Hello Mr. 200 MA

The pop was above the trend line which was surprising however, look at the Shooting start / inverted hammer formation.  This candle stick pattern is a reversal pattern that does require confirmation, so tomorrow if the markets retreat, the odds are in your favor if you short it.  This could still be risky and might not be worth holding over the weekend. To learn more about this candlestick please visit: Shooting Star.

On the hourly, the bearish divergences discussed in yesterday's posting seem to be playing out.  With the Slow Stoch showing that the momentum is down.   I am impressed that the S&P stayed above the trend line.  Nasdaq for example closed below a similar trend line.

Another note today, is that the job loss claims came in better than expected so the gap up to start the day, then a pull back all most of the day.  Also metal market got hit, the mining stocks I am currently in have not lost value so I have tight stops in case they do reverse sharply.  This could be the start of the gold pull back i mentioned a few weeks back but was caught short when the market continued higher.  I will be a strong buyer when the market corrects, possibly to the 1210 area.  Silver also declined so my initial plan is to cash out if the market starts lower, and decide what to hold over the weekend.

I will say that breaks above the 200 MA I do not expect to last, I see a tag of that level will quickly reverse the S&P, but light volume always has an upside bias so it may drifted.  What is required is a catalyst either up or down, with today's positive numbers I expected the markets to trade much higher.

Next week is Quadruple Witching, so volatility is expected to be higher.



I am planning are starting to research how to use the indicator : ADX / DMI Apparently it can give some interesting insight.