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12
Jul
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Hey guys,
I just don’t have enough time this weekend to make a video so I do want to give you a small update so that you know what i’m thinking. The close on monday was not bearish because we closed around 88,but it was not bullish either. Most people I know positioned themselves bullish at the end of the day, and therefore I positioned myself bearish. I don’t know if we’re going higher or lower tomorrow, but yesterdays close was a green day on the SPY that was on relatively low volume, that was under 88. Financials closed much worse than the SPY before earnings, which if you were a bull, you’d have to be a little scared on that. Earnings should pretty much set us up for either a bullish or bearish week, but the action on friday was nothing to be bullish about. The last few days, including friday were DOJI candles… and friday and thursday were very weak volume days… my guess is that, that’s really the consolidation we got before the next move lower… but hey, i’m not sure; to be safe i’d stay neutral (even though i do have some SPY august puts). GS rallied up to my target and it fell after that… I don’t see it going up anymore.. maybe 1-1.5% but not up anywhere close to where it was at 145. I think GS is ready to break down, after it tested it faked out under and over its H&S line, and is now sitting right at it. The XLF looked really bullish up until the last 10 minutes where it gave out all it’s gains and the potential for an inverse H&S on the 10 minute chart. It could still complete it though… but that last candle was very very scary for the bulls. The USO remained bullish but did not break out from it’s inverse H&S formation.. The charts definitely tell us that a move up is very possible, but i’m taking the contrarian view, that maybe this is sort of a false set up… and that we break through and fakeout everyone, absolutely every i know to the downside…
There is still a boat-load of puts sold on the $90-strike SPY for July. Max Pain says we close above 910 on the SPY.
Plus, we have had 5 straight weeks of red on the S&P, so I wouldn’t be positioning very strongly for a 6th week. It is options expiration week so I personally expect to see a bunch of doji’s the next 5 days.
July 12th, 2009 at 6:35 pm
its 4 straight weeks
Futures Are Red
Taking a quick look at futures for Asia’s opening, I noticed that not only are the Nikkei and the Hang Seng down but so too are most futures markets around the world. Better double check the situation before your markets open later today or tomorrow!
July 12th, 2009 at 5:48 pm
Yes sir!!
I forgot that futures at 5:48PM predict what will happen tomorrow at the opening bell.
July 12th, 2009 at 7:45 pm
Your sarcasm is juvenile. We should all look at global markets to see how things are developing and determine what impact they might have on us. Give some thought to this…and grow up.
Emerging Markets Most Expensive Since ‘07 When Shares Plunged
http://www.bloomberg.com/apps/news?pid=20601087&sid=aiUZFVXPHW5g
July 12th, 2009 at 8:02 pm
Zee:
Do you think the price of Asian futures has anything to do with oil and other markets? Do you read Bloomberg?
July 13 (Bloomberg) — Japanese and Australian stock futures slid after a more-than-anticipated decline in consumer sentiment drove down U.S. equities. Resource-linked companies retreated in New York trading after metals and oil prices fell.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWyLA.X9ROro
July 12th, 2009 at 9:52 pm
Hey Zee. Here’s a follow-up:
July 13 (Bloomberg) — Most Asian stocks fell, led by technology and mining companies, after an index of U.S. consumer sentiment sank more than economists expected and commodity prices declined.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aUoaMOWOUL0c
July 12th, 2009 at 10:24 pm
Zee:
Evening Briefing for July 12th
Starting the week with a little stock strength in Japan and weakness in yen, dollar.
http://traderfeed.blogspot.com/2009/07/evening-briefing-for-july-12th.html
July 12th, 2009 at 11:42 pm
Biggest stock tock smackdown ever.
July 13th, 2009 at 1:58 am
Thanks for clearing that up.. It’s spot on.. Will look at global equities in the days to come for a better understanding..
G’night..
July 13th, 2009 at 8:22 am
Nikkei closed down 2,55% and the Hang Seng closed down 2.56%. If you follow global markets, you can make money while you sleep. Good luck!
Timing: Short term (minutes-hours-or couple days) I feel good about holding puts. I’m expecting the usual OPEX week reversal (higher in this case) to run up towards 905-913 next week to help form the 2nd right shoulder. After that the bears will pile in, 865 will be upon us in no time, then they’ll get squeezed into oblivion when this whole H&S bs blows apart. I’m in the camp of a wave higher into late summer (beyond 956) and the test of 666 in the fall. Subject to change.
July 12th, 2009 at 6:36 pm
u must mean 1050 spx and a crash to at least 666
We all know that gs, jpm, bac, ms and even citi will show great earnings. I expect a sell on the news after a big bull trap gap.
As readers are aware, I use historical market patterns to generate hypotheses to guide my thinking about the future movement of markets. Note that the emphasis is on the generation of hypotheses, not the formulation of conclusions. I am using historical patterns as a kind of heads up, not as a source of mechanical trading signals.
Sometimes a historical investigation will lead to no hypothesis whatsoever. That, too, is information.
For example, we have recently seen four consecutive weeks of decline in the S&P 500 Index (SPY). It is reasonable to expect some bounce from such oversold conditions. Going back to 1994, however, we find that, when SPY has been down for four consecutive weeks, the next four weeks average a gain of .51% (16 up, 15 down). That does not meaningfully differ from the average four-week change for the remainder of the sample (.45%; 459 up, 315 down).
Interestingly, a careful look at the data suggests that how the market behaves in the four weeks following four consecutive down weeks is a pretty good identifier of longer-term bull and bear markets. In bull markets, four down weeks tend to be followed by strength; in bear markets, the down weeks lead to further weakness. In this case, the pattern appears to be not so much predictive as indicative. (Note: the most recent instance occurred in early March of this year and led to four weeks of strength).
July 13th, 2009 at 12:21 am
Next time reference who you quote:
http://traderfeed.blogspot.com/2009/07/when-historical-market-studies-fail-to.html
Idan:
RE:GS is might the opposite of what you think:
http://www.nytimes.com/2009/07/13/business/13goldman.html?hp
July 12th, 2009 at 8:47 pm
Will probably be the most interesting and unpredictable week of the year and would not be surprised to see 900 and 850 all within a the same week (week being Tues GS earnings to the following Tues)
Hang Seng down 405 right now
ES at 876 fair value right now
Nikkei is down 50+
July 12th, 2009 at 10:56 pm
i wonder if no 2nd stimulus is being factored in as well as the CIT bankruptcy (#1 SBA lender)= no access to 4bn capital by franchises like Dunkin Donuts and others…no orders from suppliers/manufacturers= more layoffs= more foreclosures=less consumer spending
Futures
Nikkei 225 9,200 -50
Hang Seng 17,245 -480
FTSE 100 4,101 -15
CAC 40 2,984 -40
DAX 4,574.50 -47.50
DJIA 8,064 -21
S&P 500 871.80 -2.50
NASDAQ 1,411 -5
July 12th, 2009 at 11:19 pm
its much worse now
DJIA INDEX 8,050.00 -35.00 8,105.00 8,112.00 8,048.00 23:01
S&P 500 869.40 -4.90 874.50 877.50 868.90 23:01
NASDAQ 100 1,407.50 -8.50 1,420.00 1,420.50 1,407.50 22:58
Asia/Pacific
INDEX VALUE CHANGE OPEN HIGH LOW TIME NIKKEI 225 9,200.00 -50.00 9,230.00 9,350.00 9,120.00 22:00
HANG SENG 17,344.00 -381.00 17,602.00 17,616.00 17,050.00 22:42
SPI 200 3,717.00 -34.00 3,750.00 3,757.00 3,717.00 23:02
July 12th, 2009 at 11:22 pm
SINGAPORE (Reuters) – Japan’s Nikkei fell for a ninth straight day on Monday as concerns about company earnings outlooks weighed on Asian stocks, while oil languished near a six-week low as faith in a rapid economic recovery faded.
Nine straight days!
——— IDAN SAYS “MOST PEOPLE I KNOW…. ”
guess im not most people. i wiggeled and squiggled on Friday but in the end the action convinced me to load up short at the close of the day. my call has been and still will be DOWN MONDAY … pre-market reversal TUESDAY and painfully slow grind higher to end of week. im playing it this way. i’ll unload my shorts , hopefully around 864 on the SPX. However, should the index not reach my target i’ll pare down my positions to a very minor size
July 13th, 2009 at 12:40 am
when i said most people i know.. i was refer to my friends who trade for GS, JPM, Barclays, Citigroup.. etc..
July 13th, 2009 at 1:14 am
every clown thinks GS is going to buoy the markets to 890+and any half wit with a few million $ would be selling GS calls up the ass to Joe Public….
every bounce is weaker than the last one and volume pathetic to boot. we cant even hit 38,2% retracements on bounces…wtf does that tell you..the ball is flat and it needs air and we are plum out..
July 13th, 2009 at 3:38 pm
So much for that theory LOL
Forgot to factor in the Merideth factor, she has too much influence a market like that.
Having said that, Market was oversold needed any reason to rally.
Retail investors misread Queen Mredith’s call on GS today. They hear her say buy GS and they took it as a time to go long. She is trying to tell you “that’s it”, Take your profits! Any up side left in GS and the Financials is baked in. Closing above 898 does concern this bear, Idan neutral call is a good call for day traders going into Tuesday.
Great post Idan
http://stock-market-club.blogspot.com