On Thursday, I wrote:
“We have the big jobs report tomorrow morning, which often establishes swing highs and lows on the daily chart.”
And we did indeed have a dramatic reversal on Friday, did we not? The SPX printed an impressive-looking bullish hammer candle, which often marks the end of a sell-off. However, that hammer reminds me of October 10, 2008. We had a dramatic reversal off of 899 on that day, and the market didn’t violate that low until a month later – but 899 was a long way from the ultimate low of 666, right?
So, perhaps the market has printed an intermediate swing low, with more fun to come for the bears in the weeks ahead. The primary difference between now and then is that in October 2008, the economy was collapsing, and today it has completed its collapse.
The economy is probably more likely to turn up from here than it is to turn down, but the market has not been reacting to the economy. It has been reacting to financial and political events: The Democratic loss in Massachusetts which has caused the Obama Administration to turn hostile toward business, tightening of bank lending in China, and of course, the spectacle of the European financial crises.
So, take a look at the chart in the weeks following October 10, 2008. Maybe we will enjoy another period of highly-volatile range-trading before the market decides upon its next trend. After all, there is quite a lot of crazy stuff going on.
Congratulations to all Saints fans! May the purty uniform win.
SPY still looking bullish on the 15min.
BBT in a downdraft recycling its lower time frames. It has been nice lately, so hoping it will bounce back up soon.
100 Cash. Have a feeling the Euro has fallen enough for now.
SPY testing its 15min 36MA. MACD bullish but there is a lot of overhead resistance.
If there is a green candle today I would almost call this a bottom on SPY, even though the oscillators haven’t indicated that as of yet.
SPY is still in DOO after filling its weekly gap. It may take some time to get to MOO to fill that gap and since that is an intraday gap, it may not get all of the way into the MOO circle. Still, it remains a GOOd target.
MOO and DOO:
http://i47.tinypic.com/el36ty.jpg
Well George, only you and me here and we’re both leaning bullish.
If SPY does a Humpty-Dumbty on the 15min, I’m gonna boycott peanuts.
Larry,
It should be bullish with the Saints winning. Hope you did well on your shorts.
SPY was rejected at its 5min 38% FIB, now trying again. If it busts through, that MOO gap is right above the 68% FIB. Nice target.
BONZAI
The word of the month is “contagion”. Has that been popping up everywhere or what?
Previous “sayings” and pet words were “customer service”, “paragdigm shift”, “reinvent”, “specificity”, “collateral damage”, etc.
Can’t wait until next month.
SPY now headed for the 50% FIB. Immediately before that there is a good resistance area and above that, it should be smooth sailing.
Very well George. Finally. Good start to the year.
I’m leaning bullish too, long XLE .. nice game yesterday
Sam,
I didn’t see the game. Previous superbowls have not been that good except for a couple of close ones.
Good to hear it was an exciting one.
Btw, AIG is going to do great .. cause Thain takes care of his own, btw that doesn’t mean his countrymen
Nice intraday swings today. With days like today, it doesn’t matter where the market goes… just GO!
George, this one was awesome.. parkers intercept was what I think sealed the deal for the saints
Sam,
Good to hear. There will be wild parties in the “The Big Easy” all week.
SPY hit that resistance, now backtesting the 38% FIB. If this goes to MOO, I’m going to have MOO GOO gai pan tonight.
that’s hilarious.
do u think the sovereign debt crisis was/is politics? the china currency has appreciated +10% .. and the spreads were nowhere close to default levels (except say dubai ~900bp)
SPY showing some weakness now. Maybe 5min needs to recycle.
Sam,
Me? I don’t know. Obama has been talking down to China lately about its currency. That could have some influence.
The resistance area SPY is fighting right now is where there was a huge drop and lots of folks bought, then it dropped even more. It will be difficult to get over this but IF it does, it may catapult up.
George,
Yea who knows, some say its to get everyone to impose the sanctions on iran .. too many conspiracy theorists ..
Our MAs tell truer stories .. small bounce again .. i like
Index ETFs are getting slammed at the Mid Bb on the hourly. They need a little MO to get across.
String
The jury is still working as to which time frame SPY wants to correct. Looks like it went for the 15min with the MACD now touching the zero line. No cross on the 9/36/15 yet so it isn’t done.
String,
I’ve mortgaged the house. If the tape plays
my tune over the next few months, I’m ready.
Paula
Just make sure you sing and dance loud enough for me to hear. Right now I have plenty of dry powder. Waiting on alow around the 1st of March.
String
Paula you looking for 950-975 S&P into March?
String, I will.
Scotty,
Looking for the SPX to be in the 990 to 1000
area…or a possible bottom at the SPX 200
DMA if it can’t break below it.
unbiasedtrading.blogspot.com has Jim Curry’s
latest cycle analysis plus other expert references.
Paula, I’m with you. When Larry gets out of shorts and more people look for another move to me it screams sell.
(Sorry Larry I’m not using you as a contrarian yet lol)
Scotty,
The Bradley is very good in calling trend
changes. I use a +/- 5 day window. It
is calling for a trend change March 1…but
then only has minor corrections into Aug.
I’m not sure how to read that right now.
Paula
I pointed out to you or maybe it was Julia, that I use a 21 DMA as my mid BB. In the first half of January price on the SPY hourly chart started swinging back and forth across the 36MA George likes so well. On 1/20 the 21DMA crossed down below the 36DMA. When price went back and tested the 21 DMA on 1/21 and failed easily, I was pretty comfortable going short as a hedge against my longs. Then I started adding as we gianed speed. On 2/2 the price went above the 36DMA and I went back to just hedged longs. Once the 21DMA crossed up over the 36DMA I was looking for a go back test of the 21DMA. Sure enough it did and failed handsomely. I added more shorts that I took completely off last Friday during the runup. Then today when price failed at the 21DMA I added my hedge back to my longs.
All that said how would you expect the bottom to be put in later this month. Can we look for the oscillations back and forth across the 36MA, then a move up? Or would you expect a V bounce and then a higher low to a move up?
String
String,
Congrats!!! great trading.
January was an outside month to the downside.
A super sell signal…it told me to be 200% short.
I’m not a MA trader. I try to look at the big picture
and trade off of yesterday’s SPX high/low/close.
It is easy to change direction with futures.
You are better in predicting the SPX path than I am.
If the SPX is near what I think is a bottom early
March, I will go 400% long into May…will be looking
for outside days/weeks/month.
String,
I do look at the SPX 20 DMA…is it moving
up or down?
Paula
It really wasn’t that great of trading, I was protecting my backside. I have these dividend paying stocks that I have grown weary of trying to buy at the right time. Or sell Covered Calls on or any other income technique. So now I just hold on. I have to buy some short etf to protect them on these down drafts. I chose QID for this go round at first. That burned me because the Q’s did better for a while so I had to switch to SDS. So I really didn’t make that much money just kept from losing a lot.
I gather by playing options on the OEX you will be just ballparking a bottom to start your position with a stop.
String
According to FT $7.6 billion in Euro shorts have piled up over the past couple of weeks as there is increasing worry about how the currency area is going to deal with the debt problems of many of its members.
Now over 40,000 contracts against the currency have been taken out on the CME, putting even further downward pressure on the troubled currency.
http://www.businessinsider.com/biggest-bet-against-the-euro-in-its-history-as-investors-short-currency-2010-2
http://www.businessinsider.com/recent-swoon-obliterates-one-third-of-gains-since-start-of-2009-2010-2
K, I join you after next bounce. Maybe.
Larry, I’m only in 25% of one account (via options) and 0% on the other two
http://www.stocktock.com/2010/02/08/wave-tock-monday-2810/
It appears that the ECB is set to hold an emergency meeting on the sovereign debt crisis that threatens to tear apart the EU. According to the Australian Broadcasting Company (ABC), ECB chief Jean-Claude Trichet is leaving a Sydney summit of Central Bankers early in order to fly back to Europe for the emergency talks. He had been scheduled to stay in Sydney until Wednesday.
Earlier it was revealed that investors had placed the biggest ever short bet in the history of the euro.
This is why.
“The Iranian nation, with its unity and God’s grace, will punch the arrogance (Western powers) on the 22nd of Bahman (February 11) in a way that will leave them stunned,” Khamenei, who is also Iran’s commander-in-chief, told a gathering of air force personnel.
Stringm,
Nice moves on the hedges. Necessity is the “mother of all inventions” and all that.
Khamenei is going to “moon” the press.
K,
Enlightening stat that 1/3 of S&P 2009 gains have been lost in 14 days. And it took months to get those gains.
SPY bumped up against the weekly bottom resistance trendline and couldn’t punch through. So it’s still wallering around in DOO, but hasn’t broken out one way or the other.
http://i46.tinypic.com/2ylpe34.jpg
http://www.youtube.com/watch?v=g9RzpijN35A&feature=sub
just funny watching cramer
China’s giant sovereign wealth fund revealed it has accumulated stakes totaling $9.6 billion in major U.S. companies including Coca-Cola, Apple and Goodyear following a buying spree last year.
Most of the stakes are small, reflecting China Investment Corp.’s strategy of avoiding politically sensitive acquisitions. But they highlight its growing presence in global markets as it invests a portion of Beijing’s $2.4 trillion in foreign reserves.
The holdings were disclosed Friday in a filing with the U.S. Securities and Exchange Commission that listed shares traded in the United States.
http://news.ino.com/headlines/?newsid=689687969867710
String,
One thing I’m not keen about is if everyone
expects the market to make a certain move
it does the opposite. The tape may not play
my tune.
K,
Thanks! for the links.
Watch the Euro folks.
The futures bounce this AM could lead to a BIG short squeeze and get the market back up near 1080. Then HEAVY resistance kicks in.
I agree Paula, too many people looking for the downside that are “in the know,” but remember, Joe Sixpack is NOT looking for it *IF* they are even in the market. The coming selloff could all be driven by hedge funds selling first and asking questions later.
USD index at the future session lows as I write this (revisiting them,by they way) at 80.14 but the SP500 futures have NOT yet revisited their highs of 1067 (which would be up over 1% on the session). Larry is right, watch the Euro…