The Big Snort

I am (finally) watching The Big Short, and although I’m only about half way through it, I’m enjoying it. I read the book when it first came out, and my hero of Michael Burry, of course. (I can easily empathize with being inside an office screaming obscenities that the market isn’t doing what it logically […]
Slope of Hope

The Weekend Trader – ETH Trading & Tapping Into The Strength Which We Don’t Possess!

Today’s video sheds some fervent light on tapping into our true potential.

We are ALL diamonds currently undergoing polishing.

Have a great trading week!!

P.S. One footnote is that the 5pm ET timeframe I reference near the beginning reflects the closing of the RTH futures market. The traditional RTH equity close is typically 4pm ET.

Don Miller’s S&P Trading Tank

Are Americans fundamentally dishonest?

“The Voyeur’s Motel” is a New Yorker story mostly about sex. But the subject of this blog posting is a section buried in the middle:

[The voyeur, who ran a motel in Colorado,] also got bored with cataloguing his guests’ dishonesty. They sometimes tried to cheat him out of the room rent, and hardly a week passed without his witnessing instances of chicanery. One working-class couple asked him for a few days’ grace period to pay their bill. Foos spied on them the next day and heard the husband tell the wife, “The dumb guy in the office thinks I have a check coming in from Chicago, and we will fool him the same way we did the motel in Omaha.” Foos locked the people out of their room and kept their possessions until they paid him.

Diary excerpt: “Conclusion: Thousands of unhappy, discontented people are moving to Colorado in order to fulfill that deep yearning in their soul, hoping to improve their way of life, and arrive here without any money and discover only despair. . . . Society has taught us to lie, steal, and cheat, and deception is the paramount prerequisite in man’s makeup. . . . As my observation of people approaches the fifth year, I am beginning to become pessimistic as to the direction our society is heading, and feel myself becoming more depressed as I determine the futility of it all.”

These experiences prodded Foos to concoct an “honesty test.” He would leave a suitcase, secured with a cheap padlock, in the closet of a motel room. When a guest checked in, he would say to Donna, in the guest’s hearing, that someone had just called to report leaving behind a suitcase with a thousand dollars inside. Foos then watched from the attic as the new guest found the suitcase and deliberated over whether to break the lock and look inside or return the suitcase to the motel office.

Out of fifteen guests who were subjected to the honesty test, including a minister, a lawyer, and an Army lieutenant colonel, only two returned the suitcase to the office with the padlock intact. The others all opened the suitcase and then tried to dispose of it in different ways. The minister pushed the suitcase out the bathroom window into the bushes.

A lot of U.S. government programs are set up with the idea that Americans are fundamentally honest. Offering enhanced payments for disability is not going to change the number of people who seek to collect SSDI (see “Book Review: The Redistribution Recession“). Certainly we wouldn’t ever expect 97 percent of retired government workers to claim disability benefits. Hardly anyone would have sex with a drunken married dentist in order to harvest the $ millions in tax-free child support that a Massachusetts or Wisconsin court would hand out. Nobody would work the FMLA to get full-time benefits out of a part-time job. People aren’t going to work in cash jobs in order to remain eligible for free public housing.

Readers: What do you think? Do we trust this motel owner’s data? If the data are right, is much of the current U.S. system set up improperly?

Related:

Philip Greenspun’s Weblog

SPY Trends and Influencers, April 30, 2016

Written By: DragonFly Capital

A weekly excerpt from the Macro Review analysis sent to subscribers on 10 markets and two timeframes.

Last week’s review of the macro market indicators which heading into the last week of April saw the Equity indexes were showing signs of rotation out of the QQQ and SPY and into the IWM. Elsewhere looked for Gold ($ GLD) to consolidate in a $ 30 range while Crude Oil ($ USO) continued higher. The US Dollar Index ($ UUP) continued to test the bottom of a wide consolidation range while US Treasuries ($ TLT) were biased lower. The Shanghai Composite ($ ASHR) and Emerging Markets ($ EEM) were biased to the downside with risk of the Emerging Market longer term uptrend re-exerting itself.

Volatility ($ VXX) looked to remain subdued and with a bias lower keeping the bias higher for the equity index ETF’s $ SPY, $ IWM and $ QQQ, despite the moves the prior week. Their charts were mixed with the IWM just strong all around and the SPY strong on the weekly timeframe but with cracks on the daily. The QQQ was the weakest on the daily and showed consolidation on the weekly. Perhaps the new week would rotate back into the QQQ.

The week played out with Gold holding the range but then pushed higher late to end the week up while Crude Oil continued higher. The US Dollar moved lower to the bottom of the consolidation range while Treasuries started the week moving lower but reversed mid-week to end up slightly. The Shanghai Composite spent the week consolidating the move lower, looking like a bear flag, while Emerging Markets started higher but gave it all back and then some to end the week down.

Volatility was steady at the start of the week but ramped up a 1 month high by Friday. The Equity Index ETF’s started the week where they left off, with the IWM rising, SPY steady and QQQ falling. But that turned into a party to the downside with all ending the week lower. What does this mean for the coming week? Lets look at some charts.

SPY Daily, $ SPY
spy d

The SPY started the week with a Hollow Red Hammer candle indicating intraday strength. It followed that up Tuesday with a small move higher confirming a reversal. A bullish engulfing candle Wednesday boded well for another leg higher, but Thursday saw a turn lower to the 20 day SMA and Friday continued lower, closing the gap from earlier in April, and forming another Hammer.

The price is above all the SMA’s except for the 20 day SMA, and there was a Golden Cross, with the 50 day SMA pushing up through the 200 day SMA this week. That is the good news. This has created another lower high. Momentum is fading as the RSI on the daily chart is falling and crossing the mid line. It is still in the bullish zone but deteriorating. The MACD is rolling over as well. Should it reverse next week without first breaking 203.09 it would create a positive RSI Reversal looking for a higher high.

On the weekly chart there is an Evening Star reversal confirmed. The RSI is rolling over as the MACD continues higher. There is resistance above at 207.60 and 208.50 followed by 210.5 and 211.60. Support lower comes at 206 and 203.75 followed by 201.50 and 200. Pullback in the Uptrend.

SPY Weekly, $ SPY
spy w

As the calendar turns to May the equity markets are looking worn out and in general better to the downside. Elsewhere look for Gold to continue its uptrend while Crude Oil moves higher as well. The US Dollar Index is on the cusp of a major breakdown while US Treasuries churn with a bias to break to the upside. The Shanghai Composite looks to continue to consolidate along with Emerging Markets but look for the latter to be biased to eventually break that consolidation higher.

Volatility looks to remain subdued but not at the lows keeping the bias higher for the equity index ETF’s SPY, IWM and QQQ, despite the moves lower. Their charts are more mixed with the QQQ firmly heading lower, the SPY pulling back in its uptrend and the IWM stalling. Use this information as you prepare for the coming week and trad’em well.

Join the Premium Users and you can view the Full Version with 20 detailed charts and analysis: Macro Week in Review/Preview April 29, 2016

Want to learn more about Dragonfly Capital Views?
Dragonfly Capital Views Performance Through April 2016 and sign up here

Dragonfly Capital

Bloomberg and ZeroHedge

Ever since 4:30 this morning (thank you, Coda) I was reading from my bed, in between paw taps and trilling whines, about the Bloomberg article attacking ZeroHedge. Here’s the link to the article, and here’s the headline: ……and then there’s Tyler’s response……… The response from ZeroHedge, by the way, was far better than the original […]
Slope of Hope

Will the New York Times like their own plaintiff as much as they liked Ellen Pao?

The New York Times didn’t wait to hear the evidence before lauding as meritorious Ellen Pao‘s employment discrimination claim against the one-percenters at Kleiner Perkins. Now they’ve got their own plaintiff, Marjorie Walker (“Here’s why I’m suing the New York Times for discrimination” (Guardian)), alleging that they discriminate against “older, minority and female employees” in favor of “young, high-end and primarily white” workers.

One common thread is that the Times doesn’t have any difficulty in making up its mind about these lawsuits. Just as they were quickly sure that Ellen Pao was right, they’re confident that Marjorie Walker is dead wrong:

A spokeswoman for The Times called the suit “entirely without merit” and said “we intend to fight it vigorously in court.’’ — “Suit Accuses New York Times Executives of Bias”

What do readers think? Ellen Pao’s argument was that the Kleiner Perkins partners wanted to make themselves poorer by bringing in a less qualified person as a partner (my initial posting on the lawsuit where I wondered what their motivation could be). Marjorie Walker and her co-plaintiff Ernestine Grant argue that mid-level managers at the Times are favoring workers under 40 rather than workers over 60.

Related:

Philip Greenspun’s Weblog

Gap And …….

I posted the chart below on twitter last night showing the falling wedge that has formed on SPX from the current swing high, and commenting that this setup will usually be a bull flag that would resolve up into at least a retest of that previous high. I considered the various aspects of this setup […]
Slope of Hope

Market Recap Apr 29, 2016

Despite a big rally by Amazon, the action in the general indexes was weak which is a troubling development. We also now have some technical issues which we will discuss below. Indexes started with modest losses and those built through the mid afternoon; a surge in the closing minutes helped mitigate losses. The S&P 500 dropped 0.51% and the NASDAQ 0.62%.

“The biggest surprise of…

Read the full article at StockTradingToGo.com


Stock Trading To Go

Ten. Million. Dollars.

I have written about my town, Palo Alto, many times here on the Slope of Hope (a sampling can be found by clicking here), and these posts tend to focus on its rapidly-escalating real estate prices. I personally think we’re past the top at this point, since I’ve noticed the For Sale signs in my neighborhood […]
Slope of Hope

April 29 Collapsing to Support Emini Level Update and Plan

After a rally back to the highs on the post-Fed announcement, sellers struck violently, collapsing the market to the lower Fibonacci Grid lows.

What are the lows and our updated levels – and plan?

Here’s today’s updated Fibonacci and Emini (@ES) trading levels for your plans and trades:

As I’ve been highlighting, a short-term pivot range (rectangle) took place between the 2,077 and 2,088 (2,090).

Negative divergences above the 2,090 level failed to confirm a valid breakout.

The result – outcome – was a collapse and reversal (see yesterday’s update) not only to the 2,068 Fibonacci Level (end-of-day bounce) but now through 2,060 to the final target level at 2,048.

We’re seeing a similar mid-day or late-day reversal up off our Fibonacci Levels and that will guide our plan for the rest of the session.

Note the immediate departure swing up away from 2,048 to our current 2,060 target.  Play safely in this volatility.

Get these levels and in-depth planning, analysis, and trading opportunities by joining the Daily Membership.

Afraid to Trade Premium Content and Membership

Follow along with members of the Afraid to Trade Premium Membership for real-time updates and additional trade planning.

Corey Rosenbloom, CMT

Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).


Afraid to Trade.com Blog