Given the daily pattern of Friday and Today, I am going to wait for a small counter-trend
rally before I begin to put a short line in place.
Monday, January 7, 2008
Wait For Counter-Trend Rally In March Coffee
We had talked about shorting March Coffee for a potential slaughter to the downside.
Given the daily pattern of Friday and Today, I am going to wait for a small counter-trend
rally before I begin to put a short line in place.
Given the daily pattern of Friday and Today, I am going to wait for a small counter-trend
rally before I begin to put a short line in place.
Stopped Out Of The Long Feb. Hogs Trade
We were stopped out of the Long Feb. Hogs trade today with the close below 56 even.
This was a loss of $590 per contract.
Nobody likes a loss, but the stop did what we asked it to do.
I am going to wait for a break of the wedge to the upside before I get long the Hogs again.
Perhaps I was a bit hasty in my decision to go long the hogs in the face of lower prices.
The other three positions remain in tact.
This was a loss of $590 per contract.
Nobody likes a loss, but the stop did what we asked it to do.
I am going to wait for a break of the wedge to the upside before I get long the Hogs again.
Perhaps I was a bit hasty in my decision to go long the hogs in the face of lower prices.
The other three positions remain in tact.
Equity Market Comment - 1/7/2008
Analysis of the markets is much like being a detective.
You see a pattern that strikes a cord and you go to your little black
book of patterns you keep and get some answers.
The volatility that we experienced today is indicative of trying to hammer out a point of stabilizing prices in order to stage at the very least a short term rally of 38% to 50% of the decline that was just before.
This pattern however does come with a stipulation and that is, the low of today must not be violated and if Tuesday can stage a sharp rally on top of that then the odds increase even more that a substantial move to the upside is upon us.
But, we get ahead of ourselves here. The first item of business will be the ability of the market to hold the lows of today.
Conservative traders should remain cautious here until we get more confirmation that some type of low has been put into place.
Aggressive traders should begin the process of picking up some battered issues as I began this process today. I am not advocating jumping in with both feet, but a bit of bottom fishing here while aggressive could prove very profitable.
Aggressive traders should not have their trading accounts any higher than 25% short term equities and we can always increase those levels as the market goes our way.
No question, things are looking up, but we are not out of the woods yet and if we do get some type of rally in here it will be the quality of the rally that may dictate the future for our core equity holdings that have been in place since late 2003.
You see a pattern that strikes a cord and you go to your little black
book of patterns you keep and get some answers.
The volatility that we experienced today is indicative of trying to hammer out a point of stabilizing prices in order to stage at the very least a short term rally of 38% to 50% of the decline that was just before.
This pattern however does come with a stipulation and that is, the low of today must not be violated and if Tuesday can stage a sharp rally on top of that then the odds increase even more that a substantial move to the upside is upon us.
But, we get ahead of ourselves here. The first item of business will be the ability of the market to hold the lows of today.
Conservative traders should remain cautious here until we get more confirmation that some type of low has been put into place.
Aggressive traders should begin the process of picking up some battered issues as I began this process today. I am not advocating jumping in with both feet, but a bit of bottom fishing here while aggressive could prove very profitable.
Aggressive traders should not have their trading accounts any higher than 25% short term equities and we can always increase those levels as the market goes our way.
No question, things are looking up, but we are not out of the woods yet and if we do get some type of rally in here it will be the quality of the rally that may dictate the future for our core equity holdings that have been in place since late 2003.
Sunday, January 6, 2008
BLOGELITES
SUNDAYS ARE THE BIGGEST LAG DAY FOR VOTING THE BLOGELITES, SO PLEASE, IF YOU VISIT TAKE THE TIME TO VOTE.
THANKS MUCH
THANKS MUCH
Commodity Update 1/6/2008
I have yet to complete the commodity trading blog, so the updates will continue to post here.
Time has once again become a very precious commodity and once I have more of it then I will finish the futures blog.
*************************************************************************************
Short March Coffee is a new recommendation and one I have yet to act upon.
It looks poised to make a move sharply lower with sell signals across the board and a very
large bearish spread between the Commercial Traders and the Small Speculators.
No question it is worth a look!
We remain short March Corn with a Buy Stop at 470 2/8 on a closing basis only.
Corn looks to have put in a swing high and this trade should begin to move in our
favor rather quickly if it is correct.
The Protective Stop is very close to our initial position so risk is very limited on this trade.
We continue to hold Long Feb. Hogs with a sell stop at 56 cents even on a closing basis only.
This trade is on a shoestring right now as we are very close to our protective stop price.
However, much like the corn trade, the stop was put very close to the initial position so risk
is very limited.
We remain short March Cotton with what appears to be a very strong probability of a swing high of some significance having been put into place.
Cotton offers the best Risk to Reward ratio out of all the positions currently held, so if you have yet to put the trade on, you still have time to put a line together.
*********************************************************************************
REMEMBER TO ALWAYS TRADE WITH PROTECTIVE STOPS.
Time has once again become a very precious commodity and once I have more of it then I will finish the futures blog.
*************************************************************************************
Short March Coffee is a new recommendation and one I have yet to act upon.
It looks poised to make a move sharply lower with sell signals across the board and a very
large bearish spread between the Commercial Traders and the Small Speculators.
No question it is worth a look!
We remain short March Corn with a Buy Stop at 470 2/8 on a closing basis only.
Corn looks to have put in a swing high and this trade should begin to move in our
favor rather quickly if it is correct.
The Protective Stop is very close to our initial position so risk is very limited on this trade.
We continue to hold Long Feb. Hogs with a sell stop at 56 cents even on a closing basis only.This trade is on a shoestring right now as we are very close to our protective stop price.
However, much like the corn trade, the stop was put very close to the initial position so risk
is very limited.
We remain short March Cotton with what appears to be a very strong probability of a swing high of some significance having been put into place.
Cotton offers the best Risk to Reward ratio out of all the positions currently held, so if you have yet to put the trade on, you still have time to put a line together.
*********************************************************************************REMEMBER TO ALWAYS TRADE WITH PROTECTIVE STOPS.
THERE IS NOTHING WRONG WITH BEING INCORRECT ON YOUR ANALYSIS, BUT THERE IS SOMETHING WRONG IF YOU DO NOT HAVE SAFEGUARDS PUT INTO PLACE FOR JUST SUCH AN OCCURRENCE.
Friday, January 4, 2008
#2 On BlogElites..... Many Thanks!!
Not only did the blog crack the top 5 this week, but it is currently ranked #2 on the list and I must thank all of you who have taken the time to vote and support the blog.
I encourage you to continue the voting on the week-ends as this is when the tabulations really begin to drop off.
Also, if we can get more of the subscription based readers to vote then I have a feeling we can take the #1 spot.
Once again, Thanks from the bottom of my heart and lets keep the momentum building.
I am currently working on the week-end market comment and it will be quite in depth so I do not see it being posted until Saturday night.
I realize that I say it all the time but equities are really at the cross roads and not just on the short and intermediate term time frames but the long term as well.
Stay tuned as things have the potential to get very very interesting here, with some serious volatility continuing in the markets.
I encourage you to continue the voting on the week-ends as this is when the tabulations really begin to drop off.
Also, if we can get more of the subscription based readers to vote then I have a feeling we can take the #1 spot.
Once again, Thanks from the bottom of my heart and lets keep the momentum building.
I am currently working on the week-end market comment and it will be quite in depth so I do not see it being posted until Saturday night.
I realize that I say it all the time but equities are really at the cross roads and not just on the short and intermediate term time frames but the long term as well.
Stay tuned as things have the potential to get very very interesting here, with some serious volatility continuing in the markets.
WEEK-END MARKET COMMENT WEEK ENDING 1/4/2008
We are approaching the Long Term Up Trendline from the infancy of this bull market.While the market can withstand a brief and shallow breech of the line it still remains rather worrisome at this point.
However, if you look at one of the Fear Indexes below the chart you will see that it is at or very near levels that indicate a low of some significance.
I know that I sound like a broken record here, but the market has its back up against the wall and needs some type of stabilization in prices to keep the secular bull market in force.
The chart below shows that the market is at a point of balance and probability dictates that the scales should tilt in favor of prices moving higher over the short term.
Once again, this pattern is a threshold pattern that needs the market to cease the most recent decline in order to stay valid. It is just one more pattern of many that continue to tell us that the market is at a make or break point over the intermediate term and perhaps the long term as well.
In a nut shell, it is evident that we have reached the crossroads on the vitality of the equity markets. It is now time for the market to prove itself as to its true internal condition and we will get this answer very shortly indeed.
However, if you look at one of the Fear Indexes below the chart you will see that it is at or very near levels that indicate a low of some significance.
I know that I sound like a broken record here, but the market has its back up against the wall and needs some type of stabilization in prices to keep the secular bull market in force.
There is no question about how bearish the daily chart currently looks.Most of the signs point to lower prices, but also to a selling climax in the near future that should end what might be only the first leg of the decline.
The daily chart really does nothing to clear up the possible short term direction of stock prices, other than calling for an intra-day reversal from a sharp sell-off. As I said above, we are going through a very telling period here and the possible outcomes will be from one extreme to the other.
It is at times like these that we must pay very close attention to volume, price structure and sentiment.
Price Structure certainly does not look well especially with the breaking of the uptrend line off the recent lows.
Volume is rather anemic for a market that would be looking for a low of significance. Volume is saying that while a snap back rally of sorts is always a possibility, the final intermediate term low has yet to be put into place.
Sentiment is one of a handful that shows promise for higher stock prices. There remains quite a large amount of pessimism in the markets according to the sentiment surveys and the very stubborn Investors Intelligence Survey on the S&P 500 has moved all the way to a very bullish 37% Bulls which is a 4 year low. Although there is always more room for more bears to roam, but at least this number dictates that the longer term remains more bullish.
The chart below shows that the market is at a point of balance and probability dictates that the scales should tilt in favor of prices moving higher over the short term.Once again, this pattern is a threshold pattern that needs the market to cease the most recent decline in order to stay valid. It is just one more pattern of many that continue to tell us that the market is at a make or break point over the intermediate term and perhaps the long term as well.
In a nut shell, it is evident that we have reached the crossroads on the vitality of the equity markets. It is now time for the market to prove itself as to its true internal condition and we will get this answer very shortly indeed.
It has been precisely these readings that have been our catalyst for remaining so lightly allocated to stocks. This week is going to be a very interesting one and I think a harbinger of things to come for the year, so lets monitor the action carefully.
MID-DAY MARKET COMMENT 1/4/2008
THERE SEEMS TO BE SOME MOUNTING EVIDENCE THAT THE FIRST LEG OF THE SHORT TERM DECLINE MAY HAVE COMPLETED OR BE JUST ABOUT COMPLETE.
THE SHORT TERM WORK IS CALLING FOR ONE MORE PUSH LOWER, JUST BELOW 1419.
THIS SHOULD COMPLETE THE FIRST LEG DOWN AND FROM HERE WE COULD LOOK FOR A 50% RALLY OF THE DECLINE BEFORE THE FINAL DECLINE GOES INTO EFFECT.
OF COURSE TIME IS GOING TO PROVE US RIGHT OR WRONG, BUT I AM NOT GOING TO PURCHASE PROTECTIVE PUTS JUST YET WITH THE SIGNALS I AM GETTING FROM THE SHORT TERM WORK.
THE SHORT TERM WORK IS CALLING FOR ONE MORE PUSH LOWER, JUST BELOW 1419.
THIS SHOULD COMPLETE THE FIRST LEG DOWN AND FROM HERE WE COULD LOOK FOR A 50% RALLY OF THE DECLINE BEFORE THE FINAL DECLINE GOES INTO EFFECT.
OF COURSE TIME IS GOING TO PROVE US RIGHT OR WRONG, BUT I AM NOT GOING TO PURCHASE PROTECTIVE PUTS JUST YET WITH THE SIGNALS I AM GETTING FROM THE SHORT TERM WORK.
Thursday, January 3, 2008
Equity Market Comment 1/3/2008
The market today made its rally back up to the lower trend line of the triangle and was turned away. This is the first confirmation of lower prices to come. The second confirmation will come with a breaking and a close below the low at 1442.
I have scaled back the equity positions considerably in both the short term equity trading account and the 20% in 7 days account. Both of the returns on these most recent positions have met with very mixed results.
Upon the closing below the most recent lows I will begin to scale in some put options to protect the long term equity portfolio.
Remain short term cautious.
Wednesday, January 2, 2008
NASDAQ ANALYSIS 1/2/2008
A PRETTY STRAIGHT FORWARD ANALYSIS OF THE NASDAQ, WHICH SEEMS TO CONFIRM THE CURRENT STATE OF THE S&P 500 ALSO.
THE COMMENTARY ON THE CHART ILLUSTRATES FAIRLY WELL THE MOST PROBABLE NEAR TERM DIRECTION OF NASDAQ STOCKS.
THE COMMENTARY ON THE CHART ILLUSTRATES FAIRLY WELL THE MOST PROBABLE NEAR TERM DIRECTION OF NASDAQ STOCKS.
SHORT MARCH 2008 CORN - TIGHT STOP
SHORTED MARCH 2008 CORN TODAY, WITH A TIGHT STOP JUST ABOVE TODAY'S HIGHS.
CORN HAS SATISFIED ITS UPSIDE TARGET FROM THE TRIANGLE BREAK AND APPEARS GROSSLY OVER EXTENDED. THE COMMERCIAL TRADERS ARE ALSO HEAVILY SHORT WHILE THE TREND FOLLOWING COMMODITY FUNDS ARE HEAVILY LONG. BOTH VERY BEARISH INDICATIONS OF FUTURE PRICE LEVELS.
I HAVE KEPT THE STOP VERY CLOSE SIMPLY OUT OF RESPECT FOR THE MOST RECENT STRENGTH.
CORN HAS SATISFIED ITS UPSIDE TARGET FROM THE TRIANGLE BREAK AND APPEARS GROSSLY OVER EXTENDED. THE COMMERCIAL TRADERS ARE ALSO HEAVILY SHORT WHILE THE TREND FOLLOWING COMMODITY FUNDS ARE HEAVILY LONG. BOTH VERY BEARISH INDICATIONS OF FUTURE PRICE LEVELS.
I HAVE KEPT THE STOP VERY CLOSE SIMPLY OUT OF RESPECT FOR THE MOST RECENT STRENGTH.
SHORT MAR. 08 COTTON
SHORTED MARCH 2008 COTTON TODAY NEAR THE CLOSE.
WE AFRE SHORT FROM 68.80 WITH A TIGHT STOP OF 69.10 ON A CLOSE ONLY.
WE AFRE SHORT FROM 68.80 WITH A TIGHT STOP OF 69.10 ON A CLOSE ONLY.
LONG FEB.08 LEAN HOGS FROM CLOSE
WE PULLED THE TRIGGER TODAY AND WENT LONG THE FEBRUARY HOGS AT 57.170.
PLACE A PROTECTIVE SELL STOP AT 56.250 ON A CLOSING BASIS ONLY.
PLACE A PROTECTIVE SELL STOP AT 56.250 ON A CLOSING BASIS ONLY.
FOR THOSE WHO SUBSCRIBE TO THE BLOG
I wanted to send a quick note out to those who subscribe to the Trend Analysis Blog and
get the posts sent directly to their email boxes.
Because you get the information sent directly to you I know that there are few instances that
you visit the blog. So I am asking all the subscribers to make an effort to come to the
actual blog say 3 times a week and more if possible and cast your vote to BlogElites to help
the blog not only move up the rankings, but maintain the ranking.
Also, if you visit the blog everyday, you will be certain to keep up with the positions in the different trading accounts, as these accounts are updated everyday but may not warrant an actual post that is delivered to your inbox.
I sincerely appreciate the effort and efforts being put forward by all of my readers and I am hoping that as the audience grows so does the quality of the blog as ideas are shared.
get the posts sent directly to their email boxes.
Because you get the information sent directly to you I know that there are few instances that
you visit the blog. So I am asking all the subscribers to make an effort to come to the
actual blog say 3 times a week and more if possible and cast your vote to BlogElites to help
the blog not only move up the rankings, but maintain the ranking.
Also, if you visit the blog everyday, you will be certain to keep up with the positions in the different trading accounts, as these accounts are updated everyday but may not warrant an actual post that is delivered to your inbox.
I sincerely appreciate the effort and efforts being put forward by all of my readers and I am hoping that as the audience grows so does the quality of the blog as ideas are shared.
Equity Market Comment 1/2/2008 - HAPPY NEW YEAR!!
The S&P 500 broke the triangle to the downside today, which we knew was a possibility and is exactly why we have been so lightly allocated to equities.
While this breaking of the triangle is a bearish event, there still needs to be some follow through to the downside in order to confirm the pattern. It would be of no surprise to me if we see a rally Tuesday back to the bottom line of the triangle which just happens to come in at the pivot point 1453.67, before the decline really gets going. If this comes to be the case then it will allow a further reduction in equity exposure as I will be trying to get down to the 15% invested level.
The downside target for the triangle is 1340, which is quite a sizable move.
If this break does confirm then I will be purchasing some put options to protect the Long Term Equity Portfolio.
Now, while this action today is of bearish consequence, it does not take away from the long term viability of this bull market. It merely should prolong the correction that has been in force now since June 2007, but I will be putting safeguards in place just in case this correction decides to become something more.
There still are some things that need to come together to confirm this short term down leg, but it would be prudent to prepare for such an event.
While this breaking of the triangle is a bearish event, there still needs to be some follow through to the downside in order to confirm the pattern. It would be of no surprise to me if we see a rally Tuesday back to the bottom line of the triangle which just happens to come in at the pivot point 1453.67, before the decline really gets going. If this comes to be the case then it will allow a further reduction in equity exposure as I will be trying to get down to the 15% invested level.
The downside target for the triangle is 1340, which is quite a sizable move.
If this break does confirm then I will be purchasing some put options to protect the Long Term Equity Portfolio.
Now, while this action today is of bearish consequence, it does not take away from the long term viability of this bull market. It merely should prolong the correction that has been in force now since June 2007, but I will be putting safeguards in place just in case this correction decides to become something more.
There still are some things that need to come together to confirm this short term down leg, but it would be prudent to prepare for such an event.
Tuesday, January 1, 2008
BUY LEAN HOGS - 12/31/2007
Hogs have made what appears to be its final low and should work higher from here.
Keep the stop close just a few ticks under the most recent low.
P.S. I am going to continue posting the commodity trades until I have the Futures blog up and running.
Keep the stop close just a few ticks under the most recent low.
P.S. I am going to continue posting the commodity trades until I have the Futures blog up and running.
Monday, December 31, 2007
Equity Market Comment of The Last Day Of 2007
We continue to monitor the triangles forming on the daily chart for the next move of substance.
Today did begin to clarify some of the indecision, but there still remains a fog of sorts.
This is a possible trend construction we currently are in and this scenario is bullish and would call for a strong rally to begin very quickly as in the first trading day of 2008.
I have kept the 30% equity allocation into equities and the long term portfolio remains unhedged. I have also not made any changes to the short term trading portfolio and the 20% in 7 days portfolio.
We will know very soon what the short to intermediate term will offer and adjust our posture as such.
I continue to lean towards the bullish side.
Today did begin to clarify some of the indecision, but there still remains a fog of sorts.
This is a possible trend construction we currently are in and this scenario is bullish and would call for a strong rally to begin very quickly as in the first trading day of 2008.
I have kept the 30% equity allocation into equities and the long term portfolio remains unhedged. I have also not made any changes to the short term trading portfolio and the 20% in 7 days portfolio.
We will know very soon what the short to intermediate term will offer and adjust our posture as such.
I continue to lean towards the bullish side.
The fact that both legs down were of almost exactly the same in price has added an element of symmetry to equities and does send a hint of what we may expect. In order for this hint to be correct, the market mush begin an immediate rally from here.
Sunday, December 30, 2007
NUMBER 3 ON BLOGELITES AND CLIMBING
THANKS SO MUCH FOR ALL THE EFFORT ON HELPING ME CLIMB THE RANKS OF BLOGELITES!
CURRENTLY I HAVE CRACKED THE TOP 5 AND AM AT NUMBER 3 AND I COULD NOT HAVE DONE IT WITHOUT ALL OF THE READERS OF THIS BLOGS HELP.
KEEP IT UP AND KEEP VOTING EACH DAY THAT YOU COME BY TO READ THE BLOG.
MAYBE WE CAN CRACK THE #1 SPOT!!
THANKS AGAIN!
CURRENTLY I HAVE CRACKED THE TOP 5 AND AM AT NUMBER 3 AND I COULD NOT HAVE DONE IT WITHOUT ALL OF THE READERS OF THIS BLOGS HELP.
KEEP IT UP AND KEEP VOTING EACH DAY THAT YOU COME BY TO READ THE BLOG.
MAYBE WE CAN CRACK THE #1 SPOT!!
THANKS AGAIN!
Equity Market Comment 12/30/2007
The short term picture has become quite muddled with the action Friday really throwing some indecision into the scenario.
If the strong opening we saw in the morning was able to hold and actually push a bit higher, then things would be a bit clearer, but this was not the case.
This was exactly my thinking when I only began to allocate back into equities in very small steps and currently I have only a 1/3 exposure to stocks.
So here is the short and sweet of what is currently on the board.
We must be prepared to quickly pare back our equity exposure should we see any type of rapid deterioration in the market and there is a fairly high probability of lower prices in the very short term. How low will depend upon many things, but now it appears that we must remain cautious about stock prices. This will entail scaling back not only the short term equity trading account, but the high risk 20% in 7 days portfolio as well.
It is at times of indecision that the best course of action is to remain very lightly exposed to equities until the picture begins to get a little clearer.
In order for the market to continue to rally, it will have to overcome the very high probability pattern on the stochastics and this will not be an easy task. So stay very conservative here until we get a clear signal either way.
Monday will bring very light trading and many times these markets are very easily manipulated by the locals, so if you decide to day trade the market Monday I urge you to remember the potential volatility and keep your stops tighter than usual to protect against thin run away markets.
I hope you all are having a great holiday season and lets all look forward to a healthy and profitable 2008!
Please take a look at the chart below as it really sets the tone for what is currently happening in stocks.
If the strong opening we saw in the morning was able to hold and actually push a bit higher, then things would be a bit clearer, but this was not the case.
This was exactly my thinking when I only began to allocate back into equities in very small steps and currently I have only a 1/3 exposure to stocks.
So here is the short and sweet of what is currently on the board.
We must be prepared to quickly pare back our equity exposure should we see any type of rapid deterioration in the market and there is a fairly high probability of lower prices in the very short term. How low will depend upon many things, but now it appears that we must remain cautious about stock prices. This will entail scaling back not only the short term equity trading account, but the high risk 20% in 7 days portfolio as well.
It is at times of indecision that the best course of action is to remain very lightly exposed to equities until the picture begins to get a little clearer.
In order for the market to continue to rally, it will have to overcome the very high probability pattern on the stochastics and this will not be an easy task. So stay very conservative here until we get a clear signal either way.
Monday will bring very light trading and many times these markets are very easily manipulated by the locals, so if you decide to day trade the market Monday I urge you to remember the potential volatility and keep your stops tighter than usual to protect against thin run away markets.
I hope you all are having a great holiday season and lets all look forward to a healthy and profitable 2008!
Please take a look at the chart below as it really sets the tone for what is currently happening in stocks.
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