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XLF breaks short-term support

Pikertrader — Thu, 23 Feb 2012 04:21:25 PST

XLF and financials were were down more then the overall market yesterday as selling picked up in this sector. On Tuesday this post mentioned to watch XLF because financial stocks lead this market and with yesterday's move it could be signalling some selling is coming.

Broken Support: XLF had not followed the market in climbing higher instead it remained in a range and the short-term support for this range was 14.73. This broken yesterday and sent the stock down over 1%. With this support level broken the next support level is at 14.46 and 14.44( the 20 day ema). If this level fails then the next logical support level is 14.10 which is an unfilled gap from late January.

New Resistance: Now XLF has formed in even greater resistance levels above the current price. Before yesterday XLF had strong resistance from the 14.80's which was formed after the 2011 summer base pattern broke. Now XLF has that resistance to contend with and short-term resistance from the failed highs at 14.86 and the newest resistance level at 14.73.

Overall: XLF breaking down does not show strength in the market as financial tend to lead the market. XLF's decline should stop at 14.46 for now but past that and this sector could go much lower. Keep following this sector its as close to a crystal ball and the market will give you.

SPY and its Dojis

Pikertrader — Thu, 23 Feb 2012 04:03:34 PST

SPY and It's Dojis: The markets chopped around yesterday as the robots search desperately for news that will move this market. SPY remains perched new its highs sitting slightly on short-term support. The three doji candles starting on Friday show a market that is wary of moving higher and indecisive. In addition sellers are showing some strength at the top of the candles leaving long tails.

SPY's Support and Resistance: The bulls must defend 135.93 in order to stay close to breaking resistance at 137.05. If they can't stay above this level the next true support is below at 134. For the bears they must defend 137.05 or they are done.

The VIX is crepping up: The VIX has found support in the low 18's and high 17's. It is currently on a short-term uptrend this means a little more fear has entered the the market. One thing to note is how the VIX looks compared to the last VIX spike and market drop.

Overall: Time to put on your tin foil hat, but in this market you have to think like a crooked policy maker and look at the market here. Oil is at $106, the 10 year is at 2.00% and the market has rallied over 20% since its lows. Ben and his boys need oil to come back down and the 10 year. Best way to do that is force people into the dollar and bonds. Best way to do that is to send the market lower and the dollar higher, which is easy for them to they have been doing it all along. This is what the market seems to be pointing to now.

DDR Corp (DDR)

Pikertrader — Wed, 22 Feb 2012 16:45:37 PST

DDR: DDR has been in a short-term down trend since it hit a high of 14.63 on February 3rd. Over the last week DDR has been in a tight range between 14.16 and 13.80. There is significant selling pressure at the 14.16 level and weak buying at the 13.80 level, before today 13.86 was a stronger support level and this broke today.

Technical Pattern: Bearish Triangle (Bearish) DDR has formed a descending triangle during the last two weeks.

Size: The pattern size is .83 (14.63-13.80)

Base: 13.80

Target: 12.97 (13.80-12.97)

Void/Stop: 14.18

The target for this pattern if it breaks is 12.97 but more then likely a pause could happen at 13.12 as this is support 2011. But more then likely if this stock starts to sell off and the market sells off the more logical support level for this is around 12.60.

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Trends:

Short-Term: Downtrend starting from 14.63 from February 3rd
Long-Term: Strong Uptrend from December current uptrend support is at 13.62

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Piker Ratings:

Current: HOLD

Below 13.80: SELL

XLF Not Particpating

Pikertrader — Tue, 21 Feb 2012 15:01:01 PST

Today SPY and the other indices high new highs for the year and hit the highs from 2011. While this was occurring the "most important sector" to the entire universe just barely made a new high and closed down today. This is important because since 2007 what the financials do the market does later.

XLF was not able to get a boost from the Greek bailout news and after hitting a new high by a $.01 around 12:00 XLF started to sell off eventually closing green. In fact while the market has been trending upwards XLF has remained in a range between 14.46 and 14.86. On Frida when the market made a new high XLF did not, in fact XLF made its high for the year on 2/9 since then today was the last time the it made a new high meanwhile SPY has made new highs since 2/15.

XLF is nearing strong resistance from 2011. XLF and other financials were already selling off before the market sell off in the summer. Before that sell off though, XLF formed a month long base of support at 14.78, eventually this broke and XLF went lower making it resistance. Now XLF is hitting this resistance and is having trouble getting above it.

So far it has failed at 14.86 and 14.87 this tells you there are strong sellers at this level, this price is also the middle of the summer basing level. Buyers have defended the 14.73 level during this short-term range over the last few days. So XLF remains deadlock of where it will go.

Watching XLF will be important, a market that is rallying without financials cannot last too long and if XLF sells off the market will follow. But if XLF gets above 15 it would an additional catalyst to this market.

Touching Tops

Pikertrader — Tue, 21 Feb 2012 13:22:43 PST

The market appears to finally hit some resistance after rallying non-stop since the beginning of the year. SPY has now hit the highs from 2011 right before the U.S debt down grade.

The market rallied today after the Greek bailout announcement only to meet strong resistance right at the 137.10 level. Touching the lows from Friday and eventually bouncing back to close green.

Right now SPY is sitting at a very key major infliction point, if the bulls break past this level it is very possible that 143 could be seen. But the market has rallied over more then 27% since its October lows, with a decent pullback since December and the energy to break above this level at this point in time might not be there. Meaning a pullback is in the cards soon.

SPY has a gap below the current level at 134.04 if the market does pull back from this level this would be the first spot of potential support. Now that the greek debt has been fixed the market can get back to focusing on finding out a true price rather then speculating on policy measures. SPY now is hanging in no mans land bumping up against resistance and hanging below a gap. If SPY does fail at this level it would create a nice double top pattern for the market.