Weekend Update…

538
1383

Monday Update for Tuesday...

Red
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Bullish OPX Week?

Most option expiration weeks are bullish, and I expect this one too be so as well (barring another false flag event, or planned default of some country of course).  We are in the light volume season of the summer months now, and the market can easily be control now with a lot less money... aka Free Printed Money given to the PPT.

So, the question is... which way do they want to take the market?  I think they want to take it up for awhile, as the media is still very bearish (at it seems that way to me).  I'm looking for a small pullback early in the week (Monday and possibly Tuesday too), and then a move higher or sideways the rest of the week.

The daily chart supports a move up this week, but how far is anyone's guess?  Many say it will go to the next Fib. Level of 1085 or so, and others say about 1100.  I think we will go to 112.41, either by the end of this week or the next.  I think we are in a larger wave 2 up on the weekly chart now, and that would support a higher move up then just the Fib. Levels.

However, it could take 2-4 weeks to get up there... should it not put in a lower low on the histogram bar for the weekly chart to discredit this analysis.  The monthly is still bearish, which certainly confirms that we are moving down overall.  But, we should have rallies back up within the shorter time frames of course.

I'm not too good a counting elliottwaves, but if the weekly chart did complete a 5 wave down pattern, to form a larger wave 1 down, then we could be in larger wave 2 up now.  If so, then several weeks of grinding higher is going to be needed to shake off the bearishness that is still out there.

We already had one week of a rally, and this week up could be enough to satisfy a larger wave 2 up in that week chart, but it could drag out for a third or fourth week.  I don't think it will, but I do think that the 112.41 spy print will be hit before another serious move down will start.

If that target is hit this week, then I can see another larger move down starting the following week.  So, while I do believe we will close this week out positive, it might only get to either the 1085 Fib. Level, or the 1100 Level by this coming Friday.  That would mean that the following week would be needed to hit the 112.41 spy target (about 1120 spx).

On a shorter time frame, I think we could go down on Monday and early Tuesday, and then up into Friday.  The 1060 area would be a very shallow pullback, but with no selling pressure yet, that could be all we get?  The 1040 level is more likely, and should be the pullback low.  Then up to start the "C" wave up in an ABC move from the 1010 low.

For the bears, I'd wait until that daily chart finishes putting in a lower tower high on the histogram bars before shorting.  It wouldn't surprise me if we only went down to 1060, before ramping up higher into Friday.  There were probably some bears that went short on Friday, because we hit the 50% Fib. Level... which also makes me think they might push up with that last gasp (on the 15 and 60 minute charts) to 1085 Monday morning,and then roll over.

If so, then 1060 area is more likely the downside target, and then a move up into Friday.  If it rolls over at the open or even gaps down, then I believe 1040 is more likely the downside move for the "B" wave.  Personally, I'll feel much better on the short side once that 112.41 print is hit.  For now, the bulls have control.  The only thing next week that can move the market, is earnings... and you know how easy that is too make up.

It's not going to last for long though folks.  All this bullishness will be over soon, and the bears will rejoice again.  But for next week, the bears should take a vacation... as any move down is best left for day traders, not swing traders.

Good luck to all you bulls and bears out there...

Red

538 COMMENTS

  1. July 19 thru July 23 earnings, Dow 30 doesn't have too much upside. MRK for instance, I'd short that right now. JPM at 39, 41 is probably the short sell price.
    CAT,BA,DD, probably do great!

  2. Good Video, as usual, Red! I was all set to declare, Dow going to 11,800, before the video.
    I better just watch the tape, and play what's in front of me.
    I have 2 intriguing double tops. BRCM and FFIV. I think they are shorts.

    • Anything is possible I guess? But, the monthly and weekly charts are going to have too turn back up, or at least go sideways if the market is going to 11,800… which isn't looking likely right now.

      • I'll be happy if the Q's can stay in a 41.7 – 45 price channel, for the rest of July. VIX 24's. I don't know what to think about that at this time.

  3. I think the high was on Friday-10,200, Earning that are strong will not be rewarded and poor expectations will be the norm. It did not feel like a bottom, it does not look like a top, but it is, close below 1010 this week.

  4. The 60 minute chart has now crossed on the MACD's now, and the histogram bars are ready to go into negative territory. However, I think it will be shallow, as I stated in the video above.

    Since we went up to 1080 first, I'm thinking the 1060 area might be as low as we go? I'd like to see 1040 retested, but this light volume makes it hard too fall.

        • That's the point of the race. In a restaurant, buy a piece of blueberry cheesecake. Tip on its side and place blueberries at top. Pick your blueberry. First blueberry to the bottom wins (and its owner gets to eat the cheesecake). The last blueberry's owner pays for the cheesecake!

    • But there are a few telling signs for an Opex monday.

      RVIX is over 6% so there is selling at a brisker pace than the otrher indexes. Vix is very minor negative range in complete contrast to R vix.

      So i am wondering which will play catchup??

      I got stopped out of all TNA and SSO this am so iam looking at going back short in a small way to set up adds.

      this market has no conviction on the buy at the moment.

      • Agreed Jim… there is no conviction to buy. However, I don't see any conviction to sell either… at least not today. Maybe later in the week, if the earnings are really bad (mainly on the future outlook for each company), but for now it's slow as molasses.

  5. The rout is on. Just that the Dow and some averages are masking the action so far. Russell 2000 down 1.24% and NewYork Stock Composite has been weak all day. Solar eclipse yesterday to ignite the downmove. My best trading cycle extended a day to coincide with the solar eclipse top. The last solar eclipse in January propelled a sharp drop through options expiration.

    • Maybe? But somehow I just don't see another large down move this week. If you watched that video about the bearish sentiment I posted earlier, you'll see that we are at an all time high.

      Then you look at the amount of short interest for this month, versus longs, you'll see that the put way out number the calls. So unless they want to pay out on all those puts, I think the downside will be limited.

          • I do not know. You change you picture so often LOL! Are you a morning or evening person?

            I am into cardio so thats where I would be. If you remember Christopher Reeves he looks like my twin. Although he was my Dads height and I never made it that high 🙂

            I used to get stopped by little kids all the time thinking I was Superman.

          • hahhahah yes I do… but they are all me 🙂

            on the bikes or treadmills?

            I go whenever I can, sometimes late sometimes early 🙂

            C Reeves eh OMG!!!!

          • In my younger days, people used too say I looked like Bill Clinton (especially in the 90's, when he was in office). It got old too. Of course I'm younger then him, so it would be more like his son or younger brother.

          • Back in the early 80's, when I just out of high school, I had a buddy that was shorter then me by about 4-5 inches, with dark black hair and a mustache.

            I'm 6 foot with blond hair, and back then it was longer in the back. When we went out together, the girls would giggle and smile, as we looked like Daryl Hall and John Oates.

            Those were the days…

          • Yes they were! My Dad used to ask me why I was always the one who came home with the Black Eye. I used to say, well when you are almost 6'4 and 250 people tend to leave you alone.

          • I have long hair straight healthy shiney to my back!! 😉
            strawberry blonde and if I looked like FF at anytime that would be so awesome!

          • He is a nice guy. But I think that was a two way deal. He inherited a legacy from Dungy and played his ex team in the Superbowl.

            The stars were aligned. He could not hold it together.

          • Isn't that the truth I love Tony D he made that team and built it with his bare hands 🙂
            He was my favorite, let's hope for a better year this season!

            Go Bucs!

      • Well, I keep hearing from the bears how bearish everyone is. That has to be a contrarian signal in itself. There was a market ticker sense poll last week that had 50%bulls and that was last Monday before the market meltup. Breadth is 2 to1 negative almost on a doji day. That really isn't normal.

        • I agree with you Geccko. I think there is a lot of bullishness out there too. But, I guess there is many ways to measure the sentiment, so some others might show it bullish now?

      • You mean run it up to 112.41 spy? Yeah, with this kind of volume, they can gap it up over any overhead resistance levels… and then move up to the next level.

        I don't see any major news events this week to move the market. The earnings are for companies that don't have much of an effect on the overall market too. So, it's going to take some surprise event cause a big sell off I believe.

  6. Ticker Sense poll now shows 50% bulls 7% bears. It measures blogger sentiment. AAII poll had the scary numbers last week but they are a flighty crew and most must have been polled before the 7-7meltup.

  7. This one for Jaywiz too: A preliminary reading of .68 on 5day Trin. 5day Trin/Arms sell signal.

    • Last 5day trin sell signal in a down market was Feb 3. The next day the market dropped hard and took out the large white candles prior to Feb3. Feb 3 itself was a small down day.

      • I still think there needs too be some news to cause it. I've seen them hold the tape up too many times during opx week, and without a reason too sell, I don't see a big move down yet.

        Maybe a small sell off to 1060 or so, and then back up into Friday? Of course the wild card is so country defaulting or another oil disaster… or whatever they want to blame it on?

        Maybe next week will give us a big sell off? Who knows? But this week is heavily controlled (all weeks are really, but especially opx), and I still think nothing major will happen until after opx is over.

  8. MEE, ( coal mining) It looks to me as if its in one of those price channels again, where it never has 3 down days in a row, for a few weeks.
    MEE goes 12% higher, that puts BTU near the 48-50.
    BTU has a pattern, I wish I knew the name. I'll make a drawing. Wait one sec.

  9. filed under miscellaneous
    at 1136, SPY p/e is 17.1, the lowest in 7 years. High p/e's, same time frame, are in the 20-22 range. potential 30% upside…
    I wonder what the all time low p/e was?

  10. Picking up 25% of short positions into this strength on spxu, txa,typ and faz.

    S&P hit 1090. I cannot see it moving much further.

  11. Just a random thought… what if TPTB are whipsawing the markets to eat both bears and bulls (pretty much given, no?). Profiting nicely. But what if the motive is… to drive both into treasuries? Create such uncertainty, volatility, and doubt, that they just flee? And what if the MOTIVE were to drive millions into treasuries… so that TPTB can pop the treasury bubble? Or am I just way too paranoid?

  12. I sure am sorry i got stopped out of my TNA and sso yesterday. looks to me like the 1112 level is in play.

    Only question is the volume. I am not getting a good handle on totals.

    • Volume is still very low Jim. Right now the SPY only has 140 million shares traded. Yesterday was barely over a 100 million too. We need 200 million plus too see some heavy selling I believe.

  13. Looks like AA carries the market for the next few weeks.

    The blogs are upbeat saying earnings will trump jobs.

  14. Intel beats, guides higher for current quarter. Sell the news…. or is there a devil in the details?

    • The intel CC was a blow out.

      Bears will be in hibernation a while. i did not see this one coming.

      Gonna have to look for new entry points on the bull.

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