The Trader Daily

 | Jul 11, 2014 | 7:30 AM EDT
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In the span of twenty-four hours, the gold and silver miners went from having some of the best chart set-ups around to looking downright ominous. Names like Silver Standard Resources (SSRI), Pan American Silver (PAAS) and Barrick Gold (ABX) came under extremely heavy selling pressure during the final ninety minutes of Thursday's regular session. And the bottom line is that while gold and silver futures didn't collapse, I would respect Thursday's weak price action in the miners and take a step back from this sector. Paring back existing positions, hedging or outright avoidance seems logical until we see how these stocks trade for a few days.

Moving on to the broader indices, I'm not sure it's worth worrying about whether the bulls or bears won Thursday's session. The bottom line is, lower prices attracted buyers. This is the same pattern we've experienced for literally months. And without a close under 1950 on the E-Mini S&P 500 futures contract, I simply see no reason for day timeframe traders to waste too much time worrying about (or focusing on) the short side of this market. 

As far as Friday's SPY trading is concerned, traders are expected to focus the bulk of their attention on the area between $195.90 and $197. My baseline expectation is for a rotational session, where sellers respond to prices between $196.90 and $197.05, and buyers come to life near $195.90.

That said, a sustained trade (defined as a thirty-minute bar close) above $197.05 would be expected to kick-start a continued advance toward $197.60 and $197.90. While a failure to hold above $195.90 would likely result in a secondary test of $195.20, and potential downside continuation toward $194.36 and $193.70.

SPDR S&P 500 (SPY)
Source: eSignal

Additional Notes:

1. The 6j CME traded Japanese Yen futures contract continues to be at the top of my focus list, but for whatever reason, it continues to struggle with multi-month resistance between .99 and .992. As discussed in past Trader Daily reports, I am stalking this market -- or the Currency Shares Japanese Yen Trust (FXY) -- for a long opportunity. And my guess is that such an opportunity will come on the first close above .992.

2. The iShares 20+ Year Treasury Bond ETF (TLT) and 30-Yr US Treasury Bond futures contract have made their way back toward the upper end of their respective composite balance areas. Keeping in mind that it's far safer to follow price action then attempt to interpret the news as reported by CNBC, I would advise extreme caution on the part of all short sellers above the May 29 swing highs.

Any trading or volume profile related questions can be posted in the comments section below, emailed to me at or posted to my twitter feed @ByrneRWS

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