Roadmap

I am quite sure that we will see lower lows before we see higher highs.  I plan to hold short at least until SPX hits the 200 DMA.  I will add to shorts on Monday, July 30.

The short-term technical condition of the market is very bad.

http://stockcharts.com/h-sc/ui?s=$NYAD&p=D&yr=1&mn=0&dy=0&id=p70080538802&a=225258859

However, on the other hand, we did see a very strong breadth in the July move up, and such strong breadth readings usually presages higher highs.  Long-term, this bull market is alive.

http://stockcharts.com/h-sc/ui?s=$NYHL&p=D&yr=4&mn=0&dy=0&id=p26393848542&a=270667283

So I think we see a lower low with positive breadth divergence, which will be a good time to load up on longs.

If the Fed doesn't come through immediately next Tuesday-Wednesday, that would set the stage for perhaps a precipitous drop. Such a drop would be a buying opportunity.

Added to SQQQ at 48.1, Stopped out of SOXL at 42.8

Will add to more shorts on Monday.

Bought 2 NUGT calls in fun account.

Looking to buy NUGT.

Will probably buy BGZ on Friday/Monday.

Late Trade Update; Targets

Sold NUGT at 8.25, at a loss.

Added to shorts yesterday - SQQQ at 48.5 and SOXS at 45.5.

ST Targets: 

EURUSD 1.16 to 1.18
USD Index 86-87
RUT 740
SPX 1280
AAPL 515

Fed meeting next week - bounce time! Fed will likely not announce QE but will indicate it in September.

According to the ECRI we are already in recession.  I believe it.  HGX is the last domino to fall, and fall it will.

Sold most Longs; Went short

Long TZA at 17.4

Long SOXS at 42

Also long a little TSL (will hold through earnings on Monday) and a little NUGT.

Will buy a little NOK soon.

Bought TNA at 50.5; Sold half

Sold Half TNA at 52.5 yesterday.  Will sell rest at around 55.5.  Also stopped out of half of SOXL.  Will soon sell longs and go short.

More downside ahead, after a little upside

Signals are confusing.


Positives
Breadth was strong on the recent move up, and so far there has been no breadth divergence.  This is the biggest problem for the bear thesis.

$BSE rocketing up on the daily.

$SSEC may be making a double bottom.  But more downside certainly possible.

SPX, TRAN, $COMP all at or close to 50-day support.  BUT all 50-days are downward sloping.  All 200 days are upward sloping and some distance below.  Short-term support here.

$HGX made new highs - BUT on possibly negative RSI divergence.

VIX declining, just hit declining 20 DMA. No base building on VIX.  MACD suggesting more downside on VIX, upside on equities.

Negatives


Weekly MACD on all indices very bearish.


TNX, TLT, WMT, and SOX proclaiming danger immediately ahead.

TNX suggesting at least a double bottom somewhat further below.  Big negative divergence between TNX and SPX is never good.

However, in end July TLT may make a double top with RSI divergence and TNX a double bottom.  

Hang Seng, SPX suggesting bearish wedge.  However, Hang Seng at 20 and 50-DMA support, with positive MACD divergence, suggesting bounce to 200 day is quite possible.  Also, possibly to 20000 before the wedge breaks.

Conclusions

1. Danger Ahead.  Will sell longs and go short (long BGZ, DUST) on bounce, especially if I see negative breadth divergence.  Top should come around mid-late mid July.

2. Look for double bottom on $TNX with RSI divergence to go long.  Should come in late July-mid August period?

Bought SOXL, TSL, NOK

SOXL 25.35

TSL 6.18.

Will probably try to buy more TSL around 5.95 tomorrow.

NOK 1.87 (small position)

Looking for Higher Highs in the Indices

Within a week or 10 days.

Not sure about targets yet, but breath is strong and VIX needs to come down more before this move is done.

We will also see more downside this year.  TNX, TLT, SOX, all suggest this.

Sold NUGT, TNA, SOXL, AAPL calls yesterday, Tuesday

NUGT 12.15
TNA 58.3
SOXL ... ____
AAPL 610.5

Out of most longs.

bought NUGT at 10.73

Looking to buy more.

Also looking to buy TSL 6.45, SOXL at 28.