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Day Trading Technical Analysis

12/09/2008   

Day trading Technical Analysis:  Quick Note!

The markets seem to be putting in a short term bottom with a counter trend rally happening. Keep in mind the primary markets are in a confirmed down trend. Do not get complicate.

The Dow, S&P and the Nasdaq all broke out of there downtrend line. While it’s encouraging we need to see volume pick up. One thing to note we are approaching the 50 ma moving average and having negative divergence tells me we may be in for a pull back.  We need to see an orderly pullback to back test the downtrend line for a move higher.

One thing to keep an eye on is the US Dollar it is forming a wedge pattern with support around the 84 level.  If we break below this formation then the dollar could be starting a short term correction.  This would move the markets higher.  If we chop around with in the wedge and break above this would send equities and commodities lower.   

 Below are some key levels for your review.

 Dow Industrials: 

The Dow Jones are now up approx. 1360 points off the low.  It has broken the downtrend line and stopped at the 50 ma at 8941.  Look for a possible retracement.

S&P 500: 

Looking at a 15 min chart we are starting to see negative divergence .  If the S&P pulls back were looking for a retracement to the 880 area which is horizontal support and 38.2% fib.

If we break 845 area we could see an end to this counter trend rally.

15 min  Fibonacci levels.

00.0  % – 918.51  ,  38.2 % – 880.00 , 50.0% – 868.50 , 61.8% – 856.70 , 100% – 818.00

Spy:  Support  90.68 – Resistance  92.06 – 93.11

 Spy has made higher high on light volume.  We need to see volume pick up to validate the move. The spy are approaching it’s 50 ma and need to take out the 50 ma for move higher other wise we can see a back test of the down trend channel.

Spy 60 min have an inverse head and shoulders with the neck line being around 90.  There is gap support at around 81.80.

Spy daily Fibonacci Levels.

100% – 100.78 , 61.8% – 90.68 , 50% – 87.56 , 38.2% – 84.44 , 00.0% – 74.34

Keep in mind the trend is your friend.  Have a great day!!  http://www.keystonetradinggroup.com/

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