Here Comes The Bounce? - May 9, 2012

[Billy]

Here Comes The Bounce? - May 9, 2012
The setup is unchanged for IWM, waiting for the short entry limit of 79.81 to be hit on a rebound. I would be light with position-size and leverage because yesterday has the looks of an intraday reversal from a potential bottom. The lows of the day briefly undercut the April 4th low by only a few cents before turning higher on strong MF and volume, closing above the 3-day VWAP (blue line (79.06). This is tasting like selling exhaustion with another fast move from a failed breakdown move. Monthly S1 (78.41) is now the clear support reference and a close today above it would comfort the potential bottom scenario.



GDX keeps acting like a falling knife but the GDX robot’s LT/ST settings remain neutral and are advising to stay in cash.

Quarterly S2 (41.95) is a serious candidate for offering the launching pad nessecary for a much awaited snapback rebound. The last consolidation was broken at Quarterly S1 (45.75) and Quarterly S2 is a logical temporary target for this selling wave.

Today’s porosity for the RT model is 0.092%.
Billy

[TraderD]

Here Comes The Bounce? - May 9, 2012

GDX keeps acting like a falling knife but the GDX robot’s LT/ST settings remain neutral and are advising to stay in cash.

Quarterly S2 (41.95) is a serious candidate for offering the launching pad nessecary for a much awaited snapback rebound. The last consolidation was broken at Quarterly S1 (45.75) and Quarterly S2 is a logical temporary target for this selling wave.

Today’s porosity for the RT model is 0.092%.
Billy

Hi Billy,

How does a GDX MF climb from a bottom of -1.0% to -0.6% at the close yesterday bode with a gap down below QS2 at the open today? Would you say it ain't over till the fat lady starts to sing (at -1.45%)?

Trader D

[Pascal]

Hi Billy,

How does a GDX MF climb from a bottom of -1.0% to -0.6% at the close yesterday bode with a gap down below QS2 at the open today? Would you say it ain't over till the fat lady starts to sing (at -1.45%)?

Trader D

It is pretty difficult to keep a clear head when there is a conflict between traders who expect a bounce - and trade a bounce during the day - and overnight news from abroad. The easiest is to wait for a buy signal. If it is a weak buy signal, I'll again buy leaps using "stop loss" money. If it is a strong buy, I'll buy GDX without leverage. However, I still expect a bounce for US markets. It is not like Lehman: I believe that funds have been prepared/protected against a potential market/Euro collapse and they know that the FED is back-stopping everything. I will change my mind when I see -400 points on the Dow in one day.


Pascal

[TraderD]

It is pretty difficult to keep a clear head when there is a conflict between traders who expect a bounce - and trade a bounce during the day - and overnight news from abroad. The easiest is to wait for a buy signal. If it is a weak buy signal, I'll again buy leaps using "stop loss" money. If it is a strong buy, I'll buy GDX without leverage. However, I still expect a bounce for US markets. It is not like Lehman: I believe that funds have been prepared/protected against a potential market/Euro collapse and they know that the FED is back-stopping everything. I will change my mind when I see -400 points on the Dow in one day.

Pascal

The FED is clearly not listening to traders' wishful thinking and only they know when it's time to change the tune from "No QE" to "Now QE". The part that I'm pondering is whether there is any real smart money left out there that is able to figure out where to put stake in the ground for accumulation/distribution. We could be following ghosts otherwise.

Trader D

[Pascal]

The FED is clearly not listening to traders' wishful thinking and only they know when it's time to change the tune from "No QE" to "Now QE". The part that I'm pondering is whether there is any real smart money left out there that is able to figure out where to put stake in the ground for accumulation/distribution. We could be following ghosts otherwise.

Trader D

As far as I can tell, this is an oversold bounce. Nothing says that it is sustainable. So yes, maybe ghosts!


Pascal

[pdp-brugge]

Am I correct to conclude that the PM MF will go LONG if the MF remains above 0 at the close today?

[Wei]

Looking at the below graph, it looks like no QE 3 so far, which is bearish for equity market. But of course it can change any minute (the graph is updated every two weeks. Choose 1 yr and redraw graph to see the details).

http://research.stlouisfed.org/fred2/graph/?id=BASE

As far as I can tell, this is an oversold bounce. Nothing says that it is sustainable. So yes, maybe ghosts!


Pascal

[Pascal]

The GDX RT has issued a BUY signal


Pascal

[Pascal]

The EOD GDX MF will buy if we stay above Average + Porosity (= 0.07%) by the close.


Pascal

[Billy]

The EOD GDX MF will buy if we stay above Average + Porosity (= 0.07%) by the close.


Pascal

As a reminder, the GDX robot will decide to go long or stay in cash at tomorrow’s open, depending on the LT/ST settings.
Billy