DAILY MARKET RECAP
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.