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Sunday, June 20, 2010

Next OPEX I am not waking up

Last Friday has got to be the most boring day in the option expiration history.  After opening flat spx made the low for the day at 7 am and rallied for an hour for 8 points from the low and petered out and closed up a point.  SPX made HH and HL that is positive.  It also closed up for the second day in a row that is positive.  TNA was the better money maker in term of range on Fri and for the whole week.  It was up 4 out of 5 days and went from a low of 44 to 49.  The next resistance is around 51.5.  The chart on left is TNA hourly with Dino's parallel lines.  I joined the high to low and drew equidistant parallel lines the grren ones are resistance and the red ones are support.  
The chart on right is SPX hourly with Gann angles.  50% retracement is at 1130 around the same level where a 1x4 lines resitance is.  That 1130 should prove to be a good resistance.  We have another 20 hours or so to complete the 145 hr cycle and that is roughly 2.5 days.  We also have a another 2 days to go on a 13 day cycle (top to top) on a daily chart.  This scenario is positive for SPX. 
I am slightly bullish would very minutely short at 1130 or higher with tight stops.  If I get a cloud walk then I will wait till 11.30 before any action.  If I get DMRM signal I will take it and go short. I want to try to avoid going bullish at 90 points above the bottom nearly at  the 50% line.

Thursday, June 17, 2010

Small range big day


Today's market not very active some time during day I almost fell asleep.  There were moments of action like a dialogue ridden romantic comedy.  FAS opened higher and within a minute established the high of the day at 24.35 from there are on it was down hill and finally made the low of the day at 23.2 at 12.18.  It then staged a quick rally and closed at 23.9.  It was a negative DKOD on FAS that is negative.  FAS made a LH and a LL which is negative.  SPX acted in a similar fashion.  I have not done KOD analysis on SPX.  I am starting one with today.  The string of six HH and HL was broken today in SPX as it also did a LH and LL except SPX closed higher.   It is typical for issues to rally almost all the way the to high of the but not make it in a KOD day.  That I think is what happened in FAS and SPX today. 
The chart on the left is FAS 3 days 5 mins.  Lines 1;2;3 are upward sloping D2PL lines I look for these support lines to be penetrated to the down side to short.  Occasionally they also act as resistance fans.  They are not Fib. or Gann lines.  Lines 4 and 5 are forming a nice channel.  With DKOD (24/26 correct) turned on I would be watching to see if the blue line 4 holds as resistance.  
The chart on the right is FAS for yesterday and today stacked one below the other.  I was struck at the similarity of the move not necessarily the magnitude. bottoms were made around 7.30 am and 12.20 pm and top around 11.00 am on both days.  I will follow these for a few days to see conitinuity.
With DKOD  on I am bearish and look forward to adding to my shorts.  Tomorrow is OPEx and anything can happen.  

Wednesday, June 16, 2010

Flat day



Today's action c an easily be called no action. FAS opened down50 cents at quickly rallied to 24.16 (I jotted this down) yesterday's high.  It then made the low for the day 23.44 at 7.35  and started moving up and finally reached the high of the day 24.44 at  11.05  $1 above the low and started coming down bottoming at 23.76 at 12.30 FAS finally closed at 24.04 a penny less than yesterday. The 24.16 was a tell.  Very rarely like never has FAS closed at the exact same high of the day two days in a row.  So when it came down it was a great buy at 23.44 for nice $1 profit.  SPX behaved similarly.  For 6 days in a row SPX has made HH and HL some time closing positive sometimes negative.  This is very bullish.  
The chart on the left is FAS 15 minutes.  It shows D2PL.  FAS has broken the 3 day D2PL and is back testing. Should it come back and make a LL that would be negative.  FAS did not go out of the envelopes to give a bearish signal.
The chart on the right is SPX hourly.  It is riding the middle line.
I don't like it when issues start riding the middle line.  They should either pierce to the upside or down side to continue a trend.  This to me is not bullish.  It could go up and hit the top of the channel then it would be bearish.  Tomorrow is the day before OPEX I expect good action for Fri will be another flat day.  I am looking for a chance to play both long and short tomorrow (not at the same time).  You can follow me on twitter under  Dino_007

Tuesday, June 15, 2010

The Three may be on the other side.


First let me apologize for not writing my blog on Friday and Monday.  I was a little busy with a few personal things.  Friday was a DKOD positive on FAS and it closed on Fri at 22.82 and the high on Monday was 23.66 a handsome pay.  Next on Monday SPX closed at the low of day and today it paid of nicely.  FAS after making the low of the day at 22.61 early at 9.40 never looked back and closed only a dime from the high of the day of 24.16 at 24.06.  
We have now had 4 days of HH and HL.  That is very bullish.  This is opex week and anything can happen.  However this seems like a strong move.  The chart on the left is envelope.  On previous attempts FAS was returned back at the middle DOMA 77 line.  This is the first time since FAS's top in April FAS is approaching the top line of the envelope.  It is my belief that the top will be penetrated and FAS would come back inside the envelope after that.  When FAS comes back in I will seriously consider shorting. 
The chart on right is my D2PL.  I treat the down ward sloping lines as penetration points and not as resistance points. 
When FAS moves above these lines it is a buy point  because I do not know in advance where these points are and how bad or a small a decline it is going to be at these points. Secondly I would be be speculating a lot to make one of these highs a top.  As you can see FAS has made five of these.  When FAS moves higher than a previous high a HH and an up trend is created and accordingly going long is going with the trend. 
In terms of EW  1040 to 1105 was a (1 or a) to 1042 was a (2 or b) and we may now be in a (3 or c) from 1042 taking SPX to 1145 - 1150. 
SPX and FAS and particularly TNA may take a breather and give me an opportunity to go long.  I am looking forward to it.  I am bullish.

Thursday, June 10, 2010

Learnings from Past


SPX to day did one of its famous cloud walks.  SPX moved quickly to 1083 by 7.00 and then a 7.30 low at 1076 and a final low of 1072.5 at 10am.  SPX then rallied all the way to close at 1086.84 only one point lower from the high of the day.   On a day like this the only time to buy is around 7.30.  
I did take a short at around 9 and got out around 11 with a few pennies loss.  FAS was little more wobbly than SPX
The chart on left shows inside days and outside days.  SPX hasn't had an outside day in a long time like since the decline started.  I will be on the look out for one.  The chart on right is TNA hourly with DOMA 103.  That is a formidable resistance for it.  For this rally to continue SPX will have to go over its resistance and TNA over DOMA 103.
Today was a HH and HL that is positive.  After a huge day like today the odds are tomorrow would be flat inside day.  That is neutral  Advancing issues were 6.25:1 over declining that is positive. Advacing volume to declining volume was 45:1.  That is positive.  Percentage of issues over 200 day mvg avg is 55.6 mildly positive.
SPX hasn't been able to put two positive days in a row. That is a negative. Top of the channel for FAS 30 min envelope is at 23.22.  if we go above it and come back in that would be A sign to short.  Other than that there isn't a whole lot of negative to report.
As we move to the rally side bears will come out swinging  with words ( low volume, below mvg. avg., Indicator x hasn't turned and this is a 2 wait till you see the 3 of 3 etc.. etc..) and with resources after all if things go right they could be kicked out of the house they occupied and enjoyed for 6 weeks.  It is important to have the focus on the trading system and not be drawn into the bull/bear fight. I remember what happened in June 2009, Sep. 2009, Feb 2010 all rallies were supposed to end and a 3 of 3 of 3 was to commence and that never happened.  This time I will behave differently and ignore all the chatter and aim the goal. 

I will be looking to go long when I get an opening. 

Wednesday, June 9, 2010

Continuity and limit

Today's market action was very profitable.  FAS opened up and topped out rather quickly at 21.64 making me think that it was going to be a DKOD.  Nope FAS came down and made a low at 21 around 7.10 and took off and topped out for the day at 22.13 at 8.30.  7.15 to 7.30 is a critical time in the markets They tend to correct the excessiveness from the early morning.  I got in at 21.09 and 8.30 another pivotal time period FAS I got out at 22.03 as it topped out  The first down sloping line is my D2PL for a buy and the second is for a sell confirmation.  .The third time period that is critical is 11.30 with DMRM giving a signal I went short at 21.58 and covered just before the close of day at 20.53.  Even if I we get an early exuberance it has always been better for me to trade at 7.30 than 6.30 unless I am selling a heavy load that I carried home.  I wouldn't be doing that for a while after last time.  Ooosh.  
SPX behaved very tamely today.  It opened up and 8.30 it topped out at 1077.74 and had orderly decline inside a channel and started going out of the channel at 11.10 one last attempt to go up and then accelerated the decline from 11.30.  It was up 15 then down 22 a total of 37 point move not the 22 that the high minus low range suggests.  It made a HH and HL which is positive.  Up / Down volume and number of advancing/declining issues were even at EOD.  That is mildly positive.  Here is another opposite observation if the market declines after FED testifies it goes up the next day.  That is positive.  Number of issues above the 200 day moving avg. is down to 48%   It was at 87% on April 22.  That is kind of a quick reversal.  That tell me that half the issues just barely went above or touched the 200 MA and backed off .  Not very positive.  FAZ High 2 days ago was at 18.1 and today's low was at 15.75 and high at 17.12.  The rally from low to high ~58%.  To be a triple top it should starts its decline right here ( at best 17.20 for a 61.8%) and take the 15.75 out and start its march towards 14 and then to 12 and finally to 10.  In case we go above 17.50 I will drop the triple top case.
I am bullish and will play the bullish side on indicators with stops.
  
I will tweet my calls for few days see how it goes. Look for Dino_007 ( My Dino name was already taken)

Tuesday, June 8, 2010

No news is good news

It was one of the better days for me.  FAS opened and quickly went to 20.79 and drifted lower to 19.32 by 8.15.  Then it made a double top 20.40 to 19.95 to 20.4 and collapsed to 19.60.  It is like an M with legs 80 cents and center to top 40 cents.  Then FAS took off and accelerated  and closed at 21.1.  I had good short early in the morning and one very good long late in the day.  All the positives I laid out yesterday worked out.


SPX is traveling on the 2x3 Gann line That is neutral to negative.  SPX if it wants to make a bottom just touches a line and takes off it does not travel ( come back again and again) on it.  It is 84th day that is positive.  Gann 120 has come and gone and we did make a low. These are turn dates. That is positive.  SPX did its DMRM and that is positives.  SPX doesn't give that many DMRM signals. The puts and bear ETF both got very expensive those are both positives.  SPX made a LH and LL that is not positive.  Closing at
the high of the day in itself is not negative (It is mildly 61%  positive) .  Bull ETFs made a new low that is deadly negative. Issues always jump up from new lows This rally is probably one of those.   I was thinking we haven't had a KOD or an Intra day reversal in a while
The first chart is FAZ.  It shows a  triple top.  The bottom at 14 and top at 18.  For this to be a true triple top, the current collapse will have to continue  after a brief rally at the mid point around 16.  The decline should take FAZ (18 -14) 4 points below 14 that puts it at 10.  With a fair chance we have just put a bottom this is not out of the question.  
The second chart is Russell 30 mins.  This was the most disappointing index of the day.  It needs to clear the white median line for it to participate in the rally or the whole rally is questionable.  14.6% retracement is at 630 and 23.6 is at 642 passing either one of these milestones would be positive.  This is Russell and things can happen in jiffy. 
The last chart is FAS from March 2009 low.  The lines are Dino's parallel lines. I joined the low to high and drew equidistant parallel lines.  FAS hit the bottom of the channel.  That is an excellent place to form a bottom.  The high on FAS was 39.75.  Gann 50% of value is at 19.87.  Today;'s low was at 19.37.  That is good enough to be called a 50% retracement completion. 
I am feeling a lot more bullish and will trade the bullish side on indicators with stop loss.

Monday, June 7, 2010

Burn it after you read it

If you were at our chat room yesterday evening and looked at some the uber bearish sites suggested there and saw the futures tumble in after hours you would have thought the market was going to open down  250 points.  Nope it opened up and FAS opened at 21.65 and quickly reached a high of 21.78 and just as quickly came down to 21.01 and went back up to 21.95.  It then proceeded down to 20.86 and back up to 21.53 and finally started a tumble that took it to 20.15.  The reason I am detailing all these moves is because our DMRM in its old form would have given 5 wrong signals. I changed DMRM to be dynamic it now has a new set of parameters and an overlay  just to avoid these incidents.  I traded TNA from 40.5 to 41.86.
SPX IMO closed at low of the day that is positive.  We are 83 days into the low to low cylce that is positive.  The TRIN is so negative it is positive for the market.  Tomorrow is Tuesday that is generally opposite of Monday that is positive.  In opex the market (only 61% probability) tend to finish opposite of Mondays.  That is an overall mildly positive for the week.  The four charts are FAS/FAZ and TNA/TZA 5 minutes 10 days.  The DOMA 77 worked real well.  Any break will have to break DOMA first.  I have D2PL lines on FAS they will also have to be penetrated for bullish signal.  SPX is  very close within 9 points of the old low at 1040 that is negative.  FAS has run out of support lines to draw in my D2PL.  That is a negative or also called no man's land.  FAS made lLH and LL that is negative.  SPX has  also gone below the 2x3  Gann angle line that is negative primarily because the next support is on 1x1 line at around 970 and that is steep.
I will trade the long side again with half the normal amount till I rack up a few more wins.

Saturday, June 5, 2010

Jimmy Joyce is not alone

First things first.  My trade from thursday to go long at 23.87 that went bad.  on thursday I got a DMRM signal at 24.23 which I took at 23.87.  With all the hype about friday's unemployment number I decided to keep it.  Ignorning 1) spx closing only 3 points higher than round number 1100-- bearish and 2)  spx retreating after hitting 1x2 line on the dot -- bearish and 3) friday was closest to june 6th a 120 day important date from Gann cycles-- bearish  and above all carrying a trade home when there was so much  speculation  on Friday's unemployment numbers. When I wote my blog on thursday my views were biased.  My buddy Eddie always says "one's views reflects one's position".  
Moving on FAS opened sharply down and made a quick low at 22.54 and as is customary did a 50/60 cent rally to 23.16 and proceeded down. I finally jumped out at 22.67 taking a 1.20 hit.  Rest of the day was history in the making.  No one was buying.  FAS eventually dropped to 21.03 one of the biggest hits.  I did not trade after the sell. 
The first chart is the first decline from 1576 to 666 and subsequent rally.  The rally ended 8 points shy of the 61.8% retracement.  Just 4 weeks ago I couldn't find a bear even if I looked with a x-ray vision glasses.  Sh... I was one such bulls.  The point is no one really knew.  Now the perpetual bears claim they knew.  Fresh calls for this market to collapse and goto 60 on the SPX are surfacing again.  That is one of the reasons for the weekly chart.  There is enough support just above 1040.  Should we go thru 1040 the next level to watch is 956.  The daily chart is rally from 666 to 1219.8.  The 38.2% retrace ment is at 1008.  That would be good support.. 1x2 support at 976 at 50% line is at 943 another major support.  We are essentially getting into an area where there is lot of conjusted support for the markets.    Looking at the decline from 1219.8 on the daily Gann,  SPX is on the 2x3 line from a perfect rejection from the 1x2 line.  On the parallel line the support is at 1044. I am not categorically saying June the 6th the Gann 120 day is done on Friday.   May be Monday is the real low  To me it looks like SPX is pretty darn close to A low.  How would I play it.  I would rigorously play only the DMRM.  My buy point on FAS is currently at 21.70. I am feeling a lot bullish and slightly uneasy.  I plan to trade only half my normal amount until I can put 4/5 wins in.

Thursday, June 3, 2010

Trading Day


This was one of the better days to trade.  Just look at the chart on the left it TNA for today. 47.50 to 49.20; 49.20 to 47.60; 47.60 to 49.20 ; 49.20 to 47.0 ; 47 to 49.60 So many chances to get a good trade.  It was similar on the spx.  Financials did not do that well.  I got one DMRM at 24.08 to go short which I took .  I covered at 23.69 only a 40 cent trade.  I got another long at 24.23 that I took at 23.87 but I didn't sell and carried it home.  Not particularly very happy about it.  We made HH and HL and that is positive.  
The chart on left is TNA for today.  Shows D2PL lines. Green is from a high and a lower high when that is broken I go long an red low and a higher low when TNA goes thru red to the down side I short.  
The chart on the right is 30 min spx. The 2 black lines are my D2PL.  This is a slow moving index and consequently the trades are for slightly longer term.  Top black line is my current resistance line.  The rule is again simple current high and a previous high that is higher.  D2PL works on all time frames.  
Most of the indicators DOMA, MACD, stoc, RSI  etc. are on the brink of turning positive.  VIX has come down quite a bit.  There is a little bit of uneasiness and  a sense of waiting for something to happen that is quite prevalent amongst bloggers.  We need a big day of sorts to get this train rolling again.  Today was a day everything went into reset.  Under these circumstances my inclination is to play the long side in the market.

Wednesday, June 2, 2010

Tighter stops Time


FAS opened up and gave a DMRM at 23.22 and drifted down to 22.60 at 7.00 am.  I got in at 22.71  the first high came at 23.62 at 10.00 and I sold my longs at 23.53.  FAS made its final low at 11.30 at 23.12 and took off and closed at the high at 24.44.  So I sold early.. Again..  SPX showed a similar pattern.  Both made HH and HL which is positive.  Today was 80 th trading day from feb 5th low.  If I were to take the trend has changed and the cycle low was the 1040 low then it is a 75 day cycle from low to low that doesn't fit with the rest of the cycles.  It is a rally of 60 points from the low I am not ready to call it a trend change yet.  On DMRM long side made the money today to me a trend change happens when long makes the money and the short signal doesn't.  The chart on the left is hourly ( data from FSC) the 38.% is at 1109 that is a good point to stop.  Previous top is at 1103 which also the point to cross on 1x2 line.  These are gann angles based on 1220 top to 1040 low as 1x1 line.  The chart on the right is daily SPX with Dino's parallel channels.  To form these I first draw line from hi to low and then equidistant parallel lines to form channel.  Todays close is sitting on sitting on top line of a the channel.  Not too positive to me.  Up sloping lines are parallel channels from march 666 to 1120 low.  I am not bullish and will play the short side with perhaps tighter stops.

Tuesday, June 1, 2010

Sprint to close

The FAS opened at low of the day at 23.33 and immediately rallied to reached the top of the day at 24.28 at 7.33 early  in the morning.  Specially after a 3 day holiday the expectation was for the markets to open higher.  Market started its drift lower at 10.30 and accelerated after 12.15 and FAS closed  a dime higher than the low of the day at 22.60 and SPX closed at 1070.71 and 0.81 cents higher than the low of the day.  At the very open I did not short FAS  even though the temptation was to do so.  I shorted at around 7.40 and sat with it all day and covered around 12.40. FAS broke down quite fast after that.  The point is not to short some thing because it is down that always goes against me.  Second is there was an illusion that it might be a positive DKOD on FAS until about 12.30 but even if it was  I wasn't going to buy FAS till the end of day anyways.  I had done a study before on spx closing at or near low of the day( within 0.5 ponts) where I found 100% probability that we would be up next day.  Today is not within the 0.5 points but the way everything else closed I am going to call an up day tomorrow.   2nd day of the week  (usually Tuesday)  and 1st day of the week (usually Monday)  are opposites that is a positive.  We made a LH and LL which is not a positive.
The chart is that of SPX daily.  I have marked the cycle days.  Seems like we are running a 12 day cycle of sorts.  We have completed 311 days from March 6th 2009 low and have also done 79 days since Feb 5th 2010 low.  Any thing after 80 days it is time to look out for a low.  June 6th is an important Gann date since it is a Sunday I would infer Friday may be a good day to make a good low.  I am mildly bullish primarily because the floor had to take in inventory at the end of day.  I will be watching to go long when I get a chance.