New update on Sunday, 11:40pm
What are your thoughts on the market? Where do you expect markets will go monday-tuesday of next week? Share your charts here!
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From Unersaettlich
Mon-Tue might see continued rise in financials to 50% Fib and upper boundary of downtrend channel:
Observe how influential these Fibs have been.
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Not Mon -Tue, but an update of a bearish longer-term S&P chart:
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Behind many of the moves that interest us lies the $USD, which, being an index based largely on such as the Euro and Sterling, is starting to ascend toward a loftier rank, analogous to the softest rock or the best-smelling feedlot:
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From Craig (Sunday, 11:40am)
When you hold front month puts, you begin to over-think how the trade can go wrong from a timing perspective even if you are on the correct side of the move. I’m done over-thinking, as this is what caused me to leave so much money on the table during Primary wave 1. The path of least resistance is lower. The market will encounter overheard resistance that it will not overcome.
Could we rally Monday and Tuesday?
- Possibly but I’m doubtful.
Can the market sustain a rally through next week or even into options expiration?
- My opinion is absolutely not.
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From Unersaettlich
Craig’s S&Pchart and my chart of financials (both above) look rather similar. Horizontal, diagonal, and MA resistance may have already capped the bounce. Othrwse, much stronger resistances converge just above, capable of reversing a further rise on Mon or Tue, depending on steepness, into a possible encore of the Wed-Fri plunge (or worse, if the Wed-Fri drop was a first wave and the late Fri bounce was all or part of a second wave). Here is an S&P chart that incorporates and supplements Craig’s S&P chart and my chart of financials, along with making other points:
Glad to see you are still at it Idan, I see you are still keeping up the good work as usual.
VERY HIGH probability of up monday, and likely tuesday as well. I switched from short and went long after the big piercing up candle blew through the moving averages, that is a strong reversal signal that I call a “punch”. It looks inevitable that my favorite EMA’s will cross indicating an uptrend and the price action is now on top of the averages. Bull Power is in the green, RWI is in uptrend territory, DPO is on the rise, and Stochastic appears ready to be pinned. The only thing left is for the longer term TRII to go positive but I am sure that will happen next. It is not shown on this chart but the MACD Hist is also on the rise, a strong indication of uptrend as well.
Monday I expect a gap up and further conformation of all these conditions. Going against all this would be suicide IMO.
http://img16.imageshack.us/img16/9190/spy020510close.jpg
————- NOT SURE ABOUT THE NEXT TRADING DAY ——– but im pretty certain we have 2 up weeks into OPEX EXPIRY. seems , so far , my turn date of FEB 5 is likely correct.
the weekly volume on this market failure has been convincingly strong. we should see weaker volume on the retrace to confirm that we are indeed at a turning point in the market and lower prices are in our near future. ——– 1090 ——— GOAL LINE?
what is giving me this strong feeling? look at your WEEKLY CHART. set your chart up to show the SPX back to AUG2008 (similar pattern on break of 20sma) use the 20 40 and 80sma. the 40sma should hold prices at 1025 and the 20sma should provide some resistance at 1087. a back test of 1090 and fake out above the average like we saw back in AUG2008 seems highly probable. im not as convinced we run further because the 80sma still points lower. however, watch the volume to confirm this viewpoint. the WEEKLY 20sma and 40sma are still pointing up.
last week = RED DOJI on the WEEKLY under the 20SMA but above the 40SMA
MMs — CLEARLY STEPPED IN TO ARREST THE DECLINE FRIDAY
1. they must support the market by gapping up and freaking those short.
2. they must suport it well enough to test the resolve of DIP BUYERS
3. the media must scream and yell BUY BUY BUY – you know they will.
4. buyers step up to the plate especially those late to the rally. people sitting on cash who miseed the majority of last years rally are the most likely to buy this BS.
WE HAVE SEEN IT ALL BEFORE. pre-opex support and squeeze.
WILL ALL STOCKS RALLY? not likely. DIVIDEND stocks that are oversold may
become the most attractive to dip buyers as some show monster yields. Natural Gas chart is sitting on the fence too. it could easily turn bullish in one day.
THIS IS MY GAME PLAN SHOULD WE HAVE A WEAK VOLUME RETRACE
1. NOW go long bullish charts that pay a dividend and have little debt. eg. TAP
2. IN 2 WEEKS short any strength in expensive non-dividend paying stocks preferring those with poor balance sheets. chart criteria :: they must fail the 20SMA on the weekly.
eg. PALM ( fails $12.50 ) TIN ( fails $18.25) CERN (fails $79.50)
my TOOLS: moneycentral.msn.com for balance sheets and ratios. earningswhispers.com for updates and estimates. cnbc.com for humour. stocktock.com for reality.
GOOD LUCK TRADING!
IMPORTANT to those stocks i mention. TAP CERN TIN all report tuesday. im bidding on TAP CALLS for a fill MONDAY morning.
Richard, I’m trying to find a count that supports Minute wave 1 ending on Friday, which would allow a Minute 2 bounce into Options Ex. However, I’m having a very tough time finding a valid count. It would require some very strange qualities, such a very short Minutette wave 1 and a much longer wave 2 and 4 in terms of time. Seems like a low probability to me. But I’ve appealed to DanEric and others to see if they can add more on this possibility, given the implications for traders. As always, thanks for your thoughts!
im just pretty sure we are higher in two weeks than the close on FRIDAY. im saying its good to take calls on dividend fair value stocks with oversold charts. however, im still open to the market heading down to the 40SMA @ 1025 on the weekly prior to ripping higher and then making a steady boring light volume retrace to OPEX expiry. if we gap down on MONDAY and hold 1060 im thinking the market holds up nicely. if that breaks im open to the idea of hitting 1025. if we hit 1025 im going to really load up on calls and bets against 3x ETFs. there are many ways we can end up higher by the 19th that will suit a bearish trend. im not going to trade heavily short and expect to make $$ holding that position to the 19th. if i felt that way i would not have taken profits on so many of my dog picks on FRIDAY. im still net short at the close Friday.
…I am loaded with some SPY Calls for next week, because:
- Sentiment indicators like McClellan are showing bullish cross
- PPO daily/hourly are also showing bullish entries
But:
- Major Fibonacci structure (higher highs to current lows) is very bearish. We already started W3 and we are running a minor subwave W2 retracement
Conclusion
- SPY will conclude only the maximum retracement allowed but it should drop much further
Levels to watch:
- I like 108.8 (61.8% retracement) as maximum bounce. Also it looks like a resistence area. Beyond this, the bearish major formation (yellow lines) will be invalidated
- I will short again, as soon as receive any confirmation from my favorite TA indicator (PPO hourly – 1st Tab) trigger
http://www.freestockcharts.com?emailChartID=311d5952-70ab-4594-8dd4-a0ba79e4c04b
Hey Burned bear,
What do you look for on the PPO hourly?
..chart in the middle…bullish stochastic crossing
http://www.freestockcharts.com?emailChartID=07215994-87c8-4e0e-b924-9b943e23a677
what do you guys think about gold stocks? I think it is extremely oversold and gold stock completed A-B-C down and dollar completed A-B-C up!! maybe gold stock rally? thanks!
H&S pattern to watch out for:
http://img297.imageshack.us/i/goldcharts.png/
wow! H&S is also there too! I thought last three months was just ABC down! What do you think about the volume? during ABC down, gold stocks went down with huge volume, which could indicate that it is extremely oversold… I am not looking for some medium term bounce but just short term bounce of maybe 10-15%.
Dennis Gartman Letter just out, deflation is the new scare, long gold or gld
short silver and gold stocks expected to fall while underlying commod
rises.
Sees gold retracing to 982 before rally on strong dollar trade.
He is very bearish stocks. I just can’t see his call of 10 silver while gold
bounces and heads to 2512 ? Plat/palladium will decline big as car sales
go into decline. Bearish copper.
where to you all think oil is going?
or for that matter, energy in general
the thing is when you look at dollar chart, it just finished A-B-C up. so what’s coming is correction in dollar. so this means gold and oil which basically moves inverse of dollar will rise. I said correction, not collapse of dollar. after correction, dollar will rise again and bring down everything.
I long gold stock for a short term trade, maybe less than a week. and then I think as us dollar rise after correction, everything will fall.
——- UUP ——— really does seem like a clean ABC up. almost to major resistance. this supports market UP if this is complete. however, it can be 12345 up to resistance not hit.
Or a series of 1s and 2s…
Many are expecting a bullish Monday.
Remember I said two weeks ago, before the indices made a temporary low on January 29?
I said that Monday February 1 2010 would likely be the last ramp-and-camp Monday before the downturn. I also said I expect a switch to drop-and-crap Monday/Tuesday following that.
Anyone playing the bounce? I will play against you.
Richard, you’re in BC right? Maybe you should read this: http://www.thecomingdepression.net/main-street/survival/report-vancouver-olympics-potential-false-flag-terror-target/
I would like to think Canada will not suffer the same fate as the US, Spain, and the UK. But the crash date I picked out one year ago and the timing of the Olympics, just too coincidental for my liking. I always thought it would just be a crash to pay for the bills for the 2010 Vancouver Olympics, but now that all the potential dots are being connected, I blame myself for not seeing that sooner to possibly save more people. I hope what I am worried about will not happen.
That’s some crazy stuff Fritz. Proguing parlement is already suspicious to most people. I just hope the Olympics go over well and what happened in New York isn’t repeated anywhere else. At least if the terrorists did that without the knowledge of the government, that would be a different issue.
I noticed Friday your SPX target is 956, do you have any date for that target?
September 11 2001, March 11 2004, and July 7 2005 were all inside jobs, but I won’t get into that here.
I’ve also mentioned Ides of March, 956 will be reached before that.
Who here thinks Monday will be a huge up day ?
Friday’s turn around was very impressive !!!
Could this be some kind of head fake ????
Most people will say mutual fund Monday’s have been very impressive I think the last 16 out of 19 have been up days. Fridays late day turn around was a sign of things to come ..
I am very leary of false signals in this current market..
Different view points appreciated !!!!
I think even if Monday closes in the red it will start with a gap up at least to get those “regulars” to buy in and then tank it. I don’t think of it any different than any other day. If this was a Tuesday I would play it the same. Friday was a reversal day so the chances of a gap up the next day are high. Whether we close green or red is another story. As a trader I don’t anybody should rely 100% on which days are green most of the time as a sole indicator.
The monday gap up on mutual fund buying can’t be denied when it has affected
the past 14/17 mondays. It was also a factor in the friday comeback.
Pavlov would have loved this market as a test example.
I just posted a new SPX chart that I think is valuable. I really don’t want to over-think this. There is just too much resistance for the market to overcome. I’m not sure what happens Monday, but I do not expect any sustainable rally next week or into options expiration.
I also believe the greater overall direction is down, my daily charting SCREAMS down, but Monday and Tuesday like Idan asked about . . .. . . likely up.
I’d like to remind everybody to follow the money (options sold). There is a crapload of SPY puts that have been sold, and very few calls. For example the $108 put has an open interest of 188k versus 52k on the call side. Over 3:1 ratio. If the Street is short these puts (which I think they are) then we should see a big rally to get over these big OI strikes going into OpEx the third week of February.
Think back to 2009 between April -> October. How many times did the market fall 2% the week(s) leading up to OpEx only to rally to new highs? Seemed like every month to me. Now with the VIX at 26+, it’s favorable to be an option seller.
My custom max pain for February is $110 on the SPY. This is where calls finally outnumber puts, and also the resistance line where we broke down. We can get there quite easily since there are many folks who are short this market and we can easily get a 4% rally from here just on short covering alone. We’ll probably get 1-2% on Mutual Fun Monday. As folks on FastMoney have pointed out, we’ve been up about 1% for 16 of the past 19 Monday’s (84% probability). TIFWIW.
My position for February:
SPY Iron Condor: 103-110
Betting Mutual Monday goes up after last’s week action is a 50% bet at best. At some point the Monday madness rise has to die to the chagrin of all the longs betting on it. Based on Fridays action the most short term bets are to the long side. Hopefully Mr Market gives them a wild ride at least to test their conviction.
.. I am comfortable that Monday probably will reach 50% retracement…
..beyond this, I will keep my stops very tight because another drop may be triggered very soon…
Gold down a couple bux, no one is paying attention to the G-7 releases.
Asia tanking average 3% and dow eminis down 34 pts.
Trap?
Dow has gone from +9 to -3. Never to -34. Maybe we’re not looking at the same things…
You need to discount the prior fair value of -35 based on how much they cooked
the numbers friday into the close.
Complex manipulations.
Gold is a good indicator, lower gold, look out market. gold down at 1052
as per kitco.com
Huge outflows from GLD and the gold funds that spring up daily LOL.
Double standard? ? ?…
Futures are saved: PPT/FED/Timmy/All Mighty comes in to save the day.
Futures fall: Everyone is happy.
I’m looking at Kitco and gold in the asian markets hasn’t gone below 1063 today and is now 1066 – where do you see 1052?
I think big boys are still short but they start covering thier short slowly. I think we will see some dowside follow with buying to the close just like Friday which is clearly an action of buying by big boys, The question is if big boys will short again once we retrace up enough. The answer is no one knows but the good news is that big boys will tell us. Happy trading and stick with big boys and make maony.
There goes Timmy boy buying futures again. So far it looks like Monday will be green, AGAIN.
Dow +14.
VALUE CHG %CHG
Dow 9,953.00 +12.00 +0.12%
S&P 1,060.60 +0.80 +0.08%
NAZ 1,746.25 +1.25 +0.07%
I think we go down 1% or more Monday. Much volatility throughout, but very confident of a close in the red in all indices.
Eliot wave update end of day:
http://danericselliottwaves.blogspot.com/2010/02/elliott-wave-update-8-february.html