Happy Holidays!

I have been busy preparing for a long-waited home trip next week that would last for nearly TWO months. All my accounts are back to cash now and which most likely would stay that way till I am back.

As for the market, the major indices might continue trending up to test their weekly MA10 in coming days if the shopping season is not worse than anticipated. I also tend to think that the market could continue its counter trend rally in next 2 or even 3 months, along the way to test their MA50 or even Mid-Oct08 highs. But such rally is likely to be choppy as it pins mostly not on the fundamentals but on the hope that the Obama administration would quickly turn the economy around, which obviously will be crushed. Looking into the longer time frame, the market is now pricing in the possibility that the global economy bottoms in late 2009 or early 2010, if this scenario gains traction, we might see the ultimate bottom in summer 2009.

Finally, a word of caution: for the next 2 months, regardless you trade long or short, you will be better off if you are not greedy and quickly lock in your gains because the market will not have any strong and lasting trend, one way or the other. The only things you can count on are volatility and choppiness.

If I don't get chance to post again till I am back, here is my best wish to everyone for a great holiday season!

Does this scare the crap out of you?

I got a chance to watch the clip below regarding US national debt, and while I did not shit my pants, it did send chills down to my spine and made me started to think about the years yet to come.

This could be the best 30 min you can spend.

Could someone tell me this is really some liberal/conservative scare tactics, or some deeply flawed junk, or indeed the Sword of Damocles high above this nation?

What you don't know cannot kill you, can it?

A Momentary Lapse of Reason or FEAR?

Biting my fingernails all afternoon last Thursday, but finally decided to move all my 401/403 accounts back into the index fund in the closing minutes instead of waiting for a possible Friday morning gap-down. So far so good.

I have gone through all kinds of charts on all major time frames over the weekend, and they all point to a fledgling counter trend rally, well, maybe except the key financial such as C and GS, whose charts gave me a chilling sensation. I will keep eyes on last week's lows and may consider to pull out at least 2/3 of the funds if the major indices close solidly below those lows. The current initial profit target is around MA50s of the major indices on their daily charts.

Yes we can!

What an incredible, transforming and historical night it was last night!

Besides listening to the gracious and the uplifting post-election speeches last night, I paid close attentions to the reactions of the ordinary people on the TV, especially their facial expressions. What I saw once again reaffirms my belief that USA is one of the greatest nations on the earth. As for the American people, sure there are scumbags, jerks, idiots, nuts, and fanatics among them, but overall, they are the most admirable folks in this world with their passionate, genuine, and kindhearted spirits. Their unyielding pursuit of dreams, unwavering optimism, and above all, their innocence make them truly the seeds of the promising future of the mankind, and there will be many fruitful seasons to come!

Yes we can!

Now, where was I? Oh, yeah, back to aggressively shorting both calls and puts for the NOV OE. I shorted a bunch of FSLR NOV195 calls yesterday, made a bundle despite of exiting too early. I am hoping for some sizable pullbacks for the rest of this week, especially this Friday, before re-positioning my retirement accounts for a multi-week counter trend rally.

Rally on?

While my long term view of the market remains firmly bearish, my bias on the short and intermediate term trend is turning bullish. The chance is decent that the recent low will be held throughout 2008. As we are moving within 3 weeks of the NOV OE, my primary strategy for the coming days will continue to be shorting naked calls and puts. In any case, I will try to hold back fire until the election is over.

Vote!

Biding my time......

This whole thing is getting scarier by the day, and with all the uncertainties, it is the bulls who are hibernating. However, nature (or should I say the human nature) rules ultimately, by saying that I mean the bears will go hibernating, maybe sooner than you thought.

I flipped 1/3 of my retirement account (moved to money market since Oct. 2007) a couple of times between money market and Spartan 500 index in the last several days, netting just over 10% and moved back in last Thursday. May flip that out again mid this week. Will consider moving all in if the market could get a quick 10-20% down from here for a multi-week, possibly a year-end rally, we shall see.

After sitting tight for 4 days, I shorted OTM puts for X, WLT and MON last Friday, all with 1/3 position size, and may consider close out the positions in X and WLT tomorrow ahead of their ER. I probably won't aggressively short the OTM puts until we are through the election, which for some reasons, is making me really nervous.

Be careful out of there!

Bouncing market, leaping wabbit!

Shorted a bunch of ISRG OCT140 and 135 puts this morning, and now looks like your wabbit will pock some decent profits tomorrow even if GoldmanSucks strikes again!

As the market bouncing around violently, booking quick profits is the only way you can play. I am still waiting for a new price low following this Monday's momentum low to really build up swing long positions. In the meantime, a quick short around MA10 or MA20 should work for most stocks, the key here is QUICK!

Good luck all!

Now, that's history!

Ok, it is official: history does repeat itself (from the 1930's crash), and people never change! Good thing that I made out fine and kicking, despite some sub-par executions last week AND today that burnt a big chunk of the expected profits. Closed all positions except the short WLT OCT25 puts, which I collect every penny of it.

The market rallied nicely today, but with volumes so light, the bulls will run out of steam as early as tomorrow. Unless you DT, now is the time to be a bit patient, long or short.

Is it time to not believe everything you know about human nature?

The insane market, whose decline was underestimated by about 10% on my side, and the **&#$&^ GoldmanSucks, who promptly downgraded FSLR, AKS and X this week, are leaving your wabbit in some hot water (not simmering yet). Had chance in each of past 3 days to get out with a couple grand of profits, but no thanks :P In the hindsight, I should've chosen shorting calls instead, but then again, not one foresaw a drop of this magnitude (and I know quite a few top traders).

More and more people are throwing in towels everyday, but my belief in human nature (driven by extreme emotions) is still in tact, though a bit shaken. I will get my IRA accounts ready shortly and there better be a real crash, soon!

Good luck all!

Steel balls!

Well, for almost 3 hrs, I thought my steel balls were going to be crushed by the bear claws :) Shorted OCT puts of X ($55), AKS (15), FSLR (125), WLT (25), and FCX (35), and did not cover. I did chicken out on AAPL, MA, DVN, MON, and APA, well, you just cannot win them all. The only question now is if I should lock in some profits tomorrow or hang in tough to let all options expire. Make no mistake, it is still a bear's country....

Be greedy when everyone else is fearful!

All major indices are sitting around 3% above their major support levels, but weekly charts suggesting more trending down in next 2-4 weeks, and another crash of 10% is totally possible. Nonetheless, when the panic is thickening, and everyone else is fearful, it is time to get greedy. Considering the high IV and only 2 weeks left for OCT OE, I will continue focusing on shorting the puts of many near-death stocks (mainly in the broad commodity sectors). That strategy brought me some decent profits last week, and should offer more rewards. Too busy to write more, just let you know that my focus list includes the names like: AKS, FCX, X, ENER, WLT, JASO, APA, AAPL, BIDU, SQNM, DYRS, MA....

Control your risk and good luck!

Short these!

Yes, I am serious. As the market goes insane and the IV totally exploded, it is time to play safe. With the account going up for another 1k today (flipped CLF calls and still have winning SQNM NOV30 calls), it is time to relax a bit. Will consider shorting the following puts for the remaining of the week.

1. AAPL: Oct. 95 puts $6.5 or better
2. BIDU: Oct. 200 puts $8 or better
3. CLF: Oct40 puts, 4 or better
4. FCX: OCT50 puts 5 or better
5. MA: OCT140 puts 6 or better
6. POT: OCT120 puts 8.5 or better
7. SPWR: OCT55 puts, 3 or better
8. SQNM: OCT 22.5 puts 1.25 or better
9. UYG: OCT 15 puts 1.5 or better
10. WLT: OCT35 puts 2.5 or better
11. X: OCT 65PUTS 5.5 or better
12. CF: OCT75puts, 5.5 or better.
12. DVN: OCT80 puts, 3.5 or better
13. GOOG: OCT350puts, 12 or better
14. FSLR: OCT165puts, 11.5 or better
15. MON: OCT90puts, 5 or better
16. CME: OCT290puts, 8 or better.

And yes, I am fully prepared to end up with those shares that much cheaper than the current levels.

Save them to save us?

Well, looks like the Wall Street is only going to get a half-assed rescue for now, and with that, the major indices may spend a bit longer time at bottom searching before turning up. Right now I am only comfortable about two plays:

1. Short UYG OCT17 puts if the market gaps down at the open tomorrow.
2. Short SQNM OCT22.5 puts and start to build long positions in SQNM or buying its Jan09 30 calls.

The broad commodities are oversold and I am eyeing plays for a technical rebound, however, I might have to be patient until I see how US$ and global recession outlook affect them, right now it hurts my head trying to figure that whole thing out.

Now what?

The market may have reached momentum bottom last week, but a retest of the bottom and consolidation are likely for the next week or two before another counter trend rally can materialize with force.

Key Indices Assessment

Monthly – bearish (straight down MA10, closed below MA50), not quite oversold yet; but may bottom-fish because of uprising MA50

Weekly – the bottom might be in, but more volatile side-way chopping expected.
** MA—all closed below MA10, but they are flattening or turning up; MA50 all solidly trending down
** MACD/histogram: neutral, either way
** Candle formation: indecisive with huge up/down shadows with slightly bullish white bodies

Daily – rally facing formidable resistance
** MA—short-term MA in bearish order; all closed above flattening/curing up MA10s; all failed MA50
** Candle formations—clearly bearish despite of Friday’s historic volumes.
** Stochastic/RSI all favor more near-term upside; MACD Hist still negative;
** Lots of overhead resistance, the gap will be filled soon.
** QQQQ is the weakest of all, facing formidable resistance zone from 44-46, with MA50 around 45.2.

US$– more downside to MA50 around 76 likely before resuming uptrend?
Weekly— key resistance around 80 in play; MA10=76 and MACD/histogram bullish; stochastic points to overbought pullback in early stage
Daily-- recently reversed long term trend still intact; MA10=79, increasing MACD histogram, stochastic all suggestion more downside; but RSI2 in oversold; a test near the previous consolidate zone and MA50 (76-77) inevitable.

VIX—consolidation going forward
Weekly—more upside likely as every indicator except RSI2 are bullish.
Daily—parabolic ascending in correction, some pullback/sideway movement likely in near future.


Weekly Swing Trading Calls

Tech sector (bearish bias, Q3 ER outlook gloom?)

1. AAPL: Q-S2, 146-152, IT=135; S1, 158-162, IT=146
2. AMZN: Q-S2, 84-92, IT=72
3. GOOG: CTT, 410/430—480/510
4. RIMM: CTT, 90/92—112/116; bearish bias
5. SOHU: Q-S2, 68-72, IT=60

Coal, energy, solar sectors (watch US$ and oil movement for necessary adjustment)

6. ACI: Q-S2, 45-50, IT=38; S1, 54-57, IT=42
7. CLF: L1, 64-71, IT=84
8. CLR: L1, 33-37, IT=50
9. CNX: S2, 68-72, IT=58
10. ENER: S2, 73-83, IT=60
11. JRCC: S2, 36-45, IT=28
12. MEE: S1, 49-56, IT=40
13. OIH: L2, 158-161, IT=175
14. RIG: L1, 112-121, IT=130/132
15. USO: CTT, 78/81—89/93
16. WLT: CTT, 55/62—78/85

Metals and other commodity sectors (watch US$ movement for necessary adjustment)

17. ABX: S2, 40-45, IT=32
18. AEM: S2, 64-72, IT=55
19. GG: S2, 36-42, IT=32
20. CF: L2, 105-111, IT=130
21. FCX: CTT, 62/67-85/95
22. PCU: CTT, 20/23—30/33
23. MON: L2, 102-112, IT=122/130
24. POT: L1, 158-168, IT=185
25. X: L1, 81-92, IT=118

Financial and related sectors
26. BAC: S2, 42-45, IT=36
27. CME: L1, 345-375, IT=450
28. COF: S2, 62-70, IT=50
29. GS: S1, 144-162, IT=110
30. MA: S2, 239-260, IT=210
31. SKF: L1, 71-81, IT=115
32. WFC: L1, 32-36, IT=45; S3, 45-50, IT=38.
33. XLF: L1, 18-21, IT=25,
34. RKH: CTT, 110/113—132/138

Go finishing!

OK, now is the time for any who wants to be a bull to dig out all the fishing gear. I am going to say this tonight: I expect a short to intermediate term bottom this week, could be as early as tomorrow if the market gaps down for another 2-3%.

Good luck!

Weekend notes

Well, I got it half right in my last weekend notes: I thought most people would have held on to the belief that the decline commodity is good for the market a bit longer, guess by now many have started to see the gloomy outlook for the global economy.

As the Fed running out of the ammunition, Uncle Sam steps in this time to try make yet another artificial bottom here. The major indices will rock higher tomorrow, but I seriously doubt that rebound will have the staying power.

The precipitous drops in the last several days prompted me to get in a bunch of long positions late last Thursday (all Oct. calls), I exited half of those late last Friday (MEE, CNX, CF, WLT), and will exit the rest (QQQQ, AKS, X, FCX) on Monday/Tuesday. Have been too busy to do any trades for a while, and felt happy with this round, should all be decent winners.

Not a whole lot of setups for the next week, which will be extremely volatile, but my overall strategy is closing all the long positions into the rally, while start to look for short setups (especially in financial, retailer and tech sectors) once the rally starts to losing steam). For tomorrow, I will keep close eyes on SKF, will consider long if it can spike towards 90.

Weekend notes

The actions of the low-volume days last week did not change my overall views of the market as stated in last weekend’s note, in fact, the near-term outlook becomes even cloudier as the weekly and daily technical indicators flashing conflicting signals. However, unlike last week, in the face of several key economic reports, I expect the back-from-vacation big boys will start to make up their mind in the coming days, and all we should do, is trying our best to read whatever hands they show, and then play along.

My gut feeling is that, as US $ strengthens further and global economic outlook turns bleaker, oil will lead the energy/commodity related sectors to the second leg down, which will likely drive the rest of the market up to extend the now 8 weeks-old counter trend rally. Historically, September is the cruelest month for the bulls, and I am not sure if the election will affect that.

Really not many setups for the short week:

1. CF: S2, ez1=153-158, stop just above 160, ez2=165-172, stop just above 173, IT=128.
2. CME: L2, ez=310-322, stop just below 310 (may re-enter around 280 or 300 with stops just below), IT=370.
3. CRM: S1, ez=59.8-64, CS just above 62 with bullish candle, IDS just above 65, IT=54
4. GOOG: S2, ez=480-500, stop just above 500, IT=420
5. ILMN: S2, ez=88-91, CS just above 90 with bullish candle, IT=78.
6. WLT: S1, ez=95-100, stop just above 100, IT=84.
7. GS: CTT between 158 and 178, quick on profit taking.
8. POT: S1, ez=177-185, IT=160.

Weekend thoughts and calls -- Aug. 24, 2008

Just some quick thoughts and calls:

Major indices are at a very tricky point: they may roll over right here, or there might be another leg up before the counter-trend rally eventually ends. The movement of US dollar and oil could drive the market direction for next week or two.

We are seeing the technical rebound of the extremely oversold energy/commodity/metals sectors. The rebound is yet to run it course, consequently, for this week, any dip towards the lows of the last week can be bought with stops just below. On the other hand, it is very likely that the mid-term trend of these sectors have been reversed, therefore, short-the-rebound setups should be considered in the coming weeks.

1. ABX: S1, 38-41, IT=34

2. CF: S1, 158.5-168, stop just above 173, IT=130

3. CLF: S1, 110-116, stop just above 116, IT=100

4. CME: L2, 330-350, stop just below 330, IT=390

5. CRM: S1, 60-62, closing stop just above 62, IT=54

6. FCX: CTT between 80-100/105

7. GS: Quick-swing L2 if it spikes towards 140, closing stop just below 140, IT=160,

8. JRCC: S1, 49-51, closing stop just above 51, IDS just above 52.5, IT=40

9. MA: S1, 255-258, stop just above 260, IT=221.

10. MOS: S1, 120-128, stop just above 130, IT=100

11. POT: CTT between 166/71 and 200/205

12. USO: CTT between 88/89 and 102/105

13. WLT: S2, 99-109, stop just above 110, IT=85

Weekend notes -- August 17, 2008

Got a few moments at hand so here we go:

Major Indices Assessment

Weekly – more upside possible, but may consolidate first.
** RSI2--clearly overbought for all
** MACD histogram: turned positive for NASDAQ, growing (3rd week) for Russell; poised to turn positive for DOW/SP500.
** Russell on 6 week winning streak with volume spike but backed off from the June high, stochastic near overbought; COT show increasing commercial shorts in Russell.
** VIX MACD histogram just flipped to the negative side.

Daily – rally overstretched but no clear reversal yet.
** Well defined ascending channel for all.
** Extended period of positive momentum for all but stalled
** Overbought for both NASDAQ/Rut, which are also over-stretched and crashing the Bollinger bands
** VIX breaking down
** MA50 and MA200 all with clear bearish slopes.

Weekly Swing Trading Calls

** Calls should be seriously reconsidered when there are major company-specific material events.
** All long calls for the energy/commodity/fertilizer sectors are primarily technical driven at this stage.
** Once again, EZ are set conservatively. Entries above the EZ can be used, but position sizes might need be reduced to manage the risks.

1. ABX: L1, 27-30, IT=35/38

2. ACI: L1, 37-44, IT=55

3. AGU: L1, 65-73, IT=88

4. CLR: L1, 37-42, or when it closes above MA10, IT=55/60.

5. CNX: L1, 50-58, IT=68/72

6. ELN: L1 if it spikes towards 12, IDS<11, CS>12, IT=18.

7. EWZ: L1, 60-66, IT=75

8. FCX: L1, 69-81, IT=90

9. MOS: L1, 82-93, IT=110

10. OIH: L1, 170-173, IT=190

11. POT: L1, 142-160, IT=183/190

12. RIG: L1, 110-121, IT=132

13. SLV: L1, 10.5-11.7, IT=13.7

14. USO: L1, 85-88, IT=95

15. X: L1, 111-121, IT=140/150

16. IWM: quick swing (1-2 wk), S1, from 76-80, IT=72

Back from the future...

Before I knew it, I have not posted anything for like 10 days, just got too many things going on latterly

Allow me to post some of my thoughts about the market as well as some trading calls, I hope they are good for at least a week or two.

Thoughts and observations about the current market conditions and outlook for next 2-3 weeks:

1. More and more people are now in the camp of “global-recession-here-we-go”. The crowd obviously believes the “demand destruction” due to the upcoming recession, and they probably have been selling energy/commodity/materials/agriculture sectors hard. I pretty much agree with them to this point.

2. But the crowd went on to buy all other sectors and started to think that a new bull market is coming. To that, while I think the market will overall trend up in next couple of weeks, I find it is kind of amazing that one could actually put both “upcoming global recession” and “a looming new bull market” in the same sentence.

3. My target zones for the ongoing counter-trend rally: NASDAQ: 2470-2560; SP500: 1320-1400; DOW: 12000-12700. As far as I am concerned, as long as the major indices stay below these zones, the primary trend is down.

4. While I will look for short setups in tech and other rallying sectors once the major indices approach the aforementioned zones, I will start to look for long setups in the hard-beaten energy/commodity/materials/agriculture/solar sectors in coming days. The bottom fishing is mostly technical driven at this stage.

5. As for the argument that the commodity bull market is over, while I am yet to really figure it out, I will say this now: if the commodity continues to fall, Fed will lean to rate cut, and that will drive the commodity right back up.

6. I am looking for oil to pullback to around 100, which should be a likely turning point for some decent rebound for oil and other energy/commodities.


Trading calls for the next 2-3 weeks:

Unlike before, the proposed holding time for most calls could be as long as 2-4 weeks if their IT don’t get hit within the first week or two. The calls obviously don’t take possible ER/analysts/other company specific material events into consideration so be careful. In addition, many ez are set very conservatively, up-adjustments can be made if some major signals favor (watch for the end of 1st round of oil pullback).

For most setups, the lower end of the ez is for intra-day spiking down. IDS should be at most 1-3% below the lower end, while CS should be a bit higher than the lower end of ez on bearish candle/volume.

List 1—Energy/coal related sectors.

1. ACI: L1, ez=36-43, IT=55
2. APA: L1, ez=80-95, IT=120
3. ATW, L1, ez=30-35, IT=48
4. CLR, L1, ez=30-39, IT=55
5. DVN, L1, ez=70-81, IT=100
6. RIG: L1, ez=90-111, IT=140
7. WLT: L1, ez=65-75, IT=95
8. OIH: L1, ez=150-162, IT=200
9. USO: L1, ez=80-85, IT=100

List 2—Materials and other commodity sectors.

1. ABX: L1, ez=28-32, IT=38
2. FCX: L1, ez=66-76, IT=94
3. AKS: L2, ez=40-46, IT=62
4. X: L1, ez=116-127, IT=155

List 3—Agricultures/fertilizers

1. AGU: L1, ez=60-72, IT=90
2. CF: L1, ez=100-121, IT=150
3. MON: L1, ez=88-96, IT=110
4. MOS: L1, ez=72-91, IT=120
5. POT: L1, ez=135-161, IT=190

List 4—Solar and other alternative energy sectors.

1. AMSC: L1, ez=16-21, IT=30
2. FSLR: L1, ez=200-222, IT=260
3. CSIQ: L1, ez=18-23, IT=30

List 5—other long setups.

1. DRYS: L3, ez=50-61, IT=70
2. MA: L1, ez=180=211, IT=238
3. SKF: L2, ez=90-101, IT=130

List 6—Short setups

1. RKH: S2, ez=120-130, IT=105
2. LVS: S1, ez=60-70, IT=45

That’s it folks, should keep you all busy for next week or two :) Share your views, and do let me know if you make any money on any calls, otherwise, I might just take a hiatus for now.

Another counter trend bull run coming?

Today's strong market action favors another counter trend bull run, which may last as short as 2 days (if this Friday's July job report coming in with well above 100k losses), or as long as a few weeks. But it will not be a smooth one for sure as it will run into heavy resistances almost every steps up.

In anticipating such move, I would overweight the tech sector on the long side, while shorting commodity/energy/metal materials related sectors (oil,coal,agriculture,fertilizers and steel) if those leaking ships also get lifted up near their recent highs or important resistance zones.

Just found out the ELN went down over 30% in AH, and was really upset because about 2-weeks ago, I had plan to create a strangle play in anticipation of the month-end drug study news. Got too busy lately, and got lost....

Good luck all, and share your views if they are very different.

Melt up!

Oh, boy, can it get more bullish than this? Almost every piece of crappy ER turned out to be a good buying opportunities. The funny thing is, believe it or not, Big Ben is probably the most bearish person walking around. With now concrete evidences of worsening consumer spending and no signs of housing bottom whatsoever, I have no doubt that the beatings the bears have been taken in the past few days will be returned soon.

I will keep my eyes on:
RKH (S1, ez=112-120, stop just above MA200, IT=95).
SKF(L1, ez=100-110, stop just below 100, IT=135).
BAC (S1, ez=34-38, stop just above MA200, IT=28).

Got different views, share with me!

What's your conviction?

Wow, take a look at the AH drops of AAPL, SNDK, AXP, and TXN, all well over 10% on pretty heavy volumes, and together, they are sending one loud and clear message: consumers are crapping their pants. I could imagine that many of you probably feel missed-out last week's dramatic rally and are anxiously waiting for a pullback so that you get in from the long side, it sure looks like that you will get exactly that tomorrow. So the questions I have for you all is that if you have the conviction of the bottom and the balls to buy the pullback? Please take a stab on the survey on the left side of this post.

If you ask me, FA wise, the bottom is not in yet, but TA wise, a tradeble bottom could be in once NASDAQ follows DOW/SP500 to successfully test its Jan/Mar'08 lows, which may well happen in coming days.

I have to say that AAPL's outlook surprised me a bit here, I would not be shocked if it tests a key support around 140 tomorrow morning, which would at least a good DT long setup.

On hold...

Sorry for not posting anything lately. Got a raise last week along with a couple of projects that would get my hands full in coming weeks, as the result, I won't be able to post as much for a while, but will certainly do my best.

As for the market, while I have already seen lots of commentaries claiming that the bottom is in, I am far from being convinced. While the market will have a upside bias for the next few days, the volatility could through anyone off the wagon. ERs may significantly shape up the path for the major indicies this week, particularly tomorrow's BAC and AAPL's ERs. If both of them coming in worse than expected, I would expect NASDAQ lead the market to re-test the lows.

One more thing: AAPL, AMZN, ISRG, BIDU, and NFLX may offer pretty good ER straddle plays this week.

Bulls skating on the thin ice!

Dreaming of a re-run of the Mid-March post Bear Stearns bailout rally, the (retailer) bulls jumped in at the open today on the news of Fed's rescue of F2, only to fall right into a swirling water fall as the smart money dumped what they loaded up last Friday in anticipation of the over-the-weekend Fed's rescue. You got to admire the big boys, who learned from the BSC event and executed the play to the perfection. Today's gap-and-crap action also made it clear that the market has lost faith in the Fed. Speaking of the Fed, it is probably down to the last bullet (rate cute) in its gun, which if used would be suicidal at this point.

Bears still did not show any killer instinct, which ironically may not matter much right now as bulls started to show real hesitation and fear today. As the major indices are drifting down through the 2-week mid-point consolidation zone, bulls better hope that there will be some real good news and soon or we could see the second leg down in next day or two.

Just went through my list and could not find any good swing long setups, rather, I will look for swing short setups from the following stocks: APA, DVN, JRCC, MEE, ANR, OIH, PCX, WLT.

I will also keep an eye on GS, which is on the verge of completing a head-n-shoulder formation on the daily chart. I may scale in if it spikes towards 166-168 in the early going tomorrow, with intra-day stop just above 171, closing stop around 168 and initial target around 150.

The Feds strikes back, again!

I am going to be brief for this weekend’s notes on the market. Instead of going through detailed TA examinations of the major indices, I am going to just present some distilled observations and thoughts on the current market conditions and near-term outlooks:

1. Despite of the oversold conditions on all major time frame, the weekly momentum/candle/volume patterns still favor further downside in coming days. VIX chart also favors such scenarios. There are, however, some developing bullish divergences on the daily/60 min charts.

2. The losing streak is now at 6 straight weeks, the longest since September 2002. As the overall volumes shoot up to multi-month high, the fear is growing, but it is far from panic.

3. Despite of having all the winds behind them, bears are having troubles to finish the bulls off. On the contrary, bulls have been buying in their orderly retreat as if they are convinced that the bottom is very near. If the bears continue to show such lack of killer instinct by failing to push the major indices breaking down through the 2-week trading range (by close), they will be gored by the bulls very soon.

4. I have been waiting for a big downside move to initiate some long SW positions, however, I am now start to consider the possibility that if the major indices do break down the 2-week consolidation range, they could incur another quick 5-10% loss in a week or two time frame. In such scenario, building up SW long positions at the end of the first breaking-down day may not be such a good idea.

5. On the same topic, all major European stock markets broke through their week and half long consolidation range on the Friday, and I will keep a keen eye on them to see if the size of the second leg down is comparable to the first leg.

6. The Q2 ER season kicks into high gear next week, bulls have high hopes, especially for the tech sector, that it will provide positive catalyst to at least stop the ongoing slide. I have serious doubts on such notion, considering recent movement in MSFT, CSCO, INTC, NVDA.

7. This Friday’s takeover of IndyMac by the Fed could mark the beginning of a string of high profile bank failures in coming weeks. This, together with dire distresses in Freddy and Fanny, makes the hill much steeper for bulls to climb.

As I am finishing this, the news of the Fed rescue of Fannie and Freddie just came out, and the indices futures point to a big jump tomorrow. I am pretty sure that bulls are hoping that is will be a re-run of the March counter trend rally that started with the BSC bailout and lasted over 2 months, we will see how things play out this time around.

Getting dizzy....

Wow! The bulls and bears were fighting nail and tooth today, just look at the intra-day charts of AAPL/QQQQ/SPY, certainly a great day for day-trader (I had to just watch). I have to say that I am impressed by the bulls: they were overall unfazed by increasingly dire headlines and breaking down of many stocks and just kept buying. In fact, the volume patterns on daily/60min charts are bullish. The way it is going now, either bulls or bears will run out of the ammunitions soon, I mean, something got to give.

Tomorrow morning GE ER will be crucial. My gut feeling is unless GE misses big and breaks down to new low, bulls could rally tomorrow and get on the track to destroy all the puts leading to next week's OE. On that note, if GE misses a bit and the market gaps down on low volumes in the early going, it could present a good buying opportunity for anyone who has the guts to catch some short-lived gains from the long side.

Too many bears AND bulls!

I am going to be brief here:

On trading:
The Monday was fine, and Tuesday was dandy until I put MA and lost control as it shot up violently. Being ball-less, I closed in the end with a nice hole on my pocket and put my ongoing winning streak in serious jeopardy, and promptly got spanked by my girl, which believe it or not was not fun at all! And she made me to swear not DT again, which I did to shorten the spanking binge. So there you go, I am out of DT business now! And I promptly gave up put opportunity in AAPL and X today, well, hope it is all worth it in the end.

On the market:
There are just too many bears and bulls right now! FA favors bears, TA wise it is a toss up but the ball in is bulls court. One thing is pretty sure, the longer the market stays in the current range (about 4 days now), the more violent the next move will be when the range is breaking. Before that occurs, DT is pretty much the only game in the town. Since I cannot DT now, I plan to sit down for the next few evenings to come up with a buy list in case the crash does come in the end.

Let me know if you are eying any stocks for post-crash buying.

No fear, no bottom?

The relentless advance of oil price and un-abating negative headlines about the economy around the world squashed bulls hope to stop the nose-diving as the US stock market posted yet another losing week, the fifth in a roll. Despite of the precipitous and mounting losses, the bottom searching market may be teetering on the edge of a collapse as the herd is far from panicking.

On Weekly Charts:
The momentum of ALL major indices not only flipped to the negative side but on the early stage of acceleration; MACD in solid down trend formation for all major indices; both candle formation and volume pattern remain bearish; RSI2 in oversold for all major indices but stochastic yet to become oversold except for DOW; technical indicators overwhelmingly favor further weakness in next week or two.

On Daily Charts:
The negative momentum unabating for all major indices as they accelerated to the downside; DOW is now 350 points south of its Jan’08 intra-day low, while SP500 broke its March’08 intra-day low and closed at new multi-year low, and NASDAQ now only about 90 points above its March’08 low; all major indices continue lingering in deeply oversold territory; candle formations remain bearish across the board.

On VIX Charts:
VIX finally broke its 4-week trading range last week; on its weekly chart, the momentum finally flipped to the positive side for the first time since the end of March, this along with the crossed and turning up MACD formation strongly suggest an overall uptrend for the coming weeks; daily chart also shows a clear short-term uptrend in the making.

Thoughts and observations about the current market conditions and near-term outlook:

1. Technically speaking, while the market has been deeply oversold for a while now and a technical rebound is overdue, there are virtually NO bullish divergences on any charts of the major indices. On the contrary, the weekly charts strongly favor more near-term downside movement, and major indices might need another week or two of declining to reach the kind of oversold levels that were seen in the previous bottoms.

2. While fears started to grow last week, VIX is still way below the levels associated with the previous bottoms. The VIX charts clearly favor more upside on VIX, which in turns suggest lower market.

3. The global market is turning very gloomy now:
** The current 5-weeks long losing streak, the longest since September 2002.
** The Japanese stock market is on a 12-day losing streak, the second longest ever on the record.
** The China stock market is on a 7-week losing streak as it continues to break down.
** Check out the charts on EWZ and FXI and you know the leaders of the emerging economy are in deep trouble.

4. Fundamentally speaking, the evidences and signs of a full-blown global recession are growing. I am not quite sure if the US stock market has now even fully priced in a prolonged and severe US recession, let along a serious global recession.

5. Despite of the continuously advancing oil price, the energy and related sectors (such as the coal sector) showed clear signs of the ending of their parabolic movement this past week. Other commodity sectors are also cracking up. All these may reflect the view that the tremendous growth and current high levels of many commodities cannot be sustained/support in the face of a global recession.

6. With the market entrenched in deeply oversold territory, a violent technical rebound could come anytime, but if you look around, as the Fed now practically irrelevant, there are NOT many potential catalysts out there, well, except the oil. As long as oil keeps advancing (I suspect it will touch 150 in coming days before a big pullback), I doubt bulls can muster any meaningful rally. With that said, overall speaking, aggressively open new short positions could be extremely dangerous at this conjuncture.

7. Cash is the king.


The overall trading strategy for the upcoming week:

1. Sit tight on the sideline and be prepared for all scenarios. The all-time high spread between the Lowrys selling and buying pressure is just one of the signs that a market crash is becoming a real possibility. I will be watching the market intensively to see if the major indices would be able to reach a tradable bottom around the key support zones: DOW 10750-11000, SP500 1170-1220, NASDAQ 2150-2200. I will start nibbling from the long side (swing) if the market crashes or spikes down to those key zones.

2. Only DT long with small position size for any non oil driven technical rebound.

3. Consider full position-sized, multi-day holding long plays IF oil pulls back significantly.

4. Actively seek short setups in the coal, steel, and other energy related sectors.

Happy 4th of July

It has been some tough weeks for many traders, I hope you all will be able to relax and enjoy the life a bit through this holiday weekend.

Trading update:

1. AAPL calls from Thursday: go out with a tiny profit in the opening minutes, have to say that I was lucky that the Market opened high as the June job report not shockingly bad.

2. AAPL puts: accidentally bought the puts when it rebounded to 170, got out when it broke 172, which turned out to be a head fake.

3. MOS puts: bought when it rebounded and stalled just below 133 and exited when it broke 129, the profit evened out the AAPL puts loss and then some.

Will hit the road shortly to visit our friends in San Diego, and between beers and scotch, we will have a good laugh (hopefully) on what trading has done to our lives.

Will post a weekend analysis if I get time.

Hopeless!

I felt sad all day long. You all know that I have been calling tops on the coal sectors in the past few days, and on Monday, I finally picked PCX and bought 10 puts@$8 when it was around 154 as a SW trade. But yesterday, in the first concrete sign of breaking down, I once again could not resist the temptation and exited at $8.8. Well, it got destroyed today with the puts closed at $19.7. In other words, I made $800 on a potentially $11700 movement and maybe counting, and that is not even 10% of the move. I have never known what a demoralizing victory is until today. Even though I made over $1000 today and on my way to 13th consecutive winning week, I felt low and blue because I see the cold reality: I just never learn from my mistake. I will take the upcoming weekend to think what I need to do here, maybe I should stop trading for a while, I don't know.

Trading update:

1. APA: bought puts when it was around 144 and exited when it was testing 137.

2. AAPL: bought puts when it was around 176.3 after saw the intra-day top, exited around 174.5, another poor execution.

3. Things did not get any better as the day went on, bought AAPL calls in the closing moments, and still trying to figure out why I did that.

On tomorrow's trading:

The market showed real fear late in today's session, and with jittery already spreading through the tech sector thanks to NVDA's ER warning in AH, a much worse than expected June job report tomorrow morning could really trigger a capitulation. I suppose that if we see a 2%+ drop in major indices, we could start nibbling a bit from the long side. My focus will be primarily on ag/fertilizers tomorrow, and I will avoid coals from the long side despite of the huge losses in those names today, they will rebound for sure, but could drop another 10-20% before that occurs.

Bottom watching, day 2....

Things got a bit interesting as bulls finally put together a rebound, well, sort of considering very heavy volumes and relatively small gains. Technical conditions could drive the rebound a bit higher, but fundamental conditions remain quite bleak and cloudy, and the June job report could improve the visibility on this regard. Once again, I will refrain from establishing any significant positions until I am clear about the market reactions to the job report.

Trading update:

Got out of PCX puts when it sliced through 150 in the early going, once again, captured not even 40% of the entire move. It is becoming quite obvious to all now that the main reason wabbit runs fast is because I ain't got no balls!

Trading Ideas for tomorrow:

Will focus on DT except may take a few speculative positions using Aug. dated options.

Long list: AAPL, ENER, MON
Short list: ABX, AKS, CF, RIMM, PCX, WFR, X
Speculative short list: APA, DVN, JRCC

Bottom watching

Trapped bulls hope that the bottom is in while the side-lined bulls and bears are hoping for a capitulation. I have already seen a few articles today talking about bottom-fishing here, however, I won't do any SW from the long side until we see the June employment report, which potentially could be a capitulation trigger.

Trading update:

1. BIDU calls: exited in the early moments when it spiked towards 320, only a small loss.

2. CTRP: exited when it broke 46 again, and lost around 15% instead of last Friday's 20% gain. Originally I planned to exit if it breaks 45, but the accelerating time decay somehow soured the whole thing.

3. PCX: Bought July150 Puts when it was around 154, but oddly enough, by the time it closed just above 153, the price actually drop a bit. A risky trade here, we'll see how this turns out.

Market will attempt another rebound tomorrow, which might gain some tractions if oil/energy sectors pullback somewhat here. Went through my list, and did not see any compelling long setups, and a few half-assed short setups. I think the most sensible thing to do right now is bottom watching.

The arrival of the Bear Kingdom?

The breaking-out oil, rising inflation, the bambling from the toothless Fed, and the disappointing ER from several key tech leaders delivered a devastating blow to the bulls as the market suffered huge losses last week. By the end of last Friday, DOW became the first major indices to smash through the Fed-engineered double bottom of Jan/Mar’08 with SP500 only a spiting distance away its bottom. By doing so, DOW is now about 20% off of its last year’s high, thus formally kicked the door to the Bear Kingdom wide open.

On Weekly Charts:
DOW continued to lead the market to the downside as it closed below MA200 along with SP500 for the first time in over 6 years. For both DOW/SP500, the momentum has now firmly flipped to the negative side, while declining for the 5th straight week for NASDAQ/Russell2000; MACD in solid down trend formation for both DOW/SP500; volumes rose for all major indices as the losing streak now at four straight weeks; overall candle formation became increasingly bearish; DOW is entering oversold territory, for other major indices, only RSI2 is now in oversold territory while stochastic still has distance to go.

On Daily Charts:
The negative momentum kept rising for all major indices as they accelerated to the downside; DOW is now 300 points south of its Jan’08 intra-day low, while SP500 only 22 points north of its Mar’08 intra-day low, but NASDAQ still about 160 points above its Mar’08 low; all major indices have been lingering in deeply oversold territory with several failed attempts of technical rebounds.

On 60 min Charts:
Just want to point out that there are signs of a nascent oversold rebound for all major indices.

Thoughts and observations about the current market conditions and near-term outlook:

1. Technically speaking, if the market was at a crossroad last week, it is now taking the path to the bear country. The weekly charts suggest that it is likely to take another 2-3 week decline before all major indices would reach the oversold levels that were associated with the previous bottoms in Aug’07, Jan’08, and March’08. Given that, other major indices are now very likely to follow DOW’s footsteps and break their previous lows in next 2-3 weeks.

2. Even though VIX is up for the week and now on the verge of resuming its uptrend on the weekly chart, it continues to diverge from the market movement and currently at a level that is around 1/3 lower than those associated with the previous bottoms. While arguments that the muted VIX is largely due to the lack of any significant single-event have some merits, it is rather obvious that relatively speaking, there are still too much complacement in the market. Once again, you won’t see a real bottom or at least a tradable bottom until the fear turns into panic and the Wall Street is soaked in blood.

3. It is worth to point out that all major indices and many key sector indices have now completed the 1-2-3 trend reversal, and their primary down trend, which started last November, has now resumed following the 3 month low-volume counter-trend rally. I would also like to point out that if the previous decline was largely due to the self-doubting and discouraging bulls, bears really took their glove off this week as the Lowrys selling pressure reached multi-year high last week.

4. Here is another alarming bearish signal: according to the latest COT report, the commercials have dramatically reduced their long positions this week. In the past, such re-positioning by the big boys were often followed by a 2-3 weeks of major market decline.

5. Perhaps the most important and fundamental changes in recent days are the raging inflation AROUND THE WORLD with many central banks have embarked a rate-hike campaign (with ECB likely to join the list next Thursday) hoping to reign in the inflation before it is out of control. I would like to point out two things: first, this rate-hike campaign has just started with a LONG WAY TO GO; second, the rate-hike will significantly dampen the economic growth around the world if not triggering an outright global recession. On this regard, the US is far behind, and we may pay a much bigger price down the road.

6. Contrary to my expectation, oil broke out a 3-week trading range to the upside this week despite of some bearish divergences on its daily chart. Other commodity sectors, especially energy related ones such as coals, are poised to resume their parabolic ascending. Even though the US dollar may weaken further and thus drive oil/commodities higher in near-term, the increasing possibility of a global recession could ultimately pull the carpet underneath them. When that occurs, we would likely see an equally parabolic descending, if not more dramatic.

7. The market is on a 4-week losing streak, but since Sept./2002, no losing streak has been longer than 4 weeks. That, along with other factors, might favor yet another technical rebound attempt next week. However, I doubt the size and sustainability of any rally under the current market conditions. Right now, I am leaning to an overall “sell all rally” strategy until the major indices reach a tradable bottom, my guess is: DOW 10750-11000, SP500 1170-1220, NASDAQ 2150-2200.

I welcome any comments!

Drowning in the oil tsunami?

Considering the fact that oil broke yet another record and that the rising negative momentum and fear, bulls should be content that SP500's previous bottoms are intact by the end of today's close and that there were many many doji/hammer candles ending this free-fall week.

Trading update:

1. Bought puts on PCX when it spiked towards 153 and showed signs of intra-day topping, closed near the close when it spliced through 50, felt good about the plan/execution/profit.

2. CTRP July45 calls: about 20% profit and still holding, its action in the last several days have been quite bullish, or more properly, suggesting a tradable bottom to say the least. We will see if my sitting tight is going to be rewarded.

3. BIDU July330 calls: under water and still holding, feel that it will have a good jump if the market rallies on Monday. So far the paper loss bit a chuck off my profit for the week. I totally screwed up this trade:
** Got in unplanned AND when it was far from oversold on 60 min chart (that point would be today when it was around 306-308).
** Failed to re-adjust the bullish expectation especially in yesterday's near-crashing market, had 3 chances to book as much as $1000+ profits, did not do so, and turned it into a losing position and distraction.
The lesson here? when you bottom fish, especially in the current down-turn, make sure that the stocks are oversold both on daily AND 60 min charts, given that other conditions also met.

Will I learn my lessons? Well, I will see about that after a few rounds of beer/Junmai sake in a few hours...

I hope you all survived the week without much hurt!

Window dress this!

I am gonna be brief here.

We certainly saw the blood on the Street today, the problem is that with DOW now solidly broke all the previous lows and SP500 poised to do the same, and still relatively low VIX, the blood shedding may be yet to run its course. There is no doubt that market is oversold on almost every time frame, however, without any conceivable catalyst and the out of ammunition Fed, the oversold condition alone won't produce any sizable or sustainable rebound. With that said, the market often does not accommodate the majority views, so what the market will do tomorrow is everyone's guess. Who knew, maybe big boys will do some serious window-dressing tomorrow/Monday as the month/quarter ends.

Since both long and short could be very dangerous undertaking at this stage, unless you are as sharp as Razor, or as experienced and ballsy as PCAGUY, or as fast as the wabbit, you might just hold your cash tight and enjoy the battle between bulls and bears.

Position update:
I currently have some BIDU calls (entered when it was just above 117) and some CTRP calls (entered when it was around 45.8), I might lighten both positions if market gaps and rally in the early going tomorrow.

One more thing: it is just unbelievable that the Fed engineered a double bottom with its massive rate cut and liquid injection, only to see not only the imminent demolish of the bottom, but the raging inflation that would cast a very long long shadow on the market for months to come. If I was big Ben, I will cry my eyes out tonight, seriously.

Short-the-rebound candidates: ASK, CF, GOOG, PCX, RIMM, AAPL.
Bottom fishing candidates: CLR, CRM, FSLR, MON, POT, SOHU, X.

Good luck all!

Fed up?

Is it just me or if Fed is getting better and better at using seemingly plain language to confuse the heck out of everyone? Apparently even the big boys could not figure out what exactly Fed was thinking (just look at the intra-day charts of SPY/QQQQ).

Bulls obviously felt a letdown into the close, and the AH RIMM/ORCL ER have all the looks of a gap down coming tomorrow morning. Speaking of tomorrow, it will be a crucial day for bulls because if they could survive the opening down and closes the day in black, their chance of having a 2-3 day rebound will be greatly increased.

At this stage, even though I have a bearish bias towards the whole market, I am reluctant to be aggressive from the short side mostly because of the deeply oversold conditions on the daily charts, as matter of fact, I might catch a few falling knives tomorrow morning if the market gaps down big, and even better, QQQQ/SPY reach oversold on 30 min charts (at least for RSI2). Of course, pre-determined stops will be in place for all long positions and I will nimble when it comes to take profits.

Bottom line: bears are not yet done, but bulls are not yet over.

On today's trading:

1. Closed OIH put when it sliced through 215, too bad it is a small position.

2. Somehow decided to put BIDU around 327, did not promptly book the profits, ended up with a hole in my pocket.

3. Luckily I put MEE when it rebounded towards 91, and exited when it fell down to 88.5, that got me into the black today, woohoo!

Waiting for Godot, Act #N

Well, it is time again to start the count down for the tomorrow's FOMC decision, or the lack of. Things are definitely getting dicer by the day on the Wall Street, as yet another attempt of technical rebound fizzled today. Today's decline might have more to do with the deflating bulls than the edgy bears who might be having flash backs on the beatings they took after previous Fed rate cuts.

As of the close today, several more key indices completed the 1-2-3 reversal, including: Russell2000, SP-Mid-Cap, and Dow-Transport. With DOW/SP500 only a stone-throw away from their Jan/Mar lows AND financials as a whole are at new low, it must be disheartening and discouraging for Big Ben and Co. right now. After all, the massive rate cut campaign, which was meant to save the financials, has not only failed miserably, but further fueled inflation flame along with the excessively injected liquidity. But perhaps the most tragic part of this odyssey is that unlike other central banks, no matter how much the Fed wants to, it just cannot raise the rate right now. Talking about quenching the thirst with poisonous liquor!

I gather many folks are ready to buy into this post-FOMC rally, especially the market is deeply oversold. But be very careful, especially if the Fed jacks up the hawkish tone, there are reasons while the technical rebound attempts have failed 2 days in a row.

Today's massive price raise from the DOW Chemical and India rate hike news are pushing me towards the "every rally must be sold down" mode. I probably won't be aggressively bottom fishing, unless I see a sizable drop (2-3% on major indices), and I probably will actively look for short setups if there is a 2-3% immediate jump of the major indices.

And oh, don't forget tomorrow's RIMM's ER in AH, it could be a kicker or spoiler for either bulls or bears party. Speaking of RIMM's ER, my plan right now is to use any post-ER jump as an opportunity to initiate short positions, why? just look at its weekly chart (hint, volume and other indicator bearish divergence).

Good luck to all for tomorrow, and trust me, you will need it (unless you sit out).

Boiling point!

Today was a really boring day, well, maybe except the short few minutes in the opening when bulls' technical rebound attempt turned out to be nothing more than a premature ejaculation (sorry for not finding a better term). However, several noteworthy events did happen by the closing bell:

1. Following SP500/DOW, NASDAQ and QQQQ finally completed the 1-2-3 reversal on closing basis.

2. Both semi and retailer sectors broke and closed below their recent lows.

And of course, the financials continue rolling over.

Oil and related energy sectors (including coals), however, were stronger than I had expected. I sure hope that is not because too many players like me who are convinced of an imminent pullback here. But in any case, I still feel that those parabolic movements are about to end.

Trading Update:

1. SOHU: bought 1/2 position of July 75 puts when it was just below 76, may add another half between 78-80, with intra-day stop just above 81, closing stop above 80. Initial target=72.

2. OIH: bought a speculative July220 put position when it was around 222, might not be a good move here as it broke out into the close, but hey, it is a speculative position.

3. DVN: bought a 1/5 position of July120 put when it was around 122, stop just above recent high, initial target=118.

4. RIG: bought 1/5 position of July150 put when it was around 154, just like OIH, might be a bit early here. May add more in the range of 158-162. Intra-day stop just above 162, closing stop just above 160, initial target 150/152.

5. USO: I look to initiate a small July110 put position tomorrow, especially if it gaps up at the open.

6. Coals: I plan to initiate some speculative put positions this week in the following names: ANR, JRCC, PCX and WLT.

Things will get very tricky tomorrow: with market in oversold and FOMC decision/key ER from RIMM/MON ahead, bears probably are not eager to corner the wounded bulls here. On the other hand, while certainly not on their last breath, bulls simply don't have much left to mount a meaningful counter attack, all they can do right now is just hanging tough and hope to get a shot in the arm in next day or two, and they might just get it.

Tomorrow might be another boring day, but the energy will be building up and the boiling point will be near, hopefully, it won't be the wabbit who gets cooked and passed along as snacks to those crazed bulls and bears.

What is behind us, the worst OR the best?

The talking heads on the Wall Street have been asserting us for months that “The worst is behind us”, they also told us many times that banks/brokers had finally done the write-offs. Considering how reality has been blowing away all the smoking mirrors on the Wall Street, we might just have to consider the possibility that the opposite answer might be closer to the truth.

Bulls, especially the tech bulls, tried very hard last week to stop the recent slide, but last Friday’s precipitous sell-off on heavy volume has not only squashed bulls’ hope but also drove bulls to the edge of a cliff.

On Weekly Charts: DOW led the major indices towards the bearish territory. Positive momentum flipped to the negative side for the first time in 11 weeks for the DOW while declining for the 4th straight week for other indices; MACD crossed and turning downwards for the DOW with other indices following the same path; overall candle and volume patterns remain bearish since May; stochastic and RSI(2) favor more near term downside;

On Daily Charts: the bearish short-term MA bow-tie formation now in full swing for all major indices; negative momentum started to rise again; both DOW/SP500 breached last week’s lows and key support levels with DOW now only about 100 points north of the March low; MACD in solid down trend formation; candle patterns remain firmly bearish; stochastic/RSI2 in oversold for DOW/SP500; NASDAQ/Russell2000 managed to close above last week’s lows after the failed attempt to reclaim their MA50.

Thoughts and observations about the current market conditions and near-term outlook:

1. Technically speaking, the market is at a crossroad right now: if the market goes down next week with NASDAQ/Russell2000 following DOW/SP500 footsteps, the MACD and momentum would flip to the bearish side for all major indices. That could mark the beginning of a lengthy decline as the weekly charts suggest that the market will need a minimum of 2-4 weeks before reaching the oversold levels that were associated with the previous bottoms in Aug’07, Jan’08, and March’08, which means that re-testing of the Jan/March lows will be inevitable.

2. VIX has been overall indifferent to the recent market decline: even as both DOW/SP500 solidly broke their last week’s lows, VIX remains well below its last week’s high. The muted reaction in VIX simply indicates that there is simply not much a fear in the market right now. The VIX behavior collaborates well with other facts, such as the increasing of the long positions by the big boys (as seen in the latest COT data).

3. There is a consensus that market has seen its true bottom, solidly manifested by the double bottom formation (Jan and Mar’08 lows). Consequently, many seem to position themselves for an all-out bottom fishing should the re-testing of the bottom arrives in the coming days. That kind of the mentality might well explain the muted VIX movement in recent days. However, if you study VIX chart, you will find that VIX spikes to very high levels with any meaningful bottoms, such as the Aug’07, Jan’08, and Mar’08. The relatively low level and lethargic movement of VIX right now is UNLIKELY indicative of a bottom of any significance. In other words, you won’t see a real bottom until the fear turns into panic as the Street is soaked in blood.

4. Since I am on the bottom testing topic, I want to point out that while the double bottoms formation is common and often reliable, the triple bottom formation is rather rare. In other words, if the market breaks the current double bottom formation, the consequence of the nasty surprise may be dire, especially for those who are convinced that the bottom is in.

5. I expect the tech sector to hold up a bit better than the rest of the market before the RIMM ER. Speaking of RIMM ER, it comes at an extremely crucial time. Right now the market has a high hope for RIMM ER and its recent price movement has reflected this. A better than expected RIMM ER may just give tech bulls enough jolt to regroup and save the market, but a weaker than expected RIMM ER will destroy the safe heaven for the tech bulls and send NASDAQ down to its March low in a hurry.

6. Take a look at GE’s chart if you want to know the outlook of both US and global economies.

7. Watch GOOG, BIDU and AAPL for what’s coming in tech sector, if these big name tech stocks break their recent lows, it is a kiss and good-bye time for the tech bulls.

8. Next week’s FOMC meeting is probably going to be the most irrelevant one in recent months because the Fed is now really between a rock (troubling financials and economy) and a hard place (raging inflation), and all it can do is just lip service.

9. There are now concrete signs that the raging inflation may finally choke down the miraculous economic growth in key emerging economy such as China and India. If that trend gains more traction in the coming months, it would not only dashes the hope of a quick turn around for US economy, but also deliver a lethal blow to the parabolic moving commodity and energy sectors.

I would like to ask those who consider my weekend market analysis like this one valuable to spread the words about this blog. This might be the last time that I would really spend time to go through many charts and readings to write up an in-depth weekend market commentary if I don’t see a meaningful increase in the readership in the coming days: I have been really pushing myself, but the efforts may not be worthwhile.

Bears rule!

Well, folks, there is no other way to put it when the market sold off on high volumes (especially NASDAQ) and the major indices closed below key levels (DOW under 12000, SP500 under 1320). What surprised me is that there was virtually no rebound going into the close, and the big name tech leaders were under persistent selling pressure all day long (just look at AAPL and BIDU). Even though the market is approaching oversold region again, the testing of the March bottoms is fully on now.

I got stopped out for my RIG put position, which sucked because it fell right back. Also did a couple of AAPL DT calls, and got out with small losses. Fortunately, I bought MOS July155 calls when it was retesting 150, and the quick profit on the bounce pretty much evened out those loss. Also got lucky to sell my ANR puts at 8.9 (the high of the day) when it spiked down in the early going. Despite of the decent profit for the week, the fact that I suck (just look at my FCX trade and where it closed today) has left me with a bad taste in the mouth, which can only be washed away by some yummy beers.

All in cash now, will get ready if there is a big panic sell-off next Monday.

Enjoy your weekend!

Looking for a compass?

The market is becoming more treacherous very day with bulls and bears all looking for the direction. My short-term bias is neutral as I expect the major indices bounce around between the recent lows and the May lows, my intermediate term bias is bearish as I think that a test of the March lows is a real possibility. Both bulls and bears got hurt in recent sessions so maybe it pays to be a fast-running wabbit like me :)

On recent trades:

Weds June 18

** DT GS (puts) and AAPL (calls) for modest gains.
** RIG: Swing, bought half position (5) July150 puts when it was around 149.5.

Thurs June 19

** MOS: planned SW-puts, but chickened out in the opening moments and then later when it rebound towards 157 :(
** OIH and USO: planned to short near the tops, but GoldmanSucks' upgrade ruined my "conviction".
** ANR: planned to initiate a speculative put position in anticipating a blow-off top with ez=105-110; failed to step up in the opening moments, but later bought 5 July95 put when it rebounded and stalled just below 97. My IT right now is MA10/92, but today's candle/volume combined with the extreme overbought conditions may suggest that a short-term trading top at least with downside to 85-88. Should I once again be quick on taking profits? Any thoughts on ANR welcome.
** RIG: this morning's Goldmensucks' upgrade ruined my "resolution" to add another 5 contract around 152, but still holding the original position, IT=145/147. But it might be pinned to 150 tomorrow.

Thoughts on the energy and related sectors

Look at USO chart, I feel increasingly strong that oil is on the verge of big pullback in next few days, and when that happens, the related sectors will do the same (look at OIH chart).

The coal sector(especially ANR, MEE, JRCC), and to the less extent the solar sector may take a sizable hit should the oil breaks down. While I am on the commodities, I also expect sizable pullbacks in fertilizers, especially CF and MOS.

A note to PCAGUY

Man, you got steel balls for sure! I myself try hard not to average down (UNLESS it is well planned scaled-entry) because whenever I do it, I got half-cooked. Deep pockets sure help a lot, but I am still unsure your way in recent drys play is fundamentally sound :) but congrat on good wins!!!

Do you really like FIDO's Active Trader Pro? Any major pitfalls?

One big concern I have is if FIDO has "Gainskeeper" (Ameritrade has) that would automatically generate forms for annual income tax return?

I am watching GS too, but since it closed above 186, I will be waiting at 190/195.

Later, all!

Born to be a day trader or just an idiot who never learns and will bite the dust soon?

So I said that I was going to quit DT last Friday.

Day 1 (Monday)
** no SW setups, no biggie.
** I even let a perfect DT setup in GS go (canceled the order right before it was about to hit because I remembered what I said on the Friday, it would've been a 1-2 grand winner).

Day 2 (Tuesday)
** The night before: planned swing short setups for MA around 300, and FCX around 125.
** Opening moments: MA gapped up, and acted exactly what I had expected and wanted to see, but the July300 puts had a spread of 50-70 cents, the cheaper version of wabbit took over, no entry.
** 10:05 am (EST): FCX setup materialized, bought 10 July125 puts when it recovered from the opening drop and stalled around 124.5. Planned to exit 8 contracts around 120/121, and leave the 2 run.
** 1:15 pm: Another perfect DT short pattern in GS as it rebounded toward 184, but no, I am no day trader! So proud of myself, you go, wabbit!
** 2:55 pm: FCX finally cracked, when it hesitated a bit around 122.7, I hit the sell button as if I had waited too long and I was desperate for some dough. I closed all with nearly $650 profit, woohoooo! But wait, what the (*&#$ was I doing? Did I just DT again? Holy $&#*(! it dropped more, oh my god, I could've doubled the profits, maybe more tomorrow. What was I thinking?!
** 3:30 pm: Heard my girl laughing, saying that there was not even a 5 min bullish engulfing candle and I was like a drunkard who could not even hold a $20 bill steady, wait, make that a $1 bill. Damn it!
** 5:30 pm: look at Razor, he just made another 13 points on DRYS, 13 freaking points! I wonder how many trash cans he had to destroy before he became what he is today!

A Question for Razor and PCAGUY:
which online brokerage you are using? Do they have a good option trading platform?

A Question for PCAGUY:
When there is a sizable spread in an option you want to get in, what do you normally do? Place an order around the mid point of the spread range, or just bite the bullet and hit the ask?

A Note to myself
Start looking for good online deals on trash cans you cheap idiot, you may need a lot of them. If they work out for Razor, they might do the same for you....

Best online option trading firm?

Would anyone recommend a good online brokerage firm for option trading? I have been primarily using TD Ameritrade all these years, and when it comes to option trading, it is really rudimentary to say the least. I have just looked at OptionHouse and Fidelity (OptionTrader Pro), while both seem much more sophisticated than TD Ameritrade, I am not sure which one is better. My main criteria are:

1. Speedy execution with easy navigation within the system.
2. Pre-set order entry forms for all major option strategies.
3. Essential option analysis tools, especially for P/L analysis.
4. Automated generation of year-end tax form to be filed with income tax.
5. Low commissions and rates are plus.

Thanks in advance!

Have not got chance to review the charts yet, but if there is a gap up tomorrow morning I will actively look for short setups.

Weekend notes on the market and weekly calls

TA on Major indicies

On Weekly Charts: positive momentum declining for the 3rd straight week; stochastic show developing pullback of over-bought condition; volumes came in high for the second week in a roll; MA10 turning down for all major indices for the first time since the Mid-March bottom; candle formations mostly indecisive for the week.

On Daily Charts: bearish short-term MA bow-tie formation in nascent form for NASDAQ/Russell2000 and fully developed for DOW/SP500; negative momentum stalled for the last 3 sessions as the market rebounded; all show signs of over-sold rebound; MACD in solid down trend formation; volume/candle patterns remain bearish bias; NASDAQ/Russell2000 following the footsteps of DOW/SP500 as they decisively broke their May lows and MA50, but reclaimed those key levels by last Friday.

Thoughts and observations about the current market conditions and near-term outlook:

1. Technically speaking, all major indices have broken their uptrend that started Mid-March, and now in the process of resuming the primary down trend that started last November.

2. The market is oversold, and more rebound is possible for next week.

3. Something with deep and fundamental long-term impact on the market occurred this past week: Big Ben and Fed sounded alarm of raging inflation, with a never-before-heard hawkish tone. The inflation picture is becoming gloomy as major Asian economy (China and India) started raising rates this week amid the signs of run-away inflation. Some of those inflation will be exported to US, and with out-of-control energy and commodity prices domestically, Fed may be forced to raise the rate much sooner than they would like to. This is the key reason for my overall bearish view of the US stock market throughout this year, if not longer.


Overall Trading Strategy for Next Week

Once again, while some technical rebounding will occur next week, the market/economic conditions are increasingly unfavorable to SW longs. I will use short-the-rebound approach during this oversold rebound, in addition to seeking initial SW short positions in energy and other commodity sectors. My expectation for the rebound: NASDAQ 2490-MA200; SP500 1375-MA50; DOW: 12500-12750. A close above the top of those resist zones will prompt me to reconsider my TA.

Weekly Swing Trading Calls (holding time 2-5 days for the most)

1. AAPL
SW-L2, ez=155-161 (MA200), IDS <150, CSSW-S3, if it spikes towards 180 in the early part of the week, IDS>MA10, CS>180, IT=170.

2. BIDU: CTT between 300 and 360 with a 1-2% stop, don’t trade the mid range.

3. CME: SW-S1, ez=439-459, IDS>462, CS>MA50, IT=400.

4. DRYS: CTT between 65/68 and 84/88 with a tight stop just across the boundaries, don’t trade the mid range.

5. EWZ: SW-L2, ez=85-88, IT=MA50.

6. GS: CTT between 185/195 and 160/163, don’t trade the mid range.

7. MA: CTT between MA50/270 and 300/310, don’t trade the mid range.

8. PCLN: CTT between 120 and 132 with tight stops.

9. FCX: speculative S3, ez=125-127, IDS >130, CS>128, IT=MA50.

10. Steel sectors:
AKS: speculative S3 around 72, IDS/CS>73, IT=66.
X: speculative S3, ez=180-185, IDS/CS>186, IT=MA50.

11. Energy sectors:
APA: SW-S2, ez=142-150, IDS/CS>150, IT=132
CLR: speculative S3, ez=72-76, IDS/CS>77, IT=65
OIH: SW-S1, ez=215-220, IDS/CS>221, IT=MA50.
RIG: SW-S1, ez=149-152, stop just above 152, IT=140

12. Fertilizer/agriculture sectors:
CF: speculative S3 just under 160, CS>160, It=MA50
MON: speculative S3 around 140, CS>141, IT=132
With the lead of AGU, these names may well break to new highs next week, be patient and any setups must be initiated at least in overbought (daily/60 min) with stalled momentum/topping candle formations.

Notes on last weekend's blog survey

1. Thanks to those (45 of them) who took the survey even though I was a bit disappointed that the response rate is less than 25% of the readership.

2. I am encouraged that over 95% of the participants have a very favorable view of this blog, and I am especially pleased that over 25% of the participants have financially benefited from this blog. Several folks left very kind and generous words, for which I am grateful.

3. Just over 50% of participants like the idea of turning this blog from a "monologue" to a forum where folks like Razor and PCAGUY can regularly post their comments/trading calls, vs. about 13% opposing and 35% unsure.

4. Nearly 80% of the participants expressed their willingness to do their part to increase the readership of this blog. While I very much appreciate that, I am unsure about the outcome from such intention.

In addition, both Razor and PCAGUY favor the idea of a forum where a small group of traders exchange their market insights and trading ideas aimed at improving each others trading, and I am all for it. On that regard, I would like to ask anyone who is interested in that to shoot me an email at flyingwabbit@yahoo.com, and I will figure out the best way to do that while still keep this blog as a valuable resource to the rest.

For reasons I stated last weekend, while I will try to do my best, I might have to cut back the posting a little bit, especially for next couple of months.

I will post a brief version of weekend note/trading calls later today.

TGIF!

Not sure about you, but I am glad the week is over and I came through alright and closed week all in cash. The roller-coast week ended with a draw between the bulls and bears, which means that the battle will intensify next week.

For the day, I bought puts in both POT and AAPL, exited with a tiny profit, just enough for a fancy dinner tonight with my girl, maybe at some Japanese restaurant, and do some sake-boarding.

Learned lots of old lessons this week, well, sort of, just like every other week, but will likely forget most of them and make the same old same mistakes all over again soon. However, I have made one decision: starting next week, I will no longer day-trading. I will start with small position sizes and learn how to sit tight, especially when things are moving in my direction. In other words, I must become cool and sharp, just as Razor. Being ballsy like PCAGUY but without his experiences and deep pockets, the FlyingWabbit will end up as a rabbit stew served at some raucous parties of the bulls or bears, sooner or later.

What's your lesson for this week?

Feeling GASy laterly? No worry, inflation will be as tame as it has been!

Bulls jumped higher on beer and oil in the early going today, only to gap and almost crap as they found that the mixture was not exactly a shot in the arm. Tomorrow's CPI probably will bring a lot of volatility and bulls better hope that the bad news has been priced in the precipitous drop in the past few days.
While I will still seek bottom-fishing setups, I am turning more cautious after reviewing all the charts tonight (especially GE): I will further lower the ez for my stalking list (AMZN, BIDU,DYRS, EXM, CRM, CSIQ, EWZ, LUK, MA, PCLN, GS). On the other hand, if the market gaps up in light of CPI, I may consider shorting AAPL, APA, GS, CF, MON, POT, FSLR, AKS.

The bottom line: with relatively low VIX reading (meaning not enough fear), the expected technical rebound may not worth the risk of further downside, especially given next weeks ER from troubled financial sector plays such as LEH, GS, etc. This might be especially true for those who plan to hold the bottom-fished position for more than 2-3 days.

Kung Fu Bears!

Bulls, especially the tech bulls, gave bears plenty of black eyes since Mid-March, and along way, they started to mistaken the black-eyed bears as the fun-loving, bamboo-eating, trash-talking comic relief pandas, and they paid dearly for that mistake in the last four sessions. With today's drop, NASDAQ (and QQQQ) and Russell2000 finally joined DOW and SP500, breaking both MA50 and May lows. All major indices are oversold on the 60 min charts, but are still 1-2 day away from oversold on the daily charts.

It is quite obvious that at this stage, the easy/fast money from the short side has been largely made for most short-time-frame (3-5 days) swing plays, and like many of you, I would actively bottom fish. However, keep the following in mind when conducting such risky fishing business:

1. The overall market has now resumed its primary down trend that started Oct'07. Be very careful whenever trading against the primary trend, especially when it is going the same direction in every time frame.

2. Bottom fishing here is only for the technical rebound, so try to initiate as close to the possible bottoms as possible (deep oversold+key support), honor your stops, and don't be greedy when taking profits.

3. Watch the momentum and candle formation, especially on the daily chart. Currently, these two indicators strong favor more downside in the near-term.

4. Keep eyes on Leh and WM, if they keep dropping like a rock, the market won't go higher in a hurry as the fear of something terrible persists.

5. Speaking of fear, even the major indices went down a notch today, VIX did break
the earlier high. As I said before, no fear, no bottom.

Position update

I exited my AAPL July 185 calls early this morning when it broke the opening low around 183.5. I need to be a bit more patient with AAPL under the current market conditions. As a restless wabbit, I exhibited extraordinary patience today by sitting tight on cash, resisting urges to go long on stocks such as AAPL, MA, PCLN, DRYS, and GS. I feel that I might get better entry prices in next 1-2 sessions.

As for tomorrow, I might start some fishing if the market gaps down at the open, I will refrain from chasing the long side if it gaps up at the early going.

A special note:

When answering question #4 in my survey: "If a significantly increased readership will drive me to maintain the current pace at the blog, are you willing to help out on this by means such as recommending it to your friends or/and post your recommendation on other venues such as Yahoo stock discussion boards?", about 80% of the participants said yes, and I do appreciate that. May I ask those folks to follow through their words in next couple of weeks whenever you think a post is worth recommending. I will see if there is any noticeable increase in the readership.

Thanks in advance.

Big Ben turns hawkish?!

When Big Ben turns hawkish, the real inflation picture is likely to be worse than most would imagine, and that casts a long shadow for the market in the months to come. In the meantime, bulls tried very hard to hang in there, and they might get some bounce tomorrow. I hope many energy/commodity names will move up in next few days so I can find better entry points, possibly use backspread puts as initial top catching strategy.

I bought AAPL July 185 calls this morning when it broke 183.5, and exited half near 186, while holding the rest for tomorrow. I did not keep all for tomorrow mostly because I am getting concerned that something bad might occur (just look at the charts of LEH and WM) that will drag the market down. I keep half of the position because even though it failed to close above MA10, it formed a nice bullish engulfing candle today. With any help from the overall market, I expect AAPL to test the 188-192 zone in the next day or two, at which time I might exit half of the remaining position, while leave the rest for a possible run to 200.

Also bought GS July 170 put around 169, but closed out for a small gain. This market is becoming very difficult for me to have any convictions.

Another day, another old lesson, duh!

First, thanks to all who took the survey, I will talk about the survey results and my thoughts next weekend.

Position update:

I took a good slap on the face today for my last Friday's AAPL July 185 call position. I managed to cut the loss around 183.5 before Jobs gave the presentation, and later, scrambled a DT put trade when it snapped back near 184 and exited just above 179, and luckily even out the earlier loss and then some. However, last Friday's call entry was a terrible decision as it was NOT based on any technical analysis, but on some kind of "great idea" that supposedly reflecting my incredible insights and convictions. Folks, this is yet another my same old same mistake that almost always cost me dearly. Though I had not committed it for quite sometime, I am extremely disappointed and amazed how sometimes I could so effortlessly leave all my painful lessons behind in the heat of the actions. Disgusting stuff like this makes me wonder if I should just give the whole trading thing up for good.

Let me say something about AAPL while we are at it:

AAPL is at a very tricky point, another bearish candle and close below 180, a test of MA50 would be a given, and a test of MA200 or even the gap near 156 is not out of the question. On the other hand, if it manages to close the gap near 185.5 and closes above MA10 with a bullish candle, it may test 192 or even 200 before July 11. I will keep an eye on how it opens and behaves if it approaches 185/186 before deciding which way to go. Along with the new iPhone, there were also some business model changed announced today, and I wouldn't be surprised that big boys are figuring out the math today before move in/out tomorrow, we shall see. I wonder if you all feel bullish/bearish about AAPL right now.

Today, I was itching at pulling triggers on shorting ACI, MON, MOS, JCG, CF, and long BIDU, GS and MA. But I lost focus while choking on the sour apples. I will go through them again tomorrow.

As for the overall market, let me just say this: if I shorted before last Friday's plunge, I will not exit just yet, and since I did not, I will actively look for the short-the-rebound setup.

The worst is behind us, right? right?!

*************************************************************************
I appreciate those who have voiced their views via the survey, for those who have not done so but care about the future of this blog, please take a minute to complete this very short survey.
************************************************************************

The market rallied off the March’08 bottom for nearly 10 weeks on the notion that the worst was behind us. The rally stalled for 2 weeks before showing signs of reversal in the last week or two. Both DOW and SP500 completed the 1-2-3 reversal last week, while NASDAQ and Russell2000’s break-out on last Thursday have all the looks of a head-fake following the huge sell-off on Friday.

On Weekly Charts: positive momentum all declining; both stochastic and RSI show initial signs of over-bought pullback; volume patterns bearish for the past several weeks with last week’s drop came in on the highest volume since the mid-March bottom; extremely bearish candle formation for both DOW and SP500; MA10 turning flat for both DOW and SP500 while still upwards for NASDAQ and Russell2000.

On Daily Charts: MACD crossed down and pointed down with negative momentum on the rise; DOW/SP500 in oversold; volume/candle patterns clearly bearish; NASDAQ/Russell2000 following the footsteps of DOW/SP500 with their latest failure of reclaiming MA200; DOW/SP500 solidly broke through MA50 while NASDAQ/Russell2000 still have some decent room; all major indices are now at major support levels.

Thoughts and observations about the current market conditions and near-term outlook:

1. Technically speaking, the market is at a precarious point: a further break-down of the market leaders NASDAQ/Russell2000 would confirm the trend reversal of DOW/SP500, and puts the testing of March bottom in play. The tenacious tech bulls are increasingly beleaguered, and their chance of lifting the rest of market is slipping.

2. Last Friday’s job report highlighted a new ominous trend: after weeks of overall benign/neutral headlines, the macro-economical conditions are going down a notch, which can be seen clearly in the banking/brokerage sector (breaking down to new lows) and housing sector (approaching previous bottom).

3. Oil price, shot up with the help of short-squeeze in the past two days, has the momentum to go higher in the near term. However, it is getting closer to the end of its parabolic movement. On this notion, I will start to actively seeking SW short setups in oil and all related sub-sectors.

4. The market reaction to AAPL’s new product release on Monday now becomes extremely important: a big sell-off could drive the tech bulls into the woods and a big run-up may re-ignite the tech bulls and save the market, well, for at least another day or two.

Overall Trading Strategy for Next Week

While some technical rebounding will occur next week, the market/economic conditions are increasingly unfavorable to SW longs. Personally, I am leaning to short-the-rebound approach, in addition to seeking initial SW short positions in oil and other commodity sectors. The key is that making sure you only long extremely oversold conditions (both daily and 60 min charts) and short the extremely overbought conditions, and ideally you have solid S/R in the vicinity as the stop references. As the battles between the bulls and bears in white-hot, be agile in locking-in profits.

Weekly Trading Calls

1. AAPL (for Monday):
SW-S1, IF it closes below 179/180 with a bearish candle/good volume, IDS around 182.5, IT=MA50;
DT-L1, if it spikes towards 170 following Job’s presentation, IDS just below 169, IT=175/176
SW-L1, IF it closes above 192 on a bullish candle and good vol, IDS just below 189.5, IT=200.

2. DRYS: DT-L1 if it spikes towards MA50/MA200, IDS just below 80, IT=88.

3. FSLR: CTT between 220/230 and 275/MA50. no mid-range trading.

4. GS: L3, ez=160-166, IDS just below 160, DT-IT around 170, SW-IT around 180.

5. SOHU: SW-S2, ez=88-90, IDS just above 92, CS just above 91 on bullish candle, IT=75/MA50.

Initial short setups in oil and related sectors:

CLR: extremely overbought on weekly/daily; huge run-up in recent weeks; speculative-S1 around 80, with a stop at 5% price move; IT=MA10

RIG: SW-S1 if it spikes towards 150/152, IDS just above 153, IT=MA200

APA: SW-S2, ez=139-145, IDS just above 150, CS above 142 on bullish candle, IT=120.

ENER: speculative S3 around 70, stop just above 75, IT=MA10.

Initial short setups in coal sector:

ACI: speculative S3, ez=80-85, stop just above 85, IT=65

JRCC: speculative S1, ez=42-50, stop just above 52, IT around 35

WLT: speculative S2, around 100, stop with a CS above 100 on bullish candle, IT=85/90.

I will also keep eyes on agriculture/fertilizers (AGU, CF, MOS, POT, MON) for possible initial short setups, but I will be more patient on this group.