I see the SPY support confirmed, by big volume, after our dip below 1115. If I see volume follow through in here, then I think the next move upward will have commitment and will be looking for a higher high (that is, above 1195). If I don’t see volume follow through at the 1115 area, I think the next leg up will see a lower high. All that’s assuming we stay in our trading range.
However, If Cobra's right, and with bad news out of Europe (they're saying recession now) we see 1000, then I think the next move up will fail and we'll ultimately go still lower. Lower highs, lower lows, combined with a weak earnings season would give me that feeling. Probably lower by the end of the year; we've had a downtrend in December 2 of the last 3 years. The one year where the trend was up was because the market was held up by the Bernank’s weakening of the dollar.
There's a lot of support at the 1115-1120 area. Look at the volume 8/05-8/11 and 9/21-9/23. If this leg downward goes below that, with all that committed volume holding it up, I think Cobra's going to be proven correct.
If we go to 1000, look for policy makers to do something to move the market up.
We're still in the trading range. I don't think we'll break out, even on a weak earnings season. I saw a report on Bloomberg that said that money has pretty much stopped coming out of the market. The report said that with no money coming in means we’ll stay in the range. It said the movement is typically a result of share buybacks by corporations, that this is the source of new money coming in to the market.
So here’s an interim herds report.
First, over the last 20 days, we haven’t made any money long. However, several ETFs have performed better than the S&P, showing strength.
RTH: 5.5% is the best. RTH is mostly retail. The homebuilders ETF is in the pits. So I'm wondering how retail is doing so well.
$DJULTC and XLU: 5% Utilities are safe havens during downtrends. People look to them for dividends as the value drops.
SMH, XLK: 3.9%. Tech. However, the NASDAQ has not been leading the SPY, which is bearish. So they’ve still participated in the downtrend.
Then we have BBH at 3.8%, IGV at 2.6%, and ITA at 2.5%.
The worst are TAN at –44%, SLV at –27%, KOL at –25%, and XME at –21%. These may be oversold now, and perhaps an investment in First Solar or Alcoa (who hit a 52 week low the other day) could pay off. But that’s gambling, I’d rather invest in strength as we go up.
So, to get my comment numbers up, here's my first one:
ReplyDelete@Thor
How's the dog poop? The last time I was in NYC, I couldn't sightsee because I had to continually look at the sidewalk. I think they made a law about pickup, so I hope it's better now.
@Mutt: speaking of condoms and ears, did you see the youtube video of the guy blowing up a condom with his ears?
The open's not showing commitment from yesterday's short squeeze rally. I don't like the looks of this at all.
Have a quick look at EWZ (I like to use that one for a leading indicator and emerging markets typical example) on the 60 minute chart, it has nicely increasing price and volume. That's what I wanted to see with SPY. Looks possible.
ReplyDeleteThks, again, Rock. I too look at 1115 as an important support. For the moment, this is the low for the day.
ReplyDeleteLow volume so far today. I don't like that very much. I'll be long 1 position tonite. Kick myself in the morning, I will.
ReplyDeleteOK, I'm back. Weird happenings with blogger. Evening all. Nice post, Rock.
ReplyDeleteOn another note, how about this Occupy Wall Street movement gaining steam lately? I may be wrong, but I believe there was a commenter on this very site who called this and basically said the ire would next turn to the elites and Wall Street peeps once the realization that the economy wasn't turning around any time soon set in and once the austerity talk started to turn to action. Hint: his handle here begins with an "M".
Anyway, I wonder if this thing has any legs or staying power? What does everyone think?
Blogger would not let me post from work again today...GRRRRRRR Blogger GRRRRRRR
ReplyDeleteMannwich from the little I have seen and read about "Occupy Wallstreet" these people don't seem to have a real direction or purpose and other then just protesting they have no plan set in place to achieve satisfaction.
You should also consider we are entering the winter months when the days get shorter and colder.
So my theory on Occupy WallStreet is unless a true leader steps up or a set of real demands and a plan on how to achieve this, these protests will be done and over by Thanksgiving.
With that being said though, it often takes several tries to get a movement going, so although I do not believe Occupy WallStreet is going to last long, I do believe they are the ones who are actually getting the ball going.
Mutt
RIP Steve Jobs!.
ReplyDeleteDitto anon. 56 too young for anyone to go.
ReplyDeleteI was listening very carefully to what was said about Steve.
ReplyDeleteI guess it's hard to be well-liked when you're that powerful.
But, after the pop-down, AAPL could be a buying opportunity. I plan to go a full position long after the expected drop. Bloomberg said that the NASDAQ was down because the rumored futures of AAPL. AAPL was frozen from trading.
Remember, not one of the people said "I liked Steve and he was a great person".
I hope you are never in that position, hated through your death. I hope I'm not either.
I heard one Bloomberg talking head say "Steve Jobs invented the personal computer". goes to show you stupidity is rampant among talking heads.
Tomorrow, buy AAPL after it drops and gets a turn-around on the 15 minute chart. I am. I'm buying form my ex-mother in law too.
@Mutt:
ReplyDeleteThey have the same plan I had as a sophomore in college.
Wake the world and change it.
And I too, never inhaled. V V
Rock - I LOVED the sophomore plan so much I tried to live it for 10 years, oh well I guess we all need to grow up sometime.
ReplyDeletePersonally I say Occupy Wallstreet does not get going to the level of changing the world, but those behind them just may as they are just now starting to wake up.
Your Apple Plan sounds like it has merit and VERY good thinking on your part, plus the fact you seem to make better trades with your ex-Mom-in-law means it should be a good pay day, I hope you are right.
Mutt
@Mutt
ReplyDeleteI still live it.
Someday I will be successful.
Retailers reporting results better than expected.
ReplyDeleteHow can that be?
Maybe YOY expected is lower. I'll have to look into that.
I hope somebody got AAPL at 372. I didn't. They're reporting oct 18. Watch for yet another way way beat on earnings there.
East Coast Time!
ReplyDeleteWall Street Protests look to finally be breaking out! I was hoping for union support and it looks like they (unions) have finally figured out that they'd better start fighting back and fighting back hard or it'll be the end of them.
These protests are on the news here a lot the last two days and when we walked by them yesterday on our way to the Statue of Liberty (neat) and Ellis Island (meh) there were a lot more people than the day before.
On our way North to Garrison near West Point via train to visit family then on to Vermont
Vegas was gorgeous by the way - exactly like Iceland, worst housing market in the country, always in the news. But the city has spent a lot of money on beautification and it shows. Everything is spotless, the roads are all in excellent condition and there are still mobs of people.
ReplyDeleteWhen we talk to locals (parent's neighbors an friends) they all seem resigned to the situation "it is what it is"
Makes me think of Japan - 20 Years of stagnation yet it is still a pretty nice place.
Constant growth. . . Cancer ?
Lower high here at 1160 ?
ReplyDeleteWe've had a lot of momentum since the 4th. I think it's too soon to call a lower high. If we get down to around 1140, then I think we could see the lower high.
ReplyDeleteBut I still think the volume we had on the 4th and the follow-through on the 5th will lead us higher.
However, Bloomberg reported that 6 billion left the hedge funds last month. They didn't say where that went, Bernank did say in his Q&A that the reserves in the banks are up.
TAN's up 5% today. Can you say "oversold"?
ReplyDeleteI do not know if my employer changed something on their end or if it blogger it's self but I am not able to post from work, I can read it just fine, just not post.
ReplyDeleteMutt
@Mutt:
ReplyDeleteHmmmmm
I know blogger sometimes attacks me. My firewall stops it. It could be an automatic reaction by your work's firewall.
What blogger does is tries to open some ports and tries to establish communication using those ports. That's a typical attack used by lots of hackers. It's called "looking for open ports".
It's likely your work's firewall has adapted (as did mine) to block the attacks initiated by blogger's IP address. I had to reopen the address and block the ports used by Blogger. Probably something your IT people won't do for you.
Mannwich may be right about the top. It looks like we fell out of the upchannel established around the 4th, at 117. I could see a lower high if we drop to around 115.40 or so, and hold that level to the close.
ReplyDeleteI have to go up to work now and am out of the market, after making a little money on SKF. But I'm looking for the market to rally then sell-off because I think nobody wants to be long the weekend. Hopefully I'll be back in time to play the sell-off.
Trade safe.
Oooohhhh I loved that sell-off.
ReplyDeleteRock's going to treat himself to a bottle of wine tonite!
@Mutt:
ReplyDeleteI looked up the google attacks, if you need the info.
It's from groups.google.com
74.125.127.138 TCP port 4127, TCP flag S
and
74.125.123.113 TCP port 3702 TCP flag S
Good luck.
Rock - There are no words I can say to you to express my appretioan for you checking on that, but after your earlier post (11:17) and the security my employer requires I figured you were correct.
ReplyDeleteSo I set up my iPhone (Yuck-I hate the thing) to get to the web, so hopefully I will be able to find a break during the day to post.
Dude, I have made a few bucks (And by few I mean few not enuff for a fancy ass bottle of wine, but I pretty tasty pizza) during the couple of weeks and if it were not for the lifes leasons you and others here have passed along, I would still be lossing.
However my days of posting from work are probably limited (Execpt from my iPhone..Yuck)
Thank you so kindly for the 411
Mutt
>> Makes me think of Japan - 20 Years of stagnation yet it is still a pretty nice place.
ReplyDeleteConstant growth. . . Cancer ?
http://steadystate.org/
Nasdaq is leading the spy.
ReplyDeleteBullish again.
The eurozone has a plan for a plan. And the market reacted very positively (I think because we are on an uptrend to the top of our trading range).
ReplyDeleteI think a plan for a plan is easy to announce, because it can be said because of circumstances, the plan didn't materialize. But a plan means commitment from member nations. I just don't see that happening, neither in the US where what's good for one state isn't good for another, nor in the Eurozone where what's good for one country is not good for another.
As we get closer to the top of our range, I'm going to be looking for a trend change to start falling through the end of October.
Tick is way up. I expected to see a selloff but it seems not to be so.
ReplyDeleteNow I'm looking for a turnaround Tuesday, at the end of Tuesday I expect to see the trend up continue through the rest of the week.
Of course I lose my opinion when the market opens, and I let the price and volume speak for itself.
So if we have an uptick rule for short sales, should we have a downtick rule for long sales?
ReplyDeleteSauce for goose, sauce for gander, I think.
How many long trades have you made that immediately go against you?
Remember I said AAPL is reporting the 18th. Get ready for an eye-popping beat.
ReplyDeleteRock (Oct 10 -9:43pm)- It seems like EVERY trade I make goes against me :(
ReplyDeleteAlthough I have learned to NOT hold over the weekend last 3 Mondays were down, but yesterday up big.
However I have picked up on a couple patterns for both long and short stocks that has been doing fairly well and have been jumping back and forth between them and actually making a couple dollars.
Mutt
@Mutt
ReplyDeleteGood luck with that.
I am doing the same thing except I'm using ETF's. Because with today's volatility, there may be some news item that thwaks one stock ticker.
They've been studying the volatility and the reasons behind it. Most of the reasons are involved with the retail investor getting out of the market, and the volumes are low. This makes HFT more responsible for the day-to-day swings. Then the ETFs and hedge funds rebalance on a quarterly basis, so the volatility at the quarter is huge.
Be careful with individual stock names, at this time, for sure.
UUP has fallen as a result of the rumors that the Eurozone is planning to plan for a solution.
ReplyDeleteI'm looking for a pop up, because I believe it's likely Moody's or one of the ratings agencies will downgrade France's debt.
This will happen overnight, so I'm for sure out overnight these days.
Rock - I can NOW post from work...Hmmmm what's up with that?
ReplyDeleteThanks for the advice and warning (12:17), they are well heeded.
The last couple years have been a learing process and a lesson in patients, we may "know" what is "supposed" to happen, but we have no clue "When" it will "actually" happen and that is were learning to pick up on patterens is important and also being willing to get out of a position if the pattern starts to break down.
There are a number of stocks and ETFs I follow, but only a handful I am moving on and until just recently I have only played on side at a time, meaning if I saw a bullish (Or Bearish) pattern developing in one stock I would buy only that stock, wait for the pattern to end and get out, however recently I have been doing it with two stocks (ETF's) and reversing my position more quickly.
And even though learning what you are seeing takes a lot of hard work, so far so good and I figure slow and easy is the way to go.
And like you have said on several occations, there is ALWAYS another oppertunity around the corner.
Mutt
The SPY has just about fallen out of the trend started around the 4th.
ReplyDeleteAs Mannwich says, it could be a topping time. I don't call tops (or bottoms) because it's usually a process and gets approached several times. This time, the volume's really low, so it could be false. I don't expect any follow through tomorrow, but you never know.
Anyway, my trades today went nowhere. As flat as my first....well, never mind.
Rock - Although I have not been at this as long as you, it seems like calling a top or a bottom is kind of futile....Fun, but futile.
ReplyDeleteHeck in the end everything is just an educated guess anyway, but whether the tippy top is in or not, I do believe the pressure will continue to be downward, how far down is anyones guess though
Mutt