Opening Play Monday 10/27

October 26, 2014

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Good Morning Traders!

Friday morning saw the markets trade low to high after a successful globex test of the 1931 area. The pit session put in a higher low and market breadth trended higher while the RVX trended lower into the close.  The Nazdaq led the way with APPL making yet another all time high and MSFT gapping higher.

The closing Tick reading remains at overbought levels.  Friday’s rally came on lighter volume. Stock indexes have rallied two days low to high and there are now Sell divergences on the 2-period ROC, setting up a Sell Short day.  1964 – 1971 is an area of previous highs, also the upper end of a broader trading range.  Should the market trade above Friday’s high, this is excellent resistance to short against.  1961.25 was Friday’s high and the market may also put in a lower high to this on Monday, depending on how Europe trades. The Dax closed with an inside range day on Friday, – Monday’s European session will set the early tone for US session.  The hourly EMA has been the support line for the SPs several times on the last 6 day’s of rally.  It closed at 1943.50 but will continue to rise Monday morning.   1947 – 49 would be initial support on a reaction back down.  1944 isa  more significant volume node underneath.

Have a great day!

Linda