TECHNICALS-DJIA

As one can plainly see from the chart, the DJIA has done very little over the past month even though it hit a new intra day high yesterday morning. The SPX has traded in a similar pattern while the NDX/NAZ have both been in mini downtrends over the past month. Also, check the action in the SMH semi group which hit its high of $36 back in mid October and has since slid about 6.5% to a close of $33.65, not something one hears much about from the bubblites on CNBC.

I have done a pretty good job day trading lately and my favorite trading vehicle has been the YM DJIA Futures contract. The YM trades in one point DJIA intervals with each point equivalent to $5 for each contract. The CBOT requires about $1,950 of margin for each YM contract so with 10 contracts one controls the equivalent of $617,000 for $19,500 of cash equity.

My methodology is based on my read of market direction/chop via the individual index charts, market internals and leading/lagging sectors. Entry and exit points are based on pivots, support and resistance on the charts of SPX IWM NDX YM ES NQ and DJIA.