Monday's Wrapping Up

What a great day - beautiful weather - a nice round of golf - some cold beer on the patio after the round - life can't get much better. And yes there was a stock market going on today. And yes it went down and yes I'm happy. I'm happy because it appears as if tomorrow could be a booming day. But before we get to that I have some thoughts I'd like to share.

This morning before the market opened I was watching the NASDAQ pre-market trading as I usually do and I saw it going up, up, up. The problem is the FTSI 100 at the same time was going down, down, down. I've mentioned before that when the FTSI goes down the U.S. market usually has a weak day and today wasn't an exception.

After I got back to my office this afternoon the first thing I looked at was the PC ratio. The first hour is usually the critical hour and again it was no exception. I've found that whenever the PC ratio opens above and closes above the previous day's open and close in the first hour the market is usually going to go down. That looks like this:



Now these are "rules of thumb" which means some times they don't work as well as others but most times they are pretty good indicators of market activity for the rest of the day. So add the FTSI 100 and the pcratio to your box of tools and you will probably be better off for it.

I'm still holding SYMC, WU got stripped away in the heat of the afternoon - actually before I left this morning I reset the stop order too tight and lost it. That was a mistake because my stop was swept.

I bought ORCL and Wells Fargo (WFC) at the close. Oracle was bought off a distressed list and WFC was bought because it popped over its 21-period EMA. I've got a 30 cent loss or 60 cent profit on WFC. ORCL has a 50 cent loss or $1.00 profit target - or 4 days whichever comes first.

The up/down ratio is in a nice place at 30% which is very low. The new 20 day highs barely made it to 354 and that is almost half of what it printed on Friday. The new 20 day lows on the other hand a way up at 714 and that is twice what it printed on Friday. The market sentiment as measured by the five markers we follow, DIA, SPY, IWM, QQQQ and GS (which you know what that is by now) all finished with strong white candles in the final hour of trading. Barring catastrophe or news of either good or bad persuasion we might have a tradable market tomorrow.

Poor magic coin - 37 and 29 having called a bull market for today. For tomorrow it says --- heads again - the bull will be running - I think it's right.

Monday Wraps

It was 59 degrees today and I should have gone and played golf. I didn't. One time this afternoon I looked at my monitor and after 5 seconds or so I realized that the only thing moving was the clock on one of my windows. Things started fluttering a little after that. It was all I could do to stay awake.

I remain in my swing trades - SYMC, ORCL and ALTR and have added CTXS to the mix. I plan to hold these stocks each for at least 3 or 4 days unless they crash to their stop loss points at which time I will unload them. As bad as the day was I made some in SYMC and ORCL and didn't lose much in ALTR and CTXS. ALTR is shaping up as an interesting trade. It printed a NR7 today. The NR7 as you know is the narrowest range in the last 7 candles. The method I used to pick the swing trades was a filter - low near or through bottom Bollinger Band, MACD histogram in negative territory, one of the 4 highest volume stocks matching this filter's constraints. It back tests nicely and all I have to do is be prepared for some small losses and a couple of good size wins. I can do that.

I tried daytrading a little PFE early in the session but I didn't have it long as it turned around and I unloaded it for an $96 loss including commissions.

Just so I don't forget - KKD went up again today - I showed you the quad tweezer bottom on Friday. Remember this is just a lesson - I neither play KKD nor eat their donuts.

The market has several good things going in its favor - one is the Fed meeting that should announce an end to inflation in our time on Wednesday. And the second is that more and more stocks are finding their way to the bottom of the pile and not so many are being added at the top even though the market is going up.

Speaking of that - the up/down ratio is printing 47%, there were 610 new 20 day highs and 318 new 20 day lows. That was an increase of over 60 off Friday's number. Two of the five majors printed the last hour white so that's a mixed signal at best - the only time that signal is valid is if they are all white or all red - otherwise it's a wash.

The VIX is now 6% under its 10-day moving average and that's sliding towards the bearish side but just a little bit out of neutral territory. So we have a several mixed signals, neutral signals, and leaning bearish signals. I'm going to call tomorrow more of the same as today - waiting for the Fed to speak. Maybe a little bit down.

The magic coin is 36 and 26 because it hit today fairly well and for tomorrow it says .... heads - bull market again - maybe so.

Friday Wraps Up Early

Early day - we didn't do much - added a bit to our GM trade from the other day and began a swing trade in AMD - other than that nothing too exciting.

This was a strange day - started out down then went up then went down again. Goldie (GS) kind of set the tone for the whole day - gapped down nearly $2 at the start, went down from there for the first 15 minutes losing another dollar then turned around an went up for the next couple of hours until about 11:15 when it reversed again finally finishing the day off 19 cents. All three sisters, the ugly stepsister and GS, the proxy for the stock market of the 22nd century finished the last hour in the red - which, believe it or not is a good sign. The VIX pulled way back into the neutral zone and the up/down ratio prints 40%. The new 20 day highs pulled back again but remain above 600 at 672 and the new 20 day lows also pulled back to 135. Believe it or not but all these things together suggest not just an up day on Monday but a strong up day to boot.

The magic coin is 33 and 20 having missed today and for Monday says ... heads - bull market - well we think so too.

Crazy Wrapping Monday

What a day - I didn't feel right all day so all I did was manage my "investment" (ATHR) and I sold it in early afternoon for a 50 cent gain (over the 14 cents I was down on Friday). Then later it set up again and I bought it again and now I'm plus 13 cents and hoping for another gap up tomorrow. This is a crazy game.

On Friday I said that the market was going up today and, I don't know, but if two of the three sisters go up, the ugly step sister goes up and the proxy for the market of the 22nd century goes up and if only the dumb old Dow Jones Industrials went down did the market go down? (Of course I'm talking about the ETFs DIA, SPY, QQQQ, and IWM above and not the indices they reflect.) (And why "of course" because if I wanted to I could play the cash market using those elements and that's what I'm all about - playing.) GS didn't make the 2 handle like I thought it would - maybe later this week or early next.

Yes, the market went up - it tried to go down in mid-afternoon off a housing report. But seriously who here didn't know that housing was in trouble? Obviously the entire trading community that's who - they started selling with both hands when the report came out. Morons.

Tomorrow - more of the same. Why? Because the up/down ratio edged back up to 45%, the new 20 day highs went to 668 from 575 and the new 20 day lows stayed about where they were at 212. The VIX, although it printed a single digit handle this evening still remains only about 6% below its 10 day MA and all the sisters, the ugly step sister and the proxy of the 22nd century all finished with strong white candles in the last hour. Put it all together in Thanksgiving week and you've got low volume trading in stocks that are barely going anywhere.

The magic coin loses another and now sits at 31 and 19 and for tomorrow --- heads - bull market - probably.

Friday - Itsa Wrap

Lately nothing has been able to keep the Dow Industrials down. It poked its head above the close line around 12:30 as we predicted would happen. NASDAQ was down but not by much and the Q's actually closed on yesterday's number. The Q's are still returning more (on average) than IWM by the way and I will let you know when that changes.

This morning right out of the box I took a quick shot at a newbie called ID. This was written in my notebook and I didn't know why so I took a look at about 10 to 10 and it was up strong. Given the market was sort of floundering around at the time I took a position and 15 minutes later sold it for a 30 cent profit. If everyday was like that I'd be in heaven. Unfortunately after a short break helping out the wife on a project I returned and about the time the market started turning I saw an old friend - ATHR. Now ATHR as we pointed out in an earlier post was not a particularly good set-up and I am still holding ATHR because I think the market is going to go up on Monday and take ATHR with it. So it is no longer a trade but now it has risen to swing-trade status or, an investment - too bad it doesn't pay a dividend.

The market is going up on Monday you say - how do you know - well despite the obvious (rule 1 - nobody knows nothing including me) the up/down ratio is printing 42%, there are 575 new 20 day highs which is 400+ less than yesterday and even though the new lows are weak at 214 there is a new reason for that.

When the new lows stay low when the new highs pull back it means that the market is in a consolidation mode. What you want to avoid are really low new highs coupled with really high new lows as that means the market is on its way down. I think. As with everything else you read on this site keep in mind you don't know nothing either even after you've read this stuff.

The VIX is proving to be, as usual, less useful on the bottom as it is on the top and I need to take a closer look at that. I think we can use the VIX as a measure of trader sentiment and right now that is mellow - only because I hate the word "complacent" - fact is we passed complacency weeks ago and are in some world of trading nirvana where absolutely nothing is wrong and will stay that way for a long long time. Whatever dude.

What else - oh yes the three sisters (and for those new these parts they are DIA, SPY, and the ever lovely QQQQ) all finished the last hour strong white, as did the ugly step sister (IWM) and Goldie (GS) (the proxy for the market of the 22nd century) finished with a white doji - that means "I'm sorry I went down today - please buy me and I'll print a 2 handle on Monday."

So barring some freaking catastrophe that's my take.

The magic coin returns to its winning ways and now stands at 31 and 18 and for Monday .... tails - bear - who wants to listen to a stupid magic coin anyway? Only has a 63% chance of being right. (Based on past performance and as you all know in a binary situation the actual probability of any outcome is 50% regardless of the dumbass premise behind it - or you better know that at least).

I'll be back later this weekend with some other neat stuff I've been thinking about.

Freaky Friday Wrapper

As promised another directionless day of meandering around looking for a reason to exist. But enough about me, the markets weren't much better. Another mixed ending to a mixed up day - the three sisters (DIA, SPY, Q's), the ugly stepsister (IWM) and the proxy for the 22nd century (GS) all finished strong white in the last hour.

But the up/down ratio returned to neutral (52%), the VIX stayed in neutral, the new 20 day highs jumped over 600 and the new 20 day lows pulled back to 291. This is a market headed nowhere fast. The bias remains up but the dynamics say - IDunno.

Interesting enough the Q's were up all day today and that was off the doji at the end of yesterday. Here is what that looks like -



When you see this in a 60-minute or 2 hour chart you can be pretty sure you are looking at a bottom and the next day if not the next several days will have an upward trajectory.

Not being one to make such statements lightly I plan to be back this weekend with several examples including the one I played today - what else - HANS.

Well the magic coin is 28 and 16 having nailed today and even though it was not a boomer it still was up up up so it gets the bull nod. For Monday the coin says ... heads - another bull day. I think so too. Might even be a real bull day.

Thursday Wraps

Wow - finally a down day. It had to happen sooner or later and I'm so glad it was today - I went and played golf today so no real damage. But now I see that there has been a change in the dynamic. The up/down raio prints 34% the new 20 day highs have pulled back to 572 and the new 20 day lows (the more important) have gone forward to 504.

The DIA and SPY both finished in the white the Q's printed a doji and the IWM finished strong. Only GS printed strong red but that's ok for now - it needed a rest.

I anticipate an up day tomorrow.

The magic coin missed another one and sits at 27 and 16 and for tomorrow says ... heads - bull market.

We'll see.

I'll be back before the market opens tomorrow with another update of Marlyn's curve and the three sisters and IWM - the ugly step sister.

Wednesday Wraps Up

I know you are asking yourself when will this market go down? Well, obviously the answer is never. It looked like we might get a needed drawback this morning then Don Rumsfeld cut and run and boom - for some reason or other the market said that's good news let's go up.

I will not give up - for tomorrow the up/down ratio is once again totally neutral it can't get any more neutral than 50% - this suggests that nobody knows what the market might do. Then the new 20 day highs put on over 100 today to 835 and the new 20 day lows took away 18. This suggests that while people continue to buy overbought stocks they are afraid to sell them.

The three sisters are mixed 1 red, 1 white, 1 doji while the ugly stepsister (IWM) finished a strong white and the proxy for the 22 century - GS - finished red. That's as mixed as it's going to get.

This all sums up to an up day tomorrow but for the life of me I don't know why.

Meanwhile the magic coin loses another one and prints 27 wins 15 losses but it doesn't give up either - for tomorrow ... heads - bull market.

Monday Wraps It Up

Wow. What a day - I missed most of it. Had an appointment this morning and by the time I got back it was over. Everything was at its high of the day and nothing was coming off the floor - including HANS which gapped down severely this A.M. on an excuse. The excuse? That options backdating thing that's been going on. So far HANS is the only stock affected in this manner (severe drop) and they are only going to be investigating - no one has said that they actually had a problem. Thus it is an excuse not a reason. The institutions holding HANS wanted a reason to get out. How do I know? Almost double volume. Then there was no buying once it found a floor. Might be I've lost another momo stock and have to go fishing again. We'll see.

For tomorrow --- the three sisters all finished the last hour in the red as did the ugly step sister (IWM) as did the 22nd century proxy for the market - GS. Unfortunately the VIX didn't move, the new 20 day highs only increased by 17 and the new 20 day lows increased to over 600. The up/down ratio remains in neutral. You would think in such a booming economy that stocks would generally go up - well only some of them did.

This is truly a mixed message but I'm going out on a limb and suggest that tomorrow is going to be a down day because it is needed. I might be wrong but as I'm fond of saying - it doesn't matter because I'm going to play golf.

The magic coin is 26 and 14 because it called for a bear day and it obviously wasn't. For tomorrow the coin says ... heads - bull run again.

See you tomorrow after the market closes.

Fraday Warp Up

Crazy day - but I kind of predicted it this morning so you can forget what the bobbleheads on bubblevision said about oil and the blah blah blah - fact is the market needed a rest. Now IWM didn't but that's another story which we will cover later this weekend.

I made money today - I played HANS. What, you sputter, again?!? Aye, says I, I again played HANS. Why do I play the same stocks day after day? Because they set up for a play and I know how other traders will be acting given that set up. I know because I observe - you can too. Here is a picture showing HANS in both 15 and 30 minute charting modes. Note the similarities.



I'm showing it to you this way because you need to know what a blow-out bottom looks like and it doesn't necessarily have to be a white candle - it can be red. It just needs a lot of volume (one of the few times I will use volume to inform my trades) and it is a hammer-like critter regardless of the time frame. I.E. a long tail or lower shadow which is how it is referred to in polite company.

Where it says "buy here" I did and where it says "sell here" I did also. I was 6 cents early on the sale but that's ok - I picked up 48 cents overall.

For Monday we are looking at a recovery. Again the market never goes straight down - it moves in fits and starts. The interesting thing is the up/down ratio went up today to 45% or into the neutral territory. We added to the 20 day new highs brining it to 423 and we subtracted from the 20 day new lows printing 591. That can only mean one thing - what you didn't see was a market struggling to right itself. The SPY finished in the red but the Q's finished strong as did DIA. The VIX remained in neutral. Prognosis - Monday is an up day. I'll probably play HANS again.

Mr. Magic missed today making him 26 and 13. For Monday he says tails - bear in the air - Sir, I disagree!

See you later this weekend with some more tripe and trivia.

Wrapping Thursday

Missed most of today - thank God - but did play AMD for a brief time this morning - lost a dime and HANS for an hour or so and made 50 cents. I played AMD off a two white candle formation and it went one more increment and I thought, based on shaky price action, that I should sell it then but didn't - consequently the dime loss. HANS I played off the white hammer in the first 15 minute candle. The next candle was a red spinning top which generally means wait a minute I'm thinking and this was then followed by a white candle where I took the trade. I was out about the high of the day but I didn't know that until this afternoon when I returned to the office.

Tomorrow is shaping up to be an up day - the three sisters all finished with white candles in the last hour and the VIX is back in neutral territory. The up/down ratio still stays bullish at 36% and the new 20 day highs lost some more to 333 but the new 20 day lows put on over a 100 to 715. The last time the new 20 day lows were over 700 was over 60 days and 10 SPY points ago. Another thing is that the end of the month checks will have been in the process for over 3 days which means that they are now cleared for investment purposes and the funds can start buying everything in sight.

Magic coin is 26 and 12 having nailed today even though it wasn't so much a bear day as a pause. But I'll give him his due and put another in his win column. For tomorrow he says - heads - the bull is back - I agree.

I'll be back tomorrow morning with another screen shot of the IWM and friends and we will see what Marlyn's Curve thinks about all of this.

Monday Wraps It

Left out the "Sh" in the title - you figure out where it goes. Lost 187 bucks today because I took some dumbass trades. First I managed to dump ISIL which I was holding from Friday for a small profit. Then I grabbed onto some ERS because I figured it was going up - it didn't it went down and I lost about 400 on the exchange because I was too dumb to either hold it or get rid of it sooner. If I had held it I would have made a couple of beans - eventually. But I panicked - so much for disciplined trading. Then I picked up some SAI - based on you ask - nothing says I except I thought it was going up. It did and I didn't sell it so now I am holding it over night. I expect a big day tomorrow - end of month markup and a gap up first thing in the morning - at which point I will sell it. If no gap up then I will probably hold it.

Then I bought some VRSN - this time off a hammer formation with a confirmation - look at the 12:30 candle and the 1 P.M. candle - that's where I bought it - I sold at the 2:45 candle.



Along the way I also bought RIO on a hammer formation but this one failed and I sold it at a 2 cent loss. Almost a break even trade.

All in all what an absolute crap day - 5 stocks 2 wins, one even, one loss (big one) and a holder. Hopefully the holder, SAI, will bounce enough tomorrow to get me even with the board.

In the midst of all of this crap trading I missed AMR and CTXS both of which set up nicely right out of the box and would have provided a healthy return. Oh me oh my - that's what happens when you start looking around for something new. You never know what you got till it's gone - you take paradise ... oh never mind.

For tomorrow I envision an up day - the up/down ratio remains in neutral (45%) and the VIX is also neutral. Two of the three sisters finished in the red but barely and the Q's finished strong. The 20 day new highs added a 100 but the lows only dropped 14. These are all good things for an up day tomorrow - at least tomorrow morning which is all I really care about.

I'm going to leave the coin with 24 and 12 since today was mixed and there is no way the coin can land on the edge - for tomorrow - heads - bull run coming.

Friday Wraps

Told ya! - Market went down and down hard - no excuse except nothing left to buy - so it became time for a rotation. I played AMR (what, again? yes, again) and made some early on which I then proceeded to play into ISIL. I decided to hold it over the weekend even though I hated the idea but I do believe that there was nothing wrong with the stock just the day. Of course there was news about their COO quiting or being fired or some such and that was enough of an excuse. I'll probably double up on Monday if I can get in before it shoots past my buy point.

Monday should shape up to be a fine day - end of the month of October is traditionally the start of the up season and I think today was just the prelude to that event. Anyway the up/down ratio is a torrid 30%, the new highs shaved about a thousand to 472 and the new lows hardly moved but went all the way up to 281. These are great numbers. It means the pressure is off but the rally is still intact. The three sisters finished in the white and the VIX remained neutral - pulling back a little more towards its 10 day MA.

The coin, magic my butt, is now 24 and 12 having blown an obvious lay-up today but for Monday it says ... heads - bull market comes - I believe it.

I'll be back later this weekend with some more charts for your viewing pleasure.

Thursday Later Than Usual Wrap

Had some things to do yesterday afternoon gang and by the time I got them done I was plumb tuckered out - but better late than never (or at least I think so).

Took a position in AMR (again, yet again) and it proved profitable but also served to show yet another nifty concept regarding a stock's price - that moves are done in waves. Take a look at this daily 15-minute chart.



You will see this pattern repeated over and over again in both directions. It's why we traders sometimes are crossed up because we are waiting for the third wave and the bottom falls out instead. But if you watch for setups you can see that you can use this wave method to find afternoon plays that are sometimes better than those in the morning.

Friday should be a down day - The up/down ratio has crossed the divide and now sits at 64% while new 20 day highs are at 1422 and lows are printing 159. There is nothing left to buy and this market has to be bone weary and tired regardless of all the good earnings news. And that isn't really that good anyway.

The VIX remains neutral although I don't know how but the fact is a low VIX is not as important as a high one. The three sisters either finished the last hour red or as a topping doji. The three major indices all finished with topping doji as well. She's goin' down I tells ya she's goin' down ... which is not a good thing.

Mr. Magestic ("magestic - majestic + magic" - get it) never mind - the smartass coin is now 24 and 11 having nailed Thursday and for tomorrow says ---- heads - bull market. I'm not going against the coin.

Wednesday Wrap Up

I was wrong and the dip buyers stayed home today. I didn't do much either - left early this morning to play golf and didn't get back until just before the market closed. After seeing the action on the day I was pretty glad I wasn't here. Now that the stupid Dow has made its all time 12000 record maybe we can get the draw back we so desperately need for good market health.

The up/down ratio sits at 43% and new 20 day highs are still above 500 at 698 with the new 20 day lows at 148. Still not much to buy but the VIX is in neutral teritory and the three sisters all finished in the white. Earnings keep coming in well but earnings really don't matter when the market is so oversold. There are a lot of unatractive stocks out there right now. I think we should go down tomorrow despite earnings.

The magic coin only got one out of three right today among the sisters but I'm going to say it was wrong anyway so it sits at 19 and 10 which is still not too bad and for tomorrow it says --- heads - the bull is back.