Saturday, July 13, 2024

Typical Monday Rally…


The market rose today on light volume of only 108 million shares on the SPY.  During this holiday season, I expect more sideways moves... again, it's not for a swing trader like myself.  Tomorrow the 60 minute charts are rolling over and looking bearish on the MACD, however the daily's are still neutral.

Remember, the larger chart is usually the one that plays out.  So, that means that the direction is unconfirmed.  The dollar continued to rally today, but is hitting some resistance now.  It could pull back a little, or just trade sideways for awhile, and a put in a bullish flag pattern.  This could take all week to develop.

Light volume and a pullback or sideways movement in the dollar will allow the market continue up or sideways.  I think they will try to push the market up to 1126 spx before the end of the year.  Now is a great time to do it, as fund managers will be closing out positions, and buying up popular stocks before they send out their year end portfolio statement to their clients.  (They want to give them the impression that they were in those popular stocks all year).

That mild buying, along with a little government money from good ol' Benny boy (given to Goldman Sachs/PPT) should allow them to hit that mark before this year is over.

Ok, back to what's going on tomorrow.  I think we could pull back and close the gap around 1103 spx.  That's about as far as I see us pulling back.  I know that the 60 minute charts are rolling over, but that only means that it will be hard to advance upward any more.  We could trade sideways for a day or so to work out that overbought condition, and allow the MACD to roll back up again.

My point is simple... no direction is clear yet.  Yes, we are hitting the upper resistance level around 1115-1120, and we should move down for a day or two, but until we either put in that finally high at 1126 (50% Fib. level), or break that 1085 support... we are still trading in the Twilight Zone.  This channel could very well continue until next year.

If you like to day trade, then you could have went short today around 10:30 - 11:00 am EST., as this time period has been very consistent with the high or low of the day for many weeks now.  During this light volume sideway movement, all the big traders seem to leave around that time, and sometimes come back in the evenings and trade a little more.

During the rally up, the 3:00-4:00 pm time period was always when the buy program would come in and rally the market up, but that's not the case here lately.  It's the morning only.  So, knowing that 1115-1120 level is still huge resistance, you could go short there and look to get out into the close (if it falls enough), or wait until the next day (Tuesday) for a fall down to either gap support around 1105, or gap fill at 1103.

Again though, that's only for a quick day trade.  I can't watch the tape all day, so I only do swing trades that are a few days to a week or so.  Since I don't see any real move coming this week, or next week, I'm staying on the sidelines for now.


Author: Red

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