Teach Talk Trade Day Trading & Technical Analysis

ES (E-Mini): Morning Star formation.

The S&P was up as was the NASDAQ was and Dow. After an up day on Tuesday, the markets posted supply and demand pictures that imply a turn or at least a pause while it ponders the situation.

We were able to catch a Swing Trade Yesterday for 5 points.  The entry was at 1283 short around 12:45 and we exited near the close before the final move upwards. 

The StoRSI, our momentum oscillator, momentum oscillator, closed heading north towards its upper trigger level at +100. This reading signals a possible continuation to the upside momentum. Price could consolidate from this area, and neads to break out above the trend lines for futher increases in price.  

The T8 which is trending upwards since July 21 but turned down on August 20, is now drifting sideways to slightly downward sloping. There is no room as we are at the T8 and it could continue down or reverse course here. The market could easily consolidate around the T8 exponential moving average .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 “harami”, but another morning star pattern has formed over the last 3 days. The body of Wednesday’s candle was outside the body of Monday’s candle. Many times, this formation leads to a continuationl in trend. The extension of the wicks 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 & 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 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.

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.

 

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