(122912) Support levels are in sight

good morning traders welcome to southernminn and market update utilizing technical analysis to protect direction based on human emotion today is december twenty night 2012 lots to talk about so let’s get crack-a-lackin’ alright so it is about five thirty in the morning saturday here and yeah so I got my cup of coffee right next to me and I’m analyzing some charts here and i gotta say pretty interesting stuff and let me just get right into it but as always before i do happy holidays to everyone i know i didn’t say it in my last video but merry christmas and i’m sure it’s going to be a happy new year before i make another video special shout out to Falco thank you very much for your comment and Happy Holidays to you too I appreciate all the likes that you click and I appreciate everybody’s who takes their time out to watch these videos alright so now let’s just get started let’s see what’s happening um in two days or I wouldn’t say today’s this week’s action is very similar to something of a options of the same type of volatility that we will see during the week that options expire I don’t care so please forgive me if I’m a little bit groggy right now I do apologize and because I just got a new subscriber I’m going to delete all my drawings here real quick I’m not going to do a recap too much but I’m just going to talk about what happened this week and why I almost took a trade but then decided not to towards the end alright so just looking at this chart here with no lines on it we’re just going to do a quick analysis and see what we can see without using a mathematical calculation which is pretty important but right now we’re just going to look at what we can see without those types of tools okay alright so first thing we’re going to do is grab a fib retrace her and see what we can see we are right at the fifty percent we kind of Pearson closed below it we’re going to head down to the 61 eight which is the one 3881 so I’m going to delete that because we’re not going to I really don’t like the Fibonacci retracements too much just from what I can tell we have a slight of a slight pivot here to that really a pivot because the pivot is after after a Down move right we didn’t get so much of a Down move here okay that’s which is why we didn’t take any trades and where I didn’t take any trades on on that side there but it is something to be considered and something to be respected okay so it’s going to leave a line there we have a gap window here okay and we also have a gap fail okay my gap windows and gap feels I’d like to do from the body a lot of times you get the bounce from the actual lows and highs of the candle but everybody knows that on more of a cautious trader and that’s what keeps me out of trouble so we got the gap window in the gap fill and then obviously we have the double bottom so all of these points here will be pretty good support and others a lot of talk about um you know the fiscal cliff and all that and you guys have noticed throughout all my video analysis i really talk about those type of things i try to stick to technical analysis purely because it keeps me out of trouble I’m not a economist professional or in a politician or anything like that so you know to be honest unless I fully understand those things it’s going to make my emotions and basically technical analysis is how you read other people’s emotions towards news that may affect on the direction of the market right i mean really doesn’t matter what you think what matters what matters is what other people think because you can’t move the market if you’re watching this video i’m pretty sure that you can’t move markets because you don’t have billions of dollars well of course if you did have billions of dollars then maybe you shouldn’t be watching this video but the point being I try not to talk about the news too much because um you know I just based on the news I mean I’ve seen is you know it’s very similar as an example earnings earning seasons I’m company can make a lot of money and then you see you don’t have the beat expectations but then you see the stock drop hey you know if there’s a lot of things that go into what direction the market will go to including not to

mention the manipulation that we constantly see in the market and you know maybe i’ll get to that in this video before us you know ramble too much let me just stop myself and get into an analysis so we are going to have these support levels here and yes we do have the fiscal cliff worry and that’s why you see this drop here but again if you watch even yesterday’s not yesterday’s last week’s video you would know exactly what my plan was I even made a comment in last week’s video saying that I had my eye on a certain level I think it was a one 3907 level and those levels are important to me and unless it gets to those levels with a reversal signal I’m not taking a trade and there’s reasons for it so let me just move back a little bit too right there as if friday never existed and let me know my load my drawings here you guys notice i’m not talking as fast as I used to actually let me just delete all my drawings here all right so let’s just think of this well okay this is hard to see so let me just zoom in here this dis imagined that this candle was in here and we saw Thursday scandal here this Thursday’s candle I mean let me tell you a lot of people went long on this candle here okay and I’m probably one of the few who didn’t take this long tree and yes you could go higher I’m not saying that that possibility isn’t there nothing is guaranteed especially in the markets right i mean if it was and nobody would be making money because everybody would be making the right decision somebody’s got to lose money for somebody to make money and the whole point of this this video is hopefully you guys can make money and take that away from you know other institutions who try to rip us small-timers off you know all right let me so speed this up a little bit all right so we created somewhat of a river so Kendall here which could be considered a hammer candle of some sort we did have a doll mover more than three days which is good and it validates the Samarkand reversal pattern this hammer candle was also made and created on higher volume ok so a lot of people you know who actually do play reversals on volume may have taken a long trade here all right but this is the reasons why didn’t you guys know my rules and for you for you new people this is my rule the volume has to be higher than the past three days ok in this case the volume was only hire for the past two days ok not saying that it won’t go higher just saying that that’s my rule and when you have rules you need to follow them if you don’t follow those rules and you you know as a technical trader it’s going to be very difficult for you to you know make money in the stock market simply because you’ll be all over the place you need to be consistent you need to have a set of rules I need to follow them those are my rules past three days it didn’t meet my requirement ok in addition to that we have these two moving averages right here right you know right above it giving it a lot more pressure meaning it’s going to be harder for this thing to bust through these two moving averages I don’t I don’t really necessarily like that you guys know that as well in addition to that I don’t see how this reversal can candle fell on any type of support ok I draw a line straight across from the tip here I draw a line straight across from the body here and the only thing that I see as some sort of support is this consolidation area right here ok so this consolidation area right here or any pivot point would be a good source of you know some sort of support or resistance but it wasn’t perfect in a way we’re like for example let’s just say we did consider this a pivot point it didn’t reach there ok and then get there let’s just say this was a consolidation and we’re going to get support off for that we kind of did but we actually got that intraday support on Wednesday not on Thursday Thursday we actually you know cut through it we bled through it and then recovered and closed right above it ok and this happened midday or about an hour before the market closes and the 10 minute chart if you take a look at that there’s a lot of institutional game playing when you release the news that there there may be a possible resolution to the fiscal cliff but again I’m not the type that once to really concentrate on the news I just want to see what I see in the charts and that’s it now when you when there is a lot of news out there what I normally do is and if it’s you know big news like the fiscal cliff that sort of thing like the news like the situation that’s going on now you can still trade the market or okay well let me put this back a little bit here I in my opinion will still play the markets I just may not and I’ll still play it the same way as I do any other time the only difference is I may not want to put that

much more in meaning not that much more I may not want to put as much in so let’s just say I put say 10 grand in maybe I’ll just put my ground or if it’s really bad maybe I’ll put 2,500 you know I’m saying so I’m just going to decrease the amount of shares that I normally would put in at a time like this but I would still play the markets exactly the same way as I would any other time whether there’s news or not except for earnings okay so you guys know I don’t play earnings rank ok so now let me load my drawings here and then see what we can see let me just delete these lines here I was just playing around with that and let me just delete this line it’s getting a bit messy here so i did another mathematical calculation i don’t know if i told you guys but this one 3907 level here was created on december twenty first okay and then i also told you guys that until it gets to this one 3907 with a reversal signal meaning if we got a candle like this that went into the one 3907 level you know on higher volume which was higher than the past three days then i probably would have taken a long trade but because it hadn’t done that then I didn’t take a long trip I didn’t take a long trade I stayed out of the market and I let it bleed out and that’s exactly what it did mine is dollar fifty three and SP why okay sorry forgot to tell you guys this was a chart of the SP why again it’s five thirty in the morning are you anyways long story short the reason why I want to wait for the one 3907 is we’re going to have some support here now this could be intraday support and and the whole thing about it is because of the fiscal cliff thing or issue okay so there is a possibility that we may cut through and go all the way down to is 137 51 and this one 3751 was created all the way back in october 19th okay and we only got when this was created when it got intraday bounces here okay as you can see that so this support line is going to be good but it might not be that strong what I really think is going to be really nice is this one thirty five forty if we can even get there okay so there is a possibility we can get all the way down there and obviously there’s a strong possibility well I wants a strong I should say a possibility slight possibility that we can get all the way down to the 1 30 31 but highly doubtful I me and I think they’re going to come up with a fiscal cliff solution before then but again it’s not really what I think it’s what I see and therefore right now because I have mathematic mathematical calculations all the way down to 1 30 31 level that is a possibility and let me just draw a quick line over here yeah so the reason why I didn’t create an update video during the week is simply because my thought process has not changed I would not have taking the train until I have hit the 139 07 and it didn’t get there okay and we’re coming pretty much straight down into it so i may consider taking a small trade a long trade on the one 3907 level okay so just keep that in mind that that’s a possibility and what I’ll normally do is pick up some i think was SSO okay and that will that is a two-time SP why ETF and now that I look at it you know after drying this bottom trend line here this one 3751 level actually looks pretty good okay that’s a that’s a pretty that’s going to be a pretty good level it’s right out here at this gap window okay it’s right around this consol vation period I have a mathematical calculation here at 137 51 plus a trend line okay so we’re going to have to support levels we’re going to have the 139 07 level which you have the 200 moving average plus this mathematical calculation and this not so strong pivot point there plus we have the Fibonacci retracement level here which gives a lot of support okay 26 186 monday is probably the strongest of the Fibonacci retracements in my opinion however the 137 51 looks even better so I guess it really depends on where I get that reversal signal okay if I get it on the 139 07 or the 137 51 but I will say this once we get to the 137 139 00 7 on high volume higher volumes in the past three days i’m probably going to take the tray because even if it bleeds through and cuts through the 139 07 we’re going to have to 137 15 one level right below it and right below that isn’t 1 35 40 level so where would I have my stops if i take the wintering 907 level and i get a close below that i stopped out immediately because it’s a two-dollar drop to the 137 51 i stopped out of that and once we get a close not not if it bleeds through it now if it cuts down to say 137 50 for example but towards the end of the day recovers but it still recovers above 100 751 then I don’t stop

out this is on clothes this is based on a closed meaning at the end of the day right before it closes you can pretty much tell if it’s going to close above the level or below and if it’s gonna close below the level then I stopped out no meanness it’s as easy as that and the reason for that is because there’s a lot of a market manipulation especially now okay with the fiscal cliff stuff on the institutions are just having fun whipping people out in and out of the markets it’s just it’s hilarious because I see how much they whip it up whip it down and it’s just you know stopping people out and you know they’re like oh no you know whatever anyway in any case I just wanted to warn you guys that even though i said i’m looking at the 139 07 level i’m still looking for a reversal signal normally i would take the trade at the 139 07 but right now because we got close to the 139 07 let’s see how close we got down I was in 139 92 I went into its dot close but it’s a it’s pretty close where we could start consolidating to the side first alright here’s here’s scenario number two we can start consolidating to the side there once we start consolidating then this one 3907 is no longer something that I’m going to take this consolidation could be like you know a couple days okay ate the food starts trading side words which is a possibility because next week is solid another holiday week where we have new years once you have this consolidation you could cut through the two-inch moving averaging and hit the one 3751 if that happens then I’m taking a long trade okay at the 137 51 and then i’ll look for a reversal signal if if it appears and if it appears then I’ll hold on to it and then have a 75-percent sell at the 139 07 I let it creep up by the way to probably over here okay so that’s pretty much it for the SP why let me get into some other things because I know you guys don’t want to just know about what the SP why does and I hope that was enough coverage for what my plans are for next week all right I think as a standard i’m just going to normally do gold and silver okay so this is the chart with the g OD which is etf two tracks go this is a daily chart now for gold gold is just something that I normally used to put I used to play gold a lot and you know which what makes me really sick is that I actually missed this trade all the way up here from this mathematical calculation at 174 29 and I just missed it the high of this was 170 407 okay so that whatever you guys know about that already I whenever I see that some I’m just always makes me sick and the only reason why I have this up here is too in case I go gets up there again that’s going to be pretty good a pretty good resistance level okay I sort of took it here actually anyways moving on here oh and by the way we’re not we are not on the markets we are not over sold yet we are pretty close but we’re not so the doesn’t mean that we’re going to get a bounce but there is a possibility let me just switch back I normally give you guys the wine bullish and why I am bearish kind of thing so let me just get that done real real quick why would I be bullish I would be bullish because or it could go higher I want to say bullish the market could go higher because of this reversal candle whether or not it was higher than the past three days it did do it on pretty good volume okay especially for a holiday week and it did create a strong reversal intraday as you can see and it created this hammer candle here and it was after a Down move which means we could reverse hire a lot of times the only reason why we did this on friday was what you would have to look for to negate this reversal candle is a closed below it we did not close below this come on let’s see the law of this candle was one 3992 fridays low was one 3987 so oh no the friday’s close was 140 or three so we did not close below Thursday’s candle which means that this candle is still valid this means that there is a possibility that we could go higher mean we got the 50 moving average right here but it’s not going to be major the major are moving average will be this 20 moving average which is working right above there so even if we did go higher I don’t know if it’s going to last long unless they announce a fiscal cliff thing in which case I think we’re going to get you know one of those initial knee-jerk type rallies ok which knee-jerk meaning it’s not going to last long ok so that’s where I would see it going long would I go long now no I got you guys I just explained these things here why would I be more bearish than bullish well because this didn’t happen on higher volume from the past three days and we do have the 20 moving average right here lurking right above

it giving it some resistance ok and of course you know we have this down move and there’s no signal indication saying that it’s going to have any type of reversal anytime soon so based on just thursdays candle gives it a lot of support that it may go higher but just keep in mind and that i would even though i think that that might happen i listen to the toilet moving average i still would not take the trade and this is what keeps me safe this is what keeps the institutions from you know trapping you you know giving there’s those boo traps in those bear traps this recovery here was based on news okay it happened at about two o’clock when the news came out and then boom intraday testing just spiked up you gotta watch out for those kind of things unless you get those appropriate proper signals you don’t want to take those trades you want to be very cautious about those okay so switching back here all right so this is a g-o-d back to the jod we got this this is what I mean the 159 22 level it’s a mathematically calculated level we got a reversal candle here after a Down move right I was a pretty good down move to us not bad and it was it was higher on higher volume here higher than the past three days higher than I don’t know how many days we didn’t get much of a bounce however if he had picked it up at the 159 22 level you would have had a break even stop and you would not have been stopped out just yet okay so we went right into we pierced the 200 moving average let me just as a man we pierced above the 200 moving average we could not hold it and came down and closed right on the 167 a level I’m sorry 167 in one level and then we got below it and then broke above and then now basically we just known on Friday now we broke down the 160 71 that one and we’re just basically trading sideways that’s that’s pretty much what we’re doing this could be the turn to a higher higher move but again the 20 moving average and the 50 moving average is lurking right above so there’s a possibility that this rally may not last long but that remains to be seen which is why I haven’t taken a train on the gld just yet alright SLV is the ETF that tracks silver as we all know and if you checked my previous videos you would know what these lines are it’s almost picture perfect but just to creative give a quick review because I know I got some new subscribers this triangle here was created I don’t know when a while about a while back but you long time subscribers already recognize this hopefully the way I get a predicted amount of how far this could potentially drop or pop okay it could go either way because this is a symmetrical triangle keep that in mind but in this case it dropped and I think when it dropped is when I created the triangle so i think i created the triangle maybe around these two days here you get the middle of the triangle the closest to the pivot point the closest pivot point to the middle of the triangle which in this case would be here okay you grab that and you put it where the breakdown would be and that’s where you that’s what you get and then interestingly enough in addition to that i also have these three mathematical calculated levels that that are slapped on this chart back in december 14 and i said there is a possibility that we get all the way down to this 120 I’m sorry this 2773 level what I short it because I think it’s going to get there probably not what I go long if it gets there it depends on the pattern but yeah that’s probably something that I might do now ever since 12 13 it’s just been dropping okay we got a bounce here at thirty dollar in lemon scent level it didn’t even get to the 200 moving average and then I went a gap down auto into a 2075 level and now we’re just consolidating okay so based on this pattern here this is bearish okay salvia is bearish would I take a short trade on this bearish consolidation pattern absolutely not you can if you want to but in my opinion I stay away from consolidation patterns because for whatever reason when it comes down to consolidation patterns one out of the million consolidation patterns is the one I’m going to pick and then it’s going to reverse on me so I just don’t play it but I realized that it’s there and I wait and I’m patient and I have to discipline myself and say okay this is what the pattern is looking like i’m going to wait until it gets down to the one 2773 level in which case i may

actually take a long trade depending on what the pattern looks like for example if we come down to the one 2773 level almost gets there but then it consolidates again then I’m not taking the train and i’ll have to recalculate to see if there’s another calculated level that i can put potentially do over here will be another support level obviously this is going to be a support level here on your pivots this is going to be a pretty good support level here I don’t know if he even gets all the way down here but anything’s possible right so long story short if it gets total 2773 level doesn’t mean I’m going to take a long trade but what it means is my eyes are going to be open they’re going to be wide open and I’m going to look for a reversal a reversal pattern type candle combination or single candle pattern or something of that sort ok that’s the SLV last but not least we have apple because apple is the leader in the tech sector right we all know that we have this bottom trend line over here I do have a level here at 476 39 and we also have a trend line here at the same time so if we get to the 476 39 BAM just like that one time that I may consider taking a long trade on Apple now now keep in mind this Apple is a very expensive stock do not you know I don’t doubt that okay here’s the thing though with this is that I remember we’re talking about Apple all the way up here when a reverse and started coming back down here’s the thing you just get rid of this alright um everybody at this level here everybody’s was saying Apple is going to reach 1000 and didn’t even get close to 1000 all right so just keep in mind that this is why I have to stay discipline this is why I got to turn off the news because the news is going to make you emotionally change your mind okay anyways the 470 639 level yes the stock is very expensive you probably can buy as many shares as you could with the say SSO or the SDS but this stock also moves a lot more than sson ssds I mean we have an average of thirteen twenty per day okay so that just means I mean I’ve seen this guy moved 30 bucks in one day so I say you only had I don’t know 50 shares or something like that I mean the amount of income would probably be similar to what you would have made in the SDS anyway so it’s just that Apple moves a lot faster sometimes people like it because it’s a little bit more exciting and there’s a lot more volume and an apple but again just because we get into this one the 470 639 level it doesn’t mean I’m going to take the trade it really depends on the pattern not to not to mention if there’s going to be a reversal signal there’s a couple ways that I play these things and I think someone asks me how I actually played it so let me just explain sometimes I’ll take the trade at the 470 639 level and see if there’s going to be a reversal pattern created on that day when I take that trade when a reversal pattern isn’t creating it looks likely and it looks like a continuation pattern then I stopped myself out for a break even or I stopped myself out for a small loss that way i keep my losses small and that’s the whole point of training is you want to keep your loss is small right and if it does create a reversal pattern on the 470 639 level let’s just say for example then i lock him you know I lucky and I break even stopped because we would have obviously gotten a bounce so as I have a break even stopping place then I wait for the next day to see if i get stopped out if i get stopped out no big deal and no sweat off my back but if it continues higher then i put a in the money stop that way even if I do get stopped out make money and then as the market goes higher I could I trail my stock higher and higher and I let the market stop me out I don’t care I let the market stop me out but once I see it hit a resistance point then i’m pretty sure it’s going to you know reverse or there’s a higher probability me you know pull back and then i will take 75 percent off of shares and then put a break-even stop on the remaining twenty-five percent or in the money stop doesn’t matter which one and i just set it and forget it i mean i don’t need to worry about that anymore until it hits one of the major you know planes for example if I take the 476 39 level here then we’re going to have resistance right here and then we’re going to have resistance right around here and around this area over here and then maybe I’ll take a 75 maybe I’ll put a in the money stop here then maybe I’ll take 75 percent off here and then maybe I’ll take the rest of the twenty-five percent off here and if it never reaches this pivot point up here which is the

remaining twenty-five percent let me pull back and come back down here I stopped out in the money on the remaining twenty-five percent no problem but this is that’s when you can get greedy if you take the trade up here and you try to trail your stop our way up here you take 75 percent off you can get greedy with the twenty-five percent and you know you really don’t know there’s no stress or anything and that’s normally how I play it alright so we’re into 30 minutes of this video I really didn’t think it was going to take this long because I wanted to get it over in 15 minutes but I also don’t want to miss anything and I want to make sure that explain myself to everybody again this is just my opinion you know I’m not necessarily saying this is something that you need to do to make money this is just my style this is I’m just letting you guys know what’s going through my mind and obviously if something does change and I will create a video or hopefully will create a video during the week if something changed but just like this week I mean it was a nice reversal pattern on the SP why with that long hammer looking type candle but it still didn’t take to trade and sure enough on Friday we dropped even more so and then that’s one of the reasons you need to follow your rules because those guys who went long or right now underwater okay not saying that it can’t go along on Monday because that’s definitely a possibility but you know as a technical trader you have a set of rules if you don’t follow those rules in my opinion it’s going to be always up in the air and if you base your trades on emotions you know some people do and they do great at it okay I’m just not one of those and so I have to be consistent and I have a set of rules and those are the rules that I have to follow in any case um you know happy holidays to all of you watching these videos happy new years you know and God bless to your all I hope you know good luck to your training next week if you’re even training there’s a lot of traders out there that’s not even training this this month well keep in mind that we do have a possible santa claus rally maybe not in december obviously because it’s over already anyways but probably at the beginning of january if you even want to call that a Santa Claus rally but towards the January time maybe the beginning of the January may have a quick burst of upside rally but you know I I do think that the markets still do look a bit weak but on the weekly we are still in a verified uptrend so until that changes you know we gotta be I gotta be more bullish numbers in anyways I’m rambling again thank you very much for taking the time out to watch these videos you guys have a good weekend and happy new year stay safe and god bless to you and I hope to see you in the next video