Short Term Trading (NDX / NQ / SMH)

[xe2dy]

Hello D, here is a copy of the post I was going to add to the RB jwg board but didn't. I understand and respect the fact that he wants to keep that board as 'day trading'. At this point (and probably for some time to come :) I can't effectively day trade due to the SEC rule requiring account balance greater than 25K for more than 3 day trades per week. In a way that is good because it's forcing me to take more into account when taking a position and holding over night. I need to pay attention to trend lines. divergence. volume etc.

"100% short QQQ, but on review of daily and weekly USPIX and UOPIX charts, along with daily breath charts and the QQQ 30 min chart will be 100% long very soon. Will leave the IRA flat and wait for another shorting opportunity."

BTW D, jwg offered to let me manage this board as he has 'wash his hands' with it. I feel that you are way more capable than I and will give you my vote. You have taught me a lot, D and I appreciate that.

[Dimension]

it is a difficult mkt to call. seems the best way to play it is intraday and short the bounces right now.

there are arguments tht can be made on both sides. ive mentioned the various bullish indications over the past week, but today noticed a rather bearish one.
ndx 50/200ema crossover. in addition, the ndx is now below its 38.2 retracement from the 03 bottom...these may have some rather bearish implications...

i think if you are playing for more than a week, its best to hedge with equal amt of options....august may continue like this

[tjwny]

seems to be resolving downward - as for now.

[tjwny]

Hey Dimension:
I don't understand the disconnect between simiconductors (and technology in general) and Dow. Many techs are near March 03 low. You have any thoughts which way it is gona resolve ( either Dow going to> 12000 or techs making new lows). This is bizare. situation.Any thoughts?
thanks.

[Dimension]

did pull the trigger on this trade @32.87, stop will be 32.75

[Dimension]

i picked up the Sept 33 QQQ calls today and likely will open a long position on the qubes by EOD for a daytrade tomorrow.

[Dimension]

with oil back in green...all bets off the table...

[Dimension]

jwg has moved back to RB...there's a link somewhere to his new board..check for his last post. RB is too unreliable and has caused too much frustrations for me to return and so i lurk around ihub babbling about my ideas...

[mr_cash4]

hey fellas, I see that there is a new board going on for intraday trading.

[Dimension]

if oil can continue down today for the 2nd straight day...i expect to see buyers come in later in the day.

ndx immediate resistance..1315, then 1320.


Tick continues to trend up from it's early lows..forming higher lows thus far. CPC doing the same. TRIN opend at 3.0 and since settled to around 1.5.

[Dimension]

NDX flirting with 38.2% retracement on the weekly. bought @32.58.

we've got some things going for us here..
-bullish divergence on daily
-gapped down outside BB on open
-options last 3 days still favoring puts..bullish.
-and based on activity friday and monday, qubes should close above 33 by next friday.

that said...watching oil closely today.

[GGScott1]

He sold did at 1324 see message 58 on rb, pre-market.

[xe2dy]

Hello jwg, I would rather post questions for you here rather than on the RB board.

"buy NQ/short @ 1325.00 eom" Did you close this position today? TIA

[methodibd]

Anybody know of an intraday trading vehicle that would move proportional to the tightness (of trading range) or flatness of the daily, 60min, or 15min of the nyse, qqq, smh or other index?

Basically, if I think today is going to be tight or flat, then this thing would give me a nice profit. I know selling option spreads might do this, but the timeframe for that is too long.

I guess the boredom today is getting to me.

[xe2dy]

Mitch Meana

"08-09-04 10:50 AM When the market meanders around like it has this morning it is good to look at the 10 minute chart, the goal being to view stochastic's as it relates to the action. In this case we see over sold conditions being relieved on a shallow advance, suggesting the advance will fail and new lows are coming."

[xe2dy]

Well thank you be, if you decide to get a subscription (3 mo maybe?) to stockcharts.com EXTRA real time we can exchange e-mail and I will show you what took me a few months to learn. GL

http://stockcharts.com/corp/extradetails.html

You may recall my comment on the chichi2 board about being penny wise and pound foolish.

Be, I'm still a student of the markets and always will be.

[be]

xe2dy, your last week actions have earned my respect, it's very hard for anybody to short when SMH and QQQ at a level of this year low.
I made a fatal mistake for going COUNTER TREND, as a result I paid dearly for going Long last week.
You are the one to guess it right.

50 years market statistic has shown us that August and sept are two worse months for Market, especially Tech stocks.

The Boys have gone to the Beach with their families,

the slow volume tradeswill continue to the end of summer. if volume is the weapon of the BUll..... the market will trade side way to down, and Bear will short any BOUNCE.

Please make sure to read McHughe comments.

Ps I have Ameritrade account,and got Real time chart STREAMER, i dont subribe to IQC charts any more.

[mrnatural]

QQQ, VWAP = 32.82, moving stop to 32.79

Greg

[mrnatural]

QQQ...Block money flow (MF) has been good all mourning and just spiked higher while retail MF has been oscillating below neutral.
Overall MF is improving, I've been long from 33.72, stop at b/e

Greg

[xe2dy]

Hello be, I know you have IQ Charts does that service allow you to annotate 1, 5, 15, 30 and 60 min charts with trend lines?


QQQ having a hard time breaking thru 32.94 R. Moved short stop to 32.98. May see this small rise as middle of bear flag.

1 min pattern may be bullish Ascending Triangle.

OK, broke the AT up trend line so the bearish pattern looks better.

[be]

MAKING MONEY......HAHAHAHA, it's my goal too> good luck. again thanks

[tjwny]

smh at bottom individual chip stocks about to break out after the carnage. utek up by 2

[xe2dy]

Morning Call

http://www.datacademy.com/members/mcall.htm

[grommitt]

jwg: Thanks for explaining the Belkin and Elder moving averages. Surprisingly simple.

[jwg]

@ all :

this is my new "protected member forum" , you can read without
joining , but if you want to post messages, you will have to
apply for a "join request" , this new forum posting is unlimited.

http://ragingbull.lycos.com/mboard/boards.cgi?board=CLB01233&read=1

1. click on "message list" to read the messages

2. click on "refresh list" to ensure you see all new messages

3. the present pending "join requests" will be approved on monday


jwg

[xe2dy]

Also thanks to Dimension and BuzzOnDaBeach for very educational posts.

[xe2dy]

Thanks Bliss for your thoughts. I just want to make money and I don't care if it's long or short. GL

[BuzzOnDaBeach]

Good point, and always watching the OI. I'm thinking long the following, but won't chase a gap up as slight retrace will give a better buy. Sidenote, NDX futures just went through a key ST resistance level, Friday's intraday DT line

Aug 33 QQQ calls
AMZN
YHOO
AMAT, KLAC or LRCX

Maybe TASR

Would like about 100 contracts on QQQ, and 1000 each of four of the above 6 stocks. Again, won't buy the premarket or initial gap up, but the first retrace and bounce on futures.

Buzz

[Dimension]

buzz:
...but I think puts were being closed as cots are thinking ST bottom close or in...

or could be Puts were being bought as a hedge...as institutions usually do when going long the mkt. we should know monday by keeping an eye on the OI of those Aug and Sept 33. if the Aug 33 OI increase to near 300K, then those are fresh new positions and with that kind of volume (196k on friday) it has to be mostly insitutional.

yeah..i think a bounce tomorrow is probable...but with the type of damage seen thurs and friday...sellers may jump on that bounce...so i agree with that tight stop, or better yet, take the green off the table and wait out tuesday on the sidelines. the next two weeks or so may be choppy if we are putting a bottom in here...i wouldn't be suprised to see +/- 100 on the dow on more than a few occassions. Amongst the various "indicators" i will be looking at during this time will be the QQQ option volume...i'd like to see an increase in volume with more puts being bought than calls, which would be indicative of a market bottoming...as it would imply institutions are buying the dips and hedging options.

[BuzzOnDaBeach]

Futures up quite a bit tonight. NDX 5.00. eom

[BuzzOnDaBeach]

I actually agree with that assesment. The PC hit 1.25 on Friday which is exceptionally high. The QQQ volume was 150 million, something I really wanted to see to confrim a bottom near. Volatiltiy could be a bit higher, IMO, but I think puts were being closed as cots are thinking ST bottom close or in.

Again, looking to get long tomorrow with a tight stop for rally through fed, then back to neutral.

Buzz

[BuzzOnDaBeach]

bobk, I am no guru, but this is my big picture chart right now and where I came to these numbers:

1. The low I predicted short term which was hit on the nose Friday is a TL that marks three points, the peak of the first rally off the Oct 2002 lows, the first retrace bottom when that peak/resistance was taken out in March 2003, and the second retrace point when the bull rally began. They are on the Dark Blue TL on the chart that follows and were Bright Green on the chart I posted last Thursday.

2. Directly below that is a support line that was well tested in October 2003 and was key resistance in Septemeber 2003. NOTE THIS, that same support level, approx 1106 is where the NDX gapped down after 9-11. That is a very key level, I think will be tested tomorrow and hold and we will have a short term rally off of that. That is the CYAN line on the chart that follows

3. The next solid support should the 1300 area be broken is 1200 which the bulls will defend like crazy because it's a key support level, and the last remaining TL UP, marked on chart to follow in orange TL and purple support line.

4. The next key support area is 1100 roughly (I seem to remember 1096 or 1102, would have to look) that is marked in Red and is the initial low post 9/11.

HOWVER, I may have been especially bearish yesterday, hangover from Friday, lol, and I'm rethinking that 1200 will have to hold to turn a secular bear into a secular bull.

And I think I'm no better than 50/50 on this hyposthesis, however, I think energy costs will really peak this winter and the damage will be reflected in equities in March/April. Course, could be wrong. Also, if Kerry wins, going to be reflected in the markets ST. (negative). Incidentally, I am non political and don't vote as I think we put crap up in general. The best and brightest, those who should lead, are mostly in the private sector, IMO, and want nothing to do with politics.

The big picture chart NDX, S and P correlates nicely, needless to say. Comments/arguments welcome. Once again, I am a bull trader and bullish by nature, but always like to play devil's advocate w/ myself.



Buzz

[Dimension]

adding one more bullish argument to this...

QQQ August and sept 33 puts saw heavy volume on friday, with the August 33 puts coming in with a whopping 195K volume.
Current OI on those puts are 106K. if on monday's open the OI jumps to about 300K, that suggests to me that in the short term, this market will trade higher by August expiration

[Dimension]

NDX Weekly:

[Dimension]

New Highs vs Major bottoms:
keep in mind, these are not necessarily immediate signals..

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[Dimension]

ST Bulls vs. Bears

ST bullish arguments:
-extreme TRIN readings 2 days in a row
-CPC and EPC showing a very large amount of puts being bought friday
-VIX closed outside it's Bollinger band for 2 straight days now and also has deviated significantly from it's 10 and 20ema.
-extremely lopsided breadth two straight days.
-NDX traded below it's lower BB channel for the entire of friday...a very rare occurrence.
-although Friday was horrendous, TICK touched +1000 5 times and never once hit -1000. the 5ema/ma on the intraday chart traded in positive territory for most of the day shortly after the open and even after the late day sell off, rallied back to above zero on the close.

ST bearish arguments:
-the fact that the mkt failed to bounce given similar readings on Thursday suggest bears are in control here.
-mkt continues to make new lows in extreme oversold...reinforcing the bearishness of these move..making new lows in extreme oversold requires conviction behind bears...and this type of damage cannot be reversed easily.
-ideally a 10 ma CPC of about 1.0 and EPC of .80 would be a good area to buy, we currently are at .82 and .68
-given that bears appear to have conviction here, I think it’s best to play bounces with the assumption many will try to short those bounces...

[BlissBull]

xe2dy - No, the vertical purple bar is showing that the market is still rising. It has not reached a top yet. When the 5th wave begins, it could "go vertical" and surprise everyone! That often happens in final stages of markets with broad public participation (remember when gold shot up to $841.00/oz.)

http://stockcharts.com/charts/performance/SPSectors.html

[bobkubecka]

Buzz, if you have time, why 1100? and what time frame. Do you think they prop things up untill after the election? TIA bobk

[pegwatcher]

Bliss, differences of opinion make a horse race, lol.

If we get 5 waves bull here then we would expect an ABC correction and 5 more waves up. Very bullish, indeed!

And I guess we have to find a way to count 2000 2002 a zigzag and grand supercycle wave V extending; to new all time highs.

[BuzzOnDaBeach]

Blissbull ......................

I am a firm believer in channels, tl's, basic technical indicators, my favs being adx, rsi, macd. I'm not big on EW's although I follow the consensus on them and take them into consideration (the calls recently of a nest of lows were dead wrong), not big on Hurst cycles or Bradley planetary prognostication, lol. More than anything, I watch world events, economy, and market fundamentals, and as a trader, short term indicators.

Fundamentally, the s and p is still 7 pts. over it's traditional p/e. I would agree that this is a different economy than 20 years ago, and specific sectors realize the type of growth unheard of in the 50's through 70's. However, there are still ridiculous p/e's out there in tech land. Look at OSTK market cap vs. earnings, Yhoo, most of the semi's, INTC being the only one with a fair p/e and peg.

In the short term, I think a rally will occur. However, it will just be a relief rally in the bigger down move we're currently in. Much of the earnings growth of the last year was due to cost reductions by corps, and alhtough top line growth has been impressive in certain sectors, we are also realizing the effect on the economy of the many layoffs that occured. I met a trader on IHUB who is basically daytrading for a living because he was laid off from LRCX and there's simply no new jobs in his area of semi's. Combined with higher energy prices, probably unfounded but there none the less, rising interest rates, and political uncertainty, I think this points to a medium term decline in equities. There will be rallies, I expect a nice one in Sept. But I think by spring we'll be back to the 1100 area NDX before the bull resumes in earnest.

JMO, and since I prefer trading from the long side, I hope I'm wrong! Best of luck in your trades! Looking to go long QQQ calls in the am w/ a tight mental stop if 32.50 breaks for a rebuy around 32.00. If 32.00 breaks in the coming days, QQQ's will see 30.00.

BTW, re book to bill, that will be a key number to the SOX since the decline in the last report (1.08). I am also watching inventory levels in upcoming SOX earnings, as KLAC and INTC were higher.

Basically entering each day w/ a neutral bias and trading the trend.

Buzz

[xe2dy]

Hello Bliss, in the Stockcharts.com link doesn't the 'Sector Rotation Model' indicate that the Market Cycle is beginning a 'Market Top' as listed in the red horizontal bar? "The Market Cycle precedes the Economic Cycle because investors try to anticipate economic effects."

Also isn't the 5th EW the shortest and prone to truncation?


http://stockcharts.com/charts/performance/SPSectors.html

[BlissBull]

Buzz - IMO if you are a realist, you will soon realize that the "bear party" is over!

I think Mr. Market is about to wake up and smell the roses!

I don't read other people's books and market letters. I am basing my opinion on my view of EW, Cycles, Sentiment (oddlots, put/call ratios, etc.), Funnymentals (leading and coincident indicators, book to bill ratios, interest rates, etc.), and Sector Leadership (see link)...

http://stockcharts.com/charts/performance/SPSectors.html

[BlissBull]

peg - I respectfully disagree... I think we have just completed wave 4 of the big bull market that began in 2002, and are now ready to begin wave 5 up to new highs (no, I didn't read it in anyone else's book) LOL

[BuzzOnDaBeach]

This may be a short term bottom, but not in the bigger picture. I would look for a final bottom at 1100 NDX.

I am a bull by nature, but I am also a realist.

Buzz

[Dimension]

i agree...we probably could get rewarding long play monday, but it's likely to attract shorts. bulls have their work cut out for them here....the past week was technically damaging on both the daily and weekly...

can they do it? yes...but i think the wise move would be to treat bounces with skeptiscism and not try to call the bottom here ...

[xe2dy]

One more chart of the NDX 'Big Picture' with 26 EMA.

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[pegwatcher]

Dimension, it seems every indicator (save possibly cycle analysis) indicates we are in a long term, or at least intermediate, bear. Elliott wave analysis says we will easily break 2002 lows. Fundamentals and history say we either go very much lower or sideways for many years until dividends and/or p/e ratios revert to the mean, which is about 50% below (spx) where we are today. History tells us we undershoot the mean, i.e. more than 50%. Nasdaq, of course, would drop far more than spx.

The first wave (2000 to 2002) was a bear only in junk and grossly overvalued. This, the third wave, will be a bear market in every stock. Nowhere to hide in third waves.

My count for NDX, from 2000 highs, is A33313 (very bearish, far,far below 2002 lows) or C3313 (less bearish, but still break 2002 lows by a wide margin). I, and many others, expect this bear that started in 2000 to last at least 10 more years, probably 15 or 20, interspersed with many good rallys (unless we crash very hard and fast).

Near term EW counts are sometimes difficult (not a lot of use for daytrading) but longer term the counts are more clear.

all imo, of course (and shared by quite a few others, all smarter than myself).

[xe2dy]

I tend to agree with Mitch Meana. Need to watch for a fill of the gap. If I see the market start to move up Monday, I'll close my short and go flat. Then look for a higher QQQ price to short at.

"...If the market rallies to fill this gap early next week the message sent by the market will be very very bearish and suggest no clear bottom is at hand. To put it simply if we continue down to our target of below 1720 intraday get very bullish, if we rally to fill this gap Monday Tuesday and Wednesday get very bearish. As I stated Friday we would know exactly what to do next week based off the first three trading days. Now all we can do is wait and watch and be prepared to execute a very strong trading plan. Good luck and please don't forget to vote each day."

http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID641835

[xe2dy]

Hello D, below is my version of the $NDX chart in this jwg rb post:
http://ragingbull.lycos.com/mboard/boards.cgi?board=CLB01233&read=9

Note that the ADX line is turning up and that the red -DI line is above both the ADX and +DI lines. That is indicating that this bearish trend will continue IT. Check out OCT 01, very similar.

From Elder: "The best time to be short is when both red directional and black ADX are above the green directional and ADX rises."

[Dimension]

we're we actually in a bear mkt this year, or are we starting one now?

http://stockcharts.com/def/servlet/SC.web?c=$ndx,uu[h,a]waclyyay[pc42!d20,2!f][vc60][iub9!uh9,3!ud20...

notice the macd on the above chart making a new low...and the extreme oversold conditions on the weekly. implying we need to becareful of calling a bounce here a bottom

yes, my position is changing slightly...but that's what happens when you step back and look at the bigger picture.
i think we could be bottoming, but we won't know for sure until the retest..