Bear Meat…

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3048

bear-meat

The Bulls have certainly been having their fun these last few weeks.  They tease the bear by acting like they are going to let him have a little fun.  This morning was no different as the bulls teased the bear by selling off on the Bad ADP job's numbers, only to rally back most of the loss throughout the rest of the day.

Tomorrow should be no different as the light volume should keep the market up.  But I suspect that by next week, the bear will rise again!  The bull won't know what hit him, as the bear is sneaky and will attack from behind.  Payback will be brutal and swift as bear seeks his revenge.

The government is already preparing us for bad job's numbers on Friday, by releasing the bad ADP numbers earlier today.  They are lowering the expectations by the market... which could lead everyone to believe that the numbers are really bad, or they could "pull another dead rabbit out of a hat" and beat the estimates largely?  I don't know which will happen, but a good number (from the part time new hiring of census workers) could also panic the market, as fears of rising interests rates from a growing economy come back into play.

Of course if the numbers are bad, then there is no fear that the government will raise rates, but if they're too bad... then the market may lose faith in the recovering economy and still sell off?  After all, the supposedly bullish rise in the market was based on a recovering economy (all though we all know that it was based on the PPT buying up the market with printed dollars from the Stimulus plan).

So, my feeling is that the market will sell off next week regardless of what the numbers are.  That's probably why the government didn't push up the release to Thursday, or delay them until next Monday.  They know that's it's really a "NO Win Situation", and they are hoping that people will calm down over the 3 day weekend.

I think that it's a perfect time to also release some other bad political news, or global event to blame the coming sell off on.  Blame it on Greece or some other country... but not the bad or good jobs numbers.  Yes, I guess we could rally higher or trade sideways for another week... but I seriously doubt it.  We are now at 7 days in a row of sideways trading between about 1160 and 1180.

We did that back in the first week of January too... and you see what came next.  It was also about 7 days before a fall to the down side.  Looking back on the daily chart, I see that many times the market would trade sideways, in a tight range, for a week or more before falling hard.  Of course we could have the usual bullish Monday again, but I think we are overdue for a sell off on Monday.

I don't know if it happens or not, but it certainly would surprise a lot of bulls... and bears.  Ask yourself how many bears will go short over the 3 day weekend?  Not many I would guess?  They are so used too the bullish Monday's (plus time decay on options) that they will wait until next week before getting short.

It's hard to say for sure what they are thinking, but I'm sure it's aim is to steal the money from the new retail bulls, and not to allow the bears to profit from the sell off.  I'd say that they want to steal the bears' money too, but all the bears are now broke, as they stole that money many weeks ago.

Just basing my decision on the number of days sideways, compared to previous moves in the past, I'd say we are within a couple of days of a big move... which have the odds favoring the downside.  I'm probably going to get short tomorrow if the market rallies.  If it sells off, then I'll probably wait until Monday for the bounce back up.  However, I do expect the market to float higher on light volume tomorrow.  Not much of course, but higher none the less...

Red

128 COMMENTS

  1. March 31 close: We have 3 data points for clarity now. It appears the market top was put in last Thur-Friday. Today we have the breakdown in individual stocks that I was looking for yesterday. Barring unforseeable events, market correction is imminent.

  2. I still would like to see marginal new highs for the downward thrust to have longevity

    the only other time the $SPX danced with a daily containment pt. as long as it has now without making new highs, was back in August. The operators threw a 1 day bear trap and squeezed them for the rest of the year.
    http://www.flickr.com/photos/47091634@N04/44809

    i circled all the other local tops and you'll see the local high came at the end of the sideways consolidation, not the beginning. The operators rarely give a free ride.

        • That chart clearly shows a pop higher before a drop. I think that has made my decision to wait until next week to see what happens before getting short.

          At this point, I can't think of any reason for the market to sell off hard. The jobs numbers tomorrow would have too be horrible for them to sell, or beat estimates by a huge amount, with would cause fear that they might raise interest rates… hence they would sell the market.

          It not hard to simply met the estimates, which wouldn't be bullish or bearish… so the grind sideways would continue. As for something happening over the weekend… no one can foresee it, if it does. It's not worth risking by going short.

          Since Mondays' are generally bullish, and the fund managers will get fresh new money for the start of the quarter (the first few days are historically bullish too), I see more reason to wait until next week before going short, then to risk it today.

          What's your thoughts on the USO? I'd like to see a double top, then a fall.

          • Not that you should listen to me, but I would put in my shorts at the end of today. Look at Sundancer's chart – the big pop usually signals the end of the consolidation phase and it looks like that big pop is today. I would put a stop loss in just under 1200.

      • let's hope it stays above 16.09 for the close today & it would provide a great weekly setup

    • Thank you Sundancer. I knew today was going to be painful. I like your chart and hopefully today signals the end of the consolidation phase. AAPL at new highs.

      • Think tomorrow's numbers will be positive and they don't matter anyway. When the market wants to sell off it will but I believe that will happen Monday.

        • I don't know Monica, but the chart Sundancer posted clearly shows a new high being put in before the drop. If we reach 1185-1190 today, then I'd expect the sell off to start Monday.

          But, if we don't reach a new high, then I'd expect it to happen on bullish Monday as usual. I'd love to see it put in today and fool everyone on Monday by selling off.

          Somethings fishy though, as those numbers tomorrow are likely to cause a large reaction in the market. Which way is the question? Will it be one more pop on Monday, or a sell off?

          • I agree – I'd wait until 1191-1193 area. That is also a head and shoulders patter (Right Shoulder) that dates back to the highs in 2000.

  3. Carl’s morning call:

    June S&P E-mini Futures: Today's range estimate is 1165 – 1176. The market is still stuck in a 20 point trading range but I think a strong move upward will begin soon. The ES should reach 1200 in April on its way to 1225 or so.

    1161.25 -1170.50 actual yesterday (9.25 points)
    1173.25 high last night
    1165-1176 estimate for today (11 points)
    1172 currently, so estimate is -7 to +4 from here (bearish)

    • That was 118.16 DIA… meaning that they plan on taking the DOW up to around 11,816 (The DIA isn't an exact match to the DOW, just like the SPY isn't too the SPX, but close).

      When?… is of course the real question. Is it from this level, or do will sell off to the 1078 level first, and then rally up the 118.16 DIA level in the summer months? That's more likely, as a move straight from here would probably cause a lot of retail bulls to a make a profit… and you know they aren't going to let that happen.

  4. Situation update 4/1 11:00 EST:

    ES/SPY broke new high and created a problem for some systems. However, none of the broader indexes broke new high. All my systems are not affected by ES breaking last week's high.

    The one sector that is going gangbuster is foreign stocks. They were lagging in the run-up, and are now leading the pack. That reminds me of Williams O'neil's old saying that ''when the dead dogs come back to life barking from the graveyard…”

    Odds are, two weeks from now, when the dust settled, we all wish we had shorted more on the eve of Good Friday.

    If and when the market defies gravity, the trend indicators in the systems will tell me the battle is lost and time to regroup. Whipsaws are inevitable, but the risk of being caught fighting an established trend is nil.

    In sum, all signals => stay short. No change in out look. If anything, risk of mini crash has increased.

    • I'm inclined to go short today, as although 118.25 is only a marginal high, it is still a new high as Sundancer posted in one of his charts earlier.

      We might go higher on Monday… or not. But I certainly believe that we will be lower in the next 2 weeks.

      • Red, try to adopt a ladder system. Divide your capital, which in my case, would be the a buck two fitty savings from my janitor job (hehe if you read this, OBG)… Anyway, divide your capital into 3-4 portions and deploy them in stages. Your life will be a lot happier b/c you dont have to keep pulling your hair out over when is the best point to go all in. There is no practical way to pinpoint the exact optimal point to go all in. It is always clear ex post.

        • Sounds like a good plan SC… I'm going short today with my first 33 cents, then I'll deploy the 2nd 33 cents on Monday, and hold on to the last 33 cents… just in case I need to call someone to bail me out of jail for doing something stupid after the market goes against me.

      • Well, didn't I say we will help you recover the drawdown in your portfolio? 🙂 I mean it. So stop worrying. We'll fix it for ya.

          • I will write up something more descriptive about my work over the holiday weekend, and what it takes to follow the signals successfully. A lot of the time, people end up sabotaging an otherwise effective system. Often our own human nature can be a hindrance to our own success.

  5. Ok gang… I did take a short position when we tagged 118.00 again recently. It was a 117/111 Vertical Put Spread… meaning I bought the 117 put, and sold the 111 put. This is short term, as they are April puts.

    So, I have 2 weeks for the SPY to close below 117, which I believe it will do so before the options expire on Friday the 16th of April.

    Since I sold the 111 put, I don't want the market to go below that level, which I don't think will happen. I think the support at 1115 spx will be the bounce point that will squeeze the shorts into opx.

    After that bounce back up to whatever level benefits the market makers the most (meaning they have too pay out as little as possible to both bulls and bears), I think they will sell off again the week after opx, down to the 1078 area.

    Then, as all the bears get short, as massive squeeze taking us into the following summer months… up to the 11,816 DOW level. That's the plan I'm hoping for… will it play out like that? I doubt it.

  6. been out of the office all morning

    $SPX made it's marginal new high and in the process printed 1178.50 it's VST de-leverage pt.
    $VIX hit it's VST de-leverage pt. of 16.90

    the situation is improving for the bears, I'd like to see us go sideways to up into the close

    • The perfect storm is brewing…. and all the stars are lined up.

      I see all the pieces from different methodologies falling into place.

  7. i posted a couple days ago that *if* april is going to be a reversal month then the open of the month would not be far from the high of the month, the moment of truth is not far off

    AAPL made a new high today on the Pi ritual day
    HOD = 238.73
    2 (1:1) 3*8=24=888 7*3=21=777, the operators are clever

    tomorrow is the SUN ritual

  8. for those with bearish positions need the $SPX to close above 1171.23 or $SPX is going to have 3 consecutive lower closes than opens

    Frequency of more than 3 consecutive lower closes than opens $SPX,
    in the last 111 trading days : 1 (terminated on 10/28/09)
    in the last 265 trading days : 4

    • good eyes diablos, I saw it too yesterday
      If $SPX ever prints 200 run for the hills, all hell will break loose
      I'll be running for the hills when $SPX has a 5 in front of it

  9. Maybe I should leave the house more often! I guess while I was gone, GS lowered their own growth estimates going forward and GS is looking very close to that 169.50 level. Sundancer, if GS can get below there even with the market down from open, isn't that good for the bears?

    • GS is dancing with both grey & purple lines,
      GS likes to gap around it's grey containment pt.
      if GS closes below those 2 today, the open on monday will be crucial, I've seen the operators throw the algos off by closing below containment only to gap above it the next day

      HOD & LOD should be in on the $SPX so that's good news for the bears as we'll close above 1171.23

  10. IYR looks like it's going on to it's 6th consecutive lower close than open

    I had to go back 666 trading days to find it's last occurrence of 6 consecutive lower closes than opens, that sequence terminated @ 6

    in the last 777 trading days, there was 1 occurrence where IYR had 7 consecutive lower closes than opens

  11. I would think that if we close around here or slightly higher, people will be afraid to short over the 3 day weekend. So, I think that makes for a more probable bearish Monday but who knows.

  12. Carl at day’s end:

    1165-1176 estimate for today (11 points)
    1166.25 -1177.50 actual today (11.50 points)
    Good enough

    Trades:
    no trades today

    Grade: C didn’t lose any money

  13. I joined Red in his put spread. So now I am short up to the wazoo. Red and I will be adding a shift at McDick 24hr drivethrough window starting this weekend.

  14. Just got back gang. I had to leave to do a job about 1-2 pm. Did I miss anything? Are we crashing next week? Man… I hope so…

    I bet the farm last time, and have been living on the street since. This time I sold the wife, kids, and dog. Got $6.00 for the dog (he was a good dog. I'm going to miss him). Got .60 cents for the kids (they are just too lazy these days). Got .06 cents for the wife (the loan shark said she's too worn out now).

    So, I took my $6.66 and shorted with my last breath. At least I won't lose much this time….

    😀

  15. TNA opened up 2.4%. Gap was filled. TNA was up 3.9% at the high, and closed up 2.6%.

    We are now in a Full Moon Trade, which tends to favor TNA.
    AmericanBulls had TNA with a WAIT signal yesterday, so this trade was in cash today.
    Will buy TNA when AB has a confirmed BUY signal (which might be Monday morning)

    Volume for TNA today and the other days this Holiday Week were the 4 lowest of the last 18 days.

    $RVX (VIX for $RUT) was down 0.7 % today with TNA up 2.6%. No divergence.

    TNA has now been up 3 of the last 7 days. Chop. Neutral for TNA.

    The high for TNA four days ago was $58.23, the highest TNA price since November of 2008. The high today was $56.65, 2.7% below that high.

    Ultimate Oscillator for TNA fell from 39 to 37 today, a divergence as TNA was up 2.6%. UO has been below 50 five of the last six days. Indicates (screams) weakness for TNA. Bad for TNA.

    MACD on the monthly chart crossed over downwards five days ago and is moving down. Bad for TNA.

    Bollinger Bands for $RVX (VIX for $RUT): today’s white candle closed mid way between the Bollinger mid line (20 day MA) and the top band, somewhat above an area of congestion. MACD has crossed from below and is rising. Looks like $RVX might be rising. Bad for TNA.

    Bollinger Bands for $RUT: The small white candle for $RUT is in the congestion area. The top Bollinger band is falling, and $RUT seems to be in a mature topping formation. MACD has crossed down. Bad for TNA.

    Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s black candle is at the bottom of the congestion area. The upper Bollinger Band is rising. Looks like the topping process is continuing. Bad for TNA.

    TNA had a lower high, lower low and much high close – bad for TNA.

    Money flow for the Total Stock Market was $1,809 million flowing into the market. Bullish – good for TNA.

    I will post the AmericanBulls candlestick interpretation a bit later.

    Overall, it looks bad for TNA for Monday.

  16. $DJI currently has 5 consecutive higher weekly closes than opens

    in the last 249 weeks, 4 out of the last 6 times $DJI had 5 consecutive higher weekly closes than opens it provided a reversal

  17. $VIX now has 8 consecutive lower weekly closes than opens

    In the last 249 weeks, VIX has no sequences longer than 8 consecutive lower weekly closes

    1 occurrence of 8 which terminated on 11/13/06

  18. The Daily view from Americanbulls

    TNA had been a WAIT, but was up today and now has a highly reliable BUY-IF signal (possible buy Monday morning).

    The last sell was at $55.61. TNA closed today at $55.95, up 0.6% since the sale. The candlestick today High Wave (indecision in the market). The last two candlesticks formed a highly reliable bullish reversal: Bullish Kicking Pattern.

    TZA remains a HOLD. The buy price was $7.04. TZA closed today at $6.98, down 0.86% since the buy. The candlestick today was a doji (dug-of-war between the buyers and the sellers).

    I suppose this might pass for technical humor: It’s quite possible, should TNA qualify for a BUY tomorrow, that AmericanBulls might be advocating the ownership of both TNA & TZA at the same time.

    Two recent TZA Buy signals have failed and may perhaps serve as a warning:
    Buy at $7.33, sell at $7.14
    Buy at $7.11, sell at $7.05
    Buy at $7.04, now down 0.86%

    For that matter, recent TNA Buy signals have also been uninspiring:
    Buy at $55.36, sell at $55.43
    Buy at $55.69, sell at $55.63

    Summary of $RUT based ETFs & a few popular ETFs (Market positive):
    Wait: DRV(-3x), SRS(-2x)
    Hold: DRN(3x, down 1.2%),

    Market Transition:
    Highly reliable SELL-IF (2nd Day):DIA, QQQQ, IWM(1x), UWM(2x), [all Bearish Kicking Pattern on the 1st day]
    New Highly reliable SELL-IF:RWM(-1x), TWM(-2x) [ both Bearish Kicking Patterns ]
    New Highly reliable BUY-IF: TNA(3x) [ Bullish Kicking Pattern ]

    Market Negative:
    Wait: URE(2x), IYR(1x), SPY
    Hold: DTO(-2x oil, down 11.67%), TZA (-3x, down 0.87% )

    I suppose this also might pass for technical humor: DTO is down 11.67% since the buy with a HOLD signal still. Not sure how far it can go down before AmericanBulls comes up with some sort of sell signal.

    Comment: more market positive than yesterday
    Action for Monday: Possible buy of TNA

    • Thanks Earl of. Is kind of comical. That's the thing is anyone (except for me) can do well in a trending environment but once that changes people don't know which way to go.

  19. GS is dancing with both grey & purple lines,
    GS likes to gap around it's grey containment pt.
    if GS closes below those 2 today, the open on monday will be crucial, I've seen the operators throw the algos off by closing below containment only to gap above it the next day

    HOD & LOD should be in on the $SPX so that's good news for the bears as we'll close above 1171.23

  20. good eyes diablos, I saw it too yesterday
    If $SPX ever prints 200 run for the hills, all hell will break loose
    I'll be running for the hills when $SPX has a 5 in front of it

  21. IYR looks like it's going on to it's 6th consecutive lower close than open

    I had to go back 666 trading days to find it's last occurrence of 6 consecutive lower closes than opens, that sequence terminated @ 6

    in the last 777 trading days, there was 1 occurrence where IYR had 7 consecutive lower closes than opens

  22. I would think that if we close around here or slightly higher, people will be afraid to short over the 3 day weekend. So, I think that makes for a more probable bearish Monday but who knows.

  23. I watched it trade between 16.09 and 16.10 (never below) at the close but let's see what the final print shows.

  24. i generally have to wait until the following morning for the final number between various data sources

    they play these games on the SPY all the time too

    the operators play games so the algos aren't in AH taking inventory

  25. Carl at day’s end:

    1165-1176 estimate for today (11 points)
    1166.25 -1177.50 actual today (11.50 points)
    Good enough

    Trades:
    no trades today

    Grade: C didn’t lose any money

  26. Gcocks,

    Some days, it seems that not losing any money is sort of a victory. But Carl is pretty good, so the bar is higher for him 🙂

  27. Monica,

    He nails it some times. It must be really hard to do, because some days he really misses. Unseen forces amuck.

  28. I joined Red in his put spread. So now I am short up to the wazoo. Red and I will be adding a shift at McDick 24hr drivethrough window starting this weekend.

  29. lol, McFlurry please

    the good news for the bears is the setup on AAPL daily says Monday is down

  30. Just got back gang. I had to leave to do a job about 1-2 pm. Did I miss anything? Are we crashing next week? Man… I hope so…

    I bet the farm last time, and have been living on the street since. This time I sold the wife, kids, and dog. Got $6.00 for the dog (he was a good dog. I'm going to miss him). Got .60 cents for the kids (they are just too lazy these days). Got .06 cents for the wife (the loan shark said she's too worn out now).

    So, I took my $6.66 and shorted with my last breath. At least I won't lose much this time….

    😀

  31. TNA opened up 2.4%. Gap was filled. TNA was up 3.9% at the high, and closed up 2.6%.

    We are now in a Full Moon Trade, which tends to favor TNA.
    AmericanBulls had TNA with a WAIT signal yesterday, so this trade was in cash today.
    Will buy TNA when AB has a confirmed BUY signal (which might be Monday morning)

    Volume for TNA today and the other days this Holiday Week were the 4 lowest of the last 18 days.

    $RVX (VIX for $RUT) was down 0.7 % today with TNA up 2.6%. No divergence.

    TNA has now been up 3 of the last 7 days. Chop. Neutral for TNA.

    The high for TNA four days ago was $58.23, the highest TNA price since November of 2008. The high today was $56.65, 2.7% below that high.

    Ultimate Oscillator for TNA fell from 39 to 37 today, a divergence as TNA was up 2.6%. UO has been below 50 five of the last six days. Indicates (screams) weakness for TNA. Bad for TNA.

    MACD on the monthly chart crossed over downwards five days ago and is moving down. Bad for TNA.

    Bollinger Bands for $RVX (VIX for $RUT): today’s white candle closed mid way between the Bollinger mid line (20 day MA) and the top band, somewhat above an area of congestion. MACD has crossed from below and is rising. Looks like $RVX might be rising. Bad for TNA.

    Bollinger Bands for $RUT: The small white candle for $RUT is in the congestion area. The top Bollinger band is falling, and $RUT seems to be in a mature topping formation. MACD has crossed down. Bad for TNA.

    Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s black candle is at the bottom of the congestion area. The upper Bollinger Band is rising. Looks like the topping process is continuing. Bad for TNA.

    TNA had a lower high, lower low and much high close – bad for TNA.

    Money flow for the Total Stock Market was $1,809 million flowing into the market. Bullish – good for TNA.

    I will post the AmericanBulls candlestick interpretation a bit later.

    Overall, it looks bad for TNA for Monday.

  32. $DJI currently has 5 consecutive higher weekly closes than opens

    in the last 249 weeks, 4 out of the last 6 times $DJI had 5 consecutive higher weekly closes than opens it provided a reversal

  33. $VIX now has 8 consecutive lower weekly closes than opens

    In the last 249 weeks, VIX has no sequences longer than 8 consecutive lower weekly closes than opens

    1 occurrence of 8 which terminated on 11/13/06

  34. The Daily view from Americanbulls

    TNA had been a WAIT, but was up today and now has a highly reliable BUY-IF signal (possible buy Monday morning).

    The last sell was at $55.61. TNA closed today at $55.95, up 0.6% since the sale. The candlestick today High Wave (indecision in the market). The last two candlesticks formed a highly reliable bullish reversal: Bullish Kicking Pattern.

    TZA remains a HOLD. The buy price was $7.04. TZA closed today at $6.98, down 0.86% since the buy. The candlestick today was a doji (dug-of-war between the buyers and the sellers).

    I suppose this might pass for technical humor: It’s quite possible, should TNA qualify for a BUY tomorrow, that AmericanBulls might be advocating the ownership of both TNA & TZA at the same time.

    Two recent TZA Buy signals have failed and may perhaps serve as a warning:
    Buy at $7.33, sell at $7.14
    Buy at $7.11, sell at $7.05
    Buy at $7.04, now down 0.86%

    For that matter, recent TNA Buy signals have also been uninspiring:
    Buy at $55.36, sell at $55.43
    Buy at $55.69, sell at $55.63

    Summary of $RUT based ETFs & a few popular ETFs (Market positive):
    Wait: DRV(-3x), SRS(-2x)
    Hold: DRN(3x, down 1.2%),

    Market Transition:
    Highly reliable SELL-IF (2nd Day):DIA, QQQQ, IWM(1x), UWM(2x), [all Bearish Kicking Pattern on the 1st day]
    New Highly reliable SELL-IF:RWM(-1x), TWM(-2x) [ both Bearish Kicking Patterns ]
    New Highly reliable BUY-IF: TNA(3x) [ Bullish Kicking Pattern ]

    Market Negative:
    Wait: URE(2x), IYR(1x), SPY
    Hold: DTO(-2x oil, down 11.67%), TZA (-3x, down 0.87% )

    I suppose this also might pass for technical humor: DTO is down 11.67% since the buy with a HOLD signal still. Not sure how far it can go down before AmericanBulls comes up with some sort of sell signal.

    Comment: more market positive than yesterday
    Action for Monday: Possible buy of TNA

  35. Thanks Earl of. Is kind of comical. That's the thing is anyone (except for me) can do well in a trending environment but once that changes people don't know which way to go.

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