Online Trading

The price action in the market since the 4/21/2011 swing low has been quite laborious.  Yes we have been in an uptrend, this is true, however the nature of the uptrend concerns me relative to the 2/18/2011 swing high.

This market is currently struggling to exceed the 2/18/2011 previous 52 week high, in fact it looks like it is embarking on a process to roll over (down).  The observation which earlier today led me to initiate the BOT Short Signal was simply a quick look at daily, weekly and monthly MACD along with monthly MACD histogram.  In addition I made an observation of the tape action itself from the mid March 2011 swing low and observed the angle of incline combined with the time it took to do the incline.  This is definitely more art than science, but I have look at so many thousands of market charts over the years that one begins to get a good sense when the market is rolling over just by the pattern it is forming and not even looking at any indicators.

The fact remains right now that the daily MACD and the weekly MACD are in sell mode.  The monthly MACD is in buy mode, BUT there does exist a large potential bearish divergence on the monthly MACD histogram that has the potential to crack this market down LONG TERM.

One could also make the argument that the monthly price chart of the last few months resembles a little bit the monthly price chart topping action of mid to late 2007.

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The sp500 continues its typical bullish tendencies since BestOnlineTrades decided to re instate the BOT Long signal on 4/18 and 4/19, 2011.  The sp500 is in a bullish trend and I expect it to continue to act this way for the duration of May and perhaps part of June 2011.

The NYSE summation index is crossing bullish again and should help to keep the wind at the back of the sp500 for a while going forward.

The market is essentially on auto pilot now and there is an outside chance that it may start to trade in a rather steep northward parabolic fashion.  This is just some early speculation on my part.  I don’t know for sure if the market will trade in typical two steps forward and one step back or if it will trade in 10 steps forward and 1 step back.  But I am speculating that it may move higher at a faster rate now.

Unknown is if the sp500 can reach 1470 by June 13, 2011.  It is somewhat of a longshot based on how the index trades, but if we move into parabolic then maybe it could be possible.  The solution? Simply wait and see how the market shapes up into this time frame.

For now my theory of topping action by June 13, 2011 is just that, a theory.  But this theory holds for either the sp500 or the gold and silver market.  The vertical nature of the gold and silver market tells me they may align with the date and turn hard on that date for a unique shorting opportunity.  It may be a massive short opportunity in the metals near that date… we shall see.

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Today was one of those types of days in the market where you try to match up the ‘news’ with the market result and find yourself scratching your head.  Given the credit rating news today I really would have thought this market to close down 5% on the day on massive massive volume.

What happened instead?  Instead we got a down close, but only about 1% and the volume on the SPY ETF today was dramatically light given the news.  In addition to being dramatically light it was also lighter than the 2/24/2011 price swing which we tested today.  That 2/24 price swing was an important price swing and it seems to me like it was rejected today and at least somewhat affirms my decision to switch to long signal last Thursday, although right now I am on a Neutral signal pending a holding above 1300 on the sp500.

Not only did we reject the 2/24 price swing but we also once again rejected the mini bear channel I have been referring to for a few weeks now.

It appears what is in store for us is a violent trading range type price action in the sp500 between 1300 and 1330 for the next 5 to 10 trading days.

But I do reiterate that as long as the sp500 can hold 1300 I will remain in a neutral to positive stance on the market.

But I really must admit how shocked I am at how light the total volume was today on the SPY.  It could mean this market wants to flip right around to the other side again near 1330 which was my original theory.

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