Teach Talk Trade S&P Futures E-mini Day Trading & Technical Analysis

Doji

The Dow was down slightly today. After a strong down day yesterday, the markets posted supply and demand pictures that imply a turn or at least a pause while it ponders the situation.

The StoRSI, our momentum oscillator, closed near its lower range trigger level at +39.18. This low reading signals a possible end to the downside momentum. Price could consolidate from this area, due to the oversold condition of the market (which has caused momentum to indicate the oversold conditions).

The T8 which is trending downwards since August 20 or so and now is in a sideways pattern. There is little room between price and the down trending T8 for a retracement now as it closed on the T8. The gann fan support line also proved to be a rejection area for prices. The market could easily continue to consolidate and or continue down from here. The T8 exponential moving average is our preferred exponential moving average and it dictates our thoughts on the direction of the trend.

The candlestick formation posted today was a “doji”. with a long tail which signals indecision. Many times, this formation leads to a reversal in trend. Confirmation must take place tomorrow but the extension of the wick to the downside gives us another hint that the market could begin to move up.***Volatility Alert:

During the third week in July, volatility returned to the major stock indices. For approximately four years, the markets have had low to very low volatility. This significant change has ushered in swings of 100, 200 & 700+ points, sometimes on a day-to-day basis. Stock indices tend to be either volatile, or not, for three to five years at a time. Expect continued volatility. The current volatility cycle has just started its volatile period. We feel this is the early stages of volatility and we continue to believe it is here to stay.

Uncle Mike

 

 Dow Directions 01/08/09: Play Now | Play in Popup | Download (329)