happy new year???

Attached is the daily chart for the nasdaq as of December 28, 2009. As you can see, we've had one heck of a rally since the lows of March without as much of a measily correction. But as you can see from the chart, the Q's are approaching heavy overhead resistance. The recent rally has occured on low volume. You have a major resistance point at 46.8 dating back to August 2008 . If the Q's manage to rally past 46.8 then you probably have 48.6 as the next resistance point upwards which is the (lower) high of August 2008, just before the spectacular crash. These resistance points are further bounded by the turquoise and red ascending trend lines.

So what will the new year, and especially January bring us? Well basically any knuckle head can tell you that either the market will continue to rally, or the market will correct. Based on this chart pattern, and also based on historical precedent that during January a rather significant correction occurs in the market in the past, I would place my bets that we see a long awaited correction. The big boys seem almost ready to pounce and knock down equity, commodity prices, shake out the small little fish, gobble up cheap shares, and then ride them higher with all that free money being printed by uncle Ben.

If the Q's correct (along with everything else), look for support at 40.5. Perhaps the 200 DMA will also meet at that point later on too.

Happy new year :)

dec 18... thoughts for the end of December and into January '10

didn't have much time to post lately... but looking at the mid term, it does look like the SPY is experiencing distribution right now, and a long overdue correction is in the cards. This is what I and many others expect... if we're wrong, then a major mid term rally will occur.

looking at the charts, we see the dollar UUP is rallying, oil and gold are tanking, so this would support the thesis of a correction coming up in the markets and commodities. Following this correction, then getting long commodities would likely be a good idea.

If GLD corrects to between 100 and 104, that would be an ideal buying time... probably won't happen until January. But for the next two weeks until after new years, we will likely just chop around current levels because the powers that be won't want a market to tank before Christmas.

3 weekly doji stars

We have three weekly doji stars, the SPX is hitting up against major resistance. Right now we have a major battle between the bulls and the bears on the short term. I find it hard to believe that the market can just keep on going up without some sort of correction. That correction when it comes will be a good time to load up long. In fact that correction could come quick and fast in December, last a week or two, and then we get a Santa Claus rally. With all this money printing by the FED, and with no plan to ever change course, we can expect to be in a raging bull market for the next little while. All those dollars need to find a home, and probably the best tangible assets to accumulate during any long awaited correction would be commodities like gold and oil.

jobs report tommorow... prepare for whipfest

If you take a look at the SPY chart above, you'll notice that the market for the past two day tried to make a high for the year, only to get smacked right back down. Today, the market actually dumped out near the end of the day to an upper resistance band of 110.4.

With the jobs report due out tomorrow, if we experience a gap down, I don't think we will break below 109 unless we somehow get really ugly jobs numbers. Anyways if we do gap down, that will probably mark the lows of the days, because whatever crappy job numbers, I think it was likely already baked into today's price action near the end of the day.

wierd pattern 3 days up, 2 days down...

Well don't we have crazy trading these days? Anyways I was watching inthemoneystocks research, and they pointed out something rather funny. On the SPY, if you note the major resistance band between 109.6 and 110.4, for the past two trading weeks starting two weeks ago on the Monday (and referring to the chart), you'll notice that the market gapped up above the major resistance on Monday (day 1). On day 2 and day 3, the market meandered around the highs of day 1 but never really making much gains (eg. no confirmation of the upmove on day 1). Then on day 4, the market collapses below the major resistance band, and stays below on day 5. The cycle continued again next week, and today Tuesday December 1, marked day 1 of the five day cycle, and the market gapped up. If this continues (not that it necessarily will), then day 2 and day 3 (Wednesday, Thursday) will be pause days, and day 4 (Friday) should see a major gap down. Friday also happens to be US employment numbers. What the numbers are don't particularly matter, because as I noted before, the market can act opposite to what the news should rationally dictate.

So perhaps we have not so crappy jobs numbers, and yet the market will find an excuse to pummel stocks. Or we have very crappy jobs numbers, and the market will be excited and bullishly drive the market to new highs... personally if I have to bet, I'll bet on the former scenario.

if the market wanted to go higher, then we should have had more impressive weekly closes. For the last two weeks, it looks more like it's topping, then consolidation.