Asset Classes

A review of what the major asset classes are doing (S&P, dollars, bonds, and commodities) and some follow-ups to a couple of yesterday's charts:
SPY - I don't put a ton of stock into short-term fibs; however, today retraced exactly 50% from yesterday's high - we will see if this ends up being significant.


UUP


TLT


DBC


DBA - setting up...


XOM - heading lower.


OIH low-risk entry.

Charts

The S&P hit 875 on Friday...where every possible resistance level was converging at. So as expected, we had a nice sell-off today. Market sentiment is still naturally split - it will take more than one down day to change anyone's mind. Almost everyone with a brain believes that this bear market is far from over; however, there is plenty of disagreement as to whether we see 700 or 1000 first, before heading lower. One thing that people can agree on, is that the market ran too far too fast in the last 30 trading days. At the moment, and given what is happening with earnings/guidance, I expect a more serious pullback. Now enjoy some charts.

SPY


QQQQ


VIX


SHORTS
TIE


OIH


WYNN


MMM


X


XOM


LONGS
TXN


USD



UUP

Short V ~ Long OIH

This isn't intended as a hedge, just a suggestion for both a long and a short based on some fairly low risk setups.

V - short




OIH - long

Follow Up

Due to some significant moves today, here is a follow up to last week's charts. Most notably, there is SPY, which closed below 80. Be aware of the possibility of a reversal, such as the one that took place in November (SPY went from 74 to 90 in one week).

Assuming that doesn't happen again, 75 will be the next target. There will be a bounce between now and 75, so don't chase.

Short term conditions are getting oversold (2 & 5 day RSI), so as usual, either cover, or wait for some strength before getting short. Shorting oversold stocks is a guaranteed way to lose money in the long run and usually in the short term as well.

SPY



X



TIE



MA



OIH



JPM



XLE

Free Range

The path of least resistance is SPY 80. If we get there, remember, the more times support is tested, the weaker it gets. Below are some additional setups that provide defined levels of support and resistance.
SPY



X



TIE



MA



OIH



LLL
not range bound, but rounding/topping off





Well, that tears it. I'm going skiing. Have a good weekend.

weekend watchlist

SPY - descending triangle


ICE - lower highs / lower lows


SRS - bounce?


OIH - channel


XLE - watch these support levels

Running Out of Room

IWM, as well as SPY and QQQQ continue to remain perfectly inside of its descending triangle...but not for long. It's running out of room and will resolve itself next week (expiration week). I've been looking at some reasonably prices debit/butterfly spreads and will post, if any present an attractive risk/reward ratio.

Some I'm looking at involve ICE, AAPL, GS, OIH, PFE, BMY, AKS, the list goes on and on and all candidates have a common characteristic: overhead resistance is substantial. Bounces and oversold rallies aside, I will continue to favor the downside until given a reason not to.

IWM

You serious, Clark?

QQQQ

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Congress really shit the bed today. It is a fact that many of these shaved congressional apes are too stupid to understand what they're even voting on though so you can't be too surprised. READ THIS

Please remember this come election time!

I can't imagine what the market would have done today had the no-short-sale rule not been in place.

Attached are some stocks to watch.

Everything continues to break down but don't be surprised for a huge move up should congress decide to do something else unexpected later this week. If you must trade, I recommend limiting your strategies to strangles, possibly straddles, and OTM Puts (only on a bounce, not after the market just puked up 8.79%).

Some long-term price patterns continue to work

I suggested a couple of weeks ago that when long-term support (>2 yrs) was breached, prepare for a re-test of the underside of the same trendline before continuing lower.
Granted, there were roughly two dozen extenuating circumstances since then that might negate such patterns from coming to fruition; however, it looks like despite all that, some price patterns may still hold - albeit in a quicker and choppier manner than I imagined. This applies to several oil, steel, ag, coal, etc stocks.
ACI and POT are other great examples.

QQQQ - bearish diamond pattern

QQQQ - presenting a low-risk setup

Look for a short-term bounce in oversold stocks... similar to the following:

X

OIH

OXY

Ag stocks are all now comfortably under their 200 day MA but may also be due for a short-term bounce.

And to the immediate downside, I like TIE back down to ten.

OptionSpot

RIG: leading the pack?

I think there is a good chance it is. Even though it appears that OIH, OXY, and DVN will bounce off of support as they have been, don't be surprised if they don't - see RIG. Also, often times when stocks snap back to their trendline steeply/abruptly, said trendline is unable to hold up against the momentum.

RIG

OIH

OXY

DVN