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Market Posture on a thin market

December 22, 2008

Well it does seem a bit moot to do all the active techicnal analysis on the current market. Since a few days back already, the volume has been drying up. High volume on friday, of course, due to “quadruple witching” day with all sort of contracts expiring. But as one of the TOS guys said on the friday market wrap, “After December expiration, the year is over.”

In any case, just so we keep our eye on the ball, here’s my take on the market posture. Seems we’re creeping sideways to up. Not reason to think that won’t continue in light volume unless something is broken drastically to the downside and the obviously red flag goes off.

I somehow can’t figure out how to imbed the video, but here’s the MARKET POSTURE VIDEO.

I’ll try to get back with some more charts to look at soon.

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9 Comments leave one →
  1. Jim permalink
    December 22, 2008 9:57 pm

    “After December expiration, the year is over.”

    He meant 2008 is “in the books” as it is for options traders.

    Volume is always declines to nothing into Christmas and year end. I don’t think this makes moot technical analysis, stocks still move. As a stock trader my books won’t close until 4pm Dec 31.

    Just had to get my snipe in there.

  2. Jim permalink
    December 22, 2008 10:25 pm

    “Of course, the technical aren’t moot all this time. I only mean to say that until “normal” trading volume returns to the market, it is likely to pay little heed to what happened, technically, in these last low volume days.”

    What all that means to me is it is business as usual. SPX traded in a 30 point range today. 30 points! As usual I could care less what the market “pays heed” to. What does that mean anyway? As long as I “pay heed” to what I’m doing the market can kiss its ass.

  3. Jim permalink
    December 22, 2008 10:28 pm

    But I’ve always seen the talk of light volumes and boredom as coming form people who don’t trade, don’t trade their own money, or are just taking time off. If you want to tradethese days they are the same as always and the techinicals keep flowing into each other as normal.

  4. uptownred permalink*
    December 22, 2008 10:53 pm

    Well, sleep easy, because this guy talking about light volumes is someone who DOES trade his own money AND his mother’s.
    And I’m watching the charts for signals and potential action EVEN THOUGH they have less volume than normal in most cases. The price action remains real price action all the while, just as you point out.
    Not sure what gives you the impression I think otherwise.

  5. Marco permalink
    December 23, 2008 12:48 am

    Yep, and watching the continuation pattern (ascending triangle) completing on the SPX. Looks bad for the markets.

    Here’s a chart:

    http://www.learningmarkets.com/index.php/Stocks-Discussions/733-Ascending-Triangle-on-US-equities-market.html#733

  6. Marco permalink
    December 23, 2008 12:52 pm

    You apparently don’t understand continuation patterns.

    It means a continuation of the PREVIOUS TREND, before the consolidation (triangle).

    So it indicates a continuation of the downtrend.

  7. uptownred permalink*
    December 23, 2008 3:08 pm

    Oh, Marco. Forgive me for feeling a bit snippy here, but your brief comment comes across a bit along those lines. I appreciate your chiming in and adding to the discussion. Despite my thinking you might have just posted with a link for your website to draw traffic there, I didn’t delete your post. Now, I’m just disappointed. I don’t care so much whether or not you’re looking for traffic to your site. But it is disappointing to me that you are an administrator of a market/trading education site and you seem less than informed about what you’re writing. Looks like you did sales for Investools. So I don’t know if you’re now calling yourself an educator or what, but you should probably get a better grip on the subject matter when trying to correct people. Don’t get me wrong. You’re more than welcome to comment here on this blog with any thoughts or reactions. I just hope you will be more careful, particularly considering you are coming from some sort of trading education site.

    An ascending triangle is a continuation pattern in a bullish trend. A descending triangle is a continuation pattern in a bearish trend. We are in a bearish trend and so therefore, your application of an ascending triangle is out of place. You could use that support line you drew and call it a bear flag we’re in now, which would support what seems to be your view of a likely break to the downside. That would be a bearish continuation pattern.

    The page you linked to has some links for educational purposes on it. You should reread it, although there far better and more thorough resources for this type of info. In any case, the one for continuation patterns has the following:

    “The following are the most common continuation patterns you will see during an uptrend:

    – Pennants
    – Bullish flags
    – Bullish wedges
    – Ascending triangles

    Ascending Triangles—ascending triangles form during an uptrend as the up-trending support level and the horizontal resistance level that encompass the consolidation zone converge.”

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