Hello traders everywhere! Adam Hewison here, co-founder of MarketClub with your mid-day market update for Tuesday, the 4th of October.
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It's official! We are in a BEAR MARKET in the SP500.
For MarketClub members this is old news, as we alerted all members to either exit or place short positions on the S&P500 on August 2nd at 1258.07. That's over two months ago!
How much further do we have to go on the downside? That's a legitimate question, however, with Bear markets they tend to persist longer and take more pain than most investors are willing to sit through.
As you know from watching our videos, we are projecting lower levels for the S&P 500, as well as the banks and financial institutions. Those moves on not over yet.
In today's presentation, we will be talking about three markets that are in the news. This will be a regular feature and we will try to bring you information that is timely, informative and educational. We will be talking about stocks, the Forex markets, and the futures markets.
Here are 3 markets that are in the news:
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3 STOCKS IN THE NEWS
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AMR - Trade Triangle (Monthly) short from $7.02 on 2/01/11.
Now trading @ $2.33
BAC - Trade Triangle (Monthly) short from $13.16 on 4/14/11.
Now trading @ $5.43
AAPL - Trade Triangle (Monthly) long from $355.13 on 7/07/11.
Now trading @ $379.93
Now let's go to the 6 major markets we track and update every trading day and see how we can create and maintain your wealth in 2011.
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S&P 500 INDEX
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Yesterday, the S&P 500 index broke through the key 1120 support area that we have been outlining for the last several days. The resounding break to the downside indicates that this index has quite some way to go. Any rallies back to the 1114 to 1120 area will offer a good opportunity to short this market. We would not rule out our ultimate target zone for this index which is the 1000 to 950 area. Any rallies back to the 1120 area will in our opinion being met with strong resistance. Intermediate and Long-term traders should continue hold short positions in this index.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
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Suggested S&P 500 Trading Instruments:
Non Leveraged ETF's: (Long SPY) (Short SH)
2 x Leveraged ETF's: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
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SILVER (SPOT)
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We continue to view the silver market in a negative light, and we would not be surprised to see this market move lower. Resistance continues to be around the $31.50 area and we do not expect this to be broken anytime soon. If we see a close this week below $29.60, it will represent a new low close for silver and a push down to our target zone of $20.00 an ounce. As always we will rely on Trade Triangle technology to keep us on the right side of the trends. Traders who are following our Trade Triangle Technology should be short this market with appropriate stops.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trend = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
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Suggested SILVER Trading Instruments:
Non Leveraged ETF's: (Long SLV) (Short the ETF SLV)
Leveraged ETF's: (Long AGQ) (Short ZSL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
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GOLD (SPOT)
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The gold market put in a large reversal to the downside today which reflects our -55 Chart Analysis Score. When you see Scores in this range with our Trade Triangle technology, it indicates a trading range. A close today below $1,618.80 will represent a new low closing price for gold for the last several months. I think most traders would be better off just watching from the sidelines until the volatility subsides. Only long-term traders should maintain long positions with the appropriate money management stops in place.
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = - 55
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Suggested GOLD Trading Instruments:
Non Leveraged ETF's: (Long GLD) (Short the ETF GLD)
Leveraged ETF's:(Long UGL) (Short GLL)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
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CRUDE OIL (NOVEMBER)
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The downward trend in the crude oil market continues with crude oil hitting a low today just below $75 a barrel. Our Trade Triangle technology has been all over this market and is presently short from $96.04 a barrel. The beauty of following our Trade Triangle technology is that it's totally non biased and it follows what the markets are doing, instead of what politicians, the news, or pundits are saying about a particular market. Intermediate and Long-term traders should continue to be short the crude oil market.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
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Suggested Trading Instruments:
Non Leveraged ETF's: (Long USO) (Short the ETF USO)
Leveraged ETF's: (Long UCO) (Short DTO)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
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DOLLAR INDEX
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Today the dollar index got within .50 of our target zone of 80 before pulling back on profit-taking. We still believe that the major trend in this market is positive and we expect it to move higher in the weeks ahead. We may have to see some consolidation above the 79 level before this market moves to new highs. We continue to be friendly to this market and want to hold positions with money management stops. This index is coming from a large energy field that is capable of carrying it much higher. Intermediate and Long-Term traders should maintain long positions with the appropriate money management stops in place.
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Monthly Trade Triangles for Long-Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short-Term Trends = Positive
Combined Strength of Trend Score = + 100
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Suggested DOLLAR INDEX Trading Instruments:
Non Leveraged ETF's: (Long UUP) (Short UDN)
Leveraged ETF's: (Long) (Short)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
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The REUTERS/JEFFERIES CRB COMMODITY INDEX has now completed a 61.8% Fibonacci retracement. We expect the downward pressure in this market is probably coming to an end and we may see a reflex rally from current levels. The Fibonacci measurement came from the highs that were seen around April 29th and the lows that came in around August 25th of 2010. We expect the trend to continue until our Trade Triangles inform us that the trend has changed. Short, Intermediate and Long-Term traders should maintain short positions with the appropriate money management stops in place.
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Monthly Trade Triangles for Long-Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Negative
Daily Trade Triangles for Short-Term Trends = Negative
Combined Strength of Trend Score = - 100
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Suggested REUTERS/JEFFERIES CRB COMMODITY INDEX Trading Instruments:
Non Leveraged ETF's: (Long CRBQ) (Short the ETF CRBQ)
Leveraged ETF's: (Long) (Short CMD)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
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This is Adam Hewison for MarketClub and I'll see you tomorrow, right here with my mid-day market update. Don't forget to enter for a free 1 year subscription to MarketClub on a HP WiFi Tablet.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
What a wild ride... this is when weekly technicals sure help.
there is a previous area of support at S&P 1133-1136. i expect the bounce, if it resumes tomorrow, to have some difficulty at the 3 day average of highs around 1133. we'll see
After hours two of my AG/AU silver miners went up plus Ford and a fertilizer maker. Ford got a tick upwards due to an auspicious four year contract settlement for a Chicago area Ford plant. A small uranium mine continued a slow downward plummet and a couple foreign AG/AU miners slipped or stayed put.
The fertilizer maker may have an incidental turn upward in price for odd reasons or a lot of people are planning on producing grains for a steady food demand regardless of economics. Or they could be simply be producing the basis for explosives. As for the mining operations it's likely someone is preparing for a commercial market for AG arising and the metals serving as an inflation hedge.
Government action is wrecking business relationships. When that is squelched, hopefully crushed in 2012, anyone with a larger and cheaply expanded portfolio should prosper for a while.
Thanks Adam. One more clarification. So far I know there is some email feature available to notify when trade triangle changes. How quick is this notification system? Is it instant or some time lagging is there?
Looks like trade triangle is bit lagging indicator in case of impulsive up and down move
Deb,
See my earlier reply.
Thanks,
Adam
SP500 closed above 1123. The Russell 2000 closed with a bullish engulfing candle.
Any shorts still holding will lose
The continuation of a bear market in equities and commodities would be like shooting fish in a barrel. Since when is making money that easy? Most likely the bottom is in.
Rick, it takes a lot more than a fast sell off at the close to end a bear market! :-
Elkjohn, I vote dead cat bounce since commodities could not get off the floor
Suggested S&P 500 Trading Instruments:
Non Leveraged ETF’s: (Long SPY) (Short SH)
2 x Leveraged ETF’s: (Long SSO)(Short SDS)
Futures: Contracts are available to trade this market. Contact your broker
Options: Options Contracts are available to trade this market.Contact your broker
WARNING: Liquidity is some ETFs is very thin. Contact your broker for more information.
Comment
As SPX is bearish, the leveraged SDS which moves in th opposite direction we must be long not short as recommended above. Could you please issue a correction to all traders please.
Please correct me if I am wrong!
Thanks & Regards
Jayaram,
This should help.
Description
ProShares UltraShort S&P500 (the Fund) seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the S&P 500 Index. The S&P 500 Index is a measure of large-cap United States stock market performance. It is a float-adjusted market capitalization weighted index of 500 United States operating companies and real estate investment trusts (REITs) selected through a process that factors criteria, such as liquidity, price, market capitalization and financial viability. The Fund invests in various sectors, such as consumer, non-cyclical, financial, technology, communications, energy, industrial, consumer, cyclical, utilities and basic materials. The Fund’s investment advisor is ProShare Advisors LLC.
All the best,
Adam
Will this end of day rally have happend if "Uncle Ben" hadn't pacified investors? I'm still not convinced this isn't a dead cat bounce.
a rally in a bear market is still a rally! SPY calls from S&P support at 1075-77 did well.
Hello Adam,
As per trade weekly trade triangle we are short from s&p 1136. We closed near 1124 area. All the profit is evaporated in last 30 mins. Even we closed above 1120 area which was strong resistance as per your 2 pm update. what is your view on this strong impulse up move? it is veery difficult to do emini future trading using trade triangle..I'm planning to take membership tonight.. Thanks for all of your market update
Deb,
Despite the late rally the major trend in negative for the S&P500. We may see some follow thru tomorrow but I expect the market to once again slide into a resumption of the bearish trend.
All the best,
Adam
FAKE OUT!!!
Looks like your BEAR MARKET evaporated in the last half hour of trading today.
Big rally into the close. Uncle Ben really helped the market today. Dead cat bounce? Bear/Bull fake out? Stay tuned sports fans.