Nothing has really changed, so I'll keep this short. We are still in this downward channel, which can either be 1) part of a bottoming process or 2) another primary leg down. The lower Bollinger band and flagging action suggests that we still have more downside from this point, despite the fact that we are oversold. I wouldn't commit all capital to shorting, but rather wait for the major reversal day (whenever it comes) and commit to a full-scale long position on a major spike on massive volume.
As for the employment situation, the consensus is a -648K M/M change, with a range of -800K to -500K. The previous reading was -598K. The unemployment rate is projected to be 7.9%, with a range of 7.8% to 8.1%. The previous reading was 7.6%. I've stressed this before, but the monthly employment situation report is the most important economic report. Let's see what happens!
Friday, March 6, 2009
Thursday, March 5, 2009
MARKET COMMENTARY (2-4-09)
I am in over 90% cash, so I have no bias toward either side, long or short. The reason is because I see conflicting signals. A good example of a high probability reversal to the upside is GE on a gap up. However, if you look at the XLF, it's obvious that the financial sector will once again drag this market down. Financial volume has been weak for the past three days, which doesn't confirm a sustainable reversal and besides, look at the market carpet below. If you look at GE's volume, combined with oversold indicators, the hammer reversal, and the lower Bollinger bounce, then it's likely that GE will be up. See what I mean?
Instead of holding overnights, I elected to observe the open and see what happens in the first 30 minutes (as always) today. For bounce names, I am looking at the insurers, and possibly some cheapies including, but not limited to, PNX, RDN, FOE, HW, and MIC. It all depends on what happens in the morning for Spiker™ classification. In the event that we head lower, you might as well hit various financials since they are still the absolute weakest sector in the S&P. We are still in a neutral range (so far) and I'd like to see some quick multi-day decisive action take place.
I want to express caution here as we approach March 2nd's opening gap resistance (which was already tested yesterday). I will focus on the 724-735 zone as overhead resistance. I won't short much unless we breakdown from the flag, but at these levels, it is too dangerous to short in large amounts. It is also dangerous to go considerably long. Personally, I found no reason to trade yesterday (as a primary swing trader), so I watched a movie (Running Scared), and caught up on reading my first non-financial book in 2009: The Audacity of Hope by the "O-Man". Unfortunately, I cannot trash the book because it was a gift from mom.
Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!
Instead of holding overnights, I elected to observe the open and see what happens in the first 30 minutes (as always) today. For bounce names, I am looking at the insurers, and possibly some cheapies including, but not limited to, PNX, RDN, FOE, HW, and MIC. It all depends on what happens in the morning for Spiker™ classification. In the event that we head lower, you might as well hit various financials since they are still the absolute weakest sector in the S&P. We are still in a neutral range (so far) and I'd like to see some quick multi-day decisive action take place.
I want to express caution here as we approach March 2nd's opening gap resistance (which was already tested yesterday). I will focus on the 724-735 zone as overhead resistance. I won't short much unless we breakdown from the flag, but at these levels, it is too dangerous to short in large amounts. It is also dangerous to go considerably long. Personally, I found no reason to trade yesterday (as a primary swing trader), so I watched a movie (Running Scared), and caught up on reading my first non-financial book in 2009: The Audacity of Hope by the "O-Man". Unfortunately, I cannot trash the book because it was a gift from mom.
We have jobless claims at 8:30AM. The consensus is 650K, with a range of 600K to 676K. The previous actual level was 667K.
Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!Wednesday, March 4, 2009
WATCH GE DAY
I had quite the night last night, having returned home at approximately 4AM, so sorry for the delay. The market is up +100pts, yet my bank shorts are doing mighty fine. I will cover enough to just keep a 10% short position/90% cash position.
As for the market, nothing has changed. We are still in the neutral range, but I will be cautious here. I do not know if we head higher or lower. The chart says that we cascade down further, but we are extremely oversold and are overdue for a bounce. Keep a large cash position with you.
As for the market, nothing has changed. We are still in the neutral range, but I will be cautious here. I do not know if we head higher or lower. The chart says that we cascade down further, but we are extremely oversold and are overdue for a bounce. Keep a large cash position with you.
Tuesday, March 3, 2009
MARKET COMMENTARY (3-2-09)
Looks like we will get a small bounce this morning. I am waiting for a nice sized bounce, preferably an inside day, to add short positions. There is no way I will be loading up down here. Likewise, people who are going long should be aware that we have not reached a capitulation point. If the day does end positive after a gap up (no more than +2%), then the chances of going 'largely short' are high.
Take a look at the 5-month chart of the SPX. Volume is picking up and it is supporting the selling. Although this "sell-off" has been very slow, if you know what I mean, there is enough volume to back it up. At some point, we will hit capitulation and form a short-term bottom. When the reversal day does come, it will be blatantly obvious. Either you wait for a bounce, or you go long on the reversal day. I plan to do both.
From a swing trading perspective, I have no other charts to offer, because we are in 'uncharted' territory with no immediate support/resistance levels.
On another note, America doesn't need to wait for a ratings agency for a downgrade. We've been downgrading, or more accurately, degrading ourselves for years. Just take a look around you, around society, on the streets. etc. America is downgraded in education on every level. 50% of high school students do not graduate. Asia is killing us with their armies of engineers, scientists and doctors. America is downgraded physically. Take a look at all the morbidly obese people walking the street. Many diseases are preventable by just keeping a healthy diet, not smoking, and not drinking (excessively). Yet, most people just don't care. America has also downgraded itself psychologically, morally, spiritually...everything. Every facet of life. We're in a much larger crisis than a financial one.
Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!
Take a look at the 5-month chart of the SPX. Volume is picking up and it is supporting the selling. Although this "sell-off" has been very slow, if you know what I mean, there is enough volume to back it up. At some point, we will hit capitulation and form a short-term bottom. When the reversal day does come, it will be blatantly obvious. Either you wait for a bounce, or you go long on the reversal day. I plan to do both.
From a swing trading perspective, I have no other charts to offer, because we are in 'uncharted' territory with no immediate support/resistance levels.
On another note, America doesn't need to wait for a ratings agency for a downgrade. We've been downgrading, or more accurately, degrading ourselves for years. Just take a look around you, around society, on the streets. etc. America is downgraded in education on every level. 50% of high school students do not graduate. Asia is killing us with their armies of engineers, scientists and doctors. America is downgraded physically. Take a look at all the morbidly obese people walking the street. Many diseases are preventable by just keeping a healthy diet, not smoking, and not drinking (excessively). Yet, most people just don't care. America has also downgraded itself psychologically, morally, spiritually...everything. Every facet of life. We're in a much larger crisis than a financial one.
Don't forget to try the Free Trend Analysis. It's FREE, so give it a shot!
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