Monday, December 19, 2005
Market Recap
From: Ken<info@swingtradescom.com>
Reply-To: Ken<unsubscribe@swingtradescom.com>
Subject: Market Recap
Date: Sun, 18 Dec 2005 20:15:00 -0800
-6.08 -3.62
11.37%
Swing Trading -0.64% -0.90 Notes to Charts:
Daily Chart:
- This Daily chart here defines the trading range the market which started back in November 2004
- Market broke through the support area in Mid April ( A ), however a quick return above the 20 day EMA alerted us to a possible false breakdown
- MAs went into an uptrend at ( B) with the MA crossover up. This marked the start of the uptrend to new multi-year highs
- Recent pullback in the market was supported right at the MAs ( C ).
- 20 EMA crossed below the 50 EMA, representing a Daily Chart downtrend at point ( D ).
- Market EMAs (20 and 50 EMA) have crossed up, putting the Daily chart into an uptrend
- Market pulled back today but closed below its 5 day EMA ( E ) keeping the uptrending bias in tact
- Stochastics have just come down through the overbought 80 line ( F ) creating a short term bearish signal. Although it has turned back up, we must still view this as a warning sign
Hourly Chart:
- Market began its explosive breakout to upside with the nice Moving Average crossover up at point ( H ). This marked the start of the break out of the trading range to the upside ( I ).
- After a subsequent pullback to the 20 hour EMA, market surged ahead to new trend highs ( J )
- Recent market action has found good support at uptrending MAs. Despite the recent dips below the MAs, the Hourly uptrend remained nicely in tact with the 20 EMA above the 50 EMA ( K )
- Recent pullback now has created an early Moving Average downtrend ( L ) with the 20 EMA slightly below the 50 EMA. This signals an end of the Hourly uptrend, and the start of a sideways or downtrend
- Market broke out of the recent sideways range ( M ) and has produced a MA crossover up. Hourly chart is now in an uptrend
- Market traded sideways to down, however the uptrend is still in tact with 20 EMA above the 50 EMA
5 Minute Chart:
- This chart reflects the overall directionless intraday range trading that the market has entered into
Assessment:
The longer term trend is up with the 20 EMA up above the 50 EMA on the Daily chart. Market has recently surged ahead to new multi-year highs. This could open things up for more aggressive trading now that we are out of the trading range. We will keep a close watch on the 20 day EMA going forward.
The short term trend is now up with the 20 EMA just above the 50 EMA. This is confirmed by short term sign from the Daily chart with prices above the 5 day EMA. Daily stochastics are still in a downtrend so some caution is still warranted. The trend is still up, but signs of weakness still prevail. We will continue to watch these factors closely for any signs of a change in trend..
We now have long and short term trends confirming. Due to the slight weakness showing on the Hourly charts, we will remain conservative with a slight bias to the long side of the market.
These charts are here to help you get a visual picture of where we stand in the market from a broad to a very detailed perspective. Recognize where we are and what kind of trend we are in, rather than trying to predict market direction.
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