One of the mistakes many traders make is not reviewing their own prior analysis. Granted market factors change so quickly that analysis made a few years, months, weeks, or even days earlier may prove useless, however that is not always the case. In fact, market factors changing so quickly is the whole reason its important to review your prior analysis. Put another way, analysis made prior to recent market developments might be more objective than your current analysis because you might not realize you are subconsciously taking subjective matters into consideration. Continue reading
SH @ the close 5/14/12: Oil’s slide continues, bringing markets with it
In our @ the bell commentary this morning we talked about the potential for a head fake move below 1,340 if the S&P500 did indeed breach this level. The main characteristic we said to look out for was a move below 1,340 that wasn’t first led there by a move lower in oil. Well, SPX did break below 1,340 and oil was the clear leader behind the move, as it slid another 1.5% to below $95. Oil has now finished lower 8 out of the last 9 trading days. With SPX falling to its lowest close on a negative day since late January, the VIX rose to finish at its highest level January 17th. Continue reading
SH @ the bell 5/14/12: Be on the lookout for a fakeout
The markets enter the trading week in a dangerous position for more reasons than you might think. Nervously close to a key technical level, many bears are craving an S&P500 breakdown below 1,340 (the March lows). However, its this same desire that bears need to be cautious about. From a bearish perspective, we would rather see the risk of a 1,340 breakdown not get as much as attention as it appears to be getting. This stems from the belief that technical events are much more powerful and reliable when they go unrecognized by most market participants. Numerous data leads us to believe that this does not accurate describe the current technical view of the market. Continue reading
SH @ the close 5/11/12: If the VIX was a chair it’d be uncomfortable to sit in
The VIX ended just south of the key 20 level, signaling that next week could bring some intensified volatility to the downside if the S&P500 isn’t able to hold above its most recent lows. This morning we pointed out that SPX needed to hold the 1,347-1,350 range in order to sustain some upside momentum and the result was a bounce from 1,348 to a high of 1,365. The problem though is that the market spent the afternoon giving up all of those gains, dragged lower by oil (USO) which closed at the low of the day. Continue reading
SH @ the bell 5/11/12: Markets looking for a reason to sell off further
The financial sector as represented by XLF got slammed after hours on Thursday, falling more than 2%. The downside pressure is being blamed on an announcement from J.P. Morgan (JPM) in which they stated that they lost $2 billion in a trading portfolio designed to hedge against risks the company takes with its own money. In addition, oil is again under pressure in overnight trade, breaking below its Thursday low. At last check the dollar is nearing a breakout above its Thursday high and copper is busy treading water above its Thursday low. All of these developments are likely to pressure the market as the week draws to a close. Continue reading