Long at 1330.25 ES

Stop is at 1326. I am playing it tight since I missed yesterday's rally and today's morning pull-back.

Took profits at 1318.75

I expect yesterday's rally to fail as did the previous ones. Here are my reasons:

1. The put/call ratio has risen very much and the market has barely moved. This is bearish behavior in my experience, especially when it happens around possible lows. A previous example would be 25-28 June 2010.

In the chart below I marked a similar behavior accompanying the move off the lows in March. The difference is that the market moved a lot back then.

2. The last 30 imnutes of trading, which are very significant for me, negated the after-lunch break-out.

3. Even if, overall the sentiment suggests the market is oversold, there are a lot of bloggers that are bullish from around these levels.

4. The market has just broke through important support around the 50 DMA and the next support area is lower, aound 1300 SPX.

In case I am wrong and the market does not go down, I will reenter after a break-out above 1324 ES.

Long at 1312.75 ES

Conditions for a move up are still met. I have to try until they are not met anymore.

Out at 1314.5

I do not like the reading on cpc. I will look again tomorrow.

Long Again at 1315 ES

I do not want to miss an eventual rally, although this market is tiring me a lot. I will exit if it goes below 1310

Out at 1314 ES

Long at 1320 es

Ready to Go Long Again

The put/call 5 day EMA is at a level associated with bottoms in this bull market:

The bearish sentiment is also visible throughout the online financial media.

Thus, the market is oversold and ready for a bounce. I am ready to try the long side again starting today.

I think the first opportunity to enter the market will arise after the 10 am economic data today. A minor sell off that does not break yesterday's lows will be the ideal setup as I see it right now. An advatage is that stops can be placed not too far below.

Stopped out at 1323 ES

I had left a stop loss at break-even. The fact that all these rally attempts have failed is bearish. The 1300 zone is the next support.

Put/Call Ratio in the News

The picture bellow was featured in an article on cnbc.com titled: Put-Call Ratio May Have Signaled End to Stock Pullback:

I do not feel very much at ease with the fact that my main timing tool is described and praised on CNBC.com, but by reading some reader reactions on the article, I am somewhat relieved: they are only non-believers.

Long at 1322.75 ES

I think the morning weakness was the last fake out of this correction. I will exit if today's lows are breached.

Sold Long at 1319.5 ES

Every rally has failed recently. This happens usually before a bigger move up, but it is already late, so I need to be out and reassess.

1320 ES - Line in the Sand

The weak hands are out for sure and everything else seems lined up for a rally. If the market does not rally from here and breaks 1320 decisively, I am out.

Still Long, Still Bullish

Note: Blogger was down on Friday. They took down a number of posts from all the blogs. The posts are back but the comments still seem to be missing.

The recent market action is similar to what happens at the bottom of some corrections.

Here is SPX recently:

And here is SPX in July - August 2010:

I circled the bullish reversal days. These are followed by significant sell-offs, before the market starts going up. I expect to have the same outcome this week.

With this pattern in mind I did some micromanaging of my position, selling almost half after the open on Friday and repurchasing it before the close. Should the market not show some strength today, I will exit all my longs.

Long at 1332 ES

This is a risky entry since there might be initial weakness at the open, but I like this level.

Still Bullish

Yesterday's big drop was a surprise to me, especially with the market showing strength this week and with the sentiment still very bearish. It was induced by strength in the US Dollar.

I still think the market is headed up, and I am ready to try going long again today.

The cpc made a big spike

and, also, we have a trend day down with a close around the 20 DMA

These are bullish developments in an intermediate term bull leg up.

Sold Long at 1346.5 ES

The pull-back is too deep for my taste. I am still bullish but need to reassess.

Long at 1342.75 ES

I am looking for new highs for the bull market in the coming weeks.

Back On Track

I think the path of lest resistance will be up over the next couple of weeks.

The 5 day ema of the put/call ratio is at a level (blue line) associated with inflection points during intermediate term bull moves:

The simple put/call ratio suggests the market is oversold. The bottom is already in or it will happen today or on Monday:

Also, today is a NFP day. This usually marks a turn in the markets.

However, longer term the economy is cooling a little. Retail sales growth has slowed down.

This usually is also reflected by the stock indices over the medium term. The recent correction was 7% to the downside. By my measures this qualifies as an IT correction. Still, with retail sales slowing down their rate of growth and with the envisioned stop of QE2, the markets may just remain volatile over the next months.