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FOR THIS WEEK'S POSITION TRADE NEWSLETTER
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Daily
Editorial: |
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Market Ends Its Winning Streak
Good morning! It had
to happen sometime, and on Thursday the market finally saw its first
losing day of the new year. This week has been a lot more choppy
intraday as the indices toyed with the idea of putting in a larger
correction, but it wasn't until the week was nearly over that it
finally took place. The day began with another downside move out of the
open, similar to the one on Tuesday morning. This time, however, the
market never let go of the 15 minute resistance, slowly trudging along
it going into the afternoon.
The move lower did manage to correct somewhat
off support as the morning progressed, but the upside pace never won
out over the pace on the downside action within the range. After
pivoting off highs with the 12:00 ET reversal period, the volume in the
market dropped off significantly. This continued until just after 13:30
ET when the range gave way altogether and plummeted the market to new
intraday lows.
This strong late day selling was just what we
have been watching out for over the last couple of days. Volume spiked
as the breakdown escalated into 14:00 ET. Upon hitting support at
Wednesday's lows in the S&P500 and NASDAQ Composite, the market
slowed. A slightly lower low on the 5 minute charts into the 14:30 ET
reversal period created enough of a false continuation move that the
support level held throughout the remainder of the day. Typically a
reversal pattern, that 2B pattern made with the lower low simply fell
into a range since the larger intraday time frames were so overbought.
This created a very slow and higher risk finale for the session.
We
should see that corrective action off this week's highs continue as we
head into the extended three day weekend. With the overall strength of
many of the weekly and monthly charts, I am not anticipating the
correction as a whole to be overly steep, but that it will have bouts
of stronger downside moves intraday. The 50 day moving average is the
larger daily support I am anticipating hitting over the next couple of
weeks. This would put the market back into about the halfway point for
this most recent upside, which will also serve as price support. On
Friday, use more and more caution as the afternoon progresses since the
volume is likely to decline into the weekend.
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Economic
Reports and
Events:
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Jan 13:
Business Inventories for Nov. (8:30 am), Core PPI for Dec. (8:30 am),
PPI
for Dec. (8:30 am), Retail Sales for Dec. (8:30 am), Retail Sales
ex-auto
for Dec. (8:30 am), Mich. Sentiment-Prel. for Jan. (9:50 am)
Jan 16:-
Jan 17: NY Empire State
Index for Jan (8:30 am), capacity Utilization for Dec (9:15 am),
Industrial Production for Dec (9:15 am)
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Earnings
Announcements of Interest: |
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Only stocks with an
average daily volume of 500K+ are
listed. List may not be complete so be sure to always check your
stock's earnings date before holding a position overnight. (A) =
Earnings after the close, (B) = Earnings before the open,
(?) = Earnings time not specified at the time of this writing
Jan 13: -
Jan 16:
AAPL (A)
Jan 17: ASO
(B), CAL (B), INTC (?), MEL (?), SOV (A), WFC (B)
Note: All economic numbers
and earnings reports are in lines with those compiled by Yahoo Finance.
Occasionally changes will occur that are made after the posting of this
column.
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