S&P500 (Target 1880pts) & Coca Cola Company

Bears have staked their claims on the bragging rights till the next short term support of the S&P500 index at 1880 points. Bears have pierced the bullish support at the 50 DMA and looks to advance deeply (lower) in no time.

Click on chart to enlarge (S&P500)

Even Warren Buffet's Coca Cola company, a very strong dividend play, looks to be topping out with its multiple top formed on the weekly chart. This leads me to believe that the stock markets have further room to fall and the drop will be very broad based. Check out its weekly and daily chart appended below.

Click on chart to enlarge (Weekly Chart - Coca Cola Co.)

Click on chart to enlarge (Daily Chart - Coca Cola Co.)

Toppish Patterns - Get ready to ignite short positions

Things really change fast in the financial markets. As of close of 13 Dec 2011, it seems more likely that the markets are setting up for lower prices to come. Many leadership stocks are exhibiting toppish patterns and looks likely to roll over anytime. Tricky situation.

Click on chart to enlarge (Dow Jones Index)

Click on chart to enlarge (Apple Inc)

Click on chart to enlarge (LVS)

Click on chart to enlarge (CF)

Click on chart to enlarge (Chipotle Mexican Grill)

Get ready to ignite short positions!

Market Sentiment Looking Increasingly Bearish - 17 Nov 2011

Ironically, I was harping on and on about the market being bullish for the past few weeks. Somehow, the charts are showing more footprints of sellers than buyers in this current moment. Being nimble and flexible is the key to survival. Go to cash or start looking for short-selling setups.


Click on chart to enlarge - Visa Inc

Click on chart to enlarge - US Steel Group

Click on chart to enlarge - Bank of America

Market Updates - Odds with the bulls

Both Dow Jones and S&P500 are still stuck in a symmetrical triangle pattern with a breakout on the cards soon. The odds are favouring the bulls as Dow Jones had already moved above its 200day MA. It is at this point in time that we must be flexible and trade the breakout on either direction of the move. I am currently on the bull side as my interpretation is that a mini bull run is on the cards towards the end of the year. However, we must remember that the market is designed to fool investors and traders alike. Flexibility in jumping from either camp is absolutely crucial. Be nimble.

Dow Jones Index

S&P500

Direxion Financial Bull ETF (FAS)

As Bullish as it can gets

The charts are very bullish indeed. Look at the S&P index. It looks like its going to make a new high very soon as it bounce off the top of the Ichimoku Clouds and is now aiming to clear the 200 day MA in its second attempt. Will it succeed? A break of the 200day Ma could see the index moving higher in a powerful move.

Click on charts to enlarge (S&P500)

Click on charts to enlarge (United Steel)

Click on charts to enlarge (YGE)

Click on charts to enlarge (AIG)

Click on charts to enlarge (BAC)

Always trade with stop loss.

Bias towards Bulls - Market Updates 2 Nov 2011

A pullback is inevitable after a strong run in recent weeks. Here is the support level for S&P500. Bias is to the upside if support at 1120 region holds. The bulls need a CLOSE above this level in order to resume the upside move.1273 region serves as strong resistance.

On the daily chart, the pullback or selling retraced all the way to the top of the Ichimoku Clouds after hitting the 200day MA. Top of Ichimoku Clouds served as strong support where buyers who missed the earlier rally up would hopefully pile in to support the prices.

S&P500 Daily Chart

S&P500 Weekly Chart

Change in trend - strong case for bulls (S&P500 weekly chart)

The obvious fact is that we are seeing the S&P500 index holding its long term support of 1139pts successfully 3 weeks back on the weekly chart

Moving down to the daily chart, we are seeing a change in character, or rather change in trend when the S&P500 broke out of its trading range, signaling that the Aug/Sep bottom would hold.

Adding to the strong case for the bulls, the Baltic Dry Index widely considered as the purest form of economic indicator, is already on the move, breaking out of its trading range back in Aug/Sep.

The Baltic Dry Index provides an assessment of the price of moving the major raw materials by sea and is known to be one of the purest form of economic indicator in the sense that only member companies who have actual cargo/ships are allowed to trade in this index with no speculative players involved at all.

Market Going Sideways - Ready for Bullish Breakout Or Not

S&P 500 is now just below its Ichimoku Clouds. The mere fact that it has not bounce off the resistance and moved lower is perhaps good news for the bulls. The index is now just hugging below the resistance line and if it breaks out of the Cloud, look for it to hit at least the 200 day MA at 1275pts. There are also some positive indication from the Ichimoku Cloud trading overlay that are of favorable to the bulls. If the market favor the bulls, we could see some upside next week.

S&P500

Bank of America

Market updates for week ending 14 Oct 2011

S&P500 rallied and closed just at its major resistance on Friday. We could be seeing a slight pullback for the next few days to 'retest' the resistance-turned-support for S&P500 at the 1185 area. If we could hold the 1185 level, the market could turn bullish into the weeks ahead.

S&P500 Daily Chart

S&P500 Weekly Chart

MGM

BAC

Possible Change in Trend

What a week it was! The major indices broke out of their descending triangle and went on a tremendous breathtaking rally before facing a near term resistance. Somehow, the trend looked like it is changing slowly from bearish to bullish. Stocks looks to be bottoming especially with a Right Angled Broadening formation spotted on the DJ Transportation Average. We'll have to be patient and wait for the breakout higher before placing any long bets. Nonetheless, the higher time frame bullish players are already moving in as the weekly charts of stocks are looking to form bullish reversals.

S&P500

Dow Jones Transportation Average

Bank of Ameria

Goldman Sachs

S&P 500 Market Update for 30 Sep 2011

S&P500 closed almost at the end of its trading range of 2 months on Friday, 30 Sep 2011. A break of 1120 support will spell bad news for the bulls. Will it break? We'll know on coming Monday, which happens to be the start of the 4th quarter.

 

Market is range bound despite the Dow dropping more than 300 points on Friday

Dear readers, despite the Dow dropping almost 300 points on Friday, the market is still stuck in a range. If this range holds, then it should be bouncing off the bottom channel of the trading range next week. However, if we failed to hold this level and closed below the low of this range, then we could possibly see further downside for stocks. Friday was a good opportunity for range traders to initiate their short term position.

S&P500

General Electric - Range bound between $15 and $16.50. Time to buy the bottom of the trading range on Friday.

Century Aluminum - Range bound in an ascending triangle formation.

AIG - Looking surprising good and its in the midst of forming an ascending triangle amid all the doom and gloom in the market.

Bulls preparing to overun Bears in the short term

Dear Readers, we could see potential upside for stocks in the short term with the bulls preparing to lead the charge to overrun the bears. Unmistakably, we are definitely seeing higher lows and lower high being formed on the charts, creating what looked like symmetrical triangles pattern on a broad based basis. This coil-like action could see stocks breaking out either in a thrust upwards or downwards. You can probably guess my bias from the title of my post.

S&P500

Bank of America (BAC) gap up on extremely high volume on news that Warren Buffet will invest in the company. This could possibly be a change in trend for BAC, Change in trend is the areas where investors want to get into the stock as this could possibly be the last time we see BAC under $7.

AIG

General Electric

Direxion Financial Bear 3X

In my opinion, bears are losing their ground. Having said that, we should always keep an OPEN mind at all times in the stock market.

Have a great weekend! Cheers!

Closer and closer to resistance... will it break?

Dear readers, we are getting closer and closer to the resistance for most stocks. Will price actions goes higher or be stopped in their tracks? Its anyone's guess, for now. Being nimble and flexible in these markets should pay well due to the huge resistance created by the huge drop a few weeks back.

I have entered a long trade a few days back. However I am looking to take some gains off the table and then ride the rest up with a trailing stop. In this volatile climate, rallies off shorts covering are very powerful.

Looking a the charts, trend traders have yet to cover their shorts. For those who are looking to short the market, we will need this group of traders to cover their shorts position before a good short entry materialize.

Let's take a look at the S&P500 daily chart.

Trend traders would be forced to cover their short positions at the 1200 level. If that happen, we could even see a powerful rally as high as the 1250 region (50 days MA). That will be a good short entry point if that scenario occurs.

Stay nimble, folks!

Golden Buying Opportunity or Market Meltdown?

Seriously, I had thought that the resulting aftermath of "that big sell-off" would resulted in a huge short-covering as well but what we are seeing now is a series of test on the long term weekly 200day support of the S&P500. The intensity of the drop indicates to me that it is more like a case of panicky selling more thatn anything else.This drop could either be an imminent market meltdown or a HUGE buying opportunity. And I am more inclined to the latter. We should see the market moving higher from here.

My take is that the market goes higher from here. If the market is meant to break this 200 day long term support on the S&P500 weekly chart of 1155pts, it would have bounced right off this level on the daily chart and then hit towards resistance before resuming the drop and eventually breaking the 1155 support. Instead, what we are seeing now is a consolidation of positive reversal candlestick on the daily chart which leads me to believe that the market might have formed a long term bottom here and thus creating a tremendous buying opportunity to load up stocks at this cheap levels.
 

This is my hypothesis, of course. I will only know on hindsight if I am correct on the markets. Meanwhile, my strategy is to go long at this level with stop loss and to add more if the market goes higher or bounce off any double bottom formation. For more conservative investors, one could buy only upon a successfully retest of the 1155 support. Of course, I am not oblivious toi the fact that the ride up will be choppy due to the huge overhead resistance. 

Good luck and have a great week ahead!

Market thoughts - 7 Aug 2011

Dear Readers, its like deja vu all over again just like back in the 2008 financial crisis. The S&P500 lost almost 7% last week. Utmost on everybody's mind now is that whether the markets will rebound from its current oversold situation. Almost every traders are expecting a bounce of sorts for the coming trading week. And just before the close of trading on Friday, rating agency S&P downgraded the credit rating of the US government. Question is: Is this downgrade already been baked into the current beaten stock prices? I, for one, think we'll see the market holding the low of the long hammer reversal candlestick formed on the Friday.

Not the time to be long but one should sell the short term bounce into resistance if / when the bounce comes. You can bet that investors who were not able to get out when the market plunged last week will dumped their shares on any spike in share prices when shorts cover and longs who sense bargain buys. There are signs that the hammer close on Friday on high volume might be a a sign of capitulation where investors dumped their last stocks holdings and no more sellers are to be found. We'll see. At this point in time though, cash is king in this environment.

On a separate note, I have come to know that the Baltic Dry Index (BDI) has been on a spiral downward trend and had not recovered since the financial crash back in 2008. The Baltic Dry Index provides an assessment of the price of moving the major raw materials by sea and is known to be one of the purest form of economic indicator in the sense that only member companies who have actual cargo/ships are allowed to trade in this index with no speculative players involved at all.

This brings us to this particular company Dryships Inc (DRYS), an operator of drybulk carriers who pegged its rates to the BDI. In other words, buying into DRYS is the exact of buying into the BDI. No rates go down forever. This would be a pure contrarian play and dead money while waiting for the index to recover. This might be a multi-bagger when the economy recovers. For all the contrarians out there, i present DRYS. See chart.

Weekend Updates - 1 Sep 2011

Here's a look at the daily chart of the S&P500. It will be the third time since mid-June that the crucial 200day MA will be tested. Will the overall market bounce off or break the support? Financial stocks are still in the dumps but there might be signs that they have formed a bottom as long as the lows of the reversal candlestick patterns hold.

There have been lots of talks that the financial sector needs to wake up in order for the overall market to move higher. Personally, I subscribe to this idea. The next most important point is to determine if the market has factor in the debt crisis for the financial sector? As we all know, stocks do have the ability to forecast the future and perhaps the reason why this particular sector have been stuck in a trading range since the 2008 financial crash could be due to the ongoing reported debt crisis. If this is the case, if this crisis is already priced in (which i am assuming it is - see my point above), we should see the financial sector moving higher soon since markets are forward looking. Anyone agree with me? Let's see.

Financials(Weekly charts)