Sunday, April 26, 2009

Trading Preview to Start the Week

Note the important resistance in the ES futures around the 870 level. We've opened lower in Globex trading; for swing traders, failure to take out that resistance targets the 20-day volume-weighted moving average (green line) around 836, with last week's low a logical target below that. A break to the upside accompanied by solid volume and participation would target the early 2009 highs around 939.

Although I'll be on the road much of this week working with traders, I will be posting indicators daily before the market open via Twitter (free subscription). I will particularly look for indications of market weakness: expanding 20-day lows and Supply (number of stocks closing below the volatility envelopes surrounding their short-term moving averages) exceeding Demand (number of stocks closing above their envelopes). A weekly indicator update will also appear early Monday AM.


Michele said...

"Note the important resistance in the ES futures around the 870 level."

Note also on the weekly ES & SPX charts the last two bars are a hanging man followed by a dragonfly doji. This plus high readings on the stochastic, CCI, and momentum make me think we're due for a pullback any day now.

TelespallaBob said...

Hi Brett,

i read TraderFeed everyday and everyday learn something new about trading (and sometime about life), thank you doc!

Is the Volume Weighted MA you talk about in this piece like a moving VWAP?

If yes, do you use them in the same way?

Finally, if you should suggest one of your books to start with, which one would you choose?

Many thank's
Spaghetti Trader

Brett Steenbarger, Ph.D. said...

Hi Bob,

Yes, the volume weighted MA is a moving VWAP and can be interpreted similarly to standard VWAP. For a new trader, I'd recommend the second book on Enhancing Trader Performance, as that covers both the learning curve and trading psych--