Trade Detective Market Sentiment –

Starting after the market close last Friday, technical analysis of the short market rally was looking a bit tired, but the daily chart was still bullish. I noted that the market would grab on to whichever catalyst it could, and today that catalyst was a huge draw down in gasoline inventories which has sent oil up almost 1.5%.

Roll Over On The Daily

Looking at the daily chart, Friday’s breakout above the ascending triangle didn’t have volume confirmation, and today confirmed this move was a head fake. Now the uptrend support is at risk, with the first key level at 11442. Even if this level holds, prices are getting very close to the apex of the triangle, invalidating the pattern.

How To Trade This Market

I recommend taking a look at my video on using sector trends to find profitable trades. Look for sectors which starting yesterday have made the biggest decline. Find a couple of stocks in those sectors that are near support lines and put them on your watch list, and short them once they break support. Look for volume increases to confirm your buy signals. Happy trading!

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