Jobs are on the way

There is some definite volatility showing, up moves are not holding, down moves aren’t continuing and the indices are not moving in sync. Things seem to be a little disjointed, but still the small cap and tech looks very strong. I know it makes no sense, but for some reason DOW 11,000 seems to be a little bit of a big deal.  I still think when it is taken out, it could be one of those big wick candles that signals an interim top. Tomorrow is consumer credit news, but I think the bigger news is Thursday with the continuing and initial claims. Have you noticed that our beloved government has been prepping the mkt. for bad jobs numbers? Be patient, the jobs will come, they are on the way…. yah in the form of 16,000 more government employees to handle all the bureaucracy of healthcare. Washington Examiner ( one of hundreds). Now for some happy uplifting stuff, stock charts:

The VIX is right back on key support, and I am still waiting for that big bounce up. But I know that the more support is tested, the more likely it is to break, and this is starting to look like spring ice.

Of all the indices, the 30 stocks of the DOW seem to be the weakest. That being said, it did have a pretty nice rally off the lows of the day, but in doing so it formed a nice long-legged doji cross. If you look closely you will see that a very similar cross was the start of this current rally.

The SPX still looks pretty strong, sliding up the topside of the bollinger band. The RSI looked like it was starting to trend down but it had a nice curl up today. The MACD isn’t quite there yet, but it is on the verge. I still think the top of this current never-ending ascending pennant may be the top of this move. That means SPX 1200 +.

The NASDAQ continues to be the bellwether leading the charge. Here you see another breakout, with a slight intra-day pullback. So it broke free of that support after 8 days.

I still like the EUR/USD to test this support, and then eventually break it.

KLAC is testing the bottom of this gap with two down v days in a row. Today it formed a spin top bearish harami doji, now that’s a mouthful. I think this is primed for a drop here, but watch for it to make a run at the top of the gap. Therefore, if I trade it short, I will use $32.98 as my stop, giving it a little room to play.

A very loose inverse head and shoulders that broke out. Now it is looking to re-test the neckline on declining v. If v continues to decline into this move, then I will look for bounce off that line. But it is playable either way using it as the pivot.

I liked the action on BKS today, and I am short it right now. EZ stop at $22.80. However, looking it I need to be cognizant of the up trend that it is in.

In closing: I will be watching for continued dis-jointedness in this mkt. and I will take that to mean that some sentiment is changing. As it stands with the RUT as strong as it is, this is a speculative mkt. I am leaning towards a slightly more directional day tomorrow and my game plan is to trade that way. Look for late night quick post tomorrow, oh and btw, trade well and prosper. AKOT

Finally the blockage has cleared, for now.

Finally, some movement. It could be C news, it could be FDX being “cautious” it could be the strong dollar, it could be all together, or maybe it was the

but at least something happened. Last night in my rush to get the post done, I forgot to put the UUP chart up and instead threw it on Chart.ly. It looked ripe for a bounce, but this morning I tweeted that I thought $23 would be key resistance, we’ll look at that chart.

So far this week we have had 34 companies report earnings, and all but three of those have done bte. That should be bullish, but if you dig just a hair further, only 3 companies gave upside guidance. The rest gave mixed guidance, or were unsure. FDX beat, but their guidance was unclear, and as goes FDX usually goes retail and more, so that is quite often a mkt. mover, and I neglected to catch they had earnings today, my bad! However, nothing has been moving this mkt. so I would’ve likely ignored it anyway.

Tomorrow is 3f (opt xp) so I did a quick check, since January we have had 6 closes up and 5 down, pretty even. So to be perfectly even tomorrow should be a down right? Who said things are ever even in the mkt? More importantly, 3f is known for its “volatility” and this year we have had 6 closes of 50+ points from the open, either direction. Further, we have had 7 days of a range + 100, and 3 of those days were + 200.

However, if we start from the current bottom in March, things have really not been that volatile. Only 1 close +- 100, and only 2 closes +- 50. The range has averaged 111 points from that time, with a low of 71 points and a high of 171 in August. Finally, last month the range was 71 with a close of -9 points.

So what does it all mean? Well to me it seems to point that there is a clear dissipation of volatility as we get deeper into the year. So, using just this data, my best guess would be that we have a range in the 60-100 point area and probably close up somewhat ( the last part I base on charts, so let’s look at them shall we?)

The VIX filled a whole supp / res range today. I like that it did not leave a gap to be filled, because last time it filled that right away. I will be watching for follow thru, but not counting on it. Again, still no clear direction.

We had a clear breakdown of the INDU. Not only did we take out the support line, but also the up trend line. I imagine the recent lows around 10,230 will offer some support, and if you look you can see that any big down day in recent history has not been followed by another big down day. In fact, if you recall I have been saying to use the big down day as the sign of the current bottom. BUT that was if there was a current down move, which this is not. So this fits in with my 3 f theory of probably a larger range with a pretty small close, or a hammer type candle.

The SPX too broke through its current up trend line. You can see support in the 1085 area, but after that the rest of support is secondary to me until the blue up trend line. I don’t know if it will flat drop tomorrow, and I actually doubt it, but again, I could easily see a hammer type candle here would fit in with what has been happening. Any big body red candle will signal to me that we have a lot more down movement to come.

This is a steeper up trend and a steeper break, as would be expected. This actually looks pretty bearish to me, with a very close to shaved bottom candle gapping down. I don’t see a super clear support line, just a zone from the 2168 to 2128, I know huge. I don’t have my fibs on here, bu the nearest is at 2000, should be strong if we ever get down there.

I expect this will walk sideways to slightly up off this bbb. It is oversold and looks like it needs a bounce, perhaps it will use the 200 ma for that purpose, but I think it will bounce before then. However, I will be watching for small move days and that will be my bear flag formation.

You can see what I was looking at for the 23 resistance, and we closed at $23.01. Now, I would really expect a drop here, with a little more than 1/2 the v we have today. Perhaps even close to filling the gap it just made, and then looking for another hold and move up, in conjunction with the move on the eur/usd.

In closing: I am very thankful to have some direction, right wrong or indifferent. I really think we have more down to come, but will probably stall out some before that continues. I will throw some charts up on twitter and Chart.ly so be looking for them. Remember, I don’t trade all these charts. I look for the ones that go like I expected, and sets up the way I want for me to get a good entry. Further, I look at option volume, spreads and more to help narrow down my trades. Am I always right? Not even close! But that is why I love trades that have clear stops. Trade well and prosper. AKOT

Moolah showing strength

Well at least we had some movement near the end of the day today, that was something. Although we once again finished right about where we started. I thought BBBY beating earnings might be cause for a pop, the PPI # was wte and that was given credit for our drop today. Tomorrow we have a lot of news, mkt. moving news, that comes out prior to the open. Chart time:

This support line held, for now. This seems like a semi-logical area for a possible move up, but to be perfectly honest, this chart isn’t telling me much. All I see is a big mess, what I would call a bottom forming, but until we close near $33, we can’t call it formed, and even then ????

So does this look familiar? The last time it led to a nice pop back up to the highs. The one thing to note, however, is that we had a little v pop with this selling. Now, I generally don’t give the same weight to an old resistance line as I do an old support line. So, I could see this giving way pretty easily, but I just wanted to point out this touch and pullback move which looked just like the one 6 days ago.

This is the most bearish of the indices to me. This actually looks like a decent reversal pattern here, and I would anticipate it not going higher from here, but again we have a slew of news coming out in the morning.

Still looks toppy to me, but I don’t like this tombstone doji beneath the previous day’s candle. We are in an up trend so it should be a reversal candle, I just usually like them near the top of the previous day’s candle. This chart looks the strongest to me, and I really don’t think it is strong, it looks more like more sideways movement is in store.

The strength of the RUT has surprised me. Last month I really thought this chart was breaking down in a big way, and it has rallied from death to being a pretty strong chart. That said, it hit the top bb today, with a small hammer, but closed on support. I think if we take this support out, it will probably be with a gap beneath it.

The strength of the dollar has been very impressive, and what I really like is that instead of having a huge single day up move, like last time, it is slow and steady, with great v. This equals a strong move with conviction. I think we will hit resistance at the bottom of that gap, but if this move continues along these same lines, then I think we take that out, and in turn the mkt. falls.

The eur/usd has landed right on a fib line here, but I really don’t know how long it will hold. What I see here, is if / when that fib line gives, there is a lot of vastness to drop through. Meaning, if we take out this fib, I think we see our mkt. react negatively, and probably in a hurry.

Finally, I would keep an eye on GS. It really is breaking down, and this after all the banks are repaying back the government the money they took from us the people.

In closing: Although we still grind sideways, there are a lot of signs pointing to the fact that things could get much worse quickly. Keep your eye on the dollar, and some of the big boys to see what is leading this mkt. I think we will break free tomorrow as a combo of housing and core PPI should be enough to give us a real move. Trade well and prosper. AKOT

Grinder

Is it just me or has this market been a real grinder?

It seems lately we have a great open and then nothing, just sideways movement all day. It makes for brutal trading sometimes. I am out of ETFs right now and just playing individual stocks until we have some direction. I will still look at them and show them, but right now, if I trade them it will be for intra-day trades. The eur/usd is forming a new bear flag, and the last one was a real doozy, see keep your eye on that. Let’s get right into the grinder.

The VIX is still moving down, but it is also still forming long tails. Each day it takes out a new support, and until one of them holds this mkt. will rally.

The DOW actually made a new high, by about a quarter, but a new high none-the-less. But note the v divergence into this up move, and I think if we are going to breakout too a real new high, it will take a v pop.Right now this move looks like it is loosing a little steam.

The SPX is still following the bottom of the latest up trend line back up. I suppose we could draw a proper trend line beneath the candles and have an incredibly tight range. Right now it would not shock me to see this re-test the highs, much like the DOW has.

The NAS, the weakest looking chart to AKOT, rallied right back to the new highs, but has not yet taken them out. Again, if we have a nice v pop into some buying, we could take this high out, but without v I think it will hold.

Hey, yesterday I said watch for a breakout of this bull flag, today a breakout of this bull flag. Now we look for follow thru, which, upon looking at the other charts seems like a stretch. But hey, this lead the last down move, maybe it will lead the next up move and maybe this is the sign.

This is really interesting to me. The UUP is still holding strong. Notice the huge v days have both been on up days and the mediocre v today was a small down day. I suspect if this continues to stay strong, eventually this mkt. will break down.

Just had to throw the QQQQ in here today, just as a possible indicator. I will post some others on chart.ly tonight. The RSI and v are still both trending down, although th RSI is turning up a little. The ETF has been sideways across the top bollinger band. I would say this thing is ready to drop.

Another divergence, and one of my favorite type of put trades, the cliff walker off the bottom bollinger band. I would really like this if it would move up into some resistance on the 20 ma.

XTO was big news today with XOM buying them. I just glanced at the chart out of curiosity and noticed that it moved up right into my resistance line and then pulled back. Probably will drop a little before making another run at it.

Let’s throw another X in play. Here is an inverse h&S breakout, but I personally would wait for a small pullback before buying. It could take off, but I still like to buy on pullbacks.

I had an alert trigger on this so I thought I would throw it out there. This one is curious because this was strong move up into the old neckline, normally I like these to hold, but I will watch this one carefully.

In closing: This mkt. is a meat grinder, and I don’t like it. Stay clear of the grinder tube and prosper. AKOT

Weekly video 12-13-2009

As I say in the video, this week was pretty rough. I expected some sideways movement after we touched that support line on the DOW, but instead we actually had a pretty decent up move, and made a recent higher high. Yet, the NASDAQ still looks very toppy and ripe for a turn down. It has been a meat grinder lately, and it might stay that way. But when I look at the dollar strengthening exponentially, I just have a hard time seeing this sideways to up movement holding on. We have a little economic news this week, but that didn’t really move us much at all last week, just pops here and there, and most of that move was prior to any news. Let’s see if we get more of the same.

I shall simply say good luck ( gotta read to the end)

As text-book as yesterday’s supports held, ditto today for resistance. I watched the open rubbing my hands waiting for a spot to short this rally that I was sure was going to fail mightily. I chose the SPY as my vehicle of choice for an intra day trade, and finally when it set up on the 5 min. chart I was in, right around 9:45. I should’ve waited for one more candle, but I was pretty confident of the move. Then we stalled and began to fall. I thought for sure we would fill that gap and then some, even possibly take out yesterday’s support. Much to my chagrin, we did not. In fact at 10:20 we started moving up, for what I thought was a breath and then took out most of the down move, and my small gains with it. We ended up grinding the rest of the day and I ended up a little below even and still in my “day trade”. Why did I stay in? Well we didn’t hit my stop, at 110.95, and man o man these charts still look pretty bearish to this northern chartist. So I made the decision to hold overnight, so I am short several positions that are grinding me out right now. I need a good solid move one way or the other and I am still leaning to the downside.

The reason I went short was due to the wte initial claims, the UUP the VIX and the eur/usd. As this mkt. rallied, these did not react as they should, in fact, they reacted the exact opposite as I would’ve expected. So I did not think this move up had legs, and I was right. But I waited for a decent entry and had to give up a good portion of the move. Well, we have more news tomorrow, and maybe I should be hoping for good news, then the mkt. will drop and I can get out of my shorts with at least some small profit. Quit being a baby AKOT and let’s look at some charts: Okay, but first speaking of babies……

Let’s start with the eur/usd since I was just chatting about it. As this falls, so does the mkt. The top chart is the DOW the bottom is the eur/usd. You can see that the eur/usd has started dropping, yet the DOW has yet to follow suit.

Currently the eur/usd has stalled out on support I have been showing for a few days, the 1.4717. However, now it has formed a bearish wedge / flag. I will be looking for another big burst down out of this wedge.

The VIX 60 min. chart shows this current up trend. We took out the gap and the rallied right back above it at the close. A strong break of this trend line will be sentiment change signal. However, this thing opened the day down .80 and pretty much rallied all day from then one, with one blip.

Here is a very pretty resistance touch and pullback. Never nudged a line on this chart. It is screaming breakout, but to which side is the question. You know my thoughts.

Not as picture perfect as the DOW, but the SPX gaps up, rallies close to resistance and sells off 50% of the move. Looking at just this chart, I would expect a move / gap down tomorrow and a re-test or even break of the red support line. V has been down three days in a row.

I want to point out this divergence in the NASDAQ. It is not brutally apparent but it is there. Again, another great reversal candle on resistance seems to signal reversal, but reversal candles are a dime a dozen right now.

So, with the previous chart in mind, check out the QQQQ. Divergences all over the place, and the current one is the longest baddest of them all. Taken in context with another tombstone doji, perhaps it is time to start dropping. But if you look at 12/1 we had a similar, not quite as bearish candle, and moved sideways 3 days before dropping. I really don’t want that right now, this sideways action is brutal.

I should’ve put this up there with the eur/usd, but I am too lazy to move it right now. As I type this, I just notice that looks like a bullish flag right there. Interesting, and on support. This looks like another pop up signal to me.

Man I got my charts all out of whack tonight. The RUT has made a second double top or a double top squared as I like to call it. Followed by today’s bearish engulfing candle and the RSI finally curling down, we could surely see some selling here. The 20 ma is moving up into the 50 and that is more bullish than bearish, so watch that.

Here is one of my Chart.ly / twitter charts from a couple days ago. It looks like it is working and still playable for a small short trade. Be cautious at support, but if the RSI is still above the 20 line, It may break support.

I thought LIZ may want to test that 200 ma again, and it appears that it may be headed there. I think it would be better if the RSI had come up a little more to give us more room to the downside, but still playable.

This could be affected by retail numbers tomorrow, but it is bouncing off support and the RSI is oversold, so if the numbers are good or okay, this has technical reasons to rally from here. But bad numbers and we could see a break of support and a move to the $32 area.

Overall in up trend, but a hammer followed by a tombstone doji today, resistance at the 20 ma and trend line and the RSI crashing could lead to a test / break of support.

In closing: More econ news tomorrow, and we are now on the new futures contracts with one week before 3f. I don’t think it will take much to push us over the edge ( like wte initial claims numbers today, yeh that worked real great AKOT!) Well I have to share what I truly think, and believe me I put my $$ where my blog is, and this week, other than TOL, it has been a little painful. I will post more charts on Chart.ly / twitter tonight, it is faster, easier and overall more efficient.

So trade well and prosper my friends. And I will leave you with my favorite line from the Star Trek movie: Old Spock to young Spock: “Since my customary farewell would seem oddly self-serving, I shall simply say good luck.”

trends hold….. for now.

Another quick Wednesday night post, as it is late and I just got home. Things went about as expected today, a little stronger move up than I anticipated, but not out of line. Trend lines held, but it looks like the eur/usd is weakening again. Let’s look:

The trend line was breached, but only shortly. Volume was not too impressive, and I expected this line would offer some support, but I do believe it will give way on a big down move day with some v.

The SPX is very similar, breaching this once breached support line before closing above it. I don’t view this one as strong as the DOW trend line, and I could see it easily giving way.

The UUP managed to close above the 22.50 support, although it did dip its toes in the water below. I imagine this level will offer decent support. Today was the lowest v in the last four days, the only down day of those four day, by nearly 50%.

I think this was the catalyst for the UUP move. Support held, but it looks like it is giving way, slowly as expected. Once the dam is broke, I think we will see a pretty decent down move. The one caution sign is that the RSI is moving into the oversold range, and is at the lowest levels since May, where this current rally started.

In closing: We have some real data coming out tomorrow. After the last jobs number, my guess is the mkt. is counting on a much bte initial claims number due to the awesome jobs number. If the number disappoints, this could certainly be the catalyst for a down move. If it is a lot lower than the 455,000 expected, we could see a pretty decent pop. The fact that the number comes out before the open, will help initially to stabilize the mkts. move. News set aside, I would expect a day ( as in today) to three days of small up or sideways movement followed by a big down move to break the trend line. That’s it for tonight folks, many more charts tomorrow. Trade well and prosper. AKOT