Market commentary for 07/09/2007 Good day! The holiday week is behind us and overall it was pretty good. We got our move up prior to the 4th and we got a nice continuation Thursday and Friday. The question to ask: Is the party over?? Volume should pick up this week with most traders returning and we will see what is the true market breadth. On the weekly chart we can see the QQQQ made a new high. With the volume being anemic that move greatly concerns me. When we look at the DIA and the SPY weekly charts the volume is also extremely low. http://www.ivicacharts.com/diagrams/2007/07092007diaweekly.jpg http://www.ivicacharts.com/diagrams/2007/07092007spyweekly.jpg http://www.ivicacharts.com/diagrams/2007/07092007qqqqweekly.jpg The daily chart shows us a clearer view. The is a strong move on the QQQQ chart with low volume. The move for the SPY and the DIA is quick a bit weaker. Volume is also low. http://www.ivicacharts.com/diagrams/2007/07092007dia.jpg http://www.ivicacharts.com/diagrams/2007/07092007spy.jpg http://www.ivicacharts.com/diagrams/2007/07092007qqqq.jpg The 60 min charts show the same thing. Now what? All directions are possible and for me it is difficult to predict future action. If I must bet, I will look for daily correction. It is hard to believe we will see continuation this week on the long side. Volume was very light and the SPY and the DIA are far away from daily highs, which is very strong resistance right the time being. Anything can happen, but I will be very cautious on the long side. I will look for the correction and I will not be surprised if we will see pull back to daily 10/20sma support areas. http://www.ivicacharts.com/diagrams/2007/07092007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07092007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07092007qqqq60.jpg We have the market above all the moving averages which are support areas. This is nice for the long side. On the other side the volume is terrible. For now I expect consolidation and continuation on the weekly charts for the SPY and the DIA and a correction for the QQQQ. At the open I want to observe the market action, I want to see the market pulse when all traders are back trading in the market. We are approaching earning season and that throws a cautionary wind in the air for swing traders. The market reacts quickly on news and staying overnight can be risky. For Monday I will observe the open to feel the market breath and then will determine what direction we will see. Focus is always the same: âown wayâ stocks and strongest and weakest names. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/10/2007 Good day! We had a small trading range today, especially for the QQQQ and the SPY, which both closed at Friday's closing area. Daily volume was light, despite being a new non-holiday week. The market commentary can stay the same for today. http://www.ivicacharts.com/diagrams/2007/07102007dia.jpg http://www.ivicacharts.com/diagrams/2007/07102007spy.jpg http://www.ivicacharts.com/diagrams/2007/07102007qqqq.jpg On the 60 min charts, we can clearly see yesterday's range action. Last week's buying pace slowed down and right now the charts look like they are starting to have rounded highs. It is quite possible we will see a small trading range again today. http://www.ivicacharts.com/diagrams/2007/07102007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07102007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07102007qqqq60.jpg All day I was worried about the long side and because of that we had a very slow day with new setups. I will look for a correction from the daily resistance areas. (the DIA previous daily high, the QQQQ after last week move up and the SPY from previous daily high resistance area). For now we donât have a short signal so I donât expect strong selling pressure. We will know more after we see the direction of the next move. Those who follow me know that I am a continuation breakout trader. Right now we donât have a continuation pattern and my focus will be on the weakest and strongest names and intraday moves. Earning season is getting closer and overnight trades will be higher risk which will make it more difficult for swing traders. During that period and also the summer period my advice is to stick with intraday moves with the relative strongest and weakest charts. I will use % lists for that. For swing trades, it is important to follow the earning dates and market influence on them. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/11/2007 Good day! Everyone ever hear that after a small range day we can expect a trend day. Well that is exactly what we got yesterday, only it was a down trend day. Last week we said the party is probably over and that is something we expected. The day started with strong gap down with the indices opening under Monday's low and that was the signal for the shorts to come in and trigger the panic sellers. http://www.ivicacharts.com/diagrams/2007/07112007dia.jpg http://www.ivicacharts.com/diagrams/2007/07112007spy.jpg http://www.ivicacharts.com/diagrams/2007/07112007qqqq.jpg After the day started with weakness the indices started to look to fill the gap. Only the QQQQ had the strength for that and the SPY and the DIA continued to show weakness during that period. On the 60 min charts we can see that Indices opened under 20sma 60 min and all day that resistance was to strong an area for them. After the 11:00 am ET reversal period Indices reached the high of the day. After that period which the market usually enters a slower part of the day. I didnât expect a strong reversal right away and I was going to wait till the 13:00 pm ET or 14:00 pm ET reversal periods. http://www.ivicacharts.com/diagrams/2007/07112007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07112007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07112007qqqq60.jpg Around 13:00pm ET reversal period Indices started with very whippy intraday action. They didnât have enough strength to break up, however they didnât have enough weakness for a move down. I usually avoid that period of the day for entering new trades. The weak open and weakness all morning indicated to me to look for a weak afternoon. With Bernanke talking inflation and more concern for subprime mortgages than previously noted, the market started to fall apart around 14:00 pm ET. We got a trend day after range bar day. That is common in market action. Unfortunately, this is not swing short signal. The SPY closed under 10/20/ and 50sma on the daily chart, but the DIA sitting on them and the QQQQ far away from them. That does not mean we wont see more selling pressure the next few days and that will be my focus. That mean the DIA is still in its daily range and the same for the SPY. The QQQQ started its daily correction after new highs. Volume is picking up and that is very important information. I will expect more selling pressure, but again the bulls are not dead if we look daily and weekly charts. I will use this weakness for now only for few days of correction possibilities, nothing more. Intraday focus is same; strongest and weakest names. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/12/2007 Good day! All the indices are once again above all the daily moving averages and those areas are once again the first support areas. We saw weakness at the open, but just at the open. The bounce came after several minutes and the support area held for the rest of the day. Most of intraday action was very whippy and useful only for scalp trades. A lotâs of individual names bounced strong from support areas and back to previous highs, but without intraday rest. I avoid that setup because they are high risk. I just mark intraday bounces for possible future consolidations. http://www.ivicacharts.com/diagrams/2007/07122007dia.jpg http://www.ivicacharts.com/diagrams/2007/07122007spy.jpg http://www.ivicacharts.com/diagrams/2007/07122007qqqq.jpg On the 60 min charts we can see that Indices stayed in the range. Trading during that period is higher risk. All Indices are now around the 20sma resistance areas. The QQQQ previous daily resistance area can reflect with 60 min double top pattern and same is with the SPY and the DIA, but in this case Tuesday's high of the day. http://www.ivicacharts.com/diagrams/2007/07122007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07122007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07122007qqqq60.jpg Iâm still not comfortable with swing long setups and I will use them for day trades or faster trades. On the other hand, swing shorts have a difficult time also. That brings us to the conclusion we have market range action without a true trend. One day we have a strong intraday reversal and the next day a bounce to the previous high without much of a rest. Earning's session started and we can expect more gaps at the open. Holding overnight is becoming a higher risk. During that period my focus will stay same. I donât have strong bias either way today. Iâm still more bearish right now. When I look at weekly charts I donât expect the bulls will quit that easily after several months of a nice uptrend move. I do expect the need for a correction. We can see a fight between bulls and bears over summer for a new swing direction. In other words the market needs to consolidate and correct for several weekly/months. In that time we can look for shorter time frame trades as the safest way to be profitable Good luck trading today!!!! Ivica Juracic
Market commentary for 07/13/2007 Good day! What a day. If you look at the Indices on 15 min charts you can see a perfect example of a trend day. When we add on to the new yearly highs that is telling us about market breath. The day started with strong gap up and in the pre market in the QQQQ and very soon the DIA join to party and broke to new highs. During the day, the SPY didnât want to stay alone under daily highs and closed above them also. http://www.ivicacharts.com/diagrams/2007/07132007dia.jpg http://www.ivicacharts.com/diagrams/2007/07132007spy.jpg http://www.ivicacharts.com/diagrams/2007/07132007qqqq.jpg During a trend day, you want to follow the 5/15 min 10sma and 20sma. It is very important for the trend pace. You can see that on the 15 min charts Indices stayed all day above 10sma, which suggests strength (pace). The only worry during the day, for me, was volume. I wasnât satisfied with volume, but before close that came in also. It wasn't ideal but I expect that we will also follow the next few days. http://www.ivicacharts.com/diagrams/2007/07132007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07132007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07132007qqqq60.jpg For now we have strong breakout pace and with volume coming in I expect more buying days in the future. Those who follow my commentary for some time, remember that I expected a strong exhaustion move up with strong volume to end the last several months trend up. I donât know if that is what I expected, but from start we have high possibility to see that. Unfortunately, most of the moves that up started Wednesday and just continued yesterday with gap up and because of that, we didnât have lots of opportunities. But I believe that we will find something in future days. I mentioned Iâm in a bullish mode, but that not mean I will just go today with any setup and hold. That is not my style. After a strong trend day we usually see a back and forth day (consolidation day). I was on the wrong side of market and I missed this initial break up. It would be a big mistake if I try to catch anything in market that already moved. I need rest or consolidation. I will watch for that on 30/60 min charts. If I don't see that then I will be happy because that style saved me from a false breakup. So for me when I miss trend day the next days are patience days. I will wait for intraday patterns. I wonât be surprised if we will see gap up in the morning and I believe that can only help our open long trades. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/16/2007 Good day! What a week we had!!!! We are all human and a traderâs mission is to avoid mistakes and have a clear mind every moment during trading hours. But since we are human and mistakes will happen it is important to understand them so they will not be repeated the next time. When I look at the weekly/daily charts I ask myself how I missed this last run? I expected this action for several weeks and I missed it. On the weekly charts we can see that breakout pace is very strong and it suggests a continuation in the future. The QQQQ breakout looks best and its very strong. It closed at the 50 area which is a very strong number resistance area. This breakout has additional room on the weekly chart. The same is with the DIA and the SPY. The difference is the SPY is the weakest and a double top pattern is dangerous. All three charts look great and calls the bulls out to join the party. http://www.ivicacharts.com/diagrams/2007/07162007diaweekly.jpg http://www.ivicacharts.com/diagrams/2007/07162007spyweekly.jpg http://www.ivicacharts.com/diagrams/2007/07162007qqqqweekly.jpg That strong break up on new highs really surprised me. I expected a move down or perhaps range action, but the strong break up definitely not. On the daily charts, I will try to explain why. Volume is main reason. We expected light volume during the holiday week and didnât expect the breakup on that light declining volume which can be seen on the daily charts. Those who follow me in the trading room know that I was very skeptical about the long side. If I look daily/weekly pace and volume I still have mixed feelings about that action. Because of that trading is interesting and sometimes unpredictable. http://www.ivicacharts.com/diagrams/2007/07162007dia.jpg http://www.ivicacharts.com/diagrams/2007/07162007spy.jpg http://www.ivicacharts.com/diagrams/2007/07162007qqqq.jpg The 60 min charts just confirm what I explained above. Indices are already in 3rd buying wave and last breakout pace was very strong and strongest during last 2 buying waves (with light volume). On the charts we can see that resistance areas are here and Indices need rest for new activity. http://www.ivicacharts.com/diagrams/2007/07162007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07162007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07162007qqqq60.jpg Was that massive buying result in the end of weekly trend activity? Perhaps short covering? I donât know, I know that I missed it. Frustrating, isnât it? A bad move here is to now join in the already moving market. Low risk setups are now history and I need to wait for another daily/60 min consolidation. On the weekly charts we can see the Indices have room for a move up. Light volume continuing is something to consider right now, but volume can pick up in the future and all characteristics will be here. On the daily chart the Indices area extended (the DIA daily CCI= +206), 60 min charts are extended and already show 3 buying waves. All time periods under weekly indicate that Indices need rest, and that is what I will look this week. I missed the party but I know the next party will come and I will be ready for it. Now patience is again my best friend and I donât want fall into an overtrading trap after the last two days. Focus will remain on intraday action and âown wayâ charts. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/17/2007 Good day! After the move the market has had it needs a rest. That is the process that we can expect. On the daily charts we can see that Indices reached resistance areas and right now we need to see consolidation (correction). We don't know the kind of consolidation we will see but we will follow the action during the week. Remember you hear lots of things like overbought, extended, etc., it is important to know that the market can become more overbought and more extended. http://www.ivicacharts.com/diagrams/2007/0717007dia.jpg http://www.ivicacharts.com/diagrams/2007/0717007spy.jpg http://www.ivicacharts.com/diagrams/2007/0717007qqqq.jpg Volume remains light on this move up and that still concerns me for future activity. On the 60 min charts the first support area that we have is 20sma. That is an important support area because as long as the Indices stay above it, we can expect to see possible intraday moves and bounces. If 20sma doesn't hold then we can look for larger possible correction. Right now when I see this kind of market action, I will wait for initial move. Before that is speculative and in the scalp mode. After the initial move consolidation is very important because it depends on consolidation what we can expect from future action. Example; if it is an initial move down, for continuation I want to see consolidation at lows (base, flag triangle). If we don't see that, then we can expect range action or a bounce to highs. http://www.ivicacharts.com/diagrams/2007/07172007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07172007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07172007qqqq60.jpg Until I see an initial move every action is good only for scalps or to be traded with high risk and that is not my focus. This week is option expiration week and also earning season get into full bloom. Only âown wayâ charts will be good for swing and everything else is good for intraday moves or daytrades. During option expiration week we can expect whippy action a little more than usual. The best way to trade that kind of action is to use bigger stops to avoid being whipsawed. It is also important not to overtrade. With market ready for daily consolidation that will be more important than usual this week. Caution this week: 1. option expiration week 2. summer trading and possible market consolidation (correction). 3. Earnings season So, be smart and trade small and most of all use patience. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/18/2007 Good day! The DJI hit 14K. The QQQQ continued to be a powerhouse and saw new highs with higher volume. This index is being powered by the semi's with some big names moving 10 percent today. The DIA and the SPY did not follow the enthusiasm. On the daily charts we can see that the QQQQ still has room until the equal move resistance area. The SPY and the DIA formed a doji bar which can suggest a correction in future days. As mentioned yesterday overbought can be more overbought so it can continue also. Risk is still high because Indices just continue with to new highs every day. http://www.ivicacharts.com/diagrams/2007/0718007dia.jpg http://www.ivicacharts.com/diagrams/2007/0718007spy.jpg http://www.ivicacharts.com/diagrams/2007/0718007qqqq.jpg On the 60 min charts we can see a clearer situation. The DIA's buying pace is slowing down and it looks like a start with rounding highs. It is still above 20sma which is very an important support area is for now. The SPY already in the 60 min range action and closed under 20sma and with daily doji pattern telling us that correction is close (what kind, we donât know yet without the initial move). The QQQQ is strongest and it broke above 60 min range and closed near highs. http://www.ivicacharts.com/diagrams/2007/07182007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07182007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07182007qqqq60.jpg Risk didnât change. We still donât have consolidation (correction), despite the market continues to new highs on light volume. Only the QQQQ is the exception yesterday. On the daily charts we can see that Indices are at resistance area and new long trades longer than intraday action (day/scalp trades) are risky now. We are in earnings season (INTC) and market can be effected with gaps in the morning. Depending on earning results. So I will stay in the same mode. Focus is on intraday activity on the strongest and weakest names. After hours INTC and YHOO disappointed and sold off. The futures also sold off suggesting a gap down this morning. Good luck trading today!!!! Ivica Juracic
Market commentary for 07/19/2007 Good day! We started the day with a gap down which brought additional selling pressure for the first part of the day. The weakest index was the SPY and it was the first to reach the 10sma daily support area which is strong support after the move up last week. The market consolidated near the lows during midday and formed a daily range action. http://www.ivicacharts.com/diagrams/2007/0719007dia.jpg http://www.ivicacharts.com/diagrams/2007/0719007spy.jpg http://www.ivicacharts.com/diagrams/2007/0719007qqqq.jpg On the 60 min charts we can see clearly how the previous resistance area has become support and held yesterday selling pressure. Since Indices opened under 20sma they had enough room for that move down. But the bigger time frame is always very important for reversal expectations and the afternoon's reversal is not strange. The market action is very strong and I really didnât expect that bulls to quit that easily. http://www.ivicacharts.com/diagrams/2007/07192007dia60.jpg http://www.ivicacharts.com/diagrams/2007/07192007spy60.jpg http://www.ivicacharts.com/diagrams/2007/07192007qqqq60.jpg I said many times that it is important to see consolidation after an initial move (yesterday case is move down) and support was too strong for continuation after midday consolidation. Before the close the Indices broke the 10/20sma on the 15 min and bounced. The QQQQ was the strongest and closed above 20sma on the 60 min charts while the DIA and the SPY closed right under. That area is now resistance. Yesterday's volume was stronger than previous days which suggests the market held the morning gap well and it might hold for now. All this is the introduction to the daily correction. I do not expect during option week that we will see a strong reversal from the daily highs. I think that we can expect more days like yesterday with intraday moves in both directions. We closed all shorts because they were all back to entry area and I think that is not smart to take that risk with overnight trades when we donât have clear daily setup. They will stay on my list if market shows more weakness. During earning season if open trades donât show progress it is best to close them because the risk of a gap. Good luck trading today!!!! Ivica Juracic