Tuesday, May 14, 2013

dWbShadowTrader Quad

Above is the ShadowTrader Pivots drawn off of Friday's Value Area. Notice, even now, two day's later, how prominent the POC is. Shorts tried repeatedly to break through that area of Fair Value, and when they finally gave up, realizing it was going to hold through all of the attacks, the index took off to new highs, breaking out beyond R3.

Below is the ShadowTrader Pivots for the current period. Again, the Value Area has prominence, except in this case Value Area Low provided the springboard to new Highs. There is actually another classic Wyckoff 'Spring,' evident as price temporarily closed under VAL. By the New York Open, the index had rallied off of the premarket lows and offered the bears one last shot at breaking lower. A Failed New Low at VAH and POC, was all the bulls needed to run away and send the shorts running to cover.

The index was very bullish with A/D Breadth over 3.65:1 positive on the NYSE & 2.7:1 positive on the NASD at the closing bell. There was a large spike in volume in the last fifteen minutes of trade, just after setting the new All-Time High. This may have been some profit taking, but with the breadth and Up/Down Volume Ratio, along with Cumulative $Tick strong throughout the day, the bears will be wary to step in front like they have been lately. Days like this are definitely weakening their resolve and unfortunately these are most likely the levels where it will pay to get more aggressive to the short side. Only time will tell-- until tomorrow, traders, wishing you good trading overnight...*Keep an eye on the Foreign Exchange markets, as the bias there is practically nonexistent in comparison to the stock indexes. There has been a strong move down in the Aussie, which has had a high correlation with the S&P, in the past. It may be another canary in the coal mine, as they say. I still continue to hold, that the reverberations from the recent Japanese stimulus are being very strongly felt in both the F/X markets as well as stock index, bonds, energy,  & metals futures;they will be for some time to come.