Monday Market Recap: A Look Ahead

Looking at the daily chart we see a hammer is printed as there was support at the 50dma but the close below the previous day's close and that is a negative. On the weekly chart you can see we closed below the 200wkma. So we seem to be in a sideways mode with ten up days and ten down days in the month of November. Bias is bearish (Technically)


Futures were strong overnight due to strong holiday shopping numbers, Asian markets responded positively and European markets were in positive territory.  This all changed shortly before the open as news from the UK came out showing that money supply is barely moving and a weak bond auction in Italy once again put traders back into uncertainty mode.

The week began with a significant move downward and the SPX moved ten points lower within four minutes of the open. The downward push continued almost unabated until putting the low of the session on the chart at 10:05 am, almost sixteen points down. Buyers attempted a rally which failed and the index tested the lows again just before noon. Then a successful test of the lows ensued which brought in buyers and put the bears on edge, the index surged to close fourteen points off the lows.



For the SPX Index there were 181 Advancers/301 Decliners. On the NYSE 3,131 issues were traded with 1,275 advancing issues and 1,747 retreating issues, a ratio of 1.37 to one declining. There were 64 new highs and 25 new lows. The five day moving average of New Highs is 71 while the five day moving average of New Lows is 20 and the ten day moving average of Net Advancing is -55.

Declining volume was higher at a ratio of 1.06 to one. The closing TRIN was 0.78 and the final tick was -21. The NYSE Composite Index lost -0.23% today while the SPX lost -0.14%.

For the NYSE, relative to the previous 30 session average, volume was -9.31% below the average. Of the last 15 sessions 5 sessions ended with volume greater than the previous rolling 30 day average volume. Of the last 30 sessions, 18 sessions ended on a positive tick, 5 of last 10. For the SPX, the day's volume was 79.9% of the average daily volume for the last year. Volume was 95.3% of the last 10 day average and 226.9% of the previous day’s volume.

Declining volume was milder than the declining issues; this is often a bullish sign. The ten day average of Net Advancing jumped from -330 to -85; this is basically neutral and certainly no longer indicates a bearish trend.

Total tick for the day was 49,000 and the average tick for the day was 32. There were 171 ticks greater than 600 and 91 ticks more extreme than -600. There were 15 ticks greater than 1000 and 8 ticks more extreme than -1000. The tick action suggests institutional accumulation.

Intraday volume spiked on the down moves early in the session yet also spiked on the late afternoon surge. The nightly breadth indicators suggest that we may have bottomed again today; we’re convinced we continue to see range bound trade, possibly with an upward bias.

Above 200wkma resistance coming at 200dma (81.7)

Tremendous move in the dollar since QE day

            
Materials, Precious metals, oil and miners were very strong yesterday despite and upward move in the $DXY. The $DXY is nicely above its 200wkMa. Interesting to see the afore mentioned group up along with the dollar. I'll be watching this dynamic carefully.


No change in my long term outlook for continued inflation, bursting of the bond bubble, a global debt contagion like the plague with China and India escaping most of the damage.

TLT found support at the 200wkma and is making a big move to the 150dma (Long TBT)

Long Gold, Silver, Uranium, short bonds, and picking my spots with individually strong stocks as time allows.


Have a great day everyone

$SPX: Long Term Double Top

Since the break of the 200wk moving average in 2008, we have been below that important average ( as some call it the mother of all moving averages). In April we tried to take that out and we couldn't. Recently we breached that line but only for a short while. This could be the double top that I am fearing in the US markets. I'm not a doom and gloom guy but there are people out there that are predicting some dire numbers for the DOW and SPX like Russell (Dow theory) Charles Nenner calling for 5000 on Dow, and Prechter Elliot Wave ( 7000). If you are long, all long maybe hedge with contr ETF's or raise cash, or keep an eye on the commodity stocks as the economic conditions worsen, more QE, and growing Debt in US and Europe become more a part of daily news it maybe too late at that point. Do your own homework! Dont fall in love with the mutual fund guys who come on CNBC and tell you that everything is great and they can make you money. I learned my lesson in 2008. Good Luck!

Current Positions: Technical Review

The dollar has been exceptionally strong due to problems in Europe, its break and the holding of the 200wkma has to be respected. This has been a powerful move to say the least. I don't expect gains in my commodity stocks until this reverses no position in Dollar but it effects everything I hold.

Closing position if we close below the trendline

Looking like a double top here going to sell half on a close below 20dma, and rest below the major support line.

I am weary of the dollar strength so I don't want to give up big gains, selling half  below 38 and rest below 36 support

Holding on to this one I got in on the GS call when it fell ten percent. Nice gain, sell stop 26.5

Uranium miners on fire since late September had a nice pull back, now on next leg up. Up almost 100% on URZ.

add on pullback to 5.25 to 5.50 range

add on pull back to trendline.

Holding 200wk ma support, oversold in terms of slow stochastics, resistance 200dma, may rally back to 150dma before next leg down, Long TBT which is the inverse of TLT, add TBT on any TLT strength close to 150dma

Friday Recap "A look inside the market"

The abbreviated holiday session began with a large downward gap and quickly put the low of the day on the chart eleven points down just three minutes into the day. A rally attempt ensued bring the index up seven points 45 minutes later but the bulls could not follow through and the rest of the session traded lower on very low holiday volume.


The SPX lost 10.33 points during the week. The four week RSI of the four indices (SPX, Dow, NASDAQ, and Russell 200) is 61. Pullbacks often occur as this RSI reaches 80 and bounces near 20.

For the SPX, there were 191 components advancing and 298 declining. Total tick for the week was 412,000. The number of components with their 5 DMA below their 20 DMA decreased during the week from a ratio of 3.75 to one to 1.36 to one. 

On the NYSE, the advance/decline line decreased slightly during the week -670 while the 10 DMA of Net Advancing increased from -319 to -207.For the SPX Index there were 60 Advancers/426 Decliners. On the NYSE 3,005 issues were traded with 949 advancing issues and 1,966 retreating issues, a ratio of 2.07 to one declining. There were 73 new highs and 13 new lows. The five day moving average of New Highs is 70 while the five day moving average of New Lows is 19 and the ten day moving average of Net Advancing is -207. The Net Advancing data indicates a bearish trend.

Declining volume was higher at a ratio of 4.42 to one. The closing TRIN was 2.13 and the final tick was -200. The NYSE Composite Index lost -1.04% today while the SPX lost -0.75%.

For the NYSE, relative to the previous 30 session average, volume was -58.63% 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, 19 sessions ended on a positive tick, 5 of last 10. For the SPX, the day's volume was 35.1% of the average daily volume for the last year. Volume was 38.9% of the last 10 day average and 49.9% of the previous day’s volume.

Total tick for the day was 66,000 and the average tick for the day was 43. There were 38 ticks greater than 600 and 19 ticks more extreme than -600. There were 2 ticks greater than 1000 and no ticks more extreme than -1000. The tick action suggests institutional accumulation.



Looking ahead to next week, it’s a busy economic calendar and the news from the Eurozone lend for market unpredictability. 


Market internals continue to hover around the neutral area suggesting continued range bound and choppy trade will continue for several more days as things sort themselves out. I still look for a second leg downward as part of this ongoing corrective cycle but I do not believe it becomes a significant correction until 1165 breaks.


No significant change in portfiolio and no change in long-term view (update this week)


Positions: RES SLV TBT GLD URZ UEC GDXJ small position in BGZ (trading around it, will add more if key supports broken on SPX) IRE and AIB