Monday Night

As I mentioned before the opening bell, overnight futures improved on the heels of Europe and Asia. The proximate explanation was improvement in existing home sales. "They" will always come up with some catchy phrase. Nonetheless, the market rocketed higher. And then stalled and oozed a little lower as the day went on. Breadth remained positive, however, with 2345 shares up and 708 down. Advancing shares were 3.2 bn up and 684 mn down. Summation remains up and is getting nearer to the 20 dma positive crossover.

The SPX chart continues to show the risk and uncertainty in the market. Although we're moving higher and we did manage to close back above the 1100 mark there are mixed technicals. MACD is slipping lower, SSTO is hanging on by a thread, but RSI is inching higher. Volume continues to decline, so its all anyone's guess. This market needs to bust a move soon, one way or the other. Obviously it is going to resolve higher, but the problem remains that we may need another dump. In other words there is no "all clear" yet.

RUT and NAZZY stocks did quite well but also stalled out after the initial explosion. Nonetheless the chart looks pretty good here. NAUD looks better. All we need now is a solid break out here, too. Finally here's the TNA which reflects the NAUD and mirrors the SPX chart. Mixed messages.

Options data showed a brisk pick up in DOW put buying starting near the AM peak, but did not continue to soar. Still there the data is, so keep it in full view.

So what's up. We either push higher right away or we "dither" around some more. More tax selling? More end of year stalling, so we can spend more time on our yachts in the caribbean or is it off the coast of Turkey? Whatever. Here's the strategy. Hold longs but don't be afraid to lock in some gains if breadth doesn't remain strong. We can always reload.

A zippy price break out over 1110 on rising breadth would be a sign we're okay. Likewise, another slither back below 1100 on internal weakness, could set up a more significant, albeit rapid, swoon. That's what the charts are saying.

As for the shape of the week. Volume has been dropping so I'd be surprised to see a sudden volume surge over the next few days. As such, we'll put in some stops and maybe chill with some turkey. Hope y'all do the same.

mm

Quickie Monday Morning

Futures perked up nicely overnight, Asia was okay and Europe better. We are back over the "magic" 1100 line in the SPX. All we need now is another close up there along with strong breadth. An uptick in volume would be really nice. Hey, is this too much to ask for? Hold longs.

We are in the process of moving towards much more difficult decisions here, though: apple pie, pecan pie or both? Mashed potatoes, yams with marshmallows or both? Appetizers?

Life can be filled with difficult decisions.

mm

Funny Friday - Weekend Update

The markets fell further on Friday, expiration day, but recovered nicely before the close, after flirting briefly with positive territory. Unfortunately Friday's action did not reveal all the secrets of the universe. In fact, with Friday's close there remains a high degree of uncertainty about the short term direction of the markets. Let's start as always with breadth and summation. Breadth was horrible intraday but recovered somewhat. Still, at the close, there were 1280 stocks up and 1750 down. Declining issues outpaced advancing issues by less than 2 to 1. As such, the summation is still trying to point upwards, the MACD has crossed positive but the last 2 days put a little "notch" in the RSI. We could see a final dip before the resumption of the bull move. At least that's what the dip is warning, but it is not shouting:


Advance Decline line chart either shows and advance about to get underway like in July.... or not. I'm still not 100 percent sure if this is a useful chart or not, but I do look at it everday:
The SPX continues to show how we are spinning our heels. The bummer is that we closed back in the "box" and have now stayed there for 2 days. If it weren't for the fact that the decline occurred on expiration and the summation may be pointing higher, I'd be not only gone but reversed. What may be to my detriment, though, I'm hanging in another day to see what Monday brings....First the weekly which has the real "good news bad news" data. The most ominous picture here is that long, slowly declining MACD. That could spell trouble before too long. On the other hand, RSI is holding up, price is above the key weekly MA and the 5 week ROC has yet to tip back down, but it sure looks to be hanging on by a thread:
The daily chart shows the box dilemma clearly and the "double top" in the RSI as well as the toppy look in the MACD and SSTO. Again, Monday should hold the clue. A quick recovery back above 1100 and the bulls are back in charge. A third day of price and breadth weakness and the bears have the upper hand:
I apologize for not reminding you that TNA was going x-div on Friday, so I hope none of you had a heart attack. As such the decline was really only 8 ticks by the close. This, too, is winding up:
FInally, a peek at our mini dollar trade. Patience, patience.....

The PCR closed at .90 falling gradually all day from 1.00. In addition there were twice as many DOW calls as puts, another reason to wait until Monday to see what "they" can do. Weekly options data remains quite bearish, which is bullish. All key sentiment gauges, however remain too bullish, which is bearish. AAII perked up to 43 percent bulls to 32 percent bears, but that was before Thursday and Friday.

So in sum, the short term bears have turned out to be right for 2 days. Will they get more or will the bull (nascent, next wave) get back on track? Monday may tell us or fool us. We are entering a seasonally strong period and Monday and Tuesday could be holiday distorted with an upward bias. If so, that bias could be a head fake. Look, if you haven't figured out that we are in an endless whip saw as the market digests its phenomenal gains off the March lows you've been either sleeping or not putting your money on the line. To me the big picture is clear: summation is at or very near the end of a 2 month bear phase, so a fresh move up is in the cards. Short term it is quite murky. The failure to hold above 1100 was a disappointment, so the bulls are either going to get smacked one more time, possibly back to the EMA 55, or we begin the recovery soon. You really cannot tell from the current charts. I tend to lean on the summation so I'm going to look to be long (I'm already positioned in TNA and BGU), and continue to redeploy short term scalp profits into those positions, as ultimately, before too long, another leg up in the bull is near. The dollar position is what it is. Small and fun.

I will try to update after Asia opens up tomorrow night. Could give us some clues to the week ahead.

mm

Thursday Night - Uh Oh....

The market took a major dump right from the get go. It seemed that as soon as I posted last night's update, the overnight futures started to slide. And they never recovered. The open was a major bear drubbing - no exit. Several of my positions were decimated on the open. The few that were left with a wider stop were down sharply. I reloaded at much lower prices but we are at an unusually high risk - high reward moment. First breadth. Lousy. 5 to 1 negative on issues and nearly 9 to 1 negative on share volume. The summation took a teeny hit:

SPX collapsed back below 1100. RSI broke its struggling uptrend line. Volume remained unimpressive and we closed back at the EMA 10.
The smaller stocks got pounded and the leveraged TNA got whipped. Yet, the damage was not great technically - yet.
PCR closed at .99 and DOW index options were about equal. TRIN closed at 1.82.

So what now? I took my lumps and reloaded at lower prices albeit not 100%. Here's the rub: IF we can recover soon, like tomorrow or Monday and recapture 1100 everything will be okay. But if we continue to fail, then, per box theory, we're back in the zone and will likely collapse to back to the lower end of the trading range. For those who can stomach it, the game goes on. For those who can't this isn't a bad place to step aside. Here's why. If we recover back above 1100, there will plenty of time to go long and grab some of those 80+ points. If we collapse, there will be plenty of time to see if the EMA 55 holds and there will be time to reload there, but if the EMA 55 collapses the damage could be much worse.

So if you are going to participate, know your risk and put your stops in. These choppy markets can eat you up.

At the risk of sounding like a cliche, I think tomorrow is going to be critical. Recover 1100 with better breadth and we're back on track. If not, a big decline may be in store.

mm

Wednesday Night

An interesting day for the Wednesday before options expiration. The Rut kingdom was weak and, at times, disconcerting. My strategy of adding to TNA on the dips continued, but for most of the day felt uncomfortable. However, the trend lines held and there were logical places to bid low. By the close the losses were pared and the newer (today's) positions were in the pink. Granted, the action in the NAZ AD line is weak. What does this mean against the larger picture? If (here's those "ifs" again) we do get one final swoon it will be a "totally sweet" buying opportunity. Back to the charts. Summation is pushing higher:

Why? If you were paying attention during the day today you would have noticed that advancing shares were well ahead of decliners all day. Declining shares were 350 better than advancing shares on the NYSE. Not that bad. In addition, if you were watching, you also saw that DOW index call buying outpaced put buying. This nifty little indicator will usually keep you on the right side. Next chart, below, shows the SPX spinning its wheels near the highs. Glass half full or empty? Some are looking at this as petering out. I don't. It's a "high level" consolidation and the market will take off from here. Soon:
Here's our TNA chart which shows that the EMA 10 squeaked above the EMA 55, in spite of today's weakness. I believe we are at a place not unlike early July.
I've already mentioned breadth and options data. For whatever reason the market is revving here and taking its time. Whatever. Unless something extremely unusual happens, we'll begin this next leg up with gusto soon. Worried? Just go back and look at summation. BGU, btw, held on okay today, too.

A quick note on our mini dollar position. It is what it is. Still holding.

In summary, summation is climbing. It will likely soon cross its 20 day SMA which I use as a "filter" for confirmation. I don't usually wait to act on it, but I do breathe a sigh of relief when it confirms. Hold TNA and BGU. Add, if you can, on any swoon, if you're not fully invested at this time. I expect this market to push higher, as stated here repeatedly, at least 80 SPX points and 15 - 30 TNA points. Listening to some of the chatter on some of the more popular trading boards, I believe a lot of folks are going to be surprised. There seems to be a lot of doubt and top picking out there. If you didn't notice, TickerSense sentiment indicator on Monday showed 25% bulls and 56% bears. Catch my drift?

mm

Tuesday Night

10 PM finally able to upload images. Please refer to the discussion below the charts. In order the charts are 1. Summation 2. SPX daily 3. TNA daily:






As of 7:25 PM EST there is a problem with blogger which keeps me from posting the charts. I'll try again in an hour or so.

Meanwhile here's the summary: the market moved up again, albeit with low volume and a small range. Intraday we were still able to scalp but there wasn't as much zing as yesterday. Nonetheless there was an early swoon in TNA which allowed me to add some more to the position.

NYSI keeps moving up. You'll see the chart later. It looks good. SPX is the same with price > EMA 10 > EMA 55. RSI is rising and there is a nice up - hook in the SSTO.

The TNA chart looks great with the key exponential EMAs all about to flip into proper alignment (10 >55). MACD is rising and the SSTO is just crossing positive.

Breadth today was mixed but closed better than it was during the day. There were 300 more declining issues, but advancing shares were ahead of decliners by 500 mn.

The PCR was .87, kind of neutral. The fly in the ointment was a little push in DOW index puts during the past 30 minutes. Not sure what to make of this, but someone is looking to scalp some bucks on an early pullback? We shall see.

In sum, all systems are in go mode. We're above and holding 1100 while summation is brewing a solid buy signal. The only thing missing is "acceptance" by the crowd. When that happens we'll see higher prices AND higher volume.

The next couple of days will likely be distorted by options expiration. Tomorrow should be a good trading day.

Today was a good example of why you need to manage leveraged index funds. Trading them today resulted in better gains than just holding them. If/when the market kicks into higher gear this will be less important for awhile. Until then, as long as we have these quieter days, you'll get some upside, but you'll be disappointed unless you massage them.

I'll try to post the charts in an hour.

mm

Monday Night

Wow. It feels good when the plan comes together. The market shot higher today on very strong breadth. Not only was it a great trend day, it was unusual for a trend day because there were great intraday trading opportunities. Once we soared past 1100 with conviction it was easy to unload shares at maximum prices on 1000+ tick surges and reload at lower prices after the subsequent reactions. In addition, late in the day, there were glaring signs of "irrational exuberance" so it was fairly easy to take quick, short scalps. By the end of a day of trading in and out I went home fully loaded again, leaning more on the TNA.

Advancing issues were not quite 5 to 1 positive and advancing shares were more than 6 to 1 positive. NYSI continues to move up. Next hurdle: positive MACD and a break through the 20 day SMA:


We finally got that first close above 1100. RSI is squeaking up. Volume perked up a bit, too. As you can see, again, from the box concept, if we continue to close and hold above 1100 it is likely that the SPX will target 1180 -1200:

Before I move to the TNA just remember box theory and don't forget what to do on a failure to sustain a break out of the box.....

Okay, on to the TNA. As you know I've been partial to and leaning to the smaller stock world, using TNA. Although the chart specifics were lagging, I expected the bigger bang for the buck would come from here if and when the market stopped spinning its wheels and got going. Today, anyway, we saw that, with a big explosion here. Next hurdle is a positive cross up in the SSTO and bullish alignment of the key MAs. All of this appears imminently possible. RSI broke out a bit today, which is good. Applying the "box" here you can see it is split into two. The first break, as seen today, if it holds, targets 50, while a break of and closing hold of 50 suggests 65 or more. But lets not get ahead of ourselves:

The options data was bullish all day but got a bit more cautious later in the day. Understandable because we are at the upper end of the trading range, so this will make traders cautious. I believe the cautious posturing will turn out to be a mistake.

Let's forget for a moment all the other ways of looking at the market and stay focused on what the charts show: 1)Summation is just turning up; 2)Price >EMA 10>EMA 55 for SPX ;3)Price has just closed outside the box (spx).

Using just this information, and this information alone, as a technical trader you would have to get/be long and hang on for the ride.

If you start looking back at how far we've come since March, or how the economy is doing, or how the short term oscillators are "overbought", or whether volume is "strong enough" etc. you would likely sell your longs and either go away or start looking for a place to go short.

I'm in the first camp. That said, it is prudent, as a trader, to keep relevant information handy, such as TICK, TRIN and shorter term (intraday) charts handy but ONLY for the purposes of dumping shares into parabolic bursts and picking up more shares on reactions. The RISK with this approach is that the market, given what I outlined above, could quite possibly turn fully parabolic and close the re-entry hatch completely. For that reason I'm never going to zero in my positions. As time goes on, if it looks like we're in a "parabolic" phase, it will be important to understand that sometimes the best approach is to buy high and ultimately sell even higher.

If you are trading futures then you know the risk of being "wrong" for too long, and should have no problem with this approach. If you are trading 3x funds (like Direxion), you need to understand how these are priced. DAILY. So you can't just use them as a buy and hold proxy for a "futures" position. You still have to trade them in order to keep up with the expected rate of 3x return. Never forget that. If you don't understand that, re-read the prospectus or email me or leave a comment for clarification.

In summary, the market broke above 1100 on rising breadth and volume. This suggests a fresh bull move of at least 80 points. There are times when you have to keep it simple and trade what the market delivers, no matter how "illogical" that may seem. That said, we'll need to stay sharp, because the harder they come, the harder they fall. One and all. Yeah.

mm

Sunday the 15th, November

I trust you are all having a great weekend. We had the remnants of the tropical storm and got at least 5 inches of rain. Maybe more. Saturday was a dark, dreary and rainy day. Today, Sunday, is lovely. Unseasonably warm and mild. Perfect day for agonizing over confusing charts. Our strategy of loading up on Thursday's lows so far looks smart. We had a nice, broad advance Friday, although once again volume lagged and we did not yet "break out". NYSI is revving up to move higher, but just like the last low, I suppose, we could have another hump down before the all clear. I suppose, but unless we fall out of bed tomorrow with crushing negative breadth, I still favor the long side:


The weekly chart has got to make you nervous if you are bullish. ROC is declining but, as noted last week, did not break zero and is hanging in there. Price remains comfortably above the 21 week SMA. But MACD and SSTO are fading. These are the least important indicators until they turn, i.e. they can appear to hang on by a thread for a long, long time. Still, its not pretty to look at:

The daily chart, too, is not one of great clarity. Of significant importance, at the risk of sounding redundant, is price, which remains safely above the EMA 10, which is above the 34 which is above the 55. Price pays the bills. RSI was struggling but is hanging on. MACD is rising (slowly) and SSTO is positive. Volume stinks and is giving volume folks indigestion. Not that I'm crazy about, either, but it is what it is. It's possible that the decline in volume is due to the plethora of mixed signals right now. If (here comes those "ifs") price remains in positive territory and continues to nudge up and IF breadth remains positive and IF we get a nifty close above 1100 (i.e with conviction) it is possible that volume will come in. There's still a ton of liquidity out there and if the market is not going to sell off, then folks will have to chase the market higher. Whether you're a fund manager, a professional (Wall Street) trader or an average guy looking at your retirement savings, you don't want to be left behind. But enough about fundamentals. Here's the chart:
We're still in BGU, which has a better chart and we're in TNA which is holding its own, but has a less attractive chart. As stated a few days ago, it would be nice to see the MAs turn up and SSTO to cross positive. I believe it will, soon, and I also believe that when it does price could very well acclerate upwards:
Breadth on Friday was nearly 3 to 1 positive. The closing PCR was 1.01, while the index options were once again hedged. Interestingly the weekly Put Call Data began to fall last week. It has been at "bearish" levels for a long, long time. One way to look at the fall is that perhaps folks are ready to get less bearish, and the falling PCRs may be a sign of renewed optimism. Don't worry; we are a long ways away from that data being too happy.

Sentiment readings are all still "too" bullish across the board. Its unclear how helpful these readings are, but its possible we can interpret them as we just looked at the weekly options data. Say, after a bang up year, every one is bullish, but hesitant to keep the pedal to the medal. What to do? Sell stuff? Or hedge, with puts. Maybe what we've been seeing is optimistic traders who don't quite want to commit more money just yet, but don't want to sell, so they keep hedging. Could explain the high put call readings we've seen week after week, allong with the elevated Bullish sentiment readings. Only the AAII has been swinging around, as these guys are more prone to react to daily and weekly swings in price. (hence extremes in AAII data are good for quick trades). Anyway, these guys are back to 36 to 36 bulls to bears.

In sum, we continue to spin our wheels at the upper end of the box, with a NYSI about to bust to the upside. (here come the final "ifs"). If we don't get a big decline very soon, the odds are building now for quite a surprise on the upside. For now, I'm holding TNA and BGU and will continue to try and fund it further from any day trading scalps. I'll bail on an obvious melt down; lousy breadth and collapsing prices. Going to be an interesting week. I don't think we'll spin our wheels until the end of the year. No real reason, BTW, just a gut feeling.

Have a great week - in life and in trading.

mm

Thursday Night

Well, we didn't make it over that elusive 1100 close today. There was a markedly negative tone to the market all day in spite of some early morning attempts. Breadth was lousy. Trading was great but today's market was murder on the position trades. Per the plan scalping profits were used to fund the intermediate trades at much lower prices but I can't say I feel exactly comfortable with those positions. Sometimes the market zigs and zags. Like now. We're at a point where we are very close to the resolution of the current summation sell, in other words one heck of a buying opportunity. But the persistent failure to close outside the "box" could easily lead to a severe swoon to lower levels before that next leg upwards begins. Breadth was terrible today with 2459 issues down to only 585 up. Declining shares swamped advancing shares by a 6 to 1 margin. This took a nick out of the nascent upswing in the summation (above).
The SPX chart tells all, with a bunch of mixed signals. Sagging RSI and a "nick" taken out of the MACD, yet price is still above the key MAs. Both the recent upswing and today's downturn have all come on lower volume, so the indecision is palpable.

Options data continues to be of little use, with a slight negative bias today.

So where does this leave us? The short answer is at risk. Risk of a big swoon back to the lower end of the recent trading range at best and a collapse, like the collapse we were expecting up until last week. But there is also the risk that this is all a big head fake. That is we could still perk up and leap over that 1100 level

How to play it? I'm still long TNA which took a big hit, but I was able to add to the position with the intraday scalp profits. BGU as well. I'm not married to this position, though, so tomorrow is important. If the market stabilizes we'll be alright. If not, we'll step to the sidelines until the dust settles. I have no stomach for chasing zig zags, so if it appears we're breaking down the prudent step is to step aside and reload when the bull signal is reenforced, and continue scalping intraday.

As usual we'll be looking at breadth and a clue from the options traders. And watching overseas, although the latter is not always that helpful. We've had a big run up this year. It seemed as if the time to "lock in" those gains had just passed, but maybe not. If it sounds as if I'm unclear, you're right. The charts are unclear. This is a time for careful money management. Know your risk level and trade accordingly. With clear charts you can be gung ho. With charts like we have now, you either trade carefully or not at all.

mm

Wednesday Night

No surprises today, athough watching the last 15 minutes I felt silly, as if I were watching election returns, kind of hoping for that elusive close above 1100. Nonetheless, the day was positive again with 700 more issues advancing and advancing shares ahead of decliners by 1.3 bn. A quiet day ultimately after an overly exuberant morning pop. Summation continues to turn higher.

All systems are go in the SPX chart (and the BGU chart, not shown tonight) with price > EMA 10 > EMA 55. For TNA price is up, but the MAs are still lagging. I suspect when they cross it will signal significantly higher prices there. Today was a holiday of sorts, so the action was ultimately a bit muted. In addition the market has had a pretty good run since last Wednesday's FOMC fooler. So a pause is not unexpected. But its all about what comes next. So here come the "ifs"....
IF we close above 1100 and BREADTH and VOL pick up we're heading much higher. IF we continue to stall below 1100 and breadth deteriorates, we could have another swoon, but I doubt that right now.

Once again options were overly cautiously hedged, but the bias was to too many puts overall. "They" could be making a wrong way bet.

So let's hold long and see if tomorrow they can't pump up the volume.

mm

Tuesday before lunch

Interesting morning. Zoom out of the gate with spectacular gains. Excellent breadth but a bit too much enthusiasm. Irrational, but what the hell? We've been back pedaling since 43 peak on TNA. IF we hold positive and you didn't have a chance to get long, nibble on...

IF we reverse and close negative its going to be a nervous situation. Pay attention.

As the day progresses keep a close eye on breadth primarily and price second. IF breadth stays positive, summation will be ok and price will follow - be it today or tomorrow.

Also (as always) keep an eye on the INDEX puts/calls.

Finally, and this should be clear from last night's post, the CLOSE is going to be important for our intermediate positions. A close outside the box is going to be, as Monk says, "a hell of a thing"....

intraday? Enjoy the increased volatility for pocket change. But if we break outside the box the big (and less stressful) money is going to come from sitting tight and being right for the 80-100 point runup in the SPX.

mm

Tuesday Night

Back into the fray. Although breadth was unimpressive today the recent surges have piled up in the summation index which is now pointing higher. As I stated last night we could still have some more back sliding and the market does feel edgy, but over the next few days if breadth improves at all we'll likely get the "all clear" with that cross of the 20 dma.
I'd still like to wallow in some of our lost profits from this past "sell" signal just a bit longer. In hindsight, and hopefully with further "real time" clarity in the future, I'll keep this picture available. The picture of "the box". Its important. Had we broken down through the bottom of the "box" we would have slid pretty hard. Probably 80 points hard. But we bounced off the bottom of the "box". (okay, here's my regret: should have taken some profits around the bottom of that box). But more important is now. After exiting shorts yesterday I got back in long via TNA and BGU. And now comes the stress. First, if we DON'T pop out of the box to the upside soon, I might get nervous. And with improving breadth. If we do pop out, then look out above. Its going to be those 80 points to the upside.
Here's TNA. Would also like to see some more positive EMA crossovers; we'll look for this in the days ahead.
Finally, here's BGU which has been stronger and more clearly shows the box we're in. And you can see we either take off above the box and rapidly tack on at least 80ish points or we fail again and continue zig zagging within the box. Remind me to keep the big picture on at all times.

As stated, breadth today was not great and that leaves me a little nervous. In addition I wasn't the only one, as there was significant put buying today. Not exuberant but let's just say "overly" cautious. Hence, the next few days are key.

In sum, we're back in the long camp, possibly a few days early. If the market let's us, we'll add some more on technical swoons. We'd like to see a break out of the long trading range (to the upside) and expanding breadth. TNA and BGU are it for me, but any leveraged long fund will do for our trading purposes. Out of all shorts. As for our tiny dollar position, well, we shall see. The pessimism on the dollar is overdone. Worth the risk to have a small long.

mm

Monday Night

The stock market followed Asia and Europe to the upside, exploding out of the opening bell on massive breadth, a gap and an expansion of new highs. The explosion off the recent lows last week has completely undermined the bearish option and the odds for a more significant fall have all but evaporated. It is hard to fight city hall.

Once again since the March lows all selloffs have held at shallow levels, fooling the bears (me, this time) and have gone on to new recovery highs. It is likely we will see that here. Soon after the opening bell I was stopped out of all positions, first the BGZ (for a small loss) and TZA (for a small profit). So it goes. It is going to be hard to jump back in long, but I'll get my toe in the water and either add on pullbacks or participate with a too-small position on the upside.

You know, after all these years of trading you still have to be prepared for the unexpected. And I still get disappointed when things don't work out. So it goes. To be fair, I'm still not 100% convinced this selloff is over. That said, I am not going to fight this kind of momentum.

mm

Sunday Night

The summation continues to fall, although its getting long in the tooth and the MACD is starting to drift upwards. If you look back to July the configuration is the same. Either we blast off to the upside immediately or the long-awaited "final" sell-off" is around the corner.
NYAD is suggesting some downside, too.
The weekly chart is getting very interesting. The 5-week ROC never broke down and price remains above the 21 week MA. On the other hand the MACD is rolling over and looks very suspicious. Never easy, is it?
FInally the daily chart is a mixed bag, too. If we look at the recent "July" event there is a parallel that suggests another dip, but its not a shoe-in. SSTO has bounced, the MACD is rising and price is holding up extremely well. That said, I still think there is more to come on the downside.

Options data doesn't help the downside argument at all and has remained steadfastly skeptical for weeks. Sentiment remains "too" bullish but has been so for some time. AAII dropped quickly but has been bouncing around a bit lately. The other key sentiment indicators are all solidly bullish. "They" can be right. Never forget that.

In sum? Once again since the bull took off in March the "corrections" have been tradable but shallow. The odds have been here for the more significant sell off since March, but once again price has held up well. Too well. We're short via TZA and BGZ. This week should be interesting. Best guess? We nudge up some more and collapse. Soon.

mm

Friday AM Quickie

Futures sold off after the jobs report, but did not collapse. Still an undecided market. May need to nibble some profits, but will hold tight and watch intraday breadth. In fact, the initial sell down in the futures so far pales compared to yesterday's gains.

For those who took the "fun" dollar trade last week, looking good. This is a small position , meant to be held for awhile.

Manage risk at all times. (note to self.... :) )

mm

Thursday Night Thoughts

Well, you gotta have the stomach for this business. Because once in awhile.... I hate regrets in trading but I have to have a little one. Last night, as I pointed out this morning, I was bothered by the limited down move in the overseas markets. After yesterday's late sell off on Wall Street I would have liked to see more destruction abroad. That bothered me. Also the rapid bump in the futures off the overnight lows bothered me. But rather than going with the gut, I kept to the plan and had to hustle throughout the day to manage recent purchases. I'm still long a bunch of TZA and BGZ from up near 1100, but this was an unpleasant day, personally. That said, having gotten that off my chest, let's take a look at the situation. Summation remains decidedly negative in spite of today's positive breadth, so we are still at that point where a bottom could be forming or the bottom could fall out. I still feel that the latter is more likely, although we could see some follow through after today's strength.


Note the similarity to late June/early July. This could be what we are seeing. After all of today's fireworks we have only spun our heels for a few weeks and the positions taken when the sell signals began are still in positive territory. The bottom line will be breadth. If that continues as it did today and price begins to accelerate upwards on stronger volume than we saw today, well, it will be back to the long side. Until then its not. Options data today was clearly closely hedged again, so not all the "big" guys believe in today's rally either.

So it goes. Let's see how the market reacts to the jobs data. And let's see what "they" can do overseas tonight. If possible, I'll update before the open.

mm

Thursday Morning

Didn't like the action overnight in Asia... down, but muted.... and now a bump in the futures at 8:30 AM EST after the morning's econ numbers. But the reaction is also muted, so I suspect a bouncy day between these post 8:30 highs and the overnight low around 1039. A break either way will get interesting. Ultimate resolution (? tomorrow after employement?) will be down.

mm