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Hmm, i read this wrong this morning...we did not actually make a lower low. In fact, the financials went on to make a higher high.
Still, i see the S&P and dow trading below their middle band (20ma)...that has me thinking they may go on to test the lower band if they close below that support. It also looks to me like the VIX might have hit an ST bottom two days ago.
Watching 878.94 , A move below would be a lower low on the daily chart.
It's all about banks and financials..until it ain't.
Yesterday financials gave a heads up that an ST sell was l likely coming.
Today is interesting..Financials are fairing better than the broader market, while other sectors are falling off.
Bears i think want to see financials make a lower low (lower than this morning's early low) at some point today.
Bulls the opposite, if financials continue fair better than the broader indices going into close, i suspect we'll see buyers come in.
EDIT: As i am writing this, i see that the XLF and BKX just made a lower low..so it would seem it is confirming this move down.
VXO and VIX both back above the lower BB, so that one ST signal has been fulfilled.
It doesn't seem like a big sell-off, until you compare when the these two were trading outside their bands this morning and note the price of the dow and s&p at that time.
i would like how it is acting if i were short term bearish...
if the BKX and XLF continues to diverge and lag the broader market like this, i can't help but think a an ST (1 to 3 days maybe) sell off is coming.
technically speaking only, both are bullish imo...showing what is known as a Bull Flag setup. USO has actually begun it's bull flag breakout, while DIG has still to make a higher high. Given the recent run up and the fact that these things were trading in overbought for an extended period, i think their recent retrace was consolidation and they likely are going higher (well, USO already there, but DIG will prob follow).
ah..thanks. financials and banks are significantly underperforming the broader market for the second consecutive day. Don't think too much good can come of that...we probably will see some selling soon, if not today, sometime over the next two days i would think.
Strong counter move signals...
I have to say, were i to see candles like these on a CLOSING BASIS for given stock (longer tail, smaller head and outside the bollinger band), i would probably bet strong on a reversal coming. My feeling is if we close like this today without a sell off at EOD to bring these candles back within the band, it could trigger a technical sell that may be worth trading...hmm, that almost seems like a lose-lose scenario: sell today or sell tomorrow..lol
what ails GS today? technical or news?
hmm...but maybe i should plan on shorting, for a bit. VXO is below it's lower bb for the 3rd straight day. Today it is trading completely outside it's bands...i think the rubberband is a bit too stretched here and it should move back in very soon...meaning we could see a sell off in the short term.
i am long SPY and a basket of select banks. that basket is only about 1/3 the size it was several weeks back.
I also have some puts on the XLF sept@10 , just as a little insurance...one of the nice things about lower vix, cheaper insurance.
not planning on much shorting right now...last short was of the XLF and IYF last week (the upper BB breacch and expected retrace to middle BB).
i recall a while back we were saying the VIX will establish a new lower range...i wondering if it is going to be 30 to 40 or 20 to 30? i think the later.
Financials and banks were dumped towards the end today...that's not good considering that the market finished pretty much flat.
...i am reading and watching and apparently A LOT of technical traders were surprised by yesterday's move. That surprises me more than yesterday's move.
Even though we are flat-lining right now, breadth on Nyse is fairly positive. On nasdaq, there are about same amount of advancers as decliners, but advancers contrubiting to the bulk of the volume...that seems to indicate there are buyers beneath the surface of what appears to be a BLAH day. At the very least, it doesn't appear though anyone is in a rush to take profits...we shall see...
China, Brazil planning move away from USD...
http://www.bloomberg.com/apps/news?pid=20601086&sid=a5ab_aynqzQM&refer=latin_america
Thanks for pointing that out...
I have noticed...and it seems to be you are locking in a heck of a lot more than the average +2%!
I continuing to look at properties in central FL area...selling for around 70-89K now...a few years ago, they were selling for around 250K or higher.
From the numbers i got, were you to rent these properties, the would barely cash flow positive (after all the typical expense assumptions). So while not ideal for investors, it seems to me they may be close to priced right for a family looking to buy...
if you are looking for funamental reasons to justify the run, i don't think you are going to find much.
Bulls will argue that very rarely are true bottoms supported by current fundamentals...long after a bottom, bears will continue to harp about how a run is unjustified and that there is no reason for it...and they will have plenty of CURRENT fundamental data to support such contentions.
Bears on the otherhand will point out that major bear markets have had the most powerful bull moves, and that this is all part of the 'breaking the backs of the bull' process.
I think we should keep in mind the data we are seeing...but we should also consider that at bottoms, data is always horribly negative...so given that we should be open to the POSSIBILITY that this could infact be a longer term bottom.
In addition to insider selling, banks are beginning to reduce exposure to each other. Look at recent form 4/144 filing..you'll notice the only institutions that are selling banks, are banks. So while they are giving each other upgrades, they are unloading at the same time (sounds familiar?).
Now i don't know how much we should read into that; given the run up in this market, i would expect institution to lock in some profits...it's just a bit odd that the primary profit takers at this point are banks. Maybe they are raising cash to pay back the government...who knows.
And that's probably good for a bull...there are still too many bears out there for this to be a top.
I do think the big boys are selling quietly here...but as long as there are small bears to herd back into the market, we go higher.
based on VXO close yesterday...not looking for much intraday today however...maybe into the close.
>>I have respectable friends.
Why do they hang out with you then? Charity?
i kid :))
Lol...it almost seems like they all had lunch sometime last week and decided to do their part for the economy...pump it up with words, like the good ol' days. In addition to the rosy forecasts, i note several banks decided to upgrade each other this morning...
Nasdaq and SOX back above 200MA. This is all one example of why it is good not to treat absolute S/R areas as buy/sell triggers...best to place such triggers a few percent below or above. I would bet a number of shorts were lured when these two indices retested and seemingly failed their 200MA support test; that appears to have simply been a head fake.
Tehcnically speaking i am not seeing many glaring negatives at the moment. Given the recent retrace, this market looks like it might have breathing room to move upwards again.
Only negative that pops out at me right now is a very ST sell from the VXO..
-VXO trading below it's lower BB..that implies down to sideways movement in the next day or two.
Thanks for this update Eric. Is this a 'smooth' moving index? meaning once it turns up, it tends to trend higher over the months to come, rather than whipsaws back and forth?
E-Trader...i am not one to preach or tell folks how to trade; but i think WERE I IN YOUR SHOES, i'd probably step away from FAZ and FAS for a while and stick with the 'single ETF's.
You are going to be wrong again, as am I. Every good trader will tell you that likely they have more losing trades than winning trades. IF THAT IS TRUE, and i believe it is, then FAZ and FAS are not stocks you want to play unless you are absolutely sure of the impending move. The way these things move, you basically have to tolerate and sit through 5 to 10% swings while you are holding a position in them..that's just too much risk i think.
I'd prefer the less volatile etfs, and when i'm feel strongly about direction, then i might dabble in FAS or FAZ.
Have we ever had a panic buying that caused circuit breakers to trip..like the India market?
I wish i had bought some IFN last week...a friend and i had a brief conversation about the elections last week. I was of the belief that he should sell, he was of the belief that I should buy.
My rational was "sell the news".
His rational was the news was not priced in...there was still genuine fear at the time that the communist party could have a viable say in the government after the election.
he was right and now that that fear is out of the india market, boy did it melt UP.
From bloomberg...TED Spread back under 70, lowest level since August 2007
For the moment, i think we resume the move upwards and close higher next week.
i avoid A LOT of CNBC these days...i find i can think and focus much better that way. lol
I am going on the assumption that the Middle BB that we touched on the S&P yesterday will act as support that will take us to around Dow 8940-50 (mabye 9K) and S&P 950 (the projected 200 MA area).
That would be as good as any area to lay some short bets that we will begin to retrace and paint the right shoulder of an inverted head and shoulders pattern.
If that paints picture perfect, we should be back to S&P 800 before finding good support.
if the middle BB support does not hold..i'll be forced to change this opinion ofcourse...
Sorry to hear that Elena, but glad to hear he is making a near full recovery.
IYF, XLF, and S&P all touched their middle BB (which is essentially the 20MA). That did not take long at all...Is that it or do the move on to the lower BB? i don't know...but i had my target set to that area.
Thinking we should get a bounce or a relatively flat day tomorrow given the lop-sided breadth.
Well, i will say...i don't think it was quick for me...i was beginning to question whether i was becoming a perma-bull there for a second.
It has really only been about a week since i started shifting back into more of a defensive posture; However, i take this retrace right now as just a normal short term correction in a strong uptrend...i still think we could hit a higher high in a couple of weeks; the question is from how much lower do we start that move?
lopsided breadth...it may not seem like it on the surface, but both nasdaq and dow are showing around 5/1 decliners to advances and over 80% down volume.
Nasdaq 100 breaking down through 200MA support, while the composite has clearly turned back from resistance at it's 200MA
XLF and IYF (as well as the majors) continue their journey to the center of the BB bands. I think if we pick up momo today and they dump towards the end of the day, those indices/etfs could get there. It's noteworthy to point out that the middle BB for the S&P is around 875.
REMINDER however...we have not seen 3 consecutive down days on the S&P since the march lows; whether we close down today remains to be seen.
If the middle BB does not act as short term support/fair value area...then it looks like the dow has good support at at 7800.
I do hope we continue to sell today and that this infact retraces towards the lower BB rather than the middle, so that we can continue to shake out the speculators that were driving this market up in the last couple of weeks...That should set us up for a good dip to buy and the next move up..which i think will come in the next week or two.
that might be one viable way of not shocking the system...
But i'm not getting a clear answer from you here...Believe me, i understand what you are saying. There will be grave consequences.
illegal labor have slowly rooted itself in the economy, just as bad/worthless assets did...this i think we agree on?
So do you think we should save the banks and allow illegal labor, or just the latter?
Yes, but isn't that the same arguement that can be made about letting banks fail?
Meaning if you let the bank fails, there will be great collateral damage.
If you crack down on illegal immigrtion/labor, there will be great collateral damage?
is it the sound thing to do however? I would say it is...
Things i'm watching...
Nasdaq 100 - snap back retest of the 200MA in progress (support). A break below should bring a wave of sellers/or shorters.
Nasdaq Composite - testing resistance at 200MA. it appears to be failing at that resistance.
I note that we have not had more than two consecutive down days on the S&P since the March lows. So if we close down today, that would be something to watch tomorrow as possibly a lead indicator of sorts...a stretch i know, but with little else to go on but the media, i'll take it.
I noted last week that it looked to me like the XLF and IYF wannt to retrace back to their middle BB at the very least. They look like they may have begun that journey...but over in the speculator's world, the Nasdaq and NDX have already reached that area...if those speculators are now herded back into the market (considering they appear to be the sellers here) then this it's possible that IYF and XLF won't touch their middle BB...i am hopeful however.
I have started looking at the cumaltive TICK recently. It looks to me like it may be a good indicator to help determine when an intermediate turn is at hand. What i have done is thrown a 10MA on it to smooth it out a bit..doing this, you can see that it is not a volatile series at all..when it turns, it turns and remains there for somet time. Since it is a 10MA, it is lagging by about 1 to 2 weeks, but given that it is not volatile, i think that is why it is a good indicator to use as a confirmation of a turn...
So with that said..currently it is NOT indicating that we have witnessed an intermediate term yet.
America has always been a place that gave hope to immigrants...you have got to want it pretty bad if you are willing to risk freedom and life to get here. I feel for them, BUT...
There is an analogy that can be made between an economy based in part of illegal immigrants and one based on assets that don't have much real value.
The system is being purged...as it should be. It will be painful for those businesses that rely on the things that are being removed...