Tuesday, March 15, 2011

Big plunge, morning update

Hi guys, I hope I am going to finish writing this post. I am trying to post every day but I stop before I can finish, I don't feel very well at the moment...

After going bellow 1,306 and a failed attempt on Friday to go above this level that was touched twice since market plunged from 1344, SPX started a plunge that is hard to know where is going to stop. It is possible to see another 40-50 points down, even more towards the first serious support level that is around 1220, the April's 2010 high but also the level where the bull market uptrend line resides.

If this fails, the next stop could be SMA 200 that is around 1190 at the moment.

We may see failed attempts to go above certain levels, such as 1280, the January low.

3:40 p.m. update.

Huge reversal, 20 points, and market above 1280 level! Market still on bears favor but Feds did the trick again.

Thursday, March 10, 2011

Serious damage

After trading in range for a couple of weeks market finally decided to make a serious move down. A very important technical event happened today, SPX went bellow SMA 50 for the first time since September.

SPX made a lower low on daily chart, moving bellow 1,305, a level where market closed twice in the last two weeks. However, SPX found support at a previous intra-day low, 1,295. Looking on hourly chart one can say that market is still trading in range with 1295 as the lower edge and 1332 as a higher edge, both values being touched twice in the last two weeks. 

With market slipping bellow SMA 50 chances are very good that the plunge will continue. How far is hard to sa, there are plenty of good support areas. The worst case scenario in my view is a drop around 1220, the April's 2010 top that also coincides with the 2009-2011 uptrend line. The economy is showing signs of improvement but oil over $100 may be a hard pill to swallow.

Today market reacted violently to the civil unrest spreading to Saudi Arabia, a country that controls 20% of the World oil supply, plus the trade deficits reported by both US and China.
The most important news that could push market in a direction or the opposite is the unrest in the Arab World.

A few days ago I discovered the most insane ETF called BXDD. It's an S&P500 inverse ETF but it must be a 10x since yesterday went up 21%.

Tuesday, March 1, 2011

Bears strike back, afternoon update

Bears pushed the market just in time to avoid EMas crossing. Price moved 9 points bellow SMA 120  and daily DMI is slightly negative.

The unrest in the Arab World is making everybody nervous, I do expect more rallies and plunges in the next few days. With this kind of volatility you need to be very quick in order to make money. Saying this I am going to take a little bit of profit on the short side today, just in case. I am really frustrated that is so hard to make money on the short side lately so I don't want to take the chance to see my little profit disappear again.

Take care!