IWM (May 08, 2009)

IWM is showing some signs of distribution, the chart is telling us that there is some upward to sideways biased price action moving forward.

I will be watching this for any strong positive divergence to surface by next Tuesday or Wednesday.

Stress Test Results (May 08, 2009)

Just keeping a record of the Bank Stress Test Results:

Capital Needs of Big U.S. Banks (in alphabetical order)
American Express [AXP 25.97 -1.17 (-4.31%) ] None
Bank of America [BAC 13.51 0.82 (+6.46%) ] $33.9 Billion
Bank of New York [BK 29.51 -0.95 (-3.12%) ] None
BB&T [BBT 25.34 -2.36 (-8.52%) ] None
Capital One Financial [COF 26.45 4.06 (+18.13%) ] None
Citigroup [C 3.81 -0.05 (-1.3%) ] $5.5 Billion
Fifth Third [FITB 5.346 0.068 (+1.29%) ] $1.1 billion
GMAC [GJM 12.52 0.37 (+3.05%) ] $11.5 Billion
Goldman Sachs [GS 133.73 -5.49 (-3.94%) ] None
JPMorgan Chase [JPM 35.24 -1.98 (-5.32%) ] None
KeyCorp [KEY 6.78 -0.91 (-11.83%) ] $1.8 billion
MetLife [MET 31.75 -0.60 (-1.85%) ] None
Morgan Stanley [MS 27.14 -1.37 (-4.81%) ] $1.8 Billion
PNC Financial [PNC 44.47 -2.99 (-6.3%) ] $0.6 Billion
Regions Financial [RF 5.23 -0.60 (-10.29%) ] $2.5 billion
State Street [STT 37.83 -1.30 (-3.32%) ] None
SunTrust Banks [STI 18.52 -0.97 (-4.98%) ] $2.2 billion
U.S. Bancorp [USB 19.56 -1.73 (-8.13%) ] None
Wells Fargo [WFC 24.76 -2.08 (-7.75%) ] $13.7 Billion

What to watch out for on Friday (May 08, 2009)

Well...first and foremost, I do not regard yesterday's sell off as a trend change just yet. The uptrend still has a lot of fans...even the bears are anxiously waiting to buy some dips.

I have never tried to predict the market, for those who missed this rally...coming back down to SPY - 87.5 is like a dream come true to do some dip buying. Note the stochastics....the uptrend is as intact as can be....


Taking a look at the QQQQs, the uptrend is also pretty much intact.


AMZN is as volatile as ever, we should see some interesting moves today.


Crude Oil continues to be in an uptrend this could be sticky, I think it all depends on the trend of the dollar.


OIH could stay in a trading range between 98-105 for a while to get rid of the excess supply between Oct - Dec 2008.


Copper is currently in overbought territory. So I will be staying away from FCX for a while until I see some trend emerging. The 200 MA should act as immediate support for some possible sideways action





For friday, my eyes are on the VIX, GS, OIH, AMZN, FCX

Things to watch out for tomorrow (May 07, 2009)

Doesn't it make you wonder why BAC or C are up today despite reports saying that they need more capital to get through this depression? Well...I am not....

The government is going to make sure that the economy or the market will not fail...mark my words for it.

And our role as traders is to make profits from every trade we make....Not so much so about whether the market should tank or rocket upwards.

IMHO you are just wasting your energy and time worrying about that.

Lets talk about the psychology of the market at this moment. Traders are now waiting for any signs of pullback to get an opportunity to go long and short sellers are too scared to short

Under normal circumstances, the market will sell off after a big piece of news.....

Is this going to happen tomorrow?....Honestly, I don't know the answer yet...we just have to watch the charts to find out.

I am planning to remain focused on OIH, FCX, AMZN, Financials because... thus far the trading plan is still working.

Shorts are just Piggybacks (May 05, 2009)

When the government introduced measures to cope with abusive short selling...the whole game has changed ever since. The other thing is the "Uptick Rule" which has not been mentioned ever since the announcement was made to re-implement it.

Lets start off with this concept that "Shorts" are actually piggybacks on "Sellers". I have been pointing this out since the beginning of this rally.

There are still some funds still holding on to their positions which they purchased last year when the S&P 500 was around 850 - 900. These are the strong hands who will not let go of their holdings believing that the market will turnaround. History has proven them to be correct up to this point. Question is are they letting go anytime soon?

We must remember that the stock market is not a Wild Wild West, people will learn from their past mistakes and adapt to it. If "dinosaurs" are as adaptable and smart as we are they would not become extinct.

Moving forward the only risk I see is for the stock market to move sideways for long periods of time and this is not going to be a very profitable environment for directional option traders.

I do not disagree that the market can retrace at any time, but if you do not expose yourself to that sort of risk.....you are safe.

I still do not understand why some traders are still shorting the market when this market is still clearly in a strong uptrend.....Perhaps their gurus taught them to go short in a bull market..?

Ideas for Next Week (May 04, 2009)

Friday was a superb day for all kinds of Commodity from metals, agriculture, crude....etc...

Based on my research, most commodities tend to turnaround at this time of the year....so I will be quite cautious to not chase this perceived bullishness for commodities. For all you know this could be a possible bull trap?

However, this year could be different due to the fact that commodities have been hammered to very low prices since last year.

Now lets look at a few charts:

FCX has had a phenomenal run, if the bullishness in Copper continues we could be looking at 58 pretty soon. If you see any sideways action, stand aside....Sideways action could mean a possible trend change....IMHO. But don't get so silly by entering a trade when you don't see the market move. An insincere market has cruel intentions....lol


There is a slight negative divergence showing in OIH....but it could be nothing.....Technically OIH could test 102 at some point in time.


DBA could be testing 27 soon. I don't play this ....but sometimes I look at this chart to grasp the trend of agriculture. Apparently the market just schrug off the Swine Flu outbreak.


If I were to play any of these, my picks are OIH and FCX. Try to buy on dips only.

AMZN is setting itself up for a possible target of 74.79 or 86.6.