Monday, March 9, 2009

Inside Day

Monday the market got off to a decent start but that was reversed by midday to finish new the lows around 675. Even though we did close near the lows we managed to form an inside day pattern on the SPX. This is when price stays within the range of the previous day's boundaries. Usually it precedes some sort of big move or reversal in some cases. With the range contracting tighter than the prior day, it is like a spring being coiled that may be signaling the exhaustion of the previous trend in price.

So on that note I would not be surprised to see some strength on Tuesday with of course the assumption that we can hold above the pivot.

For Tuesday the pivot on the ES futures is 680.75. We are trading a bit higher after hours so it could be a interesting day if we can get some momo above that pivot and even more so if we get over Monday's highs in the 695 area. If we cannot breakout of the range we had today then it may a choppy sort of flat day so don't overtrade it. Trade the trend.

No comments: