I wrote last Thursday on the Members Forum about my recent trades and market short term observations using a midcap ETF.

“I am trading MDY currently. I use 3 chart time frames: daily, hourly, 5 minutes. Daily chart tells me are we in uptrend (=buy pullbacks), are we in downtrend (=buy reversal), are we in a range (buy/sell according to range signals).

Hourly chart is the mail chart I use to define where I want to enter/exit the trade. Best trades for pullbacks are to enter long at low BB test on hourly chart. Then I exit the trade when it looses steam at upper BB on hourly.

To place a trade I use the 5 min chart. The best trades are when MACD and CCI on 5 min chart confirm positive divergence with the price, while the price is retesting low BB on hourly chart.

What did I expect to happen on Friday? I have to admit that not much. The three day weekend was coming and traders do not like to take big bets over long weekends.

BB on hourly chart looked like it was ready to squeeze. However the Friday gave us just more range bound trading.

The daily chart tries to press against the resistance of SMA(200).

It’s hard for me to expect a lot of downside to the market currently. I see a lot of cash chasing investments. Houses in Phoenix area don’t stay on the market long. With good prices, good houses are getting multiple offers on the first or second day on the market.

A short term shock to the stock market however may be a buying opportunity. Warning! I am not trying to predict next market move – these are just my observations.

Eva