The Holiday Markets: Wednesday is a likely to be light trading in the morning and very think in the afternoon as traders leave early for the Thursday holiday. Friday the markets close at 1:00 so it is not a good day to trade.
SPY: The SPY, DIA and IWM have the same pattern – 2 days of consolidation on or slightly below the 50-day moving average. All 3 tested their Monday low and bounced. The key to anticipating this bounce was in the fact that the QQQ did not break its Monday low. After the last 2 days of sideways action we should be prepared to follow the market in either direction outside of the range of the last 2 days. However, until the 2-day range is broken, reversals will be a good strategy.
QQQ: The Q’s were the only index to have an inside day and they close the strongest of the 4 market indexes. The low of the last 2 day’s lines up very nicely with the major swing lows from March and June of this year so this would be a very logic level for the Q’s to hold.
Long: Because of the holiday I focused on more liquid stocks. All have positive stack and have the potential for a Day or Mini swing trade if the day trade closes beyond a half an ATR from your entry.
JAZZ
AAPL
MCD
PNRA
PSA
SHW
These are potentially extended so I’d prefer a reversal
TLT
Shorts: the last two days have enabled each of these to be candidates for reversals and break downs. All Have negatively stacked pivots.
SHLD
MON
MOS
WYNN
SINA