The canary in the coal mine for this rally was the weakness in the dollar. I wrote the other day the dollar index was testing support at 84 and when it finally broke down through it this afternoon the market really took off. You can see it here in these two charts.
The charts are still pretty messy so there are no good bullish break out charts yet just some resistance shorts. I think the best case scenario for the bulls would be a day or two of consolidation and then a move higher. That would also set up some nice spots for us as well.
The following ideas may be actionable tomorrow but they are mostly resistance shorts. Let one or two pass, if they are not working then aside and don’t try a resistance short the second time around. Remember on a resistance short you want the stock extended away from any kind of base or the 5 minute EMA with a stop above the reversal candle.
do 67.22 reversal/resistance short on the 50 day MA
eog 105.79 reversal/resistance short on the 20 day MA
fast 52.04 reversal/resistance short on the 20&50 day MA
fcx 66.93 reversal/resistance short on the 50 day MA
ip 24ish reversal/resistance short on the 20&50 day MA
pnra 71.05 reversal/support buy on 200 day ma
prgo 51.7 reversal/support buy on 150 day ma
Most interesting comment I saw regarding yesterday's bounce was a throwaway by Ron Insana on a CNBC wrap-up show. He intimated that rising expectations of Republicans regaining Congressional majorities in November may be changing market sentiment. Seems a reach but - who knows?
ReplyDeleteActually that was the 2nd most interesting comment. The first was a few minutes earlier when Amanda Drury turned to the panel and asked "Double-D or not Double-D? What do you think?" Really. She did.
Video clip linked here.