The market plunged on both September 1st and October 1st. Perhaps that was because the big funds finished their month-end window-dressing. Are we seeing the same thing now? Monday will be the first trading day of November.
SPY rallied on light volume Thursday, so bulls must be cognizant of the possibility that the market is constructing a bear-flag retracement of the plunge. However, volume in the futures (ES) was not light, so this may be a bullish indication if traders were reaching for something leveraged rather than boring old SPY.
But even it does turn out to be a bear-flag, bears must be careful not to short it too early. Flags are similar to wedges in that they are sharp and pointy. They keep pushing up to a pinnacle, blowing out all your stops in the process.
Breadth ramped up to a very high level on Thursday. If the market can stay roughly flat as the internals unwind a bit on Friday, that will be a bullish development. All the bulls need to do is keep it flat and they win.
SPY didn’t leave any gaps behind on the way down, so when looking for upside targets for the market, the next one would be the QQQQ gap on October 28th at 42.35. The XME was halted at its 10/28 gap on Thursday, so maybe the Q’s will be stopped at their corresponding gap today. The XLF has two gaps above also.
All the major ETF’s left un-filled gaps on Thursday. That’s a very bullish sign, in the short term. As I write, the overnight futures are in a bull-flag formation, so that is bullish if it lasts until the open. It is ironic, but short-term bull-flags can construct a bear-flag on a higher time-frame.
Keep an eye on the BKX banking index – its 20-day moving average is poised to cross below the 50-day if the banks don’t rally strongly today. That could be a bad omen for the market. It just doesn’t seem like the sort of thing a fabulous bull market should be doing. The banks appear to be worrying about the FOMC meeting next week.
Julie
I have my number 1 necklace and tennis bracelet too. I just do the bracelet when I am by myself. I am feeling great. Not that I am top shape but after 5 weeks of pain this is MAARVELOUS.
So does this mean your loading up on shorts today hoping for another black monday?
String
Phil,
Nice.
Julie,
What a great story. Talk about “faith”. Wow.
SKF is at a 15min double top.
sorry George, been doing other things. A Tres Cruzars setting up on the long side, no?
GEORGE….thanks…you are the master
STRING…..DIAGNOSIS was benign as i thought?…if you dont answer i understand
STRING…. doctor phils diagnosis is SYNOVIAL CYST….correct???
String,
Keep wearing number 1…it will bring you
good luck.
We do not plan to change our short position
today. A SPX close below 1040 moves the
SPX chart from bullish to netural. A SPX
close below 1019 tilts the chart to the
bearish side.
We have our eyes on the next Bradley date.
Dave
Hope you are not bed ridden again. Did you buy your puts back this morning?
String
MATT…sorry for off topics
Phil
I guess it was benign because they have not contacted me. Doc said he could not get all the cyst because it had attached to the nerve. Indicating the condition had been there for sometime. Said it was chocolate looking indicating it had hemmoraged. I don’t know, I just know I feel better and my FEETS WORK. I was not looking forward to possible paralysis and loss of bowel control. Glad it is over.
String
SRS Yummy
JULIE….next bradley turn NOV 9….it has been working pretty good this year….i am looking fro a LOW near nov 9…we will see
Now you guys realize why I loved yesterdays huge move and got more short? LOL
Yumm indeed
STRING….as you know HEALTH is #1
SPY is making an inverted H&S on its 5-minute chart, but the neckline is slanted downward, so it’s not the greatest reversal pattern.
K……WHAT ARE you doing….why are you not fighting the market …??isnt it easier this way?
2thfixr,
Yes, Tres Cruzars on the long side HOWEVER, that is against the trend so I only scalp them.
SPY’s inverted H&S only produced a modest bounce. That may be the last rally attempt for the day.
SPY filled its 60min gap-up on Oct 6th. Anything can happen now?
There should be some support at NDX 1656.
George,
SPY didn’t bounce off that gap, so it may want to head directly to the next gap, which is a tiny one from October 2nd at 102.55.
Matt
String,
I think Paula posted this before. It’s an old
trader’s trick you can use. Divide the DOW
by 10. If the SPX exceeds that number
plus or minus, there is more to come.
If not, look for a change.
Keep in mind nothing works 100% of the
time. We keep a daily diary on what we
think the market is telling us. Give it a
try as you rub your number 1.
Phil,
After GS and FED went broke it was up to me to prop it up but I too decided to turn my freaky senses on and see where they want this going. I wouldn’t mind 50 more points down monday but am getting greedy.
Next stop: hairdresser
I just hope she’s been single for the past 4 months and gotten over her bf. Hehe
SPY is trying to build a bottom here. 60min stochastic is ticking up. Could be a change of direction.
EVERYONE……have a great weekend !! hasta
I am officially George Castanza. Whatever I want to do (trade), do the OPPOSITE! haha Have a great weekend all, I’ll be out of touch (travel). Hope to catch up Monday.
ICE down >$5.00.
BBT down $1.55.
2thfixr come meet me in boston
SRS really disappointing today. Hmmm can’t figure that one out. URE, its twin, was a good stand-in when SRS was bad.
QQQQ almost has a bearish Three Amigas on its weekly chart. It was a photo finish with the MACD closing at 0.0014.
I think I gained 1/3k today including eur/usd trade which I closed way too early.
1037 was amazing and unthinkable lol
George,
Take a look at trading OEX options if
you do not want to trade futures. If
you bought the Nov OEX 500 put
on this past Monday morning bounce
for $700.00, you could have sold it
Wednesday for over $1900.00. A $1200.00
gain for each option you bought. And
today was another big profit day for OEX
options. If you sold on Wednesday, we
would recommend OEX DEC put options
at yesterday’s close.
It was a good week for the bears. I was suprised there was no covering into the close. Looks like bears have wrestled for control. Something has sure changed. Gues we will watch for that close under 1020.
Here’s my workstation setup. I don’t put any screens too high because looking up is more difficult. These are the screens to my left and the second picture is the screen to my right.
http://i33.tinypic.com/2j67d6c.jpg
http://i35.tinypic.com/2wm3reh.jpg
Have a great weekend everyone!!!
Had 2 scalps on AMZN puts with totalled a 15% gain on my traded position. Not bad given the bears have been raped over the past few months
Julie,
Thanks for the tip. I don’t know anything about OEX options but I’ll check it out. I need to do something differently and I’m researching to see what I’m comfortable with.
Charlie, WTG!
George… very nice…
George
I don’t see a place for the peanuts. Do you have a peanut stand besided your chair?
String
referring to your setup..