Intraday Commentary ~ 06/10/2009

4:04pm
Wow crazy market action.. it seems like everyday is a reversal day as we keep hitting against symmetric triangle formations. You have to end the day on a slight bullish note as GS managed to save it’s wedge support and rally nicely at the end of the day, AAPL managed to not break down and rallied higher, and the SPY rallied on strong volume at the end of the day, but we were not able to break back above the support of the triangle and only backtested it.. we’ll see how significant that is. Video should be out by 7:30pm
 

3:45pm
94.35 on the SPY is also the ascending channel support, we haven’t tested it as resistance after today’s break, that usually is necessarily before moving lower. Nevertheless, if this move up is sustained on strong volume throughout the close we might get some continuation of that all the way to the top of the descending triangle resistance at 94.80 ish.  The neckline of the head and shoulders also coincides with the 200 SMA 10 minute at 94.10-15 so it’s relatively strong resistance. 50SMA 10 minute also at 94.30. 

3:33pm
My GS short gets stopped out.. as we are getting another huge rallly here into the close.. we are breaking the 20SMA 10 minute.. next resistance lies around 94.20 which is the 200 SMA 10 minute.  
 

3:01pm
20 SMA 10 minute being hit.. this is an important moment as it coincides with 3 pm time and is the last time the bears will really be able to push this market down. 

2:52pm
I never thought i would see the day of GS breaking it’s support wedge as it is happening.. take a look! GS 30 minutes: Can it hold it though? that’s the question…
 

2:39pm
AAPL is not finding much bids here.. and i think you can play it to the short side at 138.50.. a break of that will cause a huge sell off.. keep your stops above the 20 SMA 10 minute, and move them down as aapl falls.  

2:35pm
VIX has some room to run from here, all the way to the 30.50-30.60 level.  

2:33pm
XLF is trading below long long long term  ascending support (back all the way to march) here’s the 10 minute symmetrical triangle we are talking about that broke down:


 

2:30pm
I’m back in GS short as we formed a very nice topping candle on strong volume, take a look at that 10 minute candle!! It looks like today we will free fall towards that 923 right now… there is conviction buying and with GS trading below its wedge support, we can really dump here.  

2:20pm
stopped out of GS short (-0.34%) 

2:12pm
Finally some buying here, as we have been a little oversold on today’s action… and have hit the ascending support which sits below the S&P channel. I think 93.70 and 94.00 both are prior support now resistance.. and are potentially great places to go short.  GS is finding a  little bit of resistance with the wedge prior support, the question is if it is able to stay above it by the end of the day or does it fall down and thus confirm the first daily break of this wedge. 

1:54pm
The small little bounce here before 2PM is relatively bearish… GS should be shorted at wedge support, now resistance,  as it bounces slightly higher, keep some stop losses above the resistance. This level lies around 145.25 ish. 
 

1:40pm
You might be able to take a nice small long on GS at 144.40.. very strong support and resistance there, if that fails then we have our que for muc lower prices in the markets. 

1:35pm
If you have a short.. take some profits here.. this is now the new ascending support of the symmetric triangle, and we can move higher from here for at least one bounce. I’m not saying take all of them off.. just some in case we do get a reversal.  SPY 10 minute:
 

1:15pm
Treasury Sells $19 Billion in 10-Year Notes At High Yield of 3.99% That’s a very high yield, the $Tnx is shooting higher.. which means the demand for these treasuries were relatively low.  

1:06pm
GS short has been covered with a nice 1.7% profit.  Qs support lies at around 36.30.

1:03pm
Now that we are breaking the 94.10 area, the next strong support level is that formed from the last two lows, one of last week and this monday, it will hit at around 93.50 ish. After that is broken we have the crucial 92.80 to break.. a break of 92.80 will mean we have new lows and the uptrend is broken.  I will cover some of my shorts at the 93.50-93.53 level. 
 

12:53pm
We are testing H&S support on the SPY, Inverse H&S resistance neckline on the SDS, and also the SPY support of the channel.. this is the second time today within an hour that we are testing it.. we could see a breakdown on the next test.  

12:36pm
SDS 10 minute inverse H&S will break out if we got a strong volume push higher above its 200 SMA 10 minute at 53.78.

 

12:24pm
I’m looking to cover at around 145.10 GS (wedge support), although we might get a fakeout as low as 144.40… if 144.40 breaks, we are going much lower. My options trading on GS is to sell short GS 155 calls, and i’ll be selling some 130 or 135 puts if we get closer.  

12:20pm
I bought some of my SDS at this level, but it is still very possible that we will go ahead and retest the resistance of this symmetric triangle again, for a symmetrical head and shoulders.  

12:15pm
50 SMA and 20 SMA 10 minute are crossing close to a necktie at around 94.58.. good place to go short.  
 

11:40am
Volume to the upside here not impressive at all, this could be the break down  that we are looking for, you should be looking to add to your shorts at some point here, maybe close to the 50 SMA 10 minute or 20 SMA 10 minute if you want to get an even better entry point..potentially.  

11:21am
We hit the SPY channel support + 200 SMA 10 minute and found support as we predicted, this lays the foundation for a potential H&S:

11:17am
SRS 10 minute symmetric triangle very nicely broken to the upside, on strength. Next resistance lies at $19.00, my guess is we will see a small bull flag form as we hit the resistance potentially sky rocket higher.. Very bullish for the SRS here.
 
 

11:08am
GS is selling off on strong volume as we predicted earlier today… some support at 146.40.. but then it’s smooth sailing until wedge support which is now at 145… and is ascending pretty rapidly. once that wedge support breaks.. it’s over for GS’s updrift, and it’s over for the stock market as a whole, as GS  has successfully forecasted every move higher.  

11:01am
If we bounce at 94.10 level we will form a head and shoulders on the SPY.. with the left shoulder being at the start of yesterday, the head being at the start of today, and the right shoulder to be formed upon the bounce. Neckline being 94.10. I’m taking some short profits at that level too for a bounce. 

10:50am
As I mentioned yesterday in my Overbought discussion, I believe gold is overbought, and you can see how well DZZ looks with it’s inverse H&S on the 30 minute.  

10:45am
I believe GS is a great short at these levels… the push higher was due to the fact that it was able to repay tarp, that’s now old news.. time to go down to the wedge support around 144.80. I’m already short.  

10:44am
$94.15 on the SPY is the channel support.. and it also coincides very closely with the 200 SMA 10 minute which is around 94.10, so if you have a big short position, i strongly advice you to take some off there..

10:32am
We are potentially building a H&S formation on the 10 minute SPY, if you assume the strong open higher is the top of the head and we are now building the right shoulder.  SRS finally geting a bid and is outperforming the market to the down side. 

10:25am
GS now testing it’s small ascending support that is within the wedge formation, take a look at the 30 minute. You can also see a symmetric triangle there too!:


 

10:22am
We haven’t talked about the nasdaq in a while, so here’s a chart of the Qs, so you can get an idea of why the Qs are showing more weakness than the other indexes right now. It has been goingup in a small ascending channel on low volume and it finally hit it’s resistance and shot down pretty dramatically:

 

10:08am
Gap fill support around 94.78 ish, 94.59 is 50 SMA 10 minute, 200 SMA support is at 94.08 on the SPY.

10:05am
The nice small green candle before the 10 am reversal, helped the market fall even further… if this can hold.. we will have a strong down day and the bears will get the benefit of the doubt in this symmetric triangle now… XLF and SPY are trading back in their symmetric triangles… Citigroup showing incredible strength.  

10:00am
UUP 60 minute shoves back up above some strong resistance, and is getting stronger, which could mean that strength in the market is short-termed: Very much like last week. 
 
 

9:49am
Volume has considerably picked up in the last 10 minutes, so now it looks like there is a small potential to break down, we are at resistance around 94.90 can we break down or is this just a retest of support and a move higher.. i’m going to take most my shorts off here.. just in case.  

9:37am
Cyclebumer wrote: UUP went up and is positive, so SPY should be dropping more. (I agree with that), the question is if we test old resistance as support, to we break down or do we push higher, and my thoughts are that for now we push higher…  

7:54am
Futures are skyrocketing higher, despite the fact that there is some really bad news out there… russia just said that they are looking to lower their purchases of US bonds. The ES is now hovering in the 950s.. but is off its highs. It looks like we will break the resistance early today and then have a clear path to new highs. However, if this bad news will shove the ES below 944.5 again, then we might shoot down (even though right now that doesn’t seem likely at all).  

8:24pm (tuesday):
Hey guys, the futures are down slightly but as of right now they are getting a little bit of a push higher from their lows… Tomorrow is another very important day, as we might break out or break down from our symmetric triangle. With the resistance of the symmetric triangle being tested three times again, it is much weaker than the support is. A reason for an early sell off will probably be a little bit of anxiousness before the treasury action as the 10 year bond demand might not be  high enough. What do you guys think will happen tomorrow? Here are a bunch of these symmetric triangles are forming on a lot of charts, take a look:

XLF 10 minute has already broken to the upside, is this a forecast to what will happen to the SPY, or is the XLF going to shoot down early tomorrow. In the past the XLF preceded the SPY by a few hours:

SDS 10 minute shows the same  type of triangle as the SPY, only it is an inverse of it… We managed to trade right back into/a little above support after it broke at the end of the day. 
 

SRS 10 minutes, shows the same symmetric triangle, again, the support in this case (since it’s an inverse to the market) is being tested a lot more times than the resistance, which should get the bears feeling less confident, unless we get a strong sell off in the markets early tomorrow. 

UNG (natural gas ETF) 30 minute candles, are showing a different type of symmetric triangle, but one none the less. This chart provides are relatively neutral outlook, but also hints to great trades as the resistance and support of the triangles are very much spread apart: