• Home
• Our Mission
• Recent Opinion’s
• Disclaimer

Subscribe

Market Update: Trend Break

What we have here today I believe is simply a trend break. This is going to be a difficult day to predict as we still have zero firm lows of any kind. My guess is this will be a temporary move and a rejection of the highs seen will likely come probably Monday or Tuesday. Tuesday ideally. As far as today, the intraday chart should dictate this as it is not a close day. We would likely have to significantly get below yesterday’s low to cause pressure as this would break the trend line.

If this trend break is going to hold today, we should give a strong reversal above today’s low. I believe this move today should be limited to the upside, most likely. The chart says it is far too early to take this up with any confidence at all and we have no lows below.

The problem with parabolic moves, in either direction, like we say the last two days to the downside is there are zero firm lows and zero firm highs. Yesterday was all trend, no rejections. So there is no firm low and no firm high - until one is created. This will likely trade on sma lines and i despise that type of a move, as I often mention, because once they reverse, down she goes.

To keep this simple, this trend break suggests the trade is long above yesterday’s lows. I think it is as simple as that. If we get much below yesterday’s low, we may see panic. This is why news is not that important, in general. Should we be going up today with brutal news? No way. Does it matter? No.

Morning Call: Futures Down, Close Day

Today will be a close day as the futures are down this morning after more bad economic releases and warnings about retail sales. Why anyone is long retail here is beyond me. Anyhow, this is will be a close day and my readers know what means - close volatility is likely. Watch this gap and see if it is bought or sold. If it is sold, the market is clearly in trouble today. If the gap is bought it will make this a bit more complicated as the moving averages will want to force this lower early on. I personally would be a bit skeptical if we reverse today, but it is possible. My guess is traders want to get far away from 1000 on the SP here. 9350 and 980 were lids on the market for 3 hours yesterday. Those areas will likely be key today if it attempts to reverse.  We will see.

Market Recap: My Noon Call That We Had Not Seen The Lows Was On The Money

It was somewhat of a difficult day, especially early on as it continued to try and reverse on every new low because of support and moving averages. Once I saw that the early low had been taken out and we bounced higher without a firm low, I smelled trouble and posted to “sell any and all strength here”. I also said near the open that “if we were going to see pressure it would likely come late - depending on where we are”. That proved also correct as we traded essentially sideways for 3 hours. This action normally spells trouble and I mentioned that I did not like this sideways action and normally leads to another leg down late once the moving averages catch up. This is basically what happened. Once the support and moving average traders could not reverse it, down she went into the close.

Again, when you see no firm low on selling pressure, like today, and then sideways action after a drop, like today, and the moving averages are above  - it normally is trouble. It tells me that traders are waiting for the moving averages to “catch up” to the down move and take it down more. If they wanted to reverse the selling today it should have come earlier in the day - when the moving averages provided little resistance. Once I saw sideways below the moving averages above for 3 hours, I thought big trouble was likely late and we got it. This is why i said “if we are going to see pressure, it should come late”.

Tomorrow may get very volatile depending on where we are at the open. If we spike lower here, it is a “close day”. I would like to see a rejection of some hard selling and a reversal, but I am very skeptical it can happen tomorrow. Many moves last 3 days, but this is not required for tomorrow because of the size of the drop today. If we open slightly higher tomorrow, I would be very skeptical, at best and early strength is likely to be sold.

What other free site will come out and make a stand that “the lows have not been seen”? None. You normally have to pay to understand “the game”. The market dropped nearly 300 points after that call. I am not always right as everything always depends, but I did call that we were going lower. How low was the only question.

Morning Call: Election Over, News Should Dictate Again, Today Is Intraday Chart Day

I believe the election trade is over and done. I mentioned that I believed that both Monday and Tuesday were likely to be very similar to “fed days” where the shorts stay on the sidelines and the trade becomes one sided to the long side. This is essentially what happened. Now we will see the true resolve of the market.

The chart appears likely to contain any selling early on today. If we are going to get pressure, it would likely have to come later and that will depend on how long we stay down and how low we go. This is because these moves have been strictly sma driven and there is no clear number to be long this, as I see things. The intraday charts should dictate today’s action. Unless we clear yesterday’s high, it is not a close day. And we would have to go below 950 and reverse to make it a close day to the upside. Therefore, this is an intraday chart day.

Tomorrow is likely to be the key for direction, not today. We have nonfarm payrolls tomorrow as well as unemployment. Both are very likely to be ugly. If they want to take this higher, they need to spike it below 950 tomorrow and reverse it. If that happens then the market would likely have a new tradeable low to make another push higher. Keep in mind I said “if”.

11:25 Update: The Dow and SP charts are not in sync here. The Dow has not put in a low or high, but the SP has done both. It rejected just over 1000 a bit ago, and caused this selling. 985 should contain the selling on this leg down I believe. Look for it to reverse above it. If it doesn’t hold, then it is possible we may see another spike down, but it is too early in the chart to really put the heat on here.

Morning Call: Futures Way Up, Election Day Nonsense

Not sure what to make of this open other than it is election day and I mentioned before that I believed that it would be like “fed day” and the shorts would likely remain on the sidelines until we see the reaction after the election. Futures are way up this morning on basically nothing else. Make sure this open higher is bought here as other than the election it makes no sense. The news has been very ugly and getting worse. But the markets generally do not let facts get in the way.

Five minutes before the bell, the SP is set to open at about 986, up 17, and the Dow up 154 at 9486.

As I have long mentioned the markets have little, if anything, to do with economic reality. It is supply and demand, nothing more. My favorite line is, is AAPL worth $180 or is it worth $85? We have both prices on the board within 3 months. Like I have said a million times, it doesn’t matter. Reality has nothing to do with anything because reality is determined in the market, not the other way around. Normally I would smell some serious bs here and think they would use this open to sell into - but the election. We will see.

We have to clear 9924 on the Dow and 1044 on the SP, both of which should not be challenged today. Therefore, this may be a one and done day. This will be a close day and we would normally see volatility into the close, one way or another. Whether this will play out on election day, I am not sure as it may be another very low volume day as yesterday was.. If we did clear both of those today, which seems exceptionally unlikely, then we would almost certainly close at the high of the day.

The only thing I see that would move the markets here, if not the election bs, is that I said Friday that the moving averages that I watch were on a collision course and the markets would have to break one way or another when they did. The hourly sma is just under yesterday’s low and the daily just above Friday’s high. Therefore, i expected the market to break one way or another here - as it has no choice but to decide.

Morning Call: Futures Down, Economic Data Out at 10:00 EST

The futures are down a bit this morning. Thirty minutes before the bell the Dow is down 112. I mentioned that key sma support is coming and that a big gap down could be bought. However the size of the gap is not enough for that to come into play and intraday charts should dictate today. The key I believe is still taking out Wednesday’s low to maybe get some selling pressure here. If we break below that low we would need a reversal to keep contained the selling i believe. As I have mentioned before, there are zero reversals down below and why I have mnetioned this move is a complete house of cards waiting to tumble.

Intraday charts should dictate but I believe being long today is going to be difficult if we clear Wednesday’s low. We have Chicago PMI and MI Sentiment out at 10:00 EST. I would be shocked if the sentiment index isn’t far below expectations. PMI will likely be worse as well. PMI will likely move the market as I think everyone already assumes the sentiment will be bad.

Update: The futures have improved a bit. Keep in mind, even if we clear Wednesday’s high, we could still reverse. If we clear it then today will be a “close” day, and it may get very volatile into the close again. If we clear Wednesday’s low, it is not a close day, but I expect pressure if that happens. We will see. In addition, it is the last day of the month. I do not pay much attention to the monthly charts, but if we close here, the trend is clearly down for November and the trendline is about 1050 on the SP. To break out of that line, we would need a huge rally today.

Open Update: We only opened down a couple of points, so the open is not meaningful. If we cannot break down soon, the sma lines are coming. Normally this sideways action with sma support on it’s way leads to another push higher. I just do not like long this train wreck as we have nothing to stop any downside other than sma support.

Morning Call: Open Sold

Well, I said last night that traders have a firm number to short the market now, yesterdays high. Where did we open? Up huge, just under yesterday’s high. It was a suckers move. The open was sold and down she goes. Only a 250 plus drop from the open, but still there was no reason to be long that open as I gave people the number last night. The key is probably yesterday’s low to get more downside here. We need a reversal to be long this today and even that is most likely a scalp.

Staying up here is important however. Key sma’s are slowly catching up to the huge move higher. Those will likely be support to the downside soon and give traders something as a target for any weakness. They are about 8700 now and will be higher before day’s end.

Morning Call: Fed Day And Parabolic Move Means Uncertainty

Well, I missed yesterday’s rally as it took me, and most likely everyone, by surprise. An article yesterday said that normally a huge rally would have had huge cheers on the floor but yesterday’s close was greeted with mild applause. Why? Because they didn’t see it coming and traders likely believe it was not “warranted”. It was short covering that got out of hand, IMO.

What happened i believe is once we cleared Friday’s high it triggered buy programs and it skyrocketed. This is similar to what happened in 1987, but in reverse. In 1987 the crash was mostly the result of program trading that got out of control. Every new level it triggered more “sells” and nobody could stop it. Much of this has been prevented since with “curbs” put in place when markets fall too much. Basically, this means that programs are cut off. However, curbs are only placed to limit downside moves, not upside.

At any rate, I personally believe this rally like not at all. The problem with these moves is that they create a vacuum for the market to fall just as much. There are zero points to stop a fall at any point from yesterday, as I see things. This creates more uncertainty going forward - and more risk. This move would likely have more legs if it has taken several days - not an hour. It is a parabolic move that can also create the same in the other direction. Therefore, I believe traders were furious with the move and were very frustrated at the close. It just dramatically increased their risk and uncertainty.

For today, if we clear yesterday’s high - it will be a “close” day. Meaning that the close is all that matters and if we are decidedly negative into the close, selling is likely to accelerate. These days are very hard to predict and the Fed meeting will likely make this impossible to trade.

Morning Call: Futures Up

The market is set for a rebound as asian markets have put in at least a trading low. The Nikkei rebounded last night after spiking to a 26 year low to close up over 6%. And people think our markets have been bad - 26 year low. This move is not surprising as we are just above the lows and traders have a firm number to be long and the Fed meets. The only question is can this last after the Fed - that I am not certain of.

Today is likely to be a very difficult day to trade. We have Friday’s high on the SP that needs to clear to be long this big move higher and nothing to the downside to stop any move lower late - again. This is likely short covering and buying ahead of the Fed cut. I do not like moves like this as they can create parabolic moves to the downside one they turn south again.

10:00 EST Update: Consumer Confidence comes in at 38 - the worst level since the number was reported beginning in 1967. I am shocked at that, like not at all. Lucky the Fed is cutting tomorrow or the shorts would rip this thing apart. I am not certain of the “true” open, but I think the true open has cleared. That tells me we may check down further. The only thing saving this today is the Fed or we would test going negative, for sure.

Market Open: Gap Down Was Bought - But

The gap down was bought and has risen since. That trade is over as the gap has basically filled. I do not like this action. This is the third time the lows have been tested, and therefore buyers will be exhausted down there soon. That tells me the odds of a new low on the SP is reasonably high. This is going to be a difficult call today as on one hand we have to close above the open to have meaning, on the other hand I smell a false bottom even if that happens.

For today, today’s low is likely critical on these gap days. If it clears, especially into the close, there should be panic. Dow 8165 is what is holding us here and caused buyers there today and today’s low is on a downtrend line. I am skeptical - at best.

In addition, yesterday’s buyers at the close are getting hammered for doing it. Therefore, I doubt we will see that nonsense today.

« Previous Page — Next Page »

Our Mascot Trading Goal: Ferrari 599



Other Investment and Trading Thoughts

• Recent Commentary

  • Site Update: It Has Been Fun, But Closing It
  • Morning Call: Open Sold
  • Market Recap: GM News Was Not Really A Deal, Dow Low Cleared Late and Down She Goes
  • Morning Call: Open Sold, Dow 7773
  • Market Call Revisited: Sell Asia
  • Market Recap: Not Good
  • Market Update: Doesn’t Look Good, 818 and 826
  • Market Recap: Buyers Above 818
  • Morning Call: Open Gap Bought
  • Market Recap: Buying On A Big Number, Now What?
  • Morning Call: Still Uncertainty
  • Market View: GM Holds The Cards
  • Stock Charts VS Market Charts
  • Market Recap: Somewhat Predictable, Low Came Where I Said Was Likely
  • Morning Call: Unclear, Risk Is High
  • Huge Rally: Now What
  • Market Comment: Does News Even Matter?
  • Market Recap: Close Day Craziness

Copyright © 2007 StockBlade.com · · Login

\