Spy of the week.
Hello traders! Again this week, we have seen bright green in the screens. This is the fourth (!) week in a row the market is up, and the he doesn’t seem to get tired at all.
Technically speaking, the SPY has broke its all time high, yes, all time high. It’s more than 4 years that the market is in a raleigh, and except a somewhat deep decline on mid 2011, this has been an upward move with a unique slope that we have seen only during the tech bubble of 2000
have a look:
Notice how similar are the slopes, the extent of the line and the middle big correction.
We as technical analysis experts, always look for the pattern, the repetitive behavior that happens over and over again. Now we have got quite a few indices that maybe indeed we are about to replicate and re-experience the crash of 2000? Not so fast. the fact that charts look alike doesn’t mean that they will have the same future behaviour, but that certainly puts us on the edge and יןעי alert on a possible turn in the market sentiment.
One thing in which we can be sure of for the moment is that our trusted indicator Laguerre Filter did quite a good job in sounding the alarm in early 2000, and as a consequence, we are constantly monitoring the slope of the filter. Meanwhile you can be reassured, the actual slope is still positive:
The worst performer this week was the technology sector which took quite a hit due to bad seasonal reports, especially MSFT and HP. On the good performers we had the banking sector who did well regarding other sectors, which could be a good sign for the short term view of the market, when banks do well, everyone does well!
Trades from this week
We got a few enthusiastic responses from our readers about last week’s Continuation trades. Apparently it’s a concept you find valuable and therefore we will do another set of trade setups like these. We remind you that in these trades we use our proprietary indicator DarvasBox which draws boxes on the chart and indicates where to buy (green box lines) or where to sell Short (redbox lines)
E-Bay (EBAY) got hit on thursday last week. Since this is the report season we can see a lot of these panic moves. All you have to do is to look for the right stock that got hammered due to news and then wait for the right moment to get in:
Notice that here you had 3 opportunities to get in and short ebay and make almost $2 with a stock going your way all day long…
JCI had an explosive move on last thursday, and the day after we did see a continuous up move but we caught only a fraction of the move, that happens also…
UAL had a great move on wednesday last week, and therefore we waited, with the DarvasBox plotted on the chart waiting for the signal to enter a potential Long trade, which eventually came at about 2 hours after the open. This trade was up 50 cent in a matter of 30 minutes:
Bally Technologies (BYI) experienced a big gap accompanied with extraordinary volume on Tuesday last week. This setup is special for the reason that the after-move was so strong that it lasted 2 full days without a correction – quite rare – Notice how DarvasBox identifies the low volatility ranges and places the buying signal just before the break:
4 opportunities to get Long and all of them were profitable. On average, each position was held no more than 2 hours and yielded an average revenue of $1 each. In order to learn more about our premium indicators please visit our page: <ProTrdingIndicators Premium>
The important economic info this weeks comes in 3 important chunks (All times in EDT):
Existing Home sales @ Jul 24 10:00 AM.
Initial Claims @ Jul 25 8:30 AM.
Durable orders @ Jul 25 8:30 AM.
These are number that could potentially move the market in case of out of the ordinary numbers, beware that Existing Home Sales won’t catch you off guard…