Teach Talk Trade Day Trading & Technical Analysis

04-20-08  DOW Directions:  A Daily Technical Analytical View of Stocks, Futures, Eminis and Forex for online and day traders.

Weekly candlesticks and trend point to a rally in the SPY stock index.

As the trend changed to positive, the weekly candlestick pattern posted a bullish engulfing pattern.  This is always seen as a positive sign. Equally as postive is the trend turning up.  This positive turn in direction is hint of upside since last November.

The daily CMO, our momentum oscillator, turned up and could assault its upper boundaries over the next few weeks. once again. The important fact is that the CMO moving in a positive direction once again. This could result in another couple of weeks of rally.

The T8 (maroon line), our moving average that defines trend, changed direction last week. This new leg to the upside is significant.  We haven’t had a hint of upside trending since last November.  different story.  We expect price to retrace to the uptrending T8 and at that point we would love to buy this market.

Last week’s candlestick formation was a “bullish engulfing” pattern. The can be a very significant candlestick pattern. Bullish engulfing patterns are usually followed by strong market movement to the upside. 

***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 & 300+ 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.

Please take advantage of the FREE 7 DAY TRIAL to The Morning Call ( we discuss 21 futures, ETF’s, E-minis, NASDAQ & Solar & Alternative Engergy issues ) & The Mechanical Monkey where we discuss our mechanical trades.

 

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