Expecting boring Expiration

Once again the volatility I expected with the news was nowhere to be found. Perhaps it is because the VIX is so low that we won’t see that volatility again until we see in bounce. Most indices still look very strong, but are now nearing resistance again. I don’t think we will see a top until we see a big day. I think these 30-40 point up days could chug this mkt. up and up and up. However, once again I did notice a lot of bearish engulfing candles when looking at individual stocks. When I look through the sectors, most of them look strong sans energy. Tomorrow is expiration day but there is no scheduled news and unless the healthcare bill miraculously passes, I don’t expect much action tomorrow. I have continued to trade intra-day ranges, and if you trade futures at all, you can look at the /TF or /ES on a 5 min. chart and see trade set ups. Unfortunately, I did not fare well today on my futures trading. I will do better tomorrow, if that mkt. moves at all. Chart time:

The VIX has clearly broke out of the gray square of death and is now nearing what I believe to be very strong support at 16. Notice that the last two times it hit 16 it rallied 14 points, almost 100%.

I am going to use the ETF version of the indices tonight. This is the DIA, you can see it clearly broke above the 61.8% fib on the last rally. The next resistance is at the Jan 08 low.

The cubes have not yet reached the next fib line, but they are very close. Further this coincides with the 11/07 low and 8/08 high so it should be strong resistance.

The SPY is right on the 61.8% fib, which too looks to be decent resistance. However, you can see it still has room to run to reach the top of the megaphone pattern.

Here is a close-up of the SPY showing that it formed a similar candle pattern to a couple weeks ago. Note that other than a lower open, this doji did nothing. Also note the V has increased three days in a row.

The UUP actually moved up decent on a mkt. up day. However, the SPX was down a little, but not reflective of this move. I still think this is set up for a breakout to the upside, maybe not for a few more days.

The IYM had a pretty decent bearish engulfing candle on a small v pop. It has been trending up the 20 ma, and if it drops here, I would expect support off the 20 ma.

The XLE has also formed a pretty strong bearish engulfing candle today, after a day of a big top wick. To me this is even more bearish. I drew out a possible scenario which would lead to a head and shoulders pattern.

CHK is in the energy sector, CHK. This is what I call a breakdown of a pennant. Look at the volume and look at that move today. Often these will be followed by and inside day which is often a great put buying opportunity. Sometimes, if it is really bearish, it will just keep dropping.

In Closing: I expect another small up day tomorrow with not a lot of action. I used to adore options expiration days for their trade-ability, but lately they have been lack luster. By the way, thanks Georgetown and Notre Dame for blowing up my brackets on the very first day! Trade well and prosper. AKOT

Cracks in the rally? Or I may be wack!

Well at least there was more volatility, sure it wasn’t down like I thought, but at least it moved. I really thought we were going to have  a  very weak day. Why you ask? Well if you noticed, pre-open there was some pretty decent economic news that came out, and cause a small move up on the futures, but not as big a move as I anticipated. When that happens, I tend to lead to the short side. I also expected the housing numbers would be wte, as they were, and I thought this would be the catalyst to send the mkt. to over 50 points down. The mkt. did drop, but instead of having the late day drop, as I noted, it had a late day rally, a pretty decent one at that.

Tomorrow we do it all again. So far all the employment numbers this week have been bte, and most of the econ. news tomorrow is employment related, and out before the open. This should give us an idea which we should be trading for intra-day. I have a sneaky suspicion we will end the day on another up note, but there will be some key levels I will be watching as you will see on the charts:

One of the reasons that I have really been looking for a volatility spike, and in a bearish direction, is the VIX. You can see how reluctant it is to enter the gray square of death. But, the longer it sets here on top, the more likely it is to drop. The last move up was after three days at one level, so I think tomorrow is the day that will decide the short-term direction.

The DOW, lead by DIS’s near 3% up move, closed above that down trend line for the second time since January. I was really pretty confident that this was much more bearish here, so I was a little surprised to see that late day rally that took this down trend out. I know that it is not the strongest trend line, but it was just setting up pretty as a great short area. Of course the DOW took out the 50% fib without a re-test, so I guess I shouldn’t have expected much here. One thing to note here, it did not approach yesterday’s high, so it was an inside day, not a very encouraging bull signal.

Of course we all know that the SPX is a much better overall measure of the mkt. So I see here that it is still under resistance, but it looks to be forming a loose bull flag. Therefore, I would be looking for a break to the upside, but I will be ready to short on a break of the 1116 line.

The NAS has really defined resistance here this last three days. So the trade here is pretty simple, a close above 2294, I will be looking long, but more sideways or down then I will be shorting probably beneath yesterday’s open.

I spoke of the disconnect between the UUP and the mkt. lately, yesterday. So here the UUP was up .55% and the mkt. was up almost as much. So I did a little research and I found that…

… if you look closely where, theoretically, the UUP and SPX cross, you can see that it is not uncommon for them to move for a day or two in the same direction. The black candles are the SPX the blue ones are the UUP. You can see in July / August when the SPX really started moving up the UUP started dropping, and at about that time frame they crossed. There the UUP seemed to lose momentum for a bit. I don’t know if this is happening again, and I don’t understand why it would, but I look at a lot of mkt. history to see how it acted before, and I noticed this. So it may be the two are set to cross again and that is why this apparent disconnect is showing. Or I could be wack!

I talked about XLE as a possible short yesterday as it had some nice reversal candles on resistance. It ended up down today over .50%, on a mkt. up day. So I thought we would look at a couple of energy charts. This is NOV and it had a big bearish doji hammer engulfing candle, or a bbdhec for short. Speaking of short, methinks this is one.

I also like HAL as a short set up. This could be a double top, but it certainly is a bearish engulfing on decreasing v. I like those type of set ups.

I like trading DVN, as you can see by this chart. I used to trade HAL a lot, but lately not so much. Perhaps tomorrow will be another opportunity. Back to DVN; This is simply another bearish engulfing a hammer. It feels pretty bearish here to me, even though it rallied off the lows. I would like it if it opened just above the close or gaps down a little.

In closing: I think tomorrow will be a  pretty important day for the VIX to give me a little direction. Further, although the DOW did break out above the trend, the others have not, and the DOW stayed beneath yesterday’s high. I am still not full force bullish, still cautious and watching for cracks in the rally. Trade well and prosper. AKOT
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Tip your cup and handle.

Okay, so we went into flat mode right off the bat today, a lot quicker than usual. I expected a semi-flat day due to the lack of economic news, but it was brutal. It was brutal enough that I took some time to do some paper trades on the futures, now that is a slow day. However, the end of the day actually provided some action, just a touch, just enough to perhaps give us a glimpse. I really expect more volatility the next three trading days. There is a lot more news coming out, especially Thursday and Friday, and there is still a slug of earnings this week, including some retail, pharma, and medical, all of which can affect the mkt.

I am still perplexed by the lack of volume, therefore I am still a little hesitant to head into breakouts or breakdowns with full force. The following charts will show some breakouts, but they will also show some resistance nearby, so tis a bit of conundrum. Let’s look:

The VIX is entering that range of support I have been talking about. Both the RSI and MACD are still trending down hard. However, there was a decent spinning top doji today, in itself not the strongest reversal signal, but one none-the-less. I would expect a bounce from here to anywhere in the gray rectangle.

This pattern has become evident in almost all the indice charts; the cup and handle. Now technically speaking I would like to see this break out above the highs from late March to confirm this, but that did not happen. In fact, you can see the long-term down trend line held up with the DOW closing beneath it after breaching it forming a tombstone doji. Volume here was not terrible, but definitely not impressive. If this closes above those highs and above that trend line, then I think we at least re-test 10,800.

Another cup and handle with a small breakout. The RSI has moved into overbought territory, but as you can see in the past it can stay up there for a while and be comfy. The MACD and histogram were flattening and heading down, but that move has stalled out a bit as well. Once again this moved stalled out on resistance, and I am not convinced that it will close above it tomorrow.

Go figure, another cup and handle breakout. This one on the NAS is much more convincing than the last two. It took out the previous high, and has moved clear above that down trend line, but in doing so it formed a tombstone doji today. There is no clear resistance right here, but this is a very weak candle formation and one that shouts caution, so be cautious.

As I have said, the RUT has been the leader in this current up trend. Today it took out the long term down trend, but I expect this move to slow down / stall out very soon. I thought we would hit the top of the channel, and we still might, but I don’t think it is necessary for this to turn over.

The XLE has quickly formed a double top on average volume. Another tombstone doji on resistance. Unless there is a v spike tomorrow, or a gap above 57.60, I think this will drop and be a good short play. I will be watching it in my basket tomorrow morning.

LOW has breached this top three times now. Usually I say the third time is the charm, but when you have a overbought RSI, down trending histogram, and a clear volume divergence along with a near bearish engulfing candle, I say the cards are stacked against it. I think the lack of volume will cause this breakout attempt to fail. The good news, if I am wrong then there is a very clear and tight stop, I love that.

This is KRE, I have posted it before, it is the regional bank ETF. RIght now it appears poised to breakout to the upside with declining volume in this non-typical bull flag. Of course if the mkt. tanks, then this too shall tank. But if it stays flat or rises, I think we see a break to the upside.

In closing: The VIX is due for a bounce, the economic news is bearish and there is more of it coming, ergo I am expecting more volatility and more trade setups. I like the breakout patterns on the indices, but I need to see confirmation in the form of volume to be a strong buyer. So tip your teacup and handle, hang on, trade well and prosper. AKOT

stall and dive or stall and drive?

Okay, so when I said I thought today would be a directional day, I didn’t think the direction would be sideways. It does make sense though, no news, no events, not much to move the mkt. today. I thought it would linger up or down a bit, and I was leaning towards down, but this was brutal. I did get short on QCOM one of the charts I posted last week. It looks like the resistance is holding and I will be playing for some follow through with 40.0 as my stop. At least we have consumer confidence tomorrow, and a whole slug of earnings pre-market, and post-market for that matter. So not tons to say today, let’s let the charts do the talking:

The VIX, along with the rest of the mkt., has stalled out. This is the kind of action I expected to see around the 21 area. Oh well I guess 20 is close enough. All indicators still tanking hard.

The DOW is sitting on that 50% fib from the 07 highs. Volume was once again unimpressive. It sure feels like it is stalling out  here, but lately you never know. Still, for two days in a row it has failed to maintain the daily highs, by a long shot. Generally a reversal sign.

The SPX is still slightly beneath its 50% fib, and it too looks like the current up move may be stalling out. The indicators still look strong however, pointing to more up. A conflicted chart. I will be looking for more solid direction over the next couple of days.

Pretty much the same thing on the NAS. One interesting note here is the fact that it still hasn’t re-tested the top of the gap. Also note the slight down movement on the histogram. Often times this will be a leading type of indicator. If we see another down day on it tomorrow, I will be more confident of direction.

The UUP is slugging its way north. It is well above my up trend line, but I have noticed that the 20 ma seems to be acting as an up trend as well. I will be looking for bounces off of it until it is breached.

The QQQQ is sitting on the 50 ma, and though you can’t see it very well, the MACD is ever so slightly curving down a bit. The RSI is still strong. I will wait and see if this is a reversal or a breath for a run to past highs. I will try to catch the move either way.

I thought it would be timely to check out XLV, the healthcare spider ETF. Once again it is finding resistance at the $31.65 area. You can see since the January top, v has steadily declined, even the v pops have been increasingly smaller. Today was a nice v pop, which led to selling. I think this will hold and this will drop, but the best thing about it is if it closes above 31.70 I know I was wrong and I can close the trade, and maybe even reverse it.

There was a bearish engulfing formation today on XLE. However, it is on a long-term up trend line. But, there is also a gap to fill and decreasing v into this up move. Three points for the bears, one point for the bull. Watch for a break of the up trend and a gap fill.

This chart actually has a lot going on. There is a long term head and shoulder, a short-term “almost” head and shoulders, declining v with an increase today, earnings 3/8 and a bearish engulfing candle today. I think there is more down to come here, but be aware EBIX had a huge up day on 2/12 so there are buyers out there and if it drops they will have to decide if they want to buy or sell. If they sell it will fall fast.

In closing: Not much to say, things look tired again but could easily be revived by good news tomorrow and the rest of the week. I have meetings tomorrow night so I don’t know if I will do a post or not. Trade well and prosper. AKOT

The 20 ma is in play

Well I ended up selling my longs and going short today. I know, I know I said long until Wed., but I did not like the action today. We moved up quite a bit more than I anticipated, which is a good thing when you are long, but it is also a bad thing because you start entering areas of resistance much quicker. YUM, did much bte after hours and will likely cause a pop in the morning, depending on how COST, FDO & MON do in the morning. I am hearing the overall the mkt. is expecting a lot of earnings beats, and if that is the case, then I may have went short prematurely. I still the biggest move will come on Thursday (when I will be traveling!) with the initial claims number. It has projected to be over 550k, that is not good people, and if it is worse, I think we will see this mkt. sell off hard, no matter what the earnings are. No matter what Brokaw says, a jobless recovery makes absolutely no sense. So my plan is to stay short until Thursday morning. On to some charts:

If you recall, I said the VIX looked like it had topped on Sunday’s video, ergo being long into this week, that turned out to be absolutely true. Now, I can’t say we have hit a definitive bottom, but we did form a nice tail today, showing a little strength, and we bounced off the 20 ma, which is coming into play a lot lately. It is in flux and isnt’ telling me too much right now.

I was more enamored by the DOW than the VIX. Notice our high today, right in line with the high from 9/30, not an area I had targeted as resistance, but it sure acted as one. I think if we punch back up to 9832, then I will be all long again, expecting another new high. But if you notice today’s v, it was more than yesterday’s, and today we had more selling and more bears stepping in than yesterday. I will be watching to see if they follow through.

The SPX broke back up through my up trend line. But ran smack dab into the 20 ma and pulled back to finish sitting right on both. I would not call this a convincing breakthrough, but if it had closed at the highs, then it would’ve been.

Again with the 20 ma, as the NAS tried to push through, but was unable. The NAS was not as strong as the SPX, but I noticed it held up stronger during the selling. I was looking to short the SPY or QQQQ, and I chose neither. Still, this has some room up to hit my trend line, but depending on the rest of the mkt. it may not make it.

Even the RUT broke through and ran into that dirty 20 ma, which coincidentally is almost exactly on my trend line, should offer some resistance.

The SPY has been good to me lately, both ways. But I couldn’t get a good enough read on it today to short it after I sold my longs. Now it looks much clearer, it has hit two of my resistance lines and recoiled. Now to see if it will make another run or continue to pull back. I think it may have to sell some to breakthrough to the top side. The v was not super low today, but not great either, not as strong as the selling days, which is par for the course lately.

I really like how the QQQQ reached up an kissed that up trend line, and pulled back a little, closing right on the line. Similar to the SPY, the v was not near the lows, but not near as high as the selling days.

My alert on LEN triggered today, and you can see why. I don’t believe in this up move at all, and I think this may be prime for a short play. Note the decreasing v into this lackluster up move, near my old support line. I will be looking at this one hard tomorrow.

RMBS has a bit of a bear flag going on here. Watch for a breakdown , likely when it gets near that combo 20/50 ma area, although it will not wait if the mkt. sells off before then.

ENDP rallied right up into the old closing high which is also the top of the gap. This should offer resistance, but it may have been tested already by that move up early Sept. If so, we could see a pop through here, but I think it may hold and we may see some selling move in.

It looks like the FAZ formed a bottom today with this doji star. The exact opposite of the up move from Sept. 23 area. I would look for an up move from here.

DUG is retesting that resistance that led us to shorting it last time. Note the pathetic v, causing a nice v divergence. I think this level will hold again, and DUG will be digging down.

Here is my main short of the day. Not so much from this chart, but due to the intraday action I was watching. I love clean resistance, which we have here, as it gives me a clear stop. I like that it breached it, but then pulled back very hard. I also like that there is an unfilled gap looming, so I thought there were a lot of signs pointing to a drop and I am currently short XLE. We do have crude inventories coming out tomorrow, so that could easily make or break this trade, but I am in.

In closing: We are meeting some resistance, mainly in moving averages, but also in trend lines. There is an obvious lack of conviction in the buying, even on a day when we were up over 130 pts. The mkt. moved up much faster than I anticipated, so I have now positioned myself to take advantages to the short side. As earnings kick off, this could be a trader’s mkt., very volatile swinging on the last earnings report and forgetting last week’s reports. I am still looking for bad jobs numbers, and any surprise to the upside will likely lead to a strong rally, so be very cautious holding options going into Thursday. I will be traveling the next few days, but I will be looking to post as time permits. Trade well and prosper. AKOT

is it TIME?

Today started with tons of volatility, and then ended with a resounding thud. There was still no real volume along with some up movement. Things were not as bullish as they seem however. The VIX was up on the day, and as we will see tonight, there was some real selling in the spiders. Further, at around 3pm consumer confidence came out way, way worse than expected. This means that the consumer has less money to spend. I have a sneaky suspicion we are going to pay that piper, possibly as soon as tomorrow. This was a pretty bearish number that was shrugged of and ignored. But I suspect not for long. If we see a big down day in the next day or two, I submit that it will emanate from today’s consumer confidence number.

Further I read an article from one of my tweet buddies on Time’s site, TIME , which actually originated from Trim Tabs site, trimtabs, regarding insider selling. Basically, there is a lot of it. Biderman tracks the ratio of insider buying to selling and has since 2004. The normal number is 7:1, the highest he has ever seen is 24:1 in November of 2007, right now it is at 30:1. We had a pretty big down move that originated in Nov of 2007, not straight down, but down none-the-less. The part of all this that scares me is that TIME printed this article! Now onto the charts:

We are watching for higher lows, today we maintained a higher low. We will keep watching for higher lows and higher highs. It is that simple.

Not much to say on the DOW. The v was not great or even good for that matter. This is not a true three white soldiers or flag formation, but we did break and stay above that August congestion zone which coincides with a very long term support. In all honesty, I could see this moving up to the latest highs, or dropping form right here. I think if we see a v spike we drop.

I watch the SPX & ES and most of my charts during the day on 20 min. candles for buying entry points. I noticed we have formed a nice pennant inside a pennant with a gap waiting to be filled. I will be watching for a break down to fill this gap, and to look for this lower high to hold. If it breaks, I must go long.

I have highlighted two areas which may give us some insight into what is next. You see how we tested the fib line, dropped rallied and tested or approached the fib again? Obviously the first one was much more pronounced. But I am wondering if this long term down trend and fib will once again push us down a little and then we rally back up and blow through both those lines. I forgot to draw the bottom up trend which would be obvious support somewhere around the 1990 area. I think this scenario makes sense, especially after this nice hanging man on resistance from today. If it holds true to form, we will take out the recent lows on this next down move and take out that 1990 I spoke of and end up near 1900 or perhaps all the way down to fill the gap at 1800 before bouncing. I know, a lot to watch for, sorry.

On days like today, when I don’t trade too much, I like to play with fib lines and new indicators etc. I find fib fans fascinating, and I am surely no expert on using them. But when they make sense they make sense. Here on the XLE they seem to designate points of support and resistance quite often. You can see we are very close to one of those points right now.

Same chart a little closer. Notice today’s candle. Unlike in June, it did not blow through the resistance line then sell off, it touched then sold off. Pretty much everything on this chart looks bearish to me right now. Yes it is in an up trend, but I think it is setting up for some selling.

The XRT should get dealt a blow with today’s credit number, and it looks very poised to drop. I may play some puts on this tomorrow, I like it that much. However, I don’t like that the support line is so close, so it will be a quick play which is perfect in this mkt. I love the clear stop level at $32.85.

I thought this would rally to the top resistance, but it looks like the move is petering out to me here. Nice gap up hanging man, if followed with gap down tomorrow is pretty bearish with room to drop.

Here is another fib fan I tinkered with and liked. Now, this is a strong up trend, so it must be respected but the last fib line led to its testing and perhaps this is the one that leads to its break.

This is a 10 year chart on the XLI. We are at a resistance area that we just tested on 8/28 and again today. We gapped up into it today and it looks like it wants to hold. I would expect a drop to $24. But if it moves  up, then look for stronger resistance at $26.90. Again, nice ez stop.

Finally a little triple top action on teh XLB. Technically it is an ascending pennant which is a bearish formation, so we should see a breakdown with increased v.

In closing: I expected an up day, I did not expect such bearish news with no action. I think it caught the whole mkt. by surprise once it was lulled asleep by the days inaction. I think we will see the fallout of today’s number soon.

I will be out-of-town from Thursday on. I do not know if I will have internet access, but if I do I will post, even if it is short posts. I don’t know if I will be able to do Sunday’s video or not, again it depends on internet access. I will tweet some more charts as I can, and I will tweet a few others tonight. I will be back in town week after next. Trade well and prosper and you can always follow me on twitter @akoptiontrader. Trade well and prosper. AKOT

What if?

Finally we had big selling day, one that I thought a catalyst would cause. But today we had some pretty decent news, not great but decent. The ISM numbers came in solid bte and solid over 50% which is suppose to be very bullish. The mkt. reacted well and jumped up, and then it did something most did not anticipate, it sold off, and sold off hard. The bulls tried to step in several times and were thrawted with a smack to the face and a kick in the butt. Now what if; what if the banks names I have referred to had been revealed? What if the jobs numbers come in wte? What if some actual financial truth came out and was reported truthfully? How far do you think we may have fallen? Do you see the danger here? We fell over 180 points on good news, how far will we fall on bad news? The danger is that all we are hearing is recovery, bottom, recession is over….. all positive stuff. When all you hear is good news and you get real bad news, and reality starts to settle in, then you have fear and fear leads to panic and panic leads to heavy selling. Do I think we are there yet? No, not really. In fact I wouldn’t be surprised to see a small up day tomorrow, or I wouldn’t be surprised to see a big down day. Quite often, in a bullish mkt. when you have a sell off like this, it is an opportunity for buyers, so don’t be surprised to see them step in in the morning. But if they start getting beat down, they will sell and sell fast waiting for the next opportunity to buy. Chart time:

I thought a close above 28 would be very bearish for this mkt., well I think 29 is even more so. What is most impressive about the VIX today was that I never saw it go negative. I was watching it early on and as the mkt. rallied, it stayed green, up .40, but green. Look at today’s candle, shaved bottom and nearly shaved head. This was a one track mind day for the VIX. That being said, it is common for a day like this to be followed by a down day, not huge but down. If we go up more, that is extremely bearish.

The DOW closed beneath my initial support line for this period. Not by much, but below none-the-less. Again, I would not be shocked to see a small up day tomorrow. A big up day, now that would shock me. Once we break beneath this support again, my next target is right around 9060.

The SPX also blew through my initial support, but my next support for this is that up trend. It is already very close and I will respect that line until it is broken. In fact I have been waiting to move my retirement fund out of the S&P, but I have been waiting until that trend is broken, and I may wait for the retest.

I have said all along that I thought the NAS would lead our decline because I felt that it was the most overbought. But today it was the lagger. Yet is looks very bearish here with the next support near the 1925 area. Looking strictly at this chart, I don’t see anything much more than an opportunity bounce tomorrow, but looking at the charts as a whole, I see some support nearby on several of them.

This is the trend line that burnt me in the past. I thought we may pierce it in July, but she held, and then revealed herself to me. So now I will respect this trend line until it is broke. I really like today’s v, the highest we have seen since May, which is impressive considering we are still in early September. I imagine this line will hold at least a little, and possibly for a few days.

The SPY has a little more room to go before touching that up trend, but I have some nearby support that would correspond with that QQQQ hitting its up trend. The v was ridiculous, the highest since April, and a follow through would be impressive, but somehow I don’t think we will see a repeat tomorrow. If we do, then supports will be busted and I will try to get in on some puts for sure.

I usually tweet these and don’t put them on the blog. Why? Well because those in tweet land seem to like these kind of charts; ultras and inverses, but I honestly don’t trade them too much. I play them a few times a year, and this may be one of those times. Notice that immense v on this 3x small cap bear. Also notice that the v has been increasing for months into this down move. Today we had a super v breakout above a nice down trend. On a retest of that down trend or a hold at $14, and I will look at going long TZA.

I am throwing the XLP into the mix just to see if you are paying attention. What do you see? I see a possible bull flag. Crazy I know, but that is what I see. I won’t trade it unless I see the mkt. making some type of move up, but I just wanted to throw it out there to see if we can break to the upside in this environment. It will be fun to watch.

After initially busting through the top, XLK has dropped back to earth, and then some. It has moved back into the descending megaphone pattern on good v. Looking at this chart, I really don’t see technical support until $18.50. A small up day would present a great short entry with an easy nearby stop at the top of the phone.

If you were long FAZ ( like Cash21 was) you were probably a very happy camper today. And after looking at this chart, I would probably stay long the FAZ. This is a serious breakdown of a long term up trend, a bearish development. Often, these are followed by a retest of the bottom of my trend, and that my friends is one of my favorite entry points for a short. Any way you look at it, this chart looks mighty bearish to me, but it could certainly pop off of the $13.60 area, the lows of August, and I hope it does.

One more X before posting this blog, the XLB. I have played the XLB several times recently and have done pretty well. I was waiting for this move down, and I think it continues down. We have support on the bbb, but that could easily turn down from here. I see at least another $2 down from here, with a few minor support areas along the way.

In closing: I am watching for a possible small up move tomorrow, especially early in the day. I really think that last hour of trading tomorrow will be important to watch. Today was the first day in a long time that we sold at the open and sold at the close. If we see a push up followed by another sell off, I will then be inclined to think that the bears are taking over, but I still dont’ think this is the beginning of the major down move I have been anticipating.  Trade well and prosper.

Don’t Taze Me Bro!

First of all, I want to thank those of you that sent me emails, commented, or meebos with your thoughts and condolence’s. It really means a lot to me that you would take time out of your trading day to do that. Thanks a ton. You guys are awesome and I hope you all are prosperous, not just financially, but throughout you whole life. Now onto the analysis.

Looking at the charts today I had to chuckle a little to myself, which is healthy and needed in these times. Remember how I thought we would have a couple small up days then a huge down day to break the neckline? Well we broke the neckline much sooner than I thought, and now we have had a couple of small up days, on low v. I had it all backwards! But the results will still be the same. I think tomorrow has the potential for being a big down day. It is Friday, next week is 3f (opx. exp.) the mkt. is looking much weaker than in recent weeks and historically, this is one of the most volatile months. Further, Monday has been up 5 days in a row. The table is set for a sell off.

For the first time in a while, I have added a new line, the red one. I added it because it lined up so perfectly with what has been going on. Six touches is pretty significant. Now I would’ve liked to see a move down to the $29.60 area to dip into that gap, then I would’ve expected a good move up from here. But, nonetheless, I could easily see this thing bounce hard from right here.

The DOW has set up for a fall right here. Classic break of support with retest. This usually screams sell. Watch for it, and trade with it if it comes to fruition.

This is probably the most intriguing chart to me. I love flags, they trade well and usually lead to big moves. I still think the NAS will lead the drop and if this chart is any indication, the move could start very soon. We could easily get to the 1675 area in a matter of days in a July mkt.

Like I thought, we stalled out on the 200 ma and bottom channel. I would expect a move up a little before breaking the bottom, but if the NAS pulls hard enough, the S&P will follow. We broke through the 875 support once, the next time will be easier.

This is a 60 min. chart of the QQQQ. This chart looks pretty bearish to me. You can see the retrace of about 50% from the last high, which should leave to another strong move down, probably, finally, taking out that brute of a trend line.

I tweeted this one early today as a great sell. Lots of lines, I know, I know, but I look at it a lot and it is usually profitable to trade. I think it is a great short here.

Although I have never traded this, I really like the formation. I actually think this may be a .. l… lo….lon…..long play. There I said it, LONG. That is a hard word to get out of my mouth these days. Of course I prefer to trade with the overall mkt. but hey the analysis says up.

We have traded this on several times and it is time again. I will let you figure out which way. If you’re not sure, ask me.

I throw GILD in the mix just cuz this chart is so pretty. Look at the break of the wedge, look at the drop & stop on the down trend line. This is a thing of beauty. From here I would expect a small move up and perhaps a trend down the top of the line, or a v pop and break of the line. I wouldn’t trade it until I saw, but it is so pretty I had to put it on here. None of these lines have been altered since I originally put them on there a couple of weeks ago. ( just sprained my shoulder patting myself on the back)

Another pretty chart. CSL broke thru the up trend and stalled on our up trend: Again, unaltered lines. Now I think it should break back into the channel where it is warm and fuzzy. Perhaps after a bounce up.

I like this loose H&S on XLE to give way soon. We could move up a little from here, or just drop. But the next test should break support, and oil will follow probably to the mid $50′s or lower.

This is on of my favorite set ups ( if I haven’t mentioned it). The break of support and the retest. This one is especially sweet with the 200 ma adding extra resistance. I think $10 is in the near future.

Finally we finish with TASR (hence the blog title). We broke the bottom trend, but with suspect v. I would look for another down day, then watch for a move up, then short. If you want to be uber safe, you could wait till it breaks $4.05 and catch a dollar down. But I will short on retest.

In closing: If you play any of these with options, I would suggest trying August, that way if they go against us it won’t kill us, and they all have enough room down that we should do well if they do what the analysis tells us. Again, I think tomorrow could be a big down day, and I will be looking to close out some puts tomorrow, then do some day trading next week if I can. If tomorrow is not down, well then I may have to take some losses on the Qs, but not on the other three. Trade well, watch for a big move and prosper. Video will be posted this weekend, probably Sat as my Grandpa’s funeral is on Sunday. AKOT

Weekly Video

Well we had the sell off we thought would occur after some wte jobs news. The curious thing is the sheer lack of v. So now here is the million dollar question; knowing that the v will likely increase significantly on Monday, will it be buying or following the lead and selling? We will not know until Monday, but I still believe intermediate term we are in a bearish fade. I expect more selling to occur this week, maybe not every day, but I would expect us to close the week below 8260 on the DOW, perhaps way below. I think Thursday is our key news day in a light news week. I am still short and expect to be see most of next week. Watch for a bounce perhaps on Mon/ Tues but I feel some selling coming after that. If we don’t get the bounce, hang on tight.

thanks to briefing.com for the economic calendar.

Now for this week’s video: Please for you to enjoy!

Weekly Video 6-21-09

We had a pretty good week last week. A little choppy the last couple days, but other than that it was very tradeable and profitable. I hope all of you did awesome. Now what does this week hold? Well we never know but we can see what it appears via some technical analysis. You can see below we have a ton of data coming out next week that is going to move this mkt. I think the housing news may be a little wte, all others possibly a little bte. I think by August most everything we be guided down, which going into then will make it bearish, but it also makes it easier to beat expectations. To me all the charts still look pretty bearish, and I will be poised to trade that way this week. BUT with key data M-Th, anything can happen. One of my old favorite trades was to trade the opposite of the news for the day. I would wait for the pop, and then quickly buy some puts on my favorite index. Or wait for the drop and buy some calls. It seemed to work much better with the pops than the drops, but it was effective either way. I have not done that trade lately because this mkt. has been acting a little spooky, but I may try it again this week. If I do I will twitter it so you can see if it worked or not. Well onto the video and economic data for the week.

Here is this weeks economic data, thanks to briefing.com. If you don’t subscribe you  should.

Now for this week’s video, please for you to enjoy: