very overbought conditions

The market, and many stocks out there, are up about 9-10 days in a row. That is not healthy. Be cautious if deciding to enter new positions here. Especially in the true players (ie. FXI, FCX, BNI, AAPL etc...)

Ultimately I think we go to the 320SMA on the SP500, but w/respect to short-term movements, the market is very overbought right now.

The protection is costing me at the moment, but my money is where my mouth is. If the markets begin to ease from the overbought condition, while moving higher, I will close out the protection for a loss. But at the moment, that is not the case, and the SP500 keeps getting more overbought.

AAPL... nice

Really nice AAPL quarter... was hoping for a sell off from it simply meeting the whisper numbers, allowing it to come down from its overbought position, but the market seemed to have voted favorably and continue the overbought rally.

I want to be in AAPL, but I must wait for the right moment. And I do not think right now is that moment.


After hours suggest AAPL will see 158 tomorrow. With such an overbought condition, worry it will be the best time to get in. (Especially coupled with a fairly overbought -in the short term- market.)

If I can get in at today's close (151-152) in a few days, or when the overbought condition eases (which could very well mean AAPL settles at a higher price, I will enter call options with the appropriate strike.

Trade - SPY puts (day trade)

Purchased market protection via SPY 95 Sept Puts. Will look to cover when the SP500 is around 920.

Market Thought... the wall

The SP500 is currently at the 'great wall' of around 950, and overbought. Not a good combination, for the very short-term.



On top of the market's overbought position, its internals are itching for a pullback as well. The only important measure that may not need a pullback is energy/oil, but its technically weak at the moment.

In any case, I am expecting a slight market pullback of the SP500 to around the 910 level. Ultimately, I think we continue upward.

With the pullback, I will definitely get into GOOG via the Dec 420 calls, AAPL (pending where it settles after earnings, and will indicate via another post) and GS. Entries for JPM and FCX will take place as well, if interested in the names.

Also, SQM is a buy right now despite the markets desire to want to ease up.

Trade - GOOG

With the GOOG after hour action in the red, I am hoping to enter GOOG around 420. Or so the chart says.


I like the fact that YouTube will be making money sooner-than-later, and so long as the 420 or so (on the lower side) is maintained, the integrity of upward move is very much intact.

I will be entering the trade via 420 Dec calls when GOOG is around 418-420.

Charts and Time

Time is by far the most valuable commodity, screw Oil and Copper :). At work, I recently got promoted and since early June I have been transitioning from my previous position to a manager role. Like anything, there are positive and negatives, but one of the most challenging aspects of the new position is that I have little time to actively watch the ticker moment to moment, the way I like to. It actually calms me. Because of this transition, I have been spending consistent 14-16hr days at work w/overtime none-existent. It sucks balls when I can not be by a computer to readjust limit orders based on real time market observations, and partially miss out on added gains. (Gains to which would have covered my increase in pay, to which this manager position has given me, in a few days vs a full year. And then a certain socially inept beeach wonders why I have the ability to openly tell people they are ass backwards wrong... in the most politically charming sort of way :)

Anyway... the charts of the XLF and VIX are below.

The XLF clearly shows a break out:

Then there is the VIX that was up nicely w/the market being up:


If the VIX indicator is correct, and the market goes down look to take advantage. The XLF suggests to add to financials. My favorite is JPM, and if GS pushes lower, I am looking to play GS if it sees the 145-150.

Mix signals

Talk about a mix signal... there are plenty of signals to indicate we are breaking out. Most importantly the XLF has broken from the negative trend I pointed out in the last post.

However, the VIX is up fairly nicely today. It is up while the market is up. I always get uneasy when I see this. And what makes it worse is that today is a Wednesday. I do not recall any index reshuffling going on on Wed.

This to me raises an eyebrow, and will probably force my hand at some light SPY short-term protection. (via the Sept 95 puts) If we rally into the close I will enter a few puts, and will cover them on any kind of relative market dip. (The day trader in me tells me 920 on the SP500 should be my covering point... FYI, this protection trade will basically be a day-trade.)

No time to post charts... will do it later tonight to showcase what I see. (I will also explain later why I have little time to upload charts during the day anymore.)