short week

Been traveling to Nebraska today...I put in some market orders for QLD & SSO last night (I also had an order for XLF that I ended up cancelling), as I thought we might have this follow-through day today. I also just now closed those positions, as 1100 points on the Dow in 2 days may lead to a down day or inside consolidation for tomorrow. I'd rather book my profits now, since I may not be able to follow the markets so closely this week.

the bleeding continues

The S&P500 closed under 768, confirming a double top on the index. Trading the SPY this morning was just screaming a test of this 768 level. We tested, but came shy by something like 8 points. Watching the 1-minute chart of SPY we were seeing two things that (to me) were hinting at a reversal of some kind. First was a bullish momentum divergence vs price.Second, was a reading on the TRIN pointing at less momentum to the downside:
By the time price was at the V-bottom point we were somewhere around 7% away from the 50-EMA on the 15-minute chart. The 5-minute chart showed two hammer-like candles followed by a large range green bullish engulfing candle. Price recovered S1, returned to VWAP to consolidate and then moved up to the 50-EMA on my 15-minute chart, tagged it for an instant and turned back around. You can look at the 1-minute chart above to see how the top played out; showing a bearish momentum divergence as price tagged the 50-EMA on the 15-min. chart.

there ya have it

trend to the lows

A gap down this morning in SPY, a quick fill and then down we go to take out previous lows. We've been in a bearish trend all week (well, of course we've been in a bearish trend all year, but that's beside the point) so we were looking for a good spot to get in short provided the trend was intact. We had that signal right before 10:30 after price fell below it's pivot point, recovered, and made a very brief new high before completely falling apart. The sideways consolidation throughout most of the afternoon was very difficult to trade, but price presented two opportunities to scalp short via stabs at the 50-EMA (on the 5-minute chart). At the end of the day, just when you were expecting a rally, price looked to be making a play for VWAP (also corresponding to S1) but just didn't have the demand, and down we went!

blah

Another test of the lows, another rally off of them. Though the ranges of the rallies are getting smaller. Following the same strategy from the last few weeks here's a 15-min. chart of the QLD. Yesterday we had a 20- 50- EMA crossover and shorting retracements have been working. The end of the day appeared to be a short-covering rally so we'll see if price can hold above this 50-EMA.

asleep at the screen

An unbelievably indecisive, choppy session today. Here's what I ended up looking at throughout the day...
- A fun SuperObama game
- A new and improved condom
- The new Blackberry Storm
- What the Depression will be like
- Test drive the new 3x ETFs
- Mark Cuban charged with insider trading
- More people out of jobs
- after 8 years Japan is back in recession
- Goldman execs are such the philanthropists
- Haliburton seeks patent for suing "non-inventors"
- Congress finally getting some balls
- G20 meets this weekend and gets nothing done
- Will the gamblers come once the casino is built?

Also, check out the state our real estate market here in Ca...

decimated

Flipping through charts this evening and just had to post what I'm looking at, for posterity sake. What we're going through in the markets right now is just complete decimation of stocks as an asset class. I know plenty of people that are holding a lot of these stocks in their retirement accounts, and have probably held them for years, with barely a worry for them getting to the levels they currently inhabit. Take a look at some of these issues:
Let's start off with GM on a monthly chart...GE, recently fell through what should have been strong supportKO approaching decade-long supportJNJ, will it fall off the cliff it's standing on?CLX, we all need bleach
GS, all-time lows 17% away...MA weekly chart...looks like a bear flag to meHow long before we see $20 on RIMM

Uturn

Following up on yesterday's look at QLD; at the close of the day we ended up with a 20- 50- EMA crossover and with that I was looking for a retracement move back to the 50-EMA.
The retracement coincided with a 50% Fibonacci level measured off of yesterday's high to low move. A rounded bottom ensued, broke out, closed the gap from the open and then just ate it into the close.

some news

Here are some headlines from today...Is all this news "priced in" ??
- foreign trade slows (but along analyst expectations, and not factoring in the recent strength in the U.S. Dollar).
- government deficit soars to $237.2-billion; $5-billion more than estimated
- jobless levels approaching the highest levels of the 21st century: "Excluding the $21.5 billion investment in Fannie Mae, Freddie Mac and the $115 billion investment in major banks."

confused

I spent most of the day confused as to what was going on in the market. Confusion is not a good state of mind to be in when putting money at risk, so I didn't. Just when I thought the rally was fizzling it retraced before continuing into the end of day. Is that our stupendous bottom?
Anyway, take a look at a 15-minute chart of QLD over the past week.We had a 20- 50-EMA crossover that gave us our trend to the downside. Throughout the course of the trend we were given a few opportunities to go short, or add to a short position at either the 50EMA or the longer term cycle moving average (thicker red line). Notice how today we hit the longer-term red moving average, got a gravestone doji and sold off, only to come roaring back to close above the MA. We now have a 20- 50 EMA bullish crossover taking place. Healthy behavior would be to see this market consolidate to allow the averages to catch up before buying the dips.
The volume on QLD today and the Nasdaq was strong, but didn't seem capitulation strong, in my opinion. But I guess, in relative terms, it could be plenty to feed more buying from those not wanting to be left behind.

{update} on second thought; look at this candle formation for today on the S&P...a lot of strength in that candle.

Here's a look at the Dow....I don't have the S&P volume chart available at the moment.

testing lows

do we get a rip your teeth off rally, or continue the slide? It's getting hotter.

trend day

A trend day to the downside, what more can be said? It doesn't feel like anything is on anyone's buy list at this point, aside from inverse ETFs. Well, here's today's strategy; sell (on QLD, buy on QID) the vwap, 20EMA, or a green/red candle for that matter. Here's QLD on both a 5-minute and a share bar chart that is supposed to mirror a 5-minute. It's a lot cleaner using share bars with those smooth pullbacks to vwap (red dots).Here's the share bar chart:Here's a look at QID:

classic

Thanks to Stewie for the link. I could never get enough of Jim Rogers....I love that he pulls out gold from his pockets. Only guys with bowties walk around with $700+ coins in their pockets!
"Abolish the Fed"

The Global Dow

The Global Dow began today. Among it's features:
- Stocks selected by senior editors of the Wall Street Journal in 3 major global regions
- Contains 150 stocks weighted equally
- All 30 Dow industrial's are included, as well as some from the DJ Transportation and Utility averages
- Covers both developed and emerging markets
- includes companies from emerging sectors (alternative energy)
- a list of the holdings are here
- fluctuates closely to the DJ Wilshire Global -- 0.99 correlation over three years (underweight in the Americas; 42% vs. 46%, greater emphasis on Europe; 32% vs. 27%, Asia/Pacific is slightly heavier; 21% vs. 20%
- Within 10 major industries it is underweight by nearly 4% in Financials, 0.6 of a point in Oil & Gas and 0.4 in Telecommunications. It is slightly overweight in most of the remaining seven. Technology is the biggest with its weight of 10.4% being 1.4 percentage points more than in the DJ Wilshire Global.
- Through Oct. 31, it is down 42.16% on a total return basis, compared with 40.69% for the DJ Wilshire Global

gap fill

For the sake of having something happen today, we attempted to fill the morning's gap.
We had a subtle Head & Shoulders bottom pattern (in QLD) take shape today in that mess of choppy tape. The neckline broke out solidly, retraced and held as support before running for a gap fill attempt. The retracement to the neckline of the inverted H&S also coincided with a 20/50-EMA crossover.
After the volatility expansion we had another Head and Shoulders pattern evolve, on the bearish side this time (which could allude to more downside for tomorrow).

F-bomb

What to do in a market that chops sideways for 3 hours? YouTube!

QID

Long QID today...watching for the 20/50-EMA crossovers and buying the pullback. I'm messing with loading the pre- & post- market data into my charts which give sooner entries (but could perhaps lead to whipsaws on choppier days).
Here's the entry using 24-hours of market data:

reading

An interesting Sunday read in the NY Times magazine section; After the Imperial Presidency.
“Decades from now...historians will look back on the period from 9/11 to the present as an era of unbridled executive power and Congressional ineffectiveness.” -Arlen Specter

Follow-Up

A very volatile end to the day as the market stayed within yesterday's range, leaving us with what appears to be a bullish Harami pattern on the indexes (which doesn't mean we won't still stay within the channel the markets are in).
Here's the concluding week in QID to follow up from yesterday's strategy post.
We did get a 20/50-EMA crossover early in the morning. Price pulled back from the sell-off leaving three long upper wick candles where a short entry was entered just below the 50-EMA. The move from that point was very shallow, coming shy of testing the lows of the day. Price consolidated sideways for the rest of the afternoon until just before 3p.m. where things got very volatile. As you can see, the Moving Averages crossed bullish then back to bearish by the close of the day. Come Monday we might look for a pullback to the moving averages and if price can't recover we could see a continuation move to the downside for QID (which of course is short term bullish for the Nasdaq). Taking a look at the Nasdaq Comp. things can really go either way from this point. The volume on the day was pretty lame, but the selling in the Q's today was defended successfully.

Grinding Sideways

A low-volume sideways day waiting to see if we get the 3 p.m. sell-off/rally? In the meantime; here are some reads for the day on the state of our economy.
- U.S. unemployment rose to the highest level since 1994 as 240,000 more jobs were lost in October.
- GM shaking-down taxpayers for another $25-billion. I say let 'em fail!
- Here come the tax hikes and service cuts for us in Kahleefornia.
- Just like an episode of 24...except with a couple more zeroes.

Keeping it Simple

Here's a way of keeping things simple in these crazy markets. It's just a moving average crossover strategy that's been working pretty well lately. While a moving average crossover system is technically a "trend-following" approach, this is Day Trading! And as such, within a 5-minute time frame we can easily have a trend develop a few times within a week on this time frame. So, we're looking at a 5-minute chart using a 20- and 50-period Exponential Moving Average. We wait for the moving averages to cross, and then once price pulls back from that cross we initiate a trade in the trend direction.
The following chart is of QID. I actually meant to use a chart of QLD, but then discovered it was QID and just left it as such. It just shows that it can work whatever the issue is you choose to trade. Here I go back 5 days to show you where the entries were initiated.
Starting with October 28th:Things got choppy on the 28th, 31st, and 3rd. This IS an Ultra ETF in a volatile market environment, regular stocks might be a little more straightforward. More chop before the trend developsThe two EMA's are approaching and the trend might be decelerating. If the cross develops remember to wait for the pullback!

We Have a Winner!

A pretty cool look at our countries election results from the nytimes.com. Pretty fascinating that it seems wherever there is a major University and/or major city votes went to the Democrats. Take Nebraska for example. They had 4 counties out of 94 that went to Obama, the rest running away with a McCain vote. It's also fascinating that California's counties that went to McCain were all in the central valley (in other words, rural and agricultural locations). Fascinating maps they have there at the nytimes.
I'm not feeling very good today, so I'm staying away from trading.

married

I'm officially married as of last night, Monday November 3.
I was honored to be married to a sweet and beautiful woman that has been the most supportive and caring influence in my life. She has helped me to grow in ways I could never have imagined and I am thankful for having her in my life all these past 6.5 years. She is the light of my life.
We were married in one of the most low profile ceremonies in the history of weddings.