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Follow me on twitter: korenidan87
Today we look at the patterns that are showing up and what to expect into next week. I reveal my larger positions and the hedges that are placed in for next week. A potential downside of 3% or more remains as we try to aim for the support levels of the megaphone and wedge formations. I also look at the XLF, SPY, Dow Jones, GLD, AXP and AMZN.
Hi Idan,
It seems that financials are ready to drop hard. If you check some symbols like: USB, JPM, WFC, XLF, KBE and IYF, you will find that they are showing text book Fibonacci retracements:
- Topped after a nice rally
- dropped hard a little bit
- retraced 50/61.8 from this drop
- and are ready to drop again.
Some like JPM, WFC and XLF are showing a very bearish H&S
November 28th, 2009 at 9:33 pm
Sorry because I posted before watching your video. Anyway you confirm what I found as well.
Thanks for your nice work!!!
November 28th, 2009 at 9:41 pm
The mathematical expected bottom of this market is 1060 on November30th/December 1st.
If the market drops on Monday and stays above 1060, I’m adding BAC, C, SPY longs, and (FAS, SDS, UUP shorts).
The S&P seems like it is heading to 1150 to top out for the end of year.
I will likely open a small position in 113 SPY calls hedged with 103 SPY puts
November 28th, 2009 at 11:18 pm
Zee- Why would you play FAS short? Wouldn’t it be better to take Faz long? I feel that if in fact the market drops that FAZ would do better with the potential market correction whelther it is 1%-4% down and then come back and play FAS long on the return trip back up.
November 29th, 2009 at 12:09 am
Zee – do you mean you will play FAS & SDS long , UUP short ?
Also, are you looking at any options ? What targets are you looking at for C, BAC ?
Also, I have seen some other notes that Dec 2-4 may be a cycle low … is that a possibility based on your calculations as I know you mentioned +/- 2/3 days in the past – not sure for the 41 day or 21 day cycle …
Finally, thanks for sharing your insights on cycles, this seems to work really well with all the other TA to make sure that we move in the direction of the trend
– I had no idea about cycles, before I read your stuff …
November 29th, 2009 at 5:32 am
I meant FAZ short and SDS short (Proshares Ultrashort S&P500).
November 30th is the real cycle low. Therefore the market is expected to bottom +/- 1 day from the target so anywhere from November 27th — December 1st.
December 2nd is a possibility, but I think the 3rd and 4th is out of the question. I’ll be buying equities a ton of equities come Monday. And a bit of calls come Tuesday.
Targets for C & BAC..minimum $4.35 and $16.85 if the market rallies to 1150 which I think it will.
November 29th, 2009 at 12:03 pm
Sounds good Zee
… which other equiities are your looking at buying Monday ?
Also, if we go up on Monday / Tues into Dec1st, then would that be a warning that the inversion is taking place ? What would be the warning signs for that ? I know that you were very concerned about this before … can you share what you will be watching for ?
Actually it is the same difference. Taking FAS short is the same as taking Faz long on a downturn of the market. GLTY
November 29th, 2009 at 11:01 am
Wasco:
Nothing I received said so specifically, but I assumed the change to margin requirements on 2x/3x ETFs also effects the requirements when shorting such ETFs. Do you, or anyone else, have any clarification on this ?
Thanks
Wasco- True but since I am already on FAZ and do not margin anything I am best to stay the course with FAZ. Ride it for what I can and then jump over to FAS at a lower price and then ride it up . I am sitting in FAZ with 300 @ 20.
Idan – just saw the video – great to have you back
Could you share your thoughts on USO as well …
November 29th, 2009 at 2:25 pm
The USO is trading in a wedge formation too.. it hit the resistance back when i told to sell it up around the 41+ levels.. and support lies around 36 (ascending support). That said, USO seems more bullish than the market in general, i would not be playing the USO right now until we know that the huge rally we saw yesterday from open is only a bull trap.
November 29th, 2009 at 2:26 pm
I do favor USO at 36 rather than 40 though.
FAS is a Fibonacci text book example. There are 03 matches. It is very interesting because I could not find anything reliable with FAZ
- Nice H&S – neckline about 64 – it is also a 38.2% retracement from March lows
- Fibonacci 138.2% from the neckline – 54 – it is also a 50% retracement from March lows
- Fibonacci 161.80% from the neckline – 45 – it is also a 61.8% retracement from March lows
“Only time will tell how predictions hold up, but total retail sales this Black Friday weekend are expected to increase 2.8 percent from last year, totaling $42.9 billion, according to industry research firm IBISWorld.”
Sales figures so far (up .05) indicate a major disappointment, like I said Friday, Joe SixPack will screw Wall Street on Monday. Would not be surprised to see a 200 point drop on the Dow.
Given the data, some are going to rethink this recovery, hence the sell off. Dollar due for a bounce anyway.
Ok guys right now im in cash I took a profit Friday on EDZ..I am looking for another entry point.
If we rally tommorow I will take another position on EDZ around 1100-1105 but if we drop right out of the gate would you suggest waiting for a confirmed break below 1084 support or take the position in pre-market and not wait?…Thanks
#1 Anj: Couldn’t post above.. myjavascript is not working properly.
I’m going to buy the equities which outperformed the market from Nov 2-Nov16th.
These are MRK, DOW, AMD & SSS.V. They are all up 20%+ from their Nov2nd low.
An inversion is possible, only if we break the Nov 18th high by December 1st. If you want to see an inversion, take a look at my new chart.. where you see 22, on 954 of the S&P, that’s an inversion.. we should have bottomed that day but we didnt.
http://tinyurl.com/y8u5hvw
You bring a good point of being scared of the possibility of the inversion, so stops at the 1070 area for my calls, and 1029 area for stock. They rarely happen, but given the 3-month peak is theoretically either dec1st, dec16th or dec 30th.. it is a very real possibility if the market reaches the 1110-1130 level in the next 2 trading days.
November 29th, 2009 at 3:11 pm
Essentially..if you are a bull, you really want this market to stay range bound in-between 1060-1110.. for the next couple of days
November 29th, 2009 at 11:23 pm
Zee – thanks for sharing, will be great if you can post your entries too
Right now it seems that the mkt will move up …. and then may decide to fall …
November 30th, 2009 at 1:31 am
Zee – one more q, if we make an intraday high, higher than the Nov 18th high, but then fall back into Dec 1 …. does that still hold as a low ?
We will be back over 1100 tomorrow and break through 1116 by end of week. Friday was a great test and was perfect timing for the bulls with the low volume and a nice weekend to fix the timidity. It was Black Friday for the market too – hope you all got your deals like I did.
November 29th, 2009 at 6:02 pm
You are going to be in for a big disappointment. Down 200 tomorrow.
November 29th, 2009 at 6:26 pm
futures are green right now
November 29th, 2009 at 6:49 pm
Morris:
Are you planning any SCO/UCO moves tomorrow ?
Thanks
November 29th, 2009 at 7:49 pm
I don’t know yet. Mondays are pretty busy at work so I may not do much of anything until Tuesday.
November 29th, 2009 at 7:11 pm
where do you see future up 177? i see future are up 22 points on dow.
November 29th, 2009 at 8:01 pm
Who cares about futures? I hope futures don’t go up early. That would make me and all my buddies very dissapointed
November 29th, 2009 at 8:30 pm
I agree 3min…let the futures idle a bit to trap the bears in thinking it may go down
November 29th, 2009 at 11:22 pm
Agreed Jim, wouldn’t bee surprised to see it down 300 either. No way it finishes in the green.
World markets are rallying,tomorrow will be an up day to lure the retail investors IMO.The rally may last a few days but once we hit 1120-1125 i think the market will sell off rapidly to trap the bulls.
November 29th, 2009 at 8:29 pm
The bears are already trapped on the Dubia story since the close on Friday was bearish looking..Japan up 200 + points now. Will be an interesting day tomorrow.
Fed Audit Would Hurt Economic Prospects: Bernanke
http://www.cnbc.com/id/34182400
What’s wrong with this world? Why would you listen or let the creator of this mass “Fed” for economic and financial health in the future?
The market only sold off 2.5% when it should of done at least 5-7%.
This rarely occurs.. and it indicates either a huge rally or a end-of-year top.
Which one will occur? J’ne sais pas.
One of them will happen.
Get Ready to play the trend.
November 29th, 2009 at 8:44 pm
I wonder if long oil might be the play the next few days?
bulls and bears…on and on and on…just intraday trade and save yourselves the continued arguements… I have heard down 2% from the bears and up 2% from the bears…someone posted on here with an “I told you so” perspective…well, that bearish “I told you so” aspect lined my pockets monster on Friday trading the ES…like I said, take intraday and who cares who is a bull or bear…gaps like Friday WERE KICK ASS FOR THE BULLS…retracement into the money hard was a given…that is trading…not guessing like most here
November 29th, 2009 at 9:53 pm
a bull moose, no doubt.
November 29th, 2009 at 11:24 pm
Agree 100%. No, agree 200%.
As Zee says:
“The market only sold off 2.5% when it should of done at least 5-7%.
This rarely occurs.. and it indicates either a huge rally or a end-of-year top”
Wow. One or the other huh?
November 29th, 2009 at 11:28 pm
Or check out post #9. 3 min’s take followed by Jim’s. Guess we’ll be down 200 at the open and rally over 1100 by EOD.
Moved to cash after Fridays gap down and rally up. I too hope for early weakness to get long either Monday or tuesday. Still bullish until price action negates it.
I don’t know why Zee thinks it should have sold off 5 to 7%. If the Dow had sold off more than 1.87%, it would have been a new record selloff for the day following Thanksgiving, since Thanksgiving was first recognized as an official Fed holiday in 1941.
1987 holds the decline record for the day after Thanksgiving with the DOW -1.87%. The week after Thanksgiving 1987 was down 8.76%.
Friday’s trade (Dow -1.48%) now has the second largest decline on the day after Thanksgiving, since 1941.
What IS unusual, is the market declining at all on the day after Thanksgiving. I think it happened only 15 times (including this year) since 1941, and then only by minute amounts.
November 30th, 2009 at 6:17 am
You are correct in the Thanksgiving assumptions;however what I meant is that since cycles confirmed a 11-day top on nov 16th, we had TWO whole WEEKS to sell off 5% and we didn’t manage too.