Friday, June 26, 2009

MARKET COMMENTARY (6-25-09)


The Tau Empire

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The first thing I did yesterday was close out all of my shorts at the open. By 9:40AM, I was in 100% cash. How's that for perfect timing? If you missed it, you can go through my tweets. I was up +3.8 entirely from day trading select names, such as CAR, AGM, VVTV, and DTG. Heck, even Jake followed my trades. If you joined me, you came out with free money in your pockets.




The market is in a precarious position right now. I suspect that a wide-ranged consolidation will continue, therefore, I will refrain from swing trading and go exclusively with day trading. Neutral consolidations are hazardous to swing trades and benefits day traders the most. Conversely, trending markets favor the swing traders, leaving the day traders in the dust.

This bear market has lasted for 20.5 months so far. We are still down 41.2% from the October 07 peak, but up 36% from the March 09 low. I still maintain a bearish stance, but believe it is not time to short yet.



Let's talk about the exit timing of my short positions. How did I know the market was going to rally? I didn't. The only reason why I covered was because I did not get a gap down to at least 890, which was the main criteria for me. In addition, the magical lines that I use showed me immediately that there was strength in the market, prior to the spike higher. I used my "Connect-the-Dots" strategy (the "dots" can be seen on the 2-month/60-min chart). Sounds simple, right? This will have to be an entirely new educational article.


Finally, I broke down the major SPDR select sectors (XLV, XLB, XLK, XLI, XLP, XLU, XLY, XLF, XLE) and added the patterns, ratings, and technical notes:











4 comments:

relaxsome said...

Thanks for publishing the charts! It is a huge help to confirm what I am learning on my own. And yes...connnet the dots... that look like a fun one. Thanks...and don't forget to relaxsome

S Zaman said...

CA- Thanks for all the work you put in for us for free. I started a blog this week and some of the picks are doing really well. Please take a look.Its simple price/volume and pattern setups.Thanks.
http://nyctrader.blogspot.com/

envie1004 said...

I know you use the 15,20,50,100 and 200 SMA for Daily timeframe, but what SMA do you use for shorter timeframes? Such as the 5min, 10min, and 30min?

John C. Lee said...

Envie - depends on what that particular stock follows. You have to 'match it up' and see which MA's provide the best support/resistance intraday. May want to use the EMA's for intra-day.