Wednesday, May 27, 2009
Thanks to Bruce Chastain for showing me this.
I think it's only fair to add this little gem on how we got here in the first place:
Tuesday, May 26, 2009
Back to stocks, I'm starting to feel more comfortable with the ThinkOrSwim platform. I thought I'd post a couple of charts with it while I try to figure out what the Market is going to do tomorrow.
Here's a weekly of the S&P 500:
Even after this seemingly massive rally since March, it looks like we are still in a Bear Market. I like to listen to podcasts of Bloomberg radio and APM Marketplace, but the talk of "The Recovery" must be ignored while price action (charts) is used instead. From reading these charts, I am VERY biased to seeing the Market move down Tuesday, and keep moving down until it hits several support levels. There's a good one at the 20-week EMA here, RSI too.
Daily S&P 500:
Either this is a Double Top that's ready to break, or SPX will bounce up to about 918 and we could see a Descending Triangle. I know the Double Top is bearish, but I've heard mixed opinions on the Descending Triangle. I believe it should be bearish, and I'm going to presume that it is.
Remind me to check the volume levels to confirm price action. I seem to be having trouble figuring out how to get Volume to show up right in my TOS charts.
Maybe I could work on making these a little less busy, too.
Saturday, May 23, 2009
Sold out of GM at 1.75 while watching it fall. That chart today had a nice slope: x=-y (get Excel to plot it if you don't get it). It was just begging to get dumped.
I am 100% cash for the weekend and I fee just fine with it. I've been scanning some charts and see a lot of triangles at their points. Since I don't claim the skills to predict which way they will go, I'm going to wait for the patterns to break and look for confirmation next week. I think we're still going sideways, meaning a bounce off support & resistance instead of penetration (huh huh, I said 'penetration'). We'll see.
As for predictions, I did happen to call today's close of 887 on the S&P 500 over at JL's blog (read the comments). Maybe I can read these charts after all.
I know, no charts/pics are boring. Maybe when it's not 12:30AM I'll add some chart-porn.
Thursday, May 21, 2009
Sooo..... since I was feeling a bit Extra Edgy today, I took a look at FAZ around lunch and bought some more at 5.38. I had a little time to watch it today, and thought about selling around 5.68 (the top!). But I took a look at C, WFC, and BAC as underlying indicators for XLF, as an underlying indicator for FAZ.
All three of those big banks are coming to the end of flags/pennants/wedges that they've been forming for the third time since the rally. They're either about to shoot way up again or collapse for a short time. Volume Flow and Advance/Decline on a daily chart do not look promising, so I'm holding out.
FAZ closed up at the end, and aftermarket had moved it up to 11.85. This happens to be a penny short of my resistance line created in my ThinkOrSwim chart. Again, I don't have much time to post charts right now, I'm sure the one above says too much already.
I'll be watching premarket action and then opening prices of XLF and FAZ to see if this wedge pattern is broken. We are at the tip of the pattern, so today should be do or die. I wonder if this is coincidence that it's happening on a Friday? I don't think I care to hold FAZ over the weekend... I'm already nervous about holding it overnight tonight.
Tuesday, May 19, 2009
I'm looking into switching my broker. I've heard several referrals to ThinkOrSwim, so I've been checking them out. This platform allows access to Stocks, Options, Futures, Forex, and has a built-in pattern scanner. It's quite a bit to take in at first, like drinking from a firehose. But, they have online tutorials, demos, webinars, and a paper trading account to help get warmed up.
I don't consider myself too sophisticated to be looking for a bunch of particular features just yet. I have some charting techniques that I'd like access to, which I usually use through Prophet.net. TOS has prophet charts built in, so I'm liking it so far. As for the other features, I'll have to check them out to see if it's worthwhile for me. StockCharts.com is a great site, too. But I'm not paying for their premium services yet, so I'm still missing out.
The main reasons I'm looking for switching is access to FOREX, and more versatile charting tools. I'm actually hesitant to check out the other retail brokers that advertise on TV...simply because they advertise on TV. It goes against my philosophy of avoiding herds. You know what I mean.
Sunday, May 17, 2009
This is the book I am currently reading. I've picked up some new ideas that I haven't heard of before, which I find interesting since the version I'm reading was published in 2002. I've read a few TA books since I got serious in 2004, but I'm getting some great ideas from this one so far.
I've spent a few hours tonight doing some research on her methods, particularly the art of adding horizontal support and resistance levels to the RSI indicator. I've heard of adding trendlines and channels to RSI or other indicators, but never horizontal S/R. I tried it out with the S&P 500 as shown below to get an idea of what it might look like.
I know, these charts are busy. I won't have all the vertical red lines all the time, I just wanted to get some references for analysis. It appears that RSI support and resistance are pretty accurate, I picked the horizontal lines visually before looking at the price section of the charts.
And XLF, since I'm holding some FAZ:
I'm not sure what to make of these charts, just yet. I don't see any familiar patterns setting up, but I do see some support and resistance lines getting tested. We just finished Options Expiration Week, so the past few days have been crazy. Things should start to settle on Monday and reveal which way it wants to go. There's a few conflicting signals, or I just don't understand them too well yet.
I'll have to build a watchlist next.
Thursday, May 14, 2009
I think it's going to be a Trader's Market for the time being, something I won't have much time for. I dropped all my stocks except GM (from 1.13), and I'm giving FAZ the benefit of the doubt one more time. Again, TIGHT STOPS on FAZ, because that freakshow can turn on you at any time.
Here's XLF, my basis for FAZ. It spent the past two days bouncing around a narrow channel established back in December. I'm betting that it could be a bearish flag, consolidating a few days before going back down. It's not looking too good, though. As I said, a LOT of stock/indices are riding some pretty good support lines now, and even Ritholtz is feeling a little [cyclically] bullish.
And I would like to take this moment to point out that I had mentioned this time period on Ritholtz's blog months ago. Referring to the S&P's price movement from 1966-1976 and comparing to today.
The current rally in 2009 reminds me a bit of the rally in 1970. From 1965-1980, the S&P 500 had a mean price from 90 to 95...15 years of a secular bear market (SBM). Good for traders, I suppose, bad for retirees cashing in their 401k's. The current SBM started in 2000, and has a mean price around 1170. But what I'm really wondering is if we'll see a third phase of this SBM over the next 3 years as we race back to 1600 S&P. And then see another crash down to...say, 650 in 2015 before the real recovery? Maybe I should dedicate a post to this. I keep bringing it up to the real traders out there, but I've got nothing to show them.
The S&P bounced off support and kept nicely within its tight little channel. This is still anybody's game so it's probably better to just wait and see.
Besides, it's Options Expiration Week, so expect chop and turbulence until Monday. I'm about 83% in cash, and don't see any real reason to get long or short yet.
FAZ had also gapped-up and held. I bought in, late in the day, near an XLF support line betting on another breakdown. I also gave it a tight stop in case it's a head-fake. Looks like FAZ is up another 3% so far in the pre-market.
I think it is time for the rally to be corrected, now. I was starting to detect a sense of euphoria in the news, and could hear reporters talking of "The Recovery" in the present tense. Meanwhile, stocks were trading sideways and drawing out those ascending triangles. I'm glad to see this remark from the Big Picture, too.
However, this could also be a short bearish correction, turning failed ascending triangles into flags or channels (more sideways or slightly down action).
Wednesday, May 13, 2009
From Barack Obama's Teleprompter's Blog:
- Big Guy says stars aligned for healthcare reform, but NASA says those stars are actually meteors headed for Earth. #BOTeleprompter 2 minutes ago
Ok, so it's actually from Twitter, see BOTeleprompter.
In other news, the Markets are dropping across the board. All of my positions have stopped-out except GM and GMO. Patterns are breaking apart left and right, and I'm starting to see downward channels. Only GM and XLF look like they're trying to recover, but at midday GM punched through resistance while XLF is struggling. Even bonds rates are down!
In my part-time research, I don't see anything worth jumping on at this point. I'm about 90% cash.
Tuesday, May 12, 2009
Instead, I bought a small amount of GM at 1.13 to satisfy my self-destructive tendencies. I heard a rumor that the options action seems to suggest that traders are expecting Washington to finally step in. That was good enough for me!
Still holding FEED, ILMN, and GMO. Only GMO was up today, but it seems to be stuck between 1.80 and 1.85. FEED is nearing the end of it's Ascending Triangle for the Moment of Truth. And ILMN has decided to scrape along it's upward support as it drags to the end of its own Ascending Triangle.
I'm aggrevated, so these guys need to sh!t or get off the pot. STOP MOVING SIDEWAYS! I'll have to check my favorite blogs to see what all this sideways action means.
Speaking of which, POT looks like it's in a nice up-channel and rising wedge that's pointing to 117 in early June.
Monday, May 11, 2009
The Shuttle launch was definitely the highlight of the day. I forgot my camera, but there will be enough professional-quality photos circulating around that I won't miss much. I got to watch from the parking lot of the Vehicle Assembly Building (VAB), exact location below:
Anyone can access the NASA website to view any shuttle related info, including photos and video of the most recent launch that will include footage from the Solid Rocket Boosters (SRB's). Those are the little guys that detach from the Shuttle after 2 minutes, and then parachute back into the Atlantic Ocean for retrieval. The thundering roar was pretty cool, but the brightness of the flame up close was what amazed me. I had to squint or look away.
Meanwhile, I was away from the Markets but my positions held. Notice how all four of my holdings are showing various stages of an Ascending Triangle pattern (bullish), and I ended up for the day.
I'm still about 50% cash, but not for any particular reason, except that I haven't chosen to commit to any more trades at this time. After I almost gave it all away to FAZ in March, I've sub-consciously been committing no more than 12%-15% total equity to any, one trade.
Before leaving work, I had updated all my TPS reports that the boss had been asking for; even remembered to use the cover sheets! After that, I went home and cooked up some homemade fried chicken tenders, steak, and corn on the cob for dinner. Then, we all spent a relatively relaxing evening at home while a thunderstorm rolled in to water our parched Plumeria and Pineapples. Yep, it was a pretty good day...now to just convince the missus to make it a 'perfect' day with a grande finale...
Saturday, May 09, 2009
Looks like we're hitting a line of resistance. We might see a correction..most likely forming into a wedge or flag for a few weeks. What it means is that the price of gas might stay the same for the next month. Guess I won't try to wait before filling up.
"...the Fed will likely have to step up its daily purchases of Treasuries and focus more on the longer end of the curve..."
And by "the curve", I assume he means the Yield Curve, where the longer end is probably the right side, the 30-yr Bonds. But the part I DO understand is that Treasury buyback by the Fed might pickup, which means a stabilizing of the 30-yr Bond interest rates, and my precious TMV might see some white water ahead. Should've known it wasn't going to be that easy to just buy and hold.
And I couldn't stop thinking about this guy:
If you can guess who this is and where the picture is from, you can have the next two days off. Maybe if his hair was combed over a little...
Friday, May 08, 2009
Bought some GNK at 19.71 and ILMN at 38.90. ILMN just hit the bottom of an ascending triangle, if it breaks down I'm out. GNK recently broke resistance around 19.50 and shot up to 23.75 before pulling back. I'm betting that line is now support, and will drop GNK if it falls through it.
FEED and GMO were flat all day, except GMO had a small runup at the end of the day. Chart patterns are still good, both on ascending triangles which are getting closer to Judgement Day.
Thursday, May 07, 2009
In other news, I sold GSI yesterday and bought TMV and GMO. TMV is a 30-yr Treasury 3x Bear ETF, and it spiked up nicely today for a 9% gain. I've moved the stops up and still holding.
Also got back into some FEED at 3.99, thinking I saw a rising wedge. It failed later, but didn't drop so far to stop me out. I'll keep it overnight to see what it decides to do tomorrow. There's a lot of junk out there, and I might have to toss out my watch basket and find a new one, soon.
On a tip from Trader Stewie, I'll be looking at buying the dips on STM and GNK. That guy's got his sh!t together.
Tuesday, May 05, 2009
Looks like another Judgement Day in about two weeks or less. Is this an Ascending Triangle, or a Rising Wedge? Perhaps a rising wedge embedded within an ascending triangle? Ok, ok, I made that last one up.
Talk of the day has been about the S&P hitting it's 200 day MA. But I like to look at the EMA's, and the 50 week EMA has a few more points, currently at 986.
The markets have been a bit more choppy, so there are less entries. Those who are long are staying long, those in cash are staying in cash. We are currently overbought, but that has meant little during this rally so far. I've been busy with work, so I haven't had a chance to watch the tape and find a time to jump in. My only holding is GSI right now, as I got stopped-out of FEED for a small gain this morning.
I'm still itchin' to go short, but I'll go long with the trend. The problem is that the trend needs to blow off some steam.
As for conspiracy theories, I read this today, which really go the fear juices flowing. The strangest thing that came to me after reading this story was this thought: If the institutional investors have stepped-back to the retail investors trading these days, how can GoldmanSachs program trade and control the markets? Perhaps their volume is still great enough, it's just that the other big dogs know enough to stay out for now?
I'll be watching my usual, small basket of stocks for entries. Updates to come.
"For the first time in my life I know who the secretary of the treasury is," Harrington continued. "And I don't like it."
Sherpa Who Led Neil Armstrong To Moon Dead At 71
"...Phurba was as much a member of that team as anyone. Probably more than [Michael] Collins was."
The little guys are usually the suckers in a trend, by the way.
I wonder how you get access to those volume numbers, get a Bloomberg? I'll have to ask him.
"...this is not the broad institutional endorsement that you see at the end of bear markets and at the beginning of bull markets."
"Mike Santoli (from Barrons): This is an unwiding of the panic selloff that we saw January, February, March. And it's now put us at a place where the heavy lifting is going to begin."
He supports a Chrysler bankruptcy as the price of free market capitalism, and the same should be applied to the banks.
The stress tests are ineffective, not 'stressful' enough:
"...it's going to take more cash to get them to the proper amount of leverage, and more sale of assets that are way under water."
"When people are talking about green shoots.. it's not that things are getting better, it's that things are getting worse at a slower rate."
I was watching to get on FAS. But it gapped-up and kept going, so I didn't move in. I prefer to buy on pullbacks or early starts to what I percieve as long moves up. FAS was riding just under the line of support and I was waiting for a pullback. It didn't pull back, but shot back up with a grand finale finish across the line of resistance. That's one of the problems of being a part-time trader, you can't watch the tape all day, or always be there when you want to jump in. But, I still have a day job, so I'm not complaining today. I did get to jump in on some FEED during an early pullback, and it's moving nicely so far. So, now my only two holdings are in Chinese companies. Hmmmm.
This morning I heard on the radio that China has quarantined up to 70 Mexican visitors, 25 Canadian students (& their teacher), and 4 Americans, out of fears for Swine Flu. One of the visitors was quoted as saying they felt like they had been kidnapped. It's all a reminder of the uncertainty in investing in China, the government is a much greater variable over there.
In other news, the radio is also talking about "the end of the Recession" and how we could be getting out of it. That's a bearish flag to me, but I'm not shorting until I see the patterns set up.
Sunday, May 03, 2009
In fact, in the comments section for another post on GS666, I found this gem mentioning the Zero Hedge article:
smalltownlawyer on April 27, 2009 9:21 PM
I am a little disappointed at how easy it is to debunk the Zero Hedge-born conspiracy theory regarding Goldman and their program trading activty. Look at Rule 107B - Supplemental Liquidity Providers - of the NYSE Rules on Dealings and Settlements, adopted October 29, 2008. The program's description reads a lot like the trading activity described on the Zero Hedge blog these past few weeks: a group of securities assigned to Goldman, the provider (Goldman) to use program trading and the providers own accounts rather than client accounts, etc. And, the purpose is to generate liquidity. Isn't this exactly what Zero Hedge has been describing? But, if so, it is not a conspiracy - it is an announced program being run on a 6-month pilot basis.
Perhaps, but the 6 months are up now, so let's see what happens. Besides, the Zero Hedge blog didn't really get into too many details of what the purpose of the conspiracy was (citing lack of information). Rather, it stated there seems to be an excellent option for monopoly, the benefits of which are still not clear.
Saturday, May 02, 2009
"...Goldman has seen its share of Principal trading go from 60% all the way into 90%: a vast majority of all its trades are merely for its own benefit (and potentially as an SLP funnel)."
NOTE: read the article for a definition of SLP, it's the point of the whole post.
"...while the total amount of total Principal trading as a portion of NYSE PT has stayed relatively flat, at about half of total PT volumes, Goldman's share has exploded over the past six months: while GS was responsible for around 27% of Principal NYSE stock trading in Q3 and most of Q4, that number has risen to the low 50% range over the past 3 months."
"...traditional market neutral, high-frequency quants, aka independent liquidity providers have not only suffered significant P&L losses in April, but have deleveraged to a point where their presence in the market is negligible, resulting in dramatic volatility spikes on low volume. Could it be that Goldman is singlehandedly benefitting from being the liquidity provider of last resort, even more so as there are virtually no other participants in the SLP program? And, as is expected, with a liquidity "monopoly", come unprecedented opportunities to take advantage of this, depending on one's view of the market."
Thanks to Tyler Durden for excellent work. This has helped expand my knowlege about the rumors and scoffs of GS. However, this raises new fears and questions: is GS responsible for the Return of the Financials? (maybe it's really only the Bailout Money) Maybe this only means that GS is enjoying a certain monopoly on high-volume trading. But, whatever it is, those guys in the know...the full-timers, aren't too happy. So, I'll be keeping an eye out for more updates on these events. There is definitely a concerted effort to make GS seem like the new Evil That Must Be Stopped, or at least shorted someday.
As for trading, I found STM through iBankCoin.com.
At first, I saw the rising wedge, but I also see a sideways channel or flag potentially forming.
The daily chart shows RSI (pink) weakness getting stronger, and breaking down away from the momentum (green). It made a similar break to the upside in early March, so I'm guessing this stock is about to go down. Oh yeah, and it's Swine Flu-related. I would short the Swine Flu if it had an ETF right now.