Year End Market Analysis

Once again SP-500 is lingering near 1260 zone. This zone is a significant zone because 200 day SMA is right around 1258. It is also the point where the index meets the downtrend line(resistance line) connecting the recent market tops resulting into a coiling pattern.

This is the fourth time since October that SP-500 has tried to break this level.  During the last few tries it has failed failed miserably, and to add to the misery it resulted in fast paced sharp dagger declines back towards the uptrend support line that connects recent market lows. So as soon as market reaches these levels, lot of institutional bears along with retail bear crowd come out and go short, pulling the market down and that is exactly what we are seeing. SP-500 was trading slightly above the 200-day SMA and the the downtrend line but on Friday close, it went a bit negative below 200 day SMA. Hence we cannot say with confidence that we have a breakout. Also the NYSE volume was not there during the holiday week to give it more convincing look either.

However, a breakout  accompanied by volume, leading sectors (XBD, SOX and IYT)  would provide lot of convincing power.

Breadth indicators ( the one I follow is developed by Pradeep Bonde ) has been less supportive of this up move and has been like that whole year around.  The current rallies from oversold levels  on SP-500, from mid-December to now, had a strong breadth reading on 20th December but there was no follow through. We would like to see the Breadth numbers getting hammered out of the park on next consecutive days. This is a negative divergence and is giving a warning that upside breakout might be a fakeout.  So we will keep a close eye on these numbers also. 

The Volatility index mighty VIX has been declining steadily since October. This it self is a bullish signature. VIX below 150 day MA is usually bullish and we have been seeing rallies. From the above picture of VIX you can see that VIX is trading below its long term MA. Even during the recent sell off on Thursday, it did not cross its 20 day MA which is acting like a resistance now. 

As pointed out earlier, I have been watching the VX futures on CFE exchange  also to see the direction of VIX options. The VIX futures VX are trading  at lot higher prices than VIX itself. 
i.e  The institutional or smart money traders are worried about Euro crisis and Market tumbles and hence they been buying protection in the form of SP-500 puts and/or VIX futures or VIX calls. This basically has caused the price of VX futures (VIX calls and puts are hedged by its futures as there is no outright buying or selling of VIX index)

One should be worried about this type of setups as Smart monies are usually right. But again we let the Markets tell us and then we follow rather than taking a outright stand. One can take a outright stand and that can be very profitable but you need protective stops just in case you are wrong.

Our trusty indicator $BPNYA is also on buy side as of now. The RSI indicator with $BPNYA is usually telling a sign when $BPNYA is getting frothy or getting flattened out

As many of you know that I don't to get into any market prediction business but I expect markets to give you  an overall 11% that historically it has been giving you. There will be lots of up and downs in the year and those are hard to predict but those up and downs are the opportunity times and that is where we have an edge and excel.  

Avoid bad periods or even go short and then when the market turns we go bullish. So I believe achieving 20% returns safely is still possible and is the goal for this year. 

I am closing this year with 54.17% returns in ETF portfolio (join the bigbullbigbear team), nice 31.18% in 401k portfolio.

Adios 2011 and Wish you all Happy New 2012.

Going Live: Limited Time offer $200 per year.

www.bigbullbigbear.com

With most of the companies like mine, now moving the Pension account to Employee  managed Pension account, I am getting many many requests to help out.  Hence I am starting a new Premium service to provide help. 

Without basic understanding of the markets and Stock analysis thrown around him by media giants like CNBC, WSJ and not to add the great Warren Buffet’s Stocks, a regular employee get all messed up in his analysis and most of the time it is “Johnny come Late to the Party”.

He feels like “Deer in the Headlights” when markets starts collapsing and does not get out and then bears the maximum pain and then gets out. On the new uptrend he is scared, so does not participate in the new uptrend and then after certain time, he gains some confidence as markets make 10%+ moves and he joins in as market participant and makes some money.

Again the history repeats and markets go down. One feels that account  is  “Climbing up on Stairs and Coming down in Elevator”.

What I offer to premium member

• Unbiased view of the market from my experience
• Learn and Earn based on my methods (which are public domain methods).
• Teach you how to analyze markets, protect your portfolio from market collapse an even profit from market collapse.
• The methods that you will learn will teach you how to trade Exchange traded funds (ETFs), so as to avoid any un-systematic risk or event driven risk to an individual company.

GOAL

Every year the yearly return goal is 20% and stretch goal is 30%.  If you compound this for next 10 years with $100,000  account grows to 620,000. This is easily achievable goal for most of the working people.

This year 2011 the returns are at 56% YTD. I have posted these trades here on the  free blog. 

• Premium member: $250 per year for full access to the premium website.

What does Premium Site have:

• Every night there will be a review of the day 
• Discussions among the members.
• Upcoming trades that we are watching with Buy prices, Profits targets and Exit defined.
• Trades that we take will be sent to you real-time with an e-mail message or Phone text.
• Learning area has material on learning and fine tuning your own skills.
• Mentor 8 people every  6 months. 

I make you no guarantee of towering success. But I promise you to make you your $250 worth every penny in returns otherwise I will refund your money.

Limited Time Special Offer

Sign up right now at the very low price of $200 for the year. 

Markets trying to breakout of the Volatile Loop

This week markets really snapped back on BEARS and within span of a week.. took the indices up almost  7.32% on SPX and DJI up 7.02%.

The Volatitily Index (VIX) also sufffered (-20.16%) when this move happened and the spread and slope of VIX   vs VXX (VIX Futures) have not become more milder. Before in Oct and November they futures were selling at discount and have a negative slope indicating market risk and fear.

On the moving average also VIX closed right there on its 30 Week MA or 150 day MA.. This is very positive indication.  Once the market moves above the sloping resistance

Here are the ETFs that made giant strides in last 5 days. I have been sitting out after that Oct 27 giant move up as it was very unexpected and then it was followed by lots of smashdowns in November. I lost a little bit in November around (2K) and have been on sides. Now with markets trying to become normal, I will start tip toeing back into markets.

Whippy Market

The market seems to one with the Whip. Slicing people both ways. First it takes the shorts up by winding upwards on super breadth and then in the same manner, shakes the bulls by its horns again on super powerful breadth numbers.

Going into this holiday weekend (veterans day, bank holiday, school holiday), the heavy selling of two days ago seems like it has been completely forgotten, as the market is up strongly today. VIX is back below 30 which is a good sign. I expect the EU drama to continue.

However our trusted indicator is flashing a sell signal. So one has to respect that and be cautious and protect 401k. I am sitting tightly in CASH with 401k up 31% for the year....

Confirmation Signals for 9 EMA VIDYA BANDS

Couple weeks ago, I had posted 9 EMA VIDYA BANDS that I use with TICKS.  The same 9 EMA code works nicely on daily basis also. I use Stochastics as my confirming signals.

Yesterday evening, one of my students e-mailed me a old article from 1993. That article indicated use of 72 period CCI along with 5 period average. I test drove that system along with 9 EMA VIDYA bands and I was surprised to see how nicely they match up.

He ran some backtesting using TOS's on demand service and he concluded that trading 10 contracts since Feb, 2010 to the present would give you a gross profit of whopping $743,430. So catching even 1/2 of these profits would be just awesome. 

If you need this CCI code, please e-mail me at marketing1977@gmail.com

ETFs Posting 10%+ Weekly returns.

Some of these ETFs sorted by their weekly returns. Most of them are posting 10%+ and some of them are in 30%+ zone. 

Look at getting into these names. Some of these names are in my portfolio. COWL, EDC, RUSL, SOXL. 

Some of these got stopped out on the highs of Wednesday itself when during last 15 mins, the markets pulled back.  There are lot of gaps on these ETF which I expect to filled near soon. So I am planning to buy limt orders on the gap close to buy these same names again.

I have also initiated a trade in Cotton Commodity as seasonal play. Last year it gave me a gain of 34%. I expect it to behave similarly this year too..

 

Terrific Start to New Year.

For folks following Mahurat trading in US markets also. They got one huge bumper move yesterday. The rally was kind of Band Baja Rally where each and everything was bought and was bought with super intensity.

This rally seems very similar to Oct 1998 where we had a big decline from June to September and then we had a huge October. Yesterday's  rally seemed more ferocious. My ETF portfolio zoomed up 27% net in just one day. I have never seen moves like that of entire market. But the move is more than welcome as I was participating in the market.

Cheers and Happy New Year.

Happy Diwali and Prosperous New Year.

HAPPY DIWALI and PROSPEROUS NEW YEAR

Mutual Funds for 401K

Here are TOP mutual funds available in Hewitt for Caterpillar Employees. I have ranked them by 90-day Relative strength because most of the funds (expect RYDEX funds) have 90 day holding limit otherwise there is a 2% redemption fee. 

For Folks holding IRA accounts in Vanguard, here are the top funds again ranked by 90 day relative strength.

I suggest that you pick top 3 funds just for diversification purposes as the top spot will rotate among the top 5 funds.

For ETFs, I am holding SOXL and EDC both are up nicely today. Now the YTD returns are at 36%. 

Link to the ETF portfolio:

http://goo.gl/rbeuw

UP 35% in last Week.

 I wanted to compare some of the ETF relative strength to go on margin  in my ETF portfolio and I was amazed to see some of the super returns #s posted on last 5 day basis on these top performing ETF.  

Now holding such explosive names can really boost your portfolio when market turns. I will probably swap out of EEM and go to EDC fund tomorrow. 

Bulls Pushing with Horns, on all four feet, with Tail up in air and Snorts coming out of Nostrils

Today last 10 minutes was one heck of a move. There are lots of people are still skeptical of this move up. But ultimately they all come back after denial. There was lot of despondency set in when the Head and Shoulders pattern came back and tilted the market in bears favor but since then the H/S pattern has been negated but people are still living in fear.

I still think this is Trader's market till we really see some of the other indicators like VIX turn positive. The VX futures ( Nov, Dec, Jan) all flatten out and get rid of their bearish posture.  If you study the sentiment cycle then after despondency, hope, relief and optimism sets in.. With today's move, that might tilt the investor psychology towards that optimist mode.

With that said, I am long in some of the ETF that are really outperforming. EEM, SOXL and SPY.

Link to the Portfolio:
http://preview.tinyurl.com/3sqdvxz




Keep any eye on signs of pullback. If market is for real, then it will and should have the classic pullback pattern.  The sector leadership was terrific as we always expect when a bull move starts, You want Banks, Brokers and Transports to be your leaders while Bonds, Utils and Consumer discretionary should be lagging the market.

Turnaround Tuesday..

We had our Tin Tin Setup today again.. Again the 3 pm ET time, the buy program came in fast and furious and turned the overall down day into a 4% up day.

As yesterday we had around 1500+ stocks down on PNF chart.. Today similar number of stocks were up.
You can follow the link below to track these numbers and stock names.

http://stockcharts.com/def/servlet/SC.scan?s=TSAL[t.t_eq_s]![as0,20,tv_gt_40000]![yo_eq_1]&report=predefall

I added a short position on VXX and long position on SPY in ETF portfolio and long positions in AMZN call and covered the short MA position with $22 bucks profits. I will update my spreadsheet to reflect this. Since this rally is from extreme value and gauging its fast and furious intensity it felt like chasing a fast moving train to latch on due to my TOS platform settings defaulting to limit order. I was not filled twice and then I finally hit the market and got filled. Due to this ferocious move, the H/S pattern is bit negated and market can move up from here  but as I said this morning.. Watch the Road ahead

Remain cautious and protect your profits.  Good Night.. 

Hold The Handle Tight and Watch the Road Ahead (Charts)

With the convincing break of 1120 area yesterday and then subsequent slice through 1102 area.. The market is firmly in the bear hands.

The bulls might fight back here with everything getting slammed on extreme levels. The number of charts on PnF charts breakdowns were again huge.. around 1700+ numbers... so chances of snap-back up  rally are quite high (more like 35 points on SPX) but again this is news driven market so more downside might be there.

On measured move basis of Head and Shoulders Shampoo pattern, we should expect around SPX 970 to 1000 range. I believe this would cause all the Optimist to turn their heads down and retreat for a big up move.

Read your charts well and drive your portfolio very carefully. This is the place where bull and bears both can get chopped.

Worst Quarter since 2009

This quarter has been the worst since 2009, If you cannot watch the market on hourly or less basis, there is no need to trade during these crazy swings. 


As you all know, Market has it own way of hurting the most people in the worst possible way.  There is lot of pumping up and down that happens especially at the end of the day or during the last trading hour apart from overnight foreign markets trading the futures and making things worse.


Also there is lot of pessimism building up slowly and steadily. The markets is starting to get more bears than bulls. The sentiment indicators and overall common man talks  are now bearish so we know that we are nearing the extreme zone.. VIX the fear indicator is also near its extreme zone but the VIX futures (the prices of VIX are based on futures) has very bearish look since beginning of this down move and even while we are in extreme territory the posture is not improving.  So we have to remain cautious.


As always.. we allow the markets to prove itself before we start front running it. There is no need to catch the falling knife. Just as markets melt up and there are extreme moves.. falling markets can remain in the extreme zones for a while causing total capitulation.


So even though most of the indicators are telling that we are close to bottom we need to listen to the king of all THE PRICE ACTION of the indices and price action of VIX futures. 


Some of my colleagues are down 35% in their 401k  and IRA accounts and for them I have only one piece of advise. Learn to listen to markets and take a vow to Never ever get hurt again like that, otherwise History will repeat itself and you will be weeping many more times.


Good Luck.

Updated EMA code.

#########################################################
## BigbullandBigBear LLC
## Date: 1st Sept 2010
## Changed: 26th Sept 2011
#########################################################

input price       = close;
input ColoredCloud = yes;
input ColoredFill = yes;
input BreakArrows = yes;
input displace    =  0;
input length      = 10;
input multiplier  = 0.005;
def lastBar = if (IsNaN(close), 1, 0);

input AverageType = {default SMA, EMA};
def MA;
switch (AverageType) {
case SMA:
    MA = Average(close, Length);
   
case EMA:
    MA = ExpAverage(close, Length);
 
}

plot UpperBand = MA*(1+ multiplier);
plot LowerBand = MA*(1-multiplier);
def MAStatus =
  if close > MA then 2    
  else
    if close < MA then -2  
    else 0    ;                          

rec BreakStatus = compoundValue(1,
  if BreakStatus[1] == maStatus or maStatus == 0 then BreakStatus[1]
  else
    if mastatus == 2 then 2
    else -2, 0);


UpperBand.AssignValueColor (
    if !Coloredcloud then Color.White
    else
      if BreakStatus[0] == 2 then Color.Green
      else Color.Red);
UpperBand.SetLineWeight(1);


LowerBand.AssignValueColor (
    if !Coloredcloud then Color.White
    else
      if BreakStatus[0] == 2 then Color.Green
      else Color.Red);
LowerBand.SetLineWeight(1);

# Breakout/down arrows.
plot BreakOutArrow =
  if BreakArrows then
    if BreakStatus[0] == BreakStatus[1] then double.NAN
    else if BreakStatus[0] == 2 then
      close else double.NAN
  else double.NAN;
BreakOutArrow.SetPaintingStrategy(PaintingStrategy.Arrow_Up);
BreakOutArrow.SetDefaultColor(Color.Green);
BreakOutArrow.SetLineWeight(3);

plot BreakDownArrow =
  if BreakArrows then
    if BreakStatus[0] == BreakStatus[1] then double.NAN
    else if BreakStatus[0] == -2 then
      close else double.NAN
else double.NAN;
BreakDownArrow.SetPaintingStrategy(PaintingStrategy.Arrow_Down);
BreakDownArrow.SetDefaultColor(Color.Red);
BreakDownArrow.SetLineWeight(3);

# colored clouds
plot GreenUpper = if ColoredFill and BreakSTatus[0] == 2 then
  UpperBand else double.NAN;
GreenUpper.SetDefaultColor(CreateColor(0,100,0));
plot GreenLower = if ColoredFill and BreakStatus[0] == 2 then
  LowerBand else double.NAN;
GreenLower.SetDefaultColor(CreateColor(0,100,0));
AddCloud (GreenUpper, GreenLower,CreateColor(0,100,0), color.red);

plot RedUpper = if ColoredFill and BreakSTatus[0] == -2 then
  UpperBand else double.NAN;
RedUpper.SetDefaultColor(CreateColor(200,0,0));
plot RedLower = if ColoredFill and BreakStatus[0] == -2 then
  LowerBand else double.NAN;
RedLower.SetDefaultColor(CreateColor(200,0,0));
AddCloud (RedUpper, RedLower, CreateColor(200,0,0), color.green);

TOS code with 10 SMA , Choice of SMA and EMA and Clouds

#########################################################
## BigbullandBigBear LLC
## Date: 22nd Sept 2011
#########################################################

input price       = close;
input ColoredCloud = yes;
input ColoredFill = yes;
input BreakArrows = yes;
input displace    =  0;
input length      = 10;

def lastBar = if (IsNaN(close), 1, 0);

input AverageType = {default SMA, EMA};
def MA;
switch (AverageType) {
case SMA:
    MA = Average(close, Length);
   
case EMA:
    MA = ExpAverage(close, Length);
 
}

def MAStatus =
  if close >MA then 2    
  else
    if close < MA then -2  
    else 0    ;                          

rec BreakStatus = compoundValue(1,
  if BreakStatus[1] == maStatus or maStatus == 0 then BreakStatus[1]
  else
    if mastatus == 2 then 2
    else -2, 0);

plot UpperBand = MA*1.01;
UpperBand.AssignValueColor (
    if !Coloredcloud then Color.White
    else
      if BreakStatus[0] == 2 then Color.Green
      else Color.Red);
UpperBand.SetLineWeight(1);

plot LowerBand = MA*.99;
LowerBand.AssignValueColor (
    if !Coloredcloud then Color.White
    else
      if BreakStatus[0] == 2 then Color.Green
      else Color.Red);
LowerBand.SetLineWeight(1);

# Breakout/down arrows.
plot BreakOutArrow =
  if BreakArrows then
    if BreakStatus[0] == BreakStatus[1] then double.NAN
    else if BreakStatus[0] == 2 then
      close else double.NAN
  else double.NAN;
BreakOutArrow.SetPaintingStrategy(PaintingStrategy.Arrow_Up);
BreakOutArrow.SetDefaultColor(Color.Green);
BreakOutArrow.SetLineWeight(3);

plot BreakDownArrow =
  if BreakArrows then
    if BreakStatus[0] == BreakStatus[1] then double.NAN
    else if BreakStatus[0] == -2 then
      close else double.NAN
else double.NAN;
BreakDownArrow.SetPaintingStrategy(PaintingStrategy.Arrow_Down);
BreakDownArrow.SetDefaultColor(Color.Red);
BreakDownArrow.SetLineWeight(3);

# colored clouds
plot GreenUpper = if ColoredFill and BreakSTatus[0] == 2 then
  UpperBand else double.NAN;
GreenUpper.SetDefaultColor(CreateColor(0,100,0));
plot GreenLower = if ColoredFill and BreakStatus[0] == 2 then
  LowerBand else double.NAN;
GreenLower.SetDefaultColor(CreateColor(0,100,0));
AddCloud (GreenUpper, GreenLower,CreateColor(0,100,0), color.red);

plot RedUpper = if ColoredFill and BreakSTatus[0] == -2 then
  UpperBand else double.NAN;
RedUpper.SetDefaultColor(CreateColor(200,0,0));
plot RedLower = if ColoredFill and BreakStatus[0] == -2 then
  LowerBand else double.NAN;
RedLower.SetDefaultColor(CreateColor(200,0,0));
AddCloud (RedUpper, RedLower, CreateColor(200,0,0), color.green);

TOS Code for 9 Ema Break

Since lot of you have been asking about my cloud bands. I thought of posting this code on the blog itself.
The Bands I have are called Vidya Bands. These bands were invented by Prof. Tushar Chande  You can find him on SFO magazine or University of Pittsburgh's site. He has lot of indicator RAVI, ARUN etc.

I came across his article on how to find early the stocks that break out and that lead me to this quest. He had described using 1% above and 1% below his Chande momentum oscillator. His oscillator is very complex using sigmas and deviations etc. So I decided to make it little simple and I use his 99% and 101% on 9 Ema with the new clouds on TOS platform.

Here is the code for you folks to use.


#########################################################
## BigbullandBigBear LLC
## Date: 1st Sept 2010
#########################################################

input price       = close;
input ColoredCloud = yes;
input ColoredFill = yes;
input BreakArrows = yes;
input displace    =  0;
input length      = 9;

def lastBar = if (IsNaN(close), 1, 0);

def EMA = expAverage(close, 9);

def EmaStatus =
  if close >EMA then 2    
  else
    if close < EMA then -2  
    else 0    ;                          

rec BreakStatus = compoundValue(1,
  if BreakStatus[1] == emaStatus or emaStatus == 0 then BreakStatus[1]
  else
    if Emastatus == 2 then 2
    else -2, 0);

plot UpperBand = EMA*1.01;
UpperBand.AssignValueColor (
    if !Coloredcloud then Color.White
    else
      if BreakStatus[0] == 2 then Color.Green
      else Color.Red);
UpperBand.SetLineWeight(1);

plot LowerBand = EMA*.99;
LowerBand.AssignValueColor (
    if !Coloredcloud then Color.White
    else
      if BreakStatus[0] == 2 then Color.Green
      else Color.Red);
LowerBand.SetLineWeight(1);

# Breakout/down arrows.
plot BreakOutArrow =
  if BreakArrows then
    if BreakStatus[0] == BreakStatus[1] then double.NAN
    else if BreakStatus[0] == 2 then
      close else double.NAN
  else double.NAN;
BreakOutArrow.SetPaintingStrategy(PaintingStrategy.Arrow_Up);
BreakOutArrow.SetDefaultColor(Color.Green);
BreakOutArrow.SetLineWeight(3);

plot BreakDownArrow =
  if BreakArrows then
    if BreakStatus[0] == BreakStatus[1] then double.NAN
    else if BreakStatus[0] == -2 then
      close else double.NAN
else double.NAN;
BreakDownArrow.SetPaintingStrategy(PaintingStrategy.Arrow_Down);
BreakDownArrow.SetDefaultColor(Color.Red);
BreakDownArrow.SetLineWeight(3);

# colored clouds
plot GreenUpper = if ColoredFill and BreakSTatus[0] == 2 then
  UpperBand else double.NAN;
GreenUpper.SetDefaultColor(CreateColor(0,100,0));
plot GreenLower = if ColoredFill and BreakStatus[0] == 2 then
  LowerBand else double.NAN;
GreenLower.SetDefaultColor(CreateColor(0,100,0));
AddCloud (GreenUpper, GreenLower,CreateColor(0,100,0), color.red);

plot RedUpper = if ColoredFill and BreakSTatus[0] == -2 then
  UpperBand else double.NAN;
RedUpper.SetDefaultColor(CreateColor(200,0,0));
plot RedLower = if ColoredFill and BreakStatus[0] == -2 then
  LowerBand else double.NAN;
RedLower.SetDefaultColor(CreateColor(200,0,0));
AddCloud (RedUpper, RedLower, CreateColor(200,0,0), color.green);

############ END##############################################

The picture matches up very nicely with even Hekin Ashi style of charts..
Also it matched perfectly with my picture perfect setup couple days ago on SPY....that I posted here on the blog.

Any questions, please e-mail me at marketing1977@gmail.com

Tell-Tale Sign today

Today, the futures are positive so I expect VIX to drop sharply, if it does not then remain defensive and any sign of weakness bail out.

The reason for this is VIX is stubbornly sticking above 32 levels and the VIX futures all the way upto December are showing a bearish tint.  Today both has to adjust with markets moving up, if they dont then we have another down wave on the horizon. 

Another Picture perfect short term rally setup..

Couple of days ago, we had a picture perfect setup and we have the same today for another short term rally. This rally can pull around 100 points on SPX. But as usual we take some profits on the way and then have stops to protect ourselves.

 For people who follow Larry Connors RSI system, there is that 2 day RSI also in the extreme level.

Ticks started ringing the bells too.. when we got the breakout above that hourly doji..

Remain in Cash in 401k and IRA acocunt. Let the volatility subside before you commit long term capital.

Caution Ahead... Obama and his crew fail to jolt the markets.

Obama's job jolt is not working right now. May be on Monday when he announces actual numbers of the plan, it may help. Otherwise we will have to wait for Congress's vote on tug of war. 

Meanwhile  watching very carefully here.... If we break 1140 on SPX would be very bad. So plan your trade and trade to your plan.

Waiting for Longer term setup

As I said today, this is not a good time to deploy long term capital. Yes for short term bear rallies, you can deploy very strategically and bail out with profits or small losses but for longer term account, patience pays at this junction.

You want VIX to come down to 25 levels and cross below its 150 day MA. If you go back and study most of the rallies have started when VIX crossed its 150 day MA.

So patience is the name of the game. We will soon have our way.. 

Picture Perfect Set up Yesterday (for short term rally)

After last week's debacle on jumper trade and yesterday's scary open,  I was scared of market both going long and short.  But after some good coffee and good analysis, I regained my footing and sense.
Some of you know that I went long last night with deep in the money SPY calls and today morning I  sold 1/2 position on the Gap open.

Here is the setup I looked at last night..

Tick study started ringing bells 20 mins before close. There was constant ding ding.

SPY was forming very bullish setup on hourly and then daily was forming a hammer pattern that we have talked about so many times now.

This setup made me go long with tight stop below 8 EMA and I was hoping for a gap open which I got.
I am also looking at TLT short setup this morning.

I am long DBA in ETF portfolio . Also holding some long positions in MOS, IP and HD and AMZN. I am short Autodesk will cover today. Also these are all short term trades. I am only 10% invested in IRA and 401K right now. No need to initiate long positions till VIX comes to 25 levels or meets its 150 d SMA which currently is at 21.37. I expect them to meet at 25-26 levels where they have met historically.

Please e-mail me on marketing1977@gmail if you need TICK study for TOS platform.

Getting Ready for some Bull Thrust..

Sorry for the late post. I have been travelling all last week and did not get to post my views and observations. 

Last Friday we finally got out breadth thrust and our reliable indicator crossed its 10 day MA to give us our BUY signal.

Friday was also our Bull thrust day with 90% Up day..

It is also very unusual to see multiple bull thrust day without without a sharp downward reaction – at least for a day.  That may be coming up in this week and that might the the last arsenal in the Bear camp.
We have got above the 1210 area which is 20 day MA. and are holding above. We might see a sharp down day which might take us back to test that 1210 area and relieve some overbought conditions that exits now.

VIX is nearly and dearly hanging on 32 area and any moves below would indicate the bull are in full control and will try to take the SPX to 1250 area where the 50 day MA.

I went long  with 1% risk on AAPL and DBA.  I went long 10% in 401K also yesterday.

Lets see what the Jumper trade of 1st Sept brings to the market. Going by history a bit, last year we had the super jumper on 1st Sept which started the new bull move upwards. So can we have Market GODS shower us with same kind of  move ?

Time will tell..  Plan your trades and Trade to your plan.

Train Wreck and Waiting for Clean up Crew and Offense team.

Now the train wreck has decimated everything except for Gold. We should be patient here to wait for the uptown express to arrive. Also watch out you gold bugs, this is very crowded trade ready to fall off the cliff. So tighten your stops if you are long Gold.

Looking at the NYSE bullish percent Index numbers, we can see that we have gone from one goal post (80 levels) to another goal post (30 levels). Bulls scored the goal to 80 and now bears have made their goal by hitting the goal (30 levels).

Dorsey in his book Point and Figure charting explained how to read this Bullish percent Index chart..
*****************************************************************

The chart above is similar to football play.  This chart is my way of demonstrating how we view the
market as a football game where the play shifts from offense to defense throughout the game.

 The first thing an investor must know before investing any money is whether the offensive team or defensive team is on the field.In a football game, two forces operate on the field at any one time, offense and defense. The same forces act in the marketplace. There are times when the market is supporting higher prices and times when the market is not supporting higher prices. When the market is supporting higher prices, you have possession of the ball. You have the offensive team on the field. When you have the ball, your job is to take as much money away from the market as possible; this is when you must try to score. During times when the market is not supporting higher prices, you have in essence lost the ball  and must put the defensive team on the field. During such periods, the market’s job is to take as much money away from you as possible.

Think for a moment about your favorite football team. How well would they do this season if they operated with only the offensive team on the field in every game? They might do well when they had possession of the ball, but when the opposing team had the ball, your team would be scored on at will. The net result is your season would be lackluster at best. This is the problem most investors have. They don’t know where the game is being played, much less which team is on the field. Let’s face it, most American investors only buy stocks, they never sell short. The market is fair.

It has something for everyone. It goes up and it goes down. The NYSE Bullish Percent signals when the environment is ripe for offense or defense. I want to stress that there is a time to play offense and a time to play defense. You must know which is which.
*************************************************************************

Train Wreck continue to fall off the bridge..

Couple of notes

- Nasty Head and Shoulders pattern in action.. on 15 min.. on hourly, On daily and on Weekly..
- Vix Runinng exponentiall.

Finally on Friday.. cashed 1/2 of my VIX calls.

Now we are in the drastic oversold territory.. I would expect a bear market rally soon. So keep your relative strength stocks ETFs list ready.

Pivot Point Study for ThinkorSwim

Here is the study for Pivot Study. Its by default gives you weekly Pivots


# #############################
# Big Bull and Big Bear LLC
# Date: 12/01/2007
###############################
input marketThreshold = 0.0025;
input timeFrame = {default Week, DAY, "2 DAYS", "3 DAYS", "4 DAYS", MONTH, "OPT EXP"};
input showOnlyToday = no;
input applyLevelsFilter = yes;


rec marketType = {default NEUTRAL,"DISABLED",  BEARISH, BULLISH};


def PP2 = high(period = timeFrame)[2] + low(period = timeFrame)[2] + close(period = timeFrame)[2];


marketType = if !applyLevelsFilter then marketType.DISABLED else
if PP2[-1] > (PP2[-1] + PP2 + PP2[1]) / 3 + marketThreshold then marketType.BULLISH else
if PP2[-1] < (PP2[-1] + PP2 + PP2[1]) / 3 - marketThreshold then marketType.BEARISH else marketType.NEUTRAL;


plot R3;
plot R2;
plot R1;
plot RR;
plot PP;
plot SS;
plot S1;
plot S2;
plot S3;


if showOnlyToday and !IsNaN(close(period = timeFrame)[-1])
then {
    R1 = Double.NaN;
    R2 = Double.NaN;
    R3 = Double.NaN;
    PP = Double.NaN;
    S1 = Double.NaN;
    S2 = Double.NaN;
    S3 = Double.NaN;
} else {
    PP = (high(period = timeFrame)[1] + low(period = timeFrame)[1] + close(period = timeFrame)[1]) / 3;
    R1 = 2 * PP - low(period = timeFrame)[1];
    R2 = PP + high(period = timeFrame)[1] - low(period = timeFrame)[1];
    R3 = R2 + high(period = timeFrame)[1] - low(period = timeFrame)[1];
    S1 = 2 * PP - high(period = timeFrame)[1];
    S2 = PP - high(period = timeFrame)[1] + low(period = timeFrame)[1];
    S3 = S2 - high(period = timeFrame)[1] + low(period = timeFrame)[1];
}


RR = if (marketType == marketType.BEARISH or marketType == marketType.NEUTRAL) then R1 else R2;
SS = if (marketType == marketType.BULLISH or marketType == marketType.NEUTRAL) then S1 else S2;


RR.setHiding(!applyLevelsFilter);
R1.setHiding(applyLevelsFilter);
R2.setHiding(applyLevelsFilter);
R3.hide();
SS.setHiding(!applyLevelsFilter);
S1.setHiding(applyLevelsFilter);
S2.setHiding(applyLevelsFilter);
S3.hide();


PP.SetDefaultColor(GetColor(0));
R1.SetDefaultColor(GetColor(5));
R2.SetDefaultColor(GetColor(5));
R3.SetDefaultColor(GetColor(5));
S1.SetDefaultColor(GetColor(6));
S2.SetDefaultColor(GetColor(6));
S3.SetDefaultColor(GetColor(6));


SS.DefineColor("S1", GetColor(6));
SS.DefineColor("S2", GetColor(6));
SS.AssignValueColor(if SS == S1 then SS.color("S1") else SS.color("S2"));


RR.DefineColor("R1", GetColor(5));
RR.DefineColor("R2", GetColor(5));
RR.AssignValueColor(if RR == R1 then RR.color("R1") else RR.color("R2"));


PP.SetStyle(Curve.SHORT_DASH);
RR.SetStyle(Curve.SHORT_DASH);
R1.SetStyle(Curve.SHORT_DASH);
R2.SetStyle(Curve.SHORT_DASH);
R3.SetStyle(Curve.SHORT_DASH);
SS.SetStyle(Curve.SHORT_DASH);
S1.SetStyle(Curve.SHORT_DASH);
S2.SetStyle(Curve.SHORT_DASH);
S3.SetStyle(Curve.SHORT_DASH);


def paintingStrategy = if timeframe == timeframe.WEEK then PaintingStrategy.DASHES else if timeFrame == timeFrame.MONTH then PaintingStrategy.Dashes else PaintingStrategy.DASHES;


PP.SetPaintingStrategy(paintingStrategy, yes);
RR.SetPaintingStrategy(paintingStrategy, yes);
R1.SetPaintingStrategy(paintingStrategy, yes);
R2.SetPaintingStrategy(paintingStrategy, yes);
R3.SetPaintingStrategy(paintingStrategy, yes);
SS.SetPaintingStrategy(paintingStrategy, yes);
S1.SetPaintingStrategy(paintingStrategy, yes);
S2.SetPaintingStrategy(paintingStrategy, yes);
S3.SetPaintingStrategy(paintingStrategy, yes);

Another give and take.. and take to the fullest

We are at the critical junction. We broke the last week's support where we had a nice hammer pattern and then we had a nice rally which kind of challenged the July High but then it got dizzy due to shaky political in decision

As you can see from the below there is support at 200 day MA 1284 level and then last recent support  1258 where the market was stopped.

As usual, I am not getting into the prediction business but let the market tip its hand. Currently I am all in Cash in all accounts. I am also long VIX calls as any more upside or downside will contribute to volatility. Currently the VIX levels are at kind of "EVENT" levels.  where both index calls and puts are bit expensive.

So lets give a week for market to tip its hand before committing any capital. 

Rally after oversold conditions

As noted last week, there were deep oversold conditions and we got a very nice bounce back on hopes of debt crisis resolution. The Breadth indicators have also turned positive and now we wait for the break of July highs of 1346 and then ultimate Bin Laden high of 1370.

After the break of 1346, market might pullback to relieve the overbought conditions that will happen with that kind of price movement, something to be aware of before you fully back up the truck or putting tight stops at that junction.

After that, the dip hold confirmation will create a big bullish thrust and during that situation everyone should be making money.

Just remain aware this this is a news and earnings event driven market so trade accordingly.

Mentoring Chat Session

Rally running into Stumbling Blocks and Oversold conditions..

As you have seen market ran up and made great strides. Some of the stocks made almost 30% + moves (see the list below).

After that few days of thrust, the rally immediately ran into trouble with bad job number (18,000 jobs added instead of forecasted 125,000, that is a huge miss).

Now with this pullback we are at very critical junction, We are sitting on the 50d SMA with stochastics in the oversold zone. This 50 d MA zone is one critical zone where market cannot sit on for long as you can see from the past history.. (this is even true for stocks).

With Earnings around the corner, with Google stunning the streets with positive kicker and QE3 chatter and  oversold conditions, we are due for an attack back to highs created earlier this month.

As with anything, we trade the price action and trade accordingly.

Some of the ETFs of interest, here are as follows:
SLV, FXC, IEO, GDX, IDX, IGE, EWJ, ITF, FXY, JJC and IYE

Summer Rally

Summer Rally

As shown in the picture below, Friday saw very good bullish signs. There was a break of Longer term bearish downtrend. There was a Bullish thrust on the Accumulation-Distribution Study also. 

Also other indicators that I follow, BPNYA crossed its 10day MA, my VIX model and the Stockbee's Market Monitor is also now in the Bullish Thrust mode. 

We should expect a move to June 1 highs around 1345 in the upcoming week before this rally stalls. Enjoy the bullish mode till it lasts. 

I bought some ETFs in my ETF portofolio. Full portfolio available on: http://tinyurl.com/3bku4ev

Mentor Club

Since some of you know that I have been asked by a close friend of mine to teach his son how to trade. He is a complete newbie and I have never taught anyone like this. The only people I have taught like this are the prep Math and basic Physics student during my University days. Most of the time, I am talking to someone who has done bit of trading themselves or using some advisory service. So this should be fun exercise. 


As I am setting up the material, I am thinking  of helping some of you folks who have been asking me for one on one help, I am setting up a Mentor Club to help some of you folks out.


The goal here is to become self-reliant and help others.
(Principle of life to follow: What goes around comes around to help you (or destroy you))

This is what I am planning:

 - General understanding of markets

 - Understanding what is going on currently. 

 - Use of basic tools on hand to figure out action plan(s) 

   This might be broken down into more detailed session after the monthly performance review.. 

 - Going over the basic mindset.. how psychology affects your plan.

 - Designing a solid trading plan around your mindset with very specific rules

 - Monthly review of your trades to fine tune your execution skills and performance improvement. 

If interested, please e-mail me on marketing1977@gmail.com.


Also I plan on taking on 7 or 8 members initially.