All eyes on Crude Oil and Middle East

This week has been all about the Middle East and the price of Crude Oil.  The S&P is trading against Crude Oil.  Crude rallies we break, Crude breaks we rally.  Today I was doing some selling before the open from 1302.00 to 1303.75 and got stopped out 1305.25.  I thought that the market would hold the single ticks from Market Profile that I pointed out in my Morning Brief but I was wrong.  When the market finally opened I waited to see how we traded around the pivot at 1303.75.  The early morning low was 1302.75, once the market went 1303.75 bid coming off that low I started to dip in on the long side.  I felt that if the market stayed above 1303.75 we should test resistance at 1313.00 but we came up short only trading up to 1310.00.  I still made some money on my longs, just enough to get me even from the shorts that I took pre-market.  I stayed on the sidelines and waited to see what the market was going to do.  I felt the market would either rally up to 1313.00 or retest 1303.75.  I tried to buy the retest at 1303.75 and that was only successful for a few ticks before I noticed Crude starting to rally again.  Once the morning low of 1302.75 was taken out I started to get short.  I tried to stay short but they were not making it easy.  I ended up just scalping making a few ticks here and there.  I was watching Crude and just started to fade whatever Crude was doing.  That worked out for me.  Today was choppy and tricky at times but if you just faded Crude you ended up making some money.  We have to remember that we are also in rollover and technicals are really second hand right now.  I still believe that you need to have technicals but don't count on them working all day.  With all of the news coming out of the Middle East along with rollover that just spells CHOPPY.  There is always tomorrow and tomorrow happens to be Friday.  I am looking forward to the weekend.  Have a good night.  DELI
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Stocks fall over worries in Middle East

Today the market had quite a ride.  In my morning brief I wrote that I was looking to get short at 1332.50 leaning on this area of resistance.  They got me out of some of my shorts because they started to rally into some single ticks from Market Profile.  I stayed short with a small position and waited for the market to trade back down below 1332.50.  Once it did I started pressing and added more shorts on.  I scalped my way out on the way down to support at 1322.75.  Once they broke that area it was pretty much doomsday for the longs.  I just tried to keep getting short and covering but it was tough because there was never any good rallies to sell from there.  Kept my money and just watched as they traded down to 1313.00 where there was support.  I dabbled and got long small, never really committed to being long.  All in all today was a good day to make some money.  High volatility and high volume.  Looking for tomorrow to tell me a lot about what today really was.  Read my morning brief in the a.m for my thoughts.  Have a good night.  
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The Grind Continues

The market continued on its up trend and made new highs for the year. Nothing surprising happened today just the same old grind up trade. The market hit my resistance at131750 and traded higher up to 132000 just high enough or should I say low enough to keep in my shorts. My stop was at 132025. The market then traded lower to 131325. There never was a time today where there was a lot of selling. We closed just below my resistance at 131750. We might see some selling going into tomorrow possibly trading back down to 130950 where we left some single ticks. I put up a market profile chart up showing the single ticks. I believe that the market may consolidate up here for awhile building support in this area. I am not bearish but we may trade lower from here tomorrow because they didn't close as well as I would have liked to see. The VIX closed higher at 16.30 up 37 ticks for the day. The VIX seems to be range bound for awhile as well. Nothing exciting today as I look forward to tomorrow.

Inside Day

The market just needed a day to take in what has happened in the past week. I still believe the trend will remain bullish. I believe that we will see some resistance in this area but ultimately go higher again. Bull markets are very hard to day trade because you are constantly thinking that the move higher is over and you are possibly long from the top. You have to be disciplined and use your short term charts to find areas of support. Buying breaks and not buying into rallies. I struggle with this myself. Everyone seems to believe that we are going higher and that is easy to fade because most people tend to take the contrarian trade. When everyone is one way you should be the other. I believe in that but sometimes it just plain doesn't work until you are long out of the market. You have to be patient and let the market tell you when it is time to sell. Today I put in a daily chart of the S&P cash from March 2006 to show you what we did last time we crossed 1300 in the S&P. You will see that we gradually moved higher to about 1326 then slipped back down to 1220 to only rally back up to 1390 all in a 8 month period. This tells me that we should start get pretty volatile in the next several months.

Rally, Rally, Rally

Another good close on Wall St. We closed above my support area of 129975. This tells me that we should trade up to 131700. This market just wants to go up. This morning in my brief I noted that I would be watching the VIX to see if it got below 18. When it did we just never looked back. The VIX closed at 17.63 which is a bullish close for the market. I believe that we will see some resistance at 131225 before we test my resistance at 131700. Today I included a chart showing the S&P over the past 13 years. Just looking at this chart I cannot find any time that the market consolidated in this area. I put a horizontal line to show the only place that we have failed from a couple of times. If we get above that area we should see some stops. We just go from highs to lows and back up to highs. I hate to agree with all the bulls (because I hate a crowded trade) but they seem to be right. Barring any global events I think that the low for the year is in at 1255.25 in the mini. Friday was chance to get in at a great price that you may not see for awhile. The good news is that the market seems to be getting busier and that is a good sign for bulls or bears. Have a good night.

End of the Month

The S&P was up 2.2% for the month. The best January since 2006. Nothing seems to take this market down. Friday was just a chance for the longs to reload. I am usually a skeptic of moves like this, but with Gold on the decline and the Euro on the up and up it is hard to fade this rally. The market is just telling us that there is very little risk in the currency market. This just points to a solid stock market. The opening range for Gold in 2011 is the high of the year. That is very bearish and I hesitate to say that Gold might be in for a real correction. The S&P opening range for the year is the low of the year. That is very bullish. The trade right now seems to be long equities and short gold. Todays trade was a grind up. The market opened up today and never really tried to sell off. It was surprising to me not to see any selling on the close. The market is just bid and will continue to stay bid as long as we are above the 1255.25 low for the year. The one x factor for this rally could be that the VIX is now above its 50 day m.a. and did not sell off much at all today. I will be watching the VIX closely. My daily pivot in the S&P is 1282.25. We closed above that today. The bulls are in control. We should trade up to 1299.50 if we can sustain trade above 1282.25.

Correction?

Not sure that I am in the camp of a correction in the market at this point. I believe that the market sold off due news in the Middle East. Until the market takes out opening range for the year at 125525 (which is also the low of the year) I am bullish. I felt that today the market should have went lower if this were a correction. The Dow only being down 166 is not that big of a deal. Depending on what news we have this weekend I believe in buying dips on Monday. I have been noticing that gold is fading the S&P this year. The opening range for the year in gold is the high. That is the exact opposite for the S&P. I will be watching to see what happens in gold. I believe that lower gold prices will be even more bullish for equities because it takes the risk out of a currency crisis. Even though everyone seems to be thinking that a weakening dollar will cause the stock market to rally, I would rather be watching gold. Gold is now trading like a currency. If gold takes out the high of the year what will happen with the stock market? I believe a new high in gold will be the reason to become bearish on equities. So until then, I am bullish.

Time

The market is just waiting for the new year so we can rally again. The quieter it gets the more likely we are to continue this up trend. The vix has been brutally beaten down to a mere 17. That is not good for shorts. Amazing how this is the best December since 1991. This is probably the slowest in even more years. This is also the smallest amount of short positions in the market in over 4 years. I have not been fading it but it is still hard to put together a good week. This market it just being manipulated to the upside. I am a Bull until any of the big moving averages are broken on the daily. Trade small and smart.

Waiting

The market is just sitting above all the major moving averages. This just tells me that we should continue on this uptrend. When they try to break them down there is just no one in a hurry to sell. The Bulls are in full control. Waiting for next year seems to be the trade that most traders are taking right now. If you are long this market why should you sell? I see no reason to be selling or getting short until we take out the 50 day moving average. Trade small and smart. Take minimal risk right now. No one is getting rich trading this market. If you make money in the morning, just go home and enjoy the rest of your day.

Bulls are Back

The market has now held it's 50 day moving average(green line) for three days in a row. The market is telling you that we are going higher. We are going to close above the 20 day moving average(blueline) as well. All signs that we will probably make new highs for the year. My next resistance area is 121725 in the mini. Above that we should trade up to 124450. Buying breaks for now.

Starting up Again

I am suddenly getting the urge to write about this market again. The action for the past few months has been so boring that I have lacked enthusiasm. That has changed. The market volume is picking up. I believe mostly because of all the crazy things happening in the precious metals along with commodities. Basically anything linked to the dollar trade. I see a very tricky next six months coming in stocks. Are we going to make new highs in the Dow? I don't think so. I believe that we will see a big rally that everyone wants followed by new slide back down. I believe that we are close to a top and I will post some charts coming up this week to prove my theory.

Bearish

The market basically has a double bottom for the year. I don't believe it. This market is just begging for longs to get in. I am bearish because at the end of everyday we sell off. That is the sign of a bear market. Not to mention there is no volume on any of these rallies. I am staying bearish as long as we stay below the 50 day m.a. on the S&P(115710). Today I have 107800 as my pivot. Above that is 109700 and below that is 105950. Selling rallies.

Bearish

The fact is the Bears are back and the Bulls are on the run. This trade is very scary and unpredictable. There could be another crash in the horizon. I say this because the market is trading scared like it did in 2008. When this starts to happen it is like a virus that takes hold of the market place. Until they get everybody out of the market, it cannot go back to normal trading. I believe they have to trade down to the low at 105600 in order to really see what this market is made of. The have to trade down there to prove to everybody that a flash crash is bullshit. The market really crashed and deserved to be at that price. Once this happens the market will resume to a technical trade, which I believe is Bearish. I am selling rallies until proven wrong. Resistance is 110525 and support is 108450. Below 108450 is 105600 and I believe it will happen fast.

Bearish

When the market sells off, it happens quickly and with high volume. This tells me that the market is in trouble. When all of the guys on CNBC are calling for 1300 in the S&P, I tend to get worried. Like I have said before, I will be selling rallies until we make a new high for the year. This market is in bearish mode until then. 115675 is resistance. My pivot is 112975. If we can stay above that area we will trade up to 115675 where I will be a seller. If we cannot hold that area we will trade down to 110275. Selling rallies.

Bearish

The market cannot close above 116025. We should trade down to 113200. If we fail there, then 110400 is next. This market acts like it wants to go higher and before you can blink they are selling off. The selling is coming late in the day which is a sign that they are going lower. Selling rallies until proven wrong.

Bearish

My pivot to the upside is 116025. If we trade above that then the market should trade up to 119000. I am not convinced of this rally. I believe that we will be in a trading range for awhile bearing any news. That range should be 116025 down to 107350. I feel that we are at the top of the current trading range. I am trading small and from the short side. I cannot believe in a stock market when Gold is running the way it is. People do not want to be invested in this stock market. I do not blame them. This is for professionals only. That means that we should trade technically in a range. There is nothing I believe that will push this market above the highs of the year.

Bearish

I am Bearish until this market makes a new high for the year. I believe that we have seen the top for the year and will be in trading range from here on out. There is so much intervention with every issue in the world. They just fix debt issues with more debt..... Debt on top of Debt. If another problem occurs what do they do then? They cannot spend anymore money because there is none. The futures are all over the place. Which tells me that the bears are back and they are taking control. When the VIX has moves like we have seen this week, that means everyone is scared and looking for protection. I am trading small taking advantage of volatility. Resistance is 117370 and support is 111200. My pivot to the upside is 114100. If we stay below that we should trade 111200.

Bearish

This is crazy..... That is all that I can say. What changed this market overnight. I believe that there is more than meets the eye. My guess is that some banks or one bank lost a lot of money and we have not heard the news yet. There has been nothing but selling. I cannot believe that Europe is the cause of this. We shall see. I am extremely bearish because the vix is exploding again and that is how it started the last free fall. Be careful and trade small.

Bearish

If the market cannot hold 116475 we should trade down to 114475. I feel that this will happen because this market is reaching a breaking point and the VIX is proof of this. When the VIX pops this hard and fast this usually means correction or change in trend. I believe that a change in trend could very easily be happening. I will be more of a believer if we trade below the 50 day m.a (116725) for more than 2 weeks. This will force most of the longs out of the market and give the power back to the shorts. I am selling rallies until they violate 116725.

Slightly Bearish

It is the end of the month. We have had a nice run up this month so look for some selling going into the close. Goldman Sachs is opening down 8 bucks this morning due to concerns of some lawsuits. This might be a lag on the market today. Also look out for news on the Greece bailout plan. That can happen at any time. I will be selling rallies in front of 121200 looking for a pullback to 119550. Above 121200 look for 121625. Trading small and selling rallies.