Wednesday, September 1, 2010

Up big on big volume

After days of fighting over the crucial 1040 level, the bulls finally won. And what a victory it was! The market finally broke out of the mini trading range that I had pointed out yesterday, and the hold of 1040 means the bigger trading range still lives on. Let's get right to the charts.

SPX - The first thing that should strike you about this chart is the volume. It was the third highest trading volume of the year and that's extremely bullish. It is also interesting to note where we ended today - right at MA(50) and MA(20), so these should be the levels to watch out for tomorrow. After a big move such as this, some consolidation here would also count as a positive for tomorrow. But it's crucial that 1065 holds as slipping below the top of the mini-range after a big volume move like today's would count as a real negative. 

COMPQX - A similar story at the NASDAQ. We closed right at MA(20) though MA(50), unlike the S&P, is a little distance away.

Personally speaking, I doubled my CRM position at 112 and sold the entire position at 114.90 for around 2.3% gain. This was the Chart of the Day for yesterday and had almost a 6% move up today. I also got out of ARUN position at 19.20 for a 3.2% gain. I also got some NR at 8.80.

So, to wrap it up, watch out for MA(50) level tomorrow. I would take a positive close tomorrow, no matter how small, as a positive considering we have jobs data on Friday and its likely to be disappointing. I am a buyer of this rally as long as 1065 holds. I will be back later with the Chart of the Day and also some other long setups that I like here.

Take care and good luck!


Bill said...

Seems like we've had a lot of streaking days lately (4 days up, 3 days down, 5 days down 4 days up), instead of day to day choppiness we've been getting a lot of broad swings, im not sure if this is institutional trading or what but it seems strange the consistency of the herd movement on multi-day basis recently.

positiontrader said...

Hopefully, the volume today is pointing towards something. Its been an extremely tough market to trade recently if one is a swing trader and it would be interesting how the market absorbs the job numbers which I expect to be bad.If it rallies or holds up well even in light of bad news, that would indicate a trend up.