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Monday, May 31, 2010

Eyes wide open


SPX did not show any follow thru.  It opened mildly down with a small gap. Spx after the first decline of 8 point made 4 rallies of 6, 8, 7, and 15 points and correspondingly made 4 declines of 10, 13, 8, 11 points.  That is 9 chances to good trade. It was an inside day with LH and HL.  Meaning the previous day's trend should continue.  The thing to watch would be to see if we get a LL or a gap down open on Tuesday to give a change of trend. On the weekly charts we closed higher but we made a LH and LL not very positive.
The chart on the left is SPX weekly.  The trend lines A, B, C, D, E  join the top at 1576 to successive tops spx made on its rally from 666 to 1220.  The way I keep an eye on these to look for SPX to make a top come down and on its way back up,  go thru these lines to the upside and give a bullish signal.  In the chart it appears like spx finds support at the previous down trendline a couple of times. But these are not support lines and to think of them as such would not be consistent.  Lines 1, and 2 are lines joining the lows.  I think of those as support and when those are broken I take it to mean the trend is down.  Those lines I think offer better points for SPX to bounce up from.  RUT is sitting on one those.  These apply even to short term there I use the last 2 lows the second has to be higher than the first to give me an upward trending line to form supports and on the tops the second top has to be lower the first top form a downward sloping trend line to form resistance.  If the upward sloping line is broken it is short and a if downward sloping line is broken it is a long.  That is synopsis of D2PL.  Dino's 2 point line.  I actually only keep the weekly in the back of my mind,  I play mostly on my short term signals of DKOD, DMRM, D2PL and DOMA cross.
The money should have dried up for next week.  There is no big news.  There is no window dressing.  There is no opex.  There is no earnings report.  I expect the markets to be hit hard because of lack buyers. I am looking to play the short side asap. 

Thursday, May 27, 2010

Power of Window Dressing


This market is on such a heavy dose of vitamins that even the best in the business get very shaky from time to time.  After a class  A reversal yesterday one would have thought SPX  would show a little continuation.  Nope.  We got yet another reversal and shot up over 200 points on dow and 28 points SPX to move to 1095 by 7.30.  Market stayed like that for the rest of the day and shot up another 8 points to close at 1103.  From my previous study I know this kind of gap up move is not good.  Also 1103 is 3 points above the round number.  When SPX closes slightly above the round number that is negative and slightly below is positive.  SPX did make a HH and HL which is positive. Two days in a row now.  
The first chart is that of TNA.  I put this up because I noticed that 103 DOMA is resistance.  This would be a third attempt.  It is at 51.50  That may not be a bad spot to short with tight stop.  Also I was blown away that the rally took TNA from 39 to 49 and may be 51 tomorrow.  That is 12 points on 39 and that is 31% and it is a lot of money.
The second chart is FAS 30 min envelope doma 77 and deviation of 9% on either side.  After entering the channel on Tuesday FAS is alomost at the top end of the envelope.  I will wait for it get out of the channel and then get back in at the top to short.
When markets open up or down with a gap, it is best to stay away and wait for a better appropriate time to play.  The only observation I found useful at around 7 - 7.30 am there is pull back and if I feel risky I jump in for some change..
Markets only move by massive amounts when money chases stocks.  Pure demand and supply.  Money managers had to readjust their portfolios for the end of the month.  I would infer they sold yesterday and bought today.  With three day weekend coming up I would never take a position home.  I might play the short side if DMRM says so again for some change. 

Wednesday, May 26, 2010

Not so boring ..when you make money


Today was not much different in the market than previous days.  SPX opened with a gap and quickly reached its top by 8.40 at 1090 and drifted lower to 1065 at 12.35.  Then it made a half attempt to go positive but closed at 1068 down 6.  FAS was a similar story top was 24.3 and bottom was 22.3 and closed at 22.6 down .35.  This kind of move makes a lot of people go bearish.  Late in day selling produces candles with long top wick and short bottom wick and relatively small body.  These are considered bearish.  FAS is solidly below DOMA on 60 min  and after briefly passing the DOMA on 30 min it is below the doma.  We made HH and HL on both and that leaves trend positive.  
The 2 charts above are SPX daily.  Chart -1 shows the 3 cycles of 85, 82 , 65 and current count of 76 days from respective lows.  Chart 2 is more focused on the decline.  We have completed 22 days of decline from 1220 and first top to top was 13 days and low to low as 12 days.  We  have 9 days since last top.  we may have 4 more days to go. Any thing over 80 days since last bottom is an area to watch for me to spot a  bottom.  We have spent 308 days since last March 6th low.  My sense is we need to burn some time off the calender to get all the counts to be in sync and then we would have a good bottom to trade from.  I am not that bearish DMRM and D2PL worked swell and I would be looking to pick up some change on bullish side.

Tuesday, May 25, 2010

Mirror Image

SPX and FAS were hit and hit hard at the opening.  Dow was down 290+ points SPX down 35 points and FAS down 2.  Looked like the end of day we would be down 500+ dow points.  Not to be.  DKOD from yesterday worked well.  It is now 23/25.  We have LH and LL on FAS and SPX implying the trend is still down.  However the rally was impressive.  FAS is back inside the envelopes on 60, 30, and 15 minutes.  That is positive.  Tuesdays are generally (68%) opposites of Mondays.  I wasn't aware that sometimes they can be so exact.  The two charts above shows todays FAS and Yesterdays FAS 1 minute.  I would say they are mirror image. DMRM worked real well today and so did D2PL.  I will put some effort in the next day or two to see if they can be combined
The chart on right is that of SPX Daily in channels.  Today's 1040 bottom is close to a previous bottom at 1044.5 . But my observation has been bottoms are made at previous tops and not at previous bottoms.  After the 2-3 days of window dressing the SPX should revert back  to its trend and catch the 956 for a bottom.  I am not totally bearish but am ready play a few bullish hands. 

Monday, May 24, 2010

Anything is possible


SPX and FAS opened with a bang today.  It was extremely short lived.  24.8  was the high on FAS I got a signal to short at 24.01 which I took at 24.15 and quicly I got a signal to go long at 24.13.  I jumped out of my long 24.08. 
I switched to playing D2PL (Dino's 2 point line) line (1)  covered at 23.08 for a $1 and tried long at 23.02 line (2) and jumped out at 22.98.  All in all not a bad day.  Way too much trading.  My DKOD failed for the second time in over 6 months.  It is now 22/24.  I also got a new negative DKOD on FAS today.  If this also fails I will hang it up on DKOD as gig is up.  DMRM works  and I have  to be very vigilant. I am trying D2PL more and more.

We did get a higher high and higher low that is positive.  Tuesdays are opposite of Mondays.  That is a positive for the market.  
I have a weekly chart of spx on right.  I have 203 DOMA but 200 would work as well.  It is quite probable that spx touches the 80 week DOMA and jumps up.  The DOMA 80 is at 990 or just below 1000.  In a decline previous highs are better supports than previous lows.   Many bloggers are looking for a rally here as SPX has declined a bit.  The current decline from 1171 is the longest.  We are declining at the rate of 12 - 13 points a day.  This may accelerate instead decelerate like many anticipate and we could see rain fall type declines.  I would keep an eye for it if we start opening with a gap and all we can rally in a day is to barely get even to previous closing that would signal rain fall about to start.
I also have a follow up chart on RUT with Gann 4.  The first decline was from 745 to 635 and it is 110 points. At 1.68 times it is 185 and from 720  top the bottom is at 535 a previous high.  Very probable.  I am not at all bullish.

Sunday, May 23, 2010

Time Travel

The market's behavior on Friday was spectacular.  SPX started the making a low at 1056 and FAS at 20.88.  After reaching a high of 24.53 at 8.51 FAS started a steady decline all the way to 12.15 and reached a low of 22.93 at 3.17.  It then took off and closed at 24.45.  It took roughly 3.5 hours to decline 1.6 and it took less than 45 minuts to climb back to almost same levels.  The point I have been observing is if a large number of candles produce only a small decline or rally then a small number of candles will do the opposite.  It was a intra day reversal with a HH and LL and therein lies a problem I wasn't able to find bottom that happened with an intraday reversal. That is a negative It was a positive DKOD day for FAS meaning we should have 1 - 5 days of rally ( it used to be 2-7) .The Channel-1 and Channel-2 charts are both SPX daily.  I have two different configurations.  They are both at or slightly below their channel bottom lines.  The channel - 2 chart shows SPX forming nice parallelogram.  The timing days are unbelievably symmetrical.  10 days from top to top.  10 days from a top to next bottom.  The black arrow is at 1095.  I did not buy this rally on Friday at all.  It is situation rally pertaining to OPEX.  It should die out in a couple days.  The low of the day close on Thursday played out well.  It is 100% for rally on the day following a low close day.  Usually big intraday reversals are followed by inside days.  As of now IMO we should get a 2-3 candles to take us to 1095 and start the decline again.  May be a little more ferociously
I have also included RUT charts.  Daily and weekly.  The daily chart displays Gann 4 failure that accelerates the move.  We should see faster declines in  RUT in coming days.  The weekly chart (a must for any Gann person) shows the formation of very even decline channel.  It should now move towards the 1x2 line at around 560- 570.  All in all I am bearish but I will wait for confirmation before I jump in and short FAS or TNA. 



Thursday, May 20, 2010

Gann 4

Today was another historic day.  Market opened deeply lower and within minutes went lower than 1095 on spx the previous low  so did the FAS below 23.5.  That was lower low and that is not a very bullish sign.  10.00 was a low and the markets and FAS started a rally that lasted for about 2 hours.  This being opex and the fear factor at high levels FAS and markets drifted lower and accelerated rather rapidly to close at the worst levels of the day.  At right is a  1 minute chart of FAS for today.  I have circled three failed attempts and fourth attempt that was successful in breaking the trend line and real rapid deceleration once the line is broken.  This is called Gann rule of 4 the fourth attempt is highly likely to succeed.  This is a very useful rule to know.


The chart on the left is SPX on a daily basis.  On my last blog I mentioned how these humps are resolved like hot knife thru butter and that is what happened today.  SPX broke the upward trend line and if it were to lose as much as it has done that would puts us around 910.  Things are getting ugly.  The down side is always much faster than upside.  This is something I keep in the back of my mind.  In 1987 the first half of decline happened in 7 weeks and the last half in one day.  Before I get all scared out and everything today SPX and everything closed at the low of the day.  That is actually very bullish.  I did a study on my May 2nd blog.  100% probability that we will go higher.  There at many excellent analyst on our CCL two in particular I want to mention are Elliot Trader or ET and Apartofny.  They both provide extremely timely and accurate charts and EW counts and variations.  Click on the CCL blue box below and check it out. I will be bullish at least once tomorrow.

Wednesday, May 19, 2010

3 pennies for lethargy


With the way market closed yesterday and the follow up we got in the after hours with dow down close to 100 pts one would have thought it was going to open today down big. But it wasn't to be.  This happens quite a bit.  I am not going to pay attention to after market stats they seldom have any bearing on next day.  Today the spx opened flat went down 5 points and quickly rallied and made the high of the day at 6.50 both on spx at 1124 and fas at 26.44.  That was it The downturn started rather rapidly by 8.50 spx was at 1100 and FAS at 24.18 those were the lows of the day.  SPX closed almost at open 1115 and FAS bit higher than open at 25.61.  DKOD worked again and FAZ went from 14.44 to 15.77 or  9.2% . I went long early this morning.  Didn't get out and was eventually stopped out for 3 pennies.  Went in again on DMRM after 24.18 and made 50 cents.  Shorted at 25.12 and had to cover end of day at 25.55.  All in all not a good trading day on my part.  The first chart on the left is FAS 30 min showing stranded Island.  The mean between the top and bottom is at 31.11 and a 22% decline comes to 24.26 and today's low on FAS was 24.18  Good enough for me.  23.3 is still a possibility 78% of lower line at 29.88.  The Gann chart shows an exact bounce of the 1x4 line  at round number 1100.  All round numbers are honored in Gann.  On its way up SPX salutes the number and turn back down and on its way down kisses the number and turns back up.  Once a hump is formed spx at the previous low will show a rally not to be confused with THE rally and come back down again and go right thru it like hot knife thru butter.  Yellow FAS chart shows how each of the lows are are taken out.  SPX will do the same.  Markets character has changed.  Instead of dip buyers we now have rally sellers.  This is opex.  There is a good chance we will get a flat soon.  I will be looking for chances to short.  .  

Tuesday, May 18, 2010

Shock and awe


Today the markets opened with a bang. Spx was up 11.5 points within minutes and FAS opened and in 2 minutes reached its high of 28.87.  After that it was all down hill.  Drip Drip Drip the indices fell.  SPX managed not to make lower low it did make a higher high maintaining the upward bias that is positive.  But FAS is in bade shape made an Intra day reversal with a higher high and lower low.  that is a negative.  I got one signal to go short at 27.97 and I took that but exited rather early at 26.88.  Rest of day I just watched the market.  News interpretation got quite negative and even Cramer started saying we should take some money out of the market.  Germany tacked on some restrictions on short selling in certain securities.  The markets and particularly FAS closed in negative.  FA is outside the envelope in 60,30 and 15 min and below the DOMA 77 it is quite negative.  We had yet another DKOD and that is also a big negative given previous day was not an DKOD. I only count the first DKOD and not the successive ones if we get 2, 3 in a row. The charts are my best rendition of Gann angle charts for SPX and RUT (Russell 2000).  RUT looks less beaten than SPX.  RUT is at the half way point in the channel. They are very close to support angle lines and could snap back.  This is option expiration week and anything can happen because of added leverage from options. I am less bearish than before and if an bull run comes I will jump in.

Monday, May 17, 2010

Traders paradise

There are times in the market when nothing goes right for a trader and then there are days like last few days where this has been a traders paradise.  Daily one gets one or two chances to put in good trades.  Most advisers will counsel to stay away when the volatility is high in markets I always believed while the risks are more so is potential for profits.  Going into the markets this morning I was quite bearish.  Add to that the overnight negative 120 on the DOW  I was thinking we could have a disastrous day on our hand.  BUT the market does what it always does and opened flat and quickly established the highs of the day in 10 minutes.  I went short at 28.45 on the FAS primarily because of the DKOD from Friday.  Slowly but surely we got a confirmation from the DMRM and inched rapidly to make a low at 26.08.  I jumped out at 26.37.  Because there was good money to be taken out. Signal to go long came at 26.91 late in the day at 11.40 and I got in at 26.85 because I was anticipating a green stick  and jumped out 27.85 again not wanting to take any positions home.  The graph is that of FAS 15 minutes with DOMA 77.  Island is still stranded. FAS did not get the average decline of 22%  to get to 23.  That is still a negative.   FAS has not crossed the DOMA that is also a negative.  The drawn resistance line has not been broken that is also negative. High probability that Tuesday and Monday are opposites. that is a negative. SPX did give its DMRM at 1136.4 that is positive.
I sit in front of the computer all day watch the screen and as situation arises I go in.  Mostly with one of my tested observations.  (1) DKOD from the previous day gives a good idea about overall next day (2) DMRM gives in and out signals. (3) DOMA gives timing of entry (4) envelopes gives what if I am wrong limits.  and others in order of priority are Gann lines ,several trend lines ,EW counts and a few channels and  Special situation like FED rate policy days and Highs and Lows compared to previous day and including Outside days and Inside days. I haven't traded using stats like RSI, Macd , stochastic and Aroon I do look at them from time to time.  One of my favorite blogs to read is from my buddy Columbia1 at http://ewtrendsandcharts.blogspot.com/.  His analysis is high class.  
I am still bearish just a tad bit less. 

Sunday, May 16, 2010

Butterfly



The chart on the left is FAS 30 minute envelope(9,9) with DOMA 77.  After going outside the envelope on the computer glitch day FAS came back in (great point to go long) with a gap and is back testing the lower line of the envelope. For FAS to continue to go up it must reverse and start a move.  Fas appeared to be doing that on Friday at close.  I do not count the DMRM  that happened at the very end of the day.  That could have been large buy or short covering.  It is negative for now.  This brings us to the next chart which is a 5 minute FAS chart.  The gap down down Friday created a stranded Island formation.  This a true one for I can shoot a arrow from right to left.  FAS and many 3x ETF do gap up and down a lot but not one where I can draw a line thru.  Borrowing from  commodity traders they fail 15% of the time and have decline of 22% on an average roughly 7 points and that would put FAS 23 which is another negative.  I have included a monthly chart on SPX  A continuation of the rate decline from 1576 to 1220 in the 3 parallel channels first bring the spx to 1044 and subsequently to 850.  This is not very positive now the non-confirmation comes if we were to move above 1220 about 100 points.  Lastly FAS recorded a very negative DKOD on Friday.  Reaching the high in the first 5 minutes and never trading above it all day.  This is decidedly negative.  I am quite bearish

Thursday, May 13, 2010

It takes at leat 2 to tango

Today started out like a dud and stayed like a dud for majority of the day. The difference between today and cloud walk day is on C W day market rallies quite fast and reaches the high of the day by 7.30 and hovers around at the high of the day and then a quick steep drop happens around 11.30.  Today the market opened flat and stayed flat.  At 11.00 FAS was down a quarter and spx was even.  Then slowly first and rapidly towards the end SPX fell and so did FAS.  SPX closed at down 14.24 to 1157 and FAS fell 1.38 to 30.68.  FAS performed better than TNA on the down side today.  It was a HH and HL in SPX kind of keeping the trend in tact FAS was decidedly an outside day with HH and LL.  Outside days some times happen at trend changes but they do signal an inside day the next day.  I got one signal to go short at 31.14 on FAS and I took the short home not my common practice.  All of the bull ETF got turned back at their respective DOMAs which is not positive.  I have a chart of TNA 60 min DOMA 103 to illustrate the point. Lot of economic news comes out on Friday.  I will have to see how the market reacts to those stats.
The chart on the right is SPX daily  with traditional Gann decline marked.  Spx met resistance from 1x4 line and ended at the bottom of the parallel channel.  Looking at the chart to me it appears in EW terms we have completed 1 down 2 up 3 DOWN and 4 up and started 5 down.  Anywhere around 1080 would make good end of 5.  I am bearish and short and will stay like that until I can get a at least 2 of my signals to come in a doma break and a dmrm will confirm change. 

Wednesday, May 12, 2010

Null day



The word one uses when one does not want to store anything in a computer location is NULL.  That is what it was in the market today a null day. FAS sure was very slow.  TNA the 3x on russell 2000 was on fire.  FAS opened up 2%(0.65) went down 2%(0.65) up 3%(1.00) down 2.5%(.75) up another 3.0%(.95) to close at 32.06 up 3.59%.  The range was rather limited to 1.20.  We had a positive DKOD from yesterday.  Sold my FAS from last night on the second run.  Bought at the decline and sold at few minutes before the end of day.  FAS did not make a higher high it made a higher low thus giving a inside day.  Meaning yesterdays trend which was down should continue.  The top line of the envelope is at 33.27.  Fas also has two horizontal resistances of importance st 33.44 and 32.75.  We are approaching an area where the enemy is quite strong for the rally forces of FAS.  This is not positive.
TNA was up 9.3%.  TNA is up for three days in a row.  Yesterday was a outside day in bull ETFs.  Today TNA made a HH and HL.  The price was up 5 times that of yesterdays yet the volume was down 20% in TNA.  Russell is small cap on NASDAQ and is subject to high levels of speculation.  That is a point to note.  Almost all BULL ETFs are coming up to kiss the DOMAs and TNA in particular is very close. This is also not very positive.
I have 4 lines marked on the SPX  60 minute chart on the left.  1 is a trend line from the 1219.8 top and line 4 is 1181.2 horizontal line.  They are both resistances.  For SPX and the market to continue the rally these lines will have to be over come.  Line 2 is a previous resistance line that was overcome at 1158 and rally continued.  line 3 is a support line that needs to be held in case there a decline it is approximately at 1163.  Today's closing is at 1171 and it is higher than the computer glitch day and the day before that. There is sense of relief on the blogs and perhaps a blind optimism that we are permanently out of trouble.  I become very cautious under these conditions.  Unless we get a rally to kill all those resistances very soon I am getting unbullish.    

Tuesday, May 11, 2010

Even Louisiana doen't get rain every day.

Today was lot calmer than the last few days.  Today was a HH and HL day.  The markets closed lower none the less the trend was/is up.  FAS and SPX opened lower with a bang.  SPX opened down 3 pts and in 3 minutes made the low of the day at 1147.  It rallied 23 points to 1170 and finally closed down 3.94 at 1155.79.  FAS did even better 29.88 was the low in the first minute and the rally took it to 32.34 and closed down 0.33 at 30.95.  This is significant it gave me a positive DKOD on FAS.  Fas should be up in the next 2-7 days and give a rally of 10% based on previous such occurrence.  This is another positive.  For a 40 point rally in spx it only gave back 4 points today.  That is positive.  Tuesday being opposite of Monday worked great today.  DMRM gave one buy signal at 30.84 and gave me $1.10 and one short signal at 31.34 which I closed at end of day for 25 cents.  I went long at the end of day in anticipation of the rally tomorrow based on DKOD.  I did a study on spx where we closed almost at the open and the close was 2.9 or more down.  Once again the next day is quite important and almost always the first reaction is the wrong one. In candle stick stock chart talk day like today is called a long legged dogi and is supposed to indicate a top reversal.  This is not such a common occurrence in spx.  Last time it happened spx was near a bottom and did not trigger any massive sell off.  I will watch the spx and the markets with little extra caution tomorrow. This chart on the left is FAS 60 min envelope.  After being outside the envelope it is back in and that is usually a good time to get in. The thing that is little bothersome is that it is being rejected at the DOMA. 
I am bullish but not very. 

Monday, May 10, 2010

When big is not big enough

On left is spx daily chart.  There are many versions of this chart that are floating around on the blogs.  Essentially how one draws these channels is arbitrary.  The me the two most important points are the last two points.  I joined the last two highs and drew a parallel line to pass thru the immediately previous low at 1044.5.  The half line is created by the software and seems to be a good support line for the previous rally from July 2009 low. I also made a channel that doubles the channel width.  The low of that is at 980.  On many occasions I found the channel that I see is only half the picture.  Now the last 2 days of trading if I throw out the canceled trades I see SPX kissed the lower band of the channel and rallied.  If this rally is to be contained then spx should hit the half line  and start going down and works its way to the lower half and hit a good size bottom at 980.  But this is all conjuncture and sounds quite plausible. 
  On right is a study I did to look at the exceptional opening days.  Today ranks as the third best day since Jan of 1987.  The most critical day is the next day tomorrow.  Good confirmation rally would put the down side to rest.  On an average it takes 5 days plus and spx advances 2.2% on the down side spx declines 5.5% and takes 8 days.  A majority of such big gap opens have occurred when SPX is already in a decline phase.  My conclusion is such humongous gap open rallies are really not all that bullish.  I only traded FAS once today for 33 cents.  The range was very small. I will be going with DMRM and DOMA for next day.  Tuesdays are opposite of Mondays. I am not very bullish

Sunday, May 9, 2010

Yes 100% Utah is possible sometimes


These are still very violent days in the market.  Violence in the markets is opportunity to make some serious money.  FAS had 3 big moves decline 3.70 from 29.58 to 25.88 rally to 28.75 for $2.87 and decline to 26.77 for $2.10.  That are large ranges for intra day moves.  I find it better to trade on these days than to stay frozen.  After the big real imaginary data day it was all real on Friday.  DMRM works like a charm for on these days.  On left is SPX daily with traditional Gann.  Lot of times everything comes out letter perfect on Gann be it a bottom or a top.  In SPX's decline when I look at 2x3, 1x3, and 1x4 I am quite blown away at the exactness of this science.. Touching the 1x4 represents a 75% decline of the rally from 1044.5 This is an excellent spot to stop and turn to the upside. 
 I have a TNA chart with several envelopes with DOMA 77.  I was trying to find how far down do I have to go to get a kiss  on the hit (now reclassified as a computer glitch).  It was a mind boggling 25%  I have drawn three channels at 9, 17 and 25.  I will be watching these to see when TNA enters back in these channels.  The expectation would be for TNA to get rejected by each of these envelope line and then TNA goes back up piercing thru them to be met by the next. and repeat the same process.  The bear blogs  are almost unanimous in calling for this pull back to become full blown bear market leg some have SPX going to 300 or lower. I have myopia can't see that that far.  If it happens I will deal with it when the time comes.  I find it rather unfulfilling to pick a bottom or a top when there is so much money in between.  I did do study comparing TNA and FAS.  Since TNA represents larger index DMRM does better with a narrower index FAS.  We are due for a rally.  Mondays are very good days to start a rally.  I am very wanting to go long ASAP.

Thursday, May 6, 2010

I was right in the middle of history


Today was a historic day in the stock market. To try to make sense of what happened today will be futile.  FAS opened and on the fourth minute made a low of 31.53 and went on to 32.47 giving a long signal at 32.4.  at 6.45 Which I took for I was anticipating Dino's KOD on the positive side on FAS.  It was bad signal. and I got stopped out by 7.30 for $1 in the hole.   Fas bottomed at 8.51 at 29.65.  The long signal at 30.60 came at 9.30 and I jumped in.  FAS made a top at 30.9 and on its way down I had to jump out at 30.15 for a 45 cent loss.  Now

$1.50 in the hole.  I bought faz for 13.43 and sold it 14.71 and was able to trim my loss to 27 cents and then the panic set in.  I saw faz trade at 15.90 and dow down 998 .  I mean the dow went from down 107 to 150 to 200 to 245 to 345 to 407 to 5,6,7,8,900 and eventually 998.  Erin on CNBC almost running out of words. Cramer was out there telling people to stay away.  Then the bad trade of some dude entering 1 billion for 1million shares of PG came out also some market order for 10K PG that went at 40 came massive confusion.  Chat room frozen.  No one could believe what had happened.  It was the most excitement I have had in the stock market.  I have a weekly chart on spx and a daily box chart on SPX.  The 209 period weekly moving average was just kissed and spx has come down.  It is my belief that we may see the old high at 956.  I don't know when but looks like we should at least go there.  The box chart shows the width of the box in the rally phase and narrowness on the down side.  We are not too far away from going net negative for the year which started at 1115.  All signals are negative.  We may be overbought here.  Because dow and spx and the market fell so fast albeit erroneously many professionals jumped in and bought forcing the specialists and mkt mkrs to short to maintain orderly markets.  That causes a over bought condition and is resolved by a drop in prices in near future.  I also have today's FAS action just to show the severity of the move.

This is Gann time Emblem I had published before in one of my posts.  According to it May 6th today was a big turning point. I remembered the date but didn't remember why it was important.  Now I know and agree  I want to be bullish but under these circumstances I will wait for the DOMA 77 cross on the 60 min. before becoming a bull again.   

Wednesday, May 5, 2010

FAS down 66 but only 1.7% ?


We are having a very good streak of very violent days.  For past 7 days FAS has had very large ranges. Either I can sit in awe frozen and watch the market unfold by itself or use what ever I know and the knowledge from other successful fellow bloggers  and come to a logical conclusion and trade.  I choose later. There are 2 main reasons I trade. In the long run it will beat the buy and hold and secondly it is exciting.  I don't trade every signal.  As long as I end up positive for the day I have done good. 

When I woke up and saw FAS in pre market it was down $66.  After a few minutes with the broker I learned that FAS had a 3 for 1 split.  Why we need one now I never understood but some one decided we should so we do.  That threw me off quite a bit,  and I had to redo my Excel workbook for the split during early morning.  May be next time Direxion may want to tell us in advance and do it after close. Nonetheless the market and FAS opened down hard this time on spain.  It was not a Dino's KOD day but close.  The low came in the 7th minute.  Dino's KOD is only valid if the low happens in the first 5 minutes. The low came at 30.72.   DMRM kicked in at 31.71. I went long at 31.71.  Shortly plumbers came to do some work totally distracted me for the rest of the day.  FAS topped out at 33.54 and I got stopped out at 32.47.  Normally I would have shorted at 32.47 with my attention not completely on the screen I let it go for another day.  The low since is 31.40 and my buy point is 32.4.  FAS did hit the bottom of the envelope and is back inside in the 30 min with 77 period mvg avg.  I have adjusted the bottom of the envelope to get better contact points.  FAS is well below the DOMA and that is not positive. 
The whole move from 1220 on the SPX does not look impulsive meaning there is no threatening reason for the decline and it is not very steep and forceful. IN EW words it is corrective.  Market (SPX) is burning some of the gains so it can have a better rally again. We have completd 61 days since our feb low.  The last cycle was 65 days.  Some believe the whole move from 666 is not impulsive and yet spx has moved to 1220.  It is a little confusing to me.  My buddy does excellent EW   analysis.  He is at http://ewtrendsandcharts.blogspot.com/.   The spx chart is a candle chart with parallel channels drawn a slightly differently.  I thought it was interesting.  There may be a bottom at or very near 1145 - 1150. I will still be playing DMRM on FAS.  I am bullish but not gung ho.

Tuesday, May 4, 2010

Early bird catches FAS

The market (SPX)  and FAS opened lower and stayed lower all day. There was a huge gap at the start which was not filled.  FAS may have left stranded island.  FAS gapped up yesterday and gapped down today. Some believe it is an island only if you can see thru from right to left meaning the highest point today is lower than the lowest point from yesterday.  Gap ups and gap down happen a lot in FAS but it is still worth noting.  This is not positive.  FAS and SPX did not close at the low of the day and that is not positive.  
There is no buying force like a window dressing or options expiration or a great earnings.  The gravitational force is to the down side.  Astro also points to waning moon and not a positive aspect.
The daily Gann from Feb for SPX stopped at the 2x3 line that is mildly positive. The candle for today was large. It is highly probable that tomorrow would be a low range day with bias towards making lower lows. I have added a Fibonacci fans to BKX the banking index.  BKX  stopped at the 38.2 % fib fan.  That is positive.  I missed today's trading for I woke up very late.  The first thing I saw was FAS at 100.8 down 5 and I did not take a positions.  I waited all day for a DMRM rally.  I did not get one.  The signal to go long is at 99.1 and that is what I will be looking for.

Monday, May 3, 2010

Big inside day

Today was an excellent day to trade.  The market and FAS opened up as expected.  DMRM kicked in at 103.53 and gave ne a good place to get in on the long side at 103.31.  It drifted and reached a high of 106.6 and a sharp downside to 104.2 and closed at 105.8. I jumped out at 105.75.  The channel inside the envelope is proving out be a good way to look at FAS.  It hasn't crossed DOMA clearly to the upside not very positive and it did bounced of the middle line of the channel which is a positive.  If it doesn't clear the top of the channel that could be proof negative.  Tuesday are opposite of Mondays so that is also a negative for tomorrow.  FAS really did not rally as much as it should have compared to Dow and SPX and that is not positive.  I would give tomorrow a more than even chance for it to be a negative day.  The short point is at 103.20. 
The chart on the right is FAS on 60 min.  The two small trend lines are important.  If the lower  line is broken and I get a DMRM that would be a place I would short.   Today was an inside day.  Lower high and higher low.  Inside days are days of pause.  Lot happens on these days and pros take key positions. I am not bullish.

Sunday, May 2, 2010

Low close is bullish I say.

FAS and the rest of the markets opened down and stayed down most of the day giving FAZ the cloud walk this time.  It was not a negative Dino's KOD on FAS.  That is a positive.  I got a signal to go short at 106.62 and FAS rallied and gave a nice place to short at 107.5 from that point it was down  hill not very steep though and eventually closed at 100.9 and a low of 100.3.  I closed out at 101.5 for I did not want to take any short home.  I have 2 small trend lines on the charts I will be watching those.  Clearly there is nothing positive to see on the charts.  Fas is below the DOMA and  none of the indicators RSI, MACD or Williams % are positive.  MY DMRM is at 103.53 that is what I will be trading on Monday.I have a Gann with
angles on the right for SPX on the daily.  There is a major assumption here that 1044.5 is a bottom and and at a assumed rate of 3.278 per day we topped out at 1219.8.  We can then get   2x1, 1x1, and 1x2 lines. I added the the 2x3 line it is not part of Gann definitions but I saw it being the bounce point at many instances.  Based on that there is good probability that 1170 would hold if we get there. I do not think we are going that far.  From my perspective we should have a good rally from here starting as early as tomorrow.
On the left is a cut out of excel when spx closes at the low of day within 50 cents.  10/19/2007 was a close at 1500.6  The subsequent highest point was reached on 10/31/2007 at 1552.  Except for one occasion (in red) all other closes at the low have yielded very good upside.  that is 20 out of 21 times we have excellent gains. This was during the height of declines.  In the ensuing rally since 3/6/2009 we have had 5 instances of low close and they were all very good rally points.  My forecast of a rally was based on this real data.  I am bullish and would stay that way.  I am anxiously waiting to go long.