Mid day update

Well the market volatility has definitely slowed down this week. Yesterday 370 point drop was nothing to sneeze at and I was wrong to assume that this week would be an up week. I still think the bulls will make a stand at least into the resistance level again which I missed it by 5 point last week WOW. The beauty of technical analysis!!!!!
Oil looks to be set to take a pullback but honestly I dont think we pullback large enough in the bigger picture. Commodities without a doubt are stretched and are closer to a top than anything else. Google! how the might has falled. Google will be the other side of $400 this year for sure. I am predicting GOOG to be close to 360 at its lows some time this year. Apple is another one I am sure might head back sub $100 if the market get weak as I expect.
2009 will be a very bad year for the markets I can see it setting up a mile away. Sub 1000 on the S&P and sub 10k on the DOW is definite.

ISM numbers terrible

I forgot that ISM non- manufacturing numbers were due this morning- we got a number in the low 40's which is a sign of very low production. Any number below 50 signifies a weak service environment. It is the first contraction in the service economy in 58 quarters. Let's see how we open off these numbers, futures have taken a hit on the numbers

Tuesday

Monday’ session started this week off on a bad note as a bearish impulse out of the open led to lower prices all day. However, the sell-off wasn’t extreme and didn’t break us down on the market daily charts, so I am maintaining my bullish bias here for the short term. Lets look for some kind of a rebound for today and I wouldn’t be surprised if see it in the form of a Turnaround Tuesday scenario so be prepared to jump on a reversal setup if we flush-out to new lows early in the day.
I still think the market can go higher here before we head down.

YAWN

What a boring day! but crack as showing us quietly.
Google is now below 500 and i can surely says all the analyst who called for GOOGLE to $1000 will only see that numbers in their dreams. Google will be funny to watch and as noted last week Google can lose $150 in a rush. I think Google will see $375 sometime this year and will announce a split in order to boost their stock price.
Today Gold is showing some weakness and also think Gold is very toppy here as everyone is thinking Gold will goto $1500.
The homebuilding stocks bounce seem to be running out of steam and with a number of people calling for a housing bottom this year a few might set up later in the year for the 401k investors but I wouldn't be holding my breathe.
I am taking ti easy this week as I am burnt out from the last 3 weeks of trading. I will update the blog as usual

Difficult

These daily swings up and down make it very hard to trade. This morning we had news of Microsoft purchasing Yahoo sent the futures higher and then got sold off after we got ISM numbers and JOb numbers which were ever weak. It is no doubt we are in the first leg of an recession.
Oh GOOGLE down to 517 that was some nice call on that short. Right now Google can easily see 425 on a push down if we get really bearish.

Futures down

Well seem like the rate cuts yesterday didn't have a push for the bulls. The futures are currently down 200 points before the open and numbers out that consumer spending is at a 15 month low. I will be buying this gap down for at least a bounce and see what pans out. As said before we are 100% definitely in a bear market and as can be seen in yesterday's action all upside moves are being sold into.
Don't let your 401K turn into a 201 K. play the short side or stay in cash.

FOMC- FED announcement today

Tuesday as expected was a narrow range day, although it had a slight bullish tone to it. A gap up tried to fade but found support quickly and we chopped throughout the day. I would expect more of the same for today up until the FOMC announcement at 2:15 p.m. We usually don’t trend much before the Fed decision as traders sit on the sidelines. When the announcement comes it usually sets us up for a nice fade off the initial spike and then a possible trend into the close either way depending on the reaction to the report. This is certainly a key meeting so I would look for a lot of volatility surrounding the announcement and a good chance we trend following the spike.

As far as the charts are concerned, we still look higher in my opinion, as we still haven’t moved off last week’s reversal pattern, but the Fed will take center stage and precedent over the charts. If they give us good news we could blow up over the next few days, if not, we could see new lows. Let’s stay on the sidelines until the report comes out and then look for our setups .We will re-evaluate after today. Good Trading and we will talk to you on Thursday.