I really do not like where the major indices are sitting.
Looking at the three year daily charts for both the SPX and the DJI, we see that price action broke down below the lower support line started from the March 2009 low. This is great, but it would have been much better if price action broke down below the major resistance line that started from the highs of October 2007. Unfortunately, we instead got a bounce.
This puts us in an unknown state with respect to the last two major trends. My gut is telling me that we may see a test of the January highs in the coming week or so. That would be business as usual on low volume - and I am not threatened by the prospect. This week will tell us everything.
If instead we break down, we must violate 1020 on the SPX and 9600 on the DJI. That would setup the extension of the bear market down trend that many of us have bet on. These levels coincide quite well with the 200p MA - which we have not seen since July!
Sorry for the absence of late. I'll hopefully be much more attentive to the markets this week.
Cheers!
10 comments:
So good to have you back Dave.
Hope you had a good trip.
And now I am gonna read your post ;-)
Cheers Paulus!
David , good to have you back and safe and sound , Paulus , Cbs and I , dont think the market can go down without you .
One the same page , up or down , I have no idea ,
I think the leg off the bottom counts best as a zig zag , the move down at midweek as B , with C to go .
But if this is right and C gets going I dont see it stopping tell new high.
The down leg was only 3 waves in some index and 5 in others. So we could just see a rock drop , but I have no dilutions either way .1107 and 1090 seem to be the fighting range for now .
? What RSi setting do you prefer,
close, high ect Days ?
I am using it looking for Divergence , along with CCI for confirmation .
I look to make entry in 30 year bond short again , here is why,
Friday closed at the wave 2 limit , if Bonds rally my count it wrong , but if they move down Monday , it could be the start of a powerful wave 3 , With a move in the right direction, and a stop at Fridays close , its is a great risk reward , TMV or TBT.
Good Trading for everyone
Payline.
What products (ETF?) do you use for shorting bonds? And did you thinks about shorting euro bonds? Spain, Italy, (UK) might be a great risk reward for medium term.
Looks like an up day, however added to my short line (+30%) again on pullback.
Will see how open US and close goes to add/sell
Paulus , I stick to the 30 year bond , and short it with TBT ( 2x short )
sometimes I use TMV ( 3x short) ,
if I go long I use TLT ( 2x long )
I stick to use the one thing , so that it is easy to keep track of :)
Good luck out there
Hey David,
really good to hear from you.
Silver is looking like it wants to make another push. If we get over 17 and hold, I will add some silver miners.
I was a construction superintendent and couldn't stand the travel.
Hi David , Paulus, CBS
By my count the correction ( up move ) should be ending and down trend can resume , its possible that the down wave at end of day was part of a wave 4 flat , leaving one more to go go , but my count 5 of C ended today.
Bond short may have run its course for a while . There is a huge I H S in the 30 year bond chart .
Good lucK everyone
Payline, et all
Hard day at the office. Whats new.
Not closing above 1120 again is encouraging though.
Closed and added some more shorts but am under water. Opened (tue) some hedge longs for protection. Fully loaded positions.
FYI my problem is the widening divergence the index I trade and S&P. It closed 1%+ up 3 days in a row as euro/dollar and euro specifics play a (bigger than estimated) role. So huge (leveraged) swings in positions to handle.
Going forward a rush to 1125+ will make me run for cover as there is no resistance till jan high's. However some overdue downward momentum looks inevitable soon. Today?
Oil looks like a short 80.65+
Good luck!
Hi Paulus and everyone else ,
Oil and Gold both MAY be ready to fail , but the move down was only 3 clear waves in both , if there where 5 I would feel better shorting them , they maybe one more leg up on both , or not , I expect it will all come down together if it comes down ,
I counted the High as yesterday , but it looks like a big triagle formed , the break point of E at 1118 ,if that is correct one more little high is in order ,
you can count 1 up 2 down and 3 up,
(maybe 4 down at end of day ) , 5 up should be the last of it , if it is not , I dont know what to say
On the 5 min chart , look at the pattern of 4 tops 1120 high 1118 low , ( looks like nov dec huh ?)
the move up to close looks like Jan, should end the same way.
Stopped out bond short today as expected , picked up a small gain ,
Thinking of playing the other side now TLT for the I H S to play out .
My best wishes , lets be careful and play the down side when we are sure we have down side :)
It looks like last years bear rally on low volume and bad news. I now seriously doubt any big downward potential (more than 3%) SPY closed above 112.5 easily. The equity/$ correlation is completely broken, Vix is close to all time low and stocks, commodities and gold move UP together. News is generally positive.
Yesterday 2,5% drop in Shanghai invoked no reaction whatsoever, but the 2% rise in Tokyo today is cheered. Futures are up and my euro index is up .65% on no news at all.
So unless today unemploiment figures make some waves the bulls have defeated me gloriously. Hope I have any chance to make at least a somewhat gracious exit.
Good luck!
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