Monday, February 28, 2011

Market view




Market did a contra trend rally as I expected from the 1300 psychology area (support) for the bulls. We got a nice 20 point rally from Thursday and Friday - but that was just a minor retrace after a bigger plunge last week. As I have been pointing out so far - a move up to 1320-1325 area is a brilliant shorting opportunity and still stand by that - still heavy short 1333-1330 SPX , but another "lower high" should be made with some new lower lows.

So what I expect form here is a possible , minor minor gap up before a plunge today - the area 1320-1325 should find heavy resistance and we should see another move below 1300 and near 1250-1270 sometimes this week.

As long SPX is below 1325 we wont have a buy signal and short term trend in markets is still down. But IF we see a big rally today above 1330 ( to confirm the rally ) we will go out with small profits or break even from inital entry, but until then the market trend is still down and no reason to fight it before markets showing strength it self. The volume were also quite low on the contratrend rally vs the volume when markets were moving down. But for some reason markets can have low volume and be grinding up for a long while as we have seen , so not sure.

But all in all - we should hear a lot more to US debt ceiling this week and the Eurozone Debt Crisis as the Irish people got a new government and want to renegotiate with the bailout package with EU. I'm thinking the most likely is a Irish Deffault like we saw in Iceland - and if Ireland deffault wont speak good for Spain - Greece and Portugal....

We have lots of economic data this week with many meetings regarding the valuta policy , so expect some violent moves in the currency markets. I think the dollar is about to rally bigtime from this trendline to 87 next and the euro/usd about to fall of a cliff(Possible with Ireland problems comming up).

We have still problems in the Mid East and if it spreads to Saudi Arabia watch out for oil a lot higher...

All in all - short term trend is down until we breakout above 1325 and possible with confirmation 1330. (Still believe correction started late February)

Good luck to all

Friday, February 25, 2011

Market view




As expected markets bounced a bit early in the morning , but the bounce/rally were very weak. I expect a possible gap up today and then we should start by plunging further down today to close this week with a bearish engulfing candle on the weekly chart. Overall markets were mixed yesterday and SPX is right near support - but other indexes already below supports - I expect the SPX to follow to the downside soon.

The numbers to watch for is SPX 1326 if we move above this level that would be a good buy signal - but EVERYTHING below this level is a strong sell and markets should continue to move down. So IF we get a rally today the top should be around 1320-1326 maximum and that should be another shorting opportunity.

I dont know if we are going to get that high but overall looking for next leg down here soon.

I'm still heavy short 1333-1330 area with my mechanical swing trading model and holding until markets proves otherwise.

I expect we will see 1180 sometimes March/April and I think we are going to see more in Mideast and with Saudi Arabia by early/mid March. US debt ceiling date is March 4 , lets see what they will find out....

This is an early alert - but the dollar is about to have a MAJOR MAJOR rally to the upside here soon. I expect the dollar to reach 87 in next months and a big reversal to the upside is comming - so imo get long the dollar. I'm still long since bottom in November and holding long dollar.

Have a nice day

Thursday, February 24, 2011

Market view




As expected markets continued with sell off and confirmed that the correction has now begun. (Or if this was a major top). I have no clue if we move higher this year or not - but for the short term outlook the trend remains DOWN and we will continue to see weakness as long SPX is below 1327ish area. I think there is a good chance markets may have a bounce soon - cause we got on trendline on SPX, but other indexes have flushed below that trendline which have me worried for the bulls.

I'm heavy short SPX 1300-1333 as I got an early sell signal and holding as long markets holding below 1227ish.

We have Ireland Election comming up tomorrow and we have US debt ceiling latest 4th March. The VIX clearly brokeout to the upside on weekly chart and broke a big falling wedge since April/May 2010. So I guess there is a lot more downside to come - but we will get small contatrend rallies in the meantime , but all of these should be shorted heavy into....for now looks like we could get a contratrend rally - but I will not bet on going long the markets yet. We need a clearly flush and still expect markets to move to 1180 area sometimes end of March or early April. But if the short term trend changes and we get buy signals we will cover shorts and take profits and get some long positions , but until then the trend is still down....

Have a nice day !

Wednesday, February 23, 2011

Market view





As expected we got a very nice sell off early this week (Tuesday) with the markets down the most since the last 6 months!! My mechanical trading system got a sell signal as we closed below 1330 SPX and the same with Russels and QQQQ. For now the trend has changed and I got lots of short positions at 1330 and added few on little spike to 1333.

I think the correction has begun and I'm looking for a lot more downside over next 1-4 weeks. What I found interesting is the VIX broke out of a huge downtrend of the falling wedge and closed with a bullish candle.

Also Russels and NYA made the touch of the top trendline as posted in earlier posts and we got smacked down from this level which is very bearish. The volume to the downside was great and very bearish for the markets.

As you see the SPX closed right at or near the big trendline since August/September 2010 lows. When we break this level expect some massive massive sell off.

I personally think that we near term will have a bounce as we wont just sell off only - but we should have lots of these good contratrend bounces over next weeks - but we should sell off agrressive on all those bounces. There is a possibility that we test 1329-1330 area , but I dont think we will move higher. The short term trend is for now bearish and on short signal and wont get a bullish signal until we break above 1330ish level with some good volume. So look at this area closely..until then the trend remains down and I still expect us to see 1180 area sometimes in March. You should be hearing lots of US debt ceiling and US debt near term with the Eurozone debt crisis and risks in middle east near future.....

Have a nice day

Sunday, February 20, 2011

Market view








Overall markets did make a little gain on Friday, but with no volume. There were no economic data out Friday and thats why the markets could easy grind higher on POMO action. But the thing is that we are still in a huge bearish rising wedge as you can see and the Russels is in a broadening top formation. You see the SPX went higher than the Russels cause RUT is already up at the trendline. So for me looks like we will begin the major sell off already Tuesday next week and we should break down below all of these supports.

US have until 4th March with the debt ceiling and I think this could come in the news this week and into 4th Marh. Overall the short term trend is still up and until trend changes we will keep moving higher. Thats why - wait for confirmation to downside and when we get confirmation - get aggressive buying shorts. But until then better play a long or stand in cash. The numbers to watch for SPX on Tuesday is 1330-1333 , IF we break down from this area , thats when the short term trend will change and to get heavy short.

Personally I thought the sell off would start sometimes this week- but we option expiration and holidays and no big economic data we got sideways//higher. Next week should be a fun week for the bears imo - but wait cofirmations.

I have added a few counts on where I think the markets is going - as you can see looks like we are near a big top and a move down in all counts should come. (From EWT Tech)


Have a nice day

Friday, February 18, 2011

Market view




Markets still grinding higher on very low volume and today we have option expiration day. Usually the pattern I have seen before is that they are holding markets up until option expiration and then they can let the markets sell off after. But again the short term trend is still up and we are near 1350 as mentioned some days ago, do NOT try to be a hero and pick the top - wait for the CONFIRMATION that we are heading down. Actually SPX overshooted a little bit the upper trendline but with very low volume ?? breakout ..... NO way..... a breakout is with bigger volume and this is not a breakout of the upper trendline. What I think is that its an overshoot to make all the bears cover and stop out. They are really smart those guys cause they know the stops which will get taken out. Thats the same in the bottom - when markets were at 1040 , they did get us below the support for 1 or 2 days to let the bulls stop out - thats what they do.

What I find interesting tooday is the NYA chart. Today we touched the upper trendline and this pattern is usually very very bearish pattern. I still believe a sell off to come , maybe today and I think we will hear a lot of US debt ceiling and potential of deffault cause of the debt.

But again the trend is up and play it on that site , but with MINOR positions now. The levels to watch today and get short SPX is 1327-1330 level. If we breakdown of here , that is your SHORT ENTRY signal. Watch it closely..until then...trend is....UP

Have a nice day

Thursday, February 17, 2011

Market view





Markets still grinding higher on low volume and the short term trend is still up. Thats why I am telling that there is no reason to get heavy short before you see a confirmation for a new downtrend to take place. How I feel is that there is nothing out there which can get the markets down, good economic data we go up, bad economic date we go up, riots in Egypt and war Middle east and we go up, eurozone problems and we go up, weaker GDP data and we go up, all charts and divergences and alle sentiment indexes telling that we should go down - but we still go up. I am looking forward WHEN we drop to see what the reason will be for this need to be an atomic war or someone boming FED. But we need to play with the market and the market is telling us that we go up.

The level to watch for today is SPX 1323-1325 area , IF we break down below this area thats the time you wanna short - until then the trend remains up and no reason to short. However the VIX again looks like its going to make breakout today and as I have been saying before I am expecting a correction to start by mid February which is... NOW...

Have a nice day

Wednesday, February 16, 2011

Market view






Markets has been moving slightly down , but no impulsive moves to the downside - just some boring action and probably consolidation before higher. As I have mentioned before - the short term trend is still up and we wont go down before we break below 1320 area. Until then we could see 1330-1350 , so do not bet the farm on short side before you see confirmation of a new move down beginning. Overall I still expect a reversal this week and a nasty sell off to start shortly, but I want confirmation of this move before.

The market sentiment is so high and so bullish right now that its long time ago since we got so bullish. But fundamentals are still screwed , so bare very careful.

Market sentiment is completely opposite as what it was in March 2009. Everyone feared and didnt wanna buy stocks - THAT was the time to load up when everyone feared - now everyone is getting bullish and the recovery is here, thats the time you wanna take your profits and run....

But overall we are near some support zones but did not get any kinds of break down - IF we see that today , might be first sign of you should go short fast. The level you should be watching is 1320 - BELOW this level and I will go short heavy... until then just waiting. SPX is right now 1328 so we need more weakness in marktes to get a confirmation, but could easy get it. But until then the trend remains up and no reason to bet against it before this confirmation

Have a nice day

Tuesday, February 15, 2011

Market view



As expected markets continue drifting higher with easy FED money and also a combination with dumb money really confident in moving into markets. Dumb money is long 71% now and the smart money has reduced to 21% lately which is extreme bearish from a historical point of view.

I believe that the correction is right around the corner and may very well start today - we are in mid February and the time zone for a reversal as I have been expecting should start now. But remember again - as long as the markets continue to drift higher there is no signs yet that we should get a correction and until then the market trend is up. Thats why sometimes we just need to trade what there is to trade right now and here and sometimes not try to predict where markets "should" go. Overall I feel quite confident that we get a decline very soon, if its about US debt or Spain yieds rising or what - I dont know, but all of my charts are touching the upper trendline in a huge bearish rising wedge pattern where its most likely a big slash down is comming to surprise most.

Russels is in a very bearish broadening top formation where it could plunge from 827 trendline. Thats around here and the RSI(14) on markets is above 70 very overbought and every indicator , sentiment points to a drop. But again - does it matter ? Cause we have seen this over past months where the markets kept grindning higher. THIS is WHY we wait for CONFIRMATION of a breakdown before going in lots of shorts, but at least you can add a few up here if you believe in a correction. But I want confirmation as I have been burned lots of money on NON confirmation..sad but true.

So the confirmation to add lots of shorts is SPX below 1318-1319 area , BELOW this level then get as much shorts you can and above , just keep your positions light.

Have a nice day

Monday, February 14, 2011

Market view







Markets been moving up slowly the last week everyday with anemic volume with the FED underlying the bid. We are now in the week of mid February where my time analysis tells me that a reversal should take place. We have full moon 18th February and there is a lot of economic data starting from tomorrow (Tuesday). Today markets may just be sideways cause no ecnonomic data and it should be a quiet trading day, but I think the correction should begin sometimes this week as we are now in the time zone mid February.






As stated before - the trend is still up and will REMAIN to be up until the trend changes. So there is really no reason to get a lot bearish before you get the bearish signals in markets, although its imminent that we get a so called flash crash II or heavy selling. I expect the markets will discuss a lot with the debt ceiling this week and the likelyhood of a US default. These events could trigger a massive sell off ( debt )...






Overall other markets like India has been crashing down lately but the US markets is just pushing higher. Looking at the longer term view we are in the end of a long term bearish rising wedge and I expect us to break down below this sometimes this week.






But until SPX 1313-1314 is broken , the trend REMAINS up and the first signal you will get is a push below 1313-1314. This will give us a sell signal in the markets and a short signal, but until then markets may be pushing to 1333(2 x 666 hmm ??).






Have a nice week

Thursday, February 10, 2011

Market view



Markets was down by a few points yesterday and it was another slowly day. No important economic data this week , so I guess we wont see much action before next week. But overall what I found very very interesting is on small caps and QQQQ.

There is a 70% chance that the markets already have topped and the long waited correction is about to begin - as indicated before we should begin the correction by mid February , which is around here and next week.

But remember - the short term trend remains UP and bulls have the staff until bears shows up more aggressive. Thats the time when you wanna short markets big time.

So to be more specific - if SPX moves BELOW 1306 area - thats a confirmation that the short term trend have reversed from up to down. I think if we move below 1310 I am going to add some shorts. Watch the small caps - cause if they break down first SPX should follow.

The thing with small caps and QQQQ is that we made a so called BEARISH harami yesterday and if we CLOSE red or go RED today , that would confirm the pattern and reversal.....so today is critical - if we close red or move below the SPX targets - I will add big to shorts. But until then trend is still up.

Best of luck!

Wednesday, February 9, 2011

Market view



Not much to say - but those charts of QQQQ and SPY should really be screaming SELL SELL to you , as this markets since September is in a bearish rising wedge. A breakdown of this would cause MASSIVE selling very fast. But cause we have no really economic data out this week - we might just be choppy sideways/up on POMO buys and thats what we have seen. But I just say , keep your longs light and be prepared to sell all of your longs as signs showing a reversal - cause a major drop is right around the corner imo. If the timing tools is right we should see the reversal from Mid February and 1-4 weeks from there a very nice big drop. But again as I have been saying the short term trend REMAINS up and then no reason yet to short markets big. Wait for confirmation that the trend has reversed and then short bigtime..

The levels to watch on SPX to the downside is currently 1303-1304 level - so if we see a break below SPX 1303 ( then it will be confirmed ) that the trend has changed and a bigger move to downside is comming. I am going to load up as many shorts I can IF and only IF we get a breakdown below 1303 - until then we might see 1333 ( double 666 since marhc lows??)

Have a nice day and good luck to all

Tuesday, February 8, 2011

Market view



As expected markets moving higher and no reason to really go heavy short. Though I thought a short term reversal would take place - we might still see the reversal very soon. If we look at the charts we have now fulfilled 5 waves up and on QQQQ and SPX we touched yesterday the upper trendline in the long term bearish rising wedge since September last year. IF and IF we break down of this pattern - this would cause massive selling in markets and we are VERY close to it according to the chart. You can clearly see the range in markets is very tight and a big move is comming. The NYA might have topped here , but if it breaks out it should move to 8500 on chart.

But all in all - the trend REMAINS up........and no reason to go against short term trend before you see a drop below 1300-1303 level. That means dont begin short ( I mean you can short a little - but dont short a lot now before you see CONFIRMATION) and that is the 1300-1303 level. If we break down below this level, that would trigger a short term SELL SIGNAL and markets would begin trending down. Until then trend reamains up and we could see 1330-1350 next.........

Have a nice day

Sunday, February 6, 2011

Market view



Markets did end near highs of the day friday and we are currently right near a big pivot point resistance at 1313 SPX. Lots of people are thinking that 1313 is a top - and that could fuel markets higher, but again sooner or later we gotta plunge down. A correction is still imminent and the move up looks very weak and seems like markets need some new buyers, other than the FED. Our mechanical model is still on a buy signal and wont get to sell signal before markets dropping below 1297.

Russels seems still like trading in a HS topping pattern with right shoulder bein in - if Russels dosent go higher monday , that would indicate a big fat drop comming early next week. This move up since 2009 low - could also be counted as one big fat triangle where we are getting VERY close to an end....if so markets could still og higher to near 12.500 dow jones - but time will tell. Until now mechanical model is still on buy signal and wont trigger a sell signal before markets getting down below 1297. If you see markets going down monday under SPX 1297 - thats your very first and early sign to short all you can and get out of your longs. Until then I would say still safe to be long.

Notice from March 2009 the volume has been decreasing all the way up through this rally telling that there is not much left before a big drop is comming. I dont know if this is a major top before markets going to new lows - but what I think is a correction is comming to 1180-1220 would be great before moving higher.

Time will tell , lets try to keep it simple and not try guess so much, cause in reality nobody knows where we are heading. The short term trend remains up until SPX 1297 is broke. Until then we might go to 1350 - who knows. The most important is just to follow the short term trend to stay on the right side of the markets.

Have a nice day !

Friday, February 4, 2011

Market view



Keep it simple - the markets continues do drift higher with POMO money , the dollar did get a nice gain yesterday, but POMO was holding the markets up. But whatever , dosent matter , the only thing which matters now is PRICE and only price. That means that the short term trend is UP and will CONTINUE to be up until we get a SELL confirmation. The sell confirmation will be if SPX got below 1294-1295 area , if you see a move below this level, then its time to get out of markets fast , into shorts and hold on, cause then a new downtrend will begin. Until then the trend is up and we will continue to drift higher.

There is a very good possibility that Russels is making an HS pattern , only SPX were very strong , but with other indces lagging a bit. Take a look at Transports , they are leading markets and is way off the highs.

The dollar was higher yesterday as I expected aIstill expect this is beginning of a big move to the upside. The dollar could most likely breakout today... and that would set pressure of stocks and a breakdown and reversal in stocks could be most likely today. Lots of important reports, I think today is a brilliant day for a market reversal. Timell tell , butch the 1294-1295 area, if we reach below here short all you can. Also today is "Day of Departure" in Egypt...could be an awful day down there. Time will tell - people flying into USD safe heaven on this today imho.

Have a nice day and great weekend ! Enjoy

Thursday, February 3, 2011

Market view




Markets did not reverse yesterday as I expected - but I'm still expecting a reversal to happend, maybe today or next days before weekend. Overall you just CANT deny that the short term trend is up and until we see weakness - its safe enough to be long. We will get a daily SELL signal in our systems if SPX breaks below 1291 SPX ( so a move below that is the trigger for you to load up on shorts ) cause the short term trend will reverse from up to down at this level. EVERYTHING above 1291 right now points to markets moving higher and we could see 1310-1320 before getting the correction. There is lots of signs I have showing that the reversal will first happend mid February end February, but again if we get the correction earlier - then watch out. The GAME plan for you is to stay long markets as long as we are above 1291 SPX, until then good to play breakout stocks and take a few profits. I think its VERY dangerous to buy and hold for weeks and months now, NO GO....

The dollar looks like bottomed from a wave 2 down - before a BIG wave 3 up rally comming in the dollar. That is in line with a nice correction which should happend when the dollar rallies up, so I'm very bullish the dollar right now, and have been since the bottom in november 2010. Dollar will go higher near term and a big rally is underway and it will happend very soon imho.

But overall short term trend is up and 1291 is to watch for today on the downside, to be more specific looks like we could get last push up to 1310-1320 area before a big reversal, time will tell...

Have a nice day