Quick and Dirty Market TA for 7.26.2010

In this edition of the Q&D I have divined some analysis from the SPX chart since everyone loves to talk about it so much.  As always, images can be clicked to enlarge.  Behold:

Friday's candle closed inside of an existing range, and signals a potential revisit to the lower side.  Quite a few Twitterers feel that present conditions warrant an overbought reversal, and should retrenching occur I'd be looking for support around 1065.  However, the weekend press feels quite bearish, and short covering adds the power needed to wipe out old resistances.

An aside.  The reason I prefer charting the DJI lies in the fact that the larger, lower beta components of the Dow better indicate institutional money flow, in my view.  Last Friday's candle on this index closed above two downtrends I have been charting, as well as above the 200 dma.  These in addition to its MACD which also made a decisive move off the zero line over the last 3 days of last week.

Returning to the SPX, see the blue boxed MACD making a nice series of increasingly tall bars in the histogram and with a good angle on the signal line when taking out the zero.  If the market wants higher, I feel like we need to open at or above Friday's close and put in another full bodied candle or two before back-testing the 1102 level.  The confluence of 200 dma and 2 standard deviation Bollinger indicate clear resistance at the 1113-1115 level.

Going back to the Q&D for 5.24.2010 take a look at the DJI weekly.  Presently we see a curling under of the MACD on the DJI weekly here, and a weekly close right at the 10430-ish area that marks the top of a developing resistance area.  Here again, the angle of incidence on this indicator says time to put in a weekly candle above 10434 with an objective toward 10610 over the next few weeks to months as we put in our next lower high.

Many, many stock specific charts have set up with individuals beginning to go off like bottle rockets.  For now, I've got the consolidation scanner at the top of the daily checklist, especially favoring those right angled ascending triangles like the one FNSR broke out of last week.  Props to @ldrogan and @downtowntrader for picking up on that one just days before it exploded.

Good luck.

Two Week Outlook

Since there's nothing else going on in the market today went ahead and fired up the scanner early.  If the next week brings us selling back into the 9800-9850 level on the DJIA I will be awash in a sea of favorable chart setups.

As such, I used the news that NEP insiders are stepping down to book a 10% loss in LPIH as well as thin the herd elsewhere.

The preliminary angle on this play will be to participate with call option ladders as the move should be sustained, but probably not breaking to new 52 week highs.

If you've read this blog before you know that I am steadfastly and unapologetically bullish Uranium and the nuclear renaissance.  The supply/demand fundamentals for uranium are so favorable for price appreciation that it's almost scary.  We have seen the results of secondary dumping before, though, with gold during the early 2000's.  I feel that the USU news of capital injection through B&W and Toshiba should finally give the sector some much needed skeptical analysis.  My favorite pure play uranium miner is DNN.

Finally, I put a counter at the bottom of the blog 2 days ago.  Total unique visitors subsequent:  5.  Now that I know no one reads it anyway there is something I have to admit because the inherent gayness has been bothering me.  When I'm having a shitty day, like rad shitty, where the blood pressure meds fail to knock down the visible pulsing of my carotid, there is a playlist I have made on Grooveshark consisting of the following:  Major Tom (cover) by Shiny Toy Guns, Your Latest Trick by Dire Straits, seven songs by the Celtic Women(!), and concluding with Undisclosed Desires by Muse.  It's like fucking Unicorn Planet in my office, but know what?  After the play list is finished, I feel better.

I'm thinking about taking a shot at RCL on the short side later.

Quick and Dirty Market TA for 5.24.2010

Below find a marked up weekly chart for the DJIA over the past 8 years.  I am still trading based on a thesis of market consolidation over a period of at least 4 to 6 quarters though if the pattern shown repeats, it could be much, much longer.  Now would be the time to allocate money into the "real world" and I feel that is exactly what the investment banks are/will be doing with their money now that more retail investors are having their tax-deferred accounts stuffed with bloated stocks.

Blue line support drawn in a range of 9800-9850, though I do not feel like that will come into play for at least a couple more months.  (How's that for a hex?)  Presently there's a bearish engulfing candle on but after such hard moves, it would be reasonable to expect some upward movement if for no other reason than that liquidity providers need to unload their holdings from the last couple of weeks.

I have boxed analogous inverted head and shoulders patterns and the right-angled descending consolidation that followed in the period from 1-26-2004 to 10-18-2004.  The pattern of the MACD does give me pause, but not as much so as if the same pattern were seen on the daily chart.

I continue to be bearish the consumer and financial names, but steadfastly, and unapologetically bullish Uranium. Uranium is the only widely used industrial metal, apart from silver, that is maddeningly undervalued given intermediate to long term supply-demand fundamentals.  While secondary suppliers (governments) around the world dump their supplies, I am reminded of the early 2000's when governments were dumping gold at 25 year lows.

Solar panels and windmills are not enough to supply the energy demands of American consumers given their well entrenched habits of leaving every light and TV on in the house, even when no one is home.  If we are to return to a more basic production/farming/exporting economy, space will ever be at a premium.

Chart below, click to enlarge, as always.

Quick and Dirty Market TA for 5.20.2010

What a wild ride, indeed.  I remain bearish on the consumer and financials, but am frustrated and getting frustrated'er by the lack of segmentation between pigs (COF, ZION, LTD) and value (DNN, LPIH, TSL).  When the trend is on, already good values will get more valuable, so we must stay patient in adding.  There will be a post in the near future about how electronic Emini trading has effectively turned the whole American equity market into an ETF that gets rebalanced nightly.  I remain steadfastly bullish on uranium producers (not explorers), and biotechs as both sectors are long overdue for M&A among other more specific reasons.

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During the past 3 years traders have been party to rare levels of volatility coupled with self-reinforcing trends up and down.  I do not accept that we are going to double-dip, yet.  I maintain belief that the DJIA will trade a roughly horizontal range, even if that range is wider than the normal few hundred points.  I believe this partly because it is the only trade that hasn't taken place for several years, and also because it'll take at least 4 to 6 quarters for a sort of post-apocalyptic stasis to manifest itself.  Previously alluded value segmentation will be the primary validation of this thesis.

Dow chart below (click to enlarge) is one ugly mofo.  Long term trend now clearly broken.  First support 10250-10290.  This one has been very important over the last 7 months and the 200 dma just so happens to join in a confluence there.  If this one looks like it's not going to hold, I am prepared to book gains on some long term holdings.  Second support 10050-10100, reasonable to expect capitulation-type overshoot into 4 digits if this comes into play.  This support level also has a corresponding Fibonacci retrenchment area.  Below these ... let's not get below these.

Quick and Dirty Market TA for 4.30.2010

The DOW hasn't touched a lower 2 standard deviation Bollinger in almost 3 months and the 50 DMA in 8 weeks.

Still a stock pickers market, though I remain decidedly bearish on the consumer and the fall out from financial regulation, which I hope separates banks from brokerages, and in size to eliminate any concern of "too big to fail."  Also, anyone billing Medicare should start to see nice cuts until new loopholes are discovered through which to drive the bilk bus.  Finally, as the inflationista, I must maintain course and bearing with bullishness on precious metals, but especially silver, which is generally under appreciated, and well known to be highly manipulated.  I think palladium has way over shot its value as a scrubber catalyst and that is a bubble that could do some damage, I watch it for cracks all the time.

There has also been some bullish activity in nuclear stocks.  Of course SHAW got all the news because of the loan guarantee program in the new climate legislation, but USU should get nice action from the down-blending trend on top of what it has already seen which, I feel, only relates to amelioration of concern related to loan backing on their new Ohio plant.

The chart below has 4.29 closing price highlighted, followed by 50 dma and 200 dma highlighted below that.  MACD is boxed to show the beginnings of divergence.  Obviously, the heavy blue trend line is just that.

Chart below (as always, click on picture to get a higher res shot):