Thursday, April 17, 2014

Gains this week

Nice gains this week but doesn't change too much the general view. Long term remains bullish with SPX making a nice higher low on weekly chart. The question is if it's going to make a fresh higher high, somewhere in the 1,900-1,930 area.

Nasdaq continues to be the most negative index. It made a clear lower low on weekly chart. Let's see if it makes another lower low! That's very important.

So it's a mixed view with SPX making higher lows and Nasdaq making lower lows. Who will win in the end?

I would be happy with a correction here followed by another leg up. Corrections come and go, but the general view, the long term term is bullish even for Nasdaq.

Meantime I think we can make some money with options. Look at this YouTube video where I am talking about options on DIA, the ETF that tracks the Dow 30.



Friday, April 11, 2014

Correction has started...

... at least Nasdaq and Russell 2000 say this. SPX still looks OK but next week it may go into bearish territory as well. I just loaded this video.


Thursday, April 10, 2014

I'm back... sort of...

Haven't been on this blog for a long time due to personal issues. I feel better now but I am going to make more YouTube videos than posting here. My kid challenged me! He said he is going to have more visitors than me :) He is probably be right since most of the people reading this blog are not going to come back due to my lack of activity.

Overall I think market remains bullish long term but here we may see a decent correction. We didn't have a real correction in more than 17 months!!!! This is the longest rally since March 2009.

Have a look at this YouTube video I posted a few days ago. I will probably make another one tomorrow, to summarize this week market action. Enjoy.


Thursday, June 20, 2013

Correction finally here?

This is one of the strangest rally we had since the March 2009 bottom. No other rally fooled me more than the present one. Is this the end of this long rally? Probably, but after being wrong twice in a row my level of confidence is not so high at the moment. What happens now and din't happen during the previous fake sell signals? First of all, SPX slipped bellow SMA 50 on daily chart, a level that offered a very good support since November last year. Even more important, SPX went bellow a very well established uptrend line. 

Another event that happened for the first time since the beginning of the rally is SPX slipping bellow SMA 120 on 4 hours chart. EMAs are not giving a bearish crossing yet but they are touching, something that didn't happen in the last 7 months. No matter the final outcome, this is the most bearish momentum in 7 months.

Weekly chart doesn't provide too much information, except a way to figure out the first posible support level that is around 1,555. Weekly DMI remains positive for now. 

Gold and silver are hammered again, no surprise here since both of them are already in a bear market.

What I found interesting is the market reaction to Ben's comment that he is going to end up the quantitative easing. This is in fact a positive thing, it means that he thinks the market is robust enough to continue growing without the QE. Apparently the market participants are not convinced that this is the case, a.k.a. the market needs more money to survive. Or it may be just an escuse to take some profit after such a long rally. On the way down, from 2007 to 2009 I remember Feds lowering the interest rate, an event that was always followed by a rally in the market. I couldn't understand the market's reaction since a decrease in the interest rate was a clear sign that the economy was in a big trouble. Rest assured a few weeks after a temporary rally the market was establishing fresh lower lows. 

What happens now is the reverse of lowering the interest rates, a sign that the economy is on right path. If Ben is right expect another powerful rally after this correction is done. 

All the best!


Friday, May 31, 2013

Second straight week on the downside

It was a quiet, boring trading week until today, or more exactly until the last hour of trading when SPX lost 24 points. The week ends with a 22 points loss but on monthly basis SPX gained over 30 points making this month the 7th straight month on the upside, a pretty solid rally.

The bullish momentum is still intact on all time frames. The 4 hours chart still shows a bullish EMAs crossing but the price crossed today both EMAs. SMA 120 is at pretty safe distance, 40 points bellow but remember that not too long ago the difference between price and SMA 120 was no less than 100 points, one of the biggest difference since the March 2009 bottom. So the market remains bullish but not as crazily bullish as it was a couple of weeks ago.  Notice that the 7 months rally uptrend line is also around 1,590 so this is the best support this rally has.

Just above SMA 120 and rally's uptrend line is SMA 50 on daily chart, a level that behaved as a very good support in the last 7 months, so somewhere in the 1,590-1,600 area we should see a fierce battle between bulls and bears.

Weekly chart shows a very bullish picture, with weekly DMI still at a high level.

In conclusion, SPX remains bullish on all time frames. To change the trend bears need to push SPX bellow the 7 months uptrend line that is now around 1,590. Sounds easily done since SPX lost no less than 57 points since its all time high around 1,687 but it may not be so easy. Bulls have bought every single dip in the last 7 months and I will not be surprised if they are going to defend the 7 months uptrend line once again. 

Have a nice week end!