Stock Market Analysis

Monday, March 07, 2016

My Blog Has MOVED!

Yes, after 10 years of posting my blog here on blogspot.com from 2006 to 2016, I have at last decided to move my blog back onto my own site at Optiontradingpedia.com in order to provide even more customised services to all of you my dearest readers. Continue to follow my Daily Market Analysis & Forecast Blog here!

Here's a BIG thank you to Blogspot.com for a wonderful 10 years.

Wednesday, March 02, 2016

Weird Questions...

The market continued upwards today, closing the S&P500 a small 8 points higher and like I said to paid subscribers yesterday, I do expect the S&P500 to break the 2000 level and challenge the 2050 before everything goes tumbling again. Yes, that's how all previous market crashes behave, no market crashes go straight down. A lot of amateurs tend to think of market crashes as a huge single day drop of a few thousand points causing panic around the world. But no, it doesn't happen that way neither has that kind of thing happened before. Market crashes are long term bear markets that typically take about a year to play out, not in just a day. This is why I am always surprised when people ask me if the market crash is going to come and I always said, unless you live on Mars, it has already happened since last November. And then there will always be people asking me that since I think the market crash is here, do I expect the US to go into recession? That's also one of the strangest question I have ever heard... which market crash has not sent the US into some kind of recession? Recessions and market crashes (real market crashes not the kind of single day flash crash due mainly to technical reasons) go hand in hand. Why is that so? Because money goes hand in hand. When people are rich and spending and investing, everything goes up, stock market, economy, housing etc. When people are poor and not spending nor investing, everything goes down, stock market, economy, housing etc. Its an oversimplistic way of seeing it but I think it illustrates the relationship.

Today was a truly bullish day spurred by a better than expected ADP employment report that seems to suggest that the coming Friday Jobs Report is going to be able to exceed its lofty expectations. Well, that do tie in nicely with the 2050 scenario that I am expecting.

Market Crash Timer: RED

For now, the market remains in short term bull trend within an intermediate and primary bull trend.

Monday, February 29, 2016

How Did Feb Do and What Might Mar Do?

Welcome to Leap day, the 29th of February, the final day of the second month of 2016! January ended badly, setting a bearish overtone to the market and February marginally deescalated that bearish overtone by closing just 0.4% lower compared with January's -8%. February has been a congestion month with the market stuck within a price channel that started actually in January. However, such price channels don't usually last very long and we should see a directional resolution in March.

This is the first week of March 2016 and the first week of every month are heavyweight weeks ushering in a slew of heavyweight economic numbers. Tuesday's ISM Index and Friday's Jobs Reports are the two biggest numbers of the week. With the stock market turning negative for a second consecutive day today, the market is once again at an intermediate decision making junction. How will these numbers affect that decision making?

The consensus for both reports are expecting them to turn out better than expected this week. In fact, non-farm payroll is expected to make a huge leap upwards, which is a very dangerous call at this time when economic data tends to fail expectations. Missing such lofty expectations usually sets the short term momentum downwards. Looking at how today's economic numbers continued to turn in worse than expected, including the all essential housing ones, this week could end up quite badly. In fact, investors and traders who has profited from the pull up so far bailed out today strongly ahead of tomorrow's ISM index. This again suggests a lack in confidence in how these numbers might turn out. In fact, today's trading volume is the kind of trading volume I usually pick up at significant reversal points. This, combined with the upcoming numbers, could mark the start of another leg downwards. Bond yields were down as investors seek safety over risk, total equities put call ratio is neatly in favor of put options trading. Today was a truly bearish day.

On the other hand, what I didn't like about today is that it was TOO bearish. You guys know my stand on this, when something is too much in the stock market, I usually take it to suggest the other way. As such, even though I now think the market is strongly inclined downwards at this moment, just for tomorrow, we might actually see a small positive day, so don't be surprised.

Market Crash Timer: RED

For now, the market remains in short term bull trend within an intermediate and primary neutral trend.

Monday, February 22, 2016

Top of Price Channel, What's Next?

Welcome back!

Its been a week and the market continued to play out what I said last Tuesday, which is the intermediate pullback scenario. Some questionable economic data did support this pullback but they are so questionable or inherently so volatile that I won't give credit to them for anything more than just an intermediate pullback (or pullup for those who prefer this term).

However, the SP-500 is once again at its 50MA, which is intermediate support/resistance for most of its trends. On top of that, it is also the top of the sideways price channel established early in February. The question that begs answering now is, whether or not the SP-500 would do what it did last October, breaking through the top of the price channel and its 50MA into a significant short term bull trend?

Looking at the insides, the total equities put call ratio did display the same tendency it did last October 7 when the SP-500 broke out, moving in favor of call options trading. However, investors were less enthusiastic this time round as bond yields barely budged today while on 7 October just before the break out, investors were pouring into equities, causing an observable rise in the bond yields. As such, things are getting very iffy at this point as investors are less confident about the market now than back in October when people are still thinking that this is nothing more than an intermediate correction.

At this point, it is already too late to be long and too risky to be short. I would rather sit and wait for the next clear bearish reversal signal as that would put me in the high probability winning zone in such a bearish market framework. Are you ready to profit with me when that happens? Join my Master's Stock Options Picks Service now!

Market Crash Timer: RED

For now, the market remains in short term bull trend within an intermediate and primary neutral trend.

Tuesday, February 16, 2016

Double Bottom Reversal Pattern Developed!

Welcome back from the long weekend!

The dead cat bounce is currently well underway exactly how I said it would last Wednesday night. No surprise there. A strong positive day today on the back of worsening economic data only confirms that this is nothing more than a dead cat bounce. Empire state index continues to point towards a contraction in manufacturing for a 7th straight month and housing market index continued its downtrend this month after peaking off last October. Over the past few years, with little to show on the economic front, housing has been one of the most important factors for the stock market growth so far. With this factor now shaking to the core, it simply adds on to the possibility that this is nothing more than a dead cat bounce at a nice technical level which encouraged some of the remaining bullish remnants to buy.

Looking inside, we saw a significant jump upwards in the bond yields with the total equities put call ratio remaining largely in the uncertain zone. These factors tells me that today's strong up day was somewhat overdone by the investors but with traders still remaining uncertain and skeptical. On the technical front, the market did complete a very nice double bottom formation along with strong bullish divergence, which in a normal intermediate correction scenario, I would say denotes a bottom and the resuming of the previous bull trend. However, looking at it in the context of a market crash scenario tells me that this could be a significant dead cat bounce akin to an intermediate correction in a bull market scenario. Yes, even in a full blown bear market, positive weeks or even a positive month is perfectly possible and this "dead cat bounce" has every indication of becoming one of these significant pull ups before the primary trend turns bearish.

So far, over the past 2 decades, I have been sniper sharp at predicting the 2008 market crash, the 2009 market bottom (in fact, I was the first analyst online to propose that 2009 was the bottom of the bear market and few believed me then) and now this 2016 crash. In fact, people are calling me the "Options Sniper" now. And people are beginning to ask to learn my secrets of how I so accurately read and predict the market over the past 2 decades. I have been very secretive and protective of my methods so far but for the very first time, I would be open to teach this method over a one week online intensive course with 30 mins daily Skype live chat and daily lesson materials for just $10,000. Yes, $10,000 to start reading the market like a pro and making ALOT more in profit. Most  successful traders won't give up their secrets even for $100,000. So, if becoming an "Options Sniper" is what you wish, email me at founder@mastersoequity.com for more details!

Market Crash Timer: RED

For now, the market turns a short term bull trend within an intermediate bear trend and primary neutral trend.

Wednesday, February 10, 2016

DEAD cat bounce...

Remember two days ago I mentioned that this is the level where the market could once again go into another dead cat bounce? Well, it seems like at least its happening right now exactly as expected. Even though the close was mixed, intraday trading action were largely positive. However, dead cat bounces like these are so so dangerous I almost never use them for any long calls. In fact, I used the opportunity to get out of two of my most profitable put options positions on NKE and MPEL, making 82.2% profit and 44.6% profit respectively (See how its done here!), setting down our first profits of the year of the Monkey. Not bad at all.

Some of you emailed me and asked me what I meant when I said that this recession is going to be the perfect storm of recessions because factors that used to individually cause recessions are now all coming together. What exactly are these factors? Well, lets take a look...

1987 - Oil Glut crisis. Slump in oil prices following global oil inventory build up resulted in the market crashing 30%.

2001 -  Dot com bubble, emergence of terrorism, accounting scandals hitting mega corporations.

2008 - Credit crisis. Bad credit rolling into a global economic slowdown snowball. Main cause of bad credit was the subprime mortgage crisis, home price bubble. European slowdown.

This time round, we have the oil glut, China slowdown, consumer debt bubble rolling up, another home price bubble, all of these will no doubt lead to more serious consequences that will truly spark the recession. And then of course, the Feds had to drop the rate hammer right now, which of course, in one of my posts a few weeks ago, I actually felt its the right thing to do as well even though in the short term, a market crash may be the price to pay for longer term stability.

Looking at the price action today, even though the market traded with higher highs and higher lows, which is a bullish indication that agreed with my expectation of another dead cat bounce around this area, I am seeing this dead cat bounce more like DEAD cat bounce rather than dead cat BOUNCE. Yes, it felt like a dangerous expectation because the market can easily slump down so fast from here that even if it does go up another day or two, its pretty insignificant. From how the internals are poised, the market doesn't seem like it has the strength to mount another assault at the 30MA line but actually looking to completing the bearish transformation (transforming the primary trend from neutral to bearish as well) by taking out the January low... soon. I would continue to use any positive days as opportunities to position me and my Master's Stock Options Picks subscribers to downside.

So far, over the past 2 decades, I have been sniper sharp at predicting the 2008 market crash, the 2009 market bottom (in fact, I was the first analyst online to propose that 2009 was the bottom of the bear market and few believed me then) and now this 2016 crash. In fact, people are calling me the "Options Sniper" now. And people are beginning to ask to learn my secrets of how I so accurately read and predict the market over the past 2 decades. I have been very secretive and protective of my methods so far but for the very first time, I would be open to teach this method over a one week online intensive course with 30 mins daily Skype live chat and daily lesson materials for just $10,000. Yes, $10,000 to start reading the market like a pro and making ALOT more in profit. Most  successful traders won't give up their secrets even for $100,000. So, if becoming an "Options Sniper" is what you wish, email me at founder@mastersoequity.com for more details!

Market Crash Timer: RED

For now, the market remains in short term bear trend within an intermediate bear trend and primary neutral trend.

Monday, February 08, 2016

Bearish Year of the Monkey

Happy Lunar New Year to all our folks who celebrate this event! May the year of the Monkey be prosperous and happy for you!

Well, in my opinion, the year of the Monkey is going to be a painful one for most people as it is most likely going to see one of the worst recessions in history. However, the year of the Monkey has been an awesomely profitable one for me and my Master's Stock Options Picks subscribers so far as we are sitting on nearly 100% profits on our put options positions. Will make a full report on this when we close these positions out. Don't miss profiting in this bearish Monkey year! Join my Master's Stock Options Picks service now!

Last week, the S&P500 did exactly what I foretold it to a couple of weeks ago, turning around near the 30MA and nearly completing a primary trend transformation from neutral to bearish. So far, its all been extremely textbook behavior, no surprises at all. But why just nearly? Well, that's because The S&P500 still has to take out the January low in order to confirm the new trend. Interestingly, we see evident strength coming into the market once again at around this level from which the S&P500 staged its dead cat bounce last month, forming yet another bottom hammer candlestick at about exactly the same level. Looking at the internals, we see a huge jump downwards in the bond yields and a huge jump upwards in favor of put options trading in the total equities put call ratio. Trading volume was also an extremely strong breakaway style volume. All of these tells me one thing, that today's bearishness was overdone. Indeed, not even the great market crash of 2008 had the market go straight down when the bearish formation started in January of 2008. The bulls never give up without a fight. However, looking at market fundamentals, the Labor Market Condition Index created by the Feds slumped this month from 2.3 to 0.4, the kind of condition that shouts recession is coming. So, the bulls may actually be fighting in vain. Tomorrow would be critical. If tomorrow end up negative, it would negate this bottom hammer candlestick and move on to completing the bearish transformation. If tomorrow end up positive, we could see another retest of the 30MA. Its 50/50 at this point in time.

Market Crash Timer: RED

For now, the market remains in short term bear trend within an intermediate bear trend and a primary neutral trend.