DAILY MARKET RECAP Thursday May 26, 2016

Posted on Thursday May 26, 2016

Thursday May 26, 2016

The following is  be used for Informational purposes only. The charts are fact, however my interpretation is an opinion which I am sharing with readers. None of this is a recommendation to buy or sell anything. You must do your own due diligence. 


Key Developments :


  • Choppy Inside trading day as market digests recent 3.5% rally
  • Next direction likely determined by the break of the range
  • 3 unfilled down gaps below
  • Yellen speaks tomorrow 1:15PM (great timing into holiday weekend!)


In the morning P.E.P talk I said the following

And that is indeed what we got. Since we acquired the target yesterday at 2090 (purple line) we have done nothing but play tug of war. I highlighted the two boxes in the main chart tonight as it looks very similar to Monday from
a distance. However, if we drill in there is a slight difference that we should make not of.

Here is Monday.

Here is Yesterday/Today

Take notice of the higher high and potential lower high. Subtle, difference, but  much more of a potential topping pattern than the one from Monday. Does not guarantee it will play out bearishly, it’s still a range for now, but there is more potential than there was Monday.

The Russell :
Looks virtually identical to Monday as well. Let’ see if it produces the same outcome this time around. The break of this wedge will give us next direction.

S&P Big picture resistance.





The Bottom Line:
It is very hard to just blindly short into this momentum. We have the potential for a small topping pattern or trading range to watch for resolution of tomorrow. 

Chart of the Day:

IWM – Current Price action

I actually went out short some Russel tonight, but will cover on a move above today’s highs.  One tactic that I like to employ if I think the market is due for a pullback (usually after a major  target acquisition like yesterday)
is to watch very closely for a failed breakout. And short immediately. Today we got just that and I went short at 113.85 and a stop at 114. I am holding this overnight, because in order to lose more than .15 cents they would have to gap it above today’s 114 high. They may, and I will lose more, but it is a risk I’m willing to take. I did it on Monday into Tuesday and lost a tiny bit, but flipped long and played the inverse H&S. Today we don’t have such a bullish pattern to play, so again I am holding it. If we start rolling over, there is a very good chance this is the top of the swing move and can ride it for a much larger win.  Other than a gap up I am risking 15 cents, I will risk that all day long after a rally like this.

Here is a chart of IWM right before lunch that I posted in the mid-day refresher. Scroll down to see how it’s playing out so far. I try to anticipate price action, and align myself accordingly, with very low risk and high reward.


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