Thursday, May 30, 2013

Gold/Silver Miners are going higher over the coming months...

The etf to play it will be GDX. It should now be safe to buy any and all pullbacks in this sector. By the end of the year gold/silver miners could be up 40-50%. I am not as constructive on physical gold and expect any moves higher to be somewhat muted.

Bot BAC Aug 13 and 14 Puts @ .41 and .84

Tuesday, May 28, 2013

Sold /ES @ 1666.50

edit: I forgot to mention that I am 200% short from 1670.25. I mentioned last week that I would be getting short again around this area.

Friday, May 24, 2013

Covered /ES short at 1638.50

200% long from 1638.50. We should see a test of 1670 or so. I will look to re-enter shorts in that area

Thursday, May 16, 2013

Situational Awareness: FAIL

The sheer number of bullish money managers that are being interviewed by the financial media on a daily basis seems to have reached an apex.  Just like the unsuspecting woman in the picture above, the market is in a perilous situation.  While I have been very bearish (and wrong...for now) for the rise of the last 100+ SPX points, there is no doubt in my mind that the coming sell off will easily put short positions "in the money" on anything sold short at 1550 and higher. The big question is when, not if the market will correct lower. Considering the rare and strange readings throughout many volatility and breadth indicators that I review on a daily basis, I am left with only one conclusion. When the market breaks lower it will probably be unusually powerful and very similar to the moves lower in 2010 and 2011.  Perhaps, a combination will emerge, like some kind of mutant offspring . I believe this because I am seeing many of the same type of readings throughout a plethora of data that I review on a regular basis. However, for the sake of time, I will publish the charts that I think display the overhead resistance that the market has been steadily pushing up to.

DOW Monthly
Looking at just this chart, the market seems to be attempting a bullish breakout of the internal trendline that caused the selloff in the summer of 2011. However, the likelihood of a sustained move higher from the current levels is a longshot. The weekly chart of the Dow shows why.

Dow Weekly
Dow 60 min Closeup
Resistance, while it is rising, did provide some push back. However, because the channel lines are rising that does allow for the potential of some slightly higher highs over the coming days.

The final chart is of the SPX divided by the US Dollar index. While the market has been hitting new highs, this chart has not been in agreement. This divergence will be one of the catalysts that can be attributed to the coming plunge.


As of today, I don't think the intermediate term top will be formed until late May or the 1st week of June but I also don't think there is any upside past 1664-1670 on the SPX. Therefore, I expect volatility to increase over the coming days and we could see a couple moves down towards 1580 only to rebound back to 1650-1670 a few days later.

Sunday, May 12, 2013

Getting closer...

The market is coming closer to some sort of top.  It might only last a month but the ensuing sell off should be frightening. The minimum target I have for the correction is 1500 on the S&P.  However, it could be as low as the 1420-1440 area. The following price structure does not allow for much more upside. I mentioned the other day how we could see a false breakout to the upside above the upper channel line but it should fail just like the false breakdown that occurred 3 weeks ago.  Regardless, an intermediate term top is now upon us and very little upside can be achieved until the market trades down to 1500.

Wednesday, May 8, 2013

S&P 500 back to short term resistance

I expect a high over the next few days of around 1640, probably after a 15-20 point pull back. Price is now back to the top range of the structure that has contained the SPX over the last few months.
 You may have noticed the underperformance of the Dow relative to the SPX over the last several weeks. The reason is because of the push back this major internal trendline is exerting. After several months of leading the major averages higher, the change in leadership is just another warning that no one is paying attention  to.

Friday, May 3, 2013

Bot AAPL May 445Puts @ $7.40

This is a very short term trade. The 450 area should provide some push back over the next couple of trading days.