The good news of the Chicago PMI was sold at 9:45am on Monday, which is a potential signal that traders are using good news to unload inventory. The market has been shrugging off good news for a while now.
SPY finished strong with the help of XLF, however XLF still left a sizable gap behind, along with the other major ETF’s. So the close may only turn out to be a short-lived moral victory for the bulls.
SPY bounced as soon as it neared its August 21st gap, however IWM dove deep into its gap from the same day. The gap held, but IWM did twice as badly as DIA on the day, and the relative under-performance of the small caps demonstrates continued risk avoidance. DIA closed below its August 25th gap, so that is also a sign of weakness.
The IWM pierced its 20SMA, but was able to close above it. And the SPX held the 1014 area, so those are bullish factors.
Not only did the EEM close below its August 21st gap, but it opened a new gap overhead that is triple the size. That’s a statement. China may not have crashed our market, but it certainly has sucked the risk-appetite out of it. Two weeks ago, China knocked our market down in similar fashion and the SPX rebounded the next day and immediately ran to a new high. Maybe it will do so again, but China has proven that its problem was more than a hiccup, and maybe we shouldn’t expect the SPX to shrug it off so quickly this time.
The talking heads on CNBC were unanimous in their opinion of the Shanghai Index: it is a phony market populated buy fools and gamblers, and it has no bearing on the rest of the world’s markets. It sounds to me like the talking heads might be lugging a little bit too much inventory…
SPY rallied into the close on increased volume, as compared to Friday, but it was unable to eat into any of its morning gap. That is a sign of weakness.
The Advance/Decline line rolled over, and its pattern looks very similar to the pattern that it made at the peak in June.
A while ago, I mentioned that I didn’t have to wait in line at the barber on Saturday afternoons any more. Well, it isn’t just my neighborhood. It is a nationwide phenomena, and nothing screams recovery like people cutting their own hair, right? The Wall Street Journal thinks it’s funny, but if the USA is a service economy, and everybody starts to do their own services, where does our economy go?
told you so Phil,
“European Stocks, U.S. Futures Decline; Copper Gains on China Manufacturing”
K Says:
August 31st, 2009 at 5:26 pm
my SPY sell warning earlier today was just a warning and it didn’t print. but be aware that tomorrow could be the printed version
Wow talk about signals..
why don’t i follow my system again?
K, the day is not over yet…
Biderman’s question is not answered yet – and we are still in bullish terrain.
Great summary Matt.
30 short
s&p futures bounced off of 1012 mark
yerk i am with you
http://investingfreak.com/2009/08/fake-correction-followed-by-a-fake-rally/
posted this a few days back
K – great chart! Let’s see where the next bus stop will be
Larry, don’t feel so lonely: http://www.bloomberg.com/apps/news?pid=20601103&sid=auGWGWlnohNo
Nice analysis Matt. Good links folks.
I’m having to use three different web browsers to make my trading work. All because I upgraded an XP machine to IE8 which still overlays text and has some fonts so tiny they can’t be read. This will do until the weekend when I can get everything straightened out.
what happened to tlt phil. damn it
btw AVII lots of insider buying
still looking for a break of yesterdays lows for a buy entry point
K…..told you that i want to sell bonds on any strength…guess lots of others do too
K pull up a daily 3 month TLT with volume ….look at that HEAVY volume bar at this level on july 8……..lots of people got their money back just now
AVII got in 1.75 with 500 shares closed 250 out at 2.00 and 250 will let my system get me out
George….same thing happened to me…..i downgraded to ie7 and was back to normal
GEORGE….spx overlapped 1023……..we have a corrective wave from the top……..we may be in new UPWAVE……hopefully there will be more correction but time is running out to find a buy entry before LIFTOFF
K… if stocks rocket up now TLT is doomed
yes phil am out didn’t get my $97
damn it i should never touch anything without my system’s permission
K….just trying to tell you what i see….no guarantee i am correct..but with options you really dont have the luxury of waiting around…i can hold those bonds if i have to
phil:
Carter Worth mentioned PMF on CNBC. The weekly chart presents an interesting triangle. Thoughts when you get a chance?
Matt:
Well done.
phil,
I went from IE6 to IE8. I’ll go back with IE7.
Tks for your input.
SKF has 1 humpty-dumbty today, its record is two in one day, today could be record-breaking.
my system didnt yet sat sell tlt so i sold option too early
Great moves so far today.
phil,
If we are in a new upwave, surf’s up and I have my board. A chance to get surfer’s knots with profits.
mitch….pimco mun fund??? look at monthly chart for 10 years…if i had this i couldnt sell it fast enough
phil:
That’s a yet-to-be developed ascending triangle there on the 10 yr. If you picked it up 10 years ago “?odds are?” your ship is finally coming in – just in time. LOL
mitch…almost everyone who bought this dog since 2001 is still in the hole
Nothing but good news today: Housing on the rise, MFG gauge shows expansion the first time in 18 months, Ebay selling some SKYPE (Source: MarketWatch News).
Should make the market tank.
K….please tell me when your system says sell so i can unload bonds
phil:
Suppose you bought your wife this fund for Christmas 08?
MITCH….highly unlikely…i dont trust bankrupt municipalities to pay me so i would never buy it…..uncle sam will print me up some greenbacks for my treasuries so i know i will get paid….what those dollars will be worth is another matter..but as long as i have a boatload of dollars i will be able to buy an ice cream cone at least
phil,
for JNK i got a warning (aka alert) today but not yet printed on the chart.
TLT might or might not get it until second half of the day.
Again until these are printed I really won’t trust them much. i use warnings as an initial entry.
I get in on a stock when i first get alert, then if chart prints a B i double up.
I don’t like shorting much so only use it for the upside.
SPY at 15min 36ma support.
just got a Sell on IYR (not yet printed on chart tho)
Something’s going on to have this nice volatility today. Haven’t seen this in quite a while. I’m sure it has something to do with Paris Hilton.
GEORGE….looks like a corrective DOWN and corrective UP…ie still in NO MANS LAND
however this could be the scary c wave down that ends the correction that i have been looking for
srs buy
phil:
Dear Uncle hasn’t printed “greenbacks” since 1971.
http://www.merriam-webster.com/dictionary/greenbacks
got $126 out of AIG $35 options which i was risking $220 for.
don’t feel like staying in with them
phil Says:
August 31st, 2009 at 12:09 pm
i want to buy a downward blast to 1002 http://1.bp.blogspot.com/_goypolxEFd4/SpvTv3ssKJI/AAAAAAAABzg/YCoaDLI0xKU/s1600-h/SPX60min2.png
>>>>>>>>>>>maybe THIS is it
GEORGE……does this look like a SCARY c wave ???? woooooo
These are the first impulsive waves down we’ve seen in a while.
KAILASH…a c wave LOOKS like an impulse wave….thats why so many are fooled
we are coming to the END of the correction
got REW buy too just no available cash
A=C @ spx 1004……..going to buy there if it looks good
xlf sell
crazy day
Phil — or maybe the bottom just fell out of the market?
BTW I like the volume — we’ve had nothing like this in a long time.
KAILASH…still need wave 4 and 5 of c…..obviously we see wave 3 action as i have called for
bounce off .618 retrace is expected at 1002
phil,
You’re saying another move up, right?
sold my SWG sept 97 puts @ 1 even. Small profit but better than August puts where there were only losses. May re-enter lower.
Still with VXX… Go VXX !!!
Are you guys seeing another head and shoulders pattern, similar to early June? We are going to test 980?
UNG making a new yearly low, maybe sub 10 soon.
Larry’s patience is starting to pay off!
Wasn’t it Three Dog Night that proclaimed: One is the loneliest number…?
posts from people who have not posted in a while tell me to buy soon
BOUGHT @ spx 1002………gotta go…..good luck all ! hasta
Phil, I’m happy to be a contrary indicator!
I have no idea about whether we bounce here, but the swoon signals a real fear in the market.
phil you might be right.
ok spx 5 min candles want us to go to 1040 lol
(my system didnt say that so beware)
phil and the bulls are out full force
K:
I was looking for you to pop up on here and say you had a CZZ put.
on the 60 min spx bounced off its 200ma
mitch sorry.
were i supposed to let you know the czz sell signal? i sold at 8.04 again sorry if you asked me to let you know. busy at work. there is an emergency project and apparently i wasnt even supposed to have lunch.. so i just cussed the person out. i’m out by friday anyways. can always look for my next gig.
K:
No, I’m cool. I mentioned to you I was done with that for now – could not renig – true to myself.
Could you get some delicious bread in mama land for that?
i get bread for the rest of the year with that. (okok more like 250 days)
No more humpty-dumbtys for SKF today? We’ll know in 45min.
Where’s JG, seems like she should be lurking around on a day like today…
P2 on to P3? Somehow I think this could be a fake-out move.
Hi everyone! Randall—funny you should post that… I haven’t read the board for a number of days now and just jumped on.
To all (and sorry if this has been posted already): Financials cracked in 2007 many months before the SPX. Throughout phase 1 of the bear, financials led the ride down. Today, they are currently sitting just below the trendline connecting the March lows to the Juy lows. In other words, they are again leading the way down—as the SPX isn’t at that line yet.
China, CRB, financials, dollar, percent bulls, divergences, etc. all say down. The roll-over may well not be easy, with some fakes, but I don’t see us ripping up and up and up from here.
Final thought: fun is a three letter word. So is red.
Hi JG, we could get one more spike up, but this was the first snow. We have a long winter ahead of us.
Hey Kailash! Agreed (on all points).
Welcome back JG. Red streaks all ’round today. First time SPY has been down three days in a row for a long time.
george, remember those support and resistances i told you about.
http://investingfreak.com/wp-content/uploads/2009/08/spx-aug27-09-close.jpg
look at the past few days when candle CLOSED below the green line (support)
what followed?
K,
You got that down good. Is that projection still good or have things changed?
we closed below it yesterday.. so yeah.
well not sure will have to go home and re-evaluate it. all I can say is i made back 75% of AIG loss
Super,,, only 25% remaining.
George… thanks.
Kailash… agreed “could”—but I (naturally) favor the downside for a stack of technical reasons.
Sure hope Phil gets a chance to exit that SPY trade, last time around it was death by a thousand cuts on the downside…
K gets a SPY sell signal, JG and Larry and a little bit of Kailish talking the downside, does this market really stand a chance?
whoopsie looks like tomorrow will be K’s last day at work (hint scroll up “cussing”)
ah what’s $200 going to do for me anyways
why is zerohedge no longer providing stories? or is it me?
never mind LOL
http://www.zerohedge.com/
Hmmm K. I often work through lunch. I had you pegged as one who could too. Here’s a rule: never cuss a person that doesn’t deserve a punch. Work for you?
the person deserves more than a punch but it is a female. I don’t want to get into it but i am very patient and relaxed. she promised the project 2 weeks ago and today was crunch time or her but she had not done anything.
of course higher management is with her so i will see.
please guys and gals don’t judge me on what I did and i didn’t do profanity I just talked back in a way that person did not like.
Have a good afternoon Mitch,
(oh the project is still not done and will take at least until friday so there was no need for the person to deny someone their lunch hour)
K: I’m just trying to help you make it rain!
Thanks,
I hope it pours red candles tomorrow. stay tuned for my updated candle view (as if SPY “PRINTING an S” doesn’t do justice) you heard that?