Serious Profit Taking

Serious Profit Taking

We have been warning for a week or so, that a day like today was coming. 

After a week of consolidation and the market doing nothing, we finally broke the support zone, and the S&P closed down -23.34   OR  -1.32%

As you can see below the big boys (SMART MONEY) are using this opportunity to start dumping.

what the big boys are doing?

Again, there is most likely more selling and profit taking to occur I think but again, while every so called analyst is calling a multi-generational top, and this is the start of a crash, we think this is just another type of DIP in a bull market.

You can see just how resilient this market is at the moment. We have one nice red day now, lets see what happens with one day left and the all important JOBS number that many traders will be watching.

The next few days on the market will be interesting!

Happy trading.



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Market Warning Us Here

Is the market warning us here?

This is a chart I normally only share with ONLY our  VIP ELITE GROUP  -- HERE!

However I thought it was interesting that the breath of most equities belonging to the S&P 500 are telling us after such a massive run on the market, we could be about to experience a bit of profit taking or pulling back on the market.

As I have previously written on my blog, yes we are in a BULL market, but BULL MARKETS do not go up in a straight line. Some bulls have trouble with this, however it is what it is.

As you can see the A50R is up at OVERBOUGHT areas, and at 81.00 I would be thinking its an area that smart money will start to take profits, and talking to some of my colleagues we know what these guys are up to, and if we do experience a bit of a sell off in the next few weeks, it will mean our thoughts are correct.

Hope this helps.

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Bearish flag showing

I was awake at 3am this morning and witness some pretty heavy sell stops going off one after the other today, and it seems that they were not finished today, and we are most likely to see more of the same either today or possibly later in the week.

Also we have broken out of a bearish flag on the DAILY SPX CHART so the bears are still winning here, and giving alot of weight to the market right now! OUCH!

bearish flag on SPX chart

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Is The Market Really Crashing

Is The Market Really Crashing ?

Having a look around the blogosphere this morning I was quite alarmed at what I was reading. There seems to be some so called analysts and news media sites calling the sell off we have been witness too the start of a bigger crash and or meltdown on the market.

WOW! I think these are big statements but would like to take the time to help traders young and old as to what I think ('IN MY HUMBLE OPINION' - of course) is really going on right now in a few simple sentences.

Before I do that, it is important to show you a chart, so lets go to the most damaged indicie chart right now the DOW JONES DAILY CHART.....

Is The Market Really Crashing

As you can see on the chart above we have gone from 15500 all the way to the 14976 level. So in saying that we have sold off just over 500 points as you read this. No where near a crash, that is for sure.

In fact, in terms of the huge move up we saw back in JUNE - AUGUST we have only taken off about half of those profits so far. So again, it is nothing really to sneeze at.

Here are some other important NOTES to REMEMBER :-

* We have rallied quite extensively in 2013 and profit taking is always going to occur.

* We are currently in a BULL MARKET and no where does it state bull markets must go UP IN A STRAIGHT LINE. 

* There has been no let-up in the 'taper tantrum' that has demolished stocks across the emerging markets in recent months.

* The fed has not issued their TAPERING statement this will happen NEXT MONTH.

* Spiking interest rates is putting pressure on the overall market.

* This is AUGUST and notoriously known to be low volume, and prone for corrections over the decades as smart money and bigger traders are on holiday, and totally out of the market.

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spx bearish flag showing after FOMC

spx bearish flag showing after FOMC

Our VIP ELITE GROUP HERE!  Got plenty of warning about what was coming today.  The TRIN reading was pretty much giving it away.

Todays FOMC meeting was a chance for the bears to really come back and grit their teeth so to speak. The Market sold off hard down to the low 1620's and right now if you look at the chart there seems to have been a bearish flag that has formed.

If we break the 1615 level on the S&P that could spell real trouble and the market is not looking very healthy here.

spx chart - bearish flag playing out ?

Since the middle of May, if you remember back Dummy boy Bernanke and his cartmen stubled and stammered on congress hill and hinted about the end of QE and stimulus into the market. Today was just reiterating that.

News is nothing more than boring for me, and this came out in the charts first. This pattern now, or I would think it is a high probability bearish flag (meaning there is a strong chance of more movements to the downside) could play out now, as retail traders try to decipher the news, while we just trade the charts. :-) ** insert cheesy grin here **

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Market Breadth Chart

With all the relentless selling in the market over the last few weeks you can see that we are back down to fair value on the market breadth chart. Every time we get down under the green line and rally back above, there is a good chance the market sees some more buyers come on board. The next few days will be interesting as we are coming up for a fed meeting next week, and we see what Mr Bernanke Wanky has to say about QE tapering.

More lies, and more bullshit from the fed and government! There is one thing that we can be very thankful for, and that is charts like this below. WHY? Well simple, the charts never ever LIE! :-)

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dow jones transports daily chart - very telling.

The chart below is quite telling  - Which we have been talking about in the VIP ROOM HERE!

The top chart is the DOW JONES index, and bottom chart is the leader of the indicies the DOW JONES transportation average. As you can see, the leader has now crossed the 50 EMA moving average line. That is not a good thing, and sellers have come back into this market the last few weeks, and this is very clear. 

The alarm bells are ringing, however if you look at the top chart we have had a very massive bull run for the last several months, so the negative action over the last few days does not surprise us. 

Normally each year on the market, no matter if you are in a bull market or bear market you will normally always get one large corrective sell off. We could be seeing that now, and time will tell. 

dow jones transports chart

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nikkei crash - nikkei stock market

nikkei crash - nikkei stock market

nikkei crash - nikkei stock market

Well...ok, I admit this is not a crash. It was just the nikkei being put in its place after an exuberant rally.

Just weeks ago Japan had to INJECT over $19 billion Dollars into the financial system.

Today was horrific today, asn the nikkei stock market crashed. Right now as you read this the nikkei 225 is down down 1500 points from its highs and down 1150 (over 7%) from yesterday's close.

High-to-low this is the biggest drop in 26 months... and down 1000 points from its earlier highs.

All the time it is just the quadrillion JPY second-largest bond market in the world that is experiencing volatility on an unprecedented scale, the BoJ and her partners in crime are more than willing to 'officially' say "please do not worry." But when the equity market - that barometer of everything good and holy about Abenomics starts to crater, you can bet the excuses will come fast and furious.

Today's drop of over 1500 points (over 9%) from the earlier highs is the largest drop for the Nikkei 225 since March 2011. The Nikkei 225 just lost the all-powerful 15,000 level and is suffering another VaR shock with a 6-sigma move today. In fact given the price levels this drop is on par with the post-Lehman moves in 2008.

The question now (with US equity futures also fading fast -20 points and JPY crosses getting hammered) is how will the Japanese risk appetite for peripheral European crap hold up with this crimping in their plan as Japanese bonds and stocks dump?


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Jimmy Swaggart Sermon On Shorting this market

THIS IS THE FRUSTRATION OF THE BEARS RIGHT NOW ON THE MARKET.

SEE BELOW!

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Is This Time Different - Is This A Dip Or A Sell Off

Is This Time Different? Is This A Dip Or A Sell Off

Dow down 52 points, but S&P 500 up 5 points — huh? IBM is down over $14, responsible for roughly 100 Dow points.

So what is happening? just yesterday we put out a MAJOR UPDATE to our  VIP SUBSCRIBERS - Download it here!     We told them what we thought is happening on the market. 

spx chart

Everyone wants to know, Is this time different? The meager three percent pullback in the S&P 500 at the end of February made a lot of traders believe that any pullback should be bought, but there has been a lot of discussion this week that this pullback might be different. The following arguments are being batted around:

1) the technicals are worse: this week has seen two days (Monday and Wednesday) where 90 percent of the volume was on the downside on very large volume; this has led many to question whether we are still in an up trend in the markets;

2) the macros are different: March and early April economic numbers (Philly Fed) have been weak (this is becoming a regular Spring event);

3) tech is in trouble; Fairchild Semi and Sandisk had notable drops yesterday, IBM is down four percent this morning on its earning miss, and Apple is at a new low 52-week low.

However, it's a little early to draw any conclusions from earnings, other than tech disappointment. Early bank reports (JPMorgan and Wells Fargo) were good, but Bank of America disappointed, and multi-industry company reports have been mixed. General Electric was fair but CEO Jeff Immelt noted ongoing weakness in Europe.

As of this morning,104 companies have reported (21 percent of the S&P 500), with 67 percent beating expectations — slightly above the norm. Earnings are 2.0 percent higher than the same period last year, with revenue outpacing last year by 3.2 percent, according to S&P Capital IQ. However, guidance has been cautious to

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dow jones industrial average high - what next

dow jones industrial average high

The recent dow jones industrial average high  was interesting but what is next for the market leader. That is an interesting question. As you know sentment trader does like to watch the dow jones industrial average as this is the leader of the market, normally if you can analyse this chart correctly, you can get a gauge on what is coming next for the S&P and other US indicies, and also the global markets, as it does tend to be a leader for those sometimes.

Right now there have been some significant developments with the dow jones industrial average chart.

If you have a look at the dow jones industrial average below you can see that there is a pure line in the sand, at about the 5900 level. There is good support there the buyers keep coming in at, however we feel that the bears at the moment are not only having some fun, but winning the tug-o-war if you like.

The dow jones industrial average chart has been hitting lower highs since the start of March 2013 and that is another warning lower prices are on the cards soon. We will watch and wait.

dow jones industrial average

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Spx update - spx weekly update

spx weekly update

The market sold off into the weekend with talks about North Korea on the verge of war and the spillover from the Cyrus crisis.

Unemployment still remains a big problem and the market did not like that at all, and we still have a gloomy outlook. However when we take a look at the chart below, we can see the market even through the bashing, and bad news has remain pretty buoyant. Perhaps people are jumping to conclusions too soon, and we do not have a big reason to panic just yet.

It is clear the market is totally dislocated away from any bad news at the moment as a whole. There have been a few blips and blops along the way, however the market still has strength attached to its name.

spx weekly update

As you can see, we are still in a major bullish uptrend, and things are not looking too bad in the bigger picture. A few months back we even included the bull / bear ratio chart that convinced us we are still in a bull market. When you take a look at this chart you can see why.

This week was not good for the market, that is for sure. Further more it could even be the start of a much larger correction as we have been hinting. But for now the leader of the market the dow jones transportation average still remains above critical support and above the major averages.

It would be wise to monitor these support levels in the coming weeks, as a breach of these levels would not bode well for the markets.  But until that happens there is no real reason to throw hands up in the air and panic.


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Dow Transports Fall Hard—A Sign Market Rally Could Be Cracking

Dow Transports Fall Hard—A Sign Market Rally Could Be Cracking

Today the Dow Transports Fall Hard—A Sign Market Rally Could Be Cracking...

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Lets Take a look at the dow Transports chart. As you can see, the leader of the market is looking very bad. The S&P 500 has just started to crack, however the dow jones transports have given us a few days notice that something was in the woodwork...

dow jones transports

Its seems that the major uptrend line has been broken. As we have been saying for a few weeks now, the bears could be back.

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From : CNBC

The sharp selloff in the Dow Transportation index this week is causing some strategists to wonder what is happening.

The Transportation index—which led the market higher in the last few months—surged 13 percent for the first quarter, while the Dow Jones climbed 11 percent in the same period. The Transports, considered by some to be an economic bellwether are up 22 percent since the market rally began in November, while the Dow is up 16 percent and the S&P 500 is up 14.8 percent.

But this week, the Dow Transports declined more than 1 percent each day and broke below the 50-day moving average in a third day of selling Wednesday. The last time the index dropped 1 percent or more a day, in a three day period, was back in July.

By Wednesday, the broader stock market joined the sell off, logging its worst one-day performance in over a month. The losses came a day after the Dow and S&P 500 both closed at record highs.

Stocks continue to hit new highs daily, but are the good times about to end? The FMHR traders, discuss. Also, Larry MacDonald of Newedge and Savita Subramanian of Bank of America Merrill Lynch, share their market outlooks.The initial divergence in the indexes earlier this week was a red flag for traders, who also were watching an outsized drop in the small cap Russell 2000 index. The Russell is down 3.5 percent for the week so far. The Dow Transports are down nearly 4 percent, while the Dow is down just 0.2 percent and the S&P 500 is off nearly 1 percent.

For Dow Theory enthusiasts, the Dow Jones Industrial Average and the Dow Jones Transportation index need to move in lockstep to reach new highs or lows. A separation implies that the market will decline to its former trading range.

 "Given the fact that the small caps and transports have played a major role in the advance of this rally over the last few months, this is something to watch and could represent a potential turning point or lead to some churning in the days ahead," said Michael Sheldon, chief market strategist at RDM Financial Group.

But with the growing number of traders and strategists expecting a market pullback on the heels of the robust first-quarter rally, the latest action in small caps and transports have some wondering if the steepness of the declines could be signs that cracks are forming in the recent rally.

"Trying to predict when the market is going to pullback is hard…but the market has had a significant advance so it would only be natural and healthy to digest some of the gains as investors look for the next catalyst," said Sheldon.

Meanwhile, some experts downplayed the concerns, saying history shows the divergence doesn't always lead to a longer-term downtrend.

Looking at small caps, for instance, there have been only five other two-day periods in the last decade where the S&P 500 traded up while at the same time, the Russell 2000 traded down more than 1.5 percent. And according to Bespoke Investment Group, the S&P 500 has been up an average of nearly 5.5 percent in the following month. Similarly, the Russell 2000 also saw remarkable gains with an average return of more than 8 percent.

"While there has been a lot of angst over the recent underperformance of small caps, based on the historical record, these periods have typically not been a sign of the beginning of a longer-term downtrend for small caps or the overall market," according to a note from Bespoke.


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Nasdaq weekly update - Nasdaq weekly update

Nasdaq weekly update


Taking a look at the nasdaq chart on the weekly timeframe we can see that for the last few weeks, things are getting tired. The nasdaq rallied up to the previous highs in September 2012 and had trouble to get above those levels. Now the nasdaq seems to be sinking a bit.

The below indicators seems to be suggesting, there is certain headwinds that are possibly coming for the markets. The stochastics are turning and are almost on a sell signal. So it seems the market right now has lost its spark, and we are getting a few warning shots 'across the bow' so to speak.

Nasdaq weekly chart

The USD dollar chart (or the inverse trade UUP) broke out of a falling resistance line in FEB 2013, and since then has been on a steady climb upwards. This significant strength, could be another warning sign.

USD chart

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Broke To The Upside

Well we were saying the range on the S&P should be watched carefully, and said it was not long till we broke either upside or downside.

You can see in our LAST POST HERE

We broke to the upside, however I would not call it a convincing break!. The bulls yet again still have the upper hand I think. We are still up past our 1500 level we called months ago, and still the bears do not seem to be making their mark.

Yes, we are still in a bull market, however I can say to you that we are starting to see some very interesting signals on the charts, and a few warning signs that market may soon get a bit tired.


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risk on risk off - is it risk on or risk off

weeeeeeee! Up We Gooooooo!!!! LOL :P

The S&P is up over 70 points in 3 days. WOW! IT has been a complete BEAR SMOKING to the upside here.

We warned our readers to not fall in love with the downside, when we were in low volume holiday trading and now you can see why :-)

Today was a good day in the market. MOC we had almost 7 billion volume to buy. Even though the markets are overextended, they can remain that way for a while. Bears have really been creamed in the last few days, and probably lost all hope. LOL :->

What is happening right now, is that we get all these little FALSE sell offs, and that has been tricking the bears. They have been trying to test the market on the sell side, they put in their buys stops, we rally up higher, then their stops go off like a rocket and that gives us more of a boost higher!

When you have NATURAL CASH buying or buyers in the market, like we do have right now they send us up higher and keep us triggering the buy programs and or buy stops up overhead. That's what I saw many weeks ago, and warned our readers and that is why we keep ripping to the upside.

Over the last 4 days, smart money has put $5.5 billion dollars to work in the broader markets. In laymen's terms this means in the short term, the markets are most likely to go HIGHER. YES!

I guess we can say that there is a little bit of risk here also at the moment. The higher the market goes up without any serious pullbacks, at some point we will get that pull back and it will probably be a good sized one.

Now we are above our important levels of 1440 and 1450, it means that we are possibly making our way to the 1485 - 1490 now, so prepare yourself. :-)

Already our members are off to a flying start for 2013, and we are only a few days in. :-)

Happy trading :-)



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What the charts say

If we take a look at summation, we have not hit a sell signal in the market yet. As we have been saying, there is not reason to FALL IN LOVE WITH THE DOWNSIDE at the moment, no matter what others are saying or telling you to do.

When the charts tell you to buy dips, that is the smartest thing you should do. If you have been doing this and following your charts, you should be doing very well.  That is still what the summation is screaming at us for now. When we get to debt ceiling and fourth quarter reports, in a few weeks, that could be a different story but for now, that summation is still on a buy, and hinting to remain a bit cautious.










If you remember back a few weeks ago, we hinted that 1500 could be coming on the market. YOU CAN READ THE POST HERE . I called it a wild prediction, however with the fiscal cliff drama out of the way, it DOES NOT seem so much of a wild prediction any more.  Some readers did laugh off such claims, but see how 2 days can make a difference on the market.

Infact if we take a look at the weekly S&P chart, you can see how 1500 is not very far away at all now. The band-aid fix to the fiscal cliff did help alot and we would not be surprised to see 1500 come. I guess time will tell.

spx weekly chart

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