Wednesday, August 13, 2014
Wednesday, June 10, 2009
Introducing CandleQuicks
I have dedicated many hours to the study of candlestick patterns. Candlestick charting is an invaluable tool for trading. However, as I searched for a good resource that listed the most common candlestick patterns in an easy to understand reference chart I was unable to find what I really wanted.
You know the old saying, if you want something done right, do it yourself, so I made my own quick reference charts.
I have decided to publish these charts along with a candlestick orientation video on candlequicks.com. They are offered free of charge as a courtesy of tradevector.com.
You know the old saying, if you want something done right, do it yourself, so I made my own quick reference charts.
I have decided to publish these charts along with a candlestick orientation video on candlequicks.com. They are offered free of charge as a courtesy of tradevector.com.
Wednesday, May 27, 2009
Tradevector is Rolling Along
My new service, tradevector.com, is the home for all my live market updates now. I am running a live Sample Page for all viewers through this week only as a courtesy, and as a backup for the new technology rollout.
The new service is moving along nicely, and you can view an example of my live market analysis on the Sample Page. I am including another Market Wrap on this site just to keep things fresh over here as well. The courtesy postings will continue this week, and then I will be completely moving forward with the new service.
The new service is moving along nicely, and you can view an example of my live market analysis on the Sample Page. I am including another Market Wrap on this site just to keep things fresh over here as well. The courtesy postings will continue this week, and then I will be completely moving forward with the new service.
Wednesday Market Wrap
Monday, May 25, 2009
Announcing Tradevector
I am pleased to announce that the new website service is now live. The website address is: tradevector.com
There are two subscriptions available, a two week trial subscription and a monthly subscription. The monthly subscription does not force you to register for some lengthy contract agreement and can be canceled at any time (although I don't refund any pro-rated amount for time remaining on the month, which means it's a good idea to cancel at the end of the 30 days so you get your money's worth). I believe that a person teaching the stock market should always be proving themselves every month and every year, so I don't lock anyone into long-term commitments. I am also building a cancellation feature into the monthly subscription that will be working in a couple of days and will allow users to cancel their subscriptions on their own computers without having to email the site administrator. In short, I'm making the service clear, clean, and as transparent as possible.
There is a free Sample Page for non-subscribers. I am going to put the live market information on that page tomorrow as a courtesy service. Just like the blog the past week, there will be a several minute delay over the regular service since I will be cutting and pasting to get information over there.
I run daily Market Wraps on the live service, and I am going to post Friday's Market Wrap here as an additional courtesy. I am also doing this because the wrapup is a Webex recording, but it is in an ARF file format and not a WRF file format. This means that those of you used to listening to Webex recordings will still have a short auto-install of the ARF support files from Webex when you click on the link. I want you to be able to check out the ARF format right away. I happen to love the ARF format because it buffers in to your computer much faster, and after a few seconds you can start skipping forward and pick up wherever you want in the recording almost instentaneously.
Here is the Friday Market Wrap
I will post additional information and updates about the new service on this blog. I will also do a few more courtesy recordings of various sorts in the next little while. I hope you enjoy the new site.
Once again, remember that for today and tomorrow I will be posting the live market updates on the Sample Page of the new site as a courtesy to all viewers.
Friday, May 22, 2009
Market Flattens Ahead of the Holiday Weekend
Pre-market futures are fairly flat ahead of the open. There is a relative absence of economic or market-driving news. The technical levels from yesterday are still the pivotal areas for today.
It is interesting to note that SHLD is up very sharply in pre-market trading after posting better than expected earnings results. This comes after ROST did the same thing yesterday, and TGT the day before. GPS is also up pre-market after reporting better than expected earnings. The retail sector is keeping its nose above water, and some stocks like SHLD and ROST are actually swinging up. It's encouraging to see that consumer spending hasn't completely collapsed for some retailers.
What isn't as exciting is that the dollar keeps dropping, which is causing energy and commodity prices to stay high, even if consumption is not driving the rise in prices. This comes on top of the hedge fund managers buying shares because of the demand/supply risks associated with a new world consumption paradigm. So we are experiencing a mini inflation in oil and commodities based on a falling dollar and speculative buying over a lack of energy policy. Many energy stocks were on my bearish list yesterday after a series of lower highs / Shooting Stars / and Evening Stars. This morning, many of those same energy stocks are going to gap back up where they gapped down yesterday (BHI, NOV, OXY, DO, RIG, etc.). So continues our wild market reactions to the directing of the economy. However, despite the inner conflict in the energy sector, I have still moved many energy stocks to my short term bearish list for puts.
Here are stocks on the bearish list today: energy (ECA, SLB, XTO, EOG, NBL, APA, CNQ, DVN), railroads (UNP, BNI, CSX), metals (ATI, X, CLF), coals (CNX, BTU, ANR, MEE), other commodity stocks (PX, APD), and other bearish stocks (CAT, FDX, UPS, BA, UTX, MMM).
7:50 am MT: The SPY opened flat and is headed towards the 88.00 support level. Yesterday the SPY found intra-day support at the top end of the 88.00 - 88.25 support zone.
The SPY (market) will probably try to test the 88.00 area today. The three-day weekend will probably dictate some profit taking this morning, and also in the last hour. In between that time it will be important to watch the short term support and resistance levels. If the SPY pops above 89.80 - 90.00 then puts are mostly off the table for me. If the SPY hits the 88.00 zone again, it will be a place to take partial profits on puts. If the SPY breaks down through 88.00 then it's likely headed towards 87.00, which will coincide with the SPX dropping to the low end of its short term support zone.
I speculate that the most likely scenario today is the market will fade a bit, then grind at 88.00, and then drop through a little. I don't think it's likely that the SPY can drop below the 87.00 area (870 on the SPX). I think there is just enough stimulus with the three-day weekend for profit-taking down to the 87.00 - 88.00 area, but also just enough absence of economic data, along with some positive retail earnings reports, to keep the market from selling below those levels. As always, speculation is probability, so keep an eye on the 90.00 area in case the lower probability scenario plays out.
For now, the bearish downswing continues.....
11:40 am MT: The market continues to grind intra-day. This is a mini tipping point on the SPY and overall market. The SPY and SPX are forming either a rollover pattern or an intra-day bull flag. A move above 90.00, which was the early day tipping point, is still a signal that the day has tipped to the bulls. Even if the bulls push the market above 90.00 and make a run to 90.50, there is still some risk of last-hour profit taking ahead of the holiday weekend.
You can see the either/or pattern forming on the SPX 60m charts a little better than the SPY. This is another one of those real world vs. fantasy world moments for the fundies. In a normal long term bearish environment ahead of a three-day weekend, with the SPX support level clearly at 870, and a "Sell in May and Go Away" market cliche on the table, this would be a no-brainer rollover moment, like 75/25 type of probability. In the current long term bearish/fantasy bullish environment, this is a toss of the coin, or 50/50 probability.
There is the possibility of a smash and grab just above 90.00 on the SPY. What I mean is that as volume lightens up ahead of the long weekend, some traders may manipulate a technical breakout above 90.00 and then smash the pop back down by grabbing more profits. Right now, I'm sitting on my hands. I probably won't play any break above 90.00, and if the signal fails and starts to fade, I may look at puts for a run back down to the 88.25 - 88.00 area. However, a drop to 88.00 means that some big players would still be hanging around and not already flying off to the Hamptons or headed to the beach somewhere.
We'll see which traders show up in the last several hours.....
1:15 pm MT: Two things.....one is that the market is trying the break out to the upside on the consolidation I just charted for you (the SPY hit 90.00 exactly), so this is where you would watch for a late-day smash and grab. Two is that you should ignore the Sleestak photo of me, I'm playing a funny on a friend for a couple of days. And I don't want any jokes about "has anyone ever seen Dwight and a Sleestak in the same room together." I guess if I can turn Alan into Spotlight Ninja then I can make fun of myself.....
1:20 pm MT: Speaking of fun.....the market popped and is getting hammered right back down. So the smash and grab I warned of is playing out exactly. The smash and grab will complete itself if the SPY drops below 89.20 or so. Looks like the breakout traders just got there heads handed to them.....well, I can't warn everyone, I just do what I can on this blog.
2:00 pm MT: I was correct about the smash and grab. That was actually a 1.00 point play on the SPY from high to low in the last hour. Any Daisies (day traders) that tried to be breakout traders on the intra-day consolidation just got a lousy going away gift for the holiday weekend.
The trading today finished out as a Doji type of day on the SPX. It means that the 88.00 area on the SPY as a pivot area for support, and the 90.00 area as a pivot area for resistance, just got a little more important. Whichever way the pressure releases on Tuesday will be the play, so I will compile a list of both bullish and bearish stocks to watch for next week.
This is the last day I will be doing live market analysis on the blog. I will be posting the new service website address soon. I am still going to do some public service on the blog, but the trading service now moves to the new, live service. I know that some of you have wanted to see demonstations of things like contingency orders, setting up market internals, or explanations of chart patterns, etc. I will put together an occasional short training video and post it on this site as a courtesy to viewers. But this blog will now be mostly a site to direct people to the new, full service site I have put together.
I will give you updates later this evening and throughout the weekend about everything I am doing on the new site. Thanks for following along with me and supporting this blog. I have enjoyed working with you very much, and I look forward to continuing to work with you in a new service.
It is interesting to note that SHLD is up very sharply in pre-market trading after posting better than expected earnings results. This comes after ROST did the same thing yesterday, and TGT the day before. GPS is also up pre-market after reporting better than expected earnings. The retail sector is keeping its nose above water, and some stocks like SHLD and ROST are actually swinging up. It's encouraging to see that consumer spending hasn't completely collapsed for some retailers.
What isn't as exciting is that the dollar keeps dropping, which is causing energy and commodity prices to stay high, even if consumption is not driving the rise in prices. This comes on top of the hedge fund managers buying shares because of the demand/supply risks associated with a new world consumption paradigm. So we are experiencing a mini inflation in oil and commodities based on a falling dollar and speculative buying over a lack of energy policy. Many energy stocks were on my bearish list yesterday after a series of lower highs / Shooting Stars / and Evening Stars. This morning, many of those same energy stocks are going to gap back up where they gapped down yesterday (BHI, NOV, OXY, DO, RIG, etc.). So continues our wild market reactions to the directing of the economy. However, despite the inner conflict in the energy sector, I have still moved many energy stocks to my short term bearish list for puts.
Here are stocks on the bearish list today: energy (ECA, SLB, XTO, EOG, NBL, APA, CNQ, DVN), railroads (UNP, BNI, CSX), metals (ATI, X, CLF), coals (CNX, BTU, ANR, MEE), other commodity stocks (PX, APD), and other bearish stocks (CAT, FDX, UPS, BA, UTX, MMM).
7:50 am MT: The SPY opened flat and is headed towards the 88.00 support level. Yesterday the SPY found intra-day support at the top end of the 88.00 - 88.25 support zone.
Here is a chart of the SPY:
(click on image to enlarge)
(click on image to enlarge)
The SPY (market) will probably try to test the 88.00 area today. The three-day weekend will probably dictate some profit taking this morning, and also in the last hour. In between that time it will be important to watch the short term support and resistance levels. If the SPY pops above 89.80 - 90.00 then puts are mostly off the table for me. If the SPY hits the 88.00 zone again, it will be a place to take partial profits on puts. If the SPY breaks down through 88.00 then it's likely headed towards 87.00, which will coincide with the SPX dropping to the low end of its short term support zone.
I speculate that the most likely scenario today is the market will fade a bit, then grind at 88.00, and then drop through a little. I don't think it's likely that the SPY can drop below the 87.00 area (870 on the SPX). I think there is just enough stimulus with the three-day weekend for profit-taking down to the 87.00 - 88.00 area, but also just enough absence of economic data, along with some positive retail earnings reports, to keep the market from selling below those levels. As always, speculation is probability, so keep an eye on the 90.00 area in case the lower probability scenario plays out.
For now, the bearish downswing continues.....
11:40 am MT: The market continues to grind intra-day. This is a mini tipping point on the SPY and overall market. The SPY and SPX are forming either a rollover pattern or an intra-day bull flag. A move above 90.00, which was the early day tipping point, is still a signal that the day has tipped to the bulls. Even if the bulls push the market above 90.00 and make a run to 90.50, there is still some risk of last-hour profit taking ahead of the holiday weekend.
Here is a chart of the SPY:
(click on image to enlarge)
Here is a chart of the SPX:
(click on image to enlarge)
(click on image to enlarge)
Here is a chart of the SPX:
(click on image to enlarge)
You can see the either/or pattern forming on the SPX 60m charts a little better than the SPY. This is another one of those real world vs. fantasy world moments for the fundies. In a normal long term bearish environment ahead of a three-day weekend, with the SPX support level clearly at 870, and a "Sell in May and Go Away" market cliche on the table, this would be a no-brainer rollover moment, like 75/25 type of probability. In the current long term bearish/fantasy bullish environment, this is a toss of the coin, or 50/50 probability.
There is the possibility of a smash and grab just above 90.00 on the SPY. What I mean is that as volume lightens up ahead of the long weekend, some traders may manipulate a technical breakout above 90.00 and then smash the pop back down by grabbing more profits. Right now, I'm sitting on my hands. I probably won't play any break above 90.00, and if the signal fails and starts to fade, I may look at puts for a run back down to the 88.25 - 88.00 area. However, a drop to 88.00 means that some big players would still be hanging around and not already flying off to the Hamptons or headed to the beach somewhere.
We'll see which traders show up in the last several hours.....
1:15 pm MT: Two things.....one is that the market is trying the break out to the upside on the consolidation I just charted for you (the SPY hit 90.00 exactly), so this is where you would watch for a late-day smash and grab. Two is that you should ignore the Sleestak photo of me, I'm playing a funny on a friend for a couple of days. And I don't want any jokes about "has anyone ever seen Dwight and a Sleestak in the same room together." I guess if I can turn Alan into Spotlight Ninja then I can make fun of myself.....
1:20 pm MT: Speaking of fun.....the market popped and is getting hammered right back down. So the smash and grab I warned of is playing out exactly. The smash and grab will complete itself if the SPY drops below 89.20 or so. Looks like the breakout traders just got there heads handed to them.....well, I can't warn everyone, I just do what I can on this blog.
2:00 pm MT: I was correct about the smash and grab. That was actually a 1.00 point play on the SPY from high to low in the last hour. Any Daisies (day traders) that tried to be breakout traders on the intra-day consolidation just got a lousy going away gift for the holiday weekend.
The trading today finished out as a Doji type of day on the SPX. It means that the 88.00 area on the SPY as a pivot area for support, and the 90.00 area as a pivot area for resistance, just got a little more important. Whichever way the pressure releases on Tuesday will be the play, so I will compile a list of both bullish and bearish stocks to watch for next week.
This is the last day I will be doing live market analysis on the blog. I will be posting the new service website address soon. I am still going to do some public service on the blog, but the trading service now moves to the new, live service. I know that some of you have wanted to see demonstations of things like contingency orders, setting up market internals, or explanations of chart patterns, etc. I will put together an occasional short training video and post it on this site as a courtesy to viewers. But this blog will now be mostly a site to direct people to the new, full service site I have put together.
I will give you updates later this evening and throughout the weekend about everything I am doing on the new site. Thanks for following along with me and supporting this blog. I have enjoyed working with you very much, and I look forward to continuing to work with you in a new service.
Thursday, May 21, 2009
Bandwagon Rolls Downhill
Pre-market futures are down sharply after the Weekly Jobless Claims report missed expectations and Standard & Poor's lowered its debt rating for the United Kingdom. The Jobless Claims number was 631k vs. 625k, which slightly worse than consensus. S&P stated that net general government debt in Britain could approach 100% of GDP.
In addition to the Jobs report and the S&P debt downgrade, the Fed jumped on the bearish bandwagon after the minutes from the last meeting, released yestereday, showed Fedsters think there are "significant downside risks to the economy." The minutes were, in part, why the market rolled over yesterday, but I just fell off my chair laughing at hilarious news bogey moment #1. Remember, at the EXACT SAME TIME yesterday that the Fed minutes were revealing its dour economic forecast, Treasury Secretary Geithner was appearing before Christopher Dodd and the Senate Banking Committee to let us know that things were stabilizing and getting better.
Now, I'm going to tell you my hilarious news bogey #2, and remember, I'm just the messenger here, I don't make this stuff up, I really don't think I'm creative enough to write this kind of crazy, unbelievable news anyway. Former Fed Chairman Alan Greenspan jumped back in the spotlight today and stated "the banks are still in peril." I kid you not, like I said, I can't even try to make this stuff up.....This is after Greenspan, less than two weeks ago, stated that he sees a bottom in the housing market and the financial sector. You can review my post on May 12 for the writeup.
I'm not sure if Alan thinks we have all lost our memories, or if he's desperate for the spotlight, or if he's just stating both sides of the economic forecast so he can cover his tail. Whatever it is, this current market news environment, and much of the news for the past year and a half, just simply approaches the surreal for me.....
The SPY gapped down about 1.00 point at the open, so another day, another gap. The SPY (market) will probably head towards support at the 88.00 area.
Nibbling on small put positions shortly after the open is ok. It is even more ideal if the SPY (market) wiggles up a little into the 90.00 area in the next 30m or so for a larger put opportunity.
7:40 am MT: The market is still fighting with the big gap down. Somewhere in here, there may be some dip buyers who wiggle the market back up a little.
7:45 am MT: The market is wiggling up on some dip-buying. Here are some stocks of interest from yesterday's bearish watchlist: MTB, HPQ, NKE, RTH, EMR, FAST, NTRS, PH, T, ACE, RKH, RL, UPS, APC, CVX, WY, BNI, UNP, EXC, MMM, UTX, FDX, DHR, and MDY.
8:00 am MT: Many energy stocks are rolling over on lower highs with Shooting Start reversals: BHI, SLB, XTO, NBL, APA, OXY, OIH, DVN, EOG, DO, XLE. Railroad stocks are doing the same: UNP, BNI. Here are some other commodity / cyclical / other stocks in the same pattern or showing bearish signals: PX, CAT, APD, FDX, UPS, HPQ, EMR, BA, DHR, UTX, FAST. There are a couple of stocks from the 7:45 am list I will keep an eye on, but I like the 8:00 list for bearish momentum this morning.
8:15 am MT: The SPY (market) continues to battle the open. The wiggling has gone as far as 89.80, so not quite to the 90.00 I wanted, but close. The dip buyers may keep fighting between 89.50 - 90.00, but they have a very hard boat to row this morning.
The short term support target for the SPY is the 88.00 - 88.25 area. Going the other direction, a move above 90.00 would be a mini red flag for the bears. A move above 90.50 is likely a drop dead zone for the bears and put positions.
8:25 am MT: The dip buyer boat just got another hole punched through the bottom as the SPY (market) made new lows. The price action looks like it will smack the 89.00 area. I speculate that traders may try to battle on the 89.00 area and create a pause or even a bit of an intra-day bounce around that zone. Any hand-fighting in the pits that brings the market back to the 89.50 - 89.75 area intra-day is just another put buying opportunity. Eventually, the market will probably reach 88.00, possibly today, but just as likely tomorrow. Remember, we have a three-day weekend coming up, so many traders are trying to lock and walk ahead of their holiday plans. We shall see how the rest of the day goes.....
11:55 am MT: So far, the price action is playing out pretty much as I speculated. We did get the hand fighting that brought the SPY (market) back to the 89.50 area (89.46), which was another excellent put buying opportunity. The SPY rolled back over and is now pushing down on support ready to break to new lows and head towards the 88.00 area.
12:07 pm MT: There's the break to new lows. The SPY looks like it has a very good probability of sinking down to the 88.0 - 88.25 support area. At this point, it's ok to take a little of your profits (1/4 - 1/3) from the rollover up in the 89.40 - 89.46 area and bring stops to just above 88.75. If the market is going to continue down to support today, then it should stay below the 88.75 - 89.00 level.
1:02 pm MT: The SPY dropped right to the top side of the support zone at 88.25 (the low price was 88.26). As usual, there were some fast money players ready to take profits and cover shorts right on the price point. Hedgies are a fairly predictable lot once you get locked in on what's stirring their fruit cocktails on any given day.
At this point, I espect some pushing and shoving, maybe even some short covering back into the 89.00 area, but I still think there are too many profiteers out there and the market will probably fade one more time before the end of the day. Obviously, if you locked 1/3 of your profits back at the 88.50 level (the 12:07 pm post), then you wanted to lock another 1/3 of your profits at the 88.25 level just now. And of course we're all waiting for any possible move down to the 88.00 area. We'll see how the rest of the day goes.....
2:10 pm MT: The fundies started some pit-fighting along 88.25 and pushed back up into the 89.00 area as I speculated. There are still enough dip buyers out there hoping for whatever they're hoping for.
This was a good day for puts, and there is still the possibility for another test of the 88.00 area tomorrow, especially if a lot of fund managers decide to lock down some more of their overall uptrend profits ahead of the three-day weekend.
In addition to the Jobs report and the S&P debt downgrade, the Fed jumped on the bearish bandwagon after the minutes from the last meeting, released yestereday, showed Fedsters think there are "significant downside risks to the economy." The minutes were, in part, why the market rolled over yesterday, but I just fell off my chair laughing at hilarious news bogey moment #1. Remember, at the EXACT SAME TIME yesterday that the Fed minutes were revealing its dour economic forecast, Treasury Secretary Geithner was appearing before Christopher Dodd and the Senate Banking Committee to let us know that things were stabilizing and getting better.
Now, I'm going to tell you my hilarious news bogey #2, and remember, I'm just the messenger here, I don't make this stuff up, I really don't think I'm creative enough to write this kind of crazy, unbelievable news anyway. Former Fed Chairman Alan Greenspan jumped back in the spotlight today and stated "the banks are still in peril." I kid you not, like I said, I can't even try to make this stuff up.....This is after Greenspan, less than two weeks ago, stated that he sees a bottom in the housing market and the financial sector. You can review my post on May 12 for the writeup.
Waakowwwww!!
Spotlight Ninja Strikes Again!
I'm not sure if Alan thinks we have all lost our memories, or if he's desperate for the spotlight, or if he's just stating both sides of the economic forecast so he can cover his tail. Whatever it is, this current market news environment, and much of the news for the past year and a half, just simply approaches the surreal for me.....
The SPY gapped down about 1.00 point at the open, so another day, another gap. The SPY (market) will probably head towards support at the 88.00 area.
Here is a chart of the SPY just after the open:
(click on image to enlarge)
(click on image to enlarge)
Nibbling on small put positions shortly after the open is ok. It is even more ideal if the SPY (market) wiggles up a little into the 90.00 area in the next 30m or so for a larger put opportunity.
7:40 am MT: The market is still fighting with the big gap down. Somewhere in here, there may be some dip buyers who wiggle the market back up a little.
7:45 am MT: The market is wiggling up on some dip-buying. Here are some stocks of interest from yesterday's bearish watchlist: MTB, HPQ, NKE, RTH, EMR, FAST, NTRS, PH, T, ACE, RKH, RL, UPS, APC, CVX, WY, BNI, UNP, EXC, MMM, UTX, FDX, DHR, and MDY.
8:00 am MT: Many energy stocks are rolling over on lower highs with Shooting Start reversals: BHI, SLB, XTO, NBL, APA, OXY, OIH, DVN, EOG, DO, XLE. Railroad stocks are doing the same: UNP, BNI. Here are some other commodity / cyclical / other stocks in the same pattern or showing bearish signals: PX, CAT, APD, FDX, UPS, HPQ, EMR, BA, DHR, UTX, FAST. There are a couple of stocks from the 7:45 am list I will keep an eye on, but I like the 8:00 list for bearish momentum this morning.
8:15 am MT: The SPY (market) continues to battle the open. The wiggling has gone as far as 89.80, so not quite to the 90.00 I wanted, but close. The dip buyers may keep fighting between 89.50 - 90.00, but they have a very hard boat to row this morning.
Here is a 30m chart of the SPY:
(click on image to enlarge)
(click on image to enlarge)
The short term support target for the SPY is the 88.00 - 88.25 area. Going the other direction, a move above 90.00 would be a mini red flag for the bears. A move above 90.50 is likely a drop dead zone for the bears and put positions.
8:25 am MT: The dip buyer boat just got another hole punched through the bottom as the SPY (market) made new lows. The price action looks like it will smack the 89.00 area. I speculate that traders may try to battle on the 89.00 area and create a pause or even a bit of an intra-day bounce around that zone. Any hand-fighting in the pits that brings the market back to the 89.50 - 89.75 area intra-day is just another put buying opportunity. Eventually, the market will probably reach 88.00, possibly today, but just as likely tomorrow. Remember, we have a three-day weekend coming up, so many traders are trying to lock and walk ahead of their holiday plans. We shall see how the rest of the day goes.....
11:55 am MT: So far, the price action is playing out pretty much as I speculated. We did get the hand fighting that brought the SPY (market) back to the 89.50 area (89.46), which was another excellent put buying opportunity. The SPY rolled back over and is now pushing down on support ready to break to new lows and head towards the 88.00 area.
12:07 pm MT: There's the break to new lows. The SPY looks like it has a very good probability of sinking down to the 88.0 - 88.25 support area. At this point, it's ok to take a little of your profits (1/4 - 1/3) from the rollover up in the 89.40 - 89.46 area and bring stops to just above 88.75. If the market is going to continue down to support today, then it should stay below the 88.75 - 89.00 level.
1:02 pm MT: The SPY dropped right to the top side of the support zone at 88.25 (the low price was 88.26). As usual, there were some fast money players ready to take profits and cover shorts right on the price point. Hedgies are a fairly predictable lot once you get locked in on what's stirring their fruit cocktails on any given day.
At this point, I espect some pushing and shoving, maybe even some short covering back into the 89.00 area, but I still think there are too many profiteers out there and the market will probably fade one more time before the end of the day. Obviously, if you locked 1/3 of your profits back at the 88.50 level (the 12:07 pm post), then you wanted to lock another 1/3 of your profits at the 88.25 level just now. And of course we're all waiting for any possible move down to the 88.00 area. We'll see how the rest of the day goes.....
2:10 pm MT: The fundies started some pit-fighting along 88.25 and pushed back up into the 89.00 area as I speculated. There are still enough dip buyers out there hoping for whatever they're hoping for.
This was a good day for puts, and there is still the possibility for another test of the 88.00 area tomorrow, especially if a lot of fund managers decide to lock down some more of their overall uptrend profits ahead of the three-day weekend.
Wednesday, May 20, 2009
Financials Drag the Market Down
Pre-market futures are up after TGT and BJ beat earnings expectations, which is bolstering retail stocks and the overall market. In addition, DE is up a little after its earnings report, which is helping cyclical/machinery stocks and agricultural stocks. Energy stocks are getting a boost from higher oil prices ahead of the Weekly Inventory Report this morning. Oil has risen above $60 a barrel again in early futures trading. The SPY is set to gap up almost exactly to the highs of yesterday.
The early gap up will probably propel out of the gate briefly, but then some sectors (chemicals/agriculture and other commodity stocks) may see some profit taking because they are a bit extreme short term.
Financial stock investors continue to have internal conflicts over what they want to do right now. Some banks popped up on Monday, rolled back over yesterday, and are popping again this morning. The early indication is bullish, but again, watch for a bit of a gap and fade.
Here is a list of bullish stocks if the market stays bullish today: UPL, ATI, CAM, MUR, ECA, DO, APA, BHI, DVN, SCHN, PCP, X, FCX, CNX, BTU, STT, ALL, AFL, PRU, NYX, TGT. Commodity and energy stocks are performing the best, although many of these upswings are probably in their last day or so today. It looks like energy stocks will be the best performers this morning. The swing may run out of gas soon, but energy stocks (UPL, CAM, MUR, ECA, DO, APA, BHI, DVN) are the strongest performers followed by chemicals/agriculture (very extreme so I won't post them), coal (CNX, BTU), and then the metals (ATI, PCP, X, FCX). If the energy and commodity stocks have an early and orderly consolidation on the 5m - 10m charts, they may have another move in them today before the upswing is over. Stay nimble today, but energy and commodity stocks still look playable for one more short swing, even if the short term move is getting close to being done.
7:55 am MT: This is the time and area I expect the first consolidation on the SPY (and other stocks). If the energy stocks have a nice, orderly pullback, they may be playable, but remember, the Weekly Inventory Report comes out in 35m, so stay nimble. The SPY and DIA are in play this morning for calls, along with the other stocks on the list I mentioned. The target for the SPY (market) is 93.00, so anything in that area is a good place to take profits, especially with so many market-driving basic materials stocks getting a little extreme on their swings.
8:02 am MT: The bulls are making an almost frenetic push right now, as if they want to get to 93.00 as quickly as possible. If the SPY does go that extreme intra-day, then take profits and stand back to see how the market consolidates over the next hour or so. The best case scenario for the SPY over the next 1-2 days is a push up to the 94.00 - 94.50 area. However, a frenetic move this morning means that the market is likely to gas out around 93.00 and then consolidate for a while intra-day until it decides if it has enough energy to make one more run at the resistance zone.
The ideal price action for the bulls is for the SPY to hold the 92.20 area or so on an intra-day pullback and then make a push into the 93 area and a little beyond. A drop to 91.90 is acceptable as a test of the gap, but a little further than ideal. A drop below 91.80 - 91.90 is a mini red flag. A drop below 91.00 and the short term upswing is probably over.
8:11 am MT: The SPY is rolling over a bit intra-day, so now it's a matter of how the consolidation forms up and if the intra-day support levels hold. If we get an orderly intra-day consolidation that holds the 92.00 - 92.20 area and bounces then the market may have another nice push up into the resistance zone. We shall see.....
8:24 am MT: Retail, energy, coal, and metals are the "on fire" sectors that keep pushing the SPY (market) right to 93.00 in a straight line this morning. It's a speculative play right into the Weekly Inventory Report due out in about 5m. The market is going to have to consolidate for a while after this extreme move. I'm not sure if it's Shorts that are panic-buying, or Hedgies that are frenetic-buying, but it's getting pretty overcooked ahead of the report. My guess is that there are some fast money Hedgies that are trying to get as much as they can, as far as they can, and as fast as they can ahead of the oil report. They aren't interested in "orderly", they want a fast, extreme move right into resistance and right into the report so they can lock quick profits and go golfing. It will be even more important to see what kind of selling we get at 93.00, and after the report.
8:36 am MT: Treasury Secretary Geithner is testifying before the Senate Banking Committee about TARP funds. Every major media network is carrying the yappity yap session. So you have Timothy Geithner telling Christopher Dodd how well everything is going in the banking sector now, while the mainstream media broadcasts the sunshine session to the world. I don't even know what to say about this stuff anymore. If traders can't see a staged event being played out by the very people, organizations, and media that got us into this economic mess in the first place.....I just can't even find words to express myself anymore, it's astonishing to see this on a daily basis, and it's even more amazing to see how many people can't see through these machinations. All I can bring myself to mutter is.....that it is what it is.....
8:46 am MT: The SPY is going into consolidation mode. Traders will probably take a breather for a while. Stay focused on the stock charts and the overall market and ignore all the news propaganda. The charts will tell us if there are more opportunities to trade calls today. We'll see if the price points on the SPY hold up.
9:02 am MT: Flip over to the 10m charts of the SPY to watch how this Bull Flag forms up. If it pops and then doubles back I may flip over again to the 15m - 30m charts and see how the market holds up throughout the morning and early afternoon. If the 10m chart Bull Flag pops and reaches a higher high, then take some profits in the 93.00 - 93.10 area and bring up your stops. We'll see how this plays out for the next few hours.....
9:22 am MT: The SPY (market) has come all the way back to the gap. The day is still bullish, but the SPY is at an intra-day tipping point. A drop below the 91.80 area would tip the day away from the bulls and into more of a range-bound mode. A drop below 91.00 and the short term upswing is probably over. It's also likely that the 92.75 area is resistance even on a bounce off the gap. The best case scenario for bulls for the next several hours is a repeat of the sideways, intra-day Rectangle like yesterday. The worst case scenario is a drop through 91.80 which leads to a drop through 91.00.
9:34 am MT: This is the bounce point, if it's going to happen. I speculate that the 92.75 - 93.00 will stay resistance for the remainder of the morning.
10:10 am MT: The SPY tried to bounce and then collapsed down through 91.80 into the 91.50 area. The day has tipped from bullish to consolidation. This may be more of a range-bound day at best.
Energy and commodity stocks are still the most bullish performers, so they are worth keeping on your bullish movers for the day. A bearish list today would include: MTB, HPQ, PNC, RKH, JPM, EMR, NTRS, ADP, ACE, and TRV.
If the market continues to sell off throughout the day, then more stocks will come on to the bearish list. If the market stays range-bound, then both bullish and bearish stocks on the watchlist may be playable. Financial stocks are the biggest drag on the market right now, despite the yappity yap session.
11:40 am MT: This is a bounce point for the bulls intra-day. The bullish stocks should catch a little tailwind for the next hour or so if it follows through.
You can see the bounce on the 30m time frame. You can also see why I said 91.00 was the swing tipping point. A drop below 91.00 and the market is probably headed back to the 88.50 - 90.00 area. I speculate that this bounce will pause and think in the 92.00 - 92.25 area and then decide if it has the strength to climb back to the 92.50 - 92.75 area. Any way you slice the price action, it looks like a range-bound day at best and a selling day at worst. There are some bullish stocks out there (energy and commodities) still finishing up swings, so there are some possibilities, but the overall market is probably not going to make new highs later today.
1:50 pm MT: The SPY crossed 91.00 and the price action turned into a selling day. This is why I gave you some nice bearish stocks to watch. All the bolded bearish stocks from the earlier update have dropped since I posted them - most of them dropped enough to be profitable on short swings intra-day. With just a few minutes before the close, and the market so close to the 91.00 tipping point, I'm sure some crafty big money is thinking about technical chart manipulation, so we'll see how this finishes out.
2:00 pm MT: Someone either threw a weak attempt at technical manipulation with an order well above the market, or the SPY had a data error. Whatever happened, it doesn't matter because the sellers came back in on the bump up in the last 10 minutes and pushed the market back down to close near the lows. Today's price action is officially a Bearish Engulfing and a rollover (with a lot of Shooting Stars on the index charts), so it's back to short term bearish after a 2 1/2 day flirtation by the bulls with their favorite News Masseuse.....(you can add that to your list of Dwightisms, and I'll let you guess who the News Masseuse was today).
The early gap up will probably propel out of the gate briefly, but then some sectors (chemicals/agriculture and other commodity stocks) may see some profit taking because they are a bit extreme short term.
Financial stock investors continue to have internal conflicts over what they want to do right now. Some banks popped up on Monday, rolled back over yesterday, and are popping again this morning. The early indication is bullish, but again, watch for a bit of a gap and fade.
Here is a list of bullish stocks if the market stays bullish today: UPL, ATI, CAM, MUR, ECA, DO, APA, BHI, DVN, SCHN, PCP, X, FCX, CNX, BTU, STT, ALL, AFL, PRU, NYX, TGT. Commodity and energy stocks are performing the best, although many of these upswings are probably in their last day or so today. It looks like energy stocks will be the best performers this morning. The swing may run out of gas soon, but energy stocks (UPL, CAM, MUR, ECA, DO, APA, BHI, DVN) are the strongest performers followed by chemicals/agriculture (very extreme so I won't post them), coal (CNX, BTU), and then the metals (ATI, PCP, X, FCX). If the energy and commodity stocks have an early and orderly consolidation on the 5m - 10m charts, they may have another move in them today before the upswing is over. Stay nimble today, but energy and commodity stocks still look playable for one more short swing, even if the short term move is getting close to being done.
7:55 am MT: This is the time and area I expect the first consolidation on the SPY (and other stocks). If the energy stocks have a nice, orderly pullback, they may be playable, but remember, the Weekly Inventory Report comes out in 35m, so stay nimble. The SPY and DIA are in play this morning for calls, along with the other stocks on the list I mentioned. The target for the SPY (market) is 93.00, so anything in that area is a good place to take profits, especially with so many market-driving basic materials stocks getting a little extreme on their swings.
8:02 am MT: The bulls are making an almost frenetic push right now, as if they want to get to 93.00 as quickly as possible. If the SPY does go that extreme intra-day, then take profits and stand back to see how the market consolidates over the next hour or so. The best case scenario for the SPY over the next 1-2 days is a push up to the 94.00 - 94.50 area. However, a frenetic move this morning means that the market is likely to gas out around 93.00 and then consolidate for a while intra-day until it decides if it has enough energy to make one more run at the resistance zone.
Here is a daily chart of the SPY:
(click on image to enlarge)
Here is a 5m chart of the SPY:
(click on image to enlarge)
(click on image to enlarge)
Here is a 5m chart of the SPY:
(click on image to enlarge)
The ideal price action for the bulls is for the SPY to hold the 92.20 area or so on an intra-day pullback and then make a push into the 93 area and a little beyond. A drop to 91.90 is acceptable as a test of the gap, but a little further than ideal. A drop below 91.80 - 91.90 is a mini red flag. A drop below 91.00 and the short term upswing is probably over.
8:11 am MT: The SPY is rolling over a bit intra-day, so now it's a matter of how the consolidation forms up and if the intra-day support levels hold. If we get an orderly intra-day consolidation that holds the 92.00 - 92.20 area and bounces then the market may have another nice push up into the resistance zone. We shall see.....
8:24 am MT: Retail, energy, coal, and metals are the "on fire" sectors that keep pushing the SPY (market) right to 93.00 in a straight line this morning. It's a speculative play right into the Weekly Inventory Report due out in about 5m. The market is going to have to consolidate for a while after this extreme move. I'm not sure if it's Shorts that are panic-buying, or Hedgies that are frenetic-buying, but it's getting pretty overcooked ahead of the report. My guess is that there are some fast money Hedgies that are trying to get as much as they can, as far as they can, and as fast as they can ahead of the oil report. They aren't interested in "orderly", they want a fast, extreme move right into resistance and right into the report so they can lock quick profits and go golfing. It will be even more important to see what kind of selling we get at 93.00, and after the report.
8:36 am MT: Treasury Secretary Geithner is testifying before the Senate Banking Committee about TARP funds. Every major media network is carrying the yappity yap session. So you have Timothy Geithner telling Christopher Dodd how well everything is going in the banking sector now, while the mainstream media broadcasts the sunshine session to the world. I don't even know what to say about this stuff anymore. If traders can't see a staged event being played out by the very people, organizations, and media that got us into this economic mess in the first place.....I just can't even find words to express myself anymore, it's astonishing to see this on a daily basis, and it's even more amazing to see how many people can't see through these machinations. All I can bring myself to mutter is.....that it is what it is.....
8:46 am MT: The SPY is going into consolidation mode. Traders will probably take a breather for a while. Stay focused on the stock charts and the overall market and ignore all the news propaganda. The charts will tell us if there are more opportunities to trade calls today. We'll see if the price points on the SPY hold up.
9:02 am MT: Flip over to the 10m charts of the SPY to watch how this Bull Flag forms up. If it pops and then doubles back I may flip over again to the 15m - 30m charts and see how the market holds up throughout the morning and early afternoon. If the 10m chart Bull Flag pops and reaches a higher high, then take some profits in the 93.00 - 93.10 area and bring up your stops. We'll see how this plays out for the next few hours.....
9:22 am MT: The SPY (market) has come all the way back to the gap. The day is still bullish, but the SPY is at an intra-day tipping point. A drop below the 91.80 area would tip the day away from the bulls and into more of a range-bound mode. A drop below 91.00 and the short term upswing is probably over. It's also likely that the 92.75 area is resistance even on a bounce off the gap. The best case scenario for bulls for the next several hours is a repeat of the sideways, intra-day Rectangle like yesterday. The worst case scenario is a drop through 91.80 which leads to a drop through 91.00.
9:34 am MT: This is the bounce point, if it's going to happen. I speculate that the 92.75 - 93.00 will stay resistance for the remainder of the morning.
10:10 am MT: The SPY tried to bounce and then collapsed down through 91.80 into the 91.50 area. The day has tipped from bullish to consolidation. This may be more of a range-bound day at best.
Energy and commodity stocks are still the most bullish performers, so they are worth keeping on your bullish movers for the day. A bearish list today would include: MTB, HPQ, PNC, RKH, JPM, EMR, NTRS, ADP, ACE, and TRV.
If the market continues to sell off throughout the day, then more stocks will come on to the bearish list. If the market stays range-bound, then both bullish and bearish stocks on the watchlist may be playable. Financial stocks are the biggest drag on the market right now, despite the yappity yap session.
11:40 am MT: This is a bounce point for the bulls intra-day. The bullish stocks should catch a little tailwind for the next hour or so if it follows through.
Here is a 30m chart of the SPY:
(click on image to enlarge)
(click on image to enlarge)
You can see the bounce on the 30m time frame. You can also see why I said 91.00 was the swing tipping point. A drop below 91.00 and the market is probably headed back to the 88.50 - 90.00 area. I speculate that this bounce will pause and think in the 92.00 - 92.25 area and then decide if it has the strength to climb back to the 92.50 - 92.75 area. Any way you slice the price action, it looks like a range-bound day at best and a selling day at worst. There are some bullish stocks out there (energy and commodities) still finishing up swings, so there are some possibilities, but the overall market is probably not going to make new highs later today.
1:50 pm MT: The SPY crossed 91.00 and the price action turned into a selling day. This is why I gave you some nice bearish stocks to watch. All the bolded bearish stocks from the earlier update have dropped since I posted them - most of them dropped enough to be profitable on short swings intra-day. With just a few minutes before the close, and the market so close to the 91.00 tipping point, I'm sure some crafty big money is thinking about technical chart manipulation, so we'll see how this finishes out.
2:00 pm MT: Someone either threw a weak attempt at technical manipulation with an order well above the market, or the SPY had a data error. Whatever happened, it doesn't matter because the sellers came back in on the bump up in the last 10 minutes and pushed the market back down to close near the lows. Today's price action is officially a Bearish Engulfing and a rollover (with a lot of Shooting Stars on the index charts), so it's back to short term bearish after a 2 1/2 day flirtation by the bulls with their favorite News Masseuse.....(you can add that to your list of Dwightisms, and I'll let you guess who the News Masseuse was today).
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