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Mark's Weekly Trading Log (4/15-4/19)

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Log Entry 4/21/13

 

Week ends Down from 1588.85 to 1555.25 , -33.6 handles or -2.11%

 

Price corrected as much as 3.5% from 1597 high to close the week -2.6%

 

A somber week ahead with the news of Bob Korreck passing.

Loved by HSM and will be missed.

Rest in Peace, Bob.

 

From prior Log Entry

SPX Monthly Trend Lines and Candlestick Analysis

 

SPX Monthly Trend Lines and Candlestick Analysis

 

S&P Weekly Charts

Weekly Intermediate-Term Trend Lines and Candlestick Analysis

 

Closer Look

 

Weekly Trend / Pivot Lines

 

Closer Look

 

SPX Weekly ADX / DMI - MACD Chart

 

SPX Weekly Fibonacci Retracement Chart

 

S&P Weekly Chart Patterns

 

Price dropping back into flag area

SPX Weekly Bull Continuation Flag "High n Tight"

 

Daily S&P Charts

Intermediate-Term Trend / Pivot Lines

 

Closer Look

 

SPX Daily Near-Term Trend Channels / Pivots

 

Closer Look

 

SPX Daily Near-Term Key Support / Resistances

 

SPX 3yr. Regression Channel

 

Andrews Pitchfork

 

SPX Daily McClellan Oscillator

 

SPX Daily 20/50/200 Day SMA

 

SPX Daily Fibonacci Extension Chart

 

SPX Daily Fibonacci Retracement Chart

 

SPX Daily Longer-Term Fibonacci Retracement Chart

 

NYSE Advancing / Declining issues

 

Daily Chart Pattern Updates

 

SPX Daily Candlestick / Pattern Analysis Worksheet

 

SPX Daily Right Angled Ascending and Broadening

 

SPX Daily Bear Continuation Flag

 

Apr 17th

Quote:
I can see a potential Head and Shoulder, Descending Triangle and look to the near-term downside possibilities

 

 

SPX Hourly Head and Shoulders with smaller Inverted Head and Shoulder / Pennant

 

SPX Pattern Targets Updated

 

Volume

 

SPY Daily Volume by Price POC

 

SPY Daily Volume Spread Analysis VSA

 

SPY Hourly Volume Spread Analysis VSA

 

SPY 30min Volume Spread Analysis VSA

 

Risk

 

Daily VIX

 

20yr. US Treasury ETF--TLT

 

30yr. US Treasury Yield Index TYX

 

Daily US Dollar index DXY

 

From Apr 17th

hH

 

Thesis #3.

This comes from one of the Mark's crackpot, put the pipe down, crazy idea shelves.

 

Some time back I wrote up a piece on one of my more nuttier ideas of the fact that the charts were reflecting the S&P would follow golds lead and breaking from the traditional "safe haven / hedge" inverse correlation.

http://www.hotstockmarket.com/a/gold-not-the-safe-haven-the-s-p-bellwether

I am going to revisit that highly subjective and speculative thesis.

 

Exhibit A:

original chart from the article:

 

Exhibit B:

 

Gold Bugs HUI Daily Long-Term Head and Shoulders

 

Is gold once again pointing the way? Will stocks take the huge plunge just like gold?

Stay tuned sport fans because just like the Chinese farmer says, "Maybe".

 

From the same shelf I have another crazy top calling article where my time zone is a bit early

http://www.hotstockmarket.com/a/s-p-and-the-blow-off-the-top

 

On one hand the forward looking market is seeing past all the bad news (for the most part) and on the other could be setting up for the ultimate plunge.

 

Portfolio Section

 

ReCap for the week:

 

Apr 17th

To recap on options I had those two free contracts rolled over to May. Took a small 50$ in my pocket and let em roll just in time for the market to sell off.

I've averaged down 2 times since then for an average of $1 SPY May 160 with 4 contracts. Or, 170$ total risk on upside in May.

I think to keep that as it is, not put any more money to bad and call that a maxed position.

I would like to take a small put position, maybe few $100 bucks so my total risk won't exceed $400-$500.

Still watching volume and the S&P charts but right now the up and down and up and down is getting me too dizzy trying to predict what the S&P is going to do at this time in space. I'd rather try to scale in a put on some near-term buying climax and rake in some profit from these swings.

 

Apr 19th

My option update.

So the way I got it figured is I got the 2 free options that I rolled from Apr to May, plus the two that I averaged down, cost me $174 with comm, out the door, down $18 bucks.

 

Apr 19th

Not too bad.

My plan is to sell half on the event price gets to that 1570 right shoulder thesis. I've talked about the smell of distribution in the air (in my group) and I think a head and shoulder pattern would semi-confirm that type of Wyckoff market psychology.

Of course, that pattern would have to break the neckline pivot (SPY 154,) after this hypothetical right shoulder is realized.

SPY 153 would be a confirmed neckline break putting that into play.

Lot of guess work at this point but trying to think of worse case scenarios... border line over think, sorry can't help myself.

Just my stab in the dark fwiw.

 

I'm lowering my UPRO sell 1-lot order from 126 / S&P 1610 to coincide with S&P 1570.

Lot sizes are now split and considered 10 shares to a lot from 20 shares to a lot.

 

Current Portfolio

 

Guesstimated Projections

This is the final part of my log where I throw a guess out there for fun.
This is not to be taken too seriously. But I do think it's good to get down on record

the current thought process and expectations for later critique.

 

Last weeks projections:

Quote:

This Week and to conclude

 

Like last week again I have to believe in a consolidation for the market to take a small breath and fill in the daily Flag.

However, the final "late to the party" mark-up phase may linger on longer than I think.

As the S&P climbs, I look more intently than ever at a portfolio rebalance to safe haven hedge TLT for one.

 

I like the "Mr. TopStep" 1610 area at least as a re-evaluation level.

The day is coming when this market bull will still be a perma-bull but in making a rebalancing effort to ones portfolio makes that philosophy a valid course. Positioning from the riskier tech sector and small caps into staple dividend and or cash and USD/Treasury assets in these type of environments is a typical professional strategy and a philosophy that has always served me well.

Removing interests in companies and sectors that have matured and moving into places that nobody wants at the time has always been my longer-term plan of action. Buy when there selling and sell when the herd is buying. Make money on fear by selling into the greed is my motto.

 

Can the market continue up? Yes. I've never been successful ever at buying right at the bottom (well, yes I have but only few lucky times) or selling right at the top. Most the time the market keeps going down after I buy and I use the scaling technique with small lot sizes to account the best I can to account for the margin of error. Same when selling except that almost seems even more difficult a judgement to make. It can be almost more important a part of trading in knowing when or how to sell than to buy. In this way it is the same when selling. I have no idea when the market will stop going up. Therefore, I sell small lot sizes on the way up to realize or lock in gains.

 

Thank Goodness the market is not perfect and highly manipulated or it would be not only boring but impossible to make quick gains. I don't care about manipulation much in the same way I don't care about news stories. I can't imagine a stock market that would make it easy to make money or a market removed of volatility. Improvise, overcome and adapt to the market.

Volume and volatility will eventually come back, the unanswerable question is when. I take the bad things as good when dealing with Mr Market.

I do not believe that you can have one without the other.

Weekly Projection:

 

Daily Guesstimate:

 

This Week and to conclude

Quote: Apr 17th
thesis #1 where I'm seeing a shift of liquidity into the aforementioned safer "blue chips". My thought is that there has to be a lot of late to the party funds and or retail that did the jaw drop to the floor the whole 4yr wall of worry and are looking to get in. Something about that right there that gets my attention when that could be exactly what Smart Money (SM) is waiting for.

I've got that scenario covered because my strategy is I don't do nada till I see 5% or greater move. So I've missed some entries and exits but that's Ok, I'll never be able to tell for sure one way or another so 5% is a rule with me.

 

I can see a potential Head and Shoulder, Descending Triangle and look to the near-term downside possibilities

 

News out of China is bad. Europe has been bad news. A bomb gets set off in the U.S. and the markets are up one day and down the next.

We've seen a mass sell off in the commodity complex.

I see earnings season has been generally Ok=earnings but poor=overall revenues. That's important because just like how the market reacts to payrolls versus jobless claims, so how it is with revenues, from what I understand, are harder to fudge the numbers than with earnings.wink.gif

Does that speak to the resilience of the market looking past earnings, revenues or bombs? or is it an early warning sign of distribution? I'm gonna look a bit closer.

 

Thesis #2

The Bond Market is much smarter than the stock market, IMO.

There's an old rule of thumb I learned a long time back. When the 10yr Bond yields over 4-6% time to buy bonds or under 3-4% time to buy stocks, it can be just that simple for me.

I've made mention over and over "The 200 day SMA is rising." That's another one that it can be just that simple for me.

I don't think Bonds are ripe for the plucking yet. I could be wrong but I'm going to side with past historical data unless proven otherwise that until yields get up there there isn't going to be much in the way of a crash. Or, "The worst market crash ever", not by a long shot, or not at least without some kind of global economic calamity as catalyst. Good Luck trying to TA a "black swan" event. Ain't gonna happen. 5%-10% is more likely than 15%-20%. But, even if the price drop maxed out over 20% would not be the end of the world and would be some typical multi-year bearish activity.

As I've stated, the market does a major bearish leg every so many years and 3 to 4 smaller bear legs within the year in a bull market. My money is on a 5%-8% correction tops. I see no sign of an extreme catalyst other than the terrorism angle and the market seemed to have shrugged that one off. Or, I should say at least for now. Meaning more terrorist activity could mount up as a severe headwind to the capital markets.

 

Looking at the growth situation, stocks could be under priced. Commodity prices have come down and productivity is way up and I'm looking at interest rates and company margin. Margins have expanded to an all time high to GDP and if commodity prices go up to a weaker dollar then that could squeeze margins.
We could be setting up for decades of good times with debt. refinancing and operation twist.

But, congress needs to understand that we can't spend ourselves out of a recession. We can stimulate out of a recession but not spend. I think that is a very key important thing to the stock market is congress.

 

I can see the hourly Head and Shoulders with a smaller inverted Head and Shoulder / Pennant on its way to constructing the anticipated right shoulder to bleed into the Daily. This supports the distribution hypothesis at all time highs complete with a near-term top (so far as anyone knows) that could end up being a longer-term top. Support bounce off 50 day SMA strengthens the idea of a final upthrust near 1565-1575 area before testing demand at neckline. Volume also indicating a slow down in current near-term bear trend.

I think that the proposed daily bear flag to fill with consolidation up to the proposed right shoulder on the hypothetical Head and Shoulder bearish reversal pattern.

 

I think a longer-term 5%-8% correction is brewing. Supported in large part by low Treasury Bond Yield, has the feel of tipping point between risk on / risk off and the stench of distribution at the near-term soon to be an intermediate-term top. If a right shoulder does form and a breakdown of the proposed Daily Head and Shoulder neckline / pivot to 1535 would confirm pattern is in play.

 

I look forward to that type of scenario playing out as a buying opportunity and plan to trade according to laid out confirmations and set scaling rules I have put forth.

 

Weekly Projection:

 

Daily Guesstimate:

 

That's it for this week. Stay tuned same Bat Time same Bat Channelthumbup.gif

 

---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                   

                                 HSM; Off the beaten track:

 

Get Ichi's Swing Trading Impressions

http://www.hotstockmarket.com/t/273545/ichis-futures-swing-trading

 

Check out Rock's new 'Experienced Traders Market Discussion'

http://www.hotstockmarket.com/groups/show/34/experienced-traders-intraday-market-discussion

 

Kylestt and JBrand1's journal for experienced option trading at its finest

'kylestt & jbrand1's intra-day scalp plays'

http://www.hotstockmarket.com/t/191474/kylestt-jbrand1s-intra-day-scalp-plays/1160

 

                  Get in your Votes HSM!! (Links in Signature)

 

HSM 2012 Weekly/Monthly/Quarterly Sentiment Poll Spreadsheet Link:

https://docs.google.com/spreadsheet/ccc?key=0AjcECxXNIPcKdGw1UXdSdzNSVFlDUlF1TzZxSzV5MlE&usp=sharing

                                                        

Other Links :

Links to S&P DX Comparison Spreadsheet. (Data From Jan 2012)

Also includes month and quarter percentages for the S&P.

 

My Paper Trading Options Strategy Experiment

 

This Google Doc. link is a complete List of my shared Google Doc links.

*Newly added Stock Market Trading Spreadsheets* (Credit to RG for the inspiration)

 

In the event of a significant market correction, I have made up a wish list that can be viewed here:

http://www.hotstockmarket.com/t/273758/market-correction-shopping-list

 

References:

Bulkowski's thepatternsite.com (Chart patterns, Candlestick Formations and Measurements)

Finvis, News, Futures, Screener and more.

TDAmeritrade ThinkorSwim (TOS) Platform (Paper Trade Account)

 

Software:

Ubuntu Linux OS
Ubuntu Gimp image editor

Mozilla Firefox, Opera, Google Cromium and Google Chrome browsers

TD Ameritrade TOS (thinkorswim) Platform (paper trade account)

***Here is my default workspace xml file / VSA xml file, from my Ubuntu Linux opt/thinkorswim directory (Updated 4/13/13)***
***Right click on link to save as file to your computer.**

***Instructions PDF**

My ToS Scripts

Oanda Forex

Etrade

 

Published Articles:

Oct 12, 2012: Gold the S&P and how they co-relate.

Nov 23, 2012: Tao Philosophy and the Stock Market

Nov 5, 2012: S&P, US Dollar and the FED

Dec 7, 2012: Debunking the Myth: The demise of the U.S. Dollar

Jan 22, 2013 Gold: Not The Safe Haven, The S&P 'Bellwether'

Jan 25, 2013 S&P And The "Blow Off The Top"

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sheesh...you've been busy man...thumbup.gif

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