Market Behavior Confounds Sound Technical Analysis - Some of the Time.
2 Day, 5 m. SPY - July 21 - Using a combination of CCI "Hockey Stick", Weak Internals, and a Roll Over in the Treasury Spread, we identified an Intraday Swing High where we bought Puts. The Internals at that time were strongly negative so we put in an automatic sell order to close with a 20% Gain. This goal coincided with S-1 (Support). The Trade triggered and we were out with our 20% Gain. See Charts Below.
3 Month. Daily - Treasury Spread compared to the S&P Futures are shown above. Note the "Roll Over" in the Chart to the Left. This move was Bearish for the Market in general. The S&P appears overbought and overextended. Note the Oval markers in the CCI. The thought at the time was that the S&P would fall into line with the Spread which it did.
7/21/09 Internals show A/Ds on Left in a downward spiral and the UVOL/DVOL also falling. This combination of price action, internal action, and supporting indicators like the CCI helped bring off this successful trade.
3 Month, Daily - July 21 - The Close of the market today still leaves us in a technical dilemma with multiple choices on what comes next. The situation calls for patience and caution with very careful selection of entry points and size of commitment.
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