okay I admit it, I used to watch Cramer, not so much anymore. I really didn’t like that lightning round thing. I did empathize with the guy a little, after all he had to find four or five stocks that he would call as a strong buy every show. He never called shorts, at least when I watched. Then I found that I could just see his calls every day on my homepage and know what stocks would get that “Cramer” bounce. Now I don’t intentionally short the guy like others claim to do, but I try to be aware of what he is saying so I can avoid getting squeezed by Cramer Cronies. Well I got squeezed today. As you know I am still short several positions, one of which is JCP which was setting up nicely today, and another is WSM. Will Mr. Cramer said nice things about WSM tonight, so therefore we will likely see a bounce in the morning, and it will likely effect JCP as well. Just when both charts were setting up for some more down movement. Now I will have play around that bit of news. Well played Mr. Cramer.
Overall, I expected a small down day today, 50 points or so. Instead we actually rallied a little. I noticed that even though AMZN was setting new highs, the QQQQ was down most of the day. So overall tech was weak, and I would say very weak considering the afore-mentioned. The VIX stayed up most of the day and the UUP was down all day. It was a mixed up day on no real news. I have to respect that we had some buying into the close, and also financials were strong, which is currently the major mkt. mover. All that being said, it still looks like we are still in the short-term down trend and I am expecting more downside movement, which will find support early Dec. for the Dec. rally every one wants. Let us take a look, shall we:
The VIX was prime for a little down move, but I thought maybe we would start down and then rally. It appears that the 24.15 area support is holding for now, but there sure is a big gap down below, and today’s candle was pretty indecisive.
The DOW rallied right into previous resistance and was unable to push through on pretty good v. This is the first time since Sept. that a clear v spike has resulted in a white candle, albeit a hanging type candle beneath resistance. I think if we push through this and close higher, it will probably be higher than last week’s high. But it looks like the resistance might hold here and the down trend will continue. Of course all this will hinge on the data we have coming out all week, including construction spending , ISM and auto sales tomorrow. All of them have been estimated lower.
Looking closely at the SPX, I was noticing that this looks a little like a short-term double top, and even so on the RSI. So the red area highlighted becomes a key support level, if broke should lead to a decent down move. Remember, this move will likely take longer than the last down move, hence the possible reason for a prolonged top, combined with holiday v and hours.
The NAS actually closed right on previous resistance / support, below the 20 ma and above the 50 ma. The RSI still looks to be breaking down and other than the gap that will likely be filled on the next up move, most signs seem to be pointing to more selling to come.
The RUT held above support for the second day in a row with a pretty decent tail on today’s candle. But I don’t think this support is going to hold, it just looks like it is being tested until it breaks and that is what I will be watching for. It will likely do the same thing once it hits the 550 area.
The UUP has decreasing v, but the move is not defined. It is still sideways, but oversold according to the RSI.
Finally we will finish with my sob story chart. This thing was setting up as a thing of beauty. Look at the great v today while working to break through the ma’s. I was expecting a test of $18 and I hold January put options. I expect we will dwaddle around positive for a day or three, but I will probably still hold. I have worked for a tidy profit and I don’t want to lose it, but I think the reward potential is still fantastic. As I write this, it is up nearly 3% after hours. Ouch.
In Closing: I have to pack and I will be on the road until Friday. I will try to do some twitter charts tonight and some posts from the road. Trade well and prosper.
