Intra-Day Action – Bullish 1-2-3 Pattern – 29 Jan 2016

Here’s is today’s intra-day action of $SPY. It’s good to look back at previous days to compare the different times and patterns during reversals and market conditions.

You can look at previous Intra-day journals here

Today we had a strong bullish trend day. Trying to short SPY today was not a good idea. On strong trending days it’s best to wait for opportunities to buy. I’ve included a couple of examples below. The Bears had very few moments of control and the TICK shows only one -1000 reading which was actually good for the Bulls. The -1000 reading had very little volume and price expansion to the downside signaling the Bulls still were buying up all the supply.

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Market Morning Huddle – 29 January 2016

News Driver: Bank of Japan cuts interest rates, ECB inflation inline and US GDP not as bad as expected.

Into today’s open Bank of Japan Kuroda is creating risk-on (temporarily) by going NIRP (negative interest rates -0.1% on excess bank reserves), ECB Inflation metrics printing Goldilocks (Core +1% vs forecast +0.9%), and Q4 2015GDP for the US slightly missing forecast (better than market was expecting) +0.7% vs forecast of +0.8%

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Intra-Day Action – Day trading Biotech XBI

Going to do something a little different today. I saw an opportunity intra-day to play XBI  which is the S&P Biotech sector. Full disclosure: I am long XBI for a swing trade at the moment and I am near my stop loss. This was a good opportunity to play a shorter time frame trade and minimize the damage if I do get stopped out of my swing position.

 

The key is not to add this trade to my swing trade if price had of gone against me. The two should remain separate and I don’t want to compound the problem by adding more shares to a losing trade (averaging down).

 

The setup for XBI is still dislocated and cheap and the daily chart has only gotten more oversold. Leaving XBI ripe for a good reversal intra-day. I call this a “Hit and Run” trade when you have two wide range bars with volume the selling pressure can’t continue in the short term and a playable intra-day reversal can be a very good play….

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Market Morning Huddle – 28 January 2016

Yellen disappointed markets yesterday not being as dovish and defacto implying the move in Dec 2015 was spooking investors. The statement does lower odds of a March 2016 rate hike, but on the basis of a global slow down.

Read last nights Market Re-cap for more details

The markets sold off after the announcement but did not break major support floors, the S&P 500 held above 1,880-1,870 and we maintained the HOLD decision for mid-to-longer-term positions into yesterday’s close.

News Driver: Oil and earnings will be the focus today as we enter another heavy earnings day today. European markets are down moderately between -.6% and -1.5%. Asian markets had some choppy trading and closed slightly down with Hang Seng up +.75%. China was the laggard again down -2.61%

Pre-market we see a mixed sentiment towards equities, leaning risk-off in the Eurozone, and leaning risk-on in North America.

Here’s a peak at the eMini Futures contract….

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Market Recap 27 January 2016

It was an interesting day for the markets that started weak form Risk off (investors not buying high risk assets) then quickly turned RISK ON (buying higher risk assets) after the Crude Oil Inventory number was released.

The number was a huge build of 8.383M over the forecasted of 3.277M but Oil immediately rallied. The bad news was expected and oil traders took oil on a nice run to $32.84.

The S&P 500 has been strongly correlated to the oil market and rallied also. However, the mood changed quickly after the 2PM FOMC rate announcement. Rates were left unchanged but Yellen’s dovish comments spooked the markets and the  STRONG RISK OFF selloff began with some substantial volume.

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