Update for Sunday July 15 - 2012

I found this chart on another site that could help us determine a good entry for Gold.

When this ratio hits previous low, IMHO, would be a good place to go long Silver or Gold. Probably, it will hit a new low.

Market Update for Tuesday May 1st - 2012

Today we got the expect bounce in the market. Stochastic moved from oversold to overbought on the 60 min. One of the gaps on NYSE mentioned on the weekly report got closed today; however, there is one more gap above left. At the end of the day, the Stochastic indicators crossed lower, signaling a possible market retracement, as seen on the chart below.

However, the Stochastic on the 15 min chart is at oversold levels and it looks ready to cross higher (although it hasn't crossed yet). As seen on the chart below:

I had entered a position on TVIX right at the market close today, however, after seen the Stochastic on the 15 min chart, I sold half of my TVIX in after hours with a very small profit.
My gut feeling is the market will move higher at the open tomorrow and there will be a chance to buy TVIX or TZA at a lower price then. Regards, STN

Market Update for Monday April 30 - 2012

As I said on my previous post, the markets on the 60 min chart had the Stochastic at overbought levels. That changed today at the end of the day and this could be the beginning of a new rally.
I had a position on TVIX that I sold at the end of the day today when I saw the Stochastic beginning to move higher on the 30 min chart.
As you can see from the chart below, the Stochastic on the 60 min chart of the NYSE is crossing higher. As I mentioned on my Weekend Report, all indicators say that a rally of multiple days is about to begin.

Market Update for Saturday April 28 - 2012

It's been a while since my last post and I wanted to get back and write my thoughts on what I see on the markets.
I see reasons for more upside, however I also see the market could move lower any minute.
Looking at the chart of the NYSI Weekly from StockCharts.com, the Full Stochastic is turning higher, which in general is bullish for the markets.
This could mean the market is getting ready for a multi-week rally.

The daily chart already shows the Full Stochastic moving higher and not flatenning or even turning down yet:

Looking at the NYSE hourly chart below, we can see 2 open gaps above, which indicate that the market could at least return to fill the gaps at those leves. However, the Stochastic is at overbought levels, although it hasn't turned lower, which means price could continue higher.

However, looking at the NYSE weekly chart, so far it has found resistance at its long term trendline. IMHO, unless this trendline is broken, any move higher, will fade at the trendline and the markets will continue lower.

RSI for most indices is overbought on the hourly charts, however, not on the 4 hour charts. My guess is we could move higher until indices reach overbought on 4 hour charts and then we will see a decline, but looking at the hourly charts, I'd be careful opening a long position with Stochastic in the overbought zone.

Best regards,

STN.

Sell Signal on CEF

We got a sell signal on CEF last week, we have been unable to maintain a long term position on it. It looks like the markets are making a top, we need a break below SPX 1352 to confirm a new trend lower. Regards.

Long Signal on CEF

Unfortunately, CEF gave a bull signal. MACD crossed positive. I am no longer recommending a short position. It could move higher to fill the open gap.

Short CEF: Central Fund of Canada Limited

I have been reading different web sites looking for some other kind of opportunities. Perhaps, less risky ones, and came across CEF: Central Fund of Canada. Looking at the daily chart, it has reached overbought and MACD has crossed lower. IMHO, this is a great short opportunity to hold until RSI reaches oversold and/or MACD crosses the other way around.

Long Term Recommendation: EWG

It's been a while since my last post, I've been busy at work. I have been looking at some good long term buys and I believe you should set a buy order of EWG at 19.03 and keep it for the long term until it reaches overbought on the daily, weekly, or monthly chart, that would depend on how quickly you want to exit.
For now, I believe you'd have a higher than 10% return on your investment regardless of when you exit.

Market Update, Sunday, September 4, 2011

It's been a while since my last post and I wanted to share what I am seeing short term in the markets. IMHO, we are very close to reaching a short term bottom on most indices. Reading some posts on the web, I find mixed thoughts: Some say SPX could move lower, yet not below 1120. I actually feel either the bottom was made on Friday or SPX will find a strong support around 1138 or higher. The RUT seems to have found support at Friday's close; however, it will probably follow SPX if it moves lower.
Once the bottom is in place on all indices, I feel we will see a rally close to the 200 SMA since all indices are coming from oversold levels on the daily time frame and after we reach overbought, another leg down will occur that will take the indices to new lows.

As for Gold, lots of people view it as a safe heaven, climbing to "infinity and beyond". I am not comfortable with its technicals and I see many gaps below that make me believe we will see a strong correction in Gold some time in the future, the question is when. Short term, Gold is overbought, at the top or close to the top. We will see a correction in Gold soon, probably to 1740 or below, we will see.

Market Update, Thursday June 30, 2011

The markets are moving higher and the question many are asking is if this move is for real and a new uptrend has begun. The chart below shows E-mini S&P 500 futures showing resistance at around 1321, if E-mini can move above this channel, I will be convinced that a new up-trend is in the make.

Market Update for Saturday, June 25, 2011

The markets are on a downtrend and no confirmation of a turn-around has been made yet. The Vix however, moved higher on Friday and the Put/Call ratio closed above 2, signaling that a bottom is near.

It looks to me that the market may find support again at around its 200 SMA (green line below) and it could make a double-bottom like it did at the beginning of December 2010 (shaded circle on the graph below).

As for my trades, I sold my UPRO holdings at 74.65, a 3% loss, a net loss of 0.1% so far. I am planning on entering UPRO again when the market gives a bull signal.
A key level to watch is the low made on March 16 at around 1249.

Part 2: Market Update for Saturday, June 18, 2011

Looking again at the chart of S&P 500, it seems another scenario could also develop. Since we haven't seen oversold on the daily chart, I feel we should also consider the level at which this could occur. I am not sure if a broadening top is developing in which we could go as low as 1233 which corresponds to the 38.2% fib retrace from 1011 to 1371.

After reaching this level, the S&P 500 would rally to around 1400 to complete the 5th wave.
We'll soon find out which scenario develops.

Market Update for Saturday, June 18, 2011

The S&P 500 bounced off its 200 Day Moving Average (green line) this week which was at around the 1258 level. Meanwhile the longer term upward trend line (red line) from the March 2009 low is also close to the 1258 level as well.

Most indicators appear to be oversold and the S&P 500 could bounce from here. MACD is trying to turn on the 4h chart; however, it hasn't turned on the daily chart. I'd wait for a turn on MACD daily to add to a long position here. My recommendation is to stay cash until then. Another thing to watch is the Dollar Index, its MACD on the daily chart is still positive; similarly, wait for a turn on it for confirmation.

Market Update for Saturday, June 11, 2011

The markets are down +/- 8% in the past month, and I have a feeling that the bottom hasn't been reached.
RSI hasn't reached oversold on the daily chart and what has me worried is that I don't see big enough spikes on the VIX yet, thus, it seems there is no fear in the market even at these low levels

As I posted on the June 4 update, it seems more clear now that 1261 is the next support area on SPX and even the 200 SMA seems to be the ultimate support; right now at around 1253. It seems to me that the market needs to reach this level to reach oversold conditions and create fear in investors before the next rally higher can begin.

If you are holding long positions and are not willing to cover yet, be prepare to loose at least 1.3% more. Hopefully, something similar to what happened the week of June 28, 2010 or the week of August 28, 2010, will repeat again this time.

Market Update for Saturday, June 4, 2011

The markets are scaring most longs. The S&P 500 seems in no-man's land as it has broken through support at the 100 SMA and the daily RSI hasn't reached oversold conditions.

Where are we headed? That's anyone's guess. I have read 2 technical sites that are hoping for support between the 1292 and 1295 level. Since I am still holding UPRO, I hope they are right. However, if the S&P 500 were to break solidly below the 1295 area this would dramatically increase the probability of a failed Inverse Head and Shoulders breakout which could lead to an eventual drop back to the 200 Day EMA at 1261 or the previous low at 1249. A trend-line on the weekly chart from the March 2009 low through previous lows, coincides with this value, so this scenario seems quite possible.

What could move the markets higher? On Tuesday, Fed Chairman Bernanke Speaks and usually when he speaks, the markets rebound; thus, I am hoping Monday we will see the low or a temporary low and the markets won't move much and on Tuesday after Ben speaks, the markets will begin moving higher. If the markets move higher and an opportunity arrives, I will sell my UPRO position.

Market Update for Wednesday, June 1, 2011

The markets sold off severely today. IMHO this was a healthy move. E-mini is almost at oversold levels on the 4-hour chart. I think tomorrow will hit the oversold level. SPX, is also close to reaching oversold but on the 1-hour chart.

I went long today and bought UPRO again at $77.7 I think I should have waited until tomorrow for the oversold level, but I don't want to miss the train and I feel this is a good entry price. Also, I am not able to be in front of the computer all day these days.

My recommendation is for you to go long tomorrow and buy UPRO, SSO or SPY; whichever you feel more comfortable trading. Even if the stock price moves lower than your buy price, hold on to your shares and wait. If you don't feel comfortable, place a stop loss order at 1% below your buy price on SPY, 2% below your buy price on SSO and 3% below your buy price on UPRO.

Market Update for Tuesday, May 31, 2011

Today E-mini reached overbought levels on both 1-hour and 4-hour time frames. After reaching overbought levels, it sold off and then it came back to higher prices, however, not reaching overbought levels this time. Some call this a divergence; however, MACD is positive on both time frames and it never turned negative on the 4-hour chart.

At the moment I continue in cash since I still don't see a good low risk/high reward opportunity in the markets.
I recommend you do the same and no matter how long it takes for this opportunity to appear, just sit tight and wait.

Market Update for Monday, May 30, 2011

The markets were closed today for Memorial Day. The futures, however, have been on the move. The E-mini has been moving higher (it's up 9 points as I write) almost reaching overbought on the 4-hour chart. The Dollar Index on the other hand, has been moving lower, and it has already reached oversold on the 4-hour chart. On the daily charts, none of them have reached any extremes and they could move either way. Since we are coming from oversold in the daily chart for the Dollar Index, I would feel that we could still move to overbought on this time-frame. My gut feeling is tomorrow we will see a temporary high on E-mini (a temporary low on the Dollar Index) and then E-mini will move lower to make a new low. This is my gut feeling, so don't take it as trading advise. We'll see what happens tomorrow and beyond.

Market Update for May 27th

Today was a typical trading day prior to a holiday: not much happening in the markets. Usually, it is not a good idea to trade on short days or prior to long weekends; it is better to take the day off and enjoy a day with the family or do something that is not market related, IMHO. I was hoping that today /ES (E-mini) would hit overbought on the hourly chart, and although it came close to doing so, /ES hasn't reached overbought on the hourly. I expect this will happen on Tuesday and depending on the volatility, Tuesday could be a good day to go short.
I am not recommending a short position though, we have to see how Tuesday behaves to determine which way to go. The 4h chart shows that /ES is coming from oversold and could go to overbought; however it doesn't mean that /ES cannot re-visit the oversold level again before going to overbought. This is why I am still in cash and waiting for a signal to go either direction. Have a good weekend and Happy Memorial Day.

Sold UPRO at 79.40 Today

I sold my UPRO position at 79.40 for a 2.9% gain. I am cash at the moment waiting for another opportunity to enter a trade. I believe we could still move higher because we haven't reached overbought conditions on /ES (E-mini) on the hourly chart. Once we reach the overbought condition, if we reach it, we'll check the market conditions again to see the trading opportunities. I'll post when this happens.