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Markets at a Key Juncture
The S&P 500 is sitting right at the trendline that extends from the March lows, and is also right at the 20DMA, which is a reasonable place to be after drifting above that moving average for the past couple weeks. Market internals suggest that this pullback may be about finished, providing a setup for some further upside; breadth and on balance volume improved on Friday. At the same time, options sentiment is still bearish, and a few technical indicators (CCI, for one) flashed sell signals on Friday. 1395/1400 remains the key area on the S&P, 13100 is the level to watch on the Dow, and the Nasdaq needs to break above 2000 to keep the bullish thesis intact. We’re looking for a retest of the March lows sometime this summer. We posted a bit more than normal last week, so make sure you didn’t miss any of these: DIA - 2.74 by CondorTrader (Condor Options) Disclaimer: Please note that charts and commentary provided by the moderator are for educational purposes only. Any trades placed upon reliance on the moderator’s charts or information is taken at your own risk for your own account. Past performance is no guarantee of future results. While there is great potential for reward trading stocks, futures and options, there is also substantial risk of loss and you must decide your own suitability to trade. Future trading results can never be guaranteed. This is not an offer to buy or sell stock, futures, options or commodity interests. Most trading systems are based on historical formulas which have worked in the past. However, what has happened before may or may not happen again. You can lose all your money trading stocks, futures, and options and you must decide your own suitability as to whether or not to trade. Only trade with true risk capital you can afford to lose. Only trade markets you can properly afford to trade. Properly funded trading accounts typically perform better than those that are not. Never risk more than 2-3% of your account on any one trade. Always define your risk before entering a trade and place a stop to limit your risk. There are no guarantees or certainties in trading. Trading involves hard work, risk, discipline and the ability to follow rules and trade through any tough periods during a system’s draw downs. If you are looking for a guarantee, trading is probably not for you. Most people lose money trading. One of the reasons is that they lack discipline and are unable to be consistent. A system can help you become consistent. Ironically, worrying about the monetary aspect of trading can contribute to and cause a trader to make trading errors. Therefore, it is important to only trade with true risk capital. |
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