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.