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