Archive for February, 2010

I see no point in trying to forecast intraday, or even daily moves in this extremely manipulated stock market.  So, I’m going to focus on the weekly instead.  Let’s look at the weekly chart below…

We are clearly forming a nice bear flag on it, as we have now completed 3 weeks of a down move, and 3 weeks of an up to sideways move.  Notice that last week was basically flat (down a little), putting in a bearish hammer candle.  If this bear flag plays out, then we should head down to the 104 spy double bottom area by the end of next week.

I suspect that the jobs numbers will be really bad this week, and will be blamed for the sell off coming.  But that doesn’t come until later in the week.  So just remember, most Monday’s are bullish, and I’ve rarely seen a big down day on Monday.  That doesn’t mean it won’t happen, only that it’s not likely.  If Monday does push up a little more, then I think the target will be the 112.00-112.50 area, as it’s provided great resistance in the past, and should continue to do so.

If that gets broken, then we are heading for a double top at 1115 spx.  I really don’t see that happening with all the news out next week.  The bulls seem to be just about done now, as it’s going to be extremely hard to push up very much further.  From the Monthly to Weekly charts putting huge downward pressure on the market, to the seasonality of March, and multiple turn dates coming up… it’s not looking good for the bulls.

But… and this is a big butt, the bulls still have GOD on there side!  Yes, Goldman Sachs (aka God… at least in their sick minds) still has your money, and your children’s money, and your children’s children’s money too use to buy up the worthless stocks in this doomed market.  (Personally, I thought God was a giving and caring person… not a THIEF!  That tells me they are doing the Devil’s work… not God’s).

Anyway, that simply means that NO about of Technical Analysis I do is going to be accurate with all the free money still manipulating the system.  If you have unlimited funds to keep the market up, then no about of selling will ever stick.  Anna seems to think that we won’t get any significant downside until Obama pushes his worthless Heathcare system through.  That very well could be right?

Remember this… from the creation of the stock market, until the present, there has always been manipulation in the system.  However, the control that they have had, was limited by the amount of cash they had to work with.  When the PPT (Plunge Protection Team, created by Ronald Regan after the 1987 crash… which was originally designed to simply prevent further crashes, not manipulate the market) was created, the crooks seen that as an opportunity to have free funds from the government, instead of using just their own.

In the beginning, the amount of funding to the PPT was not nearly enough to fully control the market with the normal volume that occurs throughout the year.  But with light volume during holiday’s and certain times of the year, the PPT soon discovered that they could fully control the market and push it in whichever direction they wanted.

Then along came March 6th, 2009… which forced Obama to turn the money flow on full blast, giving unlimited funds to the PPT (aka Goldman Sachs).  Their humble leader Lloyd Blankfein (aka GOD), does just what any good crook would do… buy up his own stock, almost tripling it in value over the next year.  Then, pay himself and other bankster pals huge bonuses with all the money that he had stolen from the unsuspecting American public.

What does all this mean?  Simple really… it means that you can’t really use TA’s anymore to forecast the possible direction with any kind of real accuracy.  I do believe that technical analysis still works on most individual stocks and some commodities… but not the overall market right now.

If it sounds like I’m bitching and complaining again… you’re right, I am!  What good does it do to study charts, learn Elliottwave, Technical Analysis, Fibonacci Retracement levels, Astrology, Gann or Bradley turn dates, and any other forecasting method, if none of them work anymore.

I’ve always known that trading was very difficult, and not very easy to become successful at.  I’ve been through the “school of hard knocks”, and I’ve put in my time in studying and learning the techniques that are available t0o be learned.  Obviously, the “real techniques” and secrets are buried inside Goldman Sachs, as I can’t find anyone else who can figure out where this market is going next… can you?

Red

Some wild swings in the morning, and then some sideways chop until the close…  but we’re still in the rising channel on the 60 minute chart below.  I didn’t think the move down yesterday was going to stick, as the volume was just too light.  The 1092 level that held yesterday, will move up tomorrow to about 1097 on the lower trend line on the rising channel.  Will it hold again tomorrow?  As long as the volume stays low, then the answer is most likely YES.

Today’s volume was only about 175 million on the SPY.  That’s just too light for any sell off to happen.  The markets are still being held up for now.  My feeling on tomorrow is that they already know that the Initial Claims and Continuing Claims numbers are worst then expected.  So, how do you keep the market from selling off huge on the numbers?  You release other bad news like the Consumer Confidence numbers, and New Home Sales 2 days ahead of that.

The expectations will be lowered in the minds of the traders, so when the numbers are released, it won’t have as big an impact.  Smart crooks, these Fed’s are…  You have to give them credit for that.

Next, what I would do is to rally the dollar over night, then sell it hard at 8:30 am when the Claims numbers are released.  That should keep the market from selling off too hard.  Crooked isn’t it?  Of course it is… but a year ago only 1 out 20 people asked would say that the market is manipulated.  Now, I’d bet 1 out 2 would say it is…

Clearly, without the stimulus money, the market would probably be below the March 6th, 2009 low by now.  All this manipulating is really going to hurt the economy long term.  It’s like they are slowly pulling the bandaid off from the big cut or sore on your body… pulling one hair at a time.  It would be a whole lot less painful to just jerk it off quickly and be done with it.  Sheesh… every parent knows that.

But, I guess we don’t have adults running the government… we have children.  They cry when things don’t go their way, throw temper tantrums, and fight among each other.  Yep… sounds like to children too me!

Move on…

Looking at the chart above again, I’d say we could chop a little higher until the end of the week, as the MACD is rising up into positive territory, and the ADX line is still pointing down.  The ADX could bottom on Friday or Monday, and then start to curl back up, giving strength and momentum to whichever DI line is on top.  My thoughts are that the negative DI line will start to rise at that time, and nice little sell off would occur.

This will line up nicely with the weekly chart putting in a nice bear flag too.  Just keep in mind that during light volume periods, the market rarely sells off.  It usually goes up, or sideways.  So, I’m looking for the ADX to find a bottom and start to turn back up while the spy is also hitting major resistance level.

Those levels are 111.50 spy (about 1110-1112 spx), and the best level is 112.00-112.50 spy (about 1115-1120 spx).  I would love to see 112.00-112.50 by the close on Friday, as that would be an ideal place to go short over the weekend with a put spread.  It may not happen though, as that target might not be hit until the usually bullish Monday next week… but, what if Monday starts a nice sell off?  Would that catch the bears by surprise?

Hmmm, bear flag on the weekly charts, major resistance at 112.00 area, February closes out positive, new month to start next week, and maybe some bad news released over the weekend?  That sounds like the perfect setup to fool a lot of bears… and bulls too!  Will it happen?  Who knows?  I’m just throwing it out there for you to decide.

Red

With only 132 million shares traded on the SPY, the market basically went nowhere.  Nothing has changed since the March low from 2009, as light volume still rules the market.  Ever since the cap was removed for the PPT, they have easily been able to keep the market flat to up on every light volume day the market has.  Of course the market has always been controlled to some degree, but when you now have an unlimited supply of free money, the control they have now is the highest it’s ever been.

As much as I’d like to see a nice sell off, it’s not coming until the big institutions decide to sell… it’s really that simple.  The technicals didn’t really change much today, as we are still over bought short term, but we can still go higher medium term.  However, I’m still looking for a small pull back later this week, but I’m not expecting too much.

Don’t take this wrong, as I’m not bullish by any means… but I’m not bearish right now either.  The market is being propped up, and I’m not going to fight it… as I’ll lose.  Here’s an interesting video by my favorite president (I wish)…

For this week, it will be important for the master resistance at 112.00-112.50 to hold the bulls back.  If successful, then a pullback could start as early as Friday.  What I’m looking for, is for the adx line to bottom out, and start to re-cycle back up, with the negative di line leading the way.

Now if the 112.00-112.50 level fails to hold back the bulls, then we should see a move to 115.00 area for a double top next week.  I know that’s not what you’re looking to hear, but we are in a sideways market right now, that could break either way.  I’m going to remain neutral for now, and hope that 112.00-112.50 holds for the entire week.  I believe that if the level does indeed hold… for the entire week, then next week will be down.  Can the bears hold back bulls?  Only time will tell, as the market is just trying to put the bears to sleep right now.  Once they are all hibernating… the market will sell off.  Isn’t that just the way it works?

Red