MKTstate

Saturday, April 17, 2010

VIX - EXCITABLE

The VIX has been waiting for an excuse to jump and it got it on Friday.

Real deal?

With the short end of the Yield curve jumping you can smell the fear.

The Equities have plenty of room to move without altering the underlying positive sentiment. For now all the major indices are vulnerable to further losses with the VIX expected to tighten a few collars. Keep tight position management and watch the short end of the curve to stall for a signal that the sky is not falling.

Nikkei225 has the potentail to be one of the bigger losers for any negative follow through to Friday's action.

Gold sold off but could not turn its underlying technicals to the downside.

Crude Oil flip flopped last week and should have rallied if it was going to. This MKT is vulnerable to a few dollar drop.

The Dollar is ready for some big sideways action so avoid making any commitments.

Commodities are firm and are expected to inflate.

Good Trading

JS

Thursday, April 15, 2010

30YR US T-Bond - TRYING TO MAKE A DIFFERENCE

Technically the MKT is in a NEUTRAL DIGESTIVE position with a positive bias above the 116-07 Inflection Pivot. Opportunity exists on both sides of the MKT but buying weakness above here is the better opportunity.

On the SELL side BREAKOUT strategies below 116-07 or the 115-18 support pivot are aggressive and should be entered sooner [higher] than later [lower]. Expectations should be for the MKT to make its move early in the session and not look back, holding structure most of the day. If the MKT digests prior to making a negative move, it is more likely a squeeze on the longs to FADE. SELL FADE strategies against the 116-28 resistance pivot are aggressive as well and if they are going to work, should do so on the initial test of resistance. Repeated tests or "confirmation" are more likely to give way to a higher trade. SELL REVERSAL strategies at 116-28 are recommended off the session initial major resistance levels only as the MKT potential for positive trend shift. The probability is to the upside today so don't get stubborn selling strength.

On the BUY side accept FADE, BREAKOUT and REVERSAL strategies off major inflection points. BUY BREAKOUT strategies above the 116-28 resistance pivot should just "go" and not look back, so keep risk parameters tight. FADE strategies off the 116-07 level after positive breakout signals are good opportunities as well but expectation should be for the MKT to quickly move back above violated resistance. If the trade just "hangs around", it is likely a signal that more digestive action is coming and a retest of support should be expected. Be more aggressive with FADE and REVERSAL strategies at the 115-18 support pivot or above the previous session low point, targeting the opposing digestive resistance at 116-28. Below the previous session low point, entering after the 2nd or 3rd test of support is recommended over stepping in front.

Note: The MKT is in neutral so "sloppy" conditions with "false signals" should be anticipated. Have a plan for any squeeze. Don't get stubborn, however, if the MKT starts to hold structure and gets into trend mode as the contract may just be expanding its digestive parameters producing a one way trade into the close and new extreme.

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Wednesday, April 14, 2010

CRUDE OIL - FLIP FLOP

** NEUTRAL TRANSITION **

The MKT has produced a major positive technical which will need to overcome resistance at 86.51 if the signal is valid. If not a return to a sideways trend less trade is likely. Roll with any new strength and leverage up if good risk parameters present themselves. The potential to get in at the beginning of a new move higher is real.

84.29 is the Inflection Pivot keeping the positive signal in play.

On the SELL side REVERSAL strategies can be executed off the 86.51 resistance pivot. Avoid this strategy on higher levels as any new strength has the potential to be the beginning of a move. If the integrity of the previous session high remains intact FADE strategies can be accepted at or near this inflection point on the initial test with tight profit target objectives. If the MKT has already had a reaction off this resistance area avoid this strategy. Use BREAKOUT strategies below 85.03 as a signal to FADE a positive pull-back into the 85.77 Directional after a confirm break in the positive momentum. Only take this trade if the previous session high point remains intact.

On the BUY side be more aggressive after the86.51 resistance pivot is taken out. Not that this is a pre-condition but should be noted as a confirmation of strength. BREAKOUT strategies above here should just "go" so keep risk parameters tight. FADE into any negative reaction off an unsuccessful upside BREAKOUT after a support level is confirmed. Use a REVERSAL strategy to leverage up after the MKT gets back above the original breakout point. If the integrity of the 86.51 resistance pivot remains intact, avoid REVERSAL strategies off 84.29 as expectations are that the "positive" signal is going to follow through it should do so straight away and any break momentum is a negative signal that the MKT is going to return to its neutral posture. FADE strategies off 84.29 are recommended early in the session or near the end. The positive signal will either play out from the get go or will make its move in the latter stages of the trading session.

Note: This is a dangerous emotional trading environment. MKT reactions to go a little further that you expect in either direction so anticipate this in your position and risk management.

Tuesday, April 13, 2010

CRUDE OIL K'10 - NEGATIVE SIGNAL

Technically the MKT is in a BEAR TREND ACCELERATION position and is vulnerable to the offer with all trading below the 84.31 Inflection Pivot. Any positive corrective action is expected to be short lived with only one upside "stop squeeze" if the negative moemtnum is going to play out. Any held strength and repeated probe higher is a sign that the trade will turn digestive. This does not take away from the negative bias but does limit the profit potential for any new sales in the session.

On the SELL side accept FADE, REVERSAL and BREAKOUT strategies below 84.31 and the previous sessions high point. BREAKOUT strategies below 83.58 and 82.85 should just "go", so do not risk much. FADE strategies against 84.31 are recommended over REVERSAL strategies as the MKT is expected to hold lower structure and any momentum shift should be considered a potential positive corrective turn.

On the BUY side avoid REVERSAL strategies off major support levels as these signals are more likely short squeeze rallies and opportunities to SELL into and FADE. BREAKOUT strategies above 84.31 and the previous session high are a long shot, so risk less and go for more. Any BUY FADE off the 82.85 support pivot should have confirmation and are not recommended if the integrity of the previous session high is intact. After a break in the negative structure confirmed support levels can be used for short term reactions using aggressive position management.

Note: The MKT is in an aggressive sell posture. If the previous session high is intact its just a matter of time before the sellers try to overwhelm the MKT. Look for excuses to get short. If the previous session high is breached opportunity will be on both sides of the MKT, however the bias still rests with the Bears.

Saturday, April 10, 2010

WHEAT K'10 - NEGATIVE SIGNAL IN PLAY BELOW 468-2

Technically the MKT is in a BEAR TREND and has produced a negative signal. The MKT is vulnerable and all sell signals should be considered below the 468-2 Inflection Pivot.

On the SELL side accept all BREAKOUT, FADE and REVERSAL signals. If the MKT produces a BREAKOUT signal below the 460-6 support pivot early in the session it should just "go" and not look back. Beware of any break in early negative structure, as a corrective rally up to resistance is a likely scenario. Be selective and wait for an exhaustive signal to re-enter to avoid selling the corrective rally all the way up to your "ideal" sell points but with no confidence left or dry powder. Practice good size management on this move accepting sell signals but leveraging up at the resistance turning points. Anticipate a price "zone" around a major resistance point to FADE at 468-2 and the 475-6 resistance pivot. Have a plan and be ready. If your stop gets hit and the MKT does not immediately follow through, consider re-entering, even doubling up if there is structure to define low risk. Follow any corrective rise with a REVERSAL strategy. Expectations are for the negative signal to follow through even if it does in the last hour.

On the BUY side REVERSAL strategies can be executed off the 460-6 and 445-6 support levels but preferably after an emotional sell off early in the session. This is an aggressive strategy and any profits should be realized at the previous support failure points. Expectations should be for an immediate "V" bottom turn with the MKT quickly moving away from the area or a gradual rise with higher lows after a lower exhaustive signal. Avoid FADE BUYS off 460-6 even with confirmation, as this is more likely a plateau for a BREAKOUT SELL strategy. BUY BREAKOUT strategies above 468-2 and 475-6 are not recommended but do have a better chance of succeeding than a FADE.

Note: The MKT has produced a negative signal and should follow through with authority from the get go if it is serious. If not expect some starts and stops. Be patient and wait for opportunity. As soon as the MKT starts to look "good", its time dial in your sell strategies, especially if the integrity of the previous session high point remains intact. Above the previous session high point and all negative bets are off.

Wednesday, April 7, 2010

SPY - CORRECTIVE SIGNAL IN PLAY

Technically the MKT is in a NEUTRAL CORRECTIVE state producing a negative signal against a positive trend. Opportunity exists on both sides of the MKT however the threat of fresh losses will loom over this market with all trading below the 118-55 Inflection Pivot.

On the SELL side avoid FADE strategies until after the previous session low point or 117-76 support level has been broken to confirm a negative shift in momentum. Until then a better opportunity will be a REVERSAL strategy at 118-55 but not at higher resistance levels. This is a one shot trade using a low risk big profit target criteria. The idea is that if the MKT is going to follow through on its negative signal any stength is just a "head fake " before it follows through. SELL BREAKOUT strategies below 117-76 and 117-10 can be profitable but they are aggressive and should look to take profits and potentially REVERSE long at support targets. The trade is corrective and the underlying positive tone must be respected.

On the BUY side accept BREAKOUT, FADE and REVERSAL strategies off major inflection points with the expectation that the positive momentum is going to resume. REVERSAL strategies are recommended over a FADE strategies off 117-76 and 117-10, which should have at least 1 if not 2 challenges to the support integrity before executing a long off it. BREAKOUT strategies above 118-55 can risk a little more if current events and other MKTs of confluence confirm a positive posture with the expectation that the Bull Trend is going to resume. If not a better approach would be to FADE a negative "squeeze" reaction off the 117-81-117-76 Directional area after a positve breakout signal above 118-55 as the neutral technical position can keep the trend sideways.

Note: The MKT is in a corrective position with the potential to move in either direction. Keep your opinions to themselves and focus on what the MKT is telling you it wants to do. Don't fight it, roll with it.

Tuesday, April 6, 2010

BUND - MIXED SIGNALS

The MKT is in Neutral but has produced a big negative signal. Stay nimble. If the signal does not follow through the potential for a whiplash rally is high.

Key of the 12282 Inflection Pivot for an indication of the session tone.

On the SELL side accept FADE, BREAKOUT and REVERSAL strategies off major inflection points. SELL BREAKOUT strategies below 12246 may need to be "worked" as the neutral position will produce some starts and stops. FADE strategies after a negative breakdown signal against the 12282 Directional are good opportunities as well but expectation should be for the MKT to quickly move back under the failed support. If the trade just "hangs around" is more likely a signal that more digestive action is coming and a retest of resistance should be expected. Be more aggressive with FADE and REVERSAL strategies at 12318 or against the previous session high point targeting the opposing digestive support at 12246. Above the previous session high point enterying after the 2nd or 3rd press into an area is recomended over stepping in front of the initial challenge.

On the BUY side BREAKOUT strategies off 12282 or above 12318 are aggressive but do have potential if yesterday's signal was false producing a nice squeeze rally. BUY FADE strategies at 12246 are aggressive as well and if they are going to work should do so on the initial test of support. Repeated tests or "confirmation" are more likely to give way to a lower trade. BUY REVERSAL strategies at 12246 and 12282 are recommended off the session initial major support only, as the MKT is vulnerable to a negative trend shift and any new weakness is confirmation to yesterday's signal.

Note: The MKT has produced a big negative signal in a neutral environment. This is either the beging of a new trend move south or a press into the negative extreme which is about to snap back. Don't get tied into either opinion and let the MKT tell you what is.