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

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.

Setups

The following are several low risk setups worth considering for a short-term trade:

AKS


TXN


GLW


GNK


STX


RS


TIE


AAPL


PG


LLL


GOOG


BIDU

Obamaganza

Today was the best performing election day ever...
The market is up 20% since 10/27/08...

That's great, but as soon as the disoriented market is able to find its way out of the mesmerizing Obamagon, it ought swiftly drift back to reality and realize that even The Chosen One cannot fix this mess. And that's not to say that McSame could. The markets have done a rather convincing job proving that they need to play themselves out and that any sort of govt or fed intervention will only delay the inevitable.

It would behoove you to start lining up your shorts and a good place to start would be to look at those 40% + off their lows and those running into obvious resistance. This will not only put probability on your side, it will give you the opportunity to use tight stops.

The following charts are TIE, CLEG, CVX but I'm finding the price patterns to be quite common across the board.

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