3:51pm
ES rallying into the close. Resistance at 1248, then 1263. Stay tuned for today’s video.
3:39pm
After some consolidation, the ES is making a 2nd attempt to break above its 200MA.
XLF up 2.4% today.
2:47pm
ES continues to trend higher, at a new session high. However, the accumulation has come on light volume and the 200MA (1240) should serve as resistance. Today is nothing more than a pause day after yesterday’s huge sell off. I would not get overly excited about today’s reversal.
2:21pm
ES just made a fresh session high above 1237. 200MA sits above at 1240.50.
2:03pm
Volume drying up. Buyers not showing much conviction. Bear may take over but I’m leaning towards a choppy close.
12:38pm
Keep in mind a descending trendline on the ES 10-minute. It will serve as resistance. A breakout may lead to a nice buy program. Either short in front of it or get long on a breakout. StockTock is now swing trading this market. We are short from 1248 and are looking to add to our short on any moderate rally.
11:56am
XLF now up 0.6% on a unconfirmed report that Blackstone and KKR are exploring options on certain LEH assets of real estate and asset management in a deal that could be valued at around $5B.
11:53am
ES attempting to break above its 50MA. If this bounce is to hold, the market should consolidate in the form of a bull flag around its 50MA.
11:50am
XLF has recovered back to the flat line at 20.98.
11:43am
ES rallying off its lows. For any sustainable bounce today, the ES has to break above its 50MA (1228.50).
11:26am
Here are some charts of the employment picture after this morning’s data. Charts are from Barron’s Econoday:
11:12am
For those trading tech, here is a weekly chart of QQQQ with some lines drawn in. The 50MA is now declining, a bearish sign. There are some potential levels of support that traders should be aware of: The first level is 42.50, where a trendline and the 200MA rest. After that, the next potential support is under 40.
10:56am
ES making a new low under 1220.
10:55am
ES looks very weak this morning, hovering just above session lows. We may start to roll over.
10:27am
Crude at a fresh 5-month low.
10:21am
Crude falling below session lows, now down about $2 under the 106 handle.
10:10am
Oil is lower by 1% but gold is higher by about 1.7% this morning.
10:03am
ES looks determined to bounce, but needs to break its 50MA, which continues to serve as resistance.
10:00am
Mortgage Delinquencies: 6.41% v 6.35% prior. Highest level in 59 years.
9:55am
The ES is attempting to rally above its 50MA (1230.50).
9:50am
Good morning. Employment data came in worse than expectations. The unemployment rate jumped to 6.1% from 5.7%.. The market dove from about 1233 down to 1220 on the data, but has since recovered, trading back above 1230. With the ES below the important 1235 level, it just gives me more confidence that the market is headed to new lows in the coming days.
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September 5th, 2008 at 9:51 am
GS leading? Feels like there is going to be a bounce - not playing any side yet though
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September 5th, 2008 at 9:54 am
I’d be careful to be long financials today after GS put a sell on MER
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September 5th, 2008 at 9:57 am
not playing anything today.
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September 5th, 2008 at 9:52 am
maybe expectations of a rate cut are adding a feel good in the banking sector. It also means a vicious commodity/energy bounce is on the horizon
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September 5th, 2008 at 10:23 am
Why do you even think there would be a rate cut on the horizon? The fed is still concerned about inflationary pressures… and even though oil/nat gas/other commodities have dropped recently, they are still dramatically higher than they were this time last year.
Right now the yield curve looks how it should for banks to succeed in lending. Rate cuts aren’t going to help them get cheap enough capital (for the amount that they need), so sooner or later more of them will have to bite the bullet and dillute their equity even more.
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September 5th, 2008 at 10:35 am
The end game is far far away, at least another 4-5 years. I am not saying the FED should cut, though I expect them to cut. They will have to start worrying about deflation very soon. Having read some of Bernanke’s notes on the great depression, I expect him to throw money at the problem.
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September 5th, 2008 at 10:08 am
If you are waiting for a bounce or to start a long position Craig, what do you think a good entry point on SSO would be? Is there any support for SPY in this range or are we destined to keep selling till 1200? It seems to late to start a short position today.
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September 5th, 2008 at 10:11 am
I’m waiting for a confirmed break of 1227 then ill go short
brad
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September 5th, 2008 at 10:20 am
Depends on your time frame and risk tolerance. If you short right here, you have to decide how much of a bounce your willing to hold through. If you’ve missed your entry for a swing trade, you can always day trade this market with tight stops.
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September 5th, 2008 at 10:11 am
Last time vix was at 24 in july dow was at 11300. now at 11100. means at least dow will be at 10650 when vix hits 30. if vix hits 35 dow will be near 10200. maybe s/p will be at 1150.
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September 5th, 2008 at 10:33 am
Wow, great vid today. Glad to see you bring the wave back into discussion. I guess we have confirmed leg C. Looks like my 1215 call will be meager. Based on fib retracement from the 800 low on the S&P in ‘83 to the high of 1561, your call of 1,100 on the S&P bottom (or hopeful/possible bottom) seems like the number to look for.
Just eyeballing the charts (and with some guestimation), the ending of the C leg should coincide with the ending (or near ending) of the current credit problems and the end of the recession we have been in for a long time. It could set up for a nice reversal, but what we have to figure out NOW is what will be the next big thing to drive the markets forward. We had tech in 90’s, RE in the 00’s, what will be our silver bullet in the 10’s?
The leaders to me may be Biotech and clean energy. The recovery of financials and RE will help pull the market up but they won’t lead us to our next great bubble. I would appreciate it if some others would throw out some ideas here.
Craig, will you please enlighten us on some broad market ETF short ideas that you may feel to be worth looking into. Also, if the flight to safety occurs and the $ reverses, GLD (at good support and having formed a double bottom) could have some solid upside here.
Thanks and good luck.
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September 5th, 2008 at 10:39 am
Shanky, I think its interesting that gold is higher today. I’m thinking about a DGP trade, which gets you 2X long the price of gold.
I agree with your theory on biotechs and clean energy too, but I am leaning towards a 5-wave bear market that takes us under 1120. We shall see as the charts fill out.
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September 5th, 2008 at 11:00 am
…all I can say is beware of trading Gold….the central banks manipulate this and the price follows neither a technical or fundamental pattern. I have been so bullish on gold fundamentally and its only crashed through support levels since July. Buy physical precious metals, stay away from the paper trade - its like throwing firecrackers into the wind - you’ll lose your mind by the irrationale movement of gold in today’s corrupt market. Iran has dumped the dollar and bought $80billion in physical gold and the markets yawn at this news….SEVERE central bank manipulation here…
Stay short on the ES….good luck.
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September 5th, 2008 at 11:01 am
Thanks for the DGP idea. I haven’t found that one.
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September 5th, 2008 at 12:35 pm
Thanks Martin. Gold is giving up today’s gains as the market bounces.
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September 5th, 2008 at 11:47 am
Here is a link that shows bear gold market anal.
http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=6098
To reiterate, I’m thinking near 1,100 now on the S&P to finish the wave theory. That is quite a move south from my 1215 to say the least, but retracement puts it near there. Could that be real? Think about it. 1,100 is exactly 10% lower from here, which to me is a normal good downside limitation on any purchase. In this case given the current market being 22% off its high, we should be good to go with relative reasurance with the stated limited downside exposure. This argues that for LT investors, now is the time to start looking make a move in. As for the sort term and day trades, south is still the predominating direction.
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September 5th, 2008 at 1:22 pm
I think AUY is a better “leveraged” trade then DGP. With more than 100% upside now @ 9.18. I saw a report 2 weeks ago of gold being ~1600 before the end of the next year.
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September 5th, 2008 at 1:36 pm
yes the fundamentals support a break out….however, this is not a fundamental investment….Gold represents a collapse of fiat money systems(which we are experiencing) and Central banks have no choice but to suppress the paper value of gold(which they do buy selling tonage, leasing and propaganda)…..unless a physical war breaks out I would stay away from gold until we see a paradigm shift…ie China, Russia, Mid East peg to gold and dump dollars …. which we are seeing.
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September 5th, 2008 at 10:55 am
I have had this theory that this time around it will the techs which would suffer. When the financial problem started, money hid itself in tech, thinking tech is not as vulnerable. Tech even made an almost full retrace to the 2007 top during the rallies. I think this unwind could be a much better short than SPX. SPX was nowhere close to the high. E.g. look at RIMM - the execution is underway. Some of the other hi-flyers could be next.
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September 5th, 2008 at 11:04 am
New to the comment section. Great blog and analysis.
Looking at SPX 1,214.7 as the “last” support before 1,200 or lower. It was the last stop on the July downside, the 1,200 was an intrady drop. May not get there today, but if this drop holds today, perhaps Monday
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September 5th, 2008 at 11:12 am
I may start a position in SSO there.
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September 5th, 2008 at 11:04 am
There have only been 2-3 days where you could have bought SSO at this price this year. When are the buyers gonna step up?
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September 5th, 2008 at 11:04 am
Look at the weekly chart of qqqq, Looks like a symmetrical triangle breakout. Target around 28-29
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September 5th, 2008 at 11:33 am
Again, it’s somewhat surprising how much relative strength XLF is showing vs the S&P. It’s tough for me to see things continuing with the broad market without XLF picking up some downward steam and breaking the 19.75 level
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September 5th, 2008 at 11:45 am
Dangerous day to play anything. XLF has three spikes on the hour at 9:30, 10:30,11:30…will any hold? Or do we sell off into the close?
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September 5th, 2008 at 11:42 am
Anyone think this reversal is for real or are playing the long side now?
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September 5th, 2008 at 1:40 pm
I think we see a selloff at 2pm …consolidation and then a last minute selloff before the bell…just like yesterday. Only speculation…
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September 5th, 2008 at 11:42 am
Mohan, are you sticking with ALXN?
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September 5th, 2008 at 12:17 pm
The XLF is showing strength. However, the XLF 50 MA is $20.71, with a daily uptrend line support around $20.80.
I would say if it breaks and holds below either level, the SPX will make the move to 1,214 and then 1,200
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September 5th, 2008 at 2:00 pm
I bet this is your double bottom. Big Rally from here - everyone is thinking the same thing, short the next rally.
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September 5th, 2008 at 2:01 pm
Craig, are you going to consider shorts if market can not break above 1236? -Jack
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September 5th, 2008 at 2:19 pm
It’s worth a shot with a tight stop.
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September 5th, 2008 at 2:14 pm
Something for the bulls here if the market recaptures 1235 61% fib level?
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September 5th, 2008 at 2:18 pm
Eh…. I suppose it’s something. Probably false hope.
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September 5th, 2008 at 2:22 pm
Craig, I was curious about the elliot wave scenario, that you talked about some days back.
I am a 1 week newbie at EWT so pardon errors and feel free to correct.
I am using this monthly chart from 1900.
http://stockcharts.com/charts/historical/djia1900.html
I can see 5 waves clearly, the 1927-30 was wave 2, 65-80 wave 4 and upto 2000 is wave 5.
But I have trouble completing the picture.
Now we have had a correction A from 2000 to 2003, Wave B took us to new highs (expanded flat) from 2003-2007 and now we are in wave C. If my reading is right, wave C usually leads to levels lower than A. That would means 7000!. Whoa?
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September 5th, 2008 at 3:19 pm
It’s possible, over the next 10 years or so. I try not to think so long-term because it clouds by short-term bias.
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September 5th, 2008 at 2:48 pm
I think, possibly, that SPY will get up to 125 before seeing 122 again. There needs to be some retracement and a strong trending indicator of 38.3% is up at 125.33. I think it is too early to short, although a bull flag intraday could pop up giving a small umph for shorting pressure. That would also probably be a catalyst up to the fib.
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September 5th, 2008 at 2:55 pm
Hi Craig,
What is the best place to check the volume for the indices for different timeframes ? Yahoo Finance is not very clear. I usually look at the Ameritrade command center, but I was wondering if there is a better place to look at it ?
Thanks.
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September 5th, 2008 at 2:58 pm
StockCharts.com is a great charting website.
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September 5th, 2008 at 3:15 pm
The breaking news service I pay for gives me volume updates. I often just compare the volume on the ES 10-minute candles with previous days. That gives me a good sense of the day’s trading volume. I think wsj.com has volume data as well.
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September 5th, 2008 at 4:57 pm
Some breaking news: Treasury near finalizing Fannie, Freddie backstop. As a result XLF is flying like crazy, up 2.2% after hours. SSO also up 1.5% after hours.
Well we’ll see what the report has to say when it comes out over the weekend or early next week.
Just thought i’ll share this with the stocktock community. Have a nice weekend.
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September 5th, 2008 at 5:45 pm
FNM being wiped out … Treasury backstop will likely wipe out shareholders. Good to be short at this point I hope….who knows what monday will bring….but an after hours weekend announcement is not a bullish statement in my mind.
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