2:30pm
Hey guys, I have an appointment in D.C. but i’ll be back later tonight, here are my thoughts:
It’s always important to rememeber where we stand in the longer term. We are in a consolidation day on very light volume downwards, and we are really close to 840$. If we break below it, we’re forming a head and shoulders, I do have an SDS position in anticipation, but a very very tight stop. I do believe we need to see further consolidation into a fibonacci retracement which will be around 82.65$ on SPY, but the 840 could hold as support as well. In general, the real move is higher, and we have to respect that first, your short positions should be small, and your long bigger. My stop is at $99.10 on SDS.
2:12pm
The market looks like it might continue to consolidate into tomorrow, i bought some SDS at 100.2.
1:53pm
Inverse head and shoulders forming on the SPY 10 minute, possible rally into close, but volume is light. Yeilds have fallen dramatically, indicating a flight to saftey, it’ll be intresting to see if we get a sell off.
1:25pm
This market continues to be moving lower on extremely low volume. The 38.2% retracement held as support and we bounced a little higher, but it looks like a small consolidation move.
Nevertheless, 2 pm reversal time could change everything.
11:09am
Took a small Call (long) SPY option position… will be adding as we go down to fibonacci retracements.
10:53am
I have covered my shorts at this point… the market definetly wants to go higher this week, and even if we go down today, this is really just consolidation for another move higher, unless the volume picks up.
10:44am
Move lower on extremely low volume, the 20 SMA on the SPY at 85.52 could be a nice buying point.
10:17am
Market is still having a really hard time deciding where it wants to go. We hit 839 on the ES overnight, which is interesting. I’m favoring the downside in the very short term, but price action trumps bias.. and even though i have a small short position, I am not going to add to it unless we hit Pennant Descending resistance.
9:22am
The markets are about to open 2% higher, which will be very close to the 50% retracement, it’ll be intresting to see if the markets fall after they open. The short sellers haven’t really piled in as of yet, and I expect this day to reverse mid way.
“Dark Cloud Over” candle for XLF. Means reversal is in order. For those who are very aggressive, FAZ could be a good buy here.
http://stockcharts.com/h-sc/ui?s=XLF&p=D&b=5&g=0&id=p29693097570
XLF has had a nice move off the lows and a pullback may be in order.
The chart though shows a doji candle that has the potential to turn into an evening star tomorrow, assuming we get a close lower tomorrow on the XLF below the mid point of the Monday’s candle — around 10.80 or so.
The key requirement for the Dark Cloud Cover pattern is that the bearish day (red candle) closes at least half way down the previous day’s candle. That didn’t happen today.
Not sure where the financials go from one day to the next, but they have truly been taken out to the back of the woodshed recently. It would not surprise me to see them head higher. The amount of money being thrown at the financials by the government lately has been overwhelming.
A true “dark cloud cover” requires a strong white candle followed by a black candle that opens higher than the close of the previous white candle, and closes under the midpoint of the previous white candle (Nison, “Beyond Candlesticks”, pp. 68-69). The only one I see on your chart is back around July 21.
But I’m new to candles also, so I may be missing something.
I’m pretty new to TA so forgive the question, but did today’s intraday form a saucer pattern? If yes, that is very bearish, no?
Thanks for any help.
Intraday on the ES 10 min chart looks to me like a cup and handle, which is bullish.
Whadda day. Mix a good drink tonight and take a few aspirin to help with the bruises.
I am holding nothing and exect another bump up in the AM. This market wants to rally.
today’s EOD movement falls exactly in line with what i projected. hit 865 and bounced according to the intraday and overall TA. tomorrow should be a down day according to the elliot wave. will break the 840 support and probably run into the 820 support. expect another rally to come after this upcoming drop. but i could be wrong.
Drop won’t happen until after O’B speaks again.
Thanks mr woo appreciate your commentary today.
I am just learning candle-stick charting – so, don’t hold me to this…
Looks like the dark cloud over pattern is a fairly good predictor of reversals. See Citigroup chart. Note the reversal after every black candle, which is the “dark cloud over.” Looks like bigger the body of the candle stronger the reversal.
http://stockcharts.com/h-sc/ui?s=XLF&p=D&b=5&g=0&id=p29693097570
Today, charts of most financial stocks had these clouds over them. GS, GE,
Mohan,
I don’t know much about TA also, but one candle don’t tell the whole story. Looking at the chart, it looks like XLF has a very good probability to hit $13, which is major resistence. If that candle was at $13, I’ll say it is a good indicator for a reversal.
Tell me it isn’t so Mohan. You are leaving us fundamentalists to go to TA? Next your posts will start talking about “wave this of wave that”
Just some gentle ribbing.
I think there is good value with TA and have been looking at the patterns as well. Hard to teach this old dog new tricks, but I never look a gift horse in the mouth either, so if there is value in them patterns, I guess it doesn’t hurt to familiarize myself with them.
Not sure the patterns in the financials today were cloud covers — see my reply to your 98 above.
You and Shanky and Idan have been doing a great job with the commentary. Lots of good thoughts and analysis during the trading day. Thanks again for your contributions.
A true “dark cloud cover” requires a strong white candle followed by a black candle that opens higher than the close of the previous white candle, and closes under the midpoint of the previous white candle (Nison, “Beyond Candlesticks”, pp. 68-69). The only one I see on your XLF chart is back around July 21.
But I’m new to candles also, so I may be missing something.
Interesting obvervation….
Today was NOT a light volume consolidation!!!
We have had 3 consectutive up days, but they have all came from last hour rallies…
We haven’t had a good up trend day where the market march up slowly but steady. Strong uptrend days are important because they give shorts no chance get out except to cover for a loss. There’s no fear in shorting these rallies, because you can always get out with a gain.
With bond yields screaming lower, gold/silver getting decent bids, any last hour rally to 900 on SP this week is truly a gift for shorts.
Good point. Maybe we don’t get steady grinds up until the VIX breaks down into the 30′s. Volatility is so high at this time that the swings back and forth intra day frustrates bulls and bears.
I wouldn’t say there is no fear in shorting. Cashin said at the close yesterday that a large trading desk told him that no commercials were shorting this move. Maybe we get the Santa Claus rally into Jan (shorts with gains may wait til then to cover pushing their cap gains into 2009) before the cascading drop that everyone is expecting.
The bond yield move apparently is more a reflection of the Fed’s decision today to buy RMBS from the market, allowing market participants to not have to hedge their exposure to interest rate risk which normally would be done by selling the 10 year. So those hedges apparently were removed today, (buying back the shorts) causing the yield to fall. The Fed is attempting to keep mortgage rates low in order to get credit flowing to the housing market. Apparently this is “quantitative easing”: http://www.reuters.com/article/marketsNews/idUSN2528075120081125
We are due for at least a green candle on the weekly or monthly charts aren’t week? Not sure if there is a better time than now with seasonality, oversold conditions, and optimism over the new administration. There will be time for “crashes” in the market, but I think they will be Feb/March next year. Its been too easy to short lately, and bear markets typically shred both bulls and bears.
Either way, up or down, risk management is critical if you want to preserve capital for that “once in a century” trade.
I told you ew nuts to watch the rut,but your to damn proud
Thank you for your concern, BJ. I always appreciate listening to guys blather on about how smart they are…especially guys who can’t capitalize, can’t punctuate and don’t know the difference between too and to. Be that as it may, you’re a genius in my book. Keep up the good work.
FYI
Tomorrow’s Economic Data:
MBA Purchase Applications
[Bullet] 7:00 ET
Durable Goods Orders
[Consensus] [Star] 8:30 ET
Jobless Claims
[Consensus] [Bullet] 8:30 ET
Personal Income and Outlays
[Consensus] [Star] 8:30 ET
NAPM-Chicago
[Report] [Bullet] 9:45 ET
Consumer Sentiment
[Report] [Bullet] 10:00 ET
New Home Sales
[Report] [Bullet] 10:00 ET
EIA Petroleum Status Report
[Bullet] 10:35 ET
3-Month Bill Announcement
[Bullet] 11:00ET
6-Month Bill Announcement
[Bullet] 11:00ET
EIA Natural Gas Report
[Bullet] 12:00 ET
Historically, the Wednesday before Thanksgiving and Friday after are up days, while the following Monday is a down day. – ’09 Stock Trader’s Almanac
I think we are still in wave three down and will see an A-B-C 5th wave down (serious overlapping happens often in 5th waves, which is one reason for things so unclear.) Yet, historically you are right.
Then again;
Paulson translation: it is up to you the consumer
http://newsusa.myfeedportal.com/viewarticle.php?articleid=174
How much more of this can the consumer expect to take on his/her plate?
Still short with SDS.
In FAZ at around 74.5 average. Was in pain for a little while, but loved seeing it close at 70.75. Market could pop tomorrow, but I have some staying power. Any negative day puts FAZ back to at least 80, this is the most volatile thing I have ever traded. 3x doesn’t do it justice until you buy some.
I think FAZ will be at 300 in short-order.
Mohan:
Are you still holding your short positions in APOL and PCLN ?