In yesterday’s stock market analysis post, we discussed the bullishness of the market and how it was absorbing residual supply at the September highs. We noted that we were looking to be buyers on an early morning dip or, if highs were made early in the US morning session on low demand around the 1230 level, we wanted to be sellers.
Stock Market Analysis: Intraday Trading
The S&Ps rallied weakly into our shorting target to a high of 2026.75 on low demand and price bar characteristics that indicated weakness just before the US open. Recent graduates of Chart Reading Mastery would see this price and volume behavior as a poor quality demand with an upthrust at the highs offering a strong shorting opportunity. Another short opportunity arose at the hidden upthrust shortly after the US open.
The short trades gave a nice push down into the overnight low painted in the Asian session. We then have a spring of the Asian low followed by a test for a strong buy opportunity that lifted the market to new highs.
Stock Market Analysis for Tomorrow’s Trading
I would expect to end this trading week on a positive note. We do have employment numbers tomorrow and Janet Yellen is scheduled to speak on a policy panel; these both can affect trading tomorrow. For Friday, support is anticipated around the 2020 level and resistance is likely to put the breaks on a rally around 2040-45.
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