A violation of the 1240 level in the S&P would have broken a two-year trend line through the lows and it seems that traders decided to respect the significance of this support line.
The key to the market's longer-term direction depends on whether fund managers are in the mood for bargain hunting or sitting on the sidelines, leaving the main activity to short-term trading tacticians.
The severity of yesterday’s drop may be pointing to the fact that the short sellers encountered little resistance as the bulls could sense where the bears wanted to take the broad indices and decided to let them get there in a hurry.
Clive Corcoran has learned not to take the initial reaction to the monthly employment data too seriously as it often undergoes considerable second guessing in subsequent sessions.
Increasing volatility has been the hallmark for trading throughout May and yesterday's swift return back towards a probing of the lows suggests that this could remain a feature of daily activity for some time.
The banking sector may be creating a bearish flag formation as price is consolidating at the levels that precededed the late April breakout. Clive Corcoran will be watching this index closely to try to gauge how much conviction there is behind the relief rally.
Copyright 2024 Tiger Shark Publishing LLC . All rights reserved.
It should not be assumed that the methods, techniques, or indicators presented on these websites will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these websites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Free Festival of Traders Videos
printer version
full story