Sunday, December 14, 2008


***For Weekly Technical Commentary Subscribers***: There is still no point in trying to chart some type of direction for the entire week. Therefore, use the daily "Today's Action" posts, because that's exactly how you have to handle this market -- day-by-day.


Bulls need to breakout of 910 SPX at the 50-day MA (even a close sightly below is considered 'ok'). Bears need to break below 850 and close around 840 or less. This will complete the bear flag and 'officially' break the ascending wedge. In the meantime, we're still hanging out in this zone of nowhere.

None of this may not happen in one day, but it's getting pretty tight up there. The only difference between the last 50-day MA failure and this one is this time we're edging up and forming a very volatile flag (technically, we're still in it). The previous MA failures occurred in 1-2 days...and that was the end of it. The market went down.

The volume has been an issue for some time now and the rally is moving on lighter and lighter volume. I remind both bulls and bears to not become complacent, even if the market has been discounting bad news on a consistent basis. This is not a market where you just buy/short something and leave it alone to go run errands for the rest of the day. Even if you use frequent stops, you'll get stopped out so much that you'll rack up significant losses. Only active traders will prosper at this point in the market.

I still can't believe it's taking this long to sort out the GM/F mess. As long as this fiasco continues, expect the market to act like some double heroin/coke addict on withdraw. The longer this drags on, the more difficult trading will be.

The Madoff scam shows how incompetent our SEC is in regulating anything. Come on now, $50 billion in losses? How in the world do you hide that? Nothing is reliable in this market as any one "black swan" moment could change the course of the market more than it's already been changed so far.

Also, don't forget earnings from key companies coming out this week including, but not limited to: GS, TITN, ADBE, HOV, GIS, CMC, JOYG, NKE, TTWO, PAYX, FDX, LEN, PIR, RAD, ORCL, RIMM, DRI, and many others. We also have several economic reports/announcements coming out this week: FOMC meeting, NY Manufacturing, Housing Starts, CPI, Jobless Claims, Leading Indicators, Philly Fed. There's no question that the market will be gut wrenching with volatility.

There's too much shit that's going to happen (or not happen) this week. Trading this market is not for the faint-hearted.

Be careful out there.

SPX 1-day

SPX 3-day

SPX 5-day

SPX 10-day

SPX 6-month

Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!


Anonymous said...

And triple-witching! said...

Hey John, I finally found your site!!!
I had it buried in my bookmarks under some secret code.
I like this post--basically saying to play both sides and scramble around a lot.
I posted the link on my blog--member's only area.

Francisco said...

I wholeheartedly agree with your analysis. The market is still not showing signs of wanting to recover so that all the attention in the coming months will be little