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Day Trading Technical Analysis


Day trading Technical Analysis: 

On our 11/7 2008 Tech letter we pointed out key support levels along with fib levels.  Well the market has breached those levels and has headed lower. Everything is trading together both commodities and stocks.  Once a short term bottom is in place we should see both rally.

One thing to keep an eye on is the US Dollar.  During this melt down the dollar has been extremely strong.  Once the dollar puts in a top then the stock market and commodities should put in an intermediate bottom however no guarantees.

Keep an eye out for a short term snap back rally fueled by short covering and momentum traders. If this does occur we can see a sizable retracement.  Below are some key levels for your review.

 Dow Industrials:      Support: 7118 –   Resistance: 8000

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

7100 is 50% from the 2007 highs.

7350 is 50% retracement from the 1974- 2007 bull market.

7100 -7400 represents 1998 -2002 lows.

S&P 500:   Support 750 – Resistance at 850

Fibonacci support levels:  31.8%-811.40, 50%- 831.56, 61.8% 851.71 100% – 916.97.  S&P was in a descending triangle and broke support.  It now measures down to the low 700 level. It does not mean it has to got there.

Spy:  Support 75 – Resistance 83.40

 This level needs to hold otherwise we will see more downside pressure.

QQQQ Support 2 5   Resistance 28

This level also needs to hold otherwise we will see more downside pressure.

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!!




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