Weekly Stock Market Video

The volume continues to drop, as expected, and with the v dropping the mkt. rises. I continue to watch the eur/usd and it currently is in a uptrend, but that up-trend is coming in the form of a bear flag. There is a lot of resistance nearby for all the indices that would seem to coincide with another breakdown of the euro. There is not a lot of economic news next week, but the heavy days will be W / Th. Don’t forget that Friday is Quadruple witching, which always makes for an exciting week. I expect the volatility to continue and will be watching the key resistance for the next two days, to key another move down.

Back in saddle, at least for today.

All right so I sort of disappeared without notice, but I warned you last month that I am coaching soccer, two teams, and that this blog plays third fiddle to that. I have four more road tournaments so things will be sketchy through July, but I do have some time tonight.

I have found this mkt. to be very tradeable, especially intra-day in the futures. However, the longer term trades are more difficult to game, as they often are in the summer. Right now is no exception. Despite the looming bearishness all over the news, I am still looking for a bounce soon, not a technical bounce, but a relief bounce. Simply said, I think value buyers will have no choice but to eventually step in because they cannot stand to have their $$ on the sidelines. The more sideways this mkt. moves, and with smaller down moves, the more likely that is to happen. That being said, I am starting to doubt whether it will have enough juice to re-test SPX 12k like I thought before. Chart time:

The VIX is grinding its way up. I have not added nor subtracted anything from this chart for a few weeks, and you can see the loose up trend is still in tact. It closed beneath it once in the last 5 days, but has stayed above it for 18 days. A clear sign that volatility is still on the rise.

Yesterday it looked to me like the INDU was ready for a little rally, and most of the day I was right on the $$. Boy did that change quickly. Now it looks to me like it is forming a type of bear flag here. If it stays between 10,075 and 9750 for a couple more days, then I will be shorting for a mid-term move. I do think this will eventually make another run at the 200 ma, and likely fail there.

The SPX looks very similar to the INDU. You can see the breakdown of the last wedge and now it too looks to be forming a bear flag. There is clear support at the 1040 level and resistance at the 200 ma level. So either way I will be looking for a volume induced move before I continue to trade in the direction of the break.

Forget the flag, this thing looks bearish just the way it is. I will use yesterday’s low as support and also as an area for a great short.

This is the most interesting chart I have seen. Again, these are the same lines I have had on here for quite a while and note where yesterday’s low was. Now note today’s high was. Further, this looks like it is laddering down , notice the series of lower highs. If this is to continue, we should be looking for about 5 days of sideways movement and then another move down. If it takes out this support, and not by a little but a close beneath it, then I think we are in for a ride to the downside.

So there you have it. The NAS and RUT are looking pretty bearish, and the others could look that way in a hurry. Jobs numbers come out tomorrow, and although good news may lead to a little pop, a hint of bad news will likely lead to a big drop. I will try to post some stock charts to twitter / chart.ly tonight, but I wanted to get this out first and early. I am leaning to some selling tomorrow, but I am not anticipating a great big down close, not yet anyway. Trade well and prosper, and I will not be posting tomorrow night, nor Friday. I will get the video out Sunday though. AKOT

Let the charts do the talking

I don’t have much to comment on regarding the mkt. The charts pretty much say it all. Again, as I have been saying for a few weeks, volatility is the order of the day, and I don’t see that changing any time soon. So let’s let the charts do the talking tonight:

Although the VIX sold off big today, it is still in a pattern of higher lows. I don’t give VIX trend lines as much weight as indice or stock lines, but they are worth noting.

Now the INDU si showing me a few things here. First it is still beneath the 200 ma. As usual I think it would need a gap up or strong move through the 200 to break back up to the upside. Second, the v is in a steep decline, again as expected post Memorial Day holiday. Third, this is a type of bear flag formation or an ascending wedge, with the 200 ma as the top. So all in all it looks somewhat bearish to me, barring a close above the 200 ma.

The SPX is very similar to the INDU, but notice that its highs are actually declining, unlike the INDU. Because of this it has formed more of a symmetrical pennant or bear flag beneath the 200 ma. It has given two great levels to watch, 1055 and 1110, each a key to the next big directional move.

The NAS, on the other hand has a completely different picture, mainly due to the 200 ma. It seems to have bounced off the 200 ma here, but I noticed something. If you look back to the last three big up moves, they have each shrunk a little in size. So the NAS bulls seem to be losing a little steam. Now if you look from the current down move, this right now looks to be an up move consolidation that will lead to the third move down in this current move.

The RUT looks very similar to the NAS, with a very nice support level to watch. However a close beneath this level is not the big sell signal, the 200 ma still looms large.

So there you have it from my view. I kept thinking that we would see another leg up before the big sell off, however as of right now the charts look pretty bearish to me. If we see some follow through to the upside tomorrow, then perhaps that will be the start of that up move I have been waiting for. However, if I am to be honest, it does not look hopeful to me right now. Again, posts will be sporadic due to soccer. We have a tournament this weekend so I will be out-of-town until Sunday. I should be able to get some charts up tomorrow. Trade well and prosper. AKOT