Tim Bovee, Private Trader: Wednesday's Prospects: Round 2

Wednesday, June 25, 2014

Wednesday's Prospects: Round 2

None of the 12 symbols that survived my first round of screening made it through the second round. (See "Wednesday's Prospects" for the symbols list.)

I'm not surprised. Tuesday was a major reversal today, quite heavy on bear signals after a period when they were a rarity. Today the market jumped back to the upside, taking back part of of the decline, as the markets often do.

In the first couple of hours of trading, the S&P 500 has retraced about 38.2% of the decline, a Fibonacci retracement level that often serves as a pausing point or a reversal when prices retrace.

In the chart below, I've marked the upward retracement with an oval in the chart below, which shows the S&P 500 index. The dashed line is the 38.2% Fibonacci retracement level.

Click on chart to enlarge.

S&P 500 index 2 days 1-minute bars

Ten of the symbols in the second round either failed confirmation or showed marked momentum opposite the direction of the signal. The rest were bear signals that had overly wide bid/ask spreads on their options, too wide for me to use as a vehicle for a bearish trade.

I turned next to the two high-volume liquid-option symbols on my supplemental bear-signal list. One, PG, failed confirmation, and the other, NVDA, has a chart that is uptrending, contrary to the signal.

I don't intend to post any analyses today.

-- Tim Bovee, Portland, Oregon, June 25, 2014

References

My shorter-term trading rules can be read here. My longer-term trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.

Disclaimer

Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.