Thursday, December 31, 2009

Short Swing Position now + 15.75 pts in profits

Happy New Year !
What a great trade to end the year with. Short from 1126, see previous post.
Market did as expected and technical analysis scenario became reality.
The year's final session was again characterized by very light trading volume and only a trickle of news flow. While the day ended on a bearish note, equities capped a strong year (as outlined in the Market Performance section above) - the best since 2003 - and still ended the session near yearly highs. Emphasis was once again placed on the movement of the US dollar. The Dollar Index closed the session with a 0.1% gain (it ends the year with a loss of 4.1% but saw a strong recovery in December).
Looking back over the year, financials had a stellar performance when counting from the rally off the March lows. While the financial sector was up 'only' 14.8% for the year, it exploded roughly 250% off the March low where numerous widely-held bank stocks had traded as low as one dollar (and below).
When looking at the recovery rallies off the March lows (a 12-year market low), the major indexes themselves also produced stellar results this year: The Dow surged more than 3,800 points (59.3%) from its March 9 closing level; the S&P 500 exploded nearly 65% higher; the Nasdaq bolted 78.9%.
Today's economic data included the latest initial jobless claims (i.e., new claims for unemployment benefits) for the week ending December 26. While economists had been expecting to see 460,000 initial claims, the actual number came in at 432,000 (with claims falling by 22,000 from the prior week). While there were seasonal impacts (i.e., the Christmas holidays), the number was the lowest in over 15 months. A positive development was also seen for the number of continuing claims: Here, the number dipped below 5 million for the first time since February 2009 (with the number of continuing claims coming in at 4.98 million).

Wednesday, December 30, 2009

New Year 2010 the Year of the Tiger

On the last full trading session of the year, the S&P 500 and the Dow traded mostly in the red, but the indexes lifted in the afternoon and closed flat. Both indexes added a minute 0.02% for the session (for the week, the S&P 500 is currently up 0.73% while the Dow has gained 0.79%). Meanwhile, the NASDAQ 100 outperformed, climbing 0.35% today (the index is presently sporting a weekly gain of 2.13%).

Today's volume output on the S&P 500 was an anemic 1,780 million shares - 51% below the index's average daily volume production over the past three months.

The year's last full session brought little excitement and was again characterized by anemic volume (merely 650 million shares traded on the NYSE where the 50-day average is roughly 1.2 billion shares). The S&P 500 and the Dow spent most of the session mildly in the red but closed flat; the Nasdaq 100 was stronger, aided by strength in the semiconductor sector. A lack of leadership was again noted by the press.

The day's only notable economic data release pertained to the Chicago Purchasing Managers Index. According to the Institute for Supply Management, the latest ISM-Chicago data showed a pickup in production, new orders, and an improvement in the region's employment situation. The ISM-Chicago came in at a reading of 60.0 (beating economists' expectations), its best showing since 2006. The four-year high on the index shows that the US economy continues to recover, analysts commented.

Because of the dearth of noteworthy economic or corporate news releases, investors focused on the US dollar which ultimately gained 0.1% against a basket of major currencies.

Another sign that the fallout from the financial crisis is not over: The Treasury Department announced today that General Motors' former financing unit - GMAC Financial Services - will receive further government funding. $3.8 billion in cash will be pumped into GMAC to assist the company in dealing with its home mortgage business losses. Previously, GMAC had already received $12.5 billion in taxpayer money. The latest injection will boost the federal government's ownership stake in GMAC - from 35% to 56%.

Open Position: SHORT E-Mini S&P500 ( ES ) from 1126.

Tuesday, December 29, 2009

Short from 1126

Swing Position : SHORT

Now trading at 1119 + 7 points

SELL Signal worked like a champ, see previous post.

Although trading started on a bullish note today, a 'lack of leadership' was seen as the reason the indexes faltered later in the session. The rising US dollar (which gained 0.2% against a basket of key currencies) was also cited as a reason. The market was very quiet. For instance, the Dow's intraday range spanned a mere 36 points today, the narrowest range seen in almost three years!

The release of economic data appeared to have little impact on the direction of the major indexes today. On the housing front, October's data on the S&P/Case-Shiller Home Price Index came in close to consensus (actual value: 146.6; consensus estimate: 147.0). Meanwhile, the so-called Composite 20-City Home Price Index was down 7.3% in October (year-over-year), also close to the anticipated value (consensus: a 7.2% decline year-over-year). On a positive note, that value represented the slowest rate of decline seen in two years.

No surprises surfaced in regard to the latest reading on consumer confidence either. The index that tracks consumer confidence produced a reading of 52.9 (consensus estimate: 53.0). Although the current readings are well above their historic low of 25.3 seen in February 2009, consumer confidence values remain still well below levels that would signal a robust economy (a reading of 90 or higher would be required).

Friday, December 25, 2009

Breakout to New Highs

Noticed how often the market gaps opening higher , then does nothing all day . Also notice when the market closes that nearly 100% of the net gains had been put in... One wonders why the market opens at all some days.

100% of the markets recent gains have come from the overnight market (gap opens) and without them, the market would have been flat for three months.

The market has climbed steadily higher despite increasingly declining trading volume and consistent and material withdrawals from domestic equity mutual funds. Furthermore, if anyone was merely looking at the trading action in regular hours, one would think there was absolutely no profit made since early September.

The followers of this market will immediately realize what this implies: not only is there no volume breadth to the recent move in the markets, but the actual push higher likely occurs on at most tens of thousands of futures contracts on a daily/weekly basis. The fact that literally several blocks of AH trades, used persistently, can move the market higher by 6% over the past 3 months, even as regular trading accounts for absolutely no part of this move, and that the SEC finds nothing troubling about this phenomenon, should be sufficiently telling about how "efficient" US markets have become.

New home sales on Wednesday toppled like a drunk at an open bar ! New home sales crashed 11% in November to a 355,000 annual rate, which are 60,000 below low estimates! The hit includes downward revisions of 42,000 to the prior two months, which means the prior data were either put together by incompetent government boobs or were simply lies. No surprise there.

Tech issues outperformed again Thursday in a very slow session marked by anemic volume and decreasing volatility. Because of a lack of corporate news releases, investors focused largely on economic data releases.

The Labor Department reported a larger-than-expected decline in initial jobless claims (newly laid-off workers filing claims for unemployment). Compared to the previous week, these dropped from 480,000 to 450,000, better than the consensus estimate of 470,000. Although the labor market overall is still considered to be weak, today's data is encouraging as initial jobless claims are now at their lowest level since the fall of 2008. However, the impact of temporary holiday employment and low wages is hard to gauge and factor into seasonal adjustments. According to economists, initial claims numbers consistently below 425,000 (for at least several weeks) would be required in order to signal a stronger labor market (and an economy that is actually generating new jobs rather than just losing employment at a lesser rate). By the way most of those jobs been created are low wages or minimun wage, low skills, service jobs in Walmart, McDonals or Pizza delivery !

The Commerce Department reported that big-ticket durable goods orders to US factories were up 0.2% in November. While the overall increase was below economists'' expectations (for a 0.5% gain), orders were up 2% when transportation orders are excluded. Transportation suffered from a plunge in commercial aircraft orders and from slumping demand for motor vehicle parts. More orders however came from other sectors such as machinery, primary metals, as well as from computers and electronic products.

Two signs of more lingering after effects from the financial crisis / recession: In a rare Christmas Eve vote in the Senate, the US government debt ceiling has been raised by $290 billion to a total of $12.4 trillion. Further, the Treasury Department announced that it has removed a $400 billion financial cap on the money it is willing to lend to keep certain companies in business. Instead of capping the amount of funds it provides, the Treasury Department said it will start using a more flexible formula, basing the amount of support on how much a firm loses per quarter.

Beleaguered mortgage guarantors Fannie Mae and Freddie Mac (who purchase home loans from lenders and sell them to investors) are key beneficiaries of the changed procedures. Fannie Mae and Freddie Mac together own / guarantee close to 31 million home loans worth about $5.5 trillion, equating to roughly half of all US mortgages.

Osc. DownCrossed SELL Signal : Sold E-Mini S&P 500 at 1122 on the close of Thursday December 24.

Saturday, December 19, 2009

Final Greetings for the Year

My Christmas wish for you, my friend
Is not a simple one
For I wish you hope and joy and peace,
Days filled with warmth and sun.

I wish you love and friendship too,
Throughout the coming year.
Lots of laughter and happiness,
To fill your world with cheer.

May you count your blessings, one by one
And when totaled by the lot,
May you find all you’ve been given,
To be more than what you sought.

May your journeys be short, your burdens light
May your spirit never grow old,
May all your clouds have silver linings,
And your rainbows pots of gold.

I wish this all and so much more,
May all your dreams come true,
May you have a Merry Christmas friend
And a happy New Year, too…

Day Two of Market Timing Strategy

Everyone is waiting for the breakout of the Daily sideways range, now 23 days old.

Is it going to be higher or lower?

Historically, holidays are often accompanied by trend changes in the equity markets. The most noticeable of these is the year end holidays.

Trends that remain in place past November's Thanksgiving holiday usually continue until the beginning of the new year. Then in the first or second week of January the trend ends. This phenomenon was clearly observable in 2008 and 2009, and in four of the past five years

Fridays's action was split, with the NASDAQ 100 rallying immediately after a strong gap up opening, but with the Dow and the S&P 500 initially sliding below yesterday's lows and then bouncing to modestly green closes. All in all, the major indexes continue their range-bound trading, with the NASDAQ 100 currently closer to its 2009 highs than the S&P 500 and the Dow. In fact, the Dow - long the leading index - is now underperforming.

The internals are no longer confirming the market. Banking and housing are but a couple of examples of relative weakness, which also serve as warnings. Yet, the mainstream media and politicians have the masses lulled to sleep. In my opinion this is a great disservice as it only helps to set the stage for the slaughter that will ultimately follow once the Phase II decline begins. In the meantime, the longer this bear market rally lasts, the more damaging it will ultimately be once it is over.

The E-Mini S&P500 ( ES ) closed the week one tick above the 20 Day Moving Average. The US Dollar Index close the week above the Daily Green MA and above the key resistance 77.50, first time since April . There is a high probability that the ES will gap higher before it opens on Monday.

Notable about Friday's session was the relative absence of the sharp volatility often seen during quadruple witching days, but then again, the market has been characterized by low volatility and range-bound, uneventful trading for at least a month. Volume was very high however, largely due to issues being added / dropped from the S&P 500 index. Volume production on the S&P 500 was 47% above the index's average daily volume generation seen over the past three months. 5,644 million shares changed hands on the index traded today.

Technology issues were clearly in the lead today - notice the difference in the trading patterns between the Nasdaq 100 (very strong gap up opening and an uncorrected surge to the top of its recent range near 2009 highs) and the Dow and the S&P 500 (an early dip below yesterday's lows with a subsequent intraday recovery, but much weaker closes clearly off the 2009 highs). Market observers explain the pattern with two large-cap technology issues boosting investor confidence for a recovering economy: Both Oracle and Research in Motion (as discussed yesterday) reported earnings that beat expectations. Oracle provides software for large businesses, and its positive earnings make the case that such companies are becoming more willing to spend on technology. While consumer spending has not (yet) picked up, the fact that business spending appears to be improving is a step in the right direction, analysts comment.

According to a number of market observers, the market is now more or less 'shut down' for the year, with a continuation of range-bound trading likely, given that large players with notable gains are not willing to put their winnings at risk. Others still believe however that we will see a continuation of the Santa Claus rally, suggesting that the strongest two weeks of the year are still to come (starting December 21) and that stocks will thus see more upside.

Next week will be abbreviated due to the Christmas holiday, yet the economic data calendar is loaded with plenty of economic data to be released on GDP, consumer confidence, home sales, import prices, demand for Durable manufactured Goods, and more. The key report is going to be Durable Goods on Thursday after the 2yr, 5 yr and 7 yr Note Announcement on wednesday.

Review of Options Exp Friday

Posting here from my Log Cabin in the middle of the Mountains, cold as hell outside. My traditional wood burning Fireplace is running full throttle.

The First Hour High 1099 is not shown in the chart picture and it was only half a point below the Previous Day-High ( HOD )

The Gap fill probabilities was 63% for the particular Market Conditions. The Pivot was just above the Prev Close at 1095. The key to the gap fill trade was the Bearish Pin Bar formed after a rejection of the Confluence Resistance Power Zone and the fact that it opened above the Prev VAH ( see chart pic ) which was a no brainer.

Wednesday, December 16, 2009

Heading to the Mountains for some Skiing

If we had no winter, the spring would not be so pleasant: if we did not sometimes taste of adversity, prosperity would not be so welcome.

There is a privacy about it which no other season gives you.... In spring, summer and fall people sort of have an open season on each other; only in the winter, in the country, can you have longer, quiet stretches when you can savor belonging to yourself.

Wishing every visiter of this Blog a wonderful Holiday season. Good luck and good trading

End of Year Trading Tips :

Look before you leap is one of the first adages we are taught as children. It should be should the first one we are taught as traders.

I am certain I have lost more money trading, had more losing trades because I got in too soon, rather than because I got in too late. I should have looked before I leapt.
This is a real problem I have had. So I am certain you will have it as well, if you have not already experienced it. The attraction to making money, for people like us, is greater than the potential risk. We are driven more by greed than we are by fear.
We have learned to essentially see what markets are going to do. We learn to predict things, and we have learned to look forward. Thus, we are afraid more of losing the money we "could have made" than losing money we have in our pockets. That's the emotional Achilles heel of traders. Overcome it, and you will succeed.

So how do we get around this, what we should do to resolve the situation?

To me, the most helpful thing I have done is to have a checklist to make certain that at least three or four elements of a winning trade are in play. Not on my checklist? Then I simply can't take the trade. I need my checklist to make certain I am not just playing Kamikaze Cowboy. This forces me to a delay my emotions and the use of my strategies.

It's a little bit like hunting. Once you get your game in site there are three steps to go through; the first is to breathe, secondly to aim and finally, squeeze the trigger. You can't rush into this... it's the same with trading.

I have learned to wait, to be deliberate, to realize almost every trade I entered in my entire life has gone against me, which means 98% of the time there has always been a better place to get in. And for certain, the more emotional I have been about getting into a trade, the worse my entry was. The path of correct action is not an easy one to follow.

It really is the fear of losing the potential money that drives us to act too quickly, to leap before we look. So keep in mind there is plenty of money to be made trading, and there'll always be plenty of trades just around the corner. It's not the good trades that kill you. It is the bad trades we jumped into too quickly, the bad entries. For big pay, learn to delay.

Good Luck & Good Trading.

Tuesday, December 15, 2009

Live Account Updated

Last update.

Trading Method:
Combination of price action, DOM reading scalping, and other market internals setups.

Long ZBH10 117-08

Exit of trade before target at 118-04 .NO regrets.

Profits: + 28 ticks or $875 per contract

Reason for early exit:

FED Day, Equities Indices price action and other clues

Long setup worked like a champ... Out Flat

T-Bonds - Reversal Call Five Days Before

Monday, December 14, 2009

Market Timing Swing Position Update

Long from 1091 at the close of Wednesday,Dec 9 ( See previous post )

Target filled today at 1012 for 21 pts profits. Market Timing Strategy works again !
Long 117-18 , 30 yr T-Bonds Futures ZBH10
Financial Press Overview:
News of yet another bailout greeted US investors this morning and led to early bullishness on Wall Street. Overnight, Abu Dhabi agreed to bail out neighboring Dubai (in connection with Dubai World's $60 billion debt problem) to the tune of $10 billion, thereby increasing risk appetite and precipitating a move away from the safe-haven US dollar. This appears to be yet another instance where a problem created by large-scale risk-taking gone awry is 'cleaned up' by the government. The move also spares the Emirates Federation from the humiliation of a potential Dubai World default.
Predictably, the Dubai news boosted markets around the world, with Dubai's main index itself up more than 10%. On Wall Street, the news boosted the S&P 500 and the Dow to new closing highs for the year. However, such problems may continue to crop up around the globe. Case in point, Greece's prime minister announced today that the country was drowning in debt and that he would therefore implement a slew of spending cuts and new taxes. The country's Prime Minister was quoted as saying that 'Greece faces the risk of sinking under its debt....[the country] has lost every trace of credibility'. Other European countries with significant debt issues are Ireland, Spain, and Portugal.
The Dow did not perform as well today as the other major indexes; this can be directly attributed to Exxon Mobil, one of its key components. Exxon's stock lost more than 4% in today's session after the world's largest oil company announced that it would acquire natural gas (and oil) player XTO Energy for $29 billion in an all-stock deal. This deal is one of the largest in the US energy sector in about four years and also represents Exxon's largest acquisition since the company purchased Mobil Corporation in 1999. Analysts say the acquisition is crucial as it will allow Exxon Mobil to become more involved in the natural gas sector, a sector that may see a boost due to coming climate change / global warming regulations.
In other notable corporate news, Citigroup today announced that it was close to forging a deal which would allow it to repay $20 billion in TARP ( = Troubled Asset Relief Program) funds. The company, which received $45 billion of TARP funds last year (and currently still owes $20 billion), is expected to launch a $10 billion common stock offering. In recent months, several US banks that had received bailout money from the US government have repaid these loans, including Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley. Citigroup and Wells Fargo are two of the remaining large players that have yet to make this move.

Saturday, December 12, 2009

Retail Sales Day Review

Another Low Volume
Consolidation Day after a
Key Economic Report,
suggests indecision and
lack of Institutional participation.
Market Timing Swing Position from December
9th : Long 1091 ESH10. See Dec 9th Blog post
The 30yr T-Bonds ( ZBH10 )will go UP next week. Will look for a Long Entry
Thursday, December 17:
The 30yr T-Bonds did exactly as predicted last Friday, now trading at 118-23 ( Day session high )
BUY Signal worked like a Champ ( not like Tiger Woods, he's down from his pedestal ! he's not even proud of his race ).

Friday, December 11, 2009

US Dollar albatross now hangs around the Bull's neck as it has broken to the upside.

Brazil leads the world in exporting Orange juice, Sugar, Coffee, Beef and Chicken, CNBC's Erin Burnett reported live from Rio de Janeiro, Brazil.

When I spend months in Rio back in 1982, my personal driver and bodyguard was a former police officer and he told me many stories of street gangs that were arrested and executed on the spot in the streets of Rio's "Fabelas". I used to think that US police officers were inclined to be brutal with excessive force !

Two Treasury Auctions gone bad and the Dollar starting an uptrend.

NO, it doesn't look good for Equity Indices. As long term interest rates go up less home and commercial loans and mortgages are made and small businesses will also be affected.

When long term rates go up with the dollar also appreciating at the same time the combined effect on businesses is much higher.

The day's top news was released by the Commerce Department; it reported that November retail sales (as indicated by the so-called Advance Retail Sales Report) had grown unexpectedly by 1.3%, above the consensus estimate of a rise of merely 0.6%. Excluding autos, sales were up 1.2%, also better than the anticipated rise of 0.4%. Furthermore, consumer confidence also appears to be on the mend. The Reuters / University of Michigan Consumer Confidence Index also rose, exceeding analysts' expectations. Even more positive economic news emerged, as business inventory data came in higher for the first time in over a year as well.

Crude oil futures have been tumbling lately, now down eight straight sessions - the longest losing streak in some six years - to below the psychologically significant level of $70 a barrel. The recent rebound in the US dollar is largely to blame for this; the greenback surged to its highest level in two months today following stronger consumer confidence data. Crude oil continued to slide today even though the International Energy Agency had released a report stating that world demand for oil would increase in 2010 somewhat more than previously forecasts. And the commodity was weak even in the wake of reports from China about strong growth in that country's industrial production.

Analysts comment how today's trading showed 'extra-light' volume. We are also seeing multiple references to a Santa-Claus rally, although some commentators warn that after a more than 60% rise off the March lows, Santa may not necessarily be visiting Wall Street this year. On the other hand, it is noteworthy to point out that the broad market has been able to rise for two days in the face of a strongly rising US dollar. The old pattern of higher dollar, lower stocks may thus be starting to wane, or even break. The US Dollar Index gained 0.8% over the last two sessions.

Despite today's upside, the market showed a split performance. The Dow outperformed, the S&P 500 advanced modestly, but the Nasdaq lagged and closed red, due to weakness among large-cap tech issues and in the semiconductor space (the Philadelphia Semiconductor Index lost 1%).

Thursday, December 10, 2009

The Bull is on the Last Leg and Ready to Fall

This market is still in a sideways range near a Key Fibonacci retracement from the Long term downtrend. The Dollar ( Exports ) and the carry trade will not help this market go UP any further. It will have to be another catalyst to drive this market higher.

The US Labor Department released its latest statistics on unemployment benefits today, and the data paints a picture of a still very sluggish labor market. The week ending December 5 saw 17,000 more people filing new claims for unemployment benefits, boosting the total number of claims to a seasonally adjusted 474,000. First-time claims are a measure of the number of new layoffs. Economists had been expecting the number of initial claims to drop to 450,000; today's number was thus a disappointment. Equally troublesome was the fact that the total number of people claiming benefits of any kind (for the week ending November 21) swelled by 417,000 to now in excess of 10 million.

According to the financial press, investors brushed aside this negative employment picture because of the news that rising exports had helped narrow the US trade deficit in October. According to the Commerce Department, the US trade gap shrank to $32.9 billion in October, in spite of economists having anticipated an increase. US exports were boosted by the weak US dollar, which makes American goods cheaper overseas. A smaller trade imbalance deficit is seen as a positive, as it stimulates the gross domestic product (GDP).

Interestingly, the market gained ground today in spite of a modestly stronger US dollar (the dollar index was up 0.1% for the day). In recent months, US dollar strength has often led to weakness in the equity market. Of concern for the broad market is however the weakening financial sector (financials overall lost 0.2% today). Rumors that Citigroup will have to raise a new equity stake in order to repay its TARP funds were seen as a key contributing factor. Some market analysts also cite the fact that that the US treasury Secretary is making the case for an extension of the $700 billion TARP plan (we discussed this yesterday) as a cause for concern, as it underscores that the US financial system remains frail.

Tomorrow is seen as a crucial day in terms of economic data. Retail sales, as well as consumer sentiment and business inventory data will be released and may have a market-moving impact.

Wednesday, December 9, 2009

Swing target filled on both Positions-Out Flat

SHORT from 1110 ( ESZ9 ) This contract will expired today. Filled on target 1086 for a wopping
+24 pts of profits per contract or $1,200 each !.

Holding short the 1105 ESH10 ( New March Contract) for lower target

Swing trade worked like a champ ! See previous posts and charts for the analysis.

Thursday December 10 Update:

Open position SHORT 1105 ( ESH10 ) exited at 1091 . Did not reached intended target but NO regrets : Profit for this position , 14 points ( $ 700 per contract ) plus previous gain , + $1,900 net total.

Market Timing Strategy Day #3 , New Position: Buy at the Close, Long 1091
This strategy has a win ratio of 84 % in 12 years.Was first introduced at The Traders Expo in Fort Lauderdale, FLorida 2006 by Trading Markets.

Tuesday, December 8, 2009

Previous Analysis Worked as Expected

Another winning swing trade. The technical analysis done last Friday worked and the Bearish scenario became real.
SHORT from 1110 ESZ9 nad 1105 ESH10 ( New Contract ). Now looking for an exit target. Even gave two intraday setups that worked like a champ during the day session in the $ES_F StockTwits but no one paid attention to it.Two winning trade setups for free !
Today's volume production on the S&P 500 was 3,921 million shares, which is roughly in-line with index's average daily volume output over the past three months.
The market was weak today, with the S&P 500 sliding toward the bottom of its recent, multi-week trading range. The NASDAQ 100 index closed down 0.61%, the S&P 500 dropped 1.03%, and the Dow was off 1.01%. For the week, the NASDAQ 100 is now showing a loss of 1.07%, the S&P 500 has relinquished 1.26%, and the Dow is in the red by 0.99%.
In a speech at the think tank Brookings Institution, President Barack Obama today outlined new government efforts to create more jobs. It is the President's belief that the US must continue to 'spend our way out of this recession'. While the effort does not officially carry that title, critics maintain that this is exactly what it is - a second stimulus package. According to the President the package includes new spending for infrastructure programs, additional small business tax breaks, as well as energy efficiency tax incentives, and more.
Obama started his speech by outlining the previous efforts of his Administration ('We avoided the depression many feared'), but he avoided too much self-congratulation, suggesting that 'Our work is far from done.' The speech also included some sharp criticism of the Republican Party:
The President suggested that almost immediately after taking office, his Administration was tasked with taking 'a series of difficult steps' to keep the economy out of an outright depression. 'And we were forced to take those steps largely without the help of an opposition party which, unfortunately, after having presided over the decision-making that led to the crisis, decided to hand it to others to solve', Obama said.
A rising US dollar, a disappointing earnings forecast from Dow component 3M, and a disappointing McDonald's sales report all conspired today to push the major indexes lower. Rising debt levels in Greece and in Dubai, as well as reports of slumping manufacturing in Britain and in Germany, also served to push both the US dollar and Treasury prices higher. The rising US dollar in turn pressured commodity-related stocks. Crude oil prices slipped for a fifth consecutive session and gold prices lost ground for a third day in a row.
Furthermore, market analysts say we are currently seeing little buying pressure from many fund managers. They are getting defensive and in many cases merely trying to preserve their gains as we are heading into year end.

Monday, December 7, 2009

New Swing Position

Sunday Night Globex Session:
SOLD 1110 E-Mini S&P500 ( ES )
Now trading at 1087.75 ( 9:45am Tuesday morning )
Financial Press Overview:
In the absence of key economic data releases and few corporate announcements, today's trading remained largely under the influence of the direction of the US dollar, as well as under comments made by Federal Reserve Chairman Ben Bernanke.
Speaking before the Economic Club of Washington D.C., Bernanke reiterated the Fed's intent of maintaining interest rates at low levels for an extended period of time. It appears the Fed was compelled to reiterate its stance on interest rates as the market had become jittery after last Friday's stronger-than-expected employment data which had widely been interpreted as a potential early signal that rates may move higher sooner than expected. The jobs data had also sparked short-term strength on the otherwise long-sliding US dollar.
The comments made by the Fed Chairman served to quell the US dollar rally, generating a loss on the greenback against a basket of major currencies. Dollar weakness in turn prompted some early strength in equities and commodities. Interestingly, equities were not able to keep up their rise; the market rolled over in the afternoon. This prompted some market analysts to comment that even the prospect of low interest rates over an extended period of time was not able to entice buyers in this market that looked 'tired'. In contrast, some analysts however believe that given the slow pace at which the economy appears to be recovering, higher interest rates are not in the cards for the near future.
Gold was not able to profit from the sliding US dollar, likely also a result of comments made by the Fed Chairman in his speech today. Bernanke was quoted as saying that 'The Fed is committed to keeping inflation low and will be able to do so....,' adding that inflation 'appears likely to remain subdued for some time.' These comments likely impacted gold today, reducing its appeal as a hedge in inflationary times.

Sunday, December 6, 2009

Another Brilliant Observation

The Obsession with Volume Profile continues but NO trade setup !
You're going to like this Synonimous ( Z_Bob)

Saturday, December 5, 2009

The EURO Leads the way down..

The EURUSD has made a significant close below a key Daily Trend Line ( not shown on this chart)

Here is why this is an important correlation in intra-market analysis.

Weekly View Assessment of The Trend

Correction In the chart: #6 - Small Businesses pissed-off at the President on his lack of follow-through with the Economic Stimulus Plan.
Back in 2003 when the weekly UP trend began the price never traded below the Blue MA. My expectations for this trend is the same unless there is another financial extraordinary news or the unemployment continues to kreep up or the Dollar starts trending up ( not before Helicopter Ben hints at rasing rates) or a combination of all.
Looking back to the beginning of this advance, there have been a total of nine breadth surges of better than 9 to 1 up volume vs. down volume which have occurred during the early weeks or at the start of each new rally. These predictive days have already been proven correct. They have no upside limit though so higher highs can still be ahead.

Three weeks ago there was another breadth surge. This time it was a 16 to 1 up vs. down volume rally on the NYSE. Watching for a second such day to confirm a bullish signal based on this indicator.

The target for this rally is still SPX 1119.31, only 1.1% higher based on Friday's close. A decisive close above SPX 1119.31 would point to a run to the next resistance level, at SPX 1226.

Unemployment Report Stuns Wall Street but doesn't fool some traders

The Jobs Report stunned Wall Street Friday morning at 8:30am ET. From the trenches, the traders bought the news quickly, many were short ( bearish Daily signal ) and had their stops loosses orders placed above the previous high. This was a classic short squezzed.The Futures spiked up 15 points on the S&P sending shorts running for cover. ( UUUPS ! Ouch ! ,they were DEAD wrong ! LOL )

While this number was tremendous, it also has to be looked at as slightly suspicious. Why?

Mainly due to the fact that we are going into the Holiday Season and a large jump in workers which off set losses was due to temporary jobs. In other words, retailers hiring for seasonal employment going into Black Friday and Christmas ( Low pay NO benefits). This hiring helped reduce the amount of net lost jobs in a major way. There you have it , a very deceiving Jobs Report Mr President.

In addition, 100k people decided to stop looking for work. This comes off the top as once they stop technically looking for work, they are not counted in the unemployment rate which dropped from 10.2% to 10%. Why do people stop looking for work?

Well at some point, especially into the holidays, people tend to throw in the towel ( while others commict suicide) Either it gets too frustrating and depressing to continue to not find work or the holidays are a time to spend it with the kids, wives and extended family, rather than being out hitting the pavement. In any case, the number was very misleading.

Friday, December 4, 2009

Bearish Signs In the Cash Index SPX

There is a high probabilty that prices will drop next week.Will look for a short entry in the $ES_F on Sunday night Globex session.

Payrolls Day Review

NO open position at this time. Performance Record available upon request. My E-Mail is private and classified. Follow me on Twitter: Eagledives, Have a good weekend.

Sunday, November 29, 2009

Weekend Long Term Perspective

In regard to momentum, I continue to observe negative RSI divergences on all timeframes: from the hourly charts to the weekly charts. All uptrends during this entire bear market have ended at a long term key pivot. The SPX has been trying to break through the key 1107 long term pivot for nearly two months now with no success. Finally, the internal momentum of this uptrend has been deteriorating. The SPX has closed below the 20 Day EMA first time in two weeks.
The NYAD is displaying negative divergences, the financial/banking sectors (XLF, KBE, KRE) are in downtrends along with their leader GS. Plus, several foreign indices are in confirmed downtrends: ASX, BSE, DAX, NIKK and the STOX. At this stage it will not take much more selling to end this uptrend.
Over the past two weeks the SPX has traded above 1110 on five separate days, and has not been able to break through the 1107 pivot range on any of those days. In fact, over the past three weeks the market has appeared to be churning. During this period each Sunday night the USD was sold heavily overseas, the SPX surged on monday, and then went flat for the rest of the week. This action is similar to the churning action at the top of the last uptrend.
New Swing position: SHORT from 1096.50 as Twitted on Friday Nov 27. The retracement scenario played out as previously described. The $ES_F retraced more than 62% of the drop after the Dubai ,U.A.E financial news.
Update on Swing Position from 1096.50 on Nov 29:
This position was exited early for +10 pts profits due to a business trip.

Thursday, November 26, 2009

Wishing all a Happy Thanksgivings

Update on Long position from 1096.50:

Position exited at 1110 for +13.50 points profits

This Long Setup is a confluence of the Market Timing Strategy with an 84% win ratio in 12 years and the Seasonal Odds Trade; 12 out of the last 13 occurrances, with 474 occurr. since 1990 with 270 up, 201 down, 3 unchanged. Also there are some other technical factors that have occurred to give this trade more reliability and higher odds. So its a 95% chance the Market close higher today. The line in the sand is 1101.75. Price should not go beyond 1104, in fact it should take out the previous high before it opens on Turkey Day ( Thursday ) because of low volume.
Results: Market GAP down big time ! Took my money and ran way before that. A good friend in the Hedge Fund Business overseas tipped me off early, thanks to him. Should have shorted but no regrets. Going to eat that turkey now, BON Appetite !

The One that Everyone else missed

The papertraders in simulaton mode missed this trade Tue, Nov 24 in $ES_F StockTwits

Wednesday, November 25, 2009

Day-Trading Account Performance

Another COHIBA Day. Time to celebrate ! The swing Long position is doing very well, thank you for your support, for the free charts from my Secretary At Large and for the idiots that don't know how to trade and took the other side ( loosers ).
Also want to thank all those thousands of emails followers and admirers that encourage me to keep disclousing the Myths and Truths about day-trading, LOL.

Tuesday, November 24, 2009

Buy Limit FILLED at 1098.50 and 1096.50

Long $ES_F ( E-Mini S&P500 ) from 1096.50 and 1098.50. As discussed on the previous 60min chart the intraday price action found support at the Trend Line confluence with the 1095 key support level. At 10:30pm est Tuesday Nov 24 the price is trading at 1104.25. The scenario played out exactly as planed. Target is now 1117.50 or 22.5 points from 1095.

Monday, November 23, 2009

The Scenario Becomes Reality

The Bullish scenario discussed on Sunday Nov 22 ( see " 60min-View of the Trend and Projections" ) became real as the Key MA at 1096 was penetrated above for more than +8 pts and also above the Resistance zone. Now the next move for the market is to retrace back to a logical level where enough buyers will become interested again or old resistance zone becomes support zone.

Another Low Risk Trade Executed from Sunday night

Here is the result of another trade executed during the Sunday Globex session. The setup and analysis for the entry is proprietary since this is not a recommendation for anyone and I do not trade to live up to anyone s expectations.My trading account is growing quickly and that is enough satisfaction for me. Don't need any credit or cheerleading from anyone.

Like many other traders ( most of them simulating ) in $ES_F StockTwits my trades have been posted after the fact but with the Live Performance Record also posted in Twitter.However since 95% of other traders in ST are not live trading and do not know how to trade I have desided not to share my trade entries again in that medium.

Detailed Profile Compliments of My Secretary at Large

$ES_F NO credit for bad trading advice, you have to earn it first
and if you don't agree with the evaluation of these charts or with the trading signals in this Blog because you are friends or buddies of the author and your bias is being compromised , then don't send me any comments. Specially if you never day traded before and don't have any Live performance trading record like many in $ES_F StockTwitts ( read this @BigSharkInFL, you low IQ a$$hole , moron ! ).
Again, this chart is only a hypothesis.In day trading , you got to know what your doing...

Profile for Monday 11-23

No direction forecast on this profile, only a hypothesis.What is the historical odds of the scenario?

Example of Opening Swing

NO trade Entry setup is shown here. Limited usefulness.

Sunday, November 22, 2009

60min - View of the Trend and Projections

Next Week if the Thanskgivings Rally ( 13 of 15 ) occurs again then the breakout above 1091 to 1096 will be the first sign of continuation if not then Santa does not like this market...

Saturday, November 21, 2009

Opt.Exp Friday Price Action Review

Trade setups available in Twitter and Live Performance upon request. Entry setups examples in previous posts in this Blog.
Back to sleep after a very active day scuba diving. Thanks to the Hotel staff the Internet Service is working well.Will be back in the States some time next week.

Review Complements of Twitter

Here is a very self serving review of Options Exp Friday ES price action. Lots of contradictions and inacuracies.

Friday, November 20, 2009

Day 2 of Market Timing Strategy

With a 84% win ratio in 12 years and was a winner the last three occurances. See my previous Blog posts for the entry signals results. On Day 3 ( Monday) if the other conditions are meet then BUY at the Close.

" And the Sea will grant each man new hope".... This weekend will travel to the islands for some great scuba diving in the warm tropical waters of the Caribbean Sea. Bon Voyage ! Will be trading from the Hotel room, lol.

Market Recap:

An absence of stimulating economic data releases, Dell's significant earnings miss - now called a 'debacle', and of course the suddenly strengthening US dollar served as a drag for the equity market today. The S&P 500 saw its first weekly loss for the month. A number of additional bearish factors came from overseas, putting further pressure on the markets: The possibility Asian policymakers might impose capital controls; the European Central Bank's hint of withdrawing liquidity (i.e., phasing out stimulus programs).

This week's most troubling economic news came from the housing front where we learned about an unexpected decline in housing starts and a significant increase in mortgage delinquencies. This has reignited concerns about the sustainability of the current economic recovery, and has investors worried, the stock market rally since March may have been overdone.

Recent Data:
Last week's 30-Yr Bond Auction didn't go so well. It had a poor bid/cover ratio and theTreasury was forced to issue the bonds at a higher interest rate than planned.
Import prices were seven times higher than last month's import prices largely due to the falling US dollar.
Consumer sentiment was awful - coming in much worse than last month and much worse than expected. The weakness is rooted in the still contracting jobs market, which won't be improving any time soon.
Mortgage applications plummeted in the last week.Mortgage brokers are unable to execute fradulent contracts due to stricter regualtions.Many are quitting their profession.
Weekly jobless claims are still ABOVE the 500,000.
Retail sales improved. Hmm, the odd thing about this is that States are not reporting better retail TAX collections. Are the retail sales data tainted/rigged now too? probably...
Empire State (NY) Manufacturing data was absolutely horrid ! - much worse than expected.
Industrial production was really bad - much worse than expected.
PPI core data showing deflationary signs, which scares the Fed. CPI was as expected.
Housing market index was worse than expected. Housing starts were much worse than expected.
So this is the data. It is all true and yet the market continues to rally because...wait for it...the US Dollar is dropping. When did it become fashionable and BULLISH to trash one's own currency? When did a lower standard of living become B-U-L-L-I-S-H ?
Aint it grand?
Next week should see light trading because of the upcoming Thanksgivings Holiday. The week however has a loaded economic news calendar with reports scheduled on home sales, unemployment numbers, consumer confidence data, revised GDP numbers, and more.

Thursday, November 19, 2009

SHORT Position closed and reached Target as expected

Final target filled at 1087.50 for a gain of + 21 pts profits. The low was 1086.50.The short position was posted at 10pm on Wednesday evening.

The previous volume profile chart " Targets Above Monday's High" posted by my Secretary on Tuesday at 2:50am was for Wednesday's trading session and some idiots in Twitter/StockTwits made comments suggesting that my SHORT position on Thursday was a result of that previous chart which only showed price levels and NO projected market direction.That only shows the low level of IQ and stupidity of some people in $ES_F StockTwits.

Wednesday, November 18, 2009

Low Risk SELL Setup

The E-Mini S&P500 ( ES ) or $ES_F as it is known in Twitter has traded another narrow range day . The Volume for today was 23% lower than the previous session. There are other technical clues that indicate lower prices. As of 10pm est ( Globex ) , it is trading at 1105.50 down -3 pts.

New Position: SHORT from 1108.50 ( Prev Close ) filled on the close
3,372 million shares were traded on the S&P 500 today. This volume output is 17% below the index's average daily volume generated over the past three months.
An interesting change of pace in the market today: In spite of US dollar weakness that pushed the greenback back down toward its 52-week low established earlier this week, the equities market was not able to stage a sustainable rally. In fact, it was itself mired in weakness for most of the session (although a late-day upswing contained losses on the S&P 500 and on the Dow). While dollar weakness did not boost equities today, it did encourage buying in gold (which rallied to yet another new all-time high above $1153 per ounce).
Initial market weakness was attributed to poor housing data, with housing starts (i.e., the construction of homes and apartments) in October falling by 10.6% and coming in strongly below expectations. Economists had been calling for 600,000 new units whereas actual reported housing starts for October came in at an annualized 529,000. The number of building permits was also lower than expected. This weak showing of the housing market may have stirred some investor worries about the strength of the US economic recovery.
Among today's other economic data releases, it was reported that the Consumer Price Index for October was up 0.3% (slightly above consensus estimates of an increase of 0.2%); core CPI was up 0.2% (also slightly above economists' expectations).
The NASDAQ's underperformance today can be attributed to troubling outlook and earnings reports from Autodesk and from In addition, Wall Street darling Research in Motion was the object of a negative brokerage report suggesting the Blackberry maker could face increased competition. While technology issues sagged, there was however counteracting strength in the financial and materials sectors.

Review for Tuesday Nov 17

Another Inside Day and very narrow range ( NR 70 ) . Performance available in Twitter.
Financial Press Overview:A number of Dow components were in the news today as the Dow rose slightly to a new 13-month high. Home Depot lost more than 2% in today's session after reporting earnings. Both Home Depot and Target provided a disappointing outlook for the 'holiday shopping season' and suggested a meaningful recovery might not occur until the second half of next year. This news pressured the entire retail sector.
Today's economic data releases were not seen as significant market-moving events. There was a 0.3% increase in the October Producer Price Index (expectations had been for a rise of 0.5%). Core producer prices were off 0.6% in October (here, economists had been expecting a 0.1% increase). The Producer Price Index is a gauge for wholesale inflation.
In October, industrial production was up 0.1%, less than the anticipated 0.4%. The data is thus a reflection of the fact that US industrial output is not growing as fast as some had anticipated. Consensus estimates were however met for the newest data on capacity utilization which came in at 70.7%.
Showing leadership today was Dow component Microsoft. The company's stock has been on a tear over the past few weeks, today closing at an 18-month high on the heels of a brokerage upgrade which suggests good prospects for Microsoft's Windows 7 release, as well as for the holiday season. Also benefiting from an upgrade was Dow component Exxon Mobil.

Tuesday, November 17, 2009


Helicopter-Ben Bernanke has taken to blowing bubbles in the financial markets with ease.
He is surely making EZ-Al "bubbles" Greenspan proud.
They have so much in common it's hard to tell them apart. Helicopter-Ben is just as delusional as the old coot too, spewing the following bile just today: "We are attentive to the implications of changes inthe value of the dollar and will continue to formulate policy to guard against risks toour dual mandate to foster both maximum employment and price stability. Our commitment toour dual objectives, together with the underlying strengths of the U.S. economy, will helpensure that the dollar is strong and a source of global financial stability."
Bullshit! Ben S. Bernanke - you sir are a liar!
He is attentive to nothing of the sort. Clearly he would rather use the US currency astoilet paper than formulate a policy to protect it. Has Ben done anything to achieve hisso-called dual mandate? How has he or the others at the Fed "maximized employment orprice stability?" The dollar is not strong as Ben claims; in fact, it is so weak it is now being throttled like a rag doll.
There is no financial stability!
Let's be clear here - Ben's #1 objective is to give your money away to the Scamming Banksters on Fraud Street and to make the clown-posse in Congress happy - period.
Ben "I-love-to-throw-counterfeit-money-from-my-helicopter" Bernanke said a lot more, of course, but this was a doosey: "Weak income growth, should it persist, will restrainhousehold spending."
Weak income growth? What income GROWTH is he referring to? There is no real growth because any growth at all is being stripped away by a lower currency (inflation) and the banksters radically jacking up credit card interest rates regardless of your paymenthistory. If you have a card with Shitibank, you know what I'm talking about. Shitibank,without warning, raised all card holders' rates to 29.99%. So if you had a balance, anyincome growth is now gone. And if that wasn't bad enough, taxes and fees are going uplike mad on a State and local level across the country to make up for their revenueshortfalls.
Does this man live in the real world? Of course not - he's an Ivory Tower geek fromPrinceton who is now a lapdog for the clown-posse in DC and the banksters on Fraud Street
He prattles on... "The outlook for inflation is also subject to a number ofcrosscurrents...blah, blah, blah."
Uh-huh, here's one of the crosscurrents you fool...THE VALUATION OF THE US DOLLAR!
With the US dollar plummeting, have you noticed gasoline prices shooting higher? Oops, there again goes that "income growth" idea...Aaand it's gone
In the end, this cartoon above captures what Bernanke really cares about...
If Helicopter-Ben really wanted to "help ensure that the dollar is strong and a source of global financial stability" then he would DO something about it rather than blather onlike the Fed-heads love to do. Here's an idea - raise interest rates to 1.5 or 2%. Holycrap - SAVERS might even get paid to save their own money, thus providing money for futureinvestments.
A 2% interest rate would end the dollar-carry trade and the ever increasing commodity prices like oil & gasoline. If the banksters can't survive with a puny 2% interest rate -screw 'em. They don't deserve to survive.
Thin the heard!

Targets Above Monday's High

Another useful chart for projecting the next move up.
Complements of my Secretary At Large, lol

Monday-November-16-Retail Sales

Review of price action on this Retail Sales Day with after market follow through and some easy notes....

Another Useful Study for Day-Trading

It helps when you have a hard working Secretary doing the research. lol

This is for the E-Mini S&P500 ( ES )

New Research/Study

The Daily Range for Monday 11/16 was 14 points
But the Globex Low to the Day High was 21.25
In the 60min chart a very frequent occurrance on the Swings Highs or Lows is 22.5 pts. This is only a long term observation that may vary by a few points.
Why is this usefull? Today my calculation from the Globex Low was 1113 and the actual HOD was 1112.25 which is only .75 pts off ! That was close enough for me since I was Long the market.

Saturday, November 14, 2009

Review of Friday's Price Action

The Power Zones and the VWAP are included from the previous Day Session.
This was a Consolidation Day after a Trend Day yesterday.
Setups are circle in red.The Entry technique is another process that must be executed with presicion to keep the risk down to a maximun of one point or four ticks.
The Live Performance Statement is available in Twitter.
Financial Press Overview:
The newest US consumer sentiment reports came out on Friday, and they were poor, showing an unexpected tumble. In early November, consumer confidence waned, coming in at its weakest level in three months. The Reuters/University of Michigan Surveys of Consumers pegged its (preliminary) sentiment indicator for November at a reading of 66.0 (October's value had been a significantly higher reading of 70.6); meanwhile, economists had been expecting the latest reading to come in at 71.0. The accompanying Reuters statement suggested that '.... importantly, the decline in confidence was already in place before the announced increase in the unemployment rate to 10.2 percent on November 6'.
In housing-related news, the National Association of Realtors see home prices across the US improving in 2010, increasing by an estimated 4%. Furthermore, home resales should also keep rising in conjunction with the anticipated continuing housing market recovery. Specifically, home resales for 2010 are currently projected to reach 5.7 million while mortgage rates are estimated to average roughly 5.7%.
The major indexes recovered smartly yesterday from yesterday's lone slide, although they pulled back strongly later in the session. The up-move was precipitated by renewed US dollar weakness (prompted by the largest increase in a decade in the US trade deficit), strong earnings from Walt Disney (which reported a rise in both quarterly profit and revenue), and better-than-expected results from a number of retailers (including J.C. Penney and Abercrombie & Fitch).
It is interesting to point out (as some skeptic market observers have) that Friday's rally occurred on the heels of a much worse than expected reading on consumer sentiment. Some market observers use this as yet another example of a growing disconnect between Wall Street and Main Street, calling the current rally nothing more than an increasingly irrational momentum trade where technical aspects (cheap money, low interest rates, a sagging US dollar) are overshadowing poor underlying fundamentals, for now continuing to provide a strong tailwind for the bulls.

Wednesday, November 11, 2009

Another COHIBA Day....

Not a bad day after all....