Tuesday, March 31, 2015

Mar 31 - Considerable risk of further downside

Not surprisingly, the market reversed and it is possible the indexes test the lower zone of their current consolidation zone.  Currently flat except for a SLV short that at the moment doesn't seem to be gaining much momentum and will be watching carefully in case this recent downturn was just a corrective pullback.

On the SPY daily, if it breaks the lower support, it could fall a long way down.
The 60 min frame also shows room to downward movement until we are oversold.  It has a good chance of breaking the lower trendline.
$VIX also has room to go up.  If it does hit the upper Bollinger, will be interesting to see if it is rejected or continues going up.
$WLSH in a bit of a grey zone where if it fails below recent lows, it could slip quite a bit further
One positive is the lack of down volume in the last couple of weeks and strong up volume in $NYSE.  The orange box hasn't shown any major flares which is somewhat atypical.  Not an indicator to solely trade on, but I refer to it as a 'suspicious' indicator in the sense I tend to be more cautious when this is pointing in the opposite direction of where my original view of the market.
Since confirming an island reversal, my SLV short position isn't going anywhere yet.  If the overall market falls strongly, we might see a flight to fear assets, including precious metals.

Monday, March 30, 2015

Mar 30 - SLV short

Went short SLV @ 16.0, stop 16.2.   Target around 15.0-15.3. Equities getting the bounce I was looking for Friday and will be interesting to see if we get follow through rest of week.  Bots clearly in control on an intraday basis for all the indexes.  Even with the bounce, still not interested in going short or long yet.

Sunday, March 29, 2015

Mar 29 - Slightly bullish inflection point

Currently sitting flat waiting to see what happens early this week.  Price action wasn't super encouraging on Friday, I had expected a bit more of a bounce considering the lack of downward volume pressure.  Considering the big sell off Thursday, I was surprised to not see a 'distribution' type day register in the $NYUD.  This is good for the bulls.

SPY is in a weak bounce area, it hasn't sold off the point the market is very oversold which makes playing future bounces (if they arrive) more difficult.  There are quite a few scenarios possible which is why I am not in the market now.   My gut feeling is when the signals are mixed like this we could see continued froth for the intermediate term.

1. Bounce that makes it up to resistance then back down
2.  Small bounce that is sold into that doesn't reach prior resistance and retest support for another bounce up
3.  Small bounce that is sold into that breaks support
4.  Small bounce that is sold into that holds support for another retest of previous highs' resistance.
5.  Lastly, a bounce materializing into new all time highs (I don't see much mention of this over the Net, so perhaps this one will happen!).

Basically, unless the time frame is very short, I would rather be towards the top or bottom of this zone to take a position.
I had DUST for a one day trade from Thurs/ Fri but decided to unload as I thought it was still possible for GLD to bounce early this week based on the hammer printed Friday but it could easily go down.  I was also still waiting for it to go a bit higher and hit previous overbought levels so I would feel  more comfortable shorting.  The negative divergence in the miners makes this an even more potentially successful angle if you are short GLD.

Thursday, March 26, 2015

Mar 26 - Closed IBB short for +8% gain and GLD long

IBB is pretty close to what has been typically capitulation volume and is stalling a bit so decided to close out the position.

GLD although continuing to move up, is printing a second exhaustion candle and volume has been thin.  Could move up but I am concerned that it could correct like the previous events in yellow.  Not quite at the target zone but going to play it more conservatively.

$VIX also hit resistance and may signal a bounce in equities although we will need to see the close.

Wednesday, March 25, 2015

Mar 25 - Bears get more aggressive/ $VIX wakes up/ Biotechs continue to fall

For a few indexes, the markets went down for a third day, including my short position of IBB which is now up over +5%.  I will lower my stop today depending on how things go to protect profit but I am leaning towards further downside as volume picked up today.

The GLD long is still moving up but I am a bit wary about the increasing thin volume and weak candles, even though we continue to move up.
Transports again showing significant weakness and maybe 1-2 days from where the indicators usually have signaled a bounce but too early to say now.
$VIX finally woke up and is currently printing a solid candle which should mean more downside in the markets depending on how we close.  It just issued buy signal and there is room for it to go up to the yellow zone.

Tuesday, March 24, 2015

Mar 24 - Continued weakness

Markets not unexpectedly took a mild dip today as many indexes hit resistance Monday.  Remains to be seen how far we go but it hasn't yet looked like a 'threatening' initial downturn because of low volume and range.  VIX looks like it is ready to start moving up again however.  GLD made a small move up and might be ready to retrace a bit based on the weakening candles.

Monday, March 23, 2015

Mar 23 - Slow day, continued fall for UPP and rise for GLD

After the second day of EOD weakness, decided to unload the other half of my QQQ position and will look to re-enter if things look right.  SPY after having a very nice base today, broke end of day with an unwelcome sell off that should be taken as a sign for caution.  UUP is hitting the zone in RSI/ CCI that it has normally bounced up from but the recent volume has been exceptionally strong.  Too early to say we have a potential trend change but the volatility does not bode as well as it looked only a month ago for the US dollar.

Currently sitting net short via IBB short and long GLD.

Mar 23 - Weak volume near resistance, IBB sell signal confirmed, GLD continues up

Indexes are largely positive today but with a very large drop off in volume.  Almost all the indexes are close to resistance, $NYA, QQQ, SPY, etc so reason to be cautious especially when $VIX has ticked up today.  Transports showing major weakness today so also another reason to be watchful for reversals.  Otherwise the 10-30 min frames look fairly positive and today's activity looks more like consolidation.

IBB confirmed the short setup nicely and my position was increased to a mid sized one.  Still holding GLD and very carefully watching the 1/2 position of QQQ which if I see something I don't like might be let go.  One possibility I am not discounting albeit less likely is that the market stalls right at resistance and blasts off when people think it is about to reverse.

Sunday, March 22, 2015

Mar 22 - Possible consolidation this week, short IBB, long GLD

Some very bullish activity Friday including strong volume that would partly have been increased by options expiration.  Often after strong OPEX weeks, the following week does not blast off as one would think merely looking at the charts.

Per Stock Traders Almanac via the The Fat PitchThe week after March OpX has been higher just 30% of the time (data from Stock Almanac). In the last 6 years, it has been a 50/50 coin toss. If you take all the times March OPEX week has been over 1%, the average following week returns -.23%.  If one takes all weeks OPEX that returned 2%+, a resounding 8 out of 9 weeks afterwards have been negative for an average loss of -.93%. 

That said, buying volume only increasing as the week progressed so from a trend standpoint, the bulls are definitely back.

In sum, this week may bring some consolidation but still thinking there will be more upside in April.  

I also lightened up on QQQ long to half position after seeing QQQ sell off late and seeing IBB (biotechs ETF) print a large black candle north of the Bollinger, this could weigh down on QQQ if they consolidate/ correct.   Took a modest short position AH in IBB on Friday so at the moment, hedged on techs.  IWM is extremely overbought also and ended up well north of the Bollinger and will be watching very carefully whether it consolidates in bullish fashion or pulls back.  
QQQ also printed a small black candle that hasn't been much of a signal but I generally take notice after the market has been up for a few days.  It has been a much better indicator for indexes such as the Dow and S+P.
VXX also printing an interesting candle with a long wick outside of the lower Bollinger-another reason to be cautious although this signal is not posting in $VIX nor $VXO.

Continuing to hold a solid GLD position.  There could be upside to 117-120 on daily and around 120-124 on the weekly and if it finally breaks out of this year long trading zone, much higher.

Friday, March 20, 2015

Mar 20 - QQQ bull flag confirmed

Needless to say, the equity indexes are marching on up and QQQ has moved up nicely from yesterday's set up.  There is room for continued upside assuming we close well today.  Still sitting on the existing QQQ position.

Mar 20 - GLD update

It's taking off again.  I took a mid sized position right after opening and am looking for at least a move to 117 to the upper Bollinger.  On the weekly there is more upside room.  We have a buy signal on both the daily and weekly frames.  Miners are also having major moves today.  NUGT is up 11% as of now.  That said, GLD is extremely skittish so chances are there will be a lot of irregular retracing and gaps as we go.

Thursday, March 19, 2015

Mar 19 - Taking a breather

Although some indexes like DIA/ SPY got nicked today, the positive action in the riskier assets such as tech + small caps was encouraging.

QQQ if it makes new highs could make a similar move as it did last year after a mild correction such as the recent one.  It is also possible it peters out and grinds out some more sideways movement as the recent Dec/ Jan activity, but given the favorable seasonality, I am leaning towards more upward movement and perhaps corrective movement starting in late April to May.

QQQ formed a very nice platform today for potential move up tomorrow.
SPY also looks constructive and the recent buy signal has a good chance of following through.

Be Sociable, share the knowledge!  You can share this post by clicking on one of the Facebook, Google+, Twitter buttons below :)

Wednesday, March 18, 2015

Mar 18 - Bullish continuation and GLD update

Needless to say the market did a massive shakeout on longs this morning and then put the hurt on the bears this afternoon.  Both sides felt the pain, including myself who folded on the open only to re-enter longs almost 1% higher than my stop loss point.  That said, I wanted to make sure that the market was ready to move back up and that was the price of insurance but I wasn't expecting such a quick violent spike up.

NYSE up volume is trending up along with price which is a strong positive.  You generally want to some spikes early in trend changes to verify the strength of the initial up moves.

GLD made a powerful move today on strong volume and we might be looking at a weekly entry 

Mar 18 - Decision time

The bullish set up from yesterday failed and went flat on the open.  Things could go either way here so waiting for more resolution later in the day.  We are probably going to need to see a strong recovery or risk seeing this recent bounce as only a corrective one.

Tuesday, March 17, 2015

Mar 17 - Digesting gains

So far things look fairly constructive, the high risk assets like small caps and tech are showing strength and looks like we are basing here for another move up.  VIX although gapped up, is also weakening, potentially printing a black candle which would be a positive.  Will need to see what happens towards close but was enough for me to reload QQQ with expectation of further upside.  If things turn down end of day, I will lighten up like I did yesterday at close.  More to be posted later.

Monday, March 16, 2015

Mar 16 - Strong start to OPEX week

So far fairly positive start to historically bullish OPEX week although VIX is strangely strong so far.  It may be possible that we just bounce up from here but I will want to see how volume/ price action holds through close.  Right now, sitting on a premarket entry in QQQ and will probably wait until Tues/ Weds to add.

Per Quantitative Edges, more on the OPEX's history in March


SPY triggered a deep stoch and CCI buy signal on daily, it is 7 for 7 on the last 18 months.  Nevertheless, one should be careful on these shallower corrections because there is the possibility of another leg down but so far it is lining up to be 8 for 8.

Be Sociable, share the knowledge!  You can share this post by clicking on one of the Facebook, Google+, Twitter buttons below :)

Saturday, March 14, 2015

Mar 14 - Inflection point

Friday like much of the week was an interesting session.  A quick sell off which was largely reversed by a squeeze into the close.  Made the mistake of not pulling partial profits on the move down and ended up with only a tiny gain on the intraday short despite it being a big move.  As of now, I am flat as I don't see a big edge in either direction although I am favoring a bounce up on Monday more so in IWM/QQQ because of the positive divergence on the 30/ 60 min frames.  After this potential bounce, it will be hard to say what happens next.

On one hand, the bullish argument could say that this downtrend until Friday was marked by diminishing volume and a couple of solid spikes up Thurs and end of day Friday.  On the bearish side, there hasn't been such a strong volume spike that one would see with an intermediate term bottom.

Regarding FOMC, seems like most are expecting the 'patient' language to be removed or at least feel there is potential language to hint at rate increase.  So given that expectations are low, I would be more bullish going into this week.  Additionally being OPEX week, it adds some bullish seasonality.

But first, the bearish data.

Up/ down volume is fairly mixed, after distribution days similar to Friday's, the market has recovered 9 of 15 sessions but has had an intraday low lower than the previous close 12 out of 15 times.  So the bounces have occurred but often not vigorous ones.  The bearish scenarios in orange.

Although most situations where the stochs and CCI have bottomed out like this week, it has meant a solid bounce up.  Though  resting on the lower Bollinger, the increasing volume is a concern.

SPY is a little short of setting the indicators, namely the RSI to their typical bottoming area.  The dip in CCI is also a bit shallow although oversold.

And the bullish argument...
The short term time frame presents a pretty bullish divergence.  The past 2 spikes up have been solid.

Several times VIX has topped out like this and has gone down every time except once.

The $NYA, assuming we don't get a big fall like last fall, looks ready for a bounce.  There have been failures 3 out of 11 buy signals.

Transports also look close to confirming their buy signal although it is worrisome to see a down day so early off the bounce off the Bollinger.  This could be just a corrective bounce.

One striking chart seen on Sentimentrader's Optix indicator for SPY via Fat Pitch,based in part on fund flows and put/call ratios, is not at a level consistent with recent lows.

Be Sociable, share the knowledge!  You can share this post by clicking on one of the Facebook, Google+, Twitter buttons below :)

Friday, March 13, 2015

Mar 13 - Bullish failure

Closed VIX puts on the failed gap close for minimal gain and started initial short.  Selling volume looks fairly strong.  Will post more later.

Thursday, March 12, 2015

March 12 - Wary bounce

Bounce came as it was highly probable and more than a few shorts got caught holding the bag once again.   Transports and small caps confirmed this bounce so it is probable that we get at least a day or two more out of this, at very least an intraday upward move tomorrow. Although still long, I will be carefully watching intraday action and ready to jump ship if this bounce doesn't crystallize further.  My only complaint was volume was pretty weak although I am a firm believer in staying focused on price.

Here's a post from Cracked Market that sums up basically my opinion also.  Check it out.

Wednesday, March 11, 2015

Mar 11 - Bounce coming?

Things look decent for a bounce, whether short term or longer it isn't clear but still seems like we could get a bounce then more downside.  Still short VIX from yesterday's close.  Those with short term short positions should be cautious here as selling volume decreases a lot and actually was positive on the $NYSE.  This isn't a signal to go crazy bullish but definitely not one to be aggressively short.

Second day below Bollinger on third day of decreasing volume.  

Also running into downtrending Bollinger on VIX.

Sell off in QQQ very orderly last 2 days on decreasing volume.
Be Sociable, share the knowledge!  You can share this post by clicking one of the Facebook, Google+, Twitter buttons below :)

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...