Update: Living in Brazil right now! This is the reason that I haven't posted in a while. I'll be in NM in the beginning of july for the rainbow gathering. 

I was right in my prediction. Looks like we've got a perfectly formed rectangle top on the SP.  This rally has continued longer than I anticipated. Now the bad news is starting to come in. Factory production in New York alone dropped from 9.5 on the index to 5.4. This is almost a 50% drop. Usually economic indexes never move like this. Oil has hit it's peak because the dollar is strong, but the economy is not. The treasury surge is raising the interest rates to get a home mortgage, which is making housing bounce stumble. Though the proposed 15k (!!!) tax credit for homebuyers will help. We've still got staggering unemployment. Which means that consumerism, which the only good thing about america's economy, isn't fucntioning properly. 

Think about that for a minute.

The thing that has propelled growth in the U.S. since the turn of the millenium has been the financial sector, the housing market, and the debt of our consumers.

And what three things were the hardest hit?

Don't let the pundits and the indicators lie. Increased manufacturing, decreased wholesaler inventories, and higher consumer confidence mean that everyone still thinks we're in a "recession" and not in a global meltdown depression.

This is a common tendency for stocks that used to be valuable that suddenly go into freefall. As soon as the downward slide stops accelerating-- the masses think we've hit a bottom, so it shoots up one last good time before dropping off a cliff again (but this time much shorter and less intense) while the suckers slowly start to walk away from their losses. In the industry we call this shoot up a "dead cat bounce."

I was studying a chart today and found an example of a dead cat bounce.

Example: Check it out after the big drop.. it goes back up again on May 11th on relatively high volume but it cannot sustain itself. 

 I bought in this stock at 1.5k shares of this stock 2.12 a couple of days ago. It finally hit my target of 2.23, testing the 144/169 60min EMAS, but I didn't sell. If I had remembered that I told myself to sell at 2.24ish yesterday, I would have sold. So it wasn't a matter of discipline per se, just regular ole scatterbrained me. I'm not too worried, it will retest the 144/1691hrEMA major resistance again. 

I also bought GNVC today at .91 they have a good product if they can find the funding.

I also had the perfect setup for DSCO on a pullback. But my broker will only let me buy through the phone. So i missed a nice 8% gain there.

another hot stock to watch is ALTI

Nite nite time for me. I

I have been active for over a week. Dang Blasted PTD (pattern day trader) got me. It's quite frustrating, as you can imagine. I missed a 53% bounce on CT (Capital Trust), 2 quick aftermarket 15% jumps in BAC (bank of america) after the Stress Test, and FSLR (First Solar's) last test of 200. Worst of all, though, is that I can't short this market:

(DJI 15 min candles approx 2 days period)

1 or 2 candles before the big bleed that you see on the last candle, i said "i wish i could short right now."

Explanation: All of the potential buyers have become holders. Considering that this whole rise has been contrary to the mass of economic data being released... the holders will wake up and realize.. Then they will become the sellers.

We should have ALOT more volume than this, considering that we are day 2 into testing a MAJOR resistance point for the market.

Weekly Chart DJI

However, as you can clearly see, the volume quite simply isn't there. On the short term, we're seeing a slow crawling rise on low volume.

This is a bearish sign. Because no one wants to hold a stock that isn't going to rise. And it may sound crazy, but no one wants to buy a stock that doesn't rise either, even though common sense says, that if they bought it, it would rise. It may rise later, but not without a little of a fall first. The reason for this has to do with the the seller sentiment, the methods of approaching the market employed by the huge monies, and then it has to do with the reactionary methods of stock traders to these principles. Most of all, though, it's a matter of simple probability. The higher it goes, the less probable it will continue to rise and the more probable it becomes for it to fall. When you hear about a market testing, or consolidating, or slumping a bit, it could very well mean a resetting of the probability ratio---

....but don't bet the farm on it. This is just one of the things it could be.



Personally, it will definately go back and test a previous support, and the success of the of the subsequent rise and retest of the resistance will depend primarily on the speed of this process.

Why?

A precipitous drop followed by a frenzied climb back up to resistance = good sign. It means there is still a healthy apetite for stocks at this valuation.

If the retest process is much slower, it may give the overall economy some time to recover and show tangible signs of improvement.. this would be ideal. The market goes down to a realistic valuation and rises in rhythm with the economy.

If the rhythm is somewhere in the middle it = bad.


Possibility 2: could this be the second candle consolidation period?

This is me:

I'm 22 years old. I trade stocks. I live in my car because I don't give a shit about having a house. I dropped out of college and started teaching myself about economics and the stock market through wikipedia and have been trading on an almost daily basis since October. I don't want a house, I don't want a better car, or the prettier girl that comes when I have these things. I don't want to be successful, or admired. I don't want nice clothes.  I don't want power or influence. I don't want to be comfortable. I don't want adventure, I don't want friends, or even to be happy. 

I just want to make a difference.

This is my story.