Indexes have been on an extended run to the uspide (trend mode) and only the NAZ had a close below the 5 SMA on Monday setting up the Buy for Tuesday. One thing a trader can watch when markets are in trend mode is a sell divergence on the daily 3/10 oscillator. Their are not strong sell divergences and thus any close below the SMA in the SPs can still set up a Buying op. Their is a long seasonal window that comes in an end Jan 3 for the SPs. Friday’s end of year mark up was a bit excessive and not supported by volume. Short term support in SPs comes in at 1835 area. Small cap Russell is filling out consoldiation on the 120 minute charts, perhaps an A B C down rhythmn. As with many big cap blue chips, trade to the 120 minute EMA area can still set up a grail buy.
Silver had a 4 point triangle a few days ago. This often can set up the last leg down (Elliot 4th is often a triangle) Did that fifth wave test all unfold in a matter of a few hours? That would be a first. The weeklies finally have the appearance of a double bottom, BUT, silver would need a CLOSE above 2018 to confirm any upside. Gold needs a CLOSE above 1218.9
Yield charts remain in a steady uptrend. Rising rates are a possible wild card for first quarter. The weekly and monthly charts are just turning back up. This time the short end of the curve is leading in upside momentum. Any 1-2 days low to high in tens and bonds continue to set up shorting opportunities. Trade the short side for now until there is a clear buy divergence on the daily 3/10 in the ten year notes. Thursday should be a consolidation day.
New initiations for Thursday other than gold and silver which will be UP on Thursday morning already (and MAY make highs first) :
EC – 3 bar triangle breakout coil Double top in place?
CL – Buy Day, Tuesday’s low is reference point – must hold a test of this as daily sell divergences may still play out.
Wishing everyone a GREAT start to the year! I try to look for 1-3 clean initiations that I can then hold overnight for possible followthrough, 1-3 SP scalps a day, and several times a month spots where the daily and or daily/weekly chart structure suggests holding for more than 2 days. There are dozens of opportunities every day and every week. Be patient and dont chase or get frustrated if a market gets away – there are new possibilties every day and all a trader needs is one GREAT trade a week!….and the rest often end up being chicken scratch.
Happy 2014! Linda