3 Charts: An Index, An ETF & A Stock
Here's the Nasdaq 100 after today's market action.
We're still trading in the upper half of the channel dating back to the Bear Stearns Low (March 17th).
Important levels to watch are ~2010, which appears to be near term support. The next level of interest is ~1990 which is support & the median line for the channel. The median line often acts as support/resistance, as you can see from the chart.
This is the Power Shares Agriculture ETF. This basically lets you take advantage of movements in the futures of Agriculture related commodities. Notice how it's been coiling up in a descending triangle type pattern and could break either way soon.
Here's Intrepid Potash (IPI), which also is coiling up to form a symmetrical triangle. I expect it to break one direction or the other during the next week or so.
My current view for tomorrow's market is fairly neutral believe it or not. Yes today's late day action was bearish, and is definitely a reason to become more cautious, but I'll wait to see how the market acts in the first portion of the trading day. With the previous 2 late day sell offs we had recently, the markets began grinding upwards as if nothing happened.
Sure the volume on the upside is light, and sure we're over extended, but you still have to give the benefit of the doubt to the buyers.
For clues to which direction the market may move, keep an eye on the Materials (XLB, SLX, KOL, MOO), Energy (XLE, OIH, TAN), Transports (Rails & Dry Shippers), & Tech (XLK, SMH, & large cap techs).
As I mentioned earlier today, these are the sectors that have led the market higher. In essence, these are the best & strongest stocks in the market.
Alternatively, you could select the strongest few stocks from each sector & watch those.
If the market looks like it wants to bounce, AMZN (continued momentum) could setup as a decent play to the upside.
If the market looks like it wants to continue to sell off I'll be looking through my lists of stocks in the materials & energy sectors. Particularly MON (bearish flag here?) in the Ags, CLF in the Steel sector (post split effect?), ACI in the Coal sector (failed break out today?) and JASO (possible continued downside momentum) in the Solars.
Post a Comment