Today I update my fellow viewers on what the last 2 days of action really mean for this market. The DOJI candle that formed today on incredible low day could be viewed as two things: The first, is that it is a consolidation pattern for the huge move up that we had on Thursday. The second is that it is an indecision reversal candle. i would believe the former only if we get another day of consolidation down on low volume. However, I believe the latter because there are a lot of resistance which points could point to a move lower. We formed a double top area at 922 on the SPX, and this could actually be the top of the right shoulder. As we form the Head and Shoulders formation, other resistances such as the 923 level, descending channel, 20 SMA Daily lie overhead and could provide a strong push lower. Monday’s action could be one of a fakeout, we might get a rally in early trading to hit those resistances and then fall down from there to at least down 1.5%. If we fall down on low volume though, I will look to position myself long. My other advice is to not get too bullish before the 923-924 is broken. And also to take profits at the 880 level if it is reached at any point next week. We could very well break 880 but i think taking some profits off there is important and essential. I look at the SPY, AAPL, GS and VIX
Have a great weekend!
Idan,
your video comments are invaluable, thank you very much.
Keep up the good work.
Loev
im not doing much. covered all of my short shares in the morning at 914 and set a gap fill short in WXS but only 200 shares. bought some puts just over an hour to the close when we tagged 920. PALM 17 EDU 65 CERN 65 PCLN 115 CMG 80 …… see what happens. preferring JULY PUTS over short shares in case the market explodes, gaps, limit my losses to under $1000 per position. no time to be a hero. ill be quick to take profits in PALM as im only buying these for a retrace of fhe ridiculous move.
im far from 100% certain we head lower. this is why im trading small positions. however, im finding more and more people calling for end of quarter window dressing or market padding. when the market is at ridiculously oversold conditions i believe this to be a likely scenario. however, it makes more sense that the market sells off as those portfolios should now be more overweight equities. of course nobody at this point can say for certain. it is possible that these funds sold off these positions to the public already and now the market turns “dead”.
good luck trading!
here is something amazing about PALM . zero outlook given. finances in less that desirable shape. posts another large loss. shares have risen 15X from the lows. trades 72million shares or 8X average volume today. day traders dream but will it all collapse under the reality they may not have the cash to survive?
It is call the musical chair. Whoever is the last one will be “Doom”
Golden Crosses
With the index closing at 895 on June 23 (day of the GC), we can see that the 6-month downside risk is located at 783 and then 674 if we follow the path of the 1932 and 1938 GCs.
http://pensionpulse.blogspot.com/2009/06/from-golden-cross-to-golden-goose.html
ive seen many bearish charts enjoy the “golden cross” and agree that its a goose that many times lays a brown egg.
This is especially true with charts resembling current ones, where the 20- and/or 50-day MA’s may well make an upcross thru the 200-day MA, only to top out and re-cross downward in the process of generating widespread beargasms. Financials are one example of many:
http://i43.tinypic.com/2z4keba.png
Hourly chart of financials:
http://i40.tinypic.com/6oq0pk.jpg
Similar action in Dow; also resembles same period last year:
http://i43.tinypic.com/14bm3qe.png
New here, and noob on top of that, so don’t follow what i say. Feedbacks are welcome.
Been thinking about some ERY play. Energy sector has shown a lot of weakness lately on the XLE chart.
MACD is showing bearish sign, wide divergence heading down. On top of that, fast MA is below 0, another bearish sign.
Bear flag formed in the past few days, let’s see if the 200MA will be the ceiling and bounce off it.
200MA should be 48.45 on Monday, a good bounce off it can lead XLE to below 46.5 and head for 43.
But, if we close above it with good volume, we might have to wait for 20/50 MA as the next resist point, XLE can rally some more to around 49.
Beyong 50, I’m switching to ERX.
i trade oil short with HOD.TO. here is my chart. the initial move lower completed to target. and it looks like OIL may have already peaked on the retrace. if it stays below $70.50 im going short again. i covered at $67 and then made another quick trade since. currently out of the trade:
http://social.stocktock.com/photo/oil-10min-jun18?context=latest
consider the move from the daily closes and find the 50% retrace point for a clue on where prices are headed next. top $72.25 bottom $67.25 = $5
50% retrace on daily close is $69.75 failed to hold this level for consecutive closes and are now below it. if we get back up the $69.75 i’ll go short there.
great stuff! I should of look at oil if i wanted to play energy. it’s a good sign for a short on energy if oil indeed drops.
A Japanese Swan
A housing loan default problem is looming and likely to begin in the next few weeks. It amounts to the detonation of a ten-year time bomb that, researchers at the Tokyo Foundation say, started ticking around 1999 in the immediate aftermath of the Asian financial meltdown. This is the result of flawed government policy, whereby the state housing loan agency offered mortgages to families that they knew were unable to pay.
The crisis will also be tightly centred on mortgages extended by the government through the Japan Housing and Finance Agency — the body responsible for 20 per cent of the country’s domestic housing loan balance of about 180 trillion yen (£1.1 trillion).
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6578368.ece
——— MAX PAIN ——— i know its a while out. ive spent some time looking at many stocks and the indices this weekend and finding it tough to find candidates other than those i took puts on FRIDAY . for me, this is one more thing that points to chop sideways for several more weeks. PATIENCE BEARS as this could be agonizing. ROY SILVERSTONE is also open to this in his EW analysis as an X wave of sideways chop that could last several weeks. this analysis goes hand in hand with MAX PAIN targets. Copper is starting to show weakness but it may just consolidate at these levels. ive checked NEM and FCX for overvaluation compared to the options action and they are sitting on JULY MAX PAIN targets right now. im not saying we trade at 915 for 3 weeks. im saying, any upside move will most likely be met by an equal move lower and vice versa.
WHAT DOES THIS MEAN FOR OUR TRADING … im believing we see some weakness in the markets for Monday and early Tuesday. i’ll be taking some profits there. and at support going long FAS for a few days. the goal is to take equal positions and predict the waves at a better than 50% clip through the first few weeks of JULY. if i see any equities that are “out of whack” to the downside or upside i’ll be sure to post my trades. im hoping to have 12 positions with the right risk reward going into JULY OPEX but if i cant find 12 i’ll have the discipline to abstain. we may have to again wait a few more weeks for a full correction to take place.
THAT VIX —– im not in a VIX position but if i was take one id buy puts early Tuesday if this price prediction takes hold. the premium in VIX positions is just too much compared to other plays imho. VIX options, this month, expire after JULY index options. if we manage a rally well above MAX PAIN with just a few days before OPEX week it may be a good play to get calls.
KEY FOR ME: small positions as the risk reward is tightening.
good luck trading!