The equity markets retreated in Friday’s half day trade based partly on financial problems in Europe and heightened tensions in Korea. This day has historically had very high odds of being an up day but Wednesday was a large positive day so maybe some of the Friday gain was borrowed on Wednesday. The market has worked itself higher after bouncing off the 50 day moving average 8 trading sessions ago.
The key for the remainder of 2010 will be to see how determined the buyers are. Prices in the stock market can be determined at any given time by supply and demand. The large rally that began in early September has corrected slightly and consolidated. Now the key factor becomes do buyers step in at lower prices and help fuel the next leg higher. This can only be determined in time.
The ADX has dropped on the daily chart as the market has consolidated. Thus a trading range is being created that can lead to a better breakout once a direction wins out. There was good range on Friday despite the ultra low volume so more consolidation may be in store but after a long weekend, market participants may arrive ready to trade. Be alert for a break of the first 30 minute range on Monday especially if there is solid volume on the open.
Past performance not indicative of future results. Futures trading involves substantial financial risk. Please consult your personal financial advisor before using this information for your own trading purposes.
