10/16 - Market Analysis

SPX
- like the bullish candle
- volume makes me slightly nervous


NDX
- great volume
- great retest of friday's lows (concerns me very slightly that we actually broke that level intraday)
- nice candle
- volume and price action very similar to IWM


RKH
- retested friday's volume with a nice bounce
- entire body stayed above support
- until i see a close below this support, RKH is telling the market will rally


GLD
- money getting taken out of gold
- worries me a little how it finished so far off the lows
- funny how it made an intraday low the same time as equities (maybe a breakdown is not so bullish after all)


VIX
- 2x top is forming
- love the bearish gravestone candle (a much better candle than last friday's reversal as we closed very near the lows today)
- targeted move makes sense


USO
- i don't like how USO didn't finish with a gain
- another down day means the market might just be setting up for another deadcat bounce
- if oil is down again tomorrow, very bearish for the market...


A/D
- not nearly as bullish looking as i was expecting from a 400 pt reversal day
- the volume in NYSE is very disturbing as it was even between up and down
- the advance and declining stocks were also only about a 2 to 1 proportion..not very bullish


Analysis - overall a very bullish day...and basing on candles only, we should rally huge tomorrow...today felt very very much like last friday...dejavu..when i look at more factors though, i am skeptical that tomororw will rally hard like how we rallied big on monday...too many things just don't match up...at the open, if it gaps up huge, i am taking almost 100% profit on my calls...anyway, what i am saying is that we got a great day today but since the market is so unpredictable, i feel uneasy holding any positions overnight...

Sectors

Best - fxi, kol, xle, eem, xrt, xme
Worst - gdx, slv, gld, uga, uso

- complete reversal from yesterday...sectors make sense in terms of what a rally should look like but remember how monday's rally had about the same sector breakdown. i think rkh and xlf have to be in the top 5 sectors to make rallies truly sustainable...today, rkh and xlf were dead center of the pack.

Billionaire Trader's System: bought some qqqq calls when qqqq 2x bottomed on the 30" chart...and i sold EOD for a nice profit...going into tomorrow, i have a very small position going long QQQQ but have a tight stop on it...a big open down without an immediate (within 5") recovery, and i will exit my last long position...and of course, any huge open up tomorrow and i will sell at first 5" candle of decline