Swing Trading Strategies & Stock Picks Since 2003

Market commentary for 11/03/2008  

Good day!

Tomorrow is the big day.  Like everything else whoever wins the markets probably have already price it in.  Today automobile sales were reported and they were not good.  GM down 45%, Ford down 30% and Toyota down 23%, needless to say a lot of jobs are stake and much of the US GDP. Since the market did not sell off on that news shows much of the bad news is already in the market which is a positive since any good news will be received well.

From a trading standpoint Monday was the slowest least volatile, narrowest day we have had in a while. This increases our risk when we don’t have intraday trends. On the 60 min indices we have rounding highs which suggests it time for a correction. If the range will hold then the odds for a breakup will increase. Right now the 200sma is resistance area and the daily 20sma is a big support area. We must wait to see which will be broken first. If indices break under the 60 min 20sma support area I will look for short setups and if indices will break above 200sma 60 min I will look for long setups. Right now all we can do is wait and see. The safest play will be to leave the initial move and then go with the continuation pattern. Since the odds favor a false breakout.

After narrow day we can expect to see a trend day and that will be my focus for Tuesday. Usually during a trend day we must follow the 60 min high and low. Which will be broken first that is the direction we can expect for the rest of the day. Also during a trend day we will see the pace increase the last hour and we want be in a position before that. We took several short and long swing trades Monday and all did well for now, but it is important to use proper risk because swing trading is still higher risk for now. Scalp and day trading is still safest. For those of you who can’t deal with overnight trading my recommendation is to stick with them for now.

Wish you all good trading!!!

Kind regards.

Ivica