In like a Bear out like a Bull with a limp

March is over, what a crazy month. Started out horrible but ended well.
Here comes this guy and his damn "internals" again.
$SPX closed below 800 today, to me this is bearish. I was able to sell my Calls near the market top. I was flat but I added a small SPY Put, the rally to me just felt fake and there wasn't steam behind it. There was reason behind this view too.
So let's look at the $SPX again. I set 804 as resistance, not 800 and it failed today. Yet the bulls were able to defend the 50EMA. The market also closed inside, yesterdays big red candle. One thing I am seeing is a Inverted Hammer formed on today's candle. After two day's down this could signal a reversal of the trend. Although two day's down doesn't necessarily indicate a "Trend".
I still will hold my Puts until a significant break out of 804 and if the market can get out of Monday's candle. Watch 779, it is the low for the week.



Now to the Internals:
It is a good idea to get a grasp of these internals before the day starts. Many of them are calculated at the end of the day. But if you understand what makes up these indicators you can make an educated guess on what they might look like at the end of the day.

$SPXA50- I found this to be interesting, yesterday the indicator barely move. Today the market is up 1.31%, yet we have a bigger decline in this indicator. Why one reason could be the market was only really lead by the Real Estate and Fin's, most other index's were barely up. Or yesterday the majority of these stocks were at the 50Ma but today fell below them indicating that there is a lack of overall support at the 50MA.


$CPC- Calls were bought more then Puts today, this is bearish(since the majority doesn't always get it right) but right now CPC is pretty much in a normal range, but the MA(not seen here) is moving down. This was one reason, I also went short today. You can see the big shift from Puts to Calls.


$TICK- Really wasn't showing strength in the market. It should've read above 1000 to show some strength. The moving average is on a downtrend as well.


$TRIN- was below 1.00 for more of the day, but climbed above it indicating some selling. Had the market really been rallying TRIN would've been much lower throughout the day. But judging by the MA, the market is selling off and $TRIN has been rising.


$NYMO- pop up again today, I was expecting this as the Advancers were out pacing the Decliners all day, almost 3 to 1. So I was not expecting to get a sell signal today.




$NYSI- So if NYMO was not going to give me a sell signal $NYSI wasn't. Again for a 1% up day $NYSI didn't have such a powerful move as it had recently during 1% rallys.




So there are the indicators- so to summarize, no clear sell or buy signals yet. But some indicators are showing their hand. I think the $SPXA50 moving down a lot today is bearish, and the CPC showing call buying is a bearish. One thing to take notice is that, $NYMO is close to a sell signal and large move down could move it below 0. It is also April 1st (could my prediction come true) and the start of a lot of economic data releases. Right now 9:15 futures are down 1.20%, but who knows where the market will open.

I shorted XLU today. I like how it went back into it's triangle, and tried to break out but was shot down and close below my resistance line. My only problem with this XLU is tomorrow the triangle is done and it could break out. My out is the 50EMA.

Show your IRA some love

Unless you have really been active in managing your IRA, it probably has taken a hit the past year. It may be time sell those "Blue Chips", your FA so heavily invested you in and start looking else where.

Since these will be "investments", its important to look 5-10 years down the line. What can expect in 5-10 years. Let's be optimistic too, so we can say that China, India some of Europe and even the United States more then likely will recover from the depression. If we don't recover in 5-10 years, then you will have a lot more to worry about then "How are the assets in my IRA".

1. Play the overall market- "But Piker I don't want to get crushed again". That's fair, buthere are less volatile safer ways to play the market. One way which I like is to use Closed End Funds. These are basically mutual funds that are traded in the open market. The benefits of these are they have good payouts, low volatility and most of them are trading well below their NAV(Net Asset Value).

I think a great way to use these funds are to seek a "Growth and Income" fund, and re-investing the dividend, into the fund. These funds have a high-payout and are cheap. So if the market keeps moving down, you are adding to your position and it is not costing you additional money. Once the market goes up again, you will have had used the dividend to build your position.

For instance look at CII(Black Rock Enhance Capital and Income Fund)
Currently the stock is trading at 10.00, it is trading a discount of 16% and paying out a distribution of 19.62%.

So let's look at it:
Buy 100 Shares at 10.00(it closed 3/31 @ 9.99)=$1,000
Distribution rate=19.62% paying .485 per quarter= 100 shares of CII * .485(4)=$193/year.
If the share price, does not change at all you are getting around 6.6% a year. (That's not bad)
So you have a 6.6% cushion if the stock declines. But you also have another cushion. This stock's Net Asset Value is really as of 3/30= $11.80. So if you bought it today, and the fund went belly up, you would be sold at $11.80.

Now even if the market goes down, you are dollar cost averaging each quarter and since the stock is price low and the payout is high, you will be accumulating shares not just .005 shares if you went a ETF i.e SPY.

Some other funds for this type of investment are: GAB, ADX, TY, USA, BLU

To me these funds are a safe play. Make sure you pick a fund at has a good amount of assets in it, that it is not leveraged and it is at a discount.

There are countless CEF you can use. Go to www.etfconnect.com to find a fund suited for you.


2. Oil and Interest rates- Let's be honest we can't keep interest rates at 0% forever(although Ben and Co. would love too) and if the economies recover demand for oil will increase. So a great way to play this is through Oil Royalty Trust. A good thing about this sector is as oil goes up so does the dividend and also when interest rates go up so will the dividend

PBT- is a good example of this it has a dividend yield of 3.4% but at one point was paying .23 a month, when oil had peaked.

Other stocks in this sector are
SBR- 7.22% yield
HGT- 6.0%

So show your IRA some loving, it's taken a beating worse then Apollo Creed in Rocky IV.


Of course THIS IS NOT INVESTMENT ADVICE! IT'S JUST AN IDEA! PLEASE SEEK A PROFESSIONAL AND A FUND PROSPECTUS IF YOU WANT TO INVEST IN THESE COMPANIES! DO YOUR OWN RESEARCH AND DON'T GO BLINDLY INTO THE NIGHT BECAUSE I SAID SO. THAT WONT MAKE YOU MONEY! IT WILL LOSE YOU MONEY, Then your wife will get pissed and hate you, you will start drinking more, then your out one night you make a few bad decisions with a stripper name Candy, next thing you know your wife asks you to move out, your kids hate you, you start wearing the same close to work and shower less and you and you get the picture!

Top of the morning to ya your home is worth 19% less then last year

Futures are pointing to a green open today, even with home prices falling 19%
Here is another indicator to look at the Put/Call ratio, right now it's indicating there is are more puts being traded then calls.

Put/Call Ratio: Based on CBOE statistics (http://www.cboe.com/), the Put/Call Ratio equals the total number of puts divided by the total number of calls. When more puts are traded than calls, the ratio will exceed 1. As an indicator, the Put/Call Ratio is used to measure market sentiment. When the ratio gets too low, it indicates that call volume is high relative to put volume and the market may be overly bullish or complacent. When the ratio gets too high, it indicates that put volume is high relative to call volume and the market may be overly bearish or in panic. StockCharts.com charts the Put/Call ratio under the symbol CPC (current chart)" title="$CPC (current chart)" class="scLink">$CPCCPC]">.

So the bearish trade might be over crowded. But looking at the ISEE it's above 100 indicating a more Bullish view.


It will be important to see what the market does today, a close above 804 is bullish and I will be comfortable taking off my Puts and letting my Calls ride.

Wait a minute CNBC told me the bottom was in!

So the market loses 3.48% today, after running up 30%.
The only changes I made to this chart are I changed the 800 line is now red. 780 held up and provided support for the market.

For the bulls they will need to move the market up tomorrow and not break today's low. The bears, they need to keep the market below 800.
I bought some calls today, I still hold some SPY Puts, but looking at the interals from this post and other sectors. I am starting to get bearish and looking to exit my calls if we don't get above 800 in 2-3 days.



$SPXA50- Today the market decline 3.8% Yet $SPXA50 barely moved, so either stocks are bouncing of there support or still have some room to go before they get to the 50MA. If it is the latter then the market might have more room to fall but. So keep an eye on this.


Looking at other internals:

TICK- still is heading down, the MA is showing more selling pressure from the market, it still has not reach below -1000, so there is more downside.


TRIN- is showing selling pressure as well. It was above 1.00 all day today showing there was a good amount of selling, but a move above 2.00 also starts to show signs of oversold, but before TRIN was showing exterme overbought conditions, so I would expect TRIN needs to get above 2.50 to show oversold.


$NYMO- This showed some selling as well, yet still has not crossed zero, which would be a good sell signal. This does look bearish though.


$NYSI-It still was up today although barely. It looks to be stalling and if the market has another down day it could rollover. That is bearish, since $NYSI is a longer-term indicator of the $NYMO


XLF-8.67 is now resistance, this is a safe place to short XLF. Your stop is above the 8.67.


XLU- is another great short. It broke its decesending triangle today and should head back to 23.


I hope you joined me on the DOW and FO shorts today. I hope you faded me on the LEG buy today!

Also look at MHK. I didn't want to short this guy because it was above its 50MA, but it still looks great. Also MOS could be a good long, it bounced off its trendline and on the 60Min chart it bounced off the 200MA.

See what happens when Ben doesn't go on 60 Minutes(Fade me list)

Futures are down over 2.0% right now and broke through 800. Should be an interesting day for the market. Let's see if the support levels I mentioned yesterday hold. But so you are prepared today, here is a nice FADE ME LIST! I highlighted my favorites, but click on the link for all of them. Update: Check it out first default on Mall loan. I hate that mall too, so good!

Shorts: DOW,FDS,GMT,GYMB,MHK,NCR,PM,PSYS,UPS,WFMI

DOW-Could be forming a huge bear flag, but resistance at the 50MA and only support is the lows in Feb.


FDS- Gapped up earlier in month, hitting resistance and at 50% Fib level. Should look to fill the gap.


FO-V bottom, overbought, no support below. A break of that trendline is a good shorting opportunity




LONGS:HBI,JBLU,MOS,KFY

MOS- Broke above resistance and there is strong support at 40 and the 50MA.

Sunday Market View and Market Internals

No public figure will be on TV tonight telling people the market is ok, to buy stocks or trying to sell some crazy goverment b.s plan. They were actually all on this morning.

Let's see where the market can go.
Here is the chart of the $SPX.
Resistance: 847-850. More importantly the down trendline from November is in play and will be a strong resistance level.
Support: 800 level and the 50MA and below. Also the orange trendline.



A break of the orange trendline should start some selling, but 800 should provide some support as well as the 50MA. I highlight the area between the S/L levels as CHOP ZONE. I would expect some choppy trading days in this zone. But as we move through the month of April(of course my April 1-2nd could still be in play) it will be important to watch the November down trendline and 800, these will be important levels. A break above or below these levels could send the market into a new trend.

Taking a look under the hood of the market here are the market internals.

TICK: has been moving down which signals weakness in the market. If the TICK spends time below -1000 it could signal a bottom and that the market is oversold. It's important to look at the MA of these internals.


TRIN- has been climbing signalling that more stocks are declining lately. But above 2.00 could be signalling oversold. But because this market is so overbought I would expect $TRIN to climb higher before signalling oversold.


Stocks above 50MA-One thing to watch is the stocks above the 50MA, since typically the 50MA will provide support. Right now the market has just about as many stocks above their 50MA since Dec 2008. It will important to watch this, a strong dip in this number will indicate that the 50MA are not holding and that their in weakness in the market.


NYMO-is the McClellan Oscillator its the difference between the 19 Day an 39 exponential moving averages of the daily net advance decline figures. It has been chopping around between 50 and 100. A move above 100 is considered overbought, and a move below the zero line is a sell signal. So watching this is key, it provides a shorter-term view of $NYSI.



$NYSI-looks to be stalling, which could signal another reversal of the current trend. A turn down should be shorted, but it could a little rest before the market moves back up again since there is a lot of support beneath the market. If the $NYMO moves down fast, $NYSI should be heading lower as well.



Yesterday I showed some of the market sectors and saw that there is a good chance of a pull back, and that some sectors have support beneath them. Today we see the market is overbought and the internals point to some downside. But there might be support beneath the overall market as well, due to a good amount of stocks above the 50MA. So it will be important to watch the internals for an indication if the market wants to bounce or if the selling pressure is strong enough to push through the support.


Congrats for making it to the bottom of this post! Here is some light reading for you:
ShamWow Guy LOVES hookers!
The PPIP example(Great Read)
More power to the IMF
Bear Market Rally

Sector Saturday(Looking at the sectors in the market)

Here are some charts of major sectors of the market. Check them out, I appreciate comments about them too.

XLF- The big question mark in the market. There is resistance above at 9.70 and support at 8.66. This is a good short if XLF breaks 8.66. The financials are too news driven so be careful on any side of this sector. But the index overbought, playing the downside is not a bad idea.



XLE- Broke its upward trend line on Friday. Sitting at its 50MA. There is weak support beneath the 50MA. The dollar looks to be making a rally as well, which doesn't fair well for energy. UNG is breaking down as well as oil(see below). A break below the 50MA is a good place to short.



USO- It is sitting at the bottom of its channel. It failed to close above 32.04 which I mentioned earlier. This looks like a good short if it breaks the channel. It also looks like a great buy if it pulls back to the 27 level. There is support at the 27.70 and the 50MA.


XLU-Right now its consolidating in a descending triangle and is at critical support. Any break below of the support and triangle is a great place to short.



XLB-Hitting the top of it's downtrend line, and close to a 23.6 Fib line. A safe place to short is if it breaks the orange trendline. You could also short at the downtrend line, but a little riskier in case it breaks through it.



XLI-Resistance at 19.75. It might want to fill the gap above that so be aware of that. There is also support at the 50MA. A close above 19.75 and it can run, a break below the up trendline is a short. Don't try to top tick this one.


XLV- Hitting a 23.8 Fib line and resistance. It is forming an ascending triangle though. A breakout above these levels is very bullish. This stock should let us know by Monday or Tuesday which way it is going. I am leaning towards the downside though. Based on the overall market, XLV being overbought and the gap up at 23 should be filled.



XLY- Still in an uptrend, but will be meeting resistance soon at 20.88. Could easily pull back to 19 where there is strong support and the 50MA. A break below 19 is bearish, but a bounce at this level is very likely as well.



XLK- Easy chart to read. It is very range bound. It is right at resistance but have support at 13. A break above 16 bullish. Break below 13 bearish. I rather be buying at 13 or even high 14's. Technology has been a strong sector as well. It has formed a triple top or could be a 3rd Watch, as well as if it pulls down to 13 it be a triple bottom.



XLP-Looks to be forming an AB=CD bearish pattern. Hitting its first resistance level but also has resistance at 22.50. Better off waiting to 22.50 to short, not a great long entry level for this either.




So taking a top down approach from the market we can see everything is:

• Overbought
• At resistance levels
• Close to breaking trendlines

So a pullback is likely. But some of these sectors have support beneath them. Of the 10 sectors 8 are above the 50MA, which could provide support on any pullback.

My favorite shorts right now would be:
XLV
XLU
XLE

My favorite longs right now would be:
USO- at 27ish
XLK- at 13-14 or a break out above 16.
XLB- at 20ish.

Please wait 5-7 Business Days for your Market to Top

This market just won't stop going up. I bet it will now since I entered a long position on SSO today. It is a tiny position though. I am staying mostly on the sidelines. I think this market is toast or ready for a good size pull back in 5-7 more days. Why 5-7 days you ask, read on then.

Where can the market pullback too. Short-term 800 looks to be providing a good amount of support and it's a round number, which makes people feel warm and special inside when the market stays above it. There is also support below 800 at the 50MA and around 730-750 and then November lows aka the "First Bottom". If the market climbs at the same rate it is, it should reach 850-870 by April 1st - April 3nd. 5-7 business days away. The market would be at some strong resistance levels and the bears will have to come out and short at these levels.

Once March closes, everyone gets a statement either IRA statement, brokerage statement or a 401k statement from their broker showing how awesome they did this quarter and changes a fee. So could you imagine if everyone saw their statement down another 50% this quarter. They would just start selling their accounts. So to prevent this why not have the market go up so people don't think they lost a bunch of their life savings.
So, after March the buying will start to dry up. The market will be at key resistance levels and the bears will be out.


The VIX closed beneath its 200MA today. Which could mean two things, first it could be bullish as support broke and the when the VIX moves down the market tends to advance upwards. On the flip-side, it could be very bearish that the market is getting complacent and there is no fear in the market. The indicators do point to more downward pressure.
There is support around 35. Which if the VIX drops at a rate of 1-2 points a day for 5-7, it will be around this support again by April 1st-April 3rd. The market will have just ripped up to 850-870 and fear will be no where to be seen. Seems like a great shorting opportunity.


But look what else will be happening between April 1st through April 3rd.

Here are some Key highlights:
March 31st- Consumer Confidence
April 1st- ADP Employment
ISM
April 2nd- Initial Jobless Claims
April 3rd-Unemployment Rate
Ben Speaks
If these numbers come in worse then people expect, then it proves that the economy is still in bad shape.(CRAZY I know because everything was fixed on Tuesday)


Top it off with a G-20 Meeting and you have the set up for some fireworks!

So to summarize, once the quarter is over and put into the books people will want to take profits. The bears will start the part off selling at 850-870. Then we have bad economic data, and more selling, then the bulls will stumble over each other to get out.
Of course this is all constructive thinking and the market does whatever it wants. So take this with a grain of salt.

On the $NYSI front. It keeps moving up, again to keep with the theme if it keeps moving up at the same pace in 5-7 days, it could be above the zero line and the RSI will be overbought. Good thing about this is if all goes to plan the $NYSI will roll over and cross the zero line, which would be very bearish.

Hold on

So the market is just on an uproar lately.
But the tide may be turning for the bulls. The $NYSI gives a good indication of where the market might be heading but more importantly they give a signal of a reversal. Lets look at the last 3 years. (I recommend clicking on the graphs and viewing them first).

Two things I am noticing, first is that the NYSI was PERFECT in predicting the bottom. When the $NYSI is below a -1200 it signals a bottom. It hit -1000 and turned up. Had I followed this system, I would be very happy now.
Secondly the ATR which measured the voliatily of a security, has slowly stalled. Which means the $NYSI has not made large moves up lately. This could be an affect of the advancing stock losing momentum because the market appears to be overbought. A lack of movement in the $NYSI, could signal a that the $NYSI is stalling and the potential for the market pulling back and heading down, could be there. You can see from the chart when the $NYSI turns, it signals the market is rolling over. The last time the ATR of $NYSI was at these levels it was right before the last leg down in late Feb and early March.
Here is a better look at the $NYSI with the $SPX.


So what to watch, there are a few things.
1-Will the $NYSI roll over, if it does it could signal a new down-leg for the market or a pull back.
2-Will the $NYSI keep climbing and does this mean that a bottom is in.
3-Will the $NYSI pull back a little and begin to move up again.

I believe we are still a few more days from seeing the $NYSI rollover but I think it is starting too.

He said WHAT!

If you wanted to know what would happen if the world shifted from the dollar as the reserve currency. You got a sneak peak of it today. Timmy, either wasn't thinking or maybe knows a lot more then we know and accidentally spilled the beans, but in a response to a question about China's desire for a currency by the IMF. he said “designed to increase the use of the IMF’s special drawing rights. And we’re actually quite open to that.” That sent the dollar tumbling, but he was able to tell everyone "I'm just messing with you" and the dollar went back to normal.


But the EUR/USD does seem to be forming a Bull Flag and if it is to break out of that flag it would be a strong move for the EUR and hurt the dollar.


GDP numbers come out tomorrow, if they are like Home Sales and Durable Goods the GDP should be +15.00%.

So what is the next Macro play

I think the next move is to look for the dollar to get hit hard soon. On a technical level, looking at the weekly chart from Decision Point, it is bearish.

Now fundamentally what would cause the dollar to decline. Well if you printed a whole lot of it, which the gov't is going to be doing. Between the Stimulus bill, TARP, Private-Public P.O.S program, ABCDEFG. You get it, and I am sure there is some more spending that will be going on, as well as more tax cuts. Plus, if America starts to feel as if this crisis is over, we acutally had a positive savings rate for a little so this could increase the amount of money in the system.
So with all these dollars out there, prices will go up.
The UK is already experiencing inflation.
Now what could really kill the dollar is taking the wind out of it's sails.
China is making hints of moving from a dollar back currency . Russia has also stated this previously. OPEC has made rumors about this too.
China has some pull too, they came out a few days before the Fed statement demanding that their bonds be guaranteed and what did the fed do, said they would buy bonds. Combine that with our governments need for China to buy our bonds, it will be interesting to see what our "leaders" do about China's vocal concern about the current status of the economic condition of the U.S.
Plus we have the G-20 meeting on April 2nd. Although I highly skeptical that the world stops using the dollar as its main currency, I would not be surprise if there was some black lash against the dollar after the G-20 meeting.

So what am I doing to play this macro trend. I am looking to get long UDN, or buy UUP puts. GDX and GLD, after a pull back and possibly TIP. Additionaly I could go long USO and DBC. I am waiting for good entry though, this play might not work out right away; so I am trying to get the timing as close to correct as you can.

Ouch

Where there wasn't even a fight at 800-805. There was none. There wasn't even a fight at the 50MA. Let's look at the bruises left after today's bull beat down.

First 800 was broken, so we now have on a psychological numbers level support at 800-750-700-667. Then the market has support '08 Lows which have been broken. Plus the markets 50MA.


Looking the weekly SPX really wants to run and has the room too do it.


I went long CHK today: My stop is the redline.


I am also long USO Apr 34 Calls. I think USO will run. The dollar is looking weak on a weekly basis. I don't think that the run-up in oil will be based on demand as much as it will be the decline of the USD.

I am also going to look to get long UDN, the dollar should fall within a few weeks.
MACD has now crossed, and there was a clear divergence during the last move up.
Plus we have the gov't and Fed printing money like it's going out of style.


I would like to see any type of a pull back and see how the market reacts. If 800 holds, we could see a strong rally to possibly 900.