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Option Millionaires was started in February 2008 to provide traders with information about option trading. Led by three career option traders, whose pseudonyms are JimmyBob, UraniumPintoBeans, and Vantillian, they started one of the most popular option trading communities on the web. Now, Option... More
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  • Monday Morning Outlook – Bullish Candles, New Support Levels, Potential Bottom Targets (Video) 0 comments
    Nov 18, 2012 9:05 PM | about stocks: DIA, SPY, IWM, IVV

    By Christopher Diodato

    • August 8, 2011
    • May 17, 2012
    • November 15, 2012

    What's in common with these dates? These are all of the dates during the past two years that the market has reached the formal definition of "oversold" as explained by J. Welles Wilder. That is, the market has crossed below the "30″ level on the Relative Strength Index. In the past four years, shortly after the market reaches this point, the market had made a lower, panic low, then reversed back up. Especially with the bullish hammer formation we saw on Friday, I believe that a market bottom may be in the near future. The hammer occurred on very high volume especially in inflationary issues, such as energy stocks. Therefore, I would not be surprised if energy stocks emerged as a market leader in the next rally.

    (click to enlarge)

    Check out the video here for the RSI and candlestick analysis. Also included (in the above picture too) are the new support levels for the Dow Jones Industrial Average.

    Happy trading!

    ~Chris Diodato

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: DIA, SPY, IWM, IVV
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