Posts Tagged ‘RTH’

Thrill Is Gone Thursday – Already?

SPY DAILYYesterday was very exciting, but now what?

David Fry summed up yesterday’s action perfectly, saying "Wednesday’s massive rally was prompted by sudden global central bank intervention adding (printing money) liquidity (reducing the lending rate overseas to zero basically) to shore up sovereign debt in the eurozone. They basically set up a swap facility to do the job in the future. Is it a cure or a bailout? No, this is a handout. And it doesn’t solve the problems the eurozone is facing."  

"But, it must be said that the European leaders must have hit a dead end in talks and a potential financial panic must have seemed likely. Mind you, Mr. Bernanke is perfectly comfortable with reflation and money printing. He’s been at it for a long time. It will take years for the Freedom of Information Act to discover how much money and to whom the U.S. has given free money. Americans and others will see price increases in all products and services as a result of a weaker dollar negatively affecting purchasing power. Beyond Moral Hazard issues this is the cost you’ll see and perhaps even wonder why."

openingimageIt’s the classic "stick save" that was clearly (to us) telegraphed by the very low-volume blow-off bottom last week and now, in retrospect, it is also clear that the market manipulators and their media hounds were pulling out all the stops to get retail investors to SELLSELLSELL.  

As I mentioned yesterday, I’ve been railing against the market manipulation and the media nonsense that had been going on each month and today we learn that Wall Street execs did, in fact, meet privately with top Fed officials in September, according to Fed documents, and they "recommended" Central Banks make a joint effort to address the Eurozone debt crisis.  Don’t forget that our Fed works for the Banksters, not vice versa!  In addition to knowing well in advance this move was coming, their suggestions included boosting the global economy by buying securities, a move that may yet happen as many investors believe yesterday’s swap announcement was a prelude to additional coordinated action.   

You see, it’s not enough for Lloyd Blanfein (allegedly and for example, of course, a fine man like Lloyd would never do this) to know that the Fed is going to make a massive move like yesterday – there’s much more money to be made if…
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Weekend Wipe Out – All the Way Back to Mid-November Lows!

Well I hate to say I told you so but

No wait, that's nonsense – what market prognosticator doesn't love to say "I told you so"?  Actually, it's kind of my job to tell you so and the reason I'm so popular is because, more often than not, when I tell you so, I tend to be right.   I'm not right all the time and my single biggest flaw is I am often right but sometimes way too early and timing is EVERYTHING in the markets.  It's not good enough to tell you what is going to happen (give things enough time and everything happens eventually, right Cramer?) - I need to get the period right as well so we can turn it into an actionable trading idea that makes money

As a fundamentalist, I didn't like the entire last 500 points of the rally.  I had predicted the market would finish the year at 10,200 way back when it was down at 8,650 when the idea was we'd have a Santa Clause rally to 20% (10,380) and then a 20% pullback of that run (346) into Jan earnings that would take us back to 10,034 so the entire run from 10,200 to 10,700 REALLY annoyed me.  It didn't annoy me just because it made me wrong – I'm wrong a lot and I'm old enough to have learned how to deal with it.  What annoyed me was the manipulation as, clearly, the fundamentals in no way, shape or form justified the additional 5% move up. 

I've gone on and on about how fake the move was and how manipulated the markets were and how artificial the support was and I think I've pulled out the Seinfeld "fake, Fake, FAKE" clip often enough now that I don't even have to do a link (but I love it, so I do) or explain how it's a metaphor for recent market activity so I'm not going to waste our valuable time here.  Let's just do a review of the recent action, which is my best way of preparing for the upcoming Members only post where I'll be charting out new levels and coming up with action plans for the week ahead. 

So don't read this if you can't stand to hear "I told you so" because this is the review post and I did tell you so!

When did
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Wild Weekly Wrap Up – Only Halfway Through January!

Wheee, what a ride!

The week can be neatly summed up by my 1:35 comment to Members in yesterday's chat, summed the week up quite nicely as I said: "So funny, a whole week of gains I thought were ridiculous wiped out in 4 hours."  Of course it's easy to laugh when you play the market correctly – as I had said in the morning post, we had cashed out into Thursday's run up and planned on going bearish through the weekend but it turned out we got our sell-off early, jumping the $100K Virtual Portfolio, for example, up 12% in one day – enough to send us back to cash rather than risk a weekend reversal

We laid the groundwork for this little sell-off in last weekend's posts as we put up an aggressive Buy List for Members but in my regular weekend post we emphasized the need to cover our buys with "Disaster Hedges" as we were heading to the tops I had predicted when I published the "Last Charts of the Decade," where I set resistance target of Dow 10,457, S&P 1,135, Nasdaq 2,314, NYSE 7,389 and Russell 638.  As you can see, I pretty much hit them on the head, other than the Dow but that's because our year-old 5% rule calculations did not account for the change in the Dow that replaced C and GM with TRV and CVX, who added about 100 Dow points since their inclusion so we started using 10,549 this month and we'll make it 10,557 for today's chart, which makes perfect sense looking at this group (I added the Transports as they are fell right off our 2,000 target, giving us the early warning that things were not right):

As you can see, the 5% Rule rules!  I will apologize for being such a grump this week but the rally was really starting to annoy me as it was so blatantly forced up through our levels without a proper test that is was really getting me down about the markets.  I don't mind that the markets are manipulated, that's been going on since markets were invented – it's stupid and destructive manipulation that bothers me, the kind that, long term, destroys more investor confidence than it builds and squanders…
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Wild Weekly Wrap-Up

Wheee – that was fun!

Last week, I asked the question were we "Too Bearish or Just Too Early?"  I said in that wrap-up: "This Friday the market topped out about 150 points higher than last Friday, closer to the top of our range so we went much more bearish on Friday, perhaps too bearish considering this was the best Friday finish since Nov 6th and we haven’t had a down Monday since October 26th."  We did get the move up we feared on Monday but we stuck to our guns and had a fabulous week.

Even as the market was going against us Monday morning, my first Alert of the week to members at 9:44 said: "I’m still more inclined to look downward at: Dow 10,250, S&P 1,100, Nasdaq 2,187, NYSE 7,200 and Russell 600…  I’m still bearish because oil is weak, gold is weak, the financials (XLF at 14.30) are weak and most of the good news we are hearing is nothing but fluff."  That was a pretty good call as we hit our target levels yesterday and held them, so we flipped more bullish right at 11:30 on Friday, in what was some very good timing for our intra-day play. 

We are still on a stock market roller coaster that's going to have plenty of ups and down in the thin, holiday trading that will likely characterize the end of the year.  The market will be closed 2 Fridays in a row and good luck finding people around this Thursday or the next one so 6 proper trading days left to 2009 at best.  We got out – that drop was very satisfying and we've moved mainly to cash (our $100K Virtual Portfolio has $88,000 in cash at $107,249 at the end of it's first month).  Last week we were able to cash out the bull side, this week we got satisfaction from our bear plays and that leaves us footloose and fancy free to have fun the next two weeks.  If our day trading goes as well as it did on Friday, we can end this year with quite a bang.

Manic Monday – Dubai, CitiGroup and GS Move Markets

This picture says it all.  When you want to blow smoke
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Familar Friday Morning – Deja Vu All Over Again!

I’m getting some real deja vu here.

Remember last Thursday, when Japan went up 3.8% and our futures jumped almost 100 points?  No not yesterday, LAST Thursday.  Yes, and that day ended up going down about 100 on the day, which was nice because we shorted into the pump (and we were already short for the week anyway.  So yesterday felt a little like that with just about 100-point gap up in the morning, followed by a downward slope all day.  Today is now feeling like last Friday, where we got another 150-point run-up on the futures but finished the day up only 50 points.  As I’ve been pointing out for quite some time, 200% of the last two week’s moves advances came in very thin, pre-market trading – the balance of the rest of the day is selling, punctuated by stick saves into the close

Our man Cramer says you should take this as a sign to BUYBUYBUY (and Retail of all the stupid things) but I say it’s time to RUNRUNRUN as the inmates clearly have control of the asylum and we have better things to do in the last two weeks of the year than play "guess what BS moves the market this morning."  Last Friday it was the Jobs report, which we already knew would LOOK great as the seasonal adjustments made easy comps but we also knew it was a fantastic shorting opportunity (see last weekend’s Wrap-Up).

So we woke up this morning to the same nonsense as last week and what do we do?  We short the market of course!  While you were sleeping we Emailed a 3:54 am Alert to our Members indicating the Dow Futures were ripe for a short play at 10,400.  We followed through with that play in chat and were stopped out at an average of 10,389, just 11 points but very satisfying at $5 per point per contract.  We don’t play the futures very often – only when it’s obvious.  Our next entry point is a cross below 10,390 with a stop at 10,395 (10-point trailing to be safe ahead of Retail Data).  This morning we had an international pump-fest including:


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Testy Tuesday Morning – Big Data Day

Busy, busy today with lots of data! 

At the moment (8am), I only know that retail sales were flat to last week, which was 1% better than last year but this week is 3.3% better than last year because LAST YEAR TOTALLY SUCKED!  That’s right, we are now comping to numbers that are so atrocious that in order to miss them we would have to all dig holes in our backyards, cover them with tarps (no, not the bailout package but a good conceptual image) and drink only rainwater and eat earthworms.  Anything better than that will give us more economic activity than we had last November, when the market was completing a 50% dive off the previous year’s highs and we weren’t sure there was going to anything to be thankful for on November 27th

Our market hit rock bottom on November 21st, the Friday before Thanksgiving (and an option expiration day) at about 7,500 on the Dow.  People were generally shell-shocked but we did bounce back to 8,500 and drifted around there through Jan 1st (9,000) before plunging to 6,500 by March 9th.  THAT my friends, is the period we are comping against!  So beware "improvements" being sighted in the MSM as we are now comparing our weak recovery to a total train wreck and yes, it’s much better now, but better in the way that the Chicago Bears (4-6) are better than the Detroit Lions (2-8), not the way the Minnesota Vikings (9-1) are better than the Lions.

Later today we have an update (and downgrade) of our Q3 GDP followed by Redbook Chain Store Sales and Case-Shiller Home Prices at 9.  At 10 we get Consumer Confidence (or lack thereof), the FHFA Housing Price Index, the Richmond Fed Report and State Street’s Investor Confidence Index.  Later today we have the results of a massive $39Bn 3-year Note Auction, the Fed Minutes at 2pm along with Industry Charge-offs and, finally, at 5pm we get the ABC Consumer Confidence (if any) Index. 

It’s a very brave bunch of bulls who have run the futures up half a point off their lows this morning with all that data coming up.  When I say brave of course, I mean the disgustingly manipulative and should be thrown in jail kind of brave but, since none of our regulators seem to care about the nonsense that goes on every day at the commodity and futures exchanges – I guess they are
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Friday – Is Anybody Working For the Weekend?

Rollercoaster monksWheeee, what a ride! 

Just like any good roller coaster, market plunges can be fun when you are strapped in safely and prepared for them.  Our members have been so prepared we’ll have to hand our Eagle Scout badges (we don’t need no stinkin’ badges) for riding out a toppy market for two tedious weeks, which I won’t rehash here but you can go back to my Sept 19th "Wrong Way Weekly Wrap-Up" to see how hard it was to stay bearish in the face of all that "great" news that the media kept throwing at us.  Nonetheless, had you followed our trading ideas in that post, you’d be a VERY happy camper right now!   

Now we are down 300 points from that Friday’s finish, about halfway to our 9,100 target, which is the top 5% of our original trading range around Dow 8,650.  We’d love to see 9,100 hold, especially on a nice volume sell-off so we can move our range up 5% and make 9,100 our new mid-point, putting the 33% (off the top) lines withing striking distance of a proper breakout but suddenly the news-flow has turned sharply negative.   This is something I warned members about way back on August 11th, the last time I thought we were getting toppy (and we were) at Dow 9,400 when I said: "Watch the newsflow in the MSM.  If it starts to get negative, look out below."  

Yesterday we talked about GS’s about-face on the REIT sector and, later that day, we noted during Member chat that JPM had decided to downgrade SKS, hitting the retail sector hard in the afternoon.  I called a slightly early top on Retail on 9/16, when I said to Members: "Right now all retail is being played like a huge winner, as if no segment will lose market share to another.  This is amazingly stupid in a declining wages and declining consumer credit environment." RTH was $88.76 that day after running up just about 20% from July 7th so we were looking for a pullback at least to $85, but I think worse as I see nothing in the data that makes me believe in Santa Clause this year or the rally he often brings. 

As you can see from David Fry’s chart of the XLY (another Retail tracker) we topped out at technical resistance and are now looking for a completion of a 5%
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Thoughtful Thursday Morning

Maybe I am being too bearish on the economy.

Maybe there is a shining city on the hill with 1,000 points of light and if I simply close my eyes and believe in it, I will be transported there and everything will be wonderful and China will expand and Europe will expand and the US markets will rise and rise as the 18M unemployed people line up in the streets to cheer us as we all drive past them in our new cars as we head over to the gas station to pay $4 for gas, honking joyfully as we pass by each empty storefront and each abandoned home

It was good to take quick bearish profits, as I warned in yesterday's post because quick profits are all the bears get these days as it was indeed a "Whipsaw Wednesday," and Buffett's warning went in one ear and out the other of investors so quickly that clearly there was no gray matter slowing it down along the way!  I was very proud of our short plays on COF, HPQ, RTP, SRS, RTH and our DUG long but all had a half-life on their success so short you could have run an atomic clock with it.  Fortunately, we had our bounce levels to guide us and our 3 of 5 rule to get out of bearish positions so the damage was more to our pride than our virtual portfolios.

Although I could see the turn in my 9:45 Alert to Members, I didn't have the heart to make any bullish calls as it just seemed like such nonsense.  By 10:12 we were even more concerned that something was up and I said: "Don’t get too excited bears.  As I said in the post, profits need to come quickly off the table – this is not a market for riding 20% profits too far."  Sadly, I then proceeded to make a short play on OIH at 10:26 that stopped out at 10:34 and an incredibly poorly timed idea to get the DIA $93 puts at 11:22, just minutes before the market went flying and stopped that one out too as we flew through our bounce zone of Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555.   Now that they've held up so well, those levels now become our watch levels to the downside and it makes…
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Whipsaw Wednesday – Buffet Bashes Bulls

Well, you can't say I didn't tell you so

Yesterday's post was all about what total nonsense the move up was and, per usual, the whole thing was taken away in the futures, where retail investors have no chance to profit from it.  Of course, this market isn't being run for your benefit and if you wait for Cramer to tell you what to do, then you are pretty screwed (and more so if you listen to him).  Yesterday our boy Jim fell off the wagon and declared victory for the Bulls saying: "The bears must be stunned and confused, flummoxed even" and made fun of those of us who worry about "facts" and "fundamentals" as we trade.  "Every argument the bears had for selling," Cramer said, "has been totally rebuffed by this great market."  Cramer, you are not just an idiot, you are a dangerous idiot!

As the more rational David Fry points out in his "Spin City" post: 

So we got a healthy bounce today but it didn’t undo Friday and Monday’s collective damage. We were a little short-term oversold and a bounce shouldn’t surprise even though economic and company news wasn’t great. But, the “better than expected” spin was in for retailers which frankly was laughable. And, golly, banks reported losses on credit cards were slowing (maybe because Chucky’s not shopping?) which was seen as a positive. Homebuilders disappointed (oops, scratch that)… a “worse than expected” report was spun positively because more single family homes were built. I wonder about that since there are too many of them, aren’t there? But that’s the way things are these days.

What a stark contrast between a sane and insane take on yesterday's action.  In Monday's post we targeted a drop to Dow 9,100, S&P 980, Nasdaq 1,950, NYSE 6,400 and Russell 550 and in my 9:48 Alert to Members yesterday I set the bounce targets at Dow 9,200, S&P 986, Nas 1,946, NYSE 6,400 and RUT 555 but noting they were rough numbers that I was eyeballing on the fly, following our 5% rule.  Those levels were beat across the board but on such low volume that I called an audible and we stayed bearish, taking aggressive short positions like the DIA Aug $93 puts at $1.50 which, unfortunately, didn't make our double down target
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Phil's Favorites

Staggering

 

Staggering

Courtesy of 

We now have data for last week’s initial jobless claims. The number is staggering. 6.6 million filed for unemployment insurance for the first time last week. During the prior week it was 3.28 million. These numbers take your breath away.

Chart via WSJ

Here’s the even worse news – this only records the people who have successfully filed. Many, many more have been locked out of the system so far due to the overwhelmi...



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Biotech/COVID-19

Antibodies in the blood of COVID-19 survivors know how to beat coronavirus - and researchers are already testing new treatments that harness them

 

Antibodies in the blood of COVID-19 survivors know how to beat coronavirus – and researchers are already testing new treatments that harness them

A person who has recovered from COVID-19 donates plasma in Shandong, China. STR/AFP via Getty Images

Ann Sheehy, College of the Holy Cross

Amid the chaos of an epidemic, those who survive a disease like COVID-19 carry within their bodies the secrets of an effective immune response. Virologists like me...



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Zero Hedge

US Consumer Comfort Suffers Biggest 2-Week Crash... Ever

Courtesy of ZeroHedge View original post here.

Having reached near-record high levels of consumer comfort in late-January, Bloomberg's Consumer Comfort Index has plunged to its lowest since June 2018.

Source: Bloomberg

This is the biggest two-week drop in comsumer comfort... ever...

Source: Bloomberg

“Th...



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The Technical Traders

Founder of TradersWorld Magazine Issued Special Report for Free

Courtesy of Technical Traders

Larry Jacobs owner and editor of TradersWorld magazine published a free special report with his top article and market forecast to his readers yesterday.

What is really exciting is that this forecast for all assets has played out exactly as expected from the stock market crash within his time window to the gold rally, and sharp sell-off. These forecasts have just gotten started the recent moves were only the first part of his price forecasts.

There is only one article in this special supplement, click on the image or link below to download and read it today!

...

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ValueWalk

Paycheck Protection Program: Not Enough To Help Restaurant Industry

By Jacob Wolinsky. Originally published at ValueWalk.

Below is a statement from the Independent Restaurant Coalition on the start of the Paycheck Protection Program, which comes a day after the Department of Labor announced a historic surge in unemployment claims. In the last week, over 6.6 million Americans filed for unemployment bringing the total people out of work to over 10 million.

“The short-term relief made available through the Paycheck Protection Program in the CARES ...



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Kimble Charting Solutions

S&P 500 Price Pattern Similar to 2008 Market Crash?

Courtesy of Chris Kimble

Last week’s sharp rally off the lows, gave bulls some relief.

But if the bulls are going to have reason to cheer, they will need to see another move higher… and fast!

Why? Just look at today’s “weekly” price chart of the S&P 500 Index. 

This key broad-based index broke a 10-year bull market trend line in March. And it’s now kissing the underside of the trend line at (2).

The last stock market crash saw a similar pattern in 2008. And after a failed “...



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Insider Scoop

Nestle CEO Says Snack Foods 'Just As Important As Essential Nutrients'

Courtesy of Benzinga

Global food behemoth Nestle (OTC: NSRGY) is "scrambling to meet demand" to keep the world fed, but doesn't want to take much credit, as "this is our main purpose at this hour," CEO Mark Schneider said Wednesday during a "Mad Money" interview with Jim Cramer.

Nestle...

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Chart School

Big moving Averages and macro investment decisions

Courtesy of Read the Ticker

When price is falling every one wonders where demand will come in.


RTT black screen Tv videos study the simplest measure of price (simple moving average). What has happen before guides us now. 














Changes in the world is the source of all market moves, to catch and ride the change we believe a combination of Gann Angles, ...

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Members' Corner

10 ways to spot online misinformation

 

10 ways to spot online misinformation

When you share information online, do it responsibly. Sitthiphong/Getty Images

Courtesy of H. Colleen Sinclair, Mississippi State University

Propagandists are already working to sow disinformation and social discord in the run-up to the November elections.

Many of their efforts have focused on social media, where people’s limited attention spans push them to ...



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Digital Currencies

While coronavirus rages, bitcoin has made a leap towards the mainstream

 

While coronavirus rages, bitcoin has made a leap towards the mainstream

Get used to it. Anastasiia Bakai

Courtesy of Iwa Salami, University of East London

Anyone holding bitcoin would have watched the market with alarm in recent weeks. The virtual currency, whose price other cryptocurrencies like ethereum and litecoin largely follow, plummeted from more than US$10,000 (£8,206) in mid-February to briefly below US$4,000 on March 13. Despite recovering to the mid-US$6,000s at the time of writin...



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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. Contact Ilene to learn about our affiliate and content sharing programs.