Daily Archives: July 1, 2010

Quick Thursday Morning Update

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Hi Everyone,

I was charting until 12:30 in the morning, and I was up again at 5:30 this morning to get my day going. So far, it is going well. I am pleased to say that, now that I'm finally fully positioned, I'm beating the market's inverse. The S&P is down 1% as I am typing this, and I'm up about 1.2%. Huzzah!

I came into the morning short 97 positions, and now I am short 171 positions. The most exciting thing to me was that the Euro was skyrocketing, and yet gold and equities didn't care! Maybe the one-edged sword is back, but it is fighting in our direction now. I was simply flabbergasted to witness this, since my first quote check of the day was the Euro, and when I saw how strong it was, I worried that this day might really stink.

I am short a wide swath of industries, although I am avoiding retail. My big winner of the day on a percentage basis is Almost Family (AFAM), which tumbled double-digits of percent right at the opening bell.

Picture 1

Crashtastic (by Facesincabs)

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Crashtastic!

 

Today's final hour of
trading was crashtastic.  And …
considering that today was the last one of the quarter, today's distribution
and selling was clearly institutional and most likely correlated with
redemption selling by professional funds. 
1040 is gone!  Here is an $SPX
daily chart to help orient us to some of what is happening.

 

http://tinyurl.com/2dkr455

Snap24

 

I would strongly
point out the increasing volume (e.g., distribution) on the day.  The PVO indicator has turned up while prices
declined, confirming a distribution day.

 

I would also note
that the $SPX closing price held the October 2009 low, so I will now be
watching the series of monthly lows from July 2009 to October 2009 on this
chart.  Each one is now functioning for
me as a short term trading target, as this market grinds down, confirming the
continuance of the selling we have seen initiated so far this week.  I would concurrently note that the 9758 area
of the $INDU (long noted by PussyGalore) is still holding (also).

 

This evening I will
be watching the overnight market reaction to today's selling, and I expect a
rollover by the Euro now would unleash more downside for our domestic markets
(and help out my precious metal shorts, both currently slightly red).  I am also watching former leaders (like I
posted last night) for clues about the market's continuing weakness (including
financials, real estate, retail and cyclicals).

 

For myself today, I
took profits on my SPY short position entirely too soon (even though it was
intended as a day trade), but I am still holding everything else that I entered
short near the lunch time highs today.  I
like to do a combination of day trading and swing trading.  This strategy keeps cash available (each day)
for new entries, while adding capital to my main trading account.

From the desk of Nathaniel Goodwin (by Nathaniel Goodwin)

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I consider myself an average – below average trader. Maybe one day I will amass a great fortune trading, but I honestly believe that my fortune will be made with this reality/competition/cooking show that I have been pitching to all of the major networks.

Food Network has already made me an offer and told me that they could possibly get the  “Sham-Wow” guy to host the show. I told them to shove it; I want a major network and chef Gordon Ramsey to be the host. So until the deal is finalized, I’ll keep making posts here. If or when I disappear from slope; get your TIVO ready, because you can expect the most awesome reality / competition / cooking show is in production and will be airing soon, or I’m dead. If I’m dead, I’ll try to forward stock tips to my ghost hunter partner Ricky Magnuson. Keep an eye out for his posts somewhere on the Internet in the future if I’m MIA.

Here are some charts I’m watching.

I wanted to go long SPX earlier in the week, but thankfully it blew right past my buy area before I even got a chance. Rut is hanging on to support by a thread, depending the action tomorrow, I might go long RUT with a tight stop.

SPX sell signal at 1040, but I'm not comfortable shorting here right now. Look at the last buy signal at 1110, glad I didn’t go long that day!


SPX
RUT sort of looks like it’s in a big bull flag, no?


RUT copy
I’m not too interested in shorts or longs right now. Some of my indicators are neutral telling me not to trade big.


T2108

T2107
  
I might just sit it out for a while. Here is something you can take to the bank though…This is my Grandma Goodwin’s recipe for soft pretzels, and I’ll go 100% long that you will find it delicious.

If you're troubled by the market right now, try this recipe out instead of trading.

Serves: 8-12
Prep. Time: 2:00

1 1/2 tsp. active dry yeast
1/2 tsp. brown sugar
1 dash salt
1 1/2 cups 110 degree water
4 cups bread flour
1 Tbls. baking soda
1/4 cup warm water
1 cup melted real butter

1. Combine first 4 ingredients; allow to rest for 5 minutes.
2. Stir flour to mixture and knead for 5 minutes.
3. Place dough in a lightly greased bowl, cover with a damp towel, and allow to rise in a warm place for 1 hour.
4. Divide dough into 8-12 equal-size pieces; roll each piece into a rope; shape each rope into a pretzel.
5. In a shallow dish, stir baking soda into warm water; dip pretzels into mixture (or brush mixture over pretzels); lay coated pretzel onto a lightly greased cookie sheet.
6. Bake in a 550 degree oven for 8 minutes, or until golden brown.
7. Brush melted butter onto hot pretzels.

Volume by Price Bars: Total Stock Market Index (by Leisa)

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Tough day in the market for bulls–even bears. Seemed like both were playing chicken today. Looks like the bulls swerved down a cliff towards the end. Below is a chart of the total stock market index.

[edit: I purposely chose the time frame from March of 2009 through now, because that shows the current volume by price profile of this important (countertrend) rally].


Snap23

The magenta represents the volume by price bars.  As you can see, we are in tricky territory.  We have dipped below the February 5 low.  The market is literally at the edge of a precipice here. I've no predictions about which way it is going to go.  It is reasonable to expect a bounce–but the news flow will need to be supportive of that.