A news triggered bullish sentiment in the Globex sustained during the day session. The daily chart reflects a well defined wedge where the price moves. In the meantime the negative divergence remains intact. On Friday the index did not performed well compare to the rest of the indices. The financials were moving up the S&P and Dow, and the big tech like AAPL and AMZN were showing relative weakness holding the NQ from exploding to upside. All that creates a mixed picture for long term investors.
Next week is a short week. The all time high is quite close and I'm sure many expects the price to reach it. This is a potential resistance seen by everyone and some will consider to take profit. But how strong this pullback is going to be remains to be seen. The other scenario is that we see the bears step in before that level. Perhaps we see a decisive breakdown of the wedge. The bottom line is that the market is in a place where wait and see could be the best strategy for investors. Day traders can find the opportunities on both sides. In fact, the recent behavior of the market - bullish overnight -> price correction at the beginning of the day session -> crawling to upside from support for the rest of the day session.
A friend of mine who runs an Algo really benefits from that. The Algo does not sleep and keeps on trading during night and day. For a day trader this seems to be a very good solution.
Until the price remains above moving averages on different timeframes the Algos will buy pullbacks. It requires multiple days of the price to make lower lows in order to change that picture and turn the bullish sentiment first to neutral than neutral-bearish and than bearish. A strong downside day like March 22 could do the trick faster.
The earning season just started. This is a moment of truth for the market. The relentless grind to upside was driven mostly by share buy backs and news from China.
04/13/2019
Next week is a short week. The all time high is quite close and I'm sure many expects the price to reach it. This is a potential resistance seen by everyone and some will consider to take profit. But how strong this pullback is going to be remains to be seen. The other scenario is that we see the bears step in before that level. Perhaps we see a decisive breakdown of the wedge. The bottom line is that the market is in a place where wait and see could be the best strategy for investors. Day traders can find the opportunities on both sides. In fact, the recent behavior of the market - bullish overnight -> price correction at the beginning of the day session -> crawling to upside from support for the rest of the day session.
A friend of mine who runs an Algo really benefits from that. The Algo does not sleep and keeps on trading during night and day. For a day trader this seems to be a very good solution.
Until the price remains above moving averages on different timeframes the Algos will buy pullbacks. It requires multiple days of the price to make lower lows in order to change that picture and turn the bullish sentiment first to neutral than neutral-bearish and than bearish. A strong downside day like March 22 could do the trick faster.
The earning season just started. This is a moment of truth for the market. The relentless grind to upside was driven mostly by share buy backs and news from China.
04/13/2019