tim_ord's blog

Yesterday the SPY traded below the lows going back to 12/1/09.  The 12/1/09 low was where the ARMS index closed at 9.84 and the typed of reading found near intermediate term lows.  Yesterday’s break came on above average volume which is bearish.  However the tick reading on the close came in at -768 which is

Welcome to the week before options expiration week where whipsaws and exaggeration moves are common.   The master technical great one, Don Wolanchuk pointed this out to me a number of years ago.  We refer the Wednesday of the week before Option expiration week in owner of Don, “Weird Wally Wednesday”

It appears to us that a potential Head and Shoulders bottom is forming on the SPY (see chart below).  This potential Head and Shoulders bottom has an upside target near 105 which is a target we have had previously using another method.  To confirm this Head and Shoulders bottoms the SPY would need to have a “Sign of Strength” through the Neckline (Neckline is near the 90 rang

Today’s volume did not expand (expanding volume on rallies is bullish) and has us scratching our head.  However, today trading did not touch the previous high or low and does not draw a bearish or bullish picture for short term.  There is a gap at 85.75 level that formed on 1/14 and the market may try for that near term

Friday and Monday the ARMS index close at 2.41 and 2.68 respectively. ARMS index close over 2.00, two day’s in a roll can produce a short term bounce in the market.

The pattern from the December 1 low appears still to be a “Bearish Rising Wedge” pattern.   A “Bearish Rising Wedge” has up sloping boundary lines that meet out into an apex and as the market rallies towards the apex, volume gradually decreases.  “Bearish Rising Wedge” pattern have downs side target to where the pattern began and in the current ca

The last day of bullish Seasonality is tomorrow and there is a good chance tomorrow may be up but probably now much. On the chart above we have listed the ISEE put/call ratios over the last month that has exceeded 1.50. Readings above 1.50 has marked short term tops in the SPY.

If you remember in yesterday’s report, we showed you the Seasonal chart of the days around Christmas. This chart showed that the day before Christmas was up 74% of the time and tomorrow is the day before Christmas. Also remember for the 5 days after Christmas had a high percentage of being up days.

Over the last month the McClellan Oscillator has been showing excellent strength and very bullish sign for the intermediate term.

On last Thursday report we said, “Tuesday we talked about the ARMS index closing at 9.84 and that a closing ARMS index of higher then 9.00 is a rare and bullish event. Since 1965, the ARMS index closed above 9.00 four times (counting current reading) and the three previous times the ARMS index closed above 9.00 the

Yesterday the ARMS index closed at 9.84. A closing ARMS index of higher then 9.00 is a rare event. Since 1965, the ARMS index closed above 9.00 four times (counting current reading). The three previous times the ARMS index closed above 9.00 the market staged an intermediate term rally.

Above is the SPX weekly chart back to the 2002 low.   Notice that the SPX is running into the 2002 lows on much higher volume.  The test of a previous low on higher volume implies at some point the lows will be exceeded and keeps the bigger picture bearish.   However for shorter term the market is extended to the downsi

On 11/13 the SPY tested the “Selling Climax” low of 10/10 on lighter volume and then closed above the “Selling Climax” low triggering a bullish signal.   Over the last three days the SPY has worked lower on reduced volume and shows downside forces are weakening and a bullish sign.

The Rydex Cash flow Ratio measures the ratio of cash going into the bullish and bearish funds and is a sentiment indicator. When the Rydex Trader is most bullish this ratio drops to a low level and when they are most bearish a high reading is recorded. What is puzzling here is that the Rydex traders are way to bullish. Over the past year when this ratio reached .90 or lower a top in the market was not far off. Yesterday this ratio closed at .87. Maybe the Rydex trader has it right this time but history shows otherwise. Not all sentiment indicator work all the time that is why it’s wise to look at different views of sentiment. We also keep a close eye on ISEE put/call ratio.

We are bullish intermediate term, however for short term a pull back is likely. Yesterday the SPY tested the gap of 10/15 on about 20 less volume and suggests the gap has resistance and a short term bearish sign. Also as the SPY rallied from 10/28 where volume gradually decreased and suggest upside energy was weakening and another short term bearish sign. Today SPY retraced and should retrace down to first support near 90. There is still an outside chance that market may test the low of October 10 near 83.58. On this potential pull back we will be looking to buy the next intermediate term bullish signal. Our upside target will be where a gap form on 10/6 at the 107 level (see chart above). We are staying flat for now. We Bought ASTM at 1.92, Biotech group. Long POWR at 13.70 on 12/14/07.