Trade The Technicals: Daily Report

https://www.facebook.com/CTCATrading --- --- --- --- --- --- --- --- --- Twitter: @chirag1082 --- --- --- --- --- --- --- --- --- Market Correction Phase Update: --- --- --- --- --- --- --- --- --- To review my previous report on the market correction phase see: http://t.co/48lgen9wQW Markets are continuing to show their resilience, despite selling off early they seem to have enough strength to continue to bounce decently. I’d mentioned yesterday that I’d taken a DOW swing long and I was looking 156.48 on the SPY as my first target for the long trade. I’d also mentioned that I didn’t expect that to hit yesterday due to the early weakness, yet it did. This shows just how much resilience exists. The reason I took full profits at that level on my long was due to the weakness in the DOW currently. It is lagging the S&P considerably and so I will look for another long entry if I get a decent pull back. The key remains with IBM and CAT. IBM is at my swing long area that I mentioned on Friday at 188. Today’s price action will be key as to whether I take the swing long or wait for the next level at 185.16. I suspect it will continue to sell off to the lower level for a better entry. CAT bounced yesterday after earnings after hitting and slightly piercing my swing long level of 79.70, but is into very good resistance and I would expect a pullback of some sort from this level. But it must be noted that the move up yesterday was a strong move. If we get a pullback, I will consider a swing long at 80.16 and possibly at 81.10. CAT is extended to the downside and is due a bounce, as is IBM. IBM, I do believe will ultimately sell down to 177-179.50, but a bounce before then is likely. If both CAT and IBM see decent bounces then the DOW will recover and perhaps start to lead the S&P again. As I mentioned, the markets are very resilient, and whilst originally I thought the bounce from the 153-154 SPY level may take us up to 156.48 and possibly 157.52, I know believe 157.52 area is very likely and there is a possibility we could even get back up to the 158.75-159.20 area before seeing the next leg down. Of course it is too early to tell as we need to see how the charts look nearer the time, but this is a synopsis of what I am seeing right now. I will most likely take a new small swing short at 157.52 and wait for the higher level before taking a larger position, but again, this will be dictated by the charts. An important element to consider here is that AAPL reports earnings tonight and there could be a possible large move in either direction based on the market’s reaction to those earnings. Also, CVX report later in the week which is also important to the DOW. If markets are to play out as I expect, I can see CVX seeing the 120-121 area again before the next down leg, but there is still a lot of resistance for it to get through before then. I continue to hold my second half swing long trades in AMZN and CVX.