Today and Past

Here is the INDU a year ago.

CHECK OUT THE VIDEO REVIEW FOR THE WEEK!!!!!!!

1st Video Review!!!

Best if viewed at 720 minimum.

I am sorry for how amatuer the first video is but I really wanted to try this instead of posting charts.

Tell me what you think!!!

Why Charts + Sentiment?

Charts - Cannot lie

Easy!!! Huge institutions usually leave tracks on where they think the market is going: Volume provides clues as to the intensity of that trend. 

Volume

Volume is the number of shares traded during a time frame (e.g., hour, day, week, month, etc.). The analysis of volume is a simple but very important for the of technical analyst. Volume gives clues as to the intensity of a price move. 

Trend

Refers to the direction of prices. Rising peaks and troughs form an uptrend; falling peaks and troughs form a downtrend. A trading range is characterized by horizontal peaks and troughs. Trends are generally classified into major (longer than a year), intermediate (one to six months), or short (less than a month).

Sentiment - Crowd is usually wrong

Psychology! What is being traded is people, not stocks. People never change...most traders keep on making the same mistakes again and again. That is good for us!

Open Interest 

Open interest for options is very similar to shares outstanding for stocks. Open interest helps to gauge sentiment in the options market. The higher the put/call open interest ratio, the more negativity on the index or equity. The lower the put/call open interest ratio, the more optimism there is. 

Short Interest 

The number of shares that bearish traders and investors have sold short is an equity’s short interest. This data is issued by the major stock exchanges. When short selling the investor hopes that the stock’s price will decline, permitting a future repurchase of the shares at a lower price to repay the lender.

NDX 100 (7 21 10)

Quick mid week post!

 We have a battle in our hands! We're in the 7th round, of 12, and the bull is a little dazed. He's lost the last 2 rounds but looks somewhat determined to get back in it.

Is the bear a tad cocky or is he confident? He lost 3 rounds in a row after a monster debut. However he's had 2 good rounds and doesn't seem like he wants to let go.

Report 7 16 10

Howdy. Not a bad week over all. However that last day was a bit of a bummer. When I have a tad more time I will try and do a mid week analysis. Let's get this part started!

Naz 100

Mid Month Look

The markets are faring well this month. The only exception is the Russell. Oil has done the best while the US Dollar is having a bad month. The precious metals are lagging and perhaps are entering into a consolidation phase. We'll look more into that next week unless I have some time during the week.

Conclusion:
So far this month is looking decent for the bulls. Even if we pull back a tad more it will still be an up month. In and out of small trades is best.

We are most definitely positioning ourselves for a huge rally. This rally will come when most will not expect it. Most will not want to jump in and be too afraid. HOWEVER, I still feel we have a tad more downside. There is not enough fear out there and complacency has sunk in. Don't think so? Look at this!

Look at the volatility of the Nasdaq 100 and the S+P and notice that it is not as high as previous, when we had big down days and weeks, and we are lower then previous times!!! Oh the complacency = trouble!!!

Enjoy your trading!!!

Confession 11

Almost half the Dow reports this week. Here is the list:

International Business Machines Corp. (NYSE: IBM)
Johnson & Johnson (NYSE: JNJ)
The Coca-Cola Company (NYSE: KO)
United Technologies Corp. (NYSE: UTX)
3M Co. (NYSE: MMM)
AT&T, Inc. (NYSE: T)
The Travelers Companies, Inc. (NYSE: TRV)
American Express Company (NYSE: AXP)
Microsoft Corporation (NASDAQ: MSFT)
McDonald’s Corp. (NYSE: MCD)
Verizon Communications Inc. (NYSE: VZ)

More Bite the Dust

Regulators shut down 3 banks in Florida, 2 in South Carolina and 1 in Michigan. 96 closures nationwide this year is far more than 2009, which was already a brisk year for shutdowns. By this time last year, regulators had closed 57 banks.

As losses have mounted he growing bank failures have sapped billions of dollars out of the deposit insurance fund. It fell into the red last year, and its deficit stood at $20.7 billion as of March 31.

Yahoo

Central Banks Abandon $

Last week, the United Nations released a report concluding that the dollar should no longer be the world's reserve currency because it is not stable enough. The dollar is down 5% over the past month, and even currency traders don't see it as a safe haven any more.

 

Just last week, America's debt lept $166 billion in a single day. That one-day run-up is greater than the entire U.S. annual deficit in 2007.

Forbes

Fed Reserve Worries

(Reuters) - The U.S. Federal Reserve's list of worries may be getting longer.

A fading recovery, persistently high unemployment, Europe's debt troubles and commercial real estate losses have garnered most of the attention. But some Fed officials have begun talking more about another trouble zone -- recession-hit U.S. state and local government finances.

Full article here

Report 7 9 10

Hope you all had a great weekend. It was really hot this week in NY but it "cooled" down for the weekend. The markets have also been scorching! Will they also "cool down?"

Last week we mentioned that we were closing in on a short term bottom. Let's analyze to see what may be up ahead for this week

Naz 100

Dow

Interesting note before leaving:

Over the last 6 decades, between August and October, the S+P 500 has had 33 up years, nothing special. However, when you add up the losses of the remaining years the bears still win as the S+P in this time frame has totaled a negative return of around 20%!!!

I will point out that when the market trades lower in these time frames it really trades lower! 7 years have been 10% or more. 3 years have been 15% or more.

What I Confirmed Long Ago

People are beginning to see and realize that the Dow is forming a Head and Shoulders pattern. About time!

I saw this early to mid 09 and showed it to a few colleagues at work. As usual people don't like negative news or underestimate the validity of technicians. Not all are the same my friends.


 Click here for source

US - $2Bil For Solar

Nearly $2bn in loan guarantees will be given to two companies to kick-start the US solar energy industry, President Barack Obama has announced.

One of the firms, Abengoa Solar, says that it is planning to build the largest solar power plant in the world in Arizona.

Full article here.

Question. Does the US not have solar companies?

Report for 7 2 2010

Let's start this month off with a some comparisons of how the US markets and other vehicles have fared against each other.Once a month, at the beginning, we'll report and see how the markets fared in previous time frames.

US vs Gold, Silver and Crude 1 Year

 US vs Gold, Silver and Crude YTD

 US vs Gold, Silver and Crude Month

Including the monster gains of last year this market is still up on a "365 day" basis. The worst performer was the US Dollar and the best were the precious metals. 

YTD the precious metals have done well but surprisingly so has the US Dollar. Interesting that these two have done well considering that they normally have an inverse relationship.

Over the last month everything has been beaten up. Best performer, and the only one posting a positive return, is the Amex followed by gold. The biggest loser, and only one in double digits, is the Russel 2k. Interesting to note that precious metals as well as the US Dollar are still trading very close.

Now let's take a peek on how they look on a chart with a 2 month time frame.

The Amex is the only US index that has a higher low! It also seems like their 20 day simple moving average is the only one that wants to crossover. Interesting. The precious metals and the Dollar are the only ones where the 20 SMA is trading above the 50 SMA.

Let's dissect the Dow.

Weekly

Daily

DIA Dow Diamond ETF Short Interest

Shares (millions): 11.80

Short Interest Ratio: 0.80

Percent Change: 4.8%

Short Interest/Float: 14.7%

DIA Dow Diamond ETF Put call Ratio

P/C ratio 1.41

Percentile Rank: 73 %

High (1 year): 2.87
 Low (1 year): 0.78

Enjoy your trading!!!

INDU 6 4 2010

This will lead to my next post on the Industrials.

US Martket vs All

You think the US market has been bad? Think again! Ouch on China! Since the beginning of the year bonds have been king. Gold and oil have not fared bad against the overall markets but seem to be losing a little strength. The only anomaly is the German markets. Impressive.

How $ Truly Works

 

This is a must for all that want to know how our money system really works.

Last 7 days?

Over the last 7 trading days the NASDAQ 100, DOW INDUSTRIALS, SP 500, US$ , GOLD, SILVER, LIGHT CRUDE, EVERYTHING has been going down!!! Interesting. Hmmm

IAG 10 23 09

Nice looking chart!

Broke out of an inverse head and shoulders pattern in the beginning of 09. Since then up moves have been on heavy volume and down moves on light. In September and October there was heavy accumulation and looks like a great buy on this pullback on light volume. Breaks 16 and it is gone!

There is also a huge short on this company and few analysts like it. Perfect set up for a contrarian play!

INDU 5 21 2010

 

Just a quick observance and one can see a head and shoulders pattern forming on a long term monthly cart.

A) Could trade between 9 and 11k for the next 2-3 years and maybe even 4-5. As one can see we've had a humongous run over the decades.

B) IF, IF, IF this head and shoulders pattern plays out, as this is one of the most bearish chart patterns, then we can expect a crash of EPIC proportions.

C) 1st scenario: If the DJ recuperates the recent highs and then the next level to test would be 12k. If it tests and then overcomes then 13 and 14k will be the next targets and the H+S pattern is done.

2nd scenario - DJ trades sideways 1-3 years then tests the neckline, 7k, and if it, if, if, it breaks then expect all heck to break out.

Conclusion:

Because of the financial situation in the US and worldwide I am swaying towards a continuation of the H+S pattern forming and perhaps even breaking... I am preparing for this. If I am wrong the investments I will be in should still do well regardless.