Day Trading Course - S&P takes the dive again, but will it really go?

The S&P sold off again today, to touch to the 1825.00 area of support before closing.   I think tomorrows trading could be a key indicator to see if this move could continue.  If the market can give us a close tomorrow below the 1825.00 area then we could see this continue down to touch the 1800 area net week.   I took on my short position last week back at 1879.50, with an original target of 1840.00 on the move.  With the move we saw to that area, I took out a portion of my position at the 1859.00 area to capture a nice 20 points, but left the rest of that position on for the possibillity of a continuation further.  That choice seems to be paying nicely with today's sell off but will tell me more with where we see the market go tomorrow. A great target now is the 1800.00 area of support as that is the level of the long term bullish trend line on a daily and weekly chart.  Should price move to touch that area in the net couple trading days or so then I would look for the bounce there to start a possible reversal and test back up again.   Should we break that area of support at the 1800 level then we could be looking at this market perhaps making a longer term reversal going into the summer months.  With May upon us in a few short weeks, this could be the set up for the seasonal summer reversal to take us into the fall trading again.   Trade what you see, I'll see you at the starting line.

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Head and Shoulders Roll Over Trading a thin market.

New York - Head and Shoulders pattern emerging in the Dow Jones Transports

Watching as the light volume on the buyer side with the increasing volume on the sellers side is creating a head and shoulders on the Dow Jones Transports. For many the Dow Jones Transports are considered the leader for the S&P500 and Nasdaq. Will be watching for the consolidation to continue at these price levels. The first area of support was touched this past week with two more areas of support at 7380 and 7250 but breaking through the first level of support could prove difficult. As you can see the uptrend is still in tact in the long term and the market players have not distributed in high enough volume to cause a sell off. If we sell to 1390 this could signal an increase in seller commitment to break through the support. I am looking for this to chop around in this first area of support and resistance and further establish this Head and shoulders trading pattern. There is a good chance that the market will move up again on light volume. This could create the perfect storm for the sell off.  Especially with some geo political considerations thrown in.  

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