The SPX is back within the 990-1012ish neutral range. This is within a larger 980-1040 neutral range. I wouldn’t suggest trading the indices in such a tight consolidation zone.
Is it time to short? The easy way to answer this question is to break down the market by individual sectors/industries. I like to use the Select Sector SPDRs (XLV, XLB, XLK, XLP, XLI, XLU, XLY, XLF, XLE).
For the most part, each sector is within a neutral range and/or a rising wedge or channel. The XLF is the only sector that broke through it’s lower long-term trend line (out of 9). I do pay attention when 2-3 sectors start breaking down ahead of the market, usually a precursor to a major pullback. For now, however, I don’t see a reason to rush on getting short.
Thanks CA for the post and for the advice not to rush into shorts. I tend to be impatient and too early. Will wait.
Hey John, i know you are busy.
I emailed you few times in regards to our lesson, when will you be free?
I live in Los Angeles, i could make time to make a trip to anywhere if you wish.
Action is in crap finnies: $AIG, $CIT, $ABK, $FRE, $FNM, etc.
Thanks John for the great analysis
CA – reread your piece on shorts, I should have it bolted to my head…
For those iBC nutjobs out there that actually followed me into HLCS, the phenom known as GIO schooled me good in his terminator approach to digging up stuff on CTIC. So I got a call into HLCS sales and left a message, you know, using my title and stuff.
I have a couple of key questions I’m going to ask. As with any call to the sales dept. for a million dollar purchase I expect to hear back soon. Keep you suckers posted.
This is a great way to analyze the market. I’ve been having short signals go off in my head the last couple of weeks, annoyed I didn’t have the FAS short in at 80. I saw it keep hitting the ceiling at around 80, that sucker can move, it’s amazing.
Thanks for the methodology lesson once again CA!
C approves 1 for 7 reverse stock split… i think i’m reading that right…
Is it going to pull an AIG after it splits?
/CL – crude oil in a falling wedge on aa 1 hour chart (not a very tight one as of yet) and getting near some longer term trend support levels.
I’m playing it today and tomorrow – the volatility is better than ES – remember nat gas storage numbers at 10:30 today will have some impact.
The first support is $68 – this is a psychological level similar to SPX 1000 – many traders staying bullish above/bearish below – a great place to get long provided the SPX is flat to up-trending.
If we continue to bump $68 AND the SPX is showing weakness, we should head quickly to the next support level.
Next support is around $67.25 – trend line from July
Next support is around $66.25 – trend line from April
Both levels are almost guaranteed to provide quick reaction rallies to the upside once hit. The rally strength should be directly influenced by the SPX action at the time.
Resistance here says we don’t see much above $69 until the broad market shows convincing strength.
Bought $BPOP @2.12 and $RTK @1.94
RTK on FIRE!
Sounds like “duh” to me – the day will be “dynamic”
8:39AM Helicos BioSciences reports Q2 highlights and strategic update; co has engaged Thomas Weisel Partners to assist with its evaluation and execution of strategic alternatives (HLCS) 2.33 : Co announces Q2 highlights and strategic update: Helicos expects that its systems installations will provide additional revenue from the sale of proprietary reagents and that the results of the system evaluations at the reference sites will lead to additional instrument sales… As previously disclosed in the Company’s Quarterly Report on Form 10-Q for the period ended June 30, 2009, the Company is actively engaged in discussions with potential strategic partners regarding various strategic alternatives including equity financings and other sources of funding, such as joint ventures or partnerships. Such discussions have involved parties inside and outside of the genetic sequencing space. In connection with this activity, the Company has engaged Thomas Weisel Partners (TWPG), a nationally recognized investment bank, to assist the Company with its evaluation and execution of strategic alternatives. The Company is pursuing various strategies in parallel and may ultimately engage in one or more alternative financings or none at all. The Company’s failure to raise capital as and when needed would have a material negative impact on its financial condition and would have a material adverse impact on the viability of the Company as a going concern.
YONG (old YPII symbol) a nice Chinese play, I mentioned this play a few days ago.
Hating this SPX trading range… I might have to start playing in /CL with you retox
Yeah man, that’s why I moved away for now – the intraday volatility we saw over the last year is just not normal.
I’d go with 6E unless you have A LOT of tolerance for being whipped around on CL. There’s a reason they require almost double the margin for CL…
My last scalp short after that number went .20 ($200 per contract x 4) against me almost instantly before I eventually got my target 68.05.
The same short on 6E would have been 5 pips ($50 per contract) against before it paid off.
got the $68 bump I mentioned above – selling here 68.31
How are you using the three together? I’ve been watching CL, 6E, and ES in my paper trading account for the past few days and getting torn to shreds while trying to reconcile the movement of two with what *should* happen in the movement of the third. Would you suggest anywhere in particular that I could read about the relationships?
second time 68 tested for those of you not watching
give me a minute on that one…
Generally (not always) the correlation is:
Oil trades on broad market sentiment – a strong economy = the ability to digest higher oil prices and is a sign that there will be continued demand. I ALWAYS have the bias that oil wants to go higher LONG term – this based on the cartels and their interest in keeping oil high… too much money involved to not have a little “influence”. Hurricanes and wars obviously also impact this as well.
For scalp trades, you will find that oil traders (over)react spastically to moves and/or potential moves in the broad markets (they are essentially watching the set-ups we would all look for). You will see quick violent runs in anticipation of an SPX move – if the SPX hesitates or fails, you can catch a .05 to .10 cent retrace in crude. The other side of that is, if you see an SPX move that was not anticipated by oil traders, you can be sure the reaction will be swift and hard – if you don’t get in first, just don’t EVER chase it until you get a 2nd long entry signal (as CA would profess). Be sure to respect trend lines and support/resistance levels – never place your exits on the other side of a trendline in anticipation that it will break – it might, but, trendlines are respected by crude traders and the bounces can be swift and hard. In other words, don’t be greedy.
You also know that oil is sold in dollars so a weak dollar = higher oil. I use the Euro for this – a strong Euro is a weak dollar. If you want a more precise indicator, you can use /DX (the dollar index) which is the dollar vs. the Euro & the Yen. This is a secondary indicator to the market but it occasionally leads with a strong move. Watch for Euros to move quickly to and from support/resistance levels (VERY important when trading currencies) and then hang around for a while usually waiting for broad market direction.
I’m sure I missed a lot but – should be okay for now.
Next play is nat gas @ 10:30 – switching to /NG – at the bottom of the channel AND at an ALL TIME LOW so shorts here are not likely to pay off.
Inventory build of 67B CF expected – a suprise lower build (lower number) will be a long entry back to the top of the channel 2.80 area. Fat chance but we’ll see…
surprise – my a, r, & d keys are sticking. fish sticks in the keybo.
we now firm up and rise…
wait for stability
in 2.570
scaling
out 2.595 – only 2 contracts – $500 – done for the day
still a lot of potential to retrace
hah! good timing if I may say so myself – shit boy!
sell-off on expected numbers was a little overdone IMO – watch for a break of the upper trendline on a 1 min chart for a long entry back toward 2.563. not the best odds but it should work.
I have to say UNG has fucked up this market – if they close that ETF, we will see massive selling followed by firming and a nice rally.
in 2.534
I know – I said I was done
bon que que
added 2.518
I may have to caulk my windows and doors – I will take delivery of this shit before I give up. Please don’t follow me. May take days to cler this position.
added 2.501
avg’d in 2.513
out 2.518 +5 ticks – 8 contracts about $400 (was in 2.5135)
NO MORE nat gas – smelly bitch
I don’t follow what you’re doing [yet] retox, but I know it’s well done, and very, very cool.
hey, thanks man.
just so you know – I consider you invaluable to this blog Doc.
thanks for the love scrap (you know, in a manly way) –
What a great place to learn – insane really. Everyone I know with money in the markets is moping around – either now buying in again after selling at the low or just being downers. 6 months ago I never would have imagined making this kind of dough in the market. More importantly, I [think] I’ve learned enough not to get skewered by dumb ass investment advisors or the market when my career winds down in the next 10 years or so. I’m sure we all know some folks with retirement plans that changed drastically in the last year.
Friend of mine – AMEX advisor – was begging clients to sell in March at the bottom. “It will NEVER come back” she said Josh style. Talked to her few days ago – she is just now bullish. We must be ready to sell off…
Buffett has always had it right with the greed/fear thing and CA teaches you how to see it and exploit it.
That’s all you ever need to know.
SVA at 9.79-9.81
Out at 9.75
UTSI folks… nice and warm…
out of UTSI
will revisit
ZQK at 2.57
out, made 2 pennies
where the fuck is everybody?! its like a damn graveyard here…
CLNE at 11.77 added for day trade
scratched out of day trade portion
RTK accum… potential breakout….what do u guys think?
bought this morning, still in it. A kick up in volume will send it higher again. it can go either way, but i’ll bet on it heading higher.
UAUA wtf?
added to MEXP position earlier.
long-term lotto treasure hunters.
HLCS update for those taking the wild ride…from the company website today some stuff, and news of a new order:
To date, Helicos has installed six Helicos(TM) Genetic Analysis Systems at the following sites:
The Broad Institute of MIT and Harvard (Broad)
Stanford University Stem Cell Institute (Stanford)
Dana Farber Cancer Institute (Dana Farber)
Mass General Hospital Cancer Center (MGH)
Ontario Institute for Cancer Research (OICR)
An undisclosed biotechnology company in the Northeast
Of these installations, Stanford and the undisclosed biotechnology company represent outright system purchases. As previously disclosed, Broad received its system at no cost in early 2009. Dana Farber, MGH and OICR represent placement installations which have been designated as reference sites for scientific and commercial evaluation. These reference sites will have the opportunity to purchase their system outright at the end of the evaluation period.
In addition, Helicos received a system order from St. Laurent Institute
Trying to get my arms around this thing…I’d love to have Fly, Jake or so of you mega dealers out there throw an opinion on this.
My best, wild, JoshFukTardation I’m a dumbass and I don’t know shit guess is a buyout happens and fast. There’s a lot of big money that might be willing to throw down a big bone to the owners. Secondary would probably fly too though. Stock would feel the hammer but recover.
Those locations up there? That’s big shit. So big, they wouldn’t take the machines if they didn’t work, and HLCS might as well have put TNT in their own reception area rather than place crap with them.
Probably looking for a partner (public or private) to take a 20-40% interest for capital infusion at $3/sh (my spec) otherwise will be forced to do a public offering at a lower price.
Doc, this is reminding me of AFFX in 1996-2000. Came out with gene chips with an array of DNA probes used to detect sequences in samples. HUGE improvement over southern blotting in research. I think it topped out at $300.00. Will check out HLCS, Thanks.
This tSMS and analysis platform very interesting. If these were to be used successfully in the published research from the above labs I think others will follow…
I wouldn’t touch Natty Gas right now – falling knife. Better way to play UNG when this thing turns is to look at HNU in Canada, which is 2X the daily change in nat gas. The benefit here is that you get the exchange rate change in a falling market, but the underlying ETF still works off the percentage change of NYMEX Natural Gas. Still has the same contango issues.
Not a bad call on HNU.
UNG is worse than FAZ. FAZ, at least, does not wag the dog – UNG owns the whole market.
/NG Futures only for me – and scalps only for now – no swings.
This market is in a funk because UNG is a mess and supply/demand is bad. There will come a day when certainty is returned to this market with some ruling or decision on the future of UNG and/or increased demand (or maybe a big fun hurricane).
With the right catlyst, there has to be a long term trade here with front month/back month /NG contracts or with oil as a hedge.
Right now you are fighting the tape if you are not long oil as a hedge for a nat gas short – I mentioned that this AM on Fly’s blog – it’s working so far today.
I remember vividly the intense negative sentiment when oil was at $34 – there were calls for $17 oil.
The real play would be for someone to start a MACI-style contract for nat gas. MACI is an oil contract that reduces roll risk and lets you get long with smoothing. I would say, if done right, there would be intense interest from those of us who believe these levels are not sustainable long term. A contract like that might even help bring certainty to this market.
Good call retox.
isnt much to really trade today
/NG inverted H&S on 1 min chart
short term oversold – IMO
The 21st was the only other time we dumped from the channel (1 hour chart) – the 24th was nice.
The gap up was the roll to the new contract.
testing 2.545 support
long over 2.555
short under 2.545
not going to take this trade
support with lower trend line setting the cover at 2.535 limited reward potential
to 2.573 we go
Short SVA at 9.67
Covered 9.46
STEM small breakout-could have more behind it.?
Check out CHNG – China NG, big move today….
SPIKER candidate?
YMI clock is ticking
anybody like CERS at these levels?
anyone watching ELD.TO?
oil ripping – says SPX will test 1000 oil 69 – or epic failure of the rip if SPX does not touch 1000
oil traders got it right – smart fuckers!
and now they hesitate – watch for a rip in oil if SPX does 1000+
Mike,
from your question above – also see how at 1:58 oil traders predicted an SPX reversal (back up) 2 minutes before it happened.
It’s not always a tell but more often than not.
Those are the moves I mentioned to fade if the SPX does not actually perform.
then… SPX dies at 2:08 – oil dies 1 minute later (usually almost instant).
watch for shit like this – you seem to have the basics (the hardest part really) and I know you’ve been making some good trades.
just nail this part of it and you will kill it. careful careful careful playing it with CL though.
taking a crack at CRY
k, out of CRY…
taking off for a long weekend of fishing. Enjoy fellas (and ladies?). I’m still in RTK and BPOP positions from this morning. will work them mobile, but won’t post. Stops are at $1.90 and $2.05, respectively.
Am I the only lady here? lol.
you sure do have cute eyes.
Lol retox. Did you short /NG when it broke 2.54?
No, I got out of a scalp long at 2.554 for only 3 ticks – I’ve been mostly off on my entries with /NG all day today but I’ve managed to average down and get out at the right time on all the trades.
I guess that’s all that matters at the end of the day but I should have been in oil all day like I planned instead. I just don’t have a great feel for this one and it is showing.
Just like to live on the edge I suppose.
Thanks to you and Mike for posting the futures trades. I am starting to follow now with a thinkorswim platform, still a beginner, not fast enough, so just watching.
papertrade – you can’t lose with fake money
Is that a quote from our FED chairman?
now THAT was funny!
That was a good one…
Short SAI 17.86
out 17.82
SVA
Bored here at work. Thoughts on CBST?
ES 1 min chart – from 9:30am we are just under a trendline – testing a break to the upside
out 998.75
+1.25
call me a non-believer
taking a swing stab with AVII. see if it catches a little bounce after a couple of days of selling.
long oil if we break 1000 SPX
if SPX can hold 1000 – we should see +50 cents in CL in the afterhours
BPOP revving up. In at 2.09.
ARM break out
NGD at 3.69 for a swing
swinging HL and KKD
anyone watching HLCS – might make for an exciting swing if closes moving up with volume
out some oil 68.14 (from 68.00)
+14
SPX stays above 1k – I’m long the rest to 68.35 & 68.46
That trade was W-A-Y TOO EASY! oil right on $68 and it hesitated a bit giving a perfect entry
realizing I’m pretty heavily long here, about 80% into the close.
damn – nice close – I may hold some of that oil to $69 if this keeps up.
All I got is MTZ … maybe MEG into the close
THC at 4.49 overnight
ES is showing buying pressure here – should gain after the close
nice – I love this for my oil long – no doubt we will see 1005+ in ES in the overnights.
should retrace a bit but we’ll get there
/CL targets overnight
68.14 – 1/3rd position +.14 (hit/sold)
68.48 – 1/3rd position +.48
68.78 – 1/3rd position +.78
no stops
Not in it but the Euro should safely trade to 1.4275 area and probably 1.4300 tonight on any further ES strength.
and Fly says trendlines don’t work.
pooh.
(respectful pooh of course).
I shit you not my good brethren of the realm. You must check this out, you will know the man by his cloth even before you see his name. Someone ought to try and save the 22 souls following him.
http://tacharts101.blogspot.com/2009/09/silver-short.html
http://tacharts101.blogspot.com/2009/09/gld-broke-out-but.html
Holy bejesus – he bought ES the minute before it dumped 25 points and shorted gold & silver an hour before they ripped like mad.
Anybody wanting to trade and make assbuckets full of money just take the other side – mybe that’s why they follow.
No way he trades a real account – he’d have blown it out 10 times by now.
So retox, correct me if im wrong, euro breaking out from the flag now would lead to a + move in oil which the oil market doesn’t seem to be anticipating. This could either be an indication that a euro rally would fizzle out or that I should go long on CL if the euro manages to break out and hold. (6E broken down now but consider the question asked as of 10:07)