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17
Oct
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PART 1
PART 2
Today we looked at many charts all around and have tried to make sense of the market action. While we got the strong pull back we expected early on in the day, the market did reverse and move higher making the daily S&P candle not so bearish. We still want a confirmation lower and a break of a trend line before we can get more bearish but the setup in other stocks excluding energy is to the downside. With the XLF showing huge down volume in the last 20 minutes it seems like we could see an H&S forming. Other tech look weak including BIDU, AAPL and AMZN (less weak). Financials including GS, and JPM sold off away from their highs and could be showing signs of a reversal or at least a prolonged consolidation. BAC is a very weak stock after it missed it’s earnings, with that in mind it might be worth shorting BAC and Citigroup ( C ) and going long the XLF as a hedge. I also expect WYNN to potentially hit lower lows.. but keep a stop at a descending resistance trendline, I have already gotten stopped out and i’m out of this position.
Idan, if we break that blue trendline (around 1055), the bullish trend is still-intact, IMO.
We need to break the Swing Low formed on October 2nd (about 1020) to be calling a real bearish trend confirmation..
===The bull until end of year==
Here is my case. I present to you the 23-years of cycles lows/highs. To no surprise, August-October are the months that are most bearish. October 2009 is almost complete and we have not fell.. So tell me, in the most bullish months historically, why are we going to fall?? What does this mean? We go up major from here. I see 1150, even 1175 by end of year.. I’m telling you guys, we’re going to have 1 last sell-off, and that is going to happen in the next 2 weeks. After that, long is the way to goo.
1-year cycles::
September 1986 Low
August 1987 LOW
August 1988 Low
October 1989 Low
October 1990 Low
November 1991 Low
September 1992 Low [peak of 1-2-and 3 year cycle]
September 1993 Low
October 1994 Low
August 1995 Low
September 1996 Low
October 1997 Low
september 1998 Low
October 1999 Low
September 2000 High
September 2001 Low
Octobober 2002 Low
October 2003 Low
October 2004 Low [Peak of 1-2-year & 3 year cycle] 400 SPX
October 2005 Low
October 2006 High
October 2007 Major High
October 2008 Low
September 2nd 2009, Low
October 2010 ???? [peak of 1-year, 2-year & 3-year & 10 year cycle.. who knows what will happen.. but thats next year..]
I’ll be playing both shorts until November 2nd.. and this is light.. on 20 point rips higher days.. November 2nd, I’ll be going long aggresively until JAN 2010.
Here is the chart from 2 weeks ago: http://tinyurl.com/yggunfj
October 17th, 2009 at 8:44 pm
Hmm zee.. if you watch the video again, you’ll see that if we break out of the blue line we are still intact on the bullish longer term, but you can play a short term short here… but if we break out of my red wedge support.. then it’s technically over.
October 17th, 2009 at 9:15 pm
Replace ‘blue’ by ‘red’ in my previous post..
If we break the red wedge, the bull could still be intact because of the swing low [which will provide support, and theoretically the trend is still up] (SL: 1020, made on October 2nd).. no?
October 17th, 2009 at 9:50 pm
Technically you are right… a break of 1020 would be the ultimate show of new lows rather than just a correction, but a break of the wedge formation would show a shift in momentum, which is the first sign of a new pattern emerging. It might be a sideways channel.. but it’ll mean the end of a shove that we’ve seen over the last 7 months.
I am not an expert in technical analysis, but I think now there are a lot money flowing into oil and energy these days. There are some big money out there in oil and they would not give up on inflating the price very easily. Big money ususally invest in a long term and if this market was supposed to drop or crash as most people are saying, then those big boys would not have invested heavily in something like oil. Last week I just trade ERX, it is very strong and even on Friday when market was crashing down in the morning ERX was down just 2.5%. I would say this market start a correction when I see ERX is dropping 6~8% which I do not see to happen any time soon.
October 18th, 2009 at 12:07 am
Just an opinion here from a fellow investor/trader here, no expert by any means That stated, you do have an interesting take into what’s going on now Sam, however I disagree on the following point:
————
“… there are a lot money flowing into oil and energy these days. There are some big money out there in oil and they would not give up on inflating the price very easily. Big money ususally invest in a long term and if this market was supposed to drop or crash as most people are saying, then those big boys would not have invested heavily in something like oil. ”
————-
From what I read, as of recently, the big money insiders are selling at the highest level all year, not buying, but selling. Clearly GS, JP Morgan, and the Fed are indeed buying and not selling, but most other insiders and big players are selling like crazy.
If anybody else has read the same info please back me up on this or if there’s clear info to the contrary please let me know as well. Information is key, and the more we all have the better.
— FELLOW CANADIAN TRADERS — im hard short WFT.TO
1. technical inside bearish bar on Friday
2. strong fundamentals against performance
the CAD$ has bounced hard to the upside on OIL and GOLD and other metals moving higher in value. what has been harmed? Timber prices are flat while the dollar flies higher which really hurts an ailing Canadian Forest Products industry. CFP.TO and WFT.TO are my plays but im only in West Fraser Timber as insider selling back in the spring has not been met by insider buying. the selling took place at the $24 to $26 price range and the shares are currently trading at slightly higher prices than that. last added to my position Friday.
this is no 100% guarantee for a falling stock price. always pay close attention and use stops when you trade. this is not investment advice but simply an explanation of my trade.
THANKS FOR ALL YOU HARD WORK IDAN…. im slowly getting back into the swing of things as we are now settled in our new home. just have to get some more goods liquidated before im back to almost full time trading.
October 18th, 2009 at 7:58 am
welcome back Rich.. good to have you back
My real question is how do you get short? Lol, it traded 4,000 shares last trading day~
October 18th, 2009 at 12:43 pm
good richard, glad to know things are going well for you, please update me on how your family is doing as well.
I have a bull from March and been position trading in and out. Made some good money in the process. I am starting to get nervous when I see what can happen 6 months out. The $8K rebate to buy a new home is ending in Nov. A lot of the problems at state and local governments have been swept under the carpet with all the stimulus funding. Quantitative easing is winding down. They are dealing with serious revenue shortfalls. Long term interest rates are likely to rise. With the dollar continuing to fall, central banks across the world are likely to limit investing in treasuries till interest rates rise. It’s not a pretty picture.
I am not bearish either. Generally stock markets improve before main street improves. The economy is in the recovery process and should continue getting better. Unemployment will soon stop rising and start levelling off.
I think the direction which way the market will go is based on what happens in Washington. I am watching the actions carefully, as compared to words. Politicians are experts in saying the right words. But actions are a different story. The fed is not ending its buying of mortgage bonds yet. The democrats are committed to spending massive amounts of new money on health care. As long as this continues, it will hurt the dollar and I will continue to be long the market. If we see a change in actions, then it is time to sell.
October 18th, 2009 at 12:09 pm
My observs are as follows, i am never wrong, LOL>>>>
Zee needs to join a dating site and find a girl/boy pal or buddy (not that there’s
anything wrong with that!!!)
There is life outside of markets!!!
The whole commod/oil/energy trade can and will end very badly. The bounce
we see is a dead cat engineered rally from lofty, unsustainable levels. $100
oil would torpedo the world econo so be very careful and remember how
bubbles end.
Its the weekend, get laid, relax and remember, the markets will go up as long as
the wizard wants it to. When oil inflates they will tank markets and ensure your
further losses.
T/A is great, but it has done nothing to show the drops or rallies of bear or bull
markets. For evidence of that look to gold and sliver.
October 18th, 2009 at 12:25 pm
FWIW i went short MBT.TO as it has one of the worst charts i have seen in my
life. (Manitoba telecom, the next nortel?)
I will use the proceeds of the huge gains i expect i will book a trip to Cuba and
meet many 18 year old virgins at the airpor/hotel/beach.
Word to Zee. . . . learn espanole, go to cuba, meet hundreds of girls at the airport
that will do anything for 1-2 weeks to get out of that hellhole. Sure its sleazy, but
that is why we seek gains. An armload of 18 year old cuban ladies puts life
into perspective!!!
Sure they will rob you and give you mucho STD’s if precautions not taken, but
life is like that.
October 18th, 2009 at 7:46 pm
LMAO Rick.
October 18th, 2009 at 8:18 pm
Seriously though..
Rick, I’m one of the youngest traders I know that consistenly makes money. I usually don’t disclose what I do, but heck why not.
I just turned 19, and I have buying power intraday of $100,000 at the firm I work for. I’ll have buying power of $300,000 EOY by the rate I am growing.
I also traded more shares last Tuesday (400,000 shares), then you’ll do in your entire life-time.
So don’t give me any of that ‘get-a-life’ bull****.
I work my ass off.. day in and day out.. and get crunk on Friday.
It seems like ‘your’ very old compared to me since your talking about 18 year olds..
Oh shit the party I just went too had a bunch of 16-year olds.. oh wait and it’s legal too for me..
LMAO common Rick. I just turned 19.
Know who your talking too, before talking shit.
Oh yeah,
Some of us actually work in the biz.. and not just speculate on blogs.
October 18th, 2009 at 9:39 pm
Good weekend posts guys. Got me laughing.
You only 19 Zee??? You go! .
Don’t bet against oil.
October 18th, 2009 at 3:48 pm
I agree with 3m. Anecdotal evidence of green shoots. A builder in Pleasanton/Dublin area of Northern California released 17 new “will be built” homes on Saturday at 10:00AM. I was there at 4:00PM in the evening to check out the progress and was astonished to see all but one sold!. The prices ranged from 640K to 920K. For these buyers the first time credit is meaningless at this price range.
Hi Idan.
A few I am short stalking are HAR, CXTS, WHR, IOC
Also stalking RINO. For several weeks RINO has been #1 on IBD’s 100 list, ever since it closed above $15. It had been there mostly because of the MOMO, and not so much at all because of fundamentals. It’s just a highly extended story stock. During that time, IBD has mostly had very negative things to say about them, fundamentally and technically. Actually their fundamentals have been deteriorating for several Q’s according to IBD. It has now been 100% removed from their list. Not bumped down to a lower position, but removed alltogether.
Thoughts on these? Thanks.
i am comfortably long over the wknd. reason being..i have yet to see various blogs be filled with so many bearish analysis….and during my entire trading career…mkt has never fallen on back of such negativity. still eyeing 1120~1150 range on spx but ultimately 1250 into yr end… based on inverse h&s pattern on the daily chart.