akoptiontrader

Hey all, another good day following a great sell off sooner than I expected. I actually tried to buy some Q puts 15 minutes prior to the close, but my computer whacked out on me and I was left looking at what would’ve been some sweet quick profits. I will trade another day. Well I am finally starting to see a whimper of bad news rearing its ugly head, and the more bad news, the more bearish people will get, the higher the VIX will go and panic will ensue. Tomorrow existing home sales comes out, then the next day more housing news. I am at the point where I don’t think any housing news can be good news, unless we sold a good percentage of the existing homes already on the mkt. How can new housing starts be good news? If there is a lot, then we have flooded a dead mkt., if there is not too much, then the economy is stalling. Depending on how we do tomorrow, Wed. could be a pretty gruesome day for the bulls. I have included a very short video of the spider sectors, just cuz there were too many charts to post. It is less than four minutes long, but it has some good quick charts.

The VIX rallied hard today, gapping up and up nearly 15% early on. You can see it blew out of our down channel, sold off a little but stayed very strong. If this is any indication of things to come, It will not take us long to get to the $40s again.

This did pretty much what I thought, maybe a day earlier than I thought. I felt today, with the lack of real “fresh” news would be a sideways type of day. But when the mkt. tanks like it did today on “nothing” that is bearish sentiment. And it is even more bearish when all the news programs try to explain why it tanked, and they all have different answers, or generic “people are worried about the economy” . Do not read this next sentence if you are waiting for a bull mkt. I still feel the worst is yet to come. I hate to be a downer, I am usually a very optimistic person, but I can see no good coming from where this country is headed financially right now. So we should all be poised to profit greatly from it, I am working to be in that position.

If you remember in yesterday’s video I said that we would break this little bear flag with a huge red candle, maybe not today but in the next couple days. Well once again I was wrong, it was today. Note that we took out the 200 ma and the 50 ma, and now we are on the bottom bb. We could easily see a little bounce from here, but don’t be fooled, this mkt. truly has the feeling to me that we are turning a nasty corner.

The NASDAQ filled the gap, and barely broke support. There is a minor up trend nearby that could offer support, and the 50 ma is also lurking. It is not uncommon to bounce off a gap bottom. In fact in all three charts, the most bearish thing to me would be for us to bounce from the 1675 area, on this chart, and rally to the 1770 and the sell of from there forming a beauty of a h&S pattern. If so, that could be the catalyst to send us to the depths of retesting our lows.

I have included a video on the spiders sectors because there were too many charts for me to post. Needless to say, they are bearish, as I think this mkt. is turning. I looked through my QQQQ top ten and they all looked bearish, but this one stuck out a little more to me.

I  really like this evening star formation. This is one of the most consistent reversal signals, and I will often play them without confirmation. The 200 ma & 50 ma stacked on top of each other served as pretty strong support. There is also a down trend line in play but with this signal, I don’t think they will be as strong. It could’ve been a little stronger if the doji leg was up above the tops of the other two candles, but it is still a good signal. Now onto the video.