At the close of the market on Thursday, November 07, 2013 many technicians and market followers posted charts of the obvious bearish engulfing candle formed that day in the Dow (DIA) and the S&P 500 (SPX, SPY). So much for the anticipated sell-off that many were expecting, as what appeared to look like a sell-off probe for lower support areas was impressively matched on Friday, November 08, 2013 as price recovered.
The indecisive directional patterns can pose challenges for short term traders, hence why it's imperative to maintain perspective and step back from the smaller timeframes from time to time. Even then, the current outlook appears sketchy as stronger than expected job numbers coupled with stronger GDP numbers tee-up the continued dialogue for tapering. Most traders know, "it's coming" ("IT" being tapering and "IT" being the sudden rush for the exits), but the commitment by traders to maintain price above 1760 (in SPX) is a positive sign for the Bulls. If the Bulls are able to move price higher and take out the 1775 all time highs in the S&P 500 (SPX), well, it's anyone's guess where we go from there. If we trade below 1760, then the Bears will try to force the liquidation of positions at certain key price levels. Should be fun to watch. Key word is "watch", as the intraday trade has made it a bit difficult to do anything but scalp small positions.
Names to Trade (THESE ARE SHORT TERM TRADES, typically 1-day to 1-week):
Facebook ($FB) has enjoyed a stellar year. The chart shows a nice accumulation pattern from the breakout in July'13, but appears to be exhibiting a bit of "profit taking". Most traders are watching what appears to be a H & S pattern forming. It's also important to look at the accumulation points formed from the Jul'13 breakout, as the resistance and support levels (Sep'13 and Oct'13) formed during that phase are now coming into play. Important levels to watch is $46.00 - $46.30 and $45.60 Bias: SHORT
UnitedHealth Group ($UNH) is experiencing symptoms of "ACA" (Affordable Care Act) since reaching an all-time high of $75.88 in September'13. Price tried to reclaim that price level in October'13, but failed and has since been trending lower. Price is now consolidating underneath the 50-Day MA, which is also the area of the 50% retracement from the Sep'13 high. BIAS: SHORT
The indecisive directional patterns can pose challenges for short term traders, hence why it's imperative to maintain perspective and step back from the smaller timeframes from time to time. Even then, the current outlook appears sketchy as stronger than expected job numbers coupled with stronger GDP numbers tee-up the continued dialogue for tapering. Most traders know, "it's coming" ("IT" being tapering and "IT" being the sudden rush for the exits), but the commitment by traders to maintain price above 1760 (in SPX) is a positive sign for the Bulls. If the Bulls are able to move price higher and take out the 1775 all time highs in the S&P 500 (SPX), well, it's anyone's guess where we go from there. If we trade below 1760, then the Bears will try to force the liquidation of positions at certain key price levels. Should be fun to watch. Key word is "watch", as the intraday trade has made it a bit difficult to do anything but scalp small positions.
Names to Trade (THESE ARE SHORT TERM TRADES, typically 1-day to 1-week):
Facebook ($FB) has enjoyed a stellar year. The chart shows a nice accumulation pattern from the breakout in July'13, but appears to be exhibiting a bit of "profit taking". Most traders are watching what appears to be a H & S pattern forming. It's also important to look at the accumulation points formed from the Jul'13 breakout, as the resistance and support levels (Sep'13 and Oct'13) formed during that phase are now coming into play. Important levels to watch is $46.00 - $46.30 and $45.60 Bias: SHORT
UnitedHealth Group ($UNH) is experiencing symptoms of "ACA" (Affordable Care Act) since reaching an all-time high of $75.88 in September'13. Price tried to reclaim that price level in October'13, but failed and has since been trending lower. Price is now consolidating underneath the 50-Day MA, which is also the area of the 50% retracement from the Sep'13 high. BIAS: SHORT