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Day Trading Technical Analysis

11/7/2008     

Day trading Technical Analysis: 

Now that the elections are over it’s back to reality.  The markets staged a countertrend rally then a massive two day selloff.  The Dow and the S&P had formed bearish triangles and when that happens it usually favors more downside because these types of patterns generally trend in the direction they were formed.  

There can be two scenarios forming: One being the bullish case we rally from here and take out 8730 in the Dow.  we could see a rally to 10,500.  The Bearish case would be have a small bounce to the 9200 area then reverse and  take out the October lows. Below are some key Fibonacci retracement levels and as you can see they have been playing out nicely.

 

 Dow Industrials:      Support: 8200        Resistance: 9200

Fibonacci support levels:  38% – 9083, 50% – 8907,  61.8% -8730

If we lose the 8730 we could see the Dow at 8160..  The Dow needs to recapture this level quickly or risk more downside pressure.

S&P 500:   Support 850   Resistance at 986

Fibonacci support levels:  31.8%-946.32, 50%- 927.25 , 61.8% 908.17 .  If we lose the 900 level we could see more downside pressure.

Spy:  Support 85 – Resistance 95

Fibonacci support levels:  31.8% – 94.38 , 50% – 92.38, 61.8%- 90.38 . This level needs to hold otherwise we will see more downside pressure.

QQQQ Support 29     Resistance 32

Fibonacci support levels:  31.8% – 31.75, 50 %- 31.05, 61.8% – 30.35.

 

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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