Monday, August 31, 2009

Twilight Zone & Bear ETF crack down?

I "think" that tomorrow is an up-day............
-Auto Sales data and ISM is on the docket tomorrow, and if "Cash for Clunkers" did anything, it will be or should be reflected in the data Tue.

As I posted yesterday, (see chart) today's move COULD be signaling that 988 is the next intermediate target. As this is a mirror of the the past set up, with the R shoulder being 10pts higher than the left last time, hence the 988 intermediate target here. I still don't think it happens in a straight line, as i cashed in my two small short plays for zero exposure tomorrow.

Case anyone missed here is a 40 minute interview w/ Robert Prechter talking about social moods......and his latest on the market.

Disclosure: 100% cash
Sold all my EEV (7% gain in 1 week)
Sold all my DZZ (1% gain in 3 weeks)
Sold all my DBA, covered all my GLD short (pair: 5% gain in 5 months)
.....obviously not any homeruns here. As the quicker strike plays that I have gone for over the past 2 months are hitting about 40% accuracy, hence I am not too giddy to jump into those currently.

Something does not feel "right" here, and IMO the market is going to go much lower, but when??? no clue when. And even if now is when it should. It does not earn extra cash points to "catch the top". I would prefer to wait till its obvious the trend is back down, then just wait for a BOUNCE to short, than to play it heavy up here in the turbulence zone.

That is an example of what I mean. Jim Cramer hard at work? trying to BAN the bear ETF's?
That is to me, yet another sign that we are VERY near a top. However that could also cause another final spasm to the upside as well. (remember when they banned shorting the financials, oh yea, they had a lil pop from that, off an initial knee jerk reaction, yet also in retrospect recall how GREAT of an entry that gave to buy puts on them or go long SKF? any time there is a forced one sided trade, it just opens the door for a basically "gimme" reverse side trade immediatly after. 100% bulls and 0% bears = go short. Well, this bear ETF kinda noise smells like that to me. How far will they take this? No clue. However the further they do, the better future short it sets up. So heck, I hope they ban ALL short etf's tommorow and have forced liquidation. Because one the market starts to stall AFTER the initial pop it get's from that, well its as good of a short entry as their is. Whomever is in charge of these kinda decisions just must be out to lunch. Bears get all the blame for hurting the market, yet NONE of the credit for when it goes up. You want to know one of the reasons that the market has rallied so much? B/C bears keep trying to short it!!! (trust me, i know! lol) If they want to get rid of the bears here and now, then so be it. But the bears are the main reason the market remains in an uptrend.
This kinda action in regards to that e-mail about the bear ETF's reminds me alot of when they banned shorting the financials.

However as a bear, even though the charts appear to be signaling a move down, and 988 seems like a good target, I am cautious of TUE's data (car sales), and also of Friday's data (jobs)

Sunday, August 30, 2009

2 Must Watch items this week (Head n Shoulders & Jobs data surprise)

1) Developing Head n Shoulders Pattern
(see chart, this looks identical to the formation of the prior head)

2) Unemployment "up-side" surprise caution on Friday (this explains how we are NOW entering the curve where a very large portion of people are now running OUT of benefits, hence the "monthly reportable numbers" may very well surprise even more over these next couple months)

1) Speculation here, but you can not deny the move up here is identical to the last formation of the previous head.

IF the black support line of this consolidation breaks, THEN look for:
Pullback to 988 (neckline)
Bounce to 1018 (right shoulder)??
Pullback again to 990 (neckline)???
....have a feeling IF this plays out, bears wont go bonkers at a "break of the neckline" nearly as much this time. Heck due to recent memory, I would not be surprised to see people buy it! (of out fear?) again, this is speculative for the overall playout here. However a break of the support line from it's current consolidation it is in now, looks like a short trigger w/ a target of 988 to me.

2) In regards to Friday's unemployment data, there are 2 things that I think are worth sharing.
a) last month, on Aug 7th, we had a nice pop from a "better than expected Unemployment number".
(read the link posted above, for why we should EXPECT a better than expected "reportable" number, yet things are not actually getting better)

b) last month, on Aug 7th, that very same mini-euphoric pop was also a very nice swing entry for a short trade for 3 days.
(see chart)

Another opinion of mine why this potential pullback here (988 target), is just a short term one and NOT a load the boat short scenario is this:

On a fundamental (my personal hunch) side of the house, I do have a strong feeling that the "3rd qtr GDP" is something that many bulls have on their calender and are front running here. And with the bigger picture, even though some are suggesting that we might have the "top" here and now. Even if that holds to be true, I have a feeling that we would then even yet make a "double top", around the announcement of the 3rd qtr GDP. Many people (smart), are watching sentiment here, AAII, BPSPX, etc, and everyone is looking for a "euphoric climax". Which makes total sense, as Prechter pointed out, there were only "3% bulls at the march lows". When sentiment becomes THAT one-sided, so does the trade.

So what kind of catalyst could give us "ultimate bullish euphoria" causing a one-sided trade?
- well the conformation and complete media blasting of a "Confirmed 3rd qtr recovery, POSITIVE GROWTH IS BACK!, GDP in the GREEN AGAIN BABY!" is my #1 guess.

My speculation is that the 3rd qtr gdp will be in the GREEN, and that may very well the euphoric climax the bulls have all been salivating for. (how the GDP gets there with the internal numbers, I am sure that Denninger and every other economic bear will be able to elaborate on that.) However Joe Blow, the common man of the US, he just wants to hear "positive 0.1" and he jumps for joy. Keeping things simple, as the powers that be have him fooled.

I can not think of any cliche or phrase that I have heard or read more often than "positive growth in the 3rd qtr". I swear I must have heard or read that 10,000 times over the past 6-12 months. So that alone, for the bigger picture, is why I think it has potential for being a large longer term buy the hype, sell the news and that if we do get a 988 pullback here, that is likely a short term move only for now.

Best of luck this week.

Disclosure: Long DZZ, Long EEV (will look to exit both early this week for a small profit, then wait for Friday's "potential of a surprise", for a potential better re-entry point)

Saturday, August 29, 2009

Weekend Reads

Wednesday, August 26, 2009

GOOG: I will be Waiting for you, when the levy breaks.

When the Levy (RSI) breaks.....
If ya want an EW count, look no further..... (thanks as always Dano)

Upgraded today, by the same idiots who Downgraded it at the friggin bottom?? LOL
(ya just gotta love it when those kinda signals come.... :o)
......not saying its there yet, (actionable RSI trigger per chart: self-explanatory)....but GOOG appears to be getting close to putting in a top, for a long long time. (497?)

Monday, August 24, 2009

Just a few charts to watch short term

The charts on these look to offer some clean set ups, or are positioning themselves to be setting up for for that possibility.

XOM: looks like a nice short w/ a predefined stop right here, OR a waiting to trigger breakout long (preferance, short)

ETFC: looks to be consolidating to tip its hand very soon whether its a breakout long or short
(preferance, long...only IF it triggers first)

FEED: IF it is digests its gains from pulls backs a lil...and THEN breaks >50RSI, its looks like a conditional long trigger.

DZZ: the rsi already looks good here, but the PRICE has yet to still breakout. Could be very soon, or a failed attempt here.
(I am long @ 20.15)

EEM: neg divergence on a double top, looks like a nice short w/ a defined stop, OR a waiting to trigger breakout long.
(preferance, short)
Disclosure: I only own DZZ, and my stops are at entry. I am not trading these short term, nor do I intend to either. However if i had the ample free time to trade short term, these would be some that I would be watching. Just happened to notice these from my watchlist, as some of the "cleaner appearing" setups fwiw.

Hitler Capitulates

Thursday, August 20, 2009

Picture of Day (19 Aug)

Short Term Charts (spx, vix, usd, gold)

Just some levels/pivots to watch for, going either way.

disclosure: Long DZZ 20.15 (swing)
Short BLK 196.75 (till end of week only)

Sunday, August 16, 2009

DZZ update: 50% move coming?

Pole height of triangle measures at 10.5pts

rsi wedge looks nicely coiled here, it could very well lead price.

dzz daily rsi: 48.97
gld daily rsi: 50.64
Disclosure: long DZZ @ 20.15 (w/ a tight stop)
- looking to add more, only if
the pattern declares itself

Unemployment "up-side surprise" curve

It very well might just be starting here, and hitting it's sweet spot over the next couple months.

For the "reportable" data that is....

Just a heads up...... don't be surprised to get a couple more "better than expected" unemployment numbers in the next couple months. I would almost expect it.

In a nutshell, a large curve of people are about to fall OFF the books in terms of their benefits running out over the next couple months. (ie less to "report")
....details below

Saturday, August 15, 2009

Different views on the macro-economy: North vrs South

Wednesday, August 12, 2009

Which one's gonna give?

Sometimes it can help to look at them all at the same time.

Looking at the candle's only, it appears to me, that no one has proven themselves "yet" as far as an intermediate term breakout trend.

Sometimes it may be helpful to put away the oscillator's (for a minute) and also appreciate the pure candle patterns alone. At times I know I can get over big-eyed on "excessive negative/positive divergence".
It definatly can't be ignored, but it also can't take precedence over price itself either..

So for the candlestick repeating pattern purists, (and for kicks....) we can see for tomorrow if there is a:
-small down tight consolidation day for the SPX
-large down move for gold
-gap down, mild down day, with a high wave on the VIX
-mild up day with wide candle expansion for the $USD

Disclosure: Long DZZ @ 20.15

Saturday, August 8, 2009

Taking time off....

I will be posting here much much less frequently over the next couple months, (likely till Jan 2010) when I do they will be simply observations. (just something to spark thoughts or outside the box ideas that others are not mentioning etc)

For anything beyond intraday/daytrading, to me market is too difficult to trade on swing basis.

Most importantly, I am in the final leg home of my training and all my focus will be on just that. Over the next 4 months I will be: completing my Masters, taking my PANCE (Physician Assistant certification board), visiting family in NC, traveling to Texas for 2 month long Army Medical Officer Course, visiting family in NC, then moving to South Korea for a 12 month tour. (hence pretty busy w/ priorities, ie no time to trade).

Great thing about Korea, is that I will be able to day trade intraday, especially the opening gaps in the evenings (due to time zone difference).

I will continue part time to watch the tape, scan the blogs and keep my charts updated as much as possible to not loose complete touch w/ the changings of sentiment, etc. The market will still be here when I get settled in to Korea.

IMO, the market will be in grind mode for a while here. I don't see any more short term rocket blasts to the upside OR the downside coming up very soon here. But who knows......