An important failure today at 3853 area. The inability of bulls to regain that level and the price action the past two days paints a very bearish picture in the market. The next key level is 3785. A material break below that level and look out below. After 3785, next material support is not until 3695. It would finally be the minimum level of selling that the market needed to clean up the picture, and potentially a good time to look at some bargain shopping.
Key Algorithm Calculated Support Levels: 3830 (SMALL) / 3820 (MEDIUM) / 3800 (SMALL) / 3785 (LARGE)
Key Algorithm Calculated Resistance Levels: 3943 (SMALL) / 3917 (MEDIUM) / 3900 (MEDIUM) / 3857 (MEDIUM) / 3841 (SMALL)
Assessment: Mixed open with the DOW down, but everything else in the green. Yesterday was the second time this week that the S&P hit some key calculated algorithm and trend numbers. Typically, the more a key number is hit without a material bounce, means that eventually that key number or range will break. Right now it would be support in the 3830-3840 area. A material break of that area and we are likely headed under 3800. Let’s see what we get today and if this small early bounce catches stream or blows through the floor. Good luck in your trades!
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WFC has been removed from the FMA Radar List at $37.48 after moving down to a Bullish 2 in the algorithm. The position returned +$0.74 for a +2.0% ROI.
Prior to the market open I said the following… “We should see some selling early today. If it turns here, around this 3920 level, it could be a failed rally and would likely lead to some strong selling. It actually could confirm that the selling earlier this week was indeed the start of a leg down in the market. Have to see how the action plays out, but this is what I am looking at as we start the day.”
Right at the open the market moved up in the first 5 minutes to 3925, however it did turn and the failed rally appears to have been confirmed. At which point the real selling began and dropped the market all the way down to 3825. The market has since started a small bounce. As you can see on a standard 5 minute chart, the algorithmic calculated level (reported in the Telegram trading update this morning) of 3853 has acted first as support, then resistance and now it is currently acting as support again. The algorithm was definitely on to something when it called 3853 “LARGE” support. Let’s now see if the bulls recover and push higher from here or if it breaks down further. A further breakdown would be a bearish sign especially given the trend of this market recovering quickly off every sell-off attempt.
PTON has been removed from the FMA Radar List at $117.16 after moving to Neutral (a zero) in the algorithm. The SHORT position in PTON returned +$29.68 for a +20.2% ROI.
Key Algorithm Calculated Support Levels: 3917 (MEDIUM) / 3900 (MEDIUM) / 3853 (LARGE) / 3818 (MEDIUM) / 3800 (SMALL)
Key Algorithm Calculated Resistance Levels: 3943 (SMALL) / 3831 (SMALL)
Assessment: Another sharp selloff this week which has since been fully recovered. Looks like we are headed to new highs given the underlying momentum. The futures are down right now, the NASDAQ decently down at -1%. However, the futures are not a very good predictor beyond the open. So, we will have to wait and see what today’s trading brings. Looks like the Reddit crew is back in the news. Be aware of their activities. Could be a hedge fund setting a bull trap. I am avoiding the activity there. I still would like to see a real selloff because the technical picture right now keeps getting messier and messier without one. Good luck in your trades!
Key Algorithm Calculated Support Levels: 3857 (LARGE) / 3840 (MEDIUM) / 3820 (SMALL) / 3800 (SMALL) / 3790 (MEDIUM)
Key Algorithm Calculated Resistance Levels: 3943 (SMALL) / 3917 (MEDIUM) / 3900 (MEDIUM)
Assessment: Yesterday we saw the market tank hard at the open, hit support and bounce right back up. From the low to the high in the S&P was a 91 point move! Incredible and if you day traded you likely killed it playing the scalp. Tough market to trade with all the intra day swings which end almost where we start. I am not sure what to expect today. Let’s see how the market handles the various levels of resistance and support and go from there! Good luck in your trades!
Wild day of trading, from hitting the floor to a full recovery (once again). Just amazing action and continues to be a day traders dream! No material unusual options trade and the volatility kept anything from hitting the radar. We’ll see what tomorrow brings!
After a hard and fast selloff there has since been some recovery. The 3857 level was resistance on the last hour’s hourly candle and is currently support on this hour’s candle. Let’s see if they use the support to push higher or we fall through the floor.
For FMA subscribers… Not much in the way of unusual options trading and nothing yet popping on the radar. The hard and fast drop then pop has caused some mixed calculations. We’ll see how the day finishes out. If anything it appears there is a chance for 1-2 short positions popping on the radar before the day finishes out. Let’s see how it goes!