Tze 9:00 AM
It’s the last trading day before the long Labor Day weekend. Volume is going to be light. Once again, due to the holiday season, we are doing a somewhat of light market update and highlight two stocks and discuss briefly QQQ, NASDAQ-100 Index.
NFLX is definitively bearish at the moment. The stock dropped close to 30% from its peak of over $300 this year. Now it’s 14-day SMA is declining. The stock found support at the 50 SMA but now 14-day SMA is a solid resistance. A good short position can be initiated at the declining 14-day SMA at $255 if the stock even bounces to that point. With the ATR measure at 23, it is quite clear that the uptrend of this stock is officially over, at least for the short term.
BID is not particularly bullish. But we expect the stock get up to the 50 SMA at $43. Currently the ATR metric is quite elevated indicating a high degree of volatility. The last time this happened, the stock had nice rally.
The Nasdaq-100 index in deep trouble. The only viable support for this index is the 200 SMA. This index is worse than both the situation of S&P and Dow. Technology sector often can be leading indicator of what is about to happen to the broad market.
My line in the sand for the Spy was 117.75. Not good if we close below that. Tze, you are right about today being light volume, especially by noon. It will be easier for some big players to manipulate the market this afternoon(up or down). Here is the RIMM chart I posted yesterday. Noticed how it went down to the bottom of the channel this morning. Will it hold?
I doubt RIMM will hold. The 50% rally was predominantly short covering.
Great Call!! RIMM didn’t take long to bust through that channel. This is why I keep coming back here. Tze knows what he is talking about!
Haha thanks Brownie. Hopefully more people will think the same way.
What a terrible day for NFLX and QLD.
Spy tagged last Fridays gap level. I guess it was a good place to bounce. I doubt it will hold.
Getting close to the low of the day now. If it breaks then I will look for 117.75.
Wow, that was fast! As soon as it broke it went to 117.77 in about a minute.
I’m going to stick my neck out here and make a prediction. Looking at the volume on my ten minute chart I can see volume is going down as expected. I still think that will make it easier to manipulate the market. If we can break todays high of 119.09 we go higher up till the last hour when we go down on profit takers and nervous hands not wanting to hold over the long weekend.
“till the last hour when we go down on profit takers and nervous hands not wanting to hold over the long weekend.”
Yea I think most people are nervous. I think BoA is in big trouble. The Fed is asking the bank for a contingency plan
http://www.marketwatch.com/story/fed-asks-bof-a-to-provide-contingency-plan-wsj-2011-09-02
I can’t imagine what happens if BoA goes under. Of course the Fed would not allow BoA to go under but breaking the bank up is definitely a possible approach.
Taking a chance here by going long on Spy for a day trade. $119 Calls with a very tight stop.
Spy 119.07 continues to be hard to break.
What is your target?
119.26 seems like a good target. But I will probably be out by 3:00. Got within 2 cents of getting stopped out. May get out soon if we can’t get back over $119. I will post as soon as I do something.
I’m forgetting to give Tze credit for the articles when I post them on other sites; need to remember to do that from now on.
No worries roller coaster. The FocalEquity is more important than my name
Haha look at NFLX, it’s getting killed I never liked that stock and it’s really satisfying to see investor coming to their senses. Driving that stock to $300, that was absolutely insane.
Stopped out for an 11 cent loss.
I went short CL for a day trade. Liking this trade so far.
This stock also has a quintile ranking of 5 (worst) within the stock model. So good choice
Got taken out of the trade, but still kept profits.
Profit is good!
I’m referring to crude oil. Are you referring to the stock?
Haha yea CL is Colgate-Palmolive Company
Crude oil we can infer the ranking for UCO and SCO in the ETF model. They are both ranked as buys so it’s ambiguous.
Oil getting a bid now as the storm in the gulf strengthens. May be a chance to short again. By Tuesday it should be long gone when the markets reopen. Thoughts?
33.71 looks like a good spot to short if we hit it.
Sorry, I was talking about USO.
Gold is looking to reach $2,000. Hope you guys benefited somewhat from this metal along with silver.
ugly way to finish off the pre labor day session. Enjoy your holidays everyone.
Couldn’t get my price on the USO short. It will be interesting to see what it does next week. Spy finishes at my “line in the sand”. I am 95% cash as I have a small position in a small cap stock. I’ll be looking to go short next week, but hope to see a pop early in the week. Have a great holiday weekend guys. As far as my prediction on the SPY, this is what I’m having for dinner.
Haha you are humorous my friend. Where did you get this picture?
I got this from another stock site that shall not be named. You should visit my blog sometime if you like my humor. http://therealitycheckreport.blogspot.com/
What an interesting blog you have Brownie
. I will put this in our link section. Even though it’s not really related to the stock market, nevertheless it can be a humor blog for some traders. Thanks.
Thank you for the comment and the link.
No problem. Hope you had a nice labor day weekend Brownie. Your blog is listed now under the section “Trader Humor” in our web resources section.