Monday, January 10, 2011

Technical Picture - Markets Mixed

The markets gapped down on European debt concerns and made a fast move lower. The Nasdaq and S&P held above support of Friday's lows, while the DOW breached but held 20 EMA. Selling subsided after the first half hour and it was a slow grind after that, with tech and small caps outperforming.

The S&P carved out an inside day, another hanging man, in addition to the two from last week. Momentum has slowed, but supports are holding and the bulls have been persistent in owning close, so the bulls still have the edge. The rounded topping formation over the last week, however, is bearish looking. Rounded tops imply too much supply. Cautious trading as we await the inevitable correction.

HLS was spotted on the Esignal hot list. I placed the Fib. extension tool from PDC to early swing high and back down to retracement low. A very low risk entry at the base. Took a partial near 62% FE and let the rest run to full extension.

Above average volume indicates momentum. Price/volume contraction ahead of expansion gives us confidence in the setup.

AAPL was also a low risk entry after about 45 minutes of coiling.

SPRD was tweeted by GTOTOY and I followed at the next consolidation level - carved out nice handle.


Anonymous said...

Hey Jamie,

Would be interested to hear about the futures trading webinar when you have time.

Jamie said...

Hey Jim,

2,300 people signed up for the webinar, but Go to Meeting only accommodates 1,000. Members get to log in first and non-members like myself, have to wait until 30 minutes prior to the session. Needless to say, I didn't get in on day one. Today, I was lucky.

The webinar is given by Trade the Markets but it's Rob Hoffman of Power Charting who is the trader. They are joining forces. He has developed his own proprietary signals and trading methodology. On non-trending days like today, he waits for capitulation and/or euphoric price/volume spikes and trades the opposite direction for approx. 10 ticks. Two trades today, one in gold futures and one in oil. Each trade lasted less than 1 minute. It's all about timing the entry perfectly and grabbing 1 pt. Not sure I would be able to sit on my hands through the big moves just to make 1 pt. at the end of the move. It works for him. He hasn't had a losing day in his live trading room since January 22, 2010.

Anonymous said...

Thanks Jamie. I too would have a tough time waiting for such infrequent trading opportunities (re: fading climatic moves). To some degree, 'time spent in a trend' is proportional to profits. I prefer setups that I can ride for awhile (trend days), and then try to exit into a climatic move/zone.

Jamie said...


Me too. Too bad the free sessions took place on non-trending days. I'm sure today must have been a good day for shorting gold futures.

Anyway, just wanted to correct an error from my prior comment. I thought he had not had a losing day since Jan. 22 2010, turns out he hasn't had a losing trade since that date.

Anonymous said...

Wow, that is impressive if he trades everyday or almost everyday. I'm assuming that he does not allow day trades to turn into longer term trades to avoid a loss.