Market Timing – Best Online Trades

The Bullish Case for the sp500

February 7, 2012September 27, 2011 by Tom

The sp500 is looking quite bullish as we go into the end of month and end of quarter window dressing time frame. It is looking like ‘they’ will squeeze this market right up into the end of quarter. Depending on how high they squeeze it, we could see some dramatic improvement on the longer term … Read more

Is the Market Building Steam to Bust Down or Up

February 7, 2012June 27, 2011 by Tom

What is the verdict? The sp500 has for the last couple of weeks been trading in a rectangle formation with bit moves to the upside and big moves to the downside. Add up one big up move minus one big down move and the net result is zero progress. Or is it?

Well it is progress towards an eventual outcome that will either be bearish or bullish.

The Bullish Case

The bullish interpretation is that the current trading rectangle formation is a pausing point of the recent mini bear and then a reversal point where prices consolidate and then bust out north from the rectangle.

The bullish interpretation is currently supported by the fact that the recent mini foundation of price work is on a lower relative volume than occurred on the SPY in mid March 2011. That would seem to support the case that the current rectangle is serving as a pause point and reversal point.

BestOnlineTrades Nails the Low in the Market Again BOT Signal Chronology

February 7, 2012June 21, 2011 by Tom

After today’s price action in the sp500, it appears once again that BestOnlineTrades dot com has nailed the low in the market with a good amount of precision.

We do not claim to be perfect here at BestOnlineTrades.com. We do not pick perfect bottoms and perfect tops, but we know how to read the tape and follow the price action and the volume resulting in occasional powerful long or short signals in the sp500. During the last few weeks I have barely followed the economic or fundamental news. I do not watch CNBC or read Bloomberg any more.

I would say that my exposure to business fundamental news stories is almost non existent. I follow the tape 99% and maybe occasionally get 1% exposure to macro fundamental news (sometimes it is just impossible to avoid, ie. driving in the car and hear news summaries between commercial breaks etc.).

In fact, I would say that my lack of exposure to fundamental news stories and lack of interest in them puts BestOnlineTrades at a very key competitive advantage relative to many other market timers and newsletter writers and other traders. Why? Because I am making my decisions based solely on the tape action and the volume. Not just that, but also the interpretation of them minus any news bias.

sp500 Bounces from Large Swing Trading Range

February 7, 2012June 9, 2011 by Tom

There is some risk to the short side from here. I was thinking about switching to a BOT Long signal today in the AM but held back.. But that my very well have been the right course of action. But I would rather wait another day or two for confirmation. We appear to be bouncing … Read more

Here is a Possible Crash Scenario for the sp500

February 7, 2012April 13, 2011 by Tom

Here at BestOnlineTrades we like to consider a realm of possibilities for the market at any one time. Sometimes they are bullish, sometimes they are bearish, and sometimes there exists a very remote possibility of a stock market crash.

So, after reviewing a few charts of the sp500 in the current time frame and the 1987 time frame and then also the XLF financials ETF, we see that there is a possible window for a crash to develop.

These types of setups can occur a few times every few years and 99% of the time they fail and do not lead to the massive volatility of a stock market crash. Still, I like to display and consider possibilities, but am well aware that bearish expectation must be kept under control and ‘tempered’ significantly depending on price action developments.

In some cases a posting like this can be a strong contrary signal! (in other words meaning that we may have hit bottom).

However at this time I do not see much expectation for a big drop in the market. In fact when we get a reactionary rally back up to the old 52 week highs, it tends to really discourage the bears and short sellers and squeezes them out, sometimes leading to a new decline that becomes very persistent because of their lack of participation and short covering.

sp500 Could Surprise to the Upside Again Next Week

February 7, 2012March 26, 2011 by Tom

The sp500 might surprise to the upside again next week and one very big part of the reason may be end of quarter and end of month window dressing. There are four trading days left in the month next week and four trading days left in the quarter next week. If the past is any guide, these last four days could have an upward bias to finish the week.

The sp500 on 3/25/2011 managed to bust back above the mini bear down trend line and was also able to trade a full price bar (both high and low) above this down trend line. It was not a big sign of strength to end the week but it still managed to break above the near term down trend.

Right now I would describe the price action as being in a ‘neutral zone’ (the yellow shaded area below) that is neither very bullish or very bearish. It is still constrained within a zone of previous resistance. The next most important challenge level is 1332. There is likely to be some selling from that level assuming we can get up there next week. If we do get to that point then I would look for selling to be contained within the yellow neutral zone to keep the most bullish chances for the market.

Back to Long the sp500 at 1315

February 7, 2012March 25, 2011 by Tom

Today I have to initiate the BOT long signal again on the sp500. The market has spoken and appears to be in absolutely no mood for more bearish price action at this time. Currently the sp500 is trading slightly above its ‘mini bear’ down trend line and as long as price holds above this line … Read more

Stock Market is Likely to Trade Decisively Off of Friday’s GDP Number

February 7, 2012March 23, 2011 by Tom

The way the market is trading right now suggest to me that it is going to make a decision off of the GDP number this Friday. Odds seem to suggest that the number will either be in line or good which would seem to support a break out type move.

In recent days I have been focusing on the IWM Russell 2000 ETF as a possible leading indicator. The Silver ETF has been perhaps the ultimate leading indicator (new 52 week highs today) with the Gold ETF being the second best leading indicator (Right at previous 52 week highs, but not new 52 week highs yet). Then I would say the IWM falls in third place.

I do not want to ‘pre judge’ the IWM ETF too much at this point. My bias now is that it is headed for an upside breakout from the current congestion range, but depending on how the end of week shapes up, it could still be at risk of a move back down into the neutral zone.

Making any commitment now would be a mistake because the market has not made any clear decision yet. It still has to work out a few small battles in the near term.

A break down through the short term up trend line is the first indication that something is wrong with the potential northward breakout.

sp500 in Bounce Mode but Bumping Its Head on Rusty Nails

February 7, 2012March 17, 2011 by Tom

The sp500 so far early today is in strong bounce mode. Yesterdays high closing ARMS reading apparently was the clue that we were overdue for an oversold type bounce. So now the question… is today the bottom? or is it just an oversold dead cat bounce to be followed by another big drop into the … Read more

sp500 Likely to Find First Stopping Point Either at 1220 or 1180

February 7, 2012March 16, 2011 by Tom

Today the sp500 made it very clear that it was in no mood to get a real bounce going or a reversal of any kind. Instead the exact opposite occurred. We made a lower low on dramatically heavier volume. That says to me that instead of the market moving into some type of short term high on 3/18/11 or 3/21/11 it looks more likely that it will make some type of spike low into these dates. This could end up being the first tradeable bottom of the current decline.

It just feels like the current decline has not reached an exhaustion point yet. This decline is still too orderly and structured. In addition I do not see any clear or obvious candlestick reversal patterns today to work from. Had we closed today near the opening price then it would have at least opened the door to a big hammer reversal candlestick. But this was not the case.

Everything I am looking at seems to suggest that we should push towards some type of climax bottom, perhaps during the next 2 to 3 trading days. It really does not make much sense that a bottom would be formed on a Thursday or a Friday given everything that is going on right now in the world, so Monday 3/21/11 seems like the obvious choice. But then what would the market do on a Thursday? Perhaps Thursday we get some type of meager bounce which then eventually leads to a roll over on Friday and then capitulation on Monday.