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

network news

Well it is official, DOW 11 k has been breached and in case you missed it, it is headlines on the network news. NBC News CBS News

Now let’s think about this a little: This rally has happened on low volume; it has been assumed this was because the 401 k casual crew still has moolah on the sidelines; will they take this news as the “all clear” to get back into the mkt? If so, will the Pros take advantage of this? I assure you that if the first two premises are true, then the last premise will certainly be true. The weekend investor will invest off of what they hear on the news, on CNBC on the weekend radio. They will not do their own research and they DO NOT trade to the downside. The only trade to go up. My guess is that the news will continue to hype the DOW and the recovery and that they will do their best to push it to 12, 000. They want everyone to feel safe, everyone to throw their hard-earned money into the mkt. and push it up until there is no money on the sidelines anymore, and at that time, right then KABOOM. I have assumed this would have happened already, several times, and I was brutally wrong. But I am extremely confident it will happen, I am just not sure when. So until then I will continue to do short-term trades, by minutes, hours, a couple of days, while the only long-term trades I do are not covered in this blog, selling options, that is a whole other category. Anyway, I still think we will have a quick sell off before we get another real push up, but watch v closely, especially going into summer. Typically, If v increases in the summer, something is off and be cautious. Therefore, it would make the most sense for all of this to happen this fall, so that is my long-term thought.

The VIX closed beneath the gray box of support for the first time since 2007, I would say that could definitely be significant. The only caveat here is that it is a reversal candle, and if you look at the VXN it actually rallied quite a bit off the bottom.

This is a weekly of the DJI, or DOW. I put this up to show the breakouts and the next most logical area of strong resistance around 11, 750. I would imagine it would be very, very , very unlikely that we hit that without a significant pullback and I would also think that each next milestone will take longer to achieve, until we reach the top. There we will see a buying frenzy.

The NAS continues to rocket up and is very close to what I think will be the next significant resistance. I thought it would rally up and hit this on the same day the DJI took out 11k, but it did not. That is what I thought would trip the sell off.

This is the SPY. You can see it is achingly, slowly rallying up to near the top of this megaphone pattern. I point out that last time the SPY stayed over-bought for about 9 weeks, with one correction. In this current rally, we have no correction. Also note that the v is decreasing quickly. As you know, I think we are overdue for a correction.

In closing: I will do some stock set ups tonight on Chart.ly and Twitter. But on here, tonight, I wanted to share my long-term thoughts with you. I am open to opposing suggestions, thoughts, or analysis. Trade well and prosper. AKOT

Weekly Stock Market Analysis and Video 4-11-10

Well we got very close to DOW 11,000, maybe close enough to call it good, but I don’t think so. I think we will see another push up from SPX and COMPQ, which will drag the DOW with it. But, I also think that if we get a big one day move above DOW 11k, then I will be looking for a sell off that same day. If it is a gradual move, then I will be leaning to more upside. There are a lot of logical resistance areas nearby on all the indices, so a move in conjunction would be the best possible scenario for a sell off. I don’t think this will be the full change of direction, just another correction. Next week there is economic data every day, with Monday having the least impact and gaining every day peaking Thursday and Friday. On top of that there are some significant financial earnings and GOOG earnings on the docket, plus more. However, lately earnings haven’t moved the mkt. as much as in the past, but if GOOG comes in to the extreme either side, you can bet that will be a mkt. mover. The same holds true for big financial names. Now it’s video time:

Weekly Stock Market Video 4-4-2010

With the moves we saw last week, it appears volatility may be slightly increasing. However, as you will see in the video, there are signs that this may be a contained volatility. We may be stuck in a range for a while, it may be a very big range but a range none-the-less. For a while it appeared the economic news was turning sour, then this last week it once again started to improve a little, or more appropriately, is coming out a little better than expected. However, unemployment is still incredibly high and I still think this mkt. is clearly over bought. It can continue to be like this for quite some time, but the key to me is to be ready to react when we see signs that it is starting to turn. One way to do this I mentioned last week; watch not so much the news, but how the mkt. reacts to the news. Does it consistently sell good news? To me that is a sign that things are changing. Right now it is still rising on “good” news, so it feels like this mkt. still has some buying behind it. Video time:

Strictly Speaking

Well we now know the answer to that question, the mkt. likes the fact that the Fed is going to leave the rates low for an extended period of time. The mkts. didn’t love it, it just liked it about 3/4 of a percent. So now tomorrow pre-open we will have to digest the PPI news, and then crude inventory shortly after the open. I am expecting a directional day tomorrow, but I don’t think we will know that direction until after the open. Looking at most of the charts, the breakout appears to be in tact. In fact, I have come to the realization that if I had just looked at my charts, no news, no outside data, just stuck my head in the sand and poked it out to look at charts, then the buy signals would’ve been clear. I talked about them often over the past few months, but with chagrin and doubt because of my great intellect ( heavy sarcasm). Yet I have always traded trying to keep on eye on the behind the scenes activity, not whats on CNBC, the real news. This past few months that has been a detriment to me and my trading. Now I am mad, let’s look at charts:

As I suggested yesterday, I didn’t trust those top wicks on the VIX. She dropped all right, but then today we get the number one mixed signal, a huge top wick / bottom tail candle with a gap fill. So now this could be ripe for a bounce.

The INDU actually had decent v today on a small up day. That is a slight change of pattern as most v peaks have led to selling. You can see right now it is on the under belly of the bottom channel line and above support. Looking strictly at this chart, I would buy on a breakout above the channel line, or after a re-test of the 10521 line.

The SPX had a very nice breakout today, and I wouldn’t be surprised to see an inside day tomorrow, maybe even a little of a down day. Again, strictly looking at the chart, this looks very strong to me.

The NAS stalled out a bit the last couple of days, but looks poised to continue its move up. It is set up similar to early February, the one big difference, that was after a prolonged down move, this is a prolonged up move. Still, as we all know, pull backs are healthy for prolonged up moves, and we did close above Friday’s open all bullish type of signals.

The XSD triggered an alert and this is either setting up as a double top or breakout. It will depend on what the COMPQ does. It is currently overbought, but can stay that way for a while.

Another alert triggered on ETR. You can see the breakout, but if you look at the RSI it shows over-bought and turning down. However, notice the highlighted sections and you will see the RSI likes to hang out over-bought for a month at a time. So this could be a sign of things to come.

Well finish with one of my favorite things in the whole world, wingys. Love me some buffalo wings. This more than filled gap and rallied to the recent highs. Today it had an inside day with a spin top doji. This can serve as a decent reversal signal.

In closing: Looking strictly at charts, this mkt. looks poised to have another breakout. However, I would like to see a small pullback before I go headlong bullish. The pre-market news should give us a signal of which way to trade. I will be looking for the post open reversal that leads to a primary direction. Trade well and prosper. AKOT

HANS UP!

Well we finally had a real move today, and the indices moved in sync for the first time in days. It was a volatile day with a good amount of movement, great for day traders. My thought is that we will see a very similar type of day tomorrow. And just to tick me off, the mkt. will probably close down about 50 pts. so there is a nice flat week. The retail numbers come out tomorrow, and they too have been better than expected lately, so I will be looking for that to continue. Next week is expiration week which is usually a fun week to trade. Chart time:

As I talked about yesterday, the gap filled and it looked like it was going to give way, but it held. However the VIX managed to stay above yesterday’s open, so this is sideways movement waiting for direction.

The INDU is still not impressive. It is still very sideways and over bought. The high two days ago 10612, today’s 10,611. So this cannot yet be called a breakout, and it may still hold. I guess that means we are still on stand-by.

For the third time since January, the SPX has tested 1150.  Again the RSI is showing over bought, which it can sustain for lengthy periods. The MACD is trending up and the 20 ma is crossing over the 50 ma. All things to watch, and other than the RSI, all pointing to more upside. No breakout or hold yet.

Now as I have shown several times, this is a clear breakout on a short-term up trend line. The next resistance is 2410, a minor resistance. Now I don’t think this will get anywhere near that unless the INDU and SPX breakout.

This is the UUP on a 5 min. chart. You can see the pennant breakout I have been watching and the breakdown of it. You can see the clear down trend in play and there is a lot of support and the way down 23.52 and 23.45 for starters. But for now it is trending down.

HANS is trending up with a bull engulfing candle today. You can see it has had two other ones in this current move which led to small pops. The RSI and MACD are turning down, so keep on eye on them, but I like that it is bouncing off of the 20 ma as well.

In closing: I expect about the same type of movement tomorrow, and maybe even more. However, something to take into consideration is spring break. We are in spring break season and v may start decreasing even more the next two weeks. Sometimes when v decreases volatility increases. Trade well and prosper. AKOT

Alcoa can’t wait for tomorrow….

Earnings have kicked off with a resounding “thud”. AA disappointed the mkt. and now a small degree of fear has crept in. Yet the VIX was down today, because AA came out after the close. The rest of the week we will see some NASDAQ moving earnings that will be topped off with INTC on Thursday and JPM on Friday. I expect both of those to be mkt. movers.

I have to keep it quick tonight because I am so late, and may be late all week. But keep on eye on the earnings and watch how the mkt. moves. Will it sell off on bad news only to fill morning gaps and rally or will it sell off and keep selling. If it is good news, did we do the opposite. These are things I will be watching for to see what the sentiment is and where we may be heading. Often times the mkts. reaction to earnings news can be a signal of things to come, especially early on when we only have a few companies reporting. On to some charts:

The VIX broke waaaayyyyy down today. It looks like it really wants to head straight to that $16 support line. But I think we will see a pop tomorrow, at least initially in the morning.

The DOW , after seeming to be the weaker of the indices, took over the strength role today. I don’t think that will last too long as AA earnings should have a clear impact on the DOW. However, it did breakout today, while the others lagged, perhaps in anticipation of good earnings from AA.

We kind of have a weak hammer formation here, but nothing to write home about. The NAS was very weak today, held up only by the DOW strength. GOOG and AAPL both showed signs of weakness and as the Googapp goes, so goes the NAS.

I have a weird tick on my SPX so I am using the SPY instead today. Note a slight bearish divergence into this up move. These divergences have not been playing out well, but I still like to note them. The SPY is sliding up the top bb, careful not to pierce it. It is still over-bought and still rallying. I think if we see a v pop tomorrow, we see selling.

LNG looks to be breaking out. It took out the 200 on clear strength and v, a strong sign. I would look for a correction, maybe back down to the 200 ma and then some more up movement.

As I said, INTC reports on Thursday so keep an eye on it. It opened right at the open of that high candle from Oct, but failed to break above. Going into earnings, if the consensus is that they will do bte, then I think we keep rising here. If worry sneaks in, then some fast selling.

Check this out, perhaps some foreshadowing on AA. A great doji setup going into e. Maybe somebody knew something. I am curious, was this rally from Dec in anticipation of great e? If so, then I think we will see at least $14 before the move is over.

In closing: I have a lot to do this week to get ready for our trip to Costa Rica this weekend. I will do my best to post at night this week, but no promises. Watch e closely, see what the sentiment is going in , and if it returns after the initial move in the morning. Trade well and prosper. AKOT

Turn up the volume

First some house keeping, I forgot to let you know that once again I will be traveling from Wed. – Fri. Further, during the day I will likely not be able to watch the mkts. as closely as I normally would. I will be in meetings all day, and I will look at my iphone as much as possible, but it just isn’t the same. So I don’t know if I will have my normal two more posts this week or not. Stay tuned!

That leads me to my next trip. At the end of next week, 1/ 15, we will be heading back to Costa Rica for a mini vacation. Last year I was able to post a few times from there, but to be honest I wasn’t as “in tune” as I should have been, so I kind of backed off. We will be traveling a lot this time; much more exploring and looking for some opportunities. So I doubt I will have tons of time for posts, but if I see something, I will make time. I will make sure and tweet all new posts. Perhaps I will throw up some CR pics as tweets, something different eh?

Now on to the business at hand. I really expected us to see a trend forming, and instead we get more of the same, a whole lot of nothing. At least we had some intra-day movement. I have noticed that v is slowly creeping up, but it is really moving on certain sectors. I noted the strength in energy and financials this morning, and usually these two can lead the mkt. Today, nothing led the mkt., it just was. Now last year, we had a very similar set up coming out of Jan. and that led to a big sell off. If we see a white hammer tomorrow, then we will be looking at an eerily similar set up. Now I am all excited! You know how I love mkt. history. Let’s look at some charts:

Well it looks like the VIX wants to get to that $17 area sooner than later. Considering we did not have a huge up day today, this is pretty bearish. It has been trending down like this, and I would expect some follow through to the downside, at least one day.

Normally this would be an okay start of a reversal pattern, but lately I have not been trusting it. All you have to do is to look back at Nov. to see why. It makes sense to take a breather after a day like yesterday. You can see resistance all over the place, bollinger bands, down trend, up trend, and the v is nothing to shout about, but it is slowly moving up. If the VIX drops, like it looks it might, then I could see us taking all the resistance out pretty easily.

The SPX looks much stronger than the DOW or NAS. A decent up down continuing from the previous day’s move. Right now I don’t see a technical reason for it to stall out. The boll bands are opening the skies.

The NAS poked out to a new high but could not hold it. Note how the RSI is still cruising up. Again, normally I would be expecting a reversal to the downside in the next couple of days, but the way things have been lately, I am not sure that is what we will see.

For a single candle, the RUT looks most likely to stall out this current up move. Even the RSI looks to be heading down a little. Keep on eye on this, remember how it was leading the down move, and then led the up move. This may give us a little heads-up.

The UUP held steady; I thought it may drop a little here before bouncing but it was pretty much flat and made a spin top doji which could easily signal a short-term bottom. I didn’t post the chart, but the EUR/USD looks pretty weak to me right now. If it takes out the 200 ma, we will see a big move.

There was a nice bearish divergence with v and the up move here into resistance, but v has been increasing. I will be watching to see if this resistance holds, that will lead to good short trade.

I find this chart intriguing. Huge v spike, with hang man in context. This should be bearish or at least signal a slow down in the up move. But when I looked at the 5 min. chart…

… you can see that, by far, the breadth of v came with the up move into the close. That is a pretty bullish sign to me. So in light of that, I would imagine we see another pop up tomorrow on XLK.

In closing: We are in a battle between history, fundamentals, and TA. Which one will win out? Stay tuned. Trade well and prosper. AKOT

One day does not a trend make, unless it is Jan 1.

Not one day does a trend make, unless it is the first day of January. Should we be surprised by such strong move today? Not necessarily, remember ony 63%  of the time the Jan 1 move was in the same direction as the last trading day of December. Also remember that, without exception in the last 10 years, whatever Jan 1 did a trend was based off of that day, the shortest one being 3 days. What I didn’t check was to see what kind of resistance those mkts. had.

Cash21 has a feeling that we will see some decent jobs numbers on Thursday. If he is right, we could really see a strong up move. I believe this because we have had this current rally with terrible jobs numbers. Sure they have been bte, but they are still awful anyway you slice it. So if we see some confirmation I think it will be plastered all over the place and money will flow into this mkt. That is also a great time for big $$ to look for selling opportunities, after playing the up move of course. On to some charts:

As I said on the video, I think that the $16 – $17 area is a very logical zone for the VIX to end up in. There is very good support at $16. Notice the RSI is making a series of lower highs, and it is in a pretty apparent down range right now. Early on today it seemed oddly strong before finally selling off.

I actually expected quite a bit more v today. Perhaps that guy who ran in through the out-door ( Raspberry Beret, Prince 1986?) in Jersey made all the traders late getting home. Either way there has been a four-day up trend in v and a clear breakout to the upside. If you note that down trending blue line we are near, that is drawn on the highs of the day in a down trend starting with the Oct 07 high. I usually use the bodies, but we have long since smashed through that. I don’t know how strong of resistance this will be, if any, but we need to be aware of it none-the-less.

The NAS gapped up and stayed up. It doesn’t look like much, but percentage wise it did better than the others, sans the RUT. And this after a beauty of a bearish engulfing candle, albeit on low v. I don’t think it is too often that bearish engulfings near top bb are ignored. So if we continue up, like we have in the past, that will be impressive.

The SPX took out the 50% fib and the up trend line.  There is a lot of open sky right here for an up move. But again, I harp with the being oversold for so long. It didn’t gap up, but is definitely showed strength today. I am very surprised that 50% fib did not offer a lot more resistance, I was pretty confident it would.

From the weakest to the strongest. Seasonally this is the heart of strength for the RUT and it is showing it. It sure looked like it was giving up the ghost in Nov, and now we have a pretty clear breakout here. Note that once again the long-term down trend on this w chart. It could certainly offer some resistance.

UUP is in the zone here, the gap zone. There was a nice little v spike with the move and it seemed to have bounced off of the 20 ma. Looking at the past buying v, I would expect to see another spike of buying if we get down to the $22.50 area. But, I expect this gap to offer support, so I think we will likely see some strength in the $22.75 area, and I may be looking to buy this there.

I have been watching this for a while; I like the re-test of the neckline, but it is now caught between the 200 ma and the neckline. A move up with some v and play up, a move down below 200 ma and short to $13.50 area.

You can see a series of lower highs and with shorter time periods. But what really intrigues me is that we have lovely bearish engulfing candle  followed by a bearish harami. This thing really looks like it wants to drop soon to me.

In closing: Based on my short-term research, I think we will see some more up move tomorrow and perhaps the rest of the week. Today may have been the bulk of it, but if we get much bte numbers during the week, it may have been just a taste of what is to come. Yes, I still think this mkt. is clearly overbought, but as I have said before it can stay that way for a while. Trade well and prosper. AKOT

As old as Favre vs. Childress

That means this is getting old. Now I didn’t expect a huge move today, no news, low v, holiday shortened week yada yada yada. More of the same. It makes writing this blog difficult, I will not lie. I mean what do I tell you? The exact same stuff as before? There is one thing that has caught my ear. I have noticed a lot of stuff on the news regarding the retail sales improvement year to year of over 3%. I believe this was based on Mastercard’s advisor’s reports. So right now we have a potential buy the rumor sell the news type of set up. The problem with this is that we should have rallied a bit more today on the news. I realize v will be low all week, but I expect it to be a little better than last week. So tomorrow we have consumer confidence coming out and if it is in-line or wte, I think we see some selling. If it is bte, then we will probably be flat to up a little, unless it is knocked out of the park, which I wouldn’t expect. Now on to some charts:

The VIX looked like it was in rally mode early on, then pretty much sold off finishing with a shaved bottom candle. We almost had a full gap fill and could easily fill that gap tomorrow. I would not be to confident that the gap will offer too much support if it does drop.

Another breakout to another new high, but again on suspect v. It could move higher from here, but I don’t think we can call it a breakout until it is confirmed with v.

We have a pretty decent doji here, and if we gap down and close down that would be a pretty significant top, a near shooting star, a very strong reversal signal.

The NAS looks very similar to the SPX. Just looking at this chart you can see that similar candles were near intermittent tops, and lately have led to more sideways movement.

Now the RUT really looks like it may be topping, but remember we are moving into the strong tie of year for small caps, so I will be watching the RUT closely for the next few weeks. I could easily see a drop back down to that up trend line, but I imagine that 625 line will offer support.

Finally the UUP looks like it might be putting in a bit of a bull flag here. It is showing oversold and the v is waning, so I will be watching for a v spike with some buying to confirm strong move up.

In closing, we have econ news on deck and the first of it is tomorrow. I will post some individual stocks on twitter so be looking for those. Trade well and prosper. AKOT