Wednesday, June 24, 2009

State of the Market - 6/24/09

We had a Fed day today on Wall Street, and with that, we had the typical volatility. Stocks started higher and rose strongly for the first hour and a half of trading, with the Nasdaq and S&P both rising up to their short-term moving averages. Stocks leveled off from there until the Fed decision around 2:15, at which point all the indices fell sharply and quickly. The last hour was choppy but at least didn't lead to new lows, although stocks closed near their lows for the day. As of now, volume appears to be lower than yesterday.

Technically, I posted on Twitter this morning that 1801 on the Nasdaq and 912-915 on the S&P was short-term resistance (due to the 9 and 20 day moving averages being in these areas) and the markets really couldn't get past those levels. The Nasdaq got as high as 1807, while the S&P only got up to 910. Right now, I would continue to watch these numbers as resistance over the next few days. To be honest, I expect them to be broken to the upside at some point over the next week - I think the Nasdaq could get as high as 1837 and (maybe) all the way up to around 1880 where it could put in a double top. 930 is going to be hard for the S&P to get over in my opinion, and a move to that area followed by a reversal would complete a shoulder in the head and shoulders pattern I've been mentioning for a while now.

Still not doing anything right now - actually had a dentist appointment midday and we're taking our son to his first amusement park on friday - and continue to wait for the best time to short. Over the next few days, I plan on getting a video out of some of the top setups I am seeing developing here. There is still some work to do for most of these setups - some could just turn into little bear flags instead of full head and shoulders patterns. I am aware of this and will try to be prepared, although I still think we have a little more of a bounce ahead of us into the end of the month.

Go USA - watching the US soccer team upset Spain here 2-0. Not a big soccer fan but will watch when the US is playing - hope they can hold on. Good luck tomorrow and take care.

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