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 
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!
Today was just like yesterday! Yes, boring, but still showing confusion and consolidation, and again another doji. Candlesticks say we need a confirmation candle to tell us which way the market will go…but all we got was a “duh!” Which way do we go?
Oil got slapped around today, but considering that move from $69.50 to $78 in just 2 weeks, it too was due for some consolidation. Gold had a great day, breaking out through the May highs. The US dollar had a down day but may be looking for a move up. If it goes up the stock market goes crap. 
I got a few coins out of TZA in the early morning, but then just stood still for the markets to do whatever they wanted to do. I’m still sitting long and cash….and the long part has a hairline trigger!
Quadruple-witching options expiration day on Friday! And no economic data reports nor any earnings reports may make for a dull opex. The action probably comes back next week.
Doing my scans after the market closed on Friday, I found 1380 bullish engulfing patterns vs 52 bearish engulfing patterns today. Not a bad day. Now, does this strength continue Monday? I think so…and maybe a bit more than just one day.
Some weekend reading:
Was the so-called flash crash a fluke, or not?.
Timmy’s got our back? Geithner tries to reassure China over US deficit.
The markets have relationship issues. Familiar Patterns.
Happy Hour Is Over: Fox Business Network Cancels Dayside Business Program. I knew it couldn’t last long after Rebecca got married and changed to that gothic black hair style. 
With oil so much in the news, I would think that it should be hitting bottom soon…say, $70 maybe? I don’t trade the crude oil futures, so like I said a couple days ago, I’ve added USO UCO into the watchlist….I even nibbled a bit on UCO already. It looks like $10 has been a resistance/support area before.
Here’s a note on USO: Is This Oil ETF Ready For a Bounce? USO
After doing my scans this evening I see a lot of “evening star” setups, which generally means those particular stocks are going down. On the other side, I also found a greater number of hammers, looking for a reversal up on those stocks. Of course, as in all candlesticks signals, we need confirmation in the next candle, no matter which direction you think they may go.
Futures this evening are looking tired with ES down 6 points and YM down 60 points, and oil futures just about where they closed Friday. I went into the weekend on the long side, but in very small positions of UCO SSO and C. Remember, for the past year a down Friday is followed by an up Monday. 
I got some additional reading material for you today:
Impossible Wall Street Fixes
Fear of a Double Dip Could Cause One
The Huge Difference Between The “Flash Crash” And The Crash Of ’87
5 things we still don’t know about the market plunge
Happy trading and I’ll see you in the market!
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....
