Stock Market Analysis 07-09-2010

www.guerillastocktrading.com Bulls take the stock market higher once more. I am short this market. Monday might be a key day for me since I will be ready to close out my short position and move to cash. However, there is something crucial I need to see from the bulls on Monday before I close out my short position. That is volume. The volume over the preceding three trading days has been dropping into the upward move. Although it’s more than simply that. We are approaching a vital resistance zone that goes from the 61.8% Fibonacci retracement mark all the way up to the 50 day moving average. What is especially worthy of note is that buyers are falling off as we come up to that crucial resistance zone. This tells me one thing. With volume dipping, there is no way bulls are going to retain the force to burst through this key resistance zone. Volume must increase on the buy side. Buyers must come in to this market in great numbers on Monday or Tuesday in order to breach through this resistance zone. At the moment like I said, I’m short this market. So I’m not moving to close out my short until I see evidence of lots of buyers stepping in next week. With the volume falling into this upward move, bears are gaining faith that bulls are not going to be able to break the 61.8% resistance or the 50 day moving average. In this episode I do technical analysis on the SPDR S&P 500 ETF (SPY) and illustrate to you what I am looking for next week in order to close out my short position …

Share and Enjoy: