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Volume Remains Light Into the New Week
Good morning! The
market had a slow, but primarily bullish day on Monday. The indices
gapped higher into the open with declining oil prices and
better-than-expected earnings from Lowes (LOW). Buying continued at a
steady pace into last Thursday's highs. The price resistance hit at
about the same time as the 10:00 ET new homes data came out. With the
slowdown in new homes hitting its lowest levels in a year, the market
immediately reacted sharply to the downside, pulling back near opening
levels. That support held well, however, and the major indices stalled
and fell into a range as the morning progressed.
The volume on the day began on the light side
given the gap, which is unusual, and continued to drop off throughout
the morning. At 11:00 ET the market began to break higher once more.
Only then did we see more activity come in. A sharp rally off the 5
minute 20 sma support led to new highs on the day, particularly in the
NASDAQ, which had been underperforming. As a result, however, it had
the most upside room to move without resistance. This rally lasted
about half an hour before the buying subsided into lunch.
The "Mid-day Doldrums" took their nickname to
the extreme on Monday. The volume was extremely light, on par with
pre-holiday trading, and a very narrow range formed at highs. Given the
extent of the upside move thus far, a strong continuation breakout
would have needed a base of about a day and a half. This set the market
up for a false breakout attempt into the early afternoon as the indices
closed in on their 15 minute 20 sma resistance. (Room logs: 13:39:19 {ToniHansen} futs are basing at
highs but risk a false breakout and trap...)
The trap came with the 14:00 ET reversal period, making it even more
easy for traders to get stuck in it since most real breakouts also take
place at that time. The only real key for recognizing the added risk
this time around came from looking at the larger 15-30 minute charts.
Within just a few minutes of breaking the upper trend channel the
market flushed out the buyers, dropped quickly for a brief break lower
before pulling gradually back up into the 15:00 ET reversal period. The
slower upside pace this time around helped the market break lower into
the last half hour of the day. It was enough of a retracement from
highs that the S&P 500 and Dow Jones Ind. Ave. both closed in the
lower half of their daily range.
Heading into Tuesday we have a number of economic reports coming out at
8:30 and 10:00 ET, including the fourth-quarter gross domestic product
data. This could affect morning trading. Ideally, in order to see a
strong setup on the 60 minute charts, the market will pull back
gradually or continue to base for about a day to a day and a half. This
would create a buy setup on an upside breakout if volume remains light.
The market pulled up quickly enough that a break in the 100 day sma in
the NASDAQ would first require that pace to turn back over unless it
was going to break as just a trap for the bears.
UPCOMING
MENTORING OPPORTUNITIES:
To further you own knowledge of market activity and technical analysis,
you may be interested in participating in one of my upcoming online
seminars. Held March 20-24, I will be utilizing the
Hotcomm platform which will allow participants the same opportunities
as they would attending a class on-site. For more information, click on
the journal image at the right hand side of my site at http://www.tonihansen.com or
email me directly at toni@tradingfrommainstreet.com. To register CLICK
HERE.
When asking those who attended my last class which aspects of my course
were most beneficial, their responses were very similar:
"The concepts introduced
such as pace and pace within patterns which were new to me and which I
HAVEN'T SEEN ANYWHERE ELSE." - Larry
"I found
everything in the course to be beneficial... It ranked as the best I
have seen. Seriously, cant imagine any course being
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"The whole course covers everything you need to know
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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
Feb 28:
AGIX (B), ADSK (A), BJ (?), CDIS (A), CNP (B), CRDN (B), CHTR (B), CCI
(A), BOOM (?), EV (?), HLTH (A), HNZ (?), HSP (B), IIP (?), IVGN (?),
PSUN (A), PRX (B), PSS (B), PGH (?), PLUG (B), SWN (A), SPLS (B), TEVA
(B), THE (B), VPHM (B), VNO (B), WMB (B)
Mar 01:
ADCT (A), AEOS (B), AZO (B), CHS (A), CTB (B), CVTX (A), FLR (A), FL
(?), THX (B), HOV (A), JOYG (B), LIZ (B), MDR (A), MHS (B), MW (4:00 pm
ET), NVAX (?), OVTI (?), OS (?), PLL (A), PETM (A), REV (?), RDC (?),
SKS (08:00 am ET), SPW (B), TLM (?), TS (?), WLT (?), WNR (A)
Mar 02:
TFSM (B), CKP (B), CIEN (?), COST (B), CMOS (A), DT (02:00 am ET), FNSR
(A), HOMS
(A), INSM (A), KOPN (?), NTMD (B), NOVL (A), OPSW (A), PBY (A), SFCC
(A), SCON (B), THC (B), PGR (?), UVN (A)
Mar 03: BVN
(?)
Mar 06: ABP
(B), CMGI (A), RIO (A), GG (B), KFX
(A), LEXR (A), MYOG (A), SMTC (A)
Mar 07: ABS
(?), SIL (?), MATK (A), NR /?), NRG (?), OSIP (A), PSTI (B), SRZ (?),
COO (A), KR (?), URI (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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