DIA trend, GOOG & AAPL H&S patterns

The current uptrend on the DOW is hitting a retracement level. It is uncanny how the channel lines give us price levels for trading.
GOOG may bounce off the $61o level and fill the gap up from $500 or one could view the forming of a H&S pattern topping here and back to $420 GOOG goes.....
AAPL may be forming an inverterd H&S pattern and could finish the run to test new highs only to fall back to the $160 level.

Waiting on the FED

Again we are "waiting on the FED" to make a predicted 25 basis point cut and "move" the markets. Question is which way will the following 400 point DOW move be?

Patiently Waiting for PPI & CPI...

Markets are still range bound and oscilating near the middle of the YTD ranges. As10% plus haircut earnings from the likes of AA, UPS, & GE combine with additional writedowns in the billions from Wacovia the Bull fantasy is losing steam. Question is what will be the catalyst for the next major leg down? How about hot PPI (Tuesday pre-market)and CPI (Wednesday pre-market)? This should lend an interesting end to Options expiration week!

Market is like a stool.....

Sorry for not posting lately, but basically it's just been a waiting game. All the bad economic data is "Priced in" (insert coughing sound BS here) and most knowledgheable economists are now stating we are in a recession. Which by the way the average recession last six months and the market barely corrected 20%. Wow from where I stand the farmer is still on the stool milking this cow, but he's missing a leg off his three-legged stool (that would be consumer spending). Anyway there is no real reason to post charts of the same range-bound market we've been in since the first of the year. We are at the top side of the range and the market is getting tired on low volume.

The question is will it retest the lows or blow right through them? I don't know who said it but the quote applies, "there are no such things as triple bottoms or tops"!

IRRATIONAL EXCUBERANCE

Unemployment rate jumps to 5.1%

U.S. payrolls report raises concerns of widespread job losses and ultimately a more significant economic slowdown — this in the same week Fed chief Ben Bernanke allows that a recession may have taken form.

Greenspan said it best about the tech bubble and anyone with half a brain should not be BUYING into a quagmire of poor economic data. Patience is the key here folks as this GIG will implode.

Bull trap set and sprung.....

JOBLESS CLAIMS 407,000............


Bull hopes expalained by this video....


Retest of Lows coming to a chart near you soon........

Much ado bout nothing

So the market got a little ahead of itself and decided to short squeeze on April Fool's day. There could still be some upside move as evidenced by the SPY, but charts like AAPL and the VIX hitting the 200 day EMA point out the longer term trend is still heading south. It will be interesting to see if AAPL rolls over at $150 to head back to $118 to complete he head and shoulders pattern.

Dow transports best performing sector?

Dow 2 year

S&P 500 1 year
S&P 1 monthDow transports 6 months

Ok am I missing something? Transports up on the highest fuel costs we've seen in decades? Perhaps not for long.....

Quarter End and Fed speak

Last day of the quarter today and a pretty boring one. I find it intersting that Paulson chooses today to release the "New Plan" that will take 2-8 years to implement regulatory controls over the banking and mortgage inustries. I guess my $600 Rebate is to justify the billions of taxpayer dollars being thrown out and pissed on to bail these guys out of poor decision making.

Anyway, most of the charts today had an "inside day" meaning that today's action was inside the high and low of the previous day high and low. This can probably be attributed to the quarter end, but some relevance can be made for tomorrow's action based on the positioning of the candle being on the lower levels. Range bound in a declining market with low volume: be nimble.

Adding to IWM Puts on today's bounce

This 3 month chart of IWM shows the trading range we've been stuck in pretty well. The interesting thing is the IWM has been the strongest of the indexes off the January lows. Therefore could one reasonably postulate that if the "strength" fails the rest bails? Bottom-line here is if IWM cannot muster enough bullish strentgh to bust above 70.60 today and makes another lower high or breaks below 68.97 to make another lower low.......LOOKOUT BELOW!!!

+ZQNSH AMZN July 40 PUT ***Take a LOOK***

2 Year Fib fans and retracements
1 year Fans nd retracements
I'm no expert, but it is probable AMZN back-fills the gap up from 43 to 55 on April 24, 2007.

AAPL Bull run over...

Getting short APPL here:

Bottom in you say? Where's the BEEF?

Out of the four charts below one of these groups is suposed to LEAD the markets off the bottom. HMMMM sure is strange that they are all retraceing back to FIB fans or retracement lines with declining volme each day. Confucious say be very careful for the BULL smell like poop from behind.



And checout the QQQQ tring to back-fill the previous gap down. Looks similar to a GOOG chart. Can you say Puts with confidence at 45?

SIRI & XMSR

It's uncanny to me how similar SIRI & XMSR charts look on a 2 year basis. Yes a lot of people have been waiting for the government to act in order to combine these companies into a satellite radio monopoly. Well it looks like the FED's have stalled just long enough to kill any momentum in the stocks. I say sell the news when the FCC fianally allows the merger if you've been long SIRI and look for a better entry after the consolodation.

Will GOOG fill the gap down of 2/26/07?

GOOG appears to be back-filling the gap down of 2/26/07 and agian the FIB retracement and fan levels can give us a guidepost to ride calls and then enter puts. Near term resistance at 465 then a big fight at 480, intermediate resistance at 491, and a 3 year Fib retracement 38.2% level looms at 497. In other words it may go up, but it will be a painful Bull ride. Remember the overall trend is still a Bear market trend.

Set me up for a short........

The market ws at the top of this channel after the Fed meeting on Tuesday and the Earnings reports from a couple of Brokerage houses. The sell-off on Wednesday took most of those gains back bouncing off of the 50-Day EMA. Thursday is Quadrupple withching Options expirations and the beginning of a long Easter weekend and therefore could be a crazy volitile day. It would not surprise me to see the 50 Day EMA tested again, but that is as high as this market goes now. Get short with confidence at the Bigger Pain has yet to be distribritued.

FED bounce.........

All is Well?

Financial market stability?



Happy St. Patrick's Day

Are you freaking serious? Inflation cooling?

Now this is funny....Check-out the last MarketWatch headline link: "Euro-Zone inflation hits record annualized rate"

MarketWatch headlines after CPI data:

Countdown to the close:41min11sec
March 14, 2008 8:48 A.M.ET
BULLETIN
Stocks poised for higher openData show cooling inflation
Retail-level inflation moderates in February, with rate unchanged versus expectations for a 0.2% increase.
indicationsInflation data prove pleasing to Wall St.Stock futures turn on a dime, push into positive territory on the strength of positive inflation data. • Gold nudged higher Miners rise in London Mixed close in Asia• Euro-zone inflation hits record annualized rate of 3.3%

DO NOT GET SUCKED IN!!!!!!!!!

GOOG steps up and falls off a ramp

http://clearstation.etrade.com/cgi-bin/intra?Symbol=GOOG&cs=&ci=None&gtyp=Candle&gs=Huge&event=1&gr=1&tic=5-year&int=95&i1=MACD&i2=MACDHist&i3=Stochastic&i4=rsi&e1=13&e2=50&e3=200&olay=None&x=61&y=11

The link above will should send you to a clearstation.com view of a 5 year weekly GOOG chart. Long term support about to be breached at $400 will send the GOOG downward spiral stair stepping to the basement of ????? At least $300 with bear flags along the way which are easily marked by the corresponding steps on the way up. Wait for the end of this Bull push which may last until the Tuesday Fed cut of 100 basis points which will confirms the $%^&-storm the American economy is really in. Sell the News!

Whipsaw mania.....

Today's action was something to behold. As for me it was better than watching an epic Ali/Frazier fight. I kept a close eye on the VIX today and it was uncanny how market momentum off and through resistance/support correlated to the VIX moving averages. The last two day's were basically an inverse of each other:
Wednesday - Up big sell-off late
Thursday - Down big early rise to the close

After all the commotion we are basically at the bottomside of the February range. Except now the Fed has spent a lot of bullets to get us to here, the news is just getting worse, companies like Carlyle going belly up with more to come, real commodity inflation soaring such as $4 gas. The markets may go higher for a few days, but overall I believe we are only setting up for a MONSTER fall.

The chart is of the SPY and illustrates how much overhead resistance remains.

Market Ticker tells it like it is:

"Disclosure: Neither long or short Fannie or Freddie at this point in time. No need to be; if they crack you can throw darts at the stock page of the WSJ for your short selection."

I guess what KD is trying to say is that this latest BULL-$%*# rally will fail miserably and to mark your long exit points accordingly.

As you can see by the charts of the SPY and DIA resistance is again found along Fib retracements. Interestingly enough the volume was light on the downside until the very end of the day. The 5 Day EMA beckons as support for most of the indices going into tomorrow and one could reasonably expect a bounce off this level to head back up to test today's highs and possibly push everything back into the ranges that held captive for February. With the lack of real economic data this week and the FED cutting 100 basis points next Tuesday I see a final Bull push coming before the January lows are passed like a college student going through Georgia on their way to the Florida Keys on Spring break.

Boing.......

Fib fans tell the story on the DIA..

The S&P found resistance at the bottomside of a retracement. Bottom-line is does this continue and for how long? It could be that this puts the markets back in the range we've been in since February. Nimble trading will pay and Calls are the flavor of the moment.

Citigroup to $14.25

How low will Citi go? The chart below illustrates a multi-year low for the big C and unfortunately my Ameritrade charting will not allow us to view farther back than 2003. If you take a look at thinkorswim you will find the next stop down to be a one week stint around $14.25 fifteen years ago. Can it blow through $14.25 all the way to $0.00? Sure, but where will it be 3-4 years from now? The first resistance on the way back up will be $24.50. No need to be in a hurry here until the 50 month EMA -$46.07 starts getting close to the 200 month EMA - $29.62.
Anyway, it may be time to start nibbling: financials - C, GS, BAC; home builders -TOL, KBH; and retailers -BBY, HD.
The tell for the all clear to buy will be increased volume as the big money starts moving in. Nibble, because we may see a bounce, but things are still heading SouthEast over this bear market.

Broken Ranges

Here' a look at the TWM which is the ETF inverse of the IWM or Russel 2000. As you can see the Fib fans are lending clear support and resistance levels. It is quite possible a bounce off the bottomside of the top fan line may occur next week before the TWM highs will be tested.
The volume on the DOW and DIA was pretty weak for an assault on the lows. It will not take much buying to induce a short squeeze.

The same holds true for the SPY which actually posted a Long legged Doji bullish signal on the Friday close. Hmmmmm, I wonder if a reload is in order for the Bears before the lows are blasted through?

Range bound, head fakes, and small cap speculation

DIA and the SPY show the rnage of the last 6 weeks. Perhaps the Jobs report Thursday and the Employment situation report on Friday will finally break the range one way or the other.

For you small cap speculators: CPST is shaping up to be quite interesting. If this is the bottom of a cup - a double or triple could be possible.

3 words: Long term support

A new blog from a poster on The Slope of Hope, http://www.slopeofhope.com/, has it charted better than I can do. Congrats Winnace and thanks for my continued education. Check it out: http://www.channellines.com/

Range Bound

Well the bottom channel was breached again today, but the Bulls prevailed late in the afternoon. I am anticipating an upward push to backfill some gaps that took place last week in most of the indices. This may be the last upward push before we retest the lows.

Think or Swim

I have used Ameritrade as my broker for well over ten years. After reading the Slope of Hope and Market Ticker it has become very clear that people who trade have migrated to Think or Swim. It's not really about the cost per trade as much as it is about platform and tools. I'm sticking my toe in by moving my IRA account. Here is a link:

https://www.thinkorswim.com/tos/displayPage.tos;jsessionid=058FCE87346CD09EED2A9A16B5DFEF09.tos0_w18c9?webpage=main&layout=homeLayout

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?

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.

http://online.wsj.com/article/SB120417048103899149.html?mod=todays_us_personal_journal

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.

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.