Markets Are Difficult To Read: DGW – MELA – SIO.V

Markets are still very difficult to read. With quite a few stocks I see increased volatility, erratic moves and bulls and bears alike being trapped on a regular basis. This is typical trading behaviour during trading ranges. These are tough times for trend followers and position traders. Whipsaw country to be more precise. If you are not willing to do some short term trading it is best to stay aside and wait until the dust settles. I’ve updated the annotations of the S&P 500 Chart on my Public List. For now I see a trading range. Let’s see what happens.

Here are three charts that exemplify how difficult it is to position trade the markets right now:

DGW – Duoyuan Global Water is a good example for erratic and indecisive trading behaviour. It broke out to the upside after trading in an ascending triangle pattern. It then fell back into the pattern, broke out again and once again fell back into the pattern during today’s trading.

Up-to-date DGW – Douyuan Global Water Chart on my public list.

MELA – Electro Optical Sciences is an example for increased volatility. The stock has set traps for both bears and bulls alike. If you held or positioned yourself for a trending move you got killed.

Up-to-date MELA- Electro Optical Sciences Chart on my public list.

SIO.V – Sensio Technologies is a great example for divergences setting up. Price has continually moved up but the volume pattern is not confirming the move. This is a classical divergence setting up. Price always trumps volume or indicators. Still, this is a red flag. A situation where you want to be cautious and have no patience if the stock in question moves against you.

Up-to date SIO.V – Sensio Technologies Chart on my public list.

When the market sets up lots of traps, volatility and erratic moves increase – stay out.

Have a great evening!