MPT Rating (02)

20. August 2008 by admin.

Wednesday, August 20th, 2008; MPT Rating (02) 

The markets bounced as projected yesterday, and will likely try to add to it tomorrow though testing of lows will be important…

The DJIA gained 68 points today after shedding more than 300 points in two days earlier this week.  As I have said in the past this is just a bounce in my opinion, but one we, as short-term traders can, have, and will continue to use in our favor. The market is slowly but surely breaking down here but it will take time for the majority of traders and investors to realize this so we will have very choppy waters as bulls continue to try and use short-term overselling as a buy opportunity.  In short this is a great trader’s market.

The NASDAQ gained 4 points for the day finding support at the middle BB line as seen on the 6 month daily chart of the average.  Today’s activity was on increased buy volume and does suggest further upside attempts will be likely tomorrow, but the MACD is still approaching a bearish crossover, so I continue to view this market as overall bearish, but that does not mean we can not take long trades while the opportunities are available, and both of those we used today were very profitable.  The moral of the story is to trade with the current market, not against it.

Today’s MPT (Market Power Trend) Rating, which tells us what “Smart Money” is doing in the market and where support/resistance is came in at (02); this tells us today’s buying was not that of smart money and this confirms the lasting power of this bounce is nothing to get excited about.  I would look for the market to repeat more of today’s action tomorrow, as lows are tested and new highs are made where short-term potential is relevant to those trading smart.

As Always; Be Smart, Be Patient, & You Will Be Successful.

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