Position: EDZ
This market is too extended to the upside. I am picking on emerging markets (Again) because they continue to lag. What does that say about the broader market? Not good; in a real bull I think emerging markets would lead, not the DOW for pete's sake. Inexplicably, we still have commercial real estate out performing as usual. I hate to inject my bias here but I have to think the fed is buying this shit up. That is the only explanation. This isn't me going full bearish-just playing for up to ten percent downside if I'm lucky. Keep in mind that is by utilizing a triple leveraged ETF. To me the weekly's show nothing, the daily's are overbought and the intradays are ridiculously overbought. I don't pay attention to news or seasonal bias info. Supposedly we should be rallying here; to me thats like saying we had a good crop last year so a good crop is expected this year. Whatever.
Tuesday, December 27, 2011
Tuesday, December 20, 2011
Aint that a kick in the teeth
Position: IYR
Well, another case of being off by a day or two on the timing. I felt uncomfortable being short EEM seeing the oscillator flashing the warning signs but I went ahead and re-shorted based strictly on the new price low and the break below an important price level at 37. I still believe I shouldn't have covered my short based strictly on trying to tell the future using the oscillator, but I did screw up by going short again with the oscillator flashing such warning signals. If I had been disciplined I would not have covered Friday but I would have covered this morning after we gapped above a previous days high. I can even see a similar set up occurred on the Friday after thanksgiving with new price lows along with the oscillator flashing warning signals to at least not initiate new short positions. I am back into the commercial real estate ETF now; non-leveraged of course because my pride was a bit wounded after having my head handed to me in a paper sack this morning. This ETF looks better than the indices so I am trying to catch a ride on the strongest horse. Well other than the retail ETF which looks even better but I don't usually trade that ETF much. I wish I had held onto DRN now but the past is the past and I did not think it was going to rally if the market was going to roll over. Lesson learned- pay attention to the momentum oscillator. Don't initiate new shorts when it indicates momentum drying up. OK to hold a short until price forces me to cover; however this will inevitably lead to giving back some profits. On the other hand one could lock in a gain prematurely and watch prices continue to travel in the anticipated direction for another day or two thus leaving money on the table. It is a win some lose some situation however you choose to play it.
Well, another case of being off by a day or two on the timing. I felt uncomfortable being short EEM seeing the oscillator flashing the warning signs but I went ahead and re-shorted based strictly on the new price low and the break below an important price level at 37. I still believe I shouldn't have covered my short based strictly on trying to tell the future using the oscillator, but I did screw up by going short again with the oscillator flashing such warning signals. If I had been disciplined I would not have covered Friday but I would have covered this morning after we gapped above a previous days high. I can even see a similar set up occurred on the Friday after thanksgiving with new price lows along with the oscillator flashing warning signals to at least not initiate new short positions. I am back into the commercial real estate ETF now; non-leveraged of course because my pride was a bit wounded after having my head handed to me in a paper sack this morning. This ETF looks better than the indices so I am trying to catch a ride on the strongest horse. Well other than the retail ETF which looks even better but I don't usually trade that ETF much. I wish I had held onto DRN now but the past is the past and I did not think it was going to rally if the market was going to roll over. Lesson learned- pay attention to the momentum oscillator. Don't initiate new shorts when it indicates momentum drying up. OK to hold a short until price forces me to cover; however this will inevitably lead to giving back some profits. On the other hand one could lock in a gain prematurely and watch prices continue to travel in the anticipated direction for another day or two thus leaving money on the table. It is a win some lose some situation however you choose to play it.
Monday, December 19, 2011
What a difference a day makes part deux
Position: EDZ
Well, I look like a buffoon I suppose. When a trend is occurring it is useful to turn off your indicators because they will scare you out of a position prematurely. EEM had not really done any damage to the downtrend but the oscillator I look at was showing it setting up to rally. I also let the little series of higher highs and lower lows on the intra day charts feed my bias thus leading to my blowing this one. Well part of following a trend is to not try and predict, you actually have to wait for said rally then cover your short. IYR ran into a hefty down trend line on Friday that I noticed after the close. This mornings initial strength petered out so I bailed on DRN with a small gain. Probably a little late to be shorting EEM, but the fact of the matter is we are now below last weeks low and that weekly charts looks downright ugly. Adding fuel to the fire is the fact the US market is breaking down a little bit and is not even close to being oversold yet. It is entirely possible we get alot uglier from here, hence my new short position.
Well, I look like a buffoon I suppose. When a trend is occurring it is useful to turn off your indicators because they will scare you out of a position prematurely. EEM had not really done any damage to the downtrend but the oscillator I look at was showing it setting up to rally. I also let the little series of higher highs and lower lows on the intra day charts feed my bias thus leading to my blowing this one. Well part of following a trend is to not try and predict, you actually have to wait for said rally then cover your short. IYR ran into a hefty down trend line on Friday that I noticed after the close. This mornings initial strength petered out so I bailed on DRN with a small gain. Probably a little late to be shorting EEM, but the fact of the matter is we are now below last weeks low and that weekly charts looks downright ugly. Adding fuel to the fire is the fact the US market is breaking down a little bit and is not even close to being oversold yet. It is entirely possible we get alot uglier from here, hence my new short position.
Friday, December 16, 2011
What a difference a day makes
Position: DRN
I bailed on EDZ this morning. After a couple of mornings of gaps up I am kind of convinced this thing doesn't want to go lower. A look at the 60 minute chart shows a mini uptrend taking shape. The daily looks terrible as do the daily charts of the major indices. This is why I delve into the intra day markets though. They reveal things that the daily charts may not. The 60 minute EEM was flashing caution signals on the momentum indicators I use so I chose to close this trade out. We could easily gap below the now key pivot of 37 Monday morning and that would probably get me short again but I doubt that happens right now. For some reason commercial real estate is out performing right now on the charts. If you saw all of the empty commercial real estate here in Phoenix AZ. you would wonder why as well. Nevertheless I go by charts and IYR is trending up on the intra day time frames. So now I find myself against my will long commercial real estate. 56 is going to be important here. I believe we will take out some stops if we open above 56 Monday. I always keep in mind that I suck at predicting though so I am ready to leave this position with a very weak Monday open. Gold and silver are looking like they want to bounce right back up into resistance. I will watch them closely especially silver if it gets back up to 30. The law of obviousness dictates that alot of stops are situated at 30 in SLV so a strong close above 30 could kill the bears. If SLV fails at 30 this could be the chance for late comers wanting to short.
I bailed on EDZ this morning. After a couple of mornings of gaps up I am kind of convinced this thing doesn't want to go lower. A look at the 60 minute chart shows a mini uptrend taking shape. The daily looks terrible as do the daily charts of the major indices. This is why I delve into the intra day markets though. They reveal things that the daily charts may not. The 60 minute EEM was flashing caution signals on the momentum indicators I use so I chose to close this trade out. We could easily gap below the now key pivot of 37 Monday morning and that would probably get me short again but I doubt that happens right now. For some reason commercial real estate is out performing right now on the charts. If you saw all of the empty commercial real estate here in Phoenix AZ. you would wonder why as well. Nevertheless I go by charts and IYR is trending up on the intra day time frames. So now I find myself against my will long commercial real estate. 56 is going to be important here. I believe we will take out some stops if we open above 56 Monday. I always keep in mind that I suck at predicting though so I am ready to leave this position with a very weak Monday open. Gold and silver are looking like they want to bounce right back up into resistance. I will watch them closely especially silver if it gets back up to 30. The law of obviousness dictates that alot of stops are situated at 30 in SLV so a strong close above 30 could kill the bears. If SLV fails at 30 this could be the chance for late comers wanting to short.
Wednesday, December 14, 2011
You have the right to remain short
Position: short EEM
Well, it appears I was early on the silver call. Just look at what happened after we closed below 30 on SLV yesterday. I said 30 was going to be key so I'm not real surprised it got hammered today. I am starting to see the selling momentum slow down on EEM, but price pays and we made another lower low today so I remain cautiously short. We are at a key price level of 37 but recall what I said about those price levels that "should hold" and what the market likes to do to them. I believe one has to look at the dollar here and notice that it just officially went into uptrend mode making a higher low and just now making a higher high this week. The dollar can get moving in a hurry when it starts trending so I would not feel real good right now if I was long anything since the dollar is the opposite of all the world's risk assets. A radio guy I listen to who talks markets mentioned that the vix hasn't budged much this week. This to me shows complacency; everybody thinking "Oh its no biggie, we'll get another huge snap back rally any day now". Perfect fuel for continued weakness.
Well, it appears I was early on the silver call. Just look at what happened after we closed below 30 on SLV yesterday. I said 30 was going to be key so I'm not real surprised it got hammered today. I am starting to see the selling momentum slow down on EEM, but price pays and we made another lower low today so I remain cautiously short. We are at a key price level of 37 but recall what I said about those price levels that "should hold" and what the market likes to do to them. I believe one has to look at the dollar here and notice that it just officially went into uptrend mode making a higher low and just now making a higher high this week. The dollar can get moving in a hurry when it starts trending so I would not feel real good right now if I was long anything since the dollar is the opposite of all the world's risk assets. A radio guy I listen to who talks markets mentioned that the vix hasn't budged much this week. This to me shows complacency; everybody thinking "Oh its no biggie, we'll get another huge snap back rally any day now". Perfect fuel for continued weakness.
Monday, December 12, 2011
My crystal ball sucks
Position: short EEM
Well, that sucks. Of course we had to gap down today since I came into today flat! As always I reserve the right to change my position back and forth as conditions warrant. I shorted EEM at the open since it gapped down below Thursday's low; officially giving us a new low, a lower high, and now a lower low. Trends 101.
The daily already looks stretched to the downside but that matters little in the EEM. The SPX, DOW, etc., did not have much damage inflicted today but they do appear to be hanging on by their nails. Such is the nature of this market. Tops are excruciatingly long drawn out affairs while bottoms come sharp and fast intraday. Such is the life of a short seller. It is tough being on the other side of what 99% of the world wants. Not to say I wont get long if I think we are going to rally. In this market if you want to make money, you cannot get stuck in your opinion of where the market should go. I like to make money either way and even though I am usually leaning bearish, I don't care if we rally or break down. Well, it appears that silver and gold decided to show their hand a little more today, the only problem is that neither one broke a significant prior low according to the daily charts. That's not necessarily a good thing though for bulls. One thing I have noticed many times is that levels that "should" hold usually don't once a little trend gets rolling. The market loves taking out the obvious stop levels and going just a little bit further than you might think it would. This goes for up and down moves both. Let's see what surprises tomorrow may bring.
Well, that sucks. Of course we had to gap down today since I came into today flat! As always I reserve the right to change my position back and forth as conditions warrant. I shorted EEM at the open since it gapped down below Thursday's low; officially giving us a new low, a lower high, and now a lower low. Trends 101.
The daily already looks stretched to the downside but that matters little in the EEM. The SPX, DOW, etc., did not have much damage inflicted today but they do appear to be hanging on by their nails. Such is the nature of this market. Tops are excruciatingly long drawn out affairs while bottoms come sharp and fast intraday. Such is the life of a short seller. It is tough being on the other side of what 99% of the world wants. Not to say I wont get long if I think we are going to rally. In this market if you want to make money, you cannot get stuck in your opinion of where the market should go. I like to make money either way and even though I am usually leaning bearish, I don't care if we rally or break down. Well, it appears that silver and gold decided to show their hand a little more today, the only problem is that neither one broke a significant prior low according to the daily charts. That's not necessarily a good thing though for bulls. One thing I have noticed many times is that levels that "should" hold usually don't once a little trend gets rolling. The market loves taking out the obvious stop levels and going just a little bit further than you might think it would. This goes for up and down moves both. Let's see what surprises tomorrow may bring.
Sunday, December 11, 2011
Nothing doing
Position: None
Well, EEM did not get back into the little trading range it broke down from but I bailed on this one intraday Friday. Sometimes you just know that it doesn't feel right. In this case there was zero follow through selling even though there was every excuse for there to be. The overbought condition in the markets has been neutralized in my opinion and now I think we could easily rally through the end of the year. I am closely watching gold and silver for breakouts to the upside or downside from these trading ranges they are in. I think that these are setting up as good trade possibilities. Patience will be required on my part however. I tend to want to "get in early" in the direction I think a breakout will resolve itself. This strategy worked great on long bonds at the beginning of August, but on the metals, I will be much more careful.
Well, EEM did not get back into the little trading range it broke down from but I bailed on this one intraday Friday. Sometimes you just know that it doesn't feel right. In this case there was zero follow through selling even though there was every excuse for there to be. The overbought condition in the markets has been neutralized in my opinion and now I think we could easily rally through the end of the year. I am closely watching gold and silver for breakouts to the upside or downside from these trading ranges they are in. I think that these are setting up as good trade possibilities. Patience will be required on my part however. I tend to want to "get in early" in the direction I think a breakout will resolve itself. This strategy worked great on long bonds at the beginning of August, but on the metals, I will be much more careful.
Thursday, December 8, 2011
NOW it goes down
Position: EDZ
Closed out the silver short yesterday on weakness. Felt relief to be out of it and couldn't believe I took the trade to begin with. "How foolish could I have been?" I thought to myself. The real levels that mean anything are 30 and 34. Any movements between those two levels are just noise. Then today happens. We now have a mini downtrend in place after a major battle around yesterday's price low. I did not think we could get a close under there this week; what with the farce of a joke of a news item coming out of Europe not until the market closes tomorrow. Well that's what usually happens when I try to tell the future instead of just watching the charts and reacting to what actually happens. I would be ok with being short here, but I still think 30 is way more important. I shorted the emerging markets because they are the weakest market and they just fell off of a little price shelf that they had been holding all week. Could it be that the market knows something about the Europe news and doesn't like it? If we break right back into that trading range and close there I think we'll see short covering and that could fuel a rally. The charts, both daily and intraday however do not look at all bullish in my opinion. I still don't have a rock solid sell signal on the market but after a bounce if we turn down again, it could get ugly for the bulls. The weekly charts show the obvious new low and what appears to be a lower high for now. After the big white pretty bar of last week, this week has failed to follow through, but you can't blame the bulls for needing a breather; they pulled out a massive can of whoop ass last week. All I know is October's low better hold if we ever get there.
Closed out the silver short yesterday on weakness. Felt relief to be out of it and couldn't believe I took the trade to begin with. "How foolish could I have been?" I thought to myself. The real levels that mean anything are 30 and 34. Any movements between those two levels are just noise. Then today happens. We now have a mini downtrend in place after a major battle around yesterday's price low. I did not think we could get a close under there this week; what with the farce of a joke of a news item coming out of Europe not until the market closes tomorrow. Well that's what usually happens when I try to tell the future instead of just watching the charts and reacting to what actually happens. I would be ok with being short here, but I still think 30 is way more important. I shorted the emerging markets because they are the weakest market and they just fell off of a little price shelf that they had been holding all week. Could it be that the market knows something about the Europe news and doesn't like it? If we break right back into that trading range and close there I think we'll see short covering and that could fuel a rally. The charts, both daily and intraday however do not look at all bullish in my opinion. I still don't have a rock solid sell signal on the market but after a bounce if we turn down again, it could get ugly for the bulls. The weekly charts show the obvious new low and what appears to be a lower high for now. After the big white pretty bar of last week, this week has failed to follow through, but you can't blame the bulls for needing a breather; they pulled out a massive can of whoop ass last week. All I know is October's low better hold if we ever get there.
Tuesday, December 6, 2011
Feel the pain
Position: short SLV
Well, we opened weaker but right at a support level. Those who shorted at the open along with weak hands who shorted yesterday were forced to cover and we simply accelerated up from there. The up move appears to be a back test of the 32 level which SLV keeps butting up against. We finally saw some sellers come in around 32 which is pretty obvious resistance. The way I see it we went down and made a new low and now we swung back up perhaps to a lower high. Today's low will now be pivotal of course because a break of it would confirm a downtrend. That is where I screwed up because I did not wait for the classic " make a new low then come down and take out that low to confirm a downtrend". I must admit I jumped the gun on this one. I think today's low at 30.75 will not be breached before the big news coming out of Europe after the market close Friday. I think Monday morning we will either gap strongly above 32 or below today's low either move will result in an acceleration either way. For now I am only staying short because the stock market is so over extended to the upside and all we did today was go back up to resistance. Chalk this one up to a screw up and hopefully recoup some of the losses and more than likely go into the weekend flat.
Well, we opened weaker but right at a support level. Those who shorted at the open along with weak hands who shorted yesterday were forced to cover and we simply accelerated up from there. The up move appears to be a back test of the 32 level which SLV keeps butting up against. We finally saw some sellers come in around 32 which is pretty obvious resistance. The way I see it we went down and made a new low and now we swung back up perhaps to a lower high. Today's low will now be pivotal of course because a break of it would confirm a downtrend. That is where I screwed up because I did not wait for the classic " make a new low then come down and take out that low to confirm a downtrend". I must admit I jumped the gun on this one. I think today's low at 30.75 will not be breached before the big news coming out of Europe after the market close Friday. I think Monday morning we will either gap strongly above 32 or below today's low either move will result in an acceleration either way. For now I am only staying short because the stock market is so over extended to the upside and all we did today was go back up to resistance. Chalk this one up to a screw up and hopefully recoup some of the losses and more than likely go into the weekend flat.
Monday, December 5, 2011
SIlver and gold as harbingers?
Positions: short SLV
SLV fought like hell to get above 32.25 but in the end the bulls gave up the cause and we found ourselves breaking a little bit of a swing low at 31.50. The daily chart looks about as bearish as you can get and the weekly shows a downtrend in effect. Lets see where it goes, eh? Knowing this market it will gap up to 33 tomorrow morning. I wish I wasn't joking. The stock market pushed to another high today, and thus into even more over-bought territory. A move under 1240 could be the start of something problematic. GLD and SLV are looking weaker than the market right now, and I don't think that is good for the market. I am trying to figure out how to put my charts on here so bear with me to anyone who cares. This market lately is killing people who think that a shooting star candle means anything, as they always gap it up above the high of the shooting star like clockwork. Let's see if they do it again tomorrow, in my opinion it would only exacerbate the over-bought condition.
SLV fought like hell to get above 32.25 but in the end the bulls gave up the cause and we found ourselves breaking a little bit of a swing low at 31.50. The daily chart looks about as bearish as you can get and the weekly shows a downtrend in effect. Lets see where it goes, eh? Knowing this market it will gap up to 33 tomorrow morning. I wish I wasn't joking. The stock market pushed to another high today, and thus into even more over-bought territory. A move under 1240 could be the start of something problematic. GLD and SLV are looking weaker than the market right now, and I don't think that is good for the market. I am trying to figure out how to put my charts on here so bear with me to anyone who cares. This market lately is killing people who think that a shooting star candle means anything, as they always gap it up above the high of the shooting star like clockwork. Let's see if they do it again tomorrow, in my opinion it would only exacerbate the over-bought condition.
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