US stock summary -- 9/30/09 after market close

The stock market is very volatile today. From the daily chars, both Nasadq and $SPX formed a hammer off the daily 20MA/20EMA. This is bullish sign. But the volume is higher today with market going down. This is bearish sign.

As seen from the 60 min charts, both Nasdaq and $SPX have been trading within symmetrical triangle. My short term view is neutral until market shows us which way to break.

US stock update --- 9/30/09, 10:00 AM PT

Market first gave bearish sign by breaking a below short term support and then had strong bounce after testing daily 20MA/20EMA. If you want to gain for short term trading, be careful. The market is volatile.

Us stock update -- 9/30/09 7:25am PT

Stock market's drop this morning broke below 2016-2020 for Nasdaq and 1057 for $Spx decisively, confirming Monday's rally was just a bull trap and there could be more downside ahead.

US stock market update --- 9/29/09

My mid term view is still neutral. Nasadq once broke below 2020 and was able to close above it with small loss. $SPX found some support at 1057. Today's volume is slightly higher than yersterday's ( a strong up day) volume. $Vix holds above its daily 20MA/20EMA. We still can not rule out the possibility that top was formed on 9/23/09 unless Nasdadq breaks above 2040.

US stock market morning update --- 9/29/09, 8:25AM PT

The market started to pull back. The key is to watch 2120 (for Nasadq) and 1057-1062 (for $SPX) will hold or be taken out during pullback.

Update of my stock trading systems

Although I called top recently, my mechanical major top and bottom system is still on major buy.

My short term trading system for trading SSO and SDS switched to new short term buy at 10:00AM ET this morning.

US stock market update --- 9/28/09

Today's bounce is stronger than I expeced. Short term trend is up. I mentioned during the weekend update, that to validate the mid term bearish scenario, the bounce shouldn't break above 2120 (for Nasadq), and 1057- 1062 for ($SPX).
Those two levels were take out today. This made my mid term view to be neutral. Why not bullish?
1. Today's strong move came with low volume.
2. $NASI and NYSI dropped and didn't confirm the up move.
3. $VIX still hold around its daily 20MA/20EMA.

Need to see tomrrow's action to get better idea.

US stockmarket update ----- 9/28/09 7:25AM PT

US stock market went up sharply this morning, switching short term trend to be up. Nasadq has broken above the important resistance 2120 which was mentioned during weekend' update. $SPX is testing 1057 to 1062 area. My QID trade was stopped out when Nasdaq broke above 2120. My mid term view switched to neutral from bearish.

USO' next downside target is $32

USO broke below its intermediate term up trend line last Thursday. Its ADX is turning up, telling the downtrend is picking up strength. Its daily OBV broke below uptrend line. These are all saying USO is intermediate-term bearish.

Its daily full STO is showing oversold, so it may bounce to test resistance at $34.8 before its next leg down. The downside target is $32 (stop for short trade is $35)

FAS is at important support

FAS broke below its daily 20MA/EMA and closed right at its semi-intermediate term uptrendline. Its daily OBV just broke below its uptrend line, which signals possible breakdown of the price itself from semi-intermediate uptrend line.

If FAS can not bounce from here and break down from here, that would open the door for it to test $66. This will also be bearish to the overall stock market in the mid term.

US stock market weekend update --- 9/27/09

US stock market continiued to go down Friday. $SPX tested and closed at its daily 20MA/20MA. It just touched the upper limit of the support area : 1035 to 1041, which was the last breakout point. Nasadq tested the support at 2088 - 2090.

Monday, we may see some bounce. If $SPX doesn't bounce from here, 1035 would provide support and $SPX may bounce from there. But I think the bounce may be short-lived. Why? $NASI and NYSI are very close to issue new sell signal. $VIX broke above its daily 20MA/20EMA, which is bearish to stock market. Although the trend has not been confired to be down, I think we have higher chance to have seen the important top on 9/23/09. For the bearish scenario, any bounce from Nasadq shouldn't break above 2120 and any bounce from $SPX shouldn't break above 1057 to 1062.

US stock market intra-day update -- 9/25/09, 9:30AM PT

The weaker than expect manufacturing and house reports drove the US market to continue to drop this morning. Now, $SPX is testing its daily 20EMA/20MA. The daily 20EMA/20MA may provide temperary support to $SPX. The worse senario is that $SPX will not bounce until it drops to 1035 to 1037, which is the last breakout point.
SMH dropped below its daily 20MA/20EMA and semi-intermediate uptrend line.
FAS dropped below its 20MA/20EMA and is testing its semi-intermediate uptrend line.

US stock market summary -- 9/24/09 after close

Today, the US market had follow-through from yersterday' sell-off. The support of 2120 for Nasadq and 1057 for $SPX were broken below with high volume. $SPX found support at 1047 and bounced off a little bit from there. The market may bounce tomorrow. Nasdaq may test resistance at 2120 and $SPX may test resistance at 1057-1062. The key is to watch how they react to those resistance if they get there. The full STO of daily $VIX had a new short term buy signal, which is bearish to the stock market.

XLF, FAS closed right at 20MA/20EMA. Its full STO just came out from overbaught area, signaling possible more downside movement ahead although they may have temperary bounce.

SMH has been weaker than the overall market recently. It closed right at 20MA/20EMA. Today and yersterday' selloff came with high volume. Breaking below 20MA/20EMA, which bring SMH to test $24.

ADBE closed right at its intermediate up trend line which started from the early 3/09. Break below this line, that would be very bearish.

USO 's next downside target is $32

USO broke below the intermediate uptrend line yerterday. This morning, it continued to drop and broke below support at $34.7 mentioned yersterday. It's next downside target is $32, resistance is $34.7. For short trade of USO, I would set stop at $35.

US stock market updat -- 9/24/09 8:00 AM PT

The market continued to drop this morning. Nasdaq broke below 2120 and $SPX broke below 1057. It seems like $SPX found temparary support at 1048 so far. For Nasadq, next support is 2090, resistance is 2120. For $SPX, support is 1047, resistance is 1057 to 1062.

US stock market update --- 9/23/09

The stock market went up a little bit before Fed announcement. After Fed announcement, the rally was extedned. Nasadq went up to as high as 2167 . $SPX went up to 1080 and tested long term downtrend line. However, during the last two market hours, the market fell sharply with high volume. As you can see from 60 min of Nasadq and $SPX, the short term uptrend line was broken below decisively during the final market hour. The short term top should be in today. Is today's high an important top? Possible. For Nasdaq, next support is 2120. For $SPX, next support is 1057.

USO and $WTIC broke below the intermediate up trend line which started from the middloe of Feb. 2009 with high volume, which is bearish. For USO, next support is $34.7 , for $WTIC, next support is $67.5. If they get broken, the oil downtrend will be accelerated.

Some stock trading tips

I would like share some stock trading tips.

1. Understand what kind of trading is best fit for you. Day trading, swing trading, positon trading, long term investment? If you have a full time job, day trading is probably not good for you. If you can watch stock market a few times a day during market hours, you may be able to do both swing trading and postion trading. If you can not watch the stocks during market hours, you can still make money by playing position trading.
2. Identify and follow the stock trend. Don't fight the sotck trend, especailly when the stock trend is strong. This is the key to become a successful stock trader. Stock have trends for different time frames: very short term trend, short term trend, semi-intermiediate trend, intermediate trend, long term trend. For example, if you are short term trader, if the short term trend is up and the uptrend is strong, you's d better not short stocks. And buying dips would be better approach. A lot of people who trading stock for many years still don't understand this well. If you are a position trader, you need to follow both semi-intermediate trend and intermediate trend. When the stock market crashed in 9/2008, the best approch would be sell the stocks when the trend switched to down and started to short stocks or buy bear market fund, which would have made you make tremedous money then. Hoever, most people were keep buying from the start of crash and lost a lot of money by fighting the downtrend.
3. Alway use stops. Any perfect stock trade setup can turn into a losing trade. Although good trading systems can make you money from stock trading, it can not guareentee you can make money from each trade. Any perfect stock trade setup could turn into a losing trade. You want to use traing stop to protect your trading capital.

US stock market update -- 9/22, 8:30 AM PT

The market is strong and keeps going up. Nasdaq hit my upside target: 2150 intrady. $SPX's is 9 points away from my upside target. Bulls should be cautions at the current level. Bears should be patient before opening shorts.

Stock trading systems

To make profit from stock market consistently, it's better to trade with mechanical systems. which can rule out the effect of human emotion and bias.

The above are 3 mechanical trading systems I developed, after many years' learning and trading from US stock market.

The 1st system is for trading in semi-intermediate term or intermediate term. The 2nd system is for short term trading. The 3rd system is for intermediate term trading.

All 3 trading systems have generated very nice gain. I have been doing position trading with QLD/QID using system 1 and doing short term trading with SSO/SDS using system 2. And System 3 is used to do both position trading in my personal account and 401K account. I will start to trade 3X index ETF using the above 3 trading systems.

9/21/09 morning update

For US stock market, so far this morning's pullack found support at short term support. Nasdaq found support at 2120 and bounced up from there. $SPX once broke below 1062, but it managed to get back above that level. As long as Nasdaq is held above 2120, $SPX is held above 1062, the short term trend is intact.

9/20 Weekend update for US stock market

For the past 1 week, the US stock was keeping going up although it was at very overbaught condition. Nasadq gained 53 points and $SPX gained 26 points. For both Nasadq and $SPX, the short term trend, semi-intermdeiate trend, intermediate trend are all up. As you see from the weekly charts, the past week's up move was accompanied by inreased volume, which is bullish. Next week, will the stock market keep moving up from here or it will take a pause by pulling back first before moving back up or it could reverse to drop hard from here.

I think the stock market t is very close to major resiatance which could be an important top. Why?

As you can see from the weekly Nasadq chart, 2150 is clearly to be an important resiatance. From the weekly SPX, you can see that $SPX is very close to test its long term trend line. Long term trend line will probably provide strong resistance there. From the weekly charts, their full STO are showing they are very mid term overbaught. From the daily Nasdaq, NDX and Dow charts, they are all right at the upper trend line of rising wedge.

From daily full STO, they are very short term overbaught. Their daily MACD histogram and RSI are showing strong negative divergence.

Looking at daily $VIX, $VIX could not break below 23.15 for the last 7 trading days and it's very oversold now. There's good chance it could be starting strong up from here. As you know, if VIX is up, the stock market is down.

All the above analysis tells we need to be cautious at the current level. I would not add any new long positions and would raise up stops for the current long postions. Since the trend is still up and the uptrend is strong, I wouldn't fight the trend by starting to short the market. I am waiting to see some breaish reversal signs to come out. Once I see them, I will exit all the long and switch to shorts.

9/17 after close

$Bpcompq and $Bpspx are showing good market breadth for a mild down day. Although now it's very close to 2150 (for Nasdaq) and 1080-1100 (for $SPX) , we have not seen the breaish reversal signs. I would sell some of my long positions, but I will not open the shorts until I see some bearish reversal signs. If you trade for many years, you probably agree " Don't fight the trend, especially when the trend is strong".

9/17 brief summary

The stock market had small loss today. Nasadq broke below short term trend line and seemed to backtest it before close. $SPX is holding above the short term trend line. It's hard to say the pullback starts until we see Nasadq break below 2120 and $SPx broke below its short term trend line.

9/16/09 after close

Another strong up day. Now, Nasda is 17 points away from 2150 target and $SPX is 11 pts away from 1080-1100 target. I expect the above mentioned targets could be the important top. If you look at the two weekly charts, you will understand better why I am saying that. 1080 is right at the long term downtrend line which could provide heady resiatance.

I would try to sell some long positions when we are a little closer to these targets. But I will not open short until I see some bearish reversal sign.

FAS broke out from the trading range today

FAS broke out from the trading range, as indciated in the chart. Its next upside target is $100.

9/16/09 intra-day update

The Nasadq and $SPX keep going up. Watch the black lines in both 60 min $Nasadq and $SPX closely. They are short term trend line. As long as they stay above the black lines, the market will keep going up without a break. If the black lines are broken below, that would signal the start of the healthy pullback, and Nasadad will test 2088 and $SPX will test 1047.

BAC is testing the lower trendline of ascending triangle

BAC is testing the lower trendline of ascending triangle. Its daily full STO just had bearish crossover. There's better chance that it could break down from this ascending triangle. Daily MACD has been in breaish crossover and showing negative divergence.

FAS is test the upper limit of trading range

As you can see from the chart, FAS has been trading with thetrading range for a while. Today, it tested the upper limit of the trading range. Prudent traders can sell partial FAS positions and should not add more FAS shares until it breaks out from this trading range.

9/15/09 before market close

Nasdaq and $SPX just keep going up. That may keep suprise many traders who have opened short positions based on the market's overbaught condition and negative divergence. That doesn't surprise me because I still expect market will porbably not see meaningful correction until Nasadq hits 2150 and $SPX hits 1080 to 1100 resistance.

9/14 After close

Nasdaq and $SPX pulled back in the ealry morning, but they found strong support at 2065 and 1035, respectively and closed with some gain. $SPX closed above important resistance at 1044, which is short term bullish. For Nasadq, short term support is 2065, 2050, resistance: 2150. For SPX, support is 1044, and then 1035, resistance: 1080 - 1100. When the up trend is strong, the best approch is to let the profit run until the short term support/trend line is broken. Remember to use stop for any trades.

Nasdaq's early morning pullback

Nasdaq early morning's pullback found support at 2165. After bouncing back, it has recovered most loss from early morning.

For 9/14/09 morning

Pre-market futures are dropping, indicating stock market will probably have a gap down Monday morning. The short term support for Nasdaq is 2050 and for $SPX is 1030 to 1033. Let's see how market will react if they really get there. I still expect Nasdaq and $SPX will have good chance to find support at 2050, and 1030, respectively.

Intc is close to either break out or break down from symmetrical triangle

Intc has been trading with the symmetrical triangle since the middle of August. Now it's very close to either break out or break down from the symmetrical triangle. If it breaks out, the upside target is $20.65. If it breaks down, the downside target is $18.5.

Stock trading systems

Many traders have spent lots of time to search for the perfect stock trading systems. Actually, as many of them finally realized there are no perfect trading systems in the stock world. Any trading systems will have losing trades. The key is that the good trading systems not only generate more winning trades than losing trads but also the gain per winning trade is much bigger than the loss per losing trade. No matter the tradng system is mechanical system or not, it's for short term trading or for intermediate term trading, the bottom line is that you have to use stop for any trades.
Some trading systems perform better in bull market than bear markets. Some trading sytems perform better in trending market than in trendless market. You may need to have different trading systems to deal with different market environment/phases to maximize trading performance.
Once you find good trading sytem which make good profit consistantly and fit for your trading style, you'd better stick with them, insteading of keeping looking for the better ones.

Csco backtested the breakout point at $22.6 and found support there, its next upside target is $25

Thursday, Csco broke above ascending triangle with good volume, which is bullish. Friday, it backted the breakout point at $22.6 and found support there. The ADX is indicating the uptrend is strong. And OBV just broke above the small range and supports the price breakout. It's short term bullish and next upside target is $25, stop: $22.5.

Nasdaq's next target is 2150

From the weekly Nassadq charts, it tells that next Nasadq's target is 2150. Before getting there, we may see short term correction, but I expect we will get there soon since the uptrend is so strong. Since 3/2009, market has been refused any bigger correction. I expect once Nasdaq gets to 2150 and $SPX gets to 1080 to 1190 area, the market will porbably start big correction in the form of starting intermediate downtrend.

1st post at blogspot.com

I have been trading stocks since 1998. Since the beginning of 2009, I have been publishing my daily market analysis, two trading system signals and some stock charts at the public list of stockcharts.com. At stockcharts.com, I mainly highlight major stock indexes such as Nasadq and $SPX. Except about talking my market view, I will aslo highlight some individual stocks and ETFs here at blogspot.com. Hopefully, many people will like my posts.