Market Timing Comments Archive

Week of 7-12-2010

7-14-2010: 10:58 am EDT
Will our market timing be disturbed by the Fed? See how that worked? They got us back to flat and now we'll have another wave down for a bit. The Fed minutes are released this pm which could perturb the markets some say. I don't think that is likely, except to push it in the way it's already going at that point!

7-14-2010: 10:38 am EDT
We could end up filling the gap on the SPY which actually only appears in the SPY but for the Dow is 10220.28. The SPY gap was 108.24. Oddly the S&P 500 (SPX will be the shorthand here from now on for ease of typing!) itself shows no such gap, so this could be a red herring. I am just pointing out a possibility here. So where else could we find support?

The more likely place to move back to is about 1086-87 on the SPX. The correction we have had today "could be it" for today at any rate. We have not made it to the above market timing target but for ex. right now we could move to 109.58 on the SPY and then sell off again. We'll have to see how the market behaves at that point.

BUT we need to close above yesterday's SPX high of 1099.46 to make real progress. Let's say over 1100 because the market likes round market timing numbers like that. Then we should have our next leg up.

We could correct more deeply than the above of course, but I believe this rally still has energy left in it. Could the market fail right at the 1100 area which is where we drew close to yesterday? Yes, it's possible, which is why we'll preserve profits on the way down. No sense in giving all of our gains back from the lows.

7-13-2010: 6:33 pm EDT
The after hours action has been reported via Twits. INTC and other positive earnings could drive the SPY up another 3 points from here to the next resistance level. More in the newsletter tonight.

7-13-2010: 3:37 pm EDT
UPDATE OF PRIOR MESSAGE: As Twit said, SPY is up against resistance now and failed to make it through. The rally is not over as far as I can tell, but a pullback has become more likely. If you exit, I am recommending getting back in for the longer term trade, so you could be whipped around by this trade. Know that before you decide what to do. This is an intraday to one day move we would hope. You should already have decided where you will exit new positions if the rally fails. I would like to see SPY close over 110 to keep this rally moving into tomorrow.

7-13-2010: 1:39 pm EDT
As Twit said, SPY is up against resistance now and failed to make it through. The rally is not over as far as we can tell, but a pullback has become more likely. If you exit, I am recommending getting back in, so you could be whipped around by this trade. Know that before you decide what to do. I would like to see SPY close over 110 to keep this rally moving into tomorrow.

7-13-2010: 12:58 pm EDT
GLD will look good for a trade above resistance if it closes above 119.54. Sometimes the trade through resistance will happen on the same day. The risk is that it goes through and collapses, so you need to use some sort of fairly tight stop. Realize it also could close above 119.54 for one day and collapse.

Risk is coming off it seems, but today I noticed that there is both gold buying and dollar weakness adding to the increase in the price of gold. Perhaps the European selling of gold and re-entry into the Euro has let up a bit. Now the dynamic may simply be clearer with dollar down, gold up. That said the dollar index will have to break 83.62 to fuel this gold rally higher.

In sum, I'd like to see GLD > 119.54 and USD index < 83.62 and have both keep on moving up and down respectively to make this work.

You can find the dollar index here:

US Dollar Index On Marketwatch.com

7-13-2010: 11:13 am EDT
Make sure you are scaling in now and not going in "upside down." That is, in my view, it's better to use market timing and enter bigger near the bottom and add less as we move up. On bigger corrections you may be able to add more. Consult my E-Booklet again if you have questions about Scaling In and Out.

7-13-2010: 11:13 am EDT
VIX just broke support and could fuel another step up in stocks. Buying risk yesterday was what I recommended. If you bought Biotech yesterday when it was down 2% for example, you are up 2.12% as of today.

7-13-2010: 10:59 am EDT
FROM TWITS: $EURUSD The USD is playing with its up trend line but should break below 83.62 to fuel the stock markets further. PC-NU

COMMENT: Market Timing the US Dollar Index - The US dollar can move sideways and support the market or down and support the market. When it goes up, stocks go sideways or down. That is the current correlation.

7-12-2010:8:54 pm EDT
Futures are up by around 0.4% and overseas markets are up too. Good response to the data received after the close. The market timing players did stop at 1080ish on the S&P 500, so we need to get through that resistance point in the am or before then (in the futures markets which produces a gap up in the am).

7-12-2010:5:29 pm EDT
The earnings of Alcoa and CSX are both encouraging for the Bulls. Some news outlets were supposedly predicting soft results, which these do not appear to be.

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