resolution within the first few days of 2012

I think you could find an equal number of traders that would make a case for being bullish or bearish.  We sit right in the middle of the trading range we have been in for months with prices tightening tighter and tighter (less distance from the highs and lows, staying closer to the middle).

heck ... when I look at the charts, half the time I get a bullish response, and the other half ... well you know.  And my end of day analysis is very similar.

nice bounce baby!

well, my test position did quite well today, but I sold it mid day.  In hindsight ... probably would have held it until the end of the day or longer.  Today's strength put us back in the game ... surprising most market participants which is why the move was so ferocious ... shorts got squeeze out and longs had to scramble to get on board quickly ... herd mentality at its' finest.

not much different

most everything in the market looks bearish still as it has for the past week or so.  We are getting close to a situation where we should see a bounce, but I think it is still a day or two off.  I actually purchased a small long position today, but I think it is too early to put any positions of substance on.  The markets look very weak and kind of holding on top of a cliff of prior support, called a shelf.

I do see one of my leading indicators showing more strength over the past two days, but all other indicators are showing nothing healthy and so patience is strongly suggested.  In fact, I will most likely sell the position I bought today intraday tomorrow on a bounce unless I see a very strong open and follow through in the morning hours.

Not much more to say ... except be careful out there!

healing is occurring

I definitely see healing going on as the markets flatten and seem to be consolidating.  It seems that the markets have accepted the fair value and prices are sitting relatively flat.  I will say that this morning's rally attempt got shot down hard, but looking over the last 3 days we seem to be holding steady on the downside.  So ... selling has decreased momentarily.

I am fighting myself to not put on long positions, although I am very tempted ... I think we are still 1 - 2 days out from a buy signal and would prefer to wait to see what Monday brings us.

My indicators are telling me that we are still in bear territory even though prices are stabilizing.  Everything is flattening, which is good, but all it will take is some bad news out of Europe to start the selling process again.

A strong day or even mildly strong day on Monday will probably kick me into a buying mode.

more downside coming

going to keep this one very short today.  Although intraday I was seeing strength ... my end of day analysis confirms that we are not only in a downtrend, but that we have more downside to go before we are done.

Although I was hoping we would bounce sooner, it is looking now like we have 2-3% more downside to go before a bounce ... I am expecting the bounce at the rising trendline that touched the previous two lows.

The strength of this next bounce will tell us whether we are going to push higher with possible new highs in the next month or two, OR continue down to a new low.

feelings havent changed

I haven't posted in a few days and wanted to provide a quick update ... my lack of posting is simply because my view hasn't changed.  Today finally showed what I have been seeing (and discussing here) for the past few weeks.  There is a bearish underlying hue in the market and today it finally reared its' head in full force.

I am hopeful this will be a small downside move to establish a higher low from the lows of October, but I am starting to feel like we are going through a major topping process and we will revisit and pass the lows of October. 

Time will tell if this is the case and I'm certainly not positioning on the short side for such a move, but I am just getting an eerie feeling about the market over the past week or two.  It isn't abiding by 'the rules' (if there are any) and it is confusing many, many traders, but most are still uber bullish which I think is a problem.

The good news is that the decline over the past few days has been very controlled and not panicky, but that has served to keep the bulls strong in their positions ... which will cause a serious downside if and when the market falls enough for these people to want to get out of the market.

I remain on the side lines waiting for a low risk entry.  If we have a strong gap down in the morning (which I don't expect), I might get short on the market, but more than likely I will sit and wait for a long setup to occur.  It really depends on what the market does over the next few days.

like a boy at a middle school dance ...

well, we got the pullback I had been expecting and waiting for with the markets down between 2% - 3% today.  As you probably saw from my previous posts, I was surprised it had not come 2-3 days ago.  The markets continue to teach me patience, although it is so hard to have at times.

centerline support/resistance - intraday comment

This centerline is again amazing me (use the 5 min Russell 2000 image below to see this).

Today the market tanked down over 2% and then paused for about an hour right over the centerline (green zone in the image below), But what was support, quickly became resistance as ... in a flash prices rocketed through the line and paused immediately on the other side.

Now over the past hour it has attempted twice to get back above the line with little success as it fell below it again.  This resistance should prove to push the market lower at least in the short term.

This push/pull anomaly of the centerline is quite interesting to watch.  It intrigues me that price REALLY does not want to be in the centerline 'zone', so it quickly bolts through it (see the second image for a zoomed in view).  As you know ... a few days ago, prices bounced off of it and today it pushed through immediately to the other side.

This is a good example at how technical analysis can provide subtle clues as to the future direction.

fascinating stuff for a technical analysis geek like myself :)