6:05pm
Instead of a video, I want to give you guys my latest thoughts on the type of action we’ve seen. With the fed buying treasuries the market is getting a nice boost in liquidity and the bulls get what they have wanted exactly for the past month. Does this mean we’re going higher? Well today we broke the 61.8% retracement on the SPY, but the bears managed to push the market back down to that level. With that in mind, the Bulls on the DOW were not as strong, and did not reach the 61.8% retracement yet. Again, I want to focus on the dow and not on the spy for levels as the dow has presented better technical levels. I am short right now, and have only 10% in cash left. If i’m wrong, the market should hit hte 61.8% retracement of the dow, shoot down on lower volume, and then rally back up above it forming an inverse head and shoulders and breaking to new highs. Thus the bottom was 2 weeks ago. If i’m write, I expect a strong shoot downards, of the magnitude that we have seen 2 days ago, a small push up on low volume and then the beginning of a new push lower which should take us to at least a 50% retracement of subwave 4. I’m not necessarily expecting new lows, but I believe we will see much lower prices as subwave 5 can be truncated. The bearish case is that today the bulls fill like they won the fight, and the bears have not fully piled in yet. There is a H&S formation right at the end of the day, I wonder if that will come to fruition when the jobs number comes out tomorrow. Let me know what you’re thinking of this market.
Market Overview ~ 03/18/2009 It’s either here or never
– March 18, 2009Posted in: Intraday Commentary
I would say I’m first, but that’d just be lame.
Any how, I like the analysis. I think this is a pivotal moment and we’ll either look back and say “that was the bottom”, or we’ll look up and say “wish I faded that rally”
Ah, but by saying you would say it, you effectively did say it, hence, you are lame. Touche.
Doesnt count!!!!
Also, throw in the fact that its options expiration and the powers-that-be can easily take this market lower to profit from all the calls that they were able to sell today.
FAZ has never been this far below its 200 MA. Just FYI and interpret as you wish.
I would be very careful of using a 3x fund’s value to arrive at any position. Look at FAS in January before it puked or along the way down to 2.35. Until it was that low, it had never been that low. They have no real history and are re balanced every night.
If I were a noob reading this, I would at least consider avoiding the pain and follow the trend or stay in cash. You can always buy back in, why worry about missing a tiny percentage a big move ?
While the recent trend has been up, were smacking into the resistance of the longer term bear market. Which trend are you advising people to follow?
Right. I just scrounged some more cash, but will wait for a better-looking setup.
3 min – can you post your RIFIN chart that you were referring to ?
What happens vis a vis the 61.8% level is key. The SPX is there. The RUT is just below. The DJI a little further back. Interestingly, very few of the individual stocks I follow have broken through the 50 day EMA on my daily charts. This all looks awfully familiar, so failure at this juncture would surprise me less than follow through. It’s a normal bear market rally. If we rally above the 61.8% and CLOSE above it, then I’ll change my view. Until then, I’m gonna stick with who brought me to the dance. She’s short.
Yes many stocks have horrible looking chart patterns. This is just another Bear Market Rally which will eventually be followed by the start of Primary 3 later this year.
my view is that a gap up tomorrow probaly means were in primary wave 2.
vix still hasnt closed below 40. (barely missed it)
s&p still hasnt touched 804 (barely missed it)
This fellow thinks we are going lower, but I am not certain as what he thinks as of today:
http://broadcast.ino.com/education/bear_market_rally/?campaignid=
Good one (from last Fri). 7600 on the Dow as resistance and turning point downward, fits in with Idan’s post above and makes sense. 795 – 805 on the S&P. Gap up tomorrow may not matter too much, if that is what it does out of the gate.
I noticed futures for tomorrow to be negative and also Nikkei shows perhaps a negative opening, which has not occured in the recent days. So maybe a change of sentiment.
My thinking is that serious money would like a good entry point and at these levels entering the market in the long position does not seem proffessional, more like a bit on the amateur side.
that was a waste of my time.. a photo tells us as much informatino as the video.
hes just pulling numbers out of his ass.
yea.. like futures at 8:32 PM when some guy at honk kong trading 1/100000 of the stock amarket is going to dictate a billion dollar world wide stock market is going to do tomorrow……
Unless the futures are down BIG, or UP BIG, the futures are just NOISE.
Countless times you’ll see futures -1% at 11pm, then it will open up 2% at the bell.
Yep
I bailed in today with tight stops. Even if this is a major move up, it’s got to correct. It looks very toppy.
I agree with Idan that we are heading lower.
GOLD shot up which indicates more downside to come on DOW.
Weekly chart on DOW tested upper resistance at 7573 perfectly.
I would like to add to shorts as close to 7550 – 7560 range and place a stop above 7610.
Only caution is stochastic on weekly has turned up and MACD also close to crossing.
gold shot up because the dollar came down with the news of so much federal money to be used on these hopes and promise bailouts.
here is what i think
OPTIONS EXPIRATION MOTIVATION… nothing more.. nothing less
after hours the market is hovering around the 790 mark . my trade in TNA today surrounded one thing and one thing only … options expiration.. i got in at the very bottom and out at the very top.. amazing. no TA no mumbo jumbo. just watching the IWM get below 40..jumped into TNA hit 42 and i got 100% out. this post i made yesterday came to fruition with little worry on the trade.
once options expire and the bullshitish action is complete we will have a clear picture of where this market wants to settle for the near term. we have seen this time and time again and yet we continue to try and fit this motivational manipulation into TA and it leaves everyone bewildered confused and scrambling for cover.
just look at individual stocks and thier max pain #s. all of mine are just struggling to stay in the max pain pocket. this shows incredible weakness and an invitation to short them. APOL is a great example as it keeps bouncing back above $70 only to fail again again and again.
read what you want into your EW or TA but i’ve based my trades on opex manipulation and will sleep well knowing that the masssive short positions ive taken will fall into place after this week and month are over.
what will really be telling is if PNC manages to fall back to $25 after getting away from the pain pocket by almost $5… most are struggling to rally in.. but will the banks that have got ahead of themselves fall back?
good luck trading!
this said.\
volume good, stochastics, rsi strong
im amazed at how bullish the indices look. this manipulation may convince some to carry through and if we make it to 825 before month end i would
not be suprised either.
fundamentals still say 500 -600 for a more inline s+p / pe ratio…of course if inflation ratchets in hard…that number could move around
Mexico near melt down
Fed chairman appearing on prime time to allay fears
President appearing on talk show to allay fear
Fed using quantative easing (but haven’t they already been doing this with talf etc)
Buying mortgages couldn’t get the rate where they wanted so buying treasuries will?
China warning about devaluing their investment (will FED have to step in and buy to prop up the treasury market – this seems a more plausible explanation)
G20 wants a new reserve currency based on a basket of currency
Russia announced a major effort to remilaterize
Tea parties all over country
State gov’ts announciing significant cutbacks in everything…
MY local newspaper’s notice of unpaid property tax is thicker than the paper…and we are in a
area that has not suffered much at all
President had to come out and endorse that Geitner’s our man…spells trouble
Attempts to vastly increase money supply probably will countered by higher prices on
imported commodities…rendering the move ineffectual…at everything but pissing off all our creditors
Let’s see….did i leave out anything…oh yes the market has gone straight up without a significant pullback on lower volume.
still i’m upside down in FAZ and in need of my chill pill
this is purely speculation..but if there dollar loses reserve currency status or a run happens….i think the response will be to nationalize american owned assets in their foreign country as “repayment” for amounts owed by the us….careful what you are long in…e ven something as ironclad as exxon could get dicey.
“Buying mortgages couldn’t get the rate where they wanted so buying treasuries will?
China warning about devaluing their investment (will FED have to step in and buy to prop up the treasury market – this seems a more plausible explanation)”
AMEN.
This guy has made a killing with FAZ and is known to be a pretty good trader.. What do you guys think of his blog post?
http://upsidetrader.blogspot.com/
Not to be negative about the analysis but I’ve heard potential head and shoulders all day long and yesterday as well. I think everyone here is a bit too bearish. I hope you guys are in cash getting ready to be bullish for when when it’s certain it’s going in that direction.
Idan
When you recently stated we might have rally to end of year, I thought no way.
Now I’m beginning to wonder if perhaps your not the emented fellow I thought you were
I think we go higher, just to suck in the most longs before the They people take it down for a very long time.
Eventually the credit markets will show their true colors, and the massive debt burden will have it’s disaterous effects.
So, its off to 840 SPX, and possible 870 before the finale to new and lasting lows
if it gets 840 i dont see capitulation, and i see 666 as the bottom.
my view – we’re going lower. couldn’t stand the pain, so I cut FAZ prior to announcement – turned out to be wise decision. Will be looking to re-enter after move lower confirmation.
Fed buying treasuries means government printing more money with inflation picking up. Hence, gold will soon skyrocket – this is already happening. I think Fed was hoping for better outcome, but after seeing situation deteriorate further, they acted boldly – sign of desperation. This is not bullish at all. Chinese government will not like it at all, I bet nobody will like getting less because government artificially lowered your income to help greedy landlords with zero down payment.
Yes, china is already mad. Now we just pissed in their tea.
When the fed announcement occured, of course the dollar dropped causing gold to jump and will continue to escalate. The fallen dollar is also causing a negative impact on foreign exporters. I suppose that is why China is pissed since US. imports much of their junk.
What # do you all have for your 61.8% retracement on the Dow?
7605
I’m not particularly happy with the Fed devaluing our currency and in effect stealing money from the average American. The Chinese were probably told in advance that we might be going to do that and that was why they issued a warning. I am speculating on this though. I expect the longer term result will be high inflation and high interest rates possibly worse than when Jimmy Carter was president. This could be a few years away in my opinion. The cap and trade taxes should compound the problem on every American who pays for electricity or food or gas. If the Fed wants to further devalue the dollar and more people catch on to what they are doing, I could imagine interest rates shooting up immediately and stocks crashing instead of rising due to the sudden inflation. Of course I’m still learning and more concerned with the immediate future. I’m leaning towards primary 2 which has to have some major down waves if we don’t peak out until Fall of 09 and the top is only 100 to 200 points away on the S&P. Or possibly an upward flat in primary wave one and we still have a major decline coming up to new lows.
I’m new here so sorry if I got too wordy. I was mainly looking for Mike’s chart for 1937/38 to see how it compares to now.
could you please provide the link to Mike’s chart? thx
I posted the link twice today and it was apparently removed by hosts…no idea why…MktMike isn’t updating it anyway…he is AWOL
Couple of interesting posts on financials … things in the backgound.
The options market is expecting the financials to decline
http://online.barrons.com/article/SB123724176878347705.html
Why C is rising and how it could impact us in the future … us i.e. those holding it
http://online.barrons.com/article/SB123739146137172035.html?mod=mktw
I posted one in today’s intraday about how C and Morgan will have to issue additional shares to pay for compensation …..
We are definitely going lower in the next two weeks unless some news shows up on M2M. So not so much worried about FAZ positions really.
. Had FCX Mar 30 puts and GS puts which were okay early today but reversed after the fed news.
Biggest concern (or pain) are those option plays. Esp those Mar puts that became deep out of money due to today’s action
In my view this seems like a very solid entry point for APOL April puts or just short APOL
Anyone know at this point where we should be looking for XLF to turn, because I think that is what is going to dictate what we do. It blew past the fibs that was holding it back previously. Any ideas on where we should be drawing our highs from now? Hoping woo has something on the financials tonight.
The only thing that I think makes sense right now when it comes to XLF is that it will probably touch its 50 day MA at around 8.80 in the next few days – it may go to 10 beforehand. I remember big call option volume at a strike price of 10 being purchased about 2 weeks ago. These moves have been spot on in the last 3 months (either calls or puts). I wish I would have stuck to my guns. A move to 8.80 would still require an approx. 60 cent drop, or about 6% drop. A big day down tomorrow could put it there. 8.60 is also a 23% retrace and support level.
Idan, do you think that 8.0 is realistic for XLF in the very short term? Would make a nice head for a head-and-shoulders pattern. I think that a move to 8.0 would also fit in either the Wave 5 down or P2 scenario – although XLF might be quite resistant to visiting 8.0 right now. On the other hand, it was just 7.89 within the past 36 hrs!
Technically it all depends on when subwave 5 starts, and if it’s truncated. Right now, it looks like the bulls are very strong, but then again that could be exactly the sentiment we need to push the bears to start hitting this market, and hitting it hard. One thing for sure, is that the bears are scared and the bulls think they have won everything. Tomorrow might be a down day as looking at the futures. If you see a strong volume spike and a strong price action move lower, you can bet that we have probably begun wave 5, and that XLF under 8 will probably be in the days to come. If we break higher tomorrow, then I don’t think we’ll see the XLF under 8 anymore.
How’s this for right on. This was posted Wed AM. I’m definately checking back here tomorrow AM.
Disclosure: I found this site bookmarked on Shanky’s blog.
http://www.tradingpoints.net/tradingpoints.net/Daily_Comment/Entries/2009/3/18_Weaker_Open%2C_Stronger_Close_-_Market_changing_character.html
tradingpoints.net
Daily Comment US Major Indexes S&P Market Sectors Commodities Currencies Links Methodology Subscription Page Weaker Open, Stronger Close – Market changing character?
March 18, 2009 8:44 AM
The $SPX has typically rolled over for past several months on these overbought daily readings. However for the past few days the market has overcome AM to midday weakness and has been closing higher past key hourly, daily resistance levels. The $SPX has just closed above weekly symmetry resistance. The current rally is 1+ week, 111 points and 16.6% off the lows. After yesterday’s weak open the 5 min chart exhibited a pattern of higher highs and higher lows throughout the entire day into a strong close above 774 straight into the daily 34 MA @ 778. 774 is the top end of key a Fib cluster of projection & resistance levels. Currently the technical picture is a series higher highs and higher lows on the 5 min, 15 min and hourly time-frames, and until that pattern breaks the pattern is solidly bullish in these time-frames.
Yesterday we noted that a 5 minute close above 766 would shift the pattern firmly bullish project to new highs and Tuesday’s close did just that. The 15 minute charts remain bullish on continued 15 min closes above 749. An hourly close beneath 753 and prices should slip to 742 and 733 on the cash S&P 500 index $SPX. The market is bullish overbought on a daily time-frame. Next upward 15 min and 60 min targets are 781 and 789. There is very strong daily resistance at 797. A daily close above 805 and the indexes could test 830-838. Projections and the market path are guaranteed to no one.
Because of the powerful reversal on the 10th Mar, from key weekly Fib projection / support levels, the benefit of the doubt is given to the bullish case. The daily trend is bullish with continued closes above 715. While the daily charts remain bullish overbought, the $SPX has not signaled a move lower. The 5 min and 15 min corrective patterns have been very brief. The weekly charts are bearish, and the rally above 764 key weekly symmetry resistance signals the possibility that the S&P will experience and even larger rally. Strength above 805 argues for a continuation and test of at least 830-838 on the daily charts. A weekly close above 869 would represent the largest rally since the beginning of the bear market in Oct ’07, exceeding the 7 week 203 point 27.4% rally in Nov ’08 – Jan ’09.
Today’s S&P 500 Cash $SPX daily pivot is 768.72, continued price action above this level is bullish. Prices remain comfortably above the weekly pivot at 729.24. Tuesday’s price action triggered High Continuation and High Continuation & Reversal signals on $SPX, Nasdaq 100 $NDX and Dow. It also was an outside day for several of the indexes, making yesterday’s low an important short term support level. The High Continuation and Reversal signal indicates that the 1st hour low is an important support level in today’s trading. Should prices break beneath whatever 1st hour low price low is registered during the day, expect additional weakness. Fib levels noted on the charts, price support and resistance levels are posted in the other sections on this website.
Idan, et al,
I’ve finished my homework for the night and I can say with a very high degree of certainty that the majority of analysts, including luminaries like EWI, have it wrong. You are right. Minute wave [5] is not finished. In fact, at best, it may have started today. I also agree with you that we cannot predict how low it will go–it could very well be truncated.
But, I can say with confidence, and with plenty of my own bacon in this game riding on short positions, that we are NOT due for a pullback as the P[2]-ers claim. We are due for a wave 5 down.
I hope that helps back your play.
THANK you for that posting. even if you are wrong, I´m definitely going to sleep much better the next days (in FAZ @ 52)
this wave 4 was meant to confuse everybody.
hope you are right… bought some FAZ at 24,7 and will some more add at low 20s
good luck to all FAZ owner !!!
According Infomoney guys, GS is the leader in financials. The whole financial group follow it.
Beyond the overbought technicals, GS is topping its upper channel. I do think that a reversal will in place very short.
http://www.finviz.com/quote.ashx?t=gs