Stock Market Woes: The Worst February Since 1933

In order for this country to do as well as it has in the past, it must have a capitalist, free-market mind set and the will to recover with great vigor and strength.  We have the vigor and will, but we’re lacking the capitalistic free “marketeering.”  With Obama to inject billions upon billions of dollars into our system for ridiculous purposes, the state of the U.S. is under heavy consideration by many a conservative-minded economist.  I have an enormous hatred for these socialistic government programs Obama is going to institute, for the programs themselves did not prove to work during the Great Depression and drove us lower into the ground during that time period.  We have no World War to bring us out of this negative economic spiral, and without an extravagant catalyst that forces us to pick our country up by the bootstraps, we are in for a long 2009.  The “Half-Way Recovery” in 2009 is looking like less and less of an option for investors to buy into this market now and get good deals.

If, however, you’re planning on investing for the long haul (10 years +), now may be a good time, remembering, however, not to invest money you can’t afford to lose.  The saying of “History Repeats Itself” has become a well understood statement since September of 2009.

I have yet another plan to prevent us from getting demolished in the future like we have been since September.  Take the pork barrel spending money from this past Stimulus Bill and you’ll come out with a large sum of money that is going to wasteful, frivolous trash.  Obama wants to change education, correct?  Math and Science are important, that’s an obvious fact, but what’s more important than advanced calculus and organic chemistry are business courses.  High schools in the state of Pennsylvania mandate a senior project be finished as a graduation requirement (volunteering and then writing a five paragraph essay on your volunteering experience).

Although this is a great way to give back to the community in which you reside, I came up with the plan of nationally mandating EVERY child in the United States to pass a Personal Financial Literacy course as a graduation requirement instead.  This not only helps children in high school gain some kind of business education, but it will also allow them to gain the knowledge of being financially literate to some degree in their personal lives later on down the road.  Any thoughts?

The technical aspect of the market last week was gross, and for February as a whole, it was the worst one since 1933.  For now, let’s check out a couple of notable charts from the week with some technical descriptions below each chart:

S&P 500 (^GSPC)  5 Day, 10 Minute

As most of us already knew, the $SPX made some new records this week, beginning with a new low set on Tuesday and finishing with a newer low on Friday.  The danger of the $SPX going lower is becoming a large reality, and as seen from the $SPX weekly chart, each week is like riding a roller coaster that keeps getting longer and with more pivot points and sharp turns.  Technical patterns are coming out of the wood works, with double bottoms from Wednesday ending in double tops on Thursday.  Watch out for you index pattern breakouts/breakdowns and compare them with whatever sector is driving/tanking the market on that specific day!

$SPX  20 Day, 60 Minute

The $SPX Fibo Fan is currently stopped at the index’s bottom of 735.09.  Although the futures are showing the $SPX in the red early by 10-12 points, we have the potential to push higher tomorrow out of panic buying fear.  We have no technical indicators left to base a bottom off of, for Friday’s close is the new bottom for the $SPX.  The B.A.D. pattern is proving itself pretty well, and it could last for up to 10 more days without a pop.  This could put us to the supposed $SPX 600 level that CMT’s have been calling for since the beginning of 2009, and with all the ridiculous money handouts that keep reoccurring on Capital Hill, $SPX 600 isn’t out of the question.

Apple (AAPL)  10 Day, 15 Minute
*** Only stock I have found to like if the market bounces ***

Goldman Sachs (GS)  10 Day, 15 Minute
*** Watch GS as an indicator for how the rest of the Financial sector is doing.  I would short it! ***

Direxion Financial Bull 3X Shares ETF (FAS)  10 Day, 15 Minute

Direxion Financial Bear 3X Shares ETF (FAZ)  10 Day, 15 Minute

Keep your eyes on both FAS and FAZ, for they’re a dangerous couple to trade with.  If you trade them correctly, they can make you, but if you don’t, they will break you into tiny little pieces.  FAZ hasn’t broken down from its current ascending triangle pattern, FAS hasn’t broken out from its current descending triangle pattern, and because the financial sector is so weak, you might as well keep to this technical pattern until something shows you different.  In my opinion, I wouldn’t doubt that you see something similar to Friday’s trading session on Monday in that FAZ has an enormous open-to-close gap from Friday to Monday, continuing to lose some points into the middle of the day and breaking out into the close.  Also watch the volume channels outlined in both charts above concerning FAS and FAZ in order to keep up with the price-volume convergence and divergence, as well as volume breakouts.

UltraShort Real Estate ProShares ETF (SRS)  10 Day, 15 Minute
To keep it simple, SRS ended on a Spinning Top candle, giving it full reign to do whatever it pleases.  Based off of futures, SRS has a high probability of breaking above Friday’s resistance.  Based off of SRS’ past patterns, you may see something similar to what occurred on Friday and what may happen to FAZ.

General Notes for Monday:

• After trading it up in the last two hours on Friday, getting out of SLB for a +1.62 price gain as well as trading FAZ for a +1.80 price gain, I AM 100% CASH GOING INTO MONDAY.
• I am looking for the market to open down, and from there I’m going to run an intra-day sector search as to where the market weakness lies so I can short the weakness into the ground through leveraged iETFs.
• AIG (AIG) pisses me off and will probably be what CNBC talks about for the entire day until something better comes out.
• Keep to your technical price patterns as well as your price-volume comparative patterns in order to diagnose entry/exit and breakouts/breakdowns within your watch list of stocks, ETFs, and iETFs.

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