Saturday, July 31, 2010

Market view



Okay, we had a pretty volatile day friday and for me it looks like some end of month window dressings. We had bad GDP numbers and got an overreaction and gapped down perfectly to the lower trendline from july lows. Question is now, if this WAS the pullback from 27th july high? Well, I still believe we have more downside ultimately. We have first of all lots of economic data which comes out early next week and another thing I am watching is the VIX indicator , which for the first time in about a MONTH is going to have bullish MACD cross ( that means the MACD bars are going from negative to positive), which should be bad for the markets. I believe we will see that on monday and if we look at past days, we have a pennant pattern forming with LOWER volume (declining) which suggest that we will breakdown from this pattern. But all in all, no one never knows where we are going, I am just sharing my information , looking at indicators, volume price/action and it suggest we should head further down a bit. I expect us to see 10.100-10.200 in dow jones (MA(20) is around 10.177, might be bounce from there. That would mean around SPX 1070-1080 area. IF we reach that area sometimes early next week I am going to cover my shorts from 27th july, but Im still long few small cap names(JTX, OXGN, IBCP - if I should be wrong and markets moving up from here).
For the next week I am going on a vacation for the whole next week and I wont be posting any charts, but I will make comments on market direction and where I think we are heading daily. Hope you enjoy the weekend and this blog. Have a nice day everyone !

Friday, July 30, 2010

Market view




Well , yesterday was a very volatile day, we went down near 1090's and then back up again into close. This is the kind of pullback I have been expecting since 27th july, where I believe we should test 1080-1090 area. I STILL believe we should test this area, and we are not down there yet, so I am looking for more downside over next few days ( today and early next week ) , after all I will see if this big green support line from the lows holding, IF it dosent hold I will just stay short. I believe DOW jones have a great shot to touch 10.100 over next few days as I think we will go down more. But again, IF we show some big support at 1080-1090 area then I think we have a good shot to test 1140-1150 area , but dont try to catch a falling knife, look for some good support , read the trendlines and indicators and if we get a buy signal , then load up on cheap stocks. But for now still waiting for the pullback over next few days (friday, monday, tuesday).

I'm still long OXGN, RPC, IBCP, JTX and got some TRID before close yesterday

Thursday, July 29, 2010

Market view




Well - right as I expected the pullback came, but I believe the pullback is not over and we have more downside to come. My target for yesterday was 1100 SPX and we came pretty close to it. For today I think we might have a "dead cat bounce" maybe touch the MA(200) SPX or around 1110, but then again I expect markets to have a pullback over the next few days (Friday and early next week) to 1080-1090 target where I am going to buy a lot stocks back. I am still long RPC, IBCP, JTX, MPG and OXGN and hope they are going to rock today or very soon. But it looks very likely we will get the dead cat bounce today and I dont expect us to take out 1120, we should see 1080-1090 before we go higher. But I remain still bullish after we have the pullback and think we have a good shot to reach 1140-1150 area. Longer term I am still bearish and have been bearish since early may and I think the stock markets will most likely make a big bottom in September/October this year where I am going to load up on lots of cheap stocks with huge % potential gains.

Have a nice day !

Wednesday, July 28, 2010

Market view




We had a very flat day yesterday and the strength is looking very weak, looking by the volume over the rally last days. Volume declining indicating that a pullback are in due imo and could probably start today. The pullback I am looking for should find support at 1100 or 1080-1085 area. After the pullback I can see another leg up to around 1140-1150 area, but I will remind you I am long term VERY bearish, so this is just a counter rally and we wont take out the highs. So I am looking for 1140-1150 SPX, but a pullback near term should most likley come. The VIX found some great support from the lows and have positive divergence. The SPX on 60 min chart also have bearish divergence which indicates a pullback should come too. But if we no matter what, just rally more short term and goes to around 1130-1140, then I am going to load up big time on shorts, but dont think we move up to these levels before a pullback.
I got some very nice profits another day in a row on some small caps and I am only in RPC, OXGN, IBCP, JTX at the moment ( still think IBCP will be one to explode very soon; probably today)

Have a great day !

Tuesday, July 27, 2010

Market view






Wow - what a fantastic day we had yesterday , with lots of small caps running hard. I made an entry in MPG monday morning at 2.93 and it closed right at resistance - lets see if we can get a follow thru short term. Markets went up to 1115 on SPX right above the MA(200) and I believe we still have a bit more upside. But I also believe with NYMO so overbought to the extreme we are going to get a pullback very soon, probably starting today or tomorrow. I think we are able to backtest 1100 ( where we broke out , and if it dosent hold I am a happy buyer at 1080-1085 area) trendline from the lows. For now I am still in lots of small caps as they are running so hard now. PRWT was up over 10% from entry, LNG was up near 5%, RPC (added yesterday), JTX added some yesterday too and got a new position in IBCP which I love at 0.34. Above 0.35 and this will most likely run hard with small financials running. I also took a position in OXGN 0.33. I alerted PEIX and PCBC some days too early but now they are running hard! All in all my short term target is still near 1140 level but I expect a little pullback first. But small caps and microcaps is getting ready to run hard now, so pick the best ones for best gains.

Have a nice day everyone ! Hope you still enjoy my blog !

Sunday, July 25, 2010

Stock tip


Just a nice possible setup for next week imo, if this one breaks this I bet it can be a very nice mover. I'm not in yet but watching it closely on monday. Above 3 could confirm a huge breakout, so keep on watch list imo.

Saturday, July 24, 2010

Market view







Well, we got another nice rally and now confirmed a new "uptrend" has most likely begun. I can't ignore the technical indicators and they were giving me a bullish MmM pattern on the MACD and we broke the recent highs 1099. My rule was to cover my shorts if QQQQ broke 46 and it DID break it, so I took a little loss. You really need to have money management to MINIMIZE the loss instead of sitting in a huge loss. I can always get back to short in higher levels on a better entry, so took the loss and actually bought some small caps as it looks like they are going to run hard next week. I got a position in "LNG" 2.75, "PRWT" 0.45, "RPC" 0.91 and "JTX" 1.05 which all looks like they are about to go. We broke the MA(200) on dow jones too which confirmed a breakout, but again I wanna remind you that stochastics is very near overbought and we could possible have a little pullback. In FAZ and TZA we have some bullish divergence on the 15 min chart indicating they may go short term, but trend should be up and looking by the daily chart I actually think we have good shot to touch our 61.6% fib retracement from the lows which is 1140 area. We have some overhead resistance 1113(MA200), 1131(previous top), 1140-1150. So my short term target for now is 1140 and I think we are going higher short term. If we get the pullback watch us to touch the trendline from the lows which should act as good support. But for now I got out 3/4 FAZ with small loss and still holding 1/4 just for "hedging" if markets should go down. Hope you still enjoy my blog have a nice weekend !

Friday, July 23, 2010

Market view



Well we got a very nice rally yesterday and we touched the big resistance line in the QQQQ near 46 (we actually came to 45.96), so if we are going to have a move ABOVE the QQQQ I am going to cover my shorts ( same level for SPX is above 1100 area ). I was very close yesterday to cover my shorts, but late at the day we got a nice plunge cause of GS. Lets see today we are going to have bank stress test results, markets already expecting good results so I think we could plunge big on these results. If we get a follow through today in markets I will cover my shorts and if we tank I am expecting a very big tank from here....We really had some wild swings lately, +200 , - 200 , + 200 which is also normal in earning season week. We dont have any big earnings anymore, so I cant see many more catalysts near term for a big rally. But again I am only watching my charts and if they tell me we rally I' going to cover. The TZA have a bullish divergence on 15 min chart. We will see today, not much economic numbers , so we could rally, but time will tell. Its either do or die in the markets here..

Thursday, July 22, 2010

Market view





Well , a great day yesterday with a really nice reversal candlestick. I wanna point out that we are in EARNING season which should be expected at huge volatility and we have seen huge up and down days for a few days. But in all these things I have been holding my shorts since 13th july top. I called the rally in the euro since 1.19 and rally early july. I'm still short and looking for the downside just to begin now, and thats because we dont have many big earnings out soon, and when thats over investors are going to ask "Whats next?" Then we go back to the debt problems, EU etc etc.....
Well lets look at some charts, if we look at SP500 daily chart we made a so called "Dark cloud Cover" which is a BEARISH reversal candlestick and EVERYTIME we got near MA(50) on the daily we did that 4x times now, and we got a BEARISH candlestick. So as I have been saying, as long we stay UNDER the MA(50) and MA(200) I see really no big reason for buying huge in this markets. I still believe we are in a bear market and the most money will be made to the downside. Also what I have been expecting was a "Lower high" in markets and we didnt get near 1099 in SPX, but top was around 1088 which is a lower high. On the FAZ chart we started the day out with a bullish hollow red candle which is a reversal candle and at support telling me not to get out of shorts but instead add. MACD about to tick downwards and as I pointed out yesterday that these 2 days most bearish in july, then I expect another big down day today most likely as the VIX will breakout very soon. My sqwii projection target for end of july is still telling me we end near 972 in SPX, and then we could have a setup for an ugly week and maybe also start of next week. I still believe the major top was 13th july and stand by that, and I really like that just because we got a nice reversal on tuesday a lot people got so bullish, said "Wow huge earnings from them all" next day we gapped up and faded, so many suckers out there got sucked in to this and being screwed. We have lots of economic data out today and I think we will most likely react negative to those numbers and then the clearly downtrend started. But we will see, always have an open mind and IF we break 1100 with big volume I will cover my shorts, until then = stay short

Have a nice day, hope you like my blog cause I am spending a lot time doing this all for free.

Wednesday, July 21, 2010

Market view




Well we got a nice rally from the lows yesterday , which I really didnt expect would be that great. We are now at a point were we either do or die ! Either I am going to get stopped out on my shorts if we get above MA(50) and trendline its around 1090 SPX , but I want to see some big powerful volume on that move , if not it could be false.. My projection target end of july is still below 1000 SPX, so lets see if we will get a reversal from opening today or we bust the resistances here and move higher. So today will tell the story. I still believe that the major top was 13th july and we are about to make a lower high under the 1099 level, which was the highs. IF we just explode today above this level, then we are beginning of a trend up with higher highs, but until now watching the daily chart and weekly chart we are STILL making lower lows and lower highs. The stochastics still overbought. The inverse ETF's just closed at support and indexes closed at resistances, so we will see if we will get a big breakout today or just sell off the opening. Statistics tells us that these 2 days is the most bearish ones in july, so we will see how bullish it will be. All in all , I am still short and fundamentals is still very bad.

Have a nice day !

Tuesday, July 20, 2010

Market view





Well again I thought monday would be a little bit bullish and we got a little minor suckers rally and there is a possibibility we can gap up and still test 1080, but if we dont do it , then we are going to tank hard again. What I see on the VIX is that the MACD still get a HIGHER tick up and getting near centerline which indicates too that the little green monday we had was fake and just consolidation for a bigger move down. VIX will most likely cross above 0 today or next days and therefore most likely a big move down is comming. I am still thinking that the major top at 13th july is the top and we are heading way down. Looks like we will close BELOW 1000 in SPX by end of this month(projected close SPX 972) but we will see. The daily chart on SPX reamins still overbought and ready to head down and the MACD still ticking down to negative territory. I am still holding all my FAZ shares as I believe this might get ugly and probably we will get some small bounces here and there, but over the next 1-2 weeks they should be shorted. We are still below the MA(50) and MA(200) so why do you think starting getting REALLY bullish here ? This is only suckers rally and friday just showed you how you will be screwed if you get long this markets. The volume on monday was very low and volume friday was HEAVY, indicating much more to come. I am still long and strong in FAZ and for now dosent looks like I am going to cover. Only if we are breaking the MA(50) i am going to cover my shorts which is right now at 1090 area. I also wanna point out that the dollar looks like it can have a bounce here short term cause it got a confirmed triple pPp pattern. Watch that closely!

Have a nice day and hope you enjoy my blog!

Saturday, July 17, 2010

Market view





What a fantastic day , if you were shorting markets ! I still believe as called that 13th july was a major top in markets and we are heading WAY down now. As I told you, we have some bearish candlesticks on daily chart suggesting trend is reversing , and Friday we got a confirmation with close below 1080, suggesting you to load the boat with shorts if you dont have. Markets down near -3% just in 1 day and I believe next week we are heading lower. A like scenario is that the dollar looks like it has bottomed for the short term and with dollar moving higher I can easy see the markets move further down. The inverse HS pattern in FAZ and TZA played out very well with break of neckline suggesting a big breakout in these inverse ETF's and we got it. They were up over 10% just in 1 day, thats more money than avg investors make a year! Today the bearish divergences we saw lately played out very well and as I have been telling you before that the upside was VERY limited and my target for the counter trend rally should be maximum 1100, just a half point from that level. I am still holding ALL my FAZ as I believe the markets could easy see below 1000 in SPX end of this month !! But what I see on the 15 min chart of SPX is that the markets making a bullish falling wedge and that we have a possibility to breakout of this and move to the MA(50) or horizontal resistance (1080 SPX - which actet as support before). So if this plays out, another opportunity to load up with shorts. So outlook for monday is a little bit bullish as we could have a little rally and then fall back rest of week, but again I am very bearish and holding for the swing down, which I believe we are heading down under 1000.

Hope I warned a lot of people to get out before the markets stalled and hope you made good profits on the tankage. I just love when you can play both sites of the markets and the good traders are the ones who can make money in both a bull and bear market. I wanna point out I already started to build some shorts at the 1055 level, but how to play this out is to AVERAGE on the way up, so load a little bit shorts on the fast rally and then add up. The same reason I use if markets tanking then begin unloading those shares a little bit after each other until we get a confirmation that the trend has reversed. I like to use the trio MA's for buy and sell signals. But have a nice weekend and lets ride this markets down over next weeks ! Hope you still enjoy reading my blog !

Friday, July 16, 2010

Market view



Just a short update for the view. I still believe markets topped 13th july and we are heading WAY down, especially next week. We made a bearish hanging man canle on SPX which suggest we are heading down. FAZ made a inverse HS pattern which suggest this will run very soon. ADX got confirmed yesterday with a a bullish cross (for the shorts) , so all in all looking for more downside, but again we have option expiration today and could hoover in this area, but next week I will tell you, this will get VERY ugly when there are no buyers left.

Thursday, July 15, 2010

Market view




I still believe we made a major top 13th july as called and its holding up well. If we really could not rally with the best earnings ever, what does this say to you ? Markets will be heading down a lot near future, most earnings already priced in and fundamentals still very bad. Asian markets down overnight and yesterday we started to break the rising wedge, now we are in a bearish descending triangle, which could breakdown BELOW 1088(thats the number, if we break this, short the hell out and load the boat) because it will get UGLY. We have a bearish divergence on 60 min chart and the ADX line tips lower. On daily chart we made er perfect evening doji star and that will be confirmed if we breakdown today. I remain very bearish and my first targets is 1040-1050 which we actually COULD reach just today in a crash if JPM earnings miss and bad economic data comes out... it will get ugly. But we will see, I still believe markets going down to around 9000 dow jones by september, so low risk to be shorting now.

Have a nice day

Wednesday, July 14, 2010

Market view





Again we had a rally , but this rally is a suckers rally as I have been telling people and I continue to add shorts. Actually not quite sure, but I think yesterday the 13th july was the TOP in markets and we are heading down from here. But thats just how I see it now, we could continue to rally on momentum to MA(200) right above 1100 in SPX. What is interesting is that the VIX found support , but markets still rallied, indicating that the TOP is very very close if not in now. I see very little risk being short markets now and first target could be 1040-1050 and if this dosent hold we could see under 1000 pretty fast. Another thing is that Alcoa and Intel posted great earnings, but again this is only 2 companys posting profits? And markets turning just cause these companys turned profits? Is the debt crisis over? Is the eurozone crisis over? Retail sales, PPI and unemployment rate still good? Its so funny to see how the markets reacts and then ignores the macro fundamentals for just micro fundamentals of a company. But again this will turn soon.

At this point in time, I see a market that is technically reaching up toward its 200 day moving average (2,250 for the NASDAQ). I also see a 50 day moving average that is threatening to drop below that 200 day moving average. Technically, that is usually a very bad sign for the market. The question is, "will the 50DMA drop below the 200DMA?"

I think the answer is inevitably "yes". The thing about the moving averages, is that you can see which points of data are about to fall off. Meanwhile, you can make reasonable assumptions regarding the points of data that will take their place. By doing so, you can construct a range of probabilistic scenarios. In this case, some high numbers are about to come out of the 50DMA, making it go lower. Meanwhile, some low numbers are about to come out of the 200DMA, making it go higher. Since both are VERY close to each other right now, it's safe to assume that the 50DMA will indeed fall below the 200DMA. So, that's probably bad news for the market...technically.

Fundamentally, it appears that Q2 turned out well for most companies. However, most of the investing world knows this and stocks have rallied about 8% on the news. Ever hear the saying "buy the rumor, sell the news"? Well, the rumor has been bought and the news is just starting to flow in.

This means that we have to look at the NEXT bit of news to figure out what rumor the market will be buying or selling. To me, it's clear that the global economic environment will come back to the front burner as the #1 driver of stock prices...and that's bad news for stocks. A good Q2 does not mean that the future is bright. Rather, I believe that Q2 will represent the peak of earnings health. Starting in Q3, good earnings will become a bit harder to come by.

Why?

1) Economic indicators are dropping fast. For all intents and purposes, the unemployment rate has not budged. Meanwhile, store shelves are stocked again, PCs have been upgraded, etc. In other words, the pent-up demand that drove the current rebound has almost run its course. What little remains no longer has the power to drive the economy as it has over the past 18-months.

2) "Follow the money". This is one of the most powerfully simple rules on Wall Street. When money is flowing into the economy (i.e. via lower interest rates or stimulus $$$), it's usually good for stocks..and vice versa. At present, interest rates can't go much lower and the numerous stimulus programs are losing effectiveness. This means that the money is no longer flowing in.

Worse yet, the money that was spent is not generally viewed as having been money well spent. This does not bode well for a new stimulus package to come anytime soon. In other words, money is not flowing in AND doesn't appear poised to flow in anytime soon. In fact, state and municipal budgets are being cut (money flowing OUT), while they raise local sales and income taxes (more money flowing out). if federal taxes go up in 2011, as planned, even more money will be flowing out. If you follow that, you should be flowing out of the stock market.

In short, barring a new stimulus package of other major money-flowing event, I believe the economy slips back toward recession. Whether or not we double-dip, we will almost certainty slip in that direction.

3) If you follow the money in Europe, you will run for the hills. Europe has decided to spin 180-degrees and shift from stimulus to austerity (if you don't know the definition, look it up -- you'll likely hear it again -- and not just from me). Effectively the opposite of stimulus, austerity will pull money away from the European economies...which tells us to pull money away from stocks.

Worse yet, the effect of the EU/IMF bailout is already wearing off. Greek yields are rising again and Portuguese credit ratings have been reduced.

4) Global bubbles are bursting. Most notably, home sales in China and Canada are starting to fall. Remember what happened when the U.S. housing market cracked? That's right -- that's what started this mess in the first place.

5) Politically, this period in time has a tendency to be bad for stocks. There is uncertainty around the mid-year elections...and the market hates uncertainty. Historically, the political picture doesn't become clear until October, at which point we might expect a rally. Until then, expect the democrats to do everything they can to retain their jobs in November. That means, "stop pissing off the public"...and the public seems pretty pissed about how the stimulus $$$ worked out for them (or more accurately, how it DIDN'T work out for them). Thus, the political pressure will lean against further stimulus until after the elections.

The Bottom Line: I believe that the market will start to reflect these concerns very soon. These are real fundamental concerns, which you can see reflected in the technicals. As the market reaches the 50DMA and the 200DMA, it will be inclined to retreat (barring some new, hugely positive news). Meanwhile, the 50DMA is 90%+ likely to cross below the 200DMA, giving the market more reason to retrench.

At some point, if the economy sinks far enough and if the market drops far enough, political pressure for more stimulus will mount. At that point, money will flow back into the economy. But that time is not now. Now, money is flowing away like the tide...and so should your invested capital.

Tuesday, July 13, 2010

Market view




Well not much to say - we have for the last days just been creeping VERY slowly up , and nothing big as expected. I am still collecting shorts as I think markets forming a top and as I know there is a lot of BIG resistances on the daily chart. Both the downtrendline from highs, moving averages(50,200) AND fibonacci retracement. Volume is declining showing the rally is dead and we should begin to move down soon. I hope we can get the last sqwiize up to around 1082-1085 to the next fibonacci retracement and THEN tank, but we will see. No matter what the upside is little from here with a maximum target for me a 1100 in SPX. IF we should rally further up I will short into this strength for the next months. I believe we are setting up for another leg down over the next couple of months. If you look at banks they looked like they topped yesterday or is in a topping process now, thats why I loaded FAZ and if FAZ dips lower I am going to add more. Already loaded a lot FAZ now under 15 which I think is a fantastic price. The question is then, when we are going down if we find support at the 1040-1050 area, but this looks MORE and MORE that we dont get the pullback as I expected and then a rally up to 1080-1090, but we just go straight up and after that straight down. We have option expiration day 16th july and last time we had it we went up or sideways until that date and then tanked. So literally we could tank hard next week, but I am collecting cheap shorts until that. I think the next leg could take us down under 1000 in SPX and my target for SPX by September is around 950.

Have a nice day