The uptrend remained very much intact today after prices stayed within the long-term up-trend line established back at the start of September. When the trend line at 1,156 held, the S&P500 rallied to near break-even on the day (~1,165) and stayed there until the Fed released its’ FOMC Meeting Minutes at 2pm. 1,165 was immediately taken-out by a strong push higher to 1,170. Sellers then pushed prices back down to 1,165. When 1,165 held, the S&P500 rallied right back to 1,170 again. We tagged 1,172.50 and closed the day just a fraction of a point below 1,170.
The leaders of today’s rally were undoubtedly Financial stocks which were up more than 1%. XLF looks poised to push above $15 and, when it does, the whole market will follow it higher. Technology stocks also did well today (+0.65%) but, with Intel scheduled to report its’ quarterly earnings after the close of trading, I think Tech held back a bit. The heavily traded QQQQ broke above $50 today which is a key psychological level.
After failing to take-out its’ 50 period moving average (60 minute chart), the U.S. dollar headed lower. Yesterday, the VIX fell out of its’ long term falling wedge pattern. Today, the VIX back-tested the wedge trend line and then reversed course and fell even further. Bond prices got hammered today too. All of this action supports higher stock prices.
As mentioned previously (http://bitheadturneddaytrader.wordpress.com/2010/10/08/im-back-baby/), there’s a resistance zone between ~ 1,171 and 1,181 so the next few days will likely bring some choppy and/or violent price action. I’ll be locking-in profits as we approach 1,181 and will certainly exit my position if we’re unable to remain above 1,165.
Performance of my current trade: +1.62%
Performance since July 27, 2010 (78 days):
S&P500: +5.02%
Me: -7.46% (5 winning trades, 7 losing trades)
Filed under: Trading Results Tagged: | Blog, business plan, career change, chronicle, commodities, day trader, day trading, diary, education, entrepreneur, futures, journal, learning, S&P 500, stock market, stocks, technical analysis, trading, trading diary, trading journal, Trading Plan, training
[...] Yesterday, markets were on fire with optimism… at the expense of the U.S. dollar and bonds. Or maybe it was the exodus from “safe” assets like the U.S. dollar and bonds that fueled the market optimism? No matter what the cause or rationale, markets rallied right into and through the key resistance zone I mentioned in my previous post (http://bitheadturneddaytrader.wordpress.com/2010/10/12/uptrend-remains-intact/). [...]