AS one who’s looking for weekly trends I prefer CLOSING action over intraday action as a trigger.  Price never closed below the 13WEMA and only flirted with an intraday poke yesterday of the 65DEMA (AKA 13WEMA) before closing back above it.  THOSE are the punk moves I enjoy missing as an EOD trader.

Naturally, $TICK  held it’s ground also:

SPX 1345 looks like the top of a downward TL from the May top, so if there’s any merit to my notion of a weak summer then that TL needs to cap this rise.  I need solid confirmations in my favor before trying to trade around my usual summer boogie man.  The last 2 summers have imprinted a bias on my brain.

Speaking of recency bias, I’m sorta liking the triple bottom action in NVDA and the +PPO divergence in SSRI and EXK.

The last 2 summers linger in my mind and the market is once again entering that seasonal ‘sell in May and go away’ hurdle.  Furthermore, declining PPO’s are also back in play.  It looks like the only thing standing in my way of nice profits is my usual challenge of no intraday access to tweak stops as price action goes my way.  I would like the sanity of entering under the 10WEMA and simultaneously entering a stop above it; not coming home to find I was triggered below it just before the market punked me by charging back over it.  I loathe starting a position on the wrong side and especially when so much damage can be done on an intraday basis.

TICK 3Dema has room to give and I figure $SPX 1295-1300 would be the place where $TICK would once again be poised to spoil the downward momentum.  Fail 1295 and a mere 20+ handle trade could easily become a 70 handle trade:

My target on ANY SPY option trade has been 40+ handles and another set-up appears to be very close.  I need to trade this -40 move much more adroitly than I did the last one!

The good loss would be SVNT.  After nearly getting stopped out on Wed, the open on Thursday sealed the deal.  Yes, I got triggered below my level due to the yawning gap, but far better than what coulda been:

I'm not complaining about this stop out

On the other hand, NVDA now looks like a punk loss.  I was banking on the ‘plethora’ of DEMA’s to hold the line for me, but the smart players took them out, stopped me out in the process and then ran prices back up to my entry.  Well done, jerks:

It happens.  I still like NVDA so long as SPX can hold and resume the uptrend:

Hold this level then resume??

I entered these positions while $TICK was closer to a top than a bottom, so a pullback was to be expected.  I thought my stops were far in a place that would keep me in the game.  Oh well, manage risk first.

I see no strong reason to buy here because 1) Tick demas are still not washed out:

2) I promised myself no more fiascos like the last 2 summers!!  May is awfully close to summer so I need to become very stingy with my small, yet precious, gains and 3)  I now spend 10 hours a day staring at spreadsheets instead of the market, so unless the market is in a bona-fide trend i have no real interest in “Dowfolio getting slapped around just for sport.

Buying this breakout

A potential breakout on SPX wasn’t the only thing I noticed.  NVDA and SVNT also piqued my interest, so I bought both today.  NVDA presented very palatable risk:reward I couldn’t pass up with the plethora of DEMA support just below:

SVNT struck me as a potential retrace play from the horrific red candle last year while also offering DEMA support should things go wrong:

SVNT should fill the candle

I take a few weeks away and wordpress gets froggy on me   Charts won’t paste correctly.

McO shows a powerful thrust:

I will gladly accumulate more of both and anything else that looks promising if conditions warrant.  SPX looks primed to play out the long held chart target of 1420-1440 range from the much earlier cupnhandle formation and the current inverted H&S formation.  What’s a pattern for if not to serve as a trigger. 

Speaking of triggers, $TICK DEMA bottoms still prove powerful—for those with gumption to by weakness and fear.  Sadly, I struggle with summoning my inner Tiger blood at such opportune buying times:

Contrarians are loving this market

Might as well remember SPX 1420-ish that last year’s 7 month cup’n'handle suggested:

Makes buy and hold look brilliant

That $TICK low a few weeks back that I felt would NOT mark the bottom until 1240, or bette,r was a wonderful buying opportunity.  80 handles to be more precise:

80 handles of pure wall of worry rally

Given that I’m now working 12 hour days I rarely have time to look at the market, but it’s plainly evident I missed quite a money making opportunity on the long side.  Ouch. 

I’ll spend tonight and tomorrow seeking something that looks profitable.

The day was made at the open

Unfortunately, I rode into today on the wrong side of the trend.  Thursday and Friday last week were the warning shots but I was tone deaf and let near 40% profits turn into near 20% losses on my puts.  The open knocked out my stops–stops that shoulda been much tighter so as to take me out last Thursday.  I literally was 16 points away from my profit exit at Wed’s close yet made the unwise decision to leave my stops overhead by more than 2x that amount!  In hindsight, it looks and feels awfully dumb to have my risk potentail 2x my reward potential but I was married to 2 ideas:  that 1240 was in the cards and that we would likely first see an intraday spike– to clean out over-head short stops— followed by a resumption to at least 1240.  I didn’t want to get punked on said intraday spike, so I ran with wide stops.  In summary, I didn’t get punked but instead got out smarted!  The loss is well within my tolerable range when I trade options but it’s the stupid decision to be so bumble headed about my potential risk that perturbs me.  I clearly let greed overtake my thinking and certainly got what I deserved in the end.  The market is effecient like that.  If I recall, that was one of my few option trades this year and it sucks to mishandle it that way; especially after working my plan of entry so well.

The news flow I liked last night suddenly turned very positive between my going to bed and the open thanks to AT&T’s buyout offer for T-Mobile.  Merger Monday lives!  I note that the 32 DEMA is in effect as the termination point for today’s rally:

Uhhh....was I just early? Try this again or step aside and watch??

What does the weekly say:

STO's and RSI speak to resiliency for the bulls

I thought the $TICK ‘worm was turning’ in my favor.  It turned alright, but only to squirt worm juice in my face:

I had $TICK worm fever

I wouldn’t mind another crack at last week’s lows but that hinges upon action around SPX’s 32DEMA, but since I have no intraday access to monitor the situation the trade feels like a ‘pass’ for me.  The idea feels strong, though.

I sit on all cash in my equity portfolios and now all cash in my option portfolios, so there’s a winning trade out there somewhere with my name on it.  Just gotta find it.

I think the bounce is done now

ALL my put profits are gone and I’m basically 8 points shy of my starting point on the initial put position.  My intuition tells me this sell-off is not done and will once again test the lows around 1250.  1240 is another conversation but I still have exits planted there and even lower.

Daily SPX looks half empty to me, but I have a ST bias

Weekly SPX only confirms my ST bias towards puts.  I find it hard to bet on the price action NOT groping for the 32WEMA after so clearly closing below the 13WEMA.  Again, I have a vested interest in seeing the 32WEMA diddled with:

SPX's 32 WEMA is still lower than my first exit point

$TICK demas do appear to be turning in my favor as I mentioned a last week.  Appearances are in the eye of the beholder, though:

Bounce looks inept ie...weak buying action.

I sit here on Sunday thinking that these charts need an outside nudge that goes in my favor.  Alas, the news flow is turning my way for Monday—Arab League wanted help with Mommar QaDaffyDuck and now that they’re getting it they accuse western powers of ‘colonialism’ and call for an Arab summit.  Then, there are also reports of a 100 mile wide oil slick near the BP gulf well from last spring.  Dicey times that would usually favor puts, but QE is powerful!

I MAY add to my position again in the AM.

Bulls will not go quietly

Not much change to the big picture, though:

Daily SPX

AS mentioned last night $TICK DEMA’s were painting possibilities:

$TICK can punish late comers

I’m still targeting 1240 to jump off and the weekly chart looks willing:

I still feel and see an edge to my put positioning

A huge portion of my profits went up in smoke today, but thats the CODB for my type of swing trading.  The month isn’t over and I’m fully prepared for a failed back test of the 13WEMA before my target gets taken out. OE tomorrow should be full of noise and feints to spice up the day.

Steady slide and my target is in sight

My exits are parked right around 1240 and I tightened up stop levels tonight.  It would be quite a shame to not reach my target seeing as how I’ve planned my work and worked my plan about as well as I can given my ‘absent’ style of trading.  But, markets can be cruel and I expect that anything can happen here.

I’m not even being ‘greedy’ by trying to exit at the very obvious 32WEMA of 1234; I’m just looking to get out somewhere in ‘hand grenade’ proximity to it:

Note the confluence of tops at the current 32WEMA area

Speaking of hand grenades, $TICK has often provided harmful collateral damage to bears at these current levels.  Time will tell if the worm has turned and $TICK starts behaving like it did from 9/08-3/09 or if it follows the more recent playbook .  Those long forgotten days of inept $TICK bounces were wonderful times for bears:

Just need 1 more day of bad $TICK to reach my exit point

I’ve done all I can do with respect to my positioning, targeting and risk management.  Now I sit and wait to see the outcome–and ponder the feasability of a long side trade very soon.

Big opening selloff then a clawback

But, I’m not going contrarian this week.  I’m in the bear camp and seeing an edge to the calamity happening around the globe.  Once again I started the morning with an early peak at pre-market action/news and decided to cancel my put entry orders down around 1270 and instead  add to my puts at the open with another market order.  Naturally, I paid prices near the HOD as the market gapped down at the open but then proceeded to claw back much of the losses into the close.  I got a slightly better fill than had I let my parked order get triggered, so I shouldn’t snivel.  These are the pitfalls of a non-daytrading oper8tr who chooses market orders in a volatile market and who’s only actionable intel is post-market chart readings to set entries and exits.  Still, this style suits my desire to be as non emotional as possible concerning the market.  Being relatively oblivious to intraday action helps in that regard and I still sleep well at night.

I still feel like the news flow gives my puts an edge.  Good grief, a major earthquake, tsunami AND a nuclear reactor leak for one of our largest trading partners PLUS mid-east turmoil is a screaming call for puts in most markets.  But, this market has another type of tsunami that favors the bulls and that is the FED.  Amazing how powerful fiat money can be.  Tonight, my view of SPX leads me to believe I’m either on the razor’s edge of  a dreadful bear skinning rally or on the edge of more downside action.  I’m clinging to the latter view:

SPX daily hammer has to be energizing bold bulls, or.....

…it could simply give way to the more powerful WEEKLY EMA’s:

Gotta crack the 13WEMA to take a stab at the 32. We have crackage

If the wee WEMA crackage wasn’t enough of a razors edge then $TICK DEMA’s up the ante for me:

As a short, the potential + DEMA / SPX divergence is noticed

Of course, that potential + $TICK DEMA divergence is just that–potential.  It is until it isn’t and I’m content to let my puts ride another day in the anticipation it fails to produce a bounce.  If it does then kudos to those traders who saw it and went long.

In summary, I fail to see how leaking nuclear reactors can be good for the global economy’s fragile rebound.  Also, in previous posts I outlined my game plan for going short and the pieces have fallen into place.  However, in the intraday term, anything can happen to stop me out, so surviving a near term ‘punk’ type of bounce is important here.  In optimistic fashion, I’m setting a profit exit near SPX’s 32 WEMA of 1235.  In my typical ‘dont get caught with my pants down’ fashion, a stop loss is parked where I think I can survive getting punked out of a nice IT bear trade. 

May the chips fall in my favor and my pants not hit the ground.