I know I rag on these guys quite a bit, but this is an article well worth your while.
Be wary when you hear ‘this is the big stock crash’
I not only agree with the title, but also his representation of perma bears (and going the other way I might add, perma bulls) seeking to cash in to guruhood by making THE call. The kind that Richard Russell still lives off of today.
Anyway he goes on to some pretty good technical analysis focused on the relatively
week [dohhh, weak] Nasdaq and comes up with similar conclusions to the near term and reservations on the intermediate term that I carry. I don’t think I like the article because he agrees with me; at least I hope not. It’s more because I think it’s level headed and thought out, unlike so much of the crap out here on the internet these days.
Time for bulls to get out their Gox Box Sox because the Semiconductor index is negatively diverging and having an issue at the 50 day moving averages.
The daily chart would logically project to the 50 day moving averages if the bounce continues and gains strength  because in a down trend that is a notable ‘if’.
The weekly chart agrees that 3600 is the target with the broken trend channel and lateral resistance.
[edit.1] And in consideration of the relative clarity of indexes vs. individual stocks, I am going to focus trading on index ETFs, especially leveraged ones. Long, short, any sector – including the precious metals. Trader’s market and all.
[edit.2] With the media serving up the Ukraine relief pap and some volume coming in, it is possible that said bounce may have begun. We’ll see. I shorted QID and bought a triple long on the QQQ.
Signals continue to gather that a top of some significance is forming. Bull market top? Undetermined. But with the COMPQ (and also the NDX) making lower lows expect a couple things.
- A new bounce attempt that could be ferocious and
- Failure, with new lows down the road
Signals like this lower low, even if neutralized as I expect it will be, tend to be shots across the bow for a later date. So, my little bounce scenario played out in just 2 days (I am full sidelines now on any longs), showing just how weak this market is. But that may not have been the bounce. A fierce rally could be implied (as lots of things come to their 200 day moving averages) but the odds just increased that said bounce would ultimately fail.
One does not have to try too hard to visualize a left shoulder, a big fat head and a hard bounce that peters out around the 50 day moving averages. A drive to 4200 could involve a lot of relief and renewed optimism. People should remain at a steady heart rate if that goes on.
One of the PIIGS is breaking down today. PIIGY #1 (Italy) is breaking a wedge today by daily chart. It is just a wedge break and need not drop too far (often about 1/3 to 1/2 of the wedge will do). The 50 day averages should decide on that.
NFTRH has been following the monthly charts of both Italy and Spain and their improbable measured upside targets (not quite achieved) since last year for the speculative impulse they implied for the European markets.
PIIGY #2 (Spain) is still intact…
I’ll not say more because I don’t know the future. But I will say that the S&P 500 has now completed the minimum expected bounce with a touch of distinct resistance.
Still hanging on, white knuckles and all .
Triple D tested my patience today but since its test of support has not failed I held on for a wild ride. 3D Systems and me; an over hyped company in an over hyped industry and a hype-o-phobe holding it as the punch drunk bulls continue to bail. Yes, sounds about right. This is one of several ‘bounce’ longs in a net long – but very cash heavy – portfolio. We have clear parameters for this stock market bounce.
The US stock market is negative pre-open, but don’t be surprised if we get a strong bounce soon. It could be a trade-able bounce. I have bought a couple items in anticipation and am watching several more.
A bounce is a bounce; a trade. It is what happens on a would-be bounce that will be important going forward. What will the market do at resistance? That will tell us a lot about what this thus far mini correction will be, another quickie or something more lasting.
SPX has firm support at around 1800.
One of the leaders, NDX needs to bottom shortly and make a ‘higher low’ to February or it is going to activate a bearish intermediate signal.
The actively managed HDGE is not over bought and just now making a breakout. That is a scary thought for stock market bulls. It’s not just HDGE either. Go have a look at SPXU, SOXS and the other leveraged bear funds out there. They are just now breaking out and also generally not over bought.
HDGE is one that was mentioned yesterday in a subscriber update. It could be a more sensible way to play 2014 from the bear side. I plan to play it both ways. This market has made me a shorter swing trader and well, that’s what I’ll be as long as needed. It’ll sure be more fun than that robot dream machine we had last year.