Stock market analysis and commentary from a trader's perspective

Friday, December 19, 2014

Structure, Time Off, And Relocation

It would take a lot to break the current structure. Specifically 1972.56. But unless that happens, this is how things appear to me for now.

I could see this structure lasting until sometime in March. If 72.56 breaks I'll show other scenarios.

I am leaving early today for a Christmas Jazz recital. My friends' daughter is performing in it, and if it's anything like the last one I attended, I am in for a real treat. Later on is a dinner party. A great way to end a wild week.

I am relocating to Puerto Rico in early January and will be taking time off until then to finalize all the preparations. I will post occasionally when events merit. Otherwise I will be packing, tying up loose ends, and seeing friends and family.

I wish you a happy and safe holiday season. Merry Christmas and Happy New Year.

Thursday, December 18, 2014

Watching Oil And 5s & 10s

The bears got wrong-footed. For now.

Janet didn't blow her chance. She proved adept at Fed Speak. We can now look forward to other metaphors being used the next time they want to "change" the statement but not say anything: Someday. Later on. Down the road. In a little bit . . .

2016.89 just got blasted away. The move from the 2079.47 high is now likely corrective and new all-time highs will likely follow, but further lows cannot be ruled out yet depending on how big (and what type) a pattern is in play.

BUT, there is a way to count the entire decline as a 5-wave impulse. If valid, this rally is on borrowed time. (Actually it could last for a couple weeks or more, but could be entirely retraced before making much lower lows). Too soon to tell.

The S&P has rallied sharply, surpassing the 61.8% level of the decline at 2038.63. Closing above this level could signal a test of a volume shelf at the 2054 area and the 78.6% level at 2056.59.

Oil is fading. It needs to get in gear or else risk a plunge to yet further lows. Below 54.60 would be big signal -- for bears.

When I first heard the news regarding Cuba, I thought it was brilliant due to its timing. It now appears that talks between the US, Cuba, and the Vatican have been going on for well over a year.

What I thought was a master chess move to mess with Putin at the perfect time no longer holds water. And it appears to be a divisive subject among the Cuban-Hispanic community, again, something which I find surprising. I thought it was a brilliant way to rally them behind the administration -- and Democrats -- for good.

Elsewhere, 5s and 10s don't look that great . . .

Wednesday, December 17, 2014

Janet's Best Set Up Of The Year

Europe is not looking good today and seems to have spooked the indexes here which were looking good until they looked across the pond.

Or maybe the fade had something to do with crude oil which bounced and faded.

Even if futures made it back to their pre-market highs, the charts would still have a long way to go.

Above 1998.85 would look better. Above 2016.89 would likely solidify a corrective structure. That would suggest that new lows should be aggressively bought. Not a recommendation, but more like a "note to self" which is the purpose of this blog after all.

With yesterday's close below 1980, downside targets come into view: 1967.87 is a 61.8% Fib extension target, the 1960 volume shelf remains, 1947 200dma, and a cluster of other Fib extensions surround the 1937 area.

The Fed releases its interest rate decision today at 2pm, and Janet has a press conference at 2:30pm.

Friday is a quarterly option expiration and the last one of the year. What a great set up to wrong-foot the bears.

Tuesday, December 16, 2014

Buying Rubles In Cash

2025.43 held yesterday. The S&P tanked. 2007.41 is the new level of interest for me. Actually, it's 2001.24.

Closing below 1980.60 (38% Fib support level) would put pressure on 1960 (volume shelf) and 1947 (200dma).

Today I am putting in a standing order for $1,000 worth of Russian Rubles in cash at 80 USDRUB or better. Russia has a low debt/GDP, positive current account, and vast resource wealth. This is a hedge against the future of the dollar in about 20 years.

$1,000 doesn't sound like a big deal, but it's something I want to do with about 20 currencies around the world whenever there are dislocations. You might call it the ultimate buy & hold strategy.

Elsewhere, notice the yen gets stronger whenever the shit hits the fan? The markets are bigger than Abe & the BOJ.

Notice oil is starting to wedge and its rate of change is slowing dramatically? Oil can go lower, but nothing goes down forever.

Notice the 30year bond got above its October 15th high last night on lower volume? The last thing the markets need is rates rising for the wrong reasons.

1186.40 is my stop level on gold. Last night, gold got to 1191.30. I don't want to see it below 1200 now.

Monday, December 15, 2014

Elliott, Shinzo, Gold, Oil, Barron's

Lucky for the market this morning that it's bouncing after closing just above the 50dma. After a nice rest over the weekend, there very well could have been follow through selling that could have caused it to gap lower.

The Elliott wave count is indicating a "third of a third" down, which is great news. Why? Because it's so easy for it to fail.

If today's bounce gets above 2025.43, it would likely be an immediate failure and would bounce like crazy, possibly even head for new all-time highs.

The Elliott wave count suggests a strong move down to 1980 or lower if 2025.43 holds.

Oil is bouncing, but needs to get above 63.72 (WTI) to signal a reversal.

Starting to have my doubts about gold. Below 1186.40 would cause me to dump GLD and GG.

Europe is mixed. Asia ended mixed. Shinzo Abe won re-election, but had to hold early elections to do so. So it's not as much a victory for Abenomics, but a victory for the guy in charge who gets to call the shots about when the elections take place so that his opposition cannot get momentum.

And, as if Barron's was somehow emboldened by its "This Time It's Different" issue which marked the December 5th all-time high, the editorial staff has come out with another round of hilarity. And if you were poking around over the weekend, you could have read it for free, so confident they were in their panel's unanimous prognosis that 2015 will be another kick-ass "Fed's Got Yer Back" year. 10 out 10 analysts see continued gains.

They may end up correct, but in my opinion, 2025.43 has to be exceeded first, preferably sometime today.

Friday, December 12, 2014

Pandora's Box. Wild Swings. Rock 'N' Roll & Getting Paid

Wild swings here we come. 2046.60 was exceeded yesterday which opens up a Pandora's Box of larger patterns and targets.

For perspective, the 23.6% Fibonacci support level has not even been reached yet. It sits at 2018.39.

The 50dma is roughly 2000.

The 38% Fib level is at 1980.

All these are game. For starters. Lower levels could be the 200dma at 1945 and rising. Or the 61.8% level at 1919.53.

Even if the market hits 19.53 it could still be in a bullish configuration targeting new all-time highs.

And if the market fails to break lower, the 2060s look great.

So now is a great time to enjoy the rock and roll and trade. Options are cheap and make for great asymmetrical trades with very low risk.

Oh, and UVXY is paying me for my patience over the last month and a half. Yesss.

Welcome to the Jungle by Guns N' Roses on Grooveshark

Thursday, December 11, 2014

The Big Question & The Bull/Bear Line

The big question . . .

Obviously the right tactic yesterday was to stick with the downside which felt hard to do. My morning take was incorrect. However, there is now a nice bull/bear line at 2046.60.

Above that could open up a bunch of wild scenarios leading to some wild swings. It would not mean that the correction was over. But it could mean a larger pattern was in play.

As traders, large patterns can mean large paydays.

For perspective, the dip did not even reach a 23.6% Fibonacci retracement of the rally since Oct. 15th. The 38% level is 1980.60.