Monday, December 26, 2011

Day After Christmas

We had a lot fun Swing Trading and Day Trading all the High Probability Setups during 2011, thank you for you loyal support.You know who you are.

The best gift of all is your trust and the profits made on those trades.

Friday, December 23, 2011

Time to stop Diving and Head for the Mountains

Back from a long scuba diving exotic adventure trip while trading across the globe. Now is time for some high mountain skiing in Austria.

Wishing all my followers and private investors a very wonderfull, unique and exciting

holidays. May you eat well and drink fine quality spirits with your loved ones and forget your worries for a few days !Cheers !and happy christmas !

Monday, November 14, 2011

Veterans Deserve Better

Many of you may remember that Veterans Day was originally commemorated by our nation as “Armistace Day”, a celebration of the cessation of hostilities after the first ‘Great War’. It was a day set aside to remember the horrors of those war years in an effort to nourish the hope that governments could find more civil ways of resolving their differences. It wasn’t until well after the end of WWII that we modified that commemoration to honor all of the veterans of all of America’s wars.

These days the horrors of war often go unrecognized by many civilians. It is only through the experiences of our veterans and their families that the timeless agonies of war are experienced and remembered.

 Except for the financial expenditures (which are astronomical), civilians rarely share in the ‘cost’ of going to war anymore.  Yet, it is precisely those costs that are fueling our current national debt difficulties. The fiscal problems that the United States  is  currently experiencing are due largely to the fact that the debt for those unfunded wars is coming due at a time when the economy is still suffering the consequences of the economic collapse of 2008.

I find it outrageous that, after invading Iraq and Afghanistan for 10 years on borrowed money, we are now trying to pay for it by reneging on the insurance policies that great and honest Americans have created and paid for called Medicare and Social Security.

Wednesday, November 2, 2011

The Bullshit Continues in Wall Street

This is another undisputed evidence that Occupy Wall Street protesters are right about the corruption and outright fraud going on for decades in the Financial Markets.
MF Global Senior Vice President Mark B. Sachs sent me a letter on Sept 23,2011 with an offer to open a new self-directed account, but never mentioned the fact that their financial status was weak ! Never included or discloused on the invitation letter.That is the kind of deceiving and misleading marketing going on in the US Brokerage business ! and this has been going on for decades. New traders BEWARE !

MF Global Holdings Ltd failed to protect customer accounts by keeping them separate from its own funds, said a top U.S. exchange regulator, another shock for commodity markets scrambling to contain fallout from the brokerage's bankruptcy.

The New York Times reported late on Monday that federal regulators discovered that hundreds of millions of dollars in customer money -- supposed to be segregated and protected from the rest of the business -- had gone missing. MF Global has caused the markets and all of their traders lots of heartburn and unessesary stress.

Can somebody help me understand how the CME clearing house is not backing up their members (traders and brokers) who had their accounts frozen and maybe destroyed ? Isn’t that the role of an Exchange to protect it’s membership ? I don’t get it, if the CME guarantees a members segregated account- how can it NOT be ultimately responsible? Another example of the regulators being asleep at the switch..!!!!!!!!!

How about we get this right ,first thing I keep reading that Jon Corzine destroyed his firm
it wasn’t his firm and wasn’t his personal piggy bank. I think this guy had a gambling problem only with other people money and the US Regulators never bother to monitor him!.

How does someone loose a avg of 2 billion dollars a month as CEO? Goldman gave him the boot years ago and so did the people of New Jersey ! for being a loser and why would anyone hire a guy with a track record like his.This is the massive bullshit going on in Wall Street for many years. He needs to spend some time in jail along side Bernard Madoff, Mr Corzine has destroyed the trust of so many people !

Also shows for all the millions of taxpayer dollars spent running the SEC and the CFTC, they are basically worthless corrupted agencies. Do they ever spot anything ahead of time when they could actually do something about it? ! The US still does’nt have any regulations in place to stop this theft. When are they going to start acting and stop condoning this sort of behaviour.

America WAKE UP !

Insight: MF Global clients face day of reckoning as margins call

Call it the mother of all margin calls: Up to 50,000 former customers of bankrupt broker MF Global must find Approx $1 billion in additional collateral almost overnight, or be forced out of their trades.

Come Friday, with the mass transfer of commodity trading accounts from Jon Corzine's fallen firm to six of its erstwhile rivals, margin clerks will be wrapping up a reckoning of how much additional money is needed to cover millions of positions. Clients who can't quickly meet their margin will have to liquidate, making for a tumultuous day's trade.

A court order to move the trades late on Wednesday brought only marginal relief to clients who have been essentially frozen out of their funds and positions since Friday. While accounts will now be transferred more quickly, only 60 percent of the collateral will be moved to the new brokers.

Friday, October 7, 2011

Payroll Report ( NFP ) - Day Review

Trade Plan worked as expected, gap UP was faded and the 3 clues for trading the Nonfarm Payrolls worked like a champ.

Back to the states after a long journey to many islands destinations, scuba diving in the warm tropical blue oceans, while day trading the market.

Thursday, October 6, 2011

Overcoming Great Adversity and Finding Your Niche Early in Life

This incredible lucky adopted child was not a software engineer or an electrical expert but his mental ability to overcome great adversity, obstacles , focus on his dreams and then excell to an amazing degree with the help of his engineer friend, is what we should all learn to admire from his life. He was the biological son of a Muslim from Syria and an American young college graduate woman.

He was odviously rejected by his mother, never contacted by his real Muslim father, rejected by the Corporate " experts " at Apple Inc , which he founded and he never had an adequate or impressive academic background ! His adopted parents were low income working class folks that never went to college !Odviously he had social intelligence.

This was the life of a persistent optimist with an incredible luck and spirit of success :

I wanted to pass this speech on to you today that Steve Jobs gave. It is truly inpiring and touched me when I first read it and hope that it will you also. I really thought that his legacy was overrated and that he was only another lucky entreperneur that gave us a portable hand held mini-computer, something that many other qualified experts thought about doing, but never produced.But I was right on :

'You've got to find what you love,' Jobs said,( comm'on Steve, we all do but not with your luck ! )

This is a prepared text of the Commencement address delivered by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I've ever gotten to a college graduation. Today I want to tell you three stories from my life. That's it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: "We have an unexpected baby boy; do you want him?" They said: "Of course." My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents' savings were being spent on my college tuition. After six months, I couldn't see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn't interest me, and begin dropping in on the ones that looked interesting.

It wasn't all romantic. I didn't have a dorm room, so I slept on the floor in friends' rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn't have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can't capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it's likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can't connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky — I found what I loved to do early in life. Woz ( the engineer ) and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn't know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down - that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn't see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple's current renaissance. And Laurene and I have a wonderful family together.

I'm pretty sure none of this would have happened if I hadn't been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don't lose faith. I'm convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don't settle.

My third story is about death.

When I was 17, I read a quote that went something like: "If you live each day as if it was your last, someday you'll most certainly be right." It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: "If today were the last day of my life, would I want to do what I am about to do today?" And whenever the answer has been "No" for too many days in a row, I know I need to change something.

Remembering that I'll be dead soon is the most important tool I've ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure - these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die. It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I'm fine now.

This was the closest I've been to facing death, and I hope it's the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don't want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life's change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don't waste it living someone else's life. Don't be trapped by dogma — which is living with the results of other people's thinking. Don't let the noise of others' opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960's, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: "Stay Hungry. Stay Foolish." It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

Thank you all very much.

Steve Jobs , 1955 - 2011 ,  R. I. P.

Sunday, August 14, 2011

Market Outlook - Long from Thursday

Consumer sentiment worsened sharply in early August, falling to the lowest level in more than three decades, even though retail sales posted the biggest gains in four months in July, separate reports on Friday showed.

Underscoring divisions at the central bank, one top policymaker on Friday said he had cut his forecast for economic growth, even as another said he saw no economic need for new monetary stimulus.

Business inventories rose slightly less than expected in June, suggesting firms remained cautious about future demand at the end of the second quarter.

Global financial upheaval was on the agenda on Friday when President Barack Obama met with top executives from the U.S. business community, the White House said.

If history is any guide, another oil-induced recession may be just around the corner, at least for the United States and some of the other developed economies.

Minneapolis Federal Reserve Bank President Narayana Kockerlakota said on Friday that he dissented from the U.S. central bank's decision this week to keep interest rates low until mid-2013 because he felt more policy easing wasn't needed.

During the trading day on Friday, there were rumors that Standard & Poor's would strip its AAA rating from the U.S.

Purposely orchestrating the downgrade after all markets had closed, it officially did so, leaving traders across the world wondering how markets would react.

U.S. stock futures opened off with losses of more than -2.5% and after a several-hour rebound.

On Friday there were  other sovereign downgrades from AAA status. There isn't much history of these events, but from the reactions in the local stock markets were not necessarily bad, especially during the next week or so.

Of course, this time is different due to the U.S.'s status, or former status anyway, so we'll just have to wait and see how things unfold in the coming days.

For what it's worth, there have been 9 other times in their 30-year history that the S&P futures dropped 5% or more in a week, slumping to at least a six-month low, then gapped down -2% or more on the open.

8 of those 9 days closed the day higher, and were also higher 3 days later. The average return from open to close was a whopping +3.1%, with the loser being -2.2% (from October 6, 2008).

Here are the dates, along with the day's return from open to close:

9/21/01: +3.5%
6/26/02: +2.4%
7/24/02: +8.5%
1/22/08: +3.3%
1/23/08: +5.4%
9/16/08: +4.1%
10/6/08: -2.2%
10/8/08: +0.3%
10/10/08: +2.3%

The crash in '87, when the futures lost -24% of their value between the open and close, just barely missed this study because the S&P hadn't closed at a six-month low the day before the crash. But it was very close, so at least worth mentioning.

Looking at the intraday pattern of some past crashes and mini-crashes, it's pretty apparent that things could get very ugly if the low set during the first hour of trading is broken later in the day.

It shouldn't be too long before traders start focusing on Tuesday's FOMC meeting and the potential for the Federal Reserve to say something different than they have been saying.

But Monday, especially the first few hours, will be dominated by traders re-positioning in a new world without a "risk-free" USA, and nobody really knows what that's going to mean. History says we should rebound in the days ahead, but history isn't much help in a situation that's basically unprecedented.

In previous short-term outlook, I had suggested: "...overall outlook for tomorrow remains bullish..." - Friday, the major indexes moved higher.

5 minutes is showing advancing  oscillator readings at session's end. Positive money flow on this chart would suggest the possibility of positive trading on Monday after the market open.  However 30 minutes charts are showing declining  reading at this moment. Taking into account the most recent bullish proprietary accumulation I would say that despite positive outlook on 5- and 15-day charts, overall sentiment is slightly in favor of Bulls.

My Position is Long , targets and other details vailable upon request.

Wednesday, August 10, 2011

New Long Position Update


I suppose the internet expression OMG is the best description for the last 2 days trading activity. So much for the efficient market theory. Volatility and confusion should be expected since we've got Tim 'It'll never happen' Geitner and Uncle Ben at the helm steering the economy and market through the shoals and shark infested Republicans waters of Washington DC. Obviously, the BULLS love the Feds announcement .. at least for today.

I think the FEDs term comittment to ZIRP for two years is as much politics as economics. They know that this next presidential election will, no doubt, be the ugliest political carnival over the last 100 years. By affixing a term, beyond the election, they've opted out of the fray in advance to prevent accusations that policy changes are politically rigged during an election.

Over in EuroLand Italy is toast, as Mr. Trichet has delivered the terms of surrender for a bailout. The austerity measures are as harsh as those for Greece and should appease the Germans who are now the only ones paying off everybodys credit card. France is the next hotspot as CDS spreads are widening and there are rumors of serious problems with their big banks. If France is forced to surrender then they should stop calling it Eurodollars and call it like it is ... German Marks. Without the strength of the German economy none of these phony bailouts would be possible. If the German economy falters then the S#%$ will really hit the fan over there!

New Swing Long Position was initiated and one of the clues was the VIX Count. Details available to anyone if interested, the only requirement is a comment on this Blog.

The broad market shot significantly higher today. The Russell 2000 outperformed other indexes by climbing up 6.83% while the S&P 500 gained only 4.71%. The S&P 500 saw its strongest advance since 03/23/2009 when the S&P 500 gained 7.16%. The DJI had its strongest advance since 03/23/2009. The last strongest up-move was seen on the NASDAQ 100 on 05/10/2010. The bigger daily gain was seen on the Russell 2000 on 03/23/2009 when it rallied by 8.35%. The strongest up-move was seen on the NYSE Comp. on 03/23/2009.

The S&P 500's daily volume was 6,690 million shares today, which was higher by 125% than the average daily volume sustained over the past 3 months.

In previous short-term outlook, I had suggested: "Positive money flow on this chart would suggest the possibility of positive trading tomorrow after the market open. " -

The Federal Reserve, in an unprecedented move, said on Tuesday it will keep interest rates near zero for at least two more years and is considering further action, bolstering battered stock markets.

The United States faces one-in-four odds of slipping back into recession, and a weaker economic outlook is raising the likelihood the Federal Reserve will soon do more to boost growth, a Reuters poll shows.

The chances of another U.S. recession are rising and Europe's recovery is also at risk, according to the latest Reuters poll, taken during the worst stock market selloff since the nadir of the financial crisis.

U.S. non-farm productivity fell in the second quarter as economic activity slackened, while a moderation in the pace of wage growth suggested inflation pressures will remain contained.

The stock market's recent slump is reviving bad memories for California's government and raising concerns about revenue estimates for its budget, a perennial concern in the U.S. municipal debt market.

The struggling U.S. economy is beginning to take its toll on shipping companies which should be seeing a big boost from their peak season but instead find retailers delaying decisions about how much to import.

Sunday, August 7, 2011

Exit Swing Short Position and now Long

U.S. job growth accelerated more than expected in July, tamping down fears the economy was sliding into a fresh recession and easing pressure on the Federal Reserve to provide more support for the weak economy.

The message from this week's market rout is crystal-clear: investors have lost confidence in their Republican politicians, who urgently need to do something dramatic to reduce risks to the global economy as they keep worring more about lower taxes for the 1% of the US Population than about the millions unemployed. So now that they succeded in keeping the taxes low, lets see if their wealthy contituents will generate more jobs. Isn't that what they were advocating? well lets see it ! I doubt it will happen. Notice how the Republicans interviewed in CNBC argued about keeping the taxes low for the wealthy " to stimulate the economy " before the Budget negotiations was settled.Now that they got what they wanted they are still argumenting that this Administraton is to blame for the weak economy and that " Businesses will not hire, because they are unsure of what is going to happen" ! LOL , So the rethoric argument was changed from lower taxes to blame Obama- how self serving and decieving ! The Republican establishment keeps bullshiting America and keep getting away with it !

U.S. consumer credit shot up in June by $15.53 billion, according to a Federal Reserve report on Friday that showed upper middle class consumers were willing to keep borrowing robustly in a tight job market.

State and local governments continued shedding thousands of jobs in July, part of a trend that analysts say could damage everything from trash collection to the entire U.S. economy.

A scary drop in stocks and commodities threatens to squeeze life out of an already faltering U.S. economy, with deal-making, investment in plants and equipment, and capital raising at risk of slowing down or freezing up.

Army officer Donna Bachler has NOT had a regular paycheck since she left active duty four years ago, even though she boasts the kind of skills employers vie for.

Wall Street doesn't care about these people as long as shareholders and hedge funds make money, they will always blame Obama when in fact the Republicans voted to NOT extend unemployment benefits to millions including ex military and instead voted for the decrease of taxes to Millionaire Corporations that already have billions of dollars of accumulated profits in their coffers !

 Condolences for the 22 Elite members of SEAL Team 6 that died this weekend in Afganistan. Many military service men and women are returning home to be unemployed thanks to the Republican millionaires in Congress. What a shame !

Swing Position - Long with min target of 1227 - details sent to subscribers.

15-day charts  are showing advancing indicator readings. Positive money flow on this chart would suggest the possibility of positive trading on Monday after the market open. Money flow on the 30-day charts is moving slowly up, yet it is still in the negative territory. Further money flow advance  on these charts would confirmed higher odds of positive trading on Monday.

Bullish Engulfing Bar in the 4 Hour Chart closed above the 38.2% Fib level measured from the 1264 Swing High on Aug 04.

Another Clue is the Huge Volume Surge Friday : The daily volume of the S&P 500 was 6,300 million shares. This is 122% above the last 3 months average volume. This suggests that a reversal is coming next week

Also the VIX Count is due for a Reversal this coming week

Will NOT discuss Setup and exact Entry with Stop Loss due to lack of comments in recent Blog posts.

See You at the Beach !

Sunday, July 31, 2011

Market Status - New Swing Trade

Friday , August 5th
SHORT from key level as explained to subscribers,

The three central bank interventions (SNB, BOJ and ECB) prior to yesterday’s open were not enough to stem the waves of capitulation selling that overcame the markets. Or, perhaps, their actions were seen as pusillanimous half measures. Regardless, serious damage was done to the market and, while we might expect a short term flashy rally to emerge in the coming days, extreme caution must be exercised in this low liquidity environment.

 One thing that contradicts our present bearishness is the US money supply, where, as of yesterday’s post-close release, the Fed reported M2 is growing at 9.0% over the past 13 weeks. Long and intermediate term bear markets tend to emerge after a period of money supply contraction. Accordingly, there might be one more intermediate term rally that emerges in the coming months. For now, focus will turn to the central banks this weekend and, in particular, the Fed, which meets at its FOMC meeting next Tuesday.

To date the market has rallied 106% which is not out-of-line with other post recession rallies. In fact, if the market were to rally to 1574, it would represent a 136.4% rally off the March 2009 lows, which would be the average post recession, bull market, bottom to peak, gain.

This would also represent an almost perfect symmetrical move off the June 2010 reactionary low. Until the bulls are truly trapped, we will not have seen the top to the current rally.

One more intermediate term rally makes sense in that it would allow the market to trap some longs. According to the COT, “dumb” money was short along with “smart” money, although not extremely short. The real top to this bear market rally will take place when everybody is caught leaning the wrong way once again.

Thursday , August 04 :

SHORT from key level . Market droped below 1200 as predicted !

Subscribers are now enjoying the profits.
Cheers !

( Carl Futia has been wrong a record 12 consecutive times saying the market is going UP ! , LOL - what an Idiot ! )

Wednesday - August 3rd Update:

Back from a scuba diving voyage.

 Long Swing trade was voided due to price action during the Open on Monday August 01. I now think the market will break the June 16 low at 1252.25 and possibly the March 17 low at 1241.25 and below 1200. Looking to SELL at key level as explained to subscribers. 

Day Trading Performance Today : Win Ratio 88%
Travel and diving expences paid and ready for the next swing trade.

See You at The Beach ! and the other side of the trade...

The broad market declined Friday,July 29. The strongest decline was noted on the DJI (0.80% loss) while Russell 2000 lost only 0.26%. The DJI ended session lower for an sixth time in a row.

Of the last 16 sessions, the DJI has closed red 12 times. The NASDAQ 100 pushed to new one-week low today. The Russell 2000 made a new five-week low today. The NASDAQ 100 ended with a loss of 0.38%.

The S&P 500 dropped 0.65% while the Dow declined 0.8%. The week ends with the NASDAQ 100 lossing 2.75%; the S&P 500 showing a minus of 3.92%, and the Dow closing down 4.23%.

The S&P 500 saw volume of 3,268 million shares on this session. This was above the average daily volume of the last 3 months by 20%.

 The economy stumbled badly in the first half of 2011 and came dangerously close to contracting in the January-March period, raising the risk of a recession if a standoff orchestrated by the Republicans over the nation's debt does not end quickly.

The Federal Reserve should keep borrowing costs near rock-bottom lows for the foreseeable future if economic growth continues to disappoint, Atlanta Fed President Dennis Lockhart said on Friday.

The government prepared Wall Street firms on Friday for the possibility it may have to delay or cancel a major round of bond sales if Congress doesn't raise the nation's borrowing limit by August 2.

The "Great Recession" was even greater than previously thought, and the U.S. economy has skated uncomfortably close to a new one this year.

Consumer sentiment fell in July to its lowest in more than two years as anxieties over stagnant wages and rising unemployment deepened, a survey released on Friday showed.

Civilian employment costs surged a steeper-than-expected 0.7 percent in the second quarter, the biggest gain since September 2008, on a jump in benefits costs, Labor Department data showed on Friday.

A top Federal Reserve official on Friday would not rule out loosening the U.S. central bank's monetary policy further, but said conditions would have to worsen.

What this Blog is all about :

Apparently there are some retarded or low IQ followers that did not understand or misinterpreted the purpose and objectives of this Blog.

To clarify  once and for all this Blog is for :

Discretionary Day Trading Techniques

Focusing on the Futures contract E-Mini S&P500 trade entries and using

The SPX Index and other proprietary indicators.

This is NOT a Blog for soliciting new investors

The Charts examples and Reviews are NOT trade recommendations

This Blog and the Twitter trading comments do NOT have to live up to anybody’s Expectations and is only for private and confidential subscribers.

Applications for subscription is NOT open to bad faith followers ( ex. BrettonwoodsII ) or inactive traders or trading pretenders committing FRAUD during market hours ( ex. Benkotrader from Germany-Twitter among others that never trade live and only show theorical unreliable bullshit S/R lines copying someone else's research and deceiving new traders ! ).

Qualification for Subscription requires the private investor group's approval to keep the bad faith and mentally unprepared or just plain negative arrogant individuals out. We DO NOT solicit anyone in this Blog.

New Swing Position is Eminent :

Will look for a new SHORT Entry during the Globex Sunday session or the RTH in the ES

Trade Setup : SOLD

Wednesday, July 27, 2011

Market Update

Monday,July 25th bulls were able to discount the disappointment that facilitated the large down gap Sunday evening in equity futures.

Overnight, the ES traded just inside of yesterday’s day session high and low. As we draw closer to the meat of the major news releases this week, we would expect activity to pick up.

Besides the debt ceiling issue, there is Durable Goods and the Fed’s Beige Book released tomorrow, which the Fed produces in preparation for the upcoming FOMC meeting on August 9. The first estimate of Q1 GDP is released Friday, which also commences the Fed’s annual Jackson Hole event.

Many Fed governors will be speaking, and it is not lost on traders that last year’s meeting leaked hints of the resumption of Fed balance sheet maintenance and (subsequent) expansion (QE2). Accordingly, risk markets appear poised to run with any good news, provided they can avoid a rout on any disappointment. Until the ES accepts above 1350 or below 1290, it simply remains in a trading range.

The broad market declined today. The strongest decline was noted on the Russell 2000 (0.80% loss) while NASDAQ 100 gained 0.22%. Of the last 13 sessions, the DJI has closed red 9 times. On the NASDAQ 100, we saw the 6th up-close in the last 10 sessions. The DJI is now at new one-week low.

2,705 million shares traded on the S&P 500 today. This is close to the average volume we saw on a daily basis during the past 3 months.

In previous short-term outlook, I had suggested: "Negative money flow on 5-day chart would suggest the possibility of negative trading tomorrow after the market open. 15-day charts ... 30-day charts ... would favor bears as well." - Today, the major indexes declined.
 5 minutes chart are showing declining oscillator readings at session's end. Negative money flow on this chart would suggest the possibility of negative trading tomorrow after the market open. 15 min charts  are showing negative money flow as well, thus confirming 5-day chart's outlook. However, 30 minutes are showing advancing and flat  reading at this moment. Taking into account the most recent bearish readings I would say that despite negative outlook on 5- and 15 charts, overall sentiment is slightly in favor of bulls (unless we see declining  on 30-min charts).
The United States will lose its top-notch AAA credit rating from at least one major rating agency, according to a Reuters poll that also found wrangling over the debt ceiling has already damaged the economy.

A contraction in motor vehicle production because of a shortage of parts from Japan and high gasoline prices that curbed consumer spending, probably kept the U.S. economy on a slow growth path in the second quarter.

Financial markets have remained unruffled despite a stalemate over raising the debt ceiling because investors and traders expect Congress to act to prevent a debt default, a top Federal Reserve official told lawmakers on Tuesday.

Prices for new single family homes rose to a five-month high in June even as sales slipped, but recovery for the broader housing market continues to be frustrated by an oversupply of properties.

A downgrade of the United States' AAA credit rating is a bigger risk than a default and could over time add up to 0.7 percentage point to bond yields, members of a U.S. securities industry group said on Tuesday.

President Barack Obama's Democrats and their Republican rivals were further apart than ever on Tuesday in an impasse over the government's debt limit as investors braced for a looming default and downgrade. Remember that Republicans don't want Obama re-elected and now they are using dirty politics again. Many people that never voted for the President are coming out like vultures critizising him without mention of past administrations mistakes in not lowering the national debt.

If Republicans give a victory to the President it will damage their chance to get re-elected or for a Republican to be President .Real dirty politics !

US Republican Boehner says we won't hike taxes because taxes destroy job creation - lying to the people for the benefit of the wealthy !

The Republicans are decieving this nation and are trying very hard to satisfy their wealthy constituents in return for re-election, that is that is a true undisputable fact.Record profits and sitting with their wealth in overseas banks, waiting for the next expantion overseas with cheaper labor.Don't keep lying to the American people !

Will bet my whole year income that if Taxes are cut , it will NOT create more jobs due to the arrogance, greedy practices, and continue exporting of jobs by multinationals companies !  

Sunday, July 24, 2011

Short-Term Outlook

Finally arrived at this Island destination of Nevis, and getting ready for some quality scuba diving in this beautiful Island. Traveling while trading and scuba diving around the world continues, paid for by trading profits.

Market Outlook :

The broad market ended flat to slightly higher today. The NASDAQ 100 outperformed other indexes by climbing up 1.05% while the DJI lost 0.35%.

Of the last 8 sessions, the S&P 500 has closed green 5 times. The DJI is also down on 7 of the last 11 sessions. On the NASDAQ 100, we saw the 5th up-close in the last 8 sessions. The Russell 2000 are now up on 5 of the last 8 sessions as well.

The NASDAQ 100 pushed to new ten-year high today ( Friday ). The Russell 2000 made a new two-week high today.

The NASDAQ 100 index climbed 1.05% (resulting in a weekly gain of 3.09%). The S&P 500 rose 0.08% (resulting in a weekly advance of 2.18%). The Dow lossed 0.35% (bringing its weekly gain to 1.61%).

The day ended with a daily volume of 2,461 million shares on the S&P 500. This volume was 10% less than the daily volume average of the past 3 months.

Positive money flow  would suggest the possibility of positive trading Monday after the market opens. On the other hand, 15 minutes charts are showing declining money flow which would favor the Bears. Outlook on the 30-day charts is mixed at this moment: positive money flow on the Nasdaq 100 and Russell 2000, neutral money flow on the S&P 500 and negative money flow on the DJI.

I would say that there are some odds of  positive trading on Monday at the market open. However, overall outlook for Monday could be considered slightly in favor of bears - mainly because of negative money flow on the 15-day charts and strong bullish proprietary output during the yesterday's advance.

Those of you that follow this Blog and Twitter : ' Eagledives ' , are aware of my current Long position from 1261.75 initiated on June 17 when posted in Twitter : " My advancing Issues oscillators are oversold and are showing bullish divergences. Sentiment is very bearish. A sustained swing up above the 1400 level will be the next significant development." My subscriber were told to stay Long. That position is now UP + 86 Points in profit. There were other important clues given in Twitter : ' Eagledives '.

See You at the Beach.

Tuesday, June 21, 2011

Swing Long Position Update

Another High Probability Trade Winner :

Trade Recap : Long from 1261.75 Friday June 17 with second Long added on Globex 1256.50

Setup : MACD Bullish Double Divergence ( 80 % Reliable )
           RSI ( 2 ) Day #3 Bullish Setup ( 85% Reliable )
           Advance/Decline Bullish Oversold
           SPX Cash Index Reversal at 200 DMA
           Price Action during Globex last Sunday

          5 Targets reached for a total of :  + 44.75 Pts Profit GAIN
           Final Target with a runner reached at 1291 for + 34.50 Pts

Sunday, June 19, 2011

Options Exp Friday Review- Before the FED Day Next Week

Monday - June-20 Update :

Swing Trade now in profit + 9.75 pts. Second Position Long from 1256.50 also doing good.Final target as described to subscribers. Follow Twiiter for details...
To be continue..

Summer Time is Beach time and scubadiving
while listening to " Nikita " by Elton John ...

New Swing Position Long : 1261.75
Setup and Bullish High Reliability Clues
sent to subscribers...have a nice beach time !

" .. All the diamonds in this world

That mean anything to me

Are conjured up by wind and sunlight

Sparkling on the sea..
"And the sea will grant each man new hope . . . while thinking about the next great trade."

Tuesday, May 31, 2011

Swing Position Update Third Target Executed Successfuly

Long initiated May 24 has reached Third Target successfuly at : 1344 for a total profits of + 41.50 Pts or $ 2,075 per unit.

Thank you for the emails from subscribers.Hope you are enyoing your successful trade. Final target is near.

Thursday, May 26, 2011

Long Position UPDATE

Swing Position : Long @ 1302.50 - Tuesday May 24 now in profits totaling : 26 Points or $ 1,300 per unit.

BUY Setup worked as planned. First target and second  target reached as expected

In recent weeks we have watched people taking to the streets by the millions to protest political, economic, and social conditions in the oppressive societies they inhabit. Governments have been toppled in Egypt and Tunisia. Protests have erupted in Libya, Yemen, and Bahrain. The ruling families elsewhere in the region look on nervously from their air-conditioned penthouses—will they be next? They are right to worry. These are societies where a minuscule fraction of the population—less than 1 percent—controls the lion’s share of the wealth; where wealth is a main determinant of power; where entrenched corruption of one sort or another is a way of life; and where the wealthiest often stand actively in the way of policies that would improve life for people in general.

As we gaze out at the popular fervor in the streets, one question to ask ourselves is this: When will it come to America? In important ways, our own country has become like one of these distant, troubled places.

Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

Of the 1%, by the 1%, for the 1% who own 50% of this nation's wealth !

Sunday, May 22, 2011

Options Expiration Friday - Review

Tuesday, May 24 :
New Swing Position : Long 1302.50 ESM11 - June E-Mini S&P500 ( ES ) as posted in Twitter.

Mean reversion BUY SIGNAL here at 9:15pm Tuesday Night.

This means conditions are very good for a very sharp Rally off of present prices over the next 10 sessions. The last time we got this BUY signal was at 1306 ESM11

My recommendation is to Buy any gap down and get possibly leveraged for a 3-5% UPSIDE MOVE


Correction on the chart : The Mayan end of the world, slated for 2012. I still think they were full of shit and the Spanish Conquistadors noticed it very quickly. One simple common sense evidence is the human sacrifices they made to their "Sun" God by taking the heart out of the victims and the other evidence is their decendands in present day Mexico, how they have not been very smart in politics, science and other disciplines.The same horrendous violence and corruption has been carried down though generations and now it is been display in the daily killings related to the drug traffiking in Mexico.These are the direct decendants of the MAYANS folks. Are we going to believe their " End of the World Predictions " ? give me a fucking break ! Who ever belives in them crap is so full of shit.


Great day to head for the ocean, do some diving. Blue sunny days are here again !

On a side note, it is unbelievable the magnitude of ignorance by the US population on Global issues and US foreign policies. Why did the US Government gave millions of dollars to Pakistan when they never did enough to find OBL and other terrorist. Those millions should have been spent on the States budgets to keep Teachers and Police Officers from being laid off ! Even worst is the fact that no one seems capable of protesting against these long term wasteful policies.We live in a very corrupt nation indeed.I know there are other places worst than ours but we are not the model of a good efficient democracy like so many people think. Every time that NASA sends a Shuttle to space, there is no discussion of the usefulness or cost effetiveness to US Citizens for spending millions of dollars in the space project. Is like NASA is in the entertainment business and no one asks why !

Space Shuttle Launches: No One Notices the Fiery Waste of Money
-Every time the shuttle takes off it costs approximately 500 million dollars.

-There are 5 total shuttles each costing 1.7 billion dollars
-2 shuttles accidentally blew up and the other 3 are being thrown away after this year.
-The current mission costs 500 million and the goal is “delivery of a connecting module to the International Space Station that will increase its interior space.”…
-The space shuttle program alone has cost tax payers 174 billion

The space shuttle and the space station rank high on the list of major federal investments whose costs have vastly exceeded the benefits delivered. Originally NASA’s shuttle program was conceived as an inexpensive way of sending human beings on numerous important military and scientific missions—as many as twenty-five to sixty missions a year.

But the costs and complexity of life systems led to payload limits that sharply downgraded the shuttle’s usefulness. The Air Force dropped out as a customer, and both military and serious scientific tasks have long been carried out through unmanned missions. By 1988, planned flights had dropped to eight a year; the past four years flights averaged five annually.

Moreover, in the 113 shuttle flights launched to date, fourteen astronauts have died, an average fatality rate of one for every eight missions. The international space station is also vastly less productive than originally conceived. Because of spiraling costs and other problems, several design features were dropped and the planned crew size of seven was cut to three. Since substantial crew time is required simply to maintain the station, little capability is left for scientific uses. Phasing out both manned space flights and the space station would save a total of $9 billion by 2014.

It is the last frontier ?. It is entirely our obligation to explore space ?. It is a program that we MUST invest in for the good of humanity ?. What happens if we make a discovery that is useful to mankind ? - These are the stupid selfish arguments of the scientific community and other ignorant people that are either wealthy or in such high ego cloud that they can't or will not see the need for better education and infrastructure or other high priority needs of many US communities. Also Read :

There is tons of overwhelming evidence that manned space flights are a waste of money. NASA is a waste of money with the size it is and the costs . Don't matter who gets where first anymore there is only one planet we can live on and that's this one . Use that funding right here on earth and let the space travel up to private industry without ANY tax payer funding OF ANY KIND.


Friday, April 22, 2011

Register to Win a BMW, Harley or $10k!

Register to Win a BMW, Harley or $10k!: "Big Deal Give Away Free Registration. Enter to win a BMW 328i, Harley Davidson Softail or $10,000 Cash!"

Out to the Ocean this weekend. Have a nice day.

Friday, April 15, 2011

Swing Trade working like a CHAMP

As described to subscribers this is the trade
Long ES. Target as explained.

Tuesday April 19 Update :
First target reached as described to subscribers. Market drop after that and another buy setup was executed. No time to post the charts. If new visiters to this Blog would like to see it, then write your opinions in the comments.

Monday, April 11, 2011

Friday -Outside Bearish Day -Today is day # 2

Tuesday - April 12 :
 Day # 3 - BUY on the close
Long from 1308.25
Position liquidated during Globex session.
New Long position : 1300
Setup : High Volume Reversal after reaction to Thursday April 14 Econ Report followed by retest of Low on low Volume making a double bottom
this is a High Probability Reliable Trade.

Back to the markets after some scuba diving adventure travel. Blue days and beach time is back, time to head for the beach...the ocean is calling...

First let's look at the market and push the ATM machine to the limits.

Market Outlook

The economic recovery is so sluggish that the Federal Reserve needs to keep easy money policies in place while the government comes to grip with its debts, the International Monetary Fund said on Monday.

The U.S. futures regulator is scheduled to unveil a proposal on margin requirements for swap dealers and major swap participants under the Dodd-Frank financial reform law that Congress passed in the wake of the financial crisis.

The growth outlook for major industrialized economies is improving with Germany and the United States leading the recovery, the OECD's leading indicator for February showed on Monday.

The world's largest bond fund began betting against the United States last month by taking short positions on its debt on expectations the nation's shaky finances will drive interest rates higher and imperil its triple-A rating... U.S. deficit spending could result in higher inflation and a weaker dollar... lack of buyers for Treasuries once the Federal Reserve ends its own bond purchase program, also known as quantitative easing, in June...

The IMF sees new risks to the global economy from a rise in the price of oil and other raw materials, a senior German official said on Monday.

The Federal Reserve shouldn't be too enthusiastic about tightening monetary policy soon as there is still significant slack in the economy, a top central bank official said on Monday.

My prediction for this correction is that the ES will find support between 1311.50 and 1310.50
and no later than on Day # 3 it will resume the up trend. Those that follow this method on this Blog should know what the day # 3 is, if not please read the blog on previous postings.
New position : LONG from 1311.50 E-Mini S%P500 Futures- June ( ES )
Position closed and another new Long position at 1308.25 is open.
Setup : read the previous posts to find the methodology.

Friday, February 25, 2011

Another Evaluation of a BAD Trade

Never follow someone that does NOT practice what he preaches !

"A loss of control and a gambling mentality"
with no self awareness or recognition of bad performance and incompetence !

Have you ever been in one of those trading rooms where...

... the moderator ( FT71 ) tells you he took a trade AFTER it had already gone on to be a winner?

... he NEVER seems to lose or to be wrong?

... you want to punch the monitor when he says "Who's in this with me?" and you have no idea why or how he entered the trade? ( The Trading Zone )

... everybody else in the room seems to get it but you?

... the moderator is more interested in being right than to teach the room members to recognize mistakes and how to fix them?

... you are constantly being sold something i.e. "like it says in my book.....on sale now!"

  New trader BEWARE !

Thursday, January 27, 2011

Evaluation of a Trading Room-Beware

From time to time many of my trading friends, followers and subscribers ask me to evaluate the TRUE unbiased VALUE of Live Trading Room “ Educators “ that they have attended as guests.

Since 1993 I have attended and invested in many thousands of Trading Seminars and Live Trading Training of the Futures and Financial Markets giving me a very unique and qualified perspective of many different trading methods and trading teaching techniques used in the Online of Offline Trading Industry.

Here is for the entire world to see, the Unbiased and Qualified Evaluation of
“The Trading Zone”

High-frequency Trading gets away with Fraud and market Manipulation:

High-frequency trading is undeniably the wave of the future, but computerized strategies continue to receive the stink and skeptical eye from regulators and the public.

The specter of high-speed mistakes is haunting the markets, and AXA Rosenberg Group and Barr Rosenberg Research Center have agreed to pay over $200 million in a Securities and Exchange Commission settlement involving an algorithmic error.

Orinda, Calif.-based AXA has over $30 billion under management.

A problem with a Barr Rosenberg's algorithm was discovered in 2009, the SEC says, but AXA decided not to disclose related performance problems for investors:

In late June 2009, a stupid BRRC employee discovered an error in the Model’s computer code that was introduced in 2007 and effectively eliminated one of the key components in the Model for managing risk. This employee later discussed his finding in a meeting with senior ARG and BRRC officials and employees. A senior ARG and BRRC official (“Senior Official”) directed them to keep quiet about the error and to not inform others about it, and he directed that the error not be fixed at that time.

AXA came clean with clients in April of last year.

While SEC settlements over investment performance are not always able to calculate the exact damages to investors, in this case a hard number has been calculated. A consultant “determined that the error resulted in approximately $216,806,864 in losses across 608 client portfolios.”

AXA agreed to pay this amount to make clients whole, along with a civil penalty of $25 million. It also agreed to heighten its compliance efforts.

The complex algorithm was misused so that one of its variables fell out of the equation, leading to performance anomalies AXA blamed on other factors, like market volatility.

In Canada, The Globe and Mail recently examined trends in payment for order flow and noted that individual investors are often the ones paying the bill in make and take markets. The piece sparked feedback that was polarized – readers were either for or against HFT, with few fence riders.

The thread running through both sides of the argument is that one way or another, there are costs for having somebody willing and able to buy your shares if you want to sell immediately. In today’s market, that cost is paid through a fee that is mostly passed on to the HFT firms that have become modern day market makers. Prior to the entry of the HFTs, the cost was built into the bid-ask spread set up by market making brokers.

In the U.S., the SEC is looking at new ways to regulate HFT and algorithmic trading. Barron’s says that on Friday, commission Chairman Mary Schapiro made these remarks at a conference:

" Given the potential for trading algorithms to cause severe trading disruptions and shake investor confidence, we are considering whether they should be subject to appropriate rules and controls. We are examining trading or other obligations that might be required of today’s de facto market makers: the high-frequency traders which account for over 50 percent of daily trading volume and supply much of the market’s liquidity."

Likewise, the Commodity Futures Trading Commission is considering measures to review trading algorithms. But if the highly compensated egg-heads and greedy porfolio managers that create these things make mistakes buried in millions of lines of code, can we really expect workaday bureaucrats to ferret out the problems and eliminate the fraudulent manipulation?






Sunday, January 23, 2011

Communist China Visit to USA

At center stage this week was the visit from Communist Chinese President Hu Jintao to check on the status of his biggest holdings: $1 trillion dollars worth of US treasuries, and growing larger ever passing moment.

It definitely is good business for them to placate your biggest business partner, even if they are virtually bankrupt, and especially if they possess the most powerful military machine the world has ever seen. So the communist chinese deception continues.

The usual US concerns on issues ranging from currency manipulation and imbalances, trade imbalances, throttling back North Korea, and human rights issues , lack of free democratic elections, chinese industrial espionage and poor quality , low standards toxic products made in Communist China for export to the USA were mostly ignored, and the Republican interests was emphasized. Communist Hu's visit was meant to calm the waters and keep the deception going -- and move to greater appearance of cooperation between the two superpowers ( the odd couple of world foreign policy ).

We think it did. The current situation is a classic deceiving standoff: Communist Hu needs the ignorant materialistic and arrogant American consumer to keep spending to keep their Communist controled economy growing, moving the poor to middle class and keeping the Communist political status quo. .We need access to their markets, low cost labor for manufactured goods and keep them rolling over our treasuries. Who cares about free elections in China when 1 % of US population is getting more rich and powerful.Keep the foreign policies double standards as it is, keep closing our manufacturing plants in the USA, adding more to the low skilled unemployed labor force. No one in the USA is going to oppose it anyhow.The unemployed in the USA do not have a political voice that really matters. What is really important is for Wall St. and the banksters.

A decision to move away from the US dollar by buying other currencies and changing the status of the dollar as the reserve currency would be devastating to our way of life. So for now, the status quo continues, but Communist China has the trump card of owning our debt. This week, the dollar fell to its lowest levels in several months against most currencies, amidst rumblings from the market about our debt levels.

The divergence between the Dow and all other indexes is about as obvious as I have ever seen it. The DOW made new closing highs, while the QQQQs closed under the fast moving averages and ended with a lousy short term price pattern. The SPYs are waffling around the short term MA, after having tried to close under for the past two days. A reminder here is that the market phase on all the key indexes is still positive, so what we are looking at now is a test of the current bullish market phase.

Despite some continued selling in the first half of Thursday, the ES has recovered more than half the decline, continuing its surge on Friday morning on favorable GE earnings. It’s a bit premature to say the low is in, though, and we actually would like to have seen a bit more shakeout down to the ~1260 level. Looking ahead to next week, the FOMC meets Tuesday and Wednesday, issuing an announcement Wednesday afternoon, and Q4 revised GDP is released on Friday.

 Earnings season will continue and there is big Treasury supply on deck from the 2/5/7′s. This imparts some bearish seasonality from Tuesday through Thursday (with possible counteracting bullish seasonality on Wed from the FOMC meeting). This sets up the possibility of more sideways action under the 1300 level, with a potential double top. Traders will need to convincingly push above 1300 to get everyone back on board and squeeze the latest shorts. Watch for a trend reversal between Jan 28 and Feb 08, guaranteed.

Upside Vertical Development remains the primary phase of price action in the stock market. It is unlikely the stock market will “invert V” top. It is likely it will, at a minimum, form a Balance Area first. It is also likely that any top at this stage may be tested several times over weeks or months as part of a larger degree Balance Area.

The 1300-1350 zone  is a best guess for a “stopping price”, or pause, in the current rally. Last week’s high was 1296.25 and may be near the upper extreme in price for a while. 1200-1173 is the downside Key Institutional Level on the weekly chart.

The ES Daily may be developing a Balance Area between 1272-1264 and 1290-1300.Below there is 1258-1252 key zone.

Wednesday, January 19, 2011

Short Term Analysis and Development Perspective

As technical analysts, we are trained to look at chart patterns and recognize those patters in the belief that history has a high probability of repeating itself. That is the purpose of chart analysis. In addition, we also use various measurements of the strength or weakness of a market as those patterns play themselves out. While some use lagging oscillators or moving averages, I have found the information that comes directly from the market with no lagging mathematical formula to be most useful.

 As indicated to subscribers .In the daily chart of the ES from 2007 and 2008 when the ES put a high in at 1586.75. 

 Notice how on the initial move down volume began to increase but prior to that breadth diverged signaling the potential for some type of top. Then, the ES moved higher on lower volume and an even greater divergence in breadth. Finally, there was a daily reversal candle with a low reading in the VIX and then the market began a move down. As you study this chart, keep in mind that if the underlying securities are not following price and if fewer and fewer traders are buying, then price will correct. The only exception to this is if volume begins to come in and the underlying stocks begin to move up. Unless this happens, there is always a move down in some degree of time.

The chart of Tuesday shows and even greater divergence in breadth and extreme low reading in the VIX Count and one of the lowest volume readings we have seen in a long time. What is missing is a reversal candle, but that is not necessary to have a sizeable correction to the market.

As I stated above, this cannot continue. The divergences that persisted on Friday have been compounded. While price has pushed higher, there is good evidence to believe that a substantial correction may be in the offing. This is the higher probability, unless you see a substantial increase in the market internals.

The problem with this is the divergences can last longer than we can stay solvent. After all, look at the 2007 chart. The divergences persisted and as the market began to move down, volume increased. However, the result was the ES pushed to new highs before the divergences exerted themselves and a huge selloff persisted.

The key to trading this type of market is to look for other indications a top may be in and to realize that we may not catch the top of the market but we certainly can catch most of the move down, if and when it occurs. I say, "if and when" because I want to make it clear the market internals could change and increase to support price. This is typically the lower probability but it is a probability.

I prepared the above analysis on Tuesday evening for subscribers. Today, the Stock Indices had one of their best moves to the downside we have seen in quite awhile.Subscribers know when I initiated the Short position.

The issue that needs to be determined now is which timeframe the Indices are trading in. If it is a short term timeframe, the move down will likely be retraced. On the other hand, if this is a longer term trend correction, then more sellers will be attracted to the market and we will see much more downside before it is over. I want to urge you to use caution on loading up on short positions here. Just as we saw a good move to the downside in 2007 and then another test of the highs, that could also happen now.

The readings from today’s trading of the moving averages of breadth, puts the market in a short and intermediate term oversold condition. Therefore, while there could be additional downside tomorrow, the chances of rotation up will be increased.

There may be some short term follow through and a trade below 1275 9 Key Institutional Level )in the ES, but if breadth is diverging from today or there is a volume divergence, use caution on any shorts. I fully expect 1275 to provide a significant support in the short term.

From a development perspective 1275 is the upper extreme of the January 3 Area of Balance. It is an area of unfair price. Traders on the 12th of January were convinced value was higher, so they are likely to step back in and try to defend that area. Additionally, there is a gap or single prints between 1270 and 1275. The gap represents a lot of volume coming in at one time in a convincing way to push price higher in a short time period. Again, single prints are likely to be defended. Therefore, if the ES trades below 1275 but seems to stall below, use caution as the probabilities will increase for a rotation back up.
If the ES does rotate back up, evaluate volume comparing it overall to todays down volume. If it is lower, then the rotation up will likely be correctional and there will be another move to the downside. If volume is strong and breadth is expanding, it will suggest the possibility today was simply a correction and we will see another rotation up to test the highs in the 1295 area.

Tomorrow will be very important in determining the longer term development of the market. If 1270, the Point of Control from the January 3 and January 6 Balance Areas is traded through, then the probabilities increase we will see a test of 1258. The low for that week was 1255.25 .

Monday, January 17, 2011

Market Status

A pervasive, overwhelming sense of bullishness has settled over Wall Street. Numerous market observers and analysts are offering up predictions of more rallies yet to come this year.

This is accompanied by market volatility sinking to its lowest level since the summer of 2007: the Volatility Index (VIX) is barely showing a pulse (it has settled in the 15s). In such an environment, it is well known that 'all news is good news'.

Today, Friday the major US indexes started on a sluggish note but developed upside momentum as the day wore on, settling at or near session highs. The Dow and the S&P 500 saw a seventh straight up-week.

Early weakness was attributed Communist China's 50-basis point increase to its reserve requirement ratio, as well as to the news that a number of countries across the world are now grappling with (food) inflation, among them a rapid rise in the UK's producer price inputs. The specter of higher interest rates to cool inflation put pressure on gold and silver, where further downside to the recent slide was added. Strength in the US market was seen predominantly in the bank stocks sector, with the KBW Bank Index up 2.3% to a six-month high. The main catalyst for this upswing was seen in JPMorgan Chase which reported impressive quarterly earnings.

In the US, economic data releases included a 0.5% increase in the December Consumer Price Index (consensus estimate: a gain of 0.4%). When food and energy are excluded from the calculations, the CPI was up 0.1% for the month, thus matching consensus estimates.

Retail sales were reportedly up in December by 0.6% (prior month's increase: 0.8%). When automobile sales are excluded, retail sales were still up 0.5% (consensus estimate: a rise in sales of 0.6%).

The latest economic data also shows that industrial production increased 0.8% in December (consensus estimate: a rise of 0.4%). Finally, January's preliminary Consumer Sentiment Survey from the University of Michigan shows a weaker than expected reading of 72.7 (consensus estimate: a value of 75.5).

The early weakness in US equity futures overnight was in response to the Communist People’s Bank of China raising the reserve ratio effective January 20, one day after Communist President Hu arrives in the US.  Officials confirmed earlier in the month that the Yuan will be revalued 5% against the US Dollar in 2011, preferring to do so sooner rather than later.  So far, the string of  half measures since October has done little to rein in inflation as their peg currency peg has de facto imported Bernanke’s QE2. 

For now, the story remains on the backburner along with the Eurozone debt situation.  Front and center is the US’s own municipal and state budget woes, with Meredith Whitney talking down the sector early in trading yesterday. We had noted the jump in new NYSE 52 week lows, which escalated yesterday.

 Research reveals nearly all the fresh lows going back to November have been in municipal bond funds, so the overall equities structure remains pretty solid.  Not that a risk correction could not ensue off the news or ongoing earnings announcements, but it should be relatively mild and short-lived.  Today Monday, markets will be closed for the US holiday and there are no major economic reports next week, which will culminate with options expiration on Friday.  Absent a string of upside earnings surprises, it will be difficult for the ES to forge material new gains and I would expect sideways to down action at best.

Tuesday, January 11, 2011

Market Outlook - Monday Jan 10

US equities started on a soft note Monday but strengthened as the session wore on. This is a pattern I have been seeing repeatedly as of late, an indication that the bulls are still buying each and every dip. US weakness was precipitated by lower overseas markets and China reporting a decline in its trade balance (to $13.1 billion in December from $22.9 billion in November). Also setting a bearish tone were renewed concerns that further bailouts may occur in Europe.

This week may bring more news from Europe as a number of debt auctions are scheduled in Portugal, Spain, and Italy. The European Central Bank has recently been buying Portuguese government bonds and Irish securities. Austerity measures in several countries are believed to slow the pace of European growth.

There was some M&A activity in the US market Monday: Duke Energy will purchase Progress Energy (PGN) for $46.48 per share. DuPont agreed to acquire Danisco for $5.8 billion. As well, Playboy will go private for $6.15 per share.

Tech stocks overcome early weakness to close in the green, with Apple pulling the Nasdaq 100 higher yet again.

After the bell, Dow component Alcoa kicked off the unofficial start to another earnings season (which will not come into full swing until next week, however). Yet again, Wall Street is anticipating stronger-than-expected earnings. Alcoa beat expectations for earnings per share, but its stock weakened in after-hours trading.

I have known and previously shared with my subscribers the following “Monday - Friday Effect” report regarding the equity markets tendency of rallying late on Friday and into Mutual Fund Monday for many weeks,. Last week, I chimed in calling it the “Monday - Friday Effect.”  If you bought every Friday close last year, and sold the Monday close, your return so far would be 14.20%, versus a 0.42% return on the S&P 500. Virtually all the gains would accrue at the Monday morning gap opening. If you did the reverse, bought the Monday close and sold the Friday close, then your YTD loss would be 11.00%. Apparently, the market is paying a huge premium for traders willing to run the weekend risk, which during the financial crisis, is
when all the disasters occurred. I know of several desks and traders that have been working
this trade for a long time.

As we march into the new year its not the “Friday - Monday Effect” that I am worried about. It’s another factor that hasn't affected the markets up to this point and its called SENTIMENT. With most mutual funds fully vested the prospects of a brand new 12 months has people concerned that they can’t go up all year. The first hurdle will be the 4th Qtr earnings.  Investors moved $9.27 billion into equity funds in the week ended Jan. 5, the biggest inflow since June (FYI JUNE SPX 1070), while $9.6 billion exited money market funds. Last week, Goldman raised their forecast for the S&P 500 to 1500, BlackRock to 1350, Barclay’s to 1420, and Citigroup and Bank of America to 1400. Most think that any early year pull back will only produce more upside. What’s made the equities a hard game is you can really feel the anxiety on the downside. Traders are anxious because all the sells offs over the last few months (Fridays’ 16 handle sell off) have been
greeted with waves of buyers and the late sellers have gotten burned.