Sunday, January 27, 2013

Market moment:

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Dear traders: I like to write few words about market moment that we
have looking from technical glasses. I made monthly charts for indices
and on the DIA and SPY chart we can see that resistance area is very
close. Especially for DIA (already reached resistance area). On the
SPY chart we can see some room for more upside action and that is
what we could see next days. On the other side QQQ is much weaker
at this moment and one scenario that we could see is head and
shoulder pattern. Now, when I take a look on all three charts I can
make a few conclusions. First is that indices reached resistance
area and that they have already made the upside move. To me it
is logical that new swing long trades will be higher risk and I by that
I mean if we will take them it will be smarter to take them with less
risk than usual, or smaller position sizing. On the other side there is
no reversal pattern and I don’t see any reason for full risk short
position either. Obviously risk is higher and it will be good to stick
with smaller time frames and with smaller risk until market will give
us  a signal. We can see more upside action and we can see on the
charts that wont be a surprise, but on the other side if correction will
start that won’t be surprise too because resistance is already reached.
I like to remind that resistance is an "area", not an exact price.
If you have any questions, please feel free to contact me.
Good luck trading today!
Ivica Juracic

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