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.

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:
ALR, AMKR, CIEN, GNW, HLIT, JDSU, NTCT, S, VHC, VMW.

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.

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.

Starting up the blog again

After some time off from blogging, I'm coming back to it and will try to write a weekly post with some thoughts.... for now, here's a chart of the market. I'm expecting a little correction, at least down to the 38% Fib of this recent move up, and this also coincides with significant volume at price. On the 30-min chart, you can see the unfilled gaps... I'm thinking we might close 2 of those gaps, but we'll have to see...

Right now, I'm short FAS, long RENN (took 1/2 off already), long TRGL, long MU (took 1/2 off already). There are quite a few nice looking charts out there, but I'd rather wait for at least another pullback day, ideally a total of 3 pullback days before looking to add any long swings...

Chatroom

Hey, I'm testing a new free chatroom... click on the chatroom link on the right if you would like to check it out!

Week of May 2nd

I haven't written in a while, so I'll start with a review of the market. I was expecting a little cup and handle pattern in the SPY, and was getting pretty long about 2 weeks ago. We put in more of an inverted head and shoulder pattern, rather than a cup and handle, but the psychology of the consolidation and the expected move is basically the same.

For this week, I'm expecting a slight pullback or a sideways consolidation to digest the recent fast run that we had from ~129 to ~137 in the SPY. After that, I'm expecting the market to continue higher, and my target to take more profits off the table is ~139-140. The NYMO was pretty overbought coming into today, so it should come as no surprise that we had a small pullback. The Osama Bin Laden news provided a nice gap this morning, and I sold partial positions into this gap.

I have several long positions, and I added back at the end of the day some of the shares that I sold this morning. All in all, I'm long some FNSR, FTK, LNG, WNR, WPRT, and added PANL and OVTI as well today. I'm also short some TZA from a few weeks ago (which is the 3x short ETF for the IWM): basically, I am long the Russell index...

One of the swings I added today was PANL. Although it broke out of the triangle today and couldn't hold the breakout, it is still consolidating nicely inside a flag pattern on the daily. Also note the decreasing volume inside this consolidation, and the strong volume on the previous up days.