Stop in just below support
Friday, November 19, 2010
Thursday Recap: A Look inside the markets
Stock futures were posting solid gains in the early going as investor appetite for risk assets was returning amid rising hopes a solution to Ireland's banking crisis (Stronger EUR, weaker USD) as well as euphoria over the GM IPO.
The market bounce was a bit earlier than i anticipated but had taken most of my BGZ hedge off so for the swing trade I was positioned almost just right. A little too much cash than I would have liked but I'll take it. I added to my BGZ yesterday at 1195 on the SPX because I have little trust in this bounce. The index may well go higher but I had pegged the 1195 and 1202 area as the likely high for a bounce on this downtrend.
But it is always possible that the downtrend has ended. The internal action did not leave me feeling that the downtrend had reversed but this does happen sometimes on very shallow pullbacks so the door must be left open for the possibility that we now begin another leg higher. The technicals that were calling for a test of the 50 DMA may have been satisfied with the push to 1173.
It is vital to always be alert and ready to switch sides! Trade what you see, not what you think.
As for the $DXY, I think the 200wkma has proven to be very strong resistance and that should bode well for my commodity holdings. I added DBA at the open.
Friday is November options expiration and tends to be an up day (futures down slightly so far this am). The Monday following the November expiration is most often bearish; but most of the rest of the month tends to be bullish.
But it is always possible that the downtrend has ended. The internal action did not leave me feeling that the downtrend had reversed but this does happen sometimes on very shallow pullbacks so the door must be left open for the possibility that we now begin another leg higher. The technicals that were calling for a test of the 50 DMA may have been satisfied with the push to 1173.
It is vital to always be alert and ready to switch sides! Trade what you see, not what you think.
As for the $DXY, I think the 200wkma has proven to be very strong resistance and that should bode well for my commodity holdings. I added DBA at the open.
Friday is November options expiration and tends to be an up day (futures down slightly so far this am). The Monday following the November expiration is most often bearish; but most of the rest of the month tends to be bullish.
For the SPX Index there were 434 Advancers/52 Decliners. On the NYSE 3,130 issues were traded with 2,471 advancing issues and 595 retreating issues, a ratio of 4.15 to one advancing. There were 96 new highs and 12 new lows. The five day moving average of New Highs is 157 while the five day moving average of New Lows is 47 and the ten day moving average of Net Advancing is -321. The Net Advancing data indicates a bearish trend.
Advancing volume was higher at a ratio of 7.44 to one. The closing TRIN was 0.56 and the final tick was 428. The NYSE Composite Index gained 1.75% today while the SPX gained 1.51%.
For the NYSE, relative to the previous 30 session average, volume was 14.56% above the average. Of the last 15 sessions 8 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 101.9% of the average daily volume for the last year. Volume was 97.3% of the last 10 day average and 111% of the previous day’s volume.
Very strong breadth and the ratio of advancing volume was even stronger. The broad NYSE Composite Index outperformed the SPX and we closed on a strong final tick. But the ten day average of Net Advancing still suggests a downtrend.
Total tick for the day was 140,000 and the average tick for the day was 91. There were 44 ticks greater than 600 and 17 ticks more extreme than -600. There were no ticks greater than 1000 and 2 ticks more extreme than -1000.
Intraday volume surged on the SPX move upward early in the session then volume tapered off the rest of the day. Some of the nightly breadth indicators look bullish tonight; the Cumulative Volume Index, the High Low Index, and the McClellan Oscillator moved bullishly.
Advancing volume was higher at a ratio of 7.44 to one. The closing TRIN was 0.56 and the final tick was 428. The NYSE Composite Index gained 1.75% today while the SPX gained 1.51%.
For the NYSE, relative to the previous 30 session average, volume was 14.56% above the average. Of the last 15 sessions 8 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 101.9% of the average daily volume for the last year. Volume was 97.3% of the last 10 day average and 111% of the previous day’s volume.
Very strong breadth and the ratio of advancing volume was even stronger. The broad NYSE Composite Index outperformed the SPX and we closed on a strong final tick. But the ten day average of Net Advancing still suggests a downtrend.
Total tick for the day was 140,000 and the average tick for the day was 91. There were 44 ticks greater than 600 and 17 ticks more extreme than -600. There were no ticks greater than 1000 and 2 ticks more extreme than -1000.
Intraday volume surged on the SPX move upward early in the session then volume tapered off the rest of the day. Some of the nightly breadth indicators look bullish tonight; the Cumulative Volume Index, the High Low Index, and the McClellan Oscillator moved bullishly.
Thursday, November 18, 2010
$DXY
Fails to take out 200wk ma, this is a key level IMHO if you want to trade around gold silver and other commodity stocks. If we can establish a range from this high to the QE announcement low it might be too wonderful to imagine but if I see it, it means it won't happen (General rule of thumb). Keeping an eye on this anyway!
BWA
BorgWarner Inc. is a global supplier of engineered automotive systems and components, primarily for powertrain applications. The Company’s products are manufactured and sold globally, primarily to original equipment manufacturers (OEMs) of light-vehicles (passenger cars, sport-utility vehicles, vans and light-trucks). The Company’s products are also sold to other OEMs of commercial trucks, buses and agricultural and off-highway vehicles. It also manufactures and sells its products to certain tier one vehicle systems suppliers and into the aftermarket for light and commercial vehicles. The Company operates manufacturing facilities serving customers in the United States, Europe and Asia. The Company operates in two segments: Engine and Drivetrain. In April 2010, the Company acquired Dytech ENSA SL, a producer of exhaust gas recirculation (EGR) coolers, EGR tubes, and integrated EGR modules, including valves for automotive and commercial vehicle applications, both on- and off-road.
Sales (Yearly Sales - $Millions) $5,317.00
GRT (Growth Rate) 34.00
EPS (Earnings Per Share) $3.71
EY (Earnings Yield) 6.38
P/E (Price to Earnings Ratio) 15.68
Price Target 110 in 12 months
Today isn't a good day to buy anything especially in the am. I think this rally is short-lived and we will test the 50dma on the SPX, so that maybe a good time to pick up BWA and RES which I wrote about yesterday.
Wednesday Recap: A Look Inside the market
I would have like to see a further sell off to 50dma but the futures are up big before the 8:30am economic data, we'll see if they hold. Strength comes on the back of a strong Asian and European session. Something about GM (what a rip off that is, our tax dollars save them only the bankers and the super rich to benefit from this. Total Bullshit. Capitalism?
Most of the major indices painted an inside day and a narrowest range in seven days. Such chart bars are often followed by large range days within a day or two, and quite frequently these bars are downward.
Today was also the third inside day of the last five sessions. This is not a frequent characteristic of a bottoming process.
The tick pattern today as well as yesterday also continues to suggest that we have more work to do on the downside. Continue to look for a short-term bounce, but a test of the 50 DMA seems likely, after this short lived rally. A successful test would be a bullish and match well with the upcoming seasonality which is also bullish.
This appears to be a tenuous time for the market; much technical damage has been done. But until the 50 DMA falls, it is good to keep in mind that when the market is driven down by news it can also reverse based on news, and the EUR/USD manipulation is playing havoc technically.
Breadth was more positive than might have been expected with the very neutral indices. But the advancing volume ratio was weaker than the advancing issues. One positive note that shouldn’t be overlooked is that the broad NYSE Composite Index outperformed the SPX.
Total tick for the day was 71,000 and the average tick for the day was 46. There were 56 ticks greater than 600 and 56 ticks more extreme than -600. There were no ticks greater than 1000 and 4 ticks more extreme than -1000.
Once again, even with light volume today, clearly the volume spiked with every selling move. Looking at the nightly breadth indicators at first they appear quite mixed, as might be anticipated after a sluggish tight-range session. But let’s at least take notice of a few things. The Cumulative Volume Index moved higher; this isn’t bearish. The High Low Logic moved lower; this isn’t bearish. And the McClellan Summation Index remains in positive territory; this isn’t bearish. So before we get too bearish about the current market environment, let’s watch these indicators for a couple more days.
SPX Index there were 275 Advancers/211 Decliners. On the NYSE 3,133 issues were traded with 1,836 advancing issues and 1,213 retreating issues, a ratio of 1.51 to one advancing. There were 20 new highs and 19 new lows. The five day moving average of New Highs is 204 while the five day moving average of New Lows is 49 and the ten day moving average of Net Advancing is -301. The Net Advancing data indicates a bearish trend.
Advancing volume was higher at a ratio of 1.14 to one. The closing TRIN was 1.32 and the final tick was 218. The NYSE Composite Index gained 0.22% today while the SPX gained 0.02%.
For the NYSE, relative to the previous 30 session average, volume was -9.04% below the average. Of the last 15 sessions 7 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 84.9% of the average daily volume for the last year. Volume was 86.8% of the last 10 day average and 80.5% of the previous day’s volume.
I increased my SLV, GLD, bought some uranium miners yesterday. Will hold existing small position in BGZ (SPX 3x short) and holding TBT.
Wednesday, November 17, 2010
RES
BULL FLAG (Daily)
Despite market sell-off moves higher (weekly)
| RV (Relative Value) | 1.70 | P/E (Price to Earnings Ratio) | 11.62 | |
| RS (Relative Safety) | 1.43 | DIV (Dividend Paid) | 0.28 | |
| RT (Relative Timing) | 1.76 | DY (Dividend Yield) | 1.08 | |
| VST (VST Vector) | 1.64 | YSG (Yield Safety Growth Vector) | 1.25 | |
| GRT (Growth Rate) | 33.00 | Sales (Yearly Sales - $Millions) | $920.00 | |
| EPS (Earnings Per Share) | $2.24 | Mkt Cap (Market Capitalization - $Millions) | $2,569.00 | |
| EY (Earnings Yield) | 8.61 |
Looking to enter this on a break out above recent highs, stock is undervalued despite its performance could double in twelve months IMHO given coming inflation, increasing oil and nat. gas prices. No Position as yet! Looking for right entry. Would love to get this at 25.5 if I could but depends on where this market is going short-term (given the brisk pullback, which may not be over)
Tuesday Recap: A look inside the market
We need another day or two of selling, that should get us to near term target 1160, then we turn around and retest the highs.
If we don't hold 1160 we go to 1120 next.
This was a day that was ruled by the bears; they appear to have reclaimed dominance. But can they keep it up?
Declining volume was higher at a ratio of 14.27 to one. The closing TRIN was 2.27 and the final tick was -190. The NYSE Composite Index lost -1.9% today while the SPX lost -1.65%.
For the NYSE, relative to the previous 30 session average, volume was 28.92% above the average. Of the last 15 sessions 7 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 6 of last 10. For the SPX, the day's volume was 111.3% of the average daily volume for the last year. Volume was 110.8% of the last 10 day average and 135.4% of the previous day’s volume.
Really negative breadth as would be expected on a day that lost more than 1.5%. New Lows blew away New Highs today; that hasn’t happened since the end of August. The ten day average of Net Advancing moved below -200; it hasn’t been there since September 1st. The NYSE Composite underperformed the SPX today; often a bearish sign. And volume increased today.
Total tick for the day was -301,000 and the average tick for the day was -196. There were 42 ticks greater than 600 and 271 ticks more extreme than -600. There were 2 ticks greater than 1000 and 44 ticks more extreme than -1000. The tick action suggests institutional distribution.
Volume surged in the morning right at the fall off the cliff for prices. Looking at the breadth indicators, they’re all bearish. McClellan Oscillator is below -300 last time that happened was May 24th.
TBT was down big yesterday as I think the TLT will try and dead cat bounce to 200dma. TBT holding steady for now with that position.
Tuesday, November 16, 2010
Uranium Miners Follow Up
Nothing has changed in terms of my long term view of these miners. They were just on fire and of course nothing goes straight up just look at GOOG and AAPL and so many other high flying stocks. I think patients and buy and selling at key points will be rewarded over the next five years in these stocks. Aging plants, high oil prices and a government that can't cut spending and warring, inflation is running rampant but you will never see it reported by the Government who manufacture the very same number (CPI, PPI) to suit their policies.
Commodity stocks got too hot, they needed to get beat down, the easy money has been made here but the trend is in tact for years to come. Short term pain, long term gain!
See yellow trendlines, these will be re-entry points for me with stops 5% below.
Monday Market Recap: A Look Ahead
Futures were pointing to an early bounce on the back of retail sales climbing for the fourth consecutive month and as a result of merger and acquisition action.
The opening session of the week began with a three point gap higher and followed through for a few more points. The choppy session continued with a sharp and quick five point decline before recovering and putting the high of the day on the chart at 11:49 am. After a couple of hours of sideways tight range trading that lulled some traders to sleep, the bear once again awoke and the last two hours saw a nine point decline. If the bear keeps this up, we will decide there is more than one and add back the “s”.
Today’s late afternoon sell-off was blamed on treasury prices tanking; this may have well been the catalyst. But if the market isn’t ready to sell, it won’t. This market shows signs of being ready to sell. Bad news has once again become bad news.
The Dow closed higher but that’s an index that can often be disregarded. But it is interesting to note that the Financials (XLF) and small caps (Russell 2000) were both higher.
I do expect the current down trend to continue and expect 1196 to fail. But the real question is whether this happens through a gap down tomorrow morning or whether we see yet another failed bounce attempt. This market rode gaps over resistance on the way higher so a gap below support makes sense on the way down.
Breadth was a little more negative than the closing indices might suggest. The ten day average of Net Advancing is approaching zero and may turn negative.
For much of today, volume was increasing as the market was moving higher; this is most often bullish. But volume then spiked on the late session sell-off as well. So the jury remains out on this.
The nightly breadth indicators are mixed after today’s mixed close. But on balance, the indicators remain somewhat bearish. Check out the action of the McClellan Oscillator and the Summation Index. Also notice the move higher in the High Low Logic Index.
The nightly breadth indicators are mixed after today’s mixed close. But on balance, the indicators remain somewhat bearish. Check out the action of the McClellan Oscillator and the Summation Index. Also notice the move higher in the High Low Logic Index.
Silver has taken a big hit and the chart seems to be breaking down big time. To me it looks like 20dma has been support previously but there is a lot of new, or hot scared money running for the hills so I don't really know. If yo are long SLV the only encouraging thing i see is that the volume has declined since the blow off top and perhaps the sellers may be drying up.
The gap has been filled with that out of the way maybe we go back up?? On the other hand it hasn't respected its 20 dma and looks to test 129-130 area so I will wait to come in until then. But I cant see SLV holding 20 dma and GLD falling so I don't think that bodes well for SLV.
See my previous take on this matter I have a nice gain on TBT (double short long bond), The TLT has reached my short term target will take a little off and wait for a bounce in TLT before I buy it (TBT) back.
Monday, November 15, 2010
Friday Recap; The Week Ahead
JUST TOO BULLISH!
Change from last week:
Long-Term Average:
The AAII Investor Sentiment Survey measures the percentage of individual investors who are bullish, bearish, and neutral on the stock market for the next six months; individuals are polled from the ranks of the AAII membership on a weekly basis. Only one vote per member is accepted in each weekly voting period.
Last Week's Results
Sentiment Survey
ResultsWeek ending 11/10/2010 Bullish
57.6%
ResultsWeek ending 11/10/2010 Bullish
57.6%up 9.3 Neutral 14.0%
14.0%down 8.0 Bearish 28.5%
28.5%down 1.3
Change from last week:
Bullish: +9.3
Neutral: -8.0
Bearish: -1.3
Long-Term Average:
Bullish: 39%
Neutral: 31%
Bearish: 30%
Stock futures were pointing to a lower open on Wall Street as a result of concerns about the mounting debt problems in Ireland and expectations that China will continue to tighten rates. Futures sold heavily overnight but were quite a bit off their lows. There was no economic data to review before the open, but we received the University of Michigan's Confidence index at 9:55 am eastern.
A most interesting final session of the week began with about a five point gap lower. After working a bit lower for the first quarter hour the SPX tried to find a bottom and bounce about five points to put the high of the day on the chart at 9:58. Bulls attempted a brief come back about 15 minutes later before leaving for the weekend. Bears took the tape down sharply to put the low of the day on the chart at 1:00 pm. The rest of the session was choppy consolidation with the index closing about four points off the low.
This session was unique for the last several weeks in that the bulls didn’t make a sustained ramp higher at the close. Closing a Friday red has been a tough chore for the bears for the last twelve Fridays so this feels like a significant accomplishment.
Looking at the Market Leaders board we find every market leader down but the chip makers (SOX). The SOX is on our Leaders board for a good reason: The SOX can often give a good clue as to strength and weaknesses within the market. Bears should find it a bit troubling to find the SOX up on a down day such as Friday.
A most interesting final session of the week began with about a five point gap lower. After working a bit lower for the first quarter hour the SPX tried to find a bottom and bounce about five points to put the high of the day on the chart at 9:58. Bulls attempted a brief come back about 15 minutes later before leaving for the weekend. Bears took the tape down sharply to put the low of the day on the chart at 1:00 pm. The rest of the session was choppy consolidation with the index closing about four points off the low.
This session was unique for the last several weeks in that the bulls didn’t make a sustained ramp higher at the close. Closing a Friday red has been a tough chore for the bears for the last twelve Fridays so this feels like a significant accomplishment.
Looking at the Market Leaders board we find every market leader down but the chip makers (SOX). The SOX is on our Leaders board for a good reason: The SOX can often give a good clue as to strength and weaknesses within the market. Bears should find it a bit troubling to find the SOX up on a down day such as Friday.
The SPX gained 26.64 points during the week. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 200) is 64. Pullbacks often occur as this RSI reaches 80 and bounces near 20.
For the SPX, there were 77 components advancing and 410 declining. Total tick for the week was -89,000. The number of components with their 5 DMA above their 20 DMA decreased during the week from a ratio of 3.6 to one to 2.72 to one.
On the NYSE, the advance/decline line decreased during the week more than 3700 and the 10 DMA of Net Advancing dropped from 468 to 77.
This was the first Friday to lose more than a point in three months. The weekly chart painted an inside week; the first inside week since the early July short-term bottom. Inside weeks often, but certainly not always, mark pivots on the chart.
Volume on the week was significantly lower than the volume on last week’s surge. This might suggest a lack of panic this week. Yet -1000 ticks outnumbered +1000 ticks by a wide margin, 61 negative to 5 positive.
For the SPX, there were 77 components advancing and 410 declining. Total tick for the week was -89,000. The number of components with their 5 DMA above their 20 DMA decreased during the week from a ratio of 3.6 to one to 2.72 to one.
On the NYSE, the advance/decline line decreased during the week more than 3700 and the 10 DMA of Net Advancing dropped from 468 to 77.
This was the first Friday to lose more than a point in three months. The weekly chart painted an inside week; the first inside week since the early July short-term bottom. Inside weeks often, but certainly not always, mark pivots on the chart.
Volume on the week was significantly lower than the volume on last week’s surge. This might suggest a lack of panic this week. Yet -1000 ticks outnumbered +1000 ticks by a wide margin, 61 negative to 5 positive.
For the SPX Index there were 35 Advancers/453 Decliners. On the NYSE 3,111 issues were traded with 521 advancing issues and 2,509 retreating issues, a ratio of 4.82 to one declining. There were 49 new highs and 18 new lows. The five day moving average of New Highs is 262 while the five day moving average of New Lows is 16 and the ten day moving average of Net Advancing is 77.
Declining volume was higher at a ratio of 8.64 to one. The closing TRIN was 1.79 and the final tick was -628. The NYSE Composite Index lost -1.29% today while the SPX lost -1.19%.
For the NYSE, relative to the previous 30 session average, volume was -3.41% below the average. Of the last 15 sessions 6 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 91.7% of the average daily volume for the last year. Volume was 104.8% of the last 10 day average and 97.2% of the previous day’s volume.
Breadth was harshly negative and declining volume was even more so. The broad NYSE Composite Index underperformed the SPX. A large negative final tick and the ten day average of Net Advancing plummeted.
But what gets our attention is the New Highs. Friday had the lowest number of New Highs since July 2nd. Consider this a moment: We are about 20 points off the 52 week high and the New Highs have fallen to levels last seen when we were 200 points off the highs. This seems significant.
Total tick for the day was -220,000 and the average tick for the day was -143. There were 49 ticks greater than 600 and 224 ticks more extreme than -600. There was one tick greater than 1000 and 19 ticks more extreme than -1000. The tick action suggests institutional distribution.
While this pullback is only a few days old, the greater than 1000 ticks have favored the bears each of the last five weeks. It certainly appears that institutions have been taking advantage of this rally to sell. We did not see this pattern within the ticks prior to the late April sell-off.
The intraday volume pattern clearly shows the surge of volume with each wave of selling Friday but overall volume was not extraordinary.
Within the nightly breadth indicators we can see a clear bearish presence. The McClellan Oscillator has exploded to almost -200, a level last seen on August 27th. It rarely goes much lower without a market bounce occurring.
Holding My positions, Silver below 25 and I'm out wait for lower prices, Hold my BGZ. Expecting a short lived bounce.
Declining volume was higher at a ratio of 8.64 to one. The closing TRIN was 1.79 and the final tick was -628. The NYSE Composite Index lost -1.29% today while the SPX lost -1.19%.
For the NYSE, relative to the previous 30 session average, volume was -3.41% below the average. Of the last 15 sessions 6 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 22 sessions ended on a positive tick, 7 of last 10. For the SPX, the day's volume was 91.7% of the average daily volume for the last year. Volume was 104.8% of the last 10 day average and 97.2% of the previous day’s volume.
Breadth was harshly negative and declining volume was even more so. The broad NYSE Composite Index underperformed the SPX. A large negative final tick and the ten day average of Net Advancing plummeted.
But what gets our attention is the New Highs. Friday had the lowest number of New Highs since July 2nd. Consider this a moment: We are about 20 points off the 52 week high and the New Highs have fallen to levels last seen when we were 200 points off the highs. This seems significant.
Total tick for the day was -220,000 and the average tick for the day was -143. There were 49 ticks greater than 600 and 224 ticks more extreme than -600. There was one tick greater than 1000 and 19 ticks more extreme than -1000. The tick action suggests institutional distribution.
While this pullback is only a few days old, the greater than 1000 ticks have favored the bears each of the last five weeks. It certainly appears that institutions have been taking advantage of this rally to sell. We did not see this pattern within the ticks prior to the late April sell-off.
The intraday volume pattern clearly shows the surge of volume with each wave of selling Friday but overall volume was not extraordinary.
Within the nightly breadth indicators we can see a clear bearish presence. The McClellan Oscillator has exploded to almost -200, a level last seen on August 27th. It rarely goes much lower without a market bounce occurring.
Holding My positions, Silver below 25 and I'm out wait for lower prices, Hold my BGZ. Expecting a short lived bounce.
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