When you look at the market, you can do so from differing vantage points. You can look at the very large picture (time frame of months to even years), or the intermediate term picture (weeks and a few months) or the short term picture (days to weeks) or, if you care to, intraday. For regular readers, I know this is a bit of a repeat but as new readers venture to this site, it's worth repeating occasionally.
Here's a chart of the short term picture of the DJIA.
It serves the point and you could do the same with the SPX, the NASDAQ, etc.
I've marked in two time frames, the intermediate term down trend line and the short term up trend line. Currently this is my assessment of the market. Yesterday, the DJIA moved right up to the area where it threatened the intermediate term down trending line. Price was rejected at that point and we had prices back off and then sell off a bit into the close. That's when I wrote that I didn't like the way things closed and was considering hedging short overnight.
Now, zero in a little closer to a 10 day chart.
On this chart you see a slightly different picture. Here we have a break of an intraday up trend line late yesterday that ended with the gasp of selling to close the day. That was a signal of potential early weakness today and again, was what prompted the comment of hedging with a short overnight.
As you can see, there are time frames within time frames within more time frames. Some go up, some down, some sideways and many times all at different times. Making sense of them all the time is not practical because many times they are conflicting. Making sense of them some of the time is possible. Understanding what time frame you are trading with is critical.
So, turning out attention to today, I would expect to see some follow through selling today based on the shortest of time frames. A retest to find support somewhere above the bottom of the short term up trending channel shown above is likely. I expect that the test will succeed and we will be knocking on the SPX 1200 door once more in the coming week.
So, in my own trading, I'll be looking at short positions intraday today while continuing to hold and potentially add to long individual stock positions on an intermediate term time frame.
Here's a chart of the short term picture of the DJIA.
It serves the point and you could do the same with the SPX, the NASDAQ, etc.I've marked in two time frames, the intermediate term down trend line and the short term up trend line. Currently this is my assessment of the market. Yesterday, the DJIA moved right up to the area where it threatened the intermediate term down trending line. Price was rejected at that point and we had prices back off and then sell off a bit into the close. That's when I wrote that I didn't like the way things closed and was considering hedging short overnight.
Now, zero in a little closer to a 10 day chart.
On this chart you see a slightly different picture. Here we have a break of an intraday up trend line late yesterday that ended with the gasp of selling to close the day. That was a signal of potential early weakness today and again, was what prompted the comment of hedging with a short overnight.As you can see, there are time frames within time frames within more time frames. Some go up, some down, some sideways and many times all at different times. Making sense of them all the time is not practical because many times they are conflicting. Making sense of them some of the time is possible. Understanding what time frame you are trading with is critical.
So, turning out attention to today, I would expect to see some follow through selling today based on the shortest of time frames. A retest to find support somewhere above the bottom of the short term up trending channel shown above is likely. I expect that the test will succeed and we will be knocking on the SPX 1200 door once more in the coming week.
So, in my own trading, I'll be looking at short positions intraday today while continuing to hold and potentially add to long individual stock positions on an intermediate term time frame.
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