Saturday, April 13, 2024

Still In Rising Channel…

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.

The-Chart-Pattern-Trader-spy-60-minute

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

Red
Author: Red

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Apple Al
Apple Al
14 years ago

Hey Red, I hear what you're saying about volume, but my take on the weak volume is that the lack of participation spells weakness. Also, the EW pattern today seemed much more corrective in nature, so one would suspect a turn down is imminent – http://willowtreetrading.blogspot.com/

Red Dragon Leo
14 years ago
Reply to  Apple Al

The turn date is over this weekend, and could start as early as today or as late as Tuesday. It's one of those + or – 3 days, and the actual day is the 27th.

A sell off is coming though, that's for sure. It could start as early as today, as since the futures are down right now, who knows?

Apple Al
Apple Al
14 years ago
Reply to  Red Dragon Leo

Short ES from Tuesday, probably a little early but it's working now

monicadern
monicadern
14 years ago

After watching the overnight markets, I am now 100% convinced this market is manipulated. One thing to note about the volume weakness though – it could be due to the symmetrical triangle.

http://stockcharts.com/school/doku.php?id=chart

Red Dragon Leo
14 years ago
Reply to  monicadern

Anna reminded me this morning how she mentioned that we wouldn't see any real big down moves until Obama gets his health care bill passed (She said that less then a year ago, before I started this blog or her blog).

That might happen Thursday or Friday, as they are in a meeting about it today. If he gets his way, as passes that piece of crap bill, then they may let this market crash?

I have a turn date on the 27th, and it could come a little early or later. Accurate to + or – 3 days. Today could start the whole sell off? Watch the dollar this morning, as I expect they will tank it to rally the market.

O

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Thanks Red. Anna said there was another fake print this morning at 109.69. So far we got there and bounced off.

Earl of
Earl of
14 years ago

Carl's morning words:

March S&P E-mini Futures: The ES has given back all of yesterday's rally plus a little more. My best guess is that the low at 1090.25 will be taken out briefly. I see support near 1086. I am going to estimate today's day session range as 1086-1100. The market will reach 1200 over the next three months.

Note: /ES is 1088 now (2 points above Carl's low for the day)

gcocks83
gcocks83
14 years ago
Reply to  Earl of

How are you playing thinks earl.

Earl of
Earl of
14 years ago
Reply to  gcocks83

Probably will get stopped out, but I picked up some TNA at 42.15

Had a buy point there.

dreadwin
14 years ago
Reply to  Earl of

Be careful with TNA today, $RUT is starting to catch up with $SPX on the downside.

Earl of
Earl of
14 years ago
Reply to  dreadwin

I'm watching closely.

Early lows of the day seems to holding all around. So far.

Earl of
Earl of
14 years ago
Reply to  dreadwin

Dreadwin,

Typing this as fast as I can before the market drops unexpectedly.

It looks like TNA is working.

Standard 5 second guarantee applies.

monicadern
monicadern
14 years ago

Cover my positions at 107.38? What say you Big Red?!

gcocks83
gcocks83
14 years ago
Reply to  monicadern

Monica, EDZ looking good.

monicadern
monicadern
14 years ago
Reply to  gcocks83

So far – yes.

Red Dragon Leo
14 years ago
Reply to  monicadern

They should rally back up some today. Listen to the news to see if Obama gets his health bill passed today. If so, then I think they will let it fall.

Red Dragon Leo
14 years ago

String just seen a fake print to 1103 on his chart. I don't see it on mine, but that could be where they might take it back up too tomorrow?

http://img186.imageshack.us/img186/8463/2010022

Apple Al
Apple Al
14 years ago
Reply to  Red Dragon Leo

No fake prints on my charts (in TOS)

Red Dragon Leo
14 years ago
Reply to  Apple Al

I didn't see it either Al, but String did? Look at the link he posted. Strange, that's for sure…

sundancer390
sundancer390
14 years ago

We're currently back testing max contain pt. (109.24) on the 60 min.

Red Dragon Leo
14 years ago
Reply to  sundancer390

Don't know if we are going to make 1115 this week? It's not looking like it right now. If we don't, then we could see more selling next week?

sundancer390
sundancer390
14 years ago
Reply to  Red Dragon Leo

no we aren't going to close over 1115.10, which is actually bad news for the bears because no major reaction has ever originated on the monthly since 1990 without the setup i talked about yesterday

I would have preferred we got a close over 1115.10 because this slow moving market is growing old.

We need a close tomorrow in the 1070 region in order to terminate a bullish setup on the monthly.

sundancer390
sundancer390
14 years ago

update 10:30 est

SPY 60 min backtest of max contain pt. held
http://www.flickr.com/photos/47091634@N04/43876

the spike low @ 9:45 est also backtested it's twin that it gapped over on 2/17/2010

general of the bull army aapl hasn't broken it's tuesdays lows yet

Red Dragon Leo
14 years ago
Reply to  sundancer390

So what are we looking for… by the end of the day? Price target to confirm a head lower, or higher?

sundancer390
sundancer390
14 years ago
Reply to  Red Dragon Leo

the window to the spy 107.34 area opens if we get consecutive hourly closes below the max contain pt. on the 60 min.

for the 11:30 print it's @ 109.29, no selling will stick unless it breaks the max contain pt.

the Spike low @ 9:45 est looks like the LOD to me

Red Dragon Leo
14 years ago
Reply to  sundancer390

I have a close of 109.09 on the 10 minute chart for the 11:30 print. What does that imply?

bensjoyce
bensjoyce
14 years ago

I remember what Bollinger of the BB said.

If the market fails to reach the upper BB (S&P did not hit it yet) and then closes below the middle BB, than the odds favor a testing of the LOWER BB before we hit the upper again. This is bearish but depends on the close today.

Isn't this reasoning correct?

sundancer390
sundancer390
14 years ago

for those interested in the currency correlation
UUP Daily
http://www.flickr.com/photos/47091634@N04/43877

SC
SC
14 years ago

The decline expected has run its course. The distribution detected 2/19-2/22 (the basis for my VST bearish call on Mon) has bottomed on 2-23. Today's decline is not accompanied by more distribution. Accumulation is showing up, in tech stocks, small stocks, and foreign stocks.

If the accumulation continues, then the turn dates everyone is thinking of, is probably going to be turning up. We shall see when we get there. I am closing out my shorts, but not going long just yet. I like to see more evidence of accumulation. Usually you have one extra day of accumulation, before the move starts. But, as usual, this time it may be different.

Earl of
Earl of
14 years ago

Out of TNA

dreadwin
14 years ago
Reply to  Earl of

A couple days back I suggested that $RUT/IWM would bounce 1% off the 50 day MA (62.19 for IWM), and that it would yield a 3% scalp with TNA. My numbers show that a TNA buy at 42.05 (10:02 am), sell at 43.31 (at the 2pm surge) would fulfill that condition. Sounds like you took the trade. Congrats.

Earl of
Earl of
14 years ago
Reply to  dreadwin

Dreadwin,

Nice call 🙂

Never so sure about it, though, in the middle of it 🙂

dreadwin
14 years ago
Reply to  Earl of

There are times when it pays to trade with the robots rather than against them. This is one of those times.

monicadern
monicadern
14 years ago
Reply to  dreadwin

Yeah Earl!

Earl of
Earl of
14 years ago

Carl sold his 2nd /ES unit at 1097.50 — all cash now

Red Dragon Leo
14 years ago

I dipped in the waters here with a 109/105 put spread. Let's see what happens tomorrow?

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Good luck Red! Still think we are headed lower. The PPT can fight it all they want to 🙂

gcocks83
gcocks83
14 years ago
Reply to  monicadern

You know I got out of EDZ, thinking of placing order to get back in at 5.70. I did not sell any TZA today. I thought about taking some off the table and reload. Would have been the smart move.

monicadern
monicadern
14 years ago
Reply to  gcocks83

hindsight is 20/20. I shorted RIMM yesterday and covered it at the low today but still have all my other positions. You have to decide whether you think this thing is really going to cave in long term or whether you want to trade in and out. No point in holding these things if on the first big down day, you bail out. I would rebuy EDZ but that is just me! That one turned out well but there COULD be a time where we just continue to drop. While the bulls talk about this ramp job as being a good thing, I think all this volatility can't be good for the bulls.

dreadwin
14 years ago
Reply to  monicadern

Speaking of volatility, that's a really really ugly candle on the $VIX today. The Slow stoch says it needs to go up, but the MACD says we're not done going down. We could paint sideways.

monicadern
monicadern
14 years ago
Reply to  dreadwin

We sure could and for a while as well. But at some point we will go down. I would recommend to those of you who are good at trading (and I think you all are) to hold onto core short positions and trade the rest. I can't trade so I will sit here and wait.

dreadwin
14 years ago
Reply to  monicadern

Alternatively, we're consolidating / painting a bull flag. JNK was strongly up today.

monicadern
monicadern
14 years ago
Reply to  dreadwin

True, perhaps hold a core long position then! Here is my take. Does this look like July? Yes, it does. But we have rallied 70% from the lows and the dollar euro action is unusual. Volume is also higher. So July and now look a little different to me. Also, as of yesterday we were below the zero line on the MACD which signals a trend change. Also, most of the worlds markets have formed a topping pattern and are starting to come down. Who knows though. So may people calling for a rally to 1250 and i am sure they know better than I do!

monicadern
monicadern
14 years ago
Reply to  monicadern

If we are headed down, it could still take a while to form a topping pattern. I just pray we don't go sideways for the next 2 years!

Earl of
Earl of
14 years ago

Carl at days end:

Estimated /ES range: 1086-1100 (14 point range)
Actual /ES range: 1084.50-1102.75 (18.25 point range)

Today was a bit wilder (lower low, higher high & larger range) than Carl expected.

Carl's trading:
Carl went long yesterday one unit /ES at 1095.50 & one unit at 1101.50

Carl sold /ES today for 1096 & 1097.50 (loss of 3.5)

Grade D (hurt by news flow, again, but aren't we all)

dreadwin
14 years ago
Reply to  Earl of

What was the news item that has been blamed for the early selling?

It's pretty rare that Carl holds overnight, and I'm surprised that he took a loss.

Earl of
Earl of
14 years ago
Reply to  dreadwin

Dreadwin,

I never knew what the news was. I read this at Carl's site:

sold one unit at 1096.00 – lighten up prior to news

and the market moved, so I figured whatever news he was worried about must have happened. I was going to see what it was and never got around to it.

He has been getting clobbered by news lately, getting leery I guess.

Earl of
Earl of
14 years ago

TZA gapped up 4% and closed down 0.2% today.

We are in a New Moon Trade (favors TZA).
[ After eight days, this trade is DOWN 10.2% ]

Volume today for TZA was 2nd highest in the past 8 days.

$RVX (VIX for $RUT) open 7.3% higher and closed 1.9% lower.

TZA was down today and down in 11 of the past 12 days.

Ultimate Oscillator dropped from 34.5 to 31.5 while TZA fell slightly.

Bollinger Bands for $RVX (VIX for $RUT): the gap up touched the mid line and fell hard lower making a long red candle. Perhaps (not at all clear) that means $RVX will drop tomorrow, which would be bad for TZA.

Bollinger Bands for $RUT: $RUT gapped down, touched the 50 Day moving average, then recovered completely. Stayed midway between the top Bollinger band and the mid line. Looked like horizontal action. $RUT looks like it’s slowly falling from its peak, which seems good for TZA, a little.

http://www.americanbulls.com had TZA this morning as an unconfirmed buy. As I read it, the TZA buy signal was forcefully rejected today — pretty much needed a white candlestick after the opening gap up, and got the opposite of that. So, what appeared two days ago to be a TZA buy signal was actually a false alarm.

Overall, it looks like TZA is moving horizontally, neither up nor down.

monicadern
monicadern
14 years ago
Reply to  Earl of

Thank you Earl! Love your recaps.

Earl of
Earl of
14 years ago
Reply to  monicadern

I really enjoy the feedback 🙂

monicadern
monicadern
14 years ago
Reply to  Earl of

Great, I get fantastic technical analysis and you get compliments. Good trade in my book!

Earl of
Earl of
14 years ago

Official word from http://www.americanbulls.com on the TZA buy signal from 2 days ago:

The previous (TZA) BUY-IF signal is null and void. We allowed two days for the confirmation of the bullish pattern and market denied confirmation. None of the three bullish conditions were realized.

It is now time to wait for the next signal. Meanwhile, either stay at cash or check the other stocks. Do not bother with buying or short selling this stock as long as the WAIT tag stays.

(I really like this site. Look forward to a real buy signal.)

bensjoyce
bensjoyce
14 years ago

Pardon the fundementals …..BUT

One analyst/trader on forex TV is looking for a negative revision for 4th quarter GDP comes out fri 8:30am, which he says will be neg for stocks.

Ramsey Bilbiesi tues 2/23 4:43PM
http://www.forextv.com/Forex/Video/Video.jsp?ch

skip to about 5min 50sec on the
This is consistant with an early pop (Pre 8:30am est) than a sell off in stocks.

bensjoyce
bensjoyce
14 years ago

Pardon the fundementals …..BUT

One analyst/trader on forex TV is looking for a negative revision for 4th quarter GDP comes out fri 8:30am, which he says will be neg for stocks.

Ramsey Bilbiesi tues 2/23 4:43PM
http://www.forextv.com/Forex/Video/Video.jsp?ch

skip to about 5min 50sec on the
This is consistant with an early pop (Pre 8:30am est) than a sell off in stocks.

Earl of
Earl of
14 years ago

Official word from http://www.americanbulls.com on the TZA buy signal from 2 days ago:

The previous (TZA) BUY-IF signal is null and void. We allowed two days for the confirmation of the bullish pattern and market denied confirmation. None of the three bullish conditions were realized.

It is now time to wait for the next signal. Meanwhile, either stay at cash or check the other stocks. Do not bother with buying or short selling this stock as long as the WAIT tag stays.

(I really like this site. Look forward to a real buy signal.)

Earl of
Earl of
14 years ago

TZA gapped up 4% and closed down 0.2% today.

We are in a New Moon Trade (favors TZA).
[ After eight days, this trade is DOWN 10.2% ]

Volume today for TZA was 2nd highest in the past 8 days.

$RVX (VIX for $RUT) open 7.3% higher and closed 1.9% lower.

TZA was down today and down in 11 of the past 12 days.

Ultimate Oscillator dropped from 34.5 to 31.5 while TZA fell slightly.

Bollinger Bands for $RVX (VIX for $RUT): the gap up touched the mid line and fell hard lower making a long red candle. Perhaps (not at all clear) that means $RVX will drop tomorrow, which would be bad for TZA.

Bollinger Bands for $RUT: $RUT gapped down, touched the 50 Day moving average, then recovered completely. Stayed midway between the top Bollinger band and the mid line. Looked like horizontal action. $RUT looks like it’s slowly falling from its peak, which seems good for TZA, a little.

http://www.americanbulls.com had TZA this morning as an unconfirmed buy. As I read it, the TZA buy signal was forcefully rejected today — pretty much needed a white candlestick after the opening gap up, and got the opposite of that. So, what appeared two days ago to be a TZA buy signal was actually a false alarm.

Overall, it looks like TZA is moving horizontally, neither up nor down.

monicadern
monicadern
14 years ago

Thank you Earl! Love your recaps.

Earl of
Earl of
14 years ago

I really enjoy the feedback 🙂

monicadern
monicadern
14 years ago

Great, I get fantastic technical analysis and you get compliments. Good trade in my book!

Earl of
Earl of
14 years ago

Carl at days end:

Estimated /ES range: 1086-1100 (14 point range)
Actual /ES range: 1084.50-1102.75 (18.25 point range)

Today was a bit wilder (lower low, higher high & larger range) than Carl expected.

Carl's trading:
Carl went long yesterday one unit /ES at 1095.50 & one unit at 1101.50

Carl sold /ES today for 1096 & 1097.50 (loss of 3.5)

Grade D (hurt by news flow, again, but aren't we all)

dreadwin
14 years ago

What was the news item that has been blamed for the early selling?

It's pretty rare that Carl holds overnight, and I'm surprised that he took a loss.

Earl of
Earl of
14 years ago

Dreadwin,

I never knew what the news was. I read this at Carl's site:

sold one unit at 1096.00 – lighten up prior to news

and the market moved, so I figured whatever news he was worried about must have happened. I was going to see what it was and never got around to it.

He has been getting clobbered by news lately, getting leery I guess.

Red Dragon Leo
14 years ago

I dipped in the waters here with a 109/105 put spread. Let's see what happens tomorrow?

monicadern
monicadern
14 years ago

Good luck Red! Still think we are headed lower. The PPT can fight it all they want to 🙂

gcocks83
gcocks83
14 years ago

You know I got out of EDZ, thinking of placing order to get back in at 5.70. I did not sell any TZA today. I thought about taking some off the table and reload. Would have been the smart move.

monicadern
monicadern
14 years ago

hindsight is 20/20. I shorted RIMM yesterday and covered it at the low today but still have all my other positions. You have to decide whether you think this thing is really going to cave in long term or whether you want to trade in and out. No point in holding these things if on the first big down day, you bail out. I would rebuy EDZ but that is just me! That one turned out well but there COULD be a time where we just continue to drop. While the bulls talk about this ramp job as being a good thing, I think all this volatility can't be good for the bulls.

dreadwin
14 years ago

Speaking of volatility, that's a really really ugly candle on the $VIX today. The Slow stoch says it needs to go up, but the MACD says we're not done going down. We could paint sideways.

monicadern
monicadern
14 years ago

We sure could and for a while as well. But at some point we will go down. I would recommend to those of you who are good at trading (and I think you all are) to hold onto core short positions and trade the rest. I can't trade so I will sit here and wait.

dreadwin
14 years ago

Alternatively, we're consolidating / painting a bull flag. JNK was strongly up today.

monicadern
monicadern
14 years ago

True, perhaps hold a core long position then! Here is my take. Does this look like July? Yes, it does. But we have rallied 70% from the lows and the dollar euro action is unusual. Volume is also higher. So July and now look a little different to me. Also, as of yesterday we were below the zero line on the MACD which signals a trend change. Also, most of the worlds markets have formed a topping pattern and are starting to come down. Who knows though. So may people calling for a rally to 1250 and i am sure they know better than I do!

monicadern
monicadern
14 years ago

If we are headed down, it could still take a while to form a topping pattern. I just pray we don't go sideways for the next 2 years!

dreadwin
14 years ago

A couple days back I suggested that $RUT/IWM would bounce 1% off the 50 day MA (62.19 for IWM), and that it would yield a 3% scalp with TNA. My numbers show that a TNA buy at 42.05 (10:02 am), sell at 43.31 (at the 2pm surge) would fulfill that condition. Sounds like you took the trade. Congrats.

monicadern
monicadern
14 years ago

Yeah Earl!

Earl of
Earl of
14 years ago

Dreadwin,

Nice call 🙂

Never so sure about it, though, in the middle of it 🙂

dreadwin
14 years ago

There are times when it pays to trade with the robots rather than against them. This is one of those times.

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