PP-XLF = 15.15 - 3/08 Monday

[Mikey]

Good morning all, UK great to have you back. Where's Cash?

I'm still short X and long VXX and have given back nearly all of my gains from Jan/Feb, which were great months for me, but I'm holding strong, though the capitulation meter is 9.5/10. The way I rationalize the losses - I was aggressive on the way up (from mid-Jan to mid-Feb I was up 35%) so I shouldn't be surprised when the losses are big also...just wonder in times like last week if it's worth all the time I invest in it - which it is, mainly due to this thread and what I've learned through the process.

Last week did some damage but I'm still here y'all - didn't post much Friday because I don't want to lead people astray when I'm obviously not reading the market well, but will post some charts as I get back into the swing of things. Dollar showing some strength here (euro down from 137.0 to 136.3) and gold has had a big pullback. Watching the rising 20dma and 200hma on the DX and UUP.

Today's watchlist (L-considering long, S-considering short):
(L) APWR - broke 200dma, held $12.00 now re-testing
(L) YGE - down huge, Merrill posted news
(L) DDSS - Elle what 20/50 you looking at?
(L) PAAS - Depends on direction of USD
(L) PALM - got some good volume at $5.48
(L) RIMM - possible hedge against AAPL short, huge gap to fill
(S) AAPL - hit alltime high $220, Nasdaq going nuts
(S) AMZN - crazy price action today
(S) CREE - parabolic may be reversing soon
(S) TIE - Overextended, a fast mover, good play w/dollar strength

[kess]

Mar 8, 2010 10:40:43 GMT -5 lookingherethere said:

I show a low for FAS of 15.66 sounds like someone messed up their sale and got the s and z mixed up. oh man that is a sad one...

holy crap, what a bummer!!!

[ukarlewitz]

Good move in UUP to close the gap; virtually unnoticed by Spy. Correlation breakdown so far.

I've noticed that income generating stocks have done well recently. The exception has been telecos, which are up today. They have underperformed and if we rise more, they should have some outperformance. Nice yield on VZ and T.

[merrillstanley]

UK, can see the funds being cautious here, no more room for error in 'blowing up' client accounts..

1st hour global & sector ETF view (EWM) : Actively Traded Leading Global & Sector ETF Plays:
iShares Malaysia- EWM +1.50%, iShares Taiwan- EWT +0.75%, iShares Hong Kong- EWH +0.75%, iSHares Singapore- EWS +0.75%, SPDRS oil & gas equip. & services- XES +0.75%, IShares telecom- IYZ +0.50%, IShares S Korea- EWY +0.50%, Global shippers- SEA +0.50%, iShares Japan- EWJ +0.50%, Insurers- KIE +0.50%, Livestock commods- COW +0.50%, SPDRS US retailers- XRT +0.50%

Actively Traded Lagging Global & Sector ETF Plays:
Nat gas- UNG -2.25%, Solar power- TAN -1.25%, iShares Brazil- EWZ -1.25%, VIX vol index- VXX -1.0%, iShares Latin America- ILF -0.75%, SPDRS metals & mining- XME -0.75%, Gold miners- GDX -0.75%, Gold- GLD -0.50%, SPDRS healthcare- XLV -0.50%, Pound/Sterling currency shares- FXB -0.50%

[merrillstanley]

Trade remains turbulent, but the major indices have managed to make their way back to positive territory after a recent dip. The Nasdaq Composite is leading gains, thanks to strength from large-cap tech issues like Microsoft (MSFT 28.86, +0.27), Cisco Systems (CSCO 25.68, +0.47), and Research In Motion (RIMM 72.86, +3.36). Shares of RIMM have been helped by an analyst upgrade.

Elsewhere in the tech sector, Hewlett-Packard (HPQ 51.82, -0.21) disappointed investors with the downward revision of its first quarter earnings to $1.07 per share. The revision followed developments in litigation involving Electronic Data Systems, which was acquired by Hewlett-Packard in 2008. DJ30 +4.15 NASDAQ +5.34 SP500 +0.78 NASDAQ Adv/Vol/Dec 1132/346 mln/1236 NYSE Adv/Vol/Dec 1456/140 mln/1288

The dollar remains in negative territory, but it has pared losses in recent action. That has pushed several commodities lower.

Precious metals prices were clipped earlier in the session by a modest, upward move in the Dollar Index, which is now down fractionally. Gold now trades with a 0.8% loss at $1125.90 per ounce, while silver is down 0.2% at $17.34 per ounce.

March crude oil has traded in positive territory all session. It put in session highs of $82.41 per barrel, but now trades at $81.89 per barrel, up $0.39. Its pullback from morning highs was exacerbated by the greenback's improved position.

March natural gas began trending lower overnight, eventually hitting lows of $4.46 per MMBtu just before the open of pit trade. Natural gas prices are currently just above that mark with a 2.3% loss at $4.49 per MMBtu.

[merrillstanley]

mikey, good to have you back in the fold, don't think you're reading the market wrong, sometimes things defy logic

[merrillstanley]

Is B.O stripping during this speech?

[ukarlewitz]

Mikey, for what it's worth (and that may not be much) but of the three times when I got squeezed being short, the two times I capitulated it was at the max low (high) and the one time I gritted it out I came out way on top.

This is quite telling:



www.businessinsider.com/rosenberg-equity-managers-have-gone-all-in-to-levels-not-seen-since-before-the-crisis-2010-3

[merrillstanley]

Stocks are stuck in listless, lackluster trade, which has made for rather mixed results among the major indices.

Meanwhile, the dollar has recovered from its morning loss, such that it is now at the flat line. The greenback's bounce has undercut commodities, such that the CRB Commodity Index is now down 0.5% to a fresh session low after it had been up roughly 0.3% at its morning high.

With commodities under pressure, materials stocks have slipped to a 0.4% loss. Gold stocks, down 1.0%, are among the worst performers in the sector. Select steel stocks have provided support, though; shares of U.S. Steel (X 59.86, +0.96) were upgraded by analysts at Goldman Sachs. However, shares of AK Steel (AKS 23.74, -1.14) were downgraded by Goldman Sachs. Schnitzer Steel (SCHN 49.53, -1.48) was downgraded by analysts at UBS. DJ30 -18.52 NASDAQ +1.39 SP500 -1.67 NASDAQ Adv/Vol/Dec 1238/828 mln/1299 NYSE Adv/Vol/Dec 1522/320 mln/1382

[Mikey]

Thanks Merrill exalts again for the positive feedback and energy

Crude taking a dive here, might take some ERY off but there is a potential H&S setting up on the crude daily - even if it doesn't play out they may paint it which would be a decent drop from where we are here.

This chart is why I think the Euro continues lower from here. Over the past 3 months, any moves up to or above the 10/20/30dma's have been getting rejected:

[jack]

So UK...if most of the cash in brokerages is already being put to use, this suggest why volumes are so anemic. Where's ALL that money on the sidelines which has yet to be played? Or is that just a myth?

[ukarlewitz]

NQ breadth has turned slightly neg. tick is forming lower highs as is Spy. We're below the vwap. Break the PP and gap window from last Fri is likely next.

This Vix/Vxx correlation is really incredibly unfair. Swine Vxx.

[Mikey]

Yeah UK the VXX is giving me fits!!

What's up with that chart you posted - is that the "cash on the sidelines?"

Here's the crude H&S:


Be back in a bit...

[ukarlewitz]

Mar 8, 2010 11:46:57 GMT -5 jack said:

So UK...if most of the cash in brokerages is already being put to use, this suggest why volumes are so anemic. Where's ALL that money on the sidelines which has yet to be played? Or is that just a myth?

Good question. If I have $100 'on the sidelines' and buy $100 of stock from you, my $100 of sidelines money comes into the market and yours comes out. The net change is zero. If you look at cash balances over time, they rise year after year regardless of the market. Anytime someone mentions sideline cash, hit them on the head!

[abdogman]

well i will prob miss the big move but.........have to walk the dogs and cut wood (really)..back soon

[ukarlewitz]

Here's the tick from Fri and today. Again, tick is the red/green bars, the yellow line is the tick ma and the aqua line is the Spy and the red line below is trin. The tick scale is on the right, the Spy scale is on the left.

Fri - very bullish with only one tick <-300 and several >1000. Trin very bullish.

Today - very different. tick making lower Ls and lower Hs. Spy has been flat. We might see the neg divergence play out in Spy. Trin is not supporting today the way it did on Fri when it was insanely bullish. A;D has turned flat from slightly positive. Watch it for confirmation.

[merrillstanley]

European Markets Closing Prices: FTSE: 5606.7 +7.0 +0.1%, DAX: 5875.9 -1.5 -0.0%, CAC: 3903.5 -6.9 -0.2%, Spain's IBEX: +0.53%; Portugal's PSI: -0.60% :

Telecom has extended its lead over the broader market, such that the sector now sports a 1.4% gain. That puts telecom on track for its best single-session percentage advance in nearly two months.

Meanwhile, health care, consumer staples, and industrials continue to lag. Each of the three sectors trades with a loss of 0.4% at the moment. DJ30 -9.15 NASDAQ +5.02 SP500 +0.01 NASDAQ Adv/Vol/Dec 1257/1.08 mln/1310 NYSE Adv/Vol/Dec 1618/395 mln/1318

The Dow is back near its session low, but its overall loss remains rather modest. Nonetheless, industrial outfits 3M (MMM 81.50, -0.94) and Caterpillar (CAT 58.76, -0.47) are primary sources of weakness.

However, integrated telecom giants AT&T (T 25.24, +0.25) and Verizon (VZ 29.56, +0.33) have provided support. McDonald's (MCD 65.35, +1.68) is also a source of support; the company reported this morning that its global same-store sales increased 4.8% in February.

[merrillstanley]

Out DRYS, hit 10% gain

[ukarlewitz]

Good read:

www.thedisciplinedinvestor.com/blog/2010/03/08/indicators-we-are-watching-this-week-up-to-start-and-down-to-end/

[elle]

If you have iTunes, Andrew Horowitz has a free podcast

[ukarlewitz]

Carl:

The e-minis have traded in a 4 point range thus far today. The market is unusually quiet. It has been my experience that temporary tops occur when activity is relatively high, not when it is relatively low. So the market's dullness makes me think that prices have to advance further before a reaction as big as 20 points can develop. For the time being I see support in the 1131-33 range. I think we shall see the e-minis trade above 1150 during the next couple of days. This would be a breakout above the January 11 top at 1148 and should bring with it a noticeable jump in activity.


I have no reason to doubt him. He's been more right than anyone I can think of. But he's not infallible.

[deadmoney95]

Mar 8, 2010 14:07:46 GMT -5 ukarlewitz said:

Carl:

The e-minis have traded in a 4 point range thus far today. The market is unusually quiet. It has been my experience that temporary tops occur when activity is relatively high, not when it is relatively low. So the market's dullness makes me think that prices have to advance further before a reaction as big as 20 points can develop. For the time being I see support in the 1131-33 range. I think we shall see the e-minis trade above 1150 during the next couple of days. This would be a breakout above the January 11 top at 1148 and should bring with it a noticeable jump in activity.


I have no reason to doubt him. He's been more right than anyone I can think of. But he's not infallible.

I found an arguably similar sentiment in a recent ITMS posting concerning Goldman Sachs today: "Volume is super light on the overall market. Probably the lighest of the year so far. With a dead market, it is very unlikely the market will sell off significantly. Look for flat consolidation today."

I found this interesting, as ITMS has been calling for a pivot reversal since early last week and backed this call up with significant short positions. They've repeatedly pointed to the low volume as reason for a turn. Now it appears they agree with Carl that (at least for today) the low volume makes a selloff unlikely.

[Mikey]

Thanks for the feedback D-money, that IS interesting about ITMS. His weekend webinar was really good - he's clearly bearish but tries to explore reasons why the market will continue to float up - I liked his Larry Summers sandbag story on the jobs number, how he prepped the market for a disappointing jobs #, giving the market a meatball of a pitch to knock one out of the park, slow pitch softball style - it was almost guaranteed the number would be "better than expected."

Another great video to watch, since it's such a slow day:
www.youtube.com/watch?v=SWmH-BFDXts
This one from the "optionslinebacker" describes 4 stages of market moves that continuously repeat themselves:
1) Euphoria
2) Disgust
3) Disbelief
4) Acceptance
then back to 1) Euphoria

UK I also liked that disciplined investor link, good stuff

[ukarlewitz]

I think it is a question of timeframe. The IT guys always repeat that markets float up intraday on light volume. In this respect, they agree with Carl. Their swing trades are bearish based on vol not confirming the move higher interday, if that makes sense. At some point, therefore, the float up on light vol breaks and you have a higher vol sell off. Another fellow I like (Sentiment Trader) pointed out today that we could make a monthly high close today on the lowest volume in the past month; in this case, there is a 92% likelihood of a lower close by eow.

[merrillstanley]

April gold finished lower by $10.70 to $1124.50, May silver shed 11.2 cents to close at $17.27 and May copper ended off 0.7 cents to $3.4105.

SPDR Homebuilders sets new session high of 16.74, probing its 52-wk high from Sep at 16.75 (XHB) 16.74 +0.17 : LEN +0.8%, MDC +0.8%, MTH +1%, PHM +2%, SPF +1.9%, TOL +1.4%, HD +0.5%, MHK +1.4%, SHW +0.3%.

Minor new highs for Nasdaq 100 +5.4 / Nasdaq Comp +7.6, Dow -3.4 and S&P +1 trading near range midpoint (QQQQ) :

[Mikey]

If I had any money left I'd short the crap out of Macy's (M) here at $21.03 LOL

[merrillstanley]

I appreciate your research and comments Mikey, UK and DM...I made and am committed to my majority bearish play from late last week...I've been burned in the past on light volume bullish activity ( selling too early and not selling at all)...les't see what the last hour brings with respect to any indication of future movements

[abdogman]

i am back and have read ur posts and i am informed going into the last hour

[elle]

hey now, checking in, wahta snooze.

Did some looking back this weekend, and it seems that I am trading more, but not doing as well. I think this market is very hard to trade. So altered my game plan a little: take a position (in my bottomfeeder stocks, of course) and let them bounce around longer. Since I'm a bottomfeeder, most of my stocks can't go much lower, so.......that's what I'm trying for awhile. Unless I can see a really low-risk day trade here and there.

Is anyone here trading FAS/FAZ with Cash's system?

[elle]

Mikey, too bad, would love to see someone short some crap. I was all set to short on Friday, but it just didn't seem right, really glad I cancelled my SRS order. Agree, Uka, this seems much more bullish. The big moves down seem to come out of nowhere. Still thinking about the SPX daily 20, very bullish setup - in fact the exact setup I look for on the 30 min for lo-risk trade.