Mr Market appears to be paying attention to the VIX... the rule that a close outside the BB band, followed by a close back inside the BB band, followed by a second day in the same direction generates a trading signal. In this case, the signal was unmistakable. Everybody saw it and now here we are at 11:45, Up 115 Dow points and 17.60 SPX points. Right around 1% on both.
There were a couple of new Momentum Change signals yesterday with the DIA and the XLF and the IYT generating new Buy signals. Today, the SPY, IWM, QQQ, and the FXE have also generated new Buy signals. In addition, the GDX and the SLV are also nearing new buy signals. The UUP is nearing a new Sell signal. It is difficult to determine where this bounce may take us... there are some TA's talking about resistance appearing around 1303. I personally think this rally may may have some legs.....perhaps taking the SPX all the way back up to around 1340 level, which would make a nearly perfect H&S pattern that seems to be forming in most of the major indexes. Time will tell. However, my first goal would be around the 1318 level. It would make a perfect place to take some profits out of the rally and begin to set up defensive strategy for the 1334 level.
News today is focused on the elections in Greece, where the hope is that the voters will approve the proposed bailout and accept their imposed restrictions. But the larger issue in the EU is that the voters in the remaining EU members are becoming more and more hostile to the idea that it is their job to bail out the loans made by private and state banks to Sovereign nations. The ECB may be able to kick the debt issue down the road for another few months, but the tax payers and voters in nations like Germany may have other thoughts about taking on the burdens of the bad loans made by the bankers.
ON the domestic front, the annual sale of existing homes printed at 4.81 Million, vs expectation of 4.8. This is the good news the market is reacting to today. The fact that this number is 3.9% lower than the previous month is also seen as good news, as expectation had been for a decline of 5%. I guess we need to take our daily dose of Hopium with a grain of salt.
Best To Your Trading!.
Bill
Tuesday, June 21, 2011
Monday, June 20, 2011
Up Big on No Volume. Again!
Not much to comment on today.. Greece continues to be the story and How, What, Why Where and When are the questions the ECB PooBahs are trying to answer.
Movement in the Momentum Changes indicators continues to be mixed, with new guidance being provided in the Transports (also the IYT) and the DIA.. both generating new Buy signals. The SPY, the and the Q's and the IWM continue to move toward a new Buy signal, but not yet.
Best To Your Trading.
Bill
Movement in the Momentum Changes indicators continues to be mixed, with new guidance being provided in the Transports (also the IYT) and the DIA.. both generating new Buy signals. The SPY, the and the Q's and the IWM continue to move toward a new Buy signal, but not yet.
Best To Your Trading.
Bill
Thursday, June 16, 2011
Day Trading is Fun Again!
Wow.. 6 straight trades done right......this is fun again!
Nothing new in the world of Momentum Changes.. no direction in the market seems to last long enough to establish a trend... and until this violent and daily change in direction sorts its self out, I have no confidence, indeed, no strategy to identify an expected direction for the market. But I do have confidence that having knowledge of Momentum direction will again be valuable.
The market is responding today to bad news the same way it has for the past several months. Bad News is Good News!
Greece is reported by falling deeper and deeper into chaos and the ECB has no clue what to do about it. That is probably because there is nothing to do except to let it fail.
New jobless claims were reported this morning at 417,000, the 10th consecutive week of job losses over 400,000. Yesterday the Empire Manufacturing index was printed.... and it was not good. This morning the Philly Fed printed -7.7 against expectations of 7, and down from 43 in March. It is the worst number since July, 2009 and the biggest decline in the history of the series. There is a brief deconstruction of the report at Zerohedge here.
The market has been locked in a very tight range for the past 2 1/2 hours.. Zzzzzzz. Guess I will wait until 2:30 and see if it can wake up.
Best to Your Trading!
Bill
Nothing new in the world of Momentum Changes.. no direction in the market seems to last long enough to establish a trend... and until this violent and daily change in direction sorts its self out, I have no confidence, indeed, no strategy to identify an expected direction for the market. But I do have confidence that having knowledge of Momentum direction will again be valuable.
The market is responding today to bad news the same way it has for the past several months. Bad News is Good News!
Greece is reported by falling deeper and deeper into chaos and the ECB has no clue what to do about it. That is probably because there is nothing to do except to let it fail.
New jobless claims were reported this morning at 417,000, the 10th consecutive week of job losses over 400,000. Yesterday the Empire Manufacturing index was printed.... and it was not good. This morning the Philly Fed printed -7.7 against expectations of 7, and down from 43 in March. It is the worst number since July, 2009 and the biggest decline in the history of the series. There is a brief deconstruction of the report at Zerohedge here.
The market has been locked in a very tight range for the past 2 1/2 hours.. Zzzzzzz. Guess I will wait until 2:30 and see if it can wake up.
Best to Your Trading!
Bill
Wednesday, June 15, 2011
Two reports this morning... the Labor Department reports the CPI for June and the Empire State Manufacturing Index. One is up and the other is down....Want to guess?
The CPI prints 0.2%, on expectations of 0.1% for the month, and 3.6% for the year. The annual was 1.1% as recently as November, 2010. So I would guess that the Fed targets have been reached.. you know, the target of creating inflation as per the QE programs. This in spite of the mandated goal of fighting inflation.
On the other hand, the Empire State print was -7.79 on expectations of 12 and a May print of 11.88. This means that the economy is contracting, not expanding. When I worked at Paine Webber in the 70's, these kinds of numbers were considered evidence of Stagflation.......and those of us old enough to remember the 70's and early 80's remember what that felt like. The report can be found here.
The financial news out of Europe continues to deteriorate.. the Greeks are rioting, the EEU ministers are meeting in emergency, short term CDS continue to set records for Sovereign debt of Greece, Spain, Ireland, the whole world is holding its breathe, waiting for the inevitable Greek default.
As a consequence of the above financial developments, the first call on the Market had the Dow down 90, but after Industrial Production was reported up0.1%, on expectations of 0.2% of course pre-open market recovered and is down on 32 as this is written at 9:15.
It is likely to be a wild ride today.. and I have no idea what position to take, except I like the cash position.
Best to Your Trading!
Bill
The CPI prints 0.2%, on expectations of 0.1% for the month, and 3.6% for the year. The annual was 1.1% as recently as November, 2010. So I would guess that the Fed targets have been reached.. you know, the target of creating inflation as per the QE programs. This in spite of the mandated goal of fighting inflation.
On the other hand, the Empire State print was -7.79 on expectations of 12 and a May print of 11.88. This means that the economy is contracting, not expanding. When I worked at Paine Webber in the 70's, these kinds of numbers were considered evidence of Stagflation.......and those of us old enough to remember the 70's and early 80's remember what that felt like. The report can be found here.
The financial news out of Europe continues to deteriorate.. the Greeks are rioting, the EEU ministers are meeting in emergency, short term CDS continue to set records for Sovereign debt of Greece, Spain, Ireland, the whole world is holding its breathe, waiting for the inevitable Greek default.
As a consequence of the above financial developments, the first call on the Market had the Dow down 90, but after Industrial Production was reported up0.1%, on expectations of 0.2% of course pre-open market recovered and is down on 32 as this is written at 9:15.
It is likely to be a wild ride today.. and I have no idea what position to take, except I like the cash position.
Best to Your Trading!
Bill
Tuesday, June 14, 2011
I have a Position.. .It's Called Cash!
Live by the signals, die by the signals. I wish I had been on the right side of the decline, but then again, I was not on the wrong side of the decline. Which is what a disciplined stop loss strategy does for a trader. I am ready for the next signal, which I have indicated is likely to be a Buy signal, and it is getting near.
After the European market performed well this morning, we had the over night SPX trade up nearly 1%, opening around 1270. As this is written at 11:00am, the SPX is trading up 16.30 at 1288.04 and the Dow is up 130.00 at 12083.18. The rest of the major indexes are also higher, with the transports leading the way, up 1.70% at 5158.86 and the IWM (Russell) up 2.07 at 79.39.
Oil is up 75 cents at 98.05 and Brent is up 1.07 at 120.17. Gold is up 7.60 at 1523.20 and Silver is also higher at 35.18. Copper is leading the way in the metals, up 2.17% at 4.14 The Food commodities are mixed.
The Euro is higher about 0.50% at 1.447 as the Dollar again gives up some ground, trading at 74.29. The Bond Market has softened, with the Note down 5/8 at and back above 3%, trading 3.06. The Bond is also weak, trading down over 1% at 4.26.
Retail sales were reported this morning slightly better than expected, at .-0.2 on expectations of -0.5. The PPI came in higher at 0.2 on expectations of 0.1, however annualized, the PPI is at 7.3. I guess a case could be made the lower sales, and higher inflation is a good thing.. and least in the mind of the Inflation-Chief -in -Charge. He will certainly point to this print as proof that the Fed policies of QE2 are working...... The public maybe not so much.
Financial reports out of Europe continue to deteriorate, and the Powers That Be are again in emergency meetings to decide what to do next. Now that it is clear to all that Restructuring (or Credit Event as the Rating agencies like to call it) is no longer a matter of if.. it is only when that is confusing. But it is looking more and more that the "Credit Event" is likely sooner rather than later.
Nothing new on the Proprietary Momentum Change signals.... but I am seeing movement toward a new Buy signal coming shortly is this market can keep to the plus side today.
Best To Your Trading.
Bill
After the European market performed well this morning, we had the over night SPX trade up nearly 1%, opening around 1270. As this is written at 11:00am, the SPX is trading up 16.30 at 1288.04 and the Dow is up 130.00 at 12083.18. The rest of the major indexes are also higher, with the transports leading the way, up 1.70% at 5158.86 and the IWM (Russell) up 2.07 at 79.39.
Oil is up 75 cents at 98.05 and Brent is up 1.07 at 120.17. Gold is up 7.60 at 1523.20 and Silver is also higher at 35.18. Copper is leading the way in the metals, up 2.17% at 4.14 The Food commodities are mixed.
The Euro is higher about 0.50% at 1.447 as the Dollar again gives up some ground, trading at 74.29. The Bond Market has softened, with the Note down 5/8 at and back above 3%, trading 3.06. The Bond is also weak, trading down over 1% at 4.26.
Retail sales were reported this morning slightly better than expected, at .-0.2 on expectations of -0.5. The PPI came in higher at 0.2 on expectations of 0.1, however annualized, the PPI is at 7.3. I guess a case could be made the lower sales, and higher inflation is a good thing.. and least in the mind of the Inflation-Chief -in -Charge. He will certainly point to this print as proof that the Fed policies of QE2 are working...... The public maybe not so much.
Financial reports out of Europe continue to deteriorate, and the Powers That Be are again in emergency meetings to decide what to do next. Now that it is clear to all that Restructuring (or Credit Event as the Rating agencies like to call it) is no longer a matter of if.. it is only when that is confusing. But it is looking more and more that the "Credit Event" is likely sooner rather than later.
Nothing new on the Proprietary Momentum Change signals.... but I am seeing movement toward a new Buy signal coming shortly is this market can keep to the plus side today.
Best To Your Trading.
Bill
Thursday, June 9, 2011
Another Bad News is Good News Day
This morning, the BLS reported the New Jobless Claims to be 427,000 and missing the estimate of 419,000. This after the report last week of 422,000 was revised higher to 426,000. Another 52,000 unemployed workers fell off the 99 week Extended Benefit rolls, thus again reducing the numerator when the Unemployment rate is calculated...... Guess what? The Unemployment percentage will again show improvement because fewer people are unemployed. No kidding. 52,000 are no longer counted as unemployed.
Wholesale Inventories were also reported this morning, printing 0.8% on expectations of 1.0% and a revised 1.3% last month. The inventory accumulation number that is so helpful in calculating GDP is becoming less and less reliable as Inventories reach record levels. Does anyone remember the good days when the business cycle could be measured by the ebb and flow of inventories, and what we used to call a recession was widely recognized as an inventory correction? Too much stuff for sale at prices consumers were willing to pay? Huuuummm?
Oil is higher this morning, up .74 at 101.47 and Brent is also higher, trading at 118.13. Gold is up a couple of ticks at 1539.10, and Silver is up nearly 2% at 37.28. Copper is soft, trading down 0..5% at 4.08. The Food commodities are mostly higher, with Corn making new record highs at 778.74 Cotton is also strong, up nearly 2% at 148.74.
The Euro has been giving up some of its recent gains, trading at 1.451 while the Yen continues around trading near it recent high at 80.18. The Dollar has again today traded higher, back again over 74 at 71.18. The Note has given up a little of its recent gains, trading at 2.95% and while the Bond continues its rally, trading at 4.18%.
The big news of the day is that after 6 straight days of trading lower, the equity markets are in rally mode, with the Dow up 90 points and the SPX up 9.39, both of the indexes trading up 0.75%. All of the rest of the equity indexes are higher, with the Transports leading the way, up 1%.
The Momentum Change indicators are moving once again toward to new signal, with the correlated asset classes also falling into line. Just like they did 2 weeks ago. But if you can't trust your indicators, who can you trust? One more thought.. the PM are again weakening, and GLD is moving toward a sell signal. Don't forget those stop loss orders if you are long the Gold or Silver. Or both.
Best To Your Trading!
Bill
Wholesale Inventories were also reported this morning, printing 0.8% on expectations of 1.0% and a revised 1.3% last month. The inventory accumulation number that is so helpful in calculating GDP is becoming less and less reliable as Inventories reach record levels. Does anyone remember the good days when the business cycle could be measured by the ebb and flow of inventories, and what we used to call a recession was widely recognized as an inventory correction? Too much stuff for sale at prices consumers were willing to pay? Huuuummm?
Oil is higher this morning, up .74 at 101.47 and Brent is also higher, trading at 118.13. Gold is up a couple of ticks at 1539.10, and Silver is up nearly 2% at 37.28. Copper is soft, trading down 0..5% at 4.08. The Food commodities are mostly higher, with Corn making new record highs at 778.74 Cotton is also strong, up nearly 2% at 148.74.
The Euro has been giving up some of its recent gains, trading at 1.451 while the Yen continues around trading near it recent high at 80.18. The Dollar has again today traded higher, back again over 74 at 71.18. The Note has given up a little of its recent gains, trading at 2.95% and while the Bond continues its rally, trading at 4.18%.
The big news of the day is that after 6 straight days of trading lower, the equity markets are in rally mode, with the Dow up 90 points and the SPX up 9.39, both of the indexes trading up 0.75%. All of the rest of the equity indexes are higher, with the Transports leading the way, up 1%.
The Momentum Change indicators are moving once again toward to new signal, with the correlated asset classes also falling into line. Just like they did 2 weeks ago. But if you can't trust your indicators, who can you trust? One more thought.. the PM are again weakening, and GLD is moving toward a sell signal. Don't forget those stop loss orders if you are long the Gold or Silver. Or both.
Best To Your Trading!
Bill
Wednesday, June 8, 2011
This is the Kind of Action I want to see.....
Nothing much on the Econ front today......the market has been very boring. However, this is the kind of market action that the Momentum Change indicators need to set up a signal that is can be productive. The very rapid changes that we have seen the past several weeks have been very hard to measure with any degree of confidence. A couple of days like today and we should be able to make sense of the Momentum Change indicators once again.
No guidance today with the equity indexes, although the market is at a point where a signal is possible in the very near future.
Don't forget, we are looking for profitable trading opportunities, however, a stop loss order is very important so that an error does not turn into a "don't worry, it will come back" kind of scenario.
Best To Your Trading.
Bill
No guidance today with the equity indexes, although the market is at a point where a signal is possible in the very near future.
Don't forget, we are looking for profitable trading opportunities, however, a stop loss order is very important so that an error does not turn into a "don't worry, it will come back" kind of scenario.
Best To Your Trading.
Bill
Tuesday, June 7, 2011
Go Directly to Jail... Do Not Pass Go
Those old instructions for Monopoly is how I feel after last Fridays' blow out. Please review yesterdays post... and remember that trading is a hands on endeavor. I was able to pull my stops before the open, and then to get out on the late morning/early afternoon rally. Unfortunately, I do not have a mechanism that allows me offer that suggestion prior to the opening of the market.
Today the Econ calendar is pretty bare, with the only media attention on The Bernak's speech this afternoon. The financial press is pretty much focused today on the proposed 37th bailout of the Greek debt, with the rating agencies threatening to consider another bailout to be a credit event... ie: a default. In addition, the folks in Greece in charge of the debt seem to be on another page as their responses to the ECB proposal seem to be at odds with the statements out of the ECB. Photos and video out of Greece demonstrate a very unhappy population, while elections around the EEU are telling the various elected officials that the voters are not going to tolerate further extensions of credit to Sovereign nations at the expense of the tax payers in the supporting nations.
There are also reports out of Japan that the Nuke accident was orders of magnitude greater that first reported, and indications that all three of the online reactors at the time of the tsunami have completely melted down. In addition, Plutonium has actually been found in a town over 1 mile from the Nuclear site. It is the actual particles of nuclear material that poses the greatest threat.
There is an excellent deconstruction of the recent Zillow report on residential real estate, and a review of the Owner/Equity of mortgaged homes nationally this morning at Zerohedge. It is worth the 4 minute read. In addition, Charles Hugh Smith at Of Two Minds has an excellent report on Education in the U.S. It is an excellent review of current status of education process that does not get bogged down in religious dog-whistles attacking Science and promoting public funds for private religious education.
After trading higher overnight, the market opened with a small gap higher, and is currently trading up 65 Dow Points. The SPX is up 0.55% at 1293.18 and the rest of the major indexes are also higher with the Russell leading the way, up 0.85% Oil is soft this morning, trading off a few ticks at 98.71, while Brent is nearly 1% higher at 115.59 This is the largest spread in the WTC and Brent for several months. Gold is higher 80 cents at 1547.30 and Silver is higher 18cents at 36.95. Copper is again trading lower at 4.141. The soft commodities are mixed, with Cotton leading the decliners, down over 3% at 150.75.
The Euro continues to march higher, trading 0.75% higher at 1.466. while the dollar is getting hit, down nearly 0.50% at 73.61. The Jen continues strong, trading at 80.19. The Bond market is again giving back some of its gains, the the Note again trading above 3 at 3.04%, and the Bond higher, trading at 4.291%
Please note the Momentum Change signals for a series of major indexes. The abrupt change last week completely demolished the remaining pieces of the Momentum Change indicators for the equities indexes, moving completely through a Buy/Sell cycle with out getting the Sell signal. The Momentum Change indicators are near levels where they can generate a new Buy signal at any time, yet are not any place near a sell signal, having completely missed the sell. This is why it is so important to use stop loss orders to protect a trading position.
Best To Your Trading!
Bill
Today the Econ calendar is pretty bare, with the only media attention on The Bernak's speech this afternoon. The financial press is pretty much focused today on the proposed 37th bailout of the Greek debt, with the rating agencies threatening to consider another bailout to be a credit event... ie: a default. In addition, the folks in Greece in charge of the debt seem to be on another page as their responses to the ECB proposal seem to be at odds with the statements out of the ECB. Photos and video out of Greece demonstrate a very unhappy population, while elections around the EEU are telling the various elected officials that the voters are not going to tolerate further extensions of credit to Sovereign nations at the expense of the tax payers in the supporting nations.
There are also reports out of Japan that the Nuke accident was orders of magnitude greater that first reported, and indications that all three of the online reactors at the time of the tsunami have completely melted down. In addition, Plutonium has actually been found in a town over 1 mile from the Nuclear site. It is the actual particles of nuclear material that poses the greatest threat.
There is an excellent deconstruction of the recent Zillow report on residential real estate, and a review of the Owner/Equity of mortgaged homes nationally this morning at Zerohedge. It is worth the 4 minute read. In addition, Charles Hugh Smith at Of Two Minds has an excellent report on Education in the U.S. It is an excellent review of current status of education process that does not get bogged down in religious dog-whistles attacking Science and promoting public funds for private religious education.
After trading higher overnight, the market opened with a small gap higher, and is currently trading up 65 Dow Points. The SPX is up 0.55% at 1293.18 and the rest of the major indexes are also higher with the Russell leading the way, up 0.85% Oil is soft this morning, trading off a few ticks at 98.71, while Brent is nearly 1% higher at 115.59 This is the largest spread in the WTC and Brent for several months. Gold is higher 80 cents at 1547.30 and Silver is higher 18cents at 36.95. Copper is again trading lower at 4.141. The soft commodities are mixed, with Cotton leading the decliners, down over 3% at 150.75.
The Euro continues to march higher, trading 0.75% higher at 1.466. while the dollar is getting hit, down nearly 0.50% at 73.61. The Jen continues strong, trading at 80.19. The Bond market is again giving back some of its gains, the the Note again trading above 3 at 3.04%, and the Bond higher, trading at 4.291%
Please note the Momentum Change signals for a series of major indexes. The abrupt change last week completely demolished the remaining pieces of the Momentum Change indicators for the equities indexes, moving completely through a Buy/Sell cycle with out getting the Sell signal. The Momentum Change indicators are near levels where they can generate a new Buy signal at any time, yet are not any place near a sell signal, having completely missed the sell. This is why it is so important to use stop loss orders to protect a trading position.
Best To Your Trading!
Bill
Monday, June 6, 2011
OK I give!
After being in South Florida and watching helplessly as the market continued it sell off, I realized there was a serious flaw in my blog, and my ability to offer timely info in a quickly changing trading environment. Early Friday morning, and the overnight futures were down hard and it looked like a gap open, I realized I had no way to communicate concern about existing sell stop pricing. It was clear that the market was going to open below a level that would trigger my suggested sell stops. I of course can pull my own orders, but there is no way to communicate that suggestion prior the open.
So I want to offer a suggestion that any trader should be aware that a gap open can create a very painful experience. A GTC Sell Stop order , placed at 50 when the stock is at , lets say 52, becomes a market order to sell when the price falls below GTC Sell Stop price. For instance, if a stock were to open at 48, the Sell Stop would be executed at 48, 2 points lower than the stop price. In situations like we saw Friday, when nervous sellers overwhelm the orderly opening process, it often occurs that the opening price for that day will turn out to the the low of the day. It is often the case that after an hour or so of trading, the market will sort its self out, the emotion of the early morning is tempered by additional information, and the bids appear to move the market higher. As was the case on Friday, the best prices for the day for after 12:00, a good 100 Dow points above the open, which of course gives a trader a much more reasonable opportunity to execute an exit strategy.
Another observation. My Proprietary Momentum Change indicators are all based on trailing price fluctation, using a number of formulas, that when they all come together, and when properly understood, signal a change in market direction. Until the last 2 months, those signals were very accurate, occurring with in 1 or 2 days of an actual direction change. But the extreme volatility in the market since mid March has been causing the signals to get trapped in whipsaw action, not able to react quickly enough to the rapid change. For instance, the last buy signal came over a period of 3 days that saw the Buy signal occur in all the major indexes.....including the correlated indexes that properly generated Sell signals. With the strength of the signals, I felt confident that a move higher was imminent. IN almost every index, the technical patters also gave every indication that a move higher was probable. Then after the disappointment of the early part of the week and the decline we saw, by Thursday the market had again set up a pattern in several indexes that indicated a rally was probable.
But nooooo.....The gap open took care of any possibility of a rally and it was clearly time to get out, with timing the exit the only question. So cash is again what is owned. Interestingly, the Momentum Change indicators are back to a position that could generate a buy signal, with out ever actually signalling a Sell. I think one last observation must be considered, and that is the likely-hood that a market top has occurred, and that the trend has changed. In that regard, the nature of the Stop Loss orders, that I have been setting very tight, can be more liberal when the preferred position is the short side, yet continue to be very tight on the long side. Having said that, please be aware gong forward, that with very tight stops in place, and if a gap open is expected against your position, that you should pull your stops and look for a better opportunity to exit the position.
Best To Your Trading!
Bill
So I want to offer a suggestion that any trader should be aware that a gap open can create a very painful experience. A GTC Sell Stop order , placed at 50 when the stock is at , lets say 52, becomes a market order to sell when the price falls below GTC Sell Stop price. For instance, if a stock were to open at 48, the Sell Stop would be executed at 48, 2 points lower than the stop price. In situations like we saw Friday, when nervous sellers overwhelm the orderly opening process, it often occurs that the opening price for that day will turn out to the the low of the day. It is often the case that after an hour or so of trading, the market will sort its self out, the emotion of the early morning is tempered by additional information, and the bids appear to move the market higher. As was the case on Friday, the best prices for the day for after 12:00, a good 100 Dow points above the open, which of course gives a trader a much more reasonable opportunity to execute an exit strategy.
Another observation. My Proprietary Momentum Change indicators are all based on trailing price fluctation, using a number of formulas, that when they all come together, and when properly understood, signal a change in market direction. Until the last 2 months, those signals were very accurate, occurring with in 1 or 2 days of an actual direction change. But the extreme volatility in the market since mid March has been causing the signals to get trapped in whipsaw action, not able to react quickly enough to the rapid change. For instance, the last buy signal came over a period of 3 days that saw the Buy signal occur in all the major indexes.....including the correlated indexes that properly generated Sell signals. With the strength of the signals, I felt confident that a move higher was imminent. IN almost every index, the technical patters also gave every indication that a move higher was probable. Then after the disappointment of the early part of the week and the decline we saw, by Thursday the market had again set up a pattern in several indexes that indicated a rally was probable.
But nooooo.....The gap open took care of any possibility of a rally and it was clearly time to get out, with timing the exit the only question. So cash is again what is owned. Interestingly, the Momentum Change indicators are back to a position that could generate a buy signal, with out ever actually signalling a Sell. I think one last observation must be considered, and that is the likely-hood that a market top has occurred, and that the trend has changed. In that regard, the nature of the Stop Loss orders, that I have been setting very tight, can be more liberal when the preferred position is the short side, yet continue to be very tight on the long side. Having said that, please be aware gong forward, that with very tight stops in place, and if a gap open is expected against your position, that you should pull your stops and look for a better opportunity to exit the position.
Best To Your Trading!
Bill
Thursday, June 2, 2011
It Still Looks Good to Me.... Buy'n Them Again!
After that little set back, it still looks good to me at this level, support re-established after the head fake.
Stop Loss prices to follow shortly.
Best To Your Trading.
Stop Loss prices to follow shortly.
Best To Your Trading.
And I Did't Even Get a Reach-Around!
Man, it sure looked good this morning.... and after getting all the support from the Momentum Change signals last week that looked for a Bull rally.
So, here we are again... another heaping bowl of Whip-Saw Goulash. I can't wait until this market can establish a trend again. On the other hand, I just took a look at the 5 minute SPY graph and dammm... maybe we already have a new trend!
But as my old friend and manager Capt. Gatorbait, used to say.. "Bill, there is another trading coming soon"
Best To Your Trading!
Bill
So, here we are again... another heaping bowl of Whip-Saw Goulash. I can't wait until this market can establish a trend again. On the other hand, I just took a look at the 5 minute SPY graph and dammm... maybe we already have a new trend!
But as my old friend and manager Capt. Gatorbait, used to say.. "Bill, there is another trading coming soon"
Best To Your Trading!
Bill
Stop Loss Tightened... While Market Churns on Support
The stop loss prices have been tightened.... please make any changes if you used my initial stop loss prices first posted this morning. I used prices that were away from the market as I was entering trades, now that positions are established, use the new stop loss prices.
So far this feels a little like a "Dead Cat Bounce", and that may turn out to be how the day ends. If so, I will likely get stopped out by the close with small losses. But if this TA stuff works, we should find ourselves with a nice little rally off these lows that could last a few days and earn some huzzaa's.
Mr Market open soft, trading down about 22 Dow points after the open. It has bounced around "unchanged" mark now for the past 1 1/2 hours, with the major indexes mixed. The best performer has been the Transports, trading up 0.5% at 5308.56. I see support in the issues I traded this morning right at these levels, meaning that we are in a place where these stocks should rally after the big hit yesterday. If Mr Market decides he wants to trade lower, we do not have much exposure.
Oil is mostly unchanged at 100.27, while Brent is 0.75% higher at 115.38. Gold is off 7.5 at 1535.10
and Silver is off nearly 3% at 36.61. Copper is also off 1% at 4.065. The Euro continues its unbelievable advance, up nearly 1% at 1.443, while the Dollar is again weak, off 15 ticks at 74.53. Bonds are taking a breath, trading lower this morning after the big rally of the past 2 days. The Note is off 3/8 at 2.986% and the Bond is off 1 at 4.206%.
The big Eco today was the 8:30am New Jobless Claims, printing 422.000 on expectations as 417,000 and another disappointment for the Green Shoots guys. On the other hand, it was jobless claims and no net-new-jobs last August that prompted the Fed to start the rumor mill buzzing about QE3. This weeks Eco re: jobs may be just what the Fed needs to sell another round of stimulus. The financial press is full of stories about the likely hood, or not, of another round of QE, but I am reading that the Fed may see the need for further support for the weakening economy, but also feel constrained by a lack of public support for such a program. And of course, the Congress would scream bloody murder. So speculation is centering on a Fed proposal to again target interest rates by becoming the "Best Bid" for U.S. Treasuries in the 10 year range. The thought being that the 10 year rate drives many other rate sensitive products, and a lower rate would hopefully help mortgages and bank lending. Of course the net result would mean additional dollars in the hands of the TBTF banks which would continue to pad reserves and continue the river of cheap money to the money center banks.
(in case you have missed it, the money center banks have traditionally been "short" treasuries, using the low cost cash generated to bulk up reserves. With 10 year paper only costing them around 2.5% per year... the cost to carry the short,,,,,they can continue to play to "heads I win, tails you lose" game with Federal money.)
As I have been writing, I see that Mr Market is taking some hits to the bid... It may be that the market wants to go lower. This is why stop loss orders are so important.
Best To Your Trading!
Bill
So far this feels a little like a "Dead Cat Bounce", and that may turn out to be how the day ends. If so, I will likely get stopped out by the close with small losses. But if this TA stuff works, we should find ourselves with a nice little rally off these lows that could last a few days and earn some huzzaa's.
Mr Market open soft, trading down about 22 Dow points after the open. It has bounced around "unchanged" mark now for the past 1 1/2 hours, with the major indexes mixed. The best performer has been the Transports, trading up 0.5% at 5308.56. I see support in the issues I traded this morning right at these levels, meaning that we are in a place where these stocks should rally after the big hit yesterday. If Mr Market decides he wants to trade lower, we do not have much exposure.
Oil is mostly unchanged at 100.27, while Brent is 0.75% higher at 115.38. Gold is off 7.5 at 1535.10
and Silver is off nearly 3% at 36.61. Copper is also off 1% at 4.065. The Euro continues its unbelievable advance, up nearly 1% at 1.443, while the Dollar is again weak, off 15 ticks at 74.53. Bonds are taking a breath, trading lower this morning after the big rally of the past 2 days. The Note is off 3/8 at 2.986% and the Bond is off 1 at 4.206%.
The big Eco today was the 8:30am New Jobless Claims, printing 422.000 on expectations as 417,000 and another disappointment for the Green Shoots guys. On the other hand, it was jobless claims and no net-new-jobs last August that prompted the Fed to start the rumor mill buzzing about QE3. This weeks Eco re: jobs may be just what the Fed needs to sell another round of stimulus. The financial press is full of stories about the likely hood, or not, of another round of QE, but I am reading that the Fed may see the need for further support for the weakening economy, but also feel constrained by a lack of public support for such a program. And of course, the Congress would scream bloody murder. So speculation is centering on a Fed proposal to again target interest rates by becoming the "Best Bid" for U.S. Treasuries in the 10 year range. The thought being that the 10 year rate drives many other rate sensitive products, and a lower rate would hopefully help mortgages and bank lending. Of course the net result would mean additional dollars in the hands of the TBTF banks which would continue to pad reserves and continue the river of cheap money to the money center banks.
(in case you have missed it, the money center banks have traditionally been "short" treasuries, using the low cost cash generated to bulk up reserves. With 10 year paper only costing them around 2.5% per year... the cost to carry the short,,,,,they can continue to play to "heads I win, tails you lose" game with Federal money.)
As I have been writing, I see that Mr Market is taking some hits to the bid... It may be that the market wants to go lower. This is why stop loss orders are so important.
Best To Your Trading!
Bill
Trading Alert New Trades
Please note the new trades entered this morning.. up date to follow.
Best To Your Trading!
Bill
Best To Your Trading!
Bill
Wednesday, June 1, 2011
A First..... Bad News Really is Bad News!
Where to begin...........Especially after the Momentum Change indicators for all the major indexes flipped to Buy on Friday and Tuesday. But as I have repeated numerous times, I try to place these directives into context. Let me say that I was busy last evening and this morning, looking at new recommendations and potential stop loss prices. I was busy making notes and getting ready for the open when I glanced at the pre-market pricing. Whoa!
So I held off making any new trades and wanted to wait until about 10:30 to see how the market behaved. It is now 12:30 and the Dow is off 200 points. Holy Crashing Market, Batman!. Probably not a good time to be talking about Bullish Market Momentum.
The big story this morning, (after the news yesterday that the Chicago PMI printed its worst performance since the Lehman crash, and then Confidence Indicator printed a big decline in consumer confidence. Big surprise there!) But the news this morning that the ADP report on NFP (Non-Farm Payrolls) missed the consensus of 175,000 new jobs, printing 38,000, was a big surprise. Now the WSISI is busy re-writing the their estimates for the BLS report on Friday. New consensus forming around 100,000 for the Friday report.
Shortly after the ADP report, the ISM was reported to have fallen to 53.5, missing consensus of 57.1 and a previous 60.4. This is the lowest print since September, 2009. And while I have been typing, the New Vehicle Sales report has just been released, showing a decline of 1.6% from the previous month. The real surprise is the continuing production of autos, while sales decline. GM has now placed more cars for sale on their dealer lots than at any other time in history. They report 584,000 vehicles in inventory at dealers, 177,000 than the same month last year. Get ready for a Summer of "can't refuse" new auto sales pitches.
The noise in the financial press is growing louder.........QE3 must be on its way or the world as we know it will end. It should be remembered that the NFP numbers were what pushed the Fed last year to mount QE2. That and the declining Dow. But I would suspect the Fed will find it a hard sell to continue a strategy that has not convinced anyone of its success.
Oil is off nearly 2% this afternoon, trading at 100.73. Brent is also lower, trading at 115.10 Gold is up 9.60 at 1545.50 (futures are racing ahead), and Silver is off 0.50% at 37.77. The soft commodities are mixed. The Euro continues to rally, up a couple of ticks at 1.44 and the Dollar is lower a few ticks at 74.54. I am disappointed that no one offered to take the other side of my bet on the 10 year Note. As I expected, the Note has rallied strongly, breaking the magic 3%, trading at 2.96%. The Bond is also higher, trading at 4.15%.
This is turning into an exciting week of trading.. just disappointed that I am not in it. Of course, if I was in it, I would have been on the wrong side. I am reminded again that it is imperative that all trading strategies be implemented with an eye on context. I still like the long side here, and would like to find a place to enter the market again. Lets see what tomorrow brings. I doubt that the indicators can switch back to the Sell side with out giving us a chance to trade the long side. The again, it is the job of a Bear Market to fool as many people as possible, both longs and shorts, so that they all get a taste of Whipsaw Goulash before beginning a new trend.
Best To Your Trading!
Bill
So I held off making any new trades and wanted to wait until about 10:30 to see how the market behaved. It is now 12:30 and the Dow is off 200 points. Holy Crashing Market, Batman!. Probably not a good time to be talking about Bullish Market Momentum.
The big story this morning, (after the news yesterday that the Chicago PMI printed its worst performance since the Lehman crash, and then Confidence Indicator printed a big decline in consumer confidence. Big surprise there!) But the news this morning that the ADP report on NFP (Non-Farm Payrolls) missed the consensus of 175,000 new jobs, printing 38,000, was a big surprise. Now the WSISI is busy re-writing the their estimates for the BLS report on Friday. New consensus forming around 100,000 for the Friday report.
Shortly after the ADP report, the ISM was reported to have fallen to 53.5, missing consensus of 57.1 and a previous 60.4. This is the lowest print since September, 2009. And while I have been typing, the New Vehicle Sales report has just been released, showing a decline of 1.6% from the previous month. The real surprise is the continuing production of autos, while sales decline. GM has now placed more cars for sale on their dealer lots than at any other time in history. They report 584,000 vehicles in inventory at dealers, 177,000 than the same month last year. Get ready for a Summer of "can't refuse" new auto sales pitches.
The noise in the financial press is growing louder.........QE3 must be on its way or the world as we know it will end. It should be remembered that the NFP numbers were what pushed the Fed last year to mount QE2. That and the declining Dow. But I would suspect the Fed will find it a hard sell to continue a strategy that has not convinced anyone of its success.
Oil is off nearly 2% this afternoon, trading at 100.73. Brent is also lower, trading at 115.10 Gold is up 9.60 at 1545.50 (futures are racing ahead), and Silver is off 0.50% at 37.77. The soft commodities are mixed. The Euro continues to rally, up a couple of ticks at 1.44 and the Dollar is lower a few ticks at 74.54. I am disappointed that no one offered to take the other side of my bet on the 10 year Note. As I expected, the Note has rallied strongly, breaking the magic 3%, trading at 2.96%. The Bond is also higher, trading at 4.15%.
This is turning into an exciting week of trading.. just disappointed that I am not in it. Of course, if I was in it, I would have been on the wrong side. I am reminded again that it is imperative that all trading strategies be implemented with an eye on context. I still like the long side here, and would like to find a place to enter the market again. Lets see what tomorrow brings. I doubt that the indicators can switch back to the Sell side with out giving us a chance to trade the long side. The again, it is the job of a Bear Market to fool as many people as possible, both longs and shorts, so that they all get a taste of Whipsaw Goulash before beginning a new trend.
Best To Your Trading!
Bill
Trading Alert, New Trend changes
Note the Momentum Change signals for a number of indexes. I will offer trading ideas, with execution prices later this morning, around 10:30. In the mean time, I have posted the stocks that will be included in the new trades.
News out this morning, re payrolls and manufacturing in the UK point to a soft opening. I will post later this morning my thought on order entry. It may well be that sitting for a few hours may be the best strategy.
Bill
News out this morning, re payrolls and manufacturing in the UK point to a soft opening. I will post later this morning my thought on order entry. It may well be that sitting for a few hours may be the best strategy.
Bill
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