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.”

What’s happening blud?

Another surprising day to me, I should know by now not to be surprised. The strength amazed me, especially after the wte jobs claims came out. I was pretty confident that we would see a bit of a sell off today, and we did, but we were up 300 at the time so that really doesn’t count. Things really aren’t adding up to me right now. This rally has no economic, chart or mkt. reason to rally, yet onward and upward we go. The best thing we can do is make some great trades on the up moves, which I have NOT been doing. I am just having a hard time trusting the up moves. Let’s see why:

 

So the VIX stalled out twice on our support line and then smacked right through it today. You can see how far it fell and then it rallied like crazy the last few hours of the day, almost going positive several times. For the huge up move we had today, the VIX did not react as it should have. It closed right beneath that support so now it turns to resistance and we will need some conviction to break through it. This last few weeks has been a complete mess. Tomorrow is Friday, and often times Friday’s sell off so that people are not holding positions over the weekend. I would say this hammer candle today would signal a reversal, but look at the last one on the 23rd, the next two days were down, so I am not 100% convinced of that. In a normal mkt., if there ever was or will be again, I would have expected a reversal move to the upside tomorrow. 

The DOW has created a beauty of a reversal pattern, very close to deliberation, which the last two similar times this occurred led to a down move. We did not close above 8k, although we spent a good portion of the day above it, and we sold off hard and fast the last hour of the day, all things to consider for tomorrow. I really really hate to say it again, but I would be cautious of playing up moves.

On the S&P we formed another gap that will have to be dealt with. We popped up above a fib and then retraced. We are in a very confused state right now and it makes for some tricky trading. We still have not made a higher high, so ultimately we are still in a down trend mkt. wide.

This is the most intriguing of the four charts to me. You can clearly see we are overbought, we gapped up huge today, but closed right on the last high, and we sold off hard the latter part of the day. We are above our down trend line which will now act like support if we do fall. Due to the mass consolidation the last 8 days, at the top of an up move, it looks like we are forming almost an abandoned baby type reversal pattern. That being said, I could see us easily making a right shoulder on an inverse h&s pattern. Either scenario requires a down move.

Now onto some plays. I had to throw a couple of possible up moves due to the way the mkt. is reacting. So here is MXIM, it is in an up trend and didn’ tsell of too badly today. I could see it continuing up.

Another possible up move. MCHP is in a strong up pattern with clear support at 21. If it drops near there it is a buy in my eye. 

One of our old stand-bys, HPQ. I think this is a strong sell. It gapped up filled a gap with a gap up, left a huge top wick and closed beneath support. All signals point downward and I would be very very surprised to see it move up without some retracement.

Let’s look at one of my personal emotional stocks, XOM as in the Exxon Valdez Oil Spill. Back when that happened I was a commercial fisherman and that event really affected my life. Check out this chart very similar to HPQ, a gap up filling a gap and hitting a fib. WE should see a move down from here, although they are not as overbought as the others. 

Let us finish with my BLUD, and I think it is set to be losing a lot of it soon. You can see that it looks to be forming a great h&s pattern with all signs pointing downward. I would say there is some support near 22 and 20.50, but I really like the pattern setting up here, and even the big picture is forming a great strong down trend.

In closing: As much as I want to be bullish, I am having a hard time seeing how this can move up even more. Can it? Absolutely, I just can’t see it and I will have to play it intra -day if it does. My DUK puts kept working today and my DRI puts put a whipping on me today, so I am looking for another good move. I saw a lot of shooting stars adn abandoned babies out there on the charts, but I also saw a few more up trends and strong looking charts, so this mkt. is currently mixed. I am still a bear, grrrrroooooowwwwwlllll. AKOT

Finally the bounce we have been waiting for, next a drop?

Well it turned out to be  a very nice day for me. I sold the two long positions I had, and held the short, and went short again near the end of the day. Currently short X 2. Is there a technical reason for me doing this? Not really, I just have been similar plays lately and I will be very surprised if we continue the rally we had today. Sell on the news people, the news was released today and I sold. I am down quite a bit on JPM, but I really think it will turn back down and soon. I think all the financials were over bought today, regardless of what the President does. I think we will see sellers soon, but let’s look at the charts:

Check out the tail on this bad boy. Yet also notice that she rallied right back to rest on support. I really don’t know what to tell you, except that we are in a down trend and I expected a stall out near 41, which we gapped down right through. We have another level of support at 37.50.

You can see we are coming up to resistance at a 50 fib and 20ma, not near as powerful as the 200, but resistance none-the-less. 

The NAS gapped up and now rests on support. Yet the indicators are all low showing that more up is definitely possible. 

I thought I would revisit a couple of plays. This is PNRA, it moved up very little today with this rally. It is against hard resistanc, I would look for it to drop, stall near 200ma and drop some more. 

DRI, we played this down, then up and guess what, It may be down time again. On 200 ma, reversal candle, indicators in the middle and small move up on big mkt. up day. Would not be surprised to see this one drop again. 

 

So typical Wed. night post, short quick. In closing: I am not sure what to expect tomorrow, but I am playing for a pullback from today’s strong rally. We finally had that bounce I have been waiting for all week, and now it may be time to pay the piper with some selling. I am short 2X right now and will probably be so through Friday. I don’t anticipate a huge drop tomorrow, but it could be possible. I may try to go long UYG again in a day or two. I had to sell today to lock in some decent profits and I always worry about a pullback after a move like today. Trade for a reversal and prosper. AKOT

A rally? Really a rally?

The market today was really messed up. All the internals, breadth, winners vs. losers, new highs vs. new lows, etc. They all point down, yet at the end of the day we had a rally? Really, a rally? I thought we would end up down 150 plus the way the day was shaping up, uhh I was wrong. That, my friends is why I have not been playing the indexes too much lately. I am sticking to stocks. Why? Because even when the mkt. does not cooperate, you can still have a good play on the stocks. Well let’s take a look and see if anything makes sense.

Well let’s start with my favorite, the VIX. It tried, all day it tried to get into the box and stay in the box. However, it could not stay up. I did notice that my option prices moved much much more in sync with the mkt. today, and for me that was a good thing. Last week put a hurting on my only open position, but it made a glorious comeback today, partly due to the VIX actually moving up a little. Notice it hit the down trend line perfectly and retreated. Now we need to see if it makes another run at it like I think it might. 

I re-drew some lines on the DOW, finally. So as you can see it is testing the bottom trend line for the first time, allowing to make me an up trend line. Note that it hit the line and pulled back, similar to the VIX. Also note the very low v which I think will continue for the remainder of this week. 

The S&P has broke through its up trend line. Now for it to move up, it will have to break through two lines. I don’t know that, with the meek v we have up coming, it will be able to do that. Therefore, I think it will move down some more.

The NAS closed right on our old support line and beneath our up trend line. It is now trapped! The most logical move, sideways. But looking at the indicators, I think a down move may be imminent. Usually when I see a tail like it had today, I think an up move is coming, but I see a lot of resistance out there right now. Now onto some stocks.

I like the way XOM is setting up. It actually moved up above strong support and sat right on it. Now it is hitting its head on the up trend line. If it breaks above the trend line then play up, if it closes beneath the support line, then play down. 

Here is my current play. I got in puts at the gray circle, so you would think I would be smashing this one out of the park, butttt… the option prices were so messed up last week it actually put a hurting to me. For some reason this stinking fib is holding major support, which I did not expect, so every day is killing my option price. But, the good news, if it breaks support, then I think I will make some $$ on this play very quickly. You may be able to get in yourself if it breaks support here. 

This is MHK, and I just like the way it is sitting on the resistance line. I love the indicators and the op prices are good. Definitely playable. 

This one looks to be a really good play if it moves like I think. Right now the 200ma is serving as strong support but we formed a bearish engulfing candle today. I am looking to see it fail, soon and then it should fall to that 50 fib and possibly the up trend line.  A decent move, but be wary this stock moves fast. The option prices are good too. Oh when it hits the up trend, then I will turn around to play up. Oh did I mention this is GILD. 

Finally my favorite play of the day! This is a new one for us, DRI, Darden Restaurants. Look at this beauty of a chart. A gap up into awesome resistance at the 200ma with a nice red candle and a great gap to fill. The gap will be filled near 25 so that will be my first exit, and if that holds, I will be looking for another run at the 200ma from there. 

There you have it. It appears once again that I am bearish, so trade short and prosper everyone. AKOT

We vix you a merry Christmas, we vix you a merry Christmas….

I can’t stop getting the vix off my mind. It is just acting so odd and I imagine a lot of it has to do with this being expiration week and quadruple witching tomorrow. We could see a bailout of the big 3 anytime, which would probably move the markets, but barring any news, let’s see what the charts say.

I said we were at a critical point and we still are. The markets are not moving as much as I thought they would over the past couple days. A key thing is how the support of the VIX held strong. It has closed near support and I would not be surprised to see it rally up a little. Also, it was down most of the day and then near the last couple hours it started to push up. It is still not normal for the VIX to be down when the market is down, so I would submit the last couple hours of the day are bearish overtones for the overall market. 

The S&P has broke out of its wedge and is now sitting on an up trend line after hitting its head on a fib line. The key is going to be if the trend line holds or not. The RSI is moving into overbought territory. 

The DOW has filled its wedge with a large red candle. This is ready for a breakout, but to which side? Methinks it may be down. Look at the MACD starting to curl down and the RSI moving into the overbought area. 

This, again, is the most interesting to me. A very nice up trending triangle hitting resistance for the sixth time. This too is poised for a breakout move, most of the indicators are getting ready to roll, but not yet. It is hitting the 20 & 50 ma, so a move up will take some serious strength and v.

Now here is the E-mini NQ futures. Note how it has stalled its up move right on some resistance which includes a fib fan line. 

Here is the E-mini SP, it actually broke above its fib, but then retraced. You can see how well this how been living with in its own fib lines, so I put a little more weight on them when I look at this chart. Now will we have a strong enough move to break that up trend line? That remains to be seen. If we do, then I think we go down to at least 825. 

Finally, here is SHLD, yet again. I jumped back in today with a stop at 40.88, tighter than normal, but I don’t want to risk a lot on this trade. I like how the RSI and MACD are lining up and I love that it looks to slide down the down trend line. Well see how it plays out. Watch for a big move tomorrow and prosper. Remember Exp. Friday, get rid of your options. AKOT

How low can she go?

I hope you read last nights post before the mkt. this morning. I was more right then I could have ever imagined. I sold my Q puts today up 400%, and I left $$ on the table. I was proud of myself for waiting until 15 minutes prior to the close, however, as you know, the last 15 minutes was extremely profitable. I almost always use a limit order, but I wasn’t on a broadband, so I used a mkt. order and it cost me a little. But obviously I cannot complain. I did notice the option prices did not move until well after lunch, then they took off. 

Where do we go now? You tell me. Why would we move up? What news is out there that would move us up? Can’t think of any. Neither can I. I am going to wait and see if support holds tomorrow before I trade anything. I have no open positions right now. I was tempted to go long just before the close, but it was not based on anything but a feeling that we sold too much too fast. In a “normal” mkt. that would have probably worked, now, maybe not. I am posting some charts with the resistances I am watching. Basically, use the opening price of 4 days ago, and the low of the same day. If it breaks beneath those, I am short. If it hits those and can’t break them, I may think about going long.  You can click on the charts to get close ups. 

Overall, I have to remain bearish, with playable bounces in the interim. I cannot see a reason for a rally. Honestly, there is nothing out there, nothing on the horizon, not a thing that should cause a rally other than big time buyers thinking stocks are at a value.