3:22pm
Looking at Gold we got a bounce of 0.5% since we called it.. but now we are trading back down. We are still holding the level, but a break of 105.18 will be very bearish, otherwise i still would go long:
3:08am
Futures now in the green after being 0.5% down… That said, we are under that curcial 109.60 level on the SPY, and this is where we can see a massive dump towards that 1068 SPX level or 107.30 on the SPY.
SPY 4 hour candles:
The DOW has now joined the rest in the red. I’d buy calls on GS at $150 for Monday.
That was a quick drop…now it’s back up.
Those GS folks are pretty quick
It feels like there is going to be a late day pump.
Bought X Mar 47 calls.
—– RYL —- FAILED to breakout on volume. a close below yesterdays opening price would be quite bearish. $22.15 is the one to watch.
Fritz
Been working with the RSI(14) for awhile and it is quite reliable. Now that the RSI is under the 50 on several of the individual charts I look at (uraniums golds silvers rare earths) I’m more inclined to sell on a rise to the 50
Precisely. That’s where I’ll sell my call options.
I now expect XOM to rise above $66 come Monday.
im amazed it never tested $64 yet. MACD WEEKLY just crossing the ZERO line and RSI at 37 RSI . pretty sickly …. youd think it cant go much lower.
Yes it can, but not next week I don’t think. I’ll go massive short on XOM once it finishes its dead cat bounce.
whats even funnier is NYT getting more support than XOM . this market never ceases to amaze. NYT had 2 down weeks followed by this. the WEEKLY on NYT looks prime for a sharp decline next week. some will fall some will rise imo and hopefully you are in the right calls.
There’s your test of 64 Richard
– now can you say test of 66 pls ?
financials starting to take more of a hit now…
Are you looking for a selloff in to the close or a bounce and are yall looking for the market to retest the 1110-1120 area next week to put a rt shoulder in?
——— CPWR CALLS ——– getting hammered here. this one is not holding the 20SMA so im going to bail on it. put them out for sale. hopefully someone dreams of higher prices for this failed move.
order filled. lost some $$ here.
there’s a 10 year trend line around there 1050-1060 (kind of hard to get the exact number), which might be the next major support area. which is also the next 3 month major trend line.
we’ll see if this 1079 area breaks or not. it’s beginning to seem more and more likely…
————- SPX WEEKLY ————- could we get a 2 bar break at 1088 ? a strong break of trend if this occurs. a sell of into the close would complete it. would have to hit around 1060 to fit a strong break imo.
—————- SRS ——————- day trade in shares. have a sell order in at $8.23. im still bullish on SRS as i added to my CALLS had an auto fill this morning …. my scare print is $7.60. dont like the way the chart played out but the game the market plays is what we get.
TWO BAR BREAK OF $8.10 ON THE 15 MINUTE
this is the upper trendline of the channel down
anyone getting sea sick yet?
ORDER FILLED…………… $8.23
——— BZH APPROACHING $3.80 ——— ive posted this as my capitulation trigger.
—— RYL below the $22.15 mark i posted earlier.
—————– AVY ———————- LOOK AT THE WEEKLY CANDLE. SICKKKKKKKKKKKKKK………… the calls i bought are a wash but i cant
sell them on such an oversold stock short term. im more put heavy
in my portfolio but most the calls im in are looking more and more like
a complete wash.
looking at a different chart, a pretty significant trend line just broke on the spx.
1075.95 and dropping…
—————– PALM —————- MY LARGEST POOPER OFF 7.8%
i did post earlier… next stop $10.00 …… $10.14 print now.
———– NYT ————- TAKING PROFITS. the chart is giving me a mixed message.
SET sell order $0.30 above current ask . if this gets closer to the $12.60 level before the close on some more volume ill hold the puts. otherwise ill ask less and hope for a fill.
not enough “buy the dippers” today. the volume trade is well below the average for past couple of days after the failed breakout on volume. however what concerns me is that this light volume consolidation can lead to significant rise next week. this is why im considering unleashing this one.
Perfect… Bring on SPX 1068.91 please… More JPM FEB 43 CALL
They’re all very OTM, so they’re cheap. I’ll get rid of them on the pump next week and give them to bag holders.
Fritz, how much did you pay for XOM 470 call? I’m looking at getting some for .11C. Is that a good price or should wait for lower. Just picked up some VALE $29 calls. I’m following your trade into next week.
I paid $0.09 for them this morning
, when VIX dumped to 22.11
Increased volatility means increased premiums for options. That’s why I like to buy them when VIX is low.
Fritz – what is the forecast now – we breached and did not hold 1078 and did not reach 1068
an other best day for me
Jan 2010 I am up 22% 
I played both side and it works.. I learn that you don’t have to be bears or bull to win!
way to go. in the last hour i just watched my account fly higher.
dont know how much more we can drop from here. UUP should
send us a sign soon.
hmm…to hold or not to hold. market is oversold, but not badly, still room to drop more. i keep seeing that trend line break on one of my spx charts that could mean more downside into monday.
but even the candle body is right around the trend line, not a firm break. forget it. we backtested the major trend line on BAC yesterday and today and dropped hard from it. i am holding my BAC puts into monday.
i’ll swtich from feb to march options at EOD.
Update: The S&P 500 continues to test its 500-day exponential moving average. However, if weakness persists into Monday’s close, that average would be failing to hold up the market and we would cull our long exposure. That being said, this afternoon we are adding more longs, as the risk to reward ratio is favorable. We will buy OXY__UWM__ILF
if market hits 1072 today, i might just get out and not hold over the weekend.
might see a bounce to the 1078-1082 area.
Prior to a reversal, there is usually a last move by the market in the direction of the current trend so that it gives people who entered the train late a chance to get out. And then it completely reverses leaving behind all those that got greedy (look no further than March 9 2009, July 10 2009, November 4 2009, and who can forget January 19 2010 and Obama killing the rally the next day).
I’ve mentioned SPX 1068.91 as my target for this drop, and I mentioned the timing of January 29 2010. Let’s see if that holds.
great call on january 29th
not sure if we’ll make it to 1068. a decent amount of resistance in this area on the dow and spx where we hit the lows. will most likely hold for the day.
That VIX fractal from 2002 to 2008 is playing out perfectly
Coupled with cycle timing analysis, that’s how I caught this date, and that’s how I could catch the September 15 2008, October 6 2008, and February 10 2009 crashes.
Fritz – added to my XOM calls earlier in the day and VALE calls EOD (did not catch the exact low @ 1 but 1.07 …
I have bought all Mar options / same strikes – to keep things a little safer … as I cannot afford to lose this just because i did not have enough time.
Can you share a little bit about your timing analysis and what you look at for catching the big fall …. You mentioned the next big decline into Feb 5-6 – so you will be going short before then
Thanks for all your insights into RSI(14) and what you look for – this is very helpful and helps us all learn
Cheers !!!
i hope your number hits though. i would love more downside before EOD.
Fritz, do you still have the same expecations for your call positions in XOM, CVX, AXP?
More so now with the actions in the last 30 minutes.
————— BXP great post today — AlterorAbolish ….. no more tastier set-ups than that.
———– NYT ——— sold my PUTS
My pleasure, Richard. Glad to be able to contribute. I’ve gained priceless insight from you and other STers over this past year.
HOPEFULLY IT plays out early next week and come FEB 4 we can ring the register and post the following here CHA CHING
i made some $$ today. plus paid no commissions. if i didnt have to pay commissions everyday trading would be a dream
Richard – can you share what your Feb 4th turn date is based on ? Are you seeing us move lower into this date ?
———- SRS ———– this does not look like a soft move higher. can we really reverse the trend on MONDAY when SRS breaks the flag on such volume? holding my calls. UUP shows no sign of weakness here. charts that look like that ive seen massive squeezes and a pust to 80+ on the RSI.
———– DRIV —– take a look at that candle on the daily. glad i held on to those puts all day. thought this migh happen. hit resistance and bam. bid for some more PUTS now.
FILLED
———– SNDK ——- added more front month $25 calls. as it printed above $25.25 . this one is way overdone. technically a move back above $25.50 on MONDAY will be huge imo. if you read the earnings you will see why id expect this FIB to be saved.
HAVE A GOOD MIX OF PUTS CALLS INTO NEXT WEEK.
will be mostly cash by FEB 4
Fritz,
Would you be a buyer of VALE here?
Of course! I’ve just picked up a ton of OTM VALE calls. Pennies each.
Fritz, do you do your own research? Do you have any good websites for a sample of your method?
Al,
I spend a lot of time doing my own research. Occasionally I’ll look at indicators like put/call ratio. I target more for extremes on either side and go against it.
My 3+ years trading the market has taught me quite a bit. I am just fortunate that I learn from my mistakes faster than many people.
And now look at the market, perfect action just like March 6 2009.
Fritz-Are you referring to perfect action like what happened Mar 9,2009 when the bear rally started to take off or are you thinking the opposite with the market diving down?
have to be careful with those OTM options though. just as much as you can double, triple your money, you can lose 50+% really fast, or even the whole thing.
When I bought them I was prepared to lose it all.
In fact, when I buy a stock or option, I treat it as if it’s money gone. Whatever I get back is whatever I get back. That takes away the emotions.
i do that occasionally too. you get a REALLY OTM stock and put in a small amount and if u lose, u could lose that amount trading stock, but if u make money, u make a ridiculous amount.
just giving that warning in case others are throwing away life savings in very OTM options. by all means carry on sir =)
Agreed woo.
I think I’ll state that clearly next time when I post a trade like that so others don’t get screwed.
Woo that is why i have picked up the options over last 2 days, but picked them for Mar, so that I have some breathing space …
Anyone a buyer of FCX here?
Fritz,
What month and strike, if you don’t mind posting it!
All February
Strikes: 28, 29, 30, 31.
I’m using 30 for my short protection come next week, and 31 for a possible wave 5 to $35.
28 and 29 are for profit.
———- USB ———– CROSS IT OFF MY LIST …….. bailed on the puts here.
this chart speaks mandarin and dont have time to travel to Asia for details.
———— RYL ——— CROSS IT OFF TOO
Sold my SPY puts for 10% gain
Bought back the XOM calls i sold this morning.
Keeping X calls into Monday.
Fritz you’ve done some great work on this and it looks like today was a turn date for the markets, we’ll see Monday. Sunday is also the beginning of a new moon. Anjali was following that I believe.
i sold my BAC put options for a lot of profit.
market might sell off even more into monday though. this set up…crucial line was cracked…
BAC might have hit the 38% retrace of one of the recent drops and it did a strong red candle below and the major trend line above was defended. if financials follow suit, it could be a big red day for them.
however, we’re so close to the other trend line that broke on the spx, that i think i’ll resist the urge to hold a position into the weekend and get in on monday as soon as i see where the market opens and choose accordingly.
woo. im looking for another sell of Monday. sounds weird since Monday has been such an up day. but a sell off would shake out the short term buyers of this FRIDAY who think MONDAY is a guarantee. this should follow consolidation into the 4th and we can begin a corrective move higher to shake off the extreme reading this market will get if we do SELL MONDAY.
taking profits on a few now is a good idea. nothing wrong with profits.
no i agree with you richard. i’m leaning towards a sell off too.
the trend line that broke today is from FEBRUARY. it’s almost a year old. that’s no small feat.
i am HOPING that there is a rise into open so i can buy puts at open. but that backtest of the trend line at 1078 before closing makes me worried, that i might not get that chance.
if the market wants to rally on monday, they are going to have to open at least 1080+.
1072 on the long term held as expected (dipped slightly below it). However, there’s a chance we could still head a good amount lower. i don’t like where we ended the market today, this is not a strong support area.
i’m going to hope for a rise into monday to 1078 or so, and then i will probably grab puts with a tight stop. if the market opens down, i will consider some calls depending on the area.
oy what a pain. i didn’t want the market to rise into close this much to the 1078s. this will change things a bit and bring the body of the candle RIGHT on the trend line. pretty much 50/50 going into monday.
——– HAVE TO ADMIT ——- companies have done an amazing job adjusting to this environment and its great to see so many beating estimates even if those estimates
are soft. VPRT was just a complete BLOWOUT quarter.
the big question is sustainable growth. a lot of cost cutting going on. i think microsoft and yahoo did a really smart thing by agreeing to both use bing as their search engine and increase their search engine market share. a lot of companies making some really smart moves on the downturn that happened. a lot of other companies making some really bad decisions.
the month of february and march pretty much marks the 1 year anniversary of the major dip. going to be a really interesting month where we’ll either get more of a confirmed P3, or new highs.
enjoying the ride though =P
——- SNDK ——— AH PRINT…… some are betting this one moves higher as they push it above the key level $25.50 AH ………… $26.12
negate this comment…………. software MISPRINT
HAVE A GREAT WEEKEND EVERYONE!!
There should be no solid breach of 1068.91 next week, if it ever gets hit. It’s possible that we open down on Monday, but I will add more longs on any weak opening. Some OTM calls I bought are intended for short protection until February opex. I figured if I buy ATM calls on the day I short, they’ll be pretty expensive. I better buy the “to-be-ATM” calls when they’re still extremely cheap.
If we gap up on Monday, I will not chase the market and no trades will be entered, only exits on longs slowly.
And by no means am I saying the next major decline is February 5. We may in fact see gains on the DJIA approaching 250 on that day. I am targeting more for a post President’s Day crash. This is to show absolutely no confidence in Obama.
-Inauguration day January 20 2009: worst inauguration day performance on the market
-Stimulus Bill passage February 10 2009: DJIA crashed 5%
-Post President’s Day February 17 2009: 4.5% loss
-One year anniversary January 20 2010: killed the rally for saying banks should be taxed for risk taking
What’s next?
-Health Care Bill passage?: 5% crash?
-Bank Tax Bill passage?: 5% crash?
-USA defaults? Gaps below 666.79?
- Cap n’ Tax passage? 10% crash?
What do you guys make of WFC. Strong pretty much all day and AH drops and trades 30 cents lower, not a couple hundred shares either. I was able to cover a $28.8 short at 28.45 for 2500 shares. Filled instantly. Window dressing with WFC to drop next week and catch down with the other banks?
If you got filled instantly it means someone is going long, not short.
What time was the trade at? If it was past 4:10:00 and a limit order wow is all I can say.
Hey Zee, I covered my short so there was anxious sellers which aligns with the 30+ cent decline in AH. What is odd is that the drop was almost instaneous after market close. Nothing to my knowledge was released news wise.
The floor specialists may have had a sell-side imbalance in it.
I cannot locate the trade time and sales wise but volume charts show a dump of 15mm shares possibly. Very odd.
Next week I would look to go long. I think big boys are finishing up their selling. I hope to see a huge gap down on MOnday and then I would go ling huge
I agree with you Sam. I’m very long right now and I know GS and JPM will take care of all overhead resistance for me.
From Richard Russel’s Dow Theory news letter. He’s 86 and has seen it a lot of market action:
I think this bear market rally is in the process of breaking up. I’m guessing that the Dow is going to run into some panic action early this year, and I think the Dow will violate first its November low and then its March low.
I’m afraid we’re heading into something that nobody, in their wildest dreams, is thinking about. What will it be? It will be a full correction of the entire rise from the 2002 low of 7286 to the bull market high of 14164.53 set on October 9, 2007. Remember, I warned about the 50% Principle which came into play at the halfway level of the Dow 2002 to 2007 advance? That halfway level was 10725. After topping out in late 2007, the Dow turned down and violated the 10725 level. After bearishly breaking the 50% level, the Dow continued its decline and sank to 6547.05 on March 9, 2009.
Since that March low we’ve experienced a bear market rally.The rally took the Dow to 10725.43 on January 10, 2010.
Thus, and it’s almost incredible, the Dow rallied exactly back to the 50% Principle level. Having risen to 10725, the Dow then turned down. I consider this very bearish action. It’s as if the market see-saw swung all the way back to the old 50% level and then turned down.
Picture a child’s see-saw. The heavy end rises to exactly its horizonta levell, but it stops there. From the horizontal, the heavy end of the see-saw sinks down again to the ground. The market can act, physically, like a see-saw.
Working again with the 50% Principle, I now see the market sinking down, much like the heavy side of a child’s see-saw. I see the Dow declining to the low from which the entire rise started. That low was the 2002 low of 7286. If the Dow does not halt its decline at 7286, I see it sinking down to its 1980-82 area, which would be around Dow 1000.
Older subscribers who were with me over the years probably remember that the Dow pushed time and time again against that resistance ceiling of 1000. On November 20, 1980, the Dow finally broke out above the 1000 level to close at 1000.17. In 1981 the Dow hit a higher high of 1024.05. In 1982 the Dow hit still another high of 1070.55. Thus, the Dow finally left the 1000 resistance level behind. Therefore, I consider the level of Dow 1000 to be first a powerful resistance level and now a powerful support level
Thus, if the 7286 level recorded in 2002 is violated, I see the Dow declining to the 1000 level. Seems impossible? Seems out of the question? Call it anything you want, but that’s where I stand. That’s what I believe could happen if the advancing structure from the March low breaks down.And it does appear to be breaking down.
Guys, I called this downave 2 months in advance with the exact top (within 5 pts) and exact dates (within 2-3days)..
http://social.stocktock.com/photo/future-cycles?context=user
this deserves some 5 star action. I have us bearish for another 1-2 months, then blast off .
AS I MENTIONED YESTERDAY, the trend has changed for the next 2 months, instead of fierce rallies, it will be fierce sell-offs, instead of small corrections it will be small dead cat bounces. This tape allows no one to profit except those who got major balls.
Thanks Zee, could you tell us how you forecast another two months of decline? Based on what you see this?
Hey Sam, the assumption that cycle theory makes is that historically, counter trends usually last 1/2 to 1/3 of the main trend.
Since the march rally lasted 9-10 months. It is forcasted that this bear cycle will last 3-4.5 months.
Everybody has been looking for the big correction well here it is:
Your going to see sharp drops and almost no rallies. This ensures that the least people profit. (Remember in August, most ppl said, I’m not buying the S&P it’s up 50%… well in FEB-MAR 2010 your going to have people saying, ”markets are down way too much.. i’m not shorting….”..
I too have us rallying the first 2 weeks of Feb.
See Previous Photos to understand what cycles have I predicted:
http://social.stocktock.com/photo/esu9-daily_08072009_095546am?context=user
http://social.stocktock.com/photo/spy-futures-cycles?context=user
http://social.stocktock.com/photo/bull-until-jan-2010-or-march?context=user
etc. etcc.. (check my photos to see all my calls)
Zee,you have us ralling the first 2 weeks of Feb,what is your S&P target?? .
Zee – you are the one who introduced me to cycle analysis and got me hooked
- You said you are bullish for first 2 week – Can you share where you see us going to ?
- Also, do you still expect downside to 1060 by mid March or lower – any targets ?
Also, if you can share more on how you came up with this (a weekend post maybe ??? ) it would be very helpful for those of us newly introdcued to this ///
With the dates that you and Fritz are predicting, it seems that there is a method to this and your sharing will be greatly appreciated !!!
zee,
While some traders may not appreciate cycle analysis, I for one see its values and I use a different timing method; however, some of the dates seem to match yours.
I went very long on XOM today. I also went very long on CVX, VALE, and JPM.
I have us turn down before President’s Day, and bottoming on February 25. Dead cat bounce into March 4, and stomach turning drop into the Ides of March. I will again go super long on March 16. Like I said before, I think this bottom will probably be marked by a sovereign default (UK) that gets bailed out.
Oh yeah, with any luck, we bottom at 956.23
Fritz, I’ve been following your posts with great interest and have entered a XOM FEB 70 call position based on what I’ve learned from your commentary. Can you please explain “very long”? Does it mean you’ve shorted or taken a call position? I know that you’ve entered calls as protection for your short profits already attained so I just wanted to be sure what you mean. Are you still in FEB calls only? Thanks!
Very long means I’ve picked up A LOT of OTM call options. Yes, some are short protections, but I will get rid of them once my target price has been reached.
They’re all February calls only, because I have the same forecast as zee, big drop and small rallies. I don’t see us above 1130 before end of March, but I can see us below 1000 before March ends.
Zee – is this kind of movement / structure what you are expecting ?
http://1.bp.blogspot.com/_9Sqz0bUVklI/S2NZXLPbGdI/AAAAAAAAA1I/il5WflKvgGk/s1600-h/PUG+SP-500+Daily+Bull+EOD+1-29-10.jpg
This is from PUG’s blog …
I am holding ERX.
what do u guys suggest hold it over weekend or dump it now?
Remember I said that prior to reversals there is a one last move in the direction of the current trend. This is done so that people who joined the party late can get out unharmed and lure in people who got greedy. Even after a reversal there is usually a smaller move in the prior trend to create doubts on people who got it right.
March 6 2009, I got it right just a few DJIA points off the low. I bought lots of OTM calls that ended up gaining 600% on average. But I always wondered how differently it would have turned out had I not sold my OTM JPM and BAC calls on March 9.
July 8 2009, I got it right again but significantly reduced my long calls on July 10, and ended up losing $6k the following week (I lose from time to time, too).
October 19 2009, I got it right again by going short, but I reduced my short exposure by 50% on October 22 and partially missed out on the big move down on October 23.
I believe I got it this time, too. Instead of selling my calls on this morning’s pop I added more at the lows. I expect to see a ramp-and-camp Monday followed by a pullback late Tuesday and early Wednesday. I will not be shaken off my positions this time and missing out on a possible DJIA 250+ day on February 5.
Fritz, can you again explain the reasoning behind your prediction for a +250 point day on Feb 5th? Thanks in advance.
I’m not predicting a +250 day on Feb 5, I only said it’s a possibility.
That’ll all depend on how much the DJIA gains on Monday and how much it loses before Friday.
Fritz – thanks for sharing
You mentioned upside tgts for all the stocks … however you also mentioned that you are expecting a rally possibly upto president’s dau, however for some stocks you mentioned that you will get out Feb 4th ..
Are you expecting 4 days of upside ie Feb 1-4 to reach those tgts ?
iE.g. VALE closed at 25.5 … you mentioned you bought calls through till 30 expecting them to become ITM …
Can you share how you are planning to unload the positions ? When they reach their tgt or by date or some other reasoning – specially since you are expecting upside to continue further in the month ?
Thanks