Market is much "harder"

Resistance on SPX is around 825-830 ish. But there is sooooooo much overhead resistance on almost every tick above that area too that it is going to take a lot of bull power to keep pushing higher.
I'm not sure what yesterday was all about (ya know the intraday downward draft and then sudden last 45 minute blast higher)...they sold the good news yesterday...they are buying the bad news today....we have a ton of overhead resistance....a ton of cash on the sidelines.....a decent amount of time for the government's circus schemes to take effect....bank stress tests looming in the near term...tax refunds coming out soon.....suffice to say that the market is getting "harder" to trade here.

Market Prediction for Monday

Today is Friday and its Quad witching day. I expect an absolute chop session.
S&P key resistance = 800
S&P key support = 750
We aint breaking either one of those today, but what about next week?

Bulls have some control right now and I see bull flags on the charts since this rally began. I suspect that options players are going to buy some puts on Monday for April, this means that they are going to buy stocks. What? How can this be? Well, you see thats how the game is played. They short stock and then buy calls for protection. Right now they need protection on the downside, so expect some put buying and additional stock buying. MtoM accounting is still a potential catalyst and I think many traders are not taking this lightly.

I'm going to be honest: I think we go higher next week.

USO
UNG
FAS
XLE
XLF
AUY
LNC
PRU

Bear Market Rally

These bear market rallies can last 2 months. Brace yourselves.

IDEAS:

USO could be breaking out
UNG is so cheap you should be able to buy it at the Dollar Store
Semis might try a break out....SMH or the double USD
UYM might have legs to $13.50
XME and the miners look very good

An interesting trade would be to long financials and short homebuilders.

Make no mistake about it, our economy is B-A-D and the Fed is buying "stuff" because rates can't get any lower. I'm not in the bull camp, but I'm careful of the bear market rallies.
I think the S&P must print at least 450 before we are out of the woods...at least from a valuation perspective. Right now an S&P of 23! Come on! Look at the economy! When the PE of the S&P is averaged in the single digits, we will talk bottoms.

The 5 keys to trading success

1. Patience

2. Entry Price

3. Recognizing the primary trend

4. Using mental stops to cut losses

5. Patience

What a rally!

I made a fortune the past 5 trading days. Just shy of $150,000.

I was in and out of the following stocks regularly:

LNC
HIG
WFC
BNI
UYG
FAS

I doubled my money in a UYG position that I had bought at $1.38 which made me a bundle.
But big gainer were my 2010 January $3 calls in FAS.

I think we are getting a little extended now although I'd most welcome a push to a little higher.

I'm looking at SRS and FAZ now as the market may come in a tad.

best of luck out there!

Market Sentiment

Why would long term investors sell now?

Many reasons. Obama's policies alone are vast and bearish. Long term YOU should be bearish.


However, market sentiment is soooooooooo bad right now. Everyone expects the market to go lower and really there is no reason to think that it won't. This means that you should not be shorting.

I'm currently exposed to the following longs and/or am looking to scalp longs in the following:

WFC
LNC
GE
BNI
RIMM: I like it at $30
UYG/FAS
PBW
BAC

Has the market priced in 15% unemployment or 10% unemployment? I think the market HAS priced in 4 years of Obama in the White House and 10% unemployment but not 15% unemployment.

We Bottom Soon

A near term bottom is near. I don't need to post a chart to illustrate because you know already what it looks like.

March historically has marked tops and bottoms alike.

Technicals are not showing capitulation or fear based selling yet. There is a chance we may not get capitulation here. I think we bottom this week (near term) whether we get fear based selling or not.

I think option calls as far out as Sept 2009 and January 2010 look extraordinary...especially in financials.

FXP is going up

Time to buy FXP right here at $42 or better.

FXI chart looks like phat bastard.

FXP chart looks pretty

China will not pull us out of the recession. FYI, China is dumping most U.S. investments.

I'm in FXP two days ago at $38.02. It was a day early. But now we are moving higher.

Rare up Day in the Market

I think today was a weak performance by the bulls. We struggled to test the first resistance level and then sold off hard at the end of the day.

This may be all the rally we get on this move up.

I'm still making my trades intraday, primarily on long scalps. At some point we will be able to turn those scalps into swings. But not yet.

This market needs to bottom and at this rate it could take another 52 weeks.