Daily Commentary

Recent price action confirms a downward break of consolidating trendlines on the 30 Year Bond futures (USM07), combined with a New Momentum Low, forecasting lower bond prices to come (and also higher bond yields). Both outcomes (lower bond prices and subsequent higher yields) often isn’t the best scenario for the stock market, yet we’ll see…

Attached is the most recent “swing” charts and market-structure charts for the major indexes and also the quirky action I observed in Google today. First, as a teaser, here is the Google Action (15m bars): Notice how price quickly rallied from $467 up to $480 before falling right back to $470. For pure day traders,…

While 8 of the 10 items in the index of leading economic indicators registered negative, the market took it in stride and has continued its creeping trend higher.  Here are charts of the major indexes: Again, the Dow has held up the strongest in terms of relative strength.  To illustrate this point,  here is a…

The Russell 2000 suffered the worst technical damage today (in terms of support/resistance), while the Nasdaq isn’t far behind. The S&P and Dow are still looking comfortable, yet a test of the rising 20 period moving average isn’t far away. For the Nasdaq, a test of the 50 MA would mean shedding 25 more points…

Here are the most recent index charts for May 14: Dow Jones Nasdaq S&P 500 Russell: In almost all indexes, price bounced off (found support at) the rising 20 period moving average. All indexes are making divergences with price, in that momentum is decreasing while price increases which signals caution. The Stochastic indicator has pulled…

There was some damage done to the weekly trend on most of the Indexes this week. The Nasdaq clearly broke its rising trend (some have called this a rising wedge) and could serve as temporary resistance until broken (or resumed). The 20 period moving average acted as support, and may continue to do so until…

The Nasdaq fell 1.7% and the Dow fell 1.1%. Not only is this by no means surprising, it is also not a huge decline given the rally we have experienced. There is irony I discovered at least in the Nasdaq. Tuesday and Wednesday, the Nasdaq gapped lower, signaling a possible trend down day. Instead, price…

“Make hay while the sun still shines” or so the saying goes.  It’s not often we see such strength in the market, especially with dark clouds on the economic front upon us.  Maybe that’s exactly why we see market strength, from a contrarian perspective. The Dow Jones Industrial Average has risen 24 out of the…

Readers, I know I discuss momentum divergences very frequently but they work (are effective) on so many levels. Primarily, they set up trade ideas, and I take many of my swing trades based on momentum divergences. They work better than average for day-trading but not as well as swing trades off daily charts (in my…