High & Low

After a nice run up from Mar 18th, we, bulls, now reach to a critical point where a shake out is needed. We know there’re some mules, donkeys, monkeys, bugs…whatever trying to gain nice profit from our hard work by enjoy the free ride up. Hey, you! yeah, you smell donkey!

Dow clearly has higher lows and higher highs in the recent days. A closer look, you’ll see DOW is in the resist zone with considerable down side space that Bears (if still alive) can have their imaginations on. Don’t be surprise if DOW play the same trick as it had in early Feb this year, back to 12200-12300 level to shake fainting Bulls out and bring more silly Bears in. Pay attention to MACD/RSI, we’re in the up trend, that’s the trend, as long as this trend remains, shake up is acceptable. Yup, Bulls, we can take a break from Mar 18th’s 600+ point run up, take your clothes to cleaner and stay aside or, if you still enjoy the good bear days, do some shortings in the weakest sector.

If you turn your head around and look at NAZ, the chart basically telling the same story: reaching the resist zone/line while still in the up trend. Also there’s a gap in NAZ, created by yesterday’s gap up and since then NAZ is above MA50. Having a gap under MA50 is not a good thing, because all gaps shall be filled. In other words, we will see NAZ <2300 soon. Good news? MA50 is flat now. Having the index back to <MA50, fill the gap, make another higher low, then slowly push the MA50 line heading up again, by doing this, RSI will not step into oversold area that quick, help Bulls to release the power slowly and steadily.

Jimmy from JPM placed an order last weekend on BSC for $2/share and tried to grab this price error deal over. That’s for sure the deal of the year if BSC shareholders honor this sale (which, from my view, they won’t, even I want them to approve this. lol.) . The whole market suddenly got energy on this bargain hurting move from JPM. “Hey, the FED is backing them up and they still have power to buy out something!” mixed with LEH and GS’s write down news, DOW closed as a spin on Monday with huge VOL. Then there’s deal of the month event: FED .75 rate cut today. woohoo~ another 400+ point gain day and here we are, above MA50 again. Today’s VOL is a little light but anyway today did help making Monday’s low a dip on the chart.

Now we have higher low, higher high in chart/RSI/MACD, although VOL is shrinking a little and we’re still under a major down trendline. I’d still like to call it a turning point here, if not long term, at least short to mid term.

Knowing LEH and GS just borrowed money from FED and the amount is not really huge comparing to the sub prime mortgage  they’re carrying. I am just guessing bull side is gathering power to deliver a powerful blow to bears. In the past one and a half month, bears can’t push the market into lower level, looks like they’re losing stream these days. I just sent my bear costume to the cleaning store, and now it’s time to try out the shiny bull costume. ;-p

Tomorrow, will be the deal of the history, VISA IPO, looks like the stage was setup beautifully today by FED and other big sharks. Just let it rock!

Today was an important day for DOW. With an open in dip and went south quickly, market fought back into the high ground during the mid-day and finally close in green. The long tail hanging out today pretty much neutralized yesterday’s long hair. However, be aware, MA50, MA200 still heading south, and market is still under double resist line pressure around 12200 level. Tomorrow is Friday, the market might once again play tricks with us. Having a call/put combo in hands in these days, makes me feel a little bit safe. Until Dow breaks 12800 again, we can’t say we’re really out of this sh!t…

Haven’t update any post for some days. Simply watching the market made its move is another kind of joy. DOW dip down to 11700 level, close to my previous 11220, oh well, but not yet, not yet… Still I am not seeing much power from Bulls in the market right now, the $200B news broke out on 11th. just give Bulls a sweet candy, they’re so excited and jump up to take their bite. Market didn’t follow on 12th, although the VOL is not high comparing to the day before, but the long shadow on the top of this red candle does tell us something: Bulls can’t hold today’s high ground, gave it all up and Bears just tasted another bite from some early Bulls.

Not yet, still room and time to get down, 11220, I will keep this target for now.

After breaking down with decent VOL, Dow gain back a little today on a light trading day. Day high today didn’t get far enough to stand above the break down line, hence I still take it as a valid break down pattern. Breaking 12000 seems not a question any more, and follow by a retest of Jan low can be expected. We’ll see how it goes.

Most of the stocks on my watch list show either consolidation during a downtrend or a continue strong dive. Market still in a south-heading mode, I will keep my bear costume on for a while.

As per the last post, if Dow can’t hold the little triangle low support line, it will head down more and we should put up our bear costumes and have a party. Well, Dow did lost ground on that level and break down with good VOL size. Funny thing is Dow forming another triangle by the end of last trading day, hmm… short term (1 or 2 days) rebound is possible, but, hey, it’s down with VOL from the resist line, joining the bull side at this point would be too much for me, don’t you think so?

Zoom it out a little, on the weekly chart: Last week DOW gave up all the gain in one day and post a big red candle with long top shadow, good VOL as well. As a retest for the previous H&S breakout’s neckline failed again, the big trend (down) will just resume. As per H&S theory, we’re looking at 11220 as the target for this break down. 12000 level got tested 5 weeks in a row, thus I think it’s hard to keep this time.

A down day after 4-day rally came today, hitting DOW back down to sub MA50 level, showing us the 12746 resist is for real (Mid-Aug dip, Mid-Nov dip, Feb high). Today is a down day with light VOL comparing to last 4 days, looks like majority of the money still stay in the court, bulls not willing to give out the ground they gained in these days and shorts not willing to open more position even at this height. Looking back to Mid-Jan, days when DOW down with VOL, this time I would say down side is very limited.

Same as Nasdaq (or, should I say, Nasdaq is same as DOW? hehe.), a triangle setup was done for DOW and market breakout with slightly strong VOL. Bulls might not want to rush to the high ground with their asses naked, a pull back like today’s scale is meaningful, and, acceptable. As RSI and MACD also support the direction heading north, we should be able to see sunshine soon. Of course, if market dip down under 12400 again on this pull back, everybody please put on your bear costumes and join the party for some steak!

The market still in good shape, let’s see if it can pull back to test 12500 area this time and resume it’s up trend.

在经历4个多月的下行趋势之后，沪指逐渐显现出底部的形成。

2月初和前天的底部均守住了由去年6月7月顶创造出的支持区，不妨看作是对这个区域的一个确认，2月第一次下探测试之后大盘反弹，但在MA200上 被接连打压两次，似乎有心无力。沪指前天做出了7个月来的新低，然而RSI/MACD并没有做出新低响应，相反的，RSI/MACD均形成了higher low的形态，与大盘的lower low配合形成正向背离。

值得关注的是现在指数仍然在一个下降趋势中，无论是指数K线还是RSI/MACD，都还没有冲出这个通道，前天的底部碰触通道下沿/支持区后迅速拉起，现在仍然处于一个反弹阶段，能弹多高，还是直接根据RSI/MACD背离而拉起，仍然是未知数。

就目前来看，此波反弹目标在4500附近，如果此次能突破下降通道，将回去测试突破MA200/MA50/阻力区。鉴于现在MA50即将向下穿越 MA200形成死叉，如果这次无法将盘面稳定住或者小幅托起，让死叉成型，下降通道则很有可能继续，直至测试4000关口甚至3750一线。

Up from late Jan’s dip, Nasdaq’s lows (Jan 23rd, Feb 7th and Feb 22nd) and highs (Jan 10th, Feb 4th and Feb 14th) together form this triangle shape in the past 2 months. Lower support line is kept nicely, RSI and MACD moving up with the index, pretty much in sync with each other. RSI leaving the 30ish ground, moving into 40-50 range, signals this round of correction is taking a break. MACD post out a buy signal around Jan 30th/Feb 1st also gave bears/shorters a yellow card.

In the past two days Nasdaq picking up a little speed. Today it broke out a little bit heading up with slightly lower VOL. Printing out 4 white candles in a row shows an OK strength going north.

The next resist will be 2376.22 (high of Feb 14th), follow by a strong resist on 2410 level, which most likely will be MA(50) at that time as well.

As this stage, I would say Nasdaq might be ready for a breakout to test 2410 level resist. However, the first 2410 test might fail with weak VOL.