Today’s action was one big rollercoaster that brought traders on in the morning, and threw them off in the afternoon, only for it to pick up people’s broken bones in the last hour. Today was definitely a difficult day to hold as we formed the third day of a bull flag. If you were like most traders in the morning…by the end of the day, you sat there, wiping the sweat off your brow (after using the bathroom for the first time since 9:25AM) and shouted, “WTF“!!!
The most likely scenario is that we breakout above 920 SPX within 1-2 days. The other scenario is that the flag fails and we breakdown, starting a perpetual multi-day sell-off which I will gladly participate in. The former holds the highest probability, by far. Tomorrow, expect 905 SPX resistance per the 3-day chart. The 50-day MA remains as the largest point of resistance to a breakout.
It’s healthy if large volume accompanies a breakout and it slowly declines during a consolidation. What you don’t want to see is high volume during consolidation, especially on the down days. The volume signifies that the people that have been buying for the past several days are actually holding their positions. As supply is absorbed, a breakout ensues. The biggest news item that can kill this process is a negative reaction to the auto bailout.
As for my trades, I remain in my materials/industrials with a load of coal, steel, and energy stocks such as ACI, BTU, MEE, ATPG, STLD, ANR, and many more. I also have retailer ANN for some reason, and that P.O.S. REIT named PLD, both as base breakout/momentum plays. I sold out of DRYS@$11.61 (bought @ $6.46, +80% gain) and EXM@$9.01 (bought @ $6.49, +39% gain) early this morning, both having made up a total of 30% of my portfolio. I suspected a doji day, a typical characteristic of spiker plays after 2-3 days. This pushes my December monthly return to +27.2%, lead by the materials/industrials.
For tomorrow, watch the key immediate support level around 887 SPX and if needed, another trough in the flag to 880 SPX. Watch 905 SPX for a smack down from the upper range resistance level. As I write this, the House is getting ready to vote on the auto bailout bill. Obviously, the outcome of the vote will have an effect tomorrow.
Typically, it’s smart to be hedged in some sort of way while you’re swinging along during consolidation. For people who are still throwing up after getting off the rollercoaster, just stay in cash.
SPX 1-day
SPX 3-day
SPX 5-day
SPX 10-day
SPX 6-month
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Chart Addict,
When I saw that picture I thought.. why is that lady pole dancing? Are the charts telling us that sex sells?
Great write-up and again, helpful chart analysis. Thanks again.
Nice work, CA. Love the drawing and the Maryland flags!
So the most likely scenario is we breakout or else we break down?
Are you fucking kidding? That’s what you came up with after hours of analysis? Either we go up or down?
Fucking hysterical.
CA, nice job as always.
Read the title, douchebag!
My December MTD performance stands at +42% (and some change).
I thought you’d like to know that.
Wow chart addict, you are good.
We found support this morning at 887 and resistance at 905, good call.
most likely scenario is breakout!!!
I’m glad you can make money with your charts. And this is why nobody should follow anyone else.
Everything you say is completely fucking wrong. And if your performance means putting 30% of your whole portfolio in a lottery ticket like DRYS… well… fuck… good for you. I mean good for fucking you.
But obviously — your actually ‘take’ on the market is horrendous. You must be a brilliant trader but it’s clearly not apparent in your charts or comments.
“I’m up 42% this month.”
What a little bitch you are.
thanks!!!
actually up 44%!
Sir Douchebag Sir, May I be so kind as to suggest, that you not read Senor “The Chart Addict” if you do not find value here. Otherwise I will have to notify Ranger Smith, and have you removed from the park. Thank you
I should actually start making posts intra-day.
John,
Funny, funny. Thanks for the charts and explanations.
Sir D. You’ve had some good comments in the past, but I don’t understand the hating here.
If you’ve got a different take, and you’re making money doing it differently, just show your work. Everybody will applaud in awe and wonder.
Except for the haters.
If you can go up 42% in less than two weeks you could easily lose that much too. Be careful out there.
“I should actually start making posts intra-day.”
I would love it!
The more the merrier
Yo Addict… how many more guys you gonna steal lunch money from? Help me with this engine swap will yah.
As many as I can for the next 50 years.