Friday, May 14, 2010
Noble Corp - NE (5/14/2010)
Downtrend confirmed, breaking major support at 37.50. Go long at $32.50, with a stop at $32.00
5/14/2010 - Market Update
The market is in trouble. First off, the Euro is in a free fall, and transferring money from the left to right pocket isn't going to fix anything. Think of the current debt problem as the soap scum on the shower door -- accumulated over several years, and will take more than a few scrubs to clear the glass.
The downtrend in the S&P 500 is confirmed, and it's now time to be bearish.
The downtrend in the S&P 500 is confirmed, and it's now time to be bearish.
Thursday, May 13, 2010
5/13/2010 - Market in Danger
The past 2 trading days were great days for long exits and short entries. All the major indices are backtesting the 20EMA and failed today. If tomorrow finishes below today's close then the markets are in serious trouble. The crash last Thursday served as a warning and it definitely should not be overlooked.
Thursday, May 6, 2010
5/6/2010 - The day the market broke.
They're trying to rewrite history today. This was a crash. A result of the simplest and purest of market physics. A "fat finger" doesn't explain 18 full minutes of selling at the bid in the Qs and DIAs which preceded the final plunge. There were technical factors as well: the 200 day Moving Average was breached right at the time that the plunge started, triggering natural selling. That was also the moment that the demonstrations in Greece became violent. And the DXY breached 85.
We're coming off a topping process. Markets drop faster than they rise. There was evidence of a gathering liquidity crisis. Long trades and carry trades were unwinding with increasing momentum. Oil inventory and new jobless claims reports this morning came in below expectations.
In other words we had a perfect storm, a setup for a crash. Sellers simply overwhelmed bidders. And in this low volume, exhausted market at a top there simply were unanswered offers as large positions were liquidated.
What is scary is how arbitrarily and capriciously the NYSE and NASDAQ could simply nullify legitimate trades. Why didn't the safety mechanisms kick in? Where were the trading curbs, the 15 minutes of suspended trading? Would they be canceling trades if the "fat finger" made the market rise? I think we know. The playing field is full of trap doors, booby traps, land mines and leg holds. Even being right doesn't help since you can be frozen out of trades, or they can be canceled.
We are witnessing a crisis: a crisis of confidence in our markets, in capitalism as it is being practiced today and in the legal and tax system. The events in Thailand and Greece fit right in with the notion that class warfare is not only brewing, but is being fought already in the virtual trenches. But the pervasive anger and disillusionment that cuts across traditional demographics is spilling over to communities and the streets.
We're coming off a topping process. Markets drop faster than they rise. There was evidence of a gathering liquidity crisis. Long trades and carry trades were unwinding with increasing momentum. Oil inventory and new jobless claims reports this morning came in below expectations.
In other words we had a perfect storm, a setup for a crash. Sellers simply overwhelmed bidders. And in this low volume, exhausted market at a top there simply were unanswered offers as large positions were liquidated.
What is scary is how arbitrarily and capriciously the NYSE and NASDAQ could simply nullify legitimate trades. Why didn't the safety mechanisms kick in? Where were the trading curbs, the 15 minutes of suspended trading? Would they be canceling trades if the "fat finger" made the market rise? I think we know. The playing field is full of trap doors, booby traps, land mines and leg holds. Even being right doesn't help since you can be frozen out of trades, or they can be canceled.
We are witnessing a crisis: a crisis of confidence in our markets, in capitalism as it is being practiced today and in the legal and tax system. The events in Thailand and Greece fit right in with the notion that class warfare is not only brewing, but is being fought already in the virtual trenches. But the pervasive anger and disillusionment that cuts across traditional demographics is spilling over to communities and the streets.
Monday, April 26, 2010
GS - Goldman Sachs - Support
20 EMA broke down under 50, at key $150 support. Break that then it's game over.
NFLX - Netflix - Overbought
Netflix - great fundamentals, growth prospects, but way overbought on daily, weekly, and monthly charts with daily RSI > 86. Chart clearly shows a parabolic move. Likely to break higher tomorrow in the AM for a quick pop on short capitulation and fall for the rest of the day.
Short entry ~$110, cover half at $100, rest at $90, stop loss at $113.
Short entry ~$110, cover half at $100, rest at $90, stop loss at $113.
Saturday, April 10, 2010
Market Update - 4/10/2010
You may have noticed that this blog isn't updated regularly like some of the other trading blogs. That is actually intended. Over trading and over thinking is often a common mistake by traders, both experienced and novice alike. When the trend is intact, just sit back and relax; no need to analyze on a daily basis. I have noticed many bloggers angry and fed up with the market since the start of the run-up after the January correction. Many believe that this run up is government induced, fake, and must crash soon. Of course, these same lines of thoughts are repeated day after day, all the while the market is hitting 52 week highs. Folks, we are now in a bull market, and there will be no crash. Indexes are way above moving averages in a strong uptrend, and believe me, there will be plenty of signs if a crash were to happen.
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