Posts tagged stock
The Bulls And Bears Duke It Out Again…
May 5th
Yesterday, the Bear “Knocked Out” the Bull cold, but today the Bear only squeaked by with a few point victory.
Tomorrow morning we get the Initial Claims and Continuing Claims numbers at 8:30 am EST, before the bell. What will they be? Will the government continue to use their magic eraser to make the numbers look more positive to the market?
Or, will they actually release the “real” numbers and cause more selling in the market? It’s clear too me that they plan on taking it down to our fake print number of Dow 10,000… which will probably be about 1055 spx. But, that doesn’t mean it will go straight down. There will be bounces along the way, as they’ll need to squeeze out some of the shorts before the final sell off.
So where does the market bounce at? Will it be at 115.00 spy, or the next support level of 113.00? Maybe those levels will only produce intraday bounces, and the only major bounce will be at the 200 dma? Most all traders know that any moving average that the market hasn’t hit in a long time, will be good for a solid bounce.
Well, the 200 dma hasn’t been hit in a very long time. You can be sure that a bounce will occur there, and it should be a multi-day bounce. Currently the 200 dma is at 1094.07, and rising every day. It should be just under 1100 within the next week or so.
So, if the market doesn’t sell off anymore tomorrow or Friday, then it’s going down hard next week. Two more days of wild swings like today, only to put in a candle bar of indecision at the close of each day, will be the makings of a beautiful bear flag pattern on the daily chart.
That could lead to one really nasty sell off on Monday, if it plays out that way? You know how the government likes to mix in really positive news with the really negative news… confusing both bulls and bears. That’s why you could see a swing higher tomorrow, and then another swing lower… only to end the day looking like today did.
It could look exactly like January 25th (compared to today), the 26th, and the 27th (which would be like this coming Friday). If it plays out like that, then Monday is going to be ugly! I don’t know if it will or not, but I’m staying short for now.
I’ve changed my mind about going long at 115.00, as I would just feel more comfortable staying short until will hit the 200 dma. Then I might go long for a few days swing trade, and finally get back short again, looking for the final low around 1055 spx.
So for tomorrow… it’s a wild card! Being short I could get squeezed a little tomorrow, but I’m riding it out… as this ship is sinking, she just doesn’t know it yet. She could just drop another 200 point tomorrow? There was a nice bear flag formed on the 10 minute charts today… meaning that it should sell off in the morning. But, it could rally back up by the end of the day, as it’s just a guessing game at this point…
Red
Maybe Not That Hard To Kill A Bull?
May 4th
The Bears celebrated today by laughing and giving each other “High Fives”…
It’s seems it’s been such a long time since the bear has had a decent meal, that this one almost seems like a dream. The sell off I’ve been waiting for is finally here… but will it end today? I don’t think so. Here is the same chart I posted on Sunday… now look at where we are compared to the last sell off?
Do you notice anything similar? I certainly do, and I believe that tomorrow will not bounce at all, as many of the bulls are expecting it too. I think it will open and continue selling off until we hit the 115.00 spy level, and then a bounce will occur. How much is still unknown? It could end the correction and then we are back to the slow grind up to our finally destination of 11,816 (DIA 118.16), where we have our fake print that Sundancer caught many weeks back.
However, the way the market climbed to it’s current height, leads me to believe that we will continue on down to the other fake print of Dow 10,000 and 107.38 spy first, and then rally hard. The climb up is too step I believe, and a larger correction needs to happen before turning the ship back around.
Think of it as a large ship, traveling way too fast in the water. If it sees danger ahead, (like a fleet of enemy ships), it must turn the ship around as fast as possible and go back another direction. Unfortunately, it’s been moving too fast for too long, without stopping for any maintenance (pullbacks in the market), and now the engines are kicked into full reverse causing the ship too turn quickly.
But, half way through the turn (the coming bounce at 115.00), the ship’s engine’s lock up from the stress, and a quick repair must be done (another sell off to 107 area), before she can get back up to speed and away from the enemy ship (full of an army of bears of course).
So as you can see, I’m really leaning toward fulfilling the lower target fake prints first, before the rally continues back up again. Will it play out that way? That’s any one’s guess? I think it will, but time will tell…
Red
Still Hanging On…
Apr 19th
The bulls recaptured lost ground today, as the weekend allowed the media to spin the Goldman Sachs story as a non-event. We know differently, as where there is one roach… there’s always more! Nothing is ever easy in trading, and you can bet that this coming correction is going to be full of bounces along the way.
Looking at the 60 minute chart of the SPX, you can clearly see that we finally busted out of the trendline from the 1044.50 low. We are now in “backtest” mode, and will likely try to recapture the trendline tomorrow by closing inside it once again.
That doesn’t mean it’s over for the bears, as the daily chart tells a different story. Looking at it, you can see that the -DI line (in Red at the top of the chart) has clearly spiked higher from Friday’s sell off. The +DI (in Green) is also losing power and pointing down. You can see that the RSI has dropped out of the “above 70″ range, which means the up trend is losing steam. I’d like to see it fall below 50 for me to confirm that the bears are in control, but it’s a start at least.
So, at this point, I’m not going to say that we aren’t going back up and make a new high, as it still could happen, but the odds are slowly going down. We could have another sideways, wild swing, up and down movement similar to the November 9th to Mid-December time period.
I don’t think that will happen, but it is possible. It really depends on what the “powers that be” want to do at this point in time? Do they want to go straight down to the fake print around 10,000, or drag it out sideways, and run up to 11,816 first.
Personally, I believe that the release of the news on Goldman was just a start of the coming news to be released over the next few weeks. I can’t be sure, but if I recall what was “in the news” during that sideways chop fest in November and December… it wasn’t anything majorly negative.
That makes me lean more on a quick 3-4 week sell off, as they didn’t just release this news on Goldman for a one day event… at least I don’t think they did? I’m sure it’s possible, but usually they toss a bunch of negative news out there when they want to sell it off, and then pump positive news when they want to rally it up.
Bottom line here… it’s all about what news and earnings come out this week. If they make them positive, the market could chop sideways for weeks, until it finally pops out of the range and goes on up to 11,816. Or, they could dump all the bad news over these next few weeks, and cause the sell off.
I’m sure that Goldman wanted their stock to tank, so they could buy it back cheaper. Who knows how much phantom stock they sold to the public? If you read the story Matt Taibbi published, that I put up on yesterday’s post, you will see how they borrowed shares that didn’t exist, so they could bankrupt Lehman Brothers. I’m sure this is a common occurrence for them.
But, at some point, the phantom shares must be put back into the phantom vault. That’s probably why they tanked their own stock, so everyone holding shares of it would sell them at the “now heavily discounted” price.
In a way, it reminds me of a friend of mine that owned a “buy here, pay here” car lot. People would buy the car at over inflated prices, (because they had bad credit), and then pay higher then normal interest rates, with payments on a weekly basis, instead of monthly. Once they missed a payment, he would repossess the car, which would then be sold again to another sucker.
He got the car back at a discount, because the person did pay some of the weekly payments, and of course some type of a down payment. He could re-sale the same car multiple times, and do the same thing every time. Some cars he re-sold 7-8 times! He made a good living that way. Of course the difference between his business and what wall street does to the average investor, is that the people that buy the car do know the risks, and the late payment results. Wall Street lies, cheats, manipulates, and does flat out fraud to steal peoples’ money. Big difference there…
Anyway, I’m expecting an up day tomorrow… but hopefully not too far up.
Red
