Sunday, November 27, 2011

The week ahead

No matter how you look at it, charts look awful this week. News coming from Europe and around the world is bad, bond yields are soaring, and the markets are tanking... We've filled that gap at ~116 on the SPY, that I had posted last week, and we are quite oversold on many measures here, so I wouldn't be surprised if we get some kind of bounce pretty soon. However, I'm getting the feeling more and more that this might just be the tip of the iceberg in terms of correction... see my weekly chart below:

That is just one possibility... but it's a very possible scenario... Needless to say, I'll be taking a much more cautious stance going forward, and instead of 'counting' on a Christmas rally, I might be looking for some short exposure into the end of the year, especially if we can bounce back up to the area around the 50d MA on the daily chart... And of course, this could all change if there are any futher bailouts or intervention in Europe!

Sunday, November 20, 2011

For the week of November 19-23

There isn't much to say since my last post: we've broken some important support levels and it looks like we're headed lower. We're forming a bear flag on the hourly SPY chart, and I would expect 120 to be tested. The measured move from the breakdown of the triangle is ~115-116 on the SPY, and there's also a gap to fill at around those levels. I'm not sure if we'll get there, but it is possible. The market has been fooling everyone lately, so if it looks awful, it's possible that we rally from here... Last week was looking great, with tons of beautiful setups, and we broke down, so stay on your toes!

A few charts look good, but I'm seeing a lot of broken charts, so be careful this week. It is also going to be a low volume week, with markets closed on thursday and 1/2 day friday. Here's a few of the better looking charts: VHC, KWK, SONS, AFFY, MTG, IMAX, CISG, GTIV, LNG. I have a small position in VHC and LNG already.

Thursday, November 17, 2011

Update on the box

The selling that started yesterday continued today, with a significant mid-day flush! We've now broken the triangle and the box (the box could be debated here, it's borderline), and we're below the 10, 20 and 100d MAs. Things are not looking good for the bulls, and with such a fast move, we could be headed to the 50d or the 120 level on the SPY in no time at all! If we get a gap down tomorrow (3-day selling), I will look to buy some 3x ETFs for a bounce at least. Keep in mind the selling might not be over, as we still have a nice gap to fill at around 117. And look at the increased selling volume in the last few days.

Also, and this is interesting to note, the QQQs broke down significantly as well today, but the IWM and DIA are still within their consolidation patterns. Importantly, the EUR/USD is bear flagging and looks like death and so we could see more pressure coming from the USD$.

Here's one of my favorite charts that is holding up through all this mess: LNG. The company sounds like it's doing well (but I know nothing about fundamental analysis, so don't take my word for it), and the chart looks great. It is in a bull flag on the daily, and on a weekly timeframe, it is setting up to breakout of that 12$ resistance! With a big volume gap above, it has free air up to 25$. Although it's not a good time to be buying anything long-term right now, if I had to buy something, this might be a good candidate... I think building a long-term position in the 10s, with a stop just at 9.90 would be a ecent strategy here, in my opinion.

Sunday, November 13, 2011

Same box as last week

So we're still in that box that I drew last week on the SPY... I'm expecting more consolidation in this range, and I suspect we will eventually break out of this range, probably in time for a christmas rally. I'd like to see us drop down again one more time to the 123-124 area in the SPY, bounce off support on the 100d MA again, and then push higher. If we do, I'll be looking to go long some 3x ETFs for a rally into the holiday season (actually, I'll be looking to short the inverse 3x ETFs, to take advantage of the decay in those).

Also keep an eye on the USD or the EUR/USD. The EUR/USD broke down from a bear flag on the daily chart, and on friday it retested the bear flag support line (now resistance). If this resistance holds, we could see some weakness in equities next week.

There are a lot of stocks setting up nicely on the daily charts. It's still not time to swing trade full size positions, but there might be some decent opportunities nonetheless. Here's a few that I'm watching:

Sunday, November 6, 2011

Week of November 7-11

It seems to me like the market could be putting in a new range for the next few days... Also notice a little triangle consolidation over the last 10 days or so.... this is positive in my opinion... And diven that the pullback last week was quite shallow, I'm expecting the market go higher from here. As long as we hold the lows of the box in the chart below, at around 121, then I think we're headed higher. I've noticed a lot more good looking setups the last couple of days and this weekend, so I've started adding some swing plays in my account. Right now I'm long some MU, MTG, TRGL and SHZ and short some TVIX.

Tuesday, November 1, 2011

Update and targets

After a big gap down today, we closed the second gap that I mentioned yesterday. I'm now looking for the 120 level on SPY, near the 50d MA on the daily... Below is the 30min chart. If we get gap down again tomorrow, below today's lod, I'll look to buy in the area highlighted by the circle. If we open in today's range, I probably won't do much unless we breakout of that range, one way or another. If we gap above the range, I'll look for support near the 123 area to get long.

I covered my FAS short from 2 days ago, for some nice gains today, also took a day trade long in some TNA and short TVIX right at the open. Otherwise, my swings aren't doing much, RENN and MU are back to breakeven for me (only 1/2 size), I added some GNW and took a small loss in YOKU today.