Bounce or Breakdown Market Update for Oct 10

Oct 10, 2014: 1:53 PM CST

Price continues to trade within an intraday downtrend as the sell-phase continues.

There’s a clear pathway developing, but no guarantee price will follow it.

Let’s chart the pathway and highlight the top trending stocks of the session:

Today we saw a (near) test of the 200 day SMA as I highlighted in this morning’s update.

Beyond that, we’re still in this game-planning mode of “Will the market repeat an intervention pattern or will this time be different” which frames our short-term strategies in this broader context.

Nevertheless, the intraday pathway is lower but price is testing the lower boundary of the falling range.

This would suggest – at least short-term – that buyers could rally the market again toward the falling upper trendline near 1,960.

However, a touch of additional selling could collapse the market straight down – even after all the selling we’ve already seen (reference July 2011).

Continue Reading…

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Support Bounce or Breakdown Planning for the SP500 and Dow

Oct 10, 2014: 11:08 AM CST

Both the S&P 500 and Dow Jones Indexes are challenging major support levels that demand our attention.

Let’s quickly assess the situation, highlight the inflection points, and adapt our strategies accordingly.

The chart above shows the S&P 500 retracing strongly – similar to January 2014 – toward the rising 200 day SMA target (1,900/1,905 confluence).

We’ll focus all our attention on this level – buyers are favored above this level and short-sellers (bears) would strongly be favored beneath it.

Should the market break under the rising 200 day SMA, it would be the first time in 2014 to do so. Continue Reading…

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Big Bear October 9 Market Update and Trending Stock Scan

Oct 9, 2014: 12:19 PM CST

One thing’s for sure – the market always keeps us on our toes!

The intervention rally yesterday was short-lived as bears once again took a swipe at the market to create today’s intraday reversal (bearish) session.

Let’s see what happened, where we’re going, and which stocks may be the best candidates:

The same divergences that correctly forecast yesterday’s big rally and reversal (see my morning post ahead of the big rally) also forecast the top and likely reversal that set the stage for today’s session.

Momentum increased as price fell like a snowball rolling down a mountain, gathering strength (pressure) along the way.

Price remains in a downtrend in the context of the broader Fibonacci Retracement Levels (see prior update).

We’re waiting for another “Repeat Pattern in the S&P 500″ or else a failure of this pattern which would likely set in motion a steep sell-off in shares.

Each day price does not impulse higher, it sets the stage for the “This Time It’s Different” outcome.

Continue Reading…

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Learn How to Trade Three Important Price Patterns – Thursday Webinar

Oct 8, 2014: 1:22 PM CST

I’m excited to be teaching a new webinar with TraderKingdom and ICE this Thursday, October 9th (3:30 CST) and I wanted to extend a special invitation for you to join us!

Entitled “Insiders Tips to Trading Three Classic Price Patterns,” you will learn how to recognize a specific price pattern, enter a trade and set targets, manage the trade as it progresses, and then exit appropriately without doubt.

These classic price patterns have trade entry, targets, and exits built into them which takes away the guesswork or uncertainty.

The educational event is free and you can register now to join us live in the interactive presentation:

Here’s a bit more information from the description and registration page:

Many traders, both new and existing, can often get caught up searching through complicated strategies to help identify more effective trading opportunities.

As is often the case, sometimes taking a step back to focus on classic, proven approaches can reveal simple strategies that deliver what traders are searching for.

Join Corey Rosenbloom, CMT, for this live session focusing on classic price patterns. Corey will outline his three favorite price patterns and detail his new strategies to bring these “patterns of the past” into the markets of today.

Watch as Corey walks through each stage of the process he works through when trading these price patterns in the Russell and Dollar Index:

  • Recognition
  • Entry
  • Management
  • Exit

Attendees will walk away with the ability to spot each of these price patterns instantly after the webinar!

I can’t wait to see you there live with us!

Corey

PS:  Here again is the link to register and join us live.

Continue Reading…

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Key Divergences Suggesting Intraday SP500 Reversal

Oct 8, 2014: 12:19 PM CST

A quick look at our “Big Three Market Internal” Chart of the S&P 500 on the intraday basis suggests another reversal up off support.

We’re seeing that at the moment, but the question is “how far will the reversal take price?”

Let’s study the situation and plan accordingly:

We’re seeing the S&P 500 Chart above with Breadth (Advancing Issues minus Declining Issues), NYSE TICK (stocks ‘ticking’ up at a moment minus stocks ‘ticking’ or trading down), and Volume Difference of Breadth.

I’m highlighting recent divergences ahead of short-term market reversals (such as October 2nd and October 6th).

The suggestion here is that we see another up-swing from the 1,930 support level similar to that of October 2nd. Continue Reading…

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