I am very busy these days and will continue to be very busy. Sorry if I’m not able to take questions, but I’m sure someone who’s not an idiot on the blog can answer them for you.
I wrote my first post on the Chart.ly blog here. It is a comparison between the 1929 and the 2009 major rallies.
First thing to note is that the SPX is now in a neutral range as marked on the 15-day chart. Major support/resistance levels are marked:
Second, let’s talk about the SPX/SPY volume divergence. Take a look at the volume on each, and I want YOU to tell ME what you think (crazy conspiracy theories are welcome):
Finally, the market broken down to individual sector components:
Mid-day update:
What do you guys think of a good play for fidelity 401k under this market? I think it will head down south sooner or later. I currently have a lot in Contrafund, magellan , spartan index, growth companies…
Should I move all to bonds or lower risk funds?
Thanks,
Interesting chart comparisons…uncanny similarities b/n the 1929 and 2009 charts… will history rhyme? or are the green shoots for real?
Mark Twain! Enigma, I think I love you a little bit.
The down trend in SPY volume is fascinating. Here are some theories:
A lack of liquidity is one of the underlying reasons volume is leaving equity markets.
Margin calls, collateral requirements, risk, and uncertainty has taken much of that liquidity away.
A Goldman Sachs monopoly is running at least one out of every ten trades on the NYSE.
Competitors to Goldman are failing and thus removing liquidity.
Capital has made an exodus out of equities into derivatives.
Money is moving out of the regulated markets into the unregulated markets.
The regulated U.S. stock market is roughly 2% of the size of the unregulated global derivatives market.
The total 2008 global derivatives markets value is $1,566,655 billion.
Also, the tri-party repo system has broken down. This might be the prime reason of lower intraday stock market volume, and what appears to be institutional abandonment of index ETFs like DIA/SPY/Qs. The main entities which loaned money for margin trading, like JP Morgan, are in collections mode.
More info:
http://www.gamingthemarket.com/2009/04/not-too-big-to-sink.html
(retracted)
As far as declining market volume in general, Tyler Durden noted the discrepancy between the $2.7T move in equities since the March lows versus a less than $400B reduction in money market accounts – i.e., where is the money coming from? He suggests that the Fed has been driving the rally by directly and indirectly subsidizing banks to buy stocks and prop up the equity markets, thereby instilling consumer confidence, etc., etc.
http://www.zerohedge.com/article/money-sidelines-fallacy?ref=patrick.net
As for the specific $SPX/$SPY volume divergence that you noted, I’m not sure – maybe someone else can expound on it based on the above theory.
Opihi – The Fed ALWAYS drive rallies. It’s not propping up like a PPT might do, but rather after the Fed puts liquidity into the system, it first goes into financial assets. It takes time for the real economy to begin to use the liquidity, by building plants, stocking inventory, etc. This is why the stock market “predicts” upturns in the economy. Fed increases liquidity, financial assets go up, finally real investment goes up taking liquidity from financial assets thus topping out the financial markets.
Real bull markets finally die by supply — supply of new stock issued by companies raising capital.
Yogi-
I believe Durden’s point was that whereas US households helped to (directly) drive the previous secular bull market by investing wealth created by home appreciation, they’re not by-and-large participating in the current post-March rally — which therefore implies so-called “propping up” via “government intervention.”
Since households only account for less than $400B of the recent $2.7T move in equities post-March, the difference of $2.3T in purchasing power must therefore be coming from “the government” (actually, the Fed). $3.6T of (mostly) household money remains parked in MMF, whereas during the long-term bull, much of household wealth was put to work in driving the equity markets higher. Since household wealth is not being used to buy equities this time — and probably will not be in the near future — the government needed to “directly” drive this rally, and will keep having to do so, until US households feel secure enough to take on more risk.
So while I’d agree that in a very broad sense, the Fed “always drives rallies”… based on Durden’s analysis, they appear to be taking a much more direct role — i.e., “propping” — that’s maybe just one step removed from the PPT… ? (And going back to the original issue — hence, the low volume that’s being observed.)
CA – Where is the SPY volume coming from? It looks like volume from all exchanges, but it does not match Yahoo finance volume numbers which include pre -market and regional. I’ll bet if you had volume from only SP 500 trades, the patterns would match.
nevermind…
snap judgement – I’d say SPX is socalled ‘smart’ money & SPY dumb money
CA – good eyes on the SPX/SPY bear wedge en formation
or is it the other way around 😉
thanks CA, great analysis
Maybe the volume divergence is the lack of shorting in SPY and represents a “normal” bull market with longs in control.
The other issue is that volume on the SPX is not price weighted so it doesn’t really reflect amount of “money” where volume on the SPY (or any actual tradable equity, etf, etc.) does reflect actual “money”. So in the past I have trusted volume on SPY and I generally chart the SPY, not the SPX for my guaging of the market.
So, for example, lots of the volume in this latest rally has been from stocks like C, etc which are dollar stocks (now) so that volume does not represent near as much actual money as volume from 50 or 100 dollar stocks. And in general, there are a heck of a lot more dollar stocks than there were a year ago. The one thing I am not sure of for a fact is whether the volume reported on the SPX is just simple added shares or if it has some dollar weighting or not.
Just thinking out loud here so could be totally wrong on this.
The uptrend in volume is single handedly due to CITIGROUP! It trades 700M shares more per day then it did a month ago.
There is no conspiracy
either I am misreading you or you misread me…
I am definitely not talking about a conspiracy, I never believe in that junk. I am just trying to explain the disrepancy which is not usually there between SPY and SPX volume patterns. And I also did not say it is all due to C, just used that as an example and suggested that there has been many dollar stocks with lots of volume in this rally in that will add up to lots of volume on the SPX reported volume but many not represent as much actual money as it implies. That is all.
And look again at CA’s charts. The volume patterns on the SPX and SPY were very similar all the time except this last rally that started at the start of July. So something has changed and that was the point of CA bringing this up. Just trying to figure out the difference.
The volume decline in the first part of the rally happened because people were unsure of the continuation of it being that “they” expected to revisit the lows but when the market consolidated and continued higher people became convinced that the rally would sustain and volume increased for the next leg up. The psychology of people is what causes the volume divergence
HBAN, BEXP
crxx is moving
TSFG, BEE perking… wondering if BPAX has more to go…
Also, check TRXI – wtf mate
not liking the tape so I am not buying/selling just managing existing positions looking to take some more off if we don’t hold here
good plan brother! that’s what i have in mind
I figured I am just not that smart so my new rule is when confused don’t buy/sell manage and if concerned nothing wrong with banking coin on existing profits. This is what I did with my “supposed” long term position in TCK and banked more yesterday and a little today on the highs …. If I am wrong I can always buy it a bit higher and if not I will get an even better avg. cost basis 😉
great rule
TSEM!
GPOR making moves last couple days on decent volume
HILL
Enjoyed the wedge post. Tape is becoming more mysterious, but several things depending on how you look at it point in several directions. More favor lower prices. I’m starting to like the bigger candles. Anyways, wont be around for part of day. So adios. I think we head lower… as for predictions go figure, but nothing glaring to me for a major reversal until lower prices.
speaking of which that looks like an island reversal. 5 min SPX should be interesting how it closes.
“as for predictions go figure, but nothing glaring to me for a major reversal until lower prices.”
WTF… so many things wrong with that. First off you say you’re an IT trader…. the IT trend is clearly higher and intact. So any major reversal would have to be to the downside, not up.
PRICK
The IT trend changed course @ Friday’s high.
The prediction was to how far prices drop before reversing. The IT signal is invalidated upon break of Friday’s high. At which point I look @1030-1040
I should have been more clear
I love me some BEXP!!
EK
I made some money on $GFG, held 20,000shs. Damn, why did I sell?
GNW b/o… check that, no breakout lol
$EGO BE
Edited to add: Bot for the longer term ~ $11-11.08
$VM, $HEB, $SUF
SUF BTFO! multi month bo
HILL 1.32
KOL sector (ACI BTU JRCC) all BE could be limited due to NAT GAS sucking ass
DA_BEARS!
Now what you stupid bitch, go fuck yourself…. you dont get any calls right. You poor bastard. Go fuck yourself…. your TA blows balls
Pretty sure I mentioned island reversal at lows…….
I’m sorry I don’t day trade as it is for losers. I manage my IT trade. I don’t look for the five points except to improve price. I look for the 40-100+ point moves.
MY IT view still remains the same…….
day trading is for losers?
Most losers…..
Also, moving big amounts of capital in real life(not saying I am), but different concept of trading $ stocks and futures/other things.
I mean you can make money doing it and great money. Ex. you. But, if you were wielding an account size of 1mil plus day trading is always great. I position trade for IT.
This is the first time i’ve posted here since I’m still trying to learn the game and don’t want to add useless posts but I can’t agree with PissAnt more… DA_BEARS – your posts are completely useless, distracting and annoying.
CTIC moving
HOV for a potential squeeze. Family in town, little time to trade. Liking the oil sector setup.
Forgot…PODD doing very well, there should be a lot of short pain if green is the color of the day. HLCS acting like an indictment is coming…can’t believe it’s lagging…
TSFG
STAA 3.12
CNO looking possibly ripe for a move.
HILL 1.39
huge in $TTWO
$TTWO – standard size
Out $TTWO – will revisit on b/o
go HILL
nice cup w/handle sitting right at the earlier day high… go HILL!
okay that didn’t work, now we got an ascending tri
Da_bears: “I’m sorry I don’t day trade as it is for losers. I manage my IT trade. I don’t look for the five points except to improve price. I look for the 40-100+ point moves.”
WHAT? you got short this market at 975 and the market went to 1018… thats 43 points. Where the fuck were you? except for being short… FUCK LOSER
IT traders, who dismiss daytrading is for losers who cant read charts… and hope for things to happen
Lol. If you reread all my posts here it said I shorted at other spots because I was stopped out. I shorted at various spots including two points where I took 50% of capital that was never shorted and shorted for 10+ points. I covered @985 and I appleid higher. Also was in gold shorts which I cashed out of gains @30%.
Situation changes and when my lines are taken out I cover simply as that and I go short higher.
Why PissAnt and Da_bears keep fighting each other. U guys come here to make money instead of fighting
Its a question you need to ask him. Because he doesnt seem to understand that 5 points isn’t a trade I will mention and sometimes even take.
I mean he was saying how bad I was @highs of market. The market doesnt go straight down unless its a sigma event and it dont go straight up unless short covering….. So, when an IT trader expects intraday fluctuations. Day trader will try and catch every move. IF I see something that I view profitable I will trade accordingly around my IT position. Twice I shorted the other 50% of capital for 10+ point moves
WTF are you talking about? 5 points isnt a trade??? A trade consists of buying/shorting a stock then selling/covering that position back. Who says it cant be for .01 or $20 gain or loss…. you fucking idiot.
I’m saying I wont mention my own 5 point trades… most of the time. Because I don’t day trade. I never mentioned 5 points is not a trade rather one I will not list.
Da _Bears, I must say you really do have thick skin to take all the warm criticism on this board
It’s skin that knows how to play the game. When I am wrong i know I am. I just know for a fact come September that half the blog will still be buying on the “dip”. I also know that they will always be bulls. I on the other hand well someone would classify me as a permabear, but that’s fine. I am one in a bear market. I trade off an indicator that spots tops for me very well.
WRES @ 2.38
CA – Do you have an opinion on First Lithium Resources (CVE:MCI) on the daily?
avoid. Volume is horrid.
watching GSL above 1.63
bought 1.63
ACAD!!!
FTO 13.75
SII 27.31
WRES 2.44
AGEN 2.14
SD looking strong today. One of those day trades I wish I had held.
bought TTWO $10.125/$10.14 (put a buy stop in for the breakout)
Bought $TTWO $10.15/frac
MPG!
KOG @ 1.06
CA, Da_Bears adds nothing of value here. I think you all should just stop responding to his nonsense. It seems like he enjoys it.
I think he’s really a distraction for your blog.
Trader…i feel the point is this should be an open forum for discussion on opportunities both long and short in stocks…the majority of asshats here contribute very little other than to repeat someone else’s ideas or trades…so while certain people may annoy at times..the point of this or any blog is open discussion and dissemination of ideas that will help us make profitable trades and decisions..along with some entertainment value…look CNBC is full of idiots..and they get paid to babble like a cracked out slut looking for a bump
In TTWO @10.17
Whats with the “fuck you frog” pic at the beginning of the blog today?
Mike,
Thanks for the info regarding think or swim. Looks good and will support all of my various accounts
It’s just a random pic found online of 2 guys kicking a frog.
I prefer the warriors!
you haven’t had any babes as eye candy in quite some time…
Cool man, glad you found something that works for you. Don’t stop looking around for better places though, what’s best for me may not neccesarily be best for you as well.
Thx Mike. I’m giving it a go. Consolidating all of my accounts will be a plus.
STEI 5.26
SWSI b/o
Excuse my ignorance but what does b/o mean?
Bears Out
huanqqi…sorry excuse denied…
most dudes here are hard core so answering a ? like this is annoying but “b/o” means break-out.
My money is on Caveman’s theory for the SPX/SPY volume divergence.
Summertime light volume is also a factor in the SPY.
Beyond summer volume, I believe there are simply less players in the markets. Just my humble opinion, of course.
$KOG
Keep ur eyes peeled on RTK … could be getting ready
kind of like playing catch with a hand grenade..no thanks…but good luck to you with that gem.
so, what are you trading today?
dragon…not much really…added to some short positions after 30 yr auction- bot more CTIC..overall net short..long exposure reduced each day.
lol KOG bot 1.05 sold 1.07. guess i shoulda sponsored it
Get your AXL
nevermind.. sucker play
Anyone like TA here?? bought small position at 2.73
added a mid-day update at the bottom of the blog post.
what’s Portman doing there?
looking at you
got me all excited now…
come on CA, put Megan Fox in there.
took a flyer on GETA 0.35
watch STAA here
wres looking ripe
another lotto stab RPRX 1.17
shorted RF @ 5.22
ha … I went long that POS today @ 5.18 😀
AHH HAHHAAA he went short RF… cramer just pumped it
its a swing trade short….the fact cramer likes it insures it tanks shortly..plus they are loaded with bad comm. re loans…especially in florida. Cramer is like watching barney..its for kids.
Bought QTM @ 1.06… nice b/o
Do we rally or tank into the close?
Where’s Doc today? I gotta give the man some loooooove for PODD
just got in – glad you’re winning on it!
back in time to see PODD squeeze is on. Bought a second position, also second position in HBAN. No headlines about HLCS execs in jail yet….
squeeze them shorts and make them squirm like a schoolgirl
like a feeding frenzy once the pack smells the blood…this one has 20 days worth of float and held steady during the dip – watching it especially close ’cause I doubled down.
dude, i went all in since yesterday, need it to break this resistance area here
lol
if I didn’t fall for the AXL trap earlier, i’ll be up quite a bit. but it’s ok. small loss
sweet 15% 2 day meltup so far – watching for any increase in volume indicating an all clear for me to blow some cash this weekend.
Oilers turning up I see.
In taking in my HLCS debacle. Reading more, I’m feeling better about it. The company is a prime buyout candidate and absolutely belongs in my long term collection. Never happy about paying a 25% premium – no idea why it didn’t continue to explode given it’s first to market with a killer technology changer, but that’s the market.
coast is clear sir! Prepare for launch
PODD.. real nice. I will try to find an in here if I can…
You might get your chance caveman. if podd retraces to 8.98, i think it’s a good entry.
I’ma holding for a little longer
Nice play guys good for you. Today trading sucks ass – borderline retarded just like Josh’s posts.
Seems to me everyone is sick and tired of looking at earnings and low volume confirms many are either taking a break or just plain going for vacation. In my opinion no catalyst either way for a confirmed move up or down i think it will e a seesaw trading for the next few weeks. Anyways I am off to enjoy the rest of this summer instead of watching the screen. Later.
alrighty bro, later.
OMG… look at the boner on this thing
Doc, i owe you one
CEG making a nice Uturn
wres busting out
WRES baby!
WRES with a lot of room now
50ma at 3.10. caution
QTM BTFO! added @ 1.09
keep close eye on AGEN
AGEN real close fellas..and ladies, of course.
game time on this one, looks like, in at $2.21
needs some more volume but good bounce off of 50 day
PODD breaking out for absolutely no reason – no moving averages, volume lackluster, 21 days to cover might be it.
and the s.o.b. won’t take a breather so I can jump on dammit!
just a guess, but any pause might make the squeeze even better if folks see it as a buying moment. My second position is up almost 6% already.
too late for today, I think I will look in the morning for an overlapping candle.
wow… what a drop
pump then dump?
I don’t think so, I sold the second position for just under a 5% profit for the day, but I’m holding 3/4 of the first having taken profits earlier – but who knows.
we’ll see tomorrow. the inverse head and shoulders really makes me wet.
My gut says it’s just folks rightly taking some money off the table. If it shows action again tomorrow I’ll likely buy back in given the possible duration of the squeeze.
BLC looks high and tight with clear air above
last call for AGEN
THC imminent breakout
sold EDZ -2%
fuckshit!
HILL STAA GSL overnight positions
THC bought @ 4.40… swing trade
10% THC and 7.5% QTM
Swings: $AEZS, $AGEN, $CNXT, $CTIC, $KOG, $QTM, $TGB, and 1* spec play
*2
What are the 2 spec plays?
Aren’t all of these specs … u mean day vs swing?
CHB earning spec play. VERY small position.
alrighty boys… time for my massage…. cyou all tmr
Holding AGEN, TTWO overnight
CA, when you get a moment could you touch on the effect that unusually high or low volume has on determining flags? In previous posts you’ve mentioned that volume plays an integral part in your decision, but I can’t remember you saying exactly how. If anyone else has some advice on this topic I’m all ears. I’ve been watching over the past few weeks and don’t see much difference between the validity of high vs low volume flags. The volume of individual candles seems to be more important in my experience. Thoughts?
Continued declining volume as the flag establishes itself = bullish
High volume on a flag, esp on the down days = bearish
Flag with erratic price action = bearish
Flag with set ST sup/res = bullish
Time corrected flags are more bullish than price corrected flags.
High-and-tight flags are the most reliable bullish patterns in existence.
The fed study continues to work… market on avg had moved correctly 15 out 17, with an avg move of 2.1%. SPX was up .69% today, cant complain… the study has now worked 16 out of 18 times…. i’ll bring it back out 6 weeks from now.
Good work Pissant,
I have followed your post on this since you pointed this out at the time of the previous Fed meeting and stayed in yesterday, in part, based on your 3:50 post.
Thanks!!!
HBAN chart is forming a BIG BOOB Formation leading to a BIG SQUEEZE result.
What you guys think of GPOR?
I posted this yesterday on chartly: http://chart.ly/6sxqv2
Anybody look at NAVI? looks like nice breakout occuring there.
Steady buying and you no longer have to make an appointment to trade it – – I have a bunch.
Very good ideas on the blog lately.
Hey man congrats!!! I ‘m really proud of you and your accomplishments in such a really short time. Not sure if your readers
know but your first group of students (the original C.O.P) lol.. were with you as the world started to open up for you. Glad to share in the experience and most importantly……THE PROFITS…..LOL!!!
Hers to you on your anniversary big guy….”I wish you the best in all your future pursuits, endeavors, and more importantly TRADES…lol!!! You truly are one of a kind”
I would raise my glass to you but its like 7am not sure if OJ counts….lol
Oh and look what I dug up it was my first testimonial…wow memories…if only these ppl knew how much I was lying back then…LOL…j/k …lol
I started Reading the blog post after reading the Technical Analysis 101 lesson sent with the wallstreet survivor subscription. After reading the blog for a few days and applying some of the lessons to my own trading strategy I realized the benefit of Technical Analysis. That same week John offered the one on one coaching program and i jumped all over. Its not even been a full two weeks into the program and I am already up 12 percent from when I started. So in a little over a week I have made more than the money I paid for the program and what im learning is priceless. JC and TA..hell of a combination!!!!