Hanging Man
SPY finished Wednesday with a bearish Hanging Man candlestick. Of course, the “Always Goes Up” market has been steamrolling such things, but maybe this one will stick. The NASDAQ was negative for almost the entire day on Wednesday, and was only dragged into the green in the final minutes of trading. So that is a corroborating sign of weakness.
Growth?
On his CNBC show Wednesday night, Larry Kudlow was raving about the fabulous growth in the economy. I guess I didn’t get the memo that announced the reversal of the meaning of that negative sign in front of the GDP number.
Also, let the record show that Kudlow said that the recession has ended on his May 5, 2009 show. I’m sure that he will be wrong once again. As you may recall, he was a huge “recession denier” in early 2008, and when he finally admitted that he was wrong, he said that the recession would be short and shallow and was probably already over. Making himself wrong even while he was admitting that he was wrong!
I added to SRS when it made the 15min 9/36MA cross. Got in it early this AM.
SKF giving me warm fuzzies. And the S(K)F Sympathy Fund is seeking the $150 level “profits”. Each day it makes money by swinging the cycles. I may need to charge you a handling fee K.
BBT about to lose all its gains from yesterday.
If China doesn’t buy our bonds the Treasury Department will. No problem.
matt……dont forget full moon sat may 9….top may come fri or monday
george… if china doesnt buy them i will…..lol
george i’ll show you how to trade options haha. got the option at 0.90 is at 0.98. some decent change already. can’t wait to make 5000% lol
The inverse have closed the daily gap down for today. Now let’s push SKF to $80 and fill that gap.
mkb…..i think that the 3rd wave down in tlt is near its end..ie still.higher rates coming but peak in rates due early june…that would correlate nicely with stock market top…..look up monthly tyx ….june each year is a turn ….usually a peak in rates but sometimes a low
K,
I really am interested in options. I haven’t done anything about it though. I bought a book recently on the subject and there is tons of stuff on the ‘net.
I also bought Martin Weiss’ book “The Ultimate Depression Survival Guide”. When my wife saw it, she said “are you depressed”? No dear, it’s about financial depression. “Oh.”
Very wide double top on SDS 5min. That could be a H&S it is making, not sure. It’s trying to bust through.
HAHAHAHAAH george let me tell you i don’t know much about options. as i understood what i purchased is a bet that faz will be at 7 in june. it cost me 0.90 a share and it is now 1.00 a share. (contract has 100 shares by default most of the time)
so i’m basically up 10%
Up over $2 on the first SRS trade which I’m still in. Almost $1 on the second at the cross.
Thanks Phil. It’s definitely a good time to be on top-alert.
K,
That sounds like a deal to me! And you’re already green.
WTG
1.05…. haha and george that book sound cool let me know how you like it at first glance
I’m keeping one eye on BBT because that puppy will make a comeback at some point.
K,
OK. Read some last night. Reads well. All the profits go to homeless children charity. Got it from Amazon… only ~$15 for hardback.
phil:
Thx.
Here come the eights and K’s target.
my friend who has enjoyed making a killing on financials (namely BCS at $5) is down over 1k today and his anger is showing. i hope all bulls are feeling that way so we can get our -777 george.
it is an ODD day hahaha -579 would be an even better number though.
“On 5/7/09 the dow fell -579!” come on goldman get to it
This could be a setup for tonight’s news. Or us rats escaping a possible sinking ship pirated by the Fed. I mean pilot’ed… mercy, a keyboard with no erase key.
nice h&s pattern on 2d /ES indicating potential move down to 890
nothing like seeing the first option purchase go up 22%
SDS is moving up on 60 min but hasn’t cleared its 36MA. About $1.00 more to reach it. Then we’ll see if it backs off.
matt and co did i do something wrong by selling a call to open? here i am thinking i’m making money when i might actually be losing??
i guess i really don’t get this. lol
i guess I did an odd thing and i should probably sell. hmm
That was the little backtest on BBT and SSO I was looking for.
SSO setting on the bottom of my 15min trendline. Will bounce or fall through. However, I drew one on the 60min and it has a way to go like lower 25s to hit that line.
Another complexity in the use of trendlines is the time frame chosen. Learning more each day.
K,
I only buy options, so I don’t know. Charlie would though.
Matt
Tony,
Yes, I see the H&S, but the stress-test suspense may freeze the market here. We will see.
Matt
well I sold them at what seems to be like a loss. bought to close is the term i guess.
matt.. looks like top of wave 3 has been seen….. dsi at 80% now…remember at march low it was 2%……at spx top near 1600 in 2007 it was 88%……….looks like there is enough juice for one more high or at least a test of top……how about a final high friday or monday …full moon saturday
REW = buy
UNG a nice and uncorrelated security. One might want a piece of ICE too huh?
SSO lost the 15min advantage almost at the opening today. I expect nice undulations while it trys to get its footing back. The same thing happened in reverse on SSOs way down. Nice scalp environment.
MKB,
ICE is a nice one to trade. I’ve been trading UNG since someone pointed it out on the blog here.
Matt,
Your Hanging Man candlestick has paid off today. Even if it reverses, it has been nice.
Phil,
Yes, that could be. The selling in the Q’s looks substantial, but not the XLF, IWM, or SPY.
Matt
George,
Yes, and now some very ugly “bearish engulfing” candles are appearing.
Matt
I’ve been in on the BBT 5min. Sure looks like it wants to break out. Could be a sucker play.
SPY has a sort-of falling-wedge pattern. It could bounce from here.
Hey K,
If you sold a call and it is rising in value, then you’re actually losing money.. Now..not all is lost. If you sold a call that has a high enough strike, then you bank the money you sold the call for and the option expires worthless.
Take my real life trade.
Sold some $27 call options on SRS about a week ago for $2 per share = $200 in my pocket per option sold. If SRS rises to $26.99 by options X, then I keep my $200 per option.
If it rises to $27 or past $27, there is a chance I get called out of my options in which case I owe someone some SRS shares @ $27. If I happen to have those shares in my account, then I seel them to the option holder @ $27 regardless of the current price.. be it $27.01 or $101.
So in the end.. it doesn’t matter the price of the call option so long as you have the shares in your account to cough up if you get called for them.
Charlie,
Do you still have SRS?
5 min spx presents a h/s and that may take us to 893-896.
Taking profits on second-half of SRS. Doesn’t look too fresh.
no George.. I sold my SRS.. that is why it is moving higher.
i wish i realized that charlie
i can only sell shares that i have in my account.
i covered the options which sucks but it’s ok learned many lessons.
thanks for your explanation
Burned shorts will be covering at the end here.
SPY popped out of its wedge. This shows that there are dip buyers. If they weren’t there, SPY would have fallen in a bear-flag rather than a wedge.
Good thing you sold though George.. SRS definitely showing some weakness.
Nice scalp on BBT although it may go up more. Its 15min is turning up but nothing significant.
Can’t say how long the dip-buyers will last though…
Charlie, I kept my initial low(er)entry just to see what happens. I sold the X-over and really, I should have reversed that because that is an experiment.
Can’t see weakness in SRS.
I’m getting gung ho on these crossovers. Not much to do except watch. Plus with a 15min time frame, I can take a nap.
It was there and now it is gone.. typically whipsaw @ 3:30.
Dressguard,
Me either that’s why I left half ’till EOD. The “scalper’s mentality” caused me to sell the other.
REW anyone? i got in at 49.08 buy signal provided by system exclusive to this blog until end of week blog post
The devil made me do it.
K, will check it out.
Thanks!
matt…….looks like max pain on qqqq @ 33 is coming into play
K, here are the terms to get familiar with:
Buy to open (you are buying a put/call, initiating a position)
Sell to open (you are selling a put/call, initiating a position – this is what you did)
Buy to close (you are buying a put/call to close out a previous position)
sell to close (you are selling a put/call to close out a previous position)
So if you are betting the stock will go DOWN you can:
1. Buy to open a put option (then sell to close to clear out the position)
2. Sell to open a call option (then buy to close to clear out the position)
If you are betting a stock will go UP:
1. Buy to open a call option (then sell to close to clear out the position)
2. Sell to open a put option (then buy to close to clear out the position)
That’s probably a mistake you will only make once. Be careful with the triple inverse options. The gaps up/down they make overnight can be brutal. If you want to hold those overnight, just go to Vegas – at least you will know the odds.
thanks for the clarifications though
Think we should get some SPY in case the market gets happy tomorrow?
also i will just disclaim once more that there can be whipsaws on my system so picks like REW might be fakeouts but i have faith in it so i got in
i still can’t automate it!! it asks me to confirm which sucks.
matt…….possible that was wave 5 ….we will soon see…. any overlap of spx 887……(blue 1 on chart)….and thats all folks http://1.bp.blogspot.com/_goypolxEFd4/SgKT7n3-xGI/AAAAAAAAAsA/yihU-uDmwjs/s1600-h/EWU60min56.png
Closing out SRS second half EOD rule.
phil,
Nice chart. I will mock one up and follow it.
Thanks
good luck after 5pm guys. i smell a fish cooking but we’ll see if my instinct is right and we might bounce big.
Buyers piled in at the close on BBT.
george….you can see these charts on his blog… http://kennystechnicalanalysisblog.blogspot.com/
Phil,
Yes, 33 is do-able. Especially since the selling volume on SPY, QQQQ, IWM, and XLF ended up being quite brisk.
Matt
Phil,
Thanks for the link. This stuff is complicated and somewhat confusing, I must say. Maybe I’ll get the hang of it one day.
This is why we play the game:
http://www.youtube.com/watch?v=IRsxh0bjoyY&feature=related
If this doesn’t give you chills you are as cold as ice.
I love ICE
ill check it out in a bit when I get home looks like a fun finish.
meanwhile I listen to the radio… our governor wants to give welfare people used cars, pay their insurance, stickers and AAA membership all in massachusetts taxpayers money.
I am pissed and if that becomes a reality you can bet I will not just sit here and trade but pitchfork in hand will remove him from office.
sorry for the rant.
feel better now
Only a small bounce in the futures to the stress-test “news”. Maybe now it’s time for Kevin’s sell-the-news reaction.
K, he’s giving them stickers!!! The audacity!! Can you get me a sticker K?
LOL MKB let me get on welfare so i can get a car first!
Matt,
The news had been out since the WFC & B-of-Puk leak. I think there will be more selling from here.
Maybe the pattern reversed: Futures green (big up as I’m writing) and trading session red.
Figured it could be up but I didn’t get any SPY.
K,
I want to move to Mass.
noooooooooo you want to grab a pitchfork and stick it up there!! come on george! lol i’ll serve you some nice food i promise come visit
That’s a deal K