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Thursday, July 03, 2008

What's Obvious, Is Obviously Wrong...

Right? And a bounce was obviously in the cards, everyone was talking about it, everyone's indicators were showing it, the lone hold-out was the VIX and why not, why be fearful when you know a bounce is just right there? Well it seems the market makes a name for itself by making as many people wrong at any given moment as possible and that just may be what happened this week.
When all the monkeys line up at the feed bin for a monkey treat, the sadistic side in most of us would like to give them a good blast with a water canon and watch them scurry away. While most of us would refrain from that type of behavior, the market makes it's reputation from such activity day in and day out. And for each day that a stock is up or down, another trader is thrown upon the heap of despair and ruin, I know, I've felt that way many times, even this week.
They say the market is a cruel mistress, she can make you the happiest man alive, making you feel smart and witty, always laughing at your jokes and then in a blink of an eye, turn her back on you and act as if you never existed and make a grown man want to cry. I know I must have stole a few lines from a song or two there, pardon me.
In any case, the bounce was obvious, the Key One Day Reversal was put in, although on somewhat less than astonishing volume (the only doubt) and traders lined up for their monkey treats only to be hosed down by the water canon. In all of the carnage and chaos, something true seems to still exist. While the wreckage hides the existence, it would seem that, buried among the ugliness of the breadth readings, if you look close, there are some hints that she may still be ready to make good on her original intent.
Maybe after a restful July 4th weekend and assuming that she doesn't leave too bad a taste in everyone's mouths today, perhaps we'll indeed see that rally. The VIX actually crept up a peep higher today, although not where it should be quite yet. While there are fewer and fewer remaining, like King Arthur's knights after years of searching for the Grail among the wastelands, there are still a few 3C positive divergences left. Another broadside from the market though and I suspect that even those will succumb to her maltreatment.
Labels: 3C, bull market, momentum trading, qqqq, stocks, VIX [image: 125x125.gif]
posted by bulltrapper at 12:05 PM0 CommentsLinks to this post[image: icon18_email.gif][image: icon18_edit_allbkg.gif]
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Wednesday, July 02, 2008

DUG Ready to Make Good on That Wedge?

[image: Picture+2.png] It's been awhile coming, DUG has been outside of the descending wedge and ready to retrace it's path back up toward $45-$50. DUG has spent more time than I'd like to see, trading somewhat laterally beside the apex of the descending wedge. Today however, may just indeed shape up to be a Key Reversal Day to the upside. All of the prerequisites are in place, we have a gap down with a significant low being made, we have what appears to be rather large volume shaping up on the day and what may just be a close above yesterday's close. More than that, we have a retest of the lows from May 21st, and DUG failed to attain those lows, instead finding support above, yet still providing enough of a shakeout below a recent trading range to shake loose any dead weight and allow the serious traders to pick up some shares on the cheap.
Even more important than that, at least to me, my 3C indicator (provides an insight into the state of accumulation/distribution in a stock/ETF/Index) on an hourly time frame, has attained a rather impressive leading divergence to the upside. It is a really exciting looking chart from my perspective and I believe the long wait may actually be drawing to a close. Having difficulty uploading it now, I'll get up up after market close.
Labels: charting, charts, Countertrend trade, crude, DUG, energy, OIH, oil, technical analysis, trade guild, USO [image: 125x125.gif]
posted by bulltrapper at 12:55 PM0 CommentsLinks to this post[image: icon18_email.gif][image: icon18_edit_allbkg.gif]
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Tuesday, July 01, 2008

Do You Believe Bears Can Bounce?

You better!
More on that later! [image: 125x125.gif]
posted by bulltrapper at 6:11 PM0 CommentsLinks to this post[image: icon18_email.gif][image: icon18_edit_allbkg.gif]
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Thursday, June 26, 2008

OIH Comparing Charts

On Tuesday I posted a 3C chart of the OIH along with my thoughts on how I thought that the rally at that point was destined to fail, or something along those lines. Here's an updated chart. You can compare it to the one below. Basically as long as the negative divergence persists, I see no reason for a breakout, however that could change within minutes if the buyers show up meaning business. If I see it happening, I'll try to post that chart as well.
[image: Picture+7.png]
Labels: accmulation, breakout, IH, momentum trading, nega distribution, oil, Otive divergence, trade, trader [image: 125x125.gif]
posted by bulltrapper at 10:44 AM0 CommentsLinks to this post[image: icon18_email.gif][image: icon18_edit_allbkg.gif]
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Tuesday, June 24, 2008

FED to Burst the Oil Bubble with Surprise Rate Hike!

Wouldn't that be an interesting development Wednesday?
I wanted to briefly mention, you know the Fed is meeting today (Tuesday) and tomorrow (Wednesday) with a policy statement set for tomorrow afternoon. Wouldn't it be interesting if the Fed came in with a surprise rate hike, in effect buoying the crumbled dollar and crushing the speculative trade in oil? Or even if they just came in with some real serious tone on inflation. Considering all the headlines today between UAL laying off 15% or 950 of its pilots and reducing its fleet by 100 aircraft due to rising fuel costs. UPS lowered its guidance for Q2 citing rising fuel costs and a sluggish economy. DOW Chemical is coming in with ANOTHER price increase of up to 25% in July, 25%! Consumer Confidence slipped to its lowest level since, well, just about since the time the last Bush was leaving the White House-1992.
Consider this for a moment, Crude oil is up 98% from one year ago. I think crude was about $25 when Bush took office. Hey, if he had been a pig farmer, we'd be paying $30 for a package of bacon. We have what we have and that's all we have until we have something different.
In any case, maybe the Fed feels a little pressure to take some of the speculative "bubble" out of oil and since the Saudis clearly can't or won't do it, as evidenced by the market's reaction to their rather pathetic supply increase, maybe the Fed will. After all, OPEC's position has been, in a nutshell, "There's plenty of supply in the market, the only reasons for elevated prices are speculators and the falling dollar". If that be the case, the Fed could quickly nip each of those in the bud and actually kill two birds with one stone.
The way I see it, a rate increase, especially a surprise rate increase, would be taken as a very aggressive anti-inflationary position. The mere act alone would cause the dollar to strengthen, not to mention the fundamentals that would change also causing the dollar to strengthen. Both the strengthening dollar and the aggressive stance of the Fed would cause a panic among any over-leveraged speculators causing a massive wave of selling. That act alone could be enough to finally burst this bubble. Will they do it? I doubt it, but it sure is fun to speculate.
Labels: burst, ...