charts and chatter

No extremes on the put/call to show fear or greed and no real help from most charts.   The long trend line from last year is broken and we have a more skittish and uncertain market now,   The hourly tick summation is overbought but not extreme.   The daily tick shows no institutional participation on the downside and only sight participation on the upside.  The only chart to show where we are headed is cummulative breadth.  It is telling that we break over 1111 which puts us near the considation of 1115 from last year.   A break of that puts us at 1120 magic number.   There is no confluence of charts so the prediction is weaker.

the money flow charts are diverging down but pointed up on the shortest time frame.

We have the first of the month Monday and with talking with traders they will deploy more cash if we hold but they have less cash than early last week.

I see alot of blogs showing straight down from here and some showing consolidation and no one talking about quick upside.  So to frustrate most would be an upside surprise.   I have doubted this rally myself since July and have kept a short on just in case the whole time only to pare it down the last swoon.   I use myself as a contrarian indicator and I am itching to go short again which gives me pause to wait until the next upside surprise and short scramble.

The market character has changed since january but I trade best when I am uncomfortable.  It was uncomfortable to short in early january and it is uncomfortable to go long now.   I have some calls already on for defined risk and will be looking to short only with a loss of momentum and renewed euphoria.  This is a decent week to use options.

The dollar needs to be watched again closely this week as it will an important tell this week again.  It is hard to understand the end game of the fed but the housing market stabilization didnt happen and failed bond auction has them looking at their game plan hard.   In my opinion the fed will be more short sided than they were last year when they bought every toxic asset they could and pumped so much money into the system.   At the core the fed is still a bank and this is en election year and the MA republican win was a big deal and changed the health care tactic.   I stay out of politics but Obama has signaled that some form of health care will be passed and I think was a big driver of the mounds of liquidity pumped into the market.

My trade plan this week is upside bias with upside spike at some point then a possible failure that starts a new leg down.  Friday was a doji and Monday is a Taylor buy day which sets up Wednesday as a sell short day.   I am often wrong and will trade accordingly but as  a trader you have to have a trade plan and press it when it works and cut it when it doesnt and not take is personally.   Having a trade plan gives you peace of mind.  Just don’t get married to it and change if it changes.  We all know GS and the fed are manipulating the markets and as traders we need to grab the end car and ride along and not fight it.  From personal experience I know you can not stand in front of a train  no matter how wrong the market is.

On individual stocks there is a beautiful triangle in the daily AMZN chart and the nas big techs like AAPL look good.  All the big funds own appl and has to be watched.  GOOG on the other hand has not been well but if it catches a bid it will push up the nas to lead it higher pulling everything higher.    The price on AAPL and GOOG make then great tech tells as they are hard to buy at these levels.   And as always need to watch C and GS as they are market tells as always.  C especially watch 3.50 as the current resistance and magical whole number.  GS is 160.   Watch the spec stocks like POT and FSLR.  FSLR expecially has big short interest.

Quick side note whole numbers have been studied over and over for their meaning and we seem to be wired to watch them.  Studies show people think 160.01 is much higher price than 159.99 so whole number when they line up with support and resistance levels take on more importance