"Sometimes the Best Defense is to Ball Up and Hunker Down"

"There is Nothing Wrong with a Passive Defense when Faced with Uncertainty."

2D, 10m. - Apr. 30th. - Early morning momentum led us into a trade to the upside which did not go well.  There was a nice move to the upside but it failed and fell back and the trade was stopped out with a small 25 cent loss.  From there the market continued its retreat.  The close was weak.
20D, 2 Hour - Apr. 30 - The Channel Trend continues UP!   The Trend is Your Friend so take care if you try and swim against it.
3M, Daily - Apr. 30 - Trend remains UP!.  Resistance sits like a lid on the market.  This has been highly touted as a Siegfried Line with iron clad defense.  That remains to be seen.  Perhaps the Hedgehog has it right.  Ball up and stay out of the way.

"Defense!"

"Nut'z"
2D, 10m. - Apr. 29 - Todays trade was picking up on the early morning momentum.  The first few 5 minute candles were positive and the AD's and UVol/DVol were both very positive.  A Call position was taken at 8:45 @ 2.90 and was closed at 12:30 @ 3.45.  The MACD was was rising and the internals were progressively improving.  The momentum was very bullish.  A position was taken at 86.75 with a target of one point (87.75).  As long as things looked favorable the idea was to stick with it which we did.  The trade was closed out at 12:30 for a 20% profit.   What more would you want?  Several important points that can be made are 1. Target, 2. Discipline, 3. Patience.

20D, 2Hr. - Apr. 29 - The Trend continues UP.  We are at Mid Channel.  Resistance is just above out heads.
3M, Daily - The Trend is Up but a significant Resistance level is just above our present price action.  It has been talked about so much that I wonder if it is real.  It may turn out to be Whipped Cream.

Follow the Cat into Midstream & Set the Hook!

Playing to the Behavior to the Prey is Part of the Sport

2D. 10m. - Apr. 28 - The SPY opened in the lower range of the Channel.  The Trend is up.  The first candles were up and the internals improved.  The MACD was trending up.  Call position was taken with anticipation of Gap Closure and movement to the centerline of the Channel.  Note the High Hockey Stick in the CCI that signaled to Sell Point.  We will call this the "Channel Cat Play."
10D, 30m. - Apr. 28 - The trade was followed on a longer term chart to maintain perspective on the overall strategy and market environment.  
3M, Daily - Apr. 28 - The Channel Trend is still up but the resistance lines are plainly visible.  The past week has been a sideways meandering.  A Breakout above or below these lines could be important indicators as to where the market goes from here.  Notice that the MACD is "very quiet which often precedes a breakout as in the Sleeping Tiger Play.

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"It Might Have Been a Better Day at the Fairgrounds"

"Zippin' Pippin Day on Wall Street - Sneak Attack Over the Hudson!"

2D, 10m. - Apr. 27 - There was a roller coaster morning followed by a "Crack Cocaine" afternoon in the market today.  The internals weak at the outset due to the Gap down.  This was followed by some improvement only to have it fall apart in the afternoon with increased volatility.  Contributing to the morning gyrations there was a False Alarm of an errant aircraft over the Hudson that led to mass evacuations and anxiety in New York.
20D, 2 Hour - Apr. 27 - There is another wedge to contend with but this time it is neutral not yet tipping its hand as to direction.   The Channel Trend remains up.  The market is running into significant resistance at this level and may end up going sideways as it "Butt's Head."
3 Month, Daily - Apr. 27 - This chart clearly shows the Resistance Line and the Collision Course the market is on.  It reminds me of the joke about the "Battleship Trying to Stand Down the Lighthouse."

Condor Country Construction Site

"Iron Condors" may offer regular, steady income at less risk for traders with patience.  For information and education a new section is added to "Potato Peelings" featuring an Iron Condor that will be followed daily on the Blog.  This first Condor is on the SPX and the options expire in May.  It should not take long to see some results. The Iron Condor strategy takes advantage of Time Decay (Theta) as a way to make a profit.  It is a combination of two Strangles.  This is considered a (Delta Neutral) trade where the hope is that the underlying does not move up or down very much.  The market moves sideways 60% of the time and the Iron Condor can take advantage of that behavior.  The SPX chart can be viewed near the bottom of the Blog by scrolling down.  Comments and questions are welcome.

Track the Market

"Avoid Train Wrecks - Keep the Cars on Track"

5D, 10m. - Apr. 24 - Compare this Chart with Thursday's.  We got a dramatic break out from the Wedge formation to the upside.  The market has remained in the Channel Trend Line (Railroad Tracks).
20D, 60m. - Apr. 24 - The Channel remains Bullish with the market price at the center line.  The Moving Averages are Bullish.  A pull back may be expected given the gap and trend to the upside on Friday.
3M, Daily - Apr. 24 - The market is still in a secular long term Bear Market.  Currently there is a Bear Market Rally.  At this time there are no signs of slowing down the momentum to the upside.  The Wedge formation, however, suggests a Monday morning pull back.  The odds are that the market should remain inside the Channel.

As the market opens it pays to watch the action of the first several 5m. candles.  Let the market show its hand.  Watch the internals (UVOL/DVOL & ADs).  Pay attention to the MACD and CCI for trend indications and confirmation.

Sometimes a Wedge Gives You an Edge

"Is There a Wedge in Your Life?" - Go: www.chartpatterns.com

5D, 10m. - Apr. 23 - Compare this chart with yesterday's.  The Session closed inside the wedge or pennant that was drawn last night.  It just goes to show how trend lines and channels provide consistent yard lines to live and trade by.  You cannot play football and baseball without sidelines, yard lines, and baselines.  You cannot trade without close attention to the tools of the trade.

Today's session did not offer a lot of trade opportunities.  The internal were weak and the price action was choppy.  Days like this remind us that at times we need to sit on the side, be spectators, and wait for a better opportunity.  If you did well today, more power to you.  Sometimes, though, the best trade is "No Trade".
20D, Hourly - Apr. 23 - The Wedge and Channel continue to dominate this time frame.  The SPY is in the Devil's Den or Zone of Contention between Bulls and Bears.  Neither has retreated nor claimed victory.  The shape of the wedge displays a slight bias to an upside breakout.
3M. Daily - Apr. 23 - Bullish Channel prevails.  On the other hand the MACD is in decline and the CCI has receded to the zero line.  

The main lesson here is that we need to pay attention to the Big Picture even as we make trade decisions in very short term  time frames.  In the end all of the short term decisions made in the market make up the composite of longer term results.  Everyone has to decide what indicators and parameters work for them.  All of this is a continuing learning experience.

Your observations and comments are welcome.  This is not a political forum and comments of that nature will be rejected by the editor.

Tug O'War

"Pulling in Both Directions - Something Has Got to Give!"

20 D, 60m. - Apr. 22 -  This chart best demonstrates the Battle Ground for today (Apr. 23rd.)

The intermediate trend has been up as seen in the Channel above.  A minor trend of the last nine sessions has been sideways to down.  A Pennant shaped wedge has formed aimed at 85 on the SPY.  Breaking out above of below this wedge may be a telling sign of where we go from here.  The MACD is on the zero line.  The 8/21 MA is in the Devil's Den (undecided).  There is no clear bias that can be easily seen.  The market will in the end tell us what it wants to do.  We must be patient as we watch for market direction to materialize.  The Zone of Contention is between 84 & 86.  It could go either way.

A Day of Ups and Downs

"Who's in Charge of Punchin' the Buttons Anyway?"

5D, 10m. - Apr. 22 - It is a good thing to have a plan in mind as to how to approach the market each day.  The prior days highs and lows are important landmarks.  The Major Trend is very important.  Channel Analysis can be very helpful in avoiding trades that are "swimming upstream."  The Major Trend today is up and the SPY is in the lower level of the Channel.  It would make sense to look for a "bounce" off support.  This is exactly what we got, and the move was supported by progressively improving internals, a rising MACD  & CCI.  The market ran into Resistance on two occasions and dramatically fell back to support near the end of the session.  A nice profit, however, could have been made during the session assuming a disciplined exit.
20D, Hourly - Apr. 22 - Trading with the Trend can be the safer way to trade and is quite logical.  Yes, there are counter trend trades that are often profitable, but the odds of success are lower.  Use of Channel Check Analysis is a good basic strategy especially for swing trades over a two or three day period of time.  Establish a Channel that makes sense and note the higher resistance and lower support lines.  Consider appropriate trades and use stops to exit if the market goes the wrong way.  The market has a mind of  its own and we cannot tell it what to do.  Not every trade is a winner.  Albert Puhols does not get a hit on every "at bat" and we can't either.
3M, Daily - Apr. 22 - Longer term the Trend is Bullish.  We have had a minor downward trend for the past week with high volatility.  Use Channel Check Analysis and use Resistance and Support to help with trade decisions.  Get supportive data from the Internals, the MACD, the CCI, and the appropriate use of Moving Average Crossovers.  Technical Analysis is a blend of using Charts, Data, and Timing.  Trading is an Art and not simply a mechanical activity. 

The Bull Fights Back

"The Bears Have Run for the Woods."

2D, 10m. - Apr. 21 - Today we had a bounce back from yesterday's market pull back.  At 12:20 we thought we had a good trade to the downside  but the momentum did not follow through and the Bullish move resumed stopping us out at the Pivot.  The market had pulled back from Resistance, the MACD was in decline, and the CCI was turning down.  The only negative to the trade was that the Internals were strongly Bullish.  It was a good trade that just did not work out and we exercised discipline by taking to the Exit.  

Notice the "S" Turn Up which is a frequently seen pattern of price movement.
20D, Hourly - Apr. 21 - Bullish channel remains the dominate feature of the recent market action.  
3M, Daily - Apr. 21 - Bullish Channel punctured by a shorter term downward trend line.  The Bounce today resumes the move to the upside (at least it appears that way).  The big pull back on Monday could have been better stabilized by a sideways days today.  The quick bounce actually injects some increased uncertainty as to where we go from here.  The close today was modestly bullish.

The Bears are Watching Closely!

"Bears Don't Stay in Hibernation Forever"

2D, 10m. - Apr. 20 - Gap down on the back of very weak internals.  To the contrary the MACD is  bullish (divergent indicator).

20D, 2 Hour - Apr. 20 - Intermediate Bullish Trend now punctuated by a shorter term Bear move.    Near term outlook is bearish but high possibility of a Bounce to the upside.
3M, Daily - Apr. 20 - Long term charts are an absolute necessity for market perspective.  The Bear Market Rally continues but has been interrupted by a pull back or correction.  How far this will go is a big question.  The 82 area on the SPY is a good possibility.  Support can be expected at the next Low.

A Mind of Their Own

"When you come to a Wedge (sic) in the Road, Take It! - Yogi Berra 

3M, Daily - Apr. 17 - Rising Wedge with progressive compression of the upper range.  The odds would suggest that it would break to the downside.  Early morning action could prove pivotal to the next market move.
10 D, Hourly - Apr. 17 - Hourly chart shows market at upper limits of wedge in a rising channel.  Gold Spot indicates possible pull back target near the 20 D, MA line.  Take note of the MACD and CCI indicators.  Both are Bullish but with a very slight tilt to the downside suggesting a weakness in momentum.  Weekends, however, do have a way of changing sentiment.

"Little Engines Go Up & Go Down"

"Are We Over the Hill?"

2D, 10m. - Apr. 17 - While coming up against resistance the market shows a lot of strength.  The Trend continues to be Bullish but the market is very overbought.  Long positions should be taken with caution.
20D, Hourly - Apr. 17 - "The Bull Potato Carries the Day."  This is a victory for the week but will it carry on into next week?

3M, Daily - Apr. 17 - The Daily remains Bullish but there is Resistance ahead.  A pull back would not be unexpected.  A Gold Spot highlights a possibility.

Smiling Tiger Setups that Work!

"I am excited!  The Sleeping Tiger Strategy is Fantastic.  Check it Out."

3M, Daily- Apr. 16th. - The Tiger works on long term trades.  8/13 Crossover provides a nice move to the upside.  Great Potato Move!
10D, Hourly - Apr. 16 - "Tiger Breakout" on Hourly.  This play works on all time frames.  Look for the pull back into the Devil's Den.  Then watch closely for the breakout.  Execute when the 8 crosses the 13 assuming all other parameters are in sync.
10D, 60m. - Apr. 16 - 2 Tiger Breakouts in the same session.  Watch the Devil's Den for breakouts.  Line up  all indicators and you are on your way.

For more information on Sleeping Tiger setups click on the Sleeping Tiger picture in the sidebar for Toni Turner's explanation and instruction.  You must be registered on the Money Show and Sign In to view the videos.