Bear Funeral…

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No Post For Friday Gang.  I'll have the weekend post up by late Sunday Night, and I'll do a video too.  Go Enjoy The Weekend.

How many bears got wiped out today?

The market rallied up today on NO news at all.  However, all the technicals did point for a possible breakout, but I sure didn't think it would be so large.  That means tomorrow will most likely be just a pause day, with little movement in either direction.  I'd lean more toward a small pullback, as we hit the 200ma on the spx and dow.  The market rarely pushes through on the first hit of a major trendline.

I believe the target area that the market is trying to go to, is the 1120 spx, and even possibly the 1140 spx.  Will it get there?  It's hard to say for sure.  There are lots of road blocks along the way, that could stop it dead in it's tracks.  The 1120 area is the gap fill area from May the 20th, and the 1140 area is just under the left shoulder from early January of this year.

So for tomorrow... it's anyone's guess.  Since it's a Friday, and we are going into a 3 day holiday weekend, I don't expect much volume to be traded.  That will of course favor the upside.  But, that doesn't mean the market will have enough energy to pierce through all the overhead resistance.  That's why I'm just expecting a flat or "pause" day, with not too much action on the up or downside.

This move up today was probably a "C" wave, or a "3"?  I'm not a Elliottwave expert of course, but just about any trader would probably agree with me on this call.  So tomorrow is the day to lock in your positions for next week... depending on whether you are bullish, bearish, or just plan on sitting in cash to be safe.

Red

830 COMMENTS

  1. SPY Thoughts:
    – H&S is panning out – target ~114-115
    – Fib retracements 111.17 (38.2) (also 13ema), 113.21 (50), 115.26 (61.8)
    – 115.26 = 61.8 fib = left shoulder !!

  2. One thing about Bollinger Bands on the monthly Chart.

    We did not hit the upper BB at 1286. If we close below the Middle BB at 986 then the odds are that we hit the LOWER BB, at 739 BEFORE we hit the upper BB again.

    • Thanks, Ben! I cannot conceive of hitting 986 today, but I'll put the stops in anyway.

      Thinking Tuesday will be down, and bottom will be 6/3 or 6/6.

      Today we might be sweating.

  3. UK market is making an H&S this morning. We should join them at about 1103-5, drop to 1095, then back up to 1103-5 (or not) to end their day, from which we proceed to 114.40 (or not) to make our day.

    Every day is like a Chinese menu.

  4. Carl’s morning call:

    June S&P E-mini Futures: Today's range estimate is 1093-1110. I think the low at 1036.75 ended the drop from 1216. The market has broken above the 1089 high of its recent trading range and this means that a move to 1300 is underway.

    1096.50 – 1106.75 range last night (10.25 points, 40% of normal)
    1093-1110 estimate for today (17 points)
    average actual range last 10 days has been 27.0 points

    1103 currently, so estimate is -10 to +7 from here (neutral)

  5. Well i still have a small posittion in TZA and typ. And di not move long as I had to leave the computer for a while.

    May ick up some sso on a drop today to get ready for next week. It seems the bulls have some control and that Anna 1140 target is becoming probable.

    But mostly cash

  6. I think that the 1150 area will be difficult to clear and expect some type of tail off that area. In addition to the 50 EMA there is also a major gap at the $115 area.

    Its possible we get rejected near there…come back down to the neckline…form some positive divergence and then move towards the 1180-90 area and hopefully continue on with a huge burst to get to new higher highs.

  7. Been gone all morning. It's been a pleasant few days (not) but I am still short. My guess is they take this thing up into the close but I will stay short because one really never does know, does one?!

    • Not much going on today Monica…

      I expect just a lot of sideways movement, but no real trend either way. We should go down next week. I'm staying tight too.

      • Red, I wouldn't be surprised if they ramp it into the close again but I a staying put (literally). I'm not going to watch.

        • It is ok if you know the worst case scenario. The good thing about buying options is that you can't lose more than what you put in.

          You can't always close your eyes and walk straight out of a minefield. 🙂 But if you are riding in a mine resistant armoured car, your chances are better. lol

          • yes. of course the difficulty with options is that even if you are right, if there is too much sideways movement or the action takes too long to play out, you lose all your capital. There really is no easy solution.

      • Long term charts are still bearish 10 20 days below 50 and still down.

        iam debating on whether to add to my short position s in this weakness??

        • Market's acting weak either making a bull flag or starting to tank, hard to tell.

          I sold a little ETF equity (less than 10%) to make room for puts purchases and to preclude any possibility of a margin call if we go higher today. I hope this wasn't a mistake!

        • Tuesday could be another up down Jim, but the week as a whole is very bearish. I seem to buy my positions at the wrong time too, but the trend for next week is still down.

          But, I can't advise you on whether you should get a short position today, or take a chance on another up day on Tuesday. It's hard to say, as some really negative news could be realized over the weekend, and trap all the bulls… which means Tuesday would fall hard, giving you no chance to get short.

          • I do not take opinions as advice and i like listening to any opinions.

            I have a hard time seeing a bounce up to 1140 as many have called for w/ these charts but i sue as heck did not see yesterdays other than it was an oversold by in IMO.

            i have made my biggest profits in shorts buying into weakness and strength. Of course at some point that works against you.

  8. SC, if you are out there, can you tell me where the teal line resistance is now on the 60 min? I tried to figure it out yesterday but I could only chart the 100 weighted MA with 60 minutes on the 10 day chart and I'm not sure that is the right way to do it?!

    • I suggest putting a stop at 1089. It will be very bearish if we go below 1090 today.

      • I haven't figured out Carl's plan for stops. I've seen 3 point stops, 5 point stops, and one ugly 19 point stop. But he never says what his safety plan is.

        • Didn't mean to mislead you. Carl is Carl Futia. He has a blog of his own, and posts his trades and his outlook.

          You can find him — just Google Carl Futia

          • Ah, OK. I was curious about your TZA/TNA posts and wondered if that was you.

            Read your profile and see you trade TZA/TNA. I've gotten some TZA equity and options, very vibrant right now! Maybe not so much later. 🙂

          • I'm all cash — the overnight swings these days are too much. Looking for an entry into TNA.

          • Right now is good is you are a bull, but I am not a bull today. I think we are going to fail 1105, which is why I suggest the stop. It would be a good play.

            We may rally to 1140, but I am certainly not a bull after that.

  9. I think 114 will be a critical area…. however, because we had such a strong move down and everyone will be eyeing that area….I believe we will see higher highs.

  10. There were several large (1 million plus) orders that went through on the spy yesterday in afterhour. They were around the 107 spy level. I wouldn't be surprised if they didn't dip down close to that area today on a stop sweeping mission.

    Of course if they do, I expect a rebound by the end of the day. But, that might not happen until next week? It's hard to say.

    • Saw one of those, anyway, and it was on a downtick.

      Could have been scooping buys or sells, hard to say. That's a lot of shares.

      • It should would clear out all the new bulls from yesterday, if they dip down that far today. They cleaned house on the bears… why not clean house on the bulls?

        • I just thought they would squeeze it into the close to get everyone long for next week. Hmmm. Maybe they take it down and bring it back up to even keeping everyone guessing.

    • CPCE – means how many calls to how many puts so 1.6 calls for every put – is that right … so people overly bullish ?

        • That guy is obviously a bull, and he doesn't trade options either. Not my trading style. I'll stick to short term moves and try to play both sides. Right now I'm still a bear until I see a lower low.

          • His label and opinions mean nothing. It's the data on that chart. I didn't want to just grab his chart. So I linked to his article to give him the credit.

          • That's cool…

            You could have posted both a link to his site, and his chart if you wanted too. I like to promote other people too. After all, it's the least I can do since I borrow their charts all the time.

            🙂

          • I could too SC, but I'm like you… lazy. Why bother, when there are so many good chartists out there that don't seem to mind if you borrow their charts.

            I always put them on the blogroll and promote them when I can. The Chart Pattern Trader and Cobra are my two favorites. Both very good at what they do.

            Lot's of others too, and I have them on my blogroll as well. It's great to look at all the different charts, so you don't miss a trendline or something. It helps you see the big picture.

  11. We may have just tested the neckline of the inv H&S measuring to spy 114 … depending on if we turn from here …

    • We are trying to hold on to the neckline. But, the 60 minute chart is losing steam and about to turn back down. Hard too know if this will hold of if people will sell into the close?

  12. What do you guys think? Is the wolf pretending to be limping or is it a real breakdown?

  13. Conveniently stopping on lower TL of rising wedge.

    The crowd oohs and aahs.

    Like a tightrope walker dropping his pole.

    • A miraculous recovery: the tightrope walker is now reading a book and brewing a cup of tea while balanced on a chair.

          • LOL. I'm feeling sarcastic today.

            The man behind the curtain is bellowing and banging pie pans but I'm on the right side this time. I THINK. You can never be sure until everything's over and you're sitting in cash again.

  14. Not what i expected. Cap vision is showing a hard break down next week.

    Yes i am perplexed

  15. That was a pullback from the resistance (a pullback from the first attempt which can usually be expected) and a buy signal.

  16. The 60 minute chart is rolling over now. I doubt that too many traders will hold their long positions into the 3 day weekend. Gap window is at 108.88 on the spy, and seems like a likely target to be hit today.

      • It will be out of the channel in a hurry if it doesn't close over 1100 by 2:30.

        Not that it won't; it's all drama.

        Going to set my cell phone for alerts and go cut the grass. 🙂

        • In afterhours last night, two large orders went through of over a million shares each. One was about 106.88, and the other was 107.17 spy. Gap fill is at 106.88…

          • I saw that it said the low was 106.80 but I couldn't find that print (although I did see the 106.88 one). I saw multiple prints at 107.2095.

      • although dow went up till 10210 levels, it is coming down as you said let's see were it ends

  17. The acrobat falls, but impossibly reaches out with a slender hand to grasp the wire.

    C'mon bears, somebody smack that ***** down!

  18. where is anoopsan's new chart. He has been given a job, and he is slacking. Hurry buddy, we are waiting.

    anoopsan's chart, cant live without it

    • Interesting that it is still there and check out the volume for yesterday relative to the drops. on the daily Dow it poked above the 10 day but has dropped back and all averages are still down. in fact the 10 day has not even turned

      • yes jim as long as the price does not cross the recent high or 10250 levels it is negative

    • I am glad that first and last 15 minutes of each day will be immune to the new trading regulations. Plunging is best left to professionals.

      God bless heroes like Ben Bernanke and Tim Geithner, who put it all on the line for us every day.

          • Well there you go then. The correction will be over by June 15th, and they would put in the safety measure then, while they rally the market back up for a month or two. LOL

          • but correction will be over june 25th no? And, if they ban short sales, what happens to options? Aren't the underlying contracts based on shorting?

          • Writing naked options is supposed to be illegal. It is similar to shorting in that you must borrow the stock if you don't own it.

            Haven't studied in detail, figure I'll just take it as it comes.

          • My options aren't naked, only I am! Just kidding!
            Anyway, I know they'll find a way to screw me somehow when/if I am in the money 🙂

          • LOL.

            Got to trade while velocity is terminal. The triggers ought to work pretty well, though if you get a chance, manual is better.

        • Big thing will be to suspend trading when it gets violent, except for beginning and end of day.

          • Possibly banning short sales unless you own the stock. How cool that works out for the professionals, and protects us, of course.

        • Sometimes i get mesmerized by the short term charts and forget to look at the longer term charts that really have not changed much. All yesterdays bounce did was peak above the 10 day average w/. Barely peaked above down trend line and closed lower than it .

    • Our financial patriots at work. 😀

      Hope you got that stop, Pez.

      You can check into after-hours trade if you are stuck.

        • I believe in God, but I also believe there are dirty human hands all over the stock market. It will go up or down, depending on how the house is stacked.

          Historical pattern is it will plunge bad. Look at late 2007 for examples.

          We could also rally dramatically, won't know until Tuesday. That's why I'm sweating out my position, because I don't want to miss the drop.

          If there is one. 😀

          • You and I will be fine Rip. Have a good weekend and don't worry about it. Now, I remember that someone said last time they banned short selling, there was a big plunge in the market (since there was no one to run and cover shorts). Maybe that is there intention as the bottom of the market should be June 25th.

          • There may be a rally Tuesday, or it could dump. If we rally Tuesday, we dump Wednesday.

            I will have stops set pretty high, so that only a real rally can take them out. The 'teal line' does get violated by 25 points sometimes.

          • Yes, the short selling ban worked out badly, except for the foxes. 🙂

            have a nice weekend!

  19. Carl at day’s end:

    1093-1110 estimate for today (17 points)
    1083.25–1106.75 actual range today (23.50 points )
    Market was 4-9 points below Carl’s range.
    For the past 10 days, average actual range is 26.9 points

    Trades: In /ES at 1096.50, out at 1091.75 (loss of 4.75 points)
    Grade: D (lost some money)

    In the past 10 trading days, Carl has taken just two trades, a loss of 12 points total.

    • Tell Carl, if it's any consolidation… I know exactly how he feels. While he was doing well in this Bull market up, I was of course… losing my a@@. LOL

      But seriously, I wish him well too. It's a tough market for both bulls and bears right now.

      • Simply uncanny how this market moves all over the place, and buying low and selling high is so hard.

        • I note that $vix closed a gap today. There are no gaps above, but one gap below that will get filled. Eventually.

          You might try drawing a trendline chart on $vix, connecting the bottom of the white candle during the 3rd week of April to bottom of the white candle from the 4th week of may. I wonder if there is a trendline there that extends up and the last 3 candles on the $vix broke below it, and this is a backtest of that line.

          • $VIX has a 7-10 point range some days, or possibly only 1.5 points.

            The back test would need to move 4 points — child's play for this maniac index.

            Charts in the mail.

  20. We are now in a Full Moon Trade, which tends to favor TNA.

    TNA opened down 0.8%, and the opening gap was filled. TNA was up 0.3% at it’s high, and closed down 3.77%.

    AmericanBulls had TNA with a Hold today after it’s buy yesterday. TNA was down today, and is a possible but unlikely sell for Tuesday. Since that buy at $47.52, TNA is up 1.09%.

    Volume for TNA today was 16% above it’s 1 month average. Good for TNA.
    Volume for TZA today was 25% below it’s 1 month average.

    $RVX (VIX for $RUT) closed up 3.3% with TNA down 3.7%. No divergence.

    TNA closed yesterday above the previous 5 daily closes, and the lower close today repeats that. Good for TNA.

    The recent low for TNA was 3 days ago at $38.94. Today’s low was $46.87, 23% higher. Good for TNA.

    Today, Ultimate Oscillator for TNA fell from 52.2 to 50.3 (-1.9) while TNA was down 3.7%. No divergence.

    MACD fastline is < 0 rising, slowline < 0 falling. Seems to be forming a bottom. Good for TNA.

    Bollinger Bands for $RVX (VIX for $RUT): Today, $RVX rose to close near the Bollinger mid line (20 day MA). The fast MACD line is pointing sharply down, the slow line is falling. Good for TNA.

    Bollinger Bands for $RUT: Today, $RUT had a small red candle –not much change. MACD fast line is rising & slow line is falling. Neutral for TNA.

    NYSE Down volume was 4.8 times the up volume. Bad for TNA.
    TNA had a higher high & higher low & lower close (Neutral for TNA)

    Money flow for the Total Stock Market:
    $ 3,708 million flowing into the market 2 days ago.
    $ 610 million flowing out of the market yesterday.
    $ 792 million flowing into the market today.
    Good for TNA.

    I will post the AmericanBulls candlestick interpretation a bit later.

    Overall, Good for TNA for Tuesday.

  21. The Daily view from Americanbulls

    TNA was an Hold for today, but closed down 3.8%, and is a possible but unlikely Sell for Tuesday.

    TZA was a Wait today, but closed up 3.9%, and is a possible but unlikely Buy for Tuesday.

    Of the stocks & ETFs I follow, these are to hold on to:
    GLD (gold), UGL (2x Gold)
    SPXU (-3x $SPX)
    QID (-2x QQQQ)
    DXD (-2x DOW30)

    The list to avoid:
    USO(oil)
    AMZN
    QQQQ, QLD (2x QQQQ)

    The following are possible (but unlikely) buys tomorrow:
    UUP(US Dollar)
    RWM (-1x $RUT), TWM (-2x $RUT), TZA (-3x $RUT)
    SRS (-2x RE)
    SCO (-2x Oil), DTO (-3x oil)
    ERY (-3x energy)
    FAZ (-3x Financials)
    DZZ (-2x Gold)

    The following are possible (but unlikely) sells tomorrow :
    IWM (1x $RUT), UWM (2x $RUT), TNA (3x $RUT)
    SLV(silver)
    UCO(2x Oil)
    ERX(3x energy)
    DRI
    GS
    SPY

    The following are quite likely buys tomorrow:
    IYR(1x RE), URE(2x RE), DRN(3x RE)
    AAPL
    DIA
    EWG(Germany)
    EWQ(France)
    EWU(England)
    EWX(emerging mkts)

    The following are quite likely sells tomorrow:
    GOOG
    DRV (-3x RE)
    EPV (-2x Europe)

    Summary: Transition to Bearish
    New Sell today on AMZN, QQQQ, QLD (2x QQQQ)
    New Buys today on SPXU (-3x $SPX), QID (-2x QQQQ), DXD (-2x DOW30)

    Action for TNA or TZA for tomorrow: Possible but unlikely Buy on TZA, Possible but unlikely Sell on TNA

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