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Wednesday, July 28, 2010

Playing the side with highest odds


The Gann important date at 90 days was on July 27th that was yesterday and that was a top at 1120.  Keeping it at round numbers 1220 to 1120 approx 100 points from the high and at slightly over 50% of the decline from 1220 to 1010.  All Gann techniques.  Taking that to TNA we topped at 48 which is 50% more the bottom at 32.  Vertically measuring the decline from 51 to 32 and the rally to 48 the 50% is at 41.63.  We have a lower high and a lower low :--negative. 10 and 20 period  SMA have crossed in all ETFs :-- negative.  I have also been watching 77 Doma cross 200 day sma which is about to happen in spx. :-- negative.   On the Gann angles spx got rejected at 1x3 line :-- negative. Lines parallel to 666 low to 1220 hi line has been a resistance line :-- negative.  I would like to see a 22 point decline from the 1120 top to be totally convinced that trend has changed.  On the positive we should reverse and  backtest the 10/20 sma before we start good decline.  DMRM has made good money on this decline.  I will play that signal it is at 23 on FAS to buy. IMO based on all the above we should decline some more possibly to 920 before we rally to 1020.

Monday, July 26, 2010

Wait Just a moment


This coming week will be an important week in the stock market. why
1.  Astro economists are expecting Mars to come together with 3 other planets and cause extreme voltality.  2.  Gann has an important date on July 26th which is 90 degrees or 3months from April 26th top at 1219.8.  3.  SPX and TNA and other ETFs are hitting the middle line of a channel or Andrew's fork.  4.  The true reaction to dumb stress test will become more evident.  5.  1115 is 50% rally point in SPX on the decline from 1220 to  1010.  6.  SPX closed less than 3 points up from round number 1100. 7.  EW analysis is truly divided with one group calling this a 3 to the upside 666 - 1220 as (1) and 1220 to 1010 as (2). and the other group calling a 3 of 3 of 3 of 3 to the down side. 8.  End of the month window dressing is this week 9.  A positive close for the month above 1030 would stop the bear trend from forming 10.  A close above 1131  would be extremely positive.  There could be many more.  Actually this is not as alarming as it sounds every week if I hunt I can find 10 or more reasons.  One thing I know for a fact there will be more than ample oppurtunity to make money.
Starting we have had quite a run that guarantees that there will be a pullback.  and after that may be a big rally or dump.  Not knowing how would I play this? Simple DMRM.  FAZ and FAS is on 3.2% trailing and TZA/TNA is 3.4% trailing.  Patiently wait for the signal and that is what I plan to do.  My guestimate is that the down signal would come and whenever it does I will play that.  It is just a little late to buy and little too early to short. 
I have included couple charts that have helped me.

Thursday, July 22, 2010

3 views same caution





These three charts are all of TNA
with different time frames.  They all have the important eight sub divisions.  In the first fro 72 to 32 TNA did a 25% rebound and backed off and they are approaching the 25% again.  In the intermediary TNA did over 50% rally and backed off  to 12.5% and it is again approaching he 50% again.  In the last short term it has done 75% of the last decline.  The Andrews fork is for guideline channels.  The Trendline is not broken in any of these.   The last 3 days have been very active and flip flopping.  I will look for a minimum decline of 1.25 from the trailing top before I think about a short.  We had a higher high and higher low.  TNA is above the DOMA on 60, 30 ,5 and 2 min charts. The rally was a little steep and we have not corrected this move from today.  with AMZN and SNDK tanking on bad revenue numbers I would not be surprised if we get a little pullback.  That would give better evaluation of the next move.  If I get a trendline break and 1.25 less from 40.68 I will seriously consider a short term short.  Otherwise no go.   Should we get a new high that would be a long.  
A small point: we have been in a decline from 72 for over 2.5 months.  Some times we can get carried away and assume some how we can't rally to 50 or 60 or higher.  I am keeping my eyes wide open to follow the short term signals for  long term is made up of bunch of short term.  July 26th is an important Gann date. 

Tuesday, July 20, 2010

Intraday reversal is not a bottom!



Today's action in the markets were very significant.  I had earlier done a study on 2% or more declines on option expiring Fridays  and found the stocks bottom on the Tuesday following. That is kind of what happened today.  I had parked that study because of the bull leg we were in since 1980 and all good size declines were followed by  good rallies.  None the less today was an intra day reversal SPX first making a LL and then HH.  While that is big, very rarely does SPX make a low on a intraday reversal day.  We are still below the 50 and 200 day Mvg. Avgs.   We do not have a DKOD and in spite of the turnaround bullish ETFs have not crossed their DOMAs.  We are barely at the 50% retracement on TNA or FAS from recent declines.  We do have a 10 period and 20 period mvg avg crossing on the hourly on TNA and TZA.  That is positive to some extent.  This rally could have been caused solely by short covering specially with AAPL reporting earnings.  Of the prominent companies AAPL is the first to report good earnings.  They are the premier tech gadget company and with each new novelty item it is kind of hard not to, Ron Popeil also makes a lot money with new gadgets from knives to Rotisserie and many others.  A small rally or a big rally for a day or two does not change whole lot of things.  I would be watching unemployment and housing starts.  Fed money has dried up for these and the effect should start showing up. 
 Optimism is a little high for my taste and I will try to get in on TZA if and when I get a good signal. 

Sunday, July 18, 2010

Restart



It has been exactly one option expiration since I wrote my last blog.  Needless to say I got a little busy.  This option period that started on June 21st at 50.42 on a DKOD and ended at 36.26 on July 16th.  they have gone thru 50.4; 40.7 ; 44.4 ; 32.9 ; 37.2 ; 32.5 ; 42.6 ; 36.0 or approximately 10 down 5 up 12 down 5 up 5 down 10 up 6 down(so far). That adds up to 50.  In terms of percentage 20% down ; 10%up ; 25%down ; 13%up; 13%down ; 31%up; 16% down(so far).  This is just in 4 weeks.  With so much money available to be made I do not want to lost in calling a P3 or end of my U.S. or it is C or something and lose the opportunity to play either side.  My view there are really no bear or bull markets.  It is simply that markets go up and markets go down.  
Given all that how do I make some of it  knowing I will not make all of it.  
1. Doma crossing 60 min. 77 period doma.
2. DMRM wait for 3.4% on TNA move before jumping in
3. D2PL watch the last 2 lows (2nd higher than the first) and last 2 highs (second lower than first) for piercing.
4. DKOD
5. 50% retracements and Gann lines
6. D2IL special situation 2 identical lows
7. Close at low of the day 
8. H and L of today compared to yesterday
Trendlines and channels are very tough in my books are secondary and finally EW has the least weight. 
Where are we now.  DKOD negative to the market on Fri.  TNA has done 50% retracement  of last rally.  It is LH and LL on Fri. None of the other conditions apply.
 I am going to remain bearish but with a eye open to see if we get a DKOD on the plus side soon and TNA can do exactly the opposite (It is a rule that people follow) of june/july and make a low early in the morning on Monday.