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Wednesday, May 02, 2012


Should I be embarrassed to admit that currently I have absolutely no clue which way the market (SPY) is going next?  I see contradicting signals everywhere.  

First, the bull case.

  1. All shorter term MA's are above longer term MA's on the daily chart
  2. MACD cross-over to the upside, above 0, and pointing up
  3. Buydonthold.com Dashboard flashes a buy signal
  4. The Real Fly is 100% long
  5. Presidential election year
SPY Daily

On the other hand, the bear case.
  1. $BPCOMPQ is still a sell signal, albeit on the verge of losing it
  2. The daily volumes for the last 3 weeks does not confirm the rally
  3. March high has yet to be broken, double-top pattern is still in progress
  4. Daily STO is overbought
  5. 60 minute MACD shows negative divergence with ADX at a modest 23.17 level
  6. VXX is at historical low with MACD positive divergence in both the daily and 60 minute charts
  7. Earning season is coming to an end
  8. Sell-in-May-and-go-away seasonality
SPY 60 Minute

VXX Daily

If one needs not be greedy (bull) or naughty (bear), cash is king.  Or at the very least, I wouldn't go aggressive on either direction.


  1. Looking at your arguments for either case, the bear case seems to be stronger. I think saying an election year means a positive market ins't a valid argument. Look back to 2008, those in power can wish the market would do it certain thing, but as they say, "it has a mind of its own." I think were headed higher just for the mere fact that this market works till it doesn't. Maybe that day is Friday with the jobs, or maybe its next month with more Europe crap, either way you have to play to make money. You still in ZNGA?

  2. The list for the bears is longer, isn't it? My suspicion is still that of sideways consolidation. Regarding the Fed's manipulation, since 2008 it became officially legit to do so through the QE programs etc. Much like 9/11, when Homeland Security was created to reduce our liberty for the sake of security. Anyways, yes I now hold 400 ZNGA averaging 9.29 but that's after some trading around. I've forgotten my true cost basis. I just feel until FB goes IPO, all is not lost and I'd like to have some token shares and be in the game.