It’s do or die tomorrow for my day trading signal. A positive close and I’ll be closing my short positions, but it’s not in the bag for the bulls either with an important macro news event that could sabotage this rally.

This chart looks even better on a 2yr wkly as it’s completed the cup/handle round trip with a breakout to top it all off. Earnings juice has fueled the move and it should be a winner with these technicals. Now if it’d just pull back for us to all pile in everything would be perfect.

I mentioned yesterday here on twitter that the markets seemed like they were gearing up for a big move. I just had the direction wrong and never thought Obama could move that many people to jump back in the markets, but it is what it is. Oh, and I also included my twitter feed on my site (right sidebar near the middle) for those who haven’t embraced that technology yet, so you can see what I see when I don’t have the time to do a blog post.

Anyhow, before I talked about the markets, click on the chart ATC. I mentioned this stock 3 days ago and it’s up over 50% today. That is unreal. I think I’m going to start focusing more time on Canadian equities because lately I’ve been huge % gains on those stocks that have been showing up on my scans. Tell me that one of you out there was smarter than I and picked up some shares of ATC….

Back to the general markets. Huge day with volume accumulation that can’t be ignored, but it’s still too early to tell if this will lead to something more than a small bounce. The last time the Nasdaq had this much up volume in May, it resulted in nothing more than a small bounce. The pressure is on the bulls to keep this market moving higher and there is a lot of resistance along the way.

One thing that really surprised me is that my timing system barely budged today. Sure, it improved, but it was closer to a buy signal last Friday than it was after the close today. I basically spent the day away from my desk because it was obvious we were going to close near the highs and I didn’t want to get persuaded by my emotions into doing something outside my trade plan. My scans aren’t showing quality breakouts at this point and that is one reason I’m suspect of today’s move.

The bottom line is that until we get a buy signal on my timing system, I’m going to continue to hold my reduced short positions.

Continue reading “Big Move Coming or False Rally?” »

Update: For those who want to get the book Mark talks about in this interview, go to the comments section of this post.

Howard Lindzon interviews one of the market wizards, Mark Minervini. Howard asks all the right questions and there is a lot of great advice and insights packed into 33 minutes. After listening, Mark reminds me of one of the turtle traders in how he approaches the markets, reminding us that (much of the time trading is boring and a lot of sitting on your hands).

Looking at the metals market I believe we’re going to be running into some major resistance soon for a couple of reasons. I share a different opinion than most that these markets are going to explode to the upside and below I’ll explain my reasons. I do believe the bull market in gold/silver will continue, just with a fairly deep correction to stir the pot and shake out any weak hands, as well as give new traders/investors a chance to get on board this bull train.

I’m not suggesting to take action at this time and position yourself on the short side as that would be foolish as these markets continue to rise. However, if you are currently very long in these metals I would watch very closely how these charts react at the resistance areas below and then react accordingly. 

1. Sentiment is very bullish in this sector. Every single analyst and contributor at Agora Financial felt that gold was going to be significantly higher next year, and while that may very well be true, a correction would go a long way for the longevity of this bull market.
2. Technically $GOLD hasn’t based long enough after this recent pullback for a major breakout to succeed and $SILVER is approaching long term resistance that should prove difficult to overcome. These markets correct fast and furious so I’m not expecting too much of a warning when/if this does occur.

Continue reading “A Correction Would Be Good For Metals” »

Somewhat of an uneventful day on Wall St with volume almost nonexistent. I kept waiting for the markets to bounce with my market timing system flashing an initial buy signal on Friday, but as I mention in the video that did not happen. I like to have a confirmation move to avoid jumping into a number of positions only to be whipsawed out of them. This can have a devastating effect on you mentally and it’s important to avoid costly mistakes that take you out of the game.

To reiterate, my timing system remains bearish, albeit cautious, as we are at an important juncture that probably won’t be resolved until next week.

I also want to remind anybody who is on the fence about the Stockcharts offer as it expires at the end of the month (which is tomorrow). This is the best deal they have ever offered and if you want to be a serious trader, this is one tool (the only tool I pay for) you need to have to do your nightly research. You can’t go wrong for about $35/month.

Here are the results from my weekly Canadian scan highlighting mining stocks that are hitting new highs and could continue to rise. These are pure momentum plays and should be traded accordingly. Stocks that have this type of look generally take off once they cross the $10/share barrier as mutual funds give them serious looks then.

I received a very unexpected preliminary change in my trading system on Friday which caused me to trim down on my shorts after the close. I’ll need to see a bullish close on Monday to confirm that change and move into the bull camp, and that may be difficult now that we’re overbought on the NYSE Advance/Decline chart below.

I wouldn’t rule out a trend change at this point as there does seem to be a very large number of bears that were convinced this market was doomed, but I need to see a little more than a one day wonder like Friday’s action. I’ll have some long suggestions tomorrow that I’m watching but right now I’m still short, but with reduced position. It’s funny because when I saw the trend change I almost convinced myself just to hold onto the trading shares I added the day before. Anytime that I find myself making excuses for any positionI immediately go place the order to do the opposite of what I was trying to convince myself to do. It almost always ends up being the smart move.

I switched themes on zentrader and I’m not completely sold but I felt it was time to make a change.  I’m still playing around with the code on this them to see if it has the functionality that I want and it’s slow going. Basically I’m warning you that you may come and it’s one theme one day and another the next.

It seems that the action in bonds over the past week tells me that they want to pause before heading off to new highs. I’m sure many out there will say that the bond bubble has burst and that they’re toast. As of right now I tend to think this is just a little blip and TLT will see much higher prices in the future. By watching the RSI levels (80-40) we’ll get a good idea if this is just a pullback by watching how the chart reacts around the 40-50 level. If it’s going to remain strong it should bounce right off those levels and it may not get that low as dip buyers will be waiting at those levels. I’ll be watching the 20 ema (blue arrow) for first signs of support and that could be the area where were bounce as well.  

The only concern that this chart has is the amount of volume on the selling days which normally indicates distribution. However, the strength this chart has shown this year has me convinced we’re going to see 08′ highs at a minimum, and potentially a real bubble with a move into the 150+ area and beyond before the ” bond bubble” pops.