Monday, October 21, 2013

Rinse, repeat, rinse, repeat

OEX 20 YR Monthly

OEX 5 YR Weekly
I have been battling a serious infection over the past week and only now am I able to see the light at the end of the tunnel. I believe I see a very ugly bear that is a bout to swipe off the markets's face. In a seriousness, I have been very ill and unable to comment on the market's action. While I can't talk because of the tracheotomy, I am feeling much better and my understanding is that I should be going home in the next few days even if I have to wear the trache. I have apparently gone through one of the worst, if not the worst,  lymph node and lower jaw infections one could ever aspire to. The pain and level of uncomfortableness I have experienced is definitely at an all time high. 

Even through all of that I have taken a few brief moments everyday to analyze the markets. The OEX charts show where we are now and where I expect the markets to trade to over the coming days and weeks. My levels were hit overnight and I'm now 300% Short the /ES from 1740.25. I will not be covering this trade early. With the multiple attempts to break out at these levels, I believe that when the market turns, it will not give traders easy opportunities to enter on the short side.

Sunday, October 13, 2013

Covered /ES short @1682 from 1696.75

There might be a few more points on the downside tonight but I am under the weather in bad way.  I think I will have better prices to short from in the coming days.  Too tired and sick to watch the markets all night.

Friday, October 11, 2013

Short /ES @1696.75

I think there could be 15 pts or so in this trade. Volatility should pick up again soon.
/ES 4hr

Thursday, October 10, 2013

covered /es short @ 1775 from 1787.50

We'll see how tonight goes. It wouldn't surprise me if the lows for the evening or in.
/ES 60 min

Short /ES 1678.75

This is just for the last hour of the day.  Only looking to grab 2-3 points. Very quick scalp.  This trade is produced from one of my RSI studies over the past 90 days.

***NOTE*** I messed that trade up and lost 2.5 points. The RSI did not close the hour above 90 which was part of the study.  However, where the market is now (at 1687.25) the RSI is just under 93

***NOTE*** # 2  ==> I re-entered the short side @ 1687.50. This is more discretionary and I will probably try and get 7-10 points out of it. The key will be if the market can stay below the HOD (1687.75) going into the final 15 min. of trading. If so, we could give back 5-10 pts into the close

covered /es @ 1674.25

this might have been a mistake but days like today usually trend all day. That is why I took a small loss. I'm looking at a couple different indicators that could shed some light on where the best place to short this rebound is.

short /es @1672.75

This is just a quick trade. I'm only looking for 3-4 pts.

stopped out of /ES @ 1666.50

I'm going to have to watch this thing a little today. We've pushed through some levels that frankly, we shouldn't have. It could be fake out but at the moment it doesn't look like.

Short /ES @ 1662.75

I was filled on my order late last night. A political deal over the debt limit will likely be what sends the market lower. Bulls have forgotten that markets top on good news, not bad. I'll be out for a few hours today but I will put a stop in around 1665. I haven't decided exactly yet.
/ES 4 hr
Note ==> I have put a stop in @ 1666.50

Wednesday, October 9, 2013

Long Gold @ 1305.40

I bought gold via /YG. Gold bears seem to have come out of hibernation lately, talking about the head and shoulders pattern break down. I got news for you. They're wrong. Gold is headed back up towards 1450, probably on the heels of a market meltdown. A move below $1280/oz. negates a bullish move higher.
/GC 4 hr

/GC Weekly

GDX Daily-->Bullish reversal and close above important daily trendline should produce gap open tomorrow

What to expect next

On a ST basis the market is still very oversold. However, price action today told us a lot about what to expect in the next 48-72 hrs. There should be little to no upside achieved. I believe tomorrow will likely alleviate the oversold nature of the market by opening lower but closing at or near the highs of the day. The /ES chart below shows the general idea of how I expect price to play out over the coming trading days. Break down in price from both the DIA and SPY was confirmed today. 
/ES 4 hr

SPY Daily

DIA Daily

sold /es long @ 1655.50 from 1641.75

If we reach 1661 today look for a late day sell off.

Long @ 1641.75

The place to short is around 1660. That's where I expect any bounce to end.

covered /es short @ 1645

I am not bullish, I am just expecting a pause that refreshes. We might even drift a little lower but make no mistake I am in full on bear mode. The Dow is leading us lower and yesterday it broke through some key support areas. We might try to test the underneath of these zones. That's where I'll look to put shorts back on. The nasdaq trin and tick data are both extremely oversold.

Tuesday, October 8, 2013

Sold (to close) FB Nov 46 Puts @ 4.85

Got to take it when you get it. I bought these last week for $2.09

Short /es @ 1657.50. Out of all /ES longs

Now that we've clearly broken down through support I think 1645 could come into play. I'm still wary of any long term short because of the oversold nature of the market and the fact that I think there is some unfinished business on the upside
/ES 60 MIN

3rd time a charm?

My ST long bias is being put to the test. If the market can hold the 1661 level into the afternoon we could see a reversal.

Short TSLA @ 183.19

If this thing can gather momentum the top could finally be in for Elon Musk & Co.
TSLA Daily

Overnight support holds...

The lower channel was tested for the 2nd time in the /ES last night. I believe if support was going to give way it would happen in the after hours session. I expect a 5-10 pt move higher in the SPX today.
/ES 4 Hour

/ES 5 Min

Monday, October 7, 2013

no change in expectations

Today's late sell off seems to have lots of folks talking about another 3-5% of risk being in the market. First of all, I don't think that is likely, in the short term. I think we're a seeing a classic set up where the retail trader sells into the close only to wake up tomorrow and see the futures up 5-10 pts. The chart below shows what I expect to transpire over the next few trading days. The support level shown should hold the market up over night. I expect some stabilization tomorrow and the market to move back over 1685 by Thursday.
/ES 4 Hour Chart

Important Ratio at Support

SPX/VIX ratio is another indicator flashing a ST buy signal. As you can see, it is trading at support. However, you will also notice the divergence that is currently happening. While I think the market bounces here, that divergence is not favorable in the intermediate term. I suspect there will be one final divergence after the market rallies.

Nothing has changed in the short term

This morning's gap lower has done nothing to change my short term view. If anything I am expecting a few extra points profit before the next pullback. 1695 is where we're headed next and that is where I will unload longs and take a short position. I will determine my holding period based off of market action around that level. Even though I expect 1720 to be a ceiling I can't say I would be surprised if that level is breached at some point this week. The quicker we get some sort of political resolution, the sooner the intermediate term top can be put in. I expect one of two things to happen over the next couple of weeks. The market trades to a new all time high in anticipation of a budget/debt ceiling deal or a deal is announced and we spike into the vicinity of the Sept. highs. Whichever occurs it makes no difference to me. The point is that whatever happens it will probably be looked at with a "full speed ahead" type of mentality from the financial media when in fact, it will be anything but.
60 min /ES

Friday, October 4, 2013

Farmers Will Be Driving Lamborghinis

First of all, let me state that if you don't trade futures then I'm only going to give you a very tiny spot in my head space. Trading futures might be the last bastion of true american capitalism and a little bit of the wild west. It is truly a zero sum game. I'm motivated by imagining that some rookie Goldman Sachs kid is on the other side of my trades and gets fired at the end of every month because I am personally crushing him every time he places a trade against me. Having said that, there are very few, if any large money managers positioned for the upcoming run in commodities and commodity stocks. While some of these stocks have already made a good sized move off the lows, there is much more to come in the months ahead. I don't think the outperformance will become glaringly obvious until early next spring. Be ready, because it is time to put the Jimmy Rogers trade on in full force. The two charts below give you a microcosm of why I believe this shift is underway. Make no mistake, we are still all fucked in the end. Are you prepared to get Dennis Gartmaned? And btw, for full disclosure, I am long your rich aunt's house worth of VALE and I bought more GDX today. However, my favorite stocks are in the oil space, as long as they are not XOM.

Widening the Net for Sun-Mon...

Unfortunately, we didn't get filled on our sell orders late in the afternoon but that's ok. I've learned that in trading, just like life, sometimes things happen for a reason. As I've stated before, I believe that we are going to continue to see the market grind higher over the next 5-10 days without trading above the "no taper" spike high. The back and forth should provide some some nice trades on the short and long side. The 10 /ES points above these levels contains some nice entry points to scalp to the short side. After re-examining the charts you can see where I've designated the 2 different points to leg in to the short side. We should get a spike on Sun evening that will allow us to get filled. 87.50 and 91 are where I will be placing my orders. Make no mistake, after this circus of political drama plays out, the ghosts of May 2010 and August 2011 will come back to haunt the markets. The 3 long term charts below show the resistance that these markets are trading against.

Nasdaq 100

S&P 100

Dow Jones Industrials

VST Short set up is close...

I'm looking to short the market @ 1687.50 while simultaneously selling out of all my longs. This is the first legit sell set up that we've had since the lows yesterday.  This is vst in nature and I will not overstay my welcome. I'm looking to bank 5-10 /ES points.

Thursday, October 3, 2013

Long GDX @ 24.35

GDX has been good to me over the last 18 months and I'm going long the gold miners once again. It needs to hold the previous swing low in the 24 area to keep me in it.

One last bear beat down...

As much as I'm trying to look for it I still can not find any information that tells me the market is not going to make one final assault on the Sept highs. Even though I was stopped out from my longs @ /ES 1674.75, I am convinced that move higher is coming. It should start tomorrow. If it doesn't I will be looking for a sizeable gap up opening on Mon. I am rebuilding longs in the 1664-67 zone. If the /ES closes the day below this level, then "Houston, we have a problem."

Covered TSLA short @ 168.67

I think there will be better prices to short in the next few days, probably in the 180's.

Wednesday, October 2, 2013

Lifetime Channel Exerting Pressure

I've added to my longs @ 1674.75 in anticipation of a move towards 1720 (or at a min to the top of the ST channel below).
However, as you can see we are running out of room for my thesis to play out. The good news is that risk is well defined and since switching gears is not a problem for me I am still playing for a move higher.

I would be lying if I said I wasn't somewhat concerned because I know the type of pressure the lifetime channel ($DJI) will put on the rest of the market when the time is right. When it does, bulls will be crushed.  I just don't think it will start until closer to the middle of October and probably on some type of perceived "good news".
Lifetime Close-up

short FB via Nov 46 Puts @ 2.09

FB is mine and it is headed lower.

call me crazy...short TSLA @ 182.32

This looks a little different to me from past 1 day wonders. This thing might have some legs and if it does you'll have to do what I just did to make money on it. Man up and short into weakness. I said screw the options and shorted 100 shares. May the force be with me...

slow rolling...

Market's are continuing along doing what they do best...keeping bulls and bears alike on the edge of their seats. Nothing has really changed over the past couple of days. I still continue to believe that the market will trade somewhere in the neighborhood of 1720 at some point in the next few trading days. I will start looking for setups to re-short the /ES when it trades there. We could see some resistance in the 1695 zone and depending on the price action I may lighten up some of my position. I was stopped out of my gold and Nikkei trade on Monday. Gold reversed last night right where it had to if it is going to make it to my 1450 target. I will look to re-enter longs if it can show some follow up strength over the next few days.