One twitter handle I really enjoy following is 50thstr. I believe he is a hedge fund manager, though his handle is locked so you’re lucky to see his tweets. If you happen to receive the follow, you’ll be granted access to his simple, accurate and transparent position plays. Today he tweeted that he is extending his CAT short. While I wouldn’t normally devote an entire blog to one of his calls, I feel it’s worth it on this occurrence for a couple of reasons.

First, another very notable trader in gtotoy also tweeted that he also is shorting CAT. Here is gtotoy’s chart.

The second reason is that CAT has been and is known as a stalwart of American industry and holds a heavy hand in determining the direction of the entire market. iBC’s own Chess has noted this several times. Both of these fantastic traders shorting CAT at the same time lends credence to my expectation that the market pulls back.

 

Stay frosty.

What a day yesterday.. I’m very happy to see the return of volatility.. and volume! (168m SPY shares today!)

 

HCPG notes “The .23% down in market doesn’t nearly reflect the damage we see in stock universe” <The action has certainly been sloppier lately and charts are not looking so clean to technicians>

 

This morning we have FedEx missing badly, citing international economic issues. <Focus on USA!>

Also we have SPY with a nice tiny ripper, up just shy of a point.

 

Here’s some levels to watch, courtesy of Scott Redler (RedDogT3Live):

“spy continues to hold this upper range. Support stand at $154.20 then $153.60 with resistance at $155.55 then $156.40ish”

 

Market Anthropology with a couple new posts out:

Driving The Euro – With its Rearview Mirror

Mining For A Blue Light Special

 

Blurbs like the following are why I like GravityIntl so much:

“Gold: Note psychological reflation bid perks up when FOMC lurks, EUR weakness on systemic risk/bank run psychology creates a transitory bid.” <Sure, people like to holler about “Fed printing” but ultimately, the demand for gold is shrinking.>

“Sharing one monetary policy across multiple fiscal policies continues to resurface anecdotal evidence of the flaws of this Euro experiment.” <YES! The single currency has been the root cause for all of the EZ’s troubles the last few years, as interests of individual countries are forced to be aligned when naturally opposed.>

 

gtotoy notes: “We see GS lose 147.30, then this correction goes on a tad longer. SPX 1525 1st “real” support under us” <GS is king of the banks and banks have been kings in this market…>

 

ukarlewitz tweets some beneficial information from BAML research:

“BAML: Fund mgr cash at 3.8% (3.5-5% range). 57% are overweight equities, the 2nd highest since 2001 (like Feb 2011), up from 51% Jan + Feb”

“BAML: fund mgrs dollar bulls at highest ever. 72%, a 30 percentage pt increase since Feb. Wow”

“BAML: fund mgrs most bullish on banks since Dec 2006. 14% overweight. Telecoms most underweight (28%) in 7 yrs. Risk-on”

“BAML: Net 53% fund mgrs are now underweight bonds, an increase from 47% in February. This is the lowest weighting since May 2011”

Here’s the link. Fat Pitch

And last from ukarlewitz is a RT of AlmanacTrader regarding a specific setup with a severe bearish outcome. Setup

 

ivanhoff with a noteworthy thought experiment tweet: “it would require a new & unscarred generation of investors to launch a full-scale bull market” <Would it?>

 

Cullen Roche at Pragmatic Capitalism with thoughts on Cyprus. Some Monetary lessons from Cyprus

 

I continue to believe the risk in equities to be distinctly to the downside here and remain in a hedged environment with about 35% cash.

 

 

 

 

 

Purchased on 10/18/2012 @ 17.40

Sold on 3/19/2013 @ 19.55 average (+12.35%)

The XHB has been one of the strongest SPDR ETFs since the bottom in ’09, up a cool triple figures percentages. More specifically in this year, that trend has been in tact, up 12.75% YTD.

However, now may be an ominous time to initiate or add to positions in the XHB, as the simple chart below shows it’s hitting the underside of firm resistance from the fall of ’06. Volume has also dropped off significantly the past month on its approach to this level.

Wowzers @ today. After dropping over 20 handles overnight, the ES_F nearly goes green before finishing down just over half a percent. The rise in volatility is certainly welcomed by me.

The only real report on the trading front is that Legacy_Trades announced he’s effectively doubled his “SWING SS” position in the ES_F. His “swing” book is typically of the 3 month or more time horizon. I’ve seen him make several trades in the swing futures book, but only once do I recall him getting stopped out. Other times I’ve seen him cover for +50, +70 and +85 handles. Suffice to say, he’s a quality read in this context. On this occasion, he’s doubled his position giving him an average price of 1514.75 with a stop at 1569.75. <Personally I view this as risky, since even a 3% pullback barely makes him whole on the trade and I can definitely see the market running once more before summer.> Either way, he’s a fantastic trader especially in this context so it’s worth noting his moves.

 

OptionsHawk tweeted a few notable option plays occurring today.

– “Nice 15K lot of GLD may $160 Calls earlier this afternoon at $1.35 to open”

– “Yelp late day buyer of 1,500 January 2014 $23 calls $5.20 to $5.30”

<I don’t know what to make of the YELP, but I fully expect to laugh at the GLD call buyer. As noted in prior posts, I’m short silver and bearish on PMs.>

 

HCPG noted today that often they find overnight session levels are tested in the normal market hours. Specifically, the ES_F level corresponding to ~$153 in SPY was tested overnight and they are looking for this level to be tested in the coming sessions.

 

ukarlewitz and CiovaccoCapital not so active today.

 

One of my favorite reads, Market Anthropology, came through with a couple different links today.

– Welcome To The Cascades.

– Connecting The Dots (Updated 3/18).

Additionally he tweeted “CRB is rolling hard-expect silver, gold & the miners to follow w/continuation in the euro Tues”

 

Lastly, RobInTheBlack, one of the stalwarts in NewAge technical analysis (broadening formations), provided his followers with an open call night, charting requests. Hop on over to his stream to see if any symbols you are interested in were charted.

 

Futures as of 10pm EST:

 

Biggest news of the weekend is the Cyprus bailout and ensuing bank deposit penalty. Story here.

And the early reaction in futures (8pm EST):

 

 

 

 

 

 

<I welcome a sell-off, as my recent posts display.>

Should the decline in futures grow and spark a larger sell-off, here’s a couple of levels to look for:

HCPG says “153 gap fill likely this week will have all eyes– reaction on that will tell the story SPY”

OptionsHawk tweets “ES_F gaps and holding re-test of 3-8 Breakout, 23.6% Fib 1538, next level of importance 1532.5” Chart.

vcutrader chimes in with support of Cramer’s opinion: “The tells for tomorrow: BBVA and SAN. They are big liquid banks that trade here and would be rumored down…”

ukarlewitz retweeing ParagonCap chart of 2011/2013 analog. Analog. And a RT of sentimentrader: ” ‘Smart money’ hedgers now net short $62 billion of equity index futures. They were net *long* $62 billion in Aug 2011″. <So we’ll see how these two items conclude.>

More from ukarlewitz:

Also RT from sentimentrader: Traders in the Rydex family of mutual funds now have 10 times more assets invested in the leveraged long fund than the leveraged inverse fund for the Nasdaq 100 index, one of the highest ratios in history.” Leverage funds.

“EEM – strong like wet newspaper. Losing T/L but above the big S. Not hard to see what needs to happen.” EEM. <Relevant due to Cyprus news this weekend. Will it take its toll here? Also, strong like wet newspaper = Lol>

 

And thank CiovaccoCapital for a blog post since there were about 100 tweets to go through. Blog titled “Cyprus News Could Flip Markets”: Blog including video. <Some really, really good stuff here.>

 

GravityIntl tweets a long stream of info regarding the Cyprus topic and how it relates to the general issues in EZ. Too much to link. <My take is that he considers the measures taken recently in EZ are vague and incomplete and ultimately will fail. He certainly does not expect PMs to partake in safe-haven bid.>

 

Chris Burba tweeting a solid and simple chart on SMH. <I own SMH.> Chart.

And a simple read on EUR/USD. Chart.

And another on ES_F. Chart.

 

And finally the Stocktwits 50 for March 18, 2013. StockTwits 50.

 

— Hopefully tomorrow morning we’ll have stuff to read from gtotoy and Market Anthropology. —

 

I’m hedged up and will sleep safely tonight. How about you?

 

 

 

 

 

 

 

Not much to report trading wise. The stress test results were the biggest news of yesterday.

As far as trading goes though:

Chris Burba still looking for 1567 SPX as the measured move target from the inverted H&S

 

Chris Ciovacco spotting some trendlines in the VIX suggesting it could bounce here. VXX Chart.

 

ukarlewitz links a chart correlating retail sales and recessions – implication is not healthy. Retail sales.

 

And last but not least, check out this picture of the last 4 years in the stock market. Last 4 years.

Then a study that Market Anthropology has been publishing lately would issue a major, major sell signal.

Here’s the link.

While both precious metals and equities have their own respective arguments, this study is fantastic in the simple context of the demand for risk assets. As you’ll notice, it issued sell signals before the 2000 crash and 3 from late 2007 – late 2008. Basically, it’s been spot on.

Initial jobless claims 332k vs 350k exp. (332k was second lowest weekly reading since 2009 and 4 week average is at its low since 2009)

US Feb Producer Prices +0.7% vs 0.7% exp.

US Q4 Current Acct Deficit $110.42B; Seen Deficit $112.6B

Leading the market higher, SPX up a few handles

 

Chris Burba tweets “Still see no threat to measured moves from 2/20-3/4 inverse H&S bottoms: ES_F 1567.24 NQ_F 2832 SPY 156.93 QQQ 69.52”

 

Some streams to read:

Retail_Guru

GravityIntl

CiovaccoCapital

Best tweet of the morning: “In my investing experience, the “NEED” to be right never had any effect on my performance (P&L).” from matterhornbob

Right off the bat this A.M., as the market was hitting its lows, OptionsHawk tweets “SPY Mar. 156 calls in high demand here on day lows”. Not even 4 hours later, they were +100% as the market shot back up. Whoever is the buyer of this type of trade lately has been on the money, and these tweets are money.

 

Another fantastic trader I like to follow, Legacy_Trades, has started initiating some housing shorts, via home builders PHM, MDC & SPF with only partial fills today. This is notable to me because this is the first time he has shorted home builders since nailing them in 2011.

 

Vcutrader still loves AAPL & DTV, and that’s about it. He’s been in heavy cash for a bit now, awaiting better pricing on a list of names.

 

Market Anthropology with another fantastic follow up post regarding his stance on the forth coming pain trade (sic) in commodities and commodity currencies. A River Ran Through It.

 

As an extension to the commodity pain train, and into one of my own trades, silver via SLV, got denied today at the 20dma and I believe this bear flag breaks to the downside soon.

 

 

 

 

 

 

As I write, silver futs are down only a tad, after dipping below $28.60.

 

David Schawel brings to light the possibility of investing in taxi medallions via ticker TAXI, Taxi Medallion Corp. Averages 6% per year since IPO in 1996. Interesting.

 

ukarlewitz with some beneficial tweets…

“BKX Bullish % Index points to price weakness” BKX Bullish %. <My take is though the financials have lead the majority of this rally, a pause or retreat in the BKX is likely however it is not sufficient for the entire market to turn down>

“Today is the fifth consecutive close at/above 80% Bulls for S&P sentiment. We didn’t have a single reading in the 80s throughout 2012.”

“SPX has had at least one 5% correction by May every year since 1996. There were none in 1995 but it followed the crappy 1994” SPX corrections. <That’s a crazy statistic that I would have never thought.>

 

My take on the market is that if you have gains to protect, you should be initiating protections. Now is the time to become cautious over the medium term time frame.

 

In other news…

News of A new pope. Which was followed by some pretty funny tweets from the usual suspects like ReformedBroker. My favorite, actually was not from him, but read “Maybe the new pope will take a radical stance against pedophillic rape”