Intraday Commentary ~ 12/2/2009

By
FocalEquity
– December 2, 2009Posted in: Intraday Commentary, Stock and ETF Models

Idan update 3:32pm
Dow jones 60 minute shows that it might still want to hit the resistance of the megaphone yet again, but in any case the upside to the resistance is not very huge. That said last 2 hours were a nice bear flag:
dow jones 60 min

Idan update 1:48pm:
Even though there is a nice SPY 10 minute H&S formation… assuming we end under 111 today on the SPY that would be bearish. However, the 50% retracement and the resistance of the megaphone (assuming we want to go there) lie around  112.80-113…so we might get another pop yet again. AXP is finally back to underperforming the SPY like we wanted it to, a good break of $40.50, would be the completion of the H&S and then a push to $38.

Idan update 12:31pm:

Taking a bigger short on MELI (4 %  more of portfolio today/ total of 8.5%) at $54/share… that would finalize my MELI shorting to around $52.89. I will also take a big 1% of portfolio short GLD at $118.55. This is a swing trade, and not a day trade… i’m hoping to see gold in the 1000s not 1200s.
Woo update 10:22 am:

Here’s the 1115 fib projection I’ve been calling for a while, finally hitting:

woo1month

I haven’t drawn any smaller fibs going north to 1122 yet because then we’re starting to get nitpicky. we’ll see how much resistance this 1115 area causes. south of 1110 is now more of a solid short position now that 1115 has been fulfilled. a break north of this 1115 fib is bullish and will probably lead to 1122.

Idan original post:

12:23am
Futures are not really picking a direction as of now. I suggest you play the SPY long and short overbought stocks like MILE (as a hedge) or go short select financials like JPM (after a small pop). 5 weeks ago, i recommended shorting JPM at 45-46 as it was hitting the Upper part of a megaphone formation, claiming it will see $41 , which is the bottom of the megaphone. jpmdaily
As you can see, that happened 2 days ago. We got a bounce since the 41$ level, however, it is very easy to see a H&S formation on the daily JPM chart. A break of $40.70-$41 to the downside would suggest another fall of $5-6 to at least the 200 SMA daily. You can play this either as a short after the neckline is broken or try and short if we get another low volume pop with a tight stop.

The XLF managed to save itself from breaking down (like mentioned in my last video), but we have to monitor the XLF very closely, a break of that $13.90 neckline in the H&S could mean more downside. THAT SAID a break to the upside of $15, would make me want to go long the financials.

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Sun Tze is one of the founders of FocalEquity.com. After going through multiple transitions, Tze, Charlie Cheng and their new team are bringing new changes and features to the new FocalEquity.com in 2011. Tze is specialized in financial modeling and has a masters degree in Finance.