INTERNATIONAL INDICES

Just a quick look at the rest of the world:

MARKET COMMENTARY (7-22-09)

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I made a solid 1% yesterday. My multiple double-digit gains in HEB and SQNM did the job as I was about halfway through Season 5 of Lost. I've stressed the importance of careful selection many, many times. You will do well if you find stocks that move, regardless of what the general market is doing. Stocks, with minds of their own, can be your best friends as I've demonstrated time and time again.


The SPX is still testing the mid-June peak. In fact, there is so much strength that followed the continuation gap that it is just too dangerous to short. Shorting during a countertrend move is fine, but missing out on the primary trend is not. Unless you have exceptional timing skills, it's best to stick with imminent breakout or breakdown (if short) plays that make your life so much easier. On some days, I don't even bother keeping the SPY chart up because I don't need it.




The COMP is the first and only index that is trying to fill the early Oct gap. Note the boundaries in orange. We can expect significant resistance at this level, primarily because LT breakaway gap downs have a tendency to reject initial attempts.


Finally, I look to the world indices so get a feel for how the rest of the world is doing. I charted the Japanese Nikkei, Hong Kong Hang Seng, S. Korean Kospi, German Dax, French Cac, and the London FTSE. I especially like the neutral range breakout executed by the Kospi.

MARKET COMMENTARY (7-01-09)

Imperial Bolter - Astartes MK Vb Godwyn Pattern

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We just started a new month, a new beginning. Hardly new, the market is still trading in a neutral range. The possibility of an H&S is still present, though this pattern takes months to form. For those that believe the H&S pattern is hocus pocus, let me remind you that the pattern marked the top in 2007 with a neckline break on the 1st week of January 2008. As a short-term trader, I have to take advantage of intra-day and multi-day swings, prior to any breakdown (or a rare failed pattern breakout).



Besides the magical lines on the charts, keep an eye on the 20- and 30-day MAs. We've been trading in this narrow range for the past 3 days. The 20 is located at 924 and the 30 is at 919. For the day, I will focus on the 905-928 range. For the intermediate, I would focus on 895-930.

I took a look at the breadth charts, mainly the NYSE NH-NL's ($NYHL), NASDAQ NH-NL's $NAHL, VIX, NYSE A-D line ($NYAD) and the NASDAQ A-D line ($NAAD). The New Highs-New Lows Index is on it's largest cumulative positive strech since the bear market started. The VIX is back to pre-Crash levels.





The most interesting thing that I found was when I compared the NYSE and NASDAQ (COMP) indices with their respective Advance-Decline (A-D) lines. The COMP is outperforming the NYSE, however, if you look at the A-D lines, the NYSE internals have fared much better.





Finally, on the bearish side, the European indices ($DAX, $CAC, $FTSE) are all forming bear flags. The 20-day MA served as the principal support level for all three, but they have now turned into resistance.The Asian markets are still level.

MARKET COMMENTARY (6-23-09)

Today's action depends entirely on the FOMC's announcement. The market will spike up or down intra-day and you will have only minutes, if not seconds, to act. It is imperative that you have your watch lists (long and short) prepared and ready to go.

I am still leaning towards the bearish side, despite the fact that I remain in 100% cash. I took a poll a few hours ago asking traders how the market will act today, and here are the results:


As a group, this only means one thing: indecision. It will be obvious which side will win. Personally, the best option is to remain in cash until a clear direction is determined.

The SPX finds primary intra-day 10-pt support between 880-890 and 10-pt resistance between 920-930. There is also overhead resistance at 910.


Once again, I drew blank boxes for the remainder of June and all of July. Use your own imagination. I also included a weekly 7-year chart to put things in perspective:



Here are the COMP and RUT, both in precarious positions and threatening to further develop the head & shoulders pattern:




Finally, I look to the European indices (DAX, CAC, FTSE) for guidance due to the fact that they have broken down further than the US indices. Currently, Asia in the best shape.