August 19, 2017

Archives for September 2006

Another Range-Bound Day. What Will Next Week Bring?

Today marked the third straight day of tight range-bound trading in the S&P. Historically, when we witness this type of action in the S&P, weakness typically follows. Furthermore, the S&P continues to struggle with strong overhead resistance and the divergence between the small and large caps has been notable over the short-term. The list of short-term bearish indicators goes on and on. Next week brings the beginning of the month seasonal bullishness and October happens to be stronger than most months. If the seasonal tendencies hold true (which they haven't lately) as I stated over the past couple of days, any spike higher will most likely be short-lived. The move could be sharp and quick so be nimble. I will only start to become … [Read more...]

The Market Manages to Stay Alfoat (How Long Can It Last?)

For the second straight day the market traded in a fairly tight range. The market held steady today but how long can the bulls keep it alfoat? SPY and DIA have yet to break through the strong resistance that lies immediately overhead and three out the four major indices remain in an overbought state. Historically, the longer an indice stays in an overbought/oversold position the sharper the reversal (at-least over the short-term). Given the poor action, by both buyers and sellers I have to think a short-term reversal is near (within the next day or two). It would not surprise me to see a sharp spike higher that initiates the short-term wave of selling. This type of action is typical during in this type of market. If this does occur … [Read more...]

Patience, Patience, Patience

Sitting on the sidelines is often the best course of action. Market action has been unseasonably strong and the talking heads have been hyping up new all-time highs in the Dow (DIA). We have all seen this before.  There is no denying the recent strength in the market, however, will the recent move be sustainable. The S&P and Dow have moved further into overbought territory and are on the verge of moving into a "very overbought" situation. Another push higher and I will be tempted especially if we can get at least three of the indices into a "very overbought" state. We are hovering around a strong resistance area and the last two trading days of September are historically very weak. Add these and a few more short-term bearish indicators … [Read more...]

Will the Russell Catch Up?

The Russell 2000 (IWM) has been mired in mediocrity the last few days as the other major indices have move rallied higher. The lacking performance in the Russell has kept the index in a neutral stance as the other big three move firmly into an overbought position. After the strong bounce off of strong support areas yesterday the S&P, Nasdaq 100, and Dow have not looked back. The bullish move has been quite amazing to say the least and should allow the month of September (historically the worst performing month in the market) to finish in the black. An anomaly to say the least.  Where do we go from here. Certainly the bulls have had much of the control over the last few months. All of this bullishness has left the VIX (fear gauge) near … [Read more...]

Strong Support in the S&P – Be Patient

Three out of the last five trading days, the S&P has held 1310. At this level, support looks "very strong". Every time the bears try to test this level the market bounces sharply higher. This scenario was reflected in today's trading as the market tested the 1310 area early this morning only to rally significantly higher. Now the market is once again back near the May highs. This could pose a problem for the bulls over the short-term, however, given the recent action (strong bounces off 1310) the probablity of move to new highs looks much better. If the market can break above this area of resistance and hold over the next few days we could be in for a nice move over the intermediate-term. But, keep an eye on how the S&P reacts at its … [Read more...]

Will the bulls step in here?

I stated yesterday that the chances looked good for a continuation of the short-term bearish move. Will it continue into next week? Weak seasonal conditions remain for the reasons stated in the past few posts and there are still a few bearish technical indicators that remain. However, we are reaching some important support areas, 1310 on the S&P to be exact. The bulls were tested several times at this area today and were able to hold each time. As I stated yesterday, how the market reacts over the next few days should give us a better glimpse as to whether or not this recent move will continue. If the second half of September lives up to its historical billing then we could see the gap close in the S&P and QQQQ from 8/16. I still think … [Read more...]

The bears finally made an appearance. How long will they stay?

The market moved sharply lower today. The bearish indicators that I have mentioned over the past week were just too much for the bulls to overcome. An "overbought" market, weak seasonality, historically low VIX, strong overhead resistance..., the list goes on and on. The major indices have moved back into a neutral state and I still think there is room to continue the move lower over the short-term. There are quite a few bearish factors out there that can't be ignored. The Nasdaq 100 is still hovering around the overbought territory so I think this particular indice will lead the charge lower. The next few days should give us a better idea if todays move will be sustained. We are back in the trading range that was established on 9/13. … [Read more...]

Where are the bears? Will they step in over the short-term?

The bulls continue to control the ticker as the major indices have managed to stay in overbought territory since 9/12 when the SPY closed the day at 131.69. September has certainly not lived up to its historical billing so far, although I would not count out the bears just yet. The second half  of September is far weaker historically than the first and given that the "big day" has passed we shall see if the bulls have enough steam to keep the market moving upward.  I still believe the market will sell-off over the short-term before the bulls can push this market substantially higher. It is hard to ignore all of the bearish indicators out there right now. The major indices continue to be "overbought" to "very overbought", the VIX is … [Read more...]

The Pullback and Trade Results

 I normally do not do this but I have decided to post our trading results today. The perforamnce of the ETF Extremes strategy has been outstanding so far and by the response we could be closing out the strategy to new subscribers very soon. I thought all of my loyal readers should know this ahead of time just in case you planned on signing up with our service. We will have to add subscribers to a waiting list once our subscriber limit is met. Another signal was issued in our ETF Extremes strategy on Monday. Several of our proprietary indicators were in “extreme” territory, so as a result we sent out the following trade alert to our participating subscribers: Buy to Open SPY Nov06 133 puts (SFBWC) for $2.40. We were anticipating a sharp … [Read more...]

Where is the pullback?

As I stated last week, "oftentimes, sharp moves during expiration week can be deceiving. Will this past week’s move fall into that category? Not sure. But, I can tell you that the technical picture is pointing towards a short-term move lower. The Nasdaq 100 and Dow are now in a “very overbought” state, just another feather in the bears cap going into next week. When the indices reach this type of level the probability for a short-term pullback starts to look very good. Well, I have been talking about a short-term pullback for several days now and we continue to trade in the top edge of the current trading range. Bearish indicators and tendencies continue to pile up, yet the market has been able to hold its current position. The second … [Read more...]