June 2008 Archives

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart:

I wrote back then that I thought it was too soon to draw any conclusions. I noted that its 50-day moving average and January uptrend were still intact. Well that changed today and I have no problem now declaring that the transports are broken -- at least in the short-to intermediate term. It's still above its 200-day moving average so I expect long-term investors/traders to try to support it near that average. Here's an updated chart:

Financials have led the way down and they're now threatening to break the 2008 low:

It looks like a pretty flat open today. Perhaps we'll get a double inside day made today. But, the two items on the economic release calendar could very well move the indices outside of yesterday's range.

On Today's Calendar:

• 10:30 -- Crude Inventories
• 2:00 -- Fed's Beige Book

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

The market's still trying to stabilize and find direction after last Friday's big selloff. The indecision was evident today as both the S&P 500 and Nasdaq had inside days.

An inside day is often used to signal indecision because neither the bulls nor the bears are able to send the price beyond the range of the previous day. If an inside day is found at the end of a prolonged downtrend and is located near a level of support, it can be used to signal a bullish shift in trend. Conversely, an inside day found near the end of a prolonged uptrend may suggest that the rally is getting exhausted and is likely to reverse.

As always with range contraction I'm expecting an increase in volatility. These narrow(er) bars/candles often give setups with nice tight stops. (buy above the candle with a stop below or vice versa)

The dollar has had an impressive two days and is likely helping to cool oil off a bit. It's approaching resistance and could be setting up for a breakout.

No changes

I'm taking a few weeks off. Look for posting to resume around the end of July.

Goldman Sachs giveth and Goldman taketh away. This morning I mentioned that I didn't think that the whole financial sector didn't deserve to rise in sympathy with Goldman on its earnings news. Well apparently Goldman agreed with me because a little while later they warned about more losses in the financials. That was enough to squash the early rally and send financial sliding, along with Goldman's own stock. Here are charts of XLF and XBD, which were so close to breaking their May downtrends this morning before the selling kicked in:

Some people were trying to blame yesterday's light volume on people watching the U.S. Open playoff. I don't know what today's excuse would be -- maybe it's just the summer doldrums. Both the Nasdaq and S&P 500 lost about 2/3 of a percent on a slight drop in volume.

It's good to see Goldman lifting the financial sector this morning although I'd argue that many of the tag-along companies probably don't deserve it. If this strength hold it should break a 6 week downtrend on the XBD and bring that index back over its 50-day moving average. It would also help XLF to lift and continue to work on a double bottom.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Earlier today Steve mentioned that he was waiting for a blowoff top in oil before buying DUG and asked if I had similar thoughts. If I did, I certainly wouldn't use DUG as a way to short oil b/c as I explained the other day DUG is NOT the inverse of the price of oil. If I wanted to go short I'd just short USO.

I've hated short-term trading of oil for years b/c it can be so nutty on an intraday basis. But if I were so inclined to play it and if I was still swing trading I'd certainly wait for some kind of topping pattern to form, blowoff or otherwise. And speaking of... USO looks like it's working on an island top reversal pattern:

We had a mixed market today with the Dow down, the S&P essentially flat and the Nasdaq and Russell 2000 up nearly 1%. The latter two indices are once again approaching their 200-day moving averages which have been so tough to stay above. I can't see them having a successful retest with volume being as weak as it was today though. It'll be good to keep in mind that this is a triple (or quadruple) expiration week, so expect some pinning games to kick in as the week wears on.

Oil bears must be running scared this morning after Saudi Arabia announced an increase in oil production and the price of oil actually rose 3%. (If it's supposed to go down but it goes up instead that's some serious trouble for the shorts.) That surge in oil to a new all-time high, along with the Empire State index, is weighing on stock futures.

On Today's Calendar:

• nothing

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

Trading was choppy today but at least the bulls can say that the indices ended on the upside and that they fianlly reached oversold territory. I think that oil's early weakness and subsequent rally had a lot to do with the slide the indices had intraday today. Apple and Yahoo also helped to drag down the Nasdaq and especially the underperforming Nasdaq-100 today.

The futures are still indicating a pretty good bounce even after taking a hit on the news of Lehman axing their CFO and COO this morning. Once again I'll be watching Lehman (already down over 6% in the pre-market) and I want to see if XLF touches its 2008 lows.

On Today's Calendar:

• 10:00 -- Business Inventories

More Calendars: U.S. Earnings | Conf. Calls | Surprises | IPO | Economic

Potential swing trades:

A perfect storm of bad news today left all sectors down except for gold, oil & gas. The indices didn't even wait for the oil inventory report or the Beige Book to break yesterday's lows. Each of those reports just gave sellers more reason to sell. You know things are bad when you see many indices closing below their lower Bollinger Bands. As you'll see that happened today.

The transports and airlines were some of the worst performers today. It's been about three weeks since I was asked about the transports and posted this chart: