Tuesday, September 30, 2014

Sept 30 - Post close update - mixed signals

A lot of chop today and signals flashing in both directions.  The early VIX sell signal was invalidated as was the early buy signal on the daily in SPY.  Busted signals at least near term add some bearishness to the scenario.  Although still sitting long, I will need to see Q4 buyers come in strongly tomorrow or I will reconsider.  On an intermediate term basis, quite a few decent long set ups (potential diamond continuation patterns in QQQ/ DIA), unfortunately most of them come with a lot of noise so it has been difficult to make out good entry points.

There are some indexes such as NYA which are setting up interestingly for a bounce, others which are wounded but still generally bullish like QQQ (potential diamond formation)/ SPY (falling wedge), and others such as IWM which look like they have no bottom in sight.

Sept 30 - morning update - buy signal SPY

After brief morning sell-off, on 15, 60 min frames close to resistance.  Buy signal issued on SPY daily via CCI and stochs (in green vertical dotted line).  VIX also may confirm yesterday's sell signal (for VIX)

Monday, September 29, 2014

Sept 30 - Pre-opening charts - XLE, $FTSE

Just to mix things up, I like to pick indexes at random.  Found some very interesting 'turnaround' candidates.  If there is a way to trade the $FTSE, I will have to look into it.  It trades very cleanly.

Sept 29 - Falling wedge SPY

Sept 29 - Long set up, in SPY Oct 3 calls 192 strike at 5.71 EOD

This looks very bullish bc of hollow candle and low volume. VIX printing a very favorable black reversal candle outside of Bollinger.  If we stay around -.40% in SPY, I'm going long EOD.  If we have strong close, I will be less likely to go long.

Sunday, September 28, 2014

Sept 28 - Sunday night reading, great article about divergences

Very interesting read on divergences.  Discusses the 2007 top and what we saw back then.  I usually find divergences between indexes much more powerful than looking for divergence within the index because there is less competitive noise.


Sept 28 - Sunday review of divergences

Just eyeballing the negative divergences on SPY/ HYG and think we might have some more room to go down.  Not very clear but we will be watching to see if this divergence becomes a positive one to go long.  If we get a suitable entry I may go briefly short also.

Friday, September 26, 2014

Sept 26 - One of many possible scenarios

If we grind down with a lot of churn and see decreasing volume, I will feel more comfortable going long.  By then the daily indicators will have been fairly bottomed.

Sept 26 - Closing update

Looks like that oversold spike materialized and unfortunately without me as I was busy this morning.  I am even more directionally neutral than yesterday as we were oversold on short term timeframes and now 60 min are bullish but in neutral zone and 30 min slightly overbought.  Daily charts look primed for an intermediate move up if things stabilize here.  Volume was not great so we could easily see things switchback on Monday.

Going flat into the weekend.

Here's the expanding wedge and more to follow later...

Sept 26 - Potential long set-ups

Still early to say but just thinking of just a few of the many scenarios here.  Depending on how things develop today, IWM could make a 1.5-2% bounce.  While mildly bullish into next week, the technical damage leaves the possibility of just dumping from here.

Sept 26 - Morning update. Still no positions entered

Buy signals issued on 30/60 min SPY but not biting yet.  NYA is also showing positive divergence after a taking a beating this week.  I feel risk to reward it is slightly in favor of bulls on a very short term basis as the market could easily snap back.  Slight chance I take a small long but just as good chance I don't.  On an intermediate time frame, there has been a lot of technical damage so I would tread carefully.  Still lots of potential scenarios in my mind and I am going to wait until the market begins to form one of them.  My ideal scenario (for now) is seeing tired upward movement that can be reshorted.  Until then, I wait.

Thursday, September 25, 2014

Sept 25 - Potential scenarios

I am still flat, looking for the right opportunity in the megaphone.  Looks like a bounce, how large I don't know, is lurking as the 60 min timeframe is winding up which might happen tomorrow.  Going to play it by ear but as of now, looking to short resistance at 197.7 or wherever it looks gassed or potentially go long if we see lots of churn and a signal on 30+60 min frames.

Sept 25 - The bearish argument for QQQ

Volume increasing and range expanding, not what you want to see to have the next big move up.

Sept 25 - Thursday Thumper

Today's reaction was not unexpected per my previous post yesterday.  However, things were not quite set up the way I would want to go short so I am flat just seeing how things play out here.  Right now I am not interested in sticking my toes in the water and wait for the set up to appear.  Neither 30 / 60 min timeframe issuing sells or buys.

Big volume in SPY is confirming the strength of this downward move.

Many scenarios in my mind here...a big snapback to previous highs (expanding megaphone), weak up move to broken support then back down, just continued move down creating a short term bottom and back up, or a deeper correction that many having been calling for.

Wednesday, September 24, 2014

Sept 24 - Undecided

Scanning over recent data and I am leaning towards hoping to see some more consolidation so set up a move up.  I feel uncomfortable aggressively going long on a short term frame since we just busted a bullish post FOMC set up.  Mixed signals depending on timeframe but NYMO is issuing a decent intermediate term buy signal now.  IWM I am interested in going long but want to see how it recovers from the broken trend line.  Perhaps after this week/ month, there might be room to go up on a longer term basis.

Sept 24 - Closing update, exited short term positions

A strong spike up from oversold conditions today.  Closing QQQ Sept 26 strike 97 calls at 2.82, entry 2.02 (yesterday close) + 2nd position opened this morning.  Also daytraded SPY 194 Sept calls from 4.92--->5.53.  Exited all trading positions as we are right at the 50% retrace and moderately overbought on the 30 min timeframe as we could easily retrace tomorrow.  For the very short term trades, the easy money was today.  Will wait and see how things turn out tomorrow as I will continue to remain directionally agnostic.

Sept 24 - morning update. doubled QQQ position

More later...30/ 60 min buy signals.  Pos divergence snapped back on 30 min very hard and a good bounce off Bollinger on the daily.

Tuesday, September 23, 2014

Sept 23 - Looking for a bounce

Despite the down day, 3rd in a row, seeing some signs of a potential bounce.  I am leaning towards something materializing tomorrow generated from short time frame signals - 30/60 min charts.  Still a risk of things falling apart as some indices have broken support in a major way such as IWM and NYA (which dropped out of an intermediate consolidation zone.

Still sitting in minor long via QQQ calls but will be looking to unload quickly and reassess.

Sept 23 - Bearish recap

Looks like I exited the SPY puts too early.  Went long QQQ 97 Sept 26 calls at a very small position at 2.02 right at close then the market dumped about .20% to sink lower.

Entered because (and this is around 3:58 pm) volume had decreased noticeably from yesterday and had a hollow reversal candle right above lower Bollinger but now going to hold a much tighter leash here because the charts look a bit ugly.

Sept 23 - Morning update

Exited SPY puts for +61% gain at 3.83, 3.85.  Safer bet would've been selling on open (which cost me maybe .20-.30 when it looked like gap was going to be filled, not an immediate sell like yesterday.

Reason for selling was the buy signal triggered on 60 min and 30 min.  We could definitely go back down but wanted to book gains.  Still think there is technical damage here but would like to see the 30/ 60 min indicators to reset before taking a position, long or short.

If today comes in as a pause day with lower volume and posts a hollow reversal candle with SPY down .05-.15%, I will probably consider going long for a day.

Monday, September 22, 2014

Sept 22 - Looking ahead

If we got some froth around the lower trendline in  IWM, I might be looking for an intermediate term long entry.  Ideally seeing some pos divergence before settling in.  If we close below the trendline, will be something to note.

Sept 22 - Daily sell signal confirmed in DIA/ SPY

Monday stayed true to its previous years' date form and the indexes fell in decisive manner.

SPY/ QQQ/ DIA/$NYMO - sell signal
SPY 30 min - buy signal
SPY 60 min - v close to buy signal but could be reset if another dip happens
NYA 60 min - v close to buy signal but also on edge of breakdown out of consolidation zone

We could get a bounce but leaning towards retesting a full retrace of 197.6 in SPY before a meaningful bounce.  The recent FOMC buy signal was invalidated as we retraced into previous territory and fell out of the upward channel.  In addition, extreme movements outside of the Bollinger are usually at minimum 2 day events (sometimes not consecutive) against the previous trend.

Long-term outlook:  Bullish
Intermediate-term outlook:  Bullish
Short-term outlook:  Bearish

May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...