Feb 1

We did some buying on friday. Maybe we are a tad early. Maybe the SPX tags 1062 and 1050 extended targets. If it does, we expect to see a fast retrace and possibly even new highs into may this year, depending on the sentiment readings.

The next weeks should be interesting. In any case, If the market declines into Mar1, buy.

Jan 29 turn

Bang on our turndate, we get a lift. If this is really the turn date, the next turn is on Feb 12/Feb15. Since that is options expiration week, we will even give it leeway until turnaround tuesday Feb 16. We expect to see further weakness into March 1. If this weakness occurs, march 1 would be a nice buy point.

Time for the seasonal rally

We look like we have 5 waves down in quite a few of the stocks we see (T, GS, FCX etc.). Also quite a few stocks have come into their weekly or daily averages. A technical bounce combined with the famous rally of Jan 26th-Feb1 (> 80% seasonal ratio) along with our turndate on 28th(+/-) would mean a rally should start anytime now.

However, the larger cycle remains down. If we go sideways or down in the march 1, expect to be buying on March 1 for a sizeable rally from the march 1st low.

Friday Jan 22

10:30 a.m. Bullish divergences beginning to appear. We think we can get a bounce here upto 1120 or so atleast.

We like LRN a lot here. Looking for a 5-10% move in the next week. JPM if it gets down to 39.5 region for an option scalp.

And finally it comes

Our stance to bail out on the long side around 1140 seems smart in hindsight.
The question is now what?

We don't have any turn up in the advance decline lines or divergences in any of the indicators yet, meaning this decline is not done yet. We have a turn date around Jan 28th (+/-).

On an intermediate term, like many elliott wavers claim, if this is a "major top", then one thing to note compared to other major declines is that the price never got stretched far beyond the 20 and 50 day moving averages. In our work, we found that such declines are "laboured".

We are not willing to commit to a major top just yet. If we read this right, we believe there will be another attack back up towards 1170 sometime in the next 2-3 months.

In the shorter frame, most stocks are on some sort of a moving average, we expect a weak bounce followed by another decline into 1080-1060 area culminating on our turn date.

Jan 8

Regional banks (BK, IAT and others) have taken on the baton as we noted in an earlier post for another round of russian roulette sector rotation. The target of 1140 has also been met.

We still believe there will be a shakeout after tomorrow's jobs numbers or sometime next week. We expect the SPX to fall to 1100. As of this writing, we expect 1100 to hold.

Our trade will be to short on break of 1127 with a stop at 1129, if it occurs tomorrow.

Jan 6

More of the same action, slow grinding. Need to a bit cautious here around 1140. The question to ask is if 1120 - 1125was the barrier (50%) retrace why is the market not zooming upwards.

The trading shows grinding action, allowing lots of "them to get in". Typically, once a resistance breaks not many are allowed to get in. For example, look at our pick ACH, each of the moves in the past 3 days, each 5% or more. This is what a hot market should look like.

For this reason we are expecting a shakeout of the longs soon (30-50 SP points). Oil is at the doorstep of 85$ (our long held target) and so is the SP near 1140.

Our trades - closed out ACH, WNR, AB, SCHW positions for decent 10-15% profits.

2010

Welcome 2010, the grind continues. We are more cautious now. We took profits on 20% of AB position for a 7% move. We are not ready to go short yet. We still think 1040 is doable, as we have been harping for over 2-3 months now.