Saturday, March 28, 2015

Twitter Trade Posts for the Week Ending March 27, 2015



My effort at transparency, the below Google Worksheet contains all trades posted to Twitter this week.  Day trades were poor overall, and swing trades are ok so far.  Blue highlights mark swing trades that remain open.  Green highlights wins, and red highlights losses.  All trades are in percent terms with day trades in column E and swing trades in column F.  The below link should bring you to the details of the spreadsheet.

Twitter Results

Tuesday, March 24, 2015

Longs Losing Control



Shorts gaining control here, with reason to be hopeful.  I believe buying this pullback is still warranted as long as $208 (Round #) to $208.37 (Fib) can hold tomorrow.  Below $208 shorts can go for the jugular and target $206.75 (50 Day MA) and $206.62 (Fed Day Low).  I see a narrow range/low volatility day as unlikely and expect either a rip back above $210 or a capitulation down to $206.62.

The market didn't give me my price until 3:59 today, 1 minute before the close.  I was impatient and lost twice, 1 short and 1 long.  My $208.75 long has 3 things going for it.  I'm buying around a minor (8 Day SMA) and a major (8 Week SMA), both of which are trending upwards.  Secondly, the last 2 days selling is on very light volume.  Lastly, I'm buying near 15 minute support established by the first swing low from the Fed Day move higher.

3 Scenarios for Tomorrow

1.  Gap lower in $208.37 (Fib) area and my overnight long is stopped out.  Take 15 minute break and return to search for short entries, as Fed day low then becomes a reality.  No big deal here because my position overnight is small.

2.  Gap higher into $209.45  (Fib) area and I will look to sell half  at $209.70 (Back of Trendline) area.  I will look at build long back up on pullbacks after this to see if we can get a meaningful break over $210 (Round #).

3.  Unchanged open/around my long price $208.75 and I will look at add early on any strength above $209 (Round #).  If we cannot get above  $209 (Round #) and stay there by 10:00 to 10:30 ,long is likely over.



Monday, March 23, 2015

Simplicity


Summary

The market is trying to extend the gains from Fed day last week.  I mark 3 higher lows on the daily chart since that day.  During the last 6 days buy volume has outpaced sell volume.   SPY has reclaimed it's position above all moving averages I use (8, 20, 50, 200).  It appears as though a pullback from the rally that began from 3/13/15's lows of $204.58 and peaked at $211.27 (Fed Day High) is likely.  I expect SPY to pullback into the $208.70 (Fib, 8 Day SMA) to  $209.22 (20 Day SMA) area.

Macro (See Yesterday's Post As Well)

Bulls need to defend the $209.83 (VP) area, as bears can take advantage of weakness below here with targets below of $209.49 (3/20/15 Low), $209.03 (3/19/15 Low), and then $208.73 (Fib, 8 Day SMA).  As long as intra-day circumstances dictate, I have strong interest in getting long in the $208.70 (Fib, 8 Day SMA) to  $209.22 (20 Day SMA) area.


Green to Red move early tomorrow morning may offer short day trade.  Consider shorts in the $209.90 (Level in front of round #) to $210.12 (Fib) area early, with stops above $210.33 (Bottom of today's 1st 15 minute range).  Expect small buying at the $209.61 (VP) and $209.45 (Fib) levels, but bigger buyers likely to show up around the $208.70 (Fib, 8 Day SMA) to  $209.22 (20 Day SMA) area. Getting long here offers exceptional risk/reward using $.20 to $.30 cent stops.  

Finally, remember most importantly that any gap up has the potential to squeeze right back up to $211 (Round #) to $211.27 (Fed Day high) area.  Shorts on a market that spends any reasonable amount of time above $210.20 tomorrow are risky.



Sunday, March 22, 2015

Going to Infinity in a Bucket


It was late in the 4th quarter 2012 when the market told us 2008 was over.  The beginning of the weekly chart shown below (12/31/12) approximates the breakout point from a weekly ascending triangle that dated back to 8/1/11.  Those were the days when the market used to establish chart patterns, now it just trends. It's been a costly 2 years for stubborn shorts. 

More bad news for shorts my lie ahead, as the tight 3/9/15 swing low of $204.40 has been confirmed with solid volume coming into the market last week.  As I said in Friday's piece, all time highs of $212.24 hit during the week of 2/23/15 are highly likely to be breached.  If anything, weekly price action is indicating that the trend is strengthening$205.89 (VP) to $206.10 (20 Week SMA) are relevant levels to the downside, as any near term move lower to this area would threaten the current trend.


On the daily chart below, $209.83 to $210.91 (VP) is the range to watch.  Weakness below $209.83 (VP) makes $209.28 (20 Day SMA) possible.  Remember, $209.25 was a much discussed level last week.  Strength above $210.91 (VP) brings $212.24 (All Time High) into site.  A smaller level of note comes from the descending trendline beginning on March 3rd and offers a small area of resistance just above $211 (Trendline).


After last week's 5 point rip from $205.86 (Last week Low) to $211.27 (Fed Day/Week High), a pause/pull back is in order.  A break lower toward $210.26 (VP) down to $210.12 (Fib) could bring price quickly to $209.46 (VP) to $209.45 (Fib).  This type of move could offer a short off the open with a stop above  $210.46 (Friday's Close).  Early and quick moves above $211 (round number) to $211.27 (Last week high) should be viewed with suspicion.  Make such a move hold above $211.27 (Last week high) the entire morning and past lunch to trust it.


A move lower to $208.69 (Previous Breakout) to $208.91 (Fib) have a greater than 50% chance of happening, so shorts targeting these levels from above with good risk/reward should be taken.  These levels are my line in the sand for tomorrow and I'm VERY interested in longs here.  Additionally, there is an ascending trendline that meets price around $208.50.  Consider stops in $208.16 (VP) to $208 area (round number) for longs.

Morning Questions/Trade Thoughts

1.  Is the open today ($210.27) a good place to operate/trade long or short?  I see a long scalp early from $210 area targeting $210.42 (Friday's Close) with a $209.83 (VP) Stop
   
2.  If we do not see buying with conviction in $210.12 (Fib)-$210.26 (VP) area, we need to start thinking short according to above scenario (paragraph 3).



Thursday, March 19, 2015

Hold Up Bulls



Projected Max High:  $211.75  Projected Min Low:  $207.36

Longs have cause for concern after today's price action, as no serious attempt was made to even test yesterday's close ($210.44), let alone its high ($211.27).  I am definitely less bullish tonight than I was last night, so any weakness below today's close ($209.48) and I will be interested in shorting.

My line in the sand for weakness tomorrow will be $109.25 (VP) again, as targets available below are $207.70 (VP), $207.36 (8 Day SMA), then $206.62 (Fed Day Low).  I do not, however, expect $206.62 as the picture below shows a supportive trendline at the $207.90 area.  I am looking at $207.36 to $ $207.70 as my wholesale buy area, and will look to initiate longs accordingly.  Of smaller importance to me are $208.49 (Fib) to $208.69 (B/O B/D Level), but may play a small support role tomorrow that I would expect to be temporary.

For me, bears are in control anywhere below $210.  If we get back to and above $210 to $210.21  (Fib) bulls will be emboldened and shorts are likely to begin covering.  This is how rallies begin.  In this scenario I will start looking to get long the market above $210 with targets of $211 (round number) and $211.27 (Fed Day High).  An overshoot to $211.75 (VP) is possible, but unlikely.


Wednesday, March 18, 2015

Put A Fork In The Bear

$SPY:  Projected Max High: $211.69 Projected Min Low:  $208.69

$212.25/New 52 week highs all but assured in coming days/weeks.  Would like to buy $209.39-$209.55 (38% retrace from post Fed rally today) area early.  $208.69 (Monday High, B/O Level) could get tested and would possibly offer a low risk/high reward buy area, but price is unlikely to travel there tomorrow.  Early pushes to $211.27 (Today's High) should be shorted with stops at $211.52 (VP) and can target the $210.21 (23.6% Fib) area.

One possibility I'm considering in the back of my mind is that we just gap open above $212.25 (52 Week High).  Given the magnitude of today's Fed news, I would actually give this scenario a 30% chance of happening.  In this scenario you want to be long early with stops below $212 and could probably just buy trend pullbacks on the 5 minute chart.  Price opening at these levels would indicate an eagerness of buyers to catch up with today's positive fundamental/macro development.

The most unlikely scenario for me is an open in the $209 (50% Fib) area.  In such a situation, I'll consider the possibility that the market is now saying that today's Fed action/market rally was meaningless.  At this point a return to $206.62 (Full Fed Retrace, Today's Low) would be possible, as I would consider this type of open an indication of extreme weakness.




Tuesday, March 17, 2015

Thoughts on $SPY

SPY appears ready to challenge the $208.97 (12/29/14 High) to $109.33 (20 day SMA) area for now.  Above there could see a quick move to the $210 (Round Number, High of 3/6/15 Gap Down Day) area.  I don't expect the $109.33 (20 Day SMA) to offer much resistance, as you can tell by looking at the daily chart that the 20 day SMA has not played a role in recent months.  Bulls are pleased with today's inside day after yesterday's bull move and stay happy above $207.70.  Intra-day weakness below $207.70 and shorts can target a move to the $206.98 (3/17/15 Low), $206.85 (Daily 8 SMA), and then $206.68 (3/16/15 Low, Week Low).  
 
 
Bulls want work above $208.41 (Fib, Trend Line Break) for moves to $209.31 (Fib, 20 Day SMA) then the above mentioned $210.
 

15 Minute chart from above, backed off a bit below.  Price below the white high-lighted area emboldens bears and brings in the possibility of $206.98 (3/17/15 Low),  $206.85 (20 Day SMA) and then $206.68 (This Week Low).  Further moves below $206.39 (Fib) and $206 (Round Number, Gap Fill) indicate extreme market weakness and put bears back in control.