S&P and 1460

S&P is on its way to test previous highs from Feb 27th. It doesn't seem too long ago before we thought the sky was falling when the DOW gave away over 400 pts in a day. And look how quickly we have recovered those losses. As we head to re-test previous highs, it will be interesting to see if we can break through them and continue higher or form a double top and retrace. For the market to break higher past previous highs, we would need the financials and tech sector to co-operate. If you look at the chart of the SOX index, it doesn't seem to be co-operating with the overall trend right now. Here's a quick look at that:



The pharmaceuticals have been extremely bullish lately with recent FDA approvals attracting smart money. PPH is a nice ETF to play here.



Take a look at what MRK (Merck) did recently:




Oil is breaking out to new highs as well (check out $XOI and $OIX). OIH is the ETF to look at here:



CME continue to stay within the trendlines I had identified over a month ago. Look for a break-out either this week or next. I like this one a lot!

Google is in a similar squeeze with earnings coming out next week.



A lot of tech companies are reporting in the coming weeks which could change the behavior of the semi's. We'll have to wait and see. My outlook remains neutral to cautiously bullish in the short term.

Short term top developing, possibly!

There is a possibility of a short term correction coming in the market in the next day or two. The volume on the NYSE has been declining the last week as the market has moved higher. Yesterday, there was good volume in the market but it led to indecision which is typically an early sign of possible institution selling. The market could really use this short-term correction as a breather before moving higher. If you are long, I would consider getting rid of some positions or one can consider some short-term swing trades as well on the short side today or tomorrow.

1440 is a level to watch on the SPX and we are only 4 pts above that currently.

CME continue to coil up inside the beautiful penant while GOOG is showing signs of bearishness.

Keep those stops tight if you are long and look for low-risk short entry possibilities.

Comments are always welcome!

Gold Rush!

What a move in gold today. WOW! Here's the 5 min chart for today:



Ran up like a rocket.

A nice break out of its inverted head and shoulders pattern. I see it going to around 149 before some consolidation before we head higher.

Here's what it looks like:


Worries of inflation did help the XAU bring in great buying today and could sure push it higher. The technical analysis definitely supports the bullish move.

The NASDAQ gapped down on the open but bulls did not let it stay there and pushed the market to new highs. I continue to maintain a bullish outlook.

NASDAQ breaks out

NASDAQ broke out today out of its squeeze that I talked about yesterday. I like it.

Gold sold off like crazy today. XAU gapped down big time and it sitting right at the 30 day moving average.

AAPL bounced off its fib fan using it as support. I like this one here a lot. Consider some Apr 95 calls for $1.30. Here's the chart:



I'm gonna keep the post short tonight as I need to catch up on my sleep. My overall outlook is definitely bullish to sum things up.

Trade safely!

NASDAQ in a squeeze

While this week is going to be a shorter one due to the market's being closed (President's day), I think the NASDAQ is setting up for a nice break-out. Here's a look at the squeeze on the weekly chart:



This is a weekly chart so each candle is one week's action. My projection for a timely breakout would be in the next 2-3 weeks. It's a beautiful looking pattern, and looking at the uptrend, it is more likely that we break higher. But how high is high?

Here's my analysis on that. Let's zoom out to a monthly chart and look at some fibonacci retracements. Here's the chart:



You can see that the 38% retracemnt is around 2640 or so which is about 145 or so points away. That would be my long-term target. We'll see what happens.

One could look at the NDX the same way, being in that ascending wedge pattern as well.



CME is setting up the same way, look here:



This stock moves a lot. This break-out could be huge!!

Good trading.

Retail sales numbers awaited

As the S&P broke 1440 support, it was no surprise to see a sell off. While I did enjoy this pull-back in the market since it was more so due to technical reasons than anything else, I do forecast some choppiness ahead as the retails numbers come out on Feb 14th and then PPI on Feb 16th.

From a technical analysis perspective, the SPX is sitting right on its 30 day moving average. A break below this should take us to the next level of support around. The VIX gapped up on the open and made a higher high which should help juice up those option premiums.

The NASDAQ 100 on the other hand is already below is 30 day moving average and is looking weaker than all other indices. However, I wouldn't go bearish on the NDX yet as we continue to be in a channel (watch 1750-1760).



CME broke below its long-term channel. This would concern me if I was bullish on this stock.



An aggressive trader could consider a short (with a tight stop loss) from here till about 555. However, a better entry would be after the stock pull's back to the green trend line and then start a sell off.

The call side of our Iron Condor has worked out nicely. The 650/660 Bear Call can be bought back for a nickel tomorrow. We sold it for $0.50 on 2/5/07. The Bull Put spread is still working.

I will consider opening a new bear call position March 620/630 for $0.75.

GOOG is nearing support around 450. A hammer with confirmation would provide a great entry for a long position. However, I would prefer a put position after a break below this support. We'll see what happens.

Oil and Gold in action

Not much to report on the overall market, things still continue to look bullish. No change in opinion there.

Oil and Gold rallied today. The NYMEX Crude contract rallied to a high of $59.80. If you want to make an oil trade, check out USO. It just bounced off 30 day moving average. It's perfect for a long position here.

I also like GG here. It also bounced off its 30 day m.a.

I like XOM as well. It's in a beautiful uptrend now. Here's a quick look at the chart: