Ever since the March 6th, 2009 low, the market has routinely triggered the computer buy programs at 3pm-3:30pm, and today they were triggered again. Â It's so common now that you can set your watch to it. Â Every time there is extremely light volume, it seems that some buy program hits at the last hour of the day.
Of course they activated the computer buy programs at 3pm today, and squeezed the bears once again. Â Being a bear in this market should be classified as "suicidal", as they are being hunted to extinction. Â I would tell you again how massively overbought this market is and should correct back down, but again... it's worthless right now, as the bulls control the tape.
So, I looked around and found a bullish chart (found on the chart pattern trader). Â It was really hard to find one, as most charts are bearish, but the weekly chart has room to go higher.
As you can see, the MACD just crossed above the zero line last week, and in positive territory now. Â If you ignore the "overbought" condition, and just look at this chart... you would be bullish. Â Of course charts are really worthless right now, as the Obama gang isn't allowing this market to sell off any right now.
So, we wait... until Obama gives the big boys the "Go Ahead" to take some profit. Â Of course some news event will be blamed for it, so keep your eyes open. Â I doubt it will be the jobs numbers as the new Census Jobs created will probably cause the numbers to beat estimates... which could cause us to rally more.
The Greece ordeal could blow up anytime between now and eternity... meaning you can't count on that one to crash the market. Â I don't know what the event will be, but I'm sure it will be during a light volume session or holiday weekend... to catch the bears sleeping of course.
Maybe I should forget charting and go back to just bitching about corruption? Â Hell... I never started this blog by posting charts or making technical analysis... why start now? Â I'll just rub my crystal ball and tell you that nothing is going to bring the market down without volume... which will come from some bad news event.
Red
Red, you are a great writer. Thanks for cheering me up!
If only I was as good a trade…
I think staying out may be good right now. Either we make a fairly substantial move down for the next week or so and then bounce back to new highs, or we are near the lows of the day and we go higher for the final top here in the next week. I wish I knew. We have to get to Sundancers containment points on the S&P and IYR I think. Wish we do that sooner rather than later.
I started to think that if the market were to topple out, some catalyst would have to be blamed for the market's demise. Look at these two headlines on Yahoo tonight – interesting.
http://news.yahoo.com/s/mcclatchy/20100323/wl_m…
http://news.yahoo.com/s/nm/20100324/wl_nm/us_ir…
Carl’s morning call:
June S&P E-mini Futures: Today's range estimate is 1161 – 1175. I think a move to 1200 is underway. First upside target is 1175.
1159 -1170.50 actual yesterday (11.50 points)
1162 (last night's low)
1161-1175 estimate for today (14 points)
1165.50 currently, so estimate is -4.50 to +9.50 from here (bullish)
problems for the dollar bears…
dollar gapped above 4 containment pts.
the green line is the last line of defense for the dollar bears
http://www.flickr.com/photos/47091634@N04/44600…
That should be some good news for the market bears… if they continue to trade the opposite?
pressure is building across capital markets, while most people's attention is being diverted to the “rally” in the indexes, people ought to be directing their energy towards this chart of the $TNX
http://www.flickr.com/photos/47091634@N04/44600…
Looks like it could break either way, but from today's action I'd say it wants to break up.
I actually hope it does.
AAPL above regulatory limit. Any significance?
there is a 87% probability that AAPL's current uptrend since 1/09' is it's terminal ATH in it's current lifecycle, so where ever it stops will be highly ritualistic, I haven't had a chance to look @ terminal values : date, you won't see AAPL straying 10%+ from it's reg. limit
it's terminal de-leverage pt. is 134.45, all long positions above that number will eventually become underwater
Alright. Just trying to get a grip on things. Thanks. Wonder what they are going to announce with this financial regulation – probably that all 3X ETFs have to be liquidated.
i don't N.E.W.S. so what are they doing banning inverse ETF's?
Nothing yet announced. They are trying to pass a financial reform bill (led by Senator Dodd) and keep emphasizing it's passing on CNBC. One of the clauses proposes is “n addition to addressing concerns over how to maintain the financial system's stability, the bill takes aim at regulating the risky financial instruments that have been blamed for contributing to the financial crisis and protecting consumers from risky financial products that have also been blamed for their role in the crisis.” Anyway, I will keep you posted if I hear anything more but I just have this feeling that they are going to ban the 3X ETFs at the top. Here is the most recent article I could find: http://www.reuters.com/article/idUSTRE62D1YI201…
More recent article from today here:
http://www.reuters.com/article/rbssBanks/idUSN2…
Over valuation + overbought + yield pressure = -10% over several weeks…. ***IF*** historical pattern holds.
The only thing missing is trend confirmation….. tick tock tick tock….
Bad news in home sales. Guess that means it will be a while before we get to that containment level in the IYR.
One can only hope!
Not in your case, but in my case, that is true!
Carl sold long unit at 1166.50
Usually he posts his reasoning a bit later.
Interesting given his projection. Probably with all the money he has made, he just wants to go out and play a round of golf!
He must be expecting a pullback of some kind. 1166 is near the bottom of one of his boxes, not a normal place to bail.
Think Carl got some inside info from his cronies at GS!
Hey Red,
Question for you: I think we are headed for 1225-1250ish by end of may (just my 2 cents) but I do think we get a big correction some time between August and November. I'm a stock and ETF guy more than an option guy but I know you like to use options.
Which SPY puts would you buy for that correction?
Thanks
If you think we are going to 1250 by late summer, then a vertical call spread would be the safest play. You could buy the 1150 (which is “in the money now”), and sell the 1250.
You would want the market to go up to 1250 before they expire, and of course you don't want the market to go down below 1150.
I'd rather stay out the market now, as I still see some selling coming soon. The choice is yours of course.
You are sailing on a FAIL boat, red. LOL He asked what PUTs to buy for the 'correction' later.
Good answer but wrong question. LOL
Perhaps subconsciously Red is answering the right question.
Duh… you're right. I didn't fully read the question.
My basic question is: let's say we are at 1225 by May and i think we will be at 1100 by November……………what puts would you buy in may and how far out?
Thanks Red
A quick note: The topping process continues. We may have reached the apex already. Short confirmation pending. No confirmation, no action.
Carl dropped his low for today from 1161 to 1156
1155-1156 was his support area a couple of days ago.
Now he sees 1150-1156 as a possible low area.
If he is right, then that means we get there and then bounce back up to higher highs before falling gain.
He hasn't mentioned giving up on 1200.
And sadly I think it may get close to there.
Carl just raised his low for the day from 1156 to 1161.25.
I'm getting a bit dizzy.
This is fairly normal near a top. Carl gets confused because his indicators start to break down. Remember that Carl's bias is bullish — he thinks breakout / shakeout / breakout instead of “false breakout” / “make people chase” / “tank it for real”. Time will tell if he's right.
I'm still in my DRV (bought at 8.70, currently down about 1.5%).
Carl could be right or he could not be. I have more faith in you.
While I appreciate your faith, Carl has made *much much much* more $$$ than me through his trades. Hard to go wrong with profitable trades. I still think we go down before we rocket up (over the course of the next week or so).
Maybe Carl had more money to begin with! And maybe he has inside info which you don't. But I think your charting/timing skills are excellent.
Agreed. Carl sees downside as temporary, and upside as the general direction.
I still have my TNA from yesterday. I'm combining Carl's upside bias with AmericanBulls' TNA buy yesterday. As I understand it, AB does not sell the day after a buy signal.
Well, I sure do.
TNA is hanging around in the general vicinity of the pivot line ($56.71), which is my comfort zone, so I'm hanging in there. My trade is up at the moment, but that comes and goes.
As previously stated, I expected many AB signals to non-confirm as we chop, chop, chop. We've set a lower low since Carl posted his update, but we haven't taken out the overnight low (as I understand, I don't have a /es futures feed).
I knew that the bearish case was still intact when I saw DRV play out an IHS today with a target of 8.76. We'll see if it gets there…
The overnight low for /ES was 1162.
Recent low was 1161.
Yesterday's low was 1159.
Still with you on DRV @8.75
New rule of thumb to add to all my charts: DRV bottoms the day after TZA.
I hope they have bottomed
Want to point something out about the $NYMO. As of last night, it was above the 0 line (updates at 5:00PM everyday). If we have a small move down today (like down 30-40 points which seems probable), then I expect it to touch the 0 line and then bounce off of it and continue to zig zag for a few more days/week (like it did back near Jan 19th) and then plunge which will send the markets lower. If it zig zags, that could bring market prices slightly higher until it plunges through the 0 line. I figure based on Sundancers containment points that we would have to get to around 1185 or so on the SPX in order for the IYR to reach 53. Notice that on Jan 19th (the last top), the $NYMO had just busted through the 0 line. Alternatively, if we make a bigger move down today, perhaps it will bust through the 0 line today and when that happens, it typically plunges to oversold levels (bringing the market down with it). Then I would expect a more substantiated move down, at least in the short term.
http://stockcharts.com/h-sc/ui?s=$nymo
you've heard me talking about high close (HC), we got that yesterday on the $SPX, then today the ritual gap down
http://www.flickr.com/photos/47091634@N04/44598…
3 consecutive lower closes than opens on the $SPX and we're on our way to the de-leverage pt.
Thank you. If we manage to get 3 lower closes then, does it matter for the long run that we never made it to containment on SPX or IYR?
Strange how we haven't broken below the previous close on the SPX. It seems to like that 1166 number.
on the daily containment pts. for the $SPX I usually allow 2 points slippage and yesterday $SPX came about 3 pts. shy so it's odd, but the high of the $SPX has the ritual mark
1174.72 = 11 : 11(7+4) : 9(7+2)
The IYR is an interesting animal, it's currently coiling on the back of a contianment pt. the last two times that has happened it's led to a break down. The weekly & monthly look incomplete so the operator will tell us on the way down if things are complete or incomplete.
Grateful for the explanation so I don't have to wonder as much. Thank you for everything. I will try not to ask so much questions 🙂
***if*** IYR closes above 48.91 for the week it will have 6 consecutive higher closes than opens, only other occurrence of this sequence (6 consecutive higher closes than opens) in the last 222 weeks came to an end on 2/12/07, IYR put in it's all time high one week earlier, interesting the IYR hasn't taken out last weeks high yet
IYR has not, but $DJUSRE has.
did IYR have a dividend payout last friday?
I can't find any information on that. DRV and DRN had dividends this week.
SPY trendline that held the market in January has held the market for the last 9 days
http://www.flickr.com/photos/47091634@N04/44607…
Here comes the EOD ramp. Lordy lordy.
Not today. 🙂
surprise surprise!
Yahoo Finance's top story today:
http://finance.yahoo.com/news/White-House-Steps…
“The White House believes there's a short window of opportunity to get this done”
I wonder why that is!
Carl at day’s end:
1st 1161-1175 estimate today for /ES (14 points)
2nd 1156-1175 estimate today for /ES (19 points)
3rd 1161.25-1175 estimate today for /ES (13.75 points)
1161 -1168.75 actual today (7.75 points)
Nailed the low twice.
Trades:
In /ES at 1162.75 yesterday, sold today at 1166.50 (gain of 3.75 points)
Grade B (made some money)
TZA opened up 1.3%. Gap ($6.82 to $6.84) was not filled. TZA was up 3.2% at the high, and closed up 3.2%.
We are in a New Moon Trade, which favors TZA.
Following AmericanBulls guidelines, this trade was in cash all day.
After seven days, this trade is down 4.1%, and in cash.
Volume for TZA was roughly average.
$RVX (VIX for $RUT) closed up 6.0% with TZA up 3.2%. No divergence.
TZA has now been up 5 of the last 9 days — chop.
The low for TZA today was $6.84. The low yesterday was $6.79, the lowest TZA price since the invention of electricity. A little bit good for TZA.
Ultimate Oscillator for TZA bottomed at 20 twenty two trading days ago and has generally risen since then but has remained below 50 and is currently 38. Indicating continued weakness for TZA. Three days ago was highest of the last 23 days, but a 4 point drop in these last three days stopped that definite up trend. Was up 5 points today. Good for TZA.
Bollinger Bands for $RVX (VIX for $RUT): today’s white candle closed above the Bollinger mid-line (20 day MA). MACD has crossed from below and is rising. Looks like $RVX will be rising. Good for TZA.
Bollinger Bands for $RUT: The black candle for $RUT fell back to old candle highs & likely resistance. The top Bollinger band is still rising, and $RUT seems to be moving away from it. Looks like a pull back before another rally from here. MACD is getting ready to cross down (or sideways). Mixed picture for TZA.
Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s black candle fell back into the congestion area. The upper Bollinger Band seems to be flat. Looks like a return to the topping process. Good for TZA.
TZA had a lower high, higher low and higher close – mildly good for TZA.
Money flow for the Total Stock Market was $1,518 million flowing out of the market on an down day. Generally good for TZA.
I will post the AmericanBulls candlestick interpretation a bit later.
Overall, it looks bad for TZA tomorrow. (Chart and candlestick trumps everything else)
Look at dem apples! http://stockcharts.com/h-sc/ui?s=$nymo
Just below the zero line. Suppose we could have a slight bounce but looks like direction is now down from here at least until we get to a -70 or so reading.
I just took another look at the $NYMO chart. It does leave open the possibility still (since we haven't really gotten under the 0 line) that we go higher tomorrow and then chop around. But, if we close lower tomorrow we will definitely continue lower until we get that oversold reading. We don't even have to close lower tomorrow by much. We'll see.
The Daily view from Americanbulls
TNA has a low reliability SELL-IF (Sell if conditions are right tomorrow morning) signal. The candlestick today was a Black Candlestick (normal selling pressure). The last two candlesticks formed a Bearish Harami Pattern (low reliability trend reversal requiring confirmation).
TZA has a low reliability BUY-IF (Buy if conditions are right tomorrow morning) signal. The candlestick today was a White Candlestick (normal buying pressure). The last two candlesticks formed a Bullish Harami Pattern (low reliability trend reversal requiring confirmation).
Summary of $RUT based ETFs:
Hold: IWM (1x)
SELL-IF: UWM (2x), TNA (3x) (Bearish Harami)
BUY-IF: RWM (-1x), TWM (-2x), TZA (-3x) (Bullish Harami)
Action for tomorrow: Possibly sell TNA, possibly buy TZA
Katzo refers to the MACD action on $RUT as a “porpoise snout” (well, he was talking about some other symbol, but if you look at the MACD you'll know what I mean). According to Google, he's the only one who describes it this way. It means that a breakdown is coming, just “not yet”. We are in day 3 of “porpoise snout” — maybe time to roll over? Based on this completely untested indicator, $RUT is red tomorrow.
Looking at a two week chart of /NQ and /ES — there is nothing indicating any sort of turnaround. /NQ is up and to the right. /ES has a much more gradual slope, but it's still up and to the right.
Market is going up, and I think $RUT follows along.
I had some TNA after hours, but offered it for sale and someone grabbed it, so I'm back to cash again.
Don't know if I already sent this to you but it compares the 2007 top to today. Corey Rosenbloom truly is unbiased and he is a good analyst. Scroll down to the bottom of the page but all the articles on the page are relevant.
http://blog.afraidtotrade.com/
How you doing?
Not so good.
What happened?
I was trading from a 2007 chart.
Really?
Yeah. It went down in 2007, so I shorted it.
You shorted it now, because it went down in 2007?
Yeah.
Did it go down?
Well, yes. It went down. In 2007.
I mean now. Did it go down?
No, not really. Kind of went up.
Weird.
Yeah. Weird.
What is really strange is that AH futures have been so quiet lately.
What is really strange is that AH futures have been so quiet lately.
The Daily view from Americanbulls
TNA has a low reliability SELL-IF (Sell if conditions are right tomorrow morning) signal. The candlestick today was a Black Candlestick (normal selling pressure). The last two candlesticks formed a Bearish Harami Pattern (low reliability trend reversal requiring confirmation).
TZA has a low reliability BUY-IF (Buy if conditions are right tomorrow morning) signal. The candlestick today was a White Candlestick (normal buying pressure). The last two candlesticks formed a Bullish Harami Pattern (low reliability trend reversal requiring confirmation).
Summary of $RUT based ETFs:
Hold: IWM (1x)
SELL-IF: UWM (2x), TNA (3x) (Bearish Harami)
BUY-IF: RWM (-1x), TWM (-2x), TZA (-3x) (Bullish Harami)
Action for tomorrow: Possibly sell TNA, possibly buy TZA
Katzo refers to the MACD action on $RUT as a “porpoise snout” (well, he was talking about some other symbol, but if you look at the MACD you'll know what I mean). According to Google, he's the only one who describes it this way. It means that a breakdown is coming, just “not yet”. We are in day 3 of “porpoise snout” — maybe time to roll over? Based on this completely untested indicator, $RUT is red tomorrow.
Looking at a two week chart of /NQ and /ES — there is nothing indicating any sort of turnaround. /NQ is up and to the right. /ES has a much more gradual slope, but it's still up and to the right.
Market is going up, and I think $RUT follows along.
I had some TNA after hours, but offered it for sale and someone grabbed it, so I'm back to cash again.
Don't know if I already sent this to you but it compares the 2007 top to today. Corey Rosenbloom truly is unbiased and he is a good analyst. Scroll down to the bottom of the page but all the articles on the page are relevant.
http://blog.afraidtotrade.com/
How you doing?
Not so good.
What happened?
I was trading from a 2007 chart.
Really?
Yeah. It went down in 2007, so I shorted it.
You shorted it now, because it went down in 2007?
Yeah.
Did it go down?
Well, yes. It went down. In 2007.
I mean now. Did it go down?
No, not really. Kind of went up.
Weird.
Yeah. Weird.
I just took another look at the $NYMO chart. It does leave open the possibility still (since we haven't really gotten under the 0 line) that we go higher tomorrow and then chop around. But, if we close lower tomorrow we will definitely continue lower until we get that oversold reading. We don't even have to close lower tomorrow by much. We'll see.