And the ride continues. We haven’t even got to the big news of the week yet, that should be coming on Friday. The problem with news and big moves like we are just now starting to see is that quite often they can lead to ye olde buy the rumor sell the news trade. So I will be watching closely as we head into Thursday / Friday. If this mkt. continues to move up like this, then the good news will more than likely be baked in, and my trade will most likely be a short, no matter what the news. However, that being said, I am leaning towards a down day tomorrow. I cannot really explain all the reasons why, but it is a combination of charts, news and experience. I will not trade strictly on this, I will be watching the first 15-20 minutes very closely to see how the day is lining up, and that will be my guide. Chart time:
I was expecting a pull back on the VIX, and we got it. Notice that it closed over half way above yesterday’s candle, and even rallied a bit from the bottom. This is one reason I think we may see some more down tomorrow. I think today’s low will hold, and may not even be tested. But that will be something to watch, and if it gives then obviously I will change my tune to a long trade day.
There are a couple things to point out in the INDU. I have put the indicators back on this chart to show you that the SRSI has offered support in the past. If it gives way, then I will be looking for a serious pullback, much like the one early in the year. Also notice the v, the two big up days are the two lowest v days. Finally, the candles are in another range, and the 20 ma has become inefficient support at best.
The SPX is still in fat wedgie. Now normally I would be looking for a breakout to the upside from here, but you can see the down trend appears to be the stronger move. Also if we take in account the v on the INDU, then we know there is not near the $$ behind the buying as there is behind the selling.
The NAS has been honoring this current down trend, and continued to do so today. I think that is a good indicator to watch to confirm more downside. I will be looking for sell-offs, followed by up days into that down trend. If they start falling away from that line, it is more bearish. If it closes above it, then I will consider going long in NAS stocks. Also watch the support on the RSI and note that the MACD is trending down. There are a lot of small bearish signals here, nothing huge but a lot of small pieces of a bear puzzle.
Speaking of the NAS, here is AAPL. It is in a bit of wedge, and is virtually mimicking the NAS, or should I say the NAS is mimicking it. Again, normally I would look for a breakout to the upside here. But yesterday was bearish engulfing candle, and today a bearish harami, again pieces of a bearish puzzle, so I am leaning to the downside here.
Another wedge here on BEN, a post earnings wedge. I am leaning to the upside here, but if the mkt. tanks, this too will follow.
In closing: This week is setting up to be a an intra-day traders dream, and I really think Thurs/ Fri will be two very trade worthy days. I will be playing the ES, some of the individual stocks I have posted here and a couple of the indices, that is my game plan for this week. Trade well and prosper. AKOT
This mkt. continues to rise and continues to defy my call for a pullback. So despite the continued rise, there are still buyers piling it on, and they are making money, and it is easy. But it will not continue for ever. Eventually the big money will start shorting this thing a little, and going into summer is a good a time as any. I am still looking for 12k on the DOW, and I think a multi- day weakness will open the door for some more buyers to help push the DOW that way. As I say in the video, the volume and open interest in the VIX is pretty huge, especially in the May 35/45 and the June 35. The volume is such that it most likely involves some of the big money and it is pointing to a marked increase in the VIX over the next couple of months. Now on to the video:
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:
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:
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
Yes I am back in America, back in Alaska, and back in the mkt. Sorry for the long absence, but man between the beach, surfing, exploring, my wife and friends, I just could not find time to give the mkt. the justice it demands. So I decided not to blog until I got my head back into the game. My head is freezing cold, but I am back in the game. I actually spent some time with a couple traders in Costa Rica and learned a lot of new stuff. I will be incorporating it just as soon as I run some tests etc., but I am very excited.
Things are looking a little different this time, similar to the move this past July. A lot more volatility, and we took out a previous low, both of which occurred in July, and you know how that worked out. Back then I thought that was signaling a top, and I think the same now, but I am much more cautious this time. Now onto this week’s video.
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
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.”
Quick post tonight as I have been a gymnastic / basketball / basketball driver all night. I certainly did not anticipate a 200 point up move today, and felt some pain with those Q puts that I could not sell on Friday. The weak dollar has really moved this mkt. up and the dollar carry trade seems to be forming a nice bubble of its own. I said in the video that I could see us moving up more, but we broke through some resistance that I thought would hold, and as my buddy Cash21 points out, a lot of tops end with a parabolic move. We have yet to see that. Some quick charts for now:
I have been saying the DOW was the strongest index, and man did it prove its point today. This was a solid breakout, with more v than the last 4 days, and I think that is key. If v had been lower, I would’ve been looking to fade this rally, and I still might based on the morning’s action. But this is definitely a more bullish signal and I could easily see us moving up to the top of this channel.
You can read my note on this chart and see that we have a similar type of move in play here. The big difference is that we took out our up trend line and are now beneath it. A move up to last month’s high will likely be a good place for a quick short, if you can find and entry point.
The weakest of the three still has a possibility of the head and shoulders pattern forming. Further we now have a bottom gap to fill, but we did take out the up trend line on this up 2% day. 2175 seems to make a great target for a stall out from here.
Yes the UUP was down today, but let’s look at the v, down as well. Further, look closely and what do you see? A bottom tail on previous support. This could be the beginning signs of a bottom. Obviously if we take out today’s lows, then we are heading south.
Last chart of the night on this quick post, GDX. I think we are near a top here, and we have just seen an exhaustion gap. We could move a little higher, but soon we will be heading down.
In closing: In light of the lack of economic news, I thought we may grind higher the first three days of this week; wrong! So now it appears there are some logical resistance areas very close by and I will be surprised if they do not cause a least a stall or pause in this up move. Trade well and prosper. AKOT
Well Friday was certainly not what I expected. It felt like during the week that perhaps we would roll over much earlier than I had anticipated; but now it feels like we might move up some more. Hence I thought Friday might just be that day. As Yoda would say ” conflicted am I”. I still think we are in for a nice down move , and it may begin this week, but the key will be when we hit those shoulder resistance lines and whether they hold or give way. It looks to me like most of them are leaning to acting as resistance.
We don’t have news like we did last week, just Thursday and Friday so it will be earnings and surprise news that will move us. I am still convinced that the v shows us that the institutional sellers have not yet stepped in, and when they do I think we will see a sell off like we did last Friday. So keep on eye on the VIX, all the indexes and the UUP, which had some massive buying this week. I am seeing weakness in AAPL and RIMM two of the NASDAQ big boys, so I may continue to use the QQQQ as my trading venue. Now onto this week’s video:
Pieces of a bearish puzzle
Tags: AAPL, apple, ben, compq, DOW, indu, Nasdaq, s&p 500, spx, Technical Analysis, trades, vix
And the ride continues. We haven’t even got to the big news of the week yet, that should be coming on Friday. The problem with news and big moves like we are just now starting to see is that quite often they can lead to ye olde buy the rumor sell the news trade. So I will be watching closely as we head into Thursday / Friday. If this mkt. continues to move up like this, then the good news will more than likely be baked in, and my trade will most likely be a short, no matter what the news. However, that being said, I am leaning towards a down day tomorrow. I cannot really explain all the reasons why, but it is a combination of charts, news and experience. I will not trade strictly on this, I will be watching the first 15-20 minutes very closely to see how the day is lining up, and that will be my guide. Chart time:
I was expecting a pull back on the VIX, and we got it. Notice that it closed over half way above yesterday’s candle, and even rallied a bit from the bottom. This is one reason I think we may see some more down tomorrow. I think today’s low will hold, and may not even be tested. But that will be something to watch, and if it gives then obviously I will change my tune to a long trade day.
There are a couple things to point out in the INDU. I have put the indicators back on this chart to show you that the SRSI has offered support in the past. If it gives way, then I will be looking for a serious pullback, much like the one early in the year. Also notice the v, the two big up days are the two lowest v days. Finally, the candles are in another range, and the 20 ma has become inefficient support at best.
The SPX is still in fat wedgie. Now normally I would be looking for a breakout to the upside from here, but you can see the down trend appears to be the stronger move. Also if we take in account the v on the INDU, then we know there is not near the $$ behind the buying as there is behind the selling.
The NAS has been honoring this current down trend, and continued to do so today. I think that is a good indicator to watch to confirm more downside. I will be looking for sell-offs, followed by up days into that down trend. If they start falling away from that line, it is more bearish. If it closes above it, then I will consider going long in NAS stocks. Also watch the support on the RSI and note that the MACD is trending down. There are a lot of small bearish signals here, nothing huge but a lot of small pieces of a bear puzzle.
Speaking of the NAS, here is AAPL. It is in a bit of wedge, and is virtually mimicking the NAS, or should I say the NAS is mimicking it. Again, normally I would look for a breakout to the upside here. But yesterday was bearish engulfing candle, and today a bearish harami, again pieces of a bearish puzzle, so I am leaning to the downside here.
Another wedge here on BEN, a post earnings wedge. I am leaning to the upside here, but if the mkt. tanks, this too will follow.
In closing: This week is setting up to be a an intra-day traders dream, and I really think Thurs/ Fri will be two very trade worthy days. I will be playing the ES, some of the individual stocks I have posted here and a couple of the indices, that is my game plan for this week. Trade well and prosper. AKOT