$USD updates

This short pullback looks very close to done here........and the longer term trend looks to resume back upwards for the next 6-12 months.

Here is a link to my past 4 posts on the $USD

http://erikmarketview.blogspot.com/2009/12/usd-trend-change-when-will-it-start.html

...see the Weekly chart for 6-12 month TIME (not price) target of $USD up cycle. Yes, I think the $USD, will RISE for the next 6-12 months, or untill it changes it's current channell on the weekly chart.

Kenny beat me to posting the bull flag its forming here on the daily, so here it is:

http://kennystechnicalanalysisblog.blogspot.com/2010/01/market-conversation-for-january-5-2010.html

Looking at the IYR

One day into the first 2010 week, and although so far wrong on the broad market 1/5 into the week, have been on the right side of the trade. (sector) SRS was another gimme trade on its gapdown...see comments on link for rationale. 

http://erikmarketview.blogspot.com/2009/12/tightroap-walking-week.html

Notes on IYR charts, fwiw

Disclosure: Long SRS @7.31
 (target IYR 44.20-take majority profits, stops moved to break even)

Issue Advance : Volume Advance

woah, put your eye protection on. This one is wound up

Climbing the wall: GOOG

Preparing for the Tax avoidance Trade (ie the early Jan sell off)

There is no santa rally
There is no extra juice on the "end of year window dressing"

You want to know why the SPY has been up 27 of the past 29 Decembers in which the spy was up for that given year???  TAXES.  B/C people prefer to avoid them for 12 months and roll them over whenever possible. (they dont sell in Dec, unless they HAVE TO....its human nature to avoid giving money away till when you have too, especially if there is no interest on it).  Also pull up the chart and see how many of those 27 years we had a bullish START to Jan (its less than half, with an even stronger trend in the last few years, why??? my theory again, more people trade their own ports now than ever before. And i expect in its alot more than even last year, right Bernie)

I am ready..........for the New Year correction...I expect the first 1-2 weeks of Jan to be bearish.

finger on some SRS 7 calls......(plan to purchase at the very END of this trading week)

The fact is many more people trade their own account now, than they ever did before.
(and rightfully so Bernie...)

If Joe 6 pack is up big in 2009, (which he is) do you think he really wants to pay taxes on all of it right now?
.......OR............do you think he prefers to DELAY that nuissance by 12 months by simply waiting till AFTER the new years to sell a few shares.   I strongly guess the later.

USD trend change: When will it start dragging down the market?

$USD looks to be headed UP for the next many MONTHS (6-12 months is my time target for the trend), as I mentioned last week. Observe a weekly chart.

USD weekly breakout 11 Dec 09

But unless one is a currency trader, as HUGE as a key the USD is, it's not everything....
The USD is well off its 74.23 bottom, yet the market is still at it's highs. I also mentioned 2 weeks ago, that I suspect a rising USD will NOT put a damper on the stock market for the next couple weeks, due to it rolling into the Holiday anemic volume season here.

USD watch 6 Dec 09

I stick by my calls, that the dollar is headed up for the next several months, as well as the stock market will not sell off bigtime till 4 Jan 2009.

 - In regards to the USD, I mean the rubber band for now has popped. What more do they expect out of FOMC to get another dollar drop? These FOMC meetings, they have been telling us what they plan to do BEFORE the meetings. The meeting results are no "surprises" really here. They say 0 rate is the plan, and its working for now, etc etc. 

My point is, Tonight's futures, the USD is on rocking tonight, up .43 as a i type this. So the reaction from FOMC is dollar goes UP. Now, what else COULD they of really said, that would of made it dollar bearish today?  Short of "we will never ever ever increase rates, for 500 years!"...short of something "made up" like that, it just seems fully baked in here. Again, imo the 74.23 was a USD BOTTOM, for the next likely year ahead.

Yet i don't think the market "cracks" tommorow, even if the USD picks up more momentum tonight. Its expo week, then the next 2 weeks are lower volume, due to holidays, etc.

-Much more people today are managing and trading their own accounts than just a few years ago. It is my opinion of that. (no studies performed). It's also my opinion, and speculation that after the brutal 2008, the investors that manage their own accounts, and after having a great + year in 2009 they will choose to DELAY paying any income tax by 365 days, by simply waiting till after 1 jan to sell any stocks that were profitable in 2009. 

-That's my theory of why historically DEC is the most bullish month there is. No one wants to sell and pay tax, if they delay it by 12 months (up years, retail pulls the train).   Then in the down years, when some people might want to sell in dec, to get capital loss and get tax benefit like 2008, the fed steps in, and since its holiday volume it's easier for them. (down years, the ppt pulls the train).  Take alook at the dollar chart in Dec 2008. It's surprising the market was not up 15% for the month with that!!!!! So that's just why I think Dec are so historically bullish, fwiw.

The market does feel very heavy, likes its about to puke it up, it does, anyone can see/feel that. I agree 100% with the "Bernake: time magazine" indicator.  Good quick read here, how TIME magazine has been the best contrarian market signal for a little while now.

Man of the year: Time magazine = Kiss of Death


I stick to my thesis, that holidays=anemic volume
anemic volume=more bullish friendly.

If they keep this act up, (which i hope they do)...will be looking to get short heavy right at the close on 1 Jan 09
(friday's are also bullish freindly, and last year, i recall 1 Jan was a big up day, i just recall Dennis Kneale saying he would "dance a jig, if we broke 9000 or something", and every was talking about the great year ahead.  Remember last time, that the financials and reits were the 2 sectors that had HUGE spikes before the p3 crash.


disclosure: long exm, into years end, with finger on abort/sell button

Looking at the REITS

                      via SPY, IYR, and the 4 highest % reit stocks of the IYR etf

Thoughts:   SPG looks way ahead of itself in relation it's sector
                     (not saying it has already topped here).
                        - does that mean it is a leading indicator
                           and the rest will follow?
                        OR
                        - it is just far ahead of itself, and more likely
                           to come down harder than others at the next
                           downmove?
             
   (I think the later, as it also dropped the most in 08-early09,
    meaning its the higher beta. Trying put more emphasis on IYR
    to watch, than 1 individual stock)

   IYR looks like it may want to tag 48.57 (61.8% fib)

Dollar Weekly (update: breakout confirmed)

http://erikmarketview.blogspot.com/2009/12/watch-that-dollar-weekly.html

Well, There she goes. Looks like time to buy the dips now
(dollar dips that is)

It broke out clean, on the WEEKLY as of Friday (intermediate term direction now appears UP)

Personally, I am looking for a pullback on the daily chart (short term), to enter some inverse dollar swing trades.
  - even the weekly chart now can pull back some and still land above prior resistance as new found support.

Not thinking to attempting to pinpoint estimate/guess the height or length of this move, however looking at the USD weekly chart and its past trends and durations for the past 20 years. (39mo, 36 mo, 18mo, 14mo)

Even the monthly chart is bouncing where the support level is.
From a technical perspective, the USD looks as 74.23 was a solid intermediate bottom, and the trend is now up till the chart says it's not. (for the next 6-12 months)


disclosure: long exm into years end

GOOG (patience)...............

http://erikmarketview.blogspot.com/2009/08/goog-i-will-be-waiting-for-you-when.html

not yet....................................................
but its getting very close, so I mention the set up again, which is......

Waiting for the weekly rsi / macd trend breakdown for short signal.

Update from my original post (above)





disclosure: long exm

Watch that Dollar (weekly)

Remember a weekly chart ALWAYS trumps a daily.

Friday's usd move was a monster
- the daily chart looks like a breakout
- however the weekly is right at major resistance now

I would like to see it pull back and consolidate, to then look to go short names like FCX
(which trade almost totally inverse to the dollar)

I still believe that in Dec the market will "float" higher due to the anemic volume.
stocks like goog, amzn, aapl with less correlation to the dollar to lead the way. Even though the dollar was strong Friday, the market however was up. With the NASDAQ leading the way. (makes sense, again as it is the lowest USD correlation, yet commodity stocks, such as FCX were hammered)

Bottom line: I am watching the USD weekly chart to break out of its rsi channel before a trend change to be confirmed.

- also, with the low holiday volume, I would not be surprised to see stocks stay afloat and strong even WITH a confirmed USD reversal.

- If so, will wait to after the USD weekly breakout AND after Jan 1st to short this casino.

Disclosure: 100% cash

Follow the Leader, wait who is the leader?

............your guess is as good as mine which that is......

sometimes I do have a pretty good track on who is running in front.

http://erikmarketview.blogspot.com/2009/10/index-comparing-watch-dow-ndxtran-have.html

So the dow continues to have the lead torch, till it doesn't. However, the amount of time between tops and the expanding differance in the tops has grown fairly larger (ie look at the RUT!). So if i was to lean bullish, i would lean more on the RUT if i did. The divergance is pretty large now, and its chart pattern is actually set up much better than lets say the TRAN (which is in pure wait and see mode for breakout or triple top)

...but that's IF i was trading it long, which im not.

but here now, it looks dark as mud
market just looks undecisive here.....short term.

I still favor the bulls until the 2009 clock is ticking, per my below posts rationale...

.....not trading w/ em though....

random: Windows 7 is a step up and them some from the that vista

Cant stop the dollar drop

see below chart, for a technical STRONG signal of something to look for when a bottom and reversal are CONFIRMED. Until that line gets broke, there are sharks in the water.

maybe it reverses tomorrow? (i have not a clue, however i doubt it)
- which is why I will just sit and wait for it reverse and confirm prior.

Take a look at the USD performance last DEC, they tanked it hard. Worst month for the USD for the year in 2008. (no wonder dec 08 was mildly bullish huh?)

Too scary and high in the clouds to go long here.
No reason to short the market going into the holidays, the chances are NOT favorable.
- besides all the window, eoy theories...a known fact is that Holidays=anemic volume
- another known fact is anemic volume = bullish (in case you haven't noticed the past 10 months)

Ideally, to me the best swing trade plan/scenario is float and grind higher all the way up into years end, then buy vix calls on the last day of the year. The anemic volume can bring the vix lower than it intends to be. Perhaps im bias, because last year the vix calls when 400% in a week to start the new year.

I don't see the market falling too much until 2010 get's here, imo. Mainly due to the closer we get to 2010, and the holidays the lower the volume......

EDIT (add): here is a little historical data on December
Is is sell in May and go away.....or Buy in October and get yourself sober?

http://www.bespokeinvest.com/bespoke/2009/11/whats-in-store-for-december.html

The continuing watch for the USD intermediate to major bottom/reversal signal.

The blue line annotated to be broken/taken out, is the only ticket I see.

Index Comparing: Watch the DOW (ndx/tran have passed the torch)

the direction short term is DOWN.
(edit: intermediate term)

I was not expecting a Friday to be like that. I had said I think the GDP will be a sell the news event weeks ago, and elaborated 2 posts ago, in that the euphoric climax celebration will in term cause a great tradable market top.

Of course GS uses its will to make the same trade occur just the way they want it, extracting even more juice...

If you look back since March, you can see for yourself that the few and far between larger down days we have had, they are never on a Friday. (well until now!). I have begin a strong feeling that this is intentional for the "feel-good weekend" comfort to suck more money in the market.

Again, this is my opinion. However, with the exception of today, look back and see what most Friday's looked like for the past 8 months.

Without going too deep, we sold off more "after the event" than we rallied "off the event".
That alone is a pretty strong sign of what the direction is. (and remember, the event was mostly a gs induced short squeeze itself!!)

But does one CHASE this short right here? I had fully expected the market to WANT to go down today, yet i "thought" the ppt would do all they can to keep the "GDP fever" fresh in the mom n pops all weekend long to sip on and celebrate, as their was quite distribution today.

Again, if gs had not set that estimated "fear" number of 2.7, then we probably would of ended the week on about the same level, but the route getting there (ie wed/thurs/friday) would not have appeared as dramatic.

Bottom line is that the "2nd half recovery" that everyone has been talking about for over a YEAR now has occurred, and is now past tense. Earnings are also now getting into 2nd tier stocks.

the dollar, and economic data should rule here. So next week will be very telling w/ FOMC and unemployment.

my hunch is that 9.9 would not cause a sell off
but the psychological 10.0 level would however

FOMC, no clue, but the first reaction (ie 5 min bar) immediate after is usually the direction for the rest of that entire day...almost like an earnings reaction w/o the anemic ah volume to sort through.

technically, we (short term) look like we are due a bounce.

Daneric's last short term chart very feasable to to me. (bouce to 1060ish area, then call the life alert)

http://danericselliottwaves.blogspot.com/2009/10/bears-eager-to-jump-on-hold-on-sec.html

I actually bought a few DIA 98 calls at the close, yep diamonds..... (only looking to hold the first few days of next week). And I might be trying to get too cute w/ that. It was only a few. IF we get a bounce early next week, I will then cash out of them and then trade heavily w/ spy puts. But i want to see a bounce first. Just cant chase it short after today.

I really wanted to buy some CLNE calls at the close, I just hate those nickle/dime spreads.
...why CLNE?? Nothing extremely specific about it, however they do not report till 9 Nov, and "MOST" stocks do not crack before earnings. Basically any stock that reports in the next 10 trading days or so. (ideally more like 5) would be a safer long for a short term trade into next week. That way if you do NOT have the market direction correct, you still have the pre-earnings sentiment protection which is rarely more bearish than the broad market itself.


In regards to T/A, I have 1 observation (see chart)
Since the March lows, the NDX, along w/ TRAN have been the strongest indexes.
I mention this several times, that the NDX was also the ONLY index that made a higher low in March 09 (as compared to Nov 08). It is the leader, period. And when the NDX decides to pass off the leader torch, then the rally is likely over.

Do you remember that "Head and Shoulders" a couple months ago, you know the one that people in the barber shop were even talking about. The same one the spy, and especially the weak INDU had signaled. Yet that turned out to be one of the best intermediate term BUY signals in a long long time. ? Just food for thought here, but you can see the NDX actually never signaled, it landed smack dab on support.

The point being, if you LOOK for bullish or bearish signals, you can not use the weakest index only to look for bear signals OR the strongest index only to look for bull signals.

The NDX has been the best performing index since March
The INDU has been the worst performing index since March
....yet just a few days ago, they painted the dow's close, remember?

the INDU lagged the entire move up. Once could of been long the QQQQ and short the DIA as a pair trade and been lovin it since march, with very very little risk.
Now looking back in backazmith, what index is the LEAST off its highs? - the INDU

at any rate, the line in the sand to me is the INDU trend line that it closed immediately above. This looks identical to the NDX scenario head and shoulders trap. (at that time the NDX was the leader). Now, the leader is the INDU!! (well not actually a leader, just the least weak, or most propped. Hey, "dow 10,000 is catchy", ya want the retail to have that vision out there to sucker em in)

Looking for an early week bounce (led by the dow to tease the 10,000 level again)
....then another entry to short the spy (from around 1060). Just how im playing it.

3rd QTR Recovery "CONFIRMED"

Well its official now, USA is back to growth.
Yippie!

Haven't been posting much, and this will be short as well. Busy in transition.

GS controlled that one as well.
Lowering the bar the day prior, then CNBC announces how "ironic" they have been on point of late and they "better not be" this time.
GS didn't think GDP would be 2.7, GS did that b/c they traded that both ways. (short wed, then switched to long 1 min before the close)...GS made that call b/c they were trading the same news they produced. (imo)

I was actually short spy Mon-Wed, Once I saw they were NOT ramping up the market into the gdp, starting Monday, which i suspected they would I got short. Once i saw gs revise the est down the day PRIOR, after 4 consecitive red days..... it smelled way too fishy, so I went back into cash yesterday, and was wary of the pop today. (didn't play it long)

I had assumed it would be a buy the hype, sell the news. However since the market was in pullback mode, gs just simply extended it into a short the news, cover the event scenario, as they rocked the house both ways on this one. It was beutifull too how they operate. Within 3 minutes after their "revised" numbers, CNBC made sure to broadcast how very accurate they have been with these calls. The market would of probably been GREEN on wed, if gs had said nothing. Just as the market would of been probably flat today, as well. But hey, there is alot more money to be made by whipsawing it and frontrunning the same calls your making.

Will be going back in short Friday (tommorow) at the close, more than likely.
If you look back at the performace of Friday's since March, you can see it has the highest percentage of up days. And of all the larger down days we have had over the past few months, (-2oo) type. I don't believe any have happened on a Friday. (i dont have all this written down...so do your own dd). However, I have noticed that Friday's lean bullish on the most consistant basis.

Next week we have FOMC and unemployment. FOMC's historically are common pivot days, and recall the last FOMC, it was no different. Everyone one and their mother expects rates to stay at zero and it to be assured they will for a long time. Hence anything LESS than this, imo will cause a dollar rally. Again, remember the last FOMC, that's when the dollar started to show life, and the SPX moved from 1080 to 1019.

yea, the DOW is back within an earmark of the 10k level again. (great mom/pop headline catcher)...but look at the RUT and the NDX, they are no where near their tops. The NDX is the major leading index too.

I think Friday will be a small UP day....1080 tops (small: after a large move it then tends to be consolidation and UP b/c of Friday's history), then starting Monday we to resume the larger short term trend back down and revisit 1042 or 1019.

Earnings vrs GDP "hype" magnet. + a look back at the 2007 "top"

seems as if someone has rattled the market's cage here (october)
...as in the moves we are getting here are swing friendly, ie BIG (finally....!)

It was mentioned to me, that in regards to my postings, that I utilize information (perhaps too much) from others free insight.
- well i sure hope that i do! as that is what it is for...if i was better than everyone else at predicting the market, i would not read anyone else. (which is why i do, b/c im not. That's the whole purpose of blogging/message boards, isn't it?)

example, waxie was very emphatic that this post window dressing was a high probability sell off, and I shared that view. Market dropped 240pts the first day of oct. (thank ya $$)

then ya read some retail message boards and some are surprised the market went up even on Monday??? why? we had a huge sell off thurs/fri, that WAS the "post-window dressing" that was it, came and went. it's over. was very nice tho, (even tho it was short lived)...if using front month options. Short bounces / Buy dips (not chase)

that is what blogs are for, (at least to me they are)...after reading enough of them you can notice WHAT certain peoples strengths and weakness are. In regards to if there will or will not be a window dressing pre or post, or a santa rally....waxie is the best for that, hands down. imo

in regards to short term cycles and turning points, to me...inthemoneystocks has been by far the most on point (they are calling for a short term reversal of trend to the down side starting tommorow fyi)

in regards to interpreting news and how it will affect a stock...johnwelschphd is my fav source

in regards to awareness of extrinsic factors that I at times forget about (beyond charts)..i read kliguy38's blog

Tommorow, based on daily CPCE there is a 68% chance the market is RED (ie...read Cobra's blog to the right)

etc, etc...list goes on and on....

all input it compiled and used as adjunts to mine to form a gameplan.

just as important to notice what certain traders SUCK at, hence to not use that information. (again...everyone has strength's and weakness)


at any rate, as far as the market....post window dressing was great thus/fri, got in short wed at close, rang the register mid day friday......

went back short today at the open, (ouch) yet my P/L is actually flat. (great feeling after a big up day)
- short cme and goog (offset each other today)

I think that wed/thurs are down, and friday is flat, and monday is down
yep....that's my call, as deviated from all beneficial sources.

Friday's have not been deep red in a LONG time (market wants people to "feel good" for the weekend to spend more money?)

Monday's have been large moves, both ways, next is due down. (if we do happen to sell off hard to end this week tho, i then wont bet on it though)

my gut is mixed on time intervals, but it tells me:

Short Term: pull back over next 4 trading days (till end of monday only, but spx 1000 will hold short term)

Intermediate term: I have a strange (yet stong) feeling that the "announcement of 3rd qtr GDP" is perhaps "THE" BULLISH magnet that we are being pulled upward by. A major buy the hype, sell the news such event. What phrase have you heard on the financial news media more than "second half recovery", ya haven't. It's been pumped to the hills. I have NO IDEA, nor will i even begin to speculate how it will go down. However, if it goes down in a specific way, just as the close of Sept 30 (window dress final)..i will trade it heavy. That is this.
- imo, we are rallying INTO the announcement of 3rd qtr GDP. It should be positive, and i have a hunch that IF we rally hard the days leading up to it, that it very well might be one of the best "sell the news" short terms trades, since...ohhhh 1 oct. The bulls (bernake, cramer, maybe even Obama)...can then say "see you stupid bears, its confirmed now, we won". Which will then create a sentiment so lopsided that it can not go anymore, b/c its full tilt.

A classic buy the hype, short the news trade set up Oct 29th

http://www.bea.gov/newsreleases/news_release_sort_national.htm

- my plan: Sure Not going to put the cart infront of the horse, as it's conditional... IF we rally the preceeding days before GDP, and when it is announced as "positive", IF the market flattens or leans down, immediatly after it's initial impulse on that announcement...I will short it with 2 fists (so its conditional on the set up). And i will likely only play that for 2 days only, but heavy, again IF it sets up.

Long term: bear market

Disclosure: (short till monday's close, stop is if the spx looks like it will CLOSE > 1050)
goog nov 470 puts (11.20)
cme oct 280 puts (5.00)

Note: the reason such a super tight stop, if we do not pull back right here starting Wed,..then to me maybe it's voodoo but this looks alot like the 2007 "top" right before p1, which we had a lower high, lower low, as it looked like trend was reversed, then we had one last large spasm breakout up, before the fat lady sang. (if they do happen to take out spx 1050 on a CLOSE, i think we could and perhaps WILL make new highs in a blow off top). There is No reason it should look like 07, however, I am wary/cautious that it might. Another thing, "time frame" wise, that could very well if the pattern repeats itself be again the 3rd qtr GDP top theory, which preliminary is 29 Oct (bulls cigar smoking party lol), so that coincides also.

I think we pull back here for a few days..........but that's what having plans/stops are for.

Window Dressing

could be whats holding the market up here ??
..........well that and the ever crumbling USD!

- preface what I am saying by first making it aware that I am NOT watching tape every 10 minutes of the day intraday currently.
Nor am I trading it currently. Just doing market watching at the end of each day, looking at the longer term trends.

See all the top callers are lining up to get sliced one by one, yet still.

- remember Doug Kass, the one that got "all the fame" for calling the bottom to a T.
,well he has been calling for large down moves and yes a "top" since about spx 900!!!!
That is no knock on Kass. The point is simply........

Ya know how it goes: The market can stay irrational, longer than you can stay solvent.

Take home message: calling and trying to TRADE tops and bottoms is a fools game.
-better to miss the "turn" yet get all the meat and potatoes, than to pass it up, by "trying" to be cute and catch it. etc. I myself don't always abide by all my own rules 100% of the time. But that doesn't mean it's the "right" thing to do.


This current "short dollar / Long commodities" is about the most lopsided trade we might have seen here, since ohhhhh "short the financials right after LEH". Dunno, but I have to agree w/ Waxie, that come the very start of OCT we are likely to see a monster short squeeze in the dollar, come POST window dressing.

Today, USD was down 1%, yet market was only up .5%.
That is not bullish/healthy. I mean the correlation was only 1:2, that's not good.
That means the buy h hold american investor LOST wealth today being long. *yes lost*

That being said, it sure does NOT mean its time to short the market yet however.
Heck I have NO CLUE....

Daytraders, gap-faders, scalpers, news based intraday traders should continue to crush the market w/ good discipline.

Swing traders: well for myself, no clue. Way to over-extended to go long, yet NOT enough conformation to go short. If we have a few more days like today (relative weakness. ie spy/usd) etc, and push even higher, then on OCT 1st (post window dressing)...I will look to take an another entry swing to the short side. But that's conditional on how it plays out from now till then also.

Weekly momo stocks charts fwiw
- goog
- gs
- fcx

Defeat the Debt.com

interesting

And the bulls go marching on.....+ (GOOG update)

Trying to time this market on a short term swing (overnight) basis is beyond my imagination.

...
- all you intra-day scalpers, and news based 20 min duration traders, ya should continue to crush it.

..

That's the only way here to rock it consistantly, cash in and OUT before the end of the day. (or at least that is what I observe from reading numerous traders and observing the trend that ONLY that group is in the high percentage zone)
........
Hopefully my PCU oct puts (which I do still like alot) will make up for the qqqq sept's (which have rapidly evaporated into thin air)

- the fact that Copper is failing to make new highs while the market did, and the USD made new

lows, is to me a sign that copper is trading very heavily)
.............
Here is an update on GOOG as posted before, still "waiting".....no signal.
- which will most likely be the next trade I do make, when it finally comes.

http://erikmarketview.blogspot.com/2009/08/goog-i-will-be-waiting-for-you-when.html

Copper looks very toppy

My call: PCU will be trading at 23.00 within 4 weeks.

(don't follow me on this trade, do all your own dd X 10, b/c its a nasty market. But I have to go w/ my gut and the charts on this one)

.........

Disclosure: qqqq sep 39 puts @ .31

+ buying pcu oct 25 puts in the AM