Friday, May 29, 2009

Weekend Wrap Up (05/25-29/08)

After some mixed economic data the market rallied into the close on heavy volume. Advancing issues outnumbered decliners by more than a 3-to-1 on the NYSE. The government has spent trillions of dollars to prevent an all out collapse of the economy, we are now seeing some of effects such as rising interest rates, increasing commodity prices, and the weakening dollar.

The S&P shot past resistance at 914 and is showing a pattern of lower highs meeting higher lows, this pattern should be resolved in the next couple of days. Right now we are above key support levels(880/897/914) and seeing bullish patterns emerging, it’s not worth trading against the major trend and the current trend is clearly up. It will be key for the bulls to break above 930 into new highs or else we mights see a move back down to the bottom of the current range at 880. Won't turn bearish until we see a break of the current channel and close below 880.

The Nasdaq is looking more bullish, we have continued the pattern of higher highs and higher lows. Like the S&P we closed at a critical point, right at our previous highs, so we're set up either for a double top or breakout into new highs.
A brief move down would make sense since we have been up a lot lately and are at key resistance levels in both the S&P and Nasdaq, but any recent moves down have been met by buying pressure. Until we some real momentum to the downside and a break of support levels I will remain a bull.

Long, MV:

Junk long, REV:

Short, DECK:

Short, AZZ:

Short, BLK:

Thursday, May 28, 2009

05/28/09 Marker Recap

The energy sector led Thursday's gains as crude oil rose above $65 a barrel to a six-month high, advancing issues outnumbered decliners by about a 2-to-1 on the NYSE. The charts for the major indices are showing a big multi-month basing pattern, it looks as though a breakout (up or down) is coming very soon. The longer we trade flat and in this tight range, the bigger the move will be.

We are now in a revised upchannel in the SPX and currently above support levels at 896 and 880, we seem to be compressing into a wedge formation as we are seeing lower highs and higher lows, I will remain a bull until we see a breach of this channel and more importantly a close below 880. Key levels for the bulls is 914 and 886/880 for the bears.

NDX looking more bullish as we are above critical support levels and seeing higher highs and higher lows. But like the SPX we are still stuck in a range market.

Long candidate, CXG:

Current long, TS:

Current long, VFC:

Short candidate, EQIX:

Wednesday, May 27, 2009

05/27/09 Market Recap

The stock market fell, after a jump in government bond yields fanned worries that higher interest rates will sap strength from the economy before it has a chance to recover. We sold off hard into the close blowing past resistance in the 896 area of the SPX, the key level remains to be 880. Until we get a break(and close) below I will still be bullish on the market, we would just be building a base to blast higher off of. The 930-880 range can only last for so long, whichever way it breaks will confirm market direction for me. For that reason I am only moderately tilted bullish.

Taking a closer look at the SPX we are seeing lower highs but no significant signs of any downside. Bulls need to overcome 896 and 915.

NDX looking much more bullish as it failed to make a lower high, trading above support levels at 1383 and 1358.

My Oil(via USO), DBA, and DBC are doing well so I decided to add UNG to my commodities list:

Long candidate, STLD:

Short candidate, URS:

Tuesday, May 26, 2009

05/26/09 Market Recap

The market surged today after consumer sentiment rose in May to the highest level since September. Breadth was extremely bullish all day and until the last hour we didn't see any TICKS below -800, and all sectors were up big representing wide spread participation. We once again bounced off 880 in the SPX and shot up above the 20 dma, we are seeing a lower high but until we close below 880 I will remain bullish, there is no sense in fighting the trend. It will be key to see if the bulls can break 925/930 area or if we retrace back down to 880. There is still more important economic reports coming up and market direction will be dictated by them.

Taking a closer look at the SPX we have support levels around 896 and 880 which the bears need to see broken, the bulls need to take out 915 which was a the previous h&s pattern.

IHS, current long:

BEE, lottery long:

Potential long, VRX (cup and handle):

Low risk short, AAP:

SRS, near all time lows:

Sunday, May 24, 2009

05/18-23/09 Weekend Review

The SPX sold hard into the close for a forth straight down day, the key level to watch is 875-880, 880 in a 23% fibonacci retracement from the all time high to the 666 low. It has also acted as support and resistance in the past. Whether we trade above or under this level will determine market direction for me. But the advantage seems to be to the bears at the moment with the 4 consecutive down days. We need to be careful as there is a lot of economic announcement coming out this week such as home sales, orders for manufactured goods, and consumer confidence that will dictate market direction.

ES has been stuck in 925-875 range for the month of April, we have been seeing lower highs but also been seeing highers lows in the last week.

Similar with the NDX, I don't see a dominant trend as we see lower high as well as higher lows. I will look for how the market reacts around 1382 and 1358. Direction hinges more on the 880 level of the SPX.

Winning example, CSIQ:

Potential short, K:

Long candidate, DNN:

Thursday, May 21, 2009

05/21/09 Market Recap

Saw a third straight down day in the SPX, today having the largest amount of negative sentiment as declining issues outnumbered advancers by nearly a 3-to-1 ratio. All sectors were down big today except for financials which ended green, this was because the Federal Deposit Insurance Corporation announced today the approval of GMAC Financial Services to participate in the Temporary Liquidity Guarantee Program.

The SPX bounced off that key 880 level(low of day was 879.61) which is the 23% fibonacci retracement as well as previous support. I'm still net long I won't switch over to the short side until we see a close below 880 on the SPX.

The ES broke down past the 895 level of support and is now outside of the upchannel, the chart has been looking more and more bearish in the past few days and it seems like it is putting in a temporary top. But I won't be convinced until we see a close below 880, while a close above 900 would be bullish. Whichever of these occur will dictate my holdings going into the long weekend.

The Nasdaq is showing similar signs of weakness, for now it appears to have found support in the 1358 area, a close below will add to the bearish scenario.

Long candidate, KWK:

Long candidate, EJ:

Short candidate, PRGO(rising wedge):

Wednesday, May 20, 2009

05/20/09 Market Recap

Wow is all I can say about today, truly a wip-saw from hell. Market took out the shorts in the morning then took out the longs in the afternoon. The TICK was very volatile as it moved between +1200 and -1200, we also saw the VIX get back to pre-financial crisis levels. Sectors were relatively mixed as financials and technology were down the most -2.4%, and at the other end materials and consumer staples were up around +.7%. The SPX got with in 5 handles of its previous high of 930 from which it sold off hard closing at 903. The SPX looks like it is making another attempt at a double top, the bulls are still in control but the market looked very weak going into the close. The ES is currently at the bottom of the channel, the bulls need to see this level hold and get a bounce where as the bears are looking for a break of the channel below the 900 level (895 will be the first level of support). You could see evidence for the bearish scenario as we have made a small pattern of lower highs and lower lows, but the main trend remains up. Also today in the daily chart of the ES we saw a text book head and shoulders pattern which got triggered.

Nasdaq once again showed more strength, will look to see if can hold the 1385 level or not.

Potential short, AOC:

High risk long, CMZ:

High risk long, URRE:

My short positions got destroyed in the morning and I got stopped out of multiple positions on the run up but experienced really good gains in my longs...then the market decided to crash down. My gains didn't take as big of a hit as I thought but it was still pretty bad, my LEA and PCX longs were the standouts, if it wasn't for these two I would have ended the day in the red. My long position in oil did well again, I sold half my position in USO as it has now been up three days in a row since I purchased it.

Tuesday, May 19, 2009

05/19/09 Market Recap

Fairly mixed day in the market, couldn't pick a direction and we were stuck in a range day and were positive for most of the day but ended with a sell off. A surprise drop in construction and a cautious outlook from retailer Home Depot (HD) caused energy and utility stocks to lose their gains. We saw consistently higher TICK readings above +800 and didn't see any below -800 until the last 30 minutes. Most sectors ended down for the day with financials being down the most -1.95% and on the other end materials were up +1.17%. The SPX broke that key 910(61.8 retracement) level but failed to close above it. I don't see any sort of direction of where the market is going, basically if we make new highs this week it will be bullish and if we break(and close) below 880 will be bearish.

The ES is currently trading slightly below area of support at 905, we are back in the up channel, bears will be looking for a break of 895 and bulls need to see a break of 915.
The NQ is looking more bullish, I won't give more weight to the short side until we see lower lows and lower highs.
I had another strong day, my portfolio is pretty much evenly balanced between shorts and long which is pretty much useless and I agree with that, but recently my shorts have been down and long have been up so I can't complain. I am undecided with the market direction at the moment and until that changes I will be evenly weighted. At the open I got rid on my AFAM and FLIR shorts to even out my portfolio and added LEA and WSTL as longs.

Potential long, cup and handle, PEET:

Current short, DBRN:

Potential long, PCS: