Friday, April 30, 2010

Contrarian - Bear Nightmare

As always lets try to put another very bullish picture in here - one that is not fundamentally supported (well we all know whats going on in europe) but technically any bear needs to be very concerned.

This is a 200dma bollinger. Take a look at the outer bands, first the upside, 3 tests with bands widening after previous contraction and a failed 4th test - Kaboom - now on the flip side we are seeing some trouble for the bear case.

Bands widening, 3 tests thus far, if we go higher here and fail to make a 4th test on the band with a break, this combo could go back towards 200dma area which spells TROUBLE for bears.

Though keep in mind SPX and USD do not have to work together, but it seems it has always worked in favor of the bulls, so this here could be more support for a bullish case for price levels MUCH higher then I am anticipating even in my dreams. If this were to play out in a bullish form over the next 6 months which technically is very possible, I would be very concerned being short.

Ok enough for now ... lets see if we can close bearish today.

EDIT: forgot to mention, price distance from 200dma - almost the same before the breakdown, now again before the breakout higher? You tell me.

Short Term Bullish?

Well short term everything looks bullish. I probably should not post up such a one sided chart but everything is looking like a nice 5 wave impulsive move (violet) to complete an megaphone pattern (yet again). Now this pattern can play out bullish (following green to consolidate and move higher) OR complete as a megaphone pattern which is bearish - blue (3 marginal new highs with 3 marginal lower lows but each low followed by a higher high.

I will be watching this pattern very carefully as it fits with my price targets from January and my overall stance of resistance ahead. But as for all bears, there is always resistance 20 pts above us - ever since 740 SPX (yeap hah) and look where we are now - getting closer and closer to retest pre-2008-crash price points - incredible.

10:12AM Key short term support here. Bear fake out? Bull shake out? We will know in 30 minutes.

Thursday, April 29, 2010

Looking for 1204 around 10:25-10:35

Looking for this price range today. Anywhere from 1201 to 1206 to initiate short positions with a stop above 1212. Most likely scenario is for this price to be reached within the first hour of cash hours trading today. If we sell off right from the open I have to rethink but at the moment its looking like a good target.

SPX currently around 1200 so I would expect prices to go a bit higher first. Remember the stepping day scenarios based off the first 10 minutes of cash hours trading. In this case low would be made 2-3 pts below the open within 10 minutes and then we rally towards the above mentioned targets.

If we rally right off the gate and get to 1204 before 9:45 I may hold off first until noon to see how price/volume/time unfolds.

This is looking very much like an ABC formation or a 5 wave move (both counts can be applied) to complete W2 of the larger down move IF this is the start of a larger pull back.

Tuesday, April 27, 2010

First things first

3:21PM: Crazy day .... to be honest crazy 2 weeks we have had. Just a very quick chart to visualize a bit better what we are trying to do here. I will post up a bit more this week as I am starting to get a bit more active again. But its great news for us bears seeing such price action here, not just today but the combination of overhead supply and the combination of aggressive buying (because that has worked for 14+ months) is finally coming to a real battle.

Important to see the daily close prices, you can see the market trying its best to close above the top line of the rectangle, however even a close below in the rectangle itself could be tricky for either bear or bull. Are we seeing a corrective w4? or are we seeing the onset of a move lower. I have to admit its not looking corrective up here in the sky, but I am cautious to label this a start of a move lower.

Price action like we have seen in the past 2 weeks really makes it a lot easier to try to get my short bear feet wet. Of course, when looking at best possible entries ... break through the rectangle, retest the rectangle area (lower mid or upper range) and then boom down. However, as we all know, it never happens like that so trade carefully.

In the good old days I would have used this price range here to scale in and add as we move higher or add on break - but I am still being very cautious and will hold back - did I say I remain cautious?

More to come ....

3:55PM: Thats the monthly chart I was talking about. Such a beauty.

Monday, April 19, 2010

Need follow through

Watching the market with care here ... considering how much selling we saw on Friday, we need follow through today with at least a retest of the Friday lows during cash hours. We did the overnight test on futures but that needs to be confirmed first.

Market is still hesitating here to go higher - we had the gap fill that was almost assumed but a break of the current high here will likely bring us back to 1197 SPX. So watch price action very carefully at the previous close and 1197. A break through those ranges will bring us back to 1204 SPX. Next 30 minutes are very important for anyone - bear or bull.

Friday, April 16, 2010

Mid day snapshot

Wednesday, April 14, 2010

Went short

Just took a short position via ES and SPY puts. Tight stop as always but 1204 is an important barrier and we should have made a higher high here.

This should not resolve in a stepping day even with the GAP higher.

Thursday, April 1, 2010

Be careful

needless to say I got stopped out yet again. As I am watching this initially my feeling was that this was a failed breakout higher but take a look at this triangle.

While today looks like an amazing reversal day, especially with NQ, I am still concerned for more upside. I have been asking myself all week whether the price action we were seeing was corrective or if the market was tired to move lower and retrace.