S&P short term cycle swings

[MRVLReader]

S2: According to the WDC chart you posted,I have two Qs for you:
1. Could we buy the put now? (Looks like the Top is just tested in second time)
2. Do you still play "July $17.59 puts" ?(only $0.25 now)
TIA

[SyndicateTwo]

Look at WDC seasonality chart-->>

[SyndicateTwo]

Watch SPX 910. Having trouble there today because that's the 61.8% retracement level off the decine from Friday. If the SPX moves higher on a closing basis, the theory is that new higher projections are in store.

I was watching CNBC this morning and Art Cashin said from the NYSE floor that almost no one down there believes in the rally for numerous reasons from volume to other things. They almost all expect an attempt at a retest with many thinking lower lows. But the market ain't working for them. So, any move higher is expected to be a possible 'train leaving the second station'.

So, there might be a real possibility of another large rally. However, that most likely would be the biggest of sell-opps because it would be a technical rally, not a fundamental.

In other words, the market is completely juiced due to the stimulus and TARP money.

Be very careful and forget about long term holding.


Ah!, 911. Let's see if the market starts to run.

[SyndicateTwo]

hehe

[pHiLtHy]

well, i guess i can understand why their business is doing so well because of "ball bonders"... i know mine have certainly taken a beating over the past year and are probably in need of repair... anybody know where i can get some of that stuff?

[Cloner]

This might not have any interest to you guys, but
it was interesteing to see KLIC raise guidance.

KLIC, albeit being a small company, has often been used as an indicator of how business is doing in the tech sector


Kulicke & Soffa Increases Revenue Outlook for Third Fiscal Quarter of 2009
On Monday May 18, 2009, 4:31 pm EDT

FORT WASHINGTON, Pa.--(BUSINESS WIRE)--Kulicke & Soffa Industries, Inc. (NASDAQ:KLIC - News) (“K&S”) today announced that the Company has raised its revenue outlook for its fiscal third quarter ending June 27, 2009. The Company now expects net revenue for the third fiscal quarter to be in the range of $40 to $45 million, an increase from the previously forecasted range of $32 to $37 million.

Scott Kulicke, Chairman and Chief Executive Officer, commented, “The increase in customer activity that we saw near the end of our second quarter of 2009 is continuing into our third quarter. Improvement is being seen across all areas of our business, particularly in expendable tools and ball bonders.”

[blasher]

I'm getting my ducks in a row . . .
give me some time ...
email me and let me know how you're doing.
I miss seeing you around.

[sungolfer]

S2 The new software you purchased,does it due other options other than seasonal trends.

[Tictac]

Blasher, Looking forward to the email.

[dapro]

S2, would you add AMGN to your list above. TIA

[SyndicateTwo]

My problem with the July right now is that if you look at the seasonality chart, you clearly see it doesn't move until mid June. If you were to buy the Julys right now, you'd potentially lose a ton of time value. So, either just wait until June to buy them (which is what I might do) or at least get into a position now using the Oct (since they haven't posted the aug options yet).

AMGN's chart looks like it's ready to explode. It's bouncing off the bottom of it's lower end channel which is where it was at both the Nov and March lows. It's making a clear huge falling wedge and any day could just take off into the $50s. Look at the predictive seasonality chart for it and you'll see a small pullback is expected in early June. That could be from higher prices.

If the market starts pulling back more here, all these healthcare/biotech stocks are going to start to run because they are the defensive rotational sectors for summer. AET has a great seasonal trend starting in late May.

[SyndicateTwo]

AMGN seasonal chart--->>

[blasher]

brilliant! TicTac . . good income-producing . . . ...
as long as you Close out BOTH sides if one side
approaches becoming "In The Money".

I have been thinking of you lately and will email you
one week soon about a "relationship".

Good Luck Always !!!!

[sungolfer]

S2 If i could ask,why go with OCT.With major sell off expected than,don't you think AMGN would be effected.And a rally in June,odds would be better for the July option's.

[SyndicateTwo]

Try to focus on equal dollar amounts as close as possible. That way you have a pairs trade and not be weighted in one direction.

[SyndicateTwo]

Okay, I bought 20 Oct AMGN $52.50 calls for $3.8 as a starter position and 50 July WDC $17 puts for $.55 because it has major weakness going into late June.

[Tictac]

S2 - What are your thoughts on this strategy: Buy equal shares of FAS/FAZ, sell OTM Calls on both each month. In time the shares will be free.

What are the negatives to doing this?

Thanks

[MRVLReader]

See, AMGN gets all "green" during the July...
http://www.deepmarket.com/season/amgn

[SyndicateTwo]

No. The lower projection holds for 852.

Very interesting setup for the market now.

[SyndicateTwo]

AMGN TRADE SETUP!! SEASONAL TRADE!!!!-->>


BUYING tomorrow July $52.50 for $1.50 or less. Trend is for BIG moves in these stocks from mid June through end of July.

I think this is a better than double. If AMGN breaks that level, these calls could 5x your money very quickly

[dapro]

so, did todays action qualify?

[SyndicateTwo]

Alright, CHECK THIS OUT!

Someone I follow closely has some very interesting info to share tonight. Why should you care? Because this person has NAILED this thing to a 'T'. A week ago, they said the complete opposite of what just about every person coming on CNBC was saying. Everyone was calling for SPX 1000, bla bla bla and to buy every dip. Even on Fast Money they were calling for last Thursday to be bought as 'your dip' if you missed the rally.

Last week, this person I follow said that if the market is to follow the 1930s scenario, as it has almost to perfection so far, then the next thing that would happen would be for the market to stop at its 2/3 speed resistance line from the Oct 2007 high to the March bottom and the 25.8% envelope below the 2 year moving average. Don't worry about what that all means. Just know that that is exactly what happened on the big rally off the 1929 crash low's reaction rally. That rally lasted exactly 70 calander days. This week is the 70 day mark for this rally.

Now, I think it was that 935 level or so that was the mark of those levels above. What happened? So far a near 50 point decline in less than a week. What next?

This is where things get interesting. Why? Well, first, everyone I see on TV is saying to buy SPX around 875 if we get there and that there is no way on Earth you'll see a retest of the lows because the reason we hit those lows was due to panic forced margin selling, not fundamental factors. Well, yeah. But if we follow the 1930s model as we've been doing, then this could be the beginning of a new leg down to new lows.

Now get this - the new 1st downside projection for the SPX is 857.42 and 8119 on the DOW. The DOW MUST be above 8350 and the SPX above 892 at 8:45am PST tomorrow in order for those projections to NOT be confirmed and thus the market should head higher. If not, then most likely you'll see those levels shortly.

It's too soon to tell if this is the setup of a new major leg down. Of all people, Cramer sounded like he is tilting in the direction of a new leg lower.

If you see the ES trade under 850 tomorrow, expect a somewhat large reversal upward. However, that's just a trade. Things could be getting a bit dicey soon.

[MRVLReader]

S2: You are right, July is the "Red" month for ARO.
http://www.deepmarket.com/season/aro
If we buy the stock around July 24 to 26...hold for 10 days...the price may drop 14 %... according to the table above.
When will be the best time to buy the puts?

[sungolfer]

S2 am i missing something here,i don't see any calls or puts for august on ARO.

[SyndicateTwo]

Well, if I knew the algorithm I'd be selling software myself for $5k a piece.

Just kidding.


But basically it's very simple what it does and I don't know why no one else hasn't created a cheaper way of doing it. I'm actually suprised MetaStock doesn't do it.

What it does is take the last 10 years let's say of yearly charts, plots them all together over each other and then is able to find very specific times of the year by comparing each of the charts as to which is the most consistent times to short or buy. You find those and then look at a regression chart to time the entry going into that seasonality period using out of the money calls or puts.

Nailed TRMB and AET.

ARO is another beautiful setup here for a short. However, the timing is going into late May/June for a big decline through July/Aug.

So, let's hope we get a monster rally in it to setup large out of the money puts!

[valuemunger]

S2, what's the algorithm or thought process on how it picks the stocks?

[SyndicateTwo]

CYCLE UPDATE FOR MAY


14th = low
18th = high
21st = low


These are for short term trades.

[SyndicateTwo]

I got this new software called 'Best Choice Software'. It's expensive, but man does it pick the winners.

I'm posting some of the big ones to get ready for on the top board.

[The_Net]

S2, thanks. How did you go about to find all the (potential) winners, especially the seasonal one.

[SyndicateTwo]

TRADE SETUP ALERT---


Okay, the seasonal trend for ARO is to decline from June to late Aug. Look for a bounce here off this 1st decline and then a major 3rd wave down. The trade is to short or buy 1 or 2 strikes out of the money puts on ARO for AUG.

[SyndicateTwo]

Isn't this the craziest market? I mean, you have some really experienced people saying we're in a bull market that will just keep going up into next year with small pullbacks of no more than 10% or less. However, you have the guys who called this thing from the start like Nennar and Elidias saying no no no. I just don't know what to believe.

I know the wave counts are now saying we have a 1 through 5 up since this wave 1 is a clear impulse wave. That's the good news if you're long.

However, Oct could be big on the downside. I'm tempted to just sit it out until we get there and wait for the occaisional trades to pop up and not force them.

It's as if everyone has completely ignored what's going on out there. I think it's true what my friend Greg told me that he's seeing clear evidence of much of that TARP money being put into the market to prop it up rather than what it was supposed to be used for - buying bad loans off banks.

But manipulation only lasts so long - if that's what's going on. The SPX is way overvalued now and that article in Bloomberg over the weekend showing the comparion of every bear market since 1875 I think it was ending in a total disgust to be long proves that no way was March the low or end. Instead, this is a larger 4th wave. I think Moe backs that up, but 1017 is the upside target for this rally if it can get there.

Right now I think we're seeing an upside capitulation by shorts. But that too ends like capitulations end downlegs.

What to do? Don't force trades and if they get away from you, so what.

All you really need are a couple of TRMB/AET/TNA trades a year and you can turn $5k into $50k on three trades. The key is sitting and waiting for them to present themselves.

Keep AET on your radar because Obama is now going to start talking up health reform and that at first should be a problem for the stock. But as it becomes more clear, it could set up a nice new trade in it. It has a seasonality run between May 15 and June 7 each year.

[The_Net]

re. confusing. S2, you still believe that Market will fall and a Bottom will reach between July and October?

[MRVLReader]

S2: Accoding to the notes from Worden on 03/25/09 ( at that time, SOHU H-43.94 L-38.25 closing price was $41.68):

...SOHU may have serveral points of upward mobility here, but (we) also believe a major, through somewhat topsided head and shoulders top in being constructed. Any rally attempt upinto the area of the 100 week moving average should be shorted. Even as price has held within a trading range over the past few months, both TSV and MoneyStream have continued to show weekness...

Are you waiting for one more week? After 5/15/09?

If we set the target price for $39.00 or below, then, June $40.00 put is around $0.35 to $0.45 now. Ready to go?

[SyndicateTwo]

What I don't think many understand about my 'charting techniques' is that there are two ways to look at a chart. If you are long a stock, such as our play in MRVL two years ago, you (I) are looking at the pattern setups differently because you are long the stock and trying to find places for shorting calls/buying puts against it. So, naturally you're looking at the most optimistic viewpoint of it and not so much taking into account the negative setups.

However, if you're trading a stock in a one way directional play either long or short and trying to pinpoint those entries for short term trades, then you have to take into account everything regardless of your opinion.

I know there were many times when a clear breakdown setup was being formed in MRVL and I was always looking at the positive in it such as indictor divergances. Again, that was because of they way I was trading it.

As for AET and TRMB, those were easy trade setups. I'm now looking at SOHU and a possible short/put on TRMB. But not until later this month or next.

There could be a triple on the puts on each.

[snake1]

Syndicate, I have been following you for years since the Yahoo Mrvl board days where we watched that little jewel collapse. When you went here, I followed your posts and your charting insight. Although, there were often times I didn't agree with your charting techniques (and still don't at times), I learned more from you than any book and it helped build my expiernece in trading. I happened to be reading the other day with your AET recommendation and did my on DD on it. Really liked what I saw there and jumped ALL over not the June 25's, but the July 25's. Today, I sold for almost 3X my intial investment. I am making money in this market environment like never before by trading stocks. I normally don't jump around with many but CAT and BBT are the main ones I trade. Also when I can see a short or long trade with BRCM that is also one of my favorites. Syn, you are WAY out of my league with your charting knowledge and techniques but I do make money in the market and look forward to posting my ideas and plays. Thanks again for the AET play, something I would never even of looked at if not for you.

[SyndicateTwo]

Wow, I gotta tell ya, I am really confused as to what to do. I am getting completely different opinions on what's going to happen. McClellen is saying one thing, but someone far more accurate is saying the complete opposite as a very real possibility. This is just an excerpt from the May newsletter I got tonight:

"Notice that the month of
May is the best performer of the "bad" six month string with a
total return of 0.94% on average. That just beats out the worst
performer, February, of the "good" six-month string. The market
is now faced with the bad six-month string directly before
it. It does not, of course, guarantee that the May-October
period will even show a negative return, but keep in mind that
we just saw the "good" six month string yield a negative return
of 12.4% for the Dow Jones Industrial Average. If the pattern
continues this year, it suggests the next six months could well
be worse than that.

But worse, we should not push the analogy from 1930-1931 too
far or expect it to continue too long, but we will tell you that
after the resolution of the bear market rally that saw the Dow
move up to its envelope 25.8% below the two year moving in
February 1931, it took only two months and one day for the
Dow to move to new bear market lows. If today ends up being
analogous to the February top in 1931, the analogy points to
a break of the March lows sometime around July 8-15. Rest
assured there are very few investors or analysts that would
believe such a possibility exists.


Just so you know, the SPX and DOW both today hit their 25% speed resistance lines. And then showed this chart:

[SyndicateTwo]

I don't even want to look at where those AET options I said to buy (June $25) are trading at now.

This is the problem with bear markets. When you take losses, it scares you out of the winners too early.

I had 300 of those at .83. 3 days later they're at now $2.50! And going higher!

Add TRMB to it and wow.

[SyndicateTwo]

'THE' low might not be then, but 'A' low will be.

Here's the setup - in pure wave patterns, on a weekly basis, the market fall from Aug 2007 to I think it was Feb 2008 was a wave 1. Then, the fall from last summer to March was a wave 3. We are now in a wave 4 correction.

Now remember these are larger scale timeframes. The 'big picture'.

If it stands, the next leg down will be a final wave 5 which 'should' mark a new low. The theory being that all this stimulus will end up not working. And I have to tell you, if you read between the lines, things are not really changing other than the low mortgage rates bringing in new refi's in mass. I just refi'd my home to a jumbo 30 year at 4 7/8. That's insane.

So, this is most likely just a bump in things. Remember the market was trading at 14k and SpX 1500 with these investment firms trading with 40 to 1 leverage. Add in the fact that many people won't go near the market these days because they got so screwed and you have to figure what is going to be the fuel behind the move? I think just short covering and small buying to feel in out. But any large trades will not stand for too long because fundamentally there is nothing out there to really back up a new bull market .

[SyndicateTwo]

I'm playing the May because I'm not sure what's going to happen here. Looking at the SPX chart above, and then looking at what the price is doing today, it appears that that large inverse H&S is going to be the setup. So, a run here to 943 +/- 30 points? can be a good retest of the neckline.

Then, we get a fall back into the 750 range +/- 30 points or so and then that's a buy.

Like I said though, I just am not 100% sure in that because we are entering a very weak market season and I assume the shorts are pretty much all blown out. The market is now OVER valued on 2009 and 2010 eps leaving just hope to trade on.

BTW - I'm long the TZA and SHORT those calls.

But just a small position.


If you look at a 5 year or longer $NYSI or $NASI chart, you'll see that EVERY May through June, the market falls. EVERYTIME!


The question this time will be how low. The typical cycle is for the market to run from Nov to Feb/Mar, then fall into June, then bounce, then fall again from Sep to Oct and then repeat. This year it's ass backwards.

And don't forget the Jan effect. Many are foretting that.

And all these bulls better not forget the 1932 scenario - where the market fell 90% off the big rally off the initial drip from 1929. So, this H&S breakout could take the SPX to 1200 next year. But then?

[The_Net]

A lot of reports came out lately had suggested that Economy will be recovered by the end of 2009.

The Stock Market is usually (turned) ahead of the Economy.

I don’t think the Low will be in October. We will probably see the Bottom in the summer. What do you think?

[MRVLReader]

S2: Today, TZA June $30.00 call is $3.40 and July $30.00 call is $4.70. Which one is the better play?
Thanks!

[dapro]

McClellan's numbers;

Markets;
initial low due May 18-22
important low late June, then rally into September

Gold bottom May 8
T-Bond rally from here into mid-June

[SyndicateTwo]

Look for these key dates this month--


May 8th a possible short term high?
May 18th a possible high?
May 21st a possible short term low


SPX 1012 is the upside cyclical target high for this rally. That doesn't mean it needs to be reached, it's just a target.

The SPX is now overvalued on GAAP.

Also, here's a stat you might find interesting:


The fall from the Oct 2007 high to the March 6th low is almost EXACTLY 61.8% (fibo magic number) of the run from the Aug 12th, 1982 low to that Oct 2007 high. Amazing isn't it?

But be carefull because this stat is even more intriguing:

When the DOW fell in 1929, the ensuing rally off that decline was, can you guess? That's right - 61.8% from Nov 1929 to April 1930. Then what? From May 1930 to July 1932, the DOW then fell another 90%!


Will history repeat itself? There's no way to know. But the pieces are in place for it to happen.

[SyndicateTwo]

You really don't know until it turns, but if you look back at the March low of 666, back then everyone was calling for 600. Then looking back, you can easily see how that was a turn based on a 25 year chart fibo target from the 1982 bull market start.

Now, 943, the 2009 high seems to be the goal here. 920 is the multiple swing high which is first, but I'm with you in thinking that since everyone is looking for the same thing, it will probably be more of a turn before everyone gets it.

The real question though is, is this a bear market rally leading to new lows or is this a new bull market wave 1? I have no idea because Charles Nenner thinks this week or next we begin a new decent to new lows 'in a couple of months'. Peter Elidias of Stock Market Cycles made one hell of a case for this being a rally top point using some very interesting correllations between this rally and the 1932 rally off the lows.

But price is price and it's going higher.

One thing I do know is that there WILL be a pullback/selloff in the near future and the degree of that selloff will setup some very good buys going into year end. Selloffs are easier to time your buys in terms of averaging into a long trade than picking tops because tops can just keep going higher with no justification.

One thing I do find intersting though, and Bernie Scheaffer pointed this out of all people, that massive selloffs like we had going into March usually clear out all future resistance sellers because they most likely got blown out of their long positions in the capitulation of the selloff. Thus, you have no resistance overhead anymore. So, that makes it dangerous to pick tops after big selloffs.

This is also why most technicians are being fooled here now. What should be top after top is turning into nothing more than a one day speed bump. Now you have people most likely chasing performance not wanting to be left on the sidelines as the market keeps going up.

And that, usually, leads to a top.

Just remember, the second week of May is the target for a cycle top with a new leg down set to either retest the 666 lows to some degree. I think Art Cashin is with the majority who think that 750+/- would be a large buy trigger point. THAT is going to be the test.

[randygee]

btw AET...

still looks to be in a bearish downtrend to me. I wouldn't touch under the weekly and monthly f lines which converge over 24....if it gets over, you have my attention, otherwise too risky, it hasn't bottomed.

[randygee]

syn, you are within a stone's throw from your spx target--no ever says you need to touch it to confir. many other technicians were looking for 942.75....

this could be a situation of "close enough"

[SyndicateTwo]

Okay, I have a perdicament again. I bailed on the damn TNA trade WAY too early because Moe was sure the hourly charts were going to bring the market down in a final 5th. Instead I'm out over $30k on that trade I could have been in.

Now, tonight Peter Elidias is convincing me that we are at a major top and has some pretty strong evidence to back it up. His thought is we go down now, then rally into next Tuesday/Wed to finish it, then fall.

[MRVLReader]

S2: Tried again this time too. ($0.85 per call)
Look's like the seasonal stocks you picked up are better than "DNDN"...

[SyndicateTwo]

okay, how much would you pay for a company that will guarantee you they'll make $3.85+ per share for 2009? I'm talking multiple.

20? 30? Hell, if it were a tech stock I'd say AT LEAST that.

Would you pay 8x that EPS for that stable outlook? I tell you what - how about less than 6 right now?!

Here's the trade -- AET. Right now as I type this Monday morning, the stock is at $22.40. The JUNE $25 call is at .85. 10 of the last 10 years, AET has run up between May and early June. AET currently trades at a PE of under 6 with a PE of 8 making it a $30 stocks. IF it runs to $30 by June expiration, you'll make 5x your money.

I'm not counting on that. But it should be a big winner nonetheless.


Hell, with the math the way it is, it could be a nice long term investment right here.

[MRVLReader]

S2: Are you talking about the charts below:

http://www.deepmarket.com/season/ffiv

http://www.deepmarket.com/season/brcm

http://www.deepmarket.com/season/trmb

You are right,FFIV will be almost greens during the Month of Oct. and TRMB gets her greens on May...

Just change the stock's name, you can test any stock.

Thanks!