See for yourself below:

There was a strong rally in the last week of June 2011 and the weekly bar ended almost identical to what we have last week.  Did you see how the price actions consolidated mostly in July and then rolled off the hill in August 2011?  (see the price action inside the red rectangular box on the left)

In order to avoid a repeat of last July & August, we need to see price action takes out the 61.8% retracement of Point (3) and Point (4) and turn the retracement into a support instead of bumping against it as resistance.

Perhaps, this year being the Presidential election year will turn the tide to the upside instead of a replay of 2011?

Stay tune and watch out for price action.  Last Friday, I increased my equity to 29% and cash @ 71%.  I will add more equity if price action (SPY) can take out the $136.45 and stay above the retracement I mentioned above.  On the other hand, if price action is having a hard time bumping against the resistance, I will be unloading my equity back to cash to play safe.

Good Hunting!

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Wow!  What a sight!  With such force of explosion, the dead zone was obliterated in a vaporized second and the Bulls run like they were in the annual San Fermin festival in Pamplona.

At this point, price action is screaming buy!  However, with such a strong head wind already expended; I will be looking to buy on retracement and on a gradual scale due to potential profit-taking activities.

Congratulation to those who took the risk hanging on to the bull side; you earned this big win off the gate.

And thanks goodness I only have a small percentage of my money in the bear trade (TZA and SKF) which I mostly like will be stopped out since I placed stop loss below the over-night intra-day low.

Good Hunting!

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Right now, price actions from both sides, the bull and the bear, are trapped in the Dead Zone.

There is only one thing to do- escape!

While the bull’s escape plan “almost” succeeded in breaking out from the past 2 days of furious digging; it was unfortunate that the tunnel collapsed today.  The bear, meanwhile, has a better plan; it flooded the tunnel built by the bull and slide down the slippery mud with the help of gravity!

So far, the bear is in control; nevertheless, there is still a bit more to go before the bear breakout of the Dead Zone and fall off the sky.  Yes, there is nothing the bear wants more than the feeling of free fall.  And yes, that feeling can be quite addictive.

Below is the daily chart of SPY.  From the look of it, who do you think will escape the Dead Zone first?

Needless to day, I added some more SKF and TZA today.

Currently 10% long-term hold; 6% short (SKF & TZA); and 84% cash.

Good Hunting!

ps. For those not familiar with the Dead Zone; it is my own personal interpretation of the range between last Friday high and Monday low which I considered a “consolidation” area with no bias on either up or down from an intermediate to long-term perspective.

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After getting stopped out of my TZA and SKF twice this morning, I sat back and just watched the bubble floating inside the “dead zone“.  When the SP500 e-mini reached the Pivot Point- R2 level @ 1327.50 resistance and started to roll off “the hill”, I bought back starter positions on TZA and SKF with stops below intra-day lows.

Like I said in my previous post, I’m refraining from buying any long position today because the price action is trading inside the dead zone.  My “personal” thesis is that this rally (and yesterday’s) is still a head-fake.  Since I’m still 87% cash (3% being peeled off to buy TZA and SKF) and 10% long-term hold; I’m basically in a “don’t care” mindset.  Meaning I’m neither overly net short nor overly net long.  In other words, I’m giving up the opportunity to add to my YTD gain in return for protection against giving back some of my YTD gain.

Yes, I think the right word is “indifference”.  I’m indifferent to current price action due to my interpretation of the “Dead Zone”.  That is pretty much the gist of my day action.   Like I said, I don’t have any power of precognition so I can be wrong as always.

Good Hunting!

Can you see the bubbles inside the dead zone?

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I can’t believe that in the last 2 days, the SPY daily chart is showing more than a chart pattern.   My eyes must be playing trick on me; but did you see the floater in the chart below?    Yesterday a dump; today a floater!  Yuck!

While today price action took out yesterday high, the overall trend based on the last 5 days is still down.  In order for me to be convinced that the bull is back, price action has to take out the high of last Friday (June 22nd).  Meanwhile, today gallant move of the bull is nothing more than another dead cat bounce.  Yeah, just like the one last Friday.

So far, yesterday and today price actions are trading around the 50% retracement of the low of June 4th and the high of June 19th.  You can see the dashed line (50% retracement) that cut thru yesterday and today daily bars.

The big question here is, “Will this support at 50% retracement hold?”

If it doesn’t hold, then that mean price action will have to break thru the low of yesterday.

The thing about using the Fib retracement system is that you also need to be alerted to the “failure” of the Fib supports and resistances.  A failure of the Fib retracement means those supports and resistances are not there anymore.  Thus, if the 50% retracement fail to support today and yesterday price action; I will expect the market to continue the downtrend to the next support level at 130 area (see the dashed red line).

In summary, although I got bumped out (again!) of my TZA and SKF positions today, I’m still not convinced of the bull taking back the helm.  While I’m surely missing out some of the bull run in some stocks, I consider the price range b/w yesterday low and last Friday high a dead zone.  Therefore, I’m now sitting on 90% cash due to my reducing some more of my long-term holdings.

Having only 10% exposure in the market and no plan to invest more in the “bullish” side inside the dead zone; I think it is time for me to stop and smell the roses so to speak.

Good Hunting!

Almost forget, can somebody FLUSH the toilet already!

Below is the SPY daily chart which I highlighted in red rectangular box the “Dead Zone”.  My interpretation only, of course!

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Take a look at the daily and weekly SPY charts below.  It sure looks like the SPY took a dump…

Below is the daily SPY chart:

Below is the weekly SPY chart:

Just bought myself a starter position on TZA and SKF.

Unloaded some of my long-term position to lock in profit and to protect my YTD gain of 17+%.

Current cash position is 82%

Good Hunting!

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The SPY weekly bar now shows a Doji bar.  In other words, last week price action was a [PAUSE] and the direction was NEUTRAL.

Although we have a higher high and higher low; a Doji at this point is actually not a good sign for the bull since Doji can sometimes represent a “topping” of the chart; a point suspended in mid-air before turning the corner.  Doji bar generally meant that neither the bull or the bear won the battle for the week.  However, a long-tail (from top) meant the bull gave back a lot of gain before settling back to the week open price.

From here, I’ll watch how coming price action move relative to last week closing price.  If price action starts the week trading below Friday closing price, it is considered bearish.  And if the price action takes out last week low, even more bearish.  Nevertheless, if it trades above Friday closing price with a low that does not drop below last week low, the bull may still be in charge.

Based on Friday after hour price action and current Sunday night price action, it sure looks bearish to me.

 

Good Hunting!

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That’s right, a falling dead cat from the dead cat bounce.

Unless there is a significant rally later on to move price beyond half-way point of yesterday down bar; it is my opinion that today is the bear catching its breath after a speedy run yesterday.    Yeah, yeah, I got bumped out of my SKF and TZA in the morning ’cause I didn’t want to see a big red numbers on my position.  I like to keep these red numbers small; so I used tight stops and they got filled.

But don’t worry; getting out of a position at a loss only mean that I’m willing to take a “hard” loss (as opposed to paper loss) while waiting for price to regain traction on the direction I’m betting on.  And if price action decides to take the opposite direction of what I like to see; fine by me because I’m already out with the hard loss.  Hell, I may even go long if that is what the price action wants to go.

But for now; I see nothing here to refute the downward bias from yesterday Big Ass down bar.  Don’t believe me?  Take a look at the daily SPY chart below:

By the close of the day, it couldn’t even close above the 38% retracement point…

Good Hunting!

Current cash position: 75%

The remaining 25% sit in the long-term portfolio

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I’ve been patiently waiting for some sort of retracement from SKF and TZA and finally got a small ones.

Bought starter position in SKF and TZA.

It’s a good thing I sold earlier this morning when the warning bomb blew up at 10:00am EST.  Sometimes, if you are thinking of getting out; it always pay to be the 1st to get out and not worry about getting out too soon.  It is to your benefit when others are still “thinking” of what to do (indecision) while you are getting out; otherwise, you will be fighting for that narrow door when everyone is running for exit.

The daily SPY bar isn’t looking good, it took out the low of the last 4 bars!  See chart below.

The weekly SPY chart now shows a red bar; not very endearing for a bullish outlook.

Good Hunting!

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The 10:00am melt-down was a sight to see.  Exactly at 10:00am, BOOM! Down it went!

With shell explosion everywhere, you have to retreat!

Sold all of the following for some gain, breakeven, and small losses:

DDD DNN MCP SSYS SYNA URRE USEG USU

Still holding AMRN plus my 25% long-term holdings

Current cash position = 70%

Will sit back and watch instead of trading to see where the market goes.  It is definitely too early to initiate any short position since this morning mini-meltdown is not enough to call into question the weekly bullish bar yet.

Good Hunting!

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