Weakening Wednesday – Market Picture Begins to Look Grim
by phil - October 1st, 2014 8:25 am
This is not pretty.
As you can see on our Big Chart, we've failed the 50 dma on the S&P, Nasdaq, NYSE and Russell and the Russell failed its 200 dma long ago. We're still waiting for the Dow to cross below 16,940 and confirm the carnage but we made those bets long ago with our DXD Oct $24 calls, which are now 0.70 (up 55%) from our 0.45 entry back on 9/18.
In fact, we already took 1/2 of those calls off the table at 0.85 last week so, essentially, the remainder is a free put option on the Dow for the next three weeks – with DXD at $24.45, so we gain every penny from here on up as the Dow falls.
That's what hedges are supposed to do, of course. We discussed that in yesterday's Live Trading Webinar, where we also demonstrated a live Futures trade on the Russell (/TF Futures) that made $500 on the 2:30 bounce. That bounce was very easy to predict because THE MARKET IS MANIPULATED and all we had to do was wait for the same fake spike that we get at the end of every quarter, courtesy of the Fed and their fellow Banksters:
What's scary about yesterday's flood of money ($230Bn in two days) wasn't just the size of the pump job, but the ineffectiveness of it. The volume was still anemic and declining shares outpaced advancing shares by almost 2:1 in yesterday's "mixed" trading.
In reality, it wasn't mixed at all as big traders took advantage of every penny that moved into the market as they told their brokers to sell, SELL!!!
Still, it's not the end of the World just yet – only close to it, and we can still turn this puppy around by holding the line on the Dow as well as Russell 1,100 and Nasdaq 4,500. This market has been amazingly resiliant in 2014 so we're not going to be complacently bearish the same way we (thank goodness) did not let ourselves get complacently bullish this summer.
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Will We Hold It Wednesday – S&P 1,920 Edition
by phil - June 4th, 2014 8:29 am
Yesterday was a close one!
We briefly failed our first test of 1,920 (see yesterday's notes) but another low-volume rescue kept us from fulfilling the "Wave C" predicion on this Elliot Wave chart – for now.
Not that I'm an Elliot Wave person, of course – my theory is that, if you are going to draw 5 points on a graph you can imagine all sorts of random patterns and SOMETIMES you will be right. About half the time, in fact.
I believe in bigger numbers and our own EXCLUSIVE 5% Rule™ says the S&P bottomed out at 800 (in 2009) doubled to 1,600 last Spring, consolidated there for a quarter and now has made a 20% move to 1,920 – just like it was supposed to since it bottomed in 2009 (see our many, many predictions over the years). In fact, it was March of 2012, with the S&P at 1,404, when we set our new goals for the S&P to 1,600. As I said at the time:
That's right, it turns out our +10% line is still pretty much right on the money, only now we switch our focus to our goal of 1,600 and begin running our numbers off there, rather than from 800. I know I have been (and still am) Fundamentally bearish on the market at the moment – I just think we are making this move too soon – but that is not to say I think the move is unmakeable.
Once we did get the dip in June that we expected at the time (down 10%, back to 1,278 and, fortunately, we had wisely cashed out our Income Portfolio before things turned ugly) we were happy to go gung-ho bullish with our Buy List – the same kind of Buy List we just finised assembling in yesterday's Live Trading Webinar. In fact, right in that 3/17/12 post, I laid out this play to profit from our prediction:
For example, we expect the S&P to work it's way up to 1,600 and that's SPY $160 and the Jan (2013) $146/154 bull call spread is $3 and you can sell the $110 puts for
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Friday Failure – 1,880 is a Bust!
by phil - April 25th, 2014 8:27 am
Did you see the frightened ones?
Did you hear the falling bombs?
Did you ever wonder
Why we had to run for shelter
When the promise of a brave new world
Unfurled beneath a clear blue sky? - Pink Floyd
What were we excited about?
With 204 of the S&P 500 now reporting 68% (139) have beat earnings estimates BUT only 44% (90) have beaten on revenues. It's yet another year of cost-cutting and share buy-backs to boost earnings per share with no actual growth in real earnings yet the market, overall, is up 35% from where it was last year on a 2.9% overall growth in EPS. - THAT'S FRIGGIN' CRAZY!
If we back out BAC, who had the crap fined out of them this Q, then the S&P earnigs are up a more respectable 4.9% but, on the other hand, that includes superstars like AAPL, who dropped $13Bn on the S&P by themselves, and it's very unlikely the rest of the S&P will bring up the curve. In fact, Zacks is now estimating that overall earnings will be DOWN 0.9% for the quarter compared to last year and DOWN 4.6% from last quarter.
No wonder we are seeing the continued exodus of "smart money," who sell in volume into every rally we have. What's getting scary (and keeping us bearish) is that now we aren't even making gains on weak volume. Yesterday's move up was 100% due to AAPL, which gained over 8% on the day.
Since AAPL is 15%+ of the Nasdaq, that 8% gain should have popped the Nasdaq 1.2% and the rally in AAPL suppliers should have lifted the index even more. But it didn't. The Nasdaq was only up 0.8%, so it would have been down 0.5% without AAPL's contribution and even further without the rally in suppliers and the sectors that support them.
As I said to our Members yesterday ahead of the bell, Apple's gains are Samsung and others' lossses, NOT an indication of strength in the…
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See Live Demo Of This Google-Like Trade Algorithm
by Promotions - March 24th, 2014 4:55 pm
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
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Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
Follow this link to register for their training webinar where they’ll demonstrate the tested and proven Algorithm powered by the same technological principles that have made GOOGLE the #1 search engine on the planet!
And get this…had you done nothing but traded a handful of conservative alerts since its inception, you would have experienced portfolio gains exceeding 200%!
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Follow this link to register for their training webinar
Sincerely,
Phil
PhilStockWorld.com
P.S. – You can watch the video that explains this unique algorithm and learn about our upcoming training event by following this link.
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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...
Ilene is editor and affiliate program
coordinator for PSW. She manages the site
