Home / Tag Archives: $SPY

Tag Archives: $SPY

Are we due for a bullish May?

Take a look at the monthly $SPY chart below:


Did you see the three red May bars going back?  There was a green May bar four years ago. Are we due for a green May in 2013?

In the same token, after three red in a roll, what is the odd of black appearing in the next roulette spin?

Some say there is no statistical significance for the black to come out next since the roulette wheel doesn’t have memory.  How ’bout if I flip a coin with three heads in a roll? Will a tail comes out next?

Let’s try another example.  What if I rig the roulette wheel so that if I press a button, it tilts the wheel  to increase the odd of black appearing more frequently?  Isn’t that how the wild west riverboat gambling casino of the past cheated you out of your money?

How’ bout if I bend the coin in a way such that if I flip the coin certain way, it will most likely end up with head on the back of my hand?

Following the same analogy, I believe the market for 2013 is rigged to have a bullish May.

Don’t believe me?

Pay a little close attention to the past bullish May bars, did you see how each of those bullish May bar reflected a significant higher high from the previous April bar?  Now, take a look at the past three red bearish May bars (2010, 2011, and 2012), did you see that two of those red bars (2010 and 2012) had a lower high and a lower low?  The lower high is the key point here.  2011 was a mixed bar since it had an insignificant higher high but close lower than April to form a red bar.

Giving the logical patterns from the past bullish and bearish May bars, my conclusion is that the current May of 2013 has a high probability of being a bullish May bar simply because we have a higher high established today.

Take a look at the monthly $SPY chart below again.


Did you see that the current May bar is right above the highs of the past two bull trends?  May I remind you that that the current bull trend has a steeper angle than the other two uptrends?

What does it mean?

Like Mr. Partridge always say, “we are in a bull market…”; only this time, the bull market is on steroid.

My 2 cents.


Comments »

Memo is out- The Hanging Man will not be hanged after all

Today price action negates the hanging man bearish pattern confirmation bar yesterday by not continuing on the down trend; instead, it is forming a bullish harami instead.

Take a look at the daily $SPY chart below:


The bull seems to be still in complete control so far…

My 2 cents.

Comments »

Is this Spinning Top going to fall?

Today $SPY rally continues on and price action is now above the 2007 high once again.  On top of that, price action is now back over the up trendline that has started from 02/26 low.  However, I like to see price action takes out the previous high of 04/11 to be considered a full-on bull trend.

Take a look at the $SPY daily chart below:


Now take a look at the monthly $SPY chart again below:


Did you see the forming of a spinning top candlestick for the month of April?

Let’s take a closer look.


A spinning top at or near critical historical resistance such as 2007 high can be a significant tell-tale sign.  I will be more cautious going forward from here in light of May being the month of patterned down month.

Below is the primer for Spinning top candlestick pattern:

Definition of ‘Spinning Top’

A type of candlestick formation where the real body is small despite a wide range of price movement throughout the trading day. This candle is often regarded as neutral and used to signal indecision about the future direction of the underlying asset.

Investopedia explains ‘Spinning Top’

If a spinning top formation is found after a prolonged uptrend, it suggests that the bulls are losing interest in the stock and that a reversal may be in the cards. On the other hand, if this formation is found in an defined downtrend, it suggests that the sellers are losing conviction and that a bottom may be forming.

Cautiously optimistic is the way to perceive current rally.

My 2 cents.

Comments »

Did you hear that noise?

Sound like a steam engine of the north-bound train is kicking back into action.

Most of the charts I’m watching now act like they are coming back to life.

The $SPY daily chart below shows that, again, the Year 2000 high is a strong support. Price again bounces off this support instead of continuing the downdraft from yesterday.


The way I see this, we are still in a consolidation range inside these two multi-year highs. Because one successful attempt was made to break out of the 2007 high with several days over it before coming back down inside the range as opposed to zero day breaking down below the 2000 support, I’m cautiously optimistic that the bull is still alive and kicking. Of course, this is a matter of personal interpretation of the chart.

Nevertheless, I see enough today to jump back into stocks I’ve previously disposed of before.

My 2 cents.

Comments »

A Call from Next Week

Yes, we will get a call from next week to find out if 4/5/2013 low will be a support from today down day.

Take a look at the daily $SPY chart below:


It looks like 4/5 low is holding the ground for now with one hour to go.  Regardless, we will know next week how it will play out.  Meanwhile, I’m not going to sit heavily in stock waiting for judgement call.  I’ve been downsizing some of my position this morning and my cash is now 60%.

There is really nothing for me to do but to relax and rest.  Sometimes, you need to let the market goes and give it time to “digest”.  And it will be much easier to relax if you adjust your portfolio to increase cash.  If you are still heavily invested, some of you are likely to be tense and worrisome which is understandable giving today continuing bear stance.  For those who have a hard time moving from stock to cash: try this exercise, think of $CASH as a stock.  So, you will sell stock $ABC to buy stock $CASH.  That may do the trick.

Be safe.

My 2 cents.

Comments »

Bullish Harami = odd of going back up is good

We have a really nice Bullish Harami under development in the daily $SPY chart.  And the nice thing about this is that the price action is now on top of the 2007 support.

Take a look at the chart below:


Did you notice that despite yesterday big down day, it hasn’t penetrated the up trendline on the chart.

Although market is up $126 point right now, I’m sensing quietness and calmness.  Thus, I haven’t been active at all today.

Below is some primer on Bullish Harami:

Source: click here

Bullish Harami

The bullish harami is made up of two candlesticks. The first has a large body and the second a small body that is totally encompassed by the first. There are four possible combinations: white/white, white/black, black/white and black/black. Whether they are bullish reversal or bearish reversal patterns, all harami look the same. Their bullish or bearish nature depends on the preceding trend. Harami are considered potential bullish reversals after a decline and potential bearish reversals after an advance. No matter what the color of the first candlestick, the smaller the body of the second candlestick is, the more likely the reversal. If the small candlestick is a doji, the chances of a reversal increase.

Harami Candlestick example from StockCharts.com

In his book Beyond Candlesticks, Steve Nison asserts that any combination of colors can form a harami, but that the most bullish are those that form with a white/black or white/white combination. Because the first candlestick has a large body, it implies that the bullish reversal pattern would be stronger if this body were white. The long white candlestick shows a sudden and sustained resurgence of buying pressure. The small candlestick afterwards indicates consolidation. White/white and white/black bullish harami are likely to occur less often than black/black or black/white.

After a decline, a black/black or black/white combination can still be regarded as a bullish harami. The first long black candlestick signals that significant selling pressure remains and could indicate capitulation. The small candlestick immediately following forms with a gap up on the open, indicating a sudden increase in buying pressure and potential reversal.

Micromuse, Inc. (MUSE) Candlestick Harami example chart from StockCharts.com

Micromuse (MUSE)[Muse] declined to the mid sixties in Apr-00 and began to trade in a range bound by 33 and 50 over the next few weeks. After a 6-day decline back to support in late May, a bullish harami (red oval) formed. The first day formed a long white candlestick, and the second a small black candlestick that could be classified as a doji. The next day’s advance provided bullish confirmation and the stock subsequently rose to around 75.


My 2 cents


Comments »

It’s not about right or wrong picks, it’s about trade management

If the market turned south when you were 70% or higher loaded in equities, paper losses were forgone conclusion.  However, you could manage your portfolio so that the losses would be controlled if the carnage continued.

I was fortunate to have the gut to chase $DUST by Friday close; thus, I was able to gain the profit to offset the losses I took this morning.  I made several calls last week and only $DUST saved the day.  The others were either going nowhere ($CERS, $APRI) or took the other direction of my calls ($PPC, $DNDN, $PACB).  Was I upset?

Not really.

That was because I knew I was not a prophet who could foresaw price movements 100% of the time.   My intuition, at best, would give me 51% win ratio.  But the point here is not about how much winning picks versus losing picks.  If you can accept this simple truth that none of us has the divine crystal ball to work with; then you can stop chastising yourself for not seeing the current carnage.  Instead, spend the energy to manage your trades so you can prevent your portfolio from bleeding further.

As I had discussed this before, I used the “thought” of buying  back my positions I sold today at a cheaper price later to give me the confidence to execute my trades to cut losses.  Yes, I may be selling at the bottom but you cannot allow this “ego” thought to freeze you like a deer facing the headlight.  You have to be “OK” to miss the “possible” late rally so that you will allow yourself to cut losses.  Take a look at my $SZYM today.  If I hadn’t taken my losses in the morning time, I would be sitting in a much bigger losses.  Instead, I’m now salivating while waiting for the right time to buy back in for a much cheaper price.

Take heed to The Fly warning about averaging down today.  If today down day is just a  prologue; averaging down will be like opening your spigot to allow more of your blood to come out faster.

I’m not suggestion going all cash here.  Portfolio management is simply a process to minimize the risk by reducing the hi-beta or non-performance stocks so that cash will be available to buy back stocks at cheaper price if ones are fully loaded.

Go with the flow, my friends, go with the flow.

Now that I’ve done my mumble jumble on trade management. let’s take a look at the $SPY daily chart:

As you can see, today down day penetrates the support from year 2007 high.  The next level of major support is the year 2000 high.  If this 2000 high can hold the downdraft, we may still be stuck in a consolidation stage with the previous rally as an aberration.  However, if the 2000 high fails to support price; further downdraft will be quite ugly.  Yes, there is a lot of “ifs” here.  This beg the question, why will you want to be fully loaded when there is a lot of “if’s” in the face of the current downside storm?

Do some of us forget that the beauty of the stock market is that you can open and close your positions at any times in the day when the stock market is opened?  Why do you worry about holding stocks the way people are holding gold bar right now?  For crying out loud, stocks are liquid and you can always buy back.

This post is meant for people who are having a hard time deciding what to do with the fully loaded position and is gnawing their teeth right now.  If you are already managing your portfolio accordingly, my hat off for you.

Currently 57% cash.

My 2 cents.


Comments »

Dilly-Dally is over, we are going up!

Take a look at the $SPY daily chart below:

It looks strong and convincingly bullish.  There is no if or but; we are going up.



I’ve bought back $DDD, $CHK, $DNN, added more $SZYM to my portfolio.

My 2 cents


Comments »

“We ain’t gonna rollover yet” screamed the BULL

Impressive comeback for the bull.  Instead of a continuation of a downtrend based on time-of-day, the bull decided to take charge and run-over the bear to close the day with a real nice green bar that would close above the GW1 support.

My foray into $FAZ was quickly cut short when my stop was hit which I totally didn’t expect it would get hit.

Below is the strong bull $SPY chart:



My 2 cents.

Comments »

Be mindful of Time-of-Day continuation pattern

While the $SPY is struggling back to the upside; be mindful of the the time-of-day resumption of the overall current down trend.  I’ll pay attention to the price action around 02:30pm EST or 11:30am PST.  Any major dumping around that time can easily take the $DOW down another 100 points or more.

Notice the 5m $SPY chart below.  There are two 79 & 89 ma that act as resistance; in other words, this rally you are seeing may be a trap…



Be safe!

My 2 cents.

Comments »