I’m not what anyone would call an active trader in the stock market. I generally rely on my broker’s advice and invest in low risk stocks and mutual funds. This strategy worked for me until the latest recession. I lost money on some investments and my return on most of my investments was poor. I [...]
Trend following is a stock market plan that takes virtue of both the swings and roundabouts of the market. It is a strategy that employs risk management to minimize possible losses. Traders who employ trend following enter the market after a trend has been revealed, they do not try to foretell trends. They work out [...]
The title of this post is from a href=”http://www.reuters.com/articlePrint?articleId=USTRE54511C20090506″Roubini’s seminar today/a…Like Roubini says, markets are getting way ahead of themselves. There may be a lot of reasons to this but the one I have constantly been observing is the recent forged economic reports released at key market levels triggering short squeezes on quant funds.br /br /I was in a meeting with Peter Schiff at NYU last Thursday. Unlike what you may guess, we talked more about current economic policies and administrative mistakes that will lead to the destruction of this country’s assets, its currency, socioeconomic structure and eventually the whole system while creating next financial bubbles in emerging markets, especially in Asia. br /br /It is sad to see that too many smart people who foresaw this mess long ago now predict similar future for the country if the current policies are maintained… because when the ship sinks deep enough, I am afraid the policy makers themselves will be the first to leave the ship without saying goodbye. I will keep this one short because it is the close of Friday May 8 that will be very telling.br /br /Regarding the market action, I expect ESM9 to close below 885 this week to maintain a bearish intermediate term meaning for 850-870 range. It is currently trading about 30 points higher than this area. We will see what will happen by the end of the week.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-8018909221707628864?l=xtrends.blogspot.com’//div
I posted this in comments below but for those who missed my posts , I am putting it here.br /br /—————————br /br /Sheeplie is now close to get break even for the year as SP500 is now near where it was in Jan 2009 but interestingly in the last two days, all you heard was new bull market and how Atilla was wrong about SPX 850 being top… If you need a sentiment gauge right here, think about this: While Atilla was shorting their ass from 1500 to 670, it wasn’t looking as exciting as it is now, however Sheeplie is now on the new bull bus dreaming he can get even… wouln’t you say so Sheeplie?br /br /By the way, I do not mean to insult bulls or bullish investors / traders or a group of traders with specific market outlook by “Sheeplie”. Sheeplie are those that suffer from myopic syndromes in finance. Those that got raped numerous times brutally in the stock market and now think it is all different game and rules. Sheeplie is the one that can not recognize his place in the game despite countless lessons given. br /br /br /Atilla may be down for the trade at this moment but it is going to take Sheeplie more than 35 handles to get even with Atilla if this is what Sheeplie desires…That is, about 900 SP points from 670 to 1570… br /br /Atilla wants to remind Sheeplie one thing: In the last two years Atilla made many intermediate term trades publicly that he initially took 50 handle drawdown to book 100-300 handles profit from each later. Then the question Sheeplie needs an answer for: Is this going to be different? br /br /Atilla says: Unlikely but if it is, Atilla assures Sheeplie that he will let Sheeplie know that for the first time in this bear market, Atilla lost it. br /br /Other thing Atilla want’s to remind Sheeplie about is the fact that Atilla a href=”http://xtrends.blogspot.com/2009/03/covered-sp-and-es-below-670.html”covered his short positions at 670/a. That is the bottom tick of this bear market so far.br /br /Although Atilla stayed bearish all along, he traded according to what he saw as always. When Sheeplie gets emotional and claims otherwise, xTrenders know the fact that Atilla a href=”http://xtrends.blogspot.com/2009/04/covered-es-and-sp-780.html”closed his early shorts from 750 at 780./a Then a href=”http://xtrends.blogspot.com/2009/04/fully-short-sp-and-es-from-840.html”shorted at 840/a to a href=”http://xtrends.blogspot.com/2009/04/covered-remaining-50-es-sp-811.html”cover at 811/a. He then a href=”http://xtrends.blogspot.com/2009/04/long-es-803.html”went long at 800/a, and a href=”http://xtrends.blogspot.com/2009/04/closed-es-8235.html”sold at 825/a. Atilla has been shorting since 850 and trying to micromanage. br /br /People should always remember that no one can be right 100% of the time. No matter how good or bad, Market hits everyone without exception. It is inevitable and unpreventable. What is important is, a mistake must be recognized before it is too late. Within the time frames and price levels Atilla trades, he thinks market proved nothing since SPX 850. For the change in the picture to happen, key indices must take out some key levels within certain time frames. This is yet to happen.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-3137846766699265244?l=xtrends.blogspot.com’//div
Leadership sectors already started pulling back as spotted by a href=”http://xtrends.blogspot.com/2009/04/modified-p-index.html”"Modified P”/a index.br /br /I have been short most of these leading sectors that constitutes “P”. Except index short positions, the market already started moving in the direction this bear has been positioned for. br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfxihO4gnvI/AAAAAAAABno/vwuBGSJgrpg/s1600-h/DC_Capital_01+May.+02+10.04.gif”img style=”cursor:pointer; cursor:hand;width: 400px; height: 264px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfxihO4gnvI/AAAAAAAABno/vwuBGSJgrpg/s400/DC_Capital_01+May.+02+10.04.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5331244381970145010″ //abr /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfxfrq9KugI/AAAAAAAABnY/f9H5yLEoQQY/s1600-h/DC_Capital_02+May.+02+10.07.gif”img style=”cursor:pointer; cursor:hand;width: 400px; height: 263px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfxfrq9KugI/AAAAAAAABnY/f9H5yLEoQQY/s400/DC_Capital_02+May.+02+10.07.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5331241262769682946″ //abr /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfxfr3SFfQI/AAAAAAAABng/fuRgXwSOJCU/s1600-h/DC_Capital_03+May.+02+10.09.gif”img style=”cursor:pointer; cursor:hand;width: 298px; height: 400px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfxfr3SFfQI/AAAAAAAABng/fuRgXwSOJCU/s400/DC_Capital_03+May.+02+10.09.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5331241266078645506″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-8662940292195590572?l=xtrends.blogspot.com’//div
Day trading predictions… no matter how often you get them right, they get you once in a while. My gap down prediction was one of them. br /br /I posted many long term charts from DJI to OEX to SPX to COMPQ. Nothing has changed. ES is currently up 10, near yesterday’s high. Larger time frames always dominate shorter time frames, therefore span style=”font-weight:bold;”market will not be able to sustain these levels/span in regular hours as most of the indices pushing through multi-decade trendlines. Their reliability is quite proportional with their lifespan.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-3420310828747554218?l=xtrends.blogspot.com’//div
Like I predicted in my previous post, SPX spiked after the FED announcement and rinsed 04/17/09 high then reversed to the downside. There will be follow through tomorrow. br /br /Also since SPY was unable to close below the trend line at 86.9 (which was tested and held near the close), SPY will gap below 86.9 tomorrow and gap should not get filled. br /br /br /As stated before, this was the best ST scenario for the bears as it fits in bearish intermediate term picture quite well. br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfi1i_ZVe6I/AAAAAAAABnI/23YsVA4iH_E/s1600-h/DC_Capital_02+Apr.+29+16.08.gif”img style=”cursor:pointer; cursor:hand;width: 400px; height: 183px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfi1i_ZVe6I/AAAAAAAABnI/23YsVA4iH_E/s400/DC_Capital_02+Apr.+29+16.08.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5330209771730860962″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-1168008327304776863?l=xtrends.blogspot.com’//div
Fed rally I predicted in a href=”http://xtrends.blogspot.com/2009/04/another-distribution-day.html”my previous post/a came before the announcement so expect a reversal very soon. This will mark an important swing top going forward. br /br /Watch those stops above 875, they may momentarily be run after the announcement.br /br /br /Based on the following chart , SPY needs to pull back below the green trend line again. For this to happen today, we should sell off into the close. So my guess is watch the stops above 875, once they are hit, look out below. br /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfiHCXJeWNI/AAAAAAAABnA/9yjLcVJ0kkQ/s1600-h/DC_Capital_01+Apr.+29+12.56.gif”img style=”cursor:pointer; cursor:hand;width: 345px; height: 255px;” src=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfiHCXJeWNI/AAAAAAAABnA/9yjLcVJ0kkQ/s400/DC_Capital_01+Apr.+29+12.56.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5330158633636223186″ //abr /br /Edit at 2:00EST :br /br /SPX marginally broke above 04/17/09 OPEX top. We may not get a FED spike after the announcement. Be careful.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-7645270019650584804?l=xtrends.blogspot.com’//div
Tomorrow is Fed day… It is gonna be boring till 2:15br /br /Considering the big picture that suggests a multi-day sell off as a start for the impending intermediate term downtrend, my best guess is we gonna rally after the Fed to reverse next day. Because Fed pattern suggests a reversal after the Fed day or the day after. br /br /If we sell off, it wouldn’t fit quite well in the big picture as the sell off should lead to a multi-day rally that will distort the intermediate term structure. br /br /But in case we sell off, it will have to be a severe and sharp, like we test 810 or something because this sell off on Fed day will likely be followed by a reversal that will start a multi-day rally. Again, considering the big picture, this rally must stop around 875-880. Therefore any sell off on the Fed day must be deep to make enough room for the next possible rally that should die around 875. br /br /Staying massively short from 865…br /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfdtkjzXtJI/AAAAAAAABm4/8vuboStlXTs/s1600-h/DC_Capital_02+Apr.+28+16.41.gif”img style=”cursor:pointer; cursor:hand;width: 382px; height: 253px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfdtkjzXtJI/AAAAAAAABm4/8vuboStlXTs/s400/DC_Capital_02+Apr.+28+16.41.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329849158869693586″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-4246831355230840730?l=xtrends.blogspot.com’//div
SPY didn’t open below 84.55 and naturally the gap got filled. But it is now compressed between green and black TLs. All looking well within the grand schema of the topping process.br /br /A daily close near 84.6 will confirm a downside acceleration for coming days…br /br /On the upside its very limited… As multi-decade trends are pressing on many major and sectoral indices….implying an average of 40% drop in a year or so …br /br /These are precious days, shorting the pops to built an IT position before they ran out of money (only 110B left) will soon be proven another epic xTrends tradebr /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/Sfctv9YVOeI/AAAAAAAABmw/IIhbf58Eo9w/s1600-h/DC_Capital_01+Apr.+28+12.12.gif”img style=”cursor:pointer; cursor:hand;width: 288px; height: 237px;” src=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/Sfctv9YVOeI/AAAAAAAABmw/IIhbf58Eo9w/s400/DC_Capital_01+Apr.+28+12.12.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329778985969990114″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-2264388445788934951?l=xtrends.blogspot.com’//div