Well, we mentioned that we might get a retest of 739 before rallying higher, and that’s exactly what happened:



This was purely a technical bounce as far as we can can see. We failed to make a lower low and then followed through with a rally on decent volume. Keep in mind that we had six days of selling before this, so eventually we were going to reach a level where people holding short positions wanted to take profits. In a crazy market like this, sometimes simple logic can prove to be very profitable. As far as a healthy move from up from here, we are looking at 800 on the S&P, not only a technical level, but a psychological one as well. That’ll probably be enough to work off any oversold condition.



The S&P remains stuck in a channel that has been forming over the past few weeks. Until we break it with some conviction, the trend is still down. However, because we are so oversold, this channel could easily break to the upside over the next few days. If you plan on playing this long, a stop around 739 is advised. Again, we are watching 800.



We said Gold was starting to look toppy in our last post, and it sure did fall hard today. Volume was on the heavy side and it looks as if Gold may be in the process of consolidating a bit over the next few weeks. We would like to see a test of that 50-day before continuing higher. $1000 is a huge level, both technically and psychologically, as any break out would be considered all-time highs. We mentioned in the last post the formation of that inverse head and shoulders on Gold. We’ll be watching for the formation of that right shoulder over the next few weeks.

And that’s about it.

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We leave you with this:



Good luck.

The chart tells the whole story:



This is a 2 year chart of the GLD. We’ve been bullish on the GLD since $75, but had entirely failed to see that inverse head and shoulders forming on the yearly chart. Couple that with the 50/200 day crossover, as well as the tremendous buying volume and this chart couldn’t look any more bullish if it tried. The left shoulder, and the head that have already formed, leading us to believe that we could see a run up as high as $100 before maybe forming that right shoulder. Should we ge a bounce on the S&P off of 739, the GLD could see some selling as that last shoulder is formed. We’d be looking to initiate new long positions in the GLD around $92.

The fundamentals certainly support being bullish on Gold. Let’s see how the markets trade it later this year.

Also, anyone that has comments on the GLD is encouraged to share.

Things around here are pretty busy tonight, so just a brief analysis for the week ahead:



The S&P is starting to reach the lower end of its range here and the daily charts are beginning to show some signs of a trend reversal going into Monday. While the S&P could retest 739 sometime this week, we would not be initiating any short positions here. If anything, we’re looking for the S&P to make a run at 800, a place where we would begin to consider entering new shorts.

Gold is beggining to look a bit toppy so keep an eye on that as well.

Just excellent.

Just want to run through a few charts tonight:



The S&P broke 800 with conviction over the past couple of days. A retest of 739 looks imminent.



GM is really starting to break down to new lows here on heavier volume. Maybe it’s because their plan involved asking the government for an additional $16.6 billion dollars. You can bet that if they don’t go through bankruptcy now that they will be back asking for more money later. It’s ridiculous that we are even considering giving this company more money.



The XLF also broke to new lows on talk of nationalization of the banks. What on earth is this country coming to?



Gold continues to be bullish. If you caught the trade from $92 to $97 that we mentioned in the weekend analysis, you can’t go wrong with taking some profits here. If anything, we’d like to see a bit of consolidation here before continuing higher. That being said, though, you can’t argue with that tremendous buying volume. The trend is your friend.



The VIX is on the verge of a bigger move here. Definitely something to keep an eye on.

And that’s about it.

Good luck.

This should be a very interesting for a number of reasons, the most important being the deadline for the automakers. There’s also a ton of economic data due out this week, so make sure to keep an eye on that. We’ll be looking at three charts tonight:



The S&P continues to look pretty bearish. It has been trading in a range of 800-900 for some time now. We’ve been saying for a few months now that a retest of 739 is in the picture, but the bulls have been able to hold this market up fairly consistently around the 800 area. So the trade for us continues to be short at the 50-day. As for the longer side of the trade, we’ll save that for gold.



Gold is beggining to look interesting again here. After a surge of buying above $92.5, we’ve seen a low volume sell off back to $92.5 and if that support continues to hold, we could see some more buying come in. As a long term investment, Gold looks excellent.



This is a two year chart of the VIX using weekly timeframes. There is a definite triangle formation in the works here, and we believe that it is only a matter of time before this breaks chart breaks out. Given the current economic climate, as well as Obama’s so-called stimulus, we believe that this will be a break to the upside rather than the downside as this market makes its way back to 739. One would think that would also clear the way for a nice move in Gold.

Simply put, we are short equities, long Gold, and long volatility as we go into next week.

Anyone willing to place any bets on whether or not the automakers have done enough to stay viable? Probably not, but will that be enough to prevent them from recieving more tax dollars? With Pelosi and Co. running things in Washington, I think we all know the answer to that one.

Good luck.

Anyone that was trading the S&P to the short side today must’ve been wondering what on earth is going on. Later in the day, after we posted that chart showing that uptrend break, we saw a surge of buying come in as news came out saying that there was a plan in the works to help bail out homeowners. The S&P rallied all the way up to 837 where it managed to close out the day. All of a sudden the trend is up again and a retest of the 50-day looks to be in the works.

And we’ll see whether or not they actually have a plan...

The uptrend on the S&P that was intact since last week has now been broken:



The trend is now down without question. Trade accordingly.

Well, today was the perfect example of what happens when a market loses confidence in its government:



The financials were absolutely crushed today on heavy volume, leaving that downtrend that we’ve had since October of last year intact. That $8.07 level looks to be the next target. We may see a slight pop tomorrow just due to the fact that we are very oversold on the daily charts.



With regards to the S&P, we managed to hold that uptrend from last Thursday. If 822 can hold through tomorrow, we could see a move higher from there. In all honesty though, being long in this market is pretty scary. If anything, we’d like to short into any strength later this week. If that 822 level breaks, though, watch out below.

We’ll see what happens tomorrow. Retail sales and intial claims are due out in the morning, so keep an eye on those. Good luck.

This plan is doomed to fail before it has even begun. In fact, did Geithner even give us a plan? It seems as though the whole administration has NO idea what they are doing. We are literally throwing trillions of dollars down a black hole, and you can guarantee that with the federal government running this program that it is all just going to be a complete failure.

America: the land of debt.

Pretty low volume today as the markets wait to see what happens Tuesday:



Just from a technical standpoint, though, this index still looks pretty bearish, especially with the average pinned right below that 50-day. Should this be a sell the news type scenario tomorrow, watch that uptrend for support. As far as a rally for tomorrow, we’re watching that 900 level for some heavy resistance.

It’ll probably be a good idea to have CNBC on tomorrow for your trading, as that the news tomorrow will define the trading for the rest of the week.

It’s been nothing but choppy trading this week. Quick entry/exit trades have been the most rewarding and tight stops have been crucial:



We have been trading in a very tight range over the past few weeks. Take note of that triangle formation on the /ES. That’s what we’ll be watching going into tomorrow. A break above that trendline, and we could retest 860, while a break below it would almost certainly take us to 800. Until we get a break though, it’s just going to be choppy trading.



Tech has been really strong as of late. $30.5 is our line in the sand. A break below $29.5, though, and things start looking bearish again.

Lots of economic data out tomorrow morning, so it’s sure to be interesting.

Good luck.

Evening all. Three charts up for analysis tonight:



The S&P failed to make climb above the 50-day with any serious conviction. This really is beginning to look more and more like a “kiss, and good-bye” move to the downside. Volume increased as the selling came in last Friday and it really is only a matter of time before we retest 739. Watch for a break of 800 as an area to initiate any new short positions.



The financials gapped up over that $9.36 last week after after a third test of resistance, however, we managed to mostly fill that gap on Friday. $9.36 is currently considered to be “support” here, but we’ll see how long that lasts.



Gold just continues to look bullish. We saw that retracement off of $90 back to $86, before moving higher again, as mentioned in last week’s analysis. Hopefully some you caught that trade. Watch $92 for resistance. $90 looks like a good area to get long again.

And that’s about it. The so-called stimulus seems to be gaining a lot of opposition in Congress. The argument is that this is nothing more than a huge social welfare package, which probably pretty close to the truth. At the end of the day, this stimulus most likely not fix anything and most of the money is going to get wasted on issues that have little or nothing to do with repairing our economy.



We’ll see what happens this week.