SPX - November 10 to 11 a key date (Oct 29, 2009)

Going down to 1012? A rally to new highs in two days seems insane.... November 10-11 is a key cycle date and is also a holiday

SPX CCI buy signal, waiting for confirmation (Oct 27, 2009)

I have all along suspected that it could print a doji day today.....so not wasting my energy on doing any trades yet.

I see the first buy signal on CCI, so if we end with a doji day today...a higher high or lower low should be able to confirm the direction of the market....

Usually when the stochastics gives a signal, it should be a confirmation....the only thing is the stochastics is always 1 day late...lol.

I suspect the overall trend will be determined by the dollar strength

Bounce could be coming for GS and Transports (27 Oct, 2009)

The transports have a confluence of support at around here. So do not be suprised to see a bounce.



GS has a minor positive divergence, it is still trading sideways in a wide range.... Note the doji, ideally we want to see a more narrow ranged doji for us to pick a direction should we get a higher high or lower low.

IWM H and S forming (27 Oct, 2009)

This is a chart of the IWM, you can clearly see a Head and Shoulders forming, in this so called "bull market" bears often fall for the trap of shorting the hell of something that shows this pattern.

I think you need to stay alert for a rally from the neckline. In this case...the first one is around 59.

Watch the Rails (24 Oct, 2009)

The transports appear to be leading this leg down in the S&P 500. I believe there could be a possibility that some rails could retrace up to 50% in November.

Lets start with UNP.

Put action is pointing to a target price of 52.27 or lower.





Of course the other scenario is maybe UNP will stay above 59, we just have to wait and see. MMs who are playing this side of the coin have a lot of margin or perhaps they have already made their money when UNP was on its way down.


As for CSX, option activity seem to point to a possible low of 40.


As for the other two...BNI and NSC I have no comments on them at the moment. UNP tends to be a more speculative stock....so be careful out there...

GS options (Oct 22, 2009)

Just wish to share with you on my observations on GS option activity. GS started the descend on the 14th of October.



Imagine if you had purchased a put on the 180 strike price....You will only be be making real money beginning from 20th of October. Amazing isn't it..?

Point is GS made a lower high on 20th of October....but the decrease in volatility on that day made the put options on the 180 strike price seem ineffective.

On the other hand if you have shorted the sector using FAZ, you tend to get a higher high for this instrument when XLF was making lower lows.

On the other hand, if you have sold calls options at the 190 strike price. You can really see a huge difference....of course...I am not saying that writing calls is for everybody....just look at the gaps downs...if that had been a gap up...that could blow your account....lol



Another way is to buy deeper ITM puts like the 190 strike price....of course that will be more expensive...lol

My Strategy moving forward: Watch out for buy signals between 175 - 180.

Watch the Euro (Oct 6 , 2009)

Fundamentally, Euro is a currency to watch to gauge the direction of the stock market...whether you are trading earnings or commodity stocks.

Technically, the Euro is still in an uptrend if we look at the daily chart since Nov 2008. If we draw a Fibonacci Retracement from July 2008 highs to December 2008 lows. Notice that the FXE went above the 61.8% level momentarily in Sept 2009 before retracing back below this level recently.

What we should be watching for within the next few days will be whether the uptrend is going to continue if FXE gets above 61.8% again. If that happens then 149 could be the next level of resistance.

Up to now, I still haven't seen any signs of a change in trend unless the 20 EMA starts rolling over. Of course that doesn't necessarily have to be so, it could just hang around right about here and go sideways.

SPX next level to for bounce (Oct 2, 2009)

We are pretty close to another area of confluence of Fibonacci levels and support level. 1025 is an area that I will be watching for a bounce.

Revised GS possible target (Oct 1, 2009)

Option activity has changed....right now I have revised the target for GS to 180 for a start. At the moment I am relying on technical indicators for a trade.