Friday, July 29, 2011

Oversold but going lower Friday

With the continuing stupid pigheaded obstinacy emanating from our so-called leaders in Washington, there is no point whatsoever in bothering with any technicals tonight since everything now hinges on the debt ceiling debacle..  This sort of leaves me at a loss, since what I do is technical analysis.

Technically, we're now at oversold levels and due for a rally in a day or two, but practically speaking until these suicidal egomaniacs hell-bent on destroying the United States can get off their collective butts to do something constructive, the market will simply continue lower.

As I stated earlier this week, I am now out of the game until after Doomsday next week.  I've never seen anything like this and I am completely disgusted.

Wednesday, July 27, 2011


May 30, 2003 - July 27, 2011

Today, after a long illness going back more than seven months during which we tried everything possible, we finally had to admit defeat. Foofie, our beloved German Shepherd is no longer with us. She was only 8 and we had her less than seven years.

Somehow, tonight I simply do not care whether the market goes up or down. Foofie, we miss you something fierce.  We are simply devastated.

Losses may extend into Wednesday on weak technicals

Where's Cromwell when you need him?

In April 1653, Oliver Cromwell delivered a memorable address to Parliament, to wit:
“You have been sat too long here for any good you have been doing. Depart, I say, and let us have done with you. In the name of God, go!”
That about sums up the way I feel about our own "Parliament". It's really a pity we can't be done with this collection of clowns and other assorted Twelfth Night characters as easily as Cromwell was 358 years ago.  Mr. President, Harry Reid, Nancy Pelosi, John Boehner, in the name of God, go!

The technicals

Meanwhile, back here in what's left of America, the market did not hold up today (Tuesday). The pivot proved to be the deciding factor. We were above it in the wee hours, survived a test around 5:30 AM, but then sliced decisively below right at the open and it was all over. I let myself be guardedly optimistic based on the futures last night and in retrospect that was a mistake. The candlesticks and the indicators were decidedly more negative than positive.

And I hate to say it, but we've got more of the same tonight. Only now at 1 AM EDT, ES isn't even above its new daily pivot of 1330.50. Today's ES action also took us completely out of the short rising regression trend channel from July 19th and that is a bearish trigger.

I also took a look at the chart of TNA, the preferred vehicle of J-Trader's Buy/Sell model. JT's system remains stubbornly long and I have to say I'm just not seeing it. After a doji peak two days ago, a second lower doji yesterday and a longer red candle on increased selling volume today, this does not look like a stock that's going higher tomorrow. The stochastic in particular executed a bearish crossover yesterday. Not good. And to the extent that TNA is a proxy for the broader market, I think we have lower to go before we go higher.

In addition, the Dow's daily chart is even more grim with a bearish three black crows pattern. You don't see the TBC too often but it's never good. The Dow also has no support from its close today of 12,501 down to 12,385, the support level from earlier this month.  And if that wasn't enough, the Dow has now clearly formed a double top, another bearish sign.

Then the VIX is back above 20 but still far from its upper Bollinger band at 21.68. And its indicators, though now rising, are still nowhere near overbought levels. I see no reason for the VIX to fall tomorrow. VIX no fall, market no rise. So all in all, I'm going to reach for my short hat but as I mentioned, with the current outbreak of total lunacy in Washington over the debt ceiling, I'm sitting this one out until some measure of sanity returns down there.

Of course, if by some miracle, Emperor Nerobama should somehow trade in his fiddle for a fire extinguisher tomorrow, look for the markets to go up. Absent that, I'm just not feeling the love from the technicals tonight.

Tuesday, July 26, 2011

Slight positive bias but news trump technicals

Moe-bama, Nancy Curl-osi, "Larry" Reid
Nyuk nyuk nyuk

Definitely no wise guys here. I'm appalled beyond belief over the antics coming out of Washington the past week from Bo, Larry, and Nancy. It's just too bad there weren't four Stooges though, because Boehner deserves a spot in there too. Not to mention the rest of the 535 clowns down there who have the affrontery to call themselves "representatives".  Have these people no shame?

Memo to Emperor Nerobama: stop fiddling around and start being a leader. It's just disgusting beyond words.

Meanwhile on Wall St.

The market ended lower today pretty much as I expected with the Dow down 88 points after a big gap down at the open. The carnage was all over in the first 60 seconds of trading. There was no way to profit from this unless you had gone short last Friday. I suppose the subsequent retracement off the lows provided some opportunity for the day traders, but I saw none of that.

ES daily, 7/25/11
For tomorrow, I think the clues come from the S&P futures. ES is up almost a quarter percent right now at 1 AM EDT.Two things are evident in this daily chart: first, today's sad action did not take us outside the ascending regression trend channel from July 18th. Second, today's candle formed a hammer. These are both bullish signs. And tonight's action (ie. Monday evening's overnight into Tuesday) is also forming a hammer.  For tomorrow, watch the daily pivot, now at 1331.92.  We're now above that level, thanks to a combination of a minor late evening rally and the fact that the pivot is now lower.  Staying above this number will be bullish.

Meanwhile the VIX put in a big gap-up doji that's looking a lot like a bearish evening star. And J-Trader's Buy/Sell model is stubbornly hanging on to its bullish bias. That didn't work out so well today, but the market is firmly in news driven mode now and will remain so until we get past this latest comedy routine coming from the Three Washington Stooges.

Although my personal bias is to the up side for tomorrow (Tuesday), I am simply standing aside until all this debt ceiling nonsense is resolved. I hereby declare summer vacation until August 3rd. Anyone for Pina Colada?  That's all, she wrote.

Monday, July 25, 2011

Going down

With the collapse of the debt ceiling talks and the passing of Boehner's 4 PM Sunday deadline with nothing to show for it, the futures expressed their displeasure in no uncertain terms, opening this evening with the biggest gap down I've seen since I started trading in 2003.  Right now at 1:20 AM EDT, all three market futures (ES, NQ, and YM) are down just over a full percent.  That's huge.

And totally unplayable.  All the action was over in seconds.  And it will be the same story tomorrow when Wall St. opens for business.  Unless you happened to go short on Friday afternoon, forget it.  The only bright side is that it might be time to go bargain hunting when the dust settles.

Anyway, there's no point in even talking technicals tonight.  The market's going down on Monday and that's that.  Thanks a lot, Obama, Boehner, Reid, Pelosi, and all the rest of you other venal amoral ignorant egomaniacs who make me embarrassed to be an American.