Trader Mike's Market Recap for 10.5.09 <-- click here>
I will have to say that my analysis is in agreement with trader Mike's in terms of the SPX. He brings out a very good point about low volume levels. He calls this a "purely technical" play (ie. prices bouncing off 50 SMA). For those looking for more of a fundamental perspective, today can be considered people covering their short sales from Sept. 29, 2009, hence the relative volume weakness.
I will also like to add in that if prices do continue to form higher lows and lower lows, I expect support at around 1010 (4 week ATR calculated range). 1010 maybe a bit too extreme if one were looking at Bollinger Bands, either way 1000+ support is a key level to be watching. This key level will determine whether or not the SPX topped out at 1070 or if it will confirm a bullish trend that is still in place.
Either way prices are coming to a squeeze as seen in default parameter bollinger bands. Keep in mind, any directional move will certainly needed to be confirmed by volume to ascertain true trend.
higher lows and lower lows
ReplyDeleteyou are familiar with higher highs and higher lows which is a bullish pattern formation. A bearish pattern formation is a series of higher lows and lower lows. Usually determined via closing price. This is all technical analysis jargon
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