Following up on yesterday’s Market Direction note we are about to learn whether the key support levels mapped out then – 1460 NQ, 1170 ES, 10300 YM – hold, or turn into new resistance.
The day started out with a solid attempt to hold support but all attempts to move higher have so far been met by sellers, including myself.
10:31:20 Mike: 2B Test of top 5M chart: regardless in the early going provided price has not pulled back too much we expect it to try again…
10:38:55 Mike: 10313 SELL STOP LIMIT
10:39:29 Mike: can’t help but try but I will have to risk quite a bit of today’s profits initially I suspect
10:39:48 Mike: 1469 SELL STOP limit
10:44:45 Mike: otherwise, I may just get to stay short the balance of the day…. lets look at what brought us to this crazy decision to short what seemed like a strong market and decide if it made sense at all…
10:45:09 Mike: 1. Test of top in YM- check, always makes sense to consider the potential for a bend in the trend at such times
10:45:40 Mike: 2. Price weaker except in tech – not a full point to the short side – tech often does lead big rallies and I’m always cautious when it is stronger.
10:45:53 Mike: 3. Rising wedge in Nasdaq – check
10:47:25 Mike: 3. Nasdaq hits its last big target, the overhead resistance from late march / early april – check
10:48:06 Mike: (and that’s one giant rising wedge on the 135M chart – one I really don’t expect to revert to the norm and revisit 2005 lows but we never know….)
Is the rally over, kaput? Perhaps it is, perhaps not. Yesterday’s low has to break first before folks will get really excited, myself, I prefer not to wait that long and will happily take profits as my quite-tight profit stops (on long positions) are hit one by one between now and then.
Here’s where the short term oriented trader has it all over the buy and hold folks – when a major support level breaks down, we can shoot and ask questions later.
05.05.12 13:49 #