Biggest hammer evAr today

Discussion in 'Trading' started by 1a2b3cppp, Aug 3, 2011.

  1. did all of you price predictors buy at the close today?

    This is a huge bullish sign right?


    I bought 1,400 shares of SPY yesterday at $127. Had I been like the ET members who can predict price I would've waited and bought it at $124 today.
  2. luisHK


    Bought 1000spy @126.26 yesterday, been shy today as i'm already roughly 120% long and the market is worrisome but still wondering wether to add in AH.

    Have an open order on WFM which didn't quite pick up yet, too late i'm afraid for LVS, which went +7% from intraday low to close. Missed it :(

    How bullish such a hammer day is supposed to be ?
  3. S2007S


    This market is in a trading range at this point and it will be a market that you sell all rallies and but all dips, now I am not saying the market is headed further down, I do believe a bounce is coming and I wouldnt doubt the SPX gets back to 1300+ in the next week or so, it just seems anytime the SPX looks like its going to break out to 1370 its gets slammed right back down. If the SPX rallies for 2-3 straight weeks and heads back to 1340+ you would have to be a fool not to sell and wait for the next decline.

    Scary Chart Pattern Suggests More Selling on the Way | August 03, 2011 | 02:51 PM EDT

    The S&P 500 triggered a scary technical signal — a head and shoulders pattern in the chart — leaving investors to wonder if it's the sign of more selling to come — or just a head fake.

    The so-called head and shoulders pattern is formed when the chart pattern shows three rallies, with the middle rally peaking higher than the first and second, thus creating a head. If the market breaks the "neckline," that is a trend reversal signal and can mean more selling ahead.

    "What we're having is a classical technical breakdown. When the S&P broke down through the 1248 to 1250 region, it violated the neckline on a head and shoulders formation, " said Art Cashin, director of floor trading at UBS [ UBS 15.76 +0.05 (+0.32%) ].

    "If it's a valid head and shoulders then you begin a countdown to where it occurred. I think it counts down to 1120," Cashin said. The market feels oversold and ready for a bounce, but the fact that the S&P is now negative for the year could weigh on sentiment, he added.

    "You watch the rebounds. They should be restrained by the neckline at 1248 to 1252. A rally can only be a success if it punches above that," he said.

    The pattern doesn't always trigger a break through the neckline and a selloff.

    "There have been a few head fakes with this pattern since we came off the 2008 lows," said Scott Redler of He said the S&P started forming the pattern several times, but it was never triggered. "That's why nobody trusts this pattern, but it feels different this time."

    In the chart below, the market first rallied, forming the top of the left shoulder in late February. It then rallied to a higher level, forming a head in May. It then dipped down to a neckline before rallying to form a right shoulder in July. Typically, the neckline is formed at an area of prior support. That would be the 1249 to 1280 zone, according to Redler.

    "Today's move down through 1249 was the bottom end of the neckline which traders have been watching," said Redler. "What a head and shoulders tries to do is it tries to measure the potential move of a correction and the way you do that is from the top of the head to the neckline. The high was 1370. The neckline would be an average of 1270. That gives you a measured move for technicians to pick an area to buy. That takes you down to a zone of 1150 to 1180," he said.

    "That correlates to a pretty big support level from last year. That will be the level traders are watching," he said.

    Redler said another reason he was expecting this formation to be triggered was by the action in the industrial sector ETF, Industrial Select Sector SPDR Fund and the SPDR S&P Homebuilders ETF. Both showed head and shoulder patterns.

    Redler, who watches the market's short-term technicals, recommended raising macro cash in longer-term positions last Thursday when he saw the right shoulder start to get fully developed. It was also when the SPY, the ETF representing the S&P, broke its 50-day moving average at 1310.
  4. Bought at the close today but been buying and stopping out before this.

  5. spd


    I was short SSO coming into today, covered shortly after the first bounce. Couldnt pull the trigger and get long. We'll see what sets tomorrow.
  6. As has been posted elsewhere by yours truly...

  7. Also...

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  8. Well I can tell you 1057 is a target in the spus. I do not know when but I do know that 1057 is in the cards before May 2012. The "New Low" was bought hard today. We'll see what happens around here. I doubt a runaway to the upside this time though. It would seem that we hang here and then rally the end of August but that that when we fall next time we hit the target.

    Just guessing.......
  9. Common guys, spxu experienced a 4% increase at the open. You all know what to do!
  10. Hammer, what? :D
    #10     Aug 4, 2011