Tuesday, September 20, 2011

Divergence between indices and overhead resistance, what now?

What a nice market rally half an hour into the session. It brought the S&P right under 1220 were it touched several times. There we stayed rangebound until an hour and a half before the close. That's where the bears took over, taking back all of the gains of the day. This creates several bearish candlepatterns on the major indices; inverted hammers on the Dow and S&P, an engulfing candle on the Russell2000 and a dark cloud cover on the Nasdaq.
Moreover, Dow and S&P are sitting close under resistance of their 50-day moving averages. Nasdaq is sitting above some major moving averages, but at the top it's trading range (see depicted chart of QQQ below).

Charts of DIA and QQQ hereunder, both have quite a bearish look.

Gold and oil were up +1%, silver only up just over breakeven.

The focus tomorrow will be on the FOMC-meeting. Interesting to see what will be said and how the market will react to that.

I closed my GLD- & GDX-calls for a nice gain ($237 per pair traded).
I also went short ES-futures today, 1207.50 on average. Taking a prudent stance for now by hedging the position with SPY-longs. I'll peel of the SPY's on further market-weakness. Something new I want to try, see if this works out or not.

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