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Are you seeing flashing RED and GREEN lights in your sleep? You are not alone. The markets have been volatile and even short term traders may be finding that if you dont lock in immediate gains or at least take partial profits, then next day the trade can flip against you. lets look at some charts and see where we are currently...
As I write this report, this is where the futures are. A lot of GREEN so far ( Gold is actually up $4 from the close of 1157.40, I dont know why they show up here as down at 1162.00)
I sent out a cautionary update in the afternoon yesterday, lets discuss that first ...
Read MoreJust a quick note
Read MoreWhen most people first start trading, they see a market that is running up,up ,up - or falling down, down, down and they want to jump in and get some of that action. What happens? As soon as they make their move the market does a 180 and heads in the opposite direction due to extremes. We may be at the point that extremes are about to cause some decent bounces. Lets look at some charts.
SPX July 1 - the original thinking was that this could be a bear flag and become an a-b-c down.
SPX - with a lighter volume drop to the 200sma so far , and for other reasons mentioned further in this report, I am thinking we get a bounce here soon.
There is a chance that that Bounce is bigger than expected if we get a short covering rally. Let me explain.
Read MoreI gathered all of my charts Sunday morning and most of them looked like they were indicating lower prices. Monday morning , after the Greek Vote, the color of the day certainly does looks to be RED so far. Lets take a look at the charts .
Here is a quick glance of the futures as I write
This was my chart for the SPX posted here for July 1- it looked like it might have been a bear flag forming.
Read More Once you have all of the pieces of a puzzle in place, the picture gets quite clear. Unfortunately, I dont think we are quite there yet and today may not help all that much. Today is the last day before of trading before a 3 day holiday weekend in the United States, and I expect most of the Big Boys will be leaving early. I think we may see some action in the morning, but by 1 p.m. Eastern time, the day may just drift. With that in mind, lets just see where we are at currently and I'll discuss things in greater detail in the weekend report.
SPX - Is that going to become a 'buy the dips' recovery or just a bounce? It may even get to the 50sma, we'll have to see.
Read MoreThere is a rumor out that Greece is about to accept a bailout and futures are up strongly. Is it the same old "buy the dip" that we've seen again and again after every sell off in the markets? Maybe. Could it be a back test of the recent break down, only to continue selling off? To the charts...
SPX - obviously that was a big drop Monday and basically just a pause or bounce so far Tuesday .
The jump in the futures brings the SPX back up under the blue trend line...
Read MoreWhen things start to look a little "off", or maybe something just doesn't look quite right, it shouldn't be ignored. You may be seeing cracks in the armor and those cracks can, in due time, lead to further break down. Lets review some recent warning signs pointed out here.
In late May and early June we discussed the Dow Theory - warnings signs were present.
This was the JUNE 4th chart
TRAN NOW-
We've also discussed the wedges in the various indexes...
Read MoreEDIT: This report was finished by Sunday late afternoon. When the futures opened, the Greece Crisis had taken a turn for the worse and the reaction was strong. Interestingly, most of the reaction is as expected in this report. I decided to wait until Monday morning 7 : 00 a.m. to release it to update as needed . Not much needs updating, since the expectations were downside anyways. Lets take a look at the charts/ report as written Sunday, and I will add new thoughts in blue if needed.
SPX WKLY - This week we still have the bearish wedge, and a wick on top could signal a drop
NASDAQ - several indicators are showing weakness on the weekly chart
EDIT: It has been announced that Greece will not open their Banks until after July 7th and their stock market is closed. ATM's will only allow 60 Euro withdrawls. Our futures are down as expected above, but knee jerk reactions do not always have strong follow through after the panic subsides. We will have to let the dust settle. Next is IWM, USD, OIL, NATGAS, Precious Metals, etc
Thursday the Dow shot up 230 points. Friday the Dow sold off, down over 100 points. Monday the Dow shot up 166 points. Tuesday the Dow went up another 60 points, but sold off and gave most of it up into the close. Wednesday we gapped down and closed down 178 points. Currently at 6 a.m. , the Dow futures are up 100 points. Volatility is the order of the day, I should have used a picture of a roller-coaster.
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SPX - I pointed out these wedges and said I was expecting a sell off. Now we have a back test of the trend line break and a tag of the 50sma. Will this hold and give us a genuine break higher to new highs, or just more up & down action?
IWM - the IWM actually already broke to new highs, but I expected a back test, as shown here
This is where it gets interesting...
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