Disgusting market

The employment report comes out with a huge dissappointment today, only up 39k jobs with the rate jumping to 9.8% and what does the market do?   open slighly lower then rally to positive territory.  Something is very wrong with this picture.  Manipulation, stupidity, CNBC hype, HFTs???   I don't get it.   TZA has been the biggest loser I have ever had the experience of owning.  Russel 2k is still off its recent highs yet TZA is well into new  low territory.  The math is totally against long term investing in leveraged ETFs, especially inverse ones.  I guess the days of the stock market making any kind of sense are now gone.

Its been a while..

I have been so crushed with this meltup of the last couple months that I have had no energy to make any posts.  My TZA is practically dead.  It was at just under 42 end of august and now its broken below 20.  Straight down for 10 weeks.  Whats really frustrating is that when the Russell 2k was this high back in April, TZA got only as low as 26.50.  TNA its bullish counterpart is also suffering as its over 10 points less than it was in April.  My only conclusion is that shorting these leveraged ETFs is much better than buying them.

I cannot bail here on the TZA however, since the market is simply way too overbought and in dire need of a correction.  Here are some bearish considerations:

1.  We are in the area of the April highs which is big resistance but have rallied 25% on the Russell since late August and 18% on the SnP which is a big jump in a short time.
2.  Last time we were this high the forward looking PE on the SnP was 100, now its less, like 95.  GDP was projected at 3%, now its 2.5%.   The market is forward looking, discounting, and news is less good now.. go figure.
3.  The QE2 is now been announced.  What else is there to look forward to?
4.  The economy is showing no striking improvement and is just limping along.
5.  Everyone is bullish!
6.  Everyone is bearish on the buck and long everything else.  Way too crowded.
7.  The VIX is in the teens.
8.  The PIIGS problem abroad is still very present.
9.  The mortage mess is still an issue even if the banks are trying to stuff it under the rug with the help of the newly appointed republican Attorneys General.
10.  Foreign holders of US buck denominated assets are not very pleased with what we are doing to the dollar nor are our trading partners.
11.  Real Estate is still in a downward trend, both residential and commercial.
12.  41 million people are on food stamps.
13.  Govt is now entering a two year gridlock where nothing will be done.  A complete standstill.

The only reason this market is going up is because the Fed asks Goldman how much free money they would like to keep buying the market up.. and they give it to them.

Downright ugly!

This is one fucked up market..IMHO.  Just a bunch of chaos.  I guess its cause there are a bunch of computers playing against each other with algorithms that are based on human nature, however, the humans are becoming more and more absent from this whole mess.  down 165 yesterday up 130 today.  WTF??   trendlines are broken then broken back again.  20 min indicators pointing up while 60s and 5s are pointing down.  I guess its simply not time to trade.  I'm hanging it up for a while until this nonsense subsides.  this is bullshit... probably a reflection of the fucked up mass consciousness in this country.

Some bearish signals happening

SPY RSI uptrendline broken today, along with the SnP 60 min. trendline.   Market stopped at the 200 week moving average and turned down.  DXY stopped its descent at trendline support 76.14  and big up candle today, way due for a bounce.  McClellan Osc. bearish divergence and has turned down at down trendline.  VIX bollinger sell signal was 3 days ago and these usually can take a week +-3 days to manifest the selloff.   IFT total buys vs. sells has been building a bearish case for a while now.  52wk hilos although choppy has turned bearish.   My 60 min relative strength indicator has turned down (small caps leading the drop)  but the daily has yet to cross bearish.  60 min LRCs are all in sell mode and dailys are headed that way .. whether this is a good correction is still yet to be known.  Also after these parabolic rises in gold, AAPL, EURO etc .. this market is way too frothy and overbought.  I think its time to get positioned for a downswing.  The financials, small caps and R/E could be shorted here.  FAZ, DRV, TZA.

Is it time to stop paying the mortgage all together?

here is a great article from zerohedge detailing the whole mortgage mess, how it got there and where it stands now.  The banks are totally vulnerable to a homeowner revolt by just stopping payment and asking for proof that the bank owns the note.  http://www.zerohedge.com/article/gonzalo-lira-second-leg-down-americas-death-spiral

Dow screaming past 11,000 ... Happy Dow is here again!

"About three dozen of the top publicly held securities and investment-services firms—which include banks, investment banks, hedge funds, money-management firms and securities exchanges—are set to pay $144 billion in compensation and benefits this year, a 4% increase from the $139 billion paid out in 2009, according to the survey. Compensation was expected to rise at 26 of the 35 firms." WSJ

Now a buy signal!!

Talk about being whipsawed.  Now the RelativeStrength indicators both daily and 60 minute are pointing up.  I probably should bail on all shorts and switch to long, but the market seems so overbought, the SnP stopped just above the 1160 target, which is also slightly above the 100% fib projection ... well maybe more than slightly, next projection would be 1202 ..hmmmm.  The RUT just slightly exceeded the 61.8% fib retracement and at some resistance 690 area.  ???   Geez, confusing as to bail or look for a pullback from here.  TZA has broken down to new lows.  the ETFs drop way faster than they go up.  While Rut high this year was 746 and its now 689!!  and TZA at all time low??  Whats up with that?

Plus all the LRCs for 20 min, 60 min and daily... are all pointing up.   Should I jump on board the bull train at these lofty highs or just stand aside after closing all loser shorts??   This market is incredibly difficult to figure.  Its all about the Fed pumping cash into the economy with its POMO.  Why can't they just leave the markets to find their own balance?

Sell signals again today

Lots of 60 minute sell signals for the market, including the RelativeStrength mentioned in the previous post, now fully in sell mode on a 60 min basis.  Daily in all cases has not broken to sell yet.  Lots of chopping around today in the afternoon.  Faz for a week now has been directionless chop crap.  TZA/TNA were all about straight up, straight down routine.. must be heavily traded by the HFTs

Mixed signals

this market dips into the 1150's then immediately falls back into the 1140s.  I am getting all kinds of opposing signals.   the 1150's is an area of resistance plus the market has been up for a month now so its hardly prudent to buy into this, on the other hand, many technical analysis methods have not been working lately.  The market seems to even go up on bad news.  56% of the volume is from HFTs, with only slightly over 10% from retail investors/traders.   So the direction it goes is not the result of mass psychology but instead the result of algorithms programmed into computers that profit thru huge trades on minor moves.  It kinda makes me sick.

At any rate... here is a new indicator that I find quite usefull and it is pointing to longer term continued bull moves, possibly after a bit of a pullback first.   The smaller caps seem to be leading the big caps therefore this is the relative strength between the SnP vs. the Russell 2k.  As the ratio goes up the market goes up and as it goes down the market goes down.   Russell moves up faster and down faster than SnP.

This first chart is on a 60 minute basis.  I am using a 21 period linear regression curve vs. an 8 period exponential moving average of that.  The lite blue is the LRC and the yellow is the ave.  The red is the actual Relative strength number.  Right now it crossed bearish lite blue crossing below the yellow, but the red has crossed above, which usually pulls the lrc and lrc mav.  so the yellow may have changed its mind.  On the other hand, with LRCs, generally when there is a trend change, the price (or in this case the relative strength number) pulls back to the LRC ave before continuing on down.   Its a bit confusing at this juncture.

The next chart is on a daily basis.  Now this simply uses a 10 and 50 exponential moving average of the relative strength to smooth it.  You can see the market has been in a down channel since mid May, confirmed by the 10 staying below the 50.   Now, not only has the 10 crossed above the 50 but it has also broken out of the channel.   this would tell me that there is a new leg of this bull move coming soon.  I am looking for the 60min to work its way down a bit maybe 2-5 days, close my shorts then move to long unless the daily falls back into the channel and the 10/50 cross back bearish.

With this next weeks unemployment numbers hopefully the market will get out of these doldrums and do something trendlike.

Sell signals coming in..

The 20 min. charts rolled over yesterday along with the relative strength (Rut vs SP), giving a sell signal on the mkt.  Today the 60 and 80 minute charts followed with sells.  the Q's are the strongest and havent quite rolled yet, but when they do, it should be a waterfall.. or not.  Tech is still strong.   Q's closed today where they closed yesterday, whereas the RUT was down 1.2%.  A key range of support is 1115 -1105, then of course, 1100.  We havent even broken 1120 yet.  I will be at the ocean tomorrow... so all hell might break loose.  :)

Greenspan .. contributed greatly to the mess we are in.

click the graphic to better read it.

Toppy indications here, finally.

check this video from perfectstockalert.com

I hope we're done with this move already.

I think this move up and sideways is DONE!  What a boring week.  Market stopped right at the top of its channel/trading range SnP 1131 area.  Volume was ridiculously low.. AGAIN.  Unless the bulls can create some enthusiasm from the public, this little run up is over.  OPEX week was a non event.  SnP closed up today 93 cents, yesterday is closed down 41 cents.  Is that excitement or what?

The SPY is at the top of its acceleration bands and stalling, its RSI bumped up against a trendline from last May, that it generally drops from.   My IFT scans of the entire stock market show the shift to more sell signals than buy signals.  VXX has stabilized and the TRIX on it has turned mkt bearish.   However, the silver/gold ratio is indicating rally.. hmm troublesome.  The relative strength of Russell 2k vs. SnP is still bearish but iffy, its either done with this move, or poised to break up.

At any rate.. I certainly hope the rest of this month is more trending than the last two weeks.  In fact this range has been going on since mid-May with only slight downside bias... and we are at the top of that range right now.

Who is buying this market???

ICI's latest data discloses that in the week ended September 8, domestic funds saw outflows of $2.2 billion, following last week's massive $7.7 billion. And yes, ETFs experienced outflows as well. So far September has experienced nearly $10 billion in outflows, even as the market has ramped by over 6%. Who is buying this shit? Just ask The New York Fed and Citadel: they may have a few pointers (wink wink). This is the 19th sequential outflow from US stocks, and amounts to $65 billion in redemptions for the year. With the market pretty much unchanged YTD, it means that mutual funds can not resort to capital appreciation as a substitute to outflows, and most are on their last breath (Janus: blink twice if you are still alive please). The kicker:the S&P is at the level it was when the outflows began back during the flash crash. If that doesn't restore all your confidence that Uncle Sam will be so good at managing the market (just like he has done with everything else), nothing else will. Throw in a little HFT, a little subpennying, a little Flash trading, a little DMA trading, a little quote stuffing, a little hedge fund clubbing, a little specialist front running, a little daily flash crash in big caps like Nucor Steel, and you can see why next week we will most certainly have our first inflow in 20 weeks. Or not. It doesn't matter. Nobody that is made of carbon, or who doesn't already have direct access to the Fed for zero cost funding, is trading stocks anymore. -- courtesy of zerohedge.com


My view... the market is at the top of its range that it has spent the majority of time for a year now.  so I'm not going to bail on my loser shorts, however, the LRCs are still pointing up so its been quite painful.  SnP has been up 9 of the last 11 days.  I am in the bottom 100 in the latest wall street survivor contest.  Could get a margin call any day now.  Its all quite depressing.  Todays nonsense was disgusting.  Bad econ news and it stayed down for 15 minutes then up the rest of the day.  And even that was jagged and chaotic.  Maybe the stock market is simply not the way to spend my time.

tough market

daily indicators are pointing for a rally here.   80 minute indicators are aimed up but look to be turning down.  shorter term 20 minute charts are aimed down.  I need all these guys to line up in one direction in order to have any confidence in a move.  I have incorporated a new one.. doing relative strength of the Russell 2k vs. the SP.  Small caps seem to lead the way both up or down so it has proven to give a good indication of mkt direction.  here its giving mixed signals too.  60 minute basis pointing down, daily basis pointing up.  go figure...

Why am I still short?

I am still short via inverse ETFs and getting walloped. So I ask myself why. My LRCs on a daily basis have a very wierd configuration whereby the price and longer LRC has crossed up but the shorter LRC is far from it. Usually the order is first a price crossing, then a the shorter crossing the longer, then the longer crossing. Looking at the past I only found two situations like this, one led to a failure and a continuation down, while the other led to a launch on the upside. So go figure.. this is one of the problems with such a subjective indicator based on patterns. I am learning thru experimentation.

Anyway here are the few bearish indications, at least pointing to a pull back to exit my shorts and get long.

• -The ambivalence of the daily LRC patterns described above, combined with the overbought nature of the 80, 60 and even the 20 minutes LRCs.
• -SPY stopped at a down trendline, only slightly broke thru. (Problem is RUT broke thru)
• -Doji star possible top pattern on daily charts
• -natural SP resistance at 1105 area near where it closed. Seems crazy to buy here.
• -McClellan oscialtor on the rise but stopped under/at an old up trendline, usually turns down from there.
• -VIX bollinger band signal almost, but not quite a sell signal.. could be forthcoming.
• -Silver gold ratio far into the low area 62.4 indicating stock mkt turn down
• -4 up days, 3 pretty large, its due for a pullback. I would think to the 1075 area. CCOC odds are for that.
• -RUT just filled a gap on friday, maybe its done for now.
• -LRCs on TRIN have turned bearish
• -IFT on monthly SP has crossed down bearish
• -Weekly LRCs on SP have all turned bearish, down. indicating a bounce in a bear move is all this is.
• -Weekly MACDs are less than zero
• -Weekly INDU IFT is turned down. (but not RUT)
• -DXY daily is aimed up.
• -Bonds have pulled back to support at 2.75% area (10yr)and bounced, could be ready for another run at 2.0% or lower.
• -ECRI still points to double dip, unemployment claims remain high, net loss of jobs in August, auto sales in the toilet along with housing... still too much negative economics to be bullish.

What I would like to see (and my desires mean nothing to the market) would be for a pullback and the LRCs to be definitive one way or the other, I dont care if I'm long or short but I dont want to be fighting the trend like I did the latter part of this week. Lots of fakeouts so I have to be wary of that all the time, which makes it quite the guessing game especially with these overnight gaps. ugh.

LRCs configurations for daily and 80 min (20 min in center) for SP and RUT

The week from hell

WTF! Dow runs 450 points up in 3 days. geezus. Its getting to the point were its deadly to hold overnight. After being in the top 50 or top 4% in the WallStreetSurvivor August contest, I am now almost last in the september one. Slow connection and too much java crap on their site, I was unable to cancel some short etfs resulting in being the wrong way in this rally. Even tho this awful rally has been strong, the daily indicators have been somewhat iffy so I held off from bailing. Now after 4 days up, its due for a pullback so I'm gonna wait for that, hopefully on tuesday. 20 minute, 80 minute, 5 minute.. everything pointed up, except the daily and weekly. Daily has just given the setup to buy signal, but not the trigger yet. I made 12% last month, right now I am down 7% in just these few days of september. I need a beer.

I'm still trying to figure this mkt out...

Mutual fund outflows now reaches 17 consecutive weeks

$54 billion has been pulled out of the mutual funds so far this year and its accelerating.  4.3 B last week vs. 2.7B the week before.  Equity fund liquidity ratios are at an all time low of 3.4%.   Baby boomers are way to old to put on the risk that is in the market right now.  Short interest is low too at 4.3% of SP market cap, so who's gonna be buying when the market falls?

Turning point??

Lots of mixed messages within the batch of indicators I watch.  Market looks to be at a decision point, probably tomorrow with the employment report, it will break one way or the other.  short term indicators are pointing up, whether they fall back and the mkt continues down or changes trend to up... is yet to be determined.  This is the dead zone where one can get hammered like I did yesterday.  holding overnight can be deadly.   All the more reason to day trade only.

ECRI leading indicator goes to -10.0%, double dip here we come!

ECRI leading indicator at -10.0% predicts a double dip 100% of the time.   So gird your loins folks.

On another note.. the market did its oversold bounce while I was kayaking around Lake Faucherie on mon, tues, and wed.  But continued its downward slide as soon as I got back in the saddle on thurs.  first downside target is 953-944 SnP, then 884-879, then 842, then 800.  Let the fun begin!

On my entry into the contest on wallstreetsurvivor.com I am now in the top 8% for this month.   And on my 100k portfolio I am in the top 3%.  WooHoo..  The linear regression curves are working beautifully in ironing out all the noise and presenting very predictable patterns.   the only thing that gets in the way is when my bias creeps in and I anticipate the lower probability outcomes.  Weird how that happens, but I have to keep checking myself, to be sure I'm not simply seeing what I want to see.

The run up is over.

Every inverse ETF is firing off a buy right now.  Luckily, one of my practice portfolios i bought 9 short ETFs on the open, which has done hugely today.  unfortunately the other one, the contest, I waited for a pullback.. which never came.  so much for fading the open.    Luckily I didnt do that but I did mess around with buying TNA as I was attempting to pick bottoms.  If I hadnt been so greedy I coulda done well, at least something.  I shoulda just boat the whole inverse shopping cart from the open.  oh well.. I am wishing and hoping (always wrong to do) that there is a bit of a bounce tomorrow so I can bail on the TNA and get positioned on TZA etc.  then just hold them all for a week or more.  Afterhours the ES must be getting hammered.  TNA dropped another 50 cents.   Qs dropped 70 mainly due to csco.  But the SnP did stop at support at 1088 area.   Just a little bounce is all I ask.  I think this market is going down hard.  the technicals point to it and so do the crappy economic fundamentals.

Short term sell signal on the mkt

the 60 minute RUS and SnP charts have rolled over.  Whether or not this will be a pull back to 1100, then back up again is yet to be seen.  seems like the up move was less than would be expected.  I have taken off most of my longs, except for 4.  also trying to get a nice position in UNG, even tho its been deadly to most over the last 6 months.

Mkt direction up!

I hate to say it, but from what I am seeing, the market is headed up.  A perfect formation has played out on the daily charts with setup and trigger for an up move.  Weekly charts have not yet turned and are facing downward, but the dialys could drag them up if its a strong enough move.  On the other hand, there is resistance here between 1110-1130.  I am going to hold my nose and put in buy orders on ETFs and stocks that are showing the same pattern.. such as XLY (consumer discretionay)  URE (R/e) XLK (tech spider)  ITB (home builders)  FAS (financials)  HHH (internet) XLI (industrials)  TNA (small caps)  ERX (energy)  ... all contrary to my belief in where these sectors are going long term..  but this time last year, I was wrong in that regard so even tho it goes against my intuition, I will put these buys in on my new virtual account based on a very sweet 5 line daily and 60 minute charts with all the noise removed of so oscilators, candles etc.  I find this gives a much clearer picture but the performance going forward will the be the proof in the pudding.

here is the daily and 60 simplified charts I am using now (I did put in MACD and some "showmes")

here it is for the SnP and Russell 2000, top is daily, bottom is hourly.  Two sets of linear regression curves plus a x moving average on each.  price crosses above the ema of the longer curve, then pulls back, then bounces after all have crossed over and point up.

however, here is the longer term weekly charts showing a definite trend change to down.

ECRI leading indicator now breached the -10 threshold

The ECRI leading indicator has just came below the critical threshold of -10%, which according to Rosenberg has virtually assured recessions based on data from the past 50 or so years, hitting an annualized rate of -10.5%. And since even the index creators (and Ivy League tenured professors) are openly refuting the adverse implications of their own index (when they, and everyone were praising it when it topped out at 27.80 a year ago), one can be sure this is a rather dramatic data point.  Recession is inevitable.

COD.. change of direction

Very strange setup but the market now appears to be headed north.  Very confusing and cost me money.  Used housing inventory up to 8.9 months now, and with shadow housing added in its probably 2 years of inventory.  But.. the market rockets up.  WTF??

Market Gurus is dead and closed.  just a blog now, so I am setting up a new virtual account at wallstreetsurvivor.com under georgebailey.  I think i will simply trade my new 60 minute LRC patterns, to see how they fair in real time.  Right now I have to wait for an entry point, too overbought right here to jump in, although I have said that before only to see the market just keep on going.

My prediction

From what I see.. we turned down last thursday.  Today was merely a bounce back to the LR lines, and next we will see this market proceeding down, seriously.  My targets for SnP are first 953-944,  then 884-879, then 842, then 800.

For the RUT I am looking at 547-544, then 498-487.

I suggest shorting every bounce.  In fact, I was hoping for a bounce on the SnP to 1077-1082 area which may happen tomorrow, I hope.  If so, I suggest nail it!

More EuroZone troubles for monday

IMF and the EU effectively suspended Hungary's access to the remaining funds in a $25 billion rescue loan package.  The reason given for this dramatic, and very destabilizing action is that the nation must "take tough action to meet targets for cutting its budget deficit."  To quote Portfolio.hu: "Brace yourself for Monday, folks!"

Nearing bounce time

Starting to see some buyers coming in on the NAS.  Nas TRin now below 100 and dropping, at 93.  right near where RUT hit 613.  ADD is turning up, now -1914.  SnP TRIN is wildly bearish however at 370, probably short term oversold.  Maybe this is all just wishful thinking so I can get more short.

FAZ

There was a perfect setup on the close yesterday to buy FAZ.  I missed it until the market was closed... woulda been at 14.08.  now 15.57.  I have been waiting for a mean reversion, pull back, here so I can buy into it.  even just to get it at 15 would be good.  This could easily go above 18.50.

short the bounce!

I am looking for a bounce off the RUT at 613-612, or even here at 615.  a bounce to at least 620, I would think.  An opportunity to short the hell out of it.

ECRI leading indicator drops -9.8%, double dip almost assured

The ECRI Leading Economic Index just plunged at a -9.8% rate, and based on empirical evidence presented  by David Rosenberg, and also confirming all the macro economic data seen in the past two months, virtually assures that the US economy is now fully in a double dip recession scenario."It is one thing to slip to or fractionally below the zero line, but a -3.5% reading has only sent off two head-fakes in the past, while accurately foreshadowing seven recessions — with a three month lag. Keep your eye on the -10 threshold, for at that level, the economy has gone into recession … only 100% of the time (42 years of data)." We are there.


from zerohedge

China dumping treasuries

China continues to dump US treasuries, now at the lowest holdings since 6/09. they offloaded $33B in May alone. Also Japan and Oil countries dumped $8.8B. so why is total foreign holdings increasing? Someone in the UK is massively accumulating. I wonder who?

Market rolling over

The RUT turned down just below its 50 ema, SnP went to target area of 1100, top end, and stopped.  Patterns on 60 minute bars is showing a setup for a big down move.  generally its been 9 days up move, then 9 down move, meaning there could be one more bounce up then a plunge.. or maybe the 9 day thing just doesnt matter anymore.  I'm actually looking for a bounce here then a plunge.

Market pointing up for now..

Something like 14 system new buy signals as of the close on friday.  (none of which are inverse ETFs by the way) TRIN averages look bullish, the VIX is headed down, the ISEE is headed up, the 52WHLND turned up but still in negative territory, the mcClellan Oscillator is headed up but soon to be overbought, and my IFT bull/bear indicator has turned bullish.  So short term I see this market moving higher.. how much, not sure.  The 1080 - 1100 area looks to possibly be the next top.  More medium term indicators are still showing a bearish trend ... weekly indicators of TRIX, MACD, IFT, Linear Regression curves, moving averages, .. all pointing down.

the US buck has stopped at a trendline and near the 61.8% fib retracement, so it could be in the process of turning back up here, which is bearish for the market, however its indicators MACD, TRIX and IFT are still pointing down.  If it continues down, the next support would be 82.20 area.  Its now at 83.95

SRS

Good ole SRS!  Filled a gap from 6/29, so I bought in one of my marketgur accounts.  if it breaks much below 27,  I will bail.  I already am holding some TZA that I picked up at SnP 1070, which is now premature but not severly enough to bail on it.

RUT target

I am looking at a top here with the Russell at 631-632.  Big resistance and 50% retracement of last big downleg that began on the high at 6/21.  I am getting a 60 min TRIX sell but not confirmed by MACD, meaning running out of steam but still could find a burst.

Margin call

Got a margin call on my TZA today.  Weird since its been much lower before.  They must have raised their maintenance margin.  Of course you dont get these things when the ETF is at its highs, you just get them when its the worst possible time to sell.  I have to settle this by next wednesday.  ugh..

ECRI leading indicator drops even more.. headed toward -10%

The ECRI Leading Indicators just can't stop falling. From a revised annualized -7.6% drop last week, this week the index dropped to a fresh low of -8.3%. Should be sufficient for another major leg higher in stocks. Of course, the funniest thing is listening to the index creators describe how while the index was a perfect leading indicator on the way up, it is completely useless on the way down.  But yes, according to the index the probability of a recession is now about 90%; compare this number to that spewed forth by Goldman's Recession Prediction Eight Ball, which has the risk of a double dip at just about precisely 1.6%.


from zerohedge

Long FXP (the Ultra short FTSE/Xinhua ETF)

I think the whole China situation is a bubble about to burst and here is some latest negative news for them from zero hedge

 Earlier today, Bank of China, Asia’s third- largest lender by market value, announced it plans to raise as much as 60 billion yuan ($8.9 billion) in a rights offer to replenish capital. Bloomberg reports: "The lender will sell 1.1 shares for every 10 held, or as many as 19.56 billion shares in Shanghai and 8.36 billion in Hong Kong, a statement to the Hong Kong stock exchange showed today." This latest equity offering in a region already drowning in capital raises was enough to halt trading in BOC shares until July 5 as the response to it would hardly be considered favorable. A sale by Bank of China would “damage market sentiment and banking shares further because we’ve already been flooded by share offerings,” Tang Yayun, a Shanghai-based analyst at Northeast Securities Co., said before the announcement. “This is a surprise given that they just completed a bond sale.” The bolded sentence is critical as it merely implies that the rot from the trillions in bad loans made to assorted house flippers, tulip sniffers, and opium den casino dwellers are finally coming home to roost. Indeed, Bank of China's capital adequacy ratio fell to 11.09 percent as of March 31, below the minimum 11.5 percent required according to the China Banking Regulatory Commission. The next wave of the solvency crisis tsunami has now officially made landfall in China.

Another blast of bad economic news!

Another big leg down into the recognition that i) the recession was really a depression all along and ii) we are smack back in it. The ISM Manufacturing index came at 56.2 on expectations of 59, previous was 59.7. And the stunner - the prices paid index came in at 57 on expectations of 70, with a previous read of 77.5. The crash in margins will be surreal and companies will have no choice but to raise prices. And just so there are no mistakes that the Great Depression 2.0 is here, pending homes sales plunged a massive 30% on expectations of -14.2, and a previous read of 6%. This was the biggest MoM drop on record.Deflation is here, as is a full blown economic contraction, coupled with the complete pull out of the US consumer, who, absent government subsidies, will contain purchases solely to the iPad. Ben Bernanke has no choice but to print money now, or it is game over.


from zerohedge

Long term sell signal

Looking at the monthly charts of the SnP, it just gave an MACD sell signal right at the zero line, meaning this whole thing since 3/09 has been a bear market rally.  ie;  it just rolled over when it touched the zero point and is now heading down again.  Meaning we will see the lows of 2009 exceeded.

60 min bullish divergence

I am seeing a bollinger band bullish divergence on the 60  min SnP charts.  could be the short term bottom here, especially since it bounced back after taking out the support at 1029, now its 1030

Last 15 minutes

SnP just took out the low set last November!  Will it close below?  TRIN, tick and ADD  have all moved bearish.  Must be some serious dumping of losers on the funds books.

today I got long EDZ  ultra short emerging mkts
EPV  short euro

The close ... above 1040

Looks like its gonna close above the 1040.  But a bunch of sellers in the last minute.  oh well.. it is what it is.  A great day, too bad Tim Knight took the week off and went to tahoe.

Last 5 minutes

Tick is turning up strongly, TRIN dropped from 900 to 595 and dropping.  They are loading up on longs at these levels.  They may get killed this week on them.  We did have a bullish divergence on the ADD just now.

SnP blew thru 1040

SnP blew thru 1040 but stopped at 1035.  I woulda thought it would have tagged 1029ish.   It still may.  Now I'd like to see it close below the 1040, just to really shake the bulls.  tomorrow has the advance reading on the employment report with the ADP report first thing.  All my short systems got out today, some on the early side, others just now at the peaks (FAZ)

Bond yields suggest SnP should be 750

From zerohedge...

One of the less discussed topics by the propaganda machine is that with bond yields approaching record yields, and in the case of the 2Ybelow them, the S&P has no place trading over 1,000. There was a time when bonds and stocks would correlate, and as bond prices surged, equities would plunge and vice versa. Now that we live in HFT days where stock values are completely disconnected from fundamentals, and even the bond market, courtesy of the Fed's seemingly endless market interference,  it makes sense to extrapolate what the fair value of stocks would be implied purely based on bond yields stripping away for the Fed. Attached we present a very simple regression analysis between simple 10 year spreads and the S&P, and the 2s10s (steepness between the 2 and 10 Year) and the S&P. What both analyses indicate is that stocks are approximately 30% overvalued, at least based on historical regression patterns relying on yields to imply stock prices. Yet even though this analysis is purely statistical, here is a simple extension: with US stocks at about $13 trillion in market cap, if one assumes the suggested 30% haircut the result is $9.1 trillion in fair market value. Considering that the Fed has pumped $2.5 trillion in the form of monetary stimulus, and Obama's various fiscal stimuli now amount to just over $1 trillion, that explains the delta. Bonds are implying where stocks should be almost to the dot, absent the $3.5 trillion pumped into stocks by the administration and the Chairman. Fair value of stocks, when stripped away from the printer and Congress, is 750.

This dump surprised everyone!

an hour to go, and the dow is down 254.  Everyone thought this was going to be a boring week.. pre-4th of july, 3rd quarter window dressing, waiting for the employment report on friday... then BAM!  China growth slowed and the whole financial world shuddered.  China (and its bubble) is what has been keeping the world afloat.

The big question is will the Bulls be able to hold the 1040 level on the SnP as they have all year.  I have a feeling it will go if not today, soon.  then we have the November 2nd low of 1029.  It outta be interesting.  :)

Mkt internals very bearish.  TRIN at 411 ... waaaay up there!

ECRI leading indicator plunges to -6.9%

It's getting close: the fabled -10% annualized change which guarantees a recession is now just 3.1% away, which at this rate of collapse will be breached in two weeks. The ECRI is now at December 2007 levels, the time when the last recession officially started. The index dropped from an annualized revised -5.8% (previously -5.7%) to -6.9%. As a reminder, from Rosie, "It is one thing to slip to or fractionally below the zero line, but a -3.5% reading has only sent off two head-fakes in the past, while accurately foreshadowing seven recessions — with a three month lag. Keep your eye on the -10 threshold, for at that level, the economy has gone into recession … only 100% of the time (42 years of data)." We are practically there.


from zerohedge


And then we get the UMichigan consumer confidence of 76.  WTF???  How consumer confidence in May was the highest in over two years,  higher than April's already ludicrous 73.6, and highest since January 2008, is not even worthy of commentary. It must have been the flash crash, the BP oilspill catastrophe, the market's 16% drop and Europe's bankruptcy that really pushed consumer confidence to that near record level... Just who do these people call to "gauge" confidence anyway?

Buy shorts (ETFs)

Most all the inverse ETFs gave a buy signal tonight for tomorrow morning on the open.  I tend to think the market will bounce, but I am wrong quite a bit.  Best to take an impartial view and do what the indicators say.

sells on:
TWM (this morning)
TZA
DRV
FAz
SDS
SRS
SSG

Another new negative turn of events in the gulf disaster

Reuters has shockingly decided to release some of the truth about the biosystematic genocide currently happening in the Gulf: "As much as 1 million times the normal level of methane gas has been found in some regions near the Gulf of Mexico oil spill, enough to potentially deplete oxygen and create a dead zone, U.S. scientists said on Tuesday. Texas A&M University oceanography professor John Kessler, just back from a 10-day research expedition near the BP Plc oil spill in the gulf, says methane gas levels in some areas are "astonishingly high." Luckily, America is gradually realizing that the entire food chain in the southeast is about to be turned around on its head, leading to a massive and unprecedented ecological disaster, which will certainly wipe out thousands of species and result in not only a surge in unemployment (that's a given) but outright loss of life (at statistically significant levels), and the anger is mounting. Perhaps the one good thing to come out of the worst ecological disaster in world history will be the sudden, and jarring awakening from the generational slumber for most of America, and a long overdue overhaul of a broken political and economic system.

TRIN tells me its different this time.

Look at the purple line in the chart.  It is the 30 day moving average of the TRIN (the SnP is in the bottom chart.)  The TRIN ema moved between .91 and 1.33 the entire bull move from 3/09 to the recent top in April.  It has now broken out massively above the channel (bearish).  Since the trin measures market internals this tells me there is massive selling going on and that this market dip is way different from all those small corrections we experienced last year.  This is the start of something big... to the downside.  Note.. the higher the TRIN, the more bearish.  Less than 1.00 is bullish.

major break to the downside

RUT blew thru that gap support, SnP went thru the 1100 and the 1095 level, bounces seem to be met with selling.  A totally bearish day with trin at 329 and the ADs heading for -1800.

Gap filled on the RUS

the russell filled the gap from 6/14 and bounced.. so far.  could be the end of this down thrust.  Also SnP seems to not want to close below 1100, or in other words, the bulls don't want it to.

Housing headed for double dip...

May existing home sales plunged far below expectations, coming in at an annualized -2.2% rate, compared to consensus of 6.0%, and a revised 8% in April. This is the second worst monthly drop in history, and shows just how very wrong economists are, and how they will all have to revise their outlooks lower, for all macro indicators including GDP. The plunge occurred even despite near record low 30 year mortgage rates: the Freddie 30-year, conventional, fixed-rate mortgage fell to 4.89 percent in May from 5.10 percent in April; the rate was 4.86 percent in May 2009. The push forward effect of the administration's various subsidies is now over and a double dip is likely now inevitable unless yet another stimulus plan is implemented.

Retail stocks

The entire retail sector has turned down after a little bounce.  Makes sense.. why they were even up in April when the economy is so bad, is beyond me.  I just got into JAS today, catching up with the system only to see the medium term indicators all turn down and see the position go immediately into the hole.  ugh.  If RTH blows thru 89 on the downside, it will really tank.

target blown

well the market blew thru my upside target of 1125 right from the getgo.  next tgt is the 1137-1140 area.  Everything is nicely above its 200 dma.  And the SnP is back above its 50 dma.   so here we go again. How frickin boring it is.

NYSE Summation index quite bullish

This week outta be interesting.  So far, this market could go either direction.  Technicals have arguments going both ways.  This area is a good resistance area that could provide the interim top, on the other hand, some indicators such as the weekly summation index, are pointing to more upside.  Check out this chart
http://stockcharts.com/h-sc/ui?s=$NYSI&p=W&yr=2&mn=0&dy=0&id=p88506586411

50 dma

everyone is concerned about the SnP being a gnats ass over the 200 DMA however, it still has not been able to get above the 50 DMA which is just as important.  BTw.. this market sucks.  up/down .. directionless.  Whipsaw that hurts bulls and bears alike.  Also.. rather boring.

Another huge outflow of funds from equity mutual funds

In the past week domestic equity mutual funds experienced another whopper of a redemption. ICI reports that for the week ended June 9, domestic equity mutual funds saw $3.7 billion in outflows, 3 times the prior week's outflow, the sixth sequential outflow in a row, and $27 billion in outflows year to date. Yet stocks, which persist in ignoring all fundamental flow data, are not only above their 200 DMA, but also positive for the year, as the pathetic algo games on no volume continue to diverge the market from any semblance of reality. Good luck Fed, SEC, and Primary Dealers in restoring credibility to this joke of a market.

Mkt up on bad news

Unemployment claims continue to rise, there are signs of deflation and yet the market opens up.  I think the goldman's of the world have run this market up with the hopes that the retail crowd will jump on the bandwagon, selling to them then shorting the hell out of it and riding it all the way down.  this is a bull trap.

Target for the buck

My downside target for the DXY is 85.37.  Big support combined with a 38.2% retracement.  Right now its at 85.71

More about the drop in ECRI leading indicator

The smoothed ECRI leading economic index fell in the opening week in June for the fifth week in a row and now down in nine of the past ten. The index, went from +0.3% to -3.5%, the weakest it has been in a year. After predicting the V-shaped recovery we got briefly in the inventory-led GDP data when the index soared off the bottom in late 2008, at -3.5%, we can safely say that this barometer is now signalling an 80% chance of a double-dip recession. It is one thing to slip to or fractionally below the zero line, but a -3.5% reading has only sent off two head-fakes in the past, while accurately foreshadowing seven recessions — with a three month lag. Keep your eye on the -10 threshold, for at that level, the economy has gone into recession … only 100% of the time (42 years of data).

Gallup poll much different results than the michigan consumer sentiment

While the university of mich consumer sentiment numbers showed the highest reading in 2 years.... the gallup poll shows a marked drop in confidence. and an increase in the spread between the percentage of persons feeling the economy is getting worse vs. those thinking its getting better.

"It is no surprise that with nobody trading at all, US stocks are back to their old trickery of spiking ever higher on no volume and on increasingly worse news out of Europe, and not to mention on an atrocious NFP and retail saels report for May, both of which are now promptly forgotten."  - zerohedge

Two decades of Greed.. the unraveling

I read this article on zero hedge and I think its a concise description of the history and how we got where we are now.  Its long but well worth the time
http://www.zerohedge.com/article/guest-post-two-decades-greed-unraveling

ECRI leading indicator drops below zero from zerohedge

David Rosenberg's favorite leading indicator, the Economic Cycle Research Institute (ECRI) Leading Index, fell to 123.2 in the week ended June 4, down from 124 the week before, a -3.5% annualized contraction: the first time this has gone negative in over a year. This is the lowest level since July 31, 2009, when it was at 122.4, as the chart below demonstrates.

What is more troubling is a historical comparison to the dark days of the 1970's recession. While the amplitude of the recent pick up has been unprecedented, from -30 to +30, it is only mirrored by the -20 to +20 jump seen in 1971-1973. However, as can also be seen below, the ensuing crash following the first spike, was the worst one in the past 35 years. If history is any predictor, does the ECRI Leading Indicator index anticipate a comparable collapse in the economy to what was seen in late 2008?

SnP nearing area of congestion

lots of resistance in the area of 1088 - 1105. If it breaks thru that we have a double bottom set in and possible upside target of another 63 points or approx 1170. Wont that be fun. :(

Way overbought

TRIN is 18... extremely overbought. nasdaq trin is more bullish but near neutral at 86. dow up 257 with half an hour to go. I think this was a short covering day. TZA system got out perfectly yesterday at 8.23. EURO is up 134 pips to 1.2114. I think 1.215 is the tgt for the bounce. when that turns back down, the stock market will follow suit.

pullback percentages

Dow has pulled back from its highs 13.33%
SnP 14.68%
Nasdaq 15.61%
Russel 2k 18.58%

I think the russel will end up exceeding the 20% level.

GS big buy!

This morning Goldman bought 1,000 S&P big futures contracts... half a billion bucks! This is what ramped up the market. Just a little manipulation huh.

Interim bottom??

Nas is down -13 while dow is up 37. go figure. Russell is down over 1% causing TZA to be up almost 3%. Internals are bullish indicating some accumlation going on at this area of support near 1040. TRIN at 61, however nas trin is still bearish at 163. The RUS blew thru my first target of 613 and made a low of 607.32, my next target is 572. this whole market just feels like its going to keep going down beyond where people think it would/should stop. Just like when it melted up endlessly, way beyond expectations. So I would not be too anxious to take profits on shorts quite yet.

support "just" held today.

The russel 2k closed right near the 617.61 lows from 5/25, next stop is the Feb lows of 580. We may need a big gap down to break this first line of support. SnP is also supported in the 1040-50 range, closing near 1050 today. Most likely there will be a big hit of bad news gapping thru these levels. Perhaps the retail sales out this week.

Lots of distribution today, especially in the nasdaq. Nas Trin was 315 near the close. SnP trin is 210, also quite bearish. 1500 more decliners than advancers on the nyse.

the russell has now closed solidly below its 200 day ma, confirming the SnP trend change to down.

Internals bearish

Market internals are bearish.. again. TRIN is at 168 (note.. anything over 100 is bearish, under is bullish), nasdaq is even worse with 235. ADD (advancers vs. decliners) is negative after starting out positive. -400, and the tick is in negative territory. Not much reason for this market to rally, I think.

New buys

4 new buys today, all bear etfs:

FAZ
SRS
DRV
EPV

stopped out of 3 longs:

JAS
SKS
IT

This transitioning from bull to bear market has been costly for the system. The volatility has caused stops to be hit before targets hit. Could be that I need to find something that tells the system, the trend is long in the tooth, and targets should be closer to the entry price. I did add a feature that calculates the target, based on Average true range ATR, based on the most recent pivot low rather than the entry price. This would take into account late in the move entries.

at any rate.. I have two gold longs (miners and the metal), one euro short, 3 market bear etfs, two R/E bears, and one bank/financial bear. Only 3 longs.

Intraday double bottom??

Possible intraday double bottom right at support, near the 1065 5/26 lows. Broke thru but not by much.. lows 1064.12. Although.. no turn seems apparent in the TRIN, still aimed up and HUGE at 1496!!! Massive liquidation going on, I'm surprised the markets not much lower and blown thru all this support.

Big dump day so far

TRIN at 350!! whoa.. talk about oversold, at least momentarily. Must be some HFT going on. (high frequency trading) with some serious big volume. We still havent broken that next level of support on the SnP at 1070. Looking for the RUT to take out 640.

Market guru is totally down, once again. I am about to shift to using tradestations simulated accounts to track the total forward progress of my trading systems, instead of market guru. This will much more resemble real life situations. And even tho I am a bit behind in starting at the first of June, its close enough.

heading south again

everything is rolling over again. TRIN rocketing straight up at 130, ADD rolling over to the downside. Q's selling off. Maybe this is a jiggle, unless we take out 1081 and really blow that up trendline. I am getting a sell signal on the 60 min SnP.

Mkt coming back up strong

Q's coming back strong. SnP trendline pierced but now back above, so much for that. Look for SnP bounce to 1089.76 = 38.2% or 1092ish for 50%. If it breaks above 1100 we are back where we were yesterday.. limboland. TRIN is slightly bullish at 93, and nas is 84. AD/dec is still negative -2194 but turning up. tick has turned positive. It will be interesting to see how this day plays out.

SnP trend line break

SnP just broke thru its up trendline on the 60 min charts. first stop 1069 - 1065, then key support at 1040.. if it takes that out.. we should see some serious selloff.

So much for the big 700k increase in payrolls

up a measily 431k - 411k census - 31k temp = -10k net loss of real jobs. Market was down over 200 in futures but has bounced back... god knows why, other than the standard "fade the open". Dow only down 150 150 minutes into the day. Did some buying figuring this would happen. Kinda disheartening for my TZA. Internals are still bearish with TRIN at 135 but nas is about even at 106.

Bullish signals

some bullish signals today even tho the SnP still hasnt crossed above the 1102 mark, resistance and 200 day ma. McClellan Oscillator has broken thru a down trendline. the moving averages on the 52wk his vs. los has turned a corner and is now aimed up (however still in negative territory). My IFTbuys vs. sells indicator has gone extremely bullish. the TRIX on the VIX is bullish. And the ISEE is still not showing an overconfident bunch of bulls yet, this is a measure of puts vs. calls traded. However weekly indicators are still pointed down. My upside target for SnP is still 1125.

Anyone can comment!

Now anyone can comment. You don't have to be a google member. So go ahead!

The one I'm not in..

the one stock I am not in but should be, is the one that is holding up the most in this down mkt. HMIN Home Inns & Hotel Management. go figure. I got out with some big profits but left a buck on the table.... and its still going up. oh well... we'll have to see where the system gets out at, as I'm not going to chase it. Been there, done that... doesnt work.

Buy signals for this morning

A whole bunch of buy signals came in over the weekend however, most of them are filtered out due to longer term down trend.

TPX (the only one I would take)
AMD
UYM
CTEL
TCK
FCZ
DGP
EWZ
VNQ
XME
DRWI

And the futures are predicting a significant down opening.

Whats gonna happen this weekend?

With the 3 day weekend coming up, There could be a korean war, or the BP extravaganza could fail, or more bad news on the Euro front, or more PIIGS problems... all could send the market down. But what could happen that would send the market up on Tuesday??? Seems like the risk is to the downside.

Fake out friday

Lots of head fakes today. Confused the hell outta me. Broke one of my rules and sold off HMIN with a 12% profit as it was dropping only to see it reverse and come back a buck! I know better than to do that. Sell strength, buy weakness. Bought a shitload of longs luckily after the open so I got a better price, but none of them have done well. Meanwhile I want to balance this portfolio a bit going into the weekend. right now I am 35% short and would like that to be closer to 50% and since i am not fully into TZA and TWM, I am wanting to put some more on but keep thinking I should save some bullets left for 1125, if we see it. On the other hand what if a korean war starts over the weekend. The longs are gonna be toast, I need some shorts. ugh dow is only down 73 now.

projection for SnP up move

Who knows were it will stop, however, some things are seeming to line up very nicely. looking at fibonnaci price projections ... 1125 looks like a good target for this up move. Its also right below the 50 day mav and in area of resistance. that would then give a minimum downside of at least 995 which ties out to my other work. Then 945, 915

Buy signals today

Huge up day, didnt think the SnP was gonna break and close above 1100 for awhile but it sure did. some resistance at 1105, then 1125 - 1140, then 1170. It has completed a 50% bounce so far. 61.8% is 1118.
Lots of buy signals today but quite a few are showing long term bear trend therefore not taken:

IT (bought today)
FAA (L/t red - not taken)
WLT (l/t too red)
JAS
SKS
CMCSA
MJN
LCAPA
TCK (l/t too red)
DGP
CCJ (l/t too red)
VIT
RAX (L/t too red)
INCY (l/t too red)
WSM

I only have room to take a couple of these. None of the bearish ETFs have got a COD stop order yet .. so I guess I will be riding them up for a while.

marketguru.com was down all day, except for early morning. didnt matter, I only have half a position in TZA and TWM and plan on filling out the remainder when the market has stopped going up. I will probably use the 60 min charts to find an entry, unless they are stopped out before.

Mkt internals

Mkt internals are turning bearish with TRIN over 100. also the ADD has dropped like a stone from +2300 to +1500, Tick has turned negative too. Sumpthin's up.

Todays bounce

Todays bounce is pretty pathetic. This is nicely burning off the oversold situation setting up a new leg down. Yesterday also gave a bullish divergence on the McClellan Oscillator, however the MO is heading for a down trendline and unless it breaks thru, this romp to the downside is just beginning. Too many bears are looking for the this bounce and the market seems to try and make as many people wrong as it can. I also think the 1040 support was too predictable. Some sort of surprise is coming..

VIX market buy confirmed signal today!

Vix closed down confirming the market shift signal back to bullish. Plus mkt bounced off Feb support area. so this could be true. ugh.. here we go again.

Monster gap down this morning

after the dow being down close to 300 and the 1044 low of feb violated on the SnP, the market is bouncing.. at the 1040 level. I would think the next level would be 1020-1030, or 1000 even. at any rate, the TRIN has come down to 100 neutral mark after being up to 220. the ADD has leveled off at -2700 and the tick has turned slighly positive. My feeling is this is just a bounce that will suck in the bottom fishers, only to plunge deeper... or that could also be my wishful thinking. TRIN turning back up again, bearish at 7:20. Unfortunately I failed to pick up 3 big shorts in my georgebailey account that the system gave buys on. The entry was on a gap up day, so I was waiting for better pricing on a pull back of TZA, TWM, and SSG but it never came, now I am about $4k behind the systems where I should be, following them exactly. OIY!

The road to SP 870

1st target 1044, 2nd target 870 by Springheel Jack

The bounce OPEX day

As expected the market bounced back from way oversold. Actually we needed that relief from being deeply oversold. Unless the market closes decisively over 1100, we will most likely take another plunge. All in all, I am quite dissappointed in my systems. Those stops were such a sad situation considering each one of the stocks came roaring back. Meanwhile GDX which is heavy in a loss position is still hanging in there. I would like to see that piece of shit close out the position already. Gold is headed down as far as I'm concerned. At least for a while. Also.. where are the energy shorts? I'm not getting anything there. I did put on the FXP china short ETF and its underwater right away, stop loss not far from the close. Ugh. Not having TZA and TWM I am behind they system by about 500 now. I coulda got in today but was thinking this market was gonna go even higher so waited.. and missed it again. on the other hand, I think its best to be not much in anything over the weekend. Too crazy lately.

Russell 2k bounce

The RUT bounced right off its 200 day ma. even tho the SnP broke thru it's decisively at 1102. At this point the charts are still aimed down. I would think we will make new lows yet, at least tag the 1050 - 1044 area of the SP, low so far today is 1055.90. And a close on the dow below 10k. But the internals are quite bullish TRIN at 61 both nas and sp. ADD at +1300 and positive tick and rising.

I hate stops!

Blown out of 3 longs on the open.. only to see the market come roaring back. I knew this would happen yet you have to take the stops cause the one time you don't it will just keep going and you will buy the farm. Shit! HMIN, IMAX, and TPX all blown out near the LOD.

I think its the law of the universe. When you take a stop, the stock goes straight up, when you don't take a stop, it continues to plummet. Just amazing phenomena.

L~O~D Yeah baby!!

Market closed on the Low of the Day!! WOOHOO! Where are all those dip buyers now?? Feel the pain suckers! This bubble has been long time coming to burst.

When the May 6th intraday spike low is taken out on a closing basis.. the fun will really begin.
1065.79 SnP
9872 dow
637.69 Russell 2000 RUT (less than 3 bucks away)

another good day!

I like these moves. better than sideways boredom. Down or up doesnt make any difference as long as your on the right side of the move. Unfortunatley my system got long a bunch of stocks when the bull run was way long in the tooth.. but had to take the trades cause you never know. I thought this thing was way overbought 6 months ago.

Noriel Roubini was just on cnbc and pointed out all the huge macro global economic issues facing the world. He suggests reduce exposure/risk be in cash or short term govt securities from solid countries like canada or germany. Notice he didnt mention US.

10 minutes to go and the market is selling down hard again. I still havent been able to pick up that WMV at the open price. Dow down 300

Offloading risk

All the hedgefunds and large moneymanagers are offloading risk. Selling all their profitable investments including stocks and gold. Times are too strange right now for them to keep risking all their profits to date. I think this dip will be a resumption of the 10 year bear market. Way too much uncertainty in the world.. of course when IS there certainty. And what about 2012??

turn around, after lunch

shortly after lunchtime in nyc.. the market hit the lows dow down 350, and then came roaring back. However, TRIN is still deeply bearish at 205 and the ADD -2900 but the tick has turned positve.

RUT stopped right above big support from the 5/6 plunge at 638, bouncing at 641. I think it will take out the 638 and I have a Fibinocci projection of going to at least 613.53, but more likely 573 (a 138.2%). For the SnP that price projection would be 1044 and then 995

little bounce

Not much of a bounce at all. just 1095 and now continueing with new lows. Nas down 68, dow down 260. I still havent been able to pick up the TWM and TZA, also the SSG (semi conductor short) has gone nothing but up. However at 1084 we are near the area of congestion 1080 and below. should bounce from here.

20 min into the open

After that huge gap down, I am waiting to buy the TWM and TZA as I figure the market will bounce here and those will be considerably cheaper. Probably the bounce should go to 1100, whereas I will start to buy these ETFs. TRIN has rolled over and now is droppping, at 156 (was as high as 600). ADD is leveling off at -2644 and the tick has turned up and almost positive. Look for a nice bounce to sell into.

Big down open!

sold out of my EDZ on the open. 12% today alone. nice trade made 25% in 3 days. Also bought the IMAX on the open and saved myself a bunch by waiting. Next stop is 1044 SnP. thats what we need to see taken out. but support at the 1080-1044 area.

Market short buy signals

System gave buy signal on

TWM (ultra short russel 2k)
TZA (3x small cap bear)
SSG (ultra short semiconductors)

GDX - SLV buys?

GDX bounced right off its 50 day ema, so did SLV ... could be a buy here, My systems are already long both of these.

the last 15 minutes

Internals are bullish with TRIN at 47 and dropping. ADD still negative but off its lows considerably and the tick positive. Snp was down almost 20 and now its only down 3.42. dow's loss was more than cut in half. I was going to pick up the IMAX at a better price than 19.10 but got greedy and kept lowering my limit order until it bounced and left me behind. On the other hand, the 60 min IMAX charts look bearish to me and I think this is just a 50/20 bounce, whereas it will then continue its downward slide. I have a limit order in at 18.60 right at support but frankly my gut says it will go down to 17.50 - 18 which I should ignore since more often than not my intuition stinks.. thats why I use a system with rules. market turning lower a bit now with 10 minutes to go.

Internals wierd

The Trin is 44, very bullish with the dow down 135. but the nas trin is 207, very bearish and the ADD is -2200, tick down 1142... bearish. I'd love to see the SnP break below 1100, now at 1106. The 200 day ema is at 1102, important for the bulls for that to hold

break down

SnP broke support at the 1114 area. now down 12.54 at 1108, dow down 126. The RUT is even down more but headed for a Renko trendline at 670. will it hold?

2nd 15 minutes down

Crazy market.. now the SnP tagged new lows for the day. down 4 and once again bouncing off the bottom. Buy it at 1115 and sell it at 1123. easy money you would think.

First 15 minutes

Looks to be a "fade the open" day today. Very bullish internals with the TRIN at .50, same for nas trin. Decliners beating advancers by -1256 but apparently the volume is behind the uppers.

got stopped out of PETD (good thing) and CREE (bad thing .. which immediately bounced and is up on the day)... but thats just the way it is. Consistency is the important thing otherwise its whackamole.

We are at the bottom of the trading range.. probalby be an up day. TZA is dropping like a stone, now down 1.25% (was up 2.5%).

SPY .. dmi

The SPY weekly DMI has turned negative far deeper than any time since 3/09. I think key support is at 104.58 which would also take out the low on that 1,000 point day. The weekly 50/10 LRC is about to cross over bearish which would be the first time since 3/09 and usually trails the move. the 25/5 has already crossed.

Emerging mkts heading south

Since mid April the emerging mkts ETF EEM made a double top and is now headed south. Key support is at 36.20 and if that breaks it could preface a nice bear move in our market. minus DMI has taken over, very bearish.

China too, with the FXI, if it breaks below 36.24 we could see a nice run down. It actually rolled over in January and merely bounced back to the LRC line then has been selling off for the last 5 weeks.

TPX

Tempurpedic looks like a double top here. if it breaks thru 28, look out. Its been on an incredible run from 3.84 (3/09) to 36.29 last week. the 50 day ema did not show suppot on the 6th but if it holds its at 32ish.

bounce

double bottom on the SnP on both 3 min and 60 min. if it takes out 1150 then some more upside. now at 1121

Terrible tuesday

First thing out of the chute this morning, the little dog, Biggs, gets blasted in the face by a skunk. Kate washes him 3 times in tomatoe juice. I get back from the gym and of course she has me wash all my clothes (skunk and sweat). I go down to the office connect with the market, and hear this whooshing sound. go into the garage and see the utility tub overflowing, two inches of water already on the floor and something pouring out from behind the frig. Turns out to be an old drain for the old washer and dryer location. Clothes washer water coming out. Turn it off, and after trying everything in my arsenal.. about 2.5 hours later.. I give up and call a plumber. Looks like its the main drain going into the septic. and since the utility sink is the lowest part of the house thats where everything backs up. So.. there ya have it. What a way to start the day.

Meanwhile I see the market has turned down. TRIN very bearish at 174 and nas trin at 213, however the tick appears to be turning up as the trin is turning down. dow down 35, SnP down 6.6, nas is down even more at -21. The plunge in building permits seems to have helped the SRS a bit, although the more they build, the more inventory and that certainly won't help the situation. I still feel that someday SRS is gonna be $100 at least.

EDZ buy signal

I have a buy signal on EDZ the triple bear emerging market ETF. Long term charts look like its basing so I would take it. The system on this one is a 85% winner. average win is 10%. Profit factor is 12.87(huge). Average time in a trade is 3.3 days.

Also when I got back from vacation I found the system had a bunch of longs, which I added on today and took a beating. EDZ will help hedge the portfolio a bit since all I have bearishis SRS.

long:
CREE
GDX
HMIN
IMAX
INCY
PETD
SNDK
TPX (tempurpedic... our choice in crib)

Lots of buy signals

My IFT scanner is giving a mkt buy. so did the VIX yesterday. However its sitting right below the 50 day ema around 1173. Also the 52wk hi and los broke to the negative side last week and the LRCs are aiming down, if they break thru zero it could be a game change.

I have buys on:

HMIN
MJN
VIT
INCY

all the inverse ETFs have turned quite negative... unfortunately.

I still have SRS in the portfolio, heavily underwater, but now it has a COD stop (change of direction) could be stopped out tomorrow unless the market tanks from the getgo.

Small caps kick ass!

The Russell 2000 (RUT) has blasted thru the 61.8% retracement and next fib level is 76.4% at 720. 10 more points. On the other hand there is a trendline around 713 and resistance at 712... so we shall see.

Also I see the SnP is approaching the H&S neckline at 1177.50.

Had buys on TPX, SNDK, GDX today. Also HD but didnt take it, system is only 63% winner on that stock and the average winnings per month arent enough to risk the money.

VIX buy signal

With a lower close on the VIX today a market buy signal is in effect. the close was so close to yesterdays close that I wonder if it will work out.

I hate stop losses

IMAX was stopped out at the LOD (low of the day) always a heart warmer. SKS dipped a tiny bit further then rallied, its up 3.6% today. But ya gotta take em, no matter what. Evidence being my long term investment in TZA. My big mistake.

turn down

SnP turned back right at its 50 day ema around 1170. TRIN is rising dramatically to 173, bearish. So is the nas trin. ADD has dropped almost 1000 issues advanceing. I'd like to see it take out the 1147 support and then we could be on our way down. looks like the roll over happened around 11pst. by noon it had bounced back the mean or linear regression line and is now heading down again.

tchewsday

12 minutes into the open and the SnP support of 1147 held up. dow only down 61 when it was down 100 premarket in the futures. volatility is definitely back in. yesterday was step 2 of the VIX market buy signal. We will have to see if that is confirmed today or not. System bought SLV today on the open, got stopped out of IMAX and SKS longs. so now I am weighted 3 to 1 in favor of the short side.

More up monday..

the Rut did almost a 50% retrace. high was 690, 50% = 692. The SnP did a nice 61.8% retrace. Could be all done here. 1160s is a big thick area of resistance. the dow stopped right at resistance of 10845 too.

Got a buy signal on SLV (silver long etf). the system hits 85% on these so I will take it, plus long term is ok, aimed up.

The Trins are pretty blown out at .57 and .50 (Q).

The only market shorts I have are SRS and DRV both real estate. Got into DRV today so got a great price. And 3 longs IMAX, JAS, and SKS. This is gonna be fun. :)

Dow up 440, where are those trading curbs? where is the outrage now?

What a bunch of crap. They go on and on investigating the 1k drop last week... its simple... there were no bids! Duhhhhh. This big deal investigation nonsense... Its all bunch of noise to divert the public from worrying about their retirements, 401k etc. They want the public to buy the market not bail. They don't want caution. Its all about buy baby buy, consumer goods, stock, homes... its the american way. 70% of our gdp is based on consumerism. What a great thing to be proud of.

the market bounced to the 1150-1160 area. Perfect place to short the hell out of it. Actually this is what most bears have been praying for. Probably Goldman will hit it here too, just creaming the retail investor.

Prechter predicts the top is in.

In the EWT letter dated April 2010, Robert Prechter is predicting the post crash rally peak to be over within the last two weeks.. or 4/26/10 at SnP 1219.80.

"...we can project a top on this basis between April 15 and May 7, 2010. April 16, by the way, marks the anniversary of the 1930 rally peak. These dates pertain only if the current rally matches its predecessor in percent-of-cycle terms, which is conjecture, but given all the other evidence it seems a reasonable expectation. By this scenerio, the market should peak within three weeks and then fall for six years." -- dated April 16, 2010

No time to buy options

the VIX has gone thru the roof. was 15.50 near end of april... now its 41. Huge premiums on those options. when market settles down, they will totally deflate.

52 week his and los broke down

for the first time the net stocks making 52 week hi's vs. lo's went negative, since last march 09. next test is to see if the averages roll over, or the linear regression curves, and cross below zero.

Record buying climaxes last week

Got this from investors intelligence. check it out

Two weeks ago we published the above chart from Investors Intelligence showing the number of weekly buying and selling climaxes, one of the many valuable indicators they tally. The week ending April 16 saw 467 weekly buying climaxes, which, as we noted then, ranked in II’s top 10 highest readings in their 20+ year data base. It turns out that this extreme was just an appetizer, because last week II reports that there were 1,079 buying climaxes, by far an all-time record. This was the exact opposite reading to that which occurred in March 2009, at the Primary wave 1 (circle) low, when there were 1,010 selling climaxes. A buying climax occurs when a stock makes a new 52-week high and then closes the week lower. A selling climax is the opposite. Climax extremes are thought to represent distribution, from either strong hands to weak (buying climaxes), or weak hands to strong (selling climaxes). A high number of climaxes tend to congregate around market turning points. Whenever any indicator moves to a 20+ year record, one should take notice. This chart strongly suggests that the stock market’s upside potential is limited, even if the major indexes manage to eke out a push above their respective highs of last Thursday-Friday. In our opinion, last week’s upside extreme is a perfect bookend to the March 2009 downside extreme. We think the stock market is transitioning from “up” to “down.”

percent pullback, correction based on lows

dow 12.3%
SnP 12.6%
Nas 13.8%
Qs 18%
RUT 14.5%

exceeded all prior pullbacks in the bull leg since mar 09

holdings

all inverse etf's cashed out today. very nice profits 8%, 11%, 21%, 17%, 24%

remaining longs
IMAX
JAS
SKS
CMCSA
DGP (double gold long ETF)


Buy signals on SRS and DRV both inverse REIT and residential r/e ETFs

Summary

Looks like the high frequency trading caused this extreme 1,000 point move. Also a trader hit the "b" instead of the "m" selling billions instead of millions. whatever.. this market has been way overdue for this and the greek thing has been known about for weeks if not months. major damage done. broke thru 50 day ema. All charts point to buy gold and Yen... sell everything else. except the dollar of course. Also bonds going up but very bubblishcious

Wow! what a historic dump!

this was amazing, wish it would have held longer. all my support levels were so blown out I was freaking trying to get a grip on where it would stop. SnP stopped at 1065. My TZA got up to 8 bucks and I wish I had bailed on my gpanek marketguru account... but it turned so fast. dow was down just shy of 1,000. largest drop in history. huge volume and most all of it on the downside. Trin has steadied out to 138 and nas at 250. bearish but a lot of the oversold was used up on this bounce. I think this is just the beginning of some major market sell offs. The PIIGS thing is going to be bigger than anyone expected. dow only down 300 now with 5 minutes to go. SP down 31

most targets all hit.

4 out of 5 inverse ETF's targets have been hit and they are out. Still long TWM , Closed out FAZ at 14.05 and SDS at 32.27 and SSG at 17.35 tza at 7.69

SnP hit the 50% retrace at 1132 and went below to 1122. next stop would be 1112, then 1100, then 1085. but this just may be it, at least for a while. The RUT which is leading the way down broke thru support at 669

down down 750, snp down 95

Another down day

Dow has pulled back 4.2%, SnP 5.3%, Nas 6.1% and the RUS 7.4% so far. Last correction in RUS in november was 11.5% and in Feb 10.5%. We are into the second week down. the most down weeks since march 09 has been 4. In June/July and in Jan/Feb. Otherwise two in a row is generally tops. So I am interested in whether this moves beyond 2 weeks down, and then will it break 4 weeks down or not.

Greek selloff on the open

Often good to fade the open and sure enough in the first 15 minutes the SnP plunged to 1158 then bounced back strongly. Funny how support is taken out, slightly, hitting all the stops then making an abrupt turn around. Stop losses suck for this reason. Gotta give them lots of cushion. I would think a bounce to 1178 area would be reasonable. The greek thing is not going to go away or get better. Will probably get worse. Spain and/or portugal are about to get downgraded too. The euro is below 1.29 now and getting wallopped. they will probably jetison greek out of the union. I now have a split portfolio with 9 positions, 5 bulls and 4 bears.

End of day signals

XLY (consumer discretionary ETF) got a big sell signal today. Retail reports out later this week, we'll have to see if there is follow thru.

That ERY buy signal (short energy ETF) yesterday seemed doomed with oil breaking thru 85 then but now its lookng quite good up 2.6%

EEM (emerging market ETF) is getting hammered. I would not like to be in the emerging markets now. Those are all bubbles about to burst. also EWW mexico and EWZ brazil all getting hammered.ILF the latin america index.. down 4+%. That BZQ (brazil ultra short) buy signal on the 20th is now up 16%

VXX (vix etf) breaking up above the 50 day ema. wish I had bought options last week.

Buy signal on TZA and TWM both long term down trend tho, but possibly basing.... could be good but not rock solid would rather have them over the 50 day ema.

Nice selloff today! :)

My TZA is up 8%. dow down 225 and SnP down 26 and nas down a whopping 69. On a 60 min basis there seems to be complex H&S patterns pointing to a target of 1144 on SnP and 2377-2383 on the nasdaq. Tim Knight cashed out his big "ultra" shorts and more often than not, he is right, but I am going to hold out for more. I havent even gotten a buy on TZA yet... although my SSG is doing great.