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Thursday, March 31, 2011

Important Tomorrow

SPX had an inside day with LH and HL and closed in the negative. It is the first negative day after 2 plus days and this is the first time since  SPX's  low at 1250 that SPX has turned negative after 2 positive days.   Last two times it was after 3 positive days. All put together it is slightly negative for tomorrow.  Range was a pathetic 4.75 points.  This I think was a fake set up.  RUT had a HH and HL and closed in the positive.  RUT is within 5 points of best monthly closing high and thirteen points away from all time high of 856.4x.  That is a big difference.  RUT is made up of small stocks It is more volatile also it is where the most speculation happens.
I lost all my charts and had to reconstruct them and there are slight differences.
This is my hourly TNA The decline abruptly ended.  I was expecting it to touch the intersection of the bottom of the Fast channel Line 2 and slow median line.  TNA came with $2 dollars of that.  Now it is approaching the top Line 1 of the slow channel.  I believe it will bust thru that and go to the top line of the fast channel before this move ends.  It may catch a little turbulence at 93  the fast median line and come back to 90 or 86 ish.  
This is my Gann angle chart reconstructed to make the 68 low as bottom of 1x1 from 31.5 low in August.  93 is around the 3x2 line and it is approaching that.  The DOMA 77 worked really well.  It will have to really break thru the 1x1 line for me be bearish.  
 This is my TNA daily chart and it is long term from 3/09/09 with a low of 9.02.  It is one the most important charts.  I count 9.02 to 72.24 as (1) and 72.24 to 31.50 as (2) . From 31.50 to 87.78 is i of 3 and 87.78 to 68.77 on Mar. 15th is ii of 3 and it has already started iii of 3.  That is why the jumps by leaps and bounds.  Next decline from 93 to 84 may be the last chance to hop on the choo choo before the train peels of the station.  2009  sept. the decline was similar and lasted 5 weeks.  I would have like to see 5 here but we got 4 and that is good enough for me.  Many are counting this as 5 of 1 with 2 yet to come  in my books it is a low probability event.  
 This is TNA daily. The 1x1 line is from 9.02 to 31.5. The decline was to the 2x1 line. The 3x1 line which is minimum I think it will travel is at 110 or above.  These will be exciting days on the right side and I am of the opinion it is the plus side. 
Tomorrow is the all important employment number.  looking at these charts the interpretation would be that the numbers are good and stocks will take off aided by the 1st of the month buys by pensions.  Next week may be a down week getting ready for the big 3 to the upside
Just one more thing come to our CIL we have everything charts analysis discussions funnies and the best thing is it is always FREE.
Thanks for reading my blog.

Tuesday, March 22, 2011

Furious next few days

SPX had an inside day with LH and HL and closed in the negative.  IMO that is negative for the tomorrow.  RUT had a HH and HL and closed in the negative.  That also is negative because it is the first negative day after 3 positive days. Streaks have to start with a one .  Few Fib. numbers.  1344 to 1294 decline was 50 points the counter rally to 1332 was 38 points or 76% of the decline.   Next decline was to 1249 and that was 83 points 167% of first decline and also the declines were expanding.  This counter rally to 1300 is close to 5/8 of 83 point decline. It is possible but IMO nor highly probable that SPX would do the same 76% rally to 1312.  I am of the opinion this rally has ended and declines would start again as early as tomorrow.
This is my hourly SPX .  After hitting the bottom of the channel and finding support it has penetrated the median line and is very close to the upper line which it is likely to hit and come down rather sharply.  Usually there are 3 distinct bubble in a counter rally and I see those on this rally very clearly.  SPX is at the middle point of the triple top decline and that is a resistance point.  All said I see declines starting again very shortly.
This is my TNA daily.  I have marked the top half the bottom half and the respective median lines.  Don't mistake me the long term trend is still up until Line 2 of the slow channel is broken around 54.   The channel that is in jeopardy and IMO it will be broken is the fast channel.  TNA came all the up to intersection of the median line of the fast channel; median line of the top 1st quarter of the slow channel and the top line of the decline line and got stopped.  It should now start its descend to the lower line of the down channel kicking it out of the fast up channel. Exciting days ahead..
This is my hourly TNA.  After finding support at the lower half median of the fast channel and rallying back TNA got rejected at the median line.  It did go above the DOMA 77.  
Even though the appearance was nothing much happened a lot actually happened today.  Early morning was the end of the three day sale.  The markets are at a tipping point.  Anything were to happen that sends this market out of control the furious nature of the decline will show up.  Somebody has been selling a lot of stocks the last three days.  Pros always sell into a rally and retail  always buys. 

I am bearish but will not hesitate to jump to the other side.  I will be watching the indicators closely. 

Thursday, March 17, 2011

Too early to ask is it over...

SPX did not make a higher high ; made a lower low and close in the negative.  SPX has now declined for 3 days in a row with increasing amounts of 7.9; 14.5 and 25.0 and the volume is also increasing from 4.0 to 5.2 to 5.8 billion.  What does that mean there is more and more conviction that decline is for real and people are heading for the door.  Some additional news about Japan and the market dropped 100 points hard and quick today. These are not signs of the same trend as before.  However there is no decline that goes on for ever ( We now know that there is no rally that goes on for ever either sorry $30 month advisers!! ) We will have a rally. When and how much it is much too early to speculate on that. 
The chart above is my Gann angle SPX hourly.  It is in junctures like the one we are in that I really appreciate the genius of Gann.  In the above chart SPX bounced exactly from the 4x1 line.  Last time SPX bounced near this line it advanced 30 points.  This time it will have some resistances to over come and the first of them is at 3x1 line around 1270.  I like this chart a lot. 
This is also SPX hourly and this is on a channel chart.  SPX hit the bottom of the slow upward channel and slightly below the fast channel and bounced of.  This is quite important and my conclusion is we have put a bottom at that point.  I am not ready to call it THE bottom or anything that would require more data. None the less it a low point.  Another point that this may be a low is that in Aug. the decline from 1120 to 1039  covered  blue half the big channel and the current decline has done the same on the upper red half.  
At right is the close up of the decline.  It is from 1344 to 1249 about a 100 points usually a good point to get a 30 or point counter bounce.  SPX has now declined almost twice as much as it did on the first phase or wave from 1344 to 1295.  Here are some fib calculations.  1344 to 1294 is 50 points the counter rally to 1332 was 38  or 76% . The current decline from 1332 to 1249 is 83 points and that is 167% of the first 50 point decline. 
This is opex week and generally we get at least one day of good decline and  one day of solid gains.  Well we have had more than our share of decline for the week next in line would be a rally.  Friday I think will be a non event.  Triple witching too many agencies watching so the market should flat on that day.  One more thing RUT and SPX are both negative for the year as of today but dow is not it is up a whopping 36 points.  
I am still very bearish.  The calls have been good so far.  We are hitting some extremes.  I need little bit of easing of tension in the market before the next move.  
It may come tomorrow.  
Thanks for reading my blog.

Tuesday, March 15, 2011

In the middle of it now..

It is not difficult to understand what happened in the markets today.  Markets dumped till about 9.40 and rallied to close.  It was D D R R day.  My sense is the floor wasn't interested in buying early in the morning.  It selectively bought a few mid day and dumped it all near the EOD.  Why  because things didn't close near the high of the day in fact they closed in retreat.  This is a serious difference in the tone as my CIL buddy JXXD called it.  Maria is not excited about the close.  Yesterday's hourly chart with channels is a good one to follow on SPX.
This is Gann angle chart on the hourly.  A 16 point drop will put it at 1280 a support a lot of people are looking for.  Looking at the chart and the world markets particularly Japan tomorrow I would expect a drop to 1278 and rally back to 1287 and total collapse to 1255 by close.  I know many feel this is not "impulsive" enough to be a major down wave or something but I remember 2007 start wasn't that impulsive either.  Also at the start of any sequence people are not convinced this is it.  Its only towards the end they figure it out usually it is too late by then. I expect the first sequence to take us down to 1160 ish before any sensible rally develops.
This is my hourly TNA as mentioned before I am expecting a hit to 66. How it develops will be in line with the SPX story from above.  Downside is always closer to vertical than upside is meaning it fast and furious.  
Personally I will not be a hero and go long.  There will be cheaper prices to do that later.  I plan on shorting aggressively on every rally all the way  and not sit on sidelines like some suggest. 
I am absolutely bearish.  
Thanks for reading my blog.

Sunday, March 13, 2011

Decline has just started

SPX is clearly in a decline.  The trend line that held from Aug.24th is busted at 1314 and there is a little song and dance going on to convince people that is nothing but a  small pull back.  I am not buying it.  The rounding top spx has put in the last 11 days is quite deadly.  The most plausible next candle will be a large candle.  IMO it is likely to be a red one.  In a decline all consolidations resolve to the down side an vice versa in an advance. For the week spx was down 17 points.  Tues. rally cancelled Monday's  decline ; Wed.'s 2 point decline was a set up for a 25 point decline on Thurs. and Fri.'s rally of 9 points was 1/3 of the decline of 27 points the prev. 2 days.  Why this is important is because just like in a rally SPX drop 50% of the range in a day or a week for embedded correction in a decline it pulls up 33 to 50  %in short intervals of time for  a built in "correction"
The chart above is my version of 1,2; 1,2; chart.  I believe SPX is in serious decline and is  likely to see significant lows in the near future.  In the next few days say by Wed.  it should be at 1260 with at least one long red candle of 40 points or so.  The decline line are lot more closer to vertical than advances are.  The Up trending channels should see significant piercing.  The chart above is SPX  hourly is easliy duplicated and in my books is worth paying close attention to.  
The chart above is RUT daily.  The last good decline was from April. 26th to Aug. 24th. and went thru 4  quarter channels or 2 half channels. It stopped after half channel with a may melt down.  Similar decline now would pull RUT down to 650 area.  and I think it will.  
This is gann angle chart of RUT from March 2009 lows.  It bounced on the dot from the 4x3 line but I think it is going to 1x1 line around  690 and a bounce after that.  The last decline was from 745 to 587 or 160 points and lasted 4 months.  In this decline RUT should see 160 point decline in 2 months.  and That will put it around 690/700 for 1st stop of the bus.  
This is my hourly TNA chart.  I have said this before in my blog it clearly is approaching 66 possibly by this Wed.  Melt down have their own fuel mostly no event causes them and  some where in the middle things heat up because of some story.  I believe the economic story is yet to come and no one has a clue what it is.
I am utterly bearish and will short every good bounce I get.  Thanks for reading my blog.

Thursday, March 10, 2011

The Train finally came..

Today was also a cloud walk day except in the negative direction may be I should call it mine trap.  SPX opened 5 points and that was the high of the day.  It made a low 1295.30 at 7.10 and then a rally to the 44.1% line at 1305 by 10.20. That was  followed by a plunge to a new low at 1294.21 the low of the day by 10.41 and a drift to close at 1295.30 the first low of the day.  This is very significant data and I plan to preserve it.  The news was the new unemployment claims went up by 28,000 but that was a weak explanation.  The other factors were. It was the day after the anniversary;  The trade balance widened ; Trade with china slowed; Moody's down graded Spain and Libyan rebels were losing; Not enough;  The federal deficit was the largest ever recorded.  CBO upped our yearly deficits from 1.1 trillion to 1.5 trillion and said the tax breaks and 2% break on social security would add 400 billion to the red ink.  Put differently we are dead broke; People are still losing jobs; We are buying more from others than we are selling.  Here is the kicker our interest payments are soaring.  When I put all these things in front of me I can see why the markets plunged today.
Technically speaking here is my hourly chart of SPX. 
This has broken down thru the main channel it has been going up in.  The points I am watching are 1280 which would equal in magnitude the decline from 1227 to 1173 in Nov. 2010.  and 93 hours which was the time for the decline from 1129 to 1039 in August.  This tells me after early morning rally for 15 minutes to dump the crap the floor collected today and quick decline to 1280 and a rally into close is not out of the picture.  We are solidly in the declining phase and I do not want to be a hero and buy anything until I get a solid good signal.
This is my hourly TNA.  The fast channel is broken.  Support is from the upper median line in the slow channel.  I still think it is noteworthy the top is at the intersection of slow and fast channel.  The down trend channel hasn't formed yet.  Right now the next solid support is at 66.0  If this is THE decline that drop to 66 may not take too much time and could happen by Monday. 

This is my monthly dow chart.  I started making parallel channels and morphed into a parallelogram.  It had nine months of rally a 5 months of flat and another 9 months of rally. The rally for the past 24 months is in the shorter  diagonal usually meant for counter rallies.  The arrows marks the resistance on the longer diagonal.  I have an ultimate speculation low of 4500 in 17 months.  That is just an end to the pretty picture.
Just noting anything can happen and this is just a start a start my plan is to be very aggressively  bearish.  
Thanks for reading my blog.

Tuesday, March 8, 2011

Drops and Rallies.

Today was a different form of cloud walk day.  SPX started low but very quickly became positive and the market took off and never looked back.  SPX made a LH and HL and closed in the positive It was an inside day.  Generally it is the closing that matters the most on inside days and as such it is positive for the markets for tomorrow. It closed above Friday's close.   Tomorrow is 2 year anniversary of the low 666.79 on March 9th 2009.  IMO it would be gr8 conversation topic if SPX were to top at 1333.6 twice 666.79 in 2 years.  Sounds cool to me. 
This is my TNA hourly chart.  Its in ability to break even the simplest support lines is worrisome.  It is still inside the faster channel.  It has touched the bottom 3 times but no cigar.  It got stopped by the median line today.  It won't be long before it gets resolved one way or the other.  Each of the lows is slightly higher but the highs are not.  That is beginning to look like an ascending triangle and that usually breaks higher.  If I  am sounding a bit more bullish that is because I am.  There is no evidence in any indicator that we are going down barring speculation on world events.  The market is being driven by oil prices more than anything currently.  It may be worthwhile to keep an eye on them.
This is a chart I created a few days ago.  A day is broken into 4  sections.  Early action usually till about 7.30 then from 7.30 to half way point 9.45 and later day 9.45 to 3.30 and closing .  I have marked on the chart as to what happened in each of these sections of the day as either a D for drop or R for rally.  So far the day that stands out as predictor is a D R D R ( Drop Rally Drop Rally) day which slightly implies the next day to be a big up or down day. I will collect some stats and see what it tells.  
I am expecting a R D R D day. I see a H&S with very small shoulders on either side from Fri closing and today's closing and a huge long head in the shape of an U in the middle of the day yesterday.  That also is a tell that we may be setting up for a surprise rally.  
I am not that bearish any more.
Thanks for reading my blog.

Monday, March 7, 2011

A lot happened with zero result..

This is a  week where a lot happened but in the end SPX was back at neutral.  SPX started the week at 1320 and ended at 1321.  Friday was interesting inthe sense it waited almost till 12.30 before a short covering rally took the SPX to 50% of days range  and took most by surprise. Also the SPX is still at 50% point for the decline from 1344 to 1294.  The SPX top was on 2/18 and we have traded for 10 days since and lost 25 points.  That is 2.5 points a day not really a big impulsive decline. The chart itself is beginning to look like an ascending triangle with a flat top.  The rule is go with the direction of break.  
I have witnessed often times  the first move in the short lived minute charts is the false move. Meaning if the wedge break lower SPX goes up.  
This is FAS hourly chart.  I am of the opinion the banking sector is struggling.  FAS has not made a higher high and it is very close to take out all the lows.  Those are not at all bullish signs.  In contrast if one were to see the rally phase blue circles we see higher highs all the time.  Also it hit the exact point on the top line of the channel.  Since  only half the story is visible IMO it is headed to 21.5 and as is shown in the next chart it may eventually hit 12.  The parallelogram formed very symmetrically without much tweaking and as the other indices start making lower lows  FAS is likely to accelerate.  If I trust my ears no one really no one is talking about a crisis in the banking sector.  All the talk is about Libya ,oil and gas prices ; cooked up unemployment numbers; gold ; future inflation and budget.  Should the FED show signs of stopping QEs banking will be the first to get hurt.  Contrary to what one hears houses are not flying and banks are not lending.  I am very bearish on banking and FAS.  
I am bearish
Thanks for reading my blog.

Friday, March 4, 2011

Ninja trading..

Today was a perfect walk in the cloud day.  Either one was in the correct side from last night or got smacked.  SPX opened up 4 points and that was the low of the day and quickly by 6.45 SPX was at 1326 then a slow non stop advance all the way into 12.54 took SPX to the high of the day at 1332.28.  The first fifteen minutes produced 18 points and then next 6 hours produced 6 points.  Historically the next day is also a higher day even though the pace is slower.  The initial jobless claims fell and manufacturing was higher and ADP report high lighted 217,000 jobs added in the private sector.  On the basis of the statistics produced by the Government the economy is expanding.  an that was the reason for the SPX to be up savagely.  Truth be told the administration has  spent 2.5 trillion dollars to achieve this "better" jobless situation. Tomorrow is non farm payroll and unemployment stats.  It is expected to be "better".  No one has yet explained how it went from 9.4 to 9.0% with only 30,000 job gains last month.  Voodoo math.  
The market was up today and odds are it will be up tomorrow. 
This is a 15 minute chart of TNA and starts when it topped at 87.78.  It had a 3 in the 1 from 87 to 74 and a c in 1st rally to 84 and c in the decline to 76 and today another c today.  As I mentioned in my previous blog this IMO is the c of an abc counter rally.  Once this is over around 86 the decline should resume.  Anything over 86.5 invalidates that I will have to re asses again.

This is hourly TNA chart showing a fast and a slow channel.  Line1 was drawn first then line2  followed by sub- divisions.  TNA after showing a shallow respect for the upper half median line, it is on a rally again.  The channel is very precise.  This is showing early signs that it wants to go higher.  I am watching this very keenly

This is daily TNA. I am using this to project TNA at 110 by June 9th.  That is 27 months or 3x9 months or 4 x 144 days.  9 and 144 are Gann numbers.  That sits on the graph nicely.  If the current decline were to follow 2009  September's decline we will see TNA at 73.4 about a dollar lower than previous low to end this pull back.  That is my preferred projection. 
I am still bearish but very iffy at this point.  I have to see a little bit more evidence before I go long or short.  Right now I am ninja trader for a nickel (small profits)
Thanks for reading my blog.

Wednesday, March 2, 2011

Key Reversal...

Today is an Intra day reversal or in terms of TA it is considered a Key Reversal because SPX  made a higher high and a lower low and closed below yesterday's close.  This is often the first sign of a good top.  Seldom does a top form on an intra day reversal but SPX's highest point was on 2/18 at 1344.  So this is in line with topping action.  What it means to me is we topped out on 2/18 and are accelerating the decline.  Couple of important observations SPX closed at the low of the day.  My studies have proven and  it is deadly accurate and points to a plus day the next day.  
I also have a EW count that counts 1344 to 1294 as 1.  1294 to 1332.09 as (a) and 1332 to 1306.15 to day as (b) and (c) yet to come.  Chart on right display this.  This does not diminish the value of today's decline or negate it.  The observation is the hit today is severe and looks like terminal instead of start of something big.  Thats what I am  thinking.  RUT only had a LH and a LL day.
The chart on right is dow daily.  The DOMA line is at 11772 and the 1x1 support is at 11123.  Today's closing was at 120058 roughly every 250 points there is support for dow. However should it break 11775 I will start getting worried a lot for it would take out a key trend line from way back March 2009.  Ouch!.
 This is RUT daily on right.  It got hit by the 3x2 line and is on its way to the next support at 3x2 line.  Before it gets there it has support at 798 and then at 738 a previous top.  The big botheration is none of RSI reading 60;30;15;5 or 1 min ever reach the climax 75 or more.  SPX hasn't given the 30 points from 1332.  My conclusion is RUT/SPX should gives a rally here albeit small one.  That would be a good place to sell short.
I am still bearish but wouldn't be surprised to see a rally here.  I wouldn't play the rally I would wait to short.  
Thanks for reading my blog.