BullBear Trading: Stock and Financial Market Technical Analysis

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Sy Hardings move back from cash to bear position of  RWM and SH as of yesterday morning.  Fibtimer flip to a bull position on Nasdaq as of Friday but remain negative and cash on SP500 as of the past weekend.

Excerpt from Fibtimer:


"September 21, 2011

Shares of the ETF Powershares Nasdaq 100 QQQ Trust (NYSE: QQQ) broke above its prior rally closing high of $55.06 (August 31) on September 14 by closing at $55.36. It has since made four straight additional closing highs.

The QQQ has also closed above both its 50-day moving average and its 200-day moving average. The S&P 500 Index (SPX) has yet to close above any of these resistance levels and the Russell 2000 Small Cap Index is also languishing below resistance.

The QQQ is either leading the stock market higher and the other indexes will soon break out, or the QQQ is misleading everyone.

A long position for the QQQ with a sell stop at just below $55.36 would be a low risk entry point for a potential rally ahead."

Never mind.  It is clear now. AAPL is misleading everyone.

Excerpts from Stockcharts.com:

"The Fed made Operation Twist official today. As the name implies, the goal of this program is to “twist” the yield curve by buying 6-30 Year Treasuries and selling Treasuries with maturities of three years or less. This will push rates at the long end of the curve down and rates at the short end up. Remember, Treasury yields fall when bonds rise (Fed buying) and yields rise when bonds fall (Fed selling). In its policy statement, the Fed noted strains on the economy and rising risk in the financial markets.  Moreover, pushing long-term rates down and short-term rates up will make the yield curve flatter, which is not in the best interest of banks.(Empharsis added) Regardless, long-term Treasuries are soared today and long-term yields are plunged. Chart 1 shows the 30-year Treasury Yield ($TYX) moving below 3.10% for the first time since early 2009. Notice that long-term yields are falling almost as fast as they fell at the end of 2008. $TYX ultimately bottomed in December 2008 around 2.6%. As noted by John in the September 10th market message, rising Treasury prices (falling yields) are bearish for stocks. (Empharsis added) The S&P 500 bottomed in March 2009, which was four months after the 30-year Treasury Yield turned up. Therefore, we should not expect a significant bottom in the stock market until Treasuries yields bottom and turn up."

 

What?  Unintended consequence? Instead of arresting a fall in the stock market. Fed actually initiates a big free fall?

TOP 100 Alpha Stocks Index of Barchart.com is close to breaking its August 11, 2011 low.  This is very bearish?  because the Index keeps floating the best performing stocks to the top at a rather high turnover rate of 10% or more on a daily basis.  It is showing any strength in any stocks get sold right away despite the appearance of some resiliency in the general market.
I can't find that chart.  Please post a link.

Bruce Pile posted the following article back in February.  Is the scenario painted in this Article about to be realized and 2008 replay all over again? Well, gold starts to sell off too.  The ones left standing are treasuries, US Dollar, and VXX.  It is noted $VIX held steady at the August low, but VXX (the futures of $VIX)  has  moved up every time when the market tanked.

 

http://seekingalpha.com/article/254035-the-momentum-peak-forecaster...

sy Harding recommends taking another 20% short position today. This time via an inverse etf PSQ.

Excerpts from Fibtimer Editor's Blog:

 

"September 22, 2011

Shares of Ishares Russell 2000 Index Fund (NYSE: IWM) has broken a critical support level that, may point to lower lows ahead.

If IWM has lower lows ahead, it stands to reason the other major indexes would also move lower.

Over the past two months IWM has been trading in a sideways pattern after declining steeply in early August. There have been four lows reached during this period and each has stopped declining at a higher price. By drawing a line through those lows and to the right of the chart you get a rising trend support line. (daily chart)

IWM has had two rally highs during this time frame and the second high was lower than the first. If you draw a line through these highs and to the right of the chart you get a declining trend resistance line.

This is a pennant pattern. Pennant patterns tend to break in the direction of the previous trend and that trend was decidedly bearish.

In trading on Wednesday, September 21, IWM has again reached the lower line and in the last minutes of trading has broken below it. We would watch this index tomorrow for confirmation. If we get a decisive break lower, it will forecast lower lows ahead and certainly at least a test of the prior correction lows around $65.00.

The worrisome part of this is that if IWM goes lower, the other major indexes would be expected to go lower too. Right now the SPX is above a similar rising trend support line and the NDX has been rallying. This is a divergence and typically divergences are bearish."

 

 

TLT is almost at its high seen in 2008-122.00.
now 123.00

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