Bill L.'s  Instablog

Bill L.
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Methodology: setups require certain criteria to be met before trades can be executed, which include weighted statistical studies on several indicators of price, breadth, volume, and sentiment . Amount of risk taken is proportional to how many indicators are aligned. I mainly trade market... More
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  • Sunday, May 6th, 2012 - Short Term Update 4 comments
    May 6, 2012 6:45 PM | about stocks: SPY


    A short update:

    Last Thursday pointed out that there was a head and shoulders formation in the SPX, the neckline had been broken and the implied "measured move" first target was 1375. That target was promptly met following the negative reaction to the jobs report. In the short term, I'm expecting this weakness to continue.

    (click to enlarge)


    In the near term I think there's potential that the market can continue lower and could threaten to take out the 1360 level. The NYSE-McClellan oscillator recently had a bearish crossover sell signal, and the NASDAQ-McClellan looks even weaker. Looking at the relative position of the 3 and 5 day moving average there's still some room to run on the downside before I would consider this indicator oversold.

    (click to enlarge)


    I think the main concern right now is the fact that there's no clear longer term trend. Meaning my long-term trend model on the S&P 500 recently turned bullish, however there's evidence that makes me lose confidence in the signal; for example the long-term trend model applied to the NYSE composite is still in bear market territory, most likely because it doesn't have the added boost provided by Apple. So until there's some more clarity I'm keeping my trades smaller than usual and staying very nimble. I'm placing my stop at SPY 139.

    Disclosure: I am short SPY.

    Stocks: SPY
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Comments (4)
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  • Bill L.
    , contributor
    Comments (691) | Send Message
    Author’s reply » Moving my stop down to yesterday's high, 1374 $SPX.
    8 May 2012, 01:09 PM Reply Like
  • Bill L.
    , contributor
    Comments (691) | Send Message
    Author’s reply » $SPX 1364, yesterday's low as well as the 61.8% retracement (yesterday's high to this morning's low), new stop.
    8 May 2012, 03:00 PM Reply Like
  • mikeycblue
    , contributor
    Comments (21) | Send Message
    Thanks for the update!
    8 May 2012, 05:00 PM Reply Like
  • Bill L.
    , contributor
    Comments (691) | Send Message
    Author’s reply » Wednesday, 1:40pm
    All shorts are closed, lightly long, stop at today's lows.
    9 May 2012, 01:44 PM Reply Like
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