601M of Edward

Good news, or at least I think it is one that we are still in rangebound markets. However, I certainly do not want to see the markets go side way. No predictions here, and the earning season is just around the corner, so where are we heading are still wait to be seen. The Fed is working on the credit crisis, housing market is still weak, recession is definitely here. There are still some news and economic data to be announced during this week, such data as ISM Mfg Index on Tuesday, Factory orders, on Wednesday, Employment situation on Friday. Mr. Ben Bernanke will be speaking on both Wednesday and Thursday to address the financial turmoil and Bears and JPM’s merger. It will be a hectic week, let’s look at chart and see what could happen.

Daily Chart:

1. 2. 3.

Weekly Chart:

1. 2. 3.

1. SPY: The SPY is trading in the range between 138.90 and 125.40 since mid January. Based on the daily chart, CCI is showing weakness, and price action is heading down, as all EMAs are heading south. I do not expect to see the market break the range this week, but I like to see this neutral position change. The weekly chart indicates another support at 128 level, so pay attention on it too.

2. QQQQ: The Qs broke down the 42 level a few times in the past 2 weeks, and created a support around 41. Its top range is round 45.9, and same as SPY, Qs is at the neutral position too. I would like to see Qs to be closed above 45 level if the rest of the week is bullish, otherwise, I would watch the 42 level very closely. On the weekly chart, the 200 EMA is at 43, I do not have too much expectation on this level, as it did not act as a support in the past weeks. But you never know.

3. XLF: The financia Select Sector ETF has been beaten down badly since last October. The channel is drew on the daily chart, with a range between 27.6 and 23.3. It might go down further if Fed still couldn’t bring confidence into the market (that is not in their job description anyway). So I would definitely buy it for long term investment now, but it has been a good day trading candidate. Based on the weekly chart, the 20 EMA has been acting as a resistance, so I would expect to see the price close above it to confirm the bullish trend.

The market has been giving mixed signals, and shows a lot of indecision, let’s see if the new earning quarter will do any good.

Good Luck and Happy Trading!

The Fed lowered its lending rate to 3.25% during the weekend, it is a “surprise” to me, but since help the banks is in their job descriptions, I have to see they are gonna dead trying. The Easter is around the corner, this is a four-day week, but it won’t be easy.Monday, the market will react to this lending rate cut at least in the morning, and accompany by the economic data such as industrial production and Housing Market Index, I don’t think it will be quiet day. On Tuesday, there are Housing Starts and PPI in the morning, FOMC announcement in the afternoon, it gonna be another wild day. I don’t want to predict if there will be any rate cut AGAIN, or how much of a percentage point, will see. There won’t be much happening on Wednesday, market may go soft here, but you can’t. As on Thursday, it is the famous Quadruple Witching. No matter what happens during the week, take it easy, and happy holidays.

CHEERS

The market did not do well as I what expected in my previous post, I expect to see some bullish sign in the market before the Fed announcement. Now with the surprise lending rate cut and a possible interest rate cut on Tuesday, I really not sure, what should I expect, the chart of XLF looks so beaten down, it might rise on Monday to react on the lending rate cut, but I don’t know where will it go throughout the week. The following are the three weekly chart of SPY, QQQQ and GLD.

1.  2.  3.

1. SPY: Although the SPY still managed to close above its weekly 200 EMA, there wasn’t any bullish sign either, unless you want to consider that weekly doji candle as one. For this week, we have two points to watch, bearish point is below 129 the 200 EMA, and the bullish point is above 135. Remember, we are still in the range, we haven’t reach a new low yet.

2. QQQQ: In contrast to SPY, Qs reached new low this week, although it still managed to close above its support @ 42$. Also Qs is below its 200 EMA, which i think it is at more bearish point compare to SPY. So Let’s see if the FED is able to help the NASDAQ this week.

3. GLD: Bravo! A new high. The dollar is keep weakening (thanks to the FED), when your mom and girl friend both in the water, which one would save first, I guess the Fed is on working save its girlfriend first. Good luck to the shorts, and longs… BULL YA!

Happy Trading & Holidays!

Fed saved the stock markets once again. I don’t know when did the responsibility written in their job description, but finally we saw some momentum in the market after a couple of weeks market depressions. Let’s look at the same ETFs I mentioned in my previous post. According to charts, it seems that we will possibly bounce from here.

Daily Charts:

1.  2.  3.

Weekly Charts:

1.  2.  3.  

1. SPY: Based on the daily chart, SPDR didn’t quite reach the lows it created in January, and today’s bounce broke its nearest resistance. But the price is still below its 20-day moving average, and the major downward trend line. The upper range is just below 140 level, I doubt we will see that soon, but we can expect it to reach the 20-day moving average first. The weekly chart tells us that last week the SPY was still able to close above the 200 moving average, so if we can see the weekly close above last week’s high, that will be a great week.

2. QQQQ: The Qs look a little more bearish, since it broke the 42 support level yesterday. I would like to see it stay above this 42 level and break the 44. 30 level, in order to confirm the “false break” it created yesterday. The weekly charts looks much better for now, as the tail is the only thing you see under 42 level, but however in contrast to SPY, Qs is blew its 200 moving average. So if Qs couldn’t break the 44.30 level, I’d like to see if it could close above its 200 moving average this week.

3. GLD: Based on the weekly chart, Gold is still strong. But the daily chart indicates a sign of pull back, I still believe it is only a day trading candidate for the short-seller. Watch out for the supports and gap ups.

Good Luck and Happy Trading!

Are the markets going to continue the sell-offs from last week? I am not sure, as the stock markets are pretty volatile (sometimes choppy), it is difficult to predict where are the markets heading. Cash is king as people always say, but you rarely see people keep their “kings”. “Buy, buy, buy, we are hitting the bottoms”, “buy into the sell-offs”, “sell into the rising trends”, “high quality stocks are at discounts right now”. It seems that no matter what happens, there are always people who are bullish, that’s why there are always people who buy high, sell low – a pretty exciting way to kill your “kings”. Do I sound bearish here? I hope not, and I don’t have to. I am a optimist, so I am happy to know that there are many people are bullish, so there won’t be a similar market crash like 1987, when only the specialists were buying (they had to). Therefore, when the time people like to take their profits early, or enter the bear market sooner, the market forms its own trading range, with occasionally breakouts. That’s why I say, the range bound market is here. This week let’s look at some ETFs, hope that by looking at those major indexes, we could have an idea where are the markets are heading.

Daily Charts:

1. 2. 3.

Weekly Charts:

1. 2. 3.

1. SPY: Based on the daily chart, SPY looks very bearish, as the support had been broken during last Friday’s sell off, and both stochastic and MACD indicate a bearish trend. However, on the weekly chart, the condition doesn’t look as bad as the daily chart, the 200 moving average is on the support around 129, so if this a range bound market, I would expect a strong buying momentum at this price level, so make sure to set your stops/limits.

2. QQQQ: On the daily chart, Friday’s sell off broke the indecisiveness of the market, now the support around 42 looks like an important one, or I’d like to call it the bottom of the range. But on the weekly chart, as the Friday’s sell-off is close on the Fibonacci 61.8% retracement, which indicates the possibility that Qs might reverse from here. However, if the retracement be broken on Monday, then we will add our “hope” on the 42 level.

3. GLD: The gold is strong, as the US dollar is weakening, people would more likely to change it to gold. So even though that both daily and weekly charts indicates some bearish divergence, I don’t think it will be a good short for the long term, as I doubt it will go back to 85 or 75 any time soon or ever. If the Fed lower the interest again (most likely they will) in the forth coming weeks, it will drive the gold up again. But if you know where your targets and stops are, and want to do some day trading in shorts, there are always opportunities.

This week, Canadian Bank will announce their interest change on Tuesday, no predictions here, will see.

Good Luck and Happy Trading