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it will be interesting to see if traders or systems trigger off a Golden Cross (50MA crosses above 200MA), which will occurr either tomorrow or wednesday from what i see.
It is the first time i have seen this much expectations around this event (even saw it mentioned on CNBC a few times last week) and for that reason, i am thinking it may quickly cross back down.
I would agree...but for the last year it sure seems like the market has moved opposite of the dollar.
That is what the chart shows, but putting thought into it, i would think it would be advantageous for the US to give the impression that the dollar will strenghten as that may be more of an incentive for global market to partake or buy our debt and bonds..no?
Eric, along those lines - have a look at UDN vs S&P. Clearly in the last 6 months (or more), the market has been moving inversely with the dollar index.
This support on the S&P 500 is still holding. The OEX recently broke below and today has managed to climb back to clove above. These remain key supports.
We will get a Golden Cross on the S&P in matter of days. That is going to signal a bull market to many technicians. However, if it can not stay above or turns down soon after, it will lead to sharp down turn i think.
Put/Call ratio as well as VIX has spiked quite a bit over the past two days - a clear indication that the market has been jolted with some fear. I don't consider this 'healthy fear' though, as it's coming after a significant move in the market and after a period of very low VIX readings (complacency).
Anyway, as you can probably tell...consistent with some of the studies i have posted, as well as the upcoming Bradley and Gann dates, i have shifted over to the bear side and starting to position short. Stop will be S&P 957 (~4% above current level).
Thinking of hedges....
Market seems to have a tendency to sell one week after triple witching friday.
if you shorted on friday's close and covered the following friday, you finished positive 71% of the time (30/42).
Well, today i closed out most of my longs and NIBBLED at some SKF. This will probably be a position that is scaled into as we move higher from here...similar strategy to what i did with the 'axis of dead'.
S&P 500 looks like a snapback retest of the recently broken 200MA. Will it hold or will it fold? tune in..tomorrow.
TRIN currently above 2.0, breadth extremely lopsided - we could see a relief bounce tomorrow (if not into close)
Another warning: Investor's intelligence survey
Bullish: 47.7% (highest reading since jan 08)
Bearish: 23.3% (lowest reading since Jan 08)
We have seen more extreme readings at tops and bottoms - but it looks to be close to where a contrarian/sentiment trader starts to take notice.
I've got 928 and 923 as key supports. I noticed that Banks were fairing better out of the gate, but have started to deteriorate as well. key ST support there is 38 - if that goes, we could get a pretty nasty day today.
Do you keep a trade journal?
S&P made a new intraday high and made a new closing high today...without much fanfare. Probably because the close is still range bound.
http://cfe.cboe.com/Products/Products_VIX.aspx
I know i can buy/sell these at Ameritrade.
On Yahoo, this is the symbol: http://finance.yahoo.com/q?s=VIX-X.W&.yficrumb=CAFxmKa2%2Fuk
When should one accept that this may be a true recovery? i don't know...but if we step back in time and ask Charles Dow, he might say: the move in equities need to be confirmed by transportation, for if companies are doing better, are producing..then shipping and transportation must also show an increase, after all, their product needs to get to market.
I bring this up because the Dow Transporation index is the next one about to cross it's 200MA. The Baltic Dry Index has been on a tear this year as well. I recall eric had been one of the first to bring the drastic decline in that index to the board's attention BEFORE the down turn escalated a couple years ago.
What is also interesting to note is that although volume data i have goes back to 1978, the first occurrence of these high readings only started occuring in 1996. Wasn't it in the late 90s that online brokerages came to be, sparking the revolution where just about anyone could trade from home; does this tell us who most of these speculators are? i think so...
Elena, here is the data for the last study (Market closes above Nasdaq/Nyse Ratio of 1.75 for two consecutive days).
If you want me to post the result of the large data set, i can also.
Performance 30 days later
Date/Time Close Nasdaq S&P 500
5/7/1996 1182.67 -0.29 3.71
5/24/1996 1247.8 -7.55 -3.5
12/29/1999 4041.46 10.99 -3.19
2/18/2000 4411.74 -4.26 11.88
3/6/2000 4904.85 -27.84 0.73
4/14/2000 3321.29 4.16 4.86
7/14/2000 4246.18 -4.79 -0.23
8/25/2000 4042.68 -17 -6.93
9/5/2000 4143.18 -22.43 -10.42
9/25/2000 3741.22 -8.69 -0.48
11/3/2000 3451.58 -23.96 -7.29
11/8/2000 3231.7 -27.59 -9.54
11/13/2000 2966.72 -14.41 -1.65
11/24/2000 2904.38 -15.94 -3.05
12/11/2000 3015.1 -8.65 -1.64
12/18/2000 2624.52 6.03 3.84
1/11/2001 2640.57 -12.58 -4.46
1/18/2001 2768.49 -23.51 -8.44
2/23/2001 2262.51 -23.96 -9.43
4/20/2001 2163.41 -0.35 1.94
5/3/2001 2146.2 -5.49 -2.74
5/22/2001 2313.85 -10.1 -6.88
10/24/2007 2774.76 -2.37 -0.56
5/5/2008 2464.12 -0.26 -4.02
5/15/2008 2533.73 -8.61 -10.2
8/11/2008 2439.95 -11.75 -8.97
8/27/2008 2382.46 -30.95 -29
9/5/2008 2255.88 -24.14 -24.29
10/6/2008 1862.96 -20.45 -19.5
11/4/2008 1780.12 -11.28 -10.08
6/5/2009 1849.42 NA NA
if you can get me just 1hr of read on the market every day, i think it can make us both very very wealthy. :)
Not today it seems, the pattern continues.
Opened up spy@94 for an ST trade
Been wondering the same thing...and also have been thinking at some point traders will get used to the pattern, which is likely when the opposite will happen = sell off into close instead.
ah yes..i am reading it was a 5 basis point stread between the two.
Looks like it was successful, interesting that the market is reacting negatively. Last week equities didn't like the disappointing auction, this week they don't like a successful auction.
there must be something in the details that the market does not like
so far, that is looking like the right move. I hear everyone talking about the auction today...and so have me looking at that as well.
you have a very good point, will post the dates tonight. As i recall, the nasdaq showed the higher percentage movements, and i believe the s&p showed around 5% or so. i will double check...
One thing i think is certain here is there
is heavy speculation here and it's looks like in the next month or so it will be getting even heavier. The caveat with that is that i think when we see this type of speculation, it can go on for quite some time..as the herd is led to the slaughterhouse...irrational exhuberance may not be as extreme as it could be yet imo and may have more to go.
As for volatility, i actually like that play better than shorting right now...and yes, that would be via options. It may sound odd to say that since a rise in VIX would imply a fall in prices, but i think if you get large up moves (blow off top type activity, and smaller retraces, you will see the vix moving by large percentages on those smaller retraces (i suppose i could study this as well, and i will). In fact, as an example we just had what was called an NR10 day yesterday - that is the narrowest trading range in the past 10 days, and yet the vix moved more than 5%.
Nasdaq SIGNIFICANTLY lower within 30 days?
the recently high nasdaq/nyse volume ratio seems to indicate we are in for some rather volatile times ahead.
today the nasadq/nyse volume ratio closed above 2.0. It has been a while since we saw that, there were only 12 occurrences. The results were mixed. 30 days later, the nasdaq was trading higher 6 times and lower 4 times. But what's notable is the avgerage loss vs wins: -12% vs 6.72%.
Now, if we lower the threshold ratio to 1.75, things get a little more interesting in that there were 82 occurrences with the market trading lower 67 times 30 day later(or 82% of the time), and with an average loss -12.89% of vs 10.15%.
FINALLY, one last tweak. We just had the Nasdaq/Nyse ratio closed above 1.75 for two consecutive days. there were 31 such instances in the past, 28 resulting in a lower close 30 days later (or 90% of the time), with an average loss of -13.67% vs 7.06% for the 3 positive finishes.
While the accuracy percentages is pretty darn good, more interesting to me is the large percentages i see...it looks like volatility might be making an encore.
This offers two ways really to play...short the nasdaq and/or buy volatility.
If i had to summarize this study, it would be...when speculators dominate volume as market move higher...run!
this is just one study, and although it shows good good odds, obviously there is no gurantee that we will see those numbers. I think you still have to be cautious given the power of this move we have seen. if there was ever a time to defy the odds, now would be it.
Nasdaq 100 extremely overbought. A very short term play...
RSI(5) on the NDX is trading above 75 for 7th straight day. In the past 10 years, their were 7 occurrences, all of which led to a lower close at some point within the next 3 days.
with such range bound trading, it is odd to see vix and vxo making a more than 5pct move to the downside.
closed out xlf and qqqq from jun 3rd. those were bought near lod that day. that same low is now a notable short term support. i get the feeling the way this market is behaving(grinding higher and with the light volume), a decent move is coming within the next dew days. either the market is waiting for a spark for the next leg up, or buyers have dried up and it must move down to move up. i prefer waiting for it to decide while standing on the sidelines.
i wonder if that implies the 10YT may not do so well tomorrow? if investors are more atrracted to the shorter notes, does that mean they will shun the longer term notes?
Two charts to watch: XLF and DOW
One is testing support, the other is testing resistance. On the Dow, notice the Macd Histogram divergence with higher highs in price. And on the XLF, it actually never made a higher high (did not confirm dow move), instead it has been consolidating side ways, painting a wedge/pennant,implying a decent size move is not to far off in the financials..the question is, which direction?
market has been pricing something in. the question is whether it already priced in what it wanted to and whether this is now herding of the lambs.
i think that is the case..again based on nasdq vs nyse voleum and prel performance. will present some data to back this up this weekend
i think jobs were still losing jobs, but the number of new losses is not increasing month over month. one of those 'less bad' spin.
well emmett, i really hate giving advice...i can't deal with people taking my advice and losing money. lol.
So i'll tell you what i'm doing. I'm a little bit long on the heavy side (not as heavy as a month or so ago), but i am long both techs and s&p.
I have mental stop at a few points below S&P 200MA.
Ideally, what i would like to see? let the recently broken 200MAs serve as spring board, taking us on a strong rally into end of month for a blow off top around the dates we all have our eyes on. That would be an ideal world for me, but as you know...the world is hardly ideal. lol
I was thinking more along the lines of S&P 40K myself...lol.
http://www.businessinsider.com/jim-rogers-sp-could-go-to-50000-2009-6
Well greg, i became sort of a penny trader not too long ago..i picked up some C for my "Axis of Dead" portfolio several months back. lol. it wasn't quite below a dollar then, but was close.
Dow has joined S&P and Nasdaq above 200MA. Now can it stay there? if so, i wonder if this could trigger automated buys at close or open tomorrow?
Lol! Lol! Lol!
Lol! Lol! Lol!
Wow! congrats! (i had to edit this post...i am probably jet lagged still as i was thinking 25years hear with THIS group). lol.
im wathing two things today..the s&p and its 200ma support, and the dow and its 200ma resistance. if dow can take out its 200ma, we could see a strong move up.
well, i didnt exactly stay out as i said i would. two buys triggered, one qqqq and other xlf. these went in shortly after the first successful test of the 200ma on the s&p.