Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, September 22, 2014

MACD Monday

Stock Market Technical Analysis Blog



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In the market today the action was dictated by the MACD oscillator, a somewhat over-smoothed interpretational tool for directional momentum.  Generally, it pinpoints very few trades, tending to follow day to day movement.  But like a squirrel that sooner or later finds a nut so did the MACD today.  Looking at the two top charts above showing a day MACD on SPY and VIX we see that the SPY had a pushdown setup this morning and the VIX had a lift setup at the open this morning.  We took a large short position at the open and closed it out after lunch for a nearly 1% gain in 4 hours.  We decided not to hold the short position overnight as we feel it would be too easy for them to bounce the market tomorrow as can be seen in the bottom charts above.  Plus we closed right at the critical 1995 level, the July peak where Team Yellen should be interested in at least a modest defense of this level.  

Trade well my friends

Alan

Sunday, September 21, 2014

Are They Done Yet?

Stock Market Technical Analysis Blog


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In the market Friday we saw the three day blistering short squeeze lose its steam.  The move was a strong pronounced move orchestrated by Team Yellen and was boosted by Wall Street's desire to get the market higher quickly right before Friday's option expiration to allow them to keep a great deal of the money investors had spent on Puts the past two weeks.  Not pretty but that is the way the game is played.

Could we please have a few days of less manipulated stock market activity now?

Trade well my friends

Alan

Wednesday, September 17, 2014

And The Music Plays On...

Stock Market Technical Analysis Blog


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In the market today Yellen's announcement didn't remove the phrase considerable time triggering a spike short squeeze.  It will be interesting to see if they can put legs on it in the next few days.

Trade well my friends

Alan



Tuesday, September 16, 2014

Like Clockwork

Stock Market Technical Analysis Blog


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In the market today Team Yellen did the traditional market jam / short squeeze that somehow manages to happen at the beginning of every Fed speech.  It's almost enough to make you think that they are trying to give the market its reaction to Yellen's speech    ;)

Trade well my friends

Alan

Monday, September 15, 2014

Market Waiting for Yellen

Stock Market Technical Analysis Blog



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In the market today we had a serious drop in the Nasdaq but only a two point drop in the S&P as Team Yellen is in full prop mode on the S&P.  With Yellen's speech the next two days the world is basically in standby mode.  

On the lighter side there has been wide debate whether AAPL should have a two or three digit stock price as the iphone 6 comes out.  The link below helps put the iphone 6 in perspective:



Trade well my friends

Alan

Sunday, September 14, 2014

Weekend Focus Chart: Treasury Yields / Interest Rates

Stock Market Technical Analysis Blog


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There have been big changes happening in the bond market over the past two weeks.  We have seen the TLT (10 year treasury ETF) drop from 119 to 113 at a speed rarely seen.  At the same time, the TNX (10 year treasury yield index ETF) has rocketed from 2.30 to 2.60.  This sudden change in direction for these indexes lets us know that the bond market has decided that interest rates may start rising sooner than expected.  

Looking at the chart above, a weekly bars chart of the 10 year treasury yield with large EMAs applied shows they are working a powerful lift setup that just began rising the previous week.  The bond market believes that Yellen is about to turn more hawkish in her Fed meeting speech this week.  Many believe that she may drop the coveted phrase "considerable time" (interest rates will remain low for a considerable time beyond the end of QE) from her speech.   If she does remove it, it is likely the volatility will increase.  Does the bond market have it right?  They certainly think they do as they have crafted a powerful lift setup shown above.

Team Yellen no doubt sees this setup and realizes that if she does omit the phrase she could easily create market instability.  Therefore, one could argue that she won't omit it because of the delicate market situation of an overextended stock market.  Or will she? This Fed meeting speech is going to be a big one.

Trade well my friends

Alan

Friday, September 12, 2014

Major Sellers Unload Into Buy Signal


Stock Market Technical Analysis Blog


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In the market today the S&P suffered a technical breakdown right at the open from major sellers waiting for a buy signal to unload into.  I tweeted our stop loss was triggered right after the open, taking us out of the trade.  In chart 1 above, the S&P lost the blue channel firmly today as it is now being controlled in a downhill channel shown with pink lines.  

Next we will see the QQQ try the same lift likely Monday or Tuesday as shown in the lower right chart.  If it also fails it should accelerate the downtrend in stocks.  We will consider a new position Monday morning.  One notable item, today at the close there were two twin 10 million share institutional trades in the SPY.  Someone big is betting huge that this sideways action is about to convert to a definitive direction.  Next week is the Fed meeting .  Could get really interesting really fast. 

Trade well my friends

Alan