S&P 500 - June 30, 2009 - Intraday

chart courtesy of stockcharts.com

In light of today's selling, I think we can now discuss a potential H&S active on the index.

Potential means potential, and as long as neckline holds, the pattern is still evolving. For now, a new high on the index will render the pattern aborted.

on a different note, regarding the general market, all intermediate sell signals are in place, if market finishes like this, it will be a distribution day. Let's see how the buyers of SPY, SSO and ES act before the close.

S&P 500 - June 29, 2009

charts courtesy of stockcharts.com

Index did an early push, and then lazed the day in a 10-point range.

Notice how the narrow band I had depicted with purple line contained the action yesterday. Index is right at the mid-channel, failure here is a sign of weakness.

Also notice the divergences being built in momentum. Technically, index is ripe for at least a pullback. But, there always is the danger of 5-minute SPY (SSO, ES) blasts that can mop slack out of nowhere and prop the index up. So, if I were itching to short, I would first wait for the index to drop below the purple range (or its equivalent in the future market). I would then decide on a stop above the purple range. Depending on my vehicle of trade, I would close my trade, or hedge it, at the end of the trading hours.

The buyers of SPY went to work early and did a morning push. They returned late afternoon to make sure SPY would not dip below 21 EMA.

For the day, index volume was pathetic. Breadth was positive.



McClellan Oscillator, which we have been keeping an eye on, lifted above zero. It now faces a test of the downtrend line that started all the way back in March.

This is an index that seriously needs bullish participation, but instead seems to find SPY and SSO and ES participation – new market order? Maybe so, but is that healthy?

This is the 60-minute chart with the sideways channel I posted yesterday

The only change for me is that I do not think the 1-2-i-ii scenario is viable any more.

Some very smart wavers (from my OEW brethren) are counting the entire drop from June high as a wave 1. I cannot easily count the internal structure to accommodate that on S&P, nor on ES, nor on NYSE. The Dow, however, easily accommodate that count

Technically possible, and definitely a count to keep in mind, but I prefer to stay with my S&P scenarios for now.

Let’s Wrap Up:

Index did a bit of gain early on and held on to a thin line for the rest of the day

There is a wide range (885 – 965) that has the potential of containing index action in coming days, and frustrating the hell out of bulls and bears alike. A break above 935 may be the first indication that index may be gunning for the top of the range.

McClellan Oscillator has made it above mid-range. It’s now facing a downtrend line that has been in play since March

Short term trend is up. Mid-term trend is up. Long term trend is down.

Resistance is 923-928 (tested and held recently), 935 (Jan 2009 top), 950 (pierced and lost three times), and 961 pivot (a long term level from 2003). Support is 912, 905, 893 (55 EMA), 875-885 (neckline and base of a W bottom) and the frequently contested 850

Market needs new bears with capital and conviction. Let’s look for signs of distribution to determine if new bears have emerged or not. Also, let’s keep an eye on volume and wave structure

June is at its end. No real window-dressing happened, just a wide range supported at the bottom by SPY, and SSO, and ES

There is ongoing momentum and cyclical divergences on the index. I fancy no long position at this point. What I have left is hedged.

The high beta, reflation trade that has defined this rally has been weakening with only the techies still holding. Can SPY, SSO, and ES buyers buy long, and hard enough to hold the index and wait for materials, industrial, and discretionary to correct and come roaring back, or are we going to see a rotation into defensive sectors typical of an end to a rally?

All intermediate sell signals are still intact, but short term trend is up (a break of 912 may change that), and, depending on how it evolves, caution is warranted for the bears.

Have a Nice Day!

S&P 500 - June 26, 2009

some charts courtesy of stockcharts.com

The best thing I did on Friday was spending the day with family downtown, enjoying ribs and chicken from a Rib-&-Chicken-Cooking Fest that’s going on in Ottawa right now. I tried New Mexico style as well as South Texas and they were both very good

Looking at charts post mortem, Friday’s S&P session seems to have been boring and uninspired. Nas100, on the other hand, seems to have had a good day.

I have been posting a daily Nas100 chart for many, many days. One reason is that I have used Nas100 as my vehicle of being long when I wanted to be long, also as a hedge against S&P. Another reason is my thinking that a serious market move should be led by high beta. Nas100 is high beta. So are materials, consumer discretionary and industrials. A relative analysis of S&P versus non-tech high beta sub-indexes of S&P shows us that there is a weakening in the performance of materials, industrials and discretionary compared to S&P. In fact, materials and industrials are now in a mid-term downtrends. Discretionary is not yet in a mid-term downtrend, but looks very weak.

Techies, on the other hand, have reversed gears and are outperforming S&P.

I think, as long as the techies hold strong, bears are just out of sync with the general market flow of the time at hand. I may be wrong, but I have a tendency to stay with what has worked for me. A simple performance chart of Nas100 versus S&P is all I basically need. Nas100, to me, is the animal spirit of the market – the joint frequented by the drunken sailors.

It is not healthy for the bulls when only the techies are outperforming the general market. The question is whether techies can hold on for the others to correct and come back or not. I do not know the answer. I doubt it, but I have learned not to argue with the market. I just need to monitor and adapt as it plays out its game. I am still long QLD. It’s a fully hedged position with bulk of the profits secure via options till August.

There are claims of market manipulation from the shorts. They may be right, or not. But it is what it is, and there is nothing they can do about it in principle. On a different note, why don’t they claim manipulation when market drops with abandon? Why can that not be a manipulative act of this or that investment house of paper? Again, it is what it is, either don’t play it, or take it as it comes and move on.

Do not get me wrong, please! First off, I have utmost respect for bloggers like Karl Denninger and Tyler Durden who expose dissected data and teach us how to look for trading irregularities and potential shenanigans played in the market place. Secondly, I am not saying that markets are 100% free of shenanigans and manipulation. I actually believe the exact opposite. All I am saying is that there is nothing I can do about it, and, as such, I need to take every measure I can to protect myself if I want to swim in this pool of sharks.

Manipulation, if it indeed is behind market’s daily rises, works until the time it does not. But I do not know when that time is, nor do many other market participants. Just crying foul will not change anything, especially since no regulating or governing body seems to be interested in even investigating the matter. A burnt short position is money lost, and that is the bottom line of the matter.

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Too many opening words! Let us do some charts!

There is something about the index action that makes me feel uneasy. The way it sells off in earnest and the way it bids up in fury. That makes me think what if we are seeing another range-bound action.

There is a channel I have drawn in purple in the following chart

I would not feel comfortable holding unhedged shorts with S&P above the 930 area, which coincides with the center line of the channel, as well as a pivot at 935, as well as a 50% retracement of the drop from the peak of June 11. For now, let’s see how the index behaves around the 930 area.

And if you think I am the only technician watching that level, you are very likely wrong. Every technician worth his/her trade (including those employed by the alleged manipulators) should be watching and scheming around that level.

For the day, S&P did nothing. Volume came above average on the red side. Breadth was positive



Because breadth was positive, I am reluctant to call it a distribution day solely based on the close. The above average volume for the day can be an indication that some market players are positioning themselves for a move in coming days. SPY volume breakdown had a negative tilt to it.

Past few posts, I have been pointing out McClellan Oscillator as it seemed like wanting to rise to neutral. Technically, it has relieved its oversold condition and it’s at a junction. There is a down sloping trend line on that oscillator (it is the dashed red line); next test is if it can rise above 0, and break through that line.

Cyclically, there is a very pronounced negative divergence on the daily chart.

After setting a new low, daily cycle has flattened and may turn up. If it does but fails to exceed the previous cycle peak, it will set up a 4th consecutive magnitude cycle failure. I would not want to be long something like that, not even with a gun to my head.

On the chart above, on the bottom panel, I have one of my proprietary mid-term indicators (Moving Average Differential Momentum). From the lows of March, which were the most oversold this indicator had been since 1950 (it helped us pick the bottom), the indicator has risen nicely, but it is still negative. Maintaining a positive reading is a must for a healthy market. Looking at the short term cyclical setup, I doubt that we can get this indicator to get above zero and sustain itself in there any time soon. We shall see.

Let’s Wrap Up:

Index had mixed intraday volume/breadth characteristics. Given that index has been oversold near the bottom of a range, we may see range-bound action in coming days.

There is a wide range (885 – 965) that has the potential of containing index action in coming days, and frustrating the hell out of bulls and bears alike. A break above 935 may be the first indication that index may be gunning for the top of the range.

McClellan Oscillator has made it to mid-range. A cross above zero is a must for bulls. Let’s see if it can rise and overcome its downtrend

Short term trend is up. Mid-term trend is up. Long term trend is down.

Resistance is 923-928 (tested and held recently), 935 (Jan 2009 top), 950 (pierced and lost three times), and 961 pivot (a long term level from 2003). Support is 912, 905, 893 (55 EMA), 875-885 (neckline and base of a W bottom) and the frequently contested 850

Market needs new bears with capital and conviction. Let’s look for signs of distribution to determine if new bears had emerged or not. Also, let’s keep an eye on volume and wave structure

June is coming to an end. No window-dressing has happened yet, a melt up situation seems very unlikely at this point, but oversold levels and pullbacks may still entice money managers to commit funds. That may push the index towards the top of the range. If so, a momentum and cyclical study may show us whether we have the potential for a continuation of the trend or another failed daily momentum cycle.

All intermediate sell signals are still intact, but short term trend is up, and, depending on how it evolves, caution is warranted for the bears.

I leave you with these charts

If market is at the verge of collapse, the Nas100 aficionados do not know it yet. With some other high beta sectors doing poorly at the moment, market is relying too much on the techies to hold things together. That is not a very healthy situation.

S&P looks tired. Let’s watch Stochastics and see if it gets above 50 on good volume.

Seems like Benny did what he could to tame the rates a bit.

In a post of June 8, I wrote this note of warning

I would be very cautious if I were short US bonds.

I like to know how many pundits issued a warning that early. I picked the peak of the short term rate cycle to issue that warning, and sell out of my TBTs, and buy TLTs. And I am more than happy to brag about it :-)

Falling long rates are a must for the idea of green shoots to perpetuate in the market psyche.

Enjoy the Rest of Your Weekend!

S&P 500 - June 25, 2009

some charts courtesy of stockcharts.com

In the last post, when I said:

There is a down sloping channel, and there is 910-915 level. If this is a serious decline in the form of 1-2-i-ii, index has no business to be above that level. A break of the channel to upside, may be a warning sign that it’s not all that Woolly and the Boollies may cause a good bounce at the very least.

I was not expecting the channel to break, and 915 to be tested and taken, so quickly.

But that’s why we try to stay unbiased, and examine alternate scenarios. Before the open, the future market looked like setting up another day of fun for the bears, but things quickly reversed and forced the squeezable shorts to run for cover.

The size of the bounce has made me re-think my 1-2-i-ii scenario and think of other wave configurations as well

The 1-2-i-ii wave count is still viable, but the wave ii part has retraced very deeply.

It is quite possible that what we saw for a drop was only an a-b-c correction for a major wave B or a minor wave A. We need to stay open to the possibility of further advances. For now, short term trend has turned up, and until that reverses all bearish scenarios are on alert. Next level of resistance is the 925-935 area and we’ll see if the index can get there, and if so, whether that level can cap the rise or not.

This is 60minute chart of the index

I would not be comfortable with unhedged shorts if index stays above 935. But before that, we should see how the waves unfold.

For the day volume was below average. Breadth was very good

Lack of volume, and the fact that it did not expand compared to the volume of the day before, makes me hesitant to view the day as an accumulation day

McClellan Oscillator has approached the neutral zone and what it does here is important to tell us if the bounce is the beginning of a rally or just a dead cat shocked into life with some freshly printed dollars.

One interesting thing that I noticed today was the discrepancy between the volume on SPY and the volume of the index

Same thing with SSO.

Whoever the enthusiastic buyers are, they do not seem to want to buy the actual shares of actual companies that constitute the index. Instead, they buy the ETF. Don’t you think a true investor would buy the shares of an actual company? Is it not much easier to teach the bears a lesson or two by aggressively buying future contracts and ETFs rather than the shares some defunct company with a crappy balance sheet? Is it not much easier to program some HAL-99-99 super computer to just buy ETFs based on some geeky algorithm? I don’t really know what the reason is; I just think it’s not healthy for the bulls.

Let’s Wrap Up:

Index extended its bounce on below average volume. It has made some short-term bullish counts very probable


Index re-captured the 910-915 level that we had discussed, and now has a short-term positive posture

McClellan Oscillator is approaching the neutral area. A cross above 0 is a must for the bulls

Short term trend is up. Mid-term trend is up. Long term trend is down.

Resistance is 923-928 (tested and held recently), 935 (Jan 2009 top), 950 (pierced and lost three times), and 961 pivot (a long term level from 2003). Support is 912, 905, 893 (55 EMA), 875-885 (neckline and base of a W bottom) and the frequently contested 850

There was huge volume on ETFs and tepid volume on the index. I doubt that is a healthy situation for the bulls.

Market needs new bears with capital and conviction. Let’s look for signs of distribution to determine if new bears had emerged or not. Also, let’s keep an eye on volume and wave structure

June is coming to an end. No window-dressing has happened yet, a melt up situation seems very unlikely at this point, but oversold levels and pullbacks may still entice money managers to commit funds.

All intermediate sell signals are still intact, but short term trend is up, and, depending on how it evolves, caution is warranted for the bears.

I leave you with these three charts


If the perma bears are right and the descent into the depths of hell has started, Nas100 has not heard it yet. I believe that, for a meaningful, multi-sector correction, or drop, it is important for the tech sector to break down and lead the market down so far it’s been holding its ground like a champ.

I pointed out the 55 EMA yesterday. Index bounced off of that today and is now above 21 EMA. You can clearly see the trading levels on this chart. It is what it is, and I don’t give a hoot what a perma this or perma that says, it is not a broken index, sell signals? Yes, we have made money off of those, broken? Not yet!

BTW, market has corrected enough to relieve its daily overbought readings. It is not technically overbought at this point. I don’t fancy a brand new long position, but I am not gung ho short either – trading and hedging is still my mode of operation

Long term rates have been cooling off a little. More cooling is needed to perpetuate the idea of the green shoots

S&P 500 - June 24, 2009

charts courtesy of stockcharts.com

As per Monday’s post, we expected a bounce and we got one. The bounce accelerated into the FED show and then sold off. I am not sure why people get worked up what FED-dies may or may not say.

I would like to coin a term:

Feddie-Phoria:

A purely nonsensical state of a euphoric mind in anticipation of monetary bliss delivered by a 3rd party banker.

What did Feddie-Phorics expect? Like they would increase rates (since they cannot decrease)? Like they would stop monetizing the debt, ahem, quantitative easing? Like they would do something other than what is already dictated by the bond market? Like what?

I never understand these things. I’d better stick with charts.

Monday, I argued that the drop into the low of June 23 might have been a wave 1 of a lesser degree. That proposition is still valid. Notice how index rallied to, and stalled around the 910 area, which we had identified as a level that might change the index's technical posture.

Intraday, SPY volume has been showing a lot more red spikes than it did a short while ago when green shoots were all the rage.

Notice that the gap that opened on June 22 held its ground. That gap coincides with the 910-915 area that we first identified on June 3 as a possible divide between the Boolly and the Woolly

Yesterday, the 910 area provided a very low risk level for more shorts, or a day-trade

Going forward, I will try to make it short-term easy for myself by following this 60-minute chart.

There is a down sloping channel, and there is 910-915 level. If this is a serious decline in the form of 1-2-i-ii, index has no business to be above that level. A break of the channel to upside, may be a warning sign that it’s not all that Woolly and the Boollies may cause a good bounce at the very least.

For the day, volume contracted. Breadth was positive

Index looks oversold and the possibility of a more meaningful bounce cannot be ruled out.

McClellan Oscillator seems like attempting a bounce. I shall keep in mind that all my intermediate sell signals are still in place. Then, for the short term, I shall use my 60-minute chart above for trimming/adding to my positions.

Let’s Wrap Up:

Index ran up with Feddie-Phoria but could not hold to all the gains after the FED show.

McClellan Oscillator seems to have found a short-term bottom from which to bounce. Let’s see if it can make it to mid-range or not

Short term trend is down. Mid-term trend is up. Long term trend is down.

Resistance is 905, 912, 923-928 (tested as held recently), 935 (Jan 2009 top), 950 (pierced and lost three times), and 961 pivot (a long term level from 2003). Support is 893 (55 EMA), 875-885 (neckline and base of a W bottom) and the frequently contested 850

So far, we have had two major distribution days, followed by bounces on contracting volume. That is not very Bullish. Let’s see if we get a major accumulation day or not.

June is coming to an end. No window-dressing has happened yet, a melt up situation seems very unlikely at this point, but oversold levels and pullbacks may still entice money managers to commit funds into a bargain hunting bonanza.

There is plethora of sell signals present on price, momentum and breadth, but they are all getting short term oversold. Oversold does not necessarily mean an end to selling, but it can be a warning that, at least, bounces may occur.

I leave you with these charts


Nas100 has been doing admirably well. Like every time market corrected, we will hear the bears claim the beginning of their long-awaited descent into the depths of hell. Just stay focused on the charts, and follow important levels.

If we are at the beginning of a serious drop, Nas100 should preferably lead the way down. It has not been so, not yet!

And, don’t get me wrong, I have nothing against bears, or bulls, or lizards, I am just here to make money, and I have chosen charts as my primary set of tools

55 EMA has been holding the index. There is good support below around 880 and 850 (144 MA, 38% retracement)

Have a Nice Day!

S&P 500 - June 22, 2009

charts courtesy of stockcharts.com

On Sunday, we had my sister’s wedding ceremony and reception, it was a wonderful event organized and executed to perfection. Some of us stayed up till 4 am the next day, at which time, the Hotel people told us enough was really enough. I still feel some good wine floating up and down my veins, but think I am sober enough to take a look at the index.

S&P seems to also have been going through the grogginess, and hangover aftermath of having a really good time.

Many must be feeling the pain of withdrawal as a couple of distribution days last week, and the inability of the index to do anything bullish on OpEx day took their toll on the index and the general markets.

The sell on close pattern that we pointed on the above chart continued. Yesterday’s close saw heavy selling into the close. Index may be very close to some sort of a rally or, at least a bounce.

Index seems to have completed, or be near completion of two 5–wave sets of waves

I have seen some analysts counting the 2nd 5-wave set, from the point I have labelled as minor wave 2 or minor wave B, as a wave 3 or a wave C of the pullback/decline.

There is no technical evidence to rule out that view, but the whole move from 925+ to yesterday’s close is much shorter (about 62%) than the drop from 955+ to 905. So, it may be also be a wave 1 of a larger wave structure going down. I am not saying it is. Only that the size of the second set compared to the first makes me cautious about labelling what we have now as a 1-2-3 or even a complete a-b-c. It is something to keep in mind.

From the chart above, notice that, after the break of the thick blue line, index could not gather enough strength to mount a proper retest of that line.

It, however, managed a good double retest of the 928 area that I have marked with purple lines in the chart below.

I will keep 923-928 as an area of resistance for the index in coming days.

Let’s zoom out to a 60-min frame

I have labelled the current down wave as ongoing wave 1 of a lesser degree, and will regard it as such until the index either proves me wrong or makes my view improbable.

Zooming out to dailies



Breadth was horrendous. Volume, on the other hand, came below average. There has been a slowly rising pattern to volume since this drop started from north of 955. To get a good washout and a solid bounce, I would like to see a high volume day of selling. Let’s keep an eye on it and see if it expands or not.

This is one of my favourite charts

It kept me on the correct side despite all the noise coming out of bears, it made me cautious despite the madness of the Booyaa crowd, and it helped me decide on starting shorts.

There is no immediate disaster in the above chart, but I think it shows the depth and speed of recent selling. I may maintain a short posture until I see some improvement on the above chart.

Nas100 has been having a rough time as well

1440 support is broken and volume has been on the rise.

As I have mentioned before, if this were going to be a serious decline, I would expect to see the techies leading the way. That has not happened yet.

Looking at this daily chart of S&P

The sell signals I identified on June 15, 16 seem to have been good and profitable. Index is sitting on 55 EMA. If you remember, we had the index playing around it 21 EMA for quite a few days. It may do the same around 55 EMA. If not, 880 is an obvious technical support.

To Wrap Up:

Index has been selling down from 955+ with clean, well defined waves

Index broke the 910-915 level that we had discussed as a level to negatively change the short term technical profile of the index.

McClellan Oscillator seems to be probing for a bottom. A turn in this oscillator is a must for the bulls.

Short term trend is down. Mid-term trend is up. Long term trend is down.

Resistance is 905, 912, 923-928 (tested as held recently) , 935 (Jan 2009 top), 950 (pierced and lost three times), and 961 pivot (a long term level from 2003). Support is 893 (55 EMA), 875-885 (neckline and base of a W bottom) and the frequently contested 850

I said that bears of the last drop were of no significance, and that market needed new bears from the ranks of satiated bulls. I also said that we needed to look for signs of distribution to determine if new bears had emerged or not. It seems like some prior buyers have been selling in earnest. Now let’s keep an eye on volume and wave structure

June is coming to an end. No window-dressing has happened yet, a melt up situation seems very unlikely at this point, but oversold levels and pullbacks may still entice money managers to commit funds.

There is plethora of sell signals present on price, momentum and breadth, but they are all getting short term oversold. Oversold does not necessarily mean an end to selling, but it can be a warning that, at least, a bounce may be near.

S&P 500 - June 17, 2009

charts courtesy of stockcharts.com

Markets ended up mixed. Na100 gained 0.8% on expanding volume. S&P chopped tightly and finished flat, also on expanding volume.

We seem to have 5 complete waves in place.

The 910-915 range we discussed has held and index should attempt a bounce. The makeup of the next bounce will tell us if what we are seeing is a wave 1 or wave A of a larger decline or not.

I would be watching 928 (which we discussed as a first level to take on the down side), and then the underside of broken support I have in blue (935 or so).

For the day volume expanded. Breadth was negative.



And one of my favourite breadth charts

There are a myriad of sell signals all over the place. Does that mean a collapse? Not necessarily, but I, personally, would not want to buy anything here.

Short term picture is quite oversold

I have seen counts that argue that this is part of an ongoing triple correction, but the counter(s) does not tell us why it should be a triple and not a double ending with the latest peak. I myself have a low probability count of having a flat minor 4 leading to more upside.

Don’t let doubts and dreams and fantasies of wave counters like me veer you away from the message of the chart. There are no gurus and only liars and the deluded know the future. There is a range between 910-915 and 950-960. There are a number of sell signals on the charts. In this range, market can chop and chop and work off its excesses. A break of the range is the message that I would not ignore.

The blogosphere is full of bloggers like me who like to say how right and smart they are, read us if you will, but think objectively, and analyse for yourself.

My friend Bill Zimmer of prudentrader.com, who is a true veteran of the Markets, is never short of sage advice and pearls of wisdom. We had a conversation about those who got this rally right, and he said:

“Unbeknown to most traders is trading is not about being right or wrong - it's all about money and risk management.”

There you have it, the very essence of market success.

Let’s see if this limpo can bounce or not, and if so, how far it can go, and if it will be impulsive or corrective.

On a personal note, as I have mentioned before, This is going to be a very busy week for my family as my sister’s getting married and we have visitors and lots of fun family stuff is happening.

I may not post or do only quick posts until I get more blood in my system than scotch :-)

I leave you with these two charts

Sell on open, sell on close. Different from a few days ago, no?

Nas100 is doing better than S&P. If we are going to see a serious correction, I expect to see the high beta underperform and lead on the way down.

S&P 500 - June 16, 2009

charts courtesy of stockcharts.com

A second distribution day?

Selling continued today. I expected a bounce. Index managed a limp rise to 928 (identified earlier as a critical level to break), and then sold lower

Another critical level is the area of 910-915. That area held the decline today. Bears need to break this level down, but they may not be able to do it right away. There appears to be a complete (or nearly complete) wave set in place and index should soon attempt a bounce. The quality of that bounce may tell us if we are dealing with a serious correction or not.

Looking at this 60-minute chart

There is weakness in terms of momentum. But there are levels of support that may hold the index and provide a shelf for further advance, or bounces

As I have been writing for many days, the bears of the last drop are of no real significance. And it all depends on whether buyers have decided to sell or not; in other words, whether we have fresh, well capitalized bears to exert downside pressure or not. To garner clues in that regard, I watch for signs of distribution.

For the day, volume expanded. Breadth was poor.



Both yesterday and today can be counted as distribution days.

Notice that McClellan Oscillator is the lowest it has been since the March low. Volume of the decline has been below average, but, so far, it has expanded on further selling.

Technically, all the ingredients of a top are in place, and further downside should ensue. But market is the chef that decides what type of meal to cook and serve, so, one level at a time for now.

Let’s Wrap Up

Index suffered a second distribution day

Index is held by support around 910-915. This level is very important for bears to break, and for bulls not to lose

A move below 910 can shift the technicals of the index to the negative side.

McClellan Oscillator has registered its lowest reading since the March low.

Short term trend is down. Mid-term trend is up. Long term trend is down.

Resistance is 912, 935 (Jan 2009 top), 950 (pierced and lost three times), and 961 pivot (a long term level from 2003). Support is 910, 900, and 875-885 (neckline and base of a W bottom) and the frequently contested 850

Bears do not matter at this point. Market needs new bears with capital and conviction, watch for signs of distribution to see if buyers have turned or not.

I still believe that as June progresses, pressure to join the party may increase on under-invested fund managers. However, with a few more selling days like these, that will become very unlikely.
There are sell signals present on price, momentum and breadth.

This is an option expiration week., all sorts of crooked games may be played byall sorts of crooks.

I leave you with these three charts


Nas100 has been selling on expanding volume. It is now at 1440 support. There are a number of sell signals present. There may be a bounce off support, but it seems like one should evaluate existing Tech positions and make decisions as to what to keep, what to hedge, and what to sell. I still have some QLDs, but they are hedged.


Notice that 21 EMA, which had kept every pullback, has given way. Also notice the broken trend lines and the sell signals. Can it turn and go to new highs? Of course it can? But, right now, it looks weak and ready to roll. Again, a sustained move below 910 is the key in my opinion.


Seems like the buyers of the close have been showing with less frequency these past 3-4 days.