From the weekly to the 15 minutes charts, SPY is struggling as you can in the the charts below:

Below is the weekly chart:  By the way, the bar you see is qualified to be called the Bearish Divergent Bar per Bill William’s Trading Chaos book (although the day is not over yet; you can say it is in the process of making a Bearish Divergent Bar).

Below is the Daily SPY Chart.  You can see the same deal as the weekly chart.  The making of a daily bearish divergent bar is in process.

Below is the hourly SPY chart:

Below is the 15 min SPY chart:

This is actually an experimental post since I’m trying the TC2000 charts in different size format.

By the way, just because we have a divergent bar (per Bill William’s book) in development doesn’t mean it is a sell tomorrow if price break below today low.  Bill has very specific criteria in applying the divergent bar signal together with the alligator moving averages system.  It is better you read Bill’s material to familiar yourself with his system than for me to explain anything in a few simple charts if you are interested in Bill’s system.

However, I may not necessary follow Bill’s system 100%.  I like to experiment with Bill’s idea with some of my own way of trading the chart.  In a way, I borrow from other traders and try to develop a system that I can be comfortable with.  In another manner of speaking, I’m constantly evolving my trading system so that I can listen to the market better.

Today summary, I’m playing defense today by taking my profit in my precious metals.  I am currently flat on all EXK, SLW, and AUY.  Although I’m tempted to buy them back but SLW is reaching to the 89 xma so I’ve to respect its resistance power.

I’ll wait to see what happen tomorrow before committing cash back in.  Meanwhile, today is just another simple day trading exercise.

Current position:

9.7% LT equity

90.3%  Cash

Good Hunting!

 

 

 

Comments »

With a slight change of DNA (actually this week bar); the Bear twin brother vanished into thin air!

If you look at bar (5) in 2012; this look like a good healthy green bar to me providing that tomorrow continues to be a positive or a mild correction day.  The good thing about this week bar is that it stays above the lower Pitchfork median line; thus maintaining the uptrend momentum.

Giving the way the wind is blowing, we may have a bullish trend for the rest of the year to re-establish the correlation of a stock rally in the Presidential election year.  Next target is to take out the upper trendline at $137.63; and then the high of $142.21 from April 5th, 2012.

Below is the weekly SPY chart:

Good Hunting!

Comments »

I don’t know about you; but after the the head of Europe’s Central Bank declared that Euro zone will not be allowed to collapse, one must immediately think of the printing press.  I guess the sound bite means we are getting closer to QE from both Europe and possible the US.

The way I look at it, Mario Draghi’s Pledge is the catalyst to kick start the runner in precious metals.

So without hesitation, I added more EXK (silver), bought SLW (silver), and AUY (gold and silver).

My position is now heavily in precious metals (22% 24% 30.4 %):

9.4% 10.5% EXK

6.9% 10.4% SLW

5.7% 7.7% 9.5% AUY

9.5% 9.6% LT equity

68.5% 66.5% 60% cash

Below is the weekly AUY chart.  See how the over all trend is sloping up and the prices stayed on the 79 & 89 moving averages.

Notice the last bar is an up bar.  Could be the start of a run?

Good Hunting!

Comments »

Today look like a stalemate day b/w the Bull and the Bear.  I did not buy any TZA nor SKF despite the weakening of the morning rally.  Instead, I only bought EXK this morning.  I like EXK now because price action did not breakdown below the base support yesterday despite a strong down day.  This morning EXK opened up and took out the upper downtrend line.  To me, that is good enough for me to take some position at the market open since my stops will be below the base support.

The important thing for me in taking a position is knowing where my stop loss will be.  Having a strong support base, even if it is in the form of Descending Triangle, tell me that the silver buyers will be putting up a big fight to protect that base.  And if they failed, that simply mean there is a strong fundamental reason for silver to go down and the price actions is telling you this BEFORE you even know what the fundamental story is about.  At the same time, if you look pass the Descending Triangle, you cannot ignore the triple bottoms on the daily chart since late June.  This is a very strong case for a rebound from here if price actions show some bullish signals such as taking out the upper downtrend line.

From here on, if price actions continue upward, there is a good chance we may have a runner here.  And I will continue to add more accordingly.

Below is the daily EXK chart:

Current position:

7% EXK

9.6% Long-term equity

83.4% cash

Good Hunting!

Comments »

That is because today the high of TZA reached the 89 exponential moving average which to me is a strong resistance.

I will rather lock in profit now and see what happen tomorrow.   I prefer to protect my profit more than worrying about “missing” the gap up tomorrow since a gap down will mean giving back what I make today.

See below TZA daily chart.  The dash white-line is the 89 xma.

Good Hunting!

Comments »

Currently, I’ve 21% of my portfolio shorting the market using TZA and SKF; therefore, what I’ve to say here is inherently bias on the short side.

As the weekly chart below shown, the price action has broken out of the symmetrical triangle that “SHOULD” have been a continuation bullish pattern if price action has taken out the upper trendline.  But instead, price action took out the lower trendline and headed to the downside.   By taking out the lower uptrend line, the weekly SPY also took out the BEAR FLAG.  This is a bearish continuation pattern.  The week is still young; we will soon find out by Friday if this week bar is going to be a long red bar (very bearish); or a green bar like the one 2 weeks (or 2 bars) ago.

Below is the weekly SPY chart:

Current position:

21% 24.4% 0.0% short (by way of TZA and SKF) sold by 03:30pm EST to lock in profit due to strong late rally.

9.6% 9.8% long-term equity

69.4% 66%  90.2% cash

Good Hunting!

Comments »

I bought EXK this morning because it took out yesterday high of $7.77.  I also like the fact that there are 3 triple bottoms since 6/28.  But I only like EXK (or silver) if it can rebound from yesterday low.  Unfortunately, due to a down day today in the stock market, EXK morning rally frizzled and is now in negative territory.  Needless to day, I sold EXK to cut my loss quickly and started focus on extending my TZA and SKF position in the morning.

One thing that silver lovers need to be aware of is the forming of the Descending Triangle.  As a chart reader, I do not put too much weigh on the “fundamental” reason why silver has to go up (or down).   But I do pay a lot of attention to the formation of chart patterns that have been proven for decades with high probability of repetition.

By the principle of Descending Triangle, if the base support (with the 3 triple bottoms in the case of EXK) is pierced to the downside, there is a high probability of  continuation of the downtrend.

You can argue about why silver can’t go any further down due to more printing by the Euro or the US all you want; but I will be paying more attention to the Descending Triangles that are forming on on silver based stocks.  EXK is no exception.  Take a look at the daily EXK chart below.  At the rate it is going now, it may even take out the base support today.  Remember, if the price action of EXK takes out the base support and head to the downside, it is because there are enough sellers to make it happen.  And that mean there are not enough buyers who believe in the printing theory to warrant an uptrend on silver.  At least, not what the chart is saying right now.

Good Hunting!

 

Comments »

In a way, I’m glad we have this morning mini-rally ’cause I’m looking for a good entry point to re-enter my TZA and SKF.  My morning entries were stopped out earlier for tiny losses.

Basically, I’m banking on the 02:30pm – 03:00pm time-of-day continuation pattern or trend reversal pattern.  I’m betting on the continuation bearish pattern so I re-entered TZA and SKF with a tight stops that were below the most recent pivot low.  In other words, if price continues to rally from here instead of going back down, I’ll only take a very small hit on my losses.  And if the bears take back the control, I’ll look to add more TZA and SKF.

Below is the daily SPY chart which shows that today rally represents close to the Fib 38.2% retracement between Friday high and today low.  Will it be over?  We will soon find out.

Below is an hourly SPY chart which shows a clear picture on the Fib 38.2% retracement on today rally.

Good Hunting!

Comments »

Asian markets are down and the evening trading of S&P500 is also currently down.  The evening star formation does foresee the bearish stance from time to time after all.  Without a doubt, I can see that, in tomorrow opening, SPY will surely drop below the median line support (see my note on the daily SPY chart).

I also see 2 supports ($135.89 and $135.263 on the chart) that if taken out tomorrow will mean that the Bear is taking over in the intermediate term.  Although I closed out my TZA and SKF positions before Friday close, I will restart my short campaign if price actions shows that the Bull cannot recover from the downdraft.

Below is the daily SPY Chart:

Regarding the sighting of the Bear’s twin brother.  Take a look at the weekly SPY chart below.  Follow the bracket numbers in 2011 and compared it to 2012.  Notice both have the downward sloping trend lines.  While (1) to (4) don’t exactly match in shape and form comparing 2011 to 2012, but you have to pause to notice the subtle similarity that, with current S&P500 evening down move, a down (5) bar will pretty much “confirm” the possibility of the twin status.  What does that mean?  It means watch out for the next week weekly SPY bar formation.  If it going to reflect a long down bar like bar (5) in 2011, we “may” have a similar bar (6) in 2012.  Remember, we are only dealing with probability, not sure thing; therefore, there are always room to make adjustment during the week.

I also see 2 supports in the weekly SPY chart.  $133.82 is my estimate of the lower median line for bar 5 penetration; and $131.54 is the bar 5 trendline penetration.  If the trendline penetration become a reality, watch out!

Below is the weekly SPY chart:

Below is a broader view of the SPY weekly chart that also showed the general uptrend line before the “correction”.

Good Hunting!

Comments »

I’ve been looking for DJIA to break 200 points down move but this bull just won’t give in.  I could feel the resistance of the bull every times the bear tried to push it down.  I’ve to give the Bull credit for being so resilient!

As to the evening star formation, I just don’t see how a half-baked small range red bar can be convincing enough to carry thru the probability of a down day Monday; especially with the Bull fighting back so hard. I prefer to see the low of today to exceed the low of July 18th (2 days ago) but that didn’t happen.    Thus, to protect my profits from yesterday short campaign, I closed out all my short positions (TZA and SKF) so I don’t have to carry this over the weekend.  Nevertheless, I will revisit the short campaign if next week price action demands it.

Below is the daily SPY chart:

Current position:

Long-term equity: 9.5%

Cash: 90.5%

Good Hunting!

 

Comments »