When we trade intraday or even daily setups we often forget about the larger time frames. When I do my analysis for the week I always begin on the monthly chart and work my way down to the smaller time frames. Potential Inverted Head and Shoulders Forming What out for a potential inverted head and shoulders in the markets over the next two weeks. These are usually defined with a hammer which can make for difficult intraday trading.
The hammer candlestick is a very common and reliable pattern for the reason that it has a defined failure levels. Those levels would be below the tail and about the high and these can signal a strong move to new highs or lows. In the recent rally we have seen in the S&P500 we broke above the down trendline. What usually happens from here is a retest of this trendline, old resistance now acts as new support. We are anticipating…
With a hefty down day today where can we expect to take a breather? The 50MA of the S&P500 is approx. 1165 and that’s where we are targeting for a breif pause.
Options expiry (third Friday of every month), is this coming Friday. Here are some things to keep in mind. About 2-3 days prior to expiration, time decay drastically decreases (for options you’ve bought), and works in your favor (for options you’ve sold). The week of options expiry tends to be an up week followed by a down Monday. If you’ve sold a naked put and the stock is In-the-Money (ITM), you will be required to purchase those shares come expiry.
How did we know that today was going to be a trending day, and for that matter, an extremely profitable day? We look at three things on the open. 1. Prior day’s close Looking at the prior day’s close, we established (after Globex overnight trading) that today would be a gap down. Statistics show that approx. 80% of gaps fill, but the larger the gap, the less likely the gap is to fill and the more likely it is to…
Monday’s SPY chart produced a candlestick pattern called the hanging man. This is a bearish pattern. To some, Monday’s candle may look like a hammer (a bullish signal), it is the positioning of the candle (at the top of the rally) that makes it a bearish pattern. The hanging man alone does not initiate a sell or short signal. Tuesday’s price action, closing below the body of Monday does however confirm this bear signal (see the write-up on candlesticks). While…
While we have been bouncing between roughly S&P 1085 and 1115, many would be looking to short this last move, however with such a powerhouse week of news this sideways movement seems quite bullish. The list of stocks making new 52-wk highs each day continues to be extensive. If we break $1116.25 on the S&P I would be anticipating a spike (at least intraday) in the markets. This has been a very difficult intraday trading environment and the holidays it…