S&P Update

Fall to previous high as support and move onto a newer high?

FAZ

Bought 50% at 9.00, contemplating a stop at either today's low 8.8 or yesterday's low of 8.3.

Update: 8.8 stop should be sufficient.

Update: Crappy stop, low was 8.77. Currently at 9.32, I pick some horrible stops!

Trendline Update

Still holding, but frequent tests mean eventual break.

Bank Failures

Last week we saw 4.

Nat Gas

It is amazing how poorly nat gas has been doing.



We really need to learn how to use it to replace gasoline.

Meanwhile BDI is moving up a bit.

H&S

A H&S within a H&S. Interesting.

H&S

Pattern is still developing. Dont't fall in love with it. Market action is very wild.

Possible H&S on S&P

If we break 833, watch out. Target is around 800. These H&S plays do not play out very often in this market.

BDI

Wonder if it can make a new high.



It is hard for me to have any opinion on the medium term for this market. I think we will be range bound for at least several weeks. Yet we manage to have powerful moves both to the upside and downside, so I will try and continue to ride these moves the best I can.

Absurdly Accurate

The trendline has been extremely accurate. I do not expect it to hold much sooner. We will eventually go through a consolidation phase that will break the bottom trendline.

Trendline Update

This is the day I was waiting for, and I could not even trade it until late in the day.



In 2 days the index went from the top of the trendline to the bottom. Would have loved to have had FAZ during this time! We will probably be down some more tomorrow as well. Oscillators are still pretty overbought, they will stay this way for a few more days.

Market

Market is strong, but caution should be used here.



We did not get the pullback that I was expecting, but I still managed to make a profit on my bearish trade. Always keep an open mind in the market and place your stops. You can be wrong about the market and still make $ or lose little $ if you trade and position properly.

The bulls are strong, but they are also extended. They can probably stay extended for another 2-3 days. If market continues up, I would look to get bearish around Wednesday. The % of stocks above 50 DMA is above 85!

Volume Buzz TS Style

I created two TS indicators to find stocks with unusually high volume.

The first volume indicator measures the current cumulative volume of the day and compares it with the average cumulative volume.

Here is a screenshot of a list of stocks with their current/avg cumulative ratio, with a chart showing the data for DLR.

As you can see, early on DLR had 3 times its normal volume early on. The bars are colored (if ratio > exceeds a limit) red if the stock is down for the day and green if it is up.

As you can see DLR had tremendous volume today, and noticing this could have led to a great trading opportunity. It resisted new lows and its ability to take out the vwap with an increase in volume midday was the key.

One thing this indicator is lacking is that it does not pick up random spikes in volume during midday or end of day. For this I modified the code to calculate the sum of the volume for the last X bars. This way I can see if the last X bars had significantly more volume than during average trading days.

Below is a display of stocks with this value (end of day results) and an intraday chart of the GOOG volume ratio.


As you can see, the midday spike in volume for GOOG does not look like much when you view volume alone. However, with this ratio you can see how big of an increase it is. Later in the day huge volume came in and bought GOOG into the close.

Here is the code for these indicators.

Cumulative Ratio
Input: DaysToAvg(10), AlertRatio(1.2);
Vars: LenOfDay(0), BPD(0), BarsPerDay(0), VolSumToAvg(0), VolSum(0), VolSumAvg(0), VolSumPct(0), LastClose(0);

If BarType = 1 then begin

LenOfDay = TimeToMinutes(SessionEndTime(0,1)) - TimeToMinutes(SessionStartTime(0,1));
BPD = AbsValue(LenOfDay)/BarInterval;
If FracPortion(BPD) = 0 then
BarsPerDay = BPD
else
BarsPerDay = BPD + 1 - FracPortion(BPD);

VolSumToAvg = 0;

If Date <> Date[1] then begin
VolSum = Ticks;
LastClose = close[1];
end else
VolSum = VolSum + Ticks;

For Value1 = 1 to DaysToAvg begin
VolSumToAvg = VolSumToAvg + VolSum[BarsPerDay*Value1];
end;

VolSumAvg = VolSumToAvg / DaysToAvg;


If VolSumAvg > 0 then
VolSumPct = VolSum / VolSumAvg;

Plot1(VolSumPct, "Vol buzz");

if VolSumPct >= AlertRatio then
if close > LastClose then
SetPlotColor(1,Green)
else
SetPlotColor(1,Red)
else
SetPlotColor(1,White);

If VolSumPct > AlertRatio then
Alert ( "Intraday Volume exceeds" + Spaces(1) + NumToStr(AlertRatio,0) + Spaces(1) + "percent of average." );
end;

Sum Ratio
Input: DaysToAvg(10), LengthOfVol(5), AlertRatio(1.2);
Vars: LenOfDay(0), BPD(0), BarsPerDay(0), VolSumToAvg(0), VolSum(0), VolSumAvg(0), VolSumPct(0), LastClose(0);

If BarType = 1 then begin

LenOfDay = TimeToMinutes(SessionEndTime(0,1)) - TimeToMinutes(SessionStartTime(0,1));
BPD = AbsValue(LenOfDay)/BarInterval;
If FracPortion(BPD) = 0 then
BarsPerDay = BPD
else
BarsPerDay = BPD + 1 - FracPortion(BPD);

VolSumToAvg = 0;

If Date <> Date[1] then
LastClose = close[1];

VolSum = SummationFC(Ticks, LengthOfVol);

For Value1 = 1 to DaysToAvg begin
VolSumToAvg = VolSumToAvg + VolSum[BarsPerDay*Value1];
end;

VolSumAvg = VolSumToAvg / DaysToAvg;

If VolSumAvg > 0 then
VolSumPct = VolSum / VolSumAvg;

Plot1(VolSumPct, "Vol buzz");

if VolSumPct >= AlertRatio then
if close > LastClose then
SetPlotColor(1,Green)
else
SetPlotColor(1,Red)
else
SetPlotColor(1,White);

If VolSumPct > AlertRatio then
Alert ( "Intraday Volume exceeds" + Spaces(1) + NumToStr(AlertRatio,0) + Spaces(1) + "percent of average." );
end;

Here is another demo of the sum ratio on AXP

If you had noticed the spike in volume to 7 times normal, that quick pullback would have been a beautiful entry point.

Update: I forgot to mention to make sure that you include a decent amount of 'additional bars to load'. I use a 5 min chart on radar screen and give it 2000 additional bars.

FAZ

Out of FAZ at 10.22, of course I am not that happy since I could have had 11.2+ earlier today, but I was hoping for a bigger move here.

Short Term

Short term downtrend still in tact, but bulls seem strong.

Added to FAZ

Added other 50% at 9.28. So far, this is the exact low of the session. I have never managed to buy the exact low of a session (or close to it), so this is a first for me. I have definitely sold close to the lows of a session with stupid stops, so this is a very nice change. Market continuing to weaken, internals are slightly weak, selling could pick up if panic sets in. By 'panic' I do not mean real panic, just some simple profit taking panic.

Update: My stop is at 9.2, which should give this enough room to work.

Update: Stop at 10.1. I will get more aggressive with my stops starting tomorrow. If there is a 3+% gap down tomorrow, I will cover early in the morning.

Oscillators

The McClellan oscillators are not oversold enough to show.

I am thinking it would be wise to take quicker profits on a pullback.

S&P Update

Barely touched the upper trendline today and quickly faded. After hours action is weak. Maybe I did manage to pick a top with FAZ, will look for XLF to hit price targets this week if market continues to be weak. There is always the probability we gap up tomorrow from news, if that is the case, I will cut my losses if the market shows strength after the open. If a gap up is followed by strong or even slight weakness, I will add to FAZ.

FAZ

Attempting to long 50% at 9.15. I plan to be very careful with this trade if it goes through.

Update: Got in at 9.12, already trading down to 9, hopefully this was not a big mistake. Lets see how they act tomorrow. Might put on the other 50% tomorrow, but I hesitate.

Update 2: Ideal target is for XLF to reach support at 9.5-9.6 or for it to close the gap at 9.2.



An inverse hammer on the last candle with weak action after hours. Tomorrow is another day and anything can happen.

S&P

This is what I had drawn a few days ago trying to guess where this rally will top off.


I would love to see the index approach and possibly surpass the marked level. I would also love to see the oscillators that I mention to go back to the overbought levels and live there for at least 2 days straight. NYSE McClellan above 90 (100 preferred), NYSE/S&P % above 50 DMA above 80, Put/Call below 0.75, Nasdaq % above 50 DMA above 85. If these oscillators get to these levels I will go short 50% on a rally, trying to pick a top. Then wait for some resistance/consolidation to show before adding another 50% short. Stop will be placed above recent high after consolidation.

Buzz

BestFreeCharts.com has a pretty decent application. I recently started to use their volume buzz indicator to find stocks that have a lot of action going on. Give it a try!

Baltic Dry Index

BDI is still death.


To me, this means this 'recovery' is going to take a very long time. I doubt much of the shippers can make any money at these levels. Time for the strong to live and weak to die.

Getting Overbought

I would give it another day or two.

NYSE McClellan
NYSE % above 50 DMA
S&P % above 50 DMA

Possible Top

Possible top forming. This will be probably be determined by news tomorrow. If 800 breaks, look out.



Either we break below 800 soon or we continue to climb till oscillators are oversold. Bulls seem strong, but who knows how they will react to news.