The news headlines re: housing starts and FOMC seemed rather bland yesterday afternoon, but this morning are causing shock and awe across the globe.
I was pretty sure the top was in on Monday because of CPCE trend (see Cobra's site) but thought we'd be farting around with a little rally today. Turns out it will be a gap down unless something really amazing happens by the opening.
Retail is being informed of impending doom so that they will have an opportunity to sell near the bottom, I think. I'm planning to cover Monday, but may move it up if we we have a very stunning day today, Fat Freddie style.
After this sell-off, I am looking for a rally up to the MAs one more time, but will stay 50% short at all times.
The daily trend which has been up for many days has turned down now. and when an index or stock trades below 50 and 200 DMA's Short would be the ideal and safe trade to go. But there are some supports in daily chart which need to break.
As you might have gathered, I take a dim view of the PPT doctrine of market action (which isn't to say the big boys don't have built-in advantages and capital power us small-timers can never hope to match and should always keep in mind), so I don't think XHB was made some sort of window-dressing project. It's an interesting sector, but not one central to market strength like the banks or energy.
Looking at the dailies for the past three years, green-volume spikes sometimes come at bottoms, sometimes not. There's long-term support in the 15 area, so when the bad housing report failed to keep XHB below that level, it would seem to be an obvious place for shorts to cover.
As I see it, XHB doesn't signal a reversal until it can close above the descending trendline, now a hair below 16, also the neighborhood of several SMAs and EMAs. There's a double bottom in place for now, something it didn't make with broader market earlier this month.
For now, it's seems a one-day outlier. It was the volume and the positive divergence that seemed to make it notable, if not definitive of anything as yet.
I believe it could go up a little more tomorrow morning, but at some point I believe the bear flag it's making will play out, and another move down will happen.
Very interesting about the XHB… I didn't catch it. Just wondering if it's the PPT trying to save it from collapsing, or if it was some big boys buying, anticipating a big move higher? Hard to say which…
Very possible. Action of late has been quite weak, and the red volume bars on SPX have been rising ever so slightly three days in a row. Yesterday's selloff in $TRAN was quite something, $NYSI has stalled, and other bearish indicators and developments quite numerous and familiar.
There are factors advising bears to be cautious (as always, same goes for bulls), as you note.
A few of those items possibly worth bearing in mind as long as support holds: Both the $USD and the $TED spread appear to have at least short-term tops in place, and should be watched for any further moves lower (in the $USD, particularly below the 6/21 swing low).
Also, did you happen to catch the action in XHB on the heels of an ostensibly dreadful new-homes report? Quick selloff followed by a rally on double volume that heavily outperformed the $SPX. Still very much in tight downtrending channel, it should be added, but just something else to keep an eye on.
Bulls are waking up in hell today.
The news headlines re: housing starts and FOMC seemed rather bland yesterday afternoon, but this morning are causing shock and awe across the globe.
I was pretty sure the top was in on Monday because of CPCE trend (see Cobra's site) but thought we'd be farting around with a little rally today. Turns out it will be a gap down unless something really amazing happens by the opening.
Retail is being informed of impending doom so that they will have an opportunity to sell near the bottom, I think. I'm planning to cover Monday, but may move it up if we we have a very stunning day today, Fat Freddie style.
After this sell-off, I am looking for a rally up to the MAs one more time, but will stay 50% short at all times.
The daily trend which has been up for many days has turned down now. and when an index or stock trades below 50 and 200 DMA's Short would be the ideal and safe trade to go. But there are some supports in daily chart which need to break.
As you might have gathered, I take a dim view of the PPT doctrine of market action (which isn't to say the big boys don't have built-in advantages and capital power us small-timers can never hope to match and should always keep in mind), so I don't think XHB was made some sort of window-dressing project. It's an interesting sector, but not one central to market strength like the banks or energy.
Looking at the dailies for the past three years, green-volume spikes sometimes come at bottoms, sometimes not. There's long-term support in the 15 area, so when the bad housing report failed to keep XHB below that level, it would seem to be an obvious place for shorts to cover.
As I see it, XHB doesn't signal a reversal until it can close above the descending trendline, now a hair below 16, also the neighborhood of several SMAs and EMAs. There's a double bottom in place for now, something it didn't make with broader market earlier this month.
For now, it's seems a one-day outlier. It was the volume and the positive divergence that seemed to make it notable, if not definitive of anything as yet.
I believe it could go up a little more tomorrow morning, but at some point I believe the bear flag it's making will play out, and another move down will happen.
S&P 500 Analysis after closing bell. This index is looking weaker than Dow
http://niftychartsandpatterns.blogspot.com/2010…
For Dow As 10260 has held on closing basis it should go up.
Very interesting about the XHB… I didn't catch it. Just wondering if it's the PPT trying to save it from collapsing, or if it was some big boys buying, anticipating a big move higher? Hard to say which…
So what's your thoughts on tomorrow San? up, down, sideways… what do think tomorrow will bring?
Dow jones analysis after closing bell
http://niftychartsandpatterns.blogspot.com/2010…
Very possible. Action of late has been quite weak, and the red volume bars on SPX have been rising ever so slightly three days in a row. Yesterday's selloff in $TRAN was quite something, $NYSI has stalled, and other bearish indicators and developments quite numerous and familiar.
There are factors advising bears to be cautious (as always, same goes for bulls), as you note.
A few of those items possibly worth bearing in mind as long as support holds: Both the $USD and the $TED spread appear to have at least short-term tops in place, and should be watched for any further moves lower (in the $USD, particularly below the 6/21 swing low).
Also, did you happen to catch the action in XHB on the heels of an ostensibly dreadful new-homes report? Quick selloff followed by a rally on double volume that heavily outperformed the $SPX. Still very much in tight downtrending channel, it should be added, but just something else to keep an eye on.