Sunday, May 31, 2015

May 31 - Upside breakout from SPY triangle?

Although we finished down Friday, the grinding, back and forth nature of the decline makes me inclined to think we won't just fall 3 days in a row just yet although the advance on an intermediate term has been getting weak.  After breaking through long term resistance, the breakout hasn't occurred...just more of the same up and down churn.  My USO position confirmed its buy signal Friday and the UUP short probably looks like I should've cut it loose Friday based on the volume reading which have been very bullish after declines on lower volume.




Friday, May 29, 2015

May 29 - USO buy signal confirms

So far USO buy signal confirming strongly, UUP sell less so but I wait and give it time.  Equities continue to churn and I have no interest sticking my hand in that blender.

Thursday, May 28, 2015

May 28 - Staying out of equities, long USO, short UUP

Tomorrow looks like a decent bullish set up but there isn't much of an edge.  For now, I am taking a back seat to equities positions until things settle out or hit an extreme.  Entered USO long and UUP shorts based on churn outside of the BB's.  I particularly like the UUP short and am looking for this to be a 1-2+ wk long trade.



Wednesday, May 27, 2015

May 27 - Will this strong bounce continue?

I ended up closing 3/4 of my SPY longs at close and looking for limited upside.  Seems like the upwards churn will continue until things break down.  Yesterday's dip is starting to make me think that this churn is not unlike May/ June of last year until it suddenly slipped out of its channel.

VIX has been vigorously bouncing off of support for some time and until we dip below it for good, equities will continue its shake and bake.

SPY not unlike the ugly churn up that we had last year in early summer.

QQQ/ IWM made strong engulfing moves which give credence to the bullish camp.


May 27 - Buyers step in once again

The last 4 times we have seen a big sell off concluded by late day buying surge we have seen at least 2 days of upside.  So far it is setting up for the same.  After getting stopping out on the open yesterday, I re-entered longs EOD.  Although this is a good set up, at some point it will probably fail dramatically with a gap down instead of a bounce.  In addition, it isn't good that we dipped back into consolidation after breaking long time resistance.




Thursday, May 21, 2015

May 21 - More bullish consolidation

Looks like we are bouncing nicely off the lower BB on the hourly and we are probably heading into some listless flopping around into the weekend as the big traders start winding down.  Sitting long SPY looking to make this an intermediate term trade.

The best case scenario for the bulls I believe isn't the market blasting up but for it to establish a base above recent support which is around 212.5 in SPY.  If things stabilize here, it will lower the chances of a down move breaking back into the months long consolidation zone.  VIX is also breaking down from its sideways action and there is a chance that finally it also falls lower out of its extended consolidation zone.

The dotted red vertical lines indicate failed sell signals which may mark a trend change.  Looks like more sideways movement within a tight consolidation zone and potential breakout next week.

SPY on daily consolidating over support

If VXO breaks the support line, we could see some fast money come into the market.

Same with VIX...




Wednesday, May 20, 2015

May 20 - More consolidation, more upside ahead?

After attempting two quick shorts in the past few days, I flipped long this morning.  What was very bullish is that the previously reliable 60 min sell signals have failed 2 times in a row.  It could mark a trend change.  Looks like more consolidation for another move up.




Monday, May 18, 2015

May 18 - Early stages of breaking out

SPY / DIA followed through today and it is looking the intermediate trend is moving beyond the range bound zone.  The fact the sell signals from 30 min frames to 2 hr frames were negated is very bullish.  We are seeing again sell signals on short term but it remains to be seen whether they trigger.  Even if they do, I am inclined to think this is more of a buying opportunity than a major selling one.

Courtesy of Rob Hanna's Quantifiable Edges, potential bearishness towards end of this week.
http://quantifiableedges.com/why-fridays-quiet-opex-could-mean-trouble-this-week/

Many invalidated sell signals from SPY to VIX today.


VIX is still in the zone we have seen falls in equities in the past, indicating high level of absence of fear in the market.




Sunday, May 17, 2015

May 17 - Inflection point in equities

Friday we saw some minor follow through that was definitely constructive.  Although we triggered sell signals on 30 min and 1 hr frame, they were quickly shrugged off and we closed in the green.  Remains to be seen whether this signal might trigger later so the first few days of this week will be critical to see how we perform at all time highs.  Right now I am flat equities, long GLD, and a small batch of Jun VIX puts.




VIX triggered a sell signal but was burned off by close.  Monday should tell us more but this range has generally meant a pullback in equities.  If equities break out, we may be looking at much lower number in VIX.  I don't think there is a big edge in either direction so I unloaded my VIX puts Fri.
GLD stalling and my target still looks feasible.  The weekly printed a strong candle so hopefully we see follow through to the yellow zone.  We are hearing all kinds of chatter about metals going up because the dollar is correcting.  I don't pay attention since we have seen gold go up with the dollar and in other varying conditions.  





Friday, May 15, 2015

May 15 - OPEX grind, sell signal on SPY 1 hr, 2 hr frames

Hard to read much into today's activity.  Just lots of grinding and tugging because of OPEX.  Decided to unload SPY longs and wait for potential pullback or consolidation as we have CCI/ stoch sell signals on a range of frames from 30 min to 2 hr.  Who knows we might break up and out next week or today but going to play it safe as past history has meant we have some kind of pullback.

VIX hourly posting buy signal and this has generally triggered SPY sell offs in the short term.  That said, I am expecting one of these signals to fail as we have been consolidating for quite some time.
Sell signal on hourly.  For bulls, the best case scenario would be to see some sideways consolidation to base for a move higher.

When the 2 hr triggered a sell, that made me rethink my long positions.







Thursday, May 14, 2015

May 14 - Edging above resistance

SPY is very close to moving over its upper trendline.  If we make a strong close above it, a strong chance of more upside movement.  If not, we could fall back within consolidation for another spin.



Wednesday, May 13, 2015

May 13 - Chop, chop, til you drop

Exited SPY long this morning for a very minor gain, maybe 30 bps and am now flat equities but I did pick up a GLD long as it broke out of its consolidation pattern.  The set up looks very promising and quite similar to the spike back in Dec/ Jan 2015.

Equities are churning and at end of day today, I couldn't find an excuse to pick a direction but the longer the market holds on here, the more likely we like grind up to the upside.  There is still a chance that this broadening wedge in SPY breaks up and out.

It is possible that we revisit the yellow zone that provided strong support that last time around.  Given how violent the snap backs have been in both directions, I am leaning towards things stabilizing and moving up albeit not by much over the bear case.
Still grinding sideways.  

 Potential target in 120 for GLD.
The weekly frame looks extremely promising and upside up to where the stochs have maxed out previously.


Tuesday, May 12, 2015

May 12 - Wicked reversal and bullish opportunities re-emerge

As mentioned earlier, closed my SPY short and only partially escaped the morning short squeeze.  EOD entered SPY long upon seeing the gap fill and a combo of VIX/ SPY reversal candles which on lower volume presents a pretty decent long opportunity despite the recent whipsawing.  If we gap down, this position will be closed immediately but otherwise there is some potential here for a decent 1-2 day up move.

SPY bounced hard off of my sell zone today and may be heading towards an upward breakout of its broadening wedge.

QQQ reversing within its downward channel to a potential upward breakout.

 SOXX despite its bearish action a few weeks ago is consolidating fairly well.  SPY and DIA are also grinding within ranges which may be more bullish than most realize.
The bearish scenario I am seeing the most of per the internet.
What I am more inclined to be seeing more and more although I am not strongly bullish but the constant grinding is looking more stabilizing, therefore bullish.



May 12 - Whipsaw morning

Exited SPY short this morning and unfortunately deviated from my original plan to close 1/2 of my short on the gap fill and had to scramble to cover when it spiked back up.  Still ended up with a nice profit having entered on Friday but definitely botched this one from a trading discipline standpoint.  Always plan out your trades the night before and have contingencies planned so you don't have to think too much the next day.

Anyways, not unexpectedly we bounced very hard off the bottom of the gap and are consolidating intraday. I am very slightly leaning towards the market dipping back down again but not enough to take a position.  I will wait until EOD to search for opportunities.  It is also possible that this spike was part of an upward breakout in SPY's descending broadening wedge.  If we print a hollow reversal candle (which we are now), I may take a small long position but I have no plans sticking my hand in this blender intraday.

SPY and VIX currently posting reversal candles




Monday, May 11, 2015

May 11 - Listless open

So far a noncommittal open which doesn't favor either bears or bulls...yet.  Although I am currently short there is a chance that we finally break out of this consolidation zone and move up although more limited.

A good read that was in line with my feelings regarding the exaggerated VIX move from Rob Hanna.
quantifiableedges.com/what-fridays-big-vxo-drop-could-mean-for-monday/

1100am update:  A bit more weakness and the 30/ 60 min frames triggering more strongly sell signals.  Will remain to be seen if we close red though.