Are you a contrarian?

Interesting reading at ISEE index which shows a highly bearish sentiment among option traders. IN general market tend to fade this extreme sentiment. Are you prepared ?

Possible pattern for VIX

As we may see, 19 level has been important support-resistance in the past.



Now we are looking for a possible definition of the cone expansion pattern (megaphone) we are showing here. Check the chart for a similar pattern before October 2008 breakout. In that case it was a contraction cone but the twin apparence, plus the coinciding level (19 area) make me think of a possible bounce off of it.


Let's keep an eye on it for a definition.

Intriguing divergence

On Thursday closing I was looking at this interesting divergence between DJIndustrials future and SP500 future. Although the Santa rally was very strong, I could find Industrials weakening at the end. Together with some other technical factors signaled at the chart, it makes me believe the rally is due for a pullback.

Sox was right.... it was Santa rally

If you remember this post you will understand the title of the present post. We should have payed more attention to SOX , anyway it served us well to anticipate the possibility of EOY rally which was led by Techs and Small caps.
Here is an updated chart.

Unlikely but...

This new inverted HS have a target that sounds a little over extended but... a setup is a setup.

Bank coin 2

Finally our AH pattern worked out even farther than expected. Here is a pic I took earlier and forgot to post. As you know ES was propelled much higher but the good thing was we got positioned for the trade well in advance.

After hours pattern for the ES

Interesting 10-12 points trade on this classic inverted HS setup.
1105.75 is also a gap fill level.

BANK coin

Compare the chart from the preious post with the following one to wee how well this patter developed intraday.

Interesting pattern at NASDAQ BANK

Leading the way last 2 days, may be an interesting pattern to play intraday or VST.

cheers

IBM update

Remeber the last post about IBM, the daily chart shows a continuation of the evening star pattern and the 2009 trend line. Will continue watching for a possible follow through down after a pullback.

Cliffhanging

Look at this blue chip performing today

IBM

IBM is forming a very interesting pattern across different time frames (ST, IT, LT). Many other stocks and indices have similar formations but I choose this one since is so clear and is such a representatative name.
I expect it to perform as a proxy for both Techs and overall stocks markets.

LT view IT -



Weekly view ST -



Daily view



Close up - Evening star pattern

Currencies and stock's bounce is probably done

We were signaling a bounce at currencies. It took place already and drove stocks higher in last session as expected. It filled ES gap but now we think market will resume the bearish trend.

In any case the less probable scenario will be a run up to 1128 ES area.

Did you know that........ SOX just made year highs??

You know some techs stocks and subsectors tend to be leaders and anticipate moves for the broad market. Despite the recent drop in most indices, what SOX is doing called my attention. It may be driven by S rally today but in any case the formation is clear enough to keep an eye on it.

SPX-purple line
SOX- red-green line

Bounce for currencies (integrated)

Some currencies aproaching a bouncing point

We are seeing some of the currencies we use as market proxys just aproaching a bouncing point. After breaking down recently, they may be seting up for a bounce which is bullish for stocks.

AFter it broke down...

Be careful bears.... II

intraday posible setup

Bullish for stocks

AUDUSD backtesting breaking point

As we were pointing out recently, AUDUSD was testing interesting trend lines, here is an updated version where we can see how the LT trend line(orange) rejected price and how IT trend line (white) was breached and then backtested confirming the ST-IT bearish case.

LT view



ST view:

ehyyyyy NEW HIGHS!... OR NOT?

Beware bulls!!!
Internals are saying this high is a fake, dont get engaged with it.

If we are so , so , so bullish, then why....?

If this market is as bullish as media tell us every day then why is being that hard to take out one simple level.....?




meanwhile.... there are some other levels that ARE being broken ....





Sometimes it is not necessary to ask a lady where she wishes to go, it is sufficient to know where she does not wish to go.

I am affraid it was not enough...

Daily pic suming up the result of today's push up....

have you seen AIG?

Eurostoxx 50 update

Update of the previous post

Bear's "Achille's heel"

If there is a clear weakness for the bearish case is DX bahavior. Although it spiked up a couple of times it never followed through. While this bearish pressure continues, USD carry trade is to continue as well and bullish pressure on stocks markets is likely to endure. So keep an eye on it , we have some interesting levels to watch anyway....

Nasdaq and DJ Transportation Update

Nasdaq (previous analysis here)




DJT previous analysis here

Good boys

Well I cant complain, these puppies are behaving so well.... :)

SPX (previous analysis here)




RUT (previous analysis here)


INTC (previous analysis here)

Dead cat bounce....you know what to do

Go Delpo Go!!!

He is DA MAN!!

http://www.barclaysatpworldtourfinals.com/

Let's hear to the PIGS

As you may know PIGS is an acronym of Portugal, Italy, Greece and Spain. Some economist cluster this mediterranean countries since their economies are quite similar and all less developed when compared with top EU countries.
From that point of view we can analyse them as the "emerging economies" within the EU and therefore expect them to be leaders when it comes to trend changes ( they will be the first to rally once a downtrend is over and the first to drop when an uptrend is over).
In that sense I gathered these graphs to show their behavior compared to SPX.

See how they led at 2003.





and now in 2009... might it be the way.....?

News from Europe

Hi traders!

Those who were following market today may now better understand the meaning of previous posts (all that glitters is not gold.. and others). When the price is not coupled with mkt internals and comprehensive sectors support then its destiny is a correction to catch up with leading indicators.
We will post something about currencies later, since they played as usual a key role in identifying risk aversion. Meanwhile check last one to see what really happened with described trend lines .

Some may ask how would Indices look like next session. Though TF, ES, NQ may give an aproximated vision, I wanted to add today's Eurostoxx 50 chart to show how it looked like during EU session (not holiday at that market).







source

Snapshots - all that glitters is not gold

Here are some thoughts about current market status.
While many big players will be on holiday , an interesting topping pattern may be on the final resolution phase. It started on Monday and while price has been ranging, some other indicators have been sliding which may well be the clue we are looking for to anticipate the upcoming resolution for this pattern.

All that glitters is not gold

And nope I am not talking about gold...

Interesting trend lines for the Aussi

As you may have noticed already, we use AUDUSD quite frequently to assess risk appetite among investors which turn out to be a good proxy for stocks markets.

We are seeing some important LT trendlines tested last week. Decay in momentum also increase possibilities of a deep correction after an initial pop early next week.




If the ST trendline (dashed) is broken, we can expect a sizable correction next week since major trendline (black) has been backtested and failed.

Recap II - Major indices

We were pointing out some interesting levels for OEX and DJT last week. We can now check how did they do at the weekly close

DJT



OEX



SPX
Regarding SPX this was our view a couple weeks ago, main levels were succesfully tested this week. See chart below for an updated view.




About Nasdaq we were seeing a LT picture back in October which suggested a ST pop just to drop after. Main levels were tested and respected this week
NASDAQ