In an amazing turn of events, the Dow Jones and the S&P 500 stock market indexes ended one of the most turbulent weeks in their history virtually unchanged in percentage terms, while the NASDAQ and Russell 2000 closed higher on the week, with the Russell increasing almost 5.00%
Let’s take a quick look at the week that will live in history. I mentioned on Monday’s post “ Use Extreme Caution in the Week Ahead ” that the trading ‘environment could swing violently up and down due to market events scheduled to happen this week’ but I should have included the word “unscheduled events” as well! It was a tumultous week, and it seems virtually all strategies were tested to their breaking points in the week. But when the dust settled on Friday’s close, it was a very tame if not negligible percentage change for the week, despite multiple back-to-back 5% moves in the major US Equity Indexes.
First, let’s look at the Dow...
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Fun Intraday TradesFrom: blog.afraidtotrade.com
Post Date: 2008-03-04 22:54:42
Tuesday’s action provided a plethora of key set-ups and high probability trades on the short time frame intraday charts on the US Indexes.
Let’s check out the Dow Jones “Diamonds” ETF (DIA):
The first trade when there’s an overnight gap is to fade the gap for at least a 50% retracement and a potential full gap fade. Today only gave us a 50% fade trade early on.
At the failure to close the gap, the market offered up a clear bear flag trade...
more Link: Really Scary Fed ChartsFrom: blog.afraidtotrade.com
Post Date: 2008-03-04 12:36:17
Ben at The Financial Ninja blog posted examples of “ Really Scary Federal Reserve Charts ,” in which he discusses some alarming facts straight from the Federal Reserve.
Ben makes good use of the Federal Reserve website of St. Louis, which I had highlighted in a previous post about the coolness of the data available to you there.
Notice the ’scariest’ chart, which discusses that non-borrowed bank reserves have gone negative.
Just a few months ago, non-borrowed...
more A Little Intraday Flag ActionFrom: blog.afraidtotrade.com
Post Date: 2008-03-04 09:11:39
Today saw yet another gap fade and bear flag so far:
In February, 75% of trading days had an overnight gap. Will March be similar? So far, we’re 2 for 2!
Again, the first play is to fade the gap for at least a 50% retracement into the gap. The pure target is yesterday’s close, but sometimes a more tantalizing trade develops in the form of a bear flag into moving average resistance.
If you’re apt at candlesticks, you’ll notice the large upper shadows ...
more Sector Clues for the Year to DateFrom: blog.afraidtotrade.com
Post Date: 2008-03-04 08:18:26
Let’s look at some insights from the Sector Rotation Model and also Sector Returns to date:
Since the start of 2008, all nine Sector SPDRs were negative, with Materials performing the ‘best’ by only losing 0.36%.
Technology has fared the poorest, losing a massive 17% (thanks to Google and Apple and many others under intense pressure).
If we compare these returns and make them relative to the S&P Index, we see clues from the Sector Rotation Theory...
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