Market Breadth

Yesterday I shared with you some thoughts on sentiment and much stuff- more today. I still have my same swing trades, but I don’t want to be a pig if you are getting my drift… or I don’t want to be left with a hot potato.

First some thoughts on commodities…. the “wall of worry.”

Exhibit A: POMO cumulative vs. CCI index


Exhibit B: POMO 20day vs. the CCI index

Cheers again.

Now some more on the S&P.

This is Cumulative Advances-Declines. The key here is how MANY stocks continue to rise.

Ok here is a shorter term view of that.

Now I ran the ADV-DEC and divided it by the VIX for more fun.

This shows similar picture- new highs.

Here is a little price action for ya:

Here is the SPX/GLD- futures is below magnigot line FWIW.

EUR- Inside day futures-


Could be distribution- but wish I had Wednesday’s data.

Anyways have a great weekend- I will not be around for a bit- will be traveling a little bit.


One For The Road

It’s Friday afternoon and I’m preparing to go massively long my obligatory pre-weekend Hefeweizen.

Yes, I know there are great American micro breweries, but what I can I say – it brings me back to my restless days when my biggest worry was which promiscuous Fräullein to chat up at the ole’ Parkcafe in Munich. If you’ve ever been there you know what I’m talking about. Those were the days…

Anyway, I thought I throw out another symbol for my stainless steel rats – it looks like a good one and there’s really no rush to get positioned:
Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.

Yes, I’m starting right at the start of the alphabet. Agilent has a nice run and is now near a resistance line which I should really have drawn with a crayon (if there was one in Prophet charts). I think taking it either here or after a push into 51.50 is good medicine. The only caveat is time – I want to be out by 5/13, no matter what happens. FYI – if you take on puts be aware that IV may be jacked up the week ahead of earnings and you definitely want to be out before they report as to no get hit by IV crush.

It’s currently trading at 49.89 – personally I don’t want it until it touches 50 or 50.5 again. Also, it seems we didn’t get that H&S fake out reversal I was hoping for and are now in the process of resolving. Which means that there may be plenty of follow through that will lift all boats. So I would actually love to see a breach of the resistance line here after which we may get a close far outside both Bollingers.




And Now For Something Completely Different

Before I do a wrap up of where I think we are price-wise with the $spx I just took a little yen trade, and its a concept I havent shown before, so I may as well school you up.

Concept: The daily highs and lows are, as a general proposition, where a lot of stops are clustered. It stands to reason that these levels act like pivots, and are extraordinarily well-defended.

Take a look at the USDJPY today

We have both bullish and bearish potential here. Quite obviously recent momentum is DOWN, and its waaaay oversold, but the trend is showing signs of weakening. This could either be working off oversold momo, before another plunge downwards, or it could be a retest of the lows before a SHORT SQUEEZE, and potentially a chenge of trend.

We DONT WANT TO BE BIASED HERE, just stay alive to all the possibilities

My point is that you want to be long on a break of the high, and short on a break of the low (its the other way round with USDJPY, but lets keep it simple eh)

When we have a situation like today, where we have a down close thats a LONG WAY from a long trigger point, with a clear place to place our stops, we have an opportunity to get in ahead of time, not on any other basis than the risk is small and the payoff is huge.

That is, we arent even THINKING ABOUT WHAT PRICE WILL DO, simply that its a good bet. Imagine you are at the roulette wheel, and the casino all of a sudden announces that single numbers pay off at 50:1 instead of 35:1. The odds are in your favor.

Looking at the small timeframe chart, its clear that there is evidence it is finding support ahead of the daily low

I get long (I know its really short, but for simplicity’s sake I’m calling a bet that USDJPY goes up on the chart a long) at the open with a stop at the daily low.

I have a small position, with an order to take partial profits at the daily high, and leave me some of the position running, with a breakeven stop in that event.

Its a good tactic that I examine when the daily close is very close to a low which should be defended.

Moving along.

$SPX… exhibit A – PRICE

By any measure price is bullish as FUCK. The IHS is complete, we have bullish price patterns working, price is embedded in the upper bollinger. We *should* be taking every long setup from now. Smells like a blow off top to me.

The only fly in the ointment is this, market internals have not confirmed the upmove. What this means is that the rally is on shaky ground, and VULNERABLE TO A BLACK SWAN TYPE EVENT.

What this means kids, is that stops on longs should by very tight right now, the market is capable of a big one day fall at any time UNTIL the market confirms the new highs with new market internal highs.

Gut call – dont get short yet, but be cautious with longs. Frustrating, I know


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