Equities/Futures Market Alert yes, I know it's off topic..Sell Off May Be Near

[daytrader]

To all those that are invested in Mutual Funds, Stocks and are "long" in Futures.

There was a very dangerous blip in the mini russell at 3:59 pm  eastern today.  Either this was a human error or there was  a huge amount of money changing hands between institutions.  A short position @ 855.50 September contract has been taken by a large Institution.  The NASDAQ mimmicked this same move.

I wouldn't be surprised if the market swiftly moves a little higher tommorrow after the open then reverses down big time later tommorrow or later this week.  A large "gap down" open portends for later this week (or maybe tommorrow). 

Anyone long in equities or futures might consider taking a bunch of money off the table (during after hours trading tonight) and locking in profits.  There might still be room for the market to go higher, but the Nasdaq and Dow look VERY VERY OVERBOUGHT ! 

I would not wait until tuesday morning to sell, I would do it tonight.  Once the market stablilizes in a few weeks or a month or two, new buy positions can be entered after (what looks like) an inevitable pull back. 

DayTrader

[JimmySTLOUIS]

thanks for the heads up

I am sitting on the sidelines with a ton of cash in a money market, I wanted to buy back when the dow was around 10 because I thought it was a good time

now with the market where it is I have been sitting out trying to figure out where to go

thanks again

TE AMO PERU!

jim

[daytrader]

Jimmy,

There was the "mother of all buy signals"  on March 5, 6th of this year.....that was the precise time to get all the current upside gravy.  Last buy signal (in the futures) was on   May 16th. 

Last year's buy signal was July 21st/24th, 2006.

Late October 2005 started this whole rally.  Institutions have been long ever since.

It's getting frothy now, time to cash in some profits, IMO.  Any type of withdrawal from Iraq (September/October???) by the USA will end the Bull Market.  Bonds will do very well then. 

DayTrader 

[Looking4Wife]

Any type of withdrawal from Iraq (September/October???) by the USA will end the Bull Market. 

Why is that?

[daytrader]

...because, instead of fighting terrorists over there, they will come over here and blow up stuff.  There will be 'fear' in the market place, a flight to bonds will take place as investors will leave the equity markets.  Gold will be a good bet as well.  I believe the markets were dead for years after we pulled out of Vietnam if my history is correct. 

The reason oil is staying below $70/bbl is because we have boots on the ground to quell Syria from doing something foolish.  If we significantly scale back our land forces, oil can go above $70/bbl easily if Iran/Syria does something that we can't stop within 48 hours.  If oil stays above $70/bbl, no bull market, inflation sets in, ergo, flight to quality - gold & bonds, equity market drops 10% to 15%. 

Currently, there IS going to be a war in Israel this summer (80%+ chance)....a 2 front one, Gaza & Lebanon/Syria vs poor little Israel with a wimpy Prime Minister.  There are 20,000 plus rockets in Lebanon right now, pointed at Israel. 

I wouldn't want to be Long in anything (except oil) right now. 


The Russell futures market is pivoting off the am high and attempting to go lower; there's about 10  more Russell points above today's AM High then the contract must make a higher high..  likely a big time sell signal is loitering there, stopping any further highs. 

As  of 2:30 pm ET, Russell is honoring the Institutional Short position established at 855.50.  Futures are making lower daily lows all this week (bearish outlook). 


DayTrader

[daytrader]

....as of this past friday, the major indexes have honored the major short position taken last monday 1 minute before closing.  Whatever index you are following watch for friday's daily low to be honored or violated by lower lows this coming week.  Next weeks' trading will hinge completely on friday's low.  If it is violated, then look for lower daily highs and lower daily lows.  If it causes a short covering rally sunday night (in the Globex) or monday morning, there will be brief rallys in the coming week. 

There's only 10 more points left on the topside of the Russell 2000 (which was rebalanced yesterday and discussed throughly on CNBC friday).  If you noticed (via CNBC commentary), analysts are referring to the Russell 2000 as the guiding index for discerning if the Bull Market is in correction mode or will resume an uptrend.  The emini Russell 2000 is completely manipulated by the electronic market makers and provides daytraders will excellent liquidity and tight stop losses for short term trading.  It is the most technologically advanced index (and the newest) in the US futures market. 

Also look for oil to stay below $70 bbl...Oil and Gold will track each other upward inversely to the US stock markets going down.

I'm planning on the market spinning it's wheels in the coming weeks with a high probability monday of a very large gap down...I think there is much more pain the market needs to withstand before another long term buy signal occurs.  (I don't care which way the market goes cuz I am a daytrader)

Look for things to heat up around Israel and Iran this summer, it's an excellent excuse to be sitting in cash (euro's not dollars), bonds or gold the rest of the summer, IMO. 

DayTrader 

[sean126]

As far as currency....your advice is Long the euro dollar, long the British Pound, Long the Austrailian Dollar and short the US dollar? (those are the ones I'm looking at in currencies).

Usually if the US dollar slides...that helps the others go up.

[daytrader]

As far as currency....your advice is Long the euro dollar, long the British Pound, Long the Austrailian Dollar and short the US dollar? (those are the ones I'm looking at in currencies).

There are no fundamentals for being long the USD, and none in the foreseeable future.  The euro was created for the express purpose to devalue the USD by the European intelligencia.  Heck, the Canadian dollar is lookin' good, that's the first in my lifetime!  I don't follow specific currency pairs any more, the trading hours of the forex stinks when you are in North America;  I like bankers hours, 9:30 to 4 pm monday-friday here!

My excess cash has always been denominated in euros the past couple years, it picks up about 15% per year because the American fundamentals are treading water ever since the Nasdaq bubble burst. 

Communist China is using our currency against us, to maximize their exports to us and we just take it.  America is governed by wimps for the foreseeable future (open borders -North American Union, google it Rosie sez!), odds are things will likely get substantially worse for long positions is US equities before they get better (Fred in 2008!).   The Bull Market has been driven by earnings, my guess is that will be coming to an end soon, next quarterly reports probably.   

DayTrader

[utopiacowboy]

I can remember when the Canadian dollar traded above the US dollar for several years in the mid to late 70s. It was as high as 1.04 at one point. More recently it had been as low as 70 cents so it just goes to show you how much our currency is depreciating now. Why we are not experiencing worse inflation mystifies me although those idiots remove food and energy so the picture looks a lot brighter than it actually is. The US economy is headed for a major recession IMHO.

[daytrader]

...doesn't this make you sick?

[sean126]

I'm like you.....not if your on the right side of the trade.

[daytrader]

Key price support (that was predicted to fail last week) has failed.  2 or 3 more days of lower lows likely...


DayTrader

[Jeff S]

...doesn't this make you sick?

Why? Pride?

It doesn't bother me. I can kick my European competitors butts a whole lot easier now that their costs are double what they were five years ago.

[daytrader]

Why?  cuz America is no longer the financial leader in the World...we are becoming a follower. 

Sarbanes/Oxley is the coup de gras....way too much regulation of American corporations, makes them uncompetitive in the World Economy.  Few IPOs will be released stateside, they are being released overseas. 


DayTrader

[william3rd]

And your prediction for gold, silver, and other metals in the short, mid and long term?

[daytrader]

...sorry WM3, that's not my specialty ....there's too much fundamental analysis to study to play those games properly, however, I can pass a tip along that might save you lots of study time:

Copper....seems to have lots of history of operating on a 7 year cycle of low to high (& v/v).  Copper and similar metals have been on a tear recently.  If you peg the behavior of Copper properly, the related metals may fall into place. 

Since the US went off the Gold standard, the American dollar is susceptible to inflation.  Bush and the Fed have allowed the M3 money supply to balloon, thus causing dollars to be worth less and less.  Gold and some precious metals (and the Euro) should track opposite of the USD, but smarter minds than mine know those things. 

Note:
The Euro does trade "technically", so any price reversal is reflected in the futures market. 

Note2:
The October, 1929 Stock Market Crash was 'technically' perfect.  A perfect 'sell' signal preceeded the Dow crashing. 

Regards,

DayTrader