Are we done with the correction?

We saw first correction after many weeks. Next week seasonal are positive and I am also not sure if we are done with the correction. There has not been enough technical damage which means it can go higher. First 2-3 days early next week will provide more clues. One possibility is that we might complete wave B next week and then we might see another wave C leg down to 1285 (S&P). Market seemed to be in No Man's land.

Gold and Silver are on tear. It is possible that gold might reach new high and silver too.

I am publishing few long and short ideas.

CNX Daily: Looks like it has formed a high flag, Volume has been good for the last 3 days, it has cleared the resistance of the flag line, it closed above 50 DMA. MACD has turned up. Follow through will increase the odds. There is enough room on RSI to support higher prices.

UVV Daily: If it manages to clear first resistance we can easily see it rise to second resistance, if second resistance is cleared, we are looking at 45.75/46 price target. The pattern is double bottom, if true the potential target is 46. MACD and RSI can support higher prices.

MOO Daily: I think this has one more leg down. Price rise of the last 2 days in on low volume, it might test the trend line before turning lower in leg C down. Trend line is price resistance and 50 DMA is price support which puts this is in No Man's land. Next day or 2 should provide further clues.

AAPL Daily: Like MOO apple's rise of the last 2 days is on low volume and price is stuck between resistance and 50 DMA. This is also in No Man's land. Next day or two will provide further clue. I am showing the downside target if it breaks 50 DMA support. It can go either way, we will know soon.

KOL Daily: This is forming a triangle, difficult to say which way it will break. If I have to guess at this moment, I would say it has 60 % probability of breaking down. We will know soon.

Last week as per my watch list we took short position in X, we sold out short position in FCX. We also took short position in ANN.

Got to go now, looking forward to watch today's oscar awards ceremony.

Few Short oppurtunities

Today's update will be short. Market is resilient, divergences are forming all over but there is nothing bearish in the price structure. DOW transport made new high thereby erasing DOW theory non-confirmation. I think there is correction in cards but there is nothing remotely bearish in price structures of major stocks.

FCX Daily: Break of support (Green Line on chart) should trigger a good short entry. There are divergences, volume pattern looks good and Friday was a long black candle. I have highlighted the price target on chart.

AGU Daily: There are divergences all over, looks like a wedge, little early to say. Break of 50 DMA and support line should trigger a good entry.

X Daily: Another wedge like structure with divergences all over. This is on my watch list for possible short idea.

In the interest of full disclosure, last week we shorted FCX and AGU. It was aggressive at that time but price structures were compelling enough for me.

DOW Theory Non - Confirmation

This week's Market update will be short with no charts. We are seeing DOW Theory non-confirmation, this is not to say that the non-confirmation will continue but it is 3 weeks now and it assumes more importance as the time goes by. Trannies made high on Jan 13th and DOW is making new high almost every other day.

30 year bond is at serious capitulation and very close to long term support lines. If we look at TLT chart (this is not an ETF for 30 year but they move in tandem) we can see that it is near 2-3 years support line. Price action around this support line will be important. Significant and decisive violation of this line can and will have impact on economy. I don't expect that this support will be violated decisively, if it does policy makers will have something to worry about and make adjustments. Any rise in interest rates have direct impact on borrowing cost which impacts business, consumers, mortgage, auto's and the list goes on and on. Given the importance of interest rates; I will be closely watching the price action around the long term support line.

I am excited about tomorrow's Superbowl and hope that tomorrow's game is close and exciting.