Today saw yet another gap fade and bear flag so far: In February, 75% of trading days had an overnight gap. Will March be similar? So far, we’re 2 for 2! Again, the first play is to fade the gap for at least a 50% retracement into the gap. The pure target is yesterday’s close,…
Let’s look at some insights from the Sector Rotation Model and also Sector Returns to date: Since the start of 2008, all nine Sector SPDRs were negative, with Materials performing the ‘best’ by only losing 0.36%. Technology has fared the poorest, losing a massive 17% (thanks to Google and Apple and many others under intense…
Let’s take a quick look at the base statistics for overnight gaps and fills for the month of February. I used the DIA (Dow Jones ETF) for the basis of the study, though the SPY gives near identical results in terms of percentages. Of the 20 trading days in the month of February, 2008, an…
Last week was a difficult time for classic gap faders, as the market never seemed to fill a gap. The mantra of January was “Almost all gaps fill,” but February is the near opposite of that sentiment, in that “Few Gaps Fill.” Last week (and today) was particularly rough, as the market turned downwards after…
Let’s take a brief look at where we are as we start the new week, which may see a break of the recent consolidation pattern we’ve been experiencing. In the Dow Jones, an ascending triangle is forming, which could hint at a larger breakout volatility move is ahead. Consolidation patterns imply balance and relative indecision…
If you’ve never checked out the amount of data you can find and customize from the Federal Reserve of St. Louis website, I strongly suggest you do so. While you can find a plethora of information there, I strongly recommend the “FRED Graphs,” which allows customized views of virtually any Fed data you can reasonably…
Thank you so much to readers of the Afraid to Trade blog! I owe so much to you for reading, linking to, and sharing the blog and the analysis/commentary/education I share with you. I wanted to provide the traffic statistics provided by my webhosting service to show you how rapidly the blog has grown, and…
Friday saw the market make a large volatility move down, and the impetus has now shifted to the bears it seems. Let’s look at the daily Dow Jones chart: Notice that the market faced major resistance at the 12,800 level, and despite the potential triangle break, the bears could not push the market higher. I…
Did anyone else find it concerning that President Bush, in a news conference yesterday, was astonished by a reporter’s question asking what would be the effects of gasoline prices at the pump reaching $4.00 per gallon by the summer? It would seem like his team of economic advisors would have alerted him to this possibility,…
Today was in interesting day in terms of intraday analysis and trading. Let’s take a look at what happened today! First, the idealized trades in the SPY on the 5-minute chart: While the chart may seem garbled, let’s take it step by step. First, notice the gap fade trade that resulted in a bear flag….