Stock on watch

AMCN

Very healthy looking stock. Rise on heavy volume and pulls back on light volume. There is resistance @ $5.80. Watch for a pull back before entering.

HQS-Bull Flag

Another pretty looking pattern

HQS

September 30, 2010

Today is the last trading day of the month. Let's see how the month closes out. Volume looks good for now.

I sold my FUQI position this morning for a break even. I'm totally upset, I was up 10% yesterday until the news was released yesterday.

FUQI to be delisted from NASDAQ

I was away from my the desk the entire day busy with errands.

I am totally disappointed with FUQI, the 60-min, daily, weekly charts all looked promising and was really the gem in my eyes. After being up 14%, the stock is trading down 6% after hours. The company failed to comply with NASDAQ's rules and will most likely be delisted.

IRONICALLY the stock closed @ $6.66

FUQI up 14%

FUQI looks like it's ready to play out its daily pattern. If the pattern plays out to its fullest potential look for $8.00

It's clear-cut the market is being propped up by some "greater force." The financial sector is not in agreement with the direction of the market. JPM, MS, GS continue to decline despite the fact that the DOW continued to grind toward 10,900.

This is a huge red flag. Because one, you can't have a recovery without the financial sector and two, the economy must be really bad if a "greater force" has to manipulate the stock market.

The dollar is declining which is hinting the government is spending more and more, I assume, taking that money to flood liquidity into the market. Oil can't catch a bid which shows there is no demand for it. And the smart money is going into treasuries.

The health of the economy will show itself again. No matter how much the Fed decides to intervene.

Whacky Whacky Market

It seems like whenever the DOW moves down 50 points a 100 point reversal to the upside comes soon after. The market is reminding me of the days that lead to the flash crash. Just look at the chart from early February to the end of April. Extended charts with very small pullbacks.

Out of DZZ

Sold DZZ for a loss. It isn't a steep amount of loss in dollar terms, but the opportunity cost was big. I'm just sitting on my hands.

Market leaders are approaching major double-tops

Mosaic (MOS) is coming into major double-top @ $64.70

Freeport McMoran (FCX) @ $88.30

Southern Copper (SCCO) @ $35.29

International Business Machines (IBM) @ $135

Gold Miners hitting major resistance

The Gold Miner ETF (GDX) hit major resistance from the highs of 2008. Watch for a breakdown of the parallel channel.

DIA parallel channel

Final week of September

Monthly charts of SPY, DIA, and QQQQ all show bearish patterns. But the recent rally in the market is making the patterns look "less ideal" especially on the QQQQ. We had a significant close on the SPY last Friday that could signal more upside, however, I remain cautious because the market is just too overbought for me.

Although I hold QID, DZZ, FUQI; I'm neutral on the market.

We will have to watch and see how the month of September closes.

SPY $114.46

Watch to see if we can have a daily close above it.

..

SPY beginning to top intraday?

The high of the day is currently $114.71

Starting my scalps early

FUQI ready to make its move?

As you probably know, I entered FUQI yesterday for $6.20. If my wave count is correct, it should explode higher tomorrow or Monday. It favors tomorrow more. If it does "explode" higher, I'll make a post explaining the significance of the technicalities in relation to the broader markets.

If you look close enough, you can probably see the inverse relation of FUQI and SPY

The market is selling pretty hard here. But I can't see a damn thing! My strategy desk is just blank!

My TD Ameritrade isn't allowing me to see any 10-min candles. There's something wrong with their server or my computer. Anyhow, I'm done scalping for the day. I don't know if it's just my charts but where the heck is all of the volume?????

Intraday top is in?

$113.67 is the high of the day. We could see a move to $113.73 based on this little pullback, but I'm taking my intraday short scalps now.

The scenario is still valid!

I'm not lying. I went to the library, checked out Elliott Wave Principle by Frost and Prechter and reread the book wondering why my scenario was wrong. In fact it was right all along. My count was off, I had previously thought we were @ "point C," remember? click here

When in fact...we are at "point E!" On page 48 of the book, it specifically says, "Wave E can undershoot or overshoot the A-C line, and in fact, our experience tells us that it happens more often than not."

We overshot our A-C line, $113.20, with that in mind, here is the REAL count


In case you're thinking I'm making excuses to be right, here is an illustration of the scenario from Elliott Wave International

..

H&S top developing on SPY 60-min chart?

Bears are gaining momentum

I'm 70% confident that the bears are in control of this market.

Solid gap down with a nice pop. If you are bearish too, you should short this pop with a stop of $113.50 SPY.

If we break $112. Watch out below.

Bears are showing signs of life

If you thought the bears were dead, you're dead wrong.

The bears aren't in complete control, but they are fighting. The bears will regain control of this market if the 60-min. SPY breaks below the the 50MA. From there we should go to $112.

The bulls have better hold their SPY Inverse H&S neckline ($113.25), it would be a strong reversal in the market if the pattern was negated like the H&S last year.

Inverse H&S:


Failed H&S of 2009:


As you can see in 2009, we had a break below the neckline but it reversed once the bulls recaptured it.

FUQI @ $6.20

I like the pattern developing on this stock. Managed to pick some shares up @ $6.20. We could go lower to $6.00 however.

Selling my FAZ position here @ $13.05

Still holding onto DZZ and QID

All out Bearish on the Market

I have QID, FAZ, DZZ. The Bulls just delivered the last blow to the bears.

The Dollar tanks as Gold and the market spike

The Fed is keeping interest rates low, this tanked the dollar and spiked gold. $23.35 UUP is support.

Watch the FOMC Decision and the Gold

The market is not expecting any change in interest rates. Any kind of bearish comment will be bad for this market, especially after the NBER came out yesterday saying the recession ended last summer.

FOMC Decision is @ 2:00pm ET

I reviewed the charts last night, and I cannot change my long-term view on the market, I am still bearish. In the near-term and intermediate-term, I think bears will just have to wait for a hit of a major resistance or a reversal day.

We will not be retesting the April highs.

We have a clear breakout on the SPY. Unless the market reverses today's gain tomorrow the scenario is no longer valid. Watch for pullbacks as it does look like the market wants to go to $115.50-$116 SPY.

The charts are overextended near-term and volume remains light. Monitor Gold tomorrow when the Fed speaks.

Tech stocks signaling a pullback

I picked up some QID.

I'm taking a break away from the trading desk and letting the market do its "thing." I will have to come back and re-evaluate it later.

This is an extremely painful morning. My stops are in, FAZ @ $12.69

..

Markets explode to the upside

The bear flag didn't play out. I shouldn't have doubted "Obama's Power." Generally, the powers that be have no vested interest to sink the markets before a President comes out to speak. The reasons are obvious.

I'm going from all out bearish to neutral/bearish. Even though the $113.20 level is being broken on the intraday, it really depends on the daily close.

I'm still in FAZ. The XLF is not reacting to the move on the SPY.

Bearish week coming up

"Financial Blogger, why are you always bearish?"

I'm not always bearish check the August 24th posts and beyond. I just prefer the bear camp, and quite frankly, I find baby cubs to be cuter than baby calves...

-Anyways, be bearish this coming week. Stock market leaders are looking very suspicious with Friday's close now in the books. Particularly JPM.

-September 14, 2010 is my pivot-high date, and it continues to hold as the following trading days never managed to trade above it.

-I said the $48.00 on the QQQQ would be major, we closed at $47.99.....$47.99!! [Institutions follow yourfinancialblogger, it's only obvious. :)]

-We have plenty of bearish set ups all over the place

Overall, if you're a swing-trader, look for bounces along the 50-MA daily SPY. But eventually I see us heading lower. I'm still bearish on Gold near-term. Re-check my scenario for GLD, September 2, 2010.
click here

The Bearish Gold trade is not ripe enough for me to short yet. It's going to take an extremely brave person to short Gold. Chances are, you or someone you know is extremely bullish on Gold. And thats perfect, because when everyone feels strongly one way about an asset, it'll go the other way.

You have better not forget this forecast! You are at point "C"
click here

**Do not follow this blog blindly, if you are new to this blog, re-check past posts to validate the accuracy of it.

*good luck all, it's a beautiful day in San Francisco, I'll see you back on Monday! cheers*

Why did the markets dump late in the trading session?

It was the last chance to take the novices' money before the weekend.

As I warned in the previous post the markets would dump during the final hour of the trading session. I should have also warned that the last 30 min. of the day the market would attempt to rally. But it's okay because the last 30 min. sets up the next move on Monday. I will get back to that.

First of all, to understand the late day dumping you have to understand the mind set of the market of the preceding days. From the last day of August to the recent highs, the market managed to rally about 7% on the SPY having only 1 or 2 negative days in between that time. Add in the fact that Monday had a large gap up was "icing on the cake."

Too many people turned bullish; the news and even Warren Buffett. But I warned that people were late to the party, they had turned bullish into massive resistance; SPY $113.20.

For a week, the institutions managed to rally the market up so much and so fast that they had embedded the bullish mindset needed going into options ex week. Options ex week is notoriously known for a week of games Wall St. plays on the novice investor to "shake them out" of their positions. That is why there was so much whipsawing.

As you can see below, the first hour of the trading day was always the hour for the markets to dump and on heavy volume (this is the shake). But as the day progressed, volume got lighter--these are the novice investors. And as a novice investor, what are they thinking? They think to themselves, "the markets are bullish, 'buy the dips.'" Hence, a floating market.


**note how heavy the volume was the last 10-minutes of the day

But each subsequent day, the novice would get stopped out of their positions because the markets are dumping. This is how the institutions make their money. And even with a late hour dump in today's session, you see it again: novice investors stepping up to buy.

The late day buying looks to me that Monday will gap down and the next move down could be big. (-150 DOW?). That's just my personal take on how the market's behaved this week and may behave Monday.

Last minute bear flag could signal a gap down Monday

And YES, I am aware of the Inverse Head and Shoulders pattern on the daily chart. I don't like to trade the pattern in anticipation. Rather, I wait for the clear breakout and then trade the pullback. Just because you see the the pattern developing doesn't mean it will play out. Remember last year's H&S pattern back in late June? Exactly...

Markets float float float

It has been the same theme the past 4 trading days. The lows of the day are made during the first hour of the trading day and then a slow grinding float higher the rest of the day. Volume is extremely light.

Watch the final hour of the day as institutions may make an attempt to fool everyone by selling in a dramatic fashion.

I DO NOT expect this type of action to carry over into next week.

What a volatile session

It's quadruple witching and the market is extremely whacky as institutions try to whip people out of their positions.

I'm still expecting a big move today but note how light the volume is.

Potash Corp. (POT)

I was messing around with Fibonacci numbers and found that POT can rally to $178-$180. POT is currently trading @ $148. As long as there aren't any weekly closes below $143.

Will light volume prop the markets up?

Light volume has sure plagued the bears lately. Watch to see if these intraday bottoming tails hold.

..

Roaring yawns**

I don't mean to be a "Debbie Downer" but the markets are boring me to death. There are no significant moves one way or the other. Volume has been pathetic the past 2 weeks, granted, it has been picking up during option ex week.

I am expecting a move tomorrow or early next week. We just have to wait out the "institutional games" of this week as institutions attempt to rob people.

If you're short the market, like I am; don't panic if we have a close above $113.20 SPY. On the QQQQ watch the $48.00 level the bears should not allow a close above it.

The markets are doing the same thing they did early August. That is, fight $113.20 resistance while hovering above the 200 day MA.

***WATCH BSPM $2.20 IS GOOD SUPPORT. I will be picking up some shares when it gets there (cheers)

Clarifying the forecast

I want to make something clear. The forecast I've been telling you guys to memorize is the bearish forecast and is the only forecast until I say otherwise.

(Future price movements can violate the forecast, if it does my analysis will have to change.)

The Wave Principle

"when you have eliminated the impossible, whatever remains, however improbable, must be the truth." --Sherlock Holmes

I viewed a youtube video on technical analysis and the man in the video uses Elliott Wave to forecast the market. I want to let you all know that the Wave Principle is not a forecast, they are rules and guidelines. When you learn the rules, you can label the waves, assuming you've labeled the waves correctly, you can build a bias, from a bias you map scenarios, from scenarios you use deductive reasoning to make a forecast.

I, personally, use Elliott Wave to supplement other technical skills and found the Wave Principle does, in fact,work. Those of who believe Wave counting is ambiguous and inaccurate are not following the guidelines correctly.

The man in the youtube video isn't confident in his forecast, therefore, must be incorrect. In every video it seems his upside and downside targets are changing over night. This gives the impression that Elliott Wave does not work; it does.

According to my counts, we are at the beginning of the end. The 2007-2009 market crash is NOTHING compared to what is coming. After we reach point "E," I expect us to retest the lows of July, if that does not hold-- a swift drop in equity prices will come and the TRUE bottom of the DOW will be at least 1,000....yes, 1,000, at least!

DO NOT rule this forecast out, it sounds highly improbable, but it is the expectation when using the Wave Principle. You are a trader, your feelings and hopes do not matter when it comes to the markets. You must keep an open mind to every possibility unless the technicals tell you otherwise.

The only thing we can do now is build or at least maintain our capital so that when the true bottom comes, we will have the capital necessary to reinvest just as they did at the bottom of the Great Depression which was followed by a 70-year bull market.

Remain Bearish

Not much has changed. I'm still bearish. $113.20 resistance continues to hold. I continue to hold my FAZ position. The markets are weakening every time it hits $113.20

Since it is options ex week, you can always expect weird things to happen.

Intraday bear flag

Remember!

I can't emphasize the importance of this forecast enough. DO NOT forget it! Unless I say otherwise this is the ONLY scenario for the SPY.

Paint a picture of this chart on the inside of your eyelids.

Bearish all across the board

I maintain my bearish stance. Too many factors are hinting that the markets want to go down. Today's trading session, September 14, 2010, is a pivot date. Markets are way too extended. The bull trade is getting crowded. Major stocks are hitting major resistances. People are fleeing into bonds. And the MONTHLY chart of the SPY is extremely bearish.

If I was a technical teacher and told my students to draw me an example of a bear flag, I would give them an "A" if it looked anything like the chart below.

..

Too many bulls

Too many people are jumping on the Bull bandwagon.

The news is bullish, traders are bullish, gold looks bullish, Cisco has announced dividend payouts, even Warren Buffett is bullish. The only problem is, people turned bullish at major resistance; SPY $113.20. Add the fact that it's option expiration week, and I become even more bearish.

The SPY is WAY above its 20 day moving average indicating the market is too extended. If we close above $113.20 today, tomorrow will have to confirm if there is going to be further upside.

I've also noticed less traffic on the blog when the markets appear bullish, as it is today, and more traffic on days when the markets appear bearish, as it was @ SPY $105.

GLD hits major resistance

The only scenario left for the SPY

Do not forget the forecast! We are currently at the point I have labled "C." The forecast was made September 1, 2010. Today is September 14, 2010 a possible pivot HIGH date.
click here

The Markets are waving a Bear Flag

SUTR pending a breakout?

SUTR has been on my radar, because I believe it will be huge mover in the future. Although I would love to own this stock @ $1.40, I have to monitor this possible bull flag on the daily chart. I think a breakout above $1.80 would cause massive buying in the stock but that is only if the pattern does play out.

GLD has a monster recovery

The GLD has officially made new 52-week highs and managed to reverse out of a bearish consolidation. This move is suspect as it is options ex.

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Warren Buffett a contrarian indicator?

Warren Buffett is ruling out the chances of a double dip recession. He says the chances of a double dip are 1 in 3. Read the article below.
Link

I don't think the economy will double dip, either, it's impossible...because we never got out of the first recession! HAHA.

Although Buffett is the world's greatest investor, and I have much respect for him, he isn't the greatest market timer. Truth is, I think ANYONE can make money in stocks once prices become extremely depressed. Imagine buying McDonald's for $5/share. STEAL!

Anyway, below is an article posted on March 2, 2009...4 days before the actual bottom. Read it and tell me what you think.
Link

As long as the SPY continues to trade below $113.10, I am convinced that today's rally is a small "B-WAVE." B-WAVES are notorious sucker bets, and in this case, a bull trap.

The markets are extremly extended as well.

Gold is bearish

The GLD pulled back into the 20 day moving average and is forming a bear flag. GLD could consolidate for one more day before a break down. But it is still a good shorting opportunity today.

Markets gap over $112.40

The markets managed to avoid heavy resistance by "leaping over" $112.40 this morning. $113 SPY is the level of resistance. I am still short this market.

Markets look Bearish

The DOW JONES needs to correct to at least 10,300. Unfortunately, volume is so light and dismal, I doubt that that will happen today.

As long as USO doesn't close above $33.58 oil is looking bearish as hell.

Watch for Gold to retrace before shorting. GLD looks poised to go to $122.40

FAZ

My limit order on FAZ was just hit for $13.70

What is the outlook for the next week?

XLF says down

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Bear Flag on Oil

Compare and Contrast

My scenario under a microscope. Let's see how it has unfolded thus far...

The original:


Where we are today:


I've nearly nailed every top and bottom thus far almost within a $0.15 range. These scenarios are NOT random. Nothing in the market is random.

We are getting into a "gray area" of the analysis. This next move can go straight to $112.40 or shoot back down before advancing up again. Just follow the scenario for guidance.

Link


And remember to follow Yourfinancialblogger!

**cheers!

The intraday market is acting odd

I've been keeping a close eye on the market, and I can't help but think that these markets are attempting to do something "under the radar."

I have a limit order on QID at $16.36

tsk..tsk..Gold, you do not fool me

Gold looks to be breaking down this morning. I've been waiting for this pullback once Gold reached its all-time highs.

But the secret to playing this break down is not to short it right away. Rather, wait for the retrace and bear pattern to develop (the pattern should develop at the hit of the daily 20-MA) then short it. Gold's downside target will then be the 50-MA.

**If the GLD trades back into $118.42 a larger down move may be in play