The Sunny Side of the Street
SUNDAY NIGHT - May 4, 2003
(Click on any chart to make it larger.)
Figure 1: Daily INDU
As I suggested it might in last night's commentary,
the Dow has dropped under the 8511 line again. Given this evidence, I
now expect it to drop on down to the SunnyBands midline, which is currently
at 8350.
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Figure 2: QQQ Daily
The QQQs cleanly passed the 28.31 mark today and almost made the 27.46 line. I am still expecting the prices to reach the lower trendline, which is currently at 26.25. ATR is still decreasing, so it will be a slow journey getting there.
Figure 3: SPY Daily
Figure 5: E-Mini 15-minute Intraday
Yesterday I said that I thought today
would be a quick dip down, but just for a day. Today I am thinking it
looks like it might continue on down a little lower. RSI is riding the
40 line, but could still go lower, and price is well under the SunnyBands.
Figure 7: EuroDollar Daily
EuroDollars are a long-term play, and my
commentary on this symbol needs to be weekly at most. ED is in the
same position it was at last commentary, still acting on a sell signal on
the model. Henceforth I will comment on ED on Sunday nights only.
I am now very cautiously watching the market for long plays. Since we tipped barely above the Yellow Box tops, I am alerted to potential continuing up moves. Nevertheless, I am still cautious about impending failures since the move above the yellow boxes was slight and could easily be retraced.
RULES OF THUMB:
1. When price is pushing the upper Sunny_Bands upward and then eases off and moves back toward the midline, it's time to take profits. If it starts moving up and pushing on the Sunny_Bands again, it's time to get back in. Likewise, if the market is pushing down on the lower Sunny_Band and eases off to move back to the midline, it's time to take profits from the short play.
2. Divergence of the RSI and price is another good time to take profits and wait for a breakout of price before taking a position.
3. When the exchange puts in curbs or trading halts on a large move down, it usually (not always) stops the downward motion. After the market reopens is a good time to take profits from your short position.
4. The market can't go nowhere forever. Eventually, who knows how long it will be, there will have to be a breakout-- one direction or the other.
==<:>==
While it may be true that a picture is worth a thousand words, it is definitely not true that a picture deserves a thousand words.
I have been asked by one of my subscribers to comment on a currency and the E-Mini, as part of this service. If any of the rest of you agree, please email me so I will know whether others want this service as well. (sunny@moneymentor.com) However, as part of including two more markets, I cannot say as many words about each chart without taking all day. I will of necessity be more to the point and succinct. Nevertheless, I will continue to point out critical Technical Analysis constructs and things that I see, and how I read them on each of the charts. I think adding the EuroDollar and the E-Mini are a good idea for some diversity.