5-11-09

Interesting how today the tech sector was the strongest sector and did not have the same sell of as the rest of the market. Tech has been pulling back as the rest of the market has been making new highs. Seems to me the money is going back into tech as it has been the bigger mover and has been leading the market higher. This is a safe trade as most tech haven been hit like the banks or energy stocks.

Today we saw the financials sell off as with energy, two sectors that lead this market down, and have been leading it back up. This is one of the first days a weakness in these sectors in a while, as people are taking profits and letting the stocks breathe. It seems as if the institutions have st oped buying as the volume was not as high as it has been for a Monday in this recent rally off the lows. Seeing the volume more as trading volume than buying from institutions. I am looking for the market to move lower in the coming weeks as we can not rally forever and stocks are coming be be over priced. As i say that I am holding cash with a small short posistion. If i take any longs I will have a tight stop as this market can turn at any moment. Right now I am watching GLD for the price of gold to see if money is going back into a safer trade, as it has been with rising volume on the GLD, seeing gold only down around $80 off the highs in march. Looking for GLD to close above 90.5 to confirm a up turn in the sector for the short term. As this happens I think that we will see all markets pull back, and will hold a small short in SDS, and ready to catch a bounce. Right now i think the only trades that should be place should be short term day trades and scalps to keep risk down. Will be watching the short efts dxd,sds, qid, dig and skf for the down side trade. Will be come more interested in these if the market breaks 905 and 900.

SCG

Right now I'm Watching SCG. Nice flag pattern forming , looking at a 60 min chart, 30.20 is the bottom of this channel and 31.20 is the top. Interesting how we held steady here with todays market sell off. Will look fot it to close above 31.20 on the 60 min chart for an entry or low of channel at 30.20. If entry is at low of channel stop loss would be set to 30. If we do break , first target is 32.40 as gap window resistance on the 60 min chart

SDS and Market Outlook

Here is the daily chart of SDS looking for resistance, at 62 if this market continues to sell as it did today, first target is the 20 period SMA at 63.93 looking at the daily chart.


Here is the 60 min chart of SDS, looks to have a falling wedge pattern, we have the 50 SMA at 59.30 and trend line resistance in the same area (the top trendline in this falling wedge patten). Looking the see it hit the 59.30 level and consolidating before looking the the daily target.

60 min chart of the S&P 500 cash, looking at the 905 level for support if broken will continue down to the 50 sma and trendline support if broken, we will make out first lower lower, for a trend reversal. If the trendline is broke we will see a lot of selling come into the markets as many traders have tight stops in this fragmented bull market.

Weekly chart of the S&P 500 cash, looks as if we almost reached the last swing high in the 950 area, stochastic's are starting to turn down, right now this does not look like a bottoming pattern looks as if we are going to make an inverted head&shoulders pattern which is 3/4 of the way there.

Daily chart of the S&P500 have resistance at 950 area and the 200 sma. Two things can happen here, one we can get a blow off top as we did 2 March's ago where we blast through the 200 sma and then reversing intraday. If this happens we will see the market clime between 960 and 987. If we reverse here we will look for this trendline to be broken for more downside at the 900 level. After that we will look for 875, 840, 816 and 800.

Intraday April 24th

My post from yesterday got farmed. Today were are seeing buying in all indexes after the MSFT, F earnings.  Today I started in APA I liked the pattern that was forming and still holding dxd as a hedge until we take out the highs. At 2 we have the report on the banks coming out, although not the full report till may 4th, this will give us some idea what the government found, Staying cautious into this report, as the market could move in either direction.

Trade review today into April 23

Today we managed to turn around at the end of the day to close below yesterdays high. This is good for the bears. I think we shall continue to sell through this 20 period sma. The big bear candle on the 20th is what I continue to watch. Right now the market is consolidation, for the next move which should be lower. The market today gave us and opportunity  to exit longs as it was hovering around 860 all day till the end. I personally stepped out of the rest of my traded position in uyg. I continue to hold 50% cash and my dxd.

DXD today came back at the end of the day as the markets sold hard. Look at that high volume spike at the end of the day as dxd came off the double bottom. Still holding this right now and will continue. Looking for a close above 58.10 for a nice bullish sign. 

Intraday April 22

Here is what the market looks like today, coming back into that falling wedge pattern. Still waiting for the 870 to be taken of to become bullish, but am still holding dxd. I think that we may start to see a rounded top formed rather than a breakdown of this rising wedge. We have currently taken out the highs form yesterday and moving up. I will look for direction into tomorrow. If we get another day of buying and if we take out the highs I will be long, if we can not continue to move up tomorrow and make new highs before the next down day, the rounded top look more interesting. 

The market is very strong today. We are seeing continuous buying and a small amount of selling coming through, with low volume on the sell candles. 

End of trading April 21 & action for Tomarrow.

I am still holding DXD, and am look for the market to contiune to sell. Today we did get a bounce of the 20 sma, but I think we will still need to correct more and the 20 will not hold the rest of the week. The MACD has just crossed and the fast stochastic have come out of overbought with the slow soon to follow. I still think the market direction is lower. For me to become bullish again I will need to see 870 level taken out on the S&P 500, and i think we will see 810 before that. 

So i was wrong with the end of the day direction on the markets. Here is the 15 min chart of the S&P 500. Looks to be forming another rising wedge. A break down out of this patten should bring us back down to the lows of yesterday. 

This afternoon (April 21)

Looks like a good spot here to add to dxd, and other shorts, I think we will be seeing some afternoon selling today.

DXD Targets

First Target on dxd is 60 after that the 38.2% fib retrace as it aligns with support and resistance from the last year of trading.

Monday April 20th

Today we initiated our short position in DXD on the breakout of the falling wedge, and added to BGZ will keep you updated with positions as the week unfolds.

Huge move lower in the market today. As was looking for, weakness and a breakdown of this rising wedge pattern. Today the S&P 500 closed at 832.39 right on the 20 sma and our first target. I wont be surprised if tomorrow we see some sideways consolidation since we are sitting on the 20 SMA, but I am now looking at levels of 815 and 807 as support as we continue down. Look for some sector strength tomorrow and a rotation of money in the market. 

Breakdown of Rising Wedge Patterns in Current downturn

All rising wedge patters seen in this down trend.

November 2008 to January 2009

Breakdown of Rising wedge March to May 2008 and July to August 2008

Rising Wedges that was formed from August to October 2007

Week of April 19th Trade Direction

Taking a look at the direction for next week, The S&P 500 chart has formed a rising wedge pattern. It has currently closed at the top and underneath the top trend line at 869.60 on Friday the 17th. Friday the S&P 500, also bounced off a 78.6% fib-retracement level from the high on Jan. 6 2009, and trend line resistance from the highs form Jan 28th and Feb. 9th 2009. The MACD Histogram and the Slow Stochastic both are showing negative divergence with the Price action. All signs point to a move lower in the markets. But I will be waiting the conformation of this move before entering a short position, The market has been so strong lately that I want it to prove to me that I need to go short.  On monday we have BAC (Bank of America's earnings), analysts are expecting 5 cents a share. BAC Looks like its set up for a pop with the Bullish pendant pattern that has formed but with the overall index's showing weakness, Monday is going to give a good indication on market direction. Targets if there is a break down in the market in the coming week is the 20 and 50 period SMA then fib levels 38.2% and 61.8%, If we break to the upside out of this rising wedge, next level to be seen is 910.