Friday, August 18, 2006

How Much Longer?

Strength begets strength. Today the markets continued to push higher. Most of the push was left for the end of the trading session - perhaps today being an options expiration was a factor here. In any case, thus ends a nasty week for the bears.

I wonder how long this push upward will continue. We are, across the board, getting to some dangerously high levels which, if pierced, stab at the heart of the bearish arguments. I feel as confounded as I was in 1999 when everyone on the planet seemed to be a bull.

Let's take a look at some major indices and how much room is left to surge on each before they do major damage to some bearish trendlines. First, the Dow Jones Composite. The rounded rectangle indicates how much wiggle room is left:


The NASDAQ Composite is basically out of room at this point. There's a tiny amount left between today's close and the resistance line.


The Dow has been pushing toward its resistance line. It's not even that far away from its all-time high. As long as we're below resistance, I'm relatively OK with it.


The NASDAQ 100 is completely out of room. If it pushes higher on Monday, that's going to demand re-evaluation.


The S&P 100 has been remarkably strong, and it is getting very close to its high set last May.


The S&P 500 is approaching a Fib retracement level.


Earlier today, the Gold & Silver ($XAU) looked fairly weak, but it regained strength and finished in a hammer candlestick pattern. This chart is looking very indeterminate at this point.


The $XMI pushed to a new medium-term high today, exceeding the high set last May. This, among all the charts, looks the most bullish. Last May, however, you could have said the same thing, and that was the high water mark.


See you after the close on Monday - - - although the market couldn't care less, I hope next week is better than this one!

92 comments:

PB said...

Awful week! Let's get some beers! Funny how all the bulls come out of the wood work after a rally! Where were you guys/gals last week? Markets are not perfect assimilators of all information, that's why you get over-sold and over-bought conditions. We could very well be heading for a double top on the majors, just like the transports have done. I hope you bulls remind us bears to sell then!The bulls keep pointing to all the bad news being priced in. Ok, fine. Then what 'good' news is not priced in? The constant hand-holding and liquidity feeding that must be done to keep this circus afloat? Just looking for some intelligent answers, rather than the "I told you so" banter that the bulls give us after a rally. By the way, since early May the NDQ has gotten beat bad, so was this just a relief rally?

Anonymous said...

This move up is just getting started. The market forces will drive it higher even though we all think it should go down. Sorry to say guys, but the big boys who control this market (our crooked financial system) are going to hold this market up. They will not let it go down.

Anonymous said...

Why?

Tim Knight said...

Honestly, all this PPT and Market Manipulation stuff is silly. If there are sinister forces out there, fine. It should be reflected in the charts as well. And where were these evildoers from 2000 to 2002?

I hate the fact the markets are up, but I'm not going to start pointing at ghosts. The vast, vast majority of people like to buy stocks - - not short them - - and optimism/bullishness is considered the American way. Bears don't get their day in the sun very often. It's the exception, not the rule. Bears make out like bandits during those times, but Jesus, it's frustrating waiting for it to arrive!

PB said...

It's one thing to get it up, and quite another to keep it there!
Last time the DOW went to 11,600, we went straight down a good 900 points --- that was only 3 months ago!

Read my lips! NO NEW HIGHS!

How do I know this? I'm part of the PT, yes, the PLUNGE TEAM! :)

Mark said...

CAT seems to be the only one I've looked at on the DOW30 that appears to be predictable with my TA. I expected it to go down today, and it did. The rest I've looked at I'm expecting to go down next week, as they will be overbought. As far as DIA goes, I think I'll leave it alone for now and see how Monday goes.

I'm still a little miffed that what is normally considered bad news makes the market rally. Is up the new down?

Mark said...

I just got done looking at what all my DOW30 puts for today. For all but 3, it is either a day of rest to continue up, or a topping pattern. Only time will tell if I chose right.

Anonymous said...

What happens if a new high is met, then what, 12,000?

I think if we do reach new highs by mid september it will take away the whole late year rally, "santa clause rally" etc. I also think that if new highs are met that once the markets are just so overbought and tired that Oct-Nov will be the excuse to sell off everything. I say let the bulls do their thing for the next 4-8 weeks then by October-November when there all done and highs have been met the bears will take it back.


Next week will most likely give everyone an answer.

Trader 2006.

Anonymous said...

Go long F

The Trader II

Anonymous said...

This is a low risk area to put on some shorts and head for the beach. This week was option expiry theatrics. Let's thank the bulls for bringing us back into the 'over-bought' territory!

Trader Fred

costas1966 said...

PB you said earlier 'Awful week! Let's get some beers! Funny how all the bulls come out of the wood work after a rally! Where were you guys/gals last week?" Let them come out. we need more bulls. Maybe that was the problem in the market too many bears and too many shorts.

Chronictown said...

Bsi,im long with Qid<400shares>. im gonna set my stop at 65.00. Naz up 4.9% in one week. 1280 is a big number that it may very well hit, who knows.if it does,so be it.my position will stop out and ill regroup.i think we will have a pull back, maybe 2% or 3%.if thats the case ill make 4% or 6% on the position. Thats not huge but its a start and a plan. im not gonna get caught up in the emotion of wanting the market to do one thing and it does the other.As ive read on this blog before, when the last bear turns bullish the market will fall!thanks to sanjay, tony, costas,pb ,stockshaker,bsi,and all the other great posters. CHRIS

Anonymous said...

Chris you mentioned you have a stop loss at $65.00 on QID. You mention afterwards that "1280 is a big number that it may very well hit, who knows.if it does,so be it.my position will stop out and ill regroup."

With the S&P dropping back to 1280, which is around 20 points, that would be good for your QID position since the ^NDX would drop as well. You wouldnt be stopped out at $65.00.

Besides that be careful with Stops on QID, I have traded it numerous times and have seen it drop 2-3 dollars only to reverse back up. If it drops to 65 im going to avg in once again. I think we may get a positive opening followed by profit taking on Monday. Wouldnt mind seeing a move higher on the nasdaq getting in on more shares of QID only to watch the nasdaq drop hard.

Even if QID continues to fall I will patiently hold, I held QLD when the nasdaq was dropping to 2025 area and it didnt feel good. I was worried that 2000 was going to break and QLD would be trading in the low 50's, but it didnt happen. Look at QLD today, back above 70+ coming in reach of new highs. HOLD QID patiently and wait for the big drops.

Trader 2006

chickin6 said...

OK, I am a bear for new week.. my QQQQ 60m chart is flashing a truncated 5 wave top right here... I do have a special sell trigger, and we won't know for sure till Monday... Oils looking ready to be Bullish tho, A couple of other things Mid Term Election not far away. Also next couple of weeks before Labor Day could be thin trading enticing the tape painters in lower volume stocks, suggesting some jumpyness. GO BEARS

chronictown said...

trader 2006,i put the wrong number. i was meaning naz to 2180. thanks for the insight.Chris

Anonymous said...

Damn! This is still the best blog out there! A BIG thanks to TIM, and all the regulars who keep this place interesting and full of ideas. Keep up the resolve to be a bear, 'cause this current market is rotten. And no, it's not rotten because of the PPT and other 'scary' phantoms, it's rotten 'cause there is no real catalyst to drive prices higher. To me, we are in this 'fairy land' market right now where it has gotten away from reality. Remember kids, this is the rally we wanted so that we could begin shorting again. Well, here it is, you know what to do!

Trader Fred

Anonymous said...

agree trader Fred. Many bears did want gains so they could get back in the game with plenty of new short positions.

On rallies you short and sell your longs, when the market is going down hard, you reduce your short positions and add long positions.


Trader 2006

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Chronictown said...

Trader Fred, I like your style. Im short on Mot and Cern. cern seems to be going to the moon.Any thoughts on these two would be wonderful.I think ill take Fred's advice and put on some more shorts and go to the beach!My thoghts for monday are ,be patient and be flexible. I have a plan, but im gonna be ready to go with the flow.

traderswede said...

I don't know why such stubbornness. As a trader, is much better to be an opportunist looking for great setups than being a die-hard bull or bear.

Good luck Tim

Anonymous said...

For all of you who do not think the market makers are in total control of these markets, take a look at RIMM. They have taken this stock from the low 60's to 80's in less than 2weeks with no news. The biggest statement they made is they closed it at a perfect price of 80 to screw both the call and put retail options buyers. INCREDIBLE!

bsi87 said...

Chronic

A quick primer. Most traders risk 1% or less of their equity on any trade. (THIS IS EQUITY, NOT POSITION SIZE).I'm risking about between .2-.25% now due to the choppiness of the mkt. Ok, using Stockcharts.com, you can find the Average True Range for 10 days which shows stock volatility. QID is 2.58.

If your equity is $100,000 and you risk 1%, that is $1000 on the QID trade. I figure position size using 2xATR (rounding to make easy for this example), 1000/(2x2.50) or 200 shares. The entry is using the hourly chart, looking for the stock to trade near the bottom of the Bollinger Band.

Ok, assuming you got long at 65, you use the ATR to put on a trailing stop. I use 1.5X ATR, or 3.75. The stop is 61.25 (65-3.75). (I see a reversal at the bottom of the Bollinger Band at 65.60 Thursday. My stop is 65.50. My long position cost is actually 66.48 so for all the chatter about risk, etc, I'm long with a risk of a buck per share or 1.5% potential loss of that position, total loss to equity would be $150.)

If the position moves up, then I move up the trailing stop, taking the HOD-(1.5XATR).

So take your cost and subtract 3.75 or 5, depending your risk tolerance and go.

Everyone should have some method of figuring position size and controlling risk.

Good luck.

Ron Sen, MD said...

I maintain a 'multifactorial risk index' looking at a variety of technicals, ranging from volatility, to breadth, price extension from key moving averages, and some proprietary indicators. It runs from -22 (maximally bearish) to +22 (Cramerian buy, buy, buy). In mid-July it crested at +10, and as of the close yesterday (August 18th), it rests at -12, the most negative I've seen it since I've tracked it.

Can the market go higher? Sure. Amidst the abundance of interventions of the Federal Reserve (money printing, repos, ?futures buying), the market can do anything.

Do we have a free market? Do we want a free market? Maybe those are the questions that deserve more attention. But 'there's no crying in baseball', and certainly none on Wall Street. Maybe just whining (and I'm there).

www.ronsen.blogspot.com

Leisa said...

John Mauldin's newsletter today had an interesting write up on W formation prior to market reversals.

http://www.frontlinethoughts.com

~ Nona said...

bsi87, thank you for your detailed tips re: position size.

Leisa, thank you for the info Mauldin's url.

Tim, thank you, thank you, thank you for this wonderful blog!!

stockshaker said...

wow, ron sen, I had to read your post three times to understand it! Kiddin.

Its funny how when everyone starts getting squirmish (ie the markets moves not in their favor), that we start finding stats from like the 1880's to justify what could happen today.

ok, not 1880, but you know what i mean (past data, of what is SUPPOSED to happen)

I'm thinking the pull back is coming soon. But I'm sure of the 2 billion posts/day , at least half have already pointed that out... (nice work to those who post stuff that the rest of us can use, btw)

So what am I bringing to the table today?

DAMN the position size of a trade.

BSI, i konw you bring good intentions with your position size mathematical model/formula with numerious variables (im pokin' fun, buddy... all good)

And I'll tell you why: EVERY stock has an opportunity to play. WHY would you want to divide your money between stocks, learn their cycles, read their news, worry about completing price patterns, when all you need is a a few good quality stocks, and just become really good with them? A stock always has cycles, and if you know them well, theres always a position to play.

Or maybe its because I like my ETF's a lot where I like the stability of them (but don't get me wrong I do usually have some money for the risky-er plays)

Money management is not just about stops, and having 23.3% of your account in a certain stock (courtesy of BSI's mindboggling formula ;), its about HAVING A STRATEGY.

And thats why a lot of people have no idea what to do in the markets when things turn against them - due to a lack of strategy

Chronictown said...

Bsi, thanks for taking the time for the quick "primer". Your thoughts and insight are wonderful.PLease keep up the great posts. Chris

AT said...

Interesting Analysis (http://www.safehaven.com/article-5727.htm.)

"Conclusion

Because of the lack of new highs it is likely the move last week was a bear market rally rather than the beginning of a new bull market."

AT said...

Here's another article from the same site (http://www.safehaven.com/article-5725.htm).

"... there is an interesting pattern developing in the markets, called a "W" formation. ...
"We want to revisit our warning about 'W' patterns, especially when they occur after long, pronounced rallies. The following charts compare the current rally and ensuing 'W' formation with what occurred in 1987. We are NOT suggesting that a 1987-like crash is imminent; but we are warning that 'W' formations can lead to dramatic market reversals."

Can anyone explain the difference between a 'W formation' and a 'double bottom'?

Kapil Khanna said...

Technically there is more argument to be made for a bullish market than a bearish one. Atleast thats what the chart tells us. Lets not try and predict patterns, like double top etc..
I keep breathing by this statement: Dont have opinions about the market, just trade it.
A lot of people here including Tim are die hard bears. Not sure if it's a good strategy, only their trading account will tell.

Anonymous said...

Anyone realize that Nenner could be right again? He called for a low last week and then said we rally from there until 9/4 then straight down from there till the end of the year. 2007 will be up. If the market doesn't correct this week I am selling some of my Sept puts and rolling the proceeds into Oct puts.

bsi87 said...

Shaker,

I knew someone would say the math is too hard or stops don't work or some excuse why NOT to have a system. Yours appears to be intense study of maybe 20 stocks or ETF's and their patterns, nature, etc. If your "system" tells you how big of a position to take, when to enter, when to exit, more power to you. But for most people, it doesn't work because their emotions take control, lack discipline, etc. Money management is many things beyond stops. I suggest people read Alexander Elder for example. Under your "system", how do you know to take profits or to cut losses, assuming a non-subjective approach? If one doesn't like complicated, one could use Dogs of the Dow and spend 5 minutes a year and do passingly well. Or the Sell in May and Go Away seasonal calendar or the EOM trade.

Strategy is nothing without tactics and implementation.

Good luck.

bsi87 said...

AT,

I used to read safehaven until I realized it was a permabear site for the most part.

I read Dr.Duru (http://www.drduru.com/money/060817_RallysNextAndFinalStage.htm), Bill Cara (great,great site) www.billcara.com, Random Roger, TraderMike.net (he's a daytrader but his EOD summaries are excellent),Alchemy of Trading (delayed blog, I don't pay for anything GRIN),Mike Kahn on Barron's free site Monday and Wednesday (great technician, shows sector performance and discuss broad mkt themes, somewhat bearish), The Big Picture(Barry Ritholz), Seeking Alpha (try to look at before the open, they usually summarize the lead stories in that morning's WSJ), WSJ.com (front page, not tradeable info, just seeing headlines), NYT Biz page, the USA Today Biz page, IBD (sometimes screen stocks off their tables esp if the mkt is in a big uptrend, momo time), Island (to see what's moving before or after hours, research those for potential plays).

Sounds like a lot but with tabs, etc, can skim a lot in a very short period.

bsi87 said...

AT

http://www.investopedia.com/terms/d/doublebottom.asp ( look for a copy of Edwards/McGee on charting, I have a copy of Richard Schabacker's Technical Analysis and Stock Market Profits).

I saw a "hanging man" in the Naz near the end of Friday.

http://www.investopedia.com/terms/h/hangingman.asp

bsi87 said...

Wonder how the Israeli raid into Lebanon will impact Monday's open?

Anonymous said...

"Israeli raid into Lebanon"?

Way things work anymore I'd expect DOW up triple digits.

Anonymous said...

The time has come to short GOOG, my fellow bears.

cristri25 said...

What are your technical thoughts on DO, HAL, NBR, XTO.

I like DO the best right now.
It is at support Macd improving on each test of support. Usually bullsish short term. Also Oil made a nice run friday.

Wouldn't you know it IRAN will be heating the news up this week !

Jason said...

Im still suspect of the current rally last week and wanted to share a quick look of the new highs made during recent short-term tops made. its at my blog, just click on my name. Its just a quick look, nothing in depth. When the market has hit new short term bottoms, the new lows have acted accordingly, as they have in the past. Also, on 6/30 and 7/31 we have had better new highs registered than we have had last week during that huge runup on the nasdaq. If people are not buying new 52 weeks highs, more basing could be needed, and a retest of recent lows may be in the works. we need to see how strong the market is on a pullback.

stockshaker said...

hey BSI, well put buddy. My strategy is this: I always assume I'm going to be caught on the wrong side of the trade. Of course, in most cases, this doesn't happen, but obviously, we have all been on the wrong side of a trade, haven't we?

I think, that any real trader/investor looks at the market NOT at the point of HOW MUCH profit I can make (because this type of thinking brings greed, and all types of emotion on to the table - and makes you hold on to losing trades), BUT HOW TO make our initial investment back. Obviously, if the trade goes in our favor, we haven't lost our initial investment, (and we make profit), this is the BEST scenerio - needlesstosay.

BUT what if you are caught off guard? Just like (EVERYONE) was (BULLS/BEARS) in the last week? As a trader/investor, you don't stumble and worry about your investments in the market as losing trades, but you realize that ANOTHER opportunity has presented itself.

EVERY move, is an opportunity. Not something you should be fretting over - EVERY PUT can be made into a profitable trade even in a bull cycle.

My trading strategies are very different than conventional. I don't think of how much my puts/calls can make, I think, HOW can I capitalize on every movement from NOW till the time my option expires.

Thats why my calls/puts are over many many months, because I like to keep them open, and play all the cycles in between.

That is why I can see why you say about having certain % in a stock, but IF YOU KNOW YOUR STOCK well enough, EVERY move is an opportunity, and if you play it for a long time, you begin to understand it, and learn it.

AND THAT is when the real profits begin.

But I don't want to really say "real profits" because that, again, suggest emotion.

Does that make sense? A little more philosophical to say the least...

stockshaker said...

and again, maybe my opinion is biased (a little bit) because I keep more money in ETFs because Im not caught by crazy volalatility due to news - the ETFS are much more conservative, obviously.

But before I got into ETF's I played much more individual stocks, and was caught on the good and the bad side of news affecting the stocks.

Anonymous said...

does anyone know if you were to play the IWM???? IShares if you just pay commission or is there another fee for ishares that i am not aware of.......

chanon said...

Coming Week: Cooling Down
Coming Week

Think market due for pullback, after hitting top curve so quickly DOW

Anonymous said...

turned on bulls and and bears this week on fox and every one of them was more bullish then the next. One guy had a prediction of dow 12k before Oct 1st and the other had QQQQ up 10%. S&P could make new 52 week highs this week. Patiently waiting for a drop

Trader 2006

AT said...

Thanks for the info, bsi87.

Actually I knew what a double bottom is, but the article I mentioned was talking about 'W formations', considering them bearish, and I wanted to know how they are different from double bottoms, which I believe are bullish.

I try to read both bullish and bearish sites too to get a balanced view. I don't consider myself a bull or a bear, but I didn't see anyone anticipating last week's rally, especially its magnitude. What can you say when even the Federal Reserve itself thinks the US is near bankruptcy? (http://research.stlouisfed.org/publications/review/06/07/Kotlikoff.pdf)

Anonymous said...

Check out this article on QQQQ


predicts QQQQ will make lower lows, possible $28.00!!!!



http://biz.yahoo.com/tm/060818/14647.html


Trader 2006

Anonymous said...

I think CRUDE also heads back to $75+ in the next 2 weeks. To many people now think its going lower, with that in mind it means its going higher. The cease fire doesnt look like it may hold and with that happening oil could move to the upside once again.

Trader 2006

bsi87 said...

AT,

I pulled out my Schabacker book and he sez the "W" formation is a not uncommon variant of the Double Top and Double Bottom. The Double Bottom appears more frequently than Double Tops. Volume indications are lacking on the weekly chart and are irregular. Sez they are more of academic interest than practical interest and usually morph into something more substantial.

FWIW

bsi87 said...

Trader 2006

When the media started bringing Joey "Batman" Battapagli out again recently after he stayed resolutely bullish all thru the 2000-2002 period, I felt this rally was on borrowed time. Some site also sez selling short after Abbey J is on CNBC is money in the bank. GRIN.

bsi87 said...

Shaker,

Whatever blows your skirt up is fine by me.

Anonymous said...

Kapil Khanna said...
Technically there is more argument to be made for a bullish market than a bearish one.
I keep breathing by this statement: Dont have opinions about the market, just trade it.

Hey Kapil... sorry to pick apart your post, but I guess Nasdaq at 5300 would have been more bullish too? Also, EVERY trade starts with an "opinion" ... otherwise, what the figg are you trading? Seems to me that when the market is going up, you're bullish, when it's down, well I really don't know where you are. The up trade on the indexes is OVER! At 10,700 the DOW was a good buy. Hopping on the bandwagon now will guarantee you losses.

DEAD CAT BOUNCE

Anonymous said...

great market conditions to lose money... i lost all mine :(

Anonymous said...

"At 10,700 the DOW was a good buy. Hopping on the bandwagon now will guarantee you losses. "

Again, its tough to say if anyone was buying everything at 10700, alot of people were bearish at that time and thought 10500 was coming....

IF thats the case here you could go short at 11,381.47 so when the dow is back below 11k you could say dow 11,381 was a good short.

Anonymous said...

5:49 what stocks were you short or did you have many puts???


Trader 2006

Anonymous said...

This group is getting a lot of popularity. Trader Mike just mentioned about this comments section in Tim's blog. Keep it up guys, lot of interesting comments.

- Jay Mac

stockshaker said...

BSI, its sure damn windy, and I don't like giving out peep shows.

anyways, let me substantiate this post with something:

does anyone have good TA books that they found really good?

Im just looking at reading more stuff, I was really heavy into Martin Pring's books.

ps. QQQQ's at 28? are you kidding me? thats not happening for a while.

PB said...

stockshaker - judging by your pic, you are a bull!? A furry one at that! QQQQ's could hit $28 before year-end.

The profit picture for many corp's will/has started turning down. How could the market get any better than this? The fruit is now so ripe that it is falling off the tree by itself. Don't mistake this for what it is, a damn nice relief rally. The time to buy is when the seed has just been planted, NOT when it's harvest season. A lot of posters seems to have this wrong. Oh well, it's a free (and heavily indebted)country.

Anonymous said...

Anonymous said...

Again, its tough to say if anyone was buying everything at 10700, alot of people were bearish at that time and thought 10500 was coming....

Oh, so now that we're at 11,400ish, 12k is coming? Come on! Markets always turn at some point. Is this a point? Perhaps another 100 or so points on the upside if we're lucky. Many are betting on a 1994 - '95 soft landing scenario. Things are A LOT different this time around! My best guess is a range bound to slightly downward market.

Trader Fred

Anonymous said...

Read some yahoo articles saying that if the markets hold up pretty well this week that they could continue the upward trend when everyone gets back from vacation in early sept. Im not buying into that. The futures tonight, even though its less than 12 hours from the opening bell, are showing quite an early morning selloff.

Contract Last Change

CME E-mini S&P 500® 1304.75 -225

CME E-mini NASDAQ-100® 1579.75 -525




Trader 2006

Anonymous said...

trader fred agree. Anyday this week or next month could be the turning point where the dow heads back below 11,000. Dont know why but Im still going to say 10k before 12k.


Trader 2006

Anonymous said...

I am using tomorrow to roll my Sept index puts into Octobers. The Septembers expire too early in the month and if we go sideways I am nervous that they will expire worthless...

Anonymous said...

Trader 2006

with you on the DOW 10K. After a boner of a rally like last week, some pullback is expected. But to continue this rally like the news over the last few months does not matter, or does not have longer -term implications would be very myopic. The charts look like barf-bags and many stocks are still struggling with poking their heads above the 200dma. Buying at the mid-June lows was a risky bet, but look how it paid off! Selling now for the ride back down will prove to be profitable as well.

Grizz-Lee

Anonymous said...

grizz-lee

agreed. I think anyone holding onto long position here bought in the last 4-6 weeks could easily sell for a 5-40% gain depending on what they bought. I would be selling. I think the ride back down is going to be a tough one most likely ending in early Nov. However If dow 10660 and nasdaq 2000 are taken out i would clearly stand far far far away from this market.

I still think the markets are stuck in a trading range, and any clear direction should take place in the next 2 months. Expect the volatility to continue for sometime.

Trader 20006

chickin6 said...

I don't see much to fuel the upside momo this week, nothing til Wed, then some housing stats which are not likely to be good, then Durable Goods... market looks winded to me.....

bsi87 said...

Shaker

Alexander Elder's books and John Murphy's books esp Intermarket Analysis. Pring's books are good but Elder's are more nut and bolts.

Sanjay Sola said...

Bulls are getting very close to short city. a little bit more ways to go.

Anonymous said...

looks like a good opening for the bears, lets see if can last throughout the trading day.

Tradaer 2006

Anonymous said...

Only in Dreams!

When the markets were selling off, everyone was saying to watch out for explosive upside rallies! Well, here we have it and all the chicken shits think we're going higher ... one word for you wishy-washy bulls! CONVICTION ... you guys seem to lack it!

I just sold my over-vauled house so that I may sell more of this over-valued market! Reality is one thing the bulls are very good at ignoring.

cheeseman

Sanjay Sola said...

volume is very low. is everyone on vacation like me?

buy the dips?

Anonymous said...

im on vacation too, i dont think volume means anything going into the august month. There is usually low volume.

sanjay what are you going long. tech biotech retail???

Sanjay Sola said...

i am long on FMD, AKAM, PWEI, WIRE, MDR, and CHINA:

look at the charts and tell me what you think.

AKAM and MDR are near 52 week highs. might be worth watching the volume and price movement on both of them. they were pretty strong in the market decline.

bsi87 said...

I don't know if anything will be proven for the bull/bear cases today. However if the Naz closes below Friday's low ("the hanging man") on heavy volume, that'd be bearish in my book.

Anonymous said...

come on 2138!!!!!


Trader 2006

Anonymous said...

Citigroup and many other brokers bullish on the entire market. Said that the rally could hold up and new highs could be seen in Sept. HAHAHA. MORE HYPE

Trader 2006

Anonymous said...

I'm not convinced of any bearish action just yet. This would be the first red day in a week (if today's direction holds up). If tomorrow is red, then it would be a confirmation day for the dark cloud cover candle.

Friday saw a hanging man, today starts the dark cloud cover candle. Seems bearish to me, but I've been surprised before by this crazy market, so who knows.

Still short on VOL, although the MMs are really ticking it up on ultra-low volume. Probably trying to stop out the shorts around $44 or so.

Gold is picking up, too. Dollar is weak. I'll have to check the end of day charts to see what's up with that. Still no bullish sign on gold quite yet, though. Gott break through the $650 trendline before it takes off.

-Tony

bsi87 said...

Russell 2000 just traded below Friday's low. Full disclosure: I'm short the Russell.

watcher said...

Over a $ each on my SIRF, EXPD, YHOO shorts. :-)

Waiting for DELL and QCOM to fall.

Anonymous said...

DELL was running up today, was going to short but went for EBAY.

grabbed .12 on ebay so far today.

Trader 2006

Anonymous said...

2 points from 2138 on the nasdaq, i think we touch 2138 but a close under that is most likely a 10-15% chance. Doubt it will happen.

Trader 2006

Bulleater said...

The NAZ is falling the same way it went up- HARD. To all bears who are waiting in the sidelines, its time to double up.
Bears ready to pounce + Bulls selling profit = CRASH. The fundamentals have pointed to this and now the technicals do.
Prediction: Dow:10,400 SPY:1200 NAZ:1980. Thank you MM for the manipulated rally, you just gave us better prices to short- at the top!

watcher said...

Trader 2006

Should have shorted DELL.

'They' have to unload zillions of DELL shares, so they won't let it crash. They have to make a show of strength, so they can unload their shares on the bagholders.

Watch it go below 20 this week.

bsi87 said...

Trader 2006

Yeah, Naz is trading near the bottom of the hourly chart. Tough to push below esp when we had the opening selloff.

Bulleater

Options expiration had something to do with last week's mkt. I'm not too bullish or bearish. I see the potential for an '87 style crash but it's difficult to game so it's left to the pros to figure that one out. LOL.

In any case, the 20 day/20 week Bollinger Bands are as follows:

Russell 2000 677/660
Naz 2025/1980
Spx 1255/1230
DJIA 11000/10800

Not saying the indices couldn't trade lower but those are areas of support.

I thought Friday was the time to get short, not on a gap down open this morning but to each his own in his own way.

Luck to all.

Anonymous said...

thanks watcher and bsi. As for the dell short I saw it trading higher going as high as $22.29 and thought if the nasdaq turns green DELL is going higher so I waited and started trading Ebay instead. Will wait for $22+ to go short dell.


Trader 2006

bsi87 said...

PS VXN 20 day Bollinger Band is 23, 20 week is 24.75.

Just looks like a series of minicrashes/minirallies like Woody Dorsey said in the spring.

AT said...

Something I find useful daytrading - not sure if anyone else does it - in my TDAmeritrade realtime charts I open a lower window for OBV. The OBV shows me if funds are going into a stock or out. I've found that the price usually follows the OBV.

Anonymous said...

watcher where are you short on DELL

Trader 2006

Anonymous said...

covered BRCM at 29.20 for 80 cents gain.

Anonymous said...

Anyone watching the volume today?? It's been unbelievably pathetic for the last hour and a half.

I mean, I've NEVER seen the volume this light, even in the summer months.

-Tony

Anonymous said...

volume continues to be pathetic

a trading range is the best case scenario in the weeks ahead

charts are printing a w pattern for the indices

lots of similarities between 2006 and 1987

i think we will definitely test july lows again

the million dollar question is whether we can hold those lows

watcher said...

Trader 2006
I'm short DELL at 22.30 since Friday (I posted my positions on Friday). I had hoped to short it at 22.50 because that was the max pain point, but it did not reach there. Anyway, with all the issues DELL is having, I expect it to fall below 20 in the next few days. Its just the MMs keeping it up while they unload the shares of their big clients on to the bagholders.

downosedive said...

To all - Yes volume very very very low - what we are seeing is marketmakers covering their backsides by lowering prices in the absense of major buying and also to disuade sellers from dumping high volumes of shares. So, I wouldnt read anything in to this tiny decline. In fact the chart are giving out even more long and short term bull indicators than last week!! Many of the indicators are showing overbought, but pretty much everyone indicator is suggesting the overbought WILL go higher. I dont think there will be anby significant downturn until mid/late Sept.............meanwhile Im being crucified on my DJA shorta

Anonymous said...

King's conclusion: "The moral of the story is stocks need to rally sharply from here to negate the 'W' pattern, or on any decline stocks must NOT breach the base of the 'W' pattern." (i.e. 1,220). If a stock decline violates the base of the 'W' pattern, Big Mo, as in 'Momentum Players' will be unleashed by traders and investors and he will be hurling red tickets."