And The Beat Goes On...

Markets had a good day today, as they continue their recent winning streak.  AA and CSX gave the markets something to rally over and it appears that INTC is contributing fuel for tomorrow since it's up 7% in after hours trading today.

Here's a quick look at some of my indicators that I update and maintain myself.  First up, the TLT Oscillator:

As you can see, the Oscillator score is positive (bullish) and the moving average just crossed into positive territory today (very bullish).  This indicator tells me that the intermediate trend is up for now..time to look for longs if you're not long already.  Of course this is subject to change as a couple of good down days could provide a negative score and drag the moving average back down to negative territory.  So I'm not saying that we should all pile on the longs and hold them right now, I'm just saying that this indicator (one that has been pretty reliable but subject to it's own set of limitations) says that the path of least resistance right now is up.

Another indicator to check on that I've posted about before is the Overbought/Oversold Indicator:

The Overbought/Oversold Indicator just crossed over the 4 mark into overbought today.  This means that I'll will be waiting for the market to back out of the overbought territory before entering any longs (assuming the trend is still bullish when we pull back).  I guess it's just a wait and see type of thing now.

TLT

Interesting Action in Monsanto

Just look at chart of Monsanto's price action for the past 6 months or so and you can see that it's been relentlessly sold..fortunately, I had a little bit of that action.  Taken to the woodshed would be a good way to describe the beating that MON took.  Well this week, it put in a potential reversal.  Monsanto was up over 7% alone today and it registered a Bullish U-Turn on the weekly chart:

It will be interesting to see how this one plays out as this stock could rally a bit simply because of how far it has dropped recently.  Short covering is undoubtedly gonna be fuel for the fire..gotta love a good old fashioned short squeeze.

As for the market in general, I'm seeing short term bullishness.  Nothing worth getting too excited for yet, but there is potential.  Here's a chart of the TLT Oscillator with the SPY plotted over it:

As you can see from the chart, there have been 2 successive positive readings, which is a bullish sign but not bullish enough to go fully long.  The 5 day moving average is still negative which tells me that any buy signals right now have a high chance of being a whip saw because we are still in a downtrend.  However, all bull moves have to start somewhere and this one could be a bigger bull move..we have to be open to possibilities, especially if they don't seem likely to happen.  So for now, there's a slight bullish bias for the next week or so but I'll be keeping my eyes out for short signals as down is still the path of least resistance.

Hope everyone had a great week.

TLT

Indicator Update: TLT Trender and TLT Oscillator

After another down day, lets see where my indicators stand. The TLT Trender v2 is still giving a sell signal on the Daily S&P 500 chart. Here's the chart with some comments:
And here's the TLT Oscillator, which is still very bearish down in extreme negative territory. This indicator ranges from 60 to -60 with below 60 being bearish. I plot a 5 day average over the bars to smooth out the data. Here's the chart:Well, both indicators are still very bearish and there is some evidence that the selling will likely continue. Even Trader Mike today pointed out that his Trend Table that he keeps up with is the worst that its been in over a year in this post. What's the take away? Expect more selling and hold onto the shorts.

TLT

Sell and Sell Short...Maybe?

The market sold off hard today and the move happened on higher than average volume...this is significant. Several things happened for me as a result of today's action. First, I got stopped out of my TBT trade, which is not a big deal as taking losses is part of trading.

Second thing that happened is that I cashed in on my single biggest one day percentage gainer ever. Yesterday I bought some Vix call options (May 10 with a 19 strike). Today those call options were up over 200%...I rang the register at the 100% mark. This was a good trade but I must admit, I got lucky on the timing. I thought that the Vix might spike between now and May 10 (obviously b/c I bought some calls) but I did not expect the Vix to spike 30% in one day! This trade more than made up for the small TBT loss.

Last but not least, I established a short in financials yesterday via SKF. This trade is showing some potential as it's already up a decent amount and I've moved my stop up to above break even. Once again, I lucked out on timing on this one too. The big question now is, "Will we see any follow through to the downside?" Dip buyers have been coming into the market over the past few months and this dip might just be another buying opportunity for them. I have a feeling that we might see a little more of a correction on this round, but you never know.

There are a couple of things that I track every day, some proprietary indicators that I've been tracking and they are looking bearish. The first indicator is called the TLT Oscillator. It's just an oscillator that represents the general market. It ranges between -60 and +60 with 60 being a raging bull market and -60 being a major bear signal. Here's the chart showing the values from March 1, 2010:As you can see, today's reading was a +8...not terribly bearish. The thing that caught my eye is the drop...it dropped 20 points from yesterday (+28 to +8). The big sell short signal will be a drop below zero, so until then, shorting will be done in a more cautious manner and very stock/sector specific.

So I've determined that I want to be stock/sector specific and I've already mentioned that I'm short financials..how did I determine financials? Because I track buy and sell signals on the daily, hourly, and 15 minute time frames for 10 sectors and 30 stocks (3 stocks per sector) every day and financials are where the weakness is at. Here's a look at today's trend sheet for the sectors and stocks..note the sell signals in financials:I've got a couple of other indicators that I'd like to share but it's late and I've got to go to bed. We'll get to some others later but for now..be careful with the longs but don't get too aggressive on the short side either.

Hope everyone's having a great week so far.

TLT