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

News, News, then Expiration will guarantee continued volatility.

First of all I apologize for missing last night’s post, but I am in the midst of soccer season, so time is very sparse right now. I guess you could call yesterday the “up” day I was looking for. We have two more days of economic news this week, and then expiration day on Friday. I expect the volatility to continue. I am seeing some support starting to rear its head, but the way this mkt. has been I am not too sure it will be that substantial. Remember a few weeks ago every sell off was met with buyers? Well now it seems that the buying opportunities are being shorted, and like today, shorted hard. I will now be suspicious of every gap up day, but keep in mind the “news” that caused the gap. For the remainder of the week I am leaning towards some more selling, and possibly another up day on Friday.

The VIX looked prime to drop yesterday, but alas, today it looks like it is ready to rise once again. This is definitely a week that could see the VIX testing its recent highs.

The INDU looks like it wants to continue dropping here and stall out at the close and open days post-flash crash. Then right beneath that is the 200 ma.

The SPX is right near support from the top of the mini-inverse head and shoulders that led to this current rally. The bollinger bands are widening and this often confirmation of down movement. Note the 200 ma looms nearby, as with the INDU.

The NAS, one of the leaders, is right back on this long-term up trend line. The line has been breached once before, and therefore can be breached much easier the next time. Today was a huge bearish engulfing candle and could be the signal leading to the smashing of the line. Once again the 200 ma looms nearby to serve as support.

The RUT, another indice leader has dropped right back to recent support levels and on the top of the slow ascending channel. You can see how much better the small caps have been performing by looking at the distance to the 200 ma as compared to the other ones we just looked at.

In closing: Although there are definite support levels nearby, I am not convinced they will be that significant. I do think that the 200 ma will offer some support. However, I would be prepared for a news bomb this week, I don’t know what it will be, but something that will be blamed for this mkt. making a major move, and it won’t be a fat finger. Trade welll and prosper. AKOT

Quick Update

I just rolled in once again, so I am going to keep this short tonight. I was expecting some up movement, maybe not quite 400 points up, but it was still very playable this morning. I got to trade until about 9:30 AK time and unfortunately I was unable to trade the last hour of the day, which was phenomenal today. I hope you guys all caught it. My thought was that we would have a couple of moderate up days, but today may have changed the picture for the rest of the week. One thing to note is that we are still under DOW 11k and depending on the morning news, I expect a bit of down open tomorrow. If it does gap down, I will likely trade the futures long for a bounce. I think this was too much euphoria today to be sustained. It would’ve been healthier to have a +100 point day today, but like I have said, volatility seems to be back in action. so I am expecting a bit of a pullback tomorrow, perhaps just enough to go long on Wed. Chart time.

The VIX has moved back into the gray square of consolidation. Note that today was a doji star, which could signal a bounce from here. However, if you look at the VXN……

It looks decidedly more bearish. So this could signal a conflict tomorrow between the SPX and the NAS. Looking at this, and this alone, I would say that the NAS should continue up tomorrow. But that’s why we look at several things.

The COMPQ had a great gap up today, but note that not much happened after the gap. It was like the first stage of a rocket launch with a failed second stage. No follow through is not usually a good sign. Ergo, it makes me a little cautious to be long NAS stocks.

Meanwhile the RUT looks a little stronger like the others. It broke out to the March resistance levels and out of the up channel once again. However, I don’t trust straight up moves, and this is stick straight.

In closing: Watch the morning pre-open news, and I am leaning towards a down open. Personally I am enjoying having some volatility back in this mkt. after the last 9 months we had to endure. I will be late again tomorrow night, and then gone the rest of the week. You all will have to pick up the slack. Trade well and prosper. AKOT

is it really worth posting a chart?

I mean they are all jacked up right now, so they won’t tell us too much. I do know that prior to the “drop” we were headed down significantly. In fact I was waiting for an entry point to short, and about 5 minutes before the “drop” I actually entered a short trade on the /ES. I was on a conference call at the time watching my computer and my iphone. All of a sudden I saw the bottom fall out and my computer was completely different from what I saw on my phone. Two totally different prices, way apart. But I saw that my profits were piling up faster than I have ever seen. Unable to decide what the real price was, I frantically tried to buy back the /ES and close the trade, but after two failed attempts, and when I finally decided a mkt. order was the way to go, and determined that my iphone was actually keeping a closer proper price than my computer, it was too late. My humongous profit was all but gone, and I sat beating my hand against my head. I was not prepared for anything like that and I sat there like a deer in the headlights forgetting everything I ever knew about trading for 10 fateful minutes. All that being said, it was pretty exhilarating, something I do not like my trading to be.

So as I look back what have I learned? If I ever see a move like that again, and I am fortunate enough to be involved, put a stinking stop order in right now! Do not wait for it to bottom, do it on the way down. You can always move it. Just get it in. In fact the better trade would be to have my stop in place prior to the order, then I could just move it. Now there is not guarantee that would’ve worked, most of the brokerages seemed to be locked up. But it certainly would’ve been better than sitting there doe eyed trying to put a sell order in on a mkt. rising faster than my blood pressure.

So what I am looking for tomorrow? Well normally I would expect a bounce, but there a few things to consider.

1. This has now been all over the evening news. Everyone knows about.

2. The last few weeks Obama has been touting the financial reform because the banks are out of control.

3. GS threw a stink bomb on the mkt. with their so-called “shenanigans” which further enforced the need for bank control and increased fear within some investors and the general public.

4. Tomorrow is Friday. Take in consideration 1-3 and after seeing a 1,000 point drop, Greece going under, the Euro collapsing, and all this splashed all over the news, do you think people are going to want to buy going into the weekend? I am leaning towards no. In fact as I have said before, fear feeds on itself, and today my friends was scary.

That being said, I am willing to bet that CNBC, Bloomberg, CBS, NBC, ABC and FOX will all try to convince everyone that this was just a “mistake” that there is no problem at all. That it is very safe to be in stocks. I wonder if they will believe them. Remember this post about the VIX. This is the one where I comment on the huge v increase on VIX calls. Who do you think bought those VIX calls? I have my GueSs. Who do you think knows stuff that we don’t know? I have my GueSs. I smell a rat, and in all honesty, this may be just he beginning of something. I am not sure yet, but I will be watching, and yes I am leaning to shorting tomorrow, probably after a morning bounce. Trade well and prosper. AKOT

Throw some puts on the barbie ( some calls eod)

Wheeeeeee, today was a great day for traders. We like days like this, solid moves with all indicators clearly giving us a direction to trades. Throw some puts on the barbie and the odds are great that they will be profitable at the eod. You may have noticed a slight change in the tone and focus of this blog over the last few months. I can feel me doing it, but I can’t help it. I have started trading futures and I really like trading them, and I am doing well. I am still trading stocks and options, but I am really focused on intra-day futures trading, and I noticed I have focused more on next day moves rather than week-long or month-long prognostics. I am not inclined to change it, so whoop there it is. In that vein, I closed out a couple of short positions today, one of which was BKS, a chart I had posted a few weeks ago. But I did something odd, I bought a small position of SPY calls about 20 min. before the close. Again, there was really no charting element to this trade, it was just that “feeling” thing again. I could be burned big time as fear tends to feed on itself, but I saw a few things that led me to believe there may be a small gap up tomorrow, and I was willing to take a chance to get a piece of that move. So I will be looking for a gap up, probably off of bte continuing claims and initial claims numbers. In fact I hope we see an over exuberance, with numbers that just crush expectations. Because I will then shortly buy back those calls and promptly look to sell short some /TF. Let’s look at the charts:

Obviously the VIX was up big today, but one thing I noticed that edged me to the call buying was that there was a pretty good wick on today’s candle. About 1/2 the body was top wick. I also noticed that lately any big move on the VIX was followed by a down day.

The INDU slammed through the bottom of the wedge and through support on another decent v day. However, you can see it tagged the bbb, something it has not done in a while, and rallied off of it. Also the 50 ma looms fairly close and the logical support would be the up trend line. But I still like it for an open bounce tomorrow.

The SPX tagged the 50 ma and pulled back a little. Again, a good area for a stall out. Of course if it does break it tomorrow, which is a possibility ( after a gap up) then there is a lot of open air to the next true support.

If you recall, I have been saying for months that I felt the COMPQ and RUT will lead this mkt. down, so they bear watching. Percentage wise, this was nearly a whole percent lower than the last two we just looked at. It to is very near the 50 ma, and it too has a lot of open air underneath it. Chart wise I could see a few things fitting here, an inside harami day, a gap up into the day followed by some selling, or no gap and drop. I am NOT looking to take out yesterday’s open, I just don’t think this mkt. has the strength to do that right now.  But if you had to make me pick, I would be looking for the gap up into the candle followed by selling and closing lower than today’s close.

The RUT was down over 3%, again quite a bit more than the INDU or SPX, and even more than the COMPQ, all of which makes sense. You can see the clear breach and smashing of the 20 ma. You can also see this thing has a lot of clear air before it even gets close to the bbb or 50 ma. That 690 looks like a great place for a rebound.

I will finish with BKS. I was very fortunate here as I had been holding this for several days watching the premium eat away at my put options. I was looking for it to find some support on the 2o.80 line, which it didn’t, and then the 200 ma, which it didn’t. I closed it today because I thought it would definitely bounce from here. However, if it takes out the 200 ma again, I think it makes a great short to 17.75.

In closing: I expect the jobs numbers to be much bte tomorrow, and I expect that to induce the value buyers to do what they do best, buy. Then I will be watching for big $$ to step in and sell. There are tons of variables and we may see a 300 point rally tomorrow, but I don’t think so. If the jobs numbers come out wte, then you best be holding on because my SPY puts will be as worthless as excuses are to BP right now. Then it will be time to short and short fast. Trade well and prosper, AKOT.

Pieces of a bearish puzzle

And the ride continues. We haven’t even got to the big news of the week yet, that should be coming on Friday. The problem with news and big moves like we are just now starting to see is that quite often they can lead to ye olde buy the rumor sell the news trade. So I will be watching closely as we head into  Thursday / Friday. If this mkt. continues to move up like this, then the good news will more than likely be baked in, and my trade will most likely be a short, no matter what the news. However, that being said, I am leaning towards a down day tomorrow. I cannot really explain all the reasons why, but it is a combination of charts, news and experience. I will not trade strictly on this, I will be watching the first 15-20 minutes very closely to see how the day is lining up, and that will be my guide. Chart time:

I was expecting a pull back on the VIX, and we got it. Notice that it closed over half way above yesterday’s candle, and even rallied a bit from the bottom. This is one reason I think we may see some more down tomorrow. I think today’s low will hold, and may not even be tested. But that will be something to watch, and if it gives then obviously I will change my tune to a long trade day.

There are a couple things to point out in the INDU. I have put the indicators back on this chart to show you that the SRSI has offered support in the past. If it gives way, then I will be looking for a serious pullback, much like the one early in the year. Also notice the v, the two big up days are the two lowest v days. Finally, the candles are in another range, and the 20 ma has become inefficient support at best.

The SPX is still in fat wedgie. Now normally I would be looking for a breakout to the upside from here, but you can see the down trend appears to be the stronger move. Also if we take in account the v on the INDU, then we know there is not near the $$ behind the buying as there is behind the selling.

The NAS has been honoring this current down trend, and continued to do so today. I think that is a good indicator to watch to confirm more downside. I will be looking for sell-offs, followed by up days into that down trend. If they start falling away from that line, it is more bearish. If it closes above it, then I will consider going long in NAS stocks. Also watch the support on the RSI and note that the MACD is trending down. There are a lot of small bearish signals here, nothing huge but a lot of small pieces of a bear puzzle.

Speaking of the NAS, here is AAPL. It is in a bit of wedge, and is virtually mimicking the NAS, or should I say the NAS is mimicking it. Again, normally I would look for a breakout to the upside here. But yesterday was bearish engulfing candle, and today a bearish harami, again pieces of a bearish puzzle, so I am leaning to the downside here.

Another wedge here on BEN,  a post earnings wedge. I am leaning to the upside here, but if the mkt. tanks, this too will follow.

In closing: This week is setting up to be a an intra-day traders dream, and I really think Thurs/ Fri will be two very trade worthy days. I will be playing the ES, some of the individual stocks I have posted here and a couple of the indices, that is my game plan for this week. Trade well and prosper. AKOT

News Tremors

That was a bit more of a rally than I was expecting. In fact when the INDU was up about 120, I was looking for a sharp intra-day correction, that really didn’t occur until the end of the day and not until it rallied up another 50 points. I am still looking for a correction tomorrow, I am just not sure to what extent. The strength of today’s move surprised me and raises the odd slightly that there could be some follow through strength. I don’t think that will be the case, but I have to now consider it a very viable possibility. There is some minor news tomorrow, but pre-open there are a slew of earnings, no giants but possible mkt. movers on big surprises. The way things have been going, I would expect bte earnings to have a small effect as they have become the norm, and wte earnings to have a magnified effect. Chart time:

The VIX had a huge move up and now a huge move down. I looked back to 2007, where it was consolidated at this same level, when it would rally from 16 to 32 and saw something very similar to what we are seeing here. In 2007 it moved up to the 23 area, and then drop 5 points before heading back up. So I would not be surprised to see another move up, and I expected to find support near the gap.

The INDU managed to close above the solid resistance from the early April highs. Take note of the v however, notice that it has moved down two days in a row into this up move.

The SPX rocketed off the support, unlike the stall / bounce I was expecting. It took back the 20 ma rather easily, but a line once breached is much easier to breach the next time. I think if the SPX doesn’t take out Tuesday’s open by noon tomorrow, then I  will be looking for selling into the close.

The COMPQ closed beneath Tuesday’s open, but today was the first positive day of the last four, and it was significantly positive. Again, if it cannot stay above 2510 until after lunch, then I think a close around 2474 is likely.

I like this earnings gap down and mini rally to fizzle soon. I especially like the steadily decreasing v into this two-day up move. I think we see new lows very soon.

I thought HD would drop into the 20 ma and then rally into earnings. It looks like that is still a possibility here, seeing today’s uncertain hammer candle. I think this will be shortable tomorrow using today’s high as the stop.

In closing: I really feel like volatility is returning to this mkt. and I think we are set to see some more big moves. What I see is that the news is now causing mkt. tremors, instead of yawns. I am still looking for more selling before a rally to INDU 12k. There are a lot of logical support areas along the way and I will be watching them closely. Trade well and prosper. AKOT

Back in the saddle

All right I am back, but I want to forewarn you, it is very possible to be a spotty spring / summer of posts. I will be doing some traveling, and I am coaching a soccer team, so I may adjust the format to one or two indice charts, an individual stock or two and a quick commentary. I meant to do a video this weekend, but alas it did not happen.

Right now we are back in grind mode, but I think we may have a small break from that. The housing numbers come out the next couple of days, and although the news has been pumping up the economy as good, I would not be surprised to see some wte numbers. I think this mkt. is ripe for a mini pullback, nothing huge but a pullback. I think the next two days are prime days for that to happen, and that is the direction I will be leaning. Let’s look at a few charts:

The VIX continues to hang around that 16 line, breaching it briefly and rallying back above just as quick. I am still watching to see if it bounces hard like it has done in the past, but like I said, the longer it hangs around here the weaker the line gets.

The INDU is making a pretty apparent ceiling here. This is one reason that I think we may see a drop soon. In fact, I wouldn’t be surprised to see it take out the 11k line, and then rally right back up to 12k. For now, if it does fall like I think it will, I will be watching the 20 ma closely to see if it offers some support.

The SPX looks slightly more bearish than the INDU. Today was an inside day with a wicked long-legged candle. You can see that the 20 ma has been the trampoline to keep sending this thing higher, and it looks to be an admirable bottom. But the fact that it has failed to take out the hight from the big bear candle, and closed beneath yesterday’s close definitely gives it a bearish feel in my book. Again, if it does fall I will be watching the 20 ma closely.

Unlike the SPX , the COMPQ did close above yesterday’s close, but was unable to take out Friday’s high and closed a point beneath its open. Again an obvious ceiling can be seem forming here, and if it breaks above I think that would be very bullish for this whole mkt. But I think we will see a fall back before we something like that.

The RUT continues to look very strong here following that trend line up to heaven. It has closed at a new recent high and continues to lead this mkt. up, ergo it will likely lead on the way down, watch it.

A very nice rally up seems to be establishing a pattern, big up days, a couple small sell off days, a big up day. I like this to test the $37.50 line, and at the point I will be looking to short for a quick bounce, until then I will be looking long off of the 20 ma or trend line.

Perhaps it is time to look for a short entry on IBM. I like the v spike, I like the break of the 20 ma, I like the break of the trend line, and I really like the gap down, rally and bearish engulfing candle. What’s not to like?

In closing: Look for shorter posts over the summer, and I will be looking for some selling going into the weekend. But if for some reason housing numbers crush and we break out, then obviously I will have to switch quickly, but I will be watching the NAS and RUT for my cue. Trade well and prosper. AKOT

Traveling

I apologize for not posting last night, and pre-apologize for not posting tonight. I left my house at 7 am yesterday and did not walk back into the door until 10 pm to eat dinner. Tonight I am packing for a trip and I will be gone until early next week. I will try to do the weekend video, and I will try to post some charts on Chart.ly and Twitter. Meanwhile, look back at my last post and you can see that I think we are going to see an increase of buying from the weekend crowd. Today’s big move had decent v behind it, and although I haven’t had a chance to look, I bet it is all over the news and it will continue to feed on itself. I still think we will see a sell off somewhere soon, but I really think we are on our way to DOW 12000. Be looking for some charts and the weekend video, and as always, trade well and prosper. AKOT

The Friday Grinder

The charts all look pretty similar and they show some type of top forming. Likely, this will be a short-term top with more buying coming in on lengthened weakness. Unless there is an 80 point up move tomorrow, we will not reach DOW 11k like I thought this week. There is no planned big mkt. moving news tomorrow, so I think after the noise in the morning, and maybe a small move off of crude inventories at 10 am, the mkt. will pick a direction and grind that way. The last two days the selling was followed by buying, so perhaps there will be a big buy morning that spikes up and then is followed by some selling as traders close positions for the weekend. Whatever it does, I expect a very grinding afternoon. Chart time:

The VIX continues to hover around that 16 area. I am still looking for a big bounce off of here, but I understand that the longer it grinds around here, the more likely it is to fall.

The DOW has been in a very tight range. I don’t have it on the chart, but you can see where it broke out of the up trend via this sideways movement. Normally I would think of this as consolidation for a continuation move to the upside. But again, watch this range for the breakout / down move.

The SPX actually looks like it is forming a bit of a bull flag here. You can see it has done this repeatedly during this current up trend, each leading to another leg up.

The NASDAQ has entered an even tighter range than the DOW, with a very clear level of support at 2396. If it closes beneath that, then it will also be closing beneath the 20 ma for the first time since Feb 12. I think once we see that close beneath the 20, and not just a tail but a solid close, then we will see a significant correction of this current trend.

GLD had a nice breakout yesterday with a small follow through today. If it drops a little more or goes sideways, I will be looking to go long. Note the RSI is moving into the over-bought range, bu that it has no problem hanging out there for extended periods of time. The MACD still has room to the upside.

MON gapped down on earnings, then rallied back up to fill the gap, but those top wicks leave me suspicious of any further follow through. I am going to be bird dogging this for any weakness.

In closing: I am going to be looking for some very short- term trades in the morning, then I will likely take the rest of the day off. I don’t expect a lot of afternoon movement, and if I am going to enter any options trades, I will wait until very late in the day looking to not absorb so much weekend decay. Trade well and prosper. AKOT