 hrs of tomorrows trading session fast stochastic and RSI severely oversold and the -DMI on the Directional movement index starts to trend downwards. Along with major blocks of shares being bought towards end of trading session. SELL IF: IF BAC breaks $16 and -DMI trend even higher as people start selling off towards the end of the day from 2PM EST onwards if a sell off occurs join in with some short term shorts and cover by 3:30PM EST and you should make decent profits. Also note that if BAC breaks $16 know that all hell will break loose because BAC is now on a down trend. Which means you can start buying shorts at $16.10 and start covering when BAC gets near $14 or $15. Make sure you put a stop at like 16.30 and make your cover target at 15.20 for a 4:1 profit ratio or so. Note* the market might spike in the early morning session but don't be fooled, those are sponsored by amateurs with no real capital to lead a major rally. I don't trade with amateurs and neither should you. I look to professionals and major market movements from the big wall street players to determine my decisions. It's called deductive reasoning. Use it to your best ability. If the market can keep it's gains through out the day you may want to consider buying some stocks like BAC for value. YOU COULD LOAD UP ON VALUE IF THIS HAPPENS: IF the DJI collapses in the morning and BAC stock price collapses immediately at opening start positioning yourself for either a cup and handle position or a double bottom. Make sure your ready to buy up a major dip if the open is extremely ugly. You can bottom feed as well. Where can you bottom feed at? Below $16.00 is fair game. It might even hit $15.00 it might take a while to earn back the money if the market goes even lower or it might be earned back immediately. Keep a close EYE ON THE DOW it determines general market psychology as well. Remember below 8,400 means that BAC can easily hit $15.00-14.00 and you can back off until it hits the $15.00 level if this is occurring at opening bell on the NYSE.
Here's my advice, best of luck to you my fellow traders. Don't get killed and remember bears make money, bulls make money, but hogs get slaughtered.