Summary
Read Full Post.....
Lately, there has been quite a lot of conflicting opinions about whether the market will go down or go up. When there is this much crosscurrent of opinions, I find it best to stop reading them, and concentrate on the chart and listen to the message of the market. I did notice something interesting about today's action.
Today's action looks surprisingly similar to the hammer reversal on Feb/10. I have described some parameters which, if we are indeed putting in a bottom, I think the market will conform to.
Will look for confirmation to short 1141-43 area, and buy 1124-26 area.
Baidu Inc (NASDAQ:BAIDU) did not bounce as strongly as the rest of the leadership stocks. Therefore, it is safer to watch for signs of buying strength at the gap fill 71-71.4
Goldman Sachs (NYSE: GS) looks interesting, especially if the overall market is in the process of bottoming out:
If GS dips below 140 again, I plan to buy my other half position. stop on full position will then be 138. If a rally materializes in the afternoon, then I may even hold my position.
I didn't have a chance to buy Berkshire Hathaway Inc. (NYSE:BRK.B) because I was too busy scalping BIDU today for a few dimes. But now that the market is potentially trying to carve out a bottom, I will pay attention to the oracle of omaha. Plan is unchanged for BRK.B tomorrow:
1/4 position long at 76
1/4 position long at 75
1/4 position long at 74.5
1/4 position long at 74
initial stop on all 73
target 80
Monday, May 17, 2010
Deja Vu ?
Saturday, May 15, 2010
Weekend Review, May 15, 2010
S&P 500 review, along with some stocks, and update to my buy list.
Read Full Post.....
This pullback feels a bit different from the previous one that occurred in Jan-Feb/10. In the previous one, BPSPX bottomed out at 64.5 before resuming its march forward. This time, we are already below 64. So, there is a potential for a deeper correction down to 1090 or so. However, I am not expecting the Feb/10 lows of 1040 to be violated. Because of the ongoing European Debt crisis, we may be entering a period of sideways movement until Sep/10.
Moving my stop in Visa Inc. (NYSE: V) up to 76, still hopeful it can dead cat bounce up to 81-ish.
Eyeing the gap fill at 71-ish for Baidu Inc. (NASDAQ: BIDU). This stock is showing amazing strength given current market conditions. I will try to get in before the start of earnings run-up next month.
Will also be looking to buy IBM (NYSE:IBM) for an earnings run-up. Note that it is also above its pre-crash levels. Baidu and IBM are one of the few stocks that I have found so far that are above its pre-crash levels. Well, Google (NASDAQ: GOOG) is just barely above its pre-crash levels, but since it is similar to Baidu, I will swing Baidu instead of Google.
no action yet until I see how it behaves under 141.5. My original plan still applies:
Goldman Sachs (NYSE:GS):
wait for the dip below 140, and then buy the breakout back above 140
stop 135
target 150
Berkshire Hathaway Inc. (NYSE:BRK.B) is just barely above its pre-crash levels. Trading plan for this stock is a bit trickier. I think I will have to scale into this position.
1/4 position long at 76
1/4 position long at 75
1/4 position long at 74.5
1/4 position long at 74
initial stop on all 73
target 80
Plan for General Electric (NYSE:GE) slightly changed from original post :
buy any dip below 16.5
stop 14.0
target 21
All other plans for stocks that I mentioned previously are cancelled.
Saturday, May 08, 2010
One More Flush
Setup for Mutual Fund Monday.....
Read Full Post.....
The action in 2007 is eeriely similar to what we are witnessing today:
- big 85+ pt drop
- hammer reversal
- low volatility run-up to new contract highs
- volatility expansion that leads to an even bigger drop
- 50d EMA rolling over, but 200SMA still rising.
Back in 2007, NYMO peaked first, and then put in a higher low (+ve divergence). That, along with a high volume white candlestick marked the short term bottom.
So, here's where we stand today:
- big 100pt drop
- hammer reversal
- low volatility run-up to new contract highs
- volatility expansion that leads to an even bigger drop
- 50d EMA rolling over, but 200SMA still rising.
However, NYMO has not yet put in a higher low. Also, on Friday we had a 40pt selloff, but no bullish response to it (couldn't close above 1122.75). So I don't think the short term bottom is in yet.
We could see new contract highs after this correction. My rationale is that the 200SMA is rising, and this is the very first time it has been tested.
However, my own analysis based on past corrections (Aug07, Jan10) suggest that we could see one more capitulative flush down before we march on to new highs. Certainly the current downtrend of lower highs and lower lows needs to be broken before any meaningful rally can take place.
As for Monday, well, I think we will conform yet again to Mutual Fund Monday (+88% chance of close > open). But I think it will be a dead cat bounce that does not affect current market structure.
Wednesday, April 28, 2010
Potential Short Term Top
Greece, Portugal, and Spain credit downgrades may have put the brakes on this run-up.
Read Full Post.....
Today SPY attempted a reversal of yesterday's drop, as indicated by the white candlestick. However, it failed to close above the 20d EMA; that is the first warning sign. Also, price could not retrace even 50% of yesterday's drop.
ES needs to close above 1190 tomorrow to confirm the reversal. Failure to do so doesn't necesarily mean it will go down right away, but it would be another warning sign.
Also, Friday was when ES broke to new contract highs. However, the breakout has failed, as we have closed below Friday's RTH lows (1201.5) for the 2nd session now. I think this qualifies as the TraderVic 2B Top. There should be many sellers waiting at 1201.5
It is interesting to note that last week's drop (triggered by the Goldman Sachs (NYSE:GS) lawsuit) started at 1205 in ES. Yesterday's drop (triggered by Greece bond downgrade to junk status, and Portugal debt downgrade) also started at 1205. 
Note how the NYA50R broke below a 7 week range. BPSPX is starting to rollover, but a close below 85 is needed to confirm the reversal.
Nasdaq has held up better, but it also looks like a break below the 7week range is imminent. BPCOMPQ also starting to rollover, a close below 70.5 will confirm.
Looking at the leaders, I see more and more of them closing below the 20d EMA (GS, GOOG, BAC, MA, AMZN, XLF). Without leadership, any market rally will be unsustainable. Unless Monday's high of 1216.75 is taken out within a week, all signs point to this as being the short term top.
Saturday, March 13, 2010
Weekend Review, March 13, 2010
Summary
Read Full Post.....
SPY broke above a potential double top pattern. At this point, the market can go either way, and there are arguments for both a continued march upwards (established trend, individual leadership stocks acting well) or a market pullback (sentiment indicators $NYA50R, $BPSPX, $NYMO, $CPCE are at levels where previous market reversals have occurred).
Bullish scenario (ESM10): one of the support levels 1134, 1137.5, 1142 finds more buyers, gap up and market closes above 1152.
Bearish scenario: any move above 1148 resistance is not sustained, gap down, and closes below 1134.
Euro broke out of a volatility squeeze, indicating that 1.345 may have been the bottom. The Euro breakout, along with a favorable economic report in Friday's pre-market led to a gap up in ES.
Resistance 1.381, 1.385
Support 1.3727, 1.368, 1.363
Tuesday, January 12, 2010
Monday, January 11, 2010
Market Notes, Jan 11, 2010
Summary
Read Full Post.....
Euro broke above and is consolidating above 1.4445 key resistance
Gold broke above and is consolidating above 1142 key resistance
NQ continues to act weaker than ES and will likely fill its gap up first.
Friday, January 08, 2010
Market Notes, Jan 8, 2010
Summary
Read Full Post.....
Gold and the Euro have both responded quite positively to the NFP report
This could put an end to the run-up in the markets today, we shall see what happens in the regular session.
Thursday, January 07, 2010
Market Notes, Jan 7, 2010
Summary
Read Full Post.....
Gold => starting to turn bearish
Euro => bearish
Currently ES is sideways, but has yet to show any signs of weakness. Buyers are in control because the chart shows zero indication of sellers taking control - thus far. That said however, tech is already showing weakness; so, I will monitor XLF and XLE for signs of breaking down, and also as my signal to go short.
Wednesday, January 06, 2010
Market Notes, Jan 6, 2010
In real estate it`s all about location location, location.
In trading, it`s all about discipline, discipline, discipline. And perhaps patience too.
Read Full Post.....
Gold continues to trend Up.
Euro is moving sideways neutral.
Tuesday, January 05, 2010
Market Notes, Jan 5, 2010
Summary
Read Full Post.....
Gold: ran to new highs overnight, but has given most of it back => slight bearish
Euro: ran to resistance, failed breakout => bearish
Looking to sell resistance 1131
Buy support if I see signs of buyers stepping in.
Look at Opening 5min. to determine bias
Monday, January 04, 2010
Market Notes, Jan 4, 2010
Summary
Read Full Post.....
Gold is above 1098 and 12/28 highs => bullish
Euro is above 1.4355 resistance, trying to break above 1.442 => bullish
NQ new contract highs => bullish
Unless I see some sell volume and/or failure at resistance, the mkt bias is up.
Saturday, December 05, 2009
Weekend Review, Dec 5/09
"In trading, however, the person who can easily admit to being wrong is the one who walks away a winner. Besides trading, there is probably no other profession where you have to admit you’re wrong. In trading, you can’t hide your failures. The trader who tries to blame his losses on external events will never learn from his mistakes." - VICTOR SPERANDEO
Read Full Post.....
This is a SPY chart from Monday highlighting the sideways range for the past 3 weeks:
Here's what has happened since Monday Dec 1/09:
The chart can be interpreted two ways:
a) There is a complete lack of consensus amongst market participants as to market direction. Result would be more sideways consolidation
b) There are quite a lot of buyers at support still, and this is the process to make them give up control.
Sentiment has been neutral for the past couple of weeks:
Through most of the past 3 weeks of sideways consolidation, I have observed that when sellers take control, they could not follow through, but when buyers take control, they follow through. Friday's NFP selloff could be construed as follow thru from the Dubai selloff; however price is at much higher levels ever since the Dubai selloff, so the sellers have much more work to do if they want to take control.
That said, I think the odds are good for this coming week that the bottom of the range will be tested.
I will be looking for Resistance 1112
Thursday, December 03, 2009
Daily Notes for NFP Friday, Dec 4/09
Summary
Read Full Post.....
ES has been trading sideways since Nov 10/09, and above 1098 for past 3 days. There is a good chance we will test the bottom of the range, which is at 1086-1085.
Tomorrow is NFP Friday, which should produce more volatility.
Trapped longs and the tendency to book profits ahead of the weekend will put pressure on the bulls to defend support.
Resistance 1104, 1108, 1111, 1115
Support 1085, 1093
Gold broke a 4-day uptrend, and is showing cracks in the armour.
Resistance 1207.5, 1209, 1213.4, 1215.5
Monday, November 09, 2009
Notes for Tuesday, Nov 10, 2009
"You might be a trader if you idolize a guy who goes bankrupt several times and commits suicide " -- @pipmaestro
Read Full post....
Sunday, November 08, 2009
Notes for Monday, Nov 9, 2009
"Most aspiring traders underestimate the time, work, and money required to become successful." -- Mark D. Cook
Read Full post....
Wednesday, November 04, 2009
Notes for Thurs Nov 5/09
Anything is possible so long as you trust in your ability to perform.
Read Full Post.....
Sentiment indicators ($TICK, $NYSI, $BPSPX, $NYAD) have all been trending down, suggesting bearishness creeping into the market.
Sunday, November 01, 2009
notes for monday, Nov 2/09
Almost anybody can make up a list of rules that are 80% as good as what we taught. What they can't do is give (people) the confidence to stick to those rules even when things are going bad." -Richard Dennis
Read Full Post.....
Tuesday, October 27, 2009
Notes for Tuesday, Oct 28, 2009
Saturday, October 24, 2009
Notes for Monday, Oct 26, 2009
Summary
Read Full Post.....
It's always good to know about sentiment even when daytrading. BPCOMPQ has already indicated a top. Also, we are 32 weeks into this run-up, which is where the 1938 bear market rally topped out. After a couple weeks of low volatility, Volatility has increased this past week which could be indicative of a topping process. Selling resistance is starting to work again. However, a top won't be known unless ES closes below 1070. My guess is that Monday will be a "digestion" day.
NetVibes Me!
BlogLine This!
FeedBurner This!
