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

ES (E-Mini): Bearish Engulfing.

The S&P,NASDAQ and Dow tumbled after worries about employment. After an undecisive day day on Wednesday, the markets posted supply and demand pictures that imply a turn or at least a pause while it ponders the situation.

The Long Swing Trade today at netted 1.5 points with the trailing stop but then headed south. Subscribe to the Mechanical Monkey ( my Swing Trading System ) to get the dialy swing trades on the ES as well as Equity calls for the NASDAQ. The StoRSI, our momentum oscillator, momentum oscillator, closed near its bottom trigger level. This low reading usually signals an 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 extreme oversold conditions).

The T8 which is trending downwards since August 20 or so and now is accelerating to the downside. There is plenty of room between price and the down trending T8 for a retracement back up to the T8. The market could easily consolidate back to the T8 exponential moving average before it encounters further resistance. The T8 is our preferred exponential moving average and it dictates our thoughts on the direction of the trend.

The candlestick formation candlestick formation posted today was a “bearish engulfing” of sorts. The body of the candle was engulfing the body of the prior days  candle. Many times, this formation leads to a reversal in trend if this ends up as a morning star formation. Confirmation must take in the coming days but any reversal with extension of the wicks to the downside upside gives us another hint that the market could begin to move back 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 & 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 Morning Call www.teachtalktrade.com/morningcall.html” where Uncle Mike discusses Dow and & subscribe to my Swing Trading Subscription The Mechanical Monkey where we discuss our mechanical trades in ETF’s, E-Minis, NASDAQ & Solar and Alternative Energy issues.I have a new software product for Tradestation users, it will be unveiled in the next week, watch for it!

Uncle Mike

PS Check out our “Trade As A Business” course (www.teachtalktrade.com/business_plan1.html) as we will be starting a new course in the comming weeks. Email um@teachtalktrade.com for information.