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.