Thursday, October 30, 2014

Oct 30 - Transports at top of wedge

I wouldn't say this is an immediate short because of the small range and low volume but something to watch going ahead in case it picks up steam and the general indexes start showing weakness.

Oct 30 - Still plowing higher

Again another bullish close and looking for a retest of previous highs very soon.   Breaking to significantly higher highs next month is not inconceivable.   Gold and silver sold off and getting closer to another potential move down.  I have a very large short position in GLD and looking for 105 as initial target and potential 90-95 eventual target maybe early next year.  Accordingly the US dollar moving up in inverse.

Tuesday, October 28, 2014

Oct 27 - Business as usual

The market has shrugged off a handful of sell signals on the short timeframes and looking to consolidate/ grind up further.  Not anticipating big movements until FOMC and to be quite honest, not expecting a major reaction out of the announcement either.  If we get a low volume retracement to 192 to form a right shoulder in SPY, it would be an excellent risk to reward long entry.

Sunday, October 26, 2014

Oct 26 - short GLD

Looking for a breakdown through 115 in GLD.  Silver has already broken support and the current set up looks quite similar to the previous GLD breakdown.  Will be looking for 90-100 by spring next year if not earlier.  Currently building a position in GLD Jun 99 puts.

Oct 26 - New ATH?

For the third time, the market shrugged off a short term sell signal and looks primed for retesting all time highs in Nov.  Very possible the market continues to blast up like it did earlier in the year.  Will we get a tradeable pullback or will new longs need to jump on the moving train?

Thursday, October 23, 2014

Oct 23 - Still waiting for consolidation/ pullback

Once again, shorts get squeezed on the open.  We might get a retrace tomorrow based on reversal candles, 2nd day of afternoon weakness, and decent negative divergence.  We have sell signals on 30/60 frames but they have failed twice on this strong upmove.  With more fray the last 2 days, we might see a confirmation on the third signal.

If we bounce at 192.2 SPY and consolidate that would be very bullish going forward.  A break of it could mean a move lower.  If there is a down day with low volume and lack of speed, I will be interpreting that as a bullish situation.

Still a chance of going back down to retest lows, but today's gap up made that more remote.  Last night, we saw a massive squeeze in futures.  It was obvious that someone wants this market going up for now.

As of now, a slight edge to the bears tomorrow but the easier trade will be to go long on oversold timeframes if the drop is not heavy.

Wednesday, October 22, 2014

Oct 22 - Inflection point

Lots of possibilities here.  The market was extremely overbought up to now and finally some of that pressure was released.  For most indices it tapped that declining trendline and turned around.  60 min frames issued sell around mid day

We could:
1.  Retest lows because the rubber band has been stretched so quickly for so far.  As a short, would look for volume spikes to confirm 50%.  If this happens I would expect it to be a violent move down.
2.  Consolidate for move higher 25%
3.  Gap up and just shrug off today's action 25%

Some indexes like QQQ and SPY held up fairly well.  Others like DIA, NYA, and the usual leading index IWM, issued fairly bearish reversal candles.  One issue was that volume was weak but that didnt stop us from taking a big fall on Oct 7, the day after we had a similar day such as today.

Tuesday, October 21, 2014

Oct 21 - Pinned bears

Exited SPY short in premarket and took another stab at 50% retracement at 192 which also was stopped out.  Looks like a lot of shorts got fried and the tape looks extremely bullish, very steady and minimum range.  We are very overextended for sure as it has more possible that the intermediate low has been printed.   Currently flat and waiting for consolidation/ pullback.  Many indexes near or around the 50% retracement and will be interesting to see how they respond.  $NYA one of the early movers to the downside approaching resistance zone.

Monday, October 20, 2014

Oct 20 - Short SPY at close

Market closed at a pretty tough resistance area.  200MA + resistance level as indicated.  I probably would've held off until tomorrow but the extremely weak volume in most ETF's stuck out.  I try not to make too big of a deal of weak volume as it isn't a great indicator but it was hard to ignore volume dropping off so markedly since the recent bottom.  Plus the 192 level which is also even stronger resistance is right overhead so felt odds were decent here.  Regardless, I have shifted from my earlier position of putting the recent low as a intermediate bottom as the bounce up has been very weak considering the severity of the decline.  It's very possible we will need to see some froth and basing to move up with confidence.

Oct 20 - Market looks soggy

Looks like fairly weak follow up.  Exited longs via VXX puts and XIV and stepped into small SPY short.  Volume is not impressive and neither is the arc of this move.  Could just be consolidation for a move up but was expecting a more energetic bounce.

Sunday, October 19, 2014

Oct 19 - Potential for chop ahead

The bounce Friday wasn't impressive.  Considering the Fed language Thurs, one would've thought we would've gone higher.  Friday appeared to have a short squeeze in open followed by little conviction.  I still am leaning towards this being an intermediate bottom but also leaning towards some retest(s) to stabilize things before going up.  Outside possibility of just going lower which could be since this bounce was so weak.  One thing to watch is to see how the European markets fare.  Many look poised to bounce aggressively.  Also will watch how the small caps create some positive divergence vs SPY.  HYG looks very overshot and will look to see how it settles.

Looking to unload longs or start scaling out EOD Monday and reassess.  If there are trades put on they will be very short term to avoid get whipsawed in either direction.

Wednesday, October 15, 2014

Oct 15 - Fed speech schedule

8 amCharles Plosser speech
8:30 amWeekly jobless claimsOct. 11289,000287,000
9 amDennis Lockhart speech
9:15 amIndustrial productionSept.0.4%-0.1%
9:15 amCapacity utilizationSept.79.0%78.8%
10 amHome builders' indexOct.5959
10 amPhilly FedOct.19.522.5
10 amNarayana Kocherlakota speech
8:30 amHousing startsSept.1.015 mln956,000
8:30 amJanet Yellen speech
9:55 amConsumer sentimentOct.83.584.6

Plosser is a hawk but Lockhart, Kocherlakota, and of course Yellen are dovish.  With the oversold conditions, we could see some fireworks if the right words regarding delay or even re-engagement of quantitative easing.

Oct 15 - Bottoming charts

If we don't hold here, things could get more ugly.  Otherwise, we could see a pretty strong short squeeze and big gap up based on today's activity.  VIX printed a fairly promising reversal candle and Treasuries did quite a panic drop on a rush to perceived safety.

Oct 15 - Potential intermediate term bottom

If SPY doesn't break down this could be capitulation.  Volume spike per the early year correction and about to print a reversal candle.  Just added tiny amount of more VXX puts mid Nov 33.  Looking for close at 186 to put on bigger position.  If not will hold off.

345pm update: added a big position of XIV at 26.84

Oct 14 - Wait and see - potential broadening wedge

Printed a small candle today as pause day.  $VIX thrashed around somewhat undecidedly and IWM and transports showed good strength.  On the down side, oil and XLE continue to get crushed.  Until that stops, will be hard for SPY to get moving again.

Assuming we hold here, there is possibility we go to all time highs.  Otherwise, many possibilities for re shorting the market as enough technical damage has been done.

Monday, October 13, 2014

Oct 13 - Alternative means of measuring market fear

Below is the 10 yr Treasuries, typically viewed as safe haven when things go tails up.  We are tapping a long term trendline and posting a couple of hollow reversal candles.  Will be interesting to see what/if kind of bounce we get.

Oct 13 - 3 down days in a row

Unexpected but not totally surprising downside at EOD when it looked things would stabilize for a day.  It seemed too many people were expecting the 200MA (myself included) to give a strong bounce which in a way was its demise.  After today, the question is how much technical damage has been done and when we bounce, what kind of bounce will happen.  As of now, looking for a 50%-62% retracement from whereever the low occurs and further downside.  Alternative options are tests of new highs or retests of broken support and going back down.  VIX continues to go parabolic meaning at some point there will be a snapback but it could be only for the short term.

As before, waiting for some churn and lower volume before putting on intermediate longs.  Until then, we could just be seeing short squeeze spikes with limited long term intentions.

Oct 13 - Looking for bounce this week

In VXX 31 puts Nov 7 @ 1.15.  Every time frame from 15 min to daily is very oversold.

Saturday, October 11, 2014

Oct 11 - The Fat Pitch: Weekly Market Summary

The Fat Pitch: Weekly Market Summary

Something also to think about given how oversold we are.

"The coming week is Options Expiration. October is seasonally weak, but October has had the second strongest OpX week performance in the past 30 years. The only stronger OpX month is December. SPX has been higher 73% of the time during October OpX."

Friday, October 10, 2014

Oct 10 - Fri recap

Two aborted long attempts and finally jumped on board the short side towards EOD.  Looking for some kind of bottoming next week if things can churn for at least a few days within a zone.  Otherwise, looking for more downside.  the 190 level in SPY might be a bit overrated and perhaps overdiscussed (too many people expecting it to serve as support might be its underdoing) as NYA, NASDAQ, RUT have already broken support.  I am expecting that SPY does the same but given how oversold we are, a massive short squeeze is lurking so best to monitor one's short positions.

I am currently flat and waiting for some churn and lower volume to look long.  Also looking at shorting VXX.

Oct 10 - Short term buy signal SPY

Back in and again with tight stop for quick bounce

Oct 10 - Moving towards 190 SPY

Very oversold on short time frames so still possible we get a move back up.

Oct 10 - stopped out of long SPY

Oct 10- Went long SPY

More later

Oct 9 - Potential very short term long set up

If things gap up or stabilize in the morning, buy signal on 30 min will probably be triggered and perhaps once again another strong spike up.  Positive divergence and even today, lots of grinding and small upward spikes that were being quickly sold off, maybe sparks that might catch for another pent up squeeze.
There is a lot of chatter about the market tanking but a lot of this froth looks like bottoming starting even if we do end up lower than here temporarily.  Lots of favorable set ups with obvious stops out there.  DIA is sitting right on support so if it doesn't turn immediately in the morning, it is an easy fold.


Thursday, October 9, 2014

Oct 9 - 345 pm out of long SPY

Short squeeze didn't materialize...will post more later

Oct 9 - 315pm update long SPY

More later

Oct 9 - Closed longs

Closed longs via SPY calls at 9.45 for +35% on the gap close.  Going to wait until EOD to see how things play out.  Close to sell signal on 30 min frame but not going short yet to see whether this is just innocuous profit taking from yesterday or perhaps heading towards another retest of lows.

Wednesday, October 8, 2014

Oct 8 - Bear stew

Today was a good day, unloading shorts near the bottom and flipping long when SPY was roughly even for the day.  SPY calls at +40% now.  We are close to be being overbought on the 60 min and that will be the cue to unload longs and see what happens.  This was an abnormally severe spike so there is some risk of the opposite happening in the future.  Right now however, I remain directionally agnostic for the intermediate term and wait for the market to play itself out.

On the 120 day MA, SPY reversed hard and maintained status quo.

Oct 8 - Long for a bounce

In SPY 187 Oct 17 calls @7.00, will have a tight leash on these

Oct 8 - Closing shorts temporarily, very close to buy signal on 60 min SPY

Just retested previous lows and very oversold.  We could see a pretty good spike up.  Closed Oct 18 puts at 3.9 @5.13 for +31%

Oct 8 - Rebroken support $NYA and $RUT

Let's see where we are EOD but looks like the second attempt at support is leading to breakdown.  These indexes could fall a long way before stabilizing.  Smalls caps are leading the slide down.

Tuesday, October 7, 2014

Oct 7 - Thinking ahead for long positions

In an effort to keep my future longs in check, I will be looking for at minimum positive divergence and multiple retests within a short time frame to aggressively go long again. Looking back, it was clear that this was more of a bounce than a bottom.  Almost every intermediate bottom in the past couple years has been marked by a lot of this trashiness, as marked in the yellow boxes.

Oct 7 - Bearish scenario revisited

Needless to say, I got tossed out of my longs via SPY calls for a pretty sizeable hit at -30% very early today.  When we started to consolidate into that triangle, I re-entered short via SPY Oct 18 puts 198 which are now up 22%.  Very messy day which broke the bullish argument that seemed pretty feasible up to yesterday.

Looking back at NYSE and RUT indexes, the bounce at support was a small one and we continued further down below support.  SPY is looking to retest 190 very soon.

Looking at the increasing daily ranges, this downward move is very different from the early Aug move where the moves had less range and froth.

Just a hunch but we might end up seeing some major volatility and short squeezes on these down moves because of the increasing range.

Oct 7 - Exited longs SPY

Going to wait things out here, could be setting up for a retest of lows or making a soft rounded bottom for a move up.  Might jump back in for daytrade if it wants to close the gap.  More later.

Monday, October 6, 2014

Oct 6 - Closing update, still long

Despite the sell-off, SPY still looks bullish.  This helped ease some of the overbought conditions and will probably facilitate a move higher.

The selling volume was very unremarkable which does less to negate the buy confirmation from Friday.

On the 10 min chart, today's action appears like consolidation.

Sunday, October 5, 2014

Oct 5 - A cautiously bullish argument

Good read with a generous cross-referencing of indicators arguing for both sides via the Fat Pitch

Oct 5 - Intermediate longs but short term overbought

As of now, sitting long via SPY 197 call Oct 31 at 2.62.  Intermediate term looks good even though there was no preferred retest of lows.  Short term, lots of bearish situations closing at trendline resistance.  Daily time-frames trump 60 min frames however.  Short term bearishness can be negated by another strong move up.

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...