Price is awfully choppy these days. Maybe next week will kick-start some momentum.
Tuesday, June 30, 2009
last day of June
Today was nearly a mirror image day of yesterday. We gapped up and failed $93, price filled the gap and returned back to a previous consolidation range. Being that we gapped up and price returned back to the PDC a short scalp was in play and turned over a better result than it did yesterday. The remainder of the day was spent in a sideways chop.
Price is awfully choppy these days. Maybe next week will kick-start some momentum.
Price is awfully choppy these days. Maybe next week will kick-start some momentum.
first cross sell?
An interesting development is taking place in the SPY. The slow line on the 3/10 oscillator (known as the "stability of trend" line) has crossed into negative territory. Provided we don't have a really into the end of the day (anything can happen), today's close will give us a "First Cross" sell signal on the Daily time frame.
For previous posts on the First Cross method you can go here.
Leaving aside the First Cross strategy, let's just look back on the oscillator to when the slow line has crossed negative and what developed from there. Going back to April of '07 we had 7 occurrences where the slow line crossed zero to the downside (not including the current instance). These are marked with a vertical line on the chart below, and you can see what followed from each occurrence.
This doesn't guarantee anything of course, though it is a statement towards the weakening of our "trend" that has been in place since March. As you can see in June '07 we had the slow line cross negative and we did get some downside, but ended up coming back to test previous highs. It is worth noting how drastic the break-downs have been following a new negative stability of trend reading. This counter-trend rally has put in successively lower momentum highs, and lows (momentum precedes price), and more recently registered a new momentum low (lowest since March '09).
Not out of question is the slow line coming back into positive territory, however, we would need a fairly sizable rally to get us back to that position. The kind of rally that would take us at or above our most recent highs. Again, a possibility, but the path of least resistance isn't supporting that probability at the moment.
I've highlighted price action after the most recent negative slow line crossings. The most recent (January '09) resulted in a relatively sideways chop before falling lower.
For previous posts on the First Cross method you can go here.
Leaving aside the First Cross strategy, let's just look back on the oscillator to when the slow line has crossed negative and what developed from there. Going back to April of '07 we had 7 occurrences where the slow line crossed zero to the downside (not including the current instance). These are marked with a vertical line on the chart below, and you can see what followed from each occurrence.
This doesn't guarantee anything of course, though it is a statement towards the weakening of our "trend" that has been in place since March. As you can see in June '07 we had the slow line cross negative and we did get some downside, but ended up coming back to test previous highs. It is worth noting how drastic the break-downs have been following a new negative stability of trend reading. This counter-trend rally has put in successively lower momentum highs, and lows (momentum precedes price), and more recently registered a new momentum low (lowest since March '09).Not out of question is the slow line coming back into positive territory, however, we would need a fairly sizable rally to get us back to that position. The kind of rally that would take us at or above our most recent highs. Again, a possibility, but the path of least resistance isn't supporting that probability at the moment.
I've highlighted price action after the most recent negative slow line crossings. The most recent (January '09) resulted in a relatively sideways chop before falling lower.
Monday, June 29, 2009
weak day
We did about as much volume today (third lowest volume day of the year, the second lowest being Friday's) as we did on Friday, with a little juke move in the morning that was fun while it lasted.
After gapping up on the SPY this morning price eventually worked it's way back down to the PDC where a short scalp was in play (target the lower keltner channel band). The lows on the TICK weren't very extreme after we put in our little double bottom where we quickly turned around. The highest probability entry was in waiting for the little flag to set up where we got stronger volume taking price higher. After that was just a mess.
We're sitting right on in a previous consolidation range
OK, Treasuries are ready to go lower from here, right?
After gapping up on the SPY this morning price eventually worked it's way back down to the PDC where a short scalp was in play (target the lower keltner channel band). The lows on the TICK weren't very extreme after we put in our little double bottom where we quickly turned around. The highest probability entry was in waiting for the little flag to set up where we got stronger volume taking price higher. After that was just a mess.
We're sitting right on in a previous consolidation range
OK, Treasuries are ready to go lower from here, right?
Sunday, June 28, 2009
note to self...
....after a trend day, look to use the last hour's high/low (of said trend day) as support/resistance. So, following a day in which price trends up, I will look to buy a return of price to the last hour's lows. Following a day in which price trends down, I will look to sell a return of price to the last hour's highs.
Case in point; most recently this past Friday on the SPY:
I'm using 15-min charts to give the big picture. Entry will be timed on a lower time-frame. Also, keep in mind, trend day's are usually followed by narrow-range consolidation days. With that in mind, these could just be scalping holding periods.
So, on a smaller time frame, perhaps I would be looking to buy at those lows, while my target may only be a return to the 20-EMA (or bollinger band or keltner channel mid-line), perhaps taking half at the MA/mid-line. Being that post-trend days are typically choppy and/or narrow-range consolidation day's I'll have my scalping hat on, therefore these will be small plays of buying those lows/highs and covering at a mid-range value line.
Case in point; most recently this past Friday on the SPY:
I'm using 15-min charts to give the big picture. Entry will be timed on a lower time-frame. Also, keep in mind, trend day's are usually followed by narrow-range consolidation days. With that in mind, these could just be scalping holding periods.
So, on a smaller time frame, perhaps I would be looking to buy at those lows, while my target may only be a return to the 20-EMA (or bollinger band or keltner channel mid-line), perhaps taking half at the MA/mid-line. Being that post-trend days are typically choppy and/or narrow-range consolidation day's I'll have my scalping hat on, therefore these will be small plays of buying those lows/highs and covering at a mid-range value line. 
Friday, June 26, 2009
sleeper
I just woke up, did I miss anything?
I don't really have much to say about today. A typical sideways consolidation day after a strong prior day up. Nothing has been resolved regarding this range we're in, and things can go either way from here.
TBT looks like it should be back in play next week.$51 looks to be acting as resistance and I will be looking for a move to $52 (at least) on Monday. 
The Daily chart looks ready for a correction, as price seems to have found support.
I don't really have much to say about today. A typical sideways consolidation day after a strong prior day up. Nothing has been resolved regarding this range we're in, and things can go either way from here.
TBT looks like it should be back in play next week.$51 looks to be acting as resistance and I will be looking for a move to $52 (at least) on Monday. 
The Daily chart looks ready for a correction, as price seems to have found support.
RIMM base break
After a big opening this morning, RIMM retraced a bit more than it's opening range before returning to a pre-established base. The base broke out at the $70.40 highs. The target of $71 was a resistance level of a previous consolidation range.
Thursday, June 25, 2009
Thurs. 06_25
We closed on the highs of the day. Today's tape gave us a 3-push impulse move. The second push giving the highest TICK distribution of the move. After the 3rd push up we just consolidated most of the day. We did get a little shake-out move late in the day on a strong negative TICK, but it looks as though we're back into "buy the dip" strategy.
Curious to see how price behaves with $92.50 tomorrow. Do we hit up against resistance and chop around that area, or just gap above it and use it as support?
Things are looking to set up for another momentum push up, just have to feel it out for how much participation we get.
Another strong day in Treasuries. At the end of the day price based at the highs. I'm thinking it might pullback and come back to base around this $94.50 level, or pop up from here.
On the daily, again, we're at a resistance level. Pop or drop time.
Curious to see how price behaves with $92.50 tomorrow. Do we hit up against resistance and chop around that area, or just gap above it and use it as support?
Things are looking to set up for another momentum push up, just have to feel it out for how much participation we get.
Another strong day in Treasuries. At the end of the day price based at the highs. I'm thinking it might pullback and come back to base around this $94.50 level, or pop up from here.
On the daily, again, we're at a resistance level. Pop or drop time.
measured move update
SPY completed it's measured move and filled the gap-down from Monday morning. It had a little trouble at R2, but pushed through. This last push registered a lower momentum high however.
missed it
I saw the cup w. handle setting up in TLT, but missed the entry (and the re-test for support!). It was a nice one though and just barely dinged it's measured move, so I'll include it here for posterity.
SPY cont.
After our impulse move up this morning in SPY, we got a low volume retracement before continuing. here's the setup:
Here's where we stand on the 5-min chart. Using a Fibonacci Extension line we can project where our measured move could take us out of this flag pattern. We'll have to see how it plays out, but if it hits the target we'll end up filling the gap from Monday morning.
Here's where we stand on the 5-min chart. Using a Fibonacci Extension line we can project where our measured move could take us out of this flag pattern. We'll have to see how it plays out, but if it hits the target we'll end up filling the gap from Monday morning.
opening scalp
As price gapped down this morning it put in a silly little fake-out move down on weak (but not THAT weak) TICK. The better entry would have been to buy the pullback into the 20-EMA (on the 1-min chart below) at $90, but I waited for price to get closer to the Previous Day's Close (PDC), as a scalping strategy mentioned in a previous post. It set up a little flag/inside bar at that PDC level while also showing strong volume (dots above/below candle). Target was the previous day's support level. This was a big move that should have been held longer.
Wednesday, June 24, 2009
Fed day
Interesting day, and the charts tell the story why I choose to stay away from Fed day after 2pm (EST). 
On the SPY $91 was resistance and $90 turned out to be support.
We closed above the 200- & 50- Moving averages and as it stands put in a higher low in through this correction, giving us an indecisive doji right on top of the moving averages, while momentum is turning up.
On the SPY $91 was resistance and $90 turned out to be support.
We closed above the 200- & 50- Moving averages and as it stands put in a higher low in through this correction, giving us an indecisive doji right on top of the moving averages, while momentum is turning up.
Tuesday, June 23, 2009
sideways
Not much to comment on for today's session, aside from my previous two posts from today. A very sideways day where the SPY just barely moved within a $1 range.
I'm not really sure what to expect for tomorrow in terms of direction. It is a Fed day though which could give us more sideways behavior until 2:15 EST. So, all I have for this evening is some chart porn and where we stand in the SPY.
I'm not really sure what to expect for tomorrow in terms of direction. It is a Fed day though which could give us more sideways behavior until 2:15 EST. So, all I have for this evening is some chart porn and where we stand in the SPY.
ERX Continuation
A continuation play in ERX this morning. As it had a run up from it's lows it formed a flag while consolidating into the 20EMA before continuing. The HOD provided resistance while momentum looked divergent on the upside. 
Exited fully on the first red candle (5-min chart below) after testing the highs.
I'll watch to see how price holds up at the $27.50 range and whether we return to $28.25 to form a base. Especially given the weakness in the dollar today.
Exited fully on the first red candle (5-min chart below) after testing the highs.I'll watch to see how price holds up at the $27.50 range and whether we return to $28.25 to form a base. Especially given the weakness in the dollar today.
TLT base
TLT formed a base throughout the day yesterday, gapped up slightly today into that same base and consolidated in a narrow range. 
Exited on the 3rd push higher, but missed the final push above $93.60. Notice how volume tells the story. I have yellow and blue plots representing volume breakouts (yellow=strong, blue=Really strong). Notice how you get really strong volume come in right around the 20EMA (buying the pullback) and then a lot more volume that comprises the top of the move (profit taking volume).
Exited on the 3rd push higher, but missed the final push above $93.60. Notice how volume tells the story. I have yellow and blue plots representing volume breakouts (yellow=strong, blue=Really strong). Notice how you get really strong volume come in right around the 20EMA (buying the pullback) and then a lot more volume that comprises the top of the move (profit taking volume).
Monday, June 22, 2009
trend down
The markets never had a chance today.
A sizable gap down, nearly to S2 on strongly negative TICK. Declining issues outpacing Advancing by somewhere over 2:1.
Notice how price breaks down from the opening range (white horizontal dots) and pulls back to test that range, giving a good opportunity to go short (given a suspected trend day). A strategy to look at is shorting those "pullbacks" in TICK to above the zero line. It's a similar strategy to waiting for price to retrace to the 20-EMA after falling out of the keltner channel, but in this situation price didn't quite make it that far, so watch the TICK for opportune moments.
Price based around S3 for the rest of the afternoon, while getting a final push down, keeping it below the important 900 level. This s3 level coincided with a previous chop zone, as you can see from this 30-min chart highlighted in blue.
Looking at the daily chart looks pretty telling. It looks as though we aren't going to get that "Golden Cross" and if $88 doesn't hold things are going to get bloody.
Today's degenerate gambler play for end of day was TZA. I look to TZA/TNA in the last 30-min just in case we get a surge going into the close. Such was the case after breaking through previous resistance. 
A sizable gap down, nearly to S2 on strongly negative TICK. Declining issues outpacing Advancing by somewhere over 2:1.
Notice how price breaks down from the opening range (white horizontal dots) and pulls back to test that range, giving a good opportunity to go short (given a suspected trend day). A strategy to look at is shorting those "pullbacks" in TICK to above the zero line. It's a similar strategy to waiting for price to retrace to the 20-EMA after falling out of the keltner channel, but in this situation price didn't quite make it that far, so watch the TICK for opportune moments.
Price based around S3 for the rest of the afternoon, while getting a final push down, keeping it below the important 900 level. This s3 level coincided with a previous chop zone, as you can see from this 30-min chart highlighted in blue.
Looking at the daily chart looks pretty telling. It looks as though we aren't going to get that "Golden Cross" and if $88 doesn't hold things are going to get bloody.
Today's degenerate gambler play for end of day was TZA. I look to TZA/TNA in the last 30-min just in case we get a surge going into the close. Such was the case after breaking through previous resistance. 
failed break
TLT looked like a good buy on a break of the opening range high (ORH). I thought $93.25 was a reasonable target (based on the daily chart, but things quickly fell apart once it broke out.
Saturday, June 20, 2009
Neda
"If an innocent girl gets shot halfway across the world, does she make a sound? Yes, the whole world hears her."
This afternoon I was haunted by a video of a young woman (named Neda) lying in a street in Iran. She was shot and killed while watching the protests with her father by her side. The video is very disturbing (and has haunted me all day long), so I will not embed it, but here is the link should you have an insatiable urge for morbid fascination.
For a government to answer peaceful protest with violence is simply abhoribble. I find myself completely absorbed by the news and images coming out of Iran. Not only that, but the technological link by people around the world is really amazing.
Here's a link to some of the events.
On twitter you can follow #iranelection for updates that are streaming in by the second.
Another article here.
As a show of support for the people of Iran, and in memory of Neda, I'm temporarily going to a green background color for this blog.
This afternoon I was haunted by a video of a young woman (named Neda) lying in a street in Iran. She was shot and killed while watching the protests with her father by her side. The video is very disturbing (and has haunted me all day long), so I will not embed it, but here is the link should you have an insatiable urge for morbid fascination.
For a government to answer peaceful protest with violence is simply abhoribble. I find myself completely absorbed by the news and images coming out of Iran. Not only that, but the technological link by people around the world is really amazing.
Here's a link to some of the events.
On twitter you can follow #iranelection for updates that are streaming in by the second.
Another article here.
As a show of support for the people of Iran, and in memory of Neda, I'm temporarily going to a green background color for this blog.
Friday, June 19, 2009
OPEX Friday
An interesting day on OPEX friday. The dollar sold off pretty hard, as did oil/commodities (I don't really get that), the markets were slightly negative, but the financials of all things did perform well (bizarro market).
Perhaps we'll have some resolution, in terms of direction, come Monday. Especially if we find ourselves in a nuclear war.
I continue to stalk Treasuries, via TLT/TBT, and today was an excellent day for TLT.
The open on TLT was a slight gap down, followed by a narrow range consolidation that didn't seem to have a directional bias. The impulse move that followed brought us right into a previous day's resistance range, set up a nice tight flag, a volume breakout (yellow dot above the candles), followed by a breakout.
Later in the day provided another entry, as price retraced only to come back and base around the highs.
RIMM was an earning's play. They announced Thursday after-hours, beat estimates, but foreward forecasts were weak. After-hours yesterday saw a strong sell-off that was eventually bought up. This morning however, price gapped down, filled it's gap, whipped back down to the lows and consolidated into a narrowing triangle pattern. The break of the apex came complete with volume surge (yellow dots above candle).
The SPY hasn't resolved very much and today had a difficult time staying above the $92.50 level. Perhaps come Monday we're either in a nuclear stand-off with N.Korea and we tank, or it's avoided and we rally (haha).
Perhaps we'll have some resolution, in terms of direction, come Monday. Especially if we find ourselves in a nuclear war.
I continue to stalk Treasuries, via TLT/TBT, and today was an excellent day for TLT.
The open on TLT was a slight gap down, followed by a narrow range consolidation that didn't seem to have a directional bias. The impulse move that followed brought us right into a previous day's resistance range, set up a nice tight flag, a volume breakout (yellow dot above the candles), followed by a breakout.
Later in the day provided another entry, as price retraced only to come back and base around the highs.
RIMM was an earning's play. They announced Thursday after-hours, beat estimates, but foreward forecasts were weak. After-hours yesterday saw a strong sell-off that was eventually bought up. This morning however, price gapped down, filled it's gap, whipped back down to the lows and consolidated into a narrowing triangle pattern. The break of the apex came complete with volume surge (yellow dots above candle).
The SPY hasn't resolved very much and today had a difficult time staying above the $92.50 level. Perhaps come Monday we're either in a nuclear stand-off with N.Korea and we tank, or it's avoided and we rally (haha).
Thursday, June 18, 2009
slow day Thurs.
OPEX tomorrow, so the chop was to be expected today, especially after this week's move.
Not much to say about today. $92.50 looks like a big area of resistance on the SPY; either pop or drop from here.
A move up from here could show resistance at $93.25, or we could see a test of the 200-MA again just to check the supply/demand.
I mentioned yesterday TBT was worth watching. It gapped up today, retraced slightly, returned to the opening price where volume came in to buy (yellow plots above the candles). $55 provided support before continuing.
Not much to say about today. $92.50 looks like a big area of resistance on the SPY; either pop or drop from here.
A move up from here could show resistance at $93.25, or we could see a test of the 200-MA again just to check the supply/demand.
I mentioned yesterday TBT was worth watching. It gapped up today, retraced slightly, returned to the opening price where volume came in to buy (yellow plots above the candles). $55 provided support before continuing.
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