akoptiontrader

As text-book as yesterday’s supports held, ditto today for resistance. I watched the open rubbing my hands waiting for a spot to short this rally that I was sure was going to fail mightily. I chose the SPY as my vehicle of choice for an intra day trade, and finally when it set up on the 5 min. chart I was in, right around 9:45. I should’ve waited for one more candle, but I was pretty confident of the move. Then we stalled and began to fall. I thought for sure we would fill that gap and then some, even possibly take out yesterday’s support. Much to my chagrin, we did not. In fact at 10:20 we started moving up, for what I thought was a breath and then took out most of the down move, and my small gains with it. We ended up grinding the rest of the day and I ended up a little below even and still in my “day trade”. Why did I stay in? Well we didn’t hit my stop, at 110.95, and man o man these charts still look pretty bearish to this northern chartist. So I made the decision to hold overnight, so I am short several positions that are grinding me out right now. I need a good solid move one way or the other and I am still leaning to the downside.

The reason I went short was due to the wte initial claims, the UUP the VIX and the eur/usd. As this mkt. rallied, these did not react as they should, in fact, they reacted the exact opposite as I would’ve expected. So I did not think this move up had legs, and I was right. But I waited for a decent entry and had to give up a good portion of the move. Well, we have more news tomorrow, and maybe I should be hoping for good news, then the mkt. will drop and I can get out of my shorts with at least some small profit. Quit being a baby AKOT and let’s look at some charts: Okay, but first speaking of babies……

Let’s start with the eur/usd since I was just chatting about it. As this falls, so does the mkt. The top chart is the DOW the bottom is the eur/usd. You can see that the eur/usd has started dropping, yet the DOW has yet to follow suit.

Currently the eur/usd has stalled out on support I have been showing for a few days, the 1.4717. However, now it has formed a bearish wedge / flag. I will be looking for another big burst down out of this wedge.

The VIX 60 min. chart shows this current up trend. We took out the gap and the rallied right back above it at the close. A strong break of this trend line will be sentiment change signal. However, this thing opened the day down .80 and pretty much rallied all day from then one, with one blip.

Here is a very pretty resistance touch and pullback. Never nudged a line on this chart. It is screaming breakout, but to which side is the question. You know my thoughts.

Not as picture perfect as the DOW, but the SPX gaps up, rallies close to resistance and sells off 50% of the move. Looking at just this chart, I would expect a move / gap down tomorrow and a re-test or even break of the red support line. V has been down three days in a row.

I want to point out this divergence in the NASDAQ. It is not brutally apparent but it is there. Again, another great reversal candle on resistance seems to signal reversal, but reversal candles are a dime a dozen right now.

So, with the previous chart in mind, check out the QQQQ. Divergences all over the place, and the current one is the longest baddest of them all. Taken in context with another tombstone doji, perhaps it is time to start dropping. But if you look at 12/1 we had a similar, not quite as bearish candle, and moved sideways 3 days before dropping. I really don’t want that right now, this sideways action is brutal.

I should’ve put this up there with the eur/usd, but I am too lazy to move it right now. As I type this, I just notice that looks like a bullish flag right there. Interesting, and on support. This looks like another pop up signal to me.

Man I got my charts all out of whack tonight. The RUT has made a second double top or a double top squared as I like to call it. Followed by today’s bearish engulfing candle and the RSI finally curling down, we could surely see some selling here. The 20 ma is moving up into the 50 and that is more bullish than bearish, so watch that.

Here is one of my Chart.ly / twitter charts from a couple days ago. It looks like it is working and still playable for a small short trade. Be cautious at support, but if the RSI is still above the 20 line, It may break support.

I thought LIZ may want to test that 200 ma again, and it appears that it may be headed there. I think it would be better if the RSI had come up a little more to give us more room to the downside, but still playable.

This could be affected by retail numbers tomorrow, but it is bouncing off support and the RSI is oversold, so if the numbers are good or okay, this has technical reasons to rally from here. But bad numbers and we could see a break of support and a move to the $32 area.

Overall in up trend, but a hammer followed by a tombstone doji today, resistance at the 20 ma and trend line and the RSI crashing could lead to a test / break of support.

In closing: More econ news tomorrow, and we are now on the new futures contracts with one week before 3f. I don’t think it will take much to push us over the edge ( like wte initial claims numbers today, yeh that worked real great AKOT!) Well I have to share what I truly think, and believe me I put my $$ where my blog is, and this week, other than TOL, it has been a little painful. I will post more charts on Chart.ly / twitter tonight, it is faster, easier and overall more efficient.

So trade well and prosper my friends. And I will leave you with my favorite line from the Star Trek movie: Old Spock to young Spock: “Since my customary farewell would seem oddly self-serving, I shall simply say good luck.”