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07.15.10 -Free Trade Ideas and market review to Trade for a Living by TradingHighProbability.com

|Includes: AAPL, DIA, McDermott International, Inc. (MDR), SPY

Trading High Probability Inc,  Newsletter offers High Probability Trading Strategies and trade  ideas that will help you learn while enabling you to trade for a living.


Elliot Wave - Wave 3 down---here we go!!, Mini Wave 2 up should be over....




Yesterday the Dow Jones closed up 0.04% while the S&P500 Closed down -0.02%. All in all it was a day of confusion. Intel sent shock waves through the market Tuesday Night with its surprise earnings and reports of increased demand, then came Wednesday morning with the Retail Report showing the second straight month of declining retail spending. This news will likely keep unemployment high and help weaken the economy. Then came the FOMC minutes yesterday afternoon and inside those minutes it was indicated that the FED revised their growth forecasts down to 3.0=to-3.5 percent (Down From 3.2-to-3.7 percent). It also gave a more cautious mood among the Fed policy makers in light of Europe's debt crisis, a volatile Wall Street, a stalled housing market and high unemployment. The Fed also revised its outlook in that it will be at least 5-to-6 years before we can see a normal economy again. If the Fed is now stating 5-to-6 years you can probabily consider 7--to-8 years is more realistic. The only shimmering light in this storm that is brewing is that companies spent more on computers last month. 

Businesses helped drive the early stages of the recover last year by building up their stocks after slashing them during the recession. The worry now is that if consumer demand will falter and thus businesses will cut back . That could mean fewer orders to U.S. factories and weaker output from manufactures and if this happens expect more layoffs. 

 

Above we have the chart of the SPY as of the close of the bell yesterday. We are still in the bear camp even though all the talking heads on CNBC are saying that this was just a minor correction over the last three months. We have drawn and shown the Left Shoulder, Head, Right Shoulder and Neck Line. The Right shoulder has pierced the neck line which is a very good sign for a head and shoulder pattern, what we see happening now is a second opportunity to look for an short entry. Currently we are heading into the 200ma as well as the 50ma (which the 50sma is being hit right now) for a longer term short position and have a stop above the June 21st high. Aggressive traders might want to take it short anywhere from the 200ma to the current close from yesterday. While conservative traders might want to short it under yesterday's low . 

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