Market view

Markets did a sharp move down in the markets un some nasty job data - where we plunged -1.3% but ended higher over the day (as statistics said , buy the gap down on job data day and sell at close ) would make money there..

Overall I think the trend changed yesterday - I've got a BUY signal on all of my 3x short ETF's on Friday - so there is a very good chance that we changed direction. I have a bottom date late next week - so I would really love to see a hard decline sometimes next week - with some panic late on the week.

VIX looks ready to explode higher - take a look at the interesting chart from stocktiming - with the rounded bottom on VIX , very interesting indeed..... if so , VIX should spike higher soon....

The dollar UUP looks like its about to do the major breakout I have been waiting for.... to break the 1 year downtrend line as you can see on charts - with this euro should plunge hard and markets should follow with - commodities should sell off too. So the question is , if we get a hard rally in the dollar next week... Thats a critical week for either a breakout or breakdown in the dollar - but as I read it - I think we have a major breakout and bull run to come in dollar.

DUG (short oil and gas) looks like one of the most pretty inverted HS pattern - which says a big rally to come here - which means big plunge in commodities ( with a higher dollar probably???)

Time will tell - I remain long TZA and holding cash - I think this comming week should be really ugly especially late on next week. We might have a minor gap up on Monday - would not rule that out.. but after that I would expect a hard decline from Tuesday.... and over the rest of week.

When I read the VIX chart - it tells me that fear should come into markets the next week - so lets see what will trigger this...

So what is VERY interesting - now look at XLF financials.....long term view. Monthly chart we had a BULL run from march lows and tested 38.2% fib retracement from the highs in 2007. We have been moving around this level for many months - but if you look at MACD histogram - its decreasing and about to get a NEGATIVE MACD cross.....

So what does this mean on MONTHLY charts? It most likely means we are about to see a MAJOR flush in the financials this month - where it could possible test the support around 12.43-12.5 area soon based on monthly chart....

Going on a bit shorter timeframe 1 year - we also might have a giant topping HS pattern with right shoulder at 15's XLF - the head made at 17 - and right shoulder now at 15's again.... do we reverse here??

What do the HS pattern measure for downside ? It measures to 12$ .... does that say something similar to the monthly chart ? Yes a possible move to 12's in XLF which is a major move down..

It will be a VERY interesting month and could be some heavy selling pressure imo based on monthly and daily chart now. If financials start to plunge soon - then I'm the first to tell you that they could flush down hard soon...(what do we have next week ? EU BANK STRESS TEST.... uh surprise.... well nothing is for sure , we might also rally hard - but many things point to downside to come.

My plan is to hold all my TZA 34.69$ as long I have it on buy signal - for now got a buy signal on Friday and as long it stays above 31$ there is really no worries. So it might gap down small monday to 31 and then up from there - it could see 34-35 level very fast if it starts to move up - s thats what I am hoping for at least to get out break even or in some nice profits.

The topping HS pattern might still play out ... just not so sure about it anymore.. price/action next week will tell us.

Have a great weekend and enjoy.

Market view

Wow ! What a raly we have had over the past weeks.... QQQ up like 8 days in a row with about 1% in avg gain... thats really crazy and it really reminds me of the bull run we had late last year.... but the difference today is that we dont have any kind of QE now... are the big boys now trying to make people think markets can run like last year without QE ? Or will they just do this early July - before a big tank later on ?

** Updates chart with USO - potential head and shoulders pattern setting up too with target of 25$ on USO... thats a huge move down. If oil holds up here and dont move a lot higher we have a potential right shoulder setting in.**

Its really hard and as I've said before....... I dont have the CRYSTAL ball.... it came with a big surprise for me that this rally just continues and I'm sitting right now in big losses on my TZA trade from 34.69$ and holding all....

QQQ took out new highs , TRAN took out new highs - so I think my topping HS pattern is wrong - but I will still take it in my mind if we start to decline very hard from here...

So the action I will do right now is:

1. I'm really hoping of some kind of pullback - as its just really hard to believe that we will get such a big rally like last year without any kind of QE and at least a 2 or 4 day pullback after such a big rally should be expected. The thing is I hope that TZA could make a short term rally to around 34-35 and then possible get out break even on my trade - as it looks like SPX might take out new highs or get close to the previous high and then pullback befor it can take out the highs after a pullback.

But now you also understand why I said.... too much PESSIMISM in markets 2 weeks ago and why I went long TNA 68.8$ -- wow imagine if I were holding TNA still , but no one can predict the exact tops and bottoms.

I really did not think SPX would take out 1350 - were the MM's taking out the stops who did not think it could take out 1350 and then going down hard soon ?

To me UUP dollar looks pretty bullish and I still believe the dollar will breakout soon to the upside - which means markets should move down.... but last days euro has been moving down with the markets up - but most likely markets would fall down on a higher dollar.

We have bullish divergence still on 30 min and 60 min on TZA and other short ETF which means a rally is due - and we have negative divergences on SPY QQQ and others, and every single index is heavenly overbought..... long time I have seen markets this overbought - and also as I have said before - markets is ALWAYS stretching both to the bulls and bears side to make shorts cover and to make longs take a loss..... 2 weeks ago nobody really did not want to go long - today no one dare to go short..... its funny - but actually those times is often the best times to do it when you think its "crazy" to go long or short. Right now I have the feeling that it might be crazy to go short markets and other people would possible think the same, so it might be a great idea to get shorts now - but I'm already sitting in the red sea waiting for some kind of pullback.

Unemployment days usually if gap up - then sell off for the day , gap down then rally for the day.

So either way - I'm really hoping for some kind of pullback and a possible target is 1320 or 1315 if we want to run higher.

Markets looks a lot like a very BEARISH rising wedge pattern and right now we are in the end of the rising wedge which means a breakdown very soon should come. I will see how price/action in markets will do after this breakdown - if we get a -2% day , its quite strong and we might go down a lot - if we only get a -0.8% or so , then its just a little pullback where I plan to get out of my TZA trade with just a little loss or break even.

Overall I still believe we should go down over next 1 week but I have to admit this rally took me with a big surprise - so my plan is to cool off - wait out some more days and probably all next week to see if we get some kind of pullback as I can get out of my TZA break even or so.

Charts is telling me that we should breakdown and move down now - but markets just keeps going higher which reminds me a bit like late last year - but do you believe we will get such a rally without no QE ? Its possible - who knows... but I suspect it.

Remember today , a gap up would mean we likely close in red and a gap down mostly means we close green by statistics on unemployment day.

At last - I wanna share you one of my FAVOURITE indicators or tools out there which is excellent on swing trade positions and that is the Bullish percent index with an EMA(10). This gave actually a swing trade sell signal early May and have been on sell until 27th June. SPX were 1370 early May and around 27th June around 1280. Thats a big profit you would make on these signals - you could probably try them out for swing trades - and if this is reliable its still on buy signal until it moves below EMA(10). You can try it out and see how it works for you - but I find it pretty good overall - remember nothing is 100% right.

Have a nice day

Market view

Markets did have another slowly and boring day - and been very choppy up and down.

What this reminds me as I have been saying before - after a big run in large caps - they always make the markets near flat, choppy, neutral to run the low floaters and small caps. If you have been following lots of those stocks they have all ran a lot over the past days - which reminds me, that low floaters, microcaps and small caps is the last ones they run (near a short term top - after a big run in large caps).

Bt thesis still holds true - that a right shoulder is forming in a huge topping HS pattern with right shoulder on SPX 1344-1345 area - IF we break this and move above 1350 - then I'm wrong.

I'm still holding a size position TZA 34.69 (underwater right now...) but markets really has just been creeping a bit higher slowly.... nothing aggressive.

I think today (Thursday will be key day.. either we go big today or we start to sell off....) we have some key data today + tomorrow. We might see a pop fast to 1344-1345 to form right shoulder - but I'm a bit worried right now with TZA as its already a lot lower - so Russels needs to hold here and stop moving higher. But I'm watching SPX for the topping HS pattern with the right shoulder target at around 1344-1345 if we reach there today...

Like I said - sentiment is very much changed now and what I hear many places is new highs to come and so....

AAPL did a potential backtest too of long term trendline - called kiss of death ( if this is true should fall hard down soon)

Look at Russels chart - pretty nice backtest of trendlne made... and 30 min chart shows VERY tight and BEARISH rising wedge pattern.... up to trendline.... 30 min chart showing bearish divergence too - all is in place for a hard landing...
Euro has been moving down and dollar has been moving up nicely last days as I have been predicting. If its right the dollar is about th have a MAJOR move to the upside soon - which (most likely would mean downside in markets..)

I was a bit too early in my entry TZA - but its hard to predict the EXACT top - and over the last 3 months I have pretty much nailed the moves up and down. But overall still believe we are heading down hard over next week - so time will tell us today.

Agree with some comments - that markets extreme overbought and quite bullish they manage to hold us up...

Looking at TLT looks like tested support and ready for last leg higher up.... if this is true - markets should fall down (possible cup and handle in TLT)

Looking at other 3 x short ETF like ERY one PRETTY inverted HS pattern - gives me more confirmation that we are about to go down hard. ERY gave a buy signal yesterday on daily chart at 13.97$ with neckline at 18 and a move to 23-24$ could come on that pattern.

Try look at the DUG chart too - impressive and very nice inverted HS pattern on daily chart too with buy signal yesterday too , so looks like a MASSIVE flush in markets is about to start - and a big run in those 3x short ETF (Based on this HS pattern....)

Conclusion: I'm still holding all TZA and cash , what I will be watching is SPX if we breach above 1344-1345 (left shoulder and should be the right shoulder) - if we rally above there and to 1350 I'm wrong , but until then still extreme bearish at the moment. Dollar looks like about to have a major breakout with euro going down hard. ECB meeting today....

VIX daily chart is on buy signal - DUG and ERY looks like pretty inverted HS patterns - China already started to move down with Europe a bit - US should follow soon. We will have some nice action in markets end of this week Thursday and Friday.

11th July they need a long term plan for Greece - will they manage to get a good one ? Or will it result in deffault ? Portugal need 2nd bailout and maybe Ireland too - when will they stop giving money to a black hole ? Time will tell what will happends

Market view

Markets did have a pretty boring day - opening flat - and closing quite flat. No economic data were out so no "triggers" to either rally or plunge.

As more we come into this week we get more and more economic data. Thursday and Friday this week we have a lot of economic data and therefore expect some big markets movements.

What was really interesting was the change Monday on the euro and the dollar. The euro got a sell signal yesterday on daily chart with the dollar getting a buy signal.

Euro ended quite oversold short term so a possible bounce Tuesday could happend. But overall I am looking for some nasty downside in the euro and a big breakout in the dollar to come.

Still holding my SIZE position TZA 34.69 for a swing play and cash.

My view is still a MAJOR topping HS pattern to play out - as long we hold SPX below 1346-1350 then we could form a right shoulder on the daily charts. Target for the pattern is 1120-1150 area IF we break below 1250 area.

What was interesting was the VIX gave us a BUY signal too - with a move higher and higher low than Friday. So fear is moving into markets again.... which is good for bears.

Conclusion:

All in all - markets is still extreme overbought short term - take a look at my QQQ chart - literally NO support below after this runup with no pullback or consolidation - means not much support below too.... and if we dont break below 1250 over next weeks - then I would at least expect at 20-40 point pullback - so either way , watch out below... we get more and more economic data late this week + 11th July they need a long term plan for Greece (next week). I'm not sure they can make a good deal... so lets see what to come next days and weeks. Sentiment as you can see is EXTREME optimism in the short term - which mostly means downside risk to come short term...so for now - short the pops if we get some and stay cash.

Have a nice day

Market view

Wow ... markets did get the biggest sqwiiize of this week up around 1.5% on Friday - which was huge !! All shorts really must have covered today as markets has gone up around 1% or more every single day this week !

QQQ got to near 58 , remember my target of QQQ to 57+ based on pattern - reached.

Reember my target of 1320-1330 on SPX when we were trading at 1260 level ? - We got there , and actually more than I thought.... but as I have mentioned MANY times before , markets is ALWAYS stretching both bulls and bears to the limit .... so always more than everyone think about.

There are so many signs I see that a short term top is in - or is close. I got short Thursday before at 1320 and thank god I did not get short on a little bounce to 1300 and think we would go down from there - great I were waiting it also with the short term indicators extreme overbought.

First of all - NO ONE out there can predict markets to the exact number everytime - neither me , I am just trading what I see based on the technicals. Not many out there thought we would get a rally 2 weeks ago........ I were one of the few who said a rally to come and indeed we got it , also more than I thought about. What I hear now is many people telling me I am a bit screwed going short after such a strong rally in 1 week........ I care less what they tell me - I am trading what the charts are showing me - and right now so many bearish signals.

1. I'm still holding SIZE position at 34.69 on TZA and holding for a SWING trade......
2. What we have is a potential near perfect topping head and shoulders pattern on markets. SPX had left shoulder at 1345 area , head at 1370 and right now we are at 1340 (pretty close to 1345). Either way - if this pattern is going to play out I would say SPX should maximum get to few points above 1345 , if much higher ... dangerous we might see new highs then - and then I am wrong about what I see on charts.
3. Volume of the rally over the last 3 days has been decreasing steady (BEARISH signal) I would like to see increasing volume is the rally was for real......
4. Remember as fast as we moved up in markets over the last 1 week - as fast and faster we could move down again - we have literally not much support below us now as we havent been consolidating with no pullbacks at all.
5. VIX got outside the lower bollinger band and formed a bullish red hammer
6. SPX and markets got WAY above upper bollinger band - a move down into bollinger band would give a big sell signal on markets...
7. NYMO is extreme overbought at current levels.
8. USD or UUP as you can see on charts - are VERY close to the lower trendline in a bullish triangle pattern - a gap down Tuesday in dollar and possible minor little gap up Tuesday would give a bottom imo in USD and then a MAJOR rally is underway (what I see ... )
9. Take a close look at SPX - actually markets made a near PERFECT backtest of the broken trendline of March 2009 - which we broke down early June - now we are making the so called "kiss of death" which means we test that trendline - before we get a big flush down ( fits perfect with HS topping pattern )
10. IF the SPX HS topping pattern will play out - well then we are going to see a pattern target of 1125-1150 area.... sorry to say , but thats it which we could reach over next months.....
11. TZA got down to MAJOR support area at 33. As I've said 33 is a major support in TZA - we got a bit down below to 32.95 or so , as the MM's are trying to let people stop out of their stops and take their money, dont be fooled....
12. Right now sentiment is way bullish with more bulls than bears - as I've said 2 weeks ago there were too many bears calling for a crash and much lower levels - where I got against the crowd - right now doing the same as people is way too bullish short term after such a big rally so fast.

Conclusion: All in all - holding all my shorts with TZA 34.69$ size position - I think 33 level or this area right here should hold - if in case SPX moves above 1345 and higher next week ( then I may be wrong and will take the loss on TZA - as we then might take out new highs ) - but for now I see a market top made - and much much lower levels to come over next weeks.......

Hope you understand all those points - if the SPX taret is playing out - TZA will by then be above 50+ and probably a lot higher - so patience people and lets see what next week brings... :-)

All my daily charts still on daily buy signals , but so many things as I've posted telling me that a market top may already be in place now - or just a few points higher. Remember to do your OWN DD - I'm just doing my best trying to share with all of you what I think and read on the charts.

Enjoy the long weekend and get ready for next week.

Intraday alert

I would be adding heavy to TZA size position here at 33's and I posted the chart. I think we saw the top today and a huge move to the downside is underway....how I see it now..

Buy TZA here at 33.5 with a stop below 33 you wont loose a lot , but you can gain big profits for a swing.

Chart here.... target very much down on markets...

Market view

Markets rallied for the 4th straight days in a row ! Wow what an AMAZING run and amazing sqwiiize to the short sellers - which began to cover a lot lately! We have been riding this TNA from 68.88$ and took as I mentioned yesterdays post ALL profits on the move to 82 - up around 14$ per shares on it. With this - I've also took a big SIZE swing trade position in TZA (opposite) at 34.69$ as I have been looking for a short term top around this area.

Honestly - I dont think we will go down anything hard this week - I think it will be choppy up and down - and nothing special as we are going to head out over the long weekend in hapiness...lol

I think the uglyness should begin already by next week and if I am reading this right - this should be UGLY for markets as I think we will take out MA(200) this time , slice below it and further down. If my topping HS pattern proves me right target is 1170-1180 area - well sounds a bit too much and too ugly I know... but thats just how I see it right now, but lets take 1 step at each time.

There is also the possibility we gap a bit higher today and then down - but I think EVERY more to the upside from here is an EXCELLENT shorting opportunity , all imo !


VIX made a "red hammer" candlestick yesterday from support level excatly - fear is GONE (People happy weee.....) and I'm worried now as there is no fear. As I said 2 weeks ago when VIX were high , then I were looking for a market bottom - which we got - but now when VIX is at those levels , forming a reversal candlestick I'm getting very bearish markets.

Markets has also been up like 4 days , with 1% gains every day - remember , as fast as we move up... as fast we can move down , or faster...

QE2 is officially DONE yesterday , no more QE2 and we wont get any before later this year imo - all in all I think this summer could be rough as last time QE1 ended we got the flash crash.

But again , I'm just reading the charts and ignoring the news. I must say - I have NOT got any daily SELL signals on my charts on indexes yet , as they are all still on buy - but from what I know and see - there is a good possibility that we have topped around here.

QQQ hit my target perfect of 57+ watch the close yesterday... my pattern target made it perfect as nobody really trusted me that we would go this high.... THIS week. I said late Friday target were in the 1320-1330 zone by this week , and lucky enough we have made it to this zone. The euro is touching upper trendline and may breakout - but I'm in the thinking that the dollar UUP is going to have a major major breakout over next weeks from here - just how I read it - and with this , markets should tank. UUP should take out the trendline from June 2010 highs which will make it run up in a hard move.

Conclusion: We have a long weekend , Independence day - as said before markets usually bullish before this and we have seen it , optimism getting very nice again as AAII sentiment has more BULLS than BEARS now - which I just love ! Markets extreme overbought short term and a bit overbought on daily charts - I dont think we will get any big moves on this Friday to the upside or downside as I think the top is forming over days, but I took a SIZE position in TZA 34.69$ and holding for a swing play and looking for some uglyness to begin next week. No one is making 100% perfect calls - neither me. So do your own DD , but this is just how I see things forming now - most people turned bullish now as I turned bearish. Took all my profits on small caps - only in cash and TZA by now , dont wanna be a hero trying to pick a stock which will move up in a down market - so thats why I'm just holding cash and shorts.

Have a nice weekend everyone , hope you enjoy my blog still - would love to see more response from people visiting here, but enjoy weekend and get ready for the weekend update.