Opening Play for Wednesday 3/12

3-11-2014 5-04-31 PM

Good Morning Traders!  Trend mode down in the small caps and NAZ led to an eventual afternoon break of  big cap blue chips……except for McDonalds….hmmmm  SO even the “other white meat” is getting a bit too high?  Hogs have been the relative strength leader but now have 2-period ROC sell divergences that tend to cap an extended run.

Indexes have had a good run as  well.  The daily sell divergences still suggest a further push down to the daily EMA.  After a trend move like the Russell  had,  a morning reaction to the 15 minute can set up another short trade.  1177 is the daily EMA for the Rus.   1851 is the EMA for the SPs.  Not all shares look terrible –    DE,  PEP  on extended runs,  LUV trending but overbought..etc,   rotation environment with China fears encouraging profit taking?   IBM and the DOW are both under pressure from daily  osc  sell as  well.  Such sloppy action and credit fears would have goosed the bonds up a  full handle a year ago.  A push back p above the 5 SMA sets up shorts.  You can  see this on the chart of the tens above.  The only  caveat is that there is a  three bar triangle pattern.  If they start trading high to low mid morning,  there is a super Sell short day setup on the 2-period ROC.  Not sure this is likely if SPs stay under pressure.

British Pound:   Buy day after three days high to low.    However, the hard break  may result in 240 minute bear flag forming on a reaction  up.

Main movers:  metals…Gold has already pushed to new 20 day highs in the Globex market.  :  1426 – 1430 – main weekly  pivot to upside.   Silver – nasty false start  when the break in Copper pulled the rug out from it but it is making up for it in the evening session.  2126,  then 2150 = the two next high volume node from the past 2 week trading range.

Copper has had different set of dynamics with Chinese credit /cash squeeze…..wild card.

Crude – Close back above 100.13 sets up turtle soup and power buy.

Looking for good two way trading in the indexes as they work a bit lower!   Linda


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