Near term target 695 reached

Short. price and vxo levels at opposite extremes...may be early but expecting to fall back to forecasted value 680ish...from 692 which is a resistance area for now, EW wave4?? and wave5 starting?????

2c

Helicopter Ben speaks tonight

and see if he can calm the market? Nothing much to say except the market is still in up mode. 693 area may create some resistance and if the market is to regain the up trend it has to be taken out. But would not be surprised to see some pullback when we get there. Tested the pivot theory today with going long when OEX pulled back to 682 and sold when CCI in overbought area. Tomorrow's numbers are 691, 686 and 683.

2c

Wow, it is impressive

It sliced through 672 as if it did not exist. The near term target of 681 was reached in one day. Now, we should be looking to 695. A few days ago 690 seemed like a dream. Finally the volatitlity index came down. The trend has changed and is up trend. Do not short the market. It has yet to go overbought. It is monthend buying and may continue till Friday. It is buy on the dip now. Many bears got burnt for the hardest thing is mentality change. It confirmed the completion of the wave5 and falling wedge scenarios. Tomorrow, watch 693, 682 and 675.

2c

Good signs for the bulls

Today the market spent most of the time between 663 and 670. Although the late bears tried again to push it down but could not do it much below 663. For the bulls though, the 670 area proved to be too much resistance for the day. However, the fact that it had broken the 5-day trend of closing at the low of the day was a major achievement. In fact, closing at the high of the day would provide the bulls with further upside momentum. In addition, this is the first time it closed above forecasted value 665. Tomorrow's values to watch are 672, 665 and 661. For the trend to turn it has to close above 665 and in fact it better close near or above 672 if it were to get to the near term target of 680. This is a falling wedge and break out to the upside is imminent. Also, parking money in high beta stocks such as RIMM proved to be an advantage so far. But and this is a big but, there is a dark side to it in that the volatility index better come down in a hurry or we will be down in the dump again. It is comforting though to know that the volatility indicator which shows the change of trend on Oct11 and Nov1 also appeared on Nov26 to a lesser extent.

2c

No follow through

It was going pretty good in the morning, and exactly reaching 676, bounced around 670 until 666 could not hold. The selling at the close seemed a bit excessive but that was reflective of the market sentiment. Now the rising VXO was indicative of more selling to come, a slight rebound perhaps but pay attention to 670, 663 and 651.

2c

Short and sweet

The market surpassed 666 in no time at all and closed at the high of the day. All we need now is follow through on Monday. Watch 676, 670, and 667. Near term up target is 687. Any EW guy out there and shall we say wave5 completed from Oct11? Now corrective abc waves??

2c

The power of pivots.....

Notice how today's pivot number 673 act as resistance in a down trend. Conversely, in an uptrend, the pivot will act as support. If the pivot is violated, it signifies a change of trend. Well, what a sick market. One step forward and two steps back is the daily theme. Friday, watch 666 for direction, below it, expect 659 or lower. If above it will try 669, but it has to clear 675 for trend reversal. Therefore, you have an action plan for Friday.

It is only a matter of days now before this down draft will be broken. The 30 min down channel is bullish. As mentioned before, if you are adverse to shorting, park your money in AAPL, RIMM, GOOG Calls.

Have a nice Thanksgiving, although not quite sure what to thank for in the market.

2c

Bottoming process....

It tested r1, s1 and closed above pivot. Tomorrow's numbers to watch are 681, 673 and 666. If it can close above 679, the market is turning. Other good long candidates are AAPL, RIMM, XOM, OIH, GOOG and BIDU.

2c

A very disappointing day for the bulls

Could not take it above 678 and missed its chance. Now weekly 667 may give some support. Watch 672, 676 tomorrow, else short on rallies.

2c

This is trying...

It closed right at 680, but it tested 673 and bounced. But the best thing that came out from all these was 670 held. As mentioned before, the market came out from oversold and never reached overbought, unless the market is extemely weak, there is still upside to go. The bias now is up and if it continues next week, the target is Fib 61.8 retrace from Oct31 and that will take us to 704. Watch 682, 678 and 674 Monday.

ps. I see a reverse H&S on a 60 min chart from Oct31, kind of slanting, but if it is the case, it confirms target 704.


2c

Unfinished business on the up side

It is a frustrating day for the bulls. However, as much as the market wants to retest the low, it has unfinished business on the up side. Very tempting to day trade it but swing trade is the purpose of this blog. Until OEX 670 is broken to the downside, the game is not entirely over for the bulls. Today was very much like August 3rd. Daily pivot broken in a short term up trend. The bulls better take over tomorrow or the consequence will be grave. Playing with the house money now and if OEX 670 does not hold will "sell the house to go full force short" as they say. Tomorow's numbers are 687, 680 and 673.

2c

Scary close, but......

Since it closed above 682, the (near term) uptrend is still intact. A 10 point rise from 689 making it to 699 or or higher to 708 is still in the card. CPI tomorrow may just be able to do it.

2c

A no brainer day

As soon as the market opened, OEX 676 was surpassed in no time. Went long and remained long. OEX options still prove to be the most profitable of all index options. Chose in-the-money or near-the-money options as much as possible. The buy signal is officially out, simply because of WMT and GS. It is essential that it stays above 690 for it to advance higher. OEX 700 is the near term target. If it closes below 682, the rally is in doubt.


2c

The ultimate revenge...

Played the expected bounce in the morning. OEX 680 Nov calls it was, scraped 50% profit and is now completely out of Calls. No trades in the afternoon, for fear of selling into close and there it was. The market is still very weak, and no buy signals yet. Looks like it is heading for the August low. Don't leave positions overnight. Tomorrow's numbers are 681, 676 and 669. If you trade tomorrow, stay close to OEX 675 or 670 as much as possible to day trade both sides. It has to close above 676 to even consider leaving any long position overnight.

good luck

2c

Another one...

If the banks come out one a day with their subprime problems, we could see the market declines to no end. However, technically speaking many indicators point to a rebound Monday. The H&S should be considered finally complete. The sell off by the close was obvious that no one wanted to keep a position over the weekend. Since oil stocks are also retreating, the rebound will be anaemic. Right now it is not hopeful that it will go any further than 692. It has to close above 679 though.
2c

Rebounded.....without helicopter Ben

OEX 685 was right on target and more. Never thought the bull trap could cause so much damage. It is also hard to believe people would throw away quality stocks like RIMM and AAPL. Day traded RIMM today when it was down almost 14 points and rode it back up. it was a beautiful trade. Not sure if today was the capitulation day, but daily EMA 233 did attract and it halted the decline. Tomorrow on 30 minute chart one would be looking at 692 then 699, EMA 89 which is a Fib No. After that, OEX 705, EMA 233 which is another Fib no. It may be a stretch but another milestone if the market were to go back uptrend. Nasdaq will be under a bit of pressure tomorrow again, since QCOM beats but outlook is not good. Howver, NVDA tops estimates.

One assumption is that the head and shoulder from Oct23 has been completed. But looking at the entire picture, we are not completely out of the woods yet.

2c

Subprime again...

Another one of those days when fundamentals just clubber the technicals and made yesterday's run up a bull trap. May be all those companies who have subprime issues should just step forward and get it over with a thousand point drop in the DOW. After hour CSCO outlook is not good and is down. It looks like tomorrow will be a capitulation day. After all, the original OEX target of 685 is still valid.

Could not get a good entry point to get in long on the OEX except at the end of day, may be early, but will see. Resorted to shorting OIH and playing long on RIMM. Got out when profit reached 10%. Will look to add more OEX Calls tomorrow. Helicopter Ben will be talking tomorrow and see if he can claim the market.

2c

It's a buy now

A confirmed buy signal was out midday and had to reverse to longs. See how it bounced off 701 and never looked back. If you had not gone long, wait until it retraces tomorrow and get in. Watch OEX 706 tomrrow, it should close above it and it also should retrace back to the level where it broke out today. Looking back and counting the number of days, this is the fourth day and is one day early than previously forecasted 5 down days till Wednesday. The real aggresive buy signal was actually out when the market could not break through 696 yesterday. You buy when the selling sentiment was the highest. You have to be a contrarian if you trade options. Since it closed way above the 702-706 level today we should forget about the downside 685 target and instead look to OEX 720 as near term target. Such is the beauty of trading the index, you do it both ways. Don't ask me why the market is still going up in face of all these adverse fundamentals. Just follow the trend.

2c

Shorted again...just couldn't help

OK so we did not get any bounce in the morning mainly because of the Pakistan and Citigroup situations. If your conviction about the direction is strong, you would have shorted when it rebounded in the morning. OEX 696 remains a stubborn support area for the bears to break. This area was tested four times now and around 2.30pm today due to the oversold condition, the market staged a reversal. Impression, but there is basically no change in fundamentals. Even technically, today's close was still below pivot 702 and far remote from 708. Tomorrow's numbers to watch are 706,701,and of course 696. It has to close in the range of 702 - 706 for the bulls to have any chance. If it hangs around 701 for too long, chances are that it will slice though 696 to 685 area. Will see.

2c

So where do we go from here?

We got our better than expected employment report today and the sell-off intensified as anticipated. OK then, what's next? If you were a bear you would have closed your shorts today because the selling sentiment peaked. You could almost feel the reversal by the end of day, especially after it bounced off from 695ish 3 times in the last 10 days. But, do not be fooled. It was mainly short coverings and it may even continue to a small bounce come Monday morning. Yes it is in oversold zone, but the selling is not over yet. Looking at the economic calendar there is really nothing major to push the market one way or the other in the next few days. The PPI report will not be out until the 14th. Watch 708ish closely on Monday and do not trigger buy until a close above 715. If you use the resistance/support line approach, the downside target will be OEX 685ish. This is a 45 point drop from the high of 730 and is approximately Fib 0.6 retrace of the whole upleg (730-655=75) from Aug low. The reason it bounced off from 695ish was because of Fib 0.5 retrace. A drop of another 20 OEX points from today’s close of 705 will bring the DOW to 13200, the long term support. These are rough estimates for trade positioning. Be careful about sites who forecast new market high. At the moment, it just isn’t there. Really felt for Flipper who was 100% long on the day after Fed day with a close to 400 point drop in the DOW.

Good Luck

2c

Uncertainty creates the biggest reward

It was a double overnight. When you have high oil prices, slowing economy, no more interest rate cut, falling dollar, and inflation concerns and you still want to invest in equities? Yesterday's close was a setup for a fall especially in light of the fact that the market had already travelled 30 OEX (600 DOW) points from the low. It was a bit of surprise to see it down this much though. Today's price action has broken the uptrend and there is more downside to come. If the employment report is good tomorrow, brace for another fall. Do not have a downside target yet but count the number of days. Count 5 and that will bring us to next Wednesday as an estimate for down days. Or draw a line to connect the two daily tops and a parallel line to connect the lows(just one formed at the moment) and you will see OEX going below 700 for sure.


2c