Category: Stock Index Trading
The analysis published under this category are as follows.Tuesday, August 25, 2009
Stock Market Negative Divergence Signals Caution / Stock-Markets / Stock Index Trading
One of the things smart investors do, is to keep an eye out for "Negative Divergences". Market pullbacks are often seen right after a Negative Divergence fails to the downside.
As an analyst, I look for the possibility of negative divergences developing on my radar screen.
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Monday, August 24, 2009
New Stock Market Sell Signals on SPX and NDX / Stock-Markets / Stock Index Trading
The market has been whipsawing lately and the system has now indicated a reduction on the short side.
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Monday, August 24, 2009
Stock Market Trend is Definitely Up / Stock-Markets / Stock Index Trading
Summary of Position For August
On July 20 we suggested a full position in an August 1020/1030 SPX Call Spread for a net credit of $0.60 on the basis that the market seemed to be getting ahead of itself and was due for a breather. We were proved wrong as the market continued higher and held its gains. Then, in the final week the market gave a decisive move, dropping 2.5% in a day, indicating that the top was in for the time being and that our position looked safe with over a 4% buffer. Even up to Thursday, it looked as though we would be fine, but Friday's burst higher meant that the settlement price on the options expiry was also higher. This is what's known as "settlement risk". We'll take it on the chin and move on.
Monday, August 24, 2009
Stock Market Acceleration Phase Towards Panic Buying / Stock-Markets / Stock Index Trading
Trade Actions:
Buy INP (India) at 52 or Better
Sunday, August 23, 2009
Stock Market Bullish Stampede Continues / Stock-Markets / Stock Index Trading
Buy the DIPS or just HOLD
For those adopting such strategy, we suggest using one hand to hold your nose, and keep your free hand at the ready in pulling the sell-trigger when appropriate.
Sunday, August 23, 2009
Strong Stock Market Uptrend Continues...Testing the 70 Week MA on the S&P 500 / Stock-Markets / Stock Index Trading
Solid advance off our March lows continued this week, but the market did hesitate some late week at our important 1026 70 MA on the S&P 500 (see our 1st chart below) and 2-year downtrendline on the Nasdaq which finally cleared late. While we did close a few points over 2015, the close at SPX 1026 means the 70 week moving average hasn't been broken by the bulls just yet. That's the big one. If we can get the SPX well above 1026 and the Nasdaq well above 2015 then we can say with more certainty that things look even more positive for the bulls. I know it feels that way and you all know I am bullish but being bullish doesn't mean being inappropriate. You just don't go out and buy bigger because we're so close.
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Sunday, August 23, 2009
Financial Hurricane, Stock Markets Being Hit by a Storm? / Stock-Markets / Stock Index Trading
The beginning of the week certainly looked like the rally was over and it was time to abandon ship. Two of my indicators were in the life rafts and starting to lower their way down to the water. Then the end of the week came and the storm seemed to dissipate. The waves have lessened and all seems back to normal as we continue the sideways action/rally.
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Saturday, August 22, 2009
Stock Market Rally, This Time Is Different (In Reverse) / Stock-Markets / Stock Index Trading
In past articles to explain the price action, I have defined the "this time is different" scenario. For example, at market tops we typically see negative divergences between prices and momentum oscillators that measure price. These negative divergences are indicative of slowing upside momentum and a point where traders are likely to look for the market to rollover. If prices continue to move higher despite the presence of these negative divergences, often times we find investors saying "this time is different" as prices accelerate much higher. Of course, I think the acceleration in prices is due to short covering as traders who where expecting the market to rollover are now forced to cover their positions.
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Friday, August 21, 2009
Stock Market Solid Upside Follow-through / Stock-Markets / Stock Index Trading
The indices had a strong follow-through session today to yesterday's late rally. The day started out with a strong move higher, as the indices reached 1614 on the NDX and 1006 on the SPX. They then went into a coiling-type consolidation pattern for several hours, consolidating bullishly, and then broke out in the last hour, reaching the session highs with about 25-30 minutes to go. A slight pullback into the close brought them off the highs.
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Wednesday, August 19, 2009
Waiting for SDS ProShares UltraShort SPY to Fill the Upgap / Stock-Markets / Stock Index Trading
The more things change, the more they stay the same. Let's notice that this morning's early weakness in the major equity market ETFs (SPY, etc) popped the ProShares UltraShort SPY (NYSE: SDS) to test last Friday''s high at 47.80 (today's high was 47.66 so far). But that is where the SDS ran out of steam, and since has reversed all the way back down to probe yest.'s low at 46.45 (so far this AM's low is 46.59), all of which leaves behind a wide three day range of about $1.20.
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Wednesday, August 19, 2009
Grab Your Shorts, the Stock Market Correction Has Begun / Stock-Markets / Stock Index Trading
As I’ve noted in previous essays, this stock market rally has come much too far, much too fast. All told the S&P 500 is up over 48% since the March lows. This is unprecedented in the post-WWII era.
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Wednesday, August 19, 2009
Stock Market Indices Snapback, though Resistance Repels Rally / Stock-Markets / Stock Index Trading
The markets snapped back today and failed to follow-through to the downside, but at the end of the day, despite the rally, the indices did nothing more than retest the resistance zones and breakdown points.
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Tuesday, August 18, 2009
The Stock Market Leadership Ratio Chart, Part1 / Stock-Markets / Stock Index Trading
On our daily Leadership Ratio chart, we measure the strength of the Leadership stocks and compare them to the strength of the Broad Market stocks. We then divide the two numbers and create a Ratio that shows if the Leaders are moving forward or retreating relative to the Broad Market stocks.
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Sunday, August 16, 2009
Could The Deflation Arguement Start Up Again / Stock-Markets / Stock Index Trading
Hello Everybody
To learn more about my Fat Pitch ETF Advisory, please click here.
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Sunday, August 16, 2009
Stock Market Uptrend, Watch for a Pullback / Stock-Markets / Stock Index Trading
Market Pulse - The University of Michigan consumer sentiment index fell in August to its lowest level since March, according to preliminary data. The index came in at 63.2, down 2.8 points from July and even more from the second half of last month. The decline from July was led by a sharp drop in assessments of current conditions, although assessments of expectations also fell. Read full article... Read full article...
Sunday, August 16, 2009
Stock Market Dumb Money indicator Continues to Hit New Extremes / Stock-Markets / Stock Index Trading
The "Dumb Money" indicator continues to hit new extremes despite last week's slight down market. The Rydex market timers continue to be bullish and leveraged to the extreme. And to round out our sentiment analysis, selling by company insiders has hit extremes as well. It is the perfect trifecta. Whether the perfect trifecta becomes the perfect storm (again) for investors is yet to be determined.
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Sunday, August 16, 2009
Stock Market Bumping Into Resistance / Stock-Markets / Stock Index Trading
The market seems to be forming a tight sideways channel in which we are bumping up against resistance. If we are hitting up against resistance, where is support? In looking at the chart below, one could say that the support level is back around the 94 level (or even the 87 level). Where do I think the market is going?
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Sunday, August 16, 2009
Stock Market Lateral Consolidation Continues / Stock-Markets / Stock Index Trading
No one and I mean no one can deny that this market has done a great job of frustrating both bulls and bears alike. Bad news gets absorbed by the market without any real down side action. How annoying was Thursday for bears! Horrific numbers on the retail sales front. The market falls some only to recover late and show gains. With gains in retail sales expected and with losses the actual outcome, it's hard to imagine being short this report and having to cover or even if you didn't, you had to deal with an up market in a down report. No fun.
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Friday, August 14, 2009
Nasdaq Still Waiting to Resolve Bull Market or Bear Market Rally / Stock-Markets / Stock Index Trading
One week has passed, and it has not yet been resolved ...
Many investors believe the current NASDAQ 100 run-up has been a Bull market rally. Others think it has been a Bear market rally. What's the answer?
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Friday, August 14, 2009
Before You Think of Going Short the Stock market index / Stock-Markets / Stock Index Trading
How many Stock market Bears are itching to go short the stock market index? Probably too many to count. However regardless of all the fundamental reasons and thoughts to blindly go short the stock market index, this is not prudent. One could possibly listen to Paul Tudor Jones who thinks this is a bear market rally. BTW.. Paul Tudor Jones made a fortune predicting the stock market index would crash in 1987.
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