CONSOLIDATION

We are still in consolidation and may still be forming the right shoulder of a H&S pattern. No new developments.

MARKET COMMENTARY (6-25-09)

The Tau Empire

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The first thing I did yesterday was close out all of my shorts at the open. By 9:40AM, I was in 100% cash. How's that for perfect timing? If you missed it, you can go through my tweets. I was up +3.8 entirely from day trading select names, such as CAR, AGM, VVTV, and DTG. Heck, even Jake followed my trades. If you joined me, you came out with free money in your pockets.



The market is in a precarious position right now. I suspect that a wide-ranged consolidation will continue, therefore, I will refrain from swing trading and go exclusively with day trading. Neutral consolidations are hazardous to swing trades and benefits day traders the most. Conversely, trending markets favor the swing traders, leaving the day traders in the dust.

This bear market has lasted for 20.5 months so far. We are still down 41.2% from the October 07 peak, but up 36% from the March 09 low. I still maintain a bearish stance, but believe it is not time to short yet.


Let's talk about the exit timing of my short positions. How did I know the market was going to rally? I didn't. The only reason why I covered was because I did not get a gap down to at least 890, which was the main criteria for me. In addition, the magical lines that I use showed me immediately that there was strength in the market, prior to the spike higher. I used my "Connect-the-Dots" strategy (the "dots" can be seen on the 2-month/60-min chart). Sounds simple, right? This will have to be an entirely new educational article.


Finally, I broke down the major SPDR select sectors (XLV, XLB, XLK, XLI, XLP, XLU, XLY, XLF, XLE) and added the patterns, ratings, and technical notes:

MARKET COMMENTARY (6-24-09)

Black Templars on a Forest Patrol

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I expect continued consolidation primary between the 895-910 area on the SPX. I am short 10 names with 5% allocated per position for a total of 50%. The names are as follows: PCU, TTI, WTI, HLX, TC, JRCC, HOC, TSO, SD, CRZO. I see that futures are up +1%. I made a good +1.73% yesterday, so I am willing to sacrifice all of those gains if the market breaks out of the range today.

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.