Wednesday, January 06, 2010

Midday Briefing for January 6th: Building Volume and Resistance


Note how we have built significant volume between 1133 and 1134 in the ES futures (above; blue arrow), as sellers have joined in the market to absorb buying. That has helped cap strength in stocks and led to a couple of moves back to VWAP. Once you see that market dynamics cannot sustain moves to new highs, those reversions back to VWAP become good short-term trades.

Nothing in the present day's trade, however, contradicts the intermediate-term bullish scenario outlined earlier today. For that reason, I'm looking to the short side only for brief intraday trades.

Meanwhile, I see that 20 of the stocks in my basket are trading above their opening prices, 20 below. That reinforces my working view of today as a range day.

3 comments:

dnk said...

When you say a range day do you expect it to break the IB low? Do you look at that?

darkcides said...

Hi Brett, just curious on why use the es vol etc. as reference and not spx. Wouldn't the market movers be trading spx's?

sdfsdfsdf said...

You were uncannily correct both times today, despite the market being tugged in both directions.