Weekend Update…

By Red, on May 30th, 2010

Does the Bull get his old job back?

The market closed the month of May out, as the worst it’s seen in 70 years. Does that mean June is going to be just as bad? I doubt it, as I do expect a rebound to happen this month. From what level is the question? Is the current 1040 spx low the starting point, or do we still need another low first… before starting a serious rally?

In these video’s, I’m going to explore both bullish and bearish counts, as both are possible at this point. From a technical point of view, the market is looking very bullish right now. The daily chart is starting to turn back up, the vix is overheated, and the dollar is looking like it needs to pullback some and give the euro a nice bounce.

But, we all know that looking only at the technical picture will get you burnt sometimes. You must also include other things, like the news for one. Markets can stay overbought or oversold for longer then you might expect them too. I’m going to cover the news factor too, as I think that will be a big mover of the market next week.

One thing to keep your eye on is the announcement that France is now warning on their credit rating. That, plus the ongoing oil disaster, in which the latest attempt to fix the problem failed over the weekend. There are still many things that can spook the market, causing another sell off to happen.

So yes, the technicals are pointing for a relief rally, but since everyone and their brother is now expecting the same thing… what’s the likelihood that it’s going to happen like that? Most chartists now have us going back up to either 1120 or 1140 on the spx, and then another wave down.

That’s the part that makes me wonder if it’s going to happen like that? The market usually doesn’t allow the bulls and bears to profit, by entering and exiting their long and short positions at per-forecasted targets. It fact, it usually likes to trick them both, by trapping one in their position, and not allowing the other one a spot to get a position.

Regardless of whether you are bullish or bearish, both are usually taken to the cleaners in this wild casino game they call the stock market. I know that most bears were squeezed out on last weeks’ 300 point up day. The bulls didn’t see that coming either, and probably missed the ride up too. But, I think bulls are on board now, as they all see the Inverse Head and Shoulders pattern that should produce a nice 50 point up move, to about 1140 spx, should it play out?

The bears see the pattern too, and are probably sitting on the sidelines in cash… too afraid to short from the 1090 area that we are currently at. They are waiting to go short at 1140, at the same point the bulls will close out their longs. Seems a little too easy for me to believe that the market is going allow the bulls and bears to profit by a move up to 1140, or even 1120 spx, as others have as an upside target.

If I were the market maker, I’d gap it down on Tuesday, trap all the bulls, and keep going lower until I put in another lower low… not allowing the bears a good spot to get short on, or the bulls a bounce to get out on. But, I’m not the market maker, so I don’t know what will happen on Tuesday?

I will say this… if the market really does want to go up to the 1120 or 1140 area first, it needs to gap up on Tuesday to get above the current resistance levels that are currently holding it back. It could very well do that, unless some worst then expect news comes out before Tuesday.

Most of the week doesn’t have any really important data or earnings, until Friday’s jobs data. That should be a market mover, but which way… up or down? If I am to think like most retail traders right now, I’d suspect that most people will think that the data will be bad and cause more selling.

But, we all know by now that the government always lies on the data anyway. So, a better then expected number could rally the market instead of causing it to sell off. I suspect that the market will be going down into the Friday data, and will turn back up and rally on the news… which would trap a lot of bears, should the market be dumping hard into that date.

This is all just guessing of course, but again… just think what is it that most people are expecting next week? Most are looking for a positive, bullish week. A gap down on Tuesday, and continued selling into the end of the week, would put a bearish taste in everyone’s month. The bulls would become bears, and they would all be expecting an even bigger sell off on the jobs data.

Of course the opposite is also true, if we rally into Friday. At that point, I’d expect bad numbers and the market to sell off, after reaching the forecasted 1140 or 1120 area that everyone is now expecting. But again… how often does the market do what everyone expects? Just food for thought… for all you bullish folks out there.

Red

P.S. Here’s a interesting audio from Larry Pesavento. Just click on his name to go to the website, or listen to just the audio right below.

Rollercoaster Ride...

Phoevos

Good thoughts. Indeed the market bias is for an up week to 1125 – 1135. However, my thoughts are like yours-namely the market is there to surprise; especially after reading this:

http://www.mmacycles.com/weekly-preview/mma-com…

http://www.reddragonleo.com Red Dragon Leo

I read that weekly preview too Phoevos…

It's likely to surprise everyone, as the market is prone to do that. Everywhere I looked, it seemed that everyone was expecting 1120 on the falling channel scenario, or 1140 on the inverse head and shoulders. I guess we'll see on Tuesday which one plays out….

anoopsan

US DOLLAR Index will face resistance
http://niftychartsandpatterns.blogspot.com/2010…

Thank you

http://www.reddragonleo.com Red Dragon Leo

San,

You sure do cover every chart. Keep up the good work, and try to join in on the conversation sometime, if you have the time.

Thanks

anoopsan

Since i am trying to post forex us and indian markets i am not able to give prompt reply to anyone.

http://www.hotoptionbabe.com Anna

Redster! nice lonnnnnnnnnnnnnnnnnnnnnnnnnng post LOL

same page and looks like a gap up tomorrow the EUR needs to work off a bit of oversold condtions

http://hotoptionbabe.com/blog/11-another-week-w…

http://www.reddragonleo.com Red Dragon Leo

Don't let it run up too far. Let's put a leash on the bull… OK?

http://www.hotoptionbabe.com Anna

I think if it can rally past 1100 then 1120 is in view, but won't be a very long rally

http://www.reddragonleo.com Red Dragon Leo

I'll take a nap when it's at 1120, and you call me when we hit 988… OK?

http://www.hotoptionbabe.com Anna

heheh come on over we are chatting in the hotoptionbabe.com chat room (everyone has withdrawals)

bob a

Hey Red, what up my friend? I know, we've only exchanged a few thoughts, and I'm already calling you my friend. LOL. I've been out of pocket for the last few weeks, as I've been in Vegas on business (no gambling for me, I do enough of it in the markets!). I haven't had time to follow the markets closely, but still profited from the slide, which was great. I'm still short, and hope to close my position soon. though futures are looking positive right now. oh well.
actually, the reason i'm writing this note is because a week or two ago, I remember reading (quickly) where you apologized to those who were upset at you for calling market crash. I know you felt bad about how a few actually put lock, stock and barrell on your words. well, first off, I think you do an exceptional job giving market summaries. EXCELLENT! with this being said, no one is perfect, and no one can call the market tops or bottoms to a 't.' and if they do, they're lucky. As for those who banked money on your words, well, as soon as they saw it wasn't working out in their favor they should have bailed, not blame you for their error. I know you felt bad, but you are here to simply give market commentary and analysis; and offer your opinion on which way the market will go based on your TA and other experience.
However, at the end of the day, we as traders and investors have to live and die by our decisions. We can't blame others for our losses. If we do, then I suggest those in the blame game should find something else to do besides investing, because they will get chewed up and spit out every damn time. Red, continue your great work my friend. And let the markets tank on Tues. Take care sir.

http://www.reddragonleo.com Red Dragon Leo

Hey Bob,

Glad you had fun in Vegas. I've been there 4 times myself, but never to gamble (I do enough of that in the stock market… LOL). I appreciate the complement too.

And yes… you are right, is it up to everyone else to make the decision to do their own trading. I can only present possible outcomes, and show which one I favor the most. Of course it doesn't always go in the direction I want it too… but that's life.

Tuesday is looking like it will try and gap up, to get over the current resistance that's holding it back. Maybe it will go up to 1120 or 1140, and then tank? To me, that seems to easy too forecast.

But, sometimes the market actually does exactly what you think it's going to do… go figure! LOL

bob a

Hey Red, what up my friend? I know, we've only exchanged a few thoughts, and I'm already calling you my friend. LOL. I've been out of pocket for the last few weeks, as I've been in Vegas on business (no gambling for me, I do enough of it in the markets!). I haven't had time to follow the markets closely, but still profited from the slide, which was great. I'm still short, and hope to close my position soon. though futures are looking positive right now. oh well.
actually, the reason i'm writing this note is because a week or two ago, I remember reading (quickly) where you apologized to those who were upset at you for calling market crash. I know you felt bad about how a few actually put lock, stock and barrell on your words. well, first off, I think you do an exceptional job giving market summaries. EXCELLENT! with this being said, no one is perfect, and no one can call the market tops or bottoms to a 't.' and if they do, they're lucky. As for those who banked money on your words, well, as soon as they saw it wasn't working out in their favor they should have bailed, not blame you for their error. I know you felt bad, but you are here to simply give market commentary and analysis; and offer your opinion on which way the market will go based on your TA and other experience.
However, at the end of the day, we as traders and investors have to live and die by our decisions. We can't blame others for our losses. If we do, then I suggest those in the blame game should find something else to do besides investing, because they will get chewed up and spit out every damn time. Red, continue your great work my friend. And let the markets tank on Tues. Take care sir.
bob a

oops, sorry for the double post

http://www.hotoptionbabe.com Anna

Hi Bob i fixed it for you

4caster

wow…what a revelation…So the market will go either up or down..hmm
That's really really REALLY unusual Oh..how about some sideway action ? Ok here it is, I bet the market will go up or down or sideways this week

http://www.reddragonleo.com Red Dragon Leo

What do you want… a crystal ball? Wish I had one…

anoopsan

Euro vs Usdollar moving in a channel with upside possibilities

http://niftychartsandpatterns.blogspot.com/2010…

Thank you
http://www.hotoptionbabe.com Anna

http://content.screencast.com/users/Annamall2/f…

Rip Van Trader

Anna be nimble, Anna be quick; you are something else.

Rip Van Trader

CPCI (index options put-call ratio) is rather high, which is bearish though we may have to sit through a Tuesday rally.

CPC (total put-call ratio) is crazy high, as not seen since July 2007 and February 2008.

Based on these, I think the low we are looking for is imminent though any Tuesday rally might be quite uncomfy. Good news is that German, French, and Asian markets rallied hearty today but are not looking so hot toward the close. Nikkei closing is a mystery; Yahoo is not showing it.

If the foreign markets fail backtesting Tuesday, then we can hope for a down day, possibly even a gap down at open.

If we do have a lower low soon, as in sub-1000, better liquidate immediately and buy anything long while we're down there, for a day trade. Though I expect a big rally to follow, possibly challenging 1220, it may take a couple of weeks to get it off the ground (following the patterns of '07 & '08). We may languish in the 1075-1100 area for awhile, so it may not be a good idea to buy call options right away. Around OEX might be better.

http://www.reddragonleo.com Red Dragon Leo

I'm with you Rip…

Not sure I want to go long yet, because of the vix working against you. Maybe a call spread?h

newbear

The VIX is still a long way away from hitting that false print of 24.

http://www.reddragonleo.com Red Dragon Leo

Yes Newbear,

The VIX is a long way from hitting that false print of 24, but we also have the false print of 1061 that hasn't been hit either? What if neither are accurate?

http://www.screencast.com/users/alphahorn/folde…

newbear

Maybe Anna can shed some light with her secret method.
http://www.reddragonleo.com Red Dragon Leo

LOL… There isn't any secret method to it. Some prints play out to the price level forecasted, and other prints only tell the direction the market is going.

Then there are also those prints that are simply late fills and mean absolutely nothing. Picking the real ones out is tougher then it looks.

So if Anna has a secret way to know which one's are the real one's, then she has a friend named Lloyd too. Maybe that's why she won't tell us how she's figuring it out? Hmmmm…

Never underestimate the power of a woman. She's a smart cookie, that's one thing I know for sure…
newbear

Smarts and her intuition are a deadly combo.

Rip Van Trader

Stochastics indicate that VIX is due for an intermediate correction, but it can set another new high even if STO is disintegrating. That's what I'm thinking will happen the next 2-3 days.

Rip Van Trader

Anything bought at sub-1000 ought to be a winner, but I expect a twilight period after the plunge and immediate recovery, while the market is trying to make up its mind which way to go. Calls bought at the beginning of that period will be likely to lose value and/or expire, IMO.

This scenario is based on my reading of CPC and how the market reacted in '07 and '08, could be totally wrong.

Israeli commandos attacked a Palestinian humanitarian aid mission today, which bodes ill for Tuesday. Not to imply that world political events have anything to do with the stock market, or vice versa, of course.

http://www.reddragonleo.com Red Dragon Leo

Here's an interesting article predicting the rise of the dollar until the end of June, and then a collapse on it. That would mean a big drop in the market too.

Could be that June will put in a bottom in the market, instead of a top, like I previously stated in my GD2 video?

http://seeker401.wordpress.com/2010/05/31/cnbc-…
Phoevos

It might go higher next week but I don't see conviction on the European front:

http://www.spiegel.de/international/europe/0,15…
http://www.reddragonleo.com Red Dragon Leo

Last resort will be to nuke the oil well..Obama sends nuclear experts to tackle BP’s Gulf of Mexico oil leak..40,000-100,000 barrels a day not 5000!!

http://seeker401.wordpress.com/2010/05/27/last-…
http://www.reddragonleo.com Red Dragon Leo

Earthquake watch is still in effect…

http://www.youtube.com/user/astrotometry#p/a/u/…

Phoevos

Re: earthquakes

http://spiraldates.com/

http://www.reddragonleo.com Red Dragon Leo

Interesting…

I find that turn dates are very useful when combined with technical analysis too. Looks like they got the April high date pretty accurately.

Phoevos

I am still not clear of how to use. The author's commentary refers to a turning point during last(this) weekend and then the graph shows the first peak in June 6th (another turning point). So, the markets go down until the 6th? or rally until then?

BTW the futures turned a bit negative. So, say, market goes down tomorrow. When is the best time to short? opening or later? usually the first hour is dangerous but if it gaps down it might stay down for the day….

http://money.cnn.com/data/premarket/

http://www.reddragonleo.com Red Dragon Leo

As I said in my video, I'm very bearish right now. I said that the market could gap up on Tuesday and run up to 1120 or 1140? At this point it's looking more like it's going to open down.

That means that we will likely sell until this Friday, and turn back up for a bounce on Friday and into next week. That's the turn date that website is talking about.

You still have to do TA's to see what direction you are going in when you are coming up to a turn date. If we rally into the turn date, then we would likely sell off at it.

But again, it's looking to me like we are going down until the turn date, then up. I seen one around June 3rd and the June 6th. That would be down into the 3rd, turn back up into the 6th, and then fall back down or trade sideways until the next turn date.

They are helpful, but I still lean toward TA's first… and if a turn date lines up with it, then it's just that much more likely to happen.
newbear

Another tool in the arsenal to better our odds.

monicadern

Red, I don't think we will have to worry about a move to 1120 or 1140 yet. Interesting link to earthquake prediction. Lot's of bad news “allowed' out this weekend. Oil spill, Israel “terrorist attack”. German president resigning, France credit issues. Seems like the end of the world is coming. . . . .

http://www.reddragonleo.com Red Dragon Leo

Yeah, I kind of thought that Friday might be the last up move before move selling. But, I tried to cover all possibilities in my video's. Looks like my gut wins out this time.

anoopsan

EURO VS USD MIGHT GET A BOUNCE FROM 1215000 AREA

http://niftychartsandpatterns.blogspot.com/2010…
Rip Van Trader

Very encouraging morning on FTSE; last Thursday and Friday they were above their 'teal line' (12dma is what I use for very short term containment) and pressing 20dma, today are back below.

“I've fallen and I can't get up”?
jimhobson

Futures are surprising.

You may see your gap down.
But my bet is the bulls pull it out today.
Earl of

Carl’s morning call:

June S&P E-mini Futures: Today's range estimate is 1065-1085. I think the low at 1036.75 ended the drop from 1216. I had thought that the “base building” process was over, but instead we have seen another break of more than thirty points. I believe the drop from Friday's early high at 1107 will end above the low at 1055.50 made late on May 26. Once the market stabilizes a move to 1300 will start.

1069 – 1096 range last 2 nights (27 points)
For the past 8 days, the over night range has averaged 24 points.

1065-1085 estimate for today (20 points)
1074 currently, so estimate is -9 to +11 from here (neutral)
http://crashthemachine.wordpress.com/ pezhead9000

“Looks like I picked the wrong week to quit sniffing glue” — Airplane the movie

http://www.reddragonleo.com Red Dragon Leo

Pez,

Are you long? I hope not, as I'm not expecting any large bounce to get out on.

http://crashthemachine.wordpress.com/ pezhead9000

Staying long term bearish until ~SPX 920 and short term trying to play potential bounces. However, I just got stopped out of some of the bounce play
jimhobson

This morning on CNBC a commentary talked about moving averages and how anyone that pays attention to them is bound to lose,

It was surprising as i believe the 50 is the only true trend for mid to long term

http://crashthemachine.wordpress.com/ pezhead9000

Reading Dr. Elder – when the 13ema is sloped downward play the short side. Dr. Elder combines the trend (13ema) with the MACD (momentum). Although, I probably just violated his rule w/ trying to play any bounce
http://www.reddragonleo.com Red Dragon Leo

I wonder if he'll be saying the same thing when the moving averages put in a death cross, and the market tanks? LOL What a smuck!

anoopsan

BREAKOUT STOCK XINYUAN REAL ESTATE CO
http://niftychartsandpatterns.blogspot.com/2010…
http://crashthemachine.wordpress.com/ pezhead9000

I take back what I said about god. There is a god and I'm being punished for being a money-changer
jimhobson

Are we going to fill the gap? Macd fell much harder than I expected along w/ RSi but prices are not showing a follow???

http://www.reddragonleo.com Red Dragon Leo

They certainly have been trying awful hard to fill the gap. They have been tanking the dollar to do it.

http://www.reddragonleo.com Red Dragon Leo

We are at a double top on the ES at around 1087, from 2am, and we have gap filled the SPY… now it's time to turn back down.

jimhobson

That last stick on spy 5 minute is pretty strong fill.

Nice job on the videos. i tend to think we are moving down based on long term charts.

Chart trader sees a stage 1 developing and still believes a run to 1150. hard to say. i am still short but holding off on adds.

AAPL Is on fire.

http://www.reddragonleo.com Red Dragon Leo

No question about it Jim… if they want to take it up to 1120, or 1140, they can. However, I think this mornings' gap down is a sign that today will be the high for the week.

jimhobson

Volatility is turning. This sis gaining strength. Go figure.

http://www.reddragonleo.com Red Dragon Leo

I think we all knew that this tape would turn back down soon. Lots of whipsaw action going on right now, but I still see another lower low coming… and probably by the end of the week.
SC

Jim, did you say you are a vet? Can you email me, DCSmartCoin at G mail ? Thanks

jimhobson

I tried via DCSmartCoin@gmail.com.

Is that correct?

SC

yes but can you remove that? Don't want net crawlers to snatch that and spam my email. My yahoo email gets 250 mails in the spam folders and another 300 in the inbox every few days. Don't want to repeat that with this one. lol

http://www.reddragonleo.com Red Dragon Leo

I fixed it for you SC… and I agree, always spell it out so spam bot can't pick it up when they crawl the net. I don't mind real people knowing my email, and sending me stuff, but I too get hundreds of spam emails regularly.
SC

thanks red.

I read that you said today HOD is the top for the week.. I really wish you don't look at it that way. That tends to cause your mind to freeze into a particular frame and has a tendency to cause you to ignore new signals. The HOD may be the HOWeek, or it may not. Best to have no forecast/prediction, and just follow the teal lines on the hourly and follow the market, whereever it leads to. Stress free and bias free… Hope that helps. I learned that the hardway. It is true when they say we are our worst enemies. I know I am my worst enemy. lol
http://www.reddragonleo.com Red Dragon Leo

Well SC,

There is nothing to say we couldn't go higher tomorrow, but I'm just looking at past history. We seem to have the high early in the week, and sell off into the end of the week.

But, I will admit that the daily chart is now turning back up, and could continue pushing the market up again tomorrow? However, I will remain short (I must like pain or something?)
SC

Ok. gotcha.

Pain is good. But moolah is better. LOL
jimhobson

Sorry iam not used to this stuff,
SC

No prob, jim.

Earl of

Carl has just revised his projected high of the day from 1085 to 1097.

To quote him: “This is very bullish action.”
wendel

We will be going back and forth…. up and down….. for the next few weeks.
Buy pullbacks. Then off to a new high.

The following week………HUGH plunge.

The next following week…..a 50% recovery bounce.

http://www.reddragonleo.com Red Dragon Leo

If the SPX gets the death cross of the moving averages… there won't be a new high. They'll be bounces along the way, but the new trend will be down. Just keep that in mind.

SC

The market is struggling at the teal line. Odds favour a breakout to the upside, and subsequently a retest of the April highs. But if it fails at the teal line, then it is going down. The market will do what it wants to do, all the models and predictions not withstanding. I hope the market would follow the models and make life easier for us. But I have learned my lesson. There is only one rule in this game: The market will do what it wants to do, and your best bet to survival is to follow its lead.

In short, my forecast models say we are going up, short term, and die when the snow comes. My trend models say the market is still deciding.

Sorry if this doesn't help anyone. I suck.

bensjoyce

where is the teal line now? emini s&p

SC

109.75

1093.5

Rip Van Trader

TZA looks like it is breaking out, just set a new HOD including pre-market.

Whoa.

jimhobson

Its interesting that r2k is leading the down move in a substantial manner. Is this the beginning of a flight from the little guys?

Rip Van Trader

Mmm, very possible. That would demonstrate that the fabled breadth is coming apart.

My short ETFs are taking off prior to any breakout in SPX. I am tempted to cover, lol.

http://www.reddragonleo.com Red Dragon Leo

VIX is up today, despite the markets' attempt to rally. What does that tell you?

jimhobson

They are only marginally up compared to a real trend change and can swing from these levels quickly. i do not get excited until they are above 12%.on way other the other.

http://pitch3.zstock7.com/ zstock, Pro Select!

OIH is getting pummeled. BHI go long, use a 36.2 stop.
jimhobson

Lunch is over here we go again
jimhobson

Money flow indicators today will be very interesting. Who will be selling into this ??

http://www.reddragonleo.com Red Dragon Leo

Very indecisive right now. The market can't seem to make up it's mind which way it want's to go? The different time frames are fighting each other as well. Regardless, I still see another move down coming by the end of the week.

http://www.reddragonleo.com Red Dragon Leo

Mr TopStep…

http://www.youtube.com/watch?v=fAkDDZmHkLg

jimhobson

Nice snapshot
jimhobson

i THINK WE GET TO 1093.

anoopsan

Dow jones hourly chart in a diamond

http://niftychartsandpatterns.blogspot.com/2010…

cheesgo

good chart, thanks

one observation, I just checked the other country's index, looks like that germany's DAX, Britain's FTSE and HK's HSI, they all tested their respective 20 day EMA yesterday.

SPX has not done that yet so far

anoopsan

Thanks for your comments. I saw the 20 EMA in daily chart. It will take a nice reversal pattern for SPX to cross the 20 day EMA

http://jaywiz.blogspot.com Jaywiz

Hi Red.
You have a neat assessment for June
The month is setting up as a typical tricky corrective pattern
see my blog for the Monthly graph

Primarily it shows;
3rd low
7th low
16-17 HIGH
25th & 30 LOWS
this should set the stage for a decent rebound in JULY till late in the month near the Full Moon
1040 COULD give way on WED AM, but rebound off like on a trampoline
7th might just close on that value.
Any rebound should be limited to 1100
EOM could be the MOST telling for DOW theory enthusiasts
Bes Wsihes
Jay

http://www.reddragonleo.com Red Dragon Leo

Thanks Jay,

I'm still looking for one more lower low, going into this Friday, and then a rise up all of next week. And finally another sell off into the end of the month, and around the June 25th date.

After that, I do see a rally up in July and August too. But late September looks to me to be the last major top, before a huge sell off the following months.

So it seems we are pretty close to thinking along the same lines. That's nice to know, as I've seen that you guys have been on top it lately. Glad to be on the same side.

Thanks for stopping by…

Red

monicadern

Hi all – hope you are all doing well. I am still short but have vowed not to look this thing so closely – sort of a memorial day resolution!

http://www.reddragonleo.com Red Dragon Leo

Hey Monica,

We are all just watching the market sweep up and down, until she decides which way she wants too go?

jimhobson

this day seems impossible to call. A sell off now may not be very good for the week.

I was thinking of a few long positions but now i am backing off. but not adding shorts either. Which i may regret

http://www.reddragonleo.com Red Dragon Leo

It really odd Jim, as the charts look bullish, but the mood feels bearish. Which do you pick? The charts, or the mood?

jimhobson

Agreed. i guess when volume at price spreads are this tight its just nothing. A flat day that is weak on any indication.

http://www.reddragonleo.com Red Dragon Leo

Finally… we broke that triple bottom! Can we get below 1077, as Mr. TopStep say's is the key support… which if broken will cause another round of selling to put in a lower low.

jimhobson

He called it but can the last 1/2 hour fend of the dip buyers??

jimhobson

Does not look like it.

Turbo Tim

Anoopsan did not post much today. Hope everything is ok

http://www.reddragonleo.com Red Dragon Leo

I think his has a day job too, which prevents him from hanging out all day like us.

http://www.reddragonleo.com Red Dragon Leo

Should bounce at the double bottom on the spy at 108.20 though… then fail, hopefully. And, the over night low was at 1069 on the ES. Could be a target in the afterhours or tomorrow?
jimhobson

r2k is leading the drop. TZA busting out
jimhobson

I just do not think there is enough happening here to give a good window.

its pure crap shoot.

http://www.reddragonleo.com Red Dragon Leo

Just remember what the TopStep guys said (which I agree with)… if we get below 1077, we will but in another lower low.

jimhobson

Well we are breaking hard below that. Question is what is the next low cause I am light on my shorts.

http://www.reddragonleo.com Red Dragon Leo

I don't know Jim? They may not let any bulls out, or bears in tomorrow?

jimhobson

Notice the RVIX is playing near the 12% area. Vix is lagging so this may not carry tomorrow.

jimhobson

These time frames are just blowing me away. The market continues to be the last 15 minutes of the day. i need to take a lesson from Monica and stay away.

unfortunately the weather sucks so i can't play.
http://www.reddragonleo.com Red Dragon Leo

I'm in cash now gang. I took advantage of that nice sell off into the close. I will reload short on a bounce tomorrow.

monicadern

Congrats Red!

http://www.reddragonleo.com Red Dragon Leo

Thanks girl… you're doing the right thing. Stay put until we hit a new low.

monicadern

Thanks Red. One thing I have learned is that there is no one right way to do it!

monicadern

Another fun day! Still holding my shorts.

http://www.reddragonleo.com Red Dragon Leo

We Monica,

Don't worry, I still think we will put in another lower low this week. I'm just swing trading a little. I'll be back short again tomorrow, on any bounce up. I seen a false print to 108.60 going into the close. Could be the target back up tomorrow?

monicadern

I wouldn't be surprised Red. For some reason I think tomorrow will be up but I stayed with my position because I don't have time to trade.

Earl of

Carl at day’s end:

1065-1085 estimate for today (20 points)
1068.50–1094.50 actual range today (26 points )
Market was 3-9 points above Carl’s range.

For the past 10 days, average actual range is 26.7 points

Trades: No Trades today
Grade: C (lost no money)

In the past 10 trading days, Carl has taken just two trades, a loss of 12 points total.
http://www.reddragonleo.com Red Dragon Leo

Look at this giant hole gang… it reminds me of the national debt.

http://news.taume.com/World-Business/World/brea…

monicadern

reminds me of my pocketbook!
AS2009

Looks scary…

jimhobson

FYI
Nenner update this weekend I forgot to post earlier.

S&P/Nasdaq
As mentioned before, cycles only project a low later in Jun
A close for the S&P below 1074, Nasdaq below 1830, and Dow Jones below 10100 will probably lead to a test of the lows
When our downside price target on the S&P was reached, we bought a few stocks
We have very strict sell stops in order to break even
The stops are closing price only
However, investors who do not want to risk any loss should keep them intraday
The stops are:
Cat 60
Apple 248
Intel 21.20
GS 142.50 (we are long call spreads so we are not in a hurry to close those)
The sell stop for GS is for those who are long the stock only

jimhobson

FYI
Nenner update this weekend I forgot to post earlier.

S&P/Nasdaq
As mentioned before, cycles only project a low later in Jun
A close for the S&P below 1074, Nasdaq below 1830, and Dow Jones below 10100 will probably lead to a test of the lows
When our downside price target on the S&P was reached, we bought a few stocks
We have very strict sell stops in order to break even
The stops are closing price only
However, investors who do not want to risk any loss should keep them intraday
The stops are:
Cat 60
Apple 248
Intel 21.20
GS 142.50 (we are long call spreads so we are not in a hurry to close those)
The sell stop for GS is for those who are long the stock only

BTW his Nasdaq is the NDX

jimhobson

the 5minute, 15, are in sink. the 60 19 day and 20 are still above 50. Close of 107.54 is out of bb on 60, 15 etc.

This could be a bloody week.
Earl of

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

TZA opened up 3.2%, and the opening gap was filled. TZA was up 9.3% at it’s high, and closed up 9.2%.

AmericanBulls had TZA with a possible buy today. Under the rules, the buy took place today at the opening price ($7.07). TZA closed at $7.48, with this trade up 5.8%.

Volume for TNA today was 13% above it’s 1 month average.
Volume for TZA today was 20% below it’s 1 month average. Not good for TZA.

$RVX (VIX for $RUT) closed up 15.4% with TZA up 9.2%. No divergence.

TZA closed today above 4 of the last 8 daily closes. No pattern there.

The recent (8 days) low for TZA was 1 day ago at $6.59. Today’s low was $6.79, 3% higher.

Today, Ultimate Oscillator for TZA fell from 45.5 to 45.2 (-0.3) while TZA was up 9.2%. ***Huge*** divergence. Bad for TZA.

MACD both lines are > 0 rising Good for TZA.

Bollinger Bands for $RVX (VIX for $RUT): Today, $RVX fell to touch & then rose to close above the Bollinger mid line (20 day MA). The fast MACD line is pointing flat, the slow line is falling a little. Good for TZA.

Bollinger Bands for $RUT: Today, $RUT had a long red candle – looks like it peaked 2 days ago and is now falling. MACD lines are both slowly falling. Good for TZA.

NYSE Down volume was 12.3 times the up volume. Good for TZA.

TZA had a higher high & higher low & lower close (Good for TZA)

Money flow for the Total Stock Market:
$ 610 million flowing out of the market 2 days ago.
$ 792 million flowing into the market yesterday.
$ 961 million flowing out of the market today.
Good for TZA.

I will post the AmericanBulls candlestick interpretation a bit later.

Overall, Bad for TZA for tomorrow.
Earl of

The Daily view from Americanbulls

TNA was a possible sell today, gapped down & closed below the open, prompting a sell at the open. The buy was at $47.52, and the sell at $46.60 – a loss of 1.9%.

TZA was a possible buy today, gapped up, and closed higher, prompting a buy at the open ($7.07). At the close today, this trade was up 5.8%.

Of the stocks & ETFs I follow, these are to hold on to:
AAPL
RWM (-1x $RUT), TWM (-2x $RUT), TZA (-3x $RUT)
SRS (-2x RE), DRV (-3x RE)
SCO (-2x Oil), DTO (-3x oil)
ERY (-3x energy)
FAZ (-3x Financials)
EPV (-2x Europe)
SPXU (-3x $SPX)
QID (-2x QQQQ)
DXD (-2x DOW30)

The list to avoid:
IWM (1x $RUT), UWM (2x $RUT), TNA (3x $RUT)
IYR(1x RE), URE(2x RE), DRN(3x RE)
SLV(silver)
USO(oil), UCO(2x Oil)
ERX(3x energy)
AMZN
GS
DIA
SPY
QQQQ, QLD (2x QQQQ)
EWG(Germany)
EWU(England)
EWX(emerging mkts)

The following are possible (but unlikely) buys tomorrow:
UUP(US Dollar)
EWQ(France)
DZZ (-2x Gold)

The following are possible (but unlikely) sells tomorrow :
GLD (gold), UGL (2x Gold)
DRI

The following are quite likely buys tomorrow: none
The following are quite likely sells tomorrow: GOOG

Summary: Very Bearish
New Sells today on IWM (1x $RUT), UWM (2x $RUT), TNA (3x $RUT) , SLV(silver), UCO(2x Oil), ERX(3x energy), GS, SPY

New Buys today on AAPL, RWM (-1x $RUT), TWM (-2x $RUT), TZA (-3x $RUT), SRS (-2x RE), SCO (-2x Oil), DTO (-3x oil), ERY (-3x energy), FAZ (-3x Financials)

Action for TNA or TZA for tomorrow: Hold TZA, Avoid TNA

Phoevos

What's the position on VXX?

Earl of

AmericanBulls has a VXX described as IPATH S&P 500 VIX SHORT TERM FUTURES

It's rated a Hold.
The buy was at $24.10, closed today at $30.19

You can see it at
http://www.americanbulls.com/StockPage.asp?Comp…

No subscription required for the simple lookups.

Phoevos

Thanks Earl.

The issue here is speed of reaction. Take for example ERX. American Bulls still has it a sell due to the big drop today. However, a speculative buying at the closing today @$25.79 would have already yielded a profit after hours. And one could sell in the morning in the $26-27 range. (by way of example).

BTW it's a good service; I am just making conversation here as to whether signals issued are truly timely vs. safe.

Earl of

I consider AmericanBulls to be a sledgehammer approach. Nothing subtle or clever.

Not timely or safe. No awareness of old or new news. Dumb as a rock.

In spite of all that, it does pretty well at times.
http://www.reddragonleo.com Red Dragon Leo

That's funny as hell Earl… Pure honesty there my friend! I guess that's why you don't subscribe to their service… LOL.
Phoevos

Good commentary from both Earl and Leo.

BTW, Leo why did you exit your short positions? Are you sure of even a small rebound tomorrow?

Any technical signals involved?

If you re-enter what's your favorite and why?
http://www.reddragonleo.com Red Dragon Leo

The market was pretty oversold, and I just didn't like my positions. I will re-enter in some June puts again tomorrow. Not sure yet what strike price, but I'll let you know tomorrow.

However, tomorrow will probably be the last day for a bounce in the market before a big flush. So, I'll be staying short until the end of the week probably. It depends on how far we fall down by then?

Turbo Tim

With Al Gore and his wife separating, wonder what is going to happen to our global warming project. After all he invented the internet

http://www.reddragonleo.com Red Dragon Leo

LOL, he might have “thought” he invented “the green project”, but truth is stranger then fiction…

http://www.granthammond.com/2010/homes/al-gores…

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