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08
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I have been using the weekly SPX chart as a nice guide that has kept me in the bulls camp most of the way up (and at times it has made me more unpopular than others) . The 60 and 30m charts are not worth a hoot these days (as demonstrated last week) for anything. The daily charts (which I live and die by) can remain overbought or oversold for extended periods of time. Since we are approaching a major top you need to back it out a little and begin to include the monthly and weekly charts in your analysis.
The trend is UP. No one can question that (you can question fundamentals and why the heck it is up all you want – I sure do). I am a firm believer in market manipulation and until something really bad happens “they” will continue to take every advantage they have to run this puppy up, up, up with no regard for the consequences to the broader public. The low volume ramp jobs will continue till something stops them. Get used to it. As long as there is a an extremely lose monetary policy, tons of QE money, rates are low, accounting gimmicks (that is being nice) and a total lack of regulation there are few headwinds for this market.
This is not a normal market. As a trader you have to play current momentum and leave the big picture out of it. If it is not within arms reach, don’t try to touch it. Use your indicators and play the trend. Do not try to fight it. Even if you think the world is heading into some massive depression with all sorts of really bad things to come (like I do), that does not matter to your trading this week. If the trend is up, play it that way till the trend turns. Keep your stops tight and be nimble. Think this week only, not next week or next year. Arms reach.
Weekly Indicator Chart
Looking at the TA in the chart, SPX has taken out it’s upper bear market TL (I think this will come into play a lot on the way down and it will take an impulsive 3rd wave to get back under it). I have tageted the 1215 to 1220 area for some time as a possible ultimate top (at this time I do not think it gets there – I’m currently looking for a double top in the 1150 area). This area has the 200ma at 1226, the gap near 1210, the 61.8% retracement at 1229 and finally the C=A fib at 1214 (at this time I am not prescribing to the H&S target some are calling for in the 1295 area). The two TA forms I am entertaining (both are in their final phases) are the ABC corrective or the A-E rising wedge formation.
Now, this chart will not time the ST moves I discussed earlier. This is a bigger momo indicator. This chart will miss the perfect top, but it will identify/confirm the true top when it hits., thus the final trend change from up to down (and down it will go – I’m speculating lower lows).
A monthly chart can be found here. I think the RSI5 has topped on it, but it really needs some help getting rolled over. This may signal some more upside or at least churning to a top.
Good luck to all. Let me know if you have any questions.
Quality post, thanks Shanky.
One thing, we need registration to access your charts!
March 8th, 2010 at 11:09 pm
Agreed. Zee, tell us how you sold $90 worth of calls today and got the math wrong
on so simple an equation ? I can guess the commissions were 2X the premium
collected.
We should get you a job at the fed.
Thanks Zee – I think I linked charts from an edit platform – try these links
Weekly –
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3186525&cmd=shows165701390&disp=P
Monthly –
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID3186525&cmd=shows186134880&disp=P
I can not get into the post to edit these links for some reason.
I agree. All the Central banks have a lock on the market. The institutions are in bed with the gov. As a retailer investor, you shouldn’t bet against the house.
March 8th, 2010 at 7:15 pm
I love this message board, I have learned so much in the past 18 months…What I see is a very managed market by the govt and big banks. The US retail investor is gone, replaced by global players finding a home for their monies. What the bears seem to forget is this a new deal, not the 70s/80s type of market, but a market that has changed to a global perspective. Americans sometimes forget the fact we share the planet with many other investment entities and our US companies run the global table. Bears lament on how crappy the US economy is and I agree is sucks, but that is not how one should view the present day siutuation…..
1. Wage Deflation – Joe and Jane Six Pack will fight for every dollar
2. Asset Deflation- Houses slow to move assets flat at best
3. Durable Goods Deflation – China makes too much shit
4. Raw Material Inflation – the old cost of good math problem, cost goes up, wages go down.
5. GS, BAC, Central Banks keep the pumps going in a effort to prevent financial chaos – AKA Greece –
6. US has seen it glory – deleveraging and baby boomer hangover will spell social unrest for some time to come….Ross Perot was right. NAFTA was a very bad thing and destroyed many middle class job sectors like trucking, farming, and light manufacturing..
7. Teabaggers will get Obama elected again….THANKS CRY BABY GLENN BECK!!
Discloser – LONG GS, SO, SHAW, MO & MCD
Get used to socialism…the party is over. Now the FDIC wants pension funds to buy failed banks…and Obama wants to PAY people to sell their house instead of forclosing. This is typical liberal BS. Lift up the worthless, by punishing those that get it right. Where’s my hand out. My only hope is Ron Paul in 2012. Then we can shut down the fed.
i prefer weekly charts, too. here’s a look at sp500, showing the “odds increasing” that we test 1225 or so. …maybe not straight up from here (as chart shows). but it looks like market wants to gravitate towards it. also 1225 is about the 200 day MA.
fundamentally, earnings have been strong. analysts are revising estimates upwards of $80/share on sp500. at 15 times multiple, 1225 is not unreasonable over next few months/quarters.
http://social.stocktock.com/profiles/blogs/sp500-weekly-uptrend
AGREE WITH THE POTENTIAL target of the 200 WEEK SMA as many stocks have surpassed this level. even CRAPSHACK …. RSH …. has a gap to fill on the WEEKLY and im trading BA short based on the WEEKLY chart resistance area.
THE market is certainly messing with my mind. somedays i feel like im going crazy. afterhours im looking at BA and thought i was in the good. they simply reset the price to the strike price of my APRIL PUTS . decided to do more than just TA on this one as i usually do. digging deeper i see they have the potential of a LARGE ORDER from the MILITARY.
this kind of stuff is what is screwing with me. a city close to us just announced cut backs after racking up debt beyond belief. they increased the debt on thier balance sheet to 600%. i was under the impression that the US GOVERNMENT would be cutting back. also, im looking at geting short multi-nationals as im also under the impression many companies selling outside the US will struggle because of all the US has done to the worldwide financial markets selling thier TOXIC TURD to everyone. so i combine the chart with my thinking and then im now considering reversing my position tomorrow. ive never done more flip flop trading in my life.
RECESSION / DEPRESSION ??
http://www.cnbc.com/id/35758978/site/14081545
http://www.cnbc.com/id/35769109/site/14081545/for/cnbc/
MY CITY …. looks like so horrid. empty shops everywhere. new buildings never completed. im long SRS CALLS and see a gap in IYR where im thinking ill take a monster position if it gets there. yet today i took half off the table.
ONLY THING SAVING ME………… HAVE NOT WENT MONSTER SHORT
and now im thinking i never should.
March 8th, 2010 at 8:49 pm
——— MTH ——– WEEKLY ………… im short this sucka too with $22.50 puts out a few months. but look at it now. empty houses everywhere and now OBAMA is going to pay people to leave. Schiff was too funny when he was on CNBS. one of the talking heads said they like the homebuilders. Schiff said id like the homebuilders too if i had a position to unload.
i know stock promoters jobs are dependent on the market staying afloat. but how on gods earth can the dare recommend buying homebuilding stocks when most of them have falling revenues and clearly that wont end soon. their is a myriad of stocks to buy… why buy a homebuilder?
MTH looks like it wants to break out on the WEEKLY chart. third try at $23
March 8th, 2010 at 9:42 pm
THE CATALYST ………. extend and pretend i believe. im reading so many debt issues with companies due in 2010 simply get extended to 2015 with scaled payments. bottom line, banks have too much crap on thier books now so all they feel they can do is let people of the hook.
CERTAINLY PROBLEMS and corporate bankruptcies loom. however from what im seeing is most of them will be stayed execution for years as the banks desperately try to undo the mess they are currently in with home loans.
BORROW DEMAND FROM TOMORROW by offering cheap money today and when that money cant be paid simply extend the life of the loan to lower the payments. if we keep borrowing from tomorrow. what happens when tomorrow comes. it seems like we have hit the end of the line but maybe we can keep this up for years to come.
XLY!! it has to pull back in this spot. has hit the target from the IHS down at the lows. the pattern calls for $32 and here we are. double top on the RSI 70. the market really needs to pull back here…….. for me to stay sane
THIS MARKET SIMPLY has to correct so the doubters can join the party at a fair price. scalping the odd long but never holding for long enough is no way to play a move like what we have seen.
Thanks, Shanky. Right on target.
March 9th, 2010 at 1:56 pm
Thanks.
Hi Shanky,
just a quick question about TRIX parameters in weekly chart. Are you using parameters 15 and 9 for any special reason? For weekly charts, I usually track TRIX with 4,4, and in case of daily I use 12,12. Thus considering, obviously among another factors, that trend is up when TRIX is above 0 line.
Thank you,
Perpe.