Moving

It's moving day. The blog is called ToddsTrade, so now that's what the URL is going to be...
http://toddstrade.blogspot.com
So come on by and help me start a clean slate. Hope to hear from you all and see you there; thanks!

beer

wrote the day off and decided to make some beer instead. All done and fermenting as I write. mmmmm vanilla porter.

QLD...again

Back to QLD today, where most of the money was to be made in the early morning. Quick flags printed the trend up where consolidation formed a triangle (15-minute chart) with support at the first resistance pivot line. A break of the triangle took price up to the second pivot resistance line where momentum died out and price chopped around but didn't give up much ground overall. As you can see oil (as represented by the inset USO chart) is a big determinant to where the indices are going to go.Looking at the Nasdaq Composite Index price is about 1/2 way to the measured move out of the inverted roof, with about 79 points left. Who knows whether it will complete the move up to that resistance level, but it looks pretty strong here.

Hesitation...

...was my repeating theme today. I gave up on QLD today and focused on the Diamonds Trust ETF DIA. I missed/hesitated on the inverse "Holy Grail" set-ups to the down side. The DIA bottomed/found support (the 200-MA on the 30-minute chart and trend line support on the daily), while also set up an Inverse Head & Shoulders on the chart I was watching (a share bar chart that correlates to a 5-minute chart). I was also watching USO/Oil to give clues to the potential break-out of the Inverse H & S. As USO seemed to top out DIA began to move. Initial target was somewhere between 38.2% & 50% Fib. retracement (from yesterday's close to today's low) depending on the momentum behind it. Price hesitated at 38.2% and got a pop to the 50% level (where it consolidated).
I then continued to watch as DIA formed a cup w. handle pattern on the 15-min. chart. For some reason I couldn't commit to pulling the trigger to buy on the break of the rim. Hesitation payed off in this case, as a break of the rim failed at the open range high, as well as Oil holding onto it's highs of the day.

Chop

A choppy, messy day. I'm preferring to stick with watching one market lately (that market being the Ultra QQQ ProShares, QLD). It feels to me like a good method to learning to read "the tape." So, here's the one set-up that gave a decent probability to a trade in your direction. On the 15-minute chart (smaller inset chart) a triangle set up over the course of the last two sessions. The faster chart gives a better perspective. You can play it aggressively and short in anticipation of the break-down (somewhere in the long red candle), or more conservatively as price breaks the trend line (same long red candle) or makes a throw-back to the trend line (green high-wave candle).
On the shorter time frame chart (the larger chart) I have an ellipse around an indicator that fires to alert you when Bollinger Bands are squeezing inside of a Keltner Channel. It's not an indicator to trigger you into/out of a trade, but it lends you a condition to increase probability.

QLD trend day

A beautiful trend in QLD right up until about 2p.m. when the longs seemed to cover at the R2 Pivot Point resistance area.

Dubyah

G.W. just moved up a notch in my book.

Oil $$$

Who has profited most from the "oil bubble"; and what are they going to do with all that money??

America Inc.

QLD trend day

A truly awesome trend day today, Nasdaq up 2.5%. The following is a chart of QLD, and what an orderly chart it is. A lesson in tape reading...

Inverted Roof

It looks (to me) like an inverted roof has taken shape across all of the major indexes and we're testing a break out above resistance, which could bring us a measured move to the upside, if we could get past the major 50-period Moving Average resistance.
Volume on the break of resistance for the Dow is pretty unconvincing, but a measured move from here puts the upside at around 872 points.
The S&P500 breakout would add about 90 points to the upside. It needs to clear the 50-EMA at this point.The Nasdaq has definitively broken out of this pattern (and above it's 50-EMA) and give us a target of the 2530 area.

Why the Dollar Rally?

The U.S. Dollar Index has taken off and I'm left wondering; why? I understand gold and oil sold off, the broad indexes are undergoing a bear market rally, and the Fed kept rates steady and expressed concerns over keeping inflation in check. So, how do you connect the dots (if they can be connected) and what else am I missing?
The articles I have found so far give the following correlations:
-The European Central Bank announced expectations of slowed Euro growth. OK, that might explain the Euro/U.S$ correlation, but there are multiple currencies within the U.S.$-index.
-A short squeeze? "The euro crashed through "big support levels in a short period of time," said Kenneth Broux, an economist at Lloyds TSB. "A lot of participants were caught out and forced to liquidate" long euro positions." Perhaps the Euro-zone is slowing down and starting to mirror the situation the U.S. economy has been in for the past 9 months (a.k.a. recession whispers)?
-"...better-than-expected U.S. pending home sales data Thursday and, in particular, the Chinese government's recent imposition of new currency controls were likely among the catalysts for the dollar's broad surge in Asian trading."
"Currency strategists at Commerzbank also downplayed the ECB's role, saying the moves during Asian hours were clearly a reflection of broad "dollar strength," rather than euro weakness...Obviously many market participants are currently re-positioning their currency allocations and [betting] on an end of the prolonged sideways movement."
-"The Chinese measures may be among the triggers they said, leaving investors who had bet on high-yielding currencies or continued gains by China's yuan currency with few alternatives other than the dollar. That backdrop also underpins the Japanese yen, they said, as traders abandon carry trades in which they borrow low-yielding currencies then use the funds to buy assets denominated in higher-yielding currencies."
- Commodity positions are unwinding. "...investors are long commodities, the currencies of countries that benefit from increases in commodity prices, their stocks and their bonds. In addition, many investors are invested in countries benefiting cross-border capital flows tied to increases in commodity prices (Eastern Europe, for example, which, according to the BIS, has been a major recipient of money from the Middle East). The U.S. dollar is a major safe-haven amid this major unwind." This I can see having a pretty broad ripple effect.
-As part of the above explanation, the Australian dollar continues to slide. The longest consecutive decline since 1980. Another commodity correlation.
-Some more articles can be found here. I think my understanding is clearer, but still a little fuzzy.

QLD setups

QLD using 45,000 share bar chart, trading breaks off of trend lines.

IWM

Going to be watching IWM tomorrow for a possible Cup-n-Handle breakout...

QLD & FCX

QLD had some nice set-ups on it today. Here I'm using share bars which I'm tending to prefer these days.I set an alert this morning for FCX near the highs. When it triggered I bought and picked up about $1.50 quickly. I intended on shorting the second test/failure of the highs but got distracted.

Healthcare

IHF; iShares Healthcare ETF is perking up (perhaps a strategic play in case the Democrats win the White House??). This ETF has top holdings such as AET, HUM, WLP, and CI, that have seen recovery moves of late.

Rotation

The charts pretty much speak for themselves. Using these ETFs as a general representation of sector performance, many of the big names that have been in play for the past few months are breaking down below their 200 EMAs.
There's MOO, Market Vectors Agribusiness ETF (main holdings include BG, MOS, MON, POT). Or, you can check out DBA.KOL, Market Vectors Coal ETF (top holdings include WLT, CNX, MEE, ACI).
SLX, Market Vectors Steel ETF (top holdings include X, MTL, RIO, MT)IYT, iShares Dow Jones Transportation Average is in limbo at the moment, but might be good if Oil continues to the downside (top holdings of BNI, CSX, FDX, NSC, JBLU, CAL)
And then there's PBE, PowerShares Biotech ETF (top holdings being ABI, DNA, GILD, WAT)

KOL

Market Vector's Coal ETF. KOL shook off it's overbought bias and reclaimed it's 20-day EMA.

EWZ

EWZ, iShares Brazil ETF, snapped up today to cling to it's 200EMA. It's also printing a bullish momentum divergence.

watching

PBW is a clean energy ETF with solar holdings that we all have on our watchlists.SLX is a steel ETF that might be a good play this week as we saw some big moves today in AKS, RS, MTL (bullish hammer after capitulation?), X, MT, et al..

trend day

DIA presented another trend day today, except it was in the opposite direction from yesterday. Most of yesterday's support levels were in the same areas.
While the Q's took off in the morning and chopped sideways the rest of the day. It had a pop up at the 50-MA.

mess

I found this video while reading HPTs blog.

Clinton's Role

An interesting read via Stewie's blog regarding the mortgage crisis. Jason Leavitt does a fantastic job summing up the role's played by each variable of the mortgage melt-down. But, ultimately, Bill Clinton seems to deserve to be held accountable as well. Leavitt writes;
"...on November 12, 1999. With the CEO of Citigroup looking over his shoulder, Bill Clinton signed into law the Gramm-Leach-Bliley Act which repealed the Glass-Steagall Act of 1933.
The Gramm-Leach-Bliley Act permitted commercial and investment banks to consolidate, and almost overnight behemoth financial service companies that supplied everything to everybody were born. Smith-Barney, Salomon Brothers, PaineWebber and many other well-known and respected investment banks were gobbled up by Citibank, JP Morgan etc, and while the lay public didn’t have a clue what was going on, conflict of interests were rampant. Suddenly the banking arm of one of these financial service companies was pressuring the investment arm to raise its ratings on stocks to help lubricate the deal-making process. (As a quick side note, Citigroup played a major role lobbying for an end to Glass-Steagall. Starting in 1998, the finance, insurance and real estate industries together spent more than $200 million to get Glass-Steagall repealed, and not so coincidentally, only a couple days after Clinton signed Gramm-Leach-Bliley into law, recently-departed Treasury Secretary Robert Rubin was hired by Citigroup as a member of its 3-person office of the chairman.)
If you start with today and work backwards with intentions of figuring out when “all this mess started,” you’ll find many parties that played a role in adding fuel to a fire which was spinning out of control, but your journey won’t end until November 12, 1999 when Bill Clinton tore down the walls within the financial community.
I’m not going to go as far to say if Bill Clinton had not repealed Glass-Steagall, we wouldn’t be in the financial situation we’re in, but I can certainly say it would have been much more mild and probably isolated. When second and third parties are involved in a transaction, more due diligence is done, more scrutiny is applied, and less risk is taken."

It's a very interesting read. And to top it all off, the article ends with a great photo of Bill Clinton after signing the Gramm-Leach-Bliley Act. Looks like a circle-jerk at an occult sacrifice...not that I know what one of those would look like, but I've seen some movies.

DIA

DIA had a trend-day to the downside. It set up a base break at $113.10 early in the morning. It then consolidated around $112.20, tagged the 20MA (Inverse Holy Grail) before continuing lower. Consolidation then took place for an hour and a half at around $111.65 (which coincides with a 61.8% Fibonacci retracement from the high of July 22 and low of July 15) before breaking lower. Pretty text-book stuff.
Same story with the Q's.Something to keep in mind with these trend days comes from today's post at AfraidtoTrade.com, Corey writes:

"Most trend days begin with two common characteristics:

A low-range day prior (usually a NR7 or a doji pattern)
A (relatively) large opening gap

The last two trend days (the last was the previous Thursday) had slight but not ultra-range contraction, but neither began with a large opening gap. In fact, both were ‘creeping’ trends, which tend to be the most insidious, hidden style of trend days. Lack of an opening gap can lull us into complacency as we fail to recognize the potential for the trend day to unfold. It’s far easier to anticipate a large intrday trend day move if the initial gap occurs (and especially if there’s some sort of major news announcement)."

mystery chart

Would you buy or sell this chart based on the price action and technical indicators?

grinding lower/higher

As the DIA grinded lower all afternoon, SKF patterned a mirror image.

Ca. Homes

Kah-li-for-nia foreclosures topped a 20-year high this past quarter with 63,061. That's a cash value of more than $26-billion in loans (figuring a median price for a single-family detached home in California, as of March 2008, was $413,980).yikes!

R

Ryder System Inc., had a big move today (looks like it would have made a good Over-Night Hold, perhaps we'll see some follow through tomorrow morning?).

The United States...

...of Socialism.

Dollar Index

This is a follow-up to my post yesterday regarding the U.S. Dollar index. It's beginning to look like a bearish flag formation taking shape (following the H&S pattern). Being that I don't have a forex account, nor a futures account, to take a position in this set-up I'm left trying to figure out other ways to take advantage of what might be a measured move to the downside for the U.S. Dollar Index. Here's what I came up with; First a chart of the current U.S. Dollar Index position:Some vehicles to look into for a play on futures or forex are available through such places as invescopowershares. The first is DBV; it "is comprised of currency futures contracts on certain G10 currencies and is designed to exploit the trend that currencies associated with relatively high interest rates, on average, tend to rise in value relative to currencies associated with relatively low interest rates." Looks like a potential break-out candidate.There's also UDN; "designed to replicate the performance of being short the US Dollar" against a basket of currencies like that of the U.S. Dollar Index.
Not as much bang for your buck as directly playing futures or forex (I really have to open one account or the other), but a viable option. If I come across any other options I'll update this post with them.

When fast is too slow

The difference between a 1-minute chart and roughly a 30-second chart.
1-minute
30-seconds

reads

Three great reads can be found here:
The Big Picture - Stick it to 'em

Who Holds all that "Agency Debt?" (a whopping 25% of GDP, or $1-trillion is held by China)

Why can't people take sound advice when it's smacking them in the face? Here's an excerpt from this link; taking note it was written in September of '07:

"...if loans were extended to people who shouldn't have received them, real estate prices would have been bid up higher than they should have been. And it is a propagation mechanism in the sense that, as long as house prices continued to rise, all sins were forgiven. Even a completely fraudulent loan would not go into default when there's sufficient price appreciation, since the perpetrator is better off repaying the loan in order to enjoy the capital gain.The problem is that, as this process gets undone, both effects operate in reverse. A credit crunch means that some people who should get loans don't receive them, depressing real estate prices, and as prices fall, some loans will become delinquent that otherwise might not. If such fundamentals are indeed contributing factors on the way up and the way down, the magnitude of the resulting decline in real estate prices, and their implications for default rates, could be much bigger than the reassuring numbers Mishkin invites us to remember based on the historical variability of these series. What worries me in particular is, if we see this much in the way of delinquencies and short-term credit concerns in the current economic environment, in which GDP has still been growing and house price declines are quite modest, what can we expect with a full-blown recession and, say, a 20% decline in average real estate values?"

U.S. Dollar; Effed in the A?

With CPI numbers coming in larger than expected and inflation fears hinging with the Fed., concerns over the U.S. Dollar are prevalent.
Typically you see Head and Shoulders patterns at the top of bullish trends, but that doesn't mean they can't appear during consolidation of a bearish move. In this particular case in the U.S. Dollar index the short-term trend was up from the period between late April and mid-June before falling through it's trend line, pulling back and forming the right shoulder. Currently the index is struggling to stay above it's neckline, which we should expect it to do being that it's at a major level of support. A measured move from this point below the neckline would put this index at fresh lows in the $69.55 area. Check out patternsite.com for determining patterns and the measurement guidelines. Also, check out etftrends for ways to hedge against a bearish dollar through ETF's and ETN's. Particularly; FXE, ERO, DBV (Ascending Triangle on this one).

Broadening Wedge

It appears Biotech is attracting attention currently. Here is a Broadening Wedge pattern that's taken shape in BMRN. If for nothing else, it will be interesting to watch and see how it reacts. From patternsite.com a measured move would put a break-out/-down at +/- 12%, while keeping in mind the possibility of a partial decline (explained in the patternsite.com) before the breaking move.

No Run on Banks

The big news today....there's no need for a run on your bank. And, in case you were thinking of making a run on your bank, you now (for the next 30-days at least) can't short (without already owning) FNM and FRE; as well as other big names like, LEH, MS, MER, GS.
A classic "cover-your-going-broke-ass" move. What can you expect though? We have to protect those CEO's and institutional holders of LEH, MS, et al., before their holdings are worthless, right? How would you feel if you owned 2.7-million shares as head of MS? Imagine how Barclay's feels while they're stuck holding 48-million shares in Morgan Stanley.
They're scared shitless.
So, instead of allowing the entities responsible for this mess to pay the consequences (and accept the risks they took on) we'll just help them defer accountability, give them carte blanche to the Fed, and hand the costs over to tax payers. Thank goodness we have Henry Paulson as Treasury Secretary; who would know better what to do in an economic situation like this than an ex-head of Goldman Sachs?
phheewww

Things that make you go "Oh Sh@!"

NOT WORK APPROPRIATE!:


- We the people are being assured, our deposits are safe. In other words, don't go making a run on your bank. hmmmm

- Wholesale inflation jumped 1.8% from May to June.

- Don't worry, that stimulus check will kick-start our economy.

- Is Bush the new Costanza? Should we suspect the opposite of what he thinks will happen?

- The Euro is the new Dollar.

- Brazil expanding beyond major cities.

- And I thought watching 30 stocks during the day was tough.

- The next big commodity?

- VW spending $1-billion for plant in Tenn. That's only $627-million after the Euro/Dollar exchange rate, what a deal!

DUG

As the price of oil rises, so has the ETF DUG (Ultra-Short Oil & Gas) recently. Check out the information included on seekingalpha.com, which also shows a chart representing the drop in U.S. & Global oil demand.Check out the ETF for USO also which seems to be looking kinda toppy with that hanging man, followed by an inside doji bar, and a momentum divergence.

3G costs

AAPL sold 1-million 3G iphones this past weekend. At $199 per phone that works out to be $199-million in 3-days. We've learned that the previous iphone was costing Apple $246-$281 (depending on the model) to manufacture. Well, not only has Apple improved the technology behind the fancy phones, they also likely cut their production costs in half. The current 3G model could be coming in at around $100-$160 (depending on the model) to manufacture, according to speculation from a tear-down specialist company (they speculate b/c they have yet to actually tear down the new 3G).
So, that brings the profit margin, after manufacturing costs, to around $99,500,000.00 in 3-days. Not a bad weekend's work.

Ca. eFfed in the A

This guy rocks. Of course, I have to give credit to ibankcoin for The Fly's post of Mr. Mortgage's most recent post. This particular video just applies more to my surrounding economy. California is in for a world of hurt with this mortgage crisis. 4.25 years of supply in the housing market is just huge.

DIA

Finding it very difficult to get back into the swing of things this week. Took a little piece short in the DIA this afternoon, just before it tanked. So, that was nice.
Catching up on reading all the blogs out there. It seems there's a lot more reliable information there than going with the news services.

Home

Back from the road trip to the Kate Wolf festival in smoky northern california. A relaxing time hanging out and listening to folk music. I didn't think I liked folk music before attending the festival, but have since changed my mind. It was nice to watch people with obvious talent, either lyrically, instrumentally, or both. Here are a few of my favorite performers at the Kate Wolf festival:

Todd Snider


The Wailin Jennys


David Lindley

road trip

I'm taking a road trip to Northern California with the wife and kids (her father and uncle) for a music festival this weekend. Not sure how much I'll be blogging over the next week. So, for the one or two of you that read this blog, keep in touch! Have a fantastic weekend! I hope not to miss all of the volatility that might be on the horizon.

re-update

For posterity I'm updating the action of AAPL stock so as to follow up from this post and this post. The 30-min chart is a good near-term summary.The weekly isn't broken yet. It will likely be up to the overall strength (or lack of) in the broad markets to determine what will happen here.

The House of Cards...

....comes tumbling down, doo dah doo dah.
Where do we go from here? The path of least resistance tells us...
DJIA - ouch, how low can we go!S&P 500 still got a way to go to truly test those March lows.Same with the Nasdaq...got another 150 points to lose before the March lows are firmly tested.The Russell 2000 as represented by IWM just broke through it's Head and Shoulders top pattern. Broke through the neckline, tested, and may not look back.Now for Gold and Oil. Oil, as represented here by USO, is basing around it's highs. One bad news report could send us to new highs yet again.
Gold, as represented here by the ETF GLD is back up to resistance. Although the near-term trend is down, the momentum divergence is showing a positive slope.
And last but not least, the U.S.Dollar index. It had a run for a few weeks, but looks primed to test the lows it became comfortable with.