Technical Analysis

QQQ & Options Thread

MARKET WRAP:



APRIL 25TH

Stuart Riddle says:As Saturn turns direct, I'm reminded of the significance of Saturn in Gemini for the United States. Louise McWhirter wrote about this in her seminal text, Astrology and Stock Market Forcasting (New York: AFI Publishers, 1977; originally published in 1938). She confirmed the potential for conflict in the form of domestic and foreign wars during this transit: "Saturn has never passed through Gemini during the past 72 years without bringing a financial depression, financial panic, or war" (p. 92). *TMA Editors note: The last two Saturn-in-gemini periods coincided with the Vietnam War (1971-73) and World War II (1942-44). Saturn visits Gemini again from April 20th, 2001 - June 2003 (It also made a breif station from Aug 11th - Sept 16th in 2000, foreshadowing the bulk of the transit to come).

Housing activity remains very robust, as indicated by the near record level of existing home sales in March. The housing market doesn’t seem to be in the mood to go into recession. Just as with today’s existing home sales release, new single-family home sales in March set a record, increasing 4.2%

APRIL 24TH
Manias unwind poorly! We are already in the midst of a short term pullback, so today's article is not exactly short term timing. However, we feel it is necessary to comment upon what so many are counting on as a full fledged turn to the upside and a nascent bull market. Given the performance of the daily Advance/Decline numbers, this is either the most horrid bull market of all time or a lot of well wishers are going to be mighty disappointed before too long. We are nearly right back to where we were last Tuesday, just before Alan Greenspan's Fed once again cut rates, an amazing record of ineptitude on behalf of stock prices. Incredibly, bulls continue to cite the record of prior rate cuts on subsequent stock performance. The difference this time of course, is that the rate cuts come at the end of a veritable stock mania.

Jay Shartsis, says: "There is some discussion of the VXN (VIX for the Nasdaq), specifically about the meaning of the quite high readings today above .80. These kinds of numbers are to be expected in sharp selloffs. Since Nasdaq is only down one day off a big run-up, why such a normally fear-driven figure? Big VXN or VIX numbers are seen at market lows. The face value interpretation is that there are put buyers now driving up the VXN, but it seems so out of line at 80.26 that I might consider it due to smart money front-running Nasdaq 100 (NDX) puts in advance of a sharp selloff. These numbers are so strange that this might be the preferred explanation, which would be bearish."
AMEX Sets Daily And Weekly Option Volume Record

Consumers kept buying autos, homes and consumer goods, though, pushing the household debt load in the last three months of 2000 to 14.3 percent of disposable income, the largest share since the 1986 fourth quarter. Even that didn't stop borrowing. It rose at a 10.5 percent annual rate in February, reflecting the biggest rise in credit card use in more than half a decade, Fed numbers show. A Rising Debt Load

Atticus says: kim chart lines slope down hard-i.e by weeks end u w/b looking @ 1996,1903,...1800,1725....1575....1250= $$ rough 43 1/2,41 1/2,39 1/4,37 5/8,34 3/8,27 1/4

APRIL 23RD
Rip Bear Winkle says: "Back Raiding the Picnic Baskets" After a three week hibernation, this morning's breakdown stopped me into full short positions on BHH, BDH, IIH and SWH. So far, all are outperforming QQQ to the downside (strategy of attacking the weakest). Stop losses set above Friday's highs right now, but I'll start feeling a lot more comfortable about these once I can move the stops closer to breakeven. Still afraid that this pullback sucked me in, and the market is then gonna turn around to the upside and bite me. It's always that way on these kinds of setups, when my exposure on every position is at my maximum discomfort level, and every position was started at roughly the same time. This is where hard stop losses and money management (position size) come into play. Friday's highs represent the maximum amount of discomfort (total dollar loss) I'm willing to endure to put these trades on. FWIW, I was feeling the same way when I first initiated similar short trades at the end of January. I got old market on that one. Time will tell if I've got the market on this trade, of if the market has me. Good luck all. --RBW

APRIL 22ND
Baja Fish Taco says: My bearish scenario is looking for a failure high. That means we pull back for at least one day (we may have already started the pullback last Friday), and then the upleg falls short of the swing high made before the pullback. In this case, 2203 was latest swing high. If we continue the pullback on Monday, then the next upleg should not reach 2203 if we have a failure high. I'm thinking this way because the all-time high on the Nasdaq was a failure high. 5133 on 3/10/00 was the all-time high. The NDX and SPX made all-time highs on 3/24/00, but the Nasdaq hit 5079 on that date, which was not an all-time high. Similarly, on 9/1/00, the Nasdaq hit 4260, which was below the 7/17/00 swing high of 4289; the NDX was higher on 9/1/00 than on 7/17/00. The 10/18/00 to 11/6/00 rally and the 1/3/01 to 1/31/01 rally also had failure highs. My ideal bear scenario would have the pullback ending Monday morning, and the upleg would be a quick move up that tops out around 2188 late in the day. Then we start declining to new lows from there. If that happens, I project a swing low of 1234 on May 17, and a more major swing low of 901 in mid-June.
In EW theory, triangle consolidations only occur as the LAST consolidation in a trending move. That means they can occur as wave 4 of a 5-wave impulse, but NOT as wave 2. They also can occur as wave B in an ABC zigzag, or wave X in a double zigzag. Here are 3 key triangle consolidations in the past year. I believe that triangles MAY have a certain implication that neither Prechter nor Neely address. So my conjectures at this point are tentative. More on that below. Here are 3 charts. Here are my conjectures about triangles. Note that in all 3 cases, the rallies failed. The triangles told you that the rallies would end, but they did not tell you whether the ensuing decline would be merely a pullback or a decline to new lows. My conjecture is that the presence of triangle consolidations within a zigzag or double zigzag rally means that the rally will fail. Do we have a triangle consolidation in this present rally? It's ambiguous, but I think yes. In the chart below, it's labeled as wave X and is a descending triangle. On the other hand, it could also be counted as a flat correction. If it's a triangle, that means we get one more consolidation (I expect it should last at least one day), and then one more upleg, and then the move ends. Then we'll see if my conjecture is right, whether we get just a pullback, or a decline to new lows.

APRIL 21ST
Jim says: we realize we have an unpopular view of the markets and what will happen going forward. We here don't fight the FED and the Fed has opened the flood gates on liquidity. So what. those kinds of things are some of the contributing factors that has led to the credit bubble and the market bubble. You can't fix a credit bubble by lowering interest rates and opening liquidity. A credit bubble is not fixed by issuing more credit, it is fixed by paying off debt. While lowering rates may help ease the pain of those existing notes that are directly tied to the Prime rate(as most business' are) they still need to be paid off(or at least down) before the banks will give you additional money.( we speak from recent experience on this) .Yes the refinancing of homes by the consumer will help them have a smaller payment, but a smaller payment doesn't mean anything if you don't have a job next year. If there is so much liquidity in the markets and other areas, how come no one is buying gold and precious metals in the face of the most rapid slowdown(possibly) ever? Because no one has any free cash to buy anything with, so it doesn't matter what the FED does. the only answer to this is to get debt paid off, and that requires time. We feel the beginning of the next bull market won't start with a 40 % rally in stocks in 2 weeks as this one has. The bottom of this bear will come when no one wants to even think about stocks, and they don't care if this is the bottom, they just want out at any cost. Sites like this one that MAH has created while jumping from 25 k hits/day in January to 100k hits/day currently will lose lots of following, because no one will care. This site may go back down to 25k hits/day at that time. We have not broken the will of the people to buy stocks yet in our opinion, so there is more downside to come.

Lockerbee says : By virtue of 2143-2130 survival, closing at 2163, near 2169 and printing 2201 intra-day, on the rise in last few minutes of trading Monday AM points to a higher open. resistance at 2169, 2184, 2211. From any of these levels retracement is overdue to commence. Retracement targets will be 2074, 2022, 1975, 1903, 1868. Amount of retracement in days ahead will decide extent of rally to 2320, 2425 or 2650, before NASDAQ can start its doomsday journey. Average of my 5 shorts is 2139 and in probable case of higher Monday AM, I will add to my shorts. On FTSE 100 my short is at 5900. Wednesday I will decide the extent of profits and next strategy. Fed's rate cut reasons, rumors are already surfacing, like Argentine woes, Goldman Sachs hedge fund in trouble, Cisco connection. More will come out in early May, when all bad economic news which has been swept under the carpet will resurface. One effect of ECB not cutting rates is diverting money away from dollar & Yen is to strengthen Gold. In 1929 also there was a relief rally after first sell off. After relief rally was the real plunge. So what happen after 18th May is too scary to imagine. So at the peak of next leg of the rally, I short hard for intermediate term. Jim is no fool that he is accumulating shorts early to average shorts at 2200 eventually for 907.

Trustee says: Yes it was a bullish sign that on Friday rally was not sold off . But On Dow 10740 was not attempted intra-day which is bearish. NASDAQ remains bullish by virtue of closing above 2130. Resistance for Monday is pegged at 2211, 1258, 10684, and a retracement commences into Wednesday. The amount of retracement by Wednesday Mid-day will decide extent of next leg of rally in which 2310, 1305, 10589 must be taken out to head for peak of rally on 3rd May after which the fall begins which will last for 10 days and rise in anticipation of another Fed rate cut on 15th May, to sell off yet again from 18th May or earlier.

APRIL 18TH
Starmother says: I am quoting a trader "The key here is investor and business confidence, and the only way the Fed can turn that around is by springing a surprise on the market," said Sung Won Sohn, chief economist at Wells Fargo. "That's exactly what we got today."; My feelings are that this is the making of a fortune off of the market - always look to the event and say to yourself who stands to make the most money from it. With the aspects today this kind of upsurge is not a given we do of course have a lovely trine from Sun/Merc in Aries to Pluto/Mars/Chiron in Sag, of course the market may be feeling the Venus station coming on 4/20, granted. But this sick feeling about the economy still sticks in my solar plexus. The market is flying up really high +420 but they had to cut the interest rate at the fed to manipulate (Pluto) the market and the Moon entered Pisces today at market opening will be a square with Pluto Thurs. at 2:56 pm EDT. Pluto is billionaires. I also heard that the Fed held this meeting to lower by 1/2% over the phone this morning. The DJIA soared at 11 am EDT, Being a Cancer rising chart (I use Koch) the moon in Pisces is in the 8th house disposited by Pluto, a plutonian influence is assuring us that the truth will squeeze out soon. Uranus is there in the 8th also with Neptune in the 7th house. What is that archangel trumpets? Or the Veil being lowered? Kate Plumbs article in MTA is coming to pass I think.