Thursday, May 26, 2011

Nasdaq Constant Volume Bar 8:15PM CST 5/26

If you follow this, you know I am bearish the Nasdaq. See any of my recent posts such as this one. I will be the first one to tell you when I am wrong on something I said. I post all my pukes and make no bones about any of it...

That being said, I am still short this fucker and still think it is ripe to fall. I sound like a broken record, but sometimes you have to trust what you know to be right. Lets go to this constant volume chart (which plots each bar as the range price traded in for 5,000 contracts).

We have a confluence of resistance at the 2330-2340 area:
-Top of current magenta dominant bearish channel
-Bottom of old dominant orange bearish channel
-38% shallow Fib from May 2 highs to recent May 24th lows

If we can get above both of the aforementioned channel lines, I will wave the white flag.
Until then, I am holding.

WTI Crude Between a Rock Support and a Hard Resistance 8:00PM CST 5/26

Using a "constant volume bar" study (which plots each bar as the range price traded in for 10,000 contracts to trade), we have the following chart. We can see that the midpoint of the blue bullish channel has been an important level. The top of the bearish magenta channel is also key. These 2 levels are colliding in the next few 10k trades. Just underneath is $100, which as you can see has been very important as well.

I scratched my sell at $100 and am waiting to see how price breaks out of the current triangle it is in. I am betting on supply coming in at the top of the triangle and crushing it through $100, but time will tell.

Equities moving up, Russell 2K leading way 5/26

It looks like the major equity indexes are making a move up today, with the Russell 2000 and Nasdaq leading the way. Both are coming upon critical levels here in the early afternoon, with Russell reaching the first level of the complete downmove's retracement (@827.6) along with the trendline in purple. The nasdaq is coming upon a confluence of retracements at the 2327-2332 level. While I've been recommending short equity indexes, Todays close and tomorrow will be important. Closes over these aforementioned levels in the Nasdaq and Russell would make me probably dump what I have going into the long weekend. But we've seen this multiple times now on this downtrend in all equities as they make new lows then pullback for a couple days. Don't be shocked if we finish at these levels today and then head south on Friday into the weekend.

Last Swan Song for Nasdaq Shorts.... 11:55AM CST 5/26

Still like being short (and still am), but it's now or never for them to work.
Price got back to the lows of the old bull channel (yellow)
We are also right back into the 50 (blue) and 100 (yellow) day VWAPs
Combine all this with 2327 being the 50% from May 19 high to yesterday's lows.

Sell right here, but a close over 2330-2335 and you should be out.

Ebay possible buy opportunity 5/26

Ebay is lining up for a good opportunity for entry here. It looks like yesterday was a nice hammer on higher than average volume which always says to me that its put a floor in on its price. I would wait for it to crack the high of yesterdays session (@30.9) to be on the safe side as this usually confirms a hammers worthiness, otherwise take a dip near its lows for a very low risk entry. I dont know if I would predict this making new highs, but the top of this retracement channel could be more than doable in the next week or so for a 1$ or more profit.

Stock Account? ETFs please

So in case you were reading our suggestions and thinking, well all I have is my TD Ameritrade account or whatnot, how am I supposed to be buying into all these markets? Well, ETFs to the rescue. From investopedia for those who dont know an ETF is:

"A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold. "

You can almost find an ETF for anything out there and etf stock encyclopedia is one of my favorite sites for this. Just beware that most ETFs slowly lose value over time and you should always research the exact holdings of what they invest in. So Goodluck trading.

Natural Gas (NG) Bearish Number BTFD? 5/26

 After a bearish number for the natural gas storage (more than expected in storage at 105B vs expected 93B), we saw a sharp sell off. I think its is a great opportunity to BTFD and get in on this trade suggested in an earlier post. We see on the daily chart the confluence of retracements at the 4.325-4.312 range. While currently its just under this, it has held its recent uptrend's retracement. I think this holds well and we see a move back to its hights today in the 4.45-4.48 area. Everything else about this trade still looks great and the initial entry signal was a good one so far. So I've said it once and ill say it again, by that fucking dip

EDIT: just in case you are wondering, you can play NG in the stock ticket UNG (United States Natural Gas Fund) or in Direxion Daily Natural Gas Related Bull 2x Shares ETF (FCGL)

Crude Oil (CL) Indecision continues. 5/26

After breaking out of the channel it had formed yesterday, it looks like oil held steady overnight with only a slight break in the Asian session. It is now quickly moving down towards the yellow trend line that had been formed. While I still have a bearish outlook for oil and feel this might have been a fakeout the whole time, I see a more than justified play of buying oil in the 99.5-100$ range which it looks like its in right now. But that being said I think there is a good bit of risk either way right now as we are in the middle of its range and I would hold tight until we get closer to the bottom (@96) or the top (@102) to make a play.

Dolemite Pre-Open Position Update

I resold EuroUSD as posted here.

I am still short my 2 packages of semi conductor stocks (long SOXS) as a way to play being short Nasdaq. The reasons are here

I am still short crude (though I am white knuckleing it a bit)
High today was 101.90. If we crack 102 I am out and will look to resell at 103-104
You can read our recent crude thoughts here.

Good Entry to Sell Euro? 8:00 AM CST 5/26

After being wrong about selling 1.41, I am going to put my hand to the stove again. I sold after the 15 minute bar from 7:45-8 AM CST formed that shooting star. The MACD also had divergence(yellow lines). Combine this with this shooting star forming at the 62% fib level of the most recent real down move and I think this is a low risk entry. A real move over 1.42 changes my thesis.

30 Yr. Treasury Future To Resume Uptrend?

Having broken through the Fibbonacci zone at 12416-124-20, it will now provide good support, as the long bond tries to complete it's move to the top of it's bullish channel near 126 and ultimately to the Fibbonacci resistance just under 127. As evidenced by the May 19th daily chart hammer, a support zone has been established at 12416-12420. The overnight action of today's session confirmed this. Dips into this area can be bought.