The Sunny Side of the Street
Last night's admonition to watch out for the sideways moves was right on target for today's listless, do nothing day. Last night I said" " Between now and then, we most likely (from my view) have a lot of sideways choppiness to contend with, and small scalping trades, not long run trends."
Today the Dow moved about as sideways as I have ever seen it, testing the 8336 line all day, with no success. And no failure either, if you want to view it that way.
Figure 1-- Dow Jones going nowhere
If history is of any value, we have of late been going nowhere for a few days and then taking a single bar up or down move, only to go back to the sideways pattern again. If that is to happen again, the best way to catch it is to know that we won't move much past the ATR and let the market stop us in.
The ATR is about 175 points on the daily chart (Figure 2), and the pennants can give us the breakouts for both the long and short trades.
Figure 2-- Dow Daily
Notice in Figure 2 that the magenta, downsloping trendline is right where the market activity was halted again today, at 8336. The top of the most recent pennant lies at 8336, so let that be our long stop. And the bottom of the most recent pennant lies at 8304, so let that be our short stop.
The SunnyBands are moving sideways, so I will be watching for the bands to show some directional move and then move away from the slope of the bands. That will be may exit, if it happens.
Right now the Sunny Dynamic Moving Average is in a buy position on the daily chart and the bands are just beginning to move slightly upward. The daily pennant low lies at 8464, with the upper SunnyBand at 8387. That would be the likely goal for a breakout to the upside. The Attractor at 8169 is close to the SunnyBands midline at 8134, which is where I would get protective on the downside profits, if there are any.
RSI is moving up nicely on the daily and the intraday charts, and I expect that shows some strength for tomorrow's movement, which I believe will be upward.
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