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A place for friends to gather and view stock market charts, discuss technical analysis and market outlook. What is your Principal Asset? How can it be developed? Each and all should do their own due dilligence and homework before investing. And by no means should you use anything I say or show here as a sole basis to buy or sell securities as everything is for educational experience only.

Friday, February 29, 2008

VIX has tricks for Kids

Fibbonaci doing the trick on the VIX.
Range Bound on the S&P.
The DOW is still hanging on to the triangle.
To quote that great G&R tune, "Where do we go now" The downtrend is still intact, but one must be defensive at the tops and bottoms of channel lines. One could play a very short-term Call and I kinda like the SPY or AAPL here, but a tight stop would be imperative. Otherwise waiting for a better PUT entry prior to the unemployment numbers on Thursday will be the plan next week .

H&S on the 2yr DOW?

Plain & simple - If the resistance holds @ 12,800 the DOW will merely slow down to wave at 11,600 on its way to 10,750. And it appears the FED is behind the curve by at least 100 basis points for the March 18 meeting. HMMMM, I wonder if Benny and the Jetless blow their whole wad or we see sucessive 50 basis point cuts?

Thursday, February 28, 2008

America setting itself up?

Here is yet another alamrming article on the state of the financial union. Can you say no cash flow? The only question remaining is when will equities show what is really going on. I recall throughout the entire Bull run the CNBS'ers frequently reffered to the consumer as what was propelling the market upward. Well if this article is any indication of the continued falling cash flow of the american consumer it becomes fairly easy to predict what is about to occur. Especially when other factors such as rising commodotity prices, rising mortgage rates (in spite of the Fed), and falling housing vaules which put more pressure on personal liquidity are added to the equation. It just don't look good. Call it Doom and Gloom or completely pessimistic, but folks I live in reality.

Wednesday, February 27, 2008

Important levels: 1400 S&P & 12,894 DOW

Check out this 2 year chart of the SPY or S&P 500. The convergence of a declining 50 day EMA, bottom-side of a two year Fib fan line, & and most importantly the bottom-side of a 50% Fib retracement. Is it a coincidence that in the last Bear market of 2000 that the initial leg down retraced exactly back to the 50% retracement line before PLUMMETING. I think not.

And the DOW is a mere quick short squeeze from 12,894 and the bottom-side of it's 50%retracement.

There has been NOTHING but BAD, no awful news and economic data. It's amazing that CNBC can spin that all this news is "Priced in" BULL-%&*@! The big money guys are propping the market up for a decent end of month for their February reports. BULLS - Don't get suckered in for the PLUNGE that is about to transpire.

Monday, February 25, 2008

Graphs O-Plenty, but the VIX will RULE mañana

At this point there are compelling arguments for both Bear and Bull technical analysis. Triangles broken, triangles intact, 50 day moving averages setting just above the tops of channels, lower highs, higher lows, market leaders (GOOG, AAPL, etc) down on an up day.......MIXED SIGNALS. It would be a waste of time to argue either side, because the bottom line is nobody freaking knows.....
The one extremely interesting chart for me is the VIX. Check out the last chart in this post and note the support line and longer term trend lines from the bottom. I believe the VIX is making identical higher patterns and we are currently testing the bottom of the third pattern. Basically if it bounces off of today's lows and moves higher the market will tank. If it breaks through 22 to test 19 or lower we move higher till 17 bottoms on the VIX. Keep in mind the overall trend is still lower until we break 1400 on S&P 500 and 12,800 on the DOW. And even if these levels are broken to the upside, I believe we will still test the lows of 1/22/08 before truly continuing a BULL run.

In short, trade the volatility like a sober fraternity boy at a Sorority initiation celebration: carefully and quickly.

Triangle's still intact

Friday the market blasted up off its lows the last 30 minutes of trading to get back into the triangle. It apears the a big rumour of an Ambac bailout was timely released on CNBC. If you don't smell a rat here you've got a pin on your nose or some analgesic for congestion. The only thing going on is a big fat BULL TRAP. Yes the market may go higer for a few days, but the bottom line is that a 1.5% move in thirty minutes is a non-sustainable move based on heresay. I say Patience and Put entries on tops of market up moves will pay as the overall downward trend is still the predominant force.