Stock Market for April 2009

[pinetree]

I agree about a move coming.  The market's been full of bull and bear traps lately.

This kind of action seems to precede nice moves.  What tends to happen to me is I get so confused by the back and forth that when the move finally happens I don't trust it, and end up sitting and watching it.  That's what happened to me at the bottom a month ago, there were some crazy price swings that threw me off base and that nervousness made me too quick to take profits on the way up, and I only made a fraction of what I should have on FAS...

I feel that confusion now, and don't want it to keep me from getting the next move.  Just trying to keep my wits about me here.

Just noticed the XLF has almost closed it's gap, the daily candle doesn't look pretty.  A gap down tomorrow morning wouldn't surprise me.... but that's just a random hunch.

What do you guys think?  Or are you just as lost as me?

EDIT - That FAZ may work out BF.  Think of it this way...

I went short on Monday morning and made the mistake of holding overnight, and had to take myself out Tuesday morning with a small loss.

So I was selling when I should have been buying.  Now that we rallied 500 Dow points in a little over 2 trading days I'm thinking of buying?  See something wrong with that picture?

I suspect we'll see some downside tomorrow morning.  Maybe the financials will provide some clues as to whether it's a gap fill before we make new highs (banks outperform spx) or the start of a larger downswing (banks underperform as today/yesterday)?  Just trying to think ahead...

[jjj000]

So I was selling when I should have been buying.  Now that we rallied 500 Dow points in a little over 2 trading days I'm thinking of buying?  See something wrong with that picture?

Remember my stupidity clause rule--  "Trade as if you actually got the last call right"

heh... not that that would help.

What do you guys think?  Or are you just as lost as me?

No idea.  I'm lost.  At this point I'm almost thinking of making a double bet in either direction and just putting a 5% stop loss on both and letting fate decide.    With my recent luck, I'd probably get both stops taken out on an intraday move.  Pathetic but true.

Take a look at a stock like CAT - which is generally indicative of the S&P.  Right now it's pretty much finishing a perfect trend break resolution back up to it's previous Feb 06 high.

Now, you could look a month further back and wonder if that downtrend started actually back in January...?  So do we keep going up to resolve back to that high for a nice 50% gain from here?

Or does the Feb trend completion have enough resistance to beat stocks down from here and retest early March lows?  Most S&P stocks follow this same chart.

So... at this point I have no clue.  You could make a heavy bet on CAT and hedge it with some Puts or an equally heavy bet on TZA.

In addition, to make things more confusing... two more things to consider:

- "sell in May" coming up.  Which sometimes is actually "sell in April".  But on occasion turns out to be "sell in June".  Awesome.

- my half-ass options monthly high-low skew that has been valid for the past bunch of months.  Either a high or low at the start of the 2nd week of the month, and the reverse at the start of the 4th week of the month.

By this theory, April will either be at the high... or the low... for the month around next Tuesday.

So maybe you wait 3 more trading days to find out what gives.

Or maybe you sit and do nothing like me and watch other people profit 

Heh.  Damaged pride.  I'll get over it...

[pinetree]

Ok, I have no idea whether I'm actually helping people by posting this or just muddling things further.  It seems that if you look hard enough you can find a bullish case and a bearish case for pretty much anything, but anyway...

The Nasdaq appears to have broken out from the potential H & S bottom I noticed last week.  There wasn't much of a right shoulder there, so I don't know how legit this pattern is.

On the XLF we've been in an ascending triangle for 3 weeks now, which is a bullish continuation pattern according to classical TA.  It seems to meet the qualifications put out in the stockcharts article linked below.
http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:chart_patterns:ascending_triangle_c

Also, XLF almost looks like a H & S bottom too, potentially? but wtfdik?

What's interesting is despite the XLF's seemingly bad performance, it's % gain for the day was on par the SPX, 2.76% vs 2.87%.

Just some random observations to balance out all the bearish ones I've been making.

I'm going to sit it out until I see something actionable.   Right now it seems like a coin flip, the evidence is equally compelling both ways, and neither outcome would surprise me.

[jjj000]

I'm going to sit it out until I see something actionable.   Right now it seems like a coin flip, the evidence is equally compelling both ways, and neither outcome would surprise me.

Would it surprise you if we traded sideways and did nothing for a month?   heh...

[Bottomfeeder]

Oh good glad its not just me....I have to pick myself off of the floor, been rolling around LMFAO on these posts...

Our confusion, fear and lack of profits are well justified.  As Macke would say, "people when you dont know which way things are going, you DONT go faster"!  

Somehow I have managed to make practically nothing this week, while being right alot, and going for it .  Folks this is a very hard thing to do.

I feel like a bad trader right about now.....Funny I have been watching Fast Money this week, and there is absolutely no consensus on what the heck is going on.  Finnerman long SRS tomorrow.

Its felt like whether you were long or short, that you had a great probability of being wrong, because every day has seemed like a big reversal, plus or minus the gaps.  The good news is if you got it wrong just wait a day and you can get out even.....chasing your tail by definition.

But when you look at FAS check that price opening on 3/27 at 6.38 and closing today at 6.41.  Talk about pricing in the news.  I sold 75% of my FAZ for nothing today, and intend to sell in the first hour tomorrow.

So in trying to focus on something beyond the next hour, I have decided, no more shorting for me I don't think unless it is a move that can just be jumped on and sold.  Not liking the Financials action, seems to be weakening, BUT looking at a 6 month chart on FAS, it is now trading above its 30SMA, and appears to be basing, with the indicator just barely starting to point UPWARDS in direction.  

I am going to take FM's advice and stop shorting and buy on weakness instead.  It seems safer, and obviously alot of upside ahead if we should have a sustainable rally.

Sorry for the ramble, but I got scrambled, trying to pull myself together and rethink it

[ArsenalFan]

Was up 9k on Canadian Natural and then got stopped out on a big downward push one morning.  Ended up making 5k and have been sitting 100% in cash for the last week and a half watching all my other favorites skyrocket.  Had I held CNQ would have been up 14K.  So I feel like a bit of an idiot as well.  I have no idea what to do either.  Help.

[Bottomfeeder]

Still laughing....I just went back and re-read those posts...

The funniest thing is that Pinetree, you and I probably did things about a day apart it looks like, and neither one of us did crap!  Think about it, how crazy is that!

Tell you what holding these guys over nite in this volitility and not losing money is almost a miracle.  Longest move 2 days, with gaps in between.  

LOOK at the 5 day 30 minute FAS chart.  Looks like 2 eyes and a confused looking mouth as a chart....never seen anything like that before. .  WHAT SHOULD HAPPEN?

[pinetree]

BF, about the FAS chart, kinda looks like an evil smirk, I think that's the market laughing at us...

Yeah, lots of funny stuff.  Even funnier, last nite I had messaged jjj about that trade channel idea to clear a few things up.  Before I went to bed I sent a message with a lot of questions on how to handle different hypothetical scenarios, next morning before work I check and read his reply and he reminds me that he just made this system up and he's not totally sure.  ROTFLOL!  I'm thinking, Oops, I forgot this isn't some official trading system with a rulebook and all.  Struck me so funny, was laughing all the way to work.   

Anyway, back to more serious matters...

[pinetree]

Serial posting alert... replying to myself again...

You know, I like the buy on weakness idea, and like Macke said, you've got to pick a direction.  And why not pick upside?

The VIX is building out a 3 month-long symetrical triangle.  It's range is contracting so at some point in the next month it should break out.  We're near the low end of the range now.  I suspect some downside action upcoming, so that should at least send us back up into the middle of the pattern.

I have some other ideas but they wouldn't require any immediate action so they can wait.  I want to get to bed at a reasonable hour for a change... this going to bed at 2-3am every night is starting to catch up to me...

[Bottomfeeder]

Pinetree....that was nice of 3j to point that out to you...lol

I like your analysis there....I think I will close out my short after riding it down some and then go long....lol

Good grief hahahahaha

ArsenalFan....sounds like your doing alright.  You know whenever you want to try and get the most out of something by letting it ride, ineveitably it comes down and takes you out.  So you either have to pull off the stop or try and sell into strength and give up future moves up.

I have posted before about having a perspective of time.  It appears we may be in a turn here so we are all going to have to rethink our horizons a bit.  Maybe the best thing to do is to sell half into strength and let the rest run, or loosen your stop some.  These are always tough, because our picks don't trade in a vacuum, all the things going around around have to impact or should impact strategy.

Clearly everyone is struggling right now, including the pros, in all kinds of sectors.  This is not easy trading by any stretch, so don't beat yourself up for making money.  I do think it is starting to change a bit.  Shorting is becoming scarier, and it appears the pros are putting it away right about now. I would suspect more shorts coming off all the time, untl we get that "surprisingly bad news".
GLTA

[ArsenalFan]

Thought I would post the following link:     http://fdralloveragain.blogspot.com/

This guy seems extremely intelligent and has been bang on for the last couple years in almost every way (although I think he may have missed this last runup).  His deflationary theories are quite incredible.  It appears as though he believes oil will be $4.00 a barrel by 2020.  Have a look and let me know what you think of his commentary.  He has a new trading alert posted.  Cheers and best wishes to all.  Hope everyone prospers this year!

[Croaker]

I am unsure of my next move. Sold FRG for a little profit. Only holding FVI, had it since 2007 and still in the red on it.

Doing alot of reading on Gold on the internet and seeing how the Govt's manipulate it to keep it down is unbelieveable to me. I don't know if I would buy back in if it hit 800 again. The world thinks the 1.1 trillion to the IMF will stabilze the markets so they have the warm and fuzzy again and pull out of gold. So I am thinking gold is going down and sideways until inflation starts to hit.

M2M, what can you say. Now the banks can hide the current cost of their assets instead of the actual loss. Talk about hide and seek or smoke and mirrors. Now I am really thinking about hitting the Banks for the short run. But need to do my DD on it still.

I am sure I am going to miss quit a few runups while I sit on my hands and figure out the next move.

Watching the waves go by, with both eyes wide open

[jjj000]

Another 663,000 jobs lost in March.  4th month in a row.

I know davids was publishing some notes months ago about these numbers being cooked to be more positive than they really were.  I have a real hard time believing these numbers being this bad as well.  That's over 30,000 jobs a day for 4 months straight.  That's a lot of jobs.  I don't know that many people who have been fired.

My bet is this is all just another kind of "writedown"... fixing books that were cooked to look more positive during the bull run.  Now they are clearing out their funny numbers and unloading hidden losses during the bear run.

Anyway, enough of my nonsense.

I'm thinking market sell-off soon, so I picked up some TZA in pre-market.  Have conditional buy orders for FAZ and DZZ should they break out to the upside.  Tight stops on all orders.

GLTA.

[Bottomfeeder]

3j....if you dont mind....what did you put your orders in at?

[Bottomfeeder]

Getting more bearish, looking at 30 day charts on Financials, with FAS just ticking over to negative in momentum,  for the 2nd time in 5 days, with down momentum accelerating, while at the same time trading ABOVE its 10SMA.  RSI Neutral at 52.

FAZ looking at 30 day still in just slightly negative momentum, but going in the right direction, trading just BELOW it 10SMA, with a 36 RSI- oversold.

So in trying to pick a direction and coming off a big move up, the bullish indicators are indicating conflict, while the bearish FAZ has everything kind of lining up for a move here.  It kind of conservatively looks like maybe 24 AT LEAST is in play might be days or weeks to occur. Exit or protect before earnings reporting.

The market may still get to 900 first, but in trying to pick an short to intermediate move and ride it up I gotta be short.  So scratch all that no more shorting stuff I put out last nite.  This week has been tough because my mentality has gone bearish, and I have been conflicted about it having not been bearish in a couple of months, but it looks like its time for me to switch sides.

I am going to continue to deploy cash slowly for a bearish case.  I need to do some research and make sure I have the best category for the case.  Might want to look at getting short the small caps instead of financials though, because with MTM changes some volitility may have been taken out on the downside, as the banks get to borrow mney for nothing lend it at a profit and pump up their balance sheets at the same time.

So thats it.  Accumulate short positions, churn as available, but with a mindset to accumulate for a larger move ahead.