The Sunny Side of the Street
WEDNESDAY
NIGHT - June 11, 2003
Archives of Past
Commentaries . How Did We Do?
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(Click on any chart to make it larger.)
Figure 1a: COMPARISON: DOW vs SPY vs NASDAQ (Intraday)
I keep the chart in Figure 1a on each day's commentary simply to illustrate how much in tandem the 4 indexes I watch actually are. For this reason, I don't always comment on every index. Analysis of one speaks highly for the same analysis for each of the other indexes.
Figure 1b: INDU Daily
In last time's commentary I said:
- "The intraday QQQs gave a buy signal this morning on the model, which paid off by the end of the day, but was a slow grind getting there. It seemed like nothing much more than a sideways day for the most part. RSI stayed in the midrange until the end of the day, and the Average True Range continued to decline. But, there were no divergences so the confirmation kept us believing in the movement."
And, today's action proved to be a continuance of the same buy signal, which has been in place since 3/19. RSI showed no divergences and climbed on upward past the bullish marker and is now in solid bullish territory.
On the watchful side, the Dow didn't make it out above the high of day before yesterday, when it created the Shooting Star. That concerns me a bit, as it might still be cause for a double top. We shall see tomorrow, as the market speaks to listeners about its proclivity to go up or down. The next upside marker is at 9612, which could be reached in the next two weeks if the market keeps on behaving as it has for the past two weeks.
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Figure 2a: SPY Daily
The SPY continues to move along the trendline in Figure 2a steadily and firmly. While today's action on the SPY didn't seem to move as quickly as did the Dow, it nevertheless continued to make new recent highs. The Average True Range indicator has broken above its trendline, giving hope for those who are long, that some range expansion is about to occur.
At this juncture the markets are still climbing a wall of worry, moving up slowly. It wasn't in the too distant past that a three hundred point Dow day was typical. And, now, the news reads with excitement when the market has a hundred point day.
The next line of Attraction on the SPY is at 104.84, with support underneath at 96.38.
Figure 3a: QQQ Daily
The Shooting Star from 3 days ago is still very evident on the QQQ chart. It sticks out like a sore thumb. This pattern is usually a reversal pattern and is therefore of some concern. The QQQ did not make it above this line today, but nevertheless is still above the midlines on the Sunny_Bands. This is a strong sign and does not yet call for a pullback.
Figure 4a: EMini Intraday 15-minute bars
Yesterday's buy signal on the 15-minute EMini bars held through today nicely, staying above the Sunny_Bands midline all day. That made today a "do-nothing" day. A good day to get caught up on your reading.
The intraday RSI is holding up strongly above the bullish 65 line, and there is still room on the upside before the EMini tests the high of three days ago.
As an intraday trader, I would be wary when that mark is hit, and consider taking profits until the high of the Shooting Star is soundly broken. You can always get back in if the market continues to move upward.
Figure 5a: EuroDollar Daily - Sunday night commentary only
Don't you just hate it when markets get into those choppy sideways periods? There is nothing much you can do but wait for a trend to emerge.
The
current signal on the EuroDollar is short, with current closing prices still
under the Sunny_DMA lines. So, short it shall be until the market
tells us otherwise.
The bulk of the evidence weighs heavily on the side of expecting a correction, but nevertheless being in place to go long at a moment's notice. So, be sharp and on your toes.
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.
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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.