Position update

FFIV - got stopped out!!

Quick market update

SP500: still within triangle, has not decided yet where to go (short term higher highs, mid term lower lows). what still keeps me a bit more on the bullish side are the big impulsive up moves and the tiny long-lasting down moves.

Gold: after the breach of the triangle we might run into a falling wedge. we might be on the way to backtest the former breaking point before we head lower again. the long term up-trend is still intact. closed my short position again

US Bonds: TLT has formed a new short term high but has not reached the high from about 2.5 months ago. This might end in a double top pattern.

Current positions: CSCO, FFIV, AA, TBT and SIFY

I'm off now to Aussie land :)

Good luck and all the best for 2012!!!!

SP500, Gold, Bonds, USD, Agricultural Commodities - Overview

SP500: Both my trading signals (based on VIX and Put/Call ratio) are still bullish. As expected, the major short and mid term trendlines above the S&P seem to be a tough resistance. Initially I didn'tl like the massive drop on Thursday. However, markets showed a nice reaction on Friday. In case markets shoot up I expect a massive resistance around the main bear market trend line around 1340. All bears will jump on that signal and go short.

US Bonds: In the long run the bond market is in an uptrend. However, it is way overbought. I expect falling bond prices in the short term. The most recent short term uptrend is already broken. Additionally TLT shows a nice double top pattern.

Gold: still in a long term uptrend. In the short term the triangle should break soon (price hit the edges 5 times) bringing gold prices further down. I hope this will go hand in hand with rising stock markets. However, gold and stocks were highly correlated lately.

USD: The USD is forming a contracting triangle now for about 6 years. I expect this index to go lower and eventually break this triangle in the near future. However, China for instance should have a massive interest in a strong dollar. If the Index makes its way above 80.50 I'd expect a retest of the upper boundary at around 87.50 which would send stocks down.

Commodities: still bullish on agricultural commodities

Trading ideas: short gold, short bonds (e.g. long TBT), long agricultural commodities.
Major warning signal: If USD index continues its recent uptrend and forms a "higher highs" pattern above 80.50.

GCI - 7 year old down trend about to break?

long term picture:

 short term picture: break out today with high volume!!

S&P - what to expect in December

It is still extremely difficult to make predictions. Technically the S&P is still in a bear market rally (as long as the upper white resistance line is not broken) but I still think that the conditions are not as bad as the market expects them to be. Both my trading systems are bullish. However Iran or Europe are always good to change this again.
As expected the last two trading days showed a sideway to downside trading pattern. The S&P made it to the first resistance line and bounced back down again.

After last week's rally the markets are still far away from being overbought. The S&P is still sitting on the 61.8 retracement and is facing major resistance levels on the upside. However, December is usually one of the strongest months. If the technical side doesn't provide reliable signs it might make sense to have a look at other markets.
In my opinion the bond market has found resistance and is about to form a double top (which is equal to a support for TBT, double bottom) and should be able to provide the necessary cash for the stock markets. It just retested its broken short term resistance and will hopefully break its 50d MA soon.

Additionally as long as the USD index doesn't confirm its recent short term up trend by a new high the long term downward trend will be dominating sending the index down and the stock markets up.

Investing in Greece?

As soon as NBG is above this white line I will invest in Greece again. Forget about this scenario if we see new lows.

S&P - and now?

The S&P 500 smashed all major moving averages, which usually serve as a kind of reliable resistance - at least in the short term - within one day...impressive!! Now the S&P is facing 4 major short and mid term trendlines above.
What supports my bullishness is the high volume we saw today (follow through day?), the MACD which is about to cross to the upside and the negative divergence between the MACD and the index we already saw a couple of weeks ago. Since we already passed the 61.8 retracement I actually expect a couple of quiet days to the downside.

Be ready for rising food prices!!

It took half a year to form this falling wedge. If I wasnt long already I'd do it now. This wedge will definitely play out if stock markets behave as I expect .

China - should break out soon!

From a technical point of view I'm bullish for China in the mid term. Stochastic indicator is in a long term downtrend, however it is about to turn up again to test this downtrend. This should lead to a break of the triangle...

S&P - oversold levels, upside bounce expected

S&P is sitting on his 61.8 retracement. A final sell-off is possible but most indicators show a significant oversold market and 61.8 retracement level usually makes the market hold on for a while. Additionally the goal of the broken triangle is reached as well. Interesting will be to see by how much the markets will move up. I hope the former support and resistance level at around 1200-1220 will be reached and broken soon.

VIX and S&P oversold levels

VIX midterm Futures still forming the rising wedge. I'd still bet on a break out this week. McClellan Oscillator indicates an oversold market. However, other indicator still have some space to the downside. I hope we will see very oversold levels by the end of the week without going much lower in the S&P. I hope the 50% retracement will be a good support!!! Good luck!!

S&P - slowly reaching oversold levels

this more short term indicator (McClellan) is indicating that we are slowly reaching oversold levels. This however does not mean that we have to zoom up tomorrow.

S&P - a bounce exactly on 50% retracement

VIX Mid-Term Futures about to break out

...and the S&P will move up...

S&P500 - still not ready to zoom up

What to expect next week. The volatility index is moving into a rising wedge which should be ready to break beginning of next week pushing the S&P a bit higher. A backtest of this breakout hopefully makes the S&P retest its 1180-1200 support line. After that we might see a slightly oversold market which then would form a nice setup for a year's end bull market rally. If the S&P dropps below the 1180-1190 support, which is also the 50% retracement, a move to the 61.8% retracement (1160) and lower would be the result. In this case we might retest the Aug/Sep lows.

There is a worst case scenario I am kind of afraid of. If an American bank will get into trouble I'm not sure if the US does have the necessary money or support to bail them out. This scenario could bring us new lows. I'm not worried about European banks as they have the necessary support.

Potential Roadmap for SP500

People are getting more and more bullish again. Regarding the put/call ratio we are getting close to a neutral level again. Europe - Greece, Italy and Spain - will decide when markets are ready to move higher. Politicians are working on a solution for Greece. They are running through scenarios with Greece going back to the drachma. I'm pretty sure that fear will be back soon putting pressure on Italy and maybe Spain. For the next two weeks I see more of a sideway pattern before moving higher. However we won't see new lows; 1200 should be a good support. Monday might be an important day as Italy will issue new bonds...the market will be right :)

China has to decide soon where to go

Taking a look on the long term chart...China will soon make a move out of the triangle either to the up or downside. However, in the short term there is still room for about 10% up until they have to make up their mind. I'd bet on an upside move. Russia btw looks similar. Since Russia is linked to the oil price they will make a move to the upside too.

Still bullish - but with a lot of caution

The McClellan Summation Index (an indicator more for mid and long term patterns) in combination with the RSI used to spot peaks pretty reliable in the last few years. There is still a bit of space to the upside but in my point of view this is definitely limited. I'd rather see a couple of weeks to the downside or at lease a sideway pattern before we move higher.

CEG and GOOG - very bullish on both

they both will make it sooner or later and jump over this long term resistance and then booooooom!!! :)

Trading ideas for next week

Long:
AMP: short term goal 200d MA at around 49.50 - 50
NVLS: has to break its short term down-trend first, long term uptrend is now at around 32 (latest stop)
TLAB: short-term uptrend vs. mid-term downtrend. if downtrend will break, TLAB is a reversal-candidate
CSCO: definitely a buy! right now it's in the upper range of its new uptrend-channel but is also running in a rising short term wedge. waiting for a small pullback at around its 200d MA. this however might not happen if markets are generally going up.
GNW: a buy above 7.40. there is a chance that it reaches its 200d MA at around 9 and its mid-term downtrend at around 10.
FFIV: just broke its short-term downtrend. a buy above 110.5

Short:
FIS: recently a GAP to the downside with high volume, running into a short-term rising wedge, closing gap. a backtesting of the recent lows at 23.10 very likely. a sell below 25.10
RRD: is reaching its GAP level at 16.80 after a downside GAP a couple of weeks ago. this should serve as resistance. a sell right now. a stop should be set at around 17.
MCHP: for me a good short candidate. rising wedge, huge volumes to the downside. jumped up on friday after a UBS buy recommendation.

good luck

SP500 - no big moves expected for the next week

Difficult times for trading systems. Most of the blogs indicate that the majority of the trading systems is on the bearish side right now. According to the put/call ratio the market is expecting more bad things to come. However, the ratio is already very bearish. I'm still more on the bullish side. For the next week however, I don't expect big moves. On the upside it's limited to the short term downtrend line and the neckline; to the downside the 50d MA should be a good support. If there is a surprise to come I expect it for the upside.

LNC, MOS

If markets behave as expected tomorrow LNC and MOS might be worth a short. LNC already broke the rising wedge. However looking at the MACD the might be more to come.

SPY - one short trigger activated

Out of my two trading systems I use (one is based on VIX the second on the Put/Call ration CPC) one activated the short trigger:
VIX trading system: still long
Put/Call trading system: just turned short
MF Global definitely will leave some bad air in the markets in the next couple of days. As a first goal I see the area of the two support lines 1200-1230.

Tradingsystem - short trigger for SPY not yet activated

I've spent a couple of minutes over the weekend to come up with a simple trading system using the market sentiment $CPC. The idea is kind of simple. I hope I'll find time tomorrow night to explain it in a bit more detail ;) As with all trading systems this one is obviously not 100% secure but as you can see in the backtesting it has the potential to provide reliable triggers.
What you can take from this picture is that the system still suggests a long position and that the sell trigger for the S&P 500 is not yet activated...not yet. I'll keep you up-to-date.

TWC - Times Warner ready to move lower

TWC left its best times definitely behind. Will soon test its main support at around 60. If that break...A positve market environment might delay this process.

AKAM - ready to move higher

There are many bullish charts out there right now. One I really like is AKAM. Broken down-trend was confirmed today with an up-gap and high volum. Wait for a slow-down of price action before you go long...

Follow-Through Day?

Was today the follow-through day - a break out with high volume - starting the next bull rally? The next couple of days we might see a smaller bounce back. If bounce-back will be weak with low volume then I guess the party will go on!!!!

VIX is sitting on a support, McClellan indicates an overbought market. A small pull-back is kind of likely.

ESRX - interesting chart

weekly chart: long term uptrend intact

daily chart: short term downtrend broken with high volume!!!

maybe wait for a pull back and a re-testing of the 50d MA

S&P500 a bit of room to the next big resistance

SP500 does still have a bit of upside potential until it will hit the neckline

DAX fighting resistance

Gut feeling: will head higher soon

China seems to have found support

The 2010 lows might proof to be a reliable support

Market overview and trading ideas

Markets were mainly driven by Q3 earning season figures which were generally better than expected and the rescue package for the EU where people bet and hope on a positive outcome. Markets turned slightly bullish. However I expect that a lot of the hope is already priced in the markets. EU rescue won't be fixed in the next meeting it will be a rocky road.

Main stock indices:
DAX is moving between the main resistance and the 50d MA. I'm expecting a retesting of the 50d MA before we can move higher.

SP500 made it above this main resistance. A move up to the SHS neckline which is equal to the 200d MA is possible but up side is limited. I also expect a retest of the 50d MAs.

China: Shanghai Index is sitting on the 2010 low and could find a support here. Apart from that no reversal pattern yet.

Further trading ideas:
Gold: I'm expecting GLD to hit it's support at around 156.5 before it probably goes further down to test it's 200d MAs.

TBT: I expext TBT to break it's short term resistance and hit it's main trends in the mid term

Shorts: VNO rising wedge:

Long: NOK; after breaking the resistance the first goal would be around 7.10