The markets have been down all week until today, posting very small yet still positive gains today. After the Fed's surprise "no taper" announcement last week, the markets irrationally skyrocketed for a day or two. They have been nose diving since, as fear that congress may allow the US to default on it's debts sets in.
Congress is in another debt ceiling debate, where the debate whether to raise the debt ceiling so the US can pay it's bills and honor it's financial obligations. Currently the US will run out of money by early to mid October if the ceiling is not raised, and this would result in the US defaulting on it's loan payments. This would prove catastrophic.
Everything points to congress reaching a decision about this on Monday, September 30th. Considering tomorrow is Friday, I think we'll hang in there on some down-side plays and then pull out by the end of Friday, then wait and see what the markets do on Monday.
In other news, it was revealed today that in the month of September so far, companies have issued a record amount of bonds as rates have been so low that it becomes very financially "advantageous" to do so. A big part of this too could very well be fueled by the Fed's own bond buying program.
Thursday, September 26, 2013
Wednesday, September 18, 2013
September 18th
Making this a quickie as I am really REALLY angry with myself right now.
I went AGAINST my own advice... And traded today...and lost my ass at 2:00 when the fed shocked the world by announcing they would not taper! I was in a put option play on the QQQ and when 2:00 hit, my position got cut in half. I am so angry I cannot put into words how angry I am!
Lessons learned: when the Fed is expected to make a huge announcement, EXIT YOUR POSITIONS THE DAY BEFORE. There is too much potential for a massive loss!
Lesson two: I stayed in the trade as long as I did because I was already down on the trade. YOUR FIRST LOSS IS YOUR BEST LOSS. IF THE TRADE IS NOT WORKING, CUT YOUR LOSSES AND GET OUT. If it's not working NOW, WHEN IT'S SUPPOSED TO, the why will it work later? Don't give a losing trade "time to work"... Cut and run!
I'm off to lick my wounds and hopefully not lose my mind. I am a very faithful man and I can say with full confidence yes I was stupid today and yes I need Jesus right now.
Monday, September 16, 2013
September 15th, 2013 QQQ Analysis
Chart is below, and as you can see there was a MAJOR gap up in the QQQ followed by a sell off that lasted pretty much the whole session.
The gap up was supposedly caused by Lawrence Summers withdrawing his name from candidacy to become the next Federal Reserve Chairman after Bernanke steps down in January. The hard sell off is a mystery in itself, but it was due for a short term dip anyway, so that's most likely the cause. The gap up probably just gave it extra room (and an extra excuse) to fall.
The futures are down as I type this at 8:25 PM EST. Perhaps this is the "pop" followed by the "hard sell off" I've been waiting for...
The gap up was supposedly caused by Lawrence Summers withdrawing his name from candidacy to become the next Federal Reserve Chairman after Bernanke steps down in January. The hard sell off is a mystery in itself, but it was due for a short term dip anyway, so that's most likely the cause. The gap up probably just gave it extra room (and an extra excuse) to fall.
The futures are down as I type this at 8:25 PM EST. Perhaps this is the "pop" followed by the "hard sell off" I've been waiting for...
21 Minute Chart
It certainly did a good job smashing downward through a key support level (the bold pink line). The StochRSI is currently oversold and the MACD histogram is showing some signs of recovery. Having said that, it's too early to tell if the QQQ will rebound or continue falling.
Check the NASDAQ futures Tuesday morning and use them as your trend chart when making trading decisions for the QQQ.
Oh, and I WILL NOT be trading on Wednesday as that is when the Fed will announce their tapering plans following the FOMC meeting. There's too much potential for a trade to go against me during Wednesday's session, so I won't be participating. I will, however, be actively watching to see how the market responds, and I will be eagerly waiting for an opportunity to take advantage of this!
Saturday, September 14, 2013
QQQ Analysis, September 14th 2013
Wanted to take a moment to look at the QQQ seeing as it's probably my most frequently traded security.
I'll be posting the 21 minute, Daily, and Weekly charts. When trading the QQQ I typically use the Nasdaq 55 minute futures as my trend chart, however I'm doing a more in-depth analysis of the Q's so I'm doing longer term charts.
The 21 minute chart (aka my "Decision" chart) shows that yesterday there was a huge dip in the morning, but the QQQ recovered as the day went on, and pretty much got back to even. Most of the good trades have been to the upside on the Q's lately, and you'll see why when you look at the Daily and Weekly charts.
The QQQ has had a few dips the last couple of months, but for the last week or two it has been going up strong. As you can see, the last few days it seems to have stalled out. A lot of this is indecision over the upcoming Fed meeting, which we'll know more about the Fed's bond-buying tapering plans this coming Wednesday.
The MACD histogram is shrinking, and the stochRSI is topped out in the "overbought" region, so I would suspect some sort of dip coming up here soon. Plus the ADX is showing weakening in the current uptrend. The historical timing of this would coincide with the after-Sept-10th dip that I've been expecting.
The large pink line on the Daily is a trend line drawn off the weekly chart, which is coming up next...
Up, up, and away! The weekly has been going up strongly since about a year ago, and has been holding a steady trend shown by the bold pink line I drew. The weekly MACD histogram is showing some weakness. The stochRSI still has some room to run, and the candles have yet to hit the top bollinger band on the weekly. The weekly shows that, long term, the QQQ still has some room to run to the upside.
In Summary
In summary, there is a lot of indecision headed into the results of the Fed meeting next week. We'll know the results on Wednesday, September 18th. The 21 minute chart is showing choppiness, having sharp/quick downside moves that are brief and more sustained intra-day upside moves. The daily is showing signs of topping out, and may have a brief downside move soon. The weekly is showing that it still has some room to run to the upside.
I would say we're going to experience a dip going into the Fed meeting as investors ponder just what the Fed will do. Then, depending on the results of the Fed meeting, we'll either see the QQQ rocket up or sell-off sharply. There's so much hinging on the Fed meeting that I honestly cannot predict what will happen, only that (from a purely charting standpoint, ignoring the Fed entirely) there should be a short term dip on the daily soon.
I'll be posting the 21 minute, Daily, and Weekly charts. When trading the QQQ I typically use the Nasdaq 55 minute futures as my trend chart, however I'm doing a more in-depth analysis of the Q's so I'm doing longer term charts.
21-Minute Chart
The 21 minute chart (aka my "Decision" chart) shows that yesterday there was a huge dip in the morning, but the QQQ recovered as the day went on, and pretty much got back to even. Most of the good trades have been to the upside on the Q's lately, and you'll see why when you look at the Daily and Weekly charts.
Daily Chart
The QQQ has had a few dips the last couple of months, but for the last week or two it has been going up strong. As you can see, the last few days it seems to have stalled out. A lot of this is indecision over the upcoming Fed meeting, which we'll know more about the Fed's bond-buying tapering plans this coming Wednesday.
The MACD histogram is shrinking, and the stochRSI is topped out in the "overbought" region, so I would suspect some sort of dip coming up here soon. Plus the ADX is showing weakening in the current uptrend. The historical timing of this would coincide with the after-Sept-10th dip that I've been expecting.
The large pink line on the Daily is a trend line drawn off the weekly chart, which is coming up next...
Weekly Chart
Up, up, and away! The weekly has been going up strongly since about a year ago, and has been holding a steady trend shown by the bold pink line I drew. The weekly MACD histogram is showing some weakness. The stochRSI still has some room to run, and the candles have yet to hit the top bollinger band on the weekly. The weekly shows that, long term, the QQQ still has some room to run to the upside.
In Summary
In summary, there is a lot of indecision headed into the results of the Fed meeting next week. We'll know the results on Wednesday, September 18th. The 21 minute chart is showing choppiness, having sharp/quick downside moves that are brief and more sustained intra-day upside moves. The daily is showing signs of topping out, and may have a brief downside move soon. The weekly is showing that it still has some room to run to the upside.
I would say we're going to experience a dip going into the Fed meeting as investors ponder just what the Fed will do. Then, depending on the results of the Fed meeting, we'll either see the QQQ rocket up or sell-off sharply. There's so much hinging on the Fed meeting that I honestly cannot predict what will happen, only that (from a purely charting standpoint, ignoring the Fed entirely) there should be a short term dip on the daily soon.
September 14th, 2013
Today is a Saturday, but I figured I'd post some thoughts I have on the market as of late.
I keep expecting the market to make a down move just because A) September is historically the worst month on the stock market and B) According to the "market calendar" I follow, September is supposed to be a down month after the 10th with some buying opportunities presenting themselves toward the end of the month.
So far things have been up, up, and up some more. The Fed is expected to announce their tapering plans for their bond buying program at the conclusion of a 2 day meeting on Wednesday, September 18th. Given how the markets reacted to even slight whispers of Fed plans back in the summer, I'm sure the markets will have some sort of reaction. Whether this reaction is up or down, though, depends on what the Fed announces and how they announce it.
I think it's good long term, because they've been pumping so much "heroin" into the market with this bond buying that the market has become high and addicted to it.
Additionally, the US has come to an agreement with Russia for a peaceful resolution to the disarmament of Syria's chemical weapons cache, at the behest of Vladimir Putin. One week ago we were beating the drums of war, and now we've reached a peaceful resolution. This will certainly bode well for the market, seeing as it was showing some weakness at the mention of war a few weeks ago.
On the whole not a whole lot else going on. There are some signs of economic weakness popping up such as weakening consumer sentiment, and also weakening in job creation. We continue to create low paying "hamburger flipper" jobs, while good paying jobs seem to be getting more and more scarce. This is quickly turning into a nation of kings and paupers.
I keep expecting the market to make a down move just because A) September is historically the worst month on the stock market and B) According to the "market calendar" I follow, September is supposed to be a down month after the 10th with some buying opportunities presenting themselves toward the end of the month.
So far things have been up, up, and up some more. The Fed is expected to announce their tapering plans for their bond buying program at the conclusion of a 2 day meeting on Wednesday, September 18th. Given how the markets reacted to even slight whispers of Fed plans back in the summer, I'm sure the markets will have some sort of reaction. Whether this reaction is up or down, though, depends on what the Fed announces and how they announce it.
I think it's good long term, because they've been pumping so much "heroin" into the market with this bond buying that the market has become high and addicted to it.
Additionally, the US has come to an agreement with Russia for a peaceful resolution to the disarmament of Syria's chemical weapons cache, at the behest of Vladimir Putin. One week ago we were beating the drums of war, and now we've reached a peaceful resolution. This will certainly bode well for the market, seeing as it was showing some weakness at the mention of war a few weeks ago.
On the whole not a whole lot else going on. There are some signs of economic weakness popping up such as weakening consumer sentiment, and also weakening in job creation. We continue to create low paying "hamburger flipper" jobs, while good paying jobs seem to be getting more and more scarce. This is quickly turning into a nation of kings and paupers.
Tuesday, September 3, 2013
September 3rd, 2013
Alright, we're moved into the new house and settled. My office is set up, and most of the "to do" stuff that needs to be done when one moves into a new house (painting, caulking, spackling, etc etc etc) is done. This means I can finally get back to updating this blog on a regular basis.
I know the month of August was a huge down month in the market, and there was a lot of talk about the Hindenburg Omen. Additionally, there's still a lot of anxiety about the situation with Syria. I'm guessing that if we do go to war with Syria it may negatively impact the markets.
On the whole, though, the market hasn't been that volatile the last week or so. Today was the first trading day after Labor Day, though, and that means we're watching for the post-Labor-Day "pop" which will be followed by a hard sell-off.
The markets in general, though, have definitely turned over. I think a lot of what we're seeing is stock prices being over-inflated by the Fed's "heroine effect" of pumping money into the system with their bond-buying initiatives. Don't get me wrong, I say ride the wave as long as they keep feeding it, but don't expect to ride this tidal wave of cheap federal money for ever. When this does end (and it will), just be ready and make money to the downside.
Actually, be ready to make money to the downside anyway, because that's where the market's headed for at least the next month or so. There is still the very real possibility of a crash by October. Especially since there's possible war with Syria looming, possible fed tapering, and mutual funds have to dump their losers by the end of October for tax purposes.
Today the biggest news came from the tech giants.
It was revealed that Apple's share of the smartphone market rose 7.8% compared to this time last year, and Apple now controls 43.4% of the total global smartphone market. Apple shares surged early morning on the news, but slowly declined as the day wore on.
Microsoft bought out Nokia in a $7.2 Billion deal. Shares of Microsoft sank over 6% while shares of Nokia surged over 25%. Microsoft struck the deal hoping this would give them a larger foothold in the mobile devices market, currently dominated by Apple.
Amazon.com announced a program today called Matchbook. Matchbook basically lets you get an e-book copy of any real, physical book you purchased through Amazon.com for $2.99 or less (in many cases, for free). Shares of Amazon.com surged on the news.
Since it's a new month, I'm going to look back at the monthly charts for the Dow, S&P, and Nasdaq.
I know the month of August was a huge down month in the market, and there was a lot of talk about the Hindenburg Omen. Additionally, there's still a lot of anxiety about the situation with Syria. I'm guessing that if we do go to war with Syria it may negatively impact the markets.
On the whole, though, the market hasn't been that volatile the last week or so. Today was the first trading day after Labor Day, though, and that means we're watching for the post-Labor-Day "pop" which will be followed by a hard sell-off.
The markets in general, though, have definitely turned over. I think a lot of what we're seeing is stock prices being over-inflated by the Fed's "heroine effect" of pumping money into the system with their bond-buying initiatives. Don't get me wrong, I say ride the wave as long as they keep feeding it, but don't expect to ride this tidal wave of cheap federal money for ever. When this does end (and it will), just be ready and make money to the downside.
Actually, be ready to make money to the downside anyway, because that's where the market's headed for at least the next month or so. There is still the very real possibility of a crash by October. Especially since there's possible war with Syria looming, possible fed tapering, and mutual funds have to dump their losers by the end of October for tax purposes.
Today the biggest news came from the tech giants.
It was revealed that Apple's share of the smartphone market rose 7.8% compared to this time last year, and Apple now controls 43.4% of the total global smartphone market. Apple shares surged early morning on the news, but slowly declined as the day wore on.
Microsoft bought out Nokia in a $7.2 Billion deal. Shares of Microsoft sank over 6% while shares of Nokia surged over 25%. Microsoft struck the deal hoping this would give them a larger foothold in the mobile devices market, currently dominated by Apple.
Amazon.com announced a program today called Matchbook. Matchbook basically lets you get an e-book copy of any real, physical book you purchased through Amazon.com for $2.99 or less (in many cases, for free). Shares of Amazon.com surged on the news.
Since it's a new month, I'm going to look back at the monthly charts for the Dow, S&P, and Nasdaq.
Dow Jones Monthly
Nasdaq Composite Monthly
S&P 500 Monthly
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