Today if you do not already know, Twitter had it’s IPO. Going into today everyone was extremely excited about this, there was almost a sense of euphoria around the stock before it even publicly traded a share. It opened a little past 10:00 AM EST, shot up to $50 (thus providing entries for only the quickest of traders) and then petered out for the day. For the rest of the day TWTR chopped around providing limited opportunities and the ones that did present required the trader to be a surgeon to obtain benefit in trading this stock. TWTR closed the day right about the opening print, creating (in technical terms) a hammer candle. While this is not necessarily a bearish candle, it does tell us that the demand for this stock was not near as high as many perceived and may need more time that many expected. I don’t think it will be another ‘Facebook’ but it definitely needs time to build a swingable set up. Below is a chart of TWTR with some thoughts and analysis of today’s price action.

11-7-2013 TWTR - One Min

 

The indices had their worst day in 10 weeks today, which kind of makes some sense. We have seen a lot of choppy action the past couple of weeks in individual names but some how the indices have been able to up well . It could have been rotation into new names, but eventually the damage of the past couple of weeks (which started with the China names – NQ) took it’s toll on the market. As of now we do not know exactly where we will go, I have a slightly negative bias right now as today’s candles engulfed the past couple of weeks action as well more leaders broke down. I believe a new (potentially deeper) correction will ensue – which is some what ironic considering how much hype there was around the TWTR (Twitter) IPO this morning. We could look back on today’s candle and think ‘The TWTR induced high’. Below are four charts, one for each of the major indexes. Each of these charts is a weekly chart and each has a level in which I believe we will pullback to in the next 3-4 weeks.

As always, let me know if you have any questions or comments. Tweet me (@BenCBanks), StockTwits Me (@BenCBanks), or Email Me (Email).

11-7-2013 DIA Weekly 11-7-2013 IWM 11-7-2013 QQQ 11-7-2013 SPY Weekly

Twitter Induced HIGH – Euphoria Turns to Panic