coolhand's Account Talk

[Uptrend]

I didn't think it would come this fast, but stand by for some massive short covering today.

I am not so sure. The US Dollar jumped bigtime, the same time the employment numbers came out. Looks like its forming a bull flag on the 15 minute. This will put pressure on the market.

 

[coolhand]

I am not so sure. The US Dollar jumped bigtime, the same time the employment numbers came out. Looks like its forming a bull flag on the 15 minute. This will put pressure on the market.

What does a blow off top look like?

 

[Uptrend]

A blow-off top means a fast rise in price followed by a quick reversal and a huge drop. This could mean the presence of a major resistance level (like 1113 or 1124 on the SPX), or could mean the start of a reversal. If it is a resistance level it will penetrate on subsequent trading days. It can hapapen in any timeframe on the charts.

 

[Bullitt]

Where are we seeing a blow off top here? Not the major averages. Gold, maybe.

 

[fedgolfer]

Where are we seeing a blow off top here? Not the major averages. Gold, maybe.

Yeah, we need to have substantive discussions on the gold trade and the dollar trade, is this the fork in the road?

 

[coolhand]

A blow-off top means a fast rise in price followed by a quick reversal and a huge drop. This could mean the presence of a major resistance level (like 1113 or 1124 on the SPX), or could mean the start of a reversal. If it is a resistance level it will penetrate on subsequent trading days. It can hapapen in any timeframe on the charts.

I can agree with that. Now add some context. It's December, meaning seasonality has an upside bias. It's the last month of the quarter, meaning money managers are probably scrambling to ensure their portfolios don't look anemic in the face of rising prices. Bearishness rose rapidly again as divergences become commonplace in the charts. Massive Fed liquidity is still choking the system.

AND, I have a SSBS in my back pocket. I have to justify that buy signal.

Remember that fractal chart?

I'm just trying to connect some dots here. I don't think there's much disagreement between us. It's mostly a matter of timeframes. It'll fall apart at some point. But when?

 

[fedgolfer]

GLD slow stoch is still embedded above 80, also still in trendlines of the uptrend. Ichimoku clouds saying its still a buy... so the charts and TA are saying its still on, but for how long... we'll have to watch it closely because price will tell us definitively before the media will... at least that's the stategy i'm taking for now.

 

[coolhand]

Where are we seeing a blow off top here? Not the major averages. Gold, maybe.

It's a matter of opinion. I'm not hard over on a blow off top, but that darn fractal chart keeps popping into my head. In the end I'll still follow the SS.

 

[coolhand]

Just for everyone's review and consideration. It's only a projection, but it sure seems plausible in light of the currency trades. If the dollar finally reverses to the upside it's only a matter of time before the market falls apart too.

http://www.timingpointprojector.com/

 

[Bullitt]

You're right about the seasonality, we have to keep that in mind. I like what Show-Me said. How many folks will be 'scared back into the market today' with this jobs number.

I don't think this move today is any bit bullish for the dollar and I'm not 'worried' about the dollar carry trade unwinding much further any time soon. Will it unwind- sure, but one day does not make a trend.

I'm looking for some new leadership to come from this jobs report more than anything. When will KRE and IWM show some momentum? The internals haven't looked good for a while now.

 

[coolhand]

This look at oil gives us an opposing view of where the dollar may be headed in the near term, today's rally notwithstanding.

http://broadcast.ino.com/education/crudeoil1203/?campaignid=3

 

[coolhand]

Daily sentiment survey on Trader's Talk is darn near a dead even split between bulls and bears, longs and shorts. Generally portends weakness, but nothing dramatic. However, our own weekly survey is quite bullish, meaning we'll see some selling this week. Bigger picture, sentiment is mixed so choppy trading may be the overall result.

Gold trading lower, dollar higher. I would not make any "near-term" assumptions about the dollar/stock correlation. Not with all that liquidy sloshing around and the propensity of sentiment to get bearish on any whiff of blood in economic waters.

 

[coolhand]

Not exactly sure where the weakness in futures is coming from this morning, but Trader's Talk daily sentiment survey is almost evenly split again this morning on low voter participation.

I am seeing posts by bears who are beside themselves that this market isn't dropping like a rock though. I suspect futures may be a hook to get the shorts to pile in again. Of course the bulls aren't faring much better.

 

[Uptrend]

Negative Side
There are many negative divergences on the charts

Bonds are now uptrending

Many topping tails on the candlestick charts suggest that distribution has been taking place for the last month

Positive Side
The big boyz go away for the holidays starting near the end of this week. This is good for the market, because the market tends to float higher on light volume. For example, A is bidding against B and there is little C to short them both. This is one prime reason that the market tends to go higher around any holiday.

I expect this positive bias to start, just like on the seasonality chart, near the end of this week, early next. The dip should be contained no lower than SPX 1061. Probable target based on fibonacci ratios is SPX 1133.

 

[coolhand]

Negative Side
There are many negative divergences on the charts

Bonds are now uptrending

Many topping tails on the candlestick charts suggest that distribution has been taking place for the last month

Positive Side
The big boyz go away for the holidays starting near the end of this week. This is good for the market, because the market tends to float higher on light volume. For example, A is bidding against B and there is little C to short them both. This is one prime reason that the market tends to go higher around any holiday.

I expect this positive bias to start, just like on the seasonality chart, near the end of this week, early next. The dip should be contained no lower than SPX 1061. Probable target based on fibonacci ratios is SPX 1133.

I completely agree. Some pockets are quite bulled up due to seasonality, but it's not universal. Still, a shot lower could very well be in the cards to shake those bulls loose before lighter volume seasonality kicks in, and hopefully a drift higher.

A SS sell signal on volatile action could be problematic for those following the system. Stay tuned folks.

 

[coolhand]

Rebalanced my position to 50/50 CS. Dollar strength hurting I fund right now.

 

[airlift]

CH,
I'm in tune. As you walk on the sand at this shoreline, I am stepping on your footsteps right behind you --- staying put with the SS. Just make sure that you don't get too close to the waves so that I can keep your tracks in sight!

 

[coolhand]

I think getting out of the I fund yesterday was a good move. If the market begins to sense that dollar strength is the real deal, it could be watch out below for stocks. For the moment I only sidestepped dollar strength and the weakness it brings to the I fund, but I'm fully exposed to stocks in C and S.

A Santa Clause rally is not a given. It looked good early on, and it might still happen, but sentiment is not particularly supportive. More downside action may be needed to get a good turn back up. However, that may not mean new highs. I am not married to my position, but I'm willing to hold for another day as the SS is still on a buy. But it's weak.

Some traders think the real buying will begin next week, but risk is rising. No one really knows where we are headed right now and this market has been in a relatively tight channel for some time. It may be prudent to begin raising cash relative to your risk tolerance.

 

[felixthecat]

Sideways market action looking good. Dollar down. Vix slightly down. Test of S&P 1088 so far successul. Almost feels like a rubber band here...ready to launch. Going all in 50C/50S real TSP. Already fully loaded with TSPTALK play money.

Overall, market tone slightly shaken...but not stirred. Shakes a few more leaves this afternoon and maybe off to the races Wednesday.

Unless I see anything different over the next 30 minutes...appears like a good entry point.

 

[coolhand]

Sideways market action looking good. Dollar down. Vix slightly down. Test of S&P 1088 so far successul. Almost feels like a rubber band here...ready to launch. Going all in 50C/50S real TSP. Already fully loaded with TSPTALK play money.

Overall, market tone slightly shaken...but not stirred. Shakes a few more leaves this afternoon and maybe off to the races Wednesday.

Unless I see anything different over the next 30 minutes...appears like a good entry point.

My main concern is there is some strong bullish sentiment in some pockets. Dollar strength is my second concern. I'm not convinced of anything. If we stay within the channel, then we are closer to a rally then more selling. But any breakout to the downside could get interesting. It depends on how stubborn the bulls are.