Market Timing

SP500 Breaks First Critical Wedge Support Today on Heavy Volume

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The SPY slammed down through first trendline support today on substantial volume and once again confirmed the bear case that I have been talking about this week.  It was really bearish action today and the dip buying that used to work so well in recent months clearly failed this time. Right now I am thinking … Read more

Am I Too Early on the Short Trade ?

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I have a feeling that the ‘early shorts’ are going to get burned in the next week or two.  This market has shown itself to have a lot of very strong upward momentum and to turn minor corrections into pop up rallies. I was studying once again the 1974 and 2009 massive automatic rallies and … Read more

Bounce Next Week for the SP500 ?

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sp50020090925

I would have to describe the decline so far in the SP500 as ‘labored’.  I am not seeing panic or a total loss of price support at this point, instead just a slow and steady profit taking move.  The chart in this post shows that the SP500 is at the close of Friday sitting right on the steep blue uptrendline support and also at the minor horizontal support as defined by the red horizontal dotted line.

I am thinking that whatever type of decline we get in the weeks ahead may not be rapid or involve very large one day percentage moves like we saw during the 2008 period.  The reason for this is that we are just now coming off of an extremely overbought market and slowly transitioning to a mini bear leg. We are still trading above key moving averages and still to large degree the bulls are in control.  That is the mindset I am trying to keep right now because I don’t want to be too aggressive on the short side. 

I have a feeling that the coming decline in prices is going to be slow, labored and to be honest somewhat boring, especially when compared against the 2008 extremely rapid price declines.

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The SP500 Topped Today and it is Time to be Bearish

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spyetf20090923 The market topped today in my opinion and caution is advised for the next few weeks as I think we are in for some pretty severe downside.  There were plenty of significant reversals today and it looks like the SPY ETF showed a bearish engulfing candlestick pattern on heavy volume.

The structure of the market right now is still setup in a bearish divergence when we compare it to the pattern of the MACD.  It says that we should now have at least a month of downside price action with a few intermittent rallies in between.

Almost everything reversed today and a lot of the indices look bearish now whether it be stocks or commodities.  There are bearish divergences all over the place.

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I Will Stay Bullish On Spot Gold as Long as the Break Out Area Holds

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spotgold20090921 The GLD ETF declined today on what I consider to be light volume.  I think it is going to go into a sideways consolidation this week with an outside chance of a sharp reversal move up topside later in the week.  The setup still looks contructive to me on both the GLD ETF and the spot gold price.

In the chart above as long as the spot gold price holds above the 988 level which is approximately where the long blue key support line is, then I will remain BULLISH on gold for the rest of September and the last 3 months of this year.  Spot gold already did the job of breaking above this line on big volume, but not blockbuster volume.  We could pull back all the way to 990 and I would still be bullish. 

It is possible that we could enter a sideways trading range for some time but we do still have the very bullish seasonals until the end of this week and at various other time frames into the end of this year.

Why be bearish on spot gold if the chart is not telling you to?  The charts do not lie and I am not going to doubt this spot gold price chart.  Obey and stay above the breakout area, then I am happy to be a gold bull.  Break under it, then something else is going on and the bull case is delayed.

Clean. Simple. Effective.

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OREX Orexigen Therapeutics Possible Cup and Handle Setup

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OREX is a biotech stock that has the smallest tradeable float as compared to two leading rivals in the same space VVUS and ARNA.  All three of these companies are developing a new type of weight loss pill that supposedly has very minor if any side affects and tricks peoples brains into thinking they are ‘full’. 

ARNA had some wild up and down trading today and managed to close slightly positive and VVUS had a huge gap up over a week ago on positive late-stage clinical data for its weight-loss drug Qnexa.  We are seeing big moves in this sector probably because they are talking about potential billion dollar markets for these drugs.  Let’s face it, weight loss is a huge market and a huge problem in this country.  If these companies can come up with an effective solution that speeds up people’s weight loss SAFELY then it would seem these companies stand to make some pretty good money.

OREX insiders have recently bought quite a big chunk of shares in the 8 dollar range in August and have quite a big stake in the success or failure of the company.

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SPY ETF Working into a Top the Next Several Days ?

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I have gone back and forth with my bullishness and bearishness on the broad market recently.  I just think it is important to be prudently cautious at these levels. There is supposed to be an important astro aspect early next week that may stop this market dead in its tracks and case the long awaited … Read more