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[darkside of the moon] 22/12/2004 17:41

1200 points ago

[darkside of the moon] 22/12/2004 17:41

well this thread was started in nov at the recent bottom

[energyi] 22/12/2004 17:09

BAD BREADTH is giving a Warning for next year...

The Textbook says, EXCERPT:
"Confirmation occurs when both the underlying average and the new high/low figures are "in gear." On the chart below, for example, in November 2003 the NYSE broke through 6000 and at the same time the number of new highs surged to just over 600. This is analogous to the generals leading the foot soldiers forward. The large capitalization and small-cap stocks are all marching together and the market as a whole is technically healthy.






Bullish or bearish divergence can occur in one of two ways. At a top, bearish divergence can be signaled if the market reaches a new peak, yet the number of new highs is approximately equal to the previous new high figure. We saw this kind of divergence happened in the NYSE in early January, as the index rallied to 6500, yet the number of new highs again peaked at its previous level of 600.

A second kind of bearish divergence happens when the index hits a new high in price, but the number of new highs is actually lower than previous levels. This kind of bearish divergence can be seen in late January and early March 2004. In late January, the NYSE reached a closing peak of 6672.04, but new highs were just over 500. In early March when the NYSE hit its recovery high at 6780.03, new highs had receded to under 500.

This kind of bearish divergence signals that fewer stocks are being swept ahead when the average rallies to new high ground. Beneath the obvious surface price action, technical deterioration is taking place. However, this is often unknown to most investors (at least those who don't regularly track this indicator). If this type of bearish divergence persists long enough, then the market typically reverses course."

@:

[kvu] 22/12/2004 17:04

Closed out MER puts at a loss of -0.25 as the rally and then the move down from the highs of today seems very corrective. Looking at the spx making new highs as expected after the break of 1210 in the march futs this am, it seems a double top or a new high in MER may occur over the new year and the low may not come before that happens so prudance says exit position.

Am flat now for christmas and new year.

[energyi] 22/12/2004 16:57

THE BREADTH IN THIS MARKET IS POOR:

[energyi] 22/12/2004 16:55

in what way, darkone?

[darkside of the moon] 22/12/2004 16:14

youre a funny guy energyi

[kvu] 22/12/2004 15:07

Closed out QQQQ puts at 1.35 for a small profit. The drops looks like it is a B wave correction with a possible C wave rally into xmas and new year. Seems as if the SPX may have only made a three wave correction last week and hence a higher high could be on play for the next few weeks. Would be cautious shorting the spx or dow.

[kvu] 21/12/2004 18:53

Taken MER $60 JAN PUTs at $1.80. Looking for a retest of lows or a break to $57.60 levels.

Later added a few more at $1.70

[kvu] 21/12/2004 18:32

Dumped the calls at 0.80 in the last few mins. I went for a slightly out the money call on this occasion and suffered as a result with the profit as $0.41 rally in the stock amounted to less than a 0.20 rally in option price. Had I dealt with the in money option at say $38.625 then the profit would have been nearly 80% of the rise today since the low yesterday.

Taken a put position at $1.30 on the JAN $40.625 PUTS. Very smaall position looking for a drop into tomorrow or thursday before an xmas rally would begin.

[kvu] 20/12/2004 19:05

Took some more QQQQ calls on the last nas drop to 1595 on the March futs. Took the JAN 39.625 Calls at 0.63. Average holding now 0.6875

[energyi] 20/12/2004 18:23

Today's action looks good for those who shorted early-on

[torturedsoul] 20/12/2004 18:20

im only playing the short side now.

over the last week the nyse bullish percents have started to break down. the macd and dmi indicators on the chart confirms this. we've also seen significant bearish price and breadth divergence on the nyse over the last 2 trading sessions of last week.

the bullish percents chart is the primary indicator i use for the broad stock market trend of the usa indices. reversals of the bullish percents above 70 and below 30 has been an excellent indicator of significant usa market tops/bottoms.

i also have ndx 1585 as a line in the sand to show what should be a tradable market top for techs.

[kvu] 20/12/2004 18:09

Took some jan 39.625 calls at 0.70 and a few more at 0.65 in the drop to 1602 on the Nas futs. May add in a few more tomorrow if I get the chance.

[kvu] 20/12/2004 17:03

Closed out QQQQ puts at 1.57 as I had an order working in the market. Nas touched 1605 when I traded out my puts. I am buying a small number of calls on the QQQQ's over the next two days.

[kvu] 20/12/2004 15:19

Taken a few jan 39.625 QQQQ puts at 1.30. Will take more later if we get to my target nas zone of 1626-30 area. My plan is to exit them and be long for a christmas rally towards the end of the week, so hoepfully tomorrow or wednesday I can dump the puts when the nas touches 1595-1604 area in the March futs contracts

[kvu] 20/12/2004 13:02

I think BARC should provide some great put buying opportunities soon. Maybe around the 595-604 area.

[kvu] 19/12/2004 22:14

I am thinking the nas should gap down with the spx at the futures open on sunday evening which should provide a buying opportunity, or a short covering opportunity for futures and puts, as the Nas 100 index got re-weighted with stocks on friday and hence compulsory dumping of stocks occured as fund managers sold their holdings. I think many were waiting for a late rally on friday to dump into, as was I, but it never came and hence the nas lost 10 points at the close on high volume. I think if it does gap down at the open on Monday's open on the cash market then it should close that gap and re-test around 1626-30 on the futures for Christmas. I am also looking for the gap on the spx to be closed at around 1207 area before any new falls. It will be interesting to watch what happens as buying of the new stocks that enter the index should cause the qqqq's and the index to rally somewhat.

[kvu] 18/12/2004 12:29

haha....sounds interesting. It wasn't pulled from a cracker was it? Heard the wine was better this year.

[energyi] 17/12/2004 22:14

It WAS good. I even won a prize.
I'll tell you what it was later

[kvu] 17/12/2004 21:40

Will do energyi. Hope you had a good time at the advfn do the other day....you can fill me in next week when I try and pop down your way one day if you are around. Actually if you feel for lunch tom or sun then let me know and I might be in the area.

Have a good weekend.

KVU

[energyi] 17/12/2004 21:35

nice shorting, kvu.

have a look at the FORM thread

[kvu] 17/12/2004 20:33

Closed out spx longs at 1199.75 after it broke up trend line started at 1195. Maybe another gap down on monday start with a rally straight after....so will hold fire on the longs just incase.

[stoic warrior] 17/12/2004 16:44

Luck to you kvu ... I had a close call myself last night on an spx day trade ... went long too soon and had to "double down" to get out with a day profit ... (that was a UK s/b, not a US call). I'm still holding short today, both sides of the pond but looking to cash out clean for the wkend, as I'm away part of next week.

[kvu] 17/12/2004 16:35

Gone long spx at 1197.75...this should close the gap and hoepfully provide a good short after the weekend around 1205/09 area and the nas around 1628/34 as the nas just doesnt want to break down. Hope I haven't cursed myself because i said that.....