IWM, MS, RIMM (08 Jan, 2009)

RIMM has had quite a good run, if this stock does not rebound today...watch out for a retracement to 45 or 42.



MS could retrace further if there is no major rebound, possible target is around 16 area.



IWM could retrace further if there is no major rebound to a possible target of 48.


As you can see, the trading range is getting tighter and tighter. Next week will be a major test of the overrall market to see if all those major resistance hold.

Im still in daytrading mode.

SPY - Analysis of Resistance

It seems like there is so much supply above 935...approximately 1 - 1.5 billion or less accumulated from 10/10/2008.

Our chances for breaching this level depends on how much of these supplies has been released when SPY sold off to hit the bottom on 24/11/2008.

Today, we tested 936 briefly on low volume...but I doubt that was any real test of that level. Sellers could just be waiting up there to get rid of some of their supply....but the bulls chickened out and pulled back.

So I will assume that, we will continue trading in the range of between 850 to 935 for a longer time.....unless I see sufficient volume coming in to retest and buy up those supplies.

In the short term, I expect the trading range to be real tight....unless MMs make an effort to pull back lower.

More 3X ETF to add to your watchlist

Direxion rolled out more 3X ETFs some time ago which I just got aware of.

They are:
DPK - Developed Markets Bear
DZK - Developed Markets Bull
EDC - Emerging Markets Bull
EDZ - Emerging Markets Bear
TYH - Technology Bull
TYP - Technology Bear

These 3Xs etfs will become a good alternative if the markets becomes too volatile in the coming weeks or months. The only trade off is, you will need to put more capital to work as compared to options.

Whether it is options, 3Xs ETFs or stock....the "Trend" is still your friend.

Here are the recommended time frames for each instrument in my style of trading:
Options: Minutes, Hours, Days
3X ETFs: Days, Weeks
Stock: Days, Weeks, Months, Years

Possible Top on Monday

This post broke the ALL TIME RECORD for highest hits.
What is the matter with you guys? Just back from the holidays?

EOD Updates: No reason to short anything yet, it is just one of those whipsaw day. Tuesday should be an interesting day, if we don't go higher..it all means that trading will continue to be range bound.

Thus far rallies have lasted at least 4 days, so there could still be some rallying on Monday. If not then it is a correction day.

If we rally tomorrow...then the charts are pointing to a possible top or reversal on Tuesday. This should correct any overbought condition on the charts. I am looking for a possible retracement of between 38.2% to 50% for this rally to stay alive.

In addition SPY and RUT charts also pointing to another turning point between 09/01/2008 and 12/01/2008. What that is all depends on how overbought and oversold the markets are by Thursday.






My strategy shall remain the same....day trading only.

My watchlist:
GS, OIH, XOM, CVX, IWM

Friday Review

Oil and gas prices rebounded from their lows with heavy volume. Is this another dead cat bounce? Possibly.... I see this bounce as triggered by "Russia - Ukraine issue" and "Israel - Gaza conflict" at the moment.

The volume on USO has increased by 3 fold over the last two weeks. As usual next Wednesday will be the real test to see how true is this move tied to the fundamentals.


XOM is approaching the top, perhaps 1 or 2 more days to rally. It is not time to open short positions until it rolls over.


If I were to play any intermediate longs, I would do that through CVX because it has some more room to run.


GS seems like a good short in the morning, only to squeeze off the bears later in the day. This stock has the ability to correct itself within a day. The best indicator now is the overall market sentiment.

Technically, GS can still hit 88-89...with similar intraday correction in play next week. Very tricky to go long or short...you have to be really fast! But most of the time, the Bulls make most of the money...so don't fight the trend.


IWM is showing some signs of flattening due to profit taking towards the end of the day.


The VIX seems to be attracted to the 39 - 40 level, indicating that most traders still fear something and are taking some profits of the table as we head into the weekend.

Things to watch for in the First Quarter

We closed the year 2008 on a more positive note...

The past year has been a great learning experience, I believe many traders are better traders now having survived those tough environments.

Today is the first day of trading for 2009, apparently there are no major companies reporting their earnings today...but next few weeks will be loaded with earning reports.

I am planning to load up on some VIX calls to take advantage of any sudden surge in volatility if the market decides to stop rallying.
Yes, VIX is falling...but it has not fallen off the cliff....I think it might have found itself some good support at around 40. The next level if it continues its decline is around 34...so we shall see.



GS will be an interesting stock to watch to see if it is going to break that key resistance level at 86-89. If not get ready to enter some shorts.


Likewise, IWM is also interesting to watch. I think it tested the key resistance on the 31st Dec 2008 and failed somewhat. If today's attempt is successful then IWM could be retesting the 50 level.


The SPY picture is slightly better, but there is still key resistance levels between 90 to 93.5 to break.


So for today, I will be looking for short side opportunities first.....hate to say this....But I will be more than happy to participate in any rally....lol ;)

My watch list:
GS, IWM, VIX ...still compiling my list

Strategy is as usual, Im still in daytrade mode.