Daily Commentary

Let’s look at the 5-minute chart of the price action in the stock market during yesterday’s trend day: The initial gap was about a 200 Dow point ($2.00 DIA) gap, meaning odds were strongly against a full gap fade, and actually favored that a trend day was setting up. Even still, the first trade is…

Before you get ultra bullish, realize that the sharpest volatility price moves to the upside often occur during a bearish downtrend. That’s likely what happened today. The day began with a strong upside gap in all US Indexes, and proceeded to a near 50% gap fade, followed by a strong surge of buying power (combined…

Apple (AAPL) has fallen from $200 per share to $115 in two months – a mammoth drop for such a strong, newsworthy stock. Let’s look at the charts to see what might be ahead next. Notice in early November 2007 how the large volatility price move sent shockwaves through the stock, and led to a…

Let’s start by looking at the charts of this parabolic rise of this critical commodity: Daily View: Weekly View: Monthly View: Can you remember how, less than 10 years ago, the price of one barrel of oil cost less than $15? Gas prices in the US cost less than $1.00 per gallon about that time….

You’ve probably heard that commodity prices are rising, but have you looked at individual commodities and what that might mean for you or the market? Let’s peek at a few selected commodities and see exactly what magnitude these commodities have been making new lifetime highs. Soybean prices (above) have virtually doubled since October 2007 and…

Tuesday’s action provided a plethora of key set-ups and high probability trades on the short time frame intraday charts on the US Indexes. Let’s check out the Dow Jones “Diamonds” ETF (DIA): The first trade when there’s an overnight gap is to fade the gap for at least a 50% retracement and a potential full…

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…

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…