Tom

75 Percent Down from here

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I recently stumbled upon a blog posting by Peter Brandt, a technical trader who did a very long term blog posting on the major indices.  I have to say that after reviewing it, it became clear to me about how potentially large the bearish possibilities are for the market. I have known about the possibility … Read more

Sell the Rumor and Buy the News

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You have probably heard the expression ‘Buy the rumor and sell the news’  ?  Well that strategy works very well when you are looking to go long a particular stock on some forward looking news.

The opposite of buy the rumor sell is the news, is ‘Sell the rumor and buy the news’.  This is exactly what I think is going on right now.  Traders have already begun selling the upcoming news next week (shorting it) and when the news arrives (whether it is debt news, or Fed QE3 news, or maybe something else) they will very likely buy to cover and close shorts right on neckline support.

Meanwhile major news networks are providing us with great informative updates about how the market will crash and it will be Armageddon next week.  I think even MSNBC showed a price chart of the DJIA a day ago showing how it declined.  All of them are talking about the stock market and how it will fall apart.  To give them some credit, they have been right about the decline leading up to the news.

So I currently recommend closing all shorts near the 1265 to 1270 sp500 range or the DJIA 12000 range.  I believe this support will hold and the market will bounce from there.  Of course that is not guaranteed.  Will have to see how the market reactions on neckline support and then take cues from there.  But I suspect we will see a mini capitulation near these levels.  We may dip under these levels briefly but I suspect it would only be for a very short time frame.

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A BOT Sell Signal Under sp500 1331

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I will automatically switch to an ‘industrial strength’ BOT Short Signal if the sp500 by the 4pm close today manages to close under 1331.  The preliminary sell signal would be history and the full one would be activated. A close under 1331 would activate an MACD histogram sell signal on the daily time frame and … Read more

Elliottwaver Makes Similar 2007 2011 Comparison

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This Elliottwave site makes a comparison between the 2007 and 2011 time frame to argue possibly that we are at a similar juncture for a break down as was the case in 2007.

Recently I have also done a 2007 2011 comparison with respect to the head and shoulders bottoming formations that were occurring near market highs.  The comparison is compelling and the elliottwave argument is also compelling.

Having said that I have to admit that the recent talk by politicians and TV network pundits on how the stock market will crash this Monday if there is no debt deal is quite concerning from a contrarian standpoint.  Suddenly the politicians and the TV talking heads are expert stock traders and can predict a market collapse this Monday?

Something does not click here.  From a contrarian standpoint I have to say that all this ‘market will dive’ talk unless there is a huge deal by end of this weekend is concerning.

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RPRX Poised for Possible Upside Breakout

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RPRX, a highly speculative biotech stock that I have mentioned on a previous occasion appears to be at an important juncture.  The juncture is the 6.50 price level which it needs to fully exceed (preferably with a full price bar above the level) to consider it a breakout.

It would also be good to see the 6.50 price level exceeded with 700,000 or more shares in volume.

A breakout is not a breakout until it actually is.  Strange as that may sound, it is true.  I have seen many a ‘potential’ breakout, only to see prices reverse by end of day and fail back under and into the previous range the stock was trading in.

If RPRX is not able to exceed the 6.50 level this upcoming week with conviction then one may have to assume it will remain range bound and head back to the bottom of the recent longer term trading range.

For now I do not believe that will happen.  My charts are saying that RPRX has a good shot at an upside breakout this week.

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