Lucky Eleven (Hundred)?

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Brief report: volleyball banquet tonight. Great video highlights by our videographer, VideoJam Productions.

Today's action met the department of redundancy department quality seal of approval. The SP500 bounced off 1085 and moved with light volume toward the upper channel.
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Gomer Pyle of no surprise, surprise chart. The US Dollar moved DOWN as an inverse correlation to the equity move up.
_________________________________________________________Highest yielding stocks from the NDX and SP100.
_____________________________________________________________Worst performing (5 days) stocks from the NDX and SP100
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Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

More Noise, Few Signals

Another day of 'in range' activity. Sure, there will be lottery tickets that pay (or not) every day, but nobody in their right mind would bet the farm on lottery tickets.

Dynamics:

• Breadth is neutral but trending slightly negative
• The Bank Index is flat, but oversold
• Goldman Sachs is up (the one-stock tell)
  
• TRIN is ticking up...standing at 0.9 and rising above the rising moving average intraday
• Similarly the US dollar is creeping above its intraday short-term average although is overall neutral
  
• The SPX remains locked in the 1080-1120 range

Bulls and bears alike have to ask themselves what is the catalyst for "the move" which could be substantial out of this range.

Make your own decision...let's do more of what is working and less of what isn't.

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

Hate on Technical Analysis?

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Keywords: volatility, stock market, trading, investing, technical analysis, audit the Fed

So you want to hate on technical analysis? There must be plenty of company out there. You want the example du jour, and here it is.
Here's the Amibroker display of the US dollar, with the central panel showing the 3-10-16 MACD and the bottom panel RSI7.

• Price - the dollar has rallied sharply off the bottom, broken the down trendline, and has had higher close than open five consecutive days and higher close four of them. Recently bullish action.
  
• MACD - short-term highs haven't been kind to the dollar all the way down (arrows)
• RSI7 - most overbought since February

So, the trendline break says, caution fellow travelers, and the other action screams overbought!

You want oversold? Here's a partial list. Disclosure my sister is CEO of BJ's Wholesale, a Fortune 500 company, and I do not trade the stock. Can you say Martha Stewart?
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Infrastructure? Here's Jacobs Engineering (JEC)...RSI7 day, week, month 20, 24, and 32. Almost into the sweet spot of the Cara RSI7 system. But not yet, and not one of the Cara100.
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Death to bears? TZA the ultrashort (3x) small cap bear. I'm long TZA January 11 calls and short Dec 12 calls for 25 cents.
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Volatility Index (VIX) broadening horn. Does it have one trip to the bottom left in it?
____________Trade Universe for Wednesday, stochastics sort.



Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

The Yellow Caution Flag Is Out

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Binary risk: the potential for large moves in either direction.

• Risk for melt up relates to 'unexpected' economic strength during the nascent recovery.
  
• Risk for melt down relates to credit contraction contagion in the setting of debt downgrades emanating from Europe.

The "Aggregate Risk Tool" plus copper shows a number of pairs with stochastics turning up (increased risk). By no means is this universal or 'guaranteed'.
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The SP500 shows a non-trending consolidation above support in the 1080-1085 zone. The MACD indicator can't be taken in isolation but along with the declining RSI shows a divergence that makes me cautious...more open to the possibility of darker clouds ahead.

We'll have to pay close attention to the action of 1) banks, 2) breadth, 3) the dollar, 4) volatility, and 5) interest rates.

To quote a former mentor, "In God We Trust, All Others Need Data."

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

Dollar Breakout, Time to Print More?

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Some days you get the bear; some days the bear gets you.

Nothing good happened on today's 10 minute ticker. The top two panels show breadth and Goldman Sachs. Breadth was negative as was GS. The bottom two panels show the dollar and the VIX...both rising. So it was four for four concerning intraday investment headwinds.
__________________________________________________________We don't have to put lipstick on the pig today, but the technical picture isn't as clear.
Top 60 minute charts: SPX and IWM both still above support.
Bottom panels: EEM and GLD. GLD is at another support level, although the expression about no resistance in bull markets and no support in bear markets comes to mind.
____________________________________________________Heads you lose, tails you lose? Here's a point and figure chart of the yield on the ten-year note.
The column of Xs needs to reach 3.6 to trigger a double-top break out signal...which MIGHT reflect economic strength but higher rates. The current status is still negative (lower rates reflecting deflation, that the Federal Reserve desperately fights).
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The Housing Index (HGX), currently tenuously clinging to a point-and-figure buy signal (arrowhead up)...not someplace I want to play, as it could just as easily head south (arrowhead down).
___________________________________________________________The official policy of the US central planners is a "strong dollar". The de facto policy has been anything but. Today the dollar broke out above the down channel...not the news the market is looking for. Chart from Netdania.com.

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

Put Up or Shut Up Time for Bulls

Click chart to enlarge. Put up or shut up time approaches for the bovine kind. The SP500 approaches the "demilitarized zone" between bulls and bears.

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

Lesson Plan

The market never stops talking, or teaching. Can we hear it?

On the one hand, Dr. Data Dependent isn't likely to start raising rates until employment shows more consistency. On the other hand, managers who've done well (recovering from the bear)...may want to protect gains (bonuses).

So nothing much changes, the struggle between the 1080-1085 zone lows and the 1111-1117 highs continues.

Breadth is mildly negative, about -1000, the US dollar (15 minute chart) is above the 20 period average, and TRIN is at 1.88 (high and negative). NYSE breadth is about 2:1 negative and breadth has been the number one tell.

Jesse Livermore believed in doing "test buys" to establish a position and assess the response of the market. Worked for him at times, but he did end his career with a bullet.

Today's action just hasn't been favorable, and the reason doesn't matter, just like it won't matter why IF it changes for the better. Jobs are the solution to a variety of ills, and nobody has presented a solution yet where they're coming from.

Volume? ISRG has dropped over a percent with volume well above its 65 day average and XLP doesn't look so hot either. AGG is up only fractionally but has supporting volume.

Banks, as everyone knows, don't pay back TARP money for us, but to remove pay restraints. Good for shareholders?

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.

Vote

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Fedex (FDX) did well after hours, but yesterday the transports (IYT) did a high volume 'churn' at recent highs.
Daily chart, IYT. The good news for bulls is that IYT stayed above Friday's lows. The bears can argue that the bulls couldn't push through. The patient investor simply waits for this to be resolved.
__________________________________________Within the transports, the Airline Index (XAL). Will this 'prove' to be an inverse head-and-shoulders with a target circa 35, or simply another fake out.
_____________________________________________________________It's all good say the bulls. The Bank Index (BKX), borrowing free and lending dear, can't get on board. Both bulls and bears get only frustration in their stocking?
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The 'feature' du jour from the trade universe is a large expansion of NR7 (narrowest range of seven days) price expansion setups that predict price movement but not direction. That's where watching breadth, volatility, TRIN, sector action, and 'sister stocks' helps us.

No doubt the talk today will be a "Santa Claus" rally, because lacking catalysts, the bulls need the pompom shakers to do their thing.

Primary day in Massachusetts for replacing our interim US Senator. If you don't vote, you can't complain.

Good trading and great risk management to all.

Educational use only. Never intended as investment advice.