Will Support Hold for the Long Bond?

One week ago I wrote a blog post on bonds asking the question whether or not, bonds were possibly finding an area of support (click here).  My thought was that bonds were and nothing has really changed in that regard during the last week.

Price has really just chopped around at the same level I was looking at a week ago, so I thought I should take another look at the daily chart to see if support made sense still. Continue reading

Is Francisco’s Call the Correct One?

My trading budding and part-time contributor/post-writer is still standing behind his call for a huge 2350 Elliott Wave 3 and 2655 Elliott Wave 5 targets.  If he is right, then the current earnings season has to continue to surprise to the upside – so far the banks and NFLX are cooperating nicely so we look like we want to grind higher still.

Here is Francisco’s current read of the Elliott Waves … Continue reading

The Bull (Shit??) Scenario …

My trading friend Francisco has posted here on my blog site his more bullish/rosie view of where the market is going.  It is quite clear from my postings that I think the weekly uptrend is complete or in the process of completing a distribution top – however, I always like to keep an eye on the “other” possible trade.  In this case, it is a bullish call on the market, or I call it the bullshit scenario.

Here is Francisco’s Elliot Wave reading of the current pull-back … Continue reading

Bear Flag Follow-Up …

I posted on Tuesday morning my thoughts on the daily SPY ETF chart (click here) … long story short is that to me, the market looked like it was confirming the break of the ATR support level from September 9th by forming a bear flag.  I identified the $213.80 level as the lower parallel line level that would make the break of the bear flag official.

The past two days have seen price break below that $213.80 level and today we saw a push back up to that lower parallel level.

S&P 500 Index ETF (SPY) – Daily Chart


I mentioned to a trading buddy of mine that until the SPY closed twice on the daily chart above the 20SMA, the immediate downside scenario for the market was still open.  The 20SMA for the SPY is $215.00 right now.

Another trading friend of mine asked me this morning about when it would be ok to enter a short trade on the market if he/she missed the break from Tuesday … well, here we are at a perfect time – price has pushed right into the 60-min 20EMA and the 60-min ATR resistance level.  I bought some November monthly SPY puts to start a position.

Cheers … Leaf_West

Volatility Update …

The market has begun in earnest the expansion phase move lower from the weekly chart 3-wave pivot high.  My end target for support on the weekly chart is still 1950.  The path to that level will be made-up of many daily waves higher and lower, but overall I believe the trend is lower into weekly support.

Volatility is always a good factor to keep track of … I track the 30-day implied volatility in the market (VIX) vs the 90-day level.

NYSE Volatility Ratio – 30/90 Day Ratio


The extreme ratio level of 1.0x is a good area to look for a bottoming in the market that can give you bounces in equity prices that last anywhere from 3-days to several weeks.  We are working our way up to that level here this week.

Cheers … Leaf_West

Is the Next Trade in Gold Higher?

Back on August 14th I wrote an analysis on gold (click here) and how I thought the charts were implying a move lower in gold and my conclusion at that time was to short gold equities via the NUGT 3x leveraged ETF.  My friend Francisco asked me this afternoon about my thoughts on GDX here and after looking at the charts a little more closely, I think we may be at a spot where gold finds minor support and where gold equities could give us a multi-day bounce higher.

Here is the gold daily chart from my post back on August 14th in that earlier blog … Continue reading

Are Retailers Going to Roll Lower Here or In a Couple of Weeks?

Lots of traders are calling for retailers to roll lower here (i.e., Fast Money’s call on the XRT retail sector ETF last night).  I always hawk this group pretty closely (see posts on HD and COST from earlier this year), and I actually have a bullish reversal trade in TJX using call options on right now.

So what is going to happen here?  Are the bears going to get their continuation move lower from current levels or are we going to bounce and complete the “B” wave that I am looking for into the US Thanksgiving/Christmas shopping season? Continue reading