|
The market broke its resistance levels last week, some indexes
even made six year highs. As exciting as the break is, it was not sustained.
In our opinion, the breakout was caused by end of the quarter window dressing
by fund managers.
The overall effect is still positive, we did break resistance
and established an up trending channel. The market will now have a tendency
to swing back and forth between support and resistance. Support being the up
trending trend line and resistance is a parallel line. The over all trend
will be up, but the movement will be back and forth.
This is in contrast to a market that sustains a momentum-full
up move, an actual swing. Momentum requires conviction and the market is
lacking this key ingredient. Instead of conviction, we have a direction,
which causes an up trend, but not a strong up trend.
Basically, this means that we can expect nice loner term
trades on the long side and some nice short term trades back and forth within
the channel.
One tip for the up coming weeks that we think is very
important. Watch out for the first few minutes of the market each morning,
especially on listed stocks. Market makers/specialists have a tendency to
execute all stop orders first thing in the morning and then bringing price
back to normal levels. When the market lacks momentum, these can stop you in
and then out. When the market picks up momentum, they will be negligible.
Hope this helps,
Shay Horowitz - ShogunTrading
|
[ 
Dan Zanger Offers 3 week FREE trial!
