Weekly Market Glance & Analysis

[DeeBee]

Hey traders,

A bit about myself, I've been trading equities on and off since 2003 late last year I came back and considered trading the market my serious business. I have been doing my best to master the “art of successful trading” because this is the only job that can't be outsourced and the only job you can bring anywhere you want to live. I also know its tough but I believe with the right attitude, the willingness to learn, and a strong belief one can be very successful in this endeavor.

I hope you will follow me on this business venture every week I will share with you my market opinions, trade updates and lessons learned. I'm not an expert but we can still learn from each other. My trading methodology is simple and I concentrate my trades on ETFs with a handful of selected stocks.

BTW, I've known Brendan since August 2009 from his YouTube trading videos. He's one trader you should keep on your list.

Good Day, Good Luck and God Bless!

[Brendan Egan]

Hey traders,

A bit about myself, I've been trading equities on and off since 2003 late last year I came back and considered trading the market my serious business. I have been doing my best to master the “art of successful trading” because this is the only job that can't be outsourced and the only job you can bring anywhere you want to live. I also know its tough but I believe with the right attitude, the willingness to learn, and a strong belief one can be very successful in this endeavor.

I hope you will follow me on this business venture every week I will share with you my market opinions, trade updates and lessons learned. I'm not an expert but we can still learn from each other. My trading methodology is simple and I concentrate my trades on ETFs with a handful of selected stocks.

BTW, I've known Brendan since August 2009 from his YouTube trading videos. He's one trader you should keep on your list.

Good Day, Good Luck and God Bless!

Hey DeeBee,
Glad to see you starting up a journal and I'm excited to follow along! I know from past conversations with you that you are serious about trading and have a full understanding for how to trade. I never got too heavily involved in ETFs so I will certainly be excited to follow along with that segment of your journal and hopefully learn a thing or two

Talk with you soon,
Brendan

[DeeBee]

We are looking at the weekly chart of the S&P500, the widely considered benchmark of the US stock market and has been closely followed by institutions such as the major banks and large mutual funds manager. The lows of the $SPX was registered on March 2, 2009 at 666 seven days later on March 9 this index have bounced strongly printing a wide range candle closing at 758 about +91 points from the previous lows.



The next week S&P500 begun to surge higher with very little pullback on a weekly basis. By June 8, the index have met its first resistance at 950 area and the four consecutive weeks after that we have seen its first retracement from its highs of 956.23 to the lows of 869 down -87 points. The up leg continues on July 13 when S&P500 bounced again eradicating the four weeks of retracement in just one week! And from July 20 up to January 11, 2010 we have witnessed more than five months of uptrend with very minimal pullbacks. Finally the S&P500 encountered its second retracement another four weeks of correction from 1150 to 1044 the February 01 lows of about -106 points. Personally, I thought that's it we will see a much deeper correction but I was wrong the bulls have stronger stamina and able to pushed the index higher from February 01 lows 1044 to the highs of 1180 last Friday, March 22 almost two months for +136 points.

S&P500 index is getting closer to a much stronger resistance the 1200 zone and plenty of other resistance waiting just above. If you check the weekly charts of DJIA and Nasdaq you'll notice that they too are in the same situation. The uptrend in the $SPX begun last March 9, 2009 up to June 8 (point A) that's about three months from its low of 666 to the highs of 956 during that time the index gained +290 points followed by four weeks of corrections -87 points. July 13 marked the resumptions of the uptrend which lasted until January 11, 2010 at point B that's more than five months gaining +270 points and have also corrected for four weeks -106 points. The recent up leg from the second retracement lows gained +136 points. Do you notice something here? Yea, the gains are getting smaller (+290, +270, and +136) as the S&P500 continues to move higher while the correction points are getting larger (-87 and -106).

I can't tell you what will happen next but the picture is clear its time to tighten stop losses on existing positions. Postpone any buying and wait for a new trend to emerge. The US market is entering a crucial point as a trader we always need to pay great attention and adapt accordingly.

Good luck!

[Brendan Egan]

Awesome analysis! I strongly agree with you--I recently had two swing trades open (although very small size) that I closed out of. I am only going to be taking short term day trades until the market shows some stronger signs of what it wants to do. We have really rallied hard the past year or so, and I just can't justify holding anything to the long or short side for any amount of time right now.

In my opinion, although I have been saying this for a while, we should expect a pullback or at the very least some choppy sideways movement. Also keep in mind we are approaching the lower volume summer months soon which could also play a role in what the market does.

All in all, none of us here know what will happen so as you said just be cautious. This is why I closed out of my swing trades recently.

[DeeBee]

This is one of my position trades. I've long KIRK (Kirkland's Inc.) last January and based on what I'm seeing on its longer term chart I got out last Wednesday, March 24 for +28% gain. I still like the stock and I believe its worthy to be bought again in near the future.

[DeeBee]

Happy Easter Everyone!!!

Its been a short week in the market not enough for something to happen. No stress

I'd like to show you the weekly chart the SPX (S&P500) which have been up for 5 weeks and if you notice in the last two weeks prices have been trying to surpass the 1180 level current price is at 1178 I think SPX can easily overcome that level this coming week. The main focus to pay attention is the 1200 level, a major resistance point and a strategic place for the bears/sellers. If the S&P500 bulls/buyers can convincingly conquer this area even better if they can also penetrate the 1250 level and can stay above that area this uptrend has a greater chance of continuing its march higher. On the other hand if we fail to get pass these supply/resistance lines (1200 and 1250) I'll be carefully watching the price action and be ready for a possible near term correction which may challenge the 1050 lows.

In short just keep tab of these SPX numbers:

1. Price move above 1250 stay there and pause means greater chance of the recent bullish move to continue much further

2. Price fail to stay above 1200 and falters watch for possible correction near term with downward targets at 1100 and towards 1050



Interestingly both OIH and GLD gapped up sending the US Dollar to the negative side. If you have time review the weekly chart of $USD index and you'll see that we've hit 82.00 the 50% fibs level for the first time the price can't hold that line and has since reversed down and may target 79.50 the vicinity of the 200MA. We are presently at 80.71 in case price fail and trade below 80.50 the minor support this will indicate that the downward correction conitnues.



I have been long USO (United States Oil Fund) at 39.25 since January this year. I'm bullish oil and gold longer term. Tho, I sold my GLD position a month ago to lock in profit before its correction, I intend to buy GLD again patiently waiting for the bargain day.



Kindly remember, I'm just presenting one possible scenario out of many that can happen anytime in the market. This is my own personal view so please be careful and exercise due diligence. In this business whatever happen happens the best thing a trader or an investor can do is have a trading plan (with a stop loss) structured according to his/her own beliefs and stick to it without a doubt!

[Brendan Egan]

Thanks again for the outlook! I think the two levels you outlined on the $SPX should be interesting to watch. If price does break above them soundly, it will be interesting to see where price actually stops going up. IMO we are going to slow down here around one of those two levels, but to keep the record clear I also said that months ago and here we are today--some hundred points higher yet. Who knows what will happen which is why I love being an active trader rather than buy and hold investor.

[DeeBee]

A strong week for the US equities the major indexes are marching higher DJIA in particular has hit the 11K psychological level. We are now entering the resistance zone the next few days would be interesting. Keep your eyes open for possible continuation or transition.

The casualty of this positive equity move is the $USD so expect continued softness if stocks continue to move higher. We have seen similar scenario last March 2009 when the US market finally bottoms and the US Dollar begun trending down.





If the $SPX can successfully penetrate above 1200 and price able to stay above that level a positive perception will emerge that can encourage and bring new wave of buyers increasing the conviction that the bull run is not yet done. I think that picture will not be conducive to the USD index in general will history repeat itself? We will soon see

[DeeBee]

Nah! I'm just tryin to get your attention ha-ha. It is amazing how a major news release “SEC Accuses GS...” have happened at a time when the $SPX is at 1200 a major resistance point coincidence or not the market found its catalyst to correct itself. At the end of Friday all major market indices were down over 1% on heavy volume.

Few things I've learned from yesterday.
1. Professional traders big and small never hesitate to SELL! Took gains and stop sell at all cost.
2. Professional traders NEVER ASK WHY. Sell is the only logical action when there is threat to capital.
3. Professional traders are NEVER ATTACHED to any stocks or positions.
4. Trading is a STRICT BUSINESS. Sell asap and accept losses rather than left holding the bag.

As a market speculator we should adapt these qualities by doing so we add the chance to achieve success in this elusive endeavor.



Take note that this is just the first day. Avoid any assumptions let the market continue its story have an open mind that this event can also be a pullback opportunity to buy strong stocks in case the market resume its uptrend. If not no worries there's a lot of time to ride the opposite side.

The important thing is we remain objective avoid feeling the rush to short or to buy. Be smart by waiting and listening to the market rather than letting your emotion lead your actions. Keep your patience. Opportunites will soon reveal itself.

Enjoy your weekend!

[Brendan Egan]

Awesome post DeeBee and I agree it is pretty funny that the GS news hit the fan right as the market is running into resistance...hmm nice timing on this one!

I really have started looking forward to your weekly posts as they a lot of the time reflect the same thoughts I am having and it is always nice to get another opinion and hear it from someone else

Have a great weekend.