Just what the Dr. Ordered???????

9:52 PM EST

Take one pullback in the morning, add a little drama from China, then Europe and see me on Wednesday.

We have broken down thru the 20 EMA and are headed to the 50 SMA. While many would consider this a negative downturn, I'm still thinking healthy pullback.

Yes, I know it was a big day, and the largest single day drop for the year, but I have been saying that we needed a pullback.  For Day Trading or Swing Trading for just a 2-4 day period, the tend is down.  Take advantage.  But for those looking for the longer trade, this breakdown is somewhat expected and just another warning to PAY ATTENTION!  Watch your stops, your profit margins and close long positions when warrented.  If price should CLOSE below the 50 SMA I will become bearish.  But until then, the long term rally is still alive and kicking.

CURRENT MARKET TRENDS
Short Term (Daily Chart) – Down
Medium Term (3 day chart) – Down
Long Term (Weekly Chart) – UP

"Chicken-a-tor II: Judgment Day"

10:41 EST Sunday, March 4, 2012

In "Chicken-a-tor" we all remember his parting vow........."I'll be back" said Chicken Little,  "Asta La Vista Baby".  And sure enough, he has returned, leading the pundits, supposed experts and talking heads while reiterating his battle cry, "The Sky is falling, the Sky is Falling"!

Is this the beginning of the end?  OMG~
Is this finally the beginning of a correction?  Ohhhhhh, Nooooooo!
Pullback! Downturn Ahead!  We're tanking!
Blah, blah, blah, blah , blah, and more such gibberish.

Why is it that the media cronies and pundits are always trying so damned hard to sensationalize everything?
Ratings baby, we need MORE RATINGS!  Walter Cronkite, where are you?  And even more to the point, why to so many people even listen?  Does anyone think for themselves anymore?  Now there's a thought!!  Thinking for yourself.  OMG~!  Shades of Don Worden, a mentor of many and great teacher who "Knighted" his followers who thought for themselves.  BAM!  POWIE! SHAZAM!  We have a WINNER! 

I mean really, a few days of sideways consolidation, not even dropping enough to touch the 20 EMA let alone move back to the 50 SMA and the pundits and naysayers are all over the place predicting doom and gloom.  Here's a heads up people.  No Rally ever went straight up continuously!!  OMG George?  REALLY?  Yes, really.  A rally requires consolidations and pullbacks to continue it's upward momentum without becoming overbought.  (Someone should tell Apple that!!  LOL  It's recent parabolic rise is begging for a pullback.)

Also note that the VIX is under 20 and behaving well.  (Chart below)  The fear factor is subdued to normal risk levels.  And the market is not having the wild 300 point swings we had last year.  DUH!

I has also been pointed out by more than a few pundits that the Russell 2000 is in a negative divergence to the DIA and the SPY.  All I can say to that is ............ DUH!!  Coming out of the cellar, who wants to buy smaller, riskier stocks?  Not me!  I'll take the tried and true.  Have you looked thru a list of the Russell 2000 components?  If not, perhaps you should.  These are far from anything "blue chip".  I'd like to see things solidify more before I start buying stuff from the Russell 2000 index.

Sure, anything can happen.  Sure, this could be the beginning of a downturn.  And we plan for those possibilities.  Can you say "Sell Stop"?  The earth could vaporize at any moment.  Could happen.  An asteroid could collide with the earth.  Could happen.  The Mayan Calendar could be right and 2012 could be the end!  Ohhhhh, no!  Could happen.  And this blog COULD self destruct after you read it.  Could too happen~!!

Knock, knock, knock.  "Hello McFly, anybody in there"?  Knock, knock, knock.  

Remember, we are technicians!  We look at charts.  We check the underlying fundamentals.  We are the actuaries of the marketplace.  We look at the past and try to predict the future.  We knew Dow 13,000 would take some work to get thru.  We've talked about just that.  Lo and behold, that's what's happening!!  OMG~  The shock, the surprise, the dismay!  Amazingly enough the charts are saying nothing but constructive things.  So please, let's take Chicken Little,  place a muzzle on his mouth, and put him back in his cage.  Let him stay there until we get to "Chicken-a-tor III: The Rise of the Machines"

CURRENT MARKET TRENDS
Short Term (Daily Chart) – Sideways Consolidation (Upward Bias intact)
Medium Term (3 day chart) – Sideways Consolidation (Upward Bias intact)
Long Term (Weekly Chart) – UP

The Tortoise!!

1:41 PM Sunday, February, 26, 2021

Remember the story of the Tortoise and the Hare?  Sure ya do.  If not, get those lazy fingers to work and "google" it.  It's a classic.  And lately we have had the pleasure of seeing the Tortoise in action.


The Tortoise is here, in contrast to that zippy, crazy Hare that we had to endure last year.  We had another nice, easy, boring week in the market.  A good, solid, upward, boring week.  The Bull keeps snorting and moving forward, pushing prices upward little by little in a sane and safe fashion.  (If you can call being pushed by a snorting Bull safe).  In contrast to the wild swings we were subjected to last year this slow advance forward should be a relief to everyone.  Could this year be the Year of the Bunny?  The Year of the Energizer Bunny?  Yaaa-hooooooo!!

The Charts (illustrated below)

The DIA is looking good, moving up nicely without moving too fast.  But as I mentioned before, the 130 level (13,000 DOW) will be a challenge and will most likely require several attempts before breaking out to the upside.  Of course there is always the possibility that it will not be able to pierce 130 and will instead retreat to the downside.  But for not the trend favors an upside breakout.

The SPY is similar shape, although it has has not made it's breakout move as the DIA has.  So there is some work left to do here even though the trend is still up.  It could take a few attempts to break thru this important resistance level.  Assuming some consolidation here, look for a nice "pop and run" when it breaks out.

The QQQ's are moving rapidly upward, in part thanks to the parabolic move by Apple, which comprises a large chunk of this ETF.  It NEEDS to rest, consolidate and even pull back a bit.  It's over-heated and over-bought.

The last comment is about your holdings.  Are the moving up?  If not, are they paying you a good dividend?  Are they worthy stocks to hold?  Sometimes you need to cull the wheat from the chaff.  Make sure you are looking at your portfolio on a regular basis, re-evaluating your holdings to make sure that are meeting your needs.


CURRENT MARKET TRENDS
Short Term (Daily Chart) – UP
Medium Term (3 day chart) – UP
Long Term (Weekly Chart) – UP

Manic Depression - Jimi Hendrix, circa 1967

9:47 PM Sunday, February 19, 2012

Monday
   The Dow is up 72 points.
   Media and Pundits - Rally!!
Tuesday
   The Dow is up 4 points.
   Media and Pundits - Uh-oh, things are shakey!
Wednesday
  The Dow is down 97 points.
   Media and Pundits - We're in the crapper!
Thursday
   The Dow is up 123 point.
   Media and Pundits -  Yea, things are good.  Rally!
Friday
   The Dow is up 45 points.
   Media and Pundits - Rally!!

Pundits.  Who in the heck coined that word anyhow?  <Sigh>  Yes, the media, the pundits, the so called "experts" all have an opinion on every hourly move in the market.  And yet Warren Buffet, who rarely looks at the daily moves of the Dow, is acknowledged by these same people as the greatest investor of all time.  Huh?  Go figger!

So here's the skinney from this media pundit who wishes he was an expert.  Now that the VIX is under the 50 SMA and better yet, under 20, sanity has returned to the market.  So the wild daily moves spurred by nervous nellies everywhere have disappeared into rational moves.  The "news" isn't driving daily 300 point swings.  Thank goodness.

The DIA, while looking a bit over-bought to many, shows a break out Friday!  AGAIN!  Yes, we are moving to a new level.  I have repeatedly mentioned that we have been "bumping" up against resistance.  Trying to break thru to the next level.  A glance at the chart below shows the breakout.  Price is clearly above the top resitance line.  Those resistance levels wi;; now become support and we are moving to the 130 mark (13,000 on the DOW)!  Yeeeeee-Haw!

Do we need a pull back.  Yes.  And it will happen sooner or later.  But so what!?  Remember that slogan we've been bantering about?  The trend is your ............what?  Excuse me?  I can't hear you!  Yes, the trend is your FRIEND!  And until it ends this trend is clearly up.  So keep those stops in place.  Precious metals are a hold (you might even consider reducing your positions).  Stocks are the place to be at the moment.  DUH!

Below are the charts.  The Daily and the Monthly.  Please note that we're not that far from the all time high of the DIA, and hence the Dow.  I suspect it will take several attempts to pierce the 130 level and move above that.  THe Bulls they are a snorting!!

CURRENT MARKET TRENDS
Short Term (Daily Chart) – UP
Medium Term (3 day chart) – UP
Long Term (Weekly Chart) – UP

When the Bulls Go Marching In (Sing it Boys!)

1:27 AM EST


Oh when the Bulls, go marching In,
Oh when the Bulls go marching In,
Lord how I want to be in that number,
When the Bulls keep marching in.

The pundits shout,
The Media screams,
They say this rally is going to fail,
But those Bulls they keep on marching,
Oh when the Bulls go marching in.

I keep saying it over and over.  The Bull is here!!  He started his march the beginning of January and he is snorting and moving forward step by step.  Yes, the media screams this, the pundits scream that, but the Bull aren't listening.  Moody's downgrades a few more countries and adds a negative outlook for Britain, France and Austria.  Yawn, the bulls already knew that was coming.  Greece is doing an "orderly" default.  Ho-hum, priced in!!  No, this rally is not as maniacal as the running of the Bulls in Pamplona, but none the less, these are Bulls moving forward and refusing to stop.  They seem to be determined to keep on marching forward regardless of the headlines.  It's as if I can hear the lead Bull screaming "Steady as she goes boys!"

Why is it that no one wants to talk about the fact that things ARE better.  Things ARE improving.  And the "issues", especially those with Greece, are already baked in the pie.  (Gee, have I said that before?)  It is evident that Europe will have to go thru the same process we did to solve their financial crisis.  They are doing that, with Germany leading the way.  Contrary to some people's opinions, China is not dead, and things are growing over there (yes, they will have a little inflation, but so what!!)  Of course the media pundits can't say any of this publicly, as it makes Obama look good, and we can't improve his election opportunities!!  "Oh, no, things are getting better!" cried the Elephant,  that damned Donkey is going to win again!

U.S. Economy - Improving
European Crisis - Resolving
China's Growth - Alive and kicking

Sometimes even the Carney man has to scream........ "Folks, we HAVE a WINNER!"  Yes, we have a winner and the trend is UP!  And as we all know, the trend is your friend.  FOLLOW IT!

The Charts

First, I'll talk very briefly about the VIX.  A lot of pundits, including Chicken Little, and a nameless man whose initials are Peter Worden..... talked about the "spike" in the VIX last Friday and the horrid drop in the Dow.  OH NO!  THE SPIKE IN THE VIX!  OH NO!! THE DOW DOWN 89 POINTS!!  THE SKY IS FALLING!  And I pointed out the insanity of those remarks.  Those media boys and market pundits really know how to wring every drop of excitement from a dry sponge.  The VIX dropped back under 20 Monday and is still under 20.  The DOW has regained that HUGE loss from Friday without much effort.  Yes, the VIX is stuck on the 20 EMA and might likely bounce between that and the 50 SMA for a bit.  But so the heck what!?!?  Friday's spike was not a calamity.  The rally was not trashed by the little one day bump in the VIX.  No, the VIX excitement was a boring as the enormous 89 point drop in the DOW.  (Yawn)

The DIA.  Still in an uptrend.  Still bumping up against the upper resistance line.  Pushing, bumping, waiting for a breakout and another move up.  The Bulls hooves are pawing the ground as they trudge forward.  The Bulls are snorting as they await the starter's gun for the next move up.  Until proven otherwise the trend is up and as we all know .........say it with me ......... The Trend is your Friend!  On an intraday basis Monday was a gap up opening, a drop and recovery the rest of the day.  Tuesday we wandered downward until the end when the buyers came in and bought things up.  Gee, it's almost as if they were buying on dips!  Where have we heard that before?

So follow this trend.  Buy good stocks on dips.  And keep those stops in place!  Trends don't last forever and if you are greedy like me, you like to KEEP your profits.  Here's the "surprising" trends.

CURRENT MARKET TRENDS
Short Term (Daily Chart) – UP
Medium Term (3 day chart) – UP
Long Term (Weekly Chart) – UP

The Sky is Falling!! The Sky is Falling!! - Chicken Little, Circa.....Ummmm......Eons Ago

Oh, NO!  The Sky is Falling!! The Sky is Falling!!  Quick, alert the King!!

The Media and the pundits have grabbed onto this one boys and gurls.  The proverbial acorn that hit Chicken Little on the head has appeared and ...... OMG, THE SKY IS FALLING!!!!!  OMG~  The Dow is down a phenomenal 89 points!  How will we recover from this humongous loss?  This is a disaster!!

Really?  REALLY?  REALLY?!?!? The Dow drops 89 points and suddenly we're running for the hills?  Suddenly global market disasters will occur?  What surprises me is not the normal media pundits grabbing onto this little item to garner much needed attention (remember insecure people always need attention).  But I am disappointed in normally sane market guru's like Peter Worden who have grabbed this ball and are running with it.  Come on, 89 points and we're all a-twitter?

Will the world stop rotating on it's axis?  Will the sun go dark? Will the market tank?  Will Wal-Mart stop paying a dividend?  Will Verizon stop generating a cell tower signal?  Will McDonald's stop flipping burgers? Perhaps in an unknown alternative universe.  But we're big boys now.  We think.  We analyze.  We play in a marketplace filled with risk on a daily basis.  We have stops in place.  (We do have stops in place don't we?)  We know how to go..... say it with me ........short!!!

Let's let saner heads prevail and actually look at the charts.  I'll use the DIA as I always do and throw up the SPY for shits and grins.  Oh, and let's not forget to look at the fear laden VIX!  First, the DIA.  Note the trendlines drawn and it is easy to see that we were a wee bit overbought.  This needed a correction to continue the uptrend.  We learned this when we studied "Trends 101".  It's basic charting!  I hope you did not learn it in the course I skipped called  "I Lost My Pants as I wasn't Paying Attention to the Trend 101"?  Remember, The Trend is Your Friend.  Investing 101.  Let's look closer at the DIA, keeping in mind that  this applies to the SPY also.
 
1. Price was hitting the top ascending tendline over and over, wanting/needing a correction.
2. Price is ABOVE the 20 EMA and the 50 SMA, two major moving averages.
3. This little drop has not violated the 20 EMA, the 50 SMA, or the bottom of the ascending channel.
4. And while it's old news the "Golden Cross" happened when I gave a buy signal the beginning of January  (A long term signal generated by the 50 SMA crossing the 200 SMA)
5. Volume was up Friday but falls well within normal trading levels of late.  No need to get our panties in a wad here.
6. The DIA formed a bullish Hammer candlestick.  (For a description of the hammer candlestick click here)
7.  Looking back on previous moments in the last year, when Greece did not agree to harsh terms, this little downside blip is nothing compared to past drops measured in the hundreds of points.
8.  I still believe that a Greece default is essentially priced in the market already.  Yes, I could be wrong, it has, believe it or not, happened before.

The VIX.  A few pundits (Peter Worden included) have mentioned this in their commentary.  Lions and Tigers and Bears, Oh MY!  So lets' giver her a look.  After finally making it under the hallowed 20 level it has indeed "popped".  It rose to the resistance of the 50 SMA and valiantly retreated, ending the day at 20.79  Whoop de doodles!!  We are still 25% below the 25 dollar level many consider problematic and well below the 200 SMA at 26 and the 500 SMA at 23.26.  So please, let's put Henny Penny, AKA Chicken Little, back in his pen and hope another acorn doesn't fall on his head.  Nuff Said!

So what's all the hoop-la about?  As a famous wordsmith once wrote "Much Ado About Nothing~"  Yes, we too could take the position of many, looking at a very, very microscopic view and proclaim the sky is falling.  But in my world calmer heads prevail.  The uptrend is intact.  The long term trend is intact.  And as I have repeatedly said, it is my belief that Greece will default and it's baked in the pie.

Greece.  Let's talk about Greece for a moment.  A default is a given.  Private bondholders have already agreed to lose as much as 50% of the value of their bonds to avoid losing it all.  Imagine having one arm chained to a wall, a clock timer ticking away, a ravenous caged lion, and a hacksaw just within your reach.  Soon the lion will be released to tear into you as his dinner.  The clock ticks as you consider the only two possibilities.  You try everything you can imagine.  You scream.  You plead with the lion.  You try over and over to remove your arm from the chains without success.  At each turn you realize the only escape is to hack off your arm.  But the thought alone is so agonizing you cannot take action on this solution.  So you try other endless alternatives again.  You beg, you plead.  You pull trying to release your arm.  That's Greece folks.  And only one of two things can occur.  Either they will accept the bailout, cut off their arm with the hacksaw and have an orderly default, or refuse and be eaten by the lion, having a disorderly default.  Either way, it's a default.

Here's the charts with annotations for your enjoyment or lack thereof.  I'm sure you will be shocked at the amazing conclusion I have reached when you look at the trends below~

CURRENT MARKET TRENDS
Short Term (Daily Chart) – UP
Medium Term (3 day chart) – UP
Long Term (Weekly Chart) – UP

Slippin' on the Greece? No, No, No, No!

No slipping on the Greece in this little rally~!  Yes, seems even Greece, trying to throw a monkey wrench into the works, doesn't get in the way of this trend.  Yea, that's right.  Think about it.  I've said it before, Greece is gonna default!!  Arrogant little pisser.  The odds favor it.  So that is already baked into the pie folks.  Baked in, Priced in, Soon to become reality.  Count on it~  It may cause a minor blip when it happens, but I don't see more than that being caused by the eventual Slip on the Greece.

Friday's good news on the employment figures are giving us a really big heads up.  So PAY ATTENTION!  We need continued good news on that front, but I have this feeling that it is coming.  It will be a slow but sure move up, and a continued move up from here.  That's what we need to sustain the rally.

The charts are still ....... lookin' good!!  Buy or add to on pullbacks for now, as all systems are "GO"!  Below are the Daily DIA and the Daily SPY.  I added the SPY just to illustrate the inverted head and shoulders noted in a previous post before the breakout the first of January.  This is an important pattern to learn and understand.  (See 12/22/11 post titled "Bullish Inverse Head And Shoulders Alert")


CURRENT MARKET TRENDS
Short Term (Daily Chart) – UP
Medium Term (3 day chart) – UP
Long Term (Weekly Chart) – UP