Tuesday, November 29, 2011

Slow day, but oil and gold trending higher

A lot of volatility in pre-market where the euro traded equal to the futures. We opened basically flat and started working towards the 120-level in SPY (1195 in S&P-futures). At 16:00, consumer confidence numbers were announced and that was a big positive surprise; 56.0 vs. 44.0 expected (see table below).

This caused a huge spike that immediately got shorted. Price was back at the breakout-zone and that looked like a good opportunity to enter when buyers came back in. A small but fast rally was followed by another pullback towards the breakout-zone. Price than started to form a wedge which broke down at lunch time. A choppy move down with yesterday's close acting as support. The bounce wasn't too strong and the close rather weak, so I'm not too optimistic for tomorrow. But any positive Eurozone-news could change that of course ;-)

5m-chart SPY can be found in the trade-section.

Daily charts DIA, QQQ and SMH:

Tech en small caps were leading yesterday, but lagging the Dow and S&P today. The 'rally' that started yesterday, turns out very weak so far. Lack of volume, lots of chop, no conviction and a weak close today. Of course, as always, that doesn't mean we can't get any higher. But I would use tight stops on any long positions.

Silver was underperforming today, while gold and copper formed a nice intraday base. They broke that base in late afternoon trading. Oil was strong today, going right back to the 100-level.
The euro had another weak day. It rallied hard, together with futures in pre-market. But the sell-off that followed was even more brutal and the currency wasn't able to recover from that.

Two trades in SPY this morning. The first was when price pulled back from the initial spike on the consumer confidence number. I got long @120.24 and sold 1/4 @120.54 and another 1/4 @120.70 (that second sell should've been higher...). I added on the small pullback (see chart below) @120.79, but that was a mistake. The candle wasn't completed yet, the volume wasn't good and the pullback was still too far above the moving average. So basically a very bad and premature add. It costed me my gains in the first trade. Out 120.54 on the add and 120.43 on the remainder of the first trade.

5m-chart SPY:

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