bloody February

Eventually we'll have a rally, right?
The Dow and S&P closed under monthly levels not seen since 1997. Nasdaq is holding on though, but looks to want to test those '02 lows.
There was nothing of interest for me today, as the tape was an utter mess. There was a similar play on FCX that was along the same methodology from yesterday's post. March should certainly come in like a lion come Monday.
Here are the monthly charts:
DJIA
S&P500Nasdaq Composite

so much for a rally

For the first half hour this morning, the two strong sectors looked to be energy (XLE) and materials (XLB). Plenty of things gapped up today, but these two sectors held on after the first half-hour. So, playing off of that I looked to FCX (as a play off of XLB) and OXY (as a play off of XLE). Both stocks ascended into a base and broke on strong volume, much in the same way their respective ETF's performed.

Things of note from the start of this morning, the NYSE TICK was mostly positive for the first 90-min while price in SPY didn't get beyond yesterday's highs (also R1).It was all bearish breakdown after 11am once not being able to hold R1. Price spent a lot of time chopping around Pivot support before finally breaking down.We're back to a bearish stance on our 15-min perspective.While on a longer time frame (here being a 9-min SPY chart) we cracked an ascending triangle pattern.

double bottom

Price immediately sold off this morning on weak TICK performance, and somewhat expected relief from yesterday's excelerated expansion late in the day:right down to the 61.8% fib retracement between Monday's low and yesterday's highs (also correlating with yesterday's open high range; white dots on chart above). Price moved back up to pivot, formed a gravestone-like doji on the five minute and moved back to test the lows again:On our 15-min chart the 20- & 50-EMA orientation worked itself out to be short-term bullish, so we'll see where we go tomorrow from here, looking to buy dips tomorrow, unless things tank right off the bat. The closing sell-off could have been a blessing in that price doesn't have to travel far to test any solid support:Of notice today, and one of my favorite set-ups, is the prevalence of the "W" pattern (also called double-bottom patterns). The idea is to buy a break of the W's middle apex. Here's what today looked like in SPY on a 5-min.These patterns showed up all over the place in today's tape.

harami

The markets closed inside their previous day's range, creating a bullish harami candlestick pattern. Not an entirely reliable candle pattern, so it requires confirmation for us to lean temporarily bullish. Perhaps whichever direction the market goes tomorrow, it will be accredited to Obama's speech this evening.Looking at the 15-min chart of SPY that provided a short opportunity with a quick tag of the 50-EMA, which eventually brought price back down to test the lows.
Price put in a higher low before turning back to the opening range and pivot point (yellow line).The third attempt at our pivot line was rejected, but vwap held and the NYSE TICK was trending up, leading up to a decisive break of pivot; next target, R1, where we consolidated around, popped over and closed on.Cleaner perspective on the 20-point range bar chart.

just the necessities

Aside from a couple 50-lb. bags of rice (and beans), what else could sustain you through a global economic meltdown? Well, Guns and Gold of course. We know what gold has been doing lately, basing at the $1000/oz highs, while also spurring things like this hock-your-gold-jewelry tupperware-esque party. Take a look at two gun manufacturers.
SWHCWill Smith & Wesson break the trendline and make a play for the 200-EMA? Volume has been intriguing and initial resistance would be around $3.30, but after that a run to $4.25 could be in the cards.
RGR See if Ruger could hold above the 200-EMA and trend-line break, while perhaps inviting a 50- & 200-EMA crossover.

6-k here we come

A slow bleed all day long, pretty sad. The Dow closed below it's October '02 lows, it will be pretty crazy if we don't get a solid bounce here this week. The Nasdaq led the way down this morning, if you weren't short early on, another opportunity presented itself in the late afternoon with a pullback to the 20-EMA on the 15-min chart.The pressure's on for the S&P500 tomorrow. We're very over-sold (whatever that means) and a lot of people would like to see a rally to work off that over-sold condition and re-load on shorts. While at the same time, a PPT intervention/short-squeeze could give a lot of double-bottom-ers reason to buy in (with a hammer candle on large volume).The more I look at these three indexes I could quickly envision tomorrow (or wednesday) being a very volatile day, with a snap-back rally once the Nasdaq approaches 1290.I think a lot of people will be nervous at these levels and quick to cover their shorts or get long at the first sight of large range bar with strong volume. Then you'll get a lot of the TV prognosticators telling us the double bottom is in and it's a great time to buy.

tete a tete

what a week

It sure looked like we were done for in today's market. Everything was lining up; GM was down to $1.60 (slipping below $1-billion market cap), GE on it's way to sub-$9, XLF breached $7, BAC below $3, and then BAM!! PPT to the rescue! PPT, short squeeze, bear trap, whatever you want to call it, a sweeping rally closed the gap in SPY within 30-minutes.
The SPY (5-min chart) presented a short opportunity once it breached it's "M" (double-top) pattern;while at the same time FAZ presented a similar long opportunity once breaching it's "W" (double bottom) pattern;The Q's was very stubborn this morning and the first to fill it's open gap within the first hour of trade;Here's a 15-min chart on the SPY; nice how the first big "PPT candle" ding's the 50-EMA twice! before retracing;The U.S.Dollar index is approaching a critical mass come next week; pop or flop??
SPY, lowest close (on a weekly basis) since week of April 25, 1997

delicate

It's a very delicate situation as we creep down to multi-year lows. We see, and should expect, short-covering rally's right around key support (new lows, previous day's low, pivot points, etc.), with continued selling at key resistance. The Dow is just points away from the lows made in November, while the other indexes seem to be taking a wait and see posture regarding whether they will accelerate to the downside.SPY orientation is bearish; price closed on the lows, with realistic support being back down to November's low of the $75 range.Today's gap up was met with selling consolidation on vwap over the course of the first 45-minutes, afterwards it was all down with opportunities to short returns to vwap.Here's a 10-point range bar ($0.10) of the SPY with the yellow dots indicating volume breakouts.and a 20-point range

SRS

I was watching SRS today; took one trade (at the 11:30-hour), though should have taken two (after vwap held for a second time). Anyway, the first thing that intrigues me with SRS is the increased average volume in the course of the year to date, while price has been stuck in a relatively narrow range. At it's peak (11/21/08) SRS reached just over $270 trading on 7.9-million shares. While as recent as last week it traded at $61 on 32.6-million shares.Some days SRS is sloppy and all over the place, other days it can have a clean trend with a lot of profit potential for a day trader. Currently the moving averages (15-minute chart 20- & 50-EMA's) are in a bullish orientation; leading us to take notice when price pulls back to test the 50-EMA (as it did today on a gap-down). Yes the 50-EMA can be overshot on gap-down opens and end-of-day selling, but that's even more reason to pay attention and look for a reversion to the mean.So, here's a look at today's 5-minute chartFor a cleaner perspective, here's a look at a 50-point ($0.50) range-bar chartOr, better yet, here's a 100-point ($1.00) range bar chartThis is a tricky trading vehicle, it's very sensitive to the broader market sentiment, so as the market tanked at the end-of-day SRS accelerated to the highs.

some links

-Two diametric opinions...the wishful thinking? and the perhaps a little more knowledgeable?

-More idiocy from the people who run our country.

- There's a (new) whole section in newsflashr dedicated to Gold and the Dollar!

- After three months California finally has an approved budget. Some of the ingredients include:
-an elimination of Public Safety Grants (a decrease of $23.9 million, b/c who needs the petty "Rural Crime Prevention," "Methamphetamine Enforcement Teams," "Sexual Assault Felony Enforcement
Teams," etc.).
- An increase of $3.3 million General Fund and $2.5 million special fund to address problems caused by overcrowding in the Sacramento headquarters building. Those poor babies.
- Flavored Malt Beverage Taxation - "regulations that require flavored malt beverages to be taxed at the distilled liquor rate of $3.30 per gallon, as opposed to the beer rate of 20 cents per gallon.
- An increase of $17.1 million Emergency Response Fund via a 2.8% surcharge on all residential and commercial property insurance statewide.
- Comprehensive Healing Arts Board Fingerprinting Program — An increase of $5.8 million to fingerprint and conduct background checks for all licensees of the Department of Consumer Affairs healing arts boards to enhance consumer protection. I have no idea what this is all about.
- I love this...Prop 42 initiated a temporary 1.5% increase in sales tax, but due to "economic conditions" revenues from this proposition have declined since '08.
- An increase of $12 in annual vehicle registration fees.
- An increase of $11 million Motor Vehicle Account for production of
the new driver license/identification/sales person cards that will require a $3 increase
in driver’s license fees.
- $140 million from federal funds in 2008‑09 for local governments to rehabilitate neighborhoods with abandoned or foreclosed homes.
-General Fund expenditures are proposed to decrease by $1.025 billion in 2009‑10, or
3.3 percent, "significant reductions necessary to address the state’s fiscal shortfall" a theme expressed throughout the document.
- A decrease of $50.8 million in 2008‑09 and $668.7 million in 2009‑10 for various eligibility and benefit changes in the Medi‑Cal Program.Really though, it can't be easy to shrink a $42-billion deficit, can it?

Ug...

...ly...An unbelievably nasty market environment today. Choppy and messy, with the late afternoon jumping around sideways. After 1p.m things just became a mess. Price rallied late in the morning back up to the open (coinciding near Pivot Point) where selling ensued (similar to yesterday) take note of a bearish divergence. After going short here you were whip right out of a position with the nastiness that ensued right after 1pm.Though, if you were basing your stops on a 15-minute time frame you may have endured

range

Not much to say about today's tape. Strong gap down (all the way to S3) and sideways all day long. As price attempted to trade beyond the morning's highs throughout the day, it was quickly sold. Trend lines were breached, the Dow is almost 100-points away from the lows, the dollar is back to testing near-term highs, and we closed on the lows of the day. A sad state for these markets (not to mention our economy as a whole).
Here's today's dull range for the SPY, only thing to do to avoid boredom was scalp the fast time frames...A more apparent strategy for today was to short the test of the opening high range (that also coincided with a 20-EMA on a 15-min chart.b-bye Nasdaq?A full Marubozu candle at the lows of the Dow; not a good omen.look out below!