Tuesday, March 6, 2012

Indices Down Over 1%, That's New! (in 2012...)

Finally! The first day in 2012 with losses over 1% in the major indices. First there was a big gap down, followed by a slow grind down. Every time the indices seemed to setup for higher prices, there was a sudden reversal and new lows were made (except for Nasdaq where the first low wasn't taken out).

In the last half hour, the intraday-trend finally got broken when some buyers stepped in. But the bounce wasn't that impressive, we still ended close to the lows.

5m-chart SPY:

Daily charts DIA, SPY, QQQ and IWM:

Metals, euro, oil: they all went down, with metals suffering the most (copper losing 3% and silver even more).

About 90 minutes into the session, there were signs of an intraday double bottom. So I went long SPY @135.07 with a stop-loss @134.74 (entry & exit on SPY 5m-chart above: L & S). Target was high of day: 135.40. Not the best risk/reward here; 1:1.
Out 134.75 on average, in hindsight not the best timing... => no big support-area was met and we only had our first 'big' down day, so better to wait for lower prices before looking for a bottom.

Articles for tonight:
Three Charts Worth Watching
Use of Bollinger Bands

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