Wednesday, July 22, 2009

Technical Picture - Momentum Decelerating

A slower start on some mixed earnings, but midday the S&P and Nasdaq carved out new highs. The DOW didn't confirm and the markets reversed. But despite the afternoon retracement, the Nasdaq managed its 11th consecutive higher close.

Momentum is decelerating but no clear sell signal. No point in fighting the tape but it really feels overdone. Yesterday's hanging man is unconfirmed until we close below the body, and ideally below the entire stick. Today's candlestick is a spinning top and also foreshadows the end of the move is nigh.

SPY trade - long on break of triangle. Exit at shooting star when price fails to hold $96.00 whole $ level. Short the double top.

GRMN was a HCPG pick from last night's newsletter. Look at the daily and see narrow range consolidation ahead of expansion. The actual trigger was $25.00, but I missed it and waited for price to pause. It's always best to wait for price and the 5 period ema to come into play if you miss the actual BO in early trade.

MOS - bear flag break. I was holding out for an inverse C&H, but MOS didn't want. I guess earnings AH had a lot to do with it.

2 comments:

Tan said...

Hi Jamie,
On your SPY trade, your entry is when it breaks the uppper triangle or when the breakout bar is fully formed? Where is your stop in this case?

Jamie said...

Tan,

My buy stop order is 2 pennies above the high of the previous tag of the upper triangle line. My sell stop is 2 pennies below last tag (in this case near tag) of lower side of triangle.