Mark M. - Head Technical Trader

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So where do we go from here?
Posted by Mark M. - Head Technical Trader on Jul 8th, 2010 7:24pm

Quite a rally today and yesteday, actually all week. I am done trying to figure out the direction of this market more than a day or two in advance as it is truly a waste of brain power. Three weeks ago it looked as though we would rally forever and challenge yearly highs and then bamm the S&P; tanked and we tested 1000 briefly and now we are 65 handles off of those lows.

My best advice is to stay short term oriented until the market figures out direction and be able to trade from both sides.

So to live up to the title of this blog, my thoughts for Friday are as follows:

Friday's are reversal days and we have seen a strong up market this week so it would make sense for the market to sell off tomorrow. I believe that the day will play out as follows, we open down off the bell, rally up to around 1072 and then start a slow bleed down the rest of the day closing around 1050, bottom being 1044.

I am being more specific than usual and not really sure why but let's give it a shot, maybe I will be a hero.

Happy Trading!

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Lebron James Picks NY Knicks
Posted by Mark M. - Head Technical Trader on Jul 7th, 2010 7:29am

The saga that is Lebron James free agent is signing is getting crazier tomorrow night with a live press conference on ESPN to announce his decision. I think Lebron has handled himself poorly since the last game of the playoffs where he dogged it against the celtics, now he opened a twitter account and then this ridiculous "special" being put on by ESPN.

So what is my prognostication for where James goes? At first I was thinking Miami but now it appears to me that believe it or not the New York Knicks will be the lucky team. In New York Lebron can make stupid money aside from his contract, he can party with all the superstars and if he won this city a championship it would be legendary.

The press conference is in Cleveland to simply say good bye and thanks for the memories. Cleveland won't get any better which means at best they are an eastern conference runner up and that is not good enough.

The good news is that this will all end tomorrow night and we can go back to the bear market that is the S&P.;

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They Just Keep Selling Rallies
Posted by Mark M. - Head Technical Trader on Jul 6th, 2010 5:38pm

The evidence is clear that for now the shorts are in control of this market and they just keep selling rallies no matter how much apparent strength is behind the move. Last night the futures got down to 1002.75 around 8pm, by 6:30 am today the futures were at 1025 and by 10:15 at 1038.50. The only problem is that they peaked there and sold off the remainder of the day until a great MOC at 3:45 started a rally into the close.

This is a brutally tough market to trade and with the help of Zach G. he figured out that the selloff that occured on 6/21/10 in the S&P; eminis is the mirror image of todays positive green candle. It is similar in both size of shadows and size of body. The former was a red body followed by a bad red day for confirmation. Today was green leaving us waiting for confirmation. Another minor (repeat minor) tell is that the market was above resistance for 5 days before we started to sell off and today was our fifth day below support.

I truly hope that this is the bottom as the pain has been very tough to take as we have remained a primarily long fund. Individual charts look terrible, sentiment stinks and support is tenuous all the way down to 940 and the "death cross" has been confirmed.

Bulls are resting on oversold conditions and hopefully good earnings a week from now. To me, let's just see em stop selling rallies for a day or two and I could be convinced.

Stay calm, be patient, wait for your good setup to appear and make your day.

Good luck and keep following us on the webinar.

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Levels on the SPX
Posted by Mark M. - Head Technical Trader on Jun 30th, 2010 6:43pm

Another really brutal day in the markets as we sold off through 1035 right at the end of the day closing on the day lows at 1024. So what does this mean and what are some of the next support levels to be thinking about?

First this is clearly a negative event in the market, but certainly does not mean that we confirmed this break or that we can't get a move back up and through 1035 which now will serve as resistance. We broke out of 1100 two Mondays ago and all things looked good in the market but here we are 100 handles lower. The SPX spent five days above that level and broke hard to the downside, so next Wednesday could be important if we are still below these levels from simply a time standpoint, this is a minor data point but one to keep in mind.

Second, there are levels of support that we can still hold onto such as 1019, 1008 and of course the psychological level of 1000. This is a dangerous game of course because there are always levels and data points that you can look for to stay long, that is why a line in the sand is so important.

Now the bad news is first and foremost we did close through an important level, one that has been defended a number of times, just as resistance was defended before breaking. The next piece of negative information is that we are well below all Moving Averages that I follow on the daily, weekly and all but the 20 day on the monthly which sits at 995.60 and that is really not a good sign of support.

Personally speaking this has been very tiring and stressful quarter and frankly I am glad to see it go and psychologically the whole street must be feeling the same way. We shall see what the next quarter holds for us, summer rally, confirmation of this break, nobody knows so all you can do is make the best decisions you can with the information at hand and execute your plan as close to perfection as possible.

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MARK-et thoughts 6/30/10
Posted by Mark M. - Head Technical Trader on Jun 30th, 2010 7:51am

A rough day for the markets but holding support (for now). It was only about 8 days ago that we had a break above resistance after news on China letting their currency float and here we are now 85 handles lower and again on support. We have data at 8:15 and then Friday payrolls are going to be critical to health of this market so by the time you read this it could be outdated.

Today is going to be a day of patience for me as the pivots are wide and may not produce a signal on the Spooz so I will have no clear direction meaning I will trade off of individual stock signals and the support and resistance from the charts.

Listen in to find out my thoughts after ADP.

Happy Trading!

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XOM update
Posted by Mark M. - Head Technical Trader on Jun 29th, 2010 8:39am

Normally I dont just update individual stocks but XOM is a very important company/stock and as of this writing is going to open below very important support at 58.46 a level we stopped at first in the flash crash and second on May 25, another test of the lows. XOM coupled with AAPL confirming a bearish engulfing pattern is making this a tough market to want to be long, but we have yet to break support and intraday I may be bearish, I cannot ignore that this may be a great opportunity to get very long with a stop upon that break of support.

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AAPL Bearish Engulfing Does Us In Again
Posted by Mark M. - Head Technical Trader on Jun 29th, 2010 8:02am

Beware the bearish engulfing patter, especially when it comes from AAPL. I have pointed out a number of times on our webinar that the last two times that AAPL has made a bearish engulfing pattern the market has dropped dramatically within a few days of confirmation of that pattern. Well the stock made a bearish engulfing pattern on June 21, gave confirmation on June 24th and as I write this the futures are down 14 at 1057, a full 70 handles below where we were trading just 6 sessions ago.

So with ADP out on Wed and Payroll data on Friday the market is close to support again and looking like we are going to test 1040. This will be an important test of these markets as the market was able to break above support, confirm but then quickly sold off so now do we hold support or break is the question of the week. Only time will tell if this is another great buying opportunity or the resumption of what is looking like a long term bear market.

This is why I am always looking for clues and clearly AAPL is an important stock and when it makes a negative signal you had better be aware.

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MARK-et thoughts 6/28/10
Posted by Mark M. - Head Technical Trader on Jun 28th, 2010 7:45am

I spent a lot of time over the weekend thinking about what the market may do this week. Last week the S&P; lost over 3% so the trend is clearly down, AAPL confirmed a bearish engulfing pattern on the daily chart potentially adding fuel to the fire. Friday was a nice day bouncing off of 1063 and closing strong but I frequently write off what happens on Friday's as they are reversal days and carry little weight with me.

This week offers a lot more data to confuse the situation so I will defer to the charts and with Friday's small body we will look for a dominant candle today to determine direction.

Wait for confirmation for your setups, start small and add bigger on that confirmation.

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Sometimes it just seems easy!
Posted by Mark M. - Head Technical Trader on Jun 24th, 2010 9:04am

This is a tough market and this is a tough business but sometimes there are opportunities that just seem easy and today without any humility I called the reaction to the economic numbers perfectly. Why at 8:28 am was I so confident the market would rally?

The easy answer is that it just felt like we would bounce, the hard answer is that I have been a student of these markets for over 20 years now and nothing replaces all that experience. Clue #1 was the fact that we have been selling off since the strong open on Monday, clue #2 was as Schwartz called out, the homebuilders rallied on bad news and clue #3 was that we were selling off this morning pre marke and trading right at S4.

As one of my responsibilites is to be the head educator, there is a lot to be learned from this lesson today. Over time you will learn to "feel" the market, I believe by listening to our collective culture your learning curve will be steeper allowing you to learn how to interpret the markets quicker than a newbie on their own.

This trade is a microcosm of the over crowded trade in that everyone was selling into the number, therefore there are less sellers out there and more investors willing to be a buyer.

So yes today it felt very easy for me to see what was happening, it does not happen always but when it does make sure you take full advantage of it.

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MARK-et thoughts 6/23/10
Posted by Mark M. - Head Technical Trader on Jun 23rd, 2010 7:22am

Many bearish engulfing patterns from the Friday quiet day and the Monday rally, then sell off and a few names gave us confirmation yesterday like SNDK and CREE which have been two of my stronger names. I am most likely going to play from the short side as the firm is long enough.

Action will be quiet today due to 1) FOMC meeting results at 2;15 and much more important 2) US Soccer (football) in a win and your in scenario against Algeria which will garner all of the attention of Wall Streeters from 10 - 11:45.

Keep it light, have fun and Go USA.

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