Sunday, April 19, 2009

Thoughts for the Week Ahead

To prep for next week, I wanted to offer up a review of the weekly & daily S&P 500 Index chart.

I've highlighted 875 in the S&P in a past post as an area of overhead resistance, that if reached could provide a short term top in the S&P. Friday's rally lifted the S&P to 875 (875.63 to be exact). The 875 area provides:

1. A prior double top
2. Prior lows and price congestion.

It makes all the sense in the world for the market strength to begin to abate (technically it's already been diminishing(e.g. bearish wedge). Assuming 875 holds as resistance, the market should move sideways at best, deep retracement at worse. Just remember there's a difference between what we think *should* happen and what *will* happen.... so wait for some price confirmation!

Crude Oil -I've posted a few naked put trades on USO in past posts. It's still performed relatively well over the last few weeks. The April puts I sold were bought back around $.20 and I subsequently sold more for May.
USO is currently forming a symmetrical triangle, so watch for breakout of the downtrendline to potentially signal the next move up.

I'm glad to see the comments section is beginning to come to life. We've been getting some really intelligent questions, so keep it up. For those of you who haven't been utilizing the comments section of this blog, no better time than the present to start participating! To access the comments, just click on "COMMENTS" at the end of any post.

Good luck on your trades this week!


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