Weekend Update for Monday 2/14/2011 – Target is All Time Highs

Friday was a buy day, and the markets were determined to make new highs and hold them.  The crisis in Egypt seems to have been averted for now, and the bulls are back in control.

If you were with us in the Virtual Trading Floor, you know that I tried to fade the run up all day.   I ended the day with the nice loss on /TF and a sore finger from vigoriously clicking sell on my DOM.    I was determined to tell the market what it should do and not do what the market was telling me.

I wrote a post a week or so about listening to the market and detailed how i was rewarded for bad trading.  I was not rewarded Friday.  Every dip is bought.  Eventually the market will be there to humble the dip buyers, but until then it is business as usual.

Reading the Tape

The moment we broke the previous days highs on volume, that was the markets telling you to get long.  That rally lasted through lunch and the close and would have netted me over 10+ points on /TF. Coulda. Shoulda. Woulda. And late to the party.

Several times sellers tried to defend by putting what was 8-10 time the normal offer on /TF, and each time the bid pressed into the offer and we went higher.  But I was bound and determined I was going to make a short work., instead of just buying and sitting tight.  

So while price action, trend, and volume where saying buy, I just ignored them. I was trying to outsmart the market and was ripped and bloodied with the rest of the shorts.

Weakness in Commodities

On the positive side, I pulled off a nice short on /SI (Silver) and covered my losses on /TF.  The one time that day just did what the charts were telling me to do.  I will assume that it was the resignation of Mubarak that made everyone leave the safety of metals and run to equities.

I hate having wash days, probably more than having loss days.  It means I have nothing to show for a full day of trading, not even a scar to brag about.  The only guy that made money was my broker.

New week and new trades ahead.  No worries, what's done is done.

The Friday Chart

Here is the chart of /TF i looked at all day. Completely ignored the nonstop buy signals.  Prefect trend and a perfect GMMA Ribbon.


Weekend Charts

Most of the charts still look to be in good shape.  I think we see a down day this week as breadth has really been bullish 10 or so days, should be some profit taking.

You may notice that I have skipped DOW and Nasdaq daily charts.  You are better off looking at CAT, IBM, and AAPL, they account for so much of the indices per weight.  So I will stick to weekly charts and avoid the prices affected by the next Steve Jobs rumor et all.

Before looking that the Indices and Commodities, I want to show you 3 charts I think are telling.  The VIX with potential to head below 15.  And the SOX which has clearly been on a tear to the upside. Very much bullish cases, whethre a correction looms is anyone's guess.  Finally, the XLF is looking ready to breakout.

VIX – lower and lower

SOX  – Semiconductors

XLF – potential breakout for the finanacials




/ES S&P 500 emini

Daily – some extension but I thnk the we test 1350 first



/YM – DJIA – weekly

/NQ  – Nasdaq – weekly


/TF Russell 2000 – clearly a break out and a test of support

IWM – Russell ETF






/GC Gold – seems to have trend supported

/SI Silver – seems to have supported at $26 – secondary trend

/CL Crude – in a channel on the weekly – wonder ing if we test $80-82 per barrel


Weekly – you can see the channel on the weekly


/ZC – Corn – doritos are going up in price

/ZW – Wheat – bullish for price – bad for anyone who eats

/ZB – Treasuries – bak to trend with rates rising – more QE to push them up – will watch closely at this juncture

/6E Euro – ready to make a moved down as USD rallies ?

/FDAX – Germany – a couple different potential trends – still bullish I think



Gallery of all charts below.

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