Friday, July 17, 2009

A Bug's Life

Click on Chart to Enlarge

This is certainly a pivotal and emotional time in the trading world. There is lots of frustration and even anger out there regarding the market and retail traders' emotions from both bulls and bears.

Bulls are mad that lots of people have been saying the market is likely to fall and keeping them out of this explosive rebound. Bears just cursing the rally and its descendants on every up tick. I can vouch for the frustration as well this week. "Sometimes you are the windshield, and sometimes you are the bug. And this was a bug kind of week for me" was how someone phrased it. I was definitely 100% long on bug genes this week, with full margin to boot. lol.

With short-term trading you have to be flexible and largely distance yourself from any belief or hope about the market. So while from a charting and pattern perspective I still favor this area as a topping/reversal level for the intermediate term until proven otherwise, a breakout and hold for several days above the June highs will be good reason to continue treating the intermediate trend as up until proven otherwise.

Here are a few links to other posts I've made highlighting some doji candlesticks for those interested.

Have a good weekend!


  1. Typing at about 1:30 ET Monday. The intraday cumulative TICK and TICK moving averages are extremely divergent as prices have moved higher the last 2 days. The last comparable action of the TICK was June 26 to June 30, before a solid decline for a week or so.

    Also there are signs of solid bearish divergence on the 60 min stochastics of SPY. This is not too meaningful until the market makes lower lows for several hours in a row because further upside could erase the divergence.

  2. Bearish watchlist includes PLL, XLP, OII, WFT, ECL, GRMN, RL, SYMC. Following an hourly chart looking for technical indicators to show divergence for possible entry.

  3. Last week the markets yawned when CIT announced imminent collaspe.Today they were hailed as proof that "the system works. Just how long will 3 bil(@10%) carry them with +10% unemployment approuching? The vast majority of important corporate earnings reports are mostly the result of downsizing and accounting hocus pocus but The Street seems to believe that the illusion is real. White is black and black is white. Alice is following the rabbit down the hole.

  4. ... these aren't the droids you are looking for.

    obama is using a jedi mind trick.

  5. Anon,

    I know how you feel. That type of stuff is not my expertise. Simply letting price, via some objective and logical analysis mehtod, tell you what is real and for sale will do the job for short-term trading. If you are interested in the longer-term view, then no way am I buying anything now.

    I think that is what makes it so difficult the last few days. Anybody with a brain "knows" that that what started last year has not run its course. But price is acting like a bull market. Hence mega bulls AND mega bears simultaneously.

    Credit/fiat monetary systems are crazy enough with regards to implosions and bubbles, but then add in "stimulus" and it probably is going to become usual for us to continue to see historically unique, and gut-wrenching, types of moves for the next few years, IMHO.