Is tomorrow Thursday?

All right so you are thinking man he missed that call today, but did I really? Remember I had my days wrong and yet I was looking for the gap up off of the good jobs numbers. Well that catalyst wasn’t there today, but it still pretty much ran as expected. Instead of a gap up, it gapped down and then rallied right back up to the zero, before selling off. The exact type of move I was looking for today, but in reverse. Now things have changed a bit for tomorrow. It seems like most of the indices are very close to support and it makes sense to me to see a positive move tomorrow, possibly even a big one. But I would expect more of a moderate move up. I still expect the data tomorrow pre-open to be bte, and depending on what happens with the euro and Greece, that should be enough to push this thing up a bit. I would expect some selling off of any big move up intra-day, so it could be one of those really up and down type of days, really hard to trade intra-day. Oh yeh, remember those SPY calls, well I sold them about 30 minutes in for a .40 loss per, manageable. If I had held em longer I would’ve actually got out even to up a little, but believe me I was happy with what I got, after my idiotic error last night.  Chart time:

Well I thought we would see a black candle today, I just didn’t think it would be this far above yesterday’s white candle. I think this wants to drop a little more, maybe to the 22 area.

The SPX formed a spinning top doji today, not the strongest of reversal signals. It also went below the 50 ma today, but did not reach support. Yet I could still see this bouncing a little from here.

You can see the NAS has pretty much the same thing going on here. Still it dropped a little more percentage wise than the SPX. Usually when it moves out of the bollinger bands like this, it tends to make a move back in, at least a little.

The RUT was once again the leader, falling over 1.5%. It stalled out on the bottom bollinger band and very near the 50 ma. This too looks ready for a little bounce here.

FSYS is sitting on support with bullish engulfing candle. Considering the overall mkt. this seems pretty bullish to me. I would use $27.25 as my stop on a long trade.

CAT too found support, but more on a long-term up trend and off the bottom bollinger band. Easy stop on break of the 50 ma.

In closing: There has a been a significant amount of selling lately, and I am looking for some value buyers to step in soon. If the data is good in the morning, and if things quiet down overseas, then tomorrow could be the day. I will be watching the EURO very closely as it has been tipping the hand of the mkt. all 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

The tide turned in the form of a tsunami

Okay so yesterday I said the tide was changing, I didn’t expect a tsunami. Oh well, at least it was plenty tradeable for once. Volatility took off like a Goldman Sachs Executive leaving the senate hearings for a potty break. The indices are on some minor support, and the RUT still has room to go, but in my mind I would be extremely nervous if we have another 100 + point down day with no late day move up. I would not be surprised to see the mkt. open up or down, but I will be surprised if I don’t see some buying sometime tomorrow, and most likely near the end of the day. If it was Friday, I would be looking for selling, but it is not so I am not. If we have another big down day tomorrow, I think this mkt. may be in for a sustained big drop. Now some quick charts:

The VIX rallied right back up above the 200 ma, over 5 points in one day. That is a big move, even for the VIX. Now the 200 ma has not acted as support lately, but I don’t think it will give up this whole move in one day. I will be looking for a small pullback, as some sanity moves back in and value buyers scoop up some stocks. Then I think I will be watching for another pop.

The INDU took out the 20 ma in one swoop. You can see I have a lot of “minor” support beneath, and it is sitting on minor support from the recent twice tested lows. I think if this moves above the 20 ma tomorrow, it will likely close above the 20 ma tomorrow.

The SPX also took out the 20 ma without looking back. It too found support from the 4/19 lows. I don’t expect this to be strong support, and if it breaks beneath it and holds for a bit tomorrow, I will be looking for a lot more downside, with a few minor areas of support along the way.

The COMPQ landed smack dab on the 20 ma. This goes to show how much stronger it was than the “real” mkt. It rallied hard of the last test of the 20 ma, however last time the INDU and SPX were still above, so I am not sure it will be able to hold this time. The 2400 area looks like the strongest area of support to me.

The RUT was so much more over-bought than all the others that it still has a ways to go to get to the 20 ma. That being said, I don’t expect it to serve as support if the INDU and SPX continue to drop.

In closing: Like I said yesterday, the tide seems to be turning, and the big boys seem to be leading the sell off, this is dangerous for the whole mkt. and great for those of us who love puts n shorts. Watch the minor supports for good entries long and short, and keep an eye on the NAS to see if it can go against the grain. Trade well and prosper. AKOT

The indices are flopping

So today the tides have turned a bit, just a tiny bit. Instead of the INDU being pulled up by the NAS, it was the only one that managed to stay green today. So now what we have to watch for is to see if this is the tide turning and getting ready for the pullback. I was expecting a down Monday and Tuesday this week, and the re-assessing after the FOMC on Wednesday. I am still leaning towards a down Tuesday, especially if it gaps up a little. Usually mixed mkt. days like this are difficult to trade, but I have a feeling it will give us a nice entry point or two. Chart time:

The thing I noticed about the VIX is that it has had two long-legged days in a row with an up gap in between. That tells me that the volatility is increasing throughout the day and technically speaking, there is no reason for this rally to slow down.

The INDU looks to be topping here with a big wick today, but if you look back a few short weeks ago, it teased us with a similar set-up. In fact the past set up was even better with resistance, this one is after a breakout and therefore we should be looking to go long on a pullback to support.

The SPX held up on the top resistance of this long-term channel / pennant. It looks to be poised to re-test the 20 ma again, but watch for breakouts, and the COMPQ looks very similar to this.

ALL is in a bit of a flag and although it had a bearish engulfing candle today, I wouldn’t be surprised to see a breakout to the upside.

AMZN has found some support along with a bullish engulfing candle, so I am looking for a move up from here.

XLU has been in an up trend, but it is now back at the top and I am looking for a drop.

In closing: I don’t expect a huge move tomorrow, unless something leaks regarding the FOMC on Wed. , but I am still leaning to the down side. Watch the indices to see if they are truly turning over. Trade well and prosper. AKOT

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

This market needs a little Proactive

Some late charts tonight as I just finished watching the game and my voice is gone, my head hurts and my heart is still beating hard. So not a lot of commentary tonight. One point I would like to make is that the mkt. really didn’t react to the bte news, it rallied a bit but not off the news. Keep watching that.

The VIX is still holding out, although it was down today it didn’t give up the ghost. Look for a move beneath Friday’s low for a big move up in the mkt.

I think it is only a matter of time before we take out DOW 11,000. I think we will see it this week as it continues to clearly trend to the upside. Note the declining v for two days in a row.

The SPX made another new high, and although still clearly over bought, it is just hanging out there and can for months.

The NAS is in a very tight range here. I think the trade is easy, a break out or break down with a second day follow through will be short-term direction. I also think this will lead the mkt. whichever way it goes.

The RUT is in breakout city. Note that the RSI and MACD are trending down in the midst of this rally, so this rally may be dying slowly, but for now it continues to rise with new highs.

One more chart for tonight, the EUR/USD. If you recall I said this thing looked like it was ready to break down again, and it did. To me it looks like it has quite a ways to go. I think we will see new short-term lows. Notes the lower high on the RSI.

In closing: I think DOW 11k is a forgone conclusion. But, it may be one of those big up moves that leaves a wick and pulls back right away. It also may signal a great place for this mkt. to take a breather from its breakouts. I will post a bunch of charts on twitter tonight, cuz I don’t think I will have time tomorrow night. Trade well and prosper. AKOT

I’m your huckleberry.

Finally some real volatility, and if the VIX has anything to say about it, this may just be the beginning. Today’s early move was credited to the employment numbers coming in better than expected, which is certainly a mkt. mover. However, when you see good news being sold, or bad news being bought, that usually means that sentiment is not in-line with the move. Even further, after the close there was a big move down in the futures, and they haven’t bounced back.

The VIX has shown signs of strengthening lately, but today it closed strong for the first time in a while. It appears poised to breakout to the top side of the gray range, and the indicators are slowly turning up. This move up looks like it may continue, maybe not straight up, but trending that way.

The DOW has a clear tombstone doji, a reversal candle, but v is suspect here not giving clear confirmation.

The SPX IS down for second day in a row. If that big top wick wasn’t there today this would be the start of a bull flag formation. But taking the wick into consideration, and the crossing MACD, I think this thing still looks short-term bearish.

The NAS has formed some pretty clear support. In fact, I think if it breaks it, it may be one of those big down days or gaps down right into that up trend line and 20 ma.

This is the ES and you can see what I am pointing out is the similarity between candle formations. I like the v with today’s candle, and it is the opposite of the bottom candle. This is the most bearish looking of the indice charts to me.

HITK looks to be forming a head and shoulders formation here. It will likely find support on the bottom trend line, but I will be looking for it to break to the downside from there.

Existing home sales were good, new home sales were worse than expected. I think the XHB may be poised to pay for that news.

In closing: Tomorrow there is more news, the most important will be the Mich. sentiment numbers due out after the open. I will keenly watching how the mkt. reacts to this news. Will it be wte or bte and what is the follow through move? I think this will give us a hint of the direction we should look for going into the weekend. ( I have written this whole post with my left hand and a baby in my lap, so it is shorter than usual, but you get the idea. If there are any typos it is due to little Jude’s toes on my keyboard). Trade well and prosper. AKOT

Synchronized Signals

What a way to kick off the week. I could not see a direction for most of the morning, the breadth, internals, everything was up and down, but that didn’t last too long. Now the NAS already blew last week’s highs out of the water and was the early leader last week. I was looking for that big down day, and now, if we move up a little more, I will instead be looking for some consolidation, then more rally. I really want to be flexible and be able to grab some of these great moves. I missed out on today because I wasn’t ready and wasn’t by my computer when the move went off. You will note I added the MACD to tonight’s charts. I use the MACD a lot, for confirmation and direction, but I rarely put it on my posted charts. I do this just to keep the charts clean and easy to read. If you guys don’t like it, let me know and I will clean them back up, but let’s try it for a bit. On to the charts:

As I talked about yesterday, the bottom of that gap would be a logical place for the VIX to find support, and it did. The next most logical place is near 21.20, the previous low and the 50 ma. We could see a hold / bounce here, but if not we will likely hold in the 21.20 area.

One reason I put the MACD w/ histogram on these charts is to show how I look for confirmations. Check out this beautiful move in unison, its like synchronized swimming. Usually this will lead to at least a little upside momentum. However, at the blue arrow is some very obvious resistance, and I think it will be pretty decent resistance. If we take that out, I think we head towards 11,000.

You can see the same thing on the SPX. I took the liberty of pointing out some of these unison moves and you can see the corresponding SPX move. I see decent resistance at 1105.

Originally I thought this was a cliff walker; moving sideways off the bottom bollinger band. But then it took out the top of that big black candle and is nearing another resistance line. This looks strong, very strong, but strong moves often have a pause and that is what I am watching for.

The RUT looks even more impressive than the NAS. It has already taken out the 20, 50 and previous high. I would be watching for a buying opportunity on any small pullback.

The UUP really gave up the ghost today on light v. It makes sense for this to drop to the 200 ma and hold. I think when we see another big v day, we see another big up day.

I still like BWLD to head to the $40 area. It was weak on a very strong day today, and all the indicators are still signaling a drop. I do think it needs to move sideways or up slightly for a day or two before falling more.

I like this simple chart. Strong up move on earnings, gap down move up a little more the next day, then a bearish engulfing today. I think this is headed to $7.

In closing: The RUT and NAS look very strong, and the SPX and INDU are very near looking strong. I think the key is whether the SPX will take out its previous high. If it does not, then I think it will drag the others down with it. If it does, then I am going long. Trade well and prosper. AKOT

Hitting some trend lines

Well so much for another blah day. We had a real move today, with okay v, but not enough to breakdown, not enough to take out support. We have crude & wholesale inventories tomorrow and that is it. So unless another politician wants to speak, healthcare gets passed, we send more troops to atwarastahn, Dubai strikes gold and oil on the same day, or some other news item pops up, I will be expecting a bounce in the morning. Simply a relief bounce due to the abundance of selling today. Now, I don’t know if we will finish up, as every time I looked at my 10 or 15 min. charts on the ES, all the big v moves were down moves. That tells me there are more sellers than buyers in these recent middle v days. We had another strong day for the UUP and VIX, and the EUR/ USD is currently sitting on very key support, IMHO.

The VIX just keeps jumping levels of past support. It did it again today, and note that it finished much closer to the high of the day than the low of the day. I think if we see a parabolic jump up, say like the $5 move in Nov., that will signal a short-term top. However, if we keep just making small jumps up, we could go on for a while.

The DOW hit a key support line in this short-term up trend. However, although this may stall us out or even cause a little bounce up, I think the red support is the eventual target.

The SPX has hit similar support, and pulled back from it. I think when we do take this support out, and I think we will, it will be with a big down move like I was talking about yesterday. Today was big, but not big enough to take this out. It may not happen tomorrow, but Thursday or Friday sure would make sense.

We are kind of just hanging out there on the NAS. I thought we make a move to fill the gap today, but we didn’t even get close. I still think that move is coming, but this mkt. has been extremely indecisive the last couple of days.

The UUP keeps going up and away. It hit head first into some resistance from previous support today. I don’t know if it has enough fuel to shoot this or not. I was just looking at the EUR/USD and it has rallied a bit to get above that level I talked about in the intro.

FCEL, moved back up into the 200 ma with a doji harami. Note however that it did take out the top of this long wedge and that it broke above this short-term down trend, so it is not optimal. But still, these re-tests are my favorite trades and I will be watching this one.

The XLB looks pretty bearish still. You can see it made several of this megaphone type patterns in the pat before breaking down, at least a little. This current move is much more pronounced and could lead to a bigger move. I will be watching closely this current test of support.

Finally a little CCJ. This one took out two support levels, the 20 ma and found some support on the 50 ma, all on good v. That 50 ma may stall this enough for us to get short, or it may just keep on dropping to the $27.50 area.

In closing: Most signs are still pointing to more selling to come. However, as always, unexpected and expected news can and will move this mkt. If I see a huge very fast move either direction off news, I usually watch a 5 min. chart, wait for a reversal candle, and play opposite that move for a quick trade. It works way more often than not, as long as you are willing to get out as soon as your reversal candle gets smoked. I will throw some more charts up on twitter and stocktwits. Trade well and prosper. AKOT

A bounce makes sense

We had a whole lot of nothing going on today. That really isn’t true, a savvy day trader certainly could have banked some buck today, but I don’t have the time or inclination for that type of trading on a regular basis. Once in a while is fine, just not every day. I decided to keep my SPY calls thinking that we set up some nice up move signs today, and also thinking we may move up into the FOMC un-announcement. Personally, I think unless there is an interest rate change, we put waaaayyyy tooo much emphasis on the “wording”. In case you haven’t heard they re-use most of the statement. Everyone just wants that one or two words. IMHO, I think we still have another shoe to drop, a big shoe, and I think a lot of people are going to get hurt when it falls, and if I am right, then I will be prepared to strive mightily. If I am wrong, then I will do my best to keep trading the mkt. as it gives what it shall.

In the past, I have usually played the Fed as a counter play, almost every time. I wait for the initial over reaction, wait ( unlike Monday) for a nice looking entry point on the 5 minute chart, then go against the move. If I don’t see that counter forming very soon, then I look to go with the move because I think it is going to be a big one. Now, I don’t know if that will work tomorrow since this really is an un-announcement, but I will be watching for it. What was that? Enough gabbing, you want some charts? Well, fine then:

The VIX did break through yesterday’s support, and my target for the VIX is in the 25 area. Now, if the megaphone pattern keeps playing out, then we are headed to the 20 area and this mkt. will rise hard, but I don’t think that is the case.

I cleaned up the charts just for ease of viewing. Now, the DOW continues to look the most bullish long-term. The recent up trend is still in tact, there is significant support, and to make a h&s pattern here we would need to drop to the 9400 area, a long ways from here. If we break above 9900, we are back in rally mode, but I think it will hold this time, not because of the DOW , but because of everything else. Perhaps this is telling us that when this mkt. falls, the DOW stocks will be some of the best ones to be in.

The SPX really looks poised for a bounce here, hence me staying long SPY. Note that we are sitting on the bbb, and that most often predicates an up move of some type. I know that we have the 50 and 20 mas above, but we have blown right through them in the past and I think we do the same here. I also like that the RSI is so low, that give it room to move up.

This looks even more bullish to me right here, so why the heck am I in the SPY? Well at the time it was the right decision. In fact, I probably should have went long the QQQQ as well today, with an easy stop at this NAS support. This could be the beginning of a beautiful shorting opportunity that I am afraid everyone will be chortling about a few weeks from now. We could see the old h&s off a bounce from here after this nice doji followed by a huge bullish engulfing today. The only thing to note is that it stopped right at my resistance line, so perhaps this will be strong resistance. If we have any good pre-market news, a gap above would be fitting.

Again, much of the same on the SPY, on decent support but not as good as the NAS support.

Morning tweet, nice earnings, very nice range trading since August, looking for more of the same following this bullish engulfing near support.

Crucial point, mixed earnings today, beat by .07 but guided lower. It looks to me like the buyers are winning out and this support will hold. It will also make a great stop, in case the bears take over, either way there is a clear delineation.

A couple of the AG stocks looked pretty good to me, this is one of them. POT is testing the 200 ma and 4/5 times it has held. Further, the RSI is making higher lows and we had a bullish engulfing today. Yes there is resistance above, but I would classify it as minor. Given enough time before the whole mkt. starts moving back down, I could see us hitting 105 again.

AGU is set up for a bounce but on slightly different terms. It has earnings tomorrow morning, and I think if they follow suit we could see a very nice up move tomorrow with follow through. If that support gives way, the way I would trade it is wait for a retest then short, but that’s just me.

Let’s finish with some GDX. This was very, very strong today. The v was huge, the RSI is setting up great for an up move and I think $51 is there to be taken.

In closing: If you noticed, I put a lot of up charts on the blog today, because that is what I am seeing. I think we need some more up before we see more down. Of course the news the rest of the week can pretty much trash that theory and we could just drop like a rock, but you know what I think. I will be leaning a little more to the long side, just for the short-term. AKOT