My strategy for 2010 and January

The January Barometer indicates a negative year for stocks. Bearish monthly reversal candle is in place.

I've been calling for a bounce since last week, it never came so I'm still waiting for it so that I could pick up some shorts.

The QQQQ is very bearish, I'll look for a bounce to pick up some QID and then playing the Q's until it hits the weekly 200-MA

My strategy for 2010: only play to the short side and play small and mid-caps.

Watch stocks like IBM to monitor the health of the market. My prediction going forward is that IBM will go down until it hits its weekly 50-MA; that would be VERY bearish for the overall market

I finally have new trendlines!

This is the SPY intraday 60-min. chart:


as you can see, we have a descending channel taking place. A break out above the channel, I would suspect, will yield a move toward the thicker sloping trendline. TRADE IT!
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did anyone take some shorts when the SPY hit the 200-MA on the 10-min? PROFITS!

The easiest shorting opportunity is approaching!

Watching the intraday 10-minute chart of the SPY, I can't hope but to short the dang thing @ $110.40. If we can manage to get there today with the 200-MA sloping into it at the same time...it will be the easiest scalping opportunity!

I'm scalping off of the 200-MA

Smart money playing with dumb money

$109.80 on the SPY, I mentioned yesterday, is an extremely important level. We closed below it yesterday and traded below it 95% of the time today only to trade back above it the last 20 min. of the day!

I really REALLY feel that the markets are playing dead right now. It seems as though it's pretending a future break down but it faked so many people out now that the "bear trap" is in place.

Stay above $108.30 and break that $110.40 level so we could go to $112.50 level already...I still favor the upside. Make sure you have your stops in place!
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AGEN alerted Monday night @ $0.78 is now @ $0.8159 or about a 5% gainer, I still like this stock going forward.

MAKE MONEYYYYYY!!!! $$$$$$$$$$$$ :)

Markets are playing dead

I don't know what to make of these markets right now. $110.40 on the SPY is holding up very well as resistance. If we can manage to break that on the 60-min. chart, I would look for a move to at least $111.30

But if we don't get a clean break and close above $110.40 on the 60-min. look to $109.80, $109.80 will have to hold if there is going to be any bounce coming.

I still favor the upside but wouldn't bet a lot on it.

Chart update and Chart of Focus

I adjusted the sloping blue trendline on the SPY so that it fit with friday's close. The markets were up today as i expected (not as much as i had hoped). Futures are currently down but I'm still expecting a bigger up move unless we can close below friday's low.
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Last week's chart of focus was MNI and i said to go SHORT. You would have a net gain of 5%.
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This week, I say go LONG AGEN, it is currently trading at $0.78

The perfect set up

Great week for the bears, but expect some short covering next week. Here is why:

1) SPY is coming into major support @ $110 (the thick blue trendline)


2) DIA is coming into major support @ $102.80 (the thick blue trendline)


3) UUP is forming bearish patterns on the 60-min. The bearish pattern is confirmed with major supports on GLD and USO

4)Stocks like IBM, XOM, JPM are all coming into major support.

So take your profits bears!

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*GLD has broken its neckline, refer to the last post

..

Chart of Focus: SPY and MNI

The markets sold HARD on Friday. Last Thursday I mentioned the mighty $15.30 level on the XLF. XLF is now @ $14.94, my target is $14.75.
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If you don't have any short positions, you will have an opportunity coming this week. Wait for a bounce to the 60-minute 50-MA to short ($114.10-$114.20) the SPY and pick up some SDS. My final target on the SPY is $112.

There is a chance that the markets just sells at the open; I would NOT open new short positions then because of the 20-DMA sitting right below us. DO NOT CHASE THE MARKET!

SPY 60-minute:

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MNI is a prime shorting candidate. It could sell immediately going into Tuesday so short on intraday pullbacks. This chart is very bearish. I would keep a stop at $5.45.

MNI Daily:

Follow me on Twitter: http://twitter.com/xlfblog

Last week's charts of focus ran 30%, 15%, and 20%!!!! Did YOU get any piece of that pie? Overall 4/4 on the focus charts :)

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On December 12, 2009 I noted bullish patterns developing on financial stocks like GS, JPM, and BAC. Since then we've seen the financial sector become the leader these past 2 weeks. I also said $15.30 on the XLF would be MAJOR resistance, I have taken my FAZ position since the $15.30 level. I'm liking the bearish patterns in financials, however, I caution: keep a close eye/stop on FAZ, we should NOT go above $15.50 on the XLF.
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Posted below are charts of the GLD, USO, and UUP

I've been receiving emails about the UUP. Yes, it is still going up! It's simply forming an inverse head and shoulders with the neckline @ $23.00

Dollar up = oil and gold down. With that in mind, USO and GLD are forming very bearish patterns (as they should with a bullish UUP pattern) The thick blue line are their necklines.

All 3 right shoulders are in process of being made.

Targets IF these patterns play out are listed below:

GLD $96.00-$100.00


USO $26.00-$27.00


UUP $24.13-$24.80

Chart of Focus: DPTR, EGLE, BAS

Last Thursday's sell off into the close warns of a correction in the future.

The last chart of focus was a 10% gainer. To make up for the weeks I've been gone, I want to give you all 3 charts this week:

BAS: my favorite chart, buy @ $8.55


EGLE: buy @ $4.70 or upon breakout of the falling wedge


DPTR: I'm in from $1.10