O.T.

Still working overtime this week, trying to meet deadlines. In my "spare" time I've looked on the markets and saw the Indices had a Doji day. It's look pretty bearish for many of the popular names (go FAZ, TMF), but a couple of dollar stocks are showing strong interest while the prices still remained flat.

I'll be keeping an eye on ABAT to continue it's runup, AXL, CENX, UIS, VSH, and ZIGO. On the 5 min chart they look promising, but on the 60 min charts they might only be pulling some bear flags. I won't put any money in until resistance is tested at least twice.

Right now I'm 100% cash, as I don't have much time this week to watch the markets.

Volume doesn't exist

Can someone tell me why my Prophet chart in ThinkOrSwim's trading platform will not show volume data for the S&P 500 or NASDAQ indices? Before exploring TOS, I've been a regular on Prophet.net to use their Java charts, and I've noticed their volume data for the S&P started to be missing around the time of the March rally. There's a little in April, then it's gone again.



Here's the TOS chart, different scale but same story.



Fortunately, Stockcharts.com is still coming through. RSI and the short-term MA's are at a similar situation to where they were around May 21, which led to more rally action. However, we've also crossed the 200 MA, which should provide added support. But the volume and price-action is looking bearish for the short-term.


I'd say Monday isn't looking too good, but there is Strong support at 910. But if it breaks through, I'll be watching the next support at 894. I'm 100% cash right now, so I'm looking for opportunities, long or short.

On a side note, I took a short walk this Father's Day while visiting the in-laws. I walked up to the local Buick/Pontiac/GMC dealership up the road from their house after it had closed for the day. As I browsed the lot, I started by ogling the GMC Yukons, and noticed that the first one I saw was priced over $59,000. Man, my first house almost cost that much! These days, it's no wonder these cars aren't selling.

As I moved on, I saw the Pontiac G5's and G6's that they had to liquidate ('cuz GM is terminating the brand). I looked at one particular G6 with some bells and whistles, and couldn't believe the price was over $23,000. In 2001, I bought a new Chevy Impala, and got the "employee discount" (for other reasons) and bought it for $22,000, 5-yr loan with 0% interest. I still have that car, and it's about 20% bigger than this G6. I just couldn't see inflation being so great that this smaller (yet newer) car would cost more than my family-wagon only 8 years later. Then I saw that it was a 2008 model....that car could be sitting on the lot for almost 2 years!

Prices need to correct, just like in houses and stocks. I sure hope this purging process we're going through will truly clean out the system for a while. Even if the cars come out more 'inferior' for the next few years, I would like them to at least be priced right! Enough said, it's after 1 AM and I have to go to work in a few hours.

AtLas(t)

The Atlas V carrying NASA's LRO/LCROSS missions took off this evening at 5:32 pm EST. I went out to the parking lot for the building where I work across the bay to watch it. I couldn't see it because of the low cloud cover, but BOY! was that thing LOUD! The rumbling just kept going...and going... I could definitely tell the difference from Shuttle launches that I've seen from even up close.

BTW, we're across the bay because NASA can't seem to find room for us contractors on Center. Since we're working on the new launch vehicle, I'm sure a few spots will open up in a year or two, after Shuttle winds down.



In the Markets, I pulled out of my losing FAZ and TMF positions. Both had worked stellar yesterday morning when I got them before they turned on me. TMF shot down from one Fibonacci line down to the next before stalling. FAZ took its time, but it's there too. Now I'm back to 100% cash while I step back and take another look at what's going on. I've been so busy with work and doing overtime that I haven't been able to check much lately. I don't think I'll get much breathing room until July.

Meanwhile, I had to return that book to the library and ended up buying it on Half.com. The book again is: All About Technical Analysis by Constance Brown. I'll be reading it upon my leisure (pronounced: lez-shure) for the next couple of weeks to help me work on a new plan of action.

The markets are so choppy, and people are getting more aggravated about which way things might go in the short-term. One interesting note, I heard on Bloomberg today that a certain, successful hedge fund is looking to bet on mid/long-term hyperinflation. I wonder if I can do that through the Bond-short ETF's and commodity ETF's (both long and short)? Dollar Index is going down, which is going to cause a rise in commodity prices. I've got this itching feeling to get my money out of "US Dollars" for the next 5 years.

Shuttle Launch: Redux

Ok, second chance to drag the family to go see the Shuttle launch tomorrow morning. I say, "drag" because the launch is now at 5:40 AM, I have to be inside the gate within an hour before launch, and it takes almost an hour to drive there. Soooo.... that means getting up around 3 AM or so and loading up the car. At least this should count as a night launch and the sun won't be in our eyes like the last date. Here's hoping!

As for the Markets, I've been in cash since last Wednesday, and I'm glad I did. Although Thursday would've been a better day, but that was probably short-buying getting ready for this week. Judging by the Daily chart, I see more slippage down to daily RSI of 45, and then to 40. That should time about right with the Yellow Channel/Blue Fibonacci intersection I have in the chart below. It predicts S&P 500 could see an important pivot point around 894 on Thursday around 11:30 AM.



I might buy a little FAZ to ride this down, but it's too early to get brave with swing trading.

30-yr Bonds still look like prices are rising, as yields keep falling. Someone's buying, but I don't know who. I'm still bearish long-term on these bonds, and continue to keep an eye on TMV.



However, the 30-yr Bull 3x ETF: TMF is riding a significant Fibonacci retracement level (38.64). If it punches through I'll look for a good time to jump on board to the next level around 42.50, as a short-term swing play. After all, you have to be active with these multiplier-ETF's or you'll lose money due to time-decay.

Golden Ticket

I just scored front row seats for me and my family to watch the STS-127 Shuttle Launch this Saturday morning. Since I work here, I usually get to see these launches up close, but now I get to bring the kids. Here's the approximate location:

http://tinyurl.com/l6wabz

The pad is about 3 miles NE of this spot. If you look around, you can also see the crawler with an empty mobile launch platform near the upper pad, not far to the North.

As for investing/trading, I ended up pulling out of all positions yesterday. After first getting stopped-out of ILMN, I examined the others and saw breakdowns across the board. Since my account is all cash, I have to wait three days for settlement before I have access to that money again for trading. I'm out until Monday, which is just fine since I've got too much going on otherwise.

Besides, it will be good to take a step back for a breather, and to get a fresh look on where the Markets are going.

Hardly Working

Random Comic, courtesy XKCD. Hint: If you go to the website and read the real comics, then mouse-over the image to get an extra punchline.



I hate it when work gets in the way of my trading. We have a big deadline at the end of this month, and it's crunch-time to get everything looking good; I might be looking at some overtime. Meanwhile, the wife is going crazy at home with the kids out on summer vacation, and I need to replace the starter in my car.

Trading update: still holding all positions with a continued positive outlook. I am practically 100% in the market (or 0% cash) with active stops, and I check up on all my trades periodically during the day. All positions are long except TMV, which is a 3x ETF that shorts the 30-yr Treasury Bond.

Portfolio +1.47% today, while the S&P 500 was +0.35%.

If you aren't churning, you aren't learning.

I got nervous this morning as everything stumbled and fell. All my holdings were down about 2% but still "within tolerances." No stops were triggered, and all my holdings seemed to stabilize after the morning session. A few of my holdings even rose back up, and I got confident again, even enough to get back into my 30-year Treasury Bond, triple-short ETF: TMV. I even managed to get it near an intraday low of 90.80, and it closed at 93.76.

I also bought OSCI on pure speculation, and it's making me sweat as it held steady all day. Closed neutral, minus brokerage fees.

With three up and three down, I ended today +1.25%.


These guys are still making me nervous:

ABAT (-1.62% today)
Still painfully drawing out that ascending triangle, which doesn't converge until June 18 or June 23, depending on which resistance you're using.

AGO (-1.23% today)
Ended today on a promising recovery.

ILMN (-2.08% today)
Still looking for direction, but it appears that the bears are in small numbers compared to the bulls. So, I continue to hold on the assumption that this is consolidation, not a turnaround.

Keep rolling the dice

I spent Friday away from the computer, so I was unable to trade all day. I managed to check the pre-market action and adjust my stops, then tried not to worry the rest of the day. When I got back I saw that no stops were triggered, so my 5 holdings still exist. Here's the update:

ABAT
Is still creeping up the triangle support. I have two lines of resistance, the triangle peak at 4.10, and a Fibonacci peak at 3.99. On the other hand, I'm worried that this triangle has gone on too long and will fail. I'll be keeping my stops based on the Fib numbers.

AGO
Is trucking along an upward channel, and just popped through resistance. Fib numbers have a target of 21.14, and the channel says we won't get there before July 7. I'm keeping an eye on volume to see if it keeps up through this rally.

CSE
Tested resistance again today, but failed. Stop is based on Fib numbers, and the Fib target is at 6.12. I'm getting worried about this one.

ILMN
Continues to test my patience, but it's starting to look like a short-term flag for the resistance penetration. That resistance is now support, and being tested repeatedly. I'm starting to relax a little more on this one, and Fib target is at 41.82, but the channel won't let that happen until August. There's always a bump-&-run pattern to boost it quickly.

STKL
Resistance around 2.24, and there's a really strong long-term target of 4.30. Long-term here means no sooner than August.

I'll also be looking into getting into OSCI, among a few others. But OSCI is less than a dollar, and volume is going nuts, so I'm going to see what I can do with it.

(image from thestockmasters.com)

Short-Term Wins

I made 5 buys yesterday, and they made me 5.75% today.

STKL @ 1.84
It paid off nicely today; I see next resistance around 2.08, and later at 2.30. Today's close was up on light volume, and I'm pretty sure that's a good sign of continuation.


ILMN @ 39.54
I had been watching this stock for weeks from a tip by RevShark, when it was nearing 38.50 for the second or third time. After failing to break resistance and drawing out for a bit longer, I was ready to let this one drop. But then it shot through resistance and grabbed my attention. I made the sucker-buy, right at the peak of the day. It's still holding support and looks like a nice pennant, so I'm holding for now.


CSE @ 3.82
Moved up nicely today, as well, following the Ascending Triangle pattern towards resistance at 4.30. It looks good to break through, but if it drops to 4.00 first, I'm afraid it might fail (see the headfake by ILMN above).



AGO @ 14.24
Broke though a recent resistance level of 14.61 and kept on trucking. It finished the day in consolidation, but I don't see any reason for it to turn around in a big way anytime soon.


ABAT @ 3.69
This one is really stretching out it's shape, and I wonder if that is the sign of a breakdown. I see several signs of weakness, but this may still just be a prolonged consolidation period. It's not in this chart, but I also see a flat channel of 3.37-4.00, and today's close tested the midrange of that channel. I've placed my stops based on the channel, not the triangle.


Thanks to WeeklyTA and Trader Stewie for tipping me to a couple of these winners. The others I found using ThinkOrSwim's Pattern finder.

I hate it when work gets in the way of my trading

Been busy with the full-time job, so I've been inactive in the markets this past week. Despite all my pessimism since March, I'm finally starting to accept that this rally could continue. I don't see another pivot point for the S&P 500 until about 1014. Here's what I'm watching:

I expect STKL to hover around the 1.84 level all day Wednesday, where it should hit upward support (not shown). I'm going to watch it today for a long opportunity.


ASCA looks like it's forming an Ascending Triangle, but I'm a buyer in two conditions: if it bounces off support around 19.25, or if it breaks resistance around 23.34. Gotta watch out in case this turns into a Double Top pattern.


ABAT is a similar case, Ascending Triangle near it's tip.


I also like to watch the 30-yr Treasury Bonds, ever since I sold mine a short while back. Now that Direxion has a triple ETF for it, I'll be looking to play the T-Bonds through TMV/TMF. I'm long-term bearish the 30-yr, so TMV is my favorite. I might ride TMF down until $TYX hits 44, and then see if support is broken again.

Tim, Tim, Tim....

This was hard to follow at first, but when it dawned on me I just got pissed. I suppose we can't entirely blame Tax-Cheat Tim, I believe the Bush Admin started this "throw all our money at the banks" plan on their way out the door last year.

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:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

Thank you, Veterans, but this post has nothing to do with Memorial Day

I hope every American took a moment to show some kind of appreciation for our Veterans today. I called my dad, who served in Viet Nam, and now lives 3000 miles away.

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.

Cash is King

This day started with a quick jump overboard from the sinking FAZ ship. After checking out the charts, I rode FAS for a small gain and then got back off (9.04 up to 9.10). The banks (XLF) are really wishy-washy right now. I looked at the charts for C, WFC, BAC, and GE to get a feel for what the banks wanted to do. They all looked like they were breaking down out of patterns, or about to. But XLF held flat until it dumped at the end of the day. That doesn't mean anything, though, it could be anywhere Monday morning.

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.

And you can take that to the bank.

Looks like the GM bet is holding out well so far. It closed at 1.92 today up 32.41%, and up to 2.14 in aftermarket trading. That would be a 100% gain so far.

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.

TOS?

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.

All About Technical Analysis

Book of the week:


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.

Weekly:


Daily:



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.

Sucker!

Sucker's rally for the Bears? After three days of falling, many of the major stocks/indices bounced off support and confirmed a slim trading range. I've got lines all over my charts from all kinds of time frames: 20 day, 6 month, 2 year, etc... This is getting messy.

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.

Man, that was fast

If today's the end of the rally, it sure didn't mess around. The past few days was "sideways action", while today was when prices crossed support left and right. I saw pattern breakdowns across the board on Wednesday. All four of my stocks fell out of their ascending triangles and I got out. Only my casino stock, GM, went up (+5% I might add).

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).

Tweet Tweet

Had to add this for the NASA reference.



From Barack Obama's Teleprompter's Blog:

Twitter Updates

Twitter Updates

• 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.

@#$% Sideways Stocks!

My GNK position was stopped-out at 18.20 today. The stock dwindled down to 18.14 and then shot right back up, closing at 19.00, and is now up to 19.48 in aftermarket hours. %@#$ stop sweep! On the other hand, the stock has been channeling down for the past 3 days, so I fought the urge to jump back in as the price recovered. I'll check it out tomorrow to see if this stock was jerking me around or if it's ready to give me what I want.

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.