Last week, the indexes fell on average 5%. Discretionary consumer stocks, industrials, and financials were hit hardest, which pretty much put the S&P’s 50-day moving average to cross below the 200-day moving average….or the “famous” Death-Cross. Whenever a shorter moving average crosses below a longer moving average, well, the bear is back.
Last night it looked like the bear had it well under control, but by this morning, the bulls were back. For the first couple of hours, it even looked like we would have a trend-day-up. Oil led the stock markets up. But, the bulls couldn’t get their act together and began to waiver at noon, and spent the rest of the day snorting: What the $%@&*!
The S&P ended closing right where it opened, creating another doji day or another indecisive day.
Remember that at the close on Wednesday some inverse, or bearish, ETFs will undergo a 5-to-1 reverse split: ERY, DRV, TZA, and TYP. That is, if you own 500 shares of TZA Wednesday night, you will own 100 shares of TZA at a higher price…specifically 5 times the closing price….on Thursday morning.
So watch it! Happy trading 
It looked like we could have closed in the green just 5 minutes before the cash close. But bam! The bears gave the bulls a big F U and the ES quickly dove 10 points in as many minutes…and kept going for another 10 minutes into the futures close.
“Death Cross” is upon us…. Y’know when the 50-day moving average crosses below the 200-day moving average. They are at the same place right now, but one more down day will send us well below. The last time this bear signal happened was Dec. 2007…. and you do remember what happened the next 15 months, don’t you? You get the picture. But y’know, everybody is talking about it…even the TV talking heads….too much. Since everyone is talking and expecting it, maybe it won’t happen this time….or will it?
The Nasdaq has 10 down days in a row. I think this may be a first. It had 9 straight red days back in 1994. Since we broke the record it may be time for an up day.
Overall it was a very odd day – stocks down, VIX down, bonds down, dollar down, oil down – just about every asset class. So there is a lot of figuring out to do. We do have a good thing about to happen…..Congress is going on break….and when they are not in session, the markets go up. So I’m thinking next week is an up week. 
And if not, at least it will be a short week. Have a wonderful weekend.
Initial Claims higher, that sucks! The morning was entirely Bizzaro world, when all asset classes went down: dollar, oil, stocks, gold all down! Wasn’t that like an apocalypse? I was ready to capitulate, but I had a meeting to get to.
It was a day that made me money….through no fault of my own. I had put in some ES buy stops at 1013 before going to a luncheon meeting. As it turns out, I was filled and when I got back, ES was at 1023. I sold immediately when I saw that!! Thank you market.
Well, I’m not sure it was a key reversal, but the bulls shouldn’t be too discouraged. The market performed well off of a bottom. Advance/Decline volumes were -16:1 early in the morning but ended the day close to 1:1. Tomorrow is the start of a long weekend and we may see some patriotic buying.
It was surprising that the market was able to recover as much as it did with all the bad news this week. Today’s Initial Claims pretty much told us that Friday’s NFP report will be ugly. Home sales confirmed what we all knew. And the gold bugs got blasted bad! One more thing, AAII Sentiment Survey: Bearish sentiment has now stayed above its historical average for 8 straight weeks. How can any market go up after all that?
We may not go up much, but we are oversold and it is the beginning of a new quarter and a national holiday. A bounce is in order.
Bad news for sure! I think we have fallen enough from the highs to be in an official bear market now. 
The SPY, along with the S&P, confirmed a head ‘n shoulders pattern by breaking through the neckline.
Oh my!
Check out some of these other shenanigans: TSLA after being up $8 for the day, closes in the red; DNDN after closing about 4% in the red ($32.22) continued to dive after hours, trading at about $25; Oil is running down and BP is running up…What the $%@&*!
This evening, China PMI came in below expectations, so futures are in the toilet, at least for now. The bear is back! When a market opens higher and closes near or at the lows…THAT is classic bear market price action.
Our one salvation is to see what the European reports come in like. I think I’ll go and by some firecrackers for the weekend. 
Well, I said it would hurt! All my stock longs were crushed. The only redeeming action I took was hedge scalping with the ES. They were counter-trend plays scalping 3 to 5 ticks at a time. But all I came up with was a breakeven for the day. Success!
QQQQ now down 8 straight days. Only 3 times in QQQQ history has it been down 8 in a row, so we should see some relief. Circuits were tested — Circuit Breaker Kicks in, Stopping Trades of Citigroup and other financials weren’t any better: Financials take hit.
So the rest of the week will tell us if we have bottomed or just entering a new bear. It will come down to jobs, jobs, jobs. And remember, after Monday and Tuesday even the calendar says W T F . . .
Well, today didn’t go the way I thought…or wanted. The bulls really dropped the ball as they had some good news and good technical setups but didn’t have any energy to gore the market. On the other hand, the bears had an opportunity to rip out the bull’s heart, but they failed also! Look, we ended with another candle just like Friday…although this was also a bearish engulfing candle, small, but engulfing.
If the bulls don’t show some determination on Tuesday, I’d say the market is done for. I’m hoping that this week traders will get some patriotism running through their veins and get the market waving the old red, white and blue. Let’s run that up the pole and see if it flies!
The news from the G20 meeting sounds encouraging and oil looks like it wishes to be a leader. But the weekly S&P chart put in an ugly bearish engulfing pattern.
The daily chart though, looks like it poked out a bottom on Friday and may want to try the green side of the market for at least a few days.
The week prior to a holiday is usually bullish, so we have that seasonal advantage working for the bulls. Next Monday the markets will be closed for the 4th of July holiday, but this Friday morning we have the always fun and wild monthly employment report. So the markets will be fun again this week. Be careful and happy trading!
As I ready the pontoon boat to spend a day on the lake….if it doesn’t rain, I leave you some interesting reading for a Saturday morning.
I’m getting more and more bullish just because CNBC is getting more and more anti-bullish…a great contrarian indicator. 
Yes today’s market didn’t do anything great, but it also didn’t do anything terrible. I need to go through the charts this weekend, but I think we may be in for a decent bounce. Where it will lead I do not know….but I’m looking for more up than down.
Here’s some news I picked up on during the day:
Now, it’s time for me to get on a soapbox…..today’s FinReg bill (and also going back to that ugly Healthcare bill), is total bullshit! And I’m more pissed at healthcare because I got my new invoice for my medical insurance. I used to pay $1500 per month for my wife and I. The new bill is $4200….yes per month! Yes, a 300% increase. The excuse is that we turned 55 years old this year! Fuck you Medco Health! So I went looking for another provider. Their quote was $8500. I thought great…yeah…per year. Uh, excuse me…that’s per month! $8500 per month?? Fuck you!
Since they “fixed” the credit card system last year, my interest rate on my credit cards has doubled and a few have been closed. What the $%@&*! Y’know, I didn’t vote for BO because I knew he didn’t know shit and had no experience to run any business, much less the United States. But I never thought it would get this bad! I can’t wait for 2012. At least I can vote out some of his asshole buddies in congress in a couple of months!
I digress. 
Have a great weekend
Sometimes, entranced by the screens, watching equities, options and futures change colors, charts moving in a wave, and indicators pointing in every direction, I just have to scream....
