Pre-Market Update November 23rd, 2010

Watch $NYUPV, especially after 12:00pm ET. If $NYUPV is well below 80 from noon on and looks to close well below 80, then market will be oversold enough to initiate some kind of bounce on Wednesday.

Watch $TICK for readings in the -1100 to -1200 range. Track these and watch what happens 20-30 minutes after readings in this area. If this decline is real, then negative $TICK readings will continue throughout the session and trading off them could be dangerous.

Watch the $VIX on a 5min, 10min, or 15min basis. As long as the $VIX continues to rise, then entering on the long side will be very risky. When or if the $VIX starts to drop, entering on the short side will be dangerous.

Watch the the 30min updates of the P/C Ratio. If you start to see ratios over 1.50 or somewhere in that range especially near the close, then market should bounce on Wednesday. Maybe.

Watch the November 16th lows. If those don’t hold, especially on a closing basis, then consider that the market has topped.

GL

Pre-Market Update 10/14/10

You’ll want to read Ceridian’s Pulse of Commerce Report for 10/13/10

The RSI on the 60min charts pushed above 70 for IWM, SPY, DIA, $TRAN, $CYC,  XLF, &  Q’s.  Selling ensued.

Lately, only the 15min and 30min charts have indicated good entry points with the RSI on the 60min never reaching oversold levels below 30.

IWM 60min 10/13/10

Pre-Market Update, September 29th, 2010

Due to scaling, the non-confirmation in the cumulative $NYUD is not as apparent as is the non-confirmation in the CVI. This shouldn’t be close and leave people wondering.

CVI 9/28/10

The cumulative $NYAD did not make a new high yesterday. It’s close but it shouldn’t be close. Instead it should have been an obvious new high. Since the $RUT made a new high yesterday, its A/D line should have made a new high as well.

Charts courtesy of FreeStockCharts.com

$RUT A/D Line 9/28/10

These indicators should not leave people picking through chicken entrails at a high voodoo mass in an attempt to decipher their hidden meanings. Instead, they should be clear, and probably are. Add in the fact that the ADX line for all the majors ticked down yesterday in a signal that upside momentum is waning, and you have a situation that puts longs at high risk. However, and even though the $VIX, $VXN, and $RVX now have Bullish DI X’s, until there is some sign of overt or covert distribution, shorts are front running, IMHO, of course.

GL

Pre-Market Update, September 21st, 2010

$SPXA50R hit 86% on Monday. Here are its high readings going back to the March 09′ low. Once $SPXA50R peaks in the 90% area, +/-, it usually rolls over and often takes the market with it.

May 5th, 2009 = 92%
June 2nd, 2009 = 89.80%
August 1st, 2009 = 91%
September 15th, 2009 = 93%
October 19th, 2009 = 88%
January 11th, 2010 = 88.2%

You can easily see on the chart below that $SPXA50R stayed above 75% from early March of 2010 to late April of 2010, which is the longest period $SPXA50R stayed above 75% going back to the March 09′ bottom. The peak of 93.20% occurred on April 6th when the $SPX was at 1189. From there $SPXA50R went into negative divergence mode and started putting in a series of lower highs until it finally dropped below 75% around the 1st of May, 2010. If you recognized that $SPXA50R was not confirming the rally any longer and got out on the first or second non-confirmation, you would have missed 8-10pts on the upside and all the agony that followed on the downside.

$SPXA50R gained almost 10 percentage points during Monday’s rally. Historically it is very near its high if not already there.

With the $SPXA50R very close to peaking, the Q’s in a parabolic spike, the $TRIN at .32, ZBT at 61.09, the leading transportation index lagging the rest of the markets Monday by about 1/2 percentage point and failing to break above the August highs, and with the RSI on the 60min charts above 70, this is not the time to be chasing stocks. This is the time to sit back and let the markets sort things out over the next couple of days, IMHO, of course.

Chart courtesy of StockCharts.com

$SPXA50R 9/20/10

Finally a note about the SG for the $SPX. I use four different indicators/oscillators to calculate the SG. I log the daily changes in each of these indicators and watch for clues that might lead to a change in direction for any one or all of the indicators. One indicator that I use had been rising by about 8-10 digits every day since September 2nd, until last Thursday. While the other indicators rose significantly Monday, this one particular indicator didn’t truly confirm the rally. It could be nothing, but if this continues then this indicator will stall and reverse which will be the first phase of a ‘sell’ signal. But this hasn’t happened yet. I should have a clearer picture by Wednesday or Thursday.

Pre-Market Update, September 20th, 2010

I have sell/avoid signals on IWM, $TRAN, $CYC, IYR, $RIFIN/XLF, & XLE, but this does not mean these are shorts. They could become short candidates but they need to break the trend line and the 20MA on the 60min charts first. IMHO everything is in place for a decline, but the decline is not yet apparent. It could become apparent today but the market could rally hard, too.

Click here for longer term $RUT/IWM 60min chart.

Pre-Market Update September 17th, 2010

(Note: 8:30 AM, ET. What prompted me to write the following was the fact that the ES was up nearly 9pts but has since given back almost all of those gains so keep that in mind as you read on. Though I doubt it because I expect the market to rally hard today, it is possible that all those negative divergences that I’ve been noting lately will finally impact the market today the way they have in the past.)

Looks like a major, major short squeeze in progress. If you’ve paid heed to the $NYSI w/ ADX chart that I go on about, then you’re not short the market. If you’ve ignored that chart, then you won’t have a good day today.

As you know, I’ve been watching all these negative divergences in various breadth indicators and wondering why the market has not reacted to these divergences, as it has in the past. Today’s action, as long as it lives up to the hype in the futures, will render all these negative divergences null and void. However, breadth indicators will most likely peak today which will then set up a much more significant negative divergence which the markets will not be able to ignore.

Through back testing certain breadth indicators, including the $NYSI, I have found that tops have certain characteristics and one is a large spike in the $NYSI on the day of a large green candle. Your job today is to note the number increase in yesterday’s $NYSI, note the change today, then note the change on Monday. As long as the market doesn’t do some kind of Op/Ex related reversal and close red, then today should be a 90% up day, or very close to one, and a climax peak in the digit gain for the $NYSI and various other breadth indicators.

Basically it comes down to this. You can not have a bottom without a major distribution event nor can you have a top without a major accumulation event. Fear and loathing meets investor nirvana.

If my analysis is correct, and it is just supposition at this point, the real top of this move should come today but the actual nominal top won’t come until the middle of next week +/- a day or two, on a closing basis. In other words, do not front run this on the short side as there will be several days of residual buying next week. Also beware that the pro’s will sell today and let retail investors fight over the crumbs next week.

Pre-Market Update September 15th, 2010

WARNING: Watch the $TICK. If there is a huge minus $TICK of say -1000 or more in the first few minutes of trading this morning, then THEY will turn the market around on a dime. If you are champing at the bit to short this market and you see a negative $TICK in that area, +/-, you will need to wait and see what happens after that, IMHO, of course.

WARNING # II at 10:10AM: Negative tick of -910 at 9:40 and Intra-day P/C Ratio opens at 1.47, both of which are extremely bullish.

I added TMF to my Lion portfolio yesterday and thanks to Japanese currency intervention, it is getting hammered this morning. Based on the 60min trading strategy, bonds were a buy last Friday at the open. Oh well.

If the market does actually roll today, which it should based on all those negative divergences, then the buying op could be several days out. Nimble traders might have some luck shorting based on what the Pro’s do at the close. But don’t be surprised if a red close today leads to a test of recent highs tomorrow.

Looks to me like $RUT/IWM will break down today.

Click here for longer term, $RUT/IWM 60min chart.

Midnight Update September 3rd, 2010

Or why I’m locking in profits on Friday.

(Added at 10:30am, ET, 9/3/10:

Out of TQQQ in the PM in the upper 88′s.
Out of SOXL at 26.31 at the open, +/-
Out of 2/3rd’s of DRN at 50.21 literally at the open.)

Two consecutive closing $TICK readings over 1200.

Two consecutive closing $TRIN readings below 0.50.

Zweig Breadth Thrust at 57.

$NAMO within 2pts of tagging upper BB.

$NYHGH negative divergence on Thursday.

$NALOW at 20 is near extremes and previous readings in this area have precipitated one-day or multi-day pull backs.

Every major index and all the key sectors that I watch are overbought in the 60min and 15min time frames with RSI’s above 70 or hovering right around 70. They all look very much like this chart of IYR.

Click here for updated, longer term, $RUT/IWM 60min chart.

$VIX quickly approaching oversold levels with its RSI just above 30 in the 60min and 15min time frames. The RSI on $VXN in the 15 and 60min time frames is already well below 30.

Good luck to us, one and all, and especially to anyone who may be near the hurricane.

Pre-Market Update August 20th, 2010

No crystal ball here, but I see this as a possible scenario for Friday.

(Added at about 9:00AM Friday morning:

I put up the chart of IWM last night after midnight ET and it appears that IWM and others are going to fall off a cliff at the open. Be careful trying to short into the drop because the Big Boyz might be setting you up, as THEY have done so many times in the past. However, be even more careful trying to buy the dip.)

Pre-Market Update, July 23rd, 2010

This is what I’m talking about.

Chart courtesy of StockCharts.com

There is now a fairly good case that says the markets, after having moved above the persistent down trend line, are now in a new uptrend. To establish a trend, you need to have three touch points, and we have that on the $SPX. A move above and especially a close above $SPX 1099 would further support this new trend as that would give us a higher high.