6 replies to this topic

[Darris]

Spooky, too many spikes up for me early in the week to hold shorts, but they eventually paid off on Thurs. I am now heavily long from various entries on Thursday's sell off. Sort of thinking Tues/Wed could still be choppy, but the risk is not being long for an Upside surprise. The end/1st of the month seasonal is upon us, and the low could have been this past Thurs. Any gap down open Wed or Thurs this week will be a strong buy signal for me for the 1st hour of that trading day into 10:30am. Conclusion: Buying the dips, and expecting a few minor ones, with a hard stop at 1496 ES June futures contract which is about 12 pts below Thurs low. My technicals are showing some very strong Bottom signals, which is very confusing to me since we have not had much correction. From top to bottom this week, we did not even get a full 2% correction. A 2% correction in a strong uptrend is a gift. Predicting the ES June futures contract will close above 1536 on Friday June 1, 2007. Long and Strong, have a good weekend!

[thespookyone]

Hi Darris:Thanks for your thoughts. I closed my QQQQ and SPY puts Thursday, as well. Made a true killing on the puts. To be honest, I only exited Thursday because I have traded thirty years-meaning-in the situation the market is in there was bound to be a low volume bounce in Fridays trading going into a holiday, it was really a no brainer. But, in the coming week, I see the market much differently. I think there is much more risk being long here-if for no other reason, the reward on the long side seems incredibly limited-why take the risk. The reward on the short side here, though seems quite a different story-worth my risk for sure. If the Dow top is not in, I feel it is ridiculously close, and as I don't trade the dow-it's kind of meaningless to me. I do trade the S+P, but, again feel any bump up from here will be tiny. The Naz and QQQQ look like plain old toast, and I feel new highs are not forthcomung before correction in either. The past week or so should show some that the "buying the dip" game has become a bit dangerous of late, as has buying the gap up been-I think buying the dip, for the crowd, will soon abate. No, for the week we did not get a correction of a full 2%, BUT, this is a top in the wide end of the RST and has acted as such, rolling over slowly, in rounded tops. Don't let the slow nature confuse you, there is a serious correction on the way, soon. If you look at past RST formations from two years ago, you can see that time spent at "A","B","C", "D" points take longer and longer as the triangle gets larger. Now sitting at the top of the triangle. at "D" we see the longest amount of time spent at a letter so far-perfectly normal, and predictable,as is the upcoming journey to "E" in the bottom hand right corner that we are now embarking on. That we have rolled over slowly at "d" here, does little more than confirm the predictability of the pattern-it's acting as it does, and no, it won't "be different this time". I'm hoping for a gap up Monday, and high odds are I short into it. I don't see the S+P close you fo, so let my guess stand at a Friday close around 1494, or so. I'll post the positions I take here, as I think trading is my forte, and the best thing I can contribute here. My TA is hardly as esoteric as a lot I've seen here, but that is with purpose-as my simple ways have paid me best, so I stick with them. I only trade for money-not to be right, not to prove I'm smart, not to impress-I just like to make the cash, lol. I love the considered contributions of yourself and others that give me more to think about, and appreciate the discourse here that makes us all better. The cool thing is, really, we get to see others traders takes on what will affect the market, such as seasonality, indicators, sentiment,charting, fundamentals ect-and then by price-the market tells us which mattered most right now. To me, what matters most right now is the ugly divergences, high volume drops, helium inspired rises, narrow breadth up, heavy breadth down, and CPC telling me we have room to roam on the downside. Price will soon tell all of us if our thought are right or wrong-me icluded. Spooky

[arbman]

If this market was about to break down, it would've overriden the seasonal Friday bounce ahead of the Memorial Day completely and cut straight through after the Thursday's high volume decline, instead it bounced, most of the selling must be over on Thursday. There will be some down on Tuesday, but up thereafter probably for the week. However, I agree that the market is approaching for an intermediate term correction for the summer, the price is leading now and that's the left over liquidity, yet there is so much of it...

[thespookyone]

kisacik : I hear what you are saying, and only differ in one regard. Hardly anyone was trading Friday-I feel there was nobody there trading to "overide". How much faith can be put in the bounce Friday, on that volume? If we have some down Tuesday, but it comes on huge volume-will you still feel the same way about the rest of the week?

Edited by thespookyone, 27 May 2007 - 10:47 AM.

[arbman]

If we have some down Tuesday, but it comes on huge volume-will you still feel the same way about the rest of the week?

All of the down volume came on Thursday ahead of the weekend, imho. If Monday makes a larger and heavier volume decline, of course, I would expect Wed to be also down. However, the tick and shorter term internals were so negative for days and Thu felt like the final capitulation to me, again for the ST. In the long term, these days will look like the IT distribution toward the top probably and not an initiation, but I do not hold a crystal ball, it is just the odds according to what we have seen...

[Darris]

kisacik, FWIW, I think the observation you made on the TICK is important in the near term as well. From a technical standpoint, I am consumed by the amount of manipulation via program trading. My theory is, the strong number of sell programs (I saw a minus -1300 on the one minute close this past week) are due to mechanical "Sell in May and Go Away" systems. This has also weakened the internals from an IT standpoint. If we can improve the internals this week, and move back to SPX 1530, the IT might look better for more rally in June. PS. By some measures, the TICK achieved selling levels equal to the May 11, 2006 and Feb 27, 2007 initiation move sell offs over the last week or so, but with a positive divergence based on the price action in comparison.

[Darris]

Some exceptionally good stuff by mortiz (Thanks Randy) here on ETFs & Options.

http://forums.techni...post?id=1921924