Weekly Sector, Industry and Russell 1000 Money Flows

The weekly Sector money flows are no surprise, Tech basically sucks more than the rest of them sucked, with the XLK being the leading Laggard, the Dollar, UUP, continues to see interest, along with bonds. If we have a bounce coming the less bad sectors toward the top of the list, "may", bounce more than the other sectors.
The chart is the Q's going back to the July bottom, with a linear regression channel, the bottom of the channel is sitting right around $42, which if we get lucky and decide to stop the slide there, would still be a higher low than the last pivot, the November low.

I have no intention of bottom fishing the Q's, or trying to catch a falling knife, both the October and November lows set up little bottoming patterns, the October low had an Island reversal pattern, or Abandoned Baby, while the November low had an inside bar, on the body of the candle, and that was followed by a bullish engulfing, INSIDE bar, on the next day. In both cases TSV, Time Segmented Volume, followed that up with a break over the down trend lines, shown in the green circles. As shown on the far right, we actually have two down trend lines, neither of which we are even CLOSE to trying to cross over, in would be nice if TSV actually starts to move up for a change, as it's been diverging against price since late December, as I have been pointing out Ad Naseum.

The Industry groups showing the best money flows is a pretty unrelated bunch, and I really don't care for any of the charts at all, the Textile group I have on the chart is typical, very classic bear flag coming after a sharp drop, that's the basic pattern I want to see on the major index's in order to get agressively short, if we ever get a bounce on them. In the "you learn some thing every day" category, I found out that Telechart has a cool little option where you can click on that button next to the Industry name on the top area of the chart, and you can get a list of the components of the Industry. I did it on the Broadcasting-Radio bunch, and Waaaaaa Laaaaaa, SIRI is the leading money flow stock for the bunch, hahahahahhahaha!! God, what an unreal peice of dog meat, BUT, who knows what's going on behind the scenes, the chart looks REALLY good, on both the daily and weekly, it's on a break out, and at 85 cents, it's just a stinking non-expiring option anyway. I don't know, I'm looking at it.

Hmmmmmm, I'm not sure, but it sure seems to me, that a few weeks ago every yelling screaming yakking sell side analyst was touting the next great bull market in Semi's, as those people in Asia that make a dollar a day would be buying them in huge quantities for breakfast, color me spectical, but they couldn't have been trying to sell their shares to the public, could they? The good part about the Semi's is that they are the winners, eeeeeerrrrrr, they are the winning LAGGARDS!

Most of the charts of the stocks in the Russell 1000 that have the leading money flows for the week look the same, big gap up's followed by some failure bars, just not very interesting to me at all. The only thing that looked even half ass decent to me also happens to be one of my most hated peices of junk, TLAB, I don't hate what the company does, but the stock has been nothing for ten years at least. ANYWAY, it has several interesting things on it, it has a wisp of an inverse head and shoulders formation on it going back to October, it had a gap up when it actually BEAT earnings (for about the first time in the last 20 years), and it's getting a Bow Tie type cross over of multiple moving averages, it gapped up and just wallowed there as the market sold off all weeek, I could see this thing pulling back to about $6, which would make for a better entry on it, as if anyone is interested.

Now for the interesting ones, the leading laggards in the Russell 1000, ACI was about the best looking chart I could find on that list, it's been in a nice uptrend since July, which is what I want to see, obviously the gap down yesterday must be earnings related or some thing, it definitely has horrible TSV and MS parameters, but it stopped toward the bottom edge of the LRC, it probably has some more down side to go, but if it can hold at that 200ma and set up a higher low with some kind of bottoming pattern, it could be interesting. Other's that look similar include CE, SEE, HON, CVA, LEG, MCK, ITG, ZMH, GGG, X (Woooooo weeeeee, that could be a scary one, but ya gotta suck it up and take chances to make the big score (or go broke, hahaha)), FLS, NFG. QCOM of course, got their ever loving asssss kicked this week, BUT, going back to 05' this thing has had a tendency to find support in the 37 down to about the 33 levels, AND, the Fast Money bunch was all over this thing yesterday, it may get a pop monday.

EOD 1/29/10

Later than the below stuff: I was looking through some things in TS tonight, making a plan for next week, and I looked at "X", hahahahahaha, my god, the NasDog bubble all over again, God, what a peice of shit!!!!! It goes practically vertical (as Al Davis used to say, go vertical baby!) for three months, DOUBLING, and then in two weeks, it gives up 66% of those gains!! I mean, I see NO reason why it won't end up back where it started from last November, geeze, this market is just totally stupid when a stock like this is doing what it's doing, crazy stuff. Just as a note, I circled the double top it made before it collasped, but the problem is, is that it put that same formation up in the other three circles, I mean, geeze, when are you supposed to get an idea of when to sell this thing??? I'm thinking of just getting out of the market, period, with shit like this going on with an old time company like that.

My Buddy Sysin woke me up, and wanted to know if I was face down in a snow drift, hahahaha (he call's me and wakes me up in the mornings by the way). Anyway, NO, I'm just pretty busy, and tired, and besides, I basically said every thing I could say in this post on the 21st, Watch (it go DOWN) List , when I said to get ready to short, or get out of Dodge or stand aside, wad ever.

I'd like to say some thing good, so I will, the market CLOSED, hahaha! I mean, when we get the great economic reports we got this morning, and STILL go down, the market's in pretty deep Do Do right now, especially the Q's, after Mikey and the nation of women warriors reputed to have lived in Scythia reported pretty good earnings last night.

The market was really split after the open, the Q's were acting much worse than the udder averages, I had a brief hope we were going to rally on that third bar on the pivot chart, in the middle above, we tested the gap fill (we missed the fill by three cents), and then put a nice green bar on the next bar, which closed over the high of that third bar, I kind of thought we were going higher, sigh, WRONG! Geeze, they just sold the shit out of it, crashing through yesterdays close, and then yesterday's low, although we did wallow around for two hours at that point, which was also an important gap fill that I talked about yesterday or there abouts, before continued selling that took us down almost to a gap fill at 42.62, we missed it by a few cents, it shows up on the daily chart at the top, as that last yellow line in the sand.

Speaking of that daily chart, it looks like dog because of all the lines on it, but what those lines are, are RESISTANCE lines, as they used to be SUPPORT lines, thus, once broken, they become resistance, which means any rally we get from here is going to have a lot of hurdles to over come on the way up, IE, in my personal opinion, if we rally next week, IT SHOULD BE SOLD! I said that in that post on the 21st, that I would get really aggressively short if we rally back up off that $43 level.
That bottom chart is my 60min. McClellan chart, AND IT'S BUGGIN ME MAAAAAAANN! It was going up during that drop and consolidation we had from the 22nd throught the 27th, and I thought it was diverging, telling me we were getting some accumulation during that period, and it confirmed it when price broke over the down trend line going into the close on the 27th. GOOD LUCK WITH THAT ONE! Anyway, it did it again this morning, it went up during the early part of the day against the drop we had the first three hours, which made me a little hesitant to get agressively short during that period, sigh, I'm working on it, it may still prove to be right, that is, if we get a relief rally next week.

Well, I'm tired, I'm not sleeping very well these days, I'm going to bed at the same time, but I keep waking up at like 3 or 4 in the morning, old age I guess.

Lator gator's.

January Effect

2:05PM: Yikes, we tried to go up after the open, about, aaahhhh, maybe 30 seconds, and then took off south right away. The thing really had me rocking for awhile, we tested yesterdays low within the first 15min, on that pivot chart, then rallied, and set up a doji at the S1 level, I "THOUGHT", we might hold, after scaring everyone with the test of the low, hahahaha, good luck with THAT one! The next bar showed no mercy, blasting right through the lows of the day, SIGH.

Unlike the DOW, the Q's held the December low, SO FAR, in fact, they stopped right on it, $43.32. I've talked about this area before, it is EXTREMELY critical we hold here, on the daily we have a low that goes back to 11/09 at $42.88, which we tested, and held, later in November, the PROBLEM is, is that we have clear air between where we stopped today, and that $42.88, and then, Wooooooo Weeeeeee, we get under that, and like I said, it's Sadie bar the fricking door, as we have NO support, back down to the November low, at about $41, ouchie.

We tried to rally late today after Uncle Ben was reconfirmed, there seems to be a sector rotation going on, as people are piling out of the Q's and into the banks, at least today they are. The rally stopped right on that gold line on the pivot chart, which is the 43.82 gap fill from 12/17, that we filled earlier in the day. I thought we might get through it, as we have a lot of clear air above that area, but we pulled back ahead of the earnings tonight, it hasn't negated that line though, for if we can get through it, the same parameters still apply.

7:15am: You know, those fricking NasDogs are DOWN, heading into the open, Q's down about 20 cents, geeze, what a divergence, every one else is UP, that stupid QCOM is dragging us down, as shown on the heat maps, http://screening.nasdaq.com/heatmaps/heatmap_pmi.asp .
SIGH, and here I was, dreaming of rich's, as I cover my sold puts after the open, you know, I think that's the FIRST time, the market has ever thrown me a curve ball, and not done what I thought it SHOULD do!! Really, HONEST! ANYWAY, maybe I should stop dreaming of the millions I'm going to make off that senario below, and maybe concentrate on not going BROKE, and trying to survive the rest of the year!
Good luck to you out there in La La Land today.

4:30am: Since we are into the last two days of January, and the futures are UP 22 points on the DOW, which are actually DOWN, because last night after that guy that make's nice speech's got done we were UP about 65 points, which means we actually aren't UP this morning, because if we were, we wouldn't be, aaaahhhhhhh, we'd be, aaaaahhh, well, hhmmmm, oh shit, forget it, instead, in the famous words of Bart the Sheriff, "Excuse me while I whip this out", "this", of course, being my last copy of the Trader's Almanac, which is from 2005, but it don't matter, if you've brought one of them you've brought them all.

I'm actually mentioning the DOW futures because we are less than 200 points away from being able to close the month positive, and being the conspiracy nut I Yam, I have no doubt that the invisible hand, or the powers that be, or some times called Da Boyz, will do every thing they can to try and close us positive, and well they should, for the year don't bode to well if we don't close out January positive. Here's the stats in their own words, according to the Almanac:

"Every down January since 1950 was followed by a new or continuing bear market, a 10% correction or a flat year. Excluding 1956, down Januaries were followed by substantial declines, averaging minus 14.1%."

Those stat's are pretty interesting, in and of themselves, BUT, there's an even MORE interesting one, and one Da Boyz can't do a damn thing about, because it's already happened, and that's the December low indicator (followed by the February low indicator, then the March low indicator, etc etc etc, damn months, DO THEY NEVER END!!! hahaha). The December low indicator is when the DOW closes lower than the low in December, at some point in the first quarter, here's what the Almanac says about this indicator:

"Since 1950, the "December Low Indicator" has been 93.5% accurate in forecasting a further stock market decline when the Dow closes below its December closing low during the first quarter. In other words, the lowest close in December is broken in the following (first) quarter.

Since 1950, this occurred 31 times. Out of those 31 instances, the market continued to decline 29 times (on average by 10.9%). "

COOL, so we are guaranteed an 11% decline, but it's not all bad news for the year, as the Almanac points out, "In about half of those 31 instances, the market closed higher for the year", so we have a 50% chance the year closes higher.
But wait, what happens if we get a down January, combined with a December low indicator, well, they also have the stats for that:

"In the 20 years after 1950 -- when both the January Barometer was negative and the Dow closed below its December closing low in Q1 of the next year -- the Dow suffered additional declines averaging 14.5% from the closing price on the crossing day to the subsequent low."

So, actually, it set's up some interesting ideas. There's a 93.5% chance, that we are going to go AT LEAST, 11% lower than the December lows, at some point during the year. THEN, there's a 50% chance, that we close positive on the year. So using those stats on the DOW, the MINIMUM target on the down side is 9,110, give or take a quarter of a point, AND THEN, there's a 50% chance that we close higher on the year, which would be a 14% rally, at a minimum. BUT, wait, if we close out January lower tomorrow, we are probably going to go down AT LEAST, 14.5% lower than the December low, which makes the target on the DOW 8,751, and then, if we close the year higher, you then get a gain of 19%!

All right, COOL STUFF, so all I have to do, is go short NOW, wait until I get my guaranteed 11% gain, and then go long, and wait until I get my guaranteed 14% gain, and Waaaaaaa Laaaaaaa, I make 25% for the year, or even better, if the month closes negative tomorrow, go short and get my 14.5% gain, and then go long, and get my 19% gain, and make 33.5% for the year, WOOOOOOO HOOOOOOO, the markets are just to stinking easy, I CAN'T LOSE, hahahahahaha!!!!

I'm kidding of course (you know that, RIGHT??), but, SIGH, the sad part is it's probably TRUE, hahahaha. But, being the smart ass I Yam, I'll probably try to game it, like, since I think we are probably going to go higher here, I'll wait until we look to be trying to make a lower high on the rebound, then go short, and then get drunk while I watch the DOW blast off to new all time high's, or, even WORSE, I'll sit on my hands waiting for it to go higher, while in the mean time it continues to go down, eventually getting that 11% with out me, then I'll get pissed off and go short, and then, well, aaaahhhh, you get the drill here, hahahaha, SIGH!

Speaking of being a mental giant (I was, WASN'T I?), I was going to comment on this PHD's article about "systems", http://readingthemarkets.blogspot.com/2010/01/degrees-of-freedom-kiss.html , but for the life of me, I can't remember what I was thinking about, so I'm book marking it here, in the remote case I remember.

Mid-Week Swing Trade Update

Later: Hmmmmm, I hadn't even looked at the SPY today, being involved with, aaahahhh, udder things, but that's a terriffic setup, if it's "real". By real, I mean, the SPY get's bad ticks and stuff, so I don't know if the "tail" is real or not, also, I'm not sure about the scale on the cheapo charts, but it appears the SPY put in a key reversal day today, taking out the lows of the last three days, and then closing higher, while holding a trend line that goes back to August, with pretty big volume to boot, doing this while the STOCH is trying to cross to the upside out of very oversold conditions, and the RSI at the top is diverging the last three days against the down price movement. Hmmmmm, I hate to say it, but this thing looks pretty fricking good, especially as your R/R and stop is so clearly defined, under that trend line and you won't want to be hanging around long.

First off, thanks to all my CaliPorniiiiaaaa friends for sending their crud my way, it's been snowing all night and all day here, luckily, my 1989 3/4 ton TWO WHEEL drive Ford truck got me out to the street ok, so I could get to the "stuff" store, a typical GM peice of 4 WHEEL drive junk would have gotten stuck!!!
On the weekly scan of the ETF's, the MSW likes the Dollar, and I probably have to agree, it looks like a type of inverse head and shoulders on that chart, and could go higher. Other than that, it hates every thing else, being a former master carpenter for 30+ years, I know that WOOD IS GOOD, but, SIGH, the MSW doesn't agree, and I have to admit WOOD looks lower to me, being consistant, it also wants to short CUT. It also has a new weekly short signal on the Q's, and it thinks that FAA is not going to be flying so high for awhile.
ANYWAY, I have to remind myself, that we are coming into the last three days of the month, and the first two days of the next month, and this sequence of days are always, ALWAYS, HIGHER!!! Accept of course, when we go down instead, especially heading into the worse month of the year for returns, February (that whole sentence is a disclaimer to the "ALWAYS", HAH).

It has a buy on the BRIC's on the daily ETF signals, it does have a little key reversal day on it, and may go higher. It doesn't like crude oil, and any thing that get's harvested, and it also put a new short signal on the S&P 100, OEF, although I kinda don't agree with that, as per the above.

THE MAGIC SOFTWARE RULES, HAHAHAHAHAHA!! It put a new buy signal on the daily chart of NFLX, hahahahaha, in case you don't know, NFLX is up eight bucks in the after hours, after reporting. SIGH, hey look MSW, can you like call me in the future, and let me know some thing like that is going to happen ahead of time?????? Anyway, Morgan Stanley, MS, reached an area of prior support, and put a nice bar on it. For some ungodly reason, it doesn't like SIRI, hahahahaha, can you imagine THAT???? CVD looks to be double topping, although I'm not sure how much you might get on a short of that outfit, maybe a couple of bucks.

The stupid MSW likes to screw with me once in awhile, it know's I hate that fricking PCLN, but on the weekly scan of the Russell 1000 it came up with another buy on it, SIGH, who am I to argue with it, it's been trading it very well, as evidenced by the prior three trades on that chart. BGG is coming into trend line support, and "could" find it here.
On the short side, I couldn't agree more with the MSW about the short on HOV, I saw the CEO on the tube this week, I'm pretty sure that I saw in his BIO that he used to work for the Government (I could be wrong, I am a LOT), and that figures, as he's been all over Washington crying for another bail out, wad ever. The last chart I have up there is a short of, and I'm going to whisper this REAL quietly, because I know the fan's of this outfit can be really dangerous if I get them all riled up, it wants to short a-a-p-l, SSSSSSSSSHHHHHHHH, keep it quiet!

FED Day

2:10PM: After terrible chop most of the morning, we had a quick sell off that took out yesterday's low's, in the yellow circle on the bottom chart, it scared every one so badly, they brought the shit out of it into the FOMC release, hahahahaha! We chopped a couple of bars after the release, then tried to test yesterday's highs, closing with a red bar on the 15min. The daily chart, at the top, looks a lot better than it has, on the 30 min chart in the middle, I could make a case for another big "W" forming, with the break out point being yesterday's highs.

The yakking heads on the tube certainly had their work cut out for them, they almost ignored the FOMC release, as Apple was doing their Kindle copy sales job at the same time, and Paulson and Tax Cheatin Timmy were being grilled up on the Hill.

6:00am: As I wont to do, I check out as many sites as I can, and a couple of weeks ago, I signed up for Harry Boxer's "free" (the magic word) daily market analysis, you can sign up here, http://www.thetechtrader.com/ , I'm pleasantly surprised, beside's the typical stuff, he gives you quite a few stock ideas.
I mentioned this guy a while back, Zstock, he's on the link list, http://retracementlevels.zstock7.com/ , after watching him for about a month, I've come to the conclusion, that, again, for FREE, you can't go wrong, I'm very impressed with his analysis of his recommendations. Check him out.

Speaking of checking it out, I watched a movie on Roku last night, "Walkabout", from 1971, boy, was I shocked, it's an Australian film about two kids that get stranded in the outback, and learn how to survive from an Aborigine boy, the movie itself basically sucked, but they had this absolutely beautiful young girl in it, who did a whole series of "tasteful" nude scenes in it, mostly swimming scenes, anyway, I was shocked because it was pretty racy for 1971, plus I didn't think she could be 18 years old, but she was, it was Jenny Agutter, http://www.imdb.com/name/nm0000256/ , hahahaha, I never fricking heard of her, but she had a very long, and successful career, winning an emmy, among other things, and is still active, HEY, you learn some thing every day.

Speaking of naked (I was, wasn't I???), I'm going to remove all my short calls and puts after the open this morning, and just sit in the core position until after this day is through, unless I see some thing to good to pass up, and I "invest" for five minutes. As I've mentioned Ad Naseum, I'm a "partialler", as I partial in and out of all my positions, and going into the close I was partialling out of the short calls, and into short puts, the futures are up a little this morning, and if I get lucky I may be able to pick some thing up on the puts, and I'll dump the rest of the calls. I'm not comfortable holding anything after the close, with Obama's speech tonight, and with the Apple release, and the FOMC statement coming at 2pm, I'm going to see how all this plays out.

I'm not going to watch the speech, instead I may have my idea of "fun", and watch the futures blow up and down during the speech, and try and guess what he said, hahahahahaha, geeze, get a fricking LIFE!!! If you don't have access to the futures, you can get a little delayed chart of them on FINVIZ, http://finviz.com/ , pretty cool little thing, down at the bottom of the page on the left side, they have the futures, and if you mouse over the link, like, the "DOW", a one, or five minute chart of the futures pop's up on the page, delayed of course, but for you cheapo's who don't want to pay for that information, you can grab your beer and popcorn, AND SEE WHAT THE HELL HE'S DOING TO US NOW!!!

1/26/10

2:05pm: Geeze, I'm starting to think maybe I should start jakking it a little, based on the 80-20 rule, where you make 80% of your money in 20% of the time. We didn't make it to that old gap fill, we stopped right at a little dinky shelf, as shown by the green line at the top, but the really cool part was that we double topped it again today, it also shows up really well in the A/D Differential chart at the top. Once we got under the middle leg of the double top, we sold off almost immediately back down to test the break out point, which was the top of the big "W". We tried to bounce, but it was a one bar wonder, as the next bar immediately engulfed that little bounce bar, and the A/D chart broke below the zero line, in the circles, and geeze, I thought we were going to go all the way back down to the lows of the day, hahahahaha, I love this shit! That was another example of "finding support", when we stopped at the top of the "W", and "losing support", when that bar after the engulfing bar dived right through that level.

Anyway, this was another good example of what clear air can do, as the run up from the lows this morning left a big VOID, or clear air pocket, and once we started selling off, there was no support to find, to slow the selling up. The only reason we found that support going into the close, was that it was the open this morning, don't ask me, I know it sounds stupid, but hey, that's what they do, very cute stuff, nice round tripper.

Very nice day, it's a keeper.

9:45AM: My brand new pivot chart (prop's to Sysin) is showing a convoluted "Big W" on the 15 min time frame, and we just broke out over the top of the middle part of the "W", which is the "traditional" take on these things. There's a couple of things helping the bulls, one is we have clear air back up to the previous gap at that yellow line, just under 45, and the other is that FOMC days are "traditionaly" bullish in the mornings, which is tomorrow morning, meaning we may be getting some positioning ahead of the release tomorrow. Of course, the whole thing could collaspe in an instance, but that's why it's called gambling, eeeeeeeeerrrrrrrrrr, "investing".

The Market maven's are yelling and screaming about the greeeeeaaaattttt housing price numbers, hahahahahahahahaha, it cracks me up because they were DOWN more than expected, BUT, they were LESS down than the prior month, which is five month's straight of being "LESS" lower, so the idiots are claiming the consumer is just getting ALLLLLLL kinds of new spending power with the "RISING" housing prices, hahahahahaha, I'm tellin Ya, these people just kill me, the little item they some how fail to mention, is that housing prices are still 5.32% LOWER than they were a year ago!!!!!!!!!!!!! DURING THE GREATEST DEPRESSION SINCE THE LAST ONE!!! HEY, wad ever, go for it!

Watch List for 1/26/10

AAPL was all over the map after earnings tonight, down 7 bucks, up five bucks, Q's followed it around, last I saw AAPL was down a little, Q's up about 9 cents, woooo hoooo, by the by, you can get the after hours information on the Q's here, http://dynamic.nasdaq.com/dynamic/afterhourma.stm , along with the rest of the NasDogs.

Anyway, I must be out of it, I thought I scaned the Russell 1000 but it was the NasDogs, hahahahaha, geeze! I have a chart of the Q's up there, because I like to keep an eye on the TSV and MS, indicators you can get no where else but Telechart. MS, money stream, has just fallen off the chart on them, TSV is pretty negative as well. I wouldn't consider getting 'real' long on them, until they break that down trend line I drew on TSV, the white one, I have a little senario drawn on them, where TSV goes up and touch's the down trend line, and then retreats. We still have room to fall on the chart, before we touch the Linear regression channel that goes back to the September, and through the November lows, just about where the unfilled gap, that I talked about earlier, is waiting for us. It's weird, I heard some market maven's talk about the worry about the low volume on the "rally" today, well, yea, it was lower than the last two days, but still higher than just about any monday I've seen in quite a while. The inside, narrow range bar on the Q's, would indicate it was a "continuation" bar, which is where we pause, and rest, and then continue in the original direction, which right now is down. Wad ever, I feel we may rest again tomorrow, ahead of wednesday, GEEZE, we get AAPL's release of their Kindle copy, the stupid FED has another FOMC release laugher, and Obama banana gives the State of the Democratic Party, eeeeeeerrrrrrr, State of the Union, that night, hhmmmmm.
I ran the bearish engulfing scan, only five showed up, and of the five, four are biotech's, obviously, not a very good day for biotech.

There were no bullish engulfing bars on the Dogs, but a number of reversal bars, TEVA was about the only one I considered interesting, it's pulled back for two weeks after that big stupid bar, and unlike the other Biotechs, it put on a little green bar, that was a tiny key reversal bar, taking out the prior days low, and closing higher on the day, sitting right on the mid line of the Linear regression channel, naturally I find it interesting because of the R/R stop, I wouldn't want it if it goes under the low of today, as it will probably see the bottom of that channel faster than I can spell TEEEEVVVVVAAAA.

1/25/10

Pretty interesting day, for a monday that is, the 15 min pivot chart at the top looks pretty flat, although with the negative close I could see us heading for the next gap fill, in that green circle.

The 5 min was more interesting, we got the gap fill pretty late, this after a rocky open with lots of topping tails, the nail for the gap fill was driven home after the home sales release at 10am ET. The gap fill ended up being a decent buying opportunity, but the afternoon got really interesting, the Q's double topped almost at exactly the same time that the A/D's started dumping, in the circle in that middle chart, and continued to dump right into the close, with the Q's closing with a pretty negative looking bar, under heavy volume, hhmmmmm, maybe a surprise from AAPL??? We'll know in a few minutes.

I had a bunch of stuff this morning, but I'm getting tired of the BS coming out of Washington, I ain't saying anything about it any more.

Sentiment Cycle Senario's

The standard Sentiment Cycle, at the top, comes from Justin Mamis, you can google him if you want to find out more about him, and his cycle theory.

I've seen several discussions about where we are in the cycle, some people think we are just getting to the "Aversion" phase, some people think we are still in the Wall of Worry phase (hahahaha, dream on with that one!), the two lower charts are just my interpretation of where I see us, and is very speculative.

I think we had the "Wall of Worry, Anxiety and Aversion" stages in the early part, in the middle chart, as we came into the Anxiety stage when we got back to the January 09' highs, in May and June, wallowed around at that high, and then the "Aversion" pull back was from June into July. The reason I believe this, is I definitely think that the July blast off, created the "DENIAL" stage, hahahaha, when we took out the January highs, and then after we had a couple of pull backs that got brought, we started gaining more and more of the "Confidence" stage.

In the bottom chart, I am just as confident that the dumb ass blast off into earnings season this January was the "Enthusiasm" stage, meaning I think we are at the top of the cycle. I'm probably wrong, I usually am, but I think we got a "Subtle Warning" when we broke below the January low, and even more so with the blast through of the 50dma, this was a very different break of that 50 than we got the last time, in early November. I think we will get a very NOT so subtle warning if we break below that base that went from November into December, which we may test at the open tomorrow if we get any follow through to this week's weakness.

I laid out a possible "senario" on that chart, on the right side, Da Boyz may have enough shorts in the market, that with a gap down in the morning, under the November-December base, they could get the Johnnie come latelies piling in short, which might give them enough fire power to get them covering if they decide to take us up. That might leave a higher low, than the early November pivot, which would setup the possiblility of a higher "OVERT WARNING" point, the current "Overt" warning point is that November low, but if they can get them covering, we may leave a new "pivot", rally back up to the bottom of the January low, WHICH, being former support, has now become resistance. We then start heading back down, after the flag pattern, and then the "Overt" warning point would be moved up to when ever we break below the new, higher low pivot, in the first circle.

The main problem with THAT senario, is that the blast off out of the November low, left a HUGE air pocket, or VOID, from the November low to the bottom of the November-December base, and in THEORY, if we break below the base, we "SHOULD", head right down to the November pivot low. Any pivot low we make out in the middle of that void, will be a FALSE bottom, as we SHOULD test that November low at some point. Anyway, depending on how far we get into the Void area, and the lower the pivot point that set's up, the greater the odds become that the November-December base will become the "resistance" area, as the break of the base becomes the "support once broken" area, and that takes the "OVERT" warning point, back down to the November pivot, which move's the above senario, DOWN one notch.

Anyway, that's how I see it, the main thing with me, is I LIKE it, as we are probably going to get some volatility, which is what I want to see.

Good luck to you.

Weekly Swing Trade Ideas for Russell 1000 and ETF's

The MSW came up with 7 new buys and 18 new shorts on the ETF's. Most of the buy signals are on the low volume, rather weird, bond and hybrid funds.
The software makes me think it's working when it puts the same signals on similar ETF's, in this case the Q's and the XLK, although I would have liked to see it signal the short a couple of bars ago, same with the IWM. Some of the other new shorts shows that it pretty much hates oil, gold, heating oil, in keeping with hating energy it has a short on OIH, the mid caps, the entire market in UVG, and real estate.
It pretty much just hates the market right now, I can't argue with that.

Going right along with the ETF's, it's pretty negative on the Russell 1000 stocks, with 6 new buys and 25 new shorts. MS is coming into an area of prior support, and I would probably consider it IF it put some kind of bar on it, like, it opens down, then GOES down and takes out that lower support line, then rally's intraday and close's with a long tailed dragonfly type candle, some thing like that, big volume would be really nice. I imagine the entire market would do some thing like that if MS did it. BUCY was about the best of the rest, although I see absolutely nothing on it.

The short signals are all good to go, I show ABT and RCL as they have just now violated their long term uptrend lines, with increasing volume in the case of RCL, which of course is also one of the single most discretionary stocks in the market.

The market is probably a little over cooked for the moment, my personal preference with shorts is to wait for the initial down thrust, which is what we've gotten, and then look for low volume flags, especially stocks or ETF's that flag back up to a decsending short term moving average that has crossed under a longer term average, like the 20ma crosses under the 50ma, this set's up my favorite, the Avalanche setup, which usually provides you with very tight stops, which would be over the MA's.