Wednesday, July 29, 2009

Bull flag...

Looks like a bull flag on SPY. There might be one more day down...but its looking up to me.
We hit the middle of the channel on the VIX. I think a sharp drop will be coming Friday and into next week.

We are at a key point, stochs are still extremely overbought, but how long can they stay that way? VIX looks like it may drop into the teens if the red trend line breaks...

Tuesday, July 28, 2009

Bearish Advanced Block confirmed...

The bearish candlestick pattern was confirmed today. Stochs are tremendously overbought.

The red trendline held. So we might be looking for a move to the middle of the bollenger band or higher.
If this is wave 4 of primary 1, then we have not seen the top which will be at about 103.38 (50% retrace from the 5/08 high).
If this is primary 2, then its possible that we have seen the top at 98.4 (98.68 is the 38.2% retrace from the 10/07 high). So the next fib beyond this is 50% at 108.65.

Still holding...

The last three days formed a bearish Advance Block candlestick formation. This means today is likely a reversal.
Vix held the red trend line so bears have a chance...but if it breaks we are headed to 1050.

Friday, July 24, 2009

Yesterday was WOW...

If the red trendline on the VIX breaks then we are looking at support around the dotted tourquoise lines. Even with the massive upday yesterday, the VIX actually increased. If Daneric is right with his "Bullishness" analysis, then the turn will not happen till about 105 on the SPY and the VIX will likely be in the teens.
This chart is leading me to look for an exit on my shorts on the next pullback.

Wednesday, July 22, 2009

Now we really are getting complacent...

Well we have a confirmation on the bearish hanging man candlestick formation on the dailies. The stochs are very overbought also.
VIX is in the low 20's, which we haven't seen in quite a while. It is approaching a lower trend line (red) that has held up during this down turn.

The crossover on the BPSPX:CPC the other day is a warning. The market recovered too fast in the recent drop, we should see a sizable correction in the next few days. Still debatable whether the SPY can make it to 105 (depending on your ewave count that is the 50% retrace).

Tuesday, July 21, 2009

The little blue circles...

Sorry, power was knocked out last I will just upload the BPSPX:CPC chart. Note the blue circles.

Sunday, July 19, 2009

This weekend escaped me...

Too much work with my "real" businesses this weekend. Just a note that the BPSPX:SPX chart did something unexpected and fired off an intermediate term "buy indicator"...Short term I expect a pullback after so many days up. But intermediate term it looks like it turned to up?? Will post chart tomorrow.

Wednesday, July 15, 2009

Today was the day to short...

Large Rising wedge, we retraced the the full amount of the last decline. While the dailies are not overbought yet on the stochs, all time frames below that are.
The vix opened at the previous low then descended below it but finished the day up. VIX up and SPX up doesn't bode well, rising fear in the market as the market goes up. Look for the VIX:SPX to make another trip to the upper BB.

Still more upside possible...

I wrote yesterday that we might have a little more upside...Well, it still looks like we might have just a little bit more. The daily candle sticks formed a hanging man formation which isn't very reliable to call the turn. We have an ascending wedge on the 30m chart, but its steep and still has room left.
VIX:SPX is looking like it wants to revisit the low, which it can easily do in tomorrows session. But from there it should make another trip to the top of the BB. So tomorrow will more than likely be a very good day to short.

Monday, July 13, 2009


Ok, optimally I have it kissing off the 50% retrace and heading south immediately...Basically a kiss of death off the 200ma on the 30 minute. But realistically it could easily make a run for the 61.8% (90.84) retrace at this point.
Now the VIX:SPX really broke down much further than expected in one day. As it has more room to run to the lower BB, I expect there is room for the market to run up. I had 3 orders execute while I was out to lunch today, that I really did not expect to get filled till later in the week.

Sunday, July 12, 2009

Looking for a small bounce still...

This is actually an edit, I was looking at the futures just now and noted there could be a little downside at the open...then I expect a break out of the descending wedge to a fib retrace. The chart shows a 38.2 retrace...but if it takes a little longer a 50 retrace is not out of the question as the green trendline will have crossed it. the green line the neckline or is it the redline? I am looking for a bit of a retrace Monday before further downside. I would not add to my shorts until another bounce. Watch for a break of the red dotted trendline. If that goes there might not be much of a bounce.

Vix has retraced a bit even though we have had down days. I am looking for it to bounce off the 20ma of the BB band before advancing further.

Finally people have become at least neutral instead of bullish. Sentiment is starting to shift. The jobs numbers have been particularly bad.

For the intermediate term, I expect the market to test new lows before the end of the year. We will watch this for the bottom:

Yet another edit. A friend ask me a something on facebook and I went off on a little rant:
I see lots of undue optimism that the people in charge now have already/will solve all our problems. Just on a simplistic level we are running much worse than the "More Adverse" scenario the government had for the bank stress tests. Those stress tests turned out to be fairly bogus anyway as the banks could "negotiate" how much money they announced ... would be needed. Even so, the economic numbers are running much worse...but who now even remembers the bank stress tests? For a good while the news has all been "green" shoots...we saw a bounce in a lot of core numbers and the rate of weekly jobless claims was decreasing, but thats only a bounce. U.S. overall is in bad shape and relying on others to fund its spending...and when others don't come through...we will buy our own debt. The fed is buying treasuries to keep down long can that last?

Wednesday, July 8, 2009

Test of neckline resistance...

Daily stochs are oversold and we held the 200 ma. So its very very likely that we will retest the neckline (green dotted) soon.

Shooting star formed on the VIX:SPX and it just pierced the upper BB. So I definitely expect a retreat here which would correspond to a bounce up in the market.

Tuesday, July 7, 2009

Down trend stronger now...

I expected the market to be a little stronger. A bounce off the green trendline (neckline) back up to 92.50ish area before the collapse below the neckline. Well...the market appears a lot weaker than I anticipated and went ahead and closed below the neckline today. If there is a retest of the neckline, that would be an excellent time to get more short.

Daily stocks are oversold, so a retest of the neckline is probably in order. I maintain my 82-84 target for the low of this move before a sizable rebound.

Again I am looking for the market to retest the March lows before the end of the year. The question is will we hold the low or blast into uncharted territory...

Potential up day tomorrow...

No charts as I am home late. But I am looking at an up day tomorrow to potentially finish tracing out the C up leg of an ABC pattern for wave 2. In other words, looking for a target around 92.50 to 93 on SPY in the next couple of days before rolling over SHARPLY to hit the 82 H&S target.

Sunday, July 5, 2009

Rough week...

This past week has been rough for the market and me! It looks like it is going to continue for the market and lets hope it doesn't continue with me. I will stop posting the BPSPX:SPX and the CPCI:CPCE charts as they have crossed indicating a down market for the intermediate term.

So if 95.5 was the high and now the wave down has started, then if 95.5 was a wave 1 leg down to about 88.85, then wave 3 might be looking at a target of 95.5 - (1.618*(95.5-88.85)) = 84.65.
This is fairly close to the H&S target. Ultimately I am in the camp that says we will retest the March lows.

With such a large VIX spike on Thursday, the potential for a bit of retreat in the VIX is there. So you might be looking at a small bounce up in SPY on Monday, but I expect the ongoing trend to be down.
As the decline continues I will be looking at the following chart to find the low and turning point to go long:
This along with the e-wave count is what I am going to use to pick the turn.