MARKET UPDATE (6:13pm):
Hey guys,
Today we saw a huge spike in the markets, that started when we hit 877 on the futures markets (which is a double bottom or an equivalent to 880 on the cash). Futures remained low, as housing data supported the thesis that we are by no means out of the woods and declining prices still remain at the same fast pace. Nevertheless, the amazing confidence numbers was exactly what the market needed to rally from the 880-882 level up to the descending resistance that i pointed out during the day. Here’s another 30 minute chart of the SPY for you to see:
As you can see, we have not broken the descending resistance line yet, and so if we do gap any lower tomorrow, there’s a chance that we will go ahead and test the 880-882 level yet again, and then fall below to test 875. If we do break out of it tomorrow, and that will be told by the early action (by 10:30 we should know), we do expect a move up to the 925 level and then to the 933 level where we will meet the 200 SMA daily, and THEN fall back down. Yes, I do leave a chance for us to rally above the 200 SMA, but its very slim, I believe the correction is so near, and I’ve positioned myself 35% short already. I want to show you also FAZ, which finished so nicely today on support of a descending channel:
Buying FAZ after-hours looks like a potentially good trade, as long as you have your short term or longer term stops put in.
Today’s light volume also suggests that it may have potentially been more of a short cover rally than really all out buying. Yes the volume was stronger than friday, but friday is typically a low volume day, and people get out of their positions into a 3 day weekend. That means today’s volume should have been stronger than thursday’s as people enter the market yet again, yet it was quite low. This reminds me of the last 3% rally we had on monday of last week. We will see how the futures act, right now they are down slightly.
The QQQQ is trading in a symmetric triangle, and we ended right on resistance today. Here’s a 60 minute chart:
4:01pm
Market closed right under the descending blue resistance line, this sets up for a possible gap down tomorrow, however any bullish break point of this level will be a significant win for the bulls. Then again the 200 SMA is hovering right above us, and the lower it gets the better it is, that way the bears get something to hold on to before we break to new highs.
Thoughts on SGR for an intraday short?
Consumer Confidence is up. Home Prices are down. I was under the impression that a consumer`s ability to obtain credit was directly tied to the value of his or her house, and that credit card companies were lowering people`s credit lines and in some cases denying credit altogether. Please tell me how this is worth a 200 point move in the DOW.
Bogus MM pop to kill shorts.
No new buyers.
This will die shortly. “Wave” goodbye.
http://en.wikipedia.org/wiki/Consumer_Confidence_Index
noticing more and more stocks break a key level and then CNBC starts going bananas pumping the thing. HD is up 5% today. that is why XLY has stalled out here.
—FAZ— NO CONFIRMATION AT $5.10 i may enter soon
bull flaggin’ everywhere…
Traditional the consumer confidence are highly correlated with consumer spending, which is highly correlated with GDP growth. However, if you look at the confidence versus spending levels for the past 18 months, they’re not a highly correlated anymore. i think the confidence numbers are just coming from the whole ‘green shoots’ movement by the media, and getting them hopeful of getting a job. If they do secure a job, most of those previuosly out-of-work consumers will work to repair their balance sheets and save further. I don’t believe it will translate into further consumer spending.
I’m currently a bear, but I personally wouldn’t mind if the recession ended tomorrow.
Cyan:
Where is the 200sma as of today ?
Thanks
93.79 on the SPY daily. That’s the “big” number. So roughly 938-940 on the S&P 500 Cash Index.
Stockcharts.com has the 200ma on the daily at 934.35 and Kenny said its dropping about 9 per week.
It should drop huge once those back months (September 2008 in particular) roll off when we had that huge drop from last year. I think someone here had calculated the 200sma to move down to the 850′ish range once that happens.
CAN’T GO LONG FOR 1 POINT………. but from what we see here, there seems to a pretty good chance that a close above 910 is what we will enjoy. why? who the hell knows. what will then be delivered on Turnaround Tuesday? don’t know either. nothing im in has me really worried. covered up for some profits and bailed on my FAS calls.
VSH, which can’t seem to turn a profit, now appears to have support. it is between the 40 week and 50 week moving average. this i can not explain away by the actions of the PPT
people just seem to be supporting stocks right now.
if you dont want to spend your money at HOME DEPOT because you are worried you might lose your job.. just buy some HOME DEPOT shares because they are going up 5%
that is how much sense this makes. my poor brain.
The pattern on 10 min SPY is looking more and more like a bull flag for a 3 pm squeeze
Next target is 91.8 – 91.9 ….
sigh.
max pain for the SPY june is 82 … dont know how we can rip higher without a pull back with options action like that.
did post last week they are going to want a green candle for the monthly even if it is a doji. so that is a close above 875 on the month. more stick handling pain for the week im afraid. just like last MAY when i was barfing.
this is why i avoid front month option contracts. JUN $22 XLY is off 46% today. that is simply too scary of a gamble. hang tough.
the volume on the flag is really not that light compared to the volume on the upmove and for this reason it is more supportive of the current price than bullish for higher prices. the bulls are having to put in alot of cash to hold prices here compared to a light volume bull flag.
I agree Richard – glad I have the Sept puts … but even those puts are currently -25% for me ….
I am not in favor of the mkt moving up … rather trying to be neutral and read the charts …
also – regarding the monthly up candle … I mentioned earlier that we need to close above 888 this month to have a green candle …. so that may just be the plan for this week.
Next target 87.5. Oh…and I want to win Powerball tomorrow night too.
875 has to hold on the month for a green candle. something to consider since the market machine seems to be in charge of feeding the bulls.
78.6% Retrace is at 915 so I’m sure they will try and push up to this area by 3 pm Eastern. That would be close to a 4% intra day move from the 881 gap down low. Nothing like End of Month markup. The question is will they reverse the market in the last hour of trading.
Yes – that was my morning call … 91.8 … also based on the inverse H&S target … did not think it would come true so quickly though ….
Happy Birthday, Mr. Zimmerman!! (belated)
Bob Dylan (born Robert Allen Zimmerman 24 May, 1941)
I ask, has anything changed??
http://www.youtube.com/watch?v=TFtdjFoeNic
“Masters of War”
Come you masters of war
You that build all the guns
You that build the death planes
You that build the big bombs
You that hide behind walls
You that hide behind desks
I just want you to know
I can see through your masks
You that never done nothin
But build to destroy
You play with my world
Like its your little toy
You put a gun in my hand
And you hide from my eyes
And you turn and run farther
When the fast bullets fly
Like judas of old
You lie and deceive
A world war can be won
You want me to believe
But I see through your eyes
And I see through your brain
Like I see through the water
That runs down my drain
You fasten the triggers
For the others to fire
Then you set back and watch
When the death count gets higher
You hide in your mansion
As young peoples blood
Flows out of their bodies
And is buried in the mud
Youve thrown the worst fear
That can ever be hurled
Fear to bring children
Into the world
For threatening my baby
Unborn and unnamed
You aint worth the blood
That runs in your veins
How much do I know
To talk out of turn
You might say that Im young
You might say Im unlearned
But theres one thing I know
Though Im younger than you
Even jesus would never
Forgive what you do
Let me ask you one question
Is your money that good
Will it buy you forgiveness
Do you think that it could
I think you will find
When your death takes its toll
All the money you made
Will never buy back your soul
And I hope that you die
And your deathll come soon
I will follow your casket
In the pale afternoon
And Ill watch while youre lowered
Down to your deathbed
And Ill stand oer your grave
til Im sure that youre dead
Treasury Sells $40 Billion In 2 Year Notes
By InTheMoneyStocks on May 26th, 2009 1:19pm Eastern Time
The Treasury Department sold $40 billion in 2 year notes to yield 0.940% marking the first of three large note auctions this week totaling $101 billion.
I don’t think we can go much farther, unless the financial index starts participating more. We may jump up to 916.
XLF: apex of symmetrical triangle that we’ve been backtesting all day happens to sit at 2:30, $12.08.
I see that too…
CNBC Pumping bonds?
Status: “What, me worry?”
TBT (bounce after digesting auction news) GLD (gap almost filled) calls holding their own.
FAS LVS put tankage cost me $$$$
EBAY finishing right shouler
Oddly AAPL puts holding relative value since the first hour.
Close call: 905.01 (for Richard)
FL – what puts are you holding for AAPL ?
Gave up the doom and gloom theory a few weeks ago and went long, now I am killing it!
Don’t fight the trend and forget about all this chart BS.
Making big $$$ on GRO and SEED today!!
FAZ is for losers, you will go home broke.
Good luck!
FEED you would like too
what is big $$$–$5,000, $10,000, $1,000,000? It is all relative!
if he is in those he is making more today % than ihave in 3weeks
$ amount doesn’t matter. If he’s up big % wise for his personal portfolio, that’s what matters. Good for him for going over to the dark side. I’ve been fighting it and paying the price and am just tired of the rallying cries… 900 is the top, oh, now it’s 905… oh wait, 910 is IT… unless it gets to 915… oh wait, 934 may be the turn around point.
I’m frustrated with the games being played, not with the analysis, input or contributions by everyone out here. Don’t misunderstand my ranting please.
Was Annoyed:
Calling the absolute top of a rally has proved to be unprofitable in the long-run for traders . It is better to wait for confirmation in SOME circumstances. Sure you’ll miss 10-25% of the move down, but your risk becomes greatly reduced in case of a throwback/fakeout. It is unfortunate that most traders do not have the patience and discipline to do so, including me. I guess it is just human nature, and that is why most of the technical patterns keep on repeating. My thoughts on this Mar9th rally, either it continues, or this rally dies, and you have to be open to both views (as much as overbought as we think we are, it can continue very long (see internet bubble). We will find out pretty soon.
clarification–are you micro or macro?!!!
% gain since ‘pick’??? didja share it?? thx!!
Sheetfaced – you seemed to have figured the knack for picking stocks on the verge of breakout – will be helpful if you share when you enter the trade !!
What upwards channel are you looking at my friend? All I can see is uncertainty between the bears and bulls.
———- WAB —– covered at break even to lower exposure
Does is strike anybody else a little odd that XLY happens to get a bounce around the same time when government subsidized checks issued? Call it sector rotation if you want. As far as consumer confidence, maybe we are looking at it backwards. Perhaps the confidence lies in the fact that homeowners knowing they are upside down and will no longer be able to obtain credit allows them to spend and charge as much as they can before record bankruptcy’s are filed.
you know i’ve given this some thought. some stores may not do as horribly as expected because people dont give a shit about credit ratings anymore. just charge it and forget it. load up crap you dont need.
probably barking up the right tree. get short COF
ive made a few trades in it and have it on my radar once this rally proves false.
agree–bankruptcy is not a bad word anymore, because who was going to take you down? BANKS–and they have their own problems!!!
From a TA analysis = the lines on my comments on pg 2 seem to be holding for now ….
91.32 is the Pivot Point Indicator S/R line on my SPY 2min chart..
order in: buy QID at 35.27,,,gtc
Why 35.27 for the buy order
because that would be a ‘dbl top’ from last week,and the qubes might just sell off there.
I didn’t shake my 8-ball tho. Lemme check it …..
SHLD 400 SHARES SHORT pull back to the 200ma?
Seems aggressive, I was waiting for breakdown of pivot around 57.41.
IT HELD THAT — if it will happen it goes overnight. im going to only hold 100 overnight. looking for scalp on 300
GUESS WHO I GET FOR THE REST OF THE DAY
http://www.youtube.com/watch?v=DRHTS1PgAwU&NR=1
The baby !!!!
BOUGHT EBAY JUN 17 P .50
ES rejected at 911 again. See if VIX can pop the 50 ema (5 min)
Crack
905 Close with my fingers xed…
666,911?
Not sure I understand the significance of 911 since we were higher two weeks ago. Maybe its just me……
TBT lifting off
nice
300 57.86000 SHLD COVER net $45 have to gine baby lunch
VIX retraces 50% of the day SPX will be below 900 EOD
Fake out? ugh
Hey Ben…Over Here
10 Year 96.81 3.51 14 May 2019
30 Year 96.56 4.46 14 May 2039
XLY forming bear flag …
i just bought more
and more Ford puts
We could find it more difficult to make progress from here without consolidation. NDX is at a level comparable to 916 on the SPX.
ES break. Vix-o-meter poppin. No looking back here.
I don’t see any popping on the VIX.
No VIX popping! only a wish from the shorts!
See whatever you want to see
What I see is the VIX is down over 5%.
ok, boiled egg for her and $100 missing from my account bcs shld had to cover early
Better entry coming for your SHLD
Got chased out of my 22/25 srs vertical call spread, did some fancy footwork to come out flat. Not sure if this was the right move or not since 19.50 held but today was ugly ugly and I need to regroup on it.
once word on the CLI cap raise is released SRS should be more clear
I agree CK – would hold off on SRS for a bit … and focus on some other stocks … I see a massive H&S which is not negated yet ….
Bull flag RIFIN
ZERO CONVICTION EITHER WAY…… no confirmation from candle pattern
Zero conviction? Come on now, if the S&P was down 22 points today then I bet the bears would say there was some conviction from the sellers.
correct as that would breach 875. im staying the course under 910
do you understand candle patterns? FAZ did not confirm the break of $5.10
How did FAZ come into this?
And are you really arguing that a 21-point upward move on the SPX is somehow indicative of NO conviction on the part of buyers?
FAZ just confirms bear weakness, volatility is lowest in the bank stocks right now.
I can buy 50 million shares of FAZ and it will not change it much, it represents an index. I will buy up all the offers in the range and that is it. No up or down
VIX is not supporting a huge move down. Bears have tried to sell today without success. There will be a push up to the 200 SMA before the rally dies. I think it goes beyond that. The mortgage crisis took awhile to hit, this deleveraging will take awhile as well.
Ben!
NEW YORK, May 26 (Reuters) – The 30-year U.S. Treasury bond fell more a full point on Tuesday as the sell-off took on a momentum of its own, sending prices to session lows.
Thus a nice TBT push higher
Good job GM–glad I am not a bondholder, but if so, see you at the unemplyment line!!!!!
So the fun part is that according to Cobra this morning tomorrow is the second most bullish day in may.
So was today just a premove for tomorrow? Should be interesting to see
UNREAL.
Selling the 95-96 June SPY Call spread for a net credit of 0.25. It is will above the 200sma and provides easy stops in case we break it. Anybody else like this trade?
GOOD LUCK TOMORROW! halfway between 62% FIB and 910
up today but is it bullish http://stockcharts.com/charts/gallery.html?kbh
seems i called the close
Yes you did !!
Q for you Richard – did not understand why FAZ 5.10 was so important ? Maybe I am missing something ….
XLY pushed above the long term trendline again at the last candle … however still below 23.37 … this area will be key ….
$5.10 was resistance and then support over the past 3 trading days. that is all. FAZ has made clean higher lows for the last 12 sessions.
TG Richard won’t be naked after all.
Have a great night.
Bull market!
I agree with the word ” bull ” but that’s as far as I will go
Today’s action suggests a descending triangle with support around 883. The issue is discussed at a Danish investor site: http://www.proinvestor.dk/index.php?p=debat&postid=12180
As I mentioned last Friday the favorable End of Month Markup period was this week so even though the charts looked bearish we had to be on the lookout for a reversal and that’s why I was nervous about being short going into the weekend. Also the TRIN closed above 1.15 for 4 days in a row so that was pretty rare last week. The 4th day was on Friday. Today the TRIN for the S&P 500 closed at an extremely low level so tomorrow could be interesting. The last two times it closed below 0.30 was on 3/4/09 and 3/26/09 which was followed by some selling pressure.
Idan:
I think you meant to say 925 and 933 vs. 825 and 833…..
yup.. sorry
u r doing great!
Very interesting reading
http://www.gmo.com/websitecontent/JGLetter_1Q09.pdf
I posted this earlier on Social:some revision here, tho I think might be important to long term investors.:
I don’t see ANYONE talking about this simple, simple ‘system’ of mine. (Oh, it is really not mine alone. ) William O’Neil of Investors Bus. Daily says to ‘sell if the stock you buy loses 7% in value’.
Flat out, get out, and rethink it/find another stock, etc.
I can do as good with IRA, 401K, by just keeping up with PRICE action of SPX. Sell if it goes down 7% from High of trend. (or 6, 5, or whatever you choose). 7% seems to encompass most selloffs, thus avoiding whipsaw.
IF the price goes back up to where you bought, then buy back. You are out 7%. Maybe it goes on to gain, the next few years after that.
If one had got out of their IRA’s with a 7% ‘hit’ from the top (last Fall), then got back IN when the prices came back up 7% from the lows, in March, how much would your portfolio now be worth??? Way more than ‘buy and hold’, I guarantee you!!
Maybe something to consider. It is an easy concept; one just has to keep up with the SPX price, and stick to the rule, NO MATTER WHAT.
this is mainly for IRA/401K type of long term investing.
Whaddya think, Morris.