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Watching as the light volume on the buyer side with the increasing volume on the sellers side is creating a head and shoulders on the Dow Jones Transports. For many the Dow Jones Transports are considered the leader for the S&P500 and Nasdaq. Will be watching for the consolidation to continue at these price levels.
The first area of support was touched this past week with two more areas of support at 7380 and 7250 but breaking through the first level of support could prove difficult. As you can see the uptrend is still in tact in the long term and the market players have not distributed in high enough volume to cause a sell off. If we sell to 1390 this could signal an increase in seller commitment to break through the support.
I am looking for this to chop around in this first area of support and resistance and further establish this Head and shoulders trading pattern. There is a good chance that the market will move up again on light volume. This could create the perfect storm for the sell off. Especially with some geo political considerations thrown in.
Gold Trading – Gold in the ETF GLD is showing a bear flag.
Gold has it its first area of resistance off the move down from 133.80 to 123 with the retracement back to 127-128 area. if buyers don’t step up to move this to the 50 % retracement mark at 128.40 then we could see the bear flag execute with a move back to 123.00 which would be a midterm double bottom that would be also violating the uptrend at around 125.20.
Unless Ukraine heats up over this next week I am expecting this to follow the bear pattern to 123.00 and if sellers are in control that break could lead to a sell into the major support at 118.
If the Ukraine does heat up we could see this bounce through to 129.60 and then go for a double top in the midterm and completing the 100% retracement.
S&P500 has trouble over 1863-65 area as sellers move in to take profits. The market held close to resistance at 1870 for 2 hours into the close as sellers moved in and dropped the market twenty points. At 3:00 EST market makers stepped in on high volume and slowed the selling for a retracement back to 1863, we shalll see what the closing hold for the market but we could see this sell into the close.1842 is the support to watch as we move into this next week of volatility.
Downside targets of 1815 , 1780 and 1735.
Upside targets of 1910, 1940 and 1973. These are long term, If it is short term watch the chop and be careful holding onto short positions as the volatility on the buy side at support has been quite strong.
We will be in Montreal, Calgary, Edmonton this next few months for a three day training on the S&P500 futures markets and some swing trading. Join us.