This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Tag Team: Market Indicators

John:

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player



Scott: For the past few months the market has done a great job absorbing some pretty bearish headlines:

Sovereign Debt Headlines out of Europe.

Soft Economic #'s from housing.

Disappointing Jobs Data.

Even though we are few years from the start of the economic crisis in 2008, some structural problems remain. We see that in our own debt crisis as well as the political circus in Washington. As the Chief Strategic Officer/Trader/Partner, I try and monitor the action of the markets and the key stocks, with an ear open to the headlines. Ultimately the stock action tells the story.

Looking ahead, I see a head and shoulders top pattern in the making. This pattern has shown it's face a few times during this 100% move of those March 2008 lows and failed to trigger. When it did, it was a fake out move and turned out to be a better long than a short.

Last Summer we had a similar situation as the market toyed with the 1040-1060 area. Ultimately that level held and the markets went on to make new highs. This time we have some bigger problems with a similar pattern. This could be the right shoulder of the pattern. It doesn't appear perfect, but I never am. I am more of a "cocktail napkin" technician. I do not use the "exact" formation formulas.

**The important areas in my opinion for support is the 200-day at 1280-1285 area. The next neckline seems to be 1250-1260 zone. The pivot low area is from June 13 to June 27.6/13-6/27. A close below this level triggers the pattern and under that is 1220. But the real measured move of the pattern from the head to the neckline is around 80 handles which gives us a move down to 1180.

We will need more time and data and have to measure the action of key stocks along the way. I flattened out my macro positions this week and will cash flow trade until I see more clarity and the new set up. There will be action both long and short as we hit levels of importance.

Keep a level head and trade with a set of prudent rules. Time periods like this can be the most profitable times for those that embrace volatility and think fast.

If you liked this content brought to you by Options Profits and want to explore more of the product, please CLICK HERE for a 14-Day Free Trial.

John is a Commodity Trading Advisor with Razor Trading. McGraw Hill commissioned him to write a book entitled Mastering the Trade, which was released in January 2006. Carter has also been featured on ABC Money. He and Hubert Senters founded and run the Trade the Markets web site.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%
TSLA $206.79 0.00%
YHOO $44.45 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports