Stock Market for March 2009

[jjj000]

PT...you are correct.  I am looking for a crossover now on the 10 day.  A failure has me either selling my long or hedging with FAZ (at least until Thursday).  I am a little twisted at the moment, as my closing charts yesterday on the 10 day had FAS sitting right on the S&P, but this morning it showed it opened up down 11%.  .  Which is not what I was expecting, has me a bit confused, and not where I want to be.

Would one of you guys mind posting this chart again?

I missed my bids on LNC and FAS in pre-market, so I'm mostly watching this on the side.  Lucky enough to have gotten some UCO puts and XLF calls yesterday so I'm in it to a small degree.

Looks like S&P and XLF both are having trouble closing the gap here...

[pinetree]

Looks like we got the bounce, and going by recent history it could have room to run to the upside before the next downswing...

BF... how do you tackle this now?  Since the 10 day is saying buy (I assume) do we switch down to shorter timeframes to gauge the strength of this uptrend and whether to add to longs??  Hope I haven't been asking too many questions, just trying to get a feel for this...

jjj - sent you a pm...

[Bottomfeeder]

Pinetree...yeah....I wasn't awake enough when I posted earlier....showing 11% below was a function of the 10 day moving forward 1 day.  Things look correct on an 11 day.

Still that is fine.  Its just a mental visual adjustment.  Now we sit almost right on the S&P.  It needs to break through to the upside, clearly, to be a buy in my mind.  A failure is a sell and go short.

I am thinking that we are looking up for the rest of the day.  5.62 I think will be about right for entry, If yesterdays 4.80 entry was missed (stupid me).  

To me this financials play looks like it might be getting set up for a sell on the news on FASB, which should be a good short opportunity, Im just thinking out loud here.  Does anybody know off hand what the time of announcement is?

And dont worry about the questions.  I am just trying to get better too, so I appreciate your eyes! Yes time frames are getting shorter in my mind.

[Bottomfeeder]

doubled position at 5.73....watching it close here for the last hour....

[JDH]

I don't normally post during the week, but I agree with most of your thoughts, and I have turned short term bullish.

Yesterday I closed out my short positions (such as RSW), and today I took a small position in FAS, in anticipation of a continued rally on the mark to market rally.  The RSI levels on FAS, and the Dow and S&P look favourable at the moment. 

Bad news does not seem to be bothering the market.  (President Obama fired the CEO of GM and is now running the company, and no-one seems worried).  That sounds like a short term bottom to me.

I have no idea how this will impact on gold, which I continue to hold.

Longer term we are all screwed, but the final test of the lows may not happen until the summer or fall, so for now I will conserve cash and do a bit of gambling on the upside.

[pinetree]

JDH, regarding gold, there are a lot of things to look at there.  The most bullish thing is the multi-month divergence between gold stocks (HUI, XAU, GDM, take your pick) and the broad market.

Gold stocks fell with SPX in Oct, but in Nov when SPX made a new low HUI made a higher low.  A tell for the major pm rally that followed?  In March the SPX made another new low while the HUI made another higher low, extending the divergence.  This is but one aspect of the equation, but could it be another tell for things to come?  We'll see...

BF, you must have been sweating it during that surprise sell-off... even though the financials weathered it well.  I notice the ratio line was pretty much unchanged by the selloff... banks were definitely back in control today.

It seems the overlay chart (now 11 day) has been trading in a channel with the SPX forming the lower limit.  We're almost halfway up the channel now.  Another up day tomorrow would be nice as it might get us up near previous tops, which could set up a sell the news plunge like you mentioned.  I have no opinion on how likely that is to happen though... but you seem to have a good sense of how news will effect the market.

[jjj000]

PT- thanks, send you back a note.

Interesting observation on gold higher lows.  "Sell in May" has me on edge as the weeks melt away here...

[Bottomfeeder]

Yeah PT....still sweating it frankly...and it looks to me like it was the banks all the way including the late sell off.  After hours action, less than also.

I like to look at the last 5 minutes especially....which tends to set up the next days trading, which looked up, but then again after hours not great.

I should have looked closer at the crossover, from a  5-10 minute perspective.  It probably would have kept me from pulling the trigger.  My thinking is that by the time the FASB meeting occurs we will be higher than we are right now. 

Bottom line, I would have liked to see us close above that 802 level though, hoping for a gap up!

[Bottomfeeder]

I ran across a pretty good interview piece on the resource sector.  Analyst gives outlook on prices for Gold, Uranium and Copper, as well as some of his favorite picks per sector.  Worth the read.

http://www.ibtimes.com/articles/20090331/george-topping-shares-price-outlook-for-gold-copper-amp-uranium_6.htm

Interesting gold piece, discussing Indian demand....yikes...

http://www.ibtimes.com/articles/20090331/indian-gold-imports-at-zero-for-second.htm

A company on the Indian play that caught my attention recently again was Tata Motors, TTM.  I heard a report that they are also in the electricity and water business, and showed an increase of 17% in demand.  Their growth numbers were also pretty explosive.  I need to do more DD, but there chart is looking like an interesting wild ride, but trading above its 50DMA, pointing up, and pretty much at resistance.

[pinetree]

Ok, first of all if anything I said earlier didn't make any sense that's because I was using XLF not FAS as a comparison! 

Anyway, yeah, totally see that.  You had a small breakout on the 1 min, but the 5 min stopped right at SPX, and the 10 min fell short of it completely.

I dunno... I'm new to this and all... but looks to me if we don't get some upside tomorrow morning this could be a sell.  (Futures down as of now)

By the way, why FAS and not XLF?  Just wondering.  XLF is above the SPX on the 10 day, and FAS is just below...

[jjj000]

PT - oil question.  How the heck did DTO go from $130 last Thursday to $180 on Tuesday???  You see that - a 38% pop... when oil dropped from $54 to $48 - only a 12% drop??  Since when is DTO a 3X etn!?!

These derivative based things are crazy.  Contango effect?

[pinetree]

I think it's probably just due to these leveraged ETFs tracking daily price changes, and over time it can become skewed.  Kind of like SKF hitting a price high of 300 last year but this March it only got to 265 even though the financials were making new lows...

I should have thought of trading it though.

I thought 55 would be a resistance, and after such a sharp run-up....

As for DXO, I was thinking of it as a possible multi-month trade, just for a change from my usual short term stuff.  I didn't expect oil to run straight up to 70, I was thinking it might get there by June?

There's also a divergence between oil stocks and the broad market.  They made new lows with the market in Nov, but in March they put in a marginally higher low or maybe just call it a double bottom.  Not as strong as the gold divergence though...