So much for that 8/11 down days bunk!

Well I guess now we can say the mkt. has been down 8/12 years instead of 8/11. Not quite as impressive. Obviously this, like most rallies is a news driven rally. I think the barrage of the “recession is over” talk is knocking the common sense out of some people. But hey, when there is so much $$ on the sidelines, it has to go somewhere.

I have a thought on this cash for cars: If, like has been reported, one billion dollars of our money has already been spent at $3500-$4500 a pop, that means there was 220,000-280,000 units sold. So that means at least 220,000 people bought a NEW car this month. New cars come with car payments. New cars mean that they won’t be buying new cars any time soon. New cars mean increased insurance. I submit that new cars sales this month and Quarter will be through the roof. But I also submit that this will take its toll on the remainder of the year, especially if they we give this program another two billion into it. Oh, btw, who is trading a car worth less than $3500 for a new $30,000 car? Who has a car like that laying around to trade in? Ask yourself that. Then ask yourself, should that person have $300-$500 a month car payment? Just a thought.  Now onto some charts:

The VIX held above the long term trend-line from yesterday’s video. That line, IMHO, is key. If it hold, eventually this mkt. will fall, if it gives, we could keep on rallying.

This is a monthly chart of the DOW. Check out the extremely evident v divergence. You can see in June that this mkt. sure looked like it had topped to me. Especially beneath the 200 ma with that great spin top doji. Without the v, this looks like it is in a strong up trend, but with v decreasing so substantially into the up move, that usually signals the end is near.

The S&P on the monthly. Very similar. Notice the steepness of the up move. These kind of moves usually correct hard, yet we continue to rally. Now I have said many times I show the DOW chart because that is what America hears about. We all know the S&P and RUT are much better true indicators of the mkt. Notice on here we are still beneath the 200 ma. and note that it lines up perfectly with a fib line. So I could see $1013 being a great spot for a reversal.

I have two charts of the NASDAQ tonight. This one is a monthly chart. The first one shows the fib retracement lines, on a monthly chart using the wicks for highs and lows. Note with the wicks, our next fib resistance will be around the 2060 level. I would expect significant resistance there.

The second chart is a monthly with the fibs on the candle bodies. This one shows that we are at resistance right now. This one is also very close to my resistance line which we closed above today, the first day of the month. Sometimes I use the bodies, sometimes I use the wicks. It just depends on how they line up. Usually, on any chart more than daily candles I use the wicks. So if that holds true, we could easily move up a little more from here. Now onto some stocks:

STAR recently beat earnings and then was downgraded and hence the drop. I lik ethe move back up to retest the support line. This is usually a spot I like to short.

This is a pretty symetrical triangle on JNPR. This is screaming for a breakout, to which side, well that’s the question. I am leaning to the upside.

I like stocks that follow fibs, JBLU follows fibs. You can see several of the spots where fibs offered support or resistance. If it continues to follow, we should see a down move from here to $4.75. Also note that it is making lower highs. May be able to play this down, down, down for a hard landing.

I keep posting BGG because it just looks so stinking playable. I have played it and I am willing to do it again. But first I need some downward movement to confirm that it is heading in that direction. Right now it is consoladating which means it could be poising for a breakout to the upside. If I see it move to the $17 area I will be shorting.

ADSK looks like it has formed a nice little bull flag. I expect a pop to the upside very soon.  Watch for e August 13.

Finally a little descending wedge action on BKE. I would expect this to move down a little from here.

In closing: I still think this mkt. is way over bought. I still think we will fall hard when we fall. I still think that the NAS will lead the way. I still think that there is a lot more bad news to come now that the recession is over (sarcasm). Finally, I still think I better hurry and go trade my clunker in for some free govt. cash! (more sarcasm) Trade well and prosper. AKOT

still stinks.

I only have time for a couple quick charts tonight. Sorry, late night. 

I have some concerns. Remember yesterday when the VIX actually rallied at the end of the day while the mkt. rallied? Well that don’t make no sense, as my friend G. W. would say. So onto today, the mkt. tanks and the VIX moves down, huh? Something still smells fishy and I am not comfortable yet telling you what it is. I don’t know what it is, but it ain’t right so I would be cautious if I were you.

Here is the DOW down nearly 1.5%, while the VIX was down nearly .5%. Two key points for me here, 8k and 8275. 8 is obvious support and round number, 8275 is the last high, watch both of em. Right now we are on the top bb, overbought, and I expect some more down move before we see another rally. The one factor that would have me doubt that theory is that the v was extremely low today. That does not show confidence in the selling. If it is low tomorrow, we should see a similar day.

Close up of SP. Note we are near the top bb, overbought, but right above support. I would not be shocked to see 1-2 more down days then another bump up. We have several support lines and a resistance line close by as well. I was hoping to short this today, but it did not set up the way I like so I stayed out. I tried to get into one play today, but I missed my entry point:

AMGN looked to be setting up a great short, and I was right, but alas I missed my entry point and unless it rallies in the morning tomorrow, I will have to pass on it for now. 

In closing: Me thinks something fishy is a foot, wait for the smell to clear and then trade to prosper. AKOT

Another one bites the dust

Another Exp. Friday has come and gone, and now we know it will take the mm a few days to get all the option prices ironed out. If you don’t believe me, just watch em for the next few days. I am thinking short again! I know, I know, I just can’t see going long yet. It is definitely possible, and if we do then I will try and trade that way, but looking at the charts, I just don’t see it. Further, there is no economic or political reason for it, no matter what is being said. Read betweeen the lines, we are in worse shape than ever and it appears to be getting worse. Now that I have cheered you up, please for you to enjoy, this week’s video. AKOT

Give me another neck brace!

Holy whipsaw batman! If you follow me on twitter you would see that right before the close I bought some puts on SPY. Crazy? Probably, but I have a feeling, and my feeling comes from years of watching the mkt. I may be way off, it may rise right back up through 8k tomorrow and I will be taken to the woodshed and beaten for my ignorance, we shall see. Here is my thought, you see I was thinking we may have a little rally today, but after that huge down move and the v and all the things I twittered about, I thought it was going to be a huge down day again, with a small rally tomorrow. Instead, I think we had Friday’s rally today. I think this because we are coming up on a 3 day weekend, and no it is not Valentine’s Day for all you Romeos out there, it is President’s Day on Monday. 

So ask yourself, let’s say you had millions of dollars invested in this market right now, to either side up or down, would you trust this mkt. over a 3 day weekend leading into exp. week? I wouldn’t, I would be pulling as much of my $$ out as I could, especially after we had a big up day like today. Now you actually may have some profit to keep. So that is why I think we may have a big down day tomorrow. I reiterate, I may be incorrect and everyone may think the world is rosy and this new mortgage plan is going to save us all, if so then the ignorant will be leading us up and next week will be a slaughter. Those are the ramblings of a madmen my friends, now onto the charts:

Hmmm, what shall we start with, the mighty VIX? OK. Check this out, it has stopped right on our support, and I mean right on it. If you recall, so far each time it has moved up from here pretty strong. I will be looking for a move up from here.

Now this looks more bullish than bearish. The DOW closed on support, it tried to get down below it but that rally at the end of the day killed it. Support held and that is bullish, v a little low though and I expect a pretty big v day tomorrow.

DOW on a 30 min. chart. Look at the first candle of the day and the last two. OUCH!!! But, again this is hitting its head right on resistance so this is a little bearish after all. The morning v was higher the the eod v.

You can see the S&P formed a nice hanging man hanging right on the up trend line. We must close beneath this line to be truly bearish, and I thought today was the day, albeit early. 

Same thing on 30 min. chart. That eod move was very very impressive and very intimidating to bears like me. I don’t have the line drawn, but you can see we have come up against resistance and quickly. 

Here is the SPY on a 30 chart. That light blue line it pierced, is the daily pivot. I use pivots to look for trades within a day, and when it hit that line, that is when I bought some puts. Right now, I have lost about 5% on that play. I will hold through the first hour tomorrow and re-assess. You can see the V was higher in the morning than the afternoon.

We will finish with the thorn in my side, the NAS. Why a thorn? Well I have been trying to short the Qs because I thought when they turned, they would turn hard. Well they did 2 days ago, since then they have again been the strength. It is putting a good whipping to me and tomorrow is D day.You can clearly see it is in a wedge and should be heading to the bottom of the wedge and stall. 

In closing: I think, and this is purely my speculation, the inner workings of my mind, that tomorrow could be a significant down day. I know that is not what the pundits are saying, but I am going off my experience, all though it pales in comparison to theirs, and my explanation from the start of this post. If we rally, I will try to sell quickly and make $$ to the upside. Trade with a neck brace on and prosper. 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

Uh oh!

Well maybe the catalyst for a big move down wasn’t the connection with blajuekfvohgot, the Ebay Governor of Illinois. He should have had a “buy it now”  button, for that senate seat, instead of an open auction, that’s where he had some problems. But I digress; the catalyst was a catalyst we saw a short time ago, congress not sealing the deal on a bailout. Remember what happened last time? I don’t have time to show you here so google it and look at a chart on that day to refresh your memory. As I write this the futures are down 4.5%, that is significant. Now if it stays like this throughout the night, I would look for a move up after the open, then I will try to fade that rally again. 

Couple things to note tonight. Hmmmm, what should we start with? How about the vix.

Now, one thing to be very cautious about, which I think will be remedied in the morning, there really is not the amount of fear there should be in the market right now. We had a DOW that was down nearly 200 points, 2.2%, yet the VIX barely moved up. That showed not the level of fear I would expect. Now, however, after hours things have changed. I expect a big move in the VIX to the upside tomorrow. 

Mr. Dow has broken a line and the kings horses…. you know the rest of the story. Still, the indicators are lagging behind a little and now they should catch up. It still has another trend line to break.

Triangles have faltered on the sp, still indicators lagging behind.

This one has a little more to it than the other two. You see the gap, this will serve as support, but I don’t think it will be major support. I do hope it stalls it out enough to give me a chance to enter into a put play. I really like how it is turning off the fib line.

Here is SHLD, I tried to enter it today with about 3 minutes left in the trading day, but I was trying to get a bargain price on the option and it didn’t get filled. I may try again tomorrow, we will see how things shake out in the morning. 

Finally here is one from Sgtlng9 who just nailed some puts on CHTT, check out the chart. This is BDK he is calling for some more down move on this and I believe he may be right.  If that fib doesn’t offer much support, we could see a great move down. Thanks Sgt.

 FINAL THOUGHT: All though things look incredibly bearish tonight, which I have been waiting for and planning for, I would caution you to be cautious. If we have a huge down day due to the lack of another bailout, I would not put it past congress to quickly pass something to appease the mkts., much like they did last time. Remember what happened then? We had a monster rally. Just a thought. Trade carefully and prosper. AKOT

 

Oh, lay down some commments people. Not only do I appreciate them, but others do as well. I know we talk, but others like to see what everyone is thinking. I will be on in the morning. AKOT

Triangles, triangles, triangles everywhere!

That last hour gets us again eh? You must watch that last hour every day. Do not walk away from your computer the last hour of the day. Everywhere I turn people are talking about triangle formations. Here is what they are talking about.

 

DOW

As you can see, the DOW broke down through 8450, previous support, but pulled back slightly above it and closed above it. You can see the triangle that has formed. It looks to me like it should bounce up, at least a little. 

NASDAQ

The NASDAQ has formed a very similar formation. It is definitely in a trading range, still. Again, hitting up support and looking like a bounce. Indicators are also turning up. 

S&P

 This to me is the most interesting. The first triangle is the one that broke and closed well below that one. The next one is a lot more gradual and matches the other two. What I find interesting about all three of these charts are the wicks. Check out the wicks. Notice they are all on the bottoms, this to me is a slightly bullish signal. Every time it has hit that up trend-line, it has moved up. I am preparing for a bounce tomorrow, a bounce up. However, on all three charts you can see we have resistance almost immediately. Therefore, I think there are two possibilities if we move up. 1. We breakout and breakout strong or 2. We breakout and then return back onto the down trend-line leaving a huge wick for the day. Either way, you can bet I will be watching the last hour of the day if I can. I will be driving to Anchorage tomorrow, but you better believe I will have my laptop and mobile card with me. Trade nimbly and prosper. AKOT