« September 2011 | Main | November 2011 »
CPCI and CPCE showing that our favorite bears are getting excited again.
If we look at NYSE and Nasdaq Tick, it is obvious that we are approaching oversold
Our favorite Perma Bears will tell us a Halloween Story about Tops again ! Ask yourself one thing ! Why did NYSE Summation gained on a down day and has still a valid buy signal. As long as Summation Index remains on a buy signal, we remain long.
click - > SPX Looking Forward
The 1240 area and 60 EMA magnet was discussed and ES currently trades at 1243. I sold some of my ETF Shorts ERY, SQQQ, SPXU, BGZ after hours and took some profit. I do however have 3 more shorts left from last week being slightly under water. Rest of portfolio remains long since Sep & October ( see Portfolio link in Navigation Bar)
The hourly STO is oversold and MACD would need to turn back up to create a buy signal. There is still some room left to downside but my guess is that the most is behind us.
VIX Hourly is now slightly overbought and as we can see in the chart, the past 2 weeks the 60 EMA was resistance. That being said, MACD remains on a buy signal and RSI has some room left.
Summary:
The market obliged as discussed and we are already near the 1240 area mentioned prior the down move. There is still a chance we visit the 38.2% retracement and one of the reasons I kept 3 shorts in Swing Trsde Portfolio
OT was bullish in July for HUI and early Sep an overbought & cautious warning was mentioned for HUI. Please view archives .
A sell signal became even more obvious when our favorite indicator to fade (TKI) turned bullish on 2nd of September 2011 and he was bearish in GDX since 2009. GDX was his most favorite short and appeared to be his personal enemy.
TKI Quote of the Year 2nd September 2011
Miners look Sensational
This is a GORGEOUS BREAKOUT, and on top of that, we know that Shalom Bernanke will support the trade all the way to infinity. Finally, a long I can love long time!
Chin Wag Team was delighted to hear that and knew the PM stocks bought in July are now due to sell and so we did. A week ago TKI tried to short again GLD & GDX giving us a sign loading longs and we had a beautiful week so far and reached retracement in GDX at $60 level.
GDX Daily Chart
The minimum price target has been reached. Click -> Time to Load Miners
Summary:
Minimum price target has been reached. Hourly chart is overbought but can stay overbought. That being said, strong support should be near the $58 area. Daily chart has no sell signal. Pullback is due.
The hourly is somewhat overbought and would need to break STO 80 to initiate a sell signal. 20 & 60 EMA are supports in hourly chart. They both are magnets too.
SPX Daily is overbought but can stay overbought as it did in 1998. As long as STO is above 80 the daily has no sell signal at all.
SPX Weekly has a buy signal. I was drawing the green line as a possible outcome once the 13/34 EMA crosses to upside again. So far it has not crossed and it is important to remain cautious with long positions accumulated between September and October. Remember, the final confirmation for the bulls is the 13/34 EMA cross as the NDX already did. The 1210-1220 is now important support on weekly closing basis. These levels were the breakout levels of the range 1120-1220.
SPX 1998 Chart
SPX 2011 Chart
Summary
The most obvious target area is the 23.6% retracement near the 1240 area.
Early October an article stated that we have seen the stages of Panic & Capitulation in Breadth Thrust and NYSE New Highs New Lows and we should take this gift to buy agressively. Well, we all got rewarded and as a bon bon on top of it, we saw our favorite indicator TKI being spanked.
BREADTH THRUST - needless to say we bought those blue/green arrows shouting "get me" levels.
NYSE NEW HIGHS - NEW LOWS
Oh yes, we did love those Panic & Capitulation levels and went real agressive collecting stocks left, right and center. I do not know any fellow trader on OT who did not take advantage. Collective spanking of Perma Bears one could say.
NYSE SUMMATION INDEX
Our trading account savior. Gave us a sell signal in July in combination with break SPX 1315. And gave us buy signals in August and October 2011. Positive divergence with Summation marking higher lows and market made a tiny lower low. A chance for us to load even more stocks.
NYSE Advance - Decline and NYSE Up-Down Volume Charts
Both charts appear overbought to me and hedging is mandatory at those levels
SUMMARY Part 1-6
We had a fantastic 4 weeks (plus +++) and amazing gains in such a short time. We should cherish such event and protect our gains. With SPX, DOW, NDX at the upper range of retracements or at least at very strong cluster area, it would not come to my surprise to see a rather larger pullback starting next week. A normal retracement is 23.6% to 38.2% of the entire move from October 11 low. I am approximately 15% hedged with leveraged shorts to protect my equity longs.
I am happy that the very detailed analysis Part 1-6 has been concluded as it was a piece of work to bring all together to explain my thought process. I hope you enjoy it as I did.
Cheers & Have A Great Weekend
Barty
