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Day Trading Technical Analysis

10/31/2008   

Day trading Technical Analysis: 

The markets were making a symmetrical triangle and support and resistance within the triangle is 8200 and 9300 in the Dow. The bulls clearly defended the 8200 several times.  A break below would see the Dow at approx. 7100 – 7400 which would be the 2020 lows. A close above 9300 would signal a short term bottom may be in place.

 Credit spreads are gradually easing which shows some positive signs in the equity markets.  One way to gauge this is by looking at the “TED SPREAD” which is what banks charge each other for three month dollar loans.  When  the Ted Spread starts to fall we will then begin to see a relaxing credit system which in turn will be positive for the equity markets.

The markets are very volatile and we are still in a bear market.  Counter trend rallies are normal and are generally violent.  Play the bounces but do not pick a bottom!   

 Dow Industrials:      Support: 8200        Resistance: 9300

The Dow Industrials did hold the lows of 8200.  A break below will send the Dow to the 2002 lows 04 7100 -7400.  If we do close above 9300 could send the Dow at 9790.    

S&P 500:   Support 850   Resistance at 986

S&P 500 is in a symmetrical triangle.  A break below 870 would see selling pressure into the market.  A break above 986 would be bullish and could see the S&P 1005.

Spy:  Support 85 – Resistance 95

Spiders are in a descending triangle and is breaking out of the upper end of the trend line.  If it can hold would be a positive sign.

QQQQ Support 29     Resistance 32

Q’S   are also in a descending triangle and it too is at the upper end of the trend line. If it also can hold it would be a positive sign.

Our next level of support is 27.61.

Iwm:  Support 60.73    Resistance 68.04   71.37

Iwm looks like the stronger of the indexes.  Iwm is approaching the 20 sma and a break above the average would also be a bullish sign.    

 

Quote of the day: “Remember that stocks are never too high for you to begin buying or too low to begin selling”

Jesse Livermore

Keep in mind the trend is your friend.  Have a great day!!

 http://www.keystonetradinggroup.com/

 

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