Well a slowly day yesterday and thought that the bulls would push the markets up stronger than this little weak push after a big sell off...
Overall I think markets is going to touch the SPX 1187 near term, possible with a gap up with GM IPO today, lock in lots of fucked retailers and then flush it down. I think GM will have a good run when opening, but will go down after locking in most retailers. About the markets I think we will gap up most likely and then reverse hard down and we are going to see SPX 1155's near term.
My put/call ratio ALL indicates that some big boys out there are very bullish the dollar and very bearish the markets still, so that indicates more downside near term. We may get a little contra trend pop to our downtrend line, and that would fit with the VIX which broke out of huge falling wedge, making a backtest of broken trendline and the dollar making a backtest this morning with broken trendline and then rally hard off here. IF and only IF we get a gap up to near 1187 area I would use it to short as much as I can for the short term.
The weekly chart in the dollar and weekly chart in the VIX is still extreme bullish to me and should get a nice pop up near term. I think we will see 1155's area pretty soon, maybe tomorrow morning.
So yes, today welcome GM IPO... lock in those retailers money and get them...I will never ever buy a government security like Freddie Mac and Fannie May...
But all in all - the dollar looking for a backtest and then rally hard with the VIX a backtest and rally hard. TZA put/call ratio extreme bullish on TZA, so we might see TZA form right shoulder in a inverse HS pattern to around 21.5 level (support) today and then rally big from there and up to 24's tomorrow.
Also many indexes looks like we have put in a classic HS pattern with the head the highs and about to form right shoulder(but if we are going to form right shoulder it would look more pretty with a little move up today to form it - around 1187ish..)
I'm still long and strong TZA 19.4 major position and added some yesterday 21.6's. Will try to add more if we gap up today in markets. Still long the dollar too..
Have a nice day
Hi Sqwii...I like your charts but do you see any possibility of a strong rally here taking the market to a new high?
ReplyDeleteIt seems you are in the camp saying that the top was already seen. EWI and many other bears are now positioning for a new high to come over the next few weeks.
ReplyDeleteI hope for just the hard press down and never look back.
Well I dont expect new highs comming, but I expect we could have a counter trend rally, but not yet. The weekly charts in the dollar indicating that its just begun a move to the upside. So I think we can get a little rally to make a lower high than the top 1228, maybe 1200 level and then down again to 1150 level or 1130 level. All IMO but I dont see us make new highs now, we have still more downside over next 2 weeks or so.
ReplyDeleteI thought you were all in TZA at S&P=1160. You started major position at TZA=$30.
ReplyDeletehttp://www.thelion.com/bin/forum.cgi?sf=tza&msg=412&cmd=r&t=
"As you know I got 100% short at 1160 SPX with rest of my cash"
http://sqwiitrader.blogspot.com/2010/10/market-view_07.html
I was surprised you "added" at TZA $19.5 recently.
Anyway, personally, I think you missed a good opportunity to dump TZA yesterday. Good luck.