Bernanke Speaks And The Markets Sell Off…
Jul 21st
Oh NO! What Did I Say Wrong?
You gotta love it! Just as soon as Ben Bernankes’ FOMC minutes are released, the market tanks. Of course from a technical point of view, it was ready to sell off anyway… but someone has to be blamed, right? LOL. Well, tomorrow should also be a down day too, as the 60 minute chart has now rolled over and is ready to cross the zero level.
The daily chart put in a lower histogram tower, and the MACD lines are getting closer to crossing back down again. The weekly is now sitting with a topping tail on its’ candle, but of course the week hasn’t ended yet… so that could all change.
The 15 minute chart is oversold and pointing slightly back up, but the 5 minute is over bought… meaning that any move back up will be short lived, as both charts re-align themselves to point back down at the same time. With the 60 minute chart putting downward pressure, I can’t really see the 15 minute chart pushing the market back up very far.
The sideways action for the last couple of hours put in a bear flag on the 5 and 15 minute charts. While it’s possible that we go up a little, allowing the 15 to work off its’ oversold condition, we could just as easily continue to fall lower while it does it.
Overall, we are still in the falling channel, and until we get outside it… I’m bearish. I was short term bullish last week, but today turned me to short term bearish. I’m not sure how far we will sell off too, but we should see some more downside for at least tomorrow morning.
Red
Did The Bears Get Fired Today?
Jul 20th
Didn’t Obama say we’re creating more jobs?
Hmmm… If so, then they must all be bull jobs and not bear jobs as the market rallied hard today, although the crooked banks still can’t seem to make a profit… even with FREE Money! Man, if they ever do make a profit, the market will be at 12,000 Dow in no time!
LOL… I’m just venting as usual, and laughing at how controlled the market really is. It has nothing to do with the real world, but instead trades off the charts only… and only uses the news to have something to blame the rally or sell off on. I said yesterday that we could rally back up to 1080-1085 area, and we did.
Are we done yet? I’m not sure, as I don’t know if the print I got of 109.79 spy is real (or Memorex… LOL)? If it’s a real Casper, then that should be our final high tomorrow before resuming the journey back down. It’s best explained in video, as we have two possibilities now… one UP and one Down.
The upside targets are 109.79 spy, and 112.41 spy (which I believe the first one will be hit tomorrow, but the higher one might not be hit for awhile. I’m still bearish right now, and only bullish for another day or so). The downside target is Dow 8300… when? If we start falling back down this week, then within 2-4 weeks would be I estimate.
Red
Weekend Update…
Jul 17th
MONDAY UPDATE:
Not much changed today, as we had a slightly positive day as I expected. The high was around 1075, which isn’t quite as high as I’d like to have seen. I’d like to see a back test of the falling trendline (1080-1085) from the April high before another move down starts.
In this 60 minute chart you can see that the MACD is trying to curl back up, and the histogram bars have now moved up from oversold territory to the zero line. I’d like to see it go up and make a smaller histogram tower then the previous one, putting in a negative divergence on the chart.
That could push up the market to the 1080-1085 level that I’m looking for, before more selling happens. We might not get it if Goldman Sachs doesn’t do a good enough job of lying about their earnings? The high could already be in for the week? Hard too say… but the charts tell me we need to push up a little more tomorrow first.
We’ll see I guess…
Red
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The Sh*nola About To Hit The Fan!
Sorry for the bluntness… but sometimes you need too make a point stand out. Next week is looking like a slaughter house for the bulls, as a big move down is likely coming. While anything is possible, the odds of next week rallying hard like this past week… are slim and none.
Last week I really was expecting it to close out positive, as it appeared that they wanted to take the market up to the 112.41 spy FP from a week back or so. But, the large sell off on Friday changed everything. Had they really wanted to take the market up for awhile, they would have closed Friday flat to slightly down.
This now tells me that the big boys are short again, and plan on taking her down below the 1010 bottom. This next move down is likely to be some kind of wave 3 of 3 of 3… in Elliottwave terms. Again, I’m no expert in EW, but anyone can count it after the fact… and that’s exactly what I see coming next week.
Monday has a 66% chance of being an UP day, according to Cobra’s statistics (see his blog for more detail. It’s listed in my blogroll). Plus, the 60 and 15 minute charts are pretty oversold now, and need to reset themselves. This will likely take all day Monday and possibly early Tuesday too?
Since the first major earnings announcement (from any company that can move the market) is from Goldman Sachs at 8:30am on Tuesday and then Apple after the market closes, you shouldn’t expect an major selling on Monday. If Goldman reports like CitiGroup and Bank of America did on Friday… it’s going to get ugly!
Then you have Baidu on Wednesday after the bell, and Amazon and Microsoft on Thursday… also after the bell. These are the major movers for next week.
Of course I don’t know what they will say, but Apple has reception problems on the antenna of their new iPhone… which tells me they aren’t going to rally the market. Goldman is likely to report similar to the other banks… meaning they meet estimates, but have a negative future outlook. I don’t know about Baidu or Microsoft, but the charts of both companies look exactly like the rest of the market… ready to roll over and tank!
At this point, I really can’t see anything but a huge sell off coming. I’m trying too be neutral here, and look for both bullish and bearish points of views, but this looks very bearish too me next week. I was bullish all this past week, and did fairly well on my calls. I was wrong on Friday closing between 108 and 109 spy, but I did call for the day to be a down day.
No one can get them all right, and I’m not one to overlook my bad calls… believe me, I’ve made many. I’m getting a lot better at reading the charts, and they tell me that disaster is coming! Throw in a 106.66 closing price on the SPY and a 109.99 high and you’ll have a devil of a time convincing me that we are going back up next week.
Good luck to those brave bulls that went long over the weekend. You have a 66% chance of an UP day Monday, but I wouldn’t push my luck after that… as there’s nothing bullish in the charts for next week.
(Major FP in 2nd Video)
Red
P.S. This oil disaster isn’t getting better…
Watch this video too…
Bears Get Tricked Again…
Jul 15th
Man! I almost had that fish…
PLEASE DON’T FORGET TO VOTE ON THE NEW POLL DOWN THE PAGE IF YOU HAVEN’T ALREADY…
Down we go in the morning to fill the gap, then rally back to close positive. The bears that went short at the low today just got squeezed hard as the market rallied back into to close. While we came just a hair shy of the FP of 110.67 spy, I believe we will hit it tomorrow… probably on a gap open. Then possibly sell off a little the rest of the day, closing tomorrow slightly negative.
I think tomorrow will close below 110 spy, and above 109 spy (probably closer to 109). Basically, I’m looking for a “gap up and crap” day tomorrow. They need out of this falling channel, and Friday is the perfect day to gap up above the channel resistance trendline.
Once outside of it, they can fall back down and retest the trendline (at a lower point as the day goes on), which will allow them to close below 110 and still stay outside the channel. That will allow for next Monday or Tuesday to go up too.
While I think next week could end up DOWN, I do expect them to at least rally up a little further before this rally takes a nice correction. The move down today could have been the “B” wave down, in an ABC move up? That means we should go up to the 112.41 FP next week to complete the “C” wave.
I’m just guessing at the Elliottwave counts, because I don’t really know it too well… but it seems logical. I know the “C” wave is supposed too be longer then the “A” wave, and a move to 112.41 wouldn’t be very much further. Meaning, if it quit there, and turned back down for a nice down leg, that “C” wave wouldn’t be as long as the “A” wave, but again… I’m not an expert in EW stuff.
But back tomorrow, I’m expecting a slightly down day, around the 109 spy for the close.
Red
No Recession Anymore…
Jul 13th
Update for exciting Thursday…
Red
P.S. Please answer NEW POLL… Thanks
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The correction is over now…
Yeah right… and I’ve got some ocean front property for sale in Kansas too! Once again, the run up into opx week has started off with a bang. Will it continue until Friday? Probably not much high, but not much lower either I’m afraid. This light volume period that we are in now, will allow them to easily gap up over resistance levels by running it up in the pre-market session first just like they did today.
So while there still might be a pullback, I think the 1040 level is off the table now. Maybe we dip to 1060 for the “B” wave down, but it may not happen until after opx is over. We could chop sideway until then, and sell off a little bit this week and a little bit more early next week.
However, the big concern is whether or not that week chart continues to roll back up, putting in higher lows on the histogram bars. That could mean that we aren’t going to go down below the 1010 low for awhile.
If so, then we could just sell off next week, and rally the next few weeks after that (and maybe go for the DIA 118.16 print?). Now I don’t know if that’s going to happen or not, but the weekly is looking like it wants to roll back up. So, just keep your eye on that chart, for it would likely put a limit on the downside for now… at least until it turns back down again.
Moving on to tomorrow…
The daily chart is still moving up, but the ADX line is falling now. It’s losing strength… finally! The negative and positive DI line are converging together now, which means it should be choppy in the market for the next few days. No major moves up or down should be expected during this criss-cross period.
The 60 minute chart is losing steam too, after putting in a much smaller histogram tower then the previous one. With the larger amount of open interest on the 107 spy put (289,000), I’d say that we will not go below 107 before this Friday. And, since the call side has 110,000 contracts at the 110 level, I’d also say we close below that level on Friday too.
Split the difference and you are looking at 108-109 spy level on Friday. Which really makes more sense if they plan on dropping back a little early next week to maybe 1060 spx… (1040 would be a gift to the bears, and could halt the up move?), before a move up to 112.41 next week. I’m not ruling out the possibility that we hit 112.41 spy by this Friday, but the odds are decreasing because the daily chart is losing steam.
So, my best guess for tomorrow is a slightly down day (not likely lower then 1080 area) or flat. But I don’t expect too much more on the upside without a “pause” day or slight pullback at this point.
Good Luck to everyone…
Red
