3:55pm
The ES held 1263.50. The counter-trend rally may have one final push higher left in the tank, but its looks as though the downtrend is likely to continue in short order. Stay tuned for today’s video.
3:12pm
ES is fighting to hold 1263.50 support. If we break, the market could see another wave of selling.
2:33pm
Volume remains very light. ES could not break above its 50MA and has now pulled back under the 20MA. XLF holding 19.75 support.
1:34pm
ES reaching for the 50MA at 1271.50. Oil and nat gas are well off their highs, allowing the S&P to bounce.
12:43pm
SEC to announce a new short-selling rule in the next few weeks. The proposal will focus on a market-wide solution.
12:40pm
The ES is poking its head above the 20MA for the first time since the open. Volume is very light. The 50MA rests above at 1272.50
11:55am
ES at session lows, trending lower just under the 20MA. Oil and nat gas at fresh session highs. Crude now up more than $1 to 114.
11:18am
Oil and nat gas at session highs.
11:00am
Financials weak today with the XLF down 2.5%. LEH is down 8%. FRE and FNM are extending yesterday’s losses, each down more than 4%. Remember, the XLF has support between 19.75 and 19.90.
10:15am
The ES may find some support around this level. 1266.75 was the lowest close on Aug 7-8 on the 60-minute chart.
10:10am
Dare I call another bounce in UNG for the 3rd time? I’m noticing a bullish divergence on the 10-minute stochastic. This is a highly manipulated commodity so be careful. I’m long… again.
9:55am
Crude oil is volatile this morning. It has comes off its highs above 113 and is now trading under 112.
9:43am
Look for continued downside in the ES to the next support level at 1263. Check out the various support levels:
9:40am
Energy names are higher this morning while financials and retailers are weak.
9:37am
Now that the S&P has made a lower low, the primary uptrend has been violated, but the rally is still healthy. In the short-term, watch for a continued pullback/consolidation. There are several minor support levels in the S&P where the market may find support.
9:30am
Market lower on a hotter than expected PPI number. Came in at 1.2% v 0.6% expectation.
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August 19th, 2008 at 10:18 am
I’m with you Craig on UNG. Still hold my downside target of 33 (it will drop there after bounce)
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August 19th, 2008 at 10:19 am
Craig, look at the COT report of NG. It is a real eye opener. The commercials and speculators are on historically extreme sides. There are so many speculators short.
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August 19th, 2008 at 10:20 am
money flow consistently increases to UNG. bought some calls.
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August 19th, 2008 at 10:21 am
Sean, I would exit S&P shorts at 1267 to be conservative. We could go lower, but there is support there on the 60-minute chart.
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August 19th, 2008 at 10:21 am
This is what I like - UNG - downside risk - limited. possible upside - present.
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August 19th, 2008 at 10:23 am
A lot of the hedge funds had put on a long oil:short gas trade in the last leg of the oil rally - gather from the internet. I don’t if that is trust worthy, but oil COT presents a totally different picture to NG.
Also look at Silver, gold cots. Not indicative of a bottom in those yet. However, some of the grain cots look slightly better. The russell cot also looks bleak.
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August 19th, 2008 at 10:23 am
Clarke, where can I find the COT report.
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August 19th, 2008 at 10:26 am
RIG looks also very attractive.
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August 19th, 2008 at 10:26 am
Sean, where did you find short interest data on UNG?
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August 19th, 2008 at 10:32 am
RIG is getting very interesting. There’s a lot of forced selling going on in energy names that have nothing to do with fundamentals. But how much longer will it last? Remember, traders have large capital gains in energy names over the past 20 years. With the cap gains rate moving higher next year, it makes sense for money to rotate out of energy.
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August 19th, 2008 at 10:32 am
http://www.softwarenorth.net/cot/current/charts/CL.png
All the symbols you want for commodities can be obtained from
http://www.freecotcharts.com/charts/AD.htm
This is a damn effective tool for predicting turn of commodities especially. I found out about it only after I got hurt in UNG.
shortsqueeze.com
gives the short interest
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August 19th, 2008 at 10:33 am
I believe there are paid softwares which give “nice” COT charts. I just use these
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August 19th, 2008 at 10:35 am
short interest is not very good imo. It is not as useful for a commodity, probably for individual stocks. I used it for CALM. But in general it is quite difficult to use shortsqueeze data. From what I have read about cot charts, infact there was a movement to shut down the publishing of COT reports, because they are quite effective in demonstrating market turn arounds.
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August 19th, 2008 at 10:37 am
Clarke, that 1st link is great but I cannot view other symbols. The 2nd link shows old charts from 2007.
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August 19th, 2008 at 10:38 am
OK, I got it.
http://www.cotpricecharts.com/commitmentscurrent/
This is useful! Thanks!
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August 19th, 2008 at 10:45 am
OK Clarke, this data is very interesting. For natural gas, large speculators are increasing their short position while commercial institutions are increasing their long positions. How do you use this data to predict a turn around?
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August 19th, 2008 at 10:48 am
http://www.nowandfutures.com/cot.html
Try this otherwise
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August 19th, 2008 at 10:56 am
Like charts, there are different interpretations:-
1. for commodities, commercials are players who use it e.g. airlines hedging oil or CHK hedging UNG. Also in commodities, it is usually the commercials who know the likely future trend, since these people deal with it and it is advisable you are on that side. For indexes, it is not necessarily true.
2. You can use momentum indicators for the “speed” of short vs. long positions.
3. Open interest is used as volume.
4. Bottomline, like in charts the assumption is history repeats. So the trends in COT reports and chart price keep recurring. If you put up a historical cot chart and price chart side-by-side and watch for “similar” entry/exit points.
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August 19th, 2008 at 11:15 am
Craig,
Is this countertrend rally finished. Similiar to in july when 1327 broke, it seemed it was time to be defensive. Are we going to 1200 soon.
Thanks
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August 19th, 2008 at 11:21 am
Craig would greatly appreciate your thoughts on SRS. Looks to have broken out of a descending wedge.
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August 19th, 2008 at 11:23 am
apatel, that’s the golden question. I think it is premature to say the rally is over. For me, the rally remains intact until we break below 1235. According to Elliot Wave Theory, we will not touch the descending bear market trendline until Wave 4, so 1313 may have been the top for this counter trend rally. I think there is one more push higher coming soon, perhaps to a double top level. Let’s observe the action of this pullback and try to conclude whether the bears have taken control over the market.
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August 19th, 2008 at 11:27 am
SRS looks great. Strong volume on the breakout.
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August 19th, 2008 at 11:44 am
I’m sticking with my test of 1215. S&P channelling down.
Cool COT chart info especially on the second link - much more user friendly.
Craig, you are now long UNG. We’ve all tried this one a couple of times. What is the technical reason for your entry at this point? I can’t see one. I’m more inclined to wait for a bounce off support @ 34.75ish. Very interesting divergence between the small and large speculators on the COT chart as far as short/long positions. Seems no one knows which way it will go.
Love the site’s new look. Congrats on the success. remember us little people when you hit it big time.
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August 19th, 2008 at 11:54 am
Shanky, glad you like the new look. My partner Scott has been putting a lot of hard work into improving the site. So you think the S&P will find support at 1215?
UNG… well, I entered this morning on a bullish divergence on the stochastic, 10-minute chart. It has worked well as a day trade. Now I’m watching carefully to see if I should hold it.
Might it be a revenge trade… maybe. (Which is very bad.)
But check out the Money Flow over than past 2 weeks on an hourly chart. Money has been going into UNG. The risk/reward is also attractive. 2pts down / at least 4pts up
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August 19th, 2008 at 11:55 am
which would be better SKF or SRS since they are correlated?
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August 19th, 2008 at 11:58 am
Right now, I like SRS because of the breakout. Financials are weak but still in a channel.
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August 19th, 2008 at 12:46 pm
MACD on the daily time frame for XLF continues to be short term bearish for the XLF
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August 19th, 2008 at 12:58 pm
Hey Craig,
on playing NAT gas rebound, why not choose the companies like CHK? CHK seems to be putting in an inv hns, target around 55?
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August 19th, 2008 at 1:12 pm
Nice call out. I like CHK on a break above 47.50. Improving MACD and Stochastic.
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August 19th, 2008 at 1:36 pm
Hey Craig u still holding long to your ung. If you look at the $NATGAS 10 year chart it usually bottoms sept october time then rallies all winter as demand increases. Dont you think that would be a better time to enter for a longer term horizon
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August 19th, 2008 at 1:38 pm
Roop, I am still holding, but it is a short-term trade and I do not think a bottom is in yet. I would not be a buyer yet for a longer term trade. Thanks for making me clarify this. In fact, I will cover UNG (L) on a break below 36.75
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August 19th, 2008 at 1:51 pm
Craig, do you feel we may rally into the close today? Or do the markets continue to sell off?
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August 19th, 2008 at 1:52 pm
possible head and shoulders on the XLF minute frame
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August 19th, 2008 at 1:53 pm
Thai, it’s a tough call to predict what will happen in the next 2 hours, but I think we trend lower over the next couple days.
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August 19th, 2008 at 3:04 pm
GS will close below trendline.
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August 19th, 2008 at 3:04 pm
qid moving
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