Each day I write a ‘daily summary’ I call my “Idealized Trades” reports (which will be available for subscription by next week) and I wanted to highlight a few lessons from today’s (June 22, 2009) intraday Type III “Trend Day Down” in the SPY 5-min chart.
I wanted to highlight a key structural point that many traders might have missed when evaluating this morning’s gap in the stock market. Let’s learn a quick lesson on market internals as sources of confirmation.
to highlight something interesting I’m seeing in the Market Internals for May 11th in the S&P 500 (SPY). So far on this rangebound day (following a gap-down), the Market Internals (particularly TICK and Breadth) have been biased to the upside.
Using today’s price action so far as an example, let me walk you inside the price action for April 30, 2009 in the SPY to discover that massive TICK, Breadth, and Momentum divergences all formed, clueing you in that a price reversal was far more likely than price continuation. Let’s walk through the market internals…