601M of Edward

I try not to be downer here, but if you really believe this post-holiday, light volume retracement could be the bullish sign, then I must say, keep your seat belt on, and wait. The market tumbled drastically last week with heavier volume made me think this might be the time to sell. I have no more positions left for either swing or long-term investments now, thanks to the bounce this week. I am not saying I made a good decision, and I might even cry out loud if I realize I sold too soon. However, I just don’t feel comfortable to keep any of my positions right now, as I just too ‘chicken’ to place any bets… Cash is the king when I have this kind of feelings, that is the what I learned from my past mistakes.

Still, let’s look at the charts and see how the markets closed the month of MAY. And analyze some possible scenarios on how markets gonna act.

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1. SPY: I questioned the steepness of the trend line two weeks ago and expected a pull back. Then I saw the drastic sell off in last week, I wondered if it might not be just a pull back. Now, after the upward movement this week, I see no clear messages, neither up nor down. To be frank, if you draw a trend line again (red), it looks much better, which means the market could just go up from here, even though I doubt it could happen that soon. WHY? I just don’t trust post-holiday, light volume trading. IF I want to enter for long term investment, I would like to see a higher high appear on SPY, with stronger volume and momentum. I don’t really care if the blue trend line broken next week. I want to see a higher high at least closed above/@ $145 level. If the red trend line broke first, I MIGHT not wait for the lower low to rush in my short positions. Still, the support levels you should watch are $138.5, $137.5, and 135 and etc.

2. QQQQ: Qs had a pretty good run today, thanks to Dell’s strong earning. From the technical point of view, it covered relatively the best among the three. And its old uptrend line is still holding. NICE! But it seems to have difficulty to break the support sits around 50.20 area. Especially, with the weaker volume upward movement, I have to see the higher high to confirm the bullish trend. Otherwise, I will watch how will be the red trend line broken (volume and momentum).

3. XLF: Financial is still lagging behind, but I really happy to see it hold on above the supports at 24.40/24 levels. For the first week in June, I’d like to see whether those supports could still hold the selling pressure, or it could actually push the price higher. Don’t know, don’t say. Be patient and calm.

Good Luck and Happy SWING!

It didn’t take that long for the stock market to give back its recent gains. I did expect a pullback as I mentioned in my previous post, but this is just too much and too quick. Hence, it made me to wondering what if this is more than just a pullback? The market is tumbling faster than it was rising with relative higher volume. If so, this MIGHT BE a time to sell. I was happy to see with all the inflation worries, recession concerns, unresolved financial and housing issues, the market was still rising. But now, if it keep falling, it might be something called stagflation, which nobody likes to see. Here, I will still briefly explain the charts, and point out the potential supports and resistances we should pay attention on:

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1. SPY: The SPY stopped its rising pace at its 61.8%  Fibonacci’s retracement I pointed out in my previous post, and started its ‘pullback?’ quicker and stronger than I was expecting. Based on the indicators, it will go down further. If this is a pullback, I am looking for some supports to be tested, such levels as $136.9, $132.3 and $131 or maybe, just maybe the 50% Fibonacci retracement (the high of 144.30 to the low in the mid-march) around 135 area.

2. QQQQ: The Qs which was the strongest, also tumbling in sync with SPY. As the chart shows, it is just sitting on its upward trend line right now. I doubt it will sit there and reverse, so I am more concerned whether 200 EMA around 47 will act a strong support, if not, then watch closely for levels around $46, $45 and $43.80 areas.

3. XLF: Since XLF broken its red trend line last week, my eyes are on the $24 level already. It has been the weakest among the three, and it is showing more weakness. I would like to see the $24 level could be stronger enough to hold xlf’s falling pace and start recovering the ground in June, otherwise, it could be very dangerous.

Oil started pulling back, I am not sure if it will continue, but I won’t be surprised if it does. Even though this is only a four-day week, but it is going to be very hectic. New Home Sales data on Tuesday; Durable Goods Order on Wednesday; preliminary GDP and Jobless claims on Thursday; Personal Income and outlays on Friday. So be cautious and patience, you might be able to see a clearer trend by the end of the week.

Good Luck and Happy Trading

After the pullback (a lot smaller than I expected), both SPY and QQQQ are making higher highs. I don’t know what to add onto this price action but a opinion of long with caution. Qs is having a more than 62% retracement since the low it made at early this year, and SPY is getting there. Oil and some commodities are at the record highs, Gold is back to 900+. There is no good or bad, same as what I mentioned in the previous post, we are having a inflated market, as there is inflation everywhere, we shouldn’t feel surprised to see this kind of the market, instead we should be happy that market is not tanking when others are inflating. Let’s continue check the charts of the following ETFs, and see where should we be cautious.

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1. SPY: The 61.8% sits around $144.30 level. I’d like to see spy reaches that level before another pullback. I am waiting for another pullback because I feel the uptrend line (red) is too steep to continue. The volatility is slowing down, as memorial weekend is just around the corner, and summer is just steps away, so pace your own steps, this is just not the right time to be aggressive. The first support level is on the 200 day EMA ($140 level), and then $138 level.

2. QQQQ: Qs is very strong on the daily chart, the chart above is a weekly chart, as we can see the first potential resistance is around $50.50 and then $53. Support is around $48. It might be slowing down its rising pace and starting consolidation.

3. XLF: The financial sector is the worse performer among the three, as it hasn’t make the higher high yet since the early pullback. It seems already started consolidating. I drew two trend lines on the chart, now we just need to wait and see which one breaks first. If the red line breaks first, I will watch for $24.40 level for supports. If the blue one breaks first, I am expecting a higher high, which will push the financial to $29 level (the 200 ema).

Good Luck and Happy Trading

Well done! Bull! and welcome back, if you plan to stay for long. I have been keep saying that I am not trust this bullish move, and having a short bias sentiment towards the market, guess I was just trying to be a contrarian, not a good one apparently. The resistances on SPY, QQQQ and XLF are all broken on Thursday with strong upward strength and volume. It took me by ’surprise’, more of a disbelief. Good thing was, I didn’t have any short positions for swing, was mainly doing some day trading.

As the economics report and employment data are better than expected, seems investors are pretty opitimistic and feel the bad things are behind us already. Since the inflation is inevitable, why don’t inflated the market too, as least money can be made here. Well, the market might be inflated, but I don’t think the bad things are behind us right now. So if you are riding or planning to ride this uptrend, be careful, and don’t take full positions, and pay attention on the resistances on the way, watch out for the test on supports. Based on the indicators, there will be a pullback coming, and I will observe it closely. The following are the charts for now:

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1. SPY: The 140 level should act as support now, and there is very high possiblity that it would be tested next week, I’d like to see it holds steadily and back up again in order to confirm the bull. If 140 level fails to hold the selling, we will look at the green uptrend line, and the support at 137 level. The resistance now sits at 61.8% Fibonacci Retracement around 144.36. I doubt it will go straight to that level, but I could be wrong. Will see.

2. QQQQ: Qs is still the strongest among the three. All indicators show in the chart are bullish. The nearest resistance is around 49.70. It doesn’t seem that far away, might be reached in a day. The next resistance is around 50.80 level. I would like to see 48 level be tested first, before it go up to 50ish.

3. XLF: The financial also broke the resistance at 27, and seems going to heading higher, as two of the three indicators showing bullish signals, however the money flow doesn’t look that great. Next resistance is around 28.78, the 50% Fibonacci Retracement, and the 200-day EMA is sitting at 29. Supports are on 27 and the green uptrend line. Will see.

Next week doesn’t seem like a very hectic week, it might be a consolidating week, so careful and patience. I will write a new post for update if necessary.

     Good Luck and Happy Trading