Magic Rulers

In my charting universe the most valuable charts are at the same time often the most simplest. Just give me a channel or a trendline and I’m happy. And I’m not alone – as Jeffrey Kennedy over at EWI puts it: How a Kid With a Ruler Can Make a Million.

Well, that’s exactly what I do on a daily basis (the drawing of lines part – not the making of millions) – I look at a symbol and the first thing I do is to connect the dots, and only then I might add a fib here and there. I’m pretty lukewarm on indicators – I use only a small selection of them – for me price is king.

You should try it – just make sure you have at least three touch points, otherwise your mind is probably dong some good ole’ fashion line fitting.

Today just so happens to offer a great example – pick any average you like but the OEX seems to sport the cleanest pattern. Is it a coincidence that we ran into a wall at this morning’s drop? Obviously not – this is one major support line we got here and the bears won’t get anywhere until they muster the energy to push the tape below it, after which it’ll serve us as resistance.

Everyone Gets It Today

The tape turns on a dime today – much to the chagrin of anyone who’s either bearish, bullish, or not a primary dealer. Oh, sorry – you didn’t get the memo at 2:46pm EDT?

That’s right – everyone gets it today.

3:20pm EDT: And now get read for the obligatory bounce back. VWAP reversion at its finest.

Oh, I sound a bit cynical today? Whatever do you mean?

3:33pm EDT: Here come the marines – just in time for the 3:30pm ramp up.

3:50pm EDT: No EOD wrap up today – need to catch up on some chores. Program trading update: All strategies took it up the ass – even geronimo had an early morning stop out. Another day like this and I’ll need a vacation again.

3:55pm EDT: I hate to be right on the snapback – sorry rats – but the script is so blatantly obvious these days.

4:07pm EDT: Someone asked for an updated BAA-TYX chart:

Not looking so hot IMNSHO – BAA keeps dropping and the only consolation for the bears is that the TYX is dropping along, thus keeping it from breaching the 2% mark.

POMO Games

Economic reality continues to be steadfastly ignored – bullish exuberance appears to be ubiquitous. Even better – a ‘worse than expected’ (snort) Chicago PMI report is nothing but yet another dip buying opportunity to cash flush POMO infused primary dealers:

The wave count and our inflection point have not changed – we remain in the whipsaw from hell zone we have been bouncing around in for the past three weeks. Our uncle point remains at 1069.62.

The bull will not be denied as various exotic Fed cash windows continue to hand out tax payer coin to primary dealers happy to burn the bears just one more time.

Inversely the Dollar has turned into the Fed’s favorite pinata – the more they hit this thing the more candy drops out to the delight of various gnomes driving the new USD carry trade.

Finally, NYSE A/D ratio currently at around 1.0 – not much of a change since yesterday’s reading at the close.

2:26pm EDT: So, you want to be a big bad swing trader, do you? Well, do I have a little gem for you:

I think this chart is pretty much self explanatory.

2:41pm EDT: Okay, I apologize in advance for the unrelated post but prepare yourself for the cheesiest infomercial I have ever seen (and that is quite an accomplishment in itself). You guys just have to see this:

Now, I actually do run Windows 7 right here at the evil lair and am loving it. It’s hosting geronimo and various other charting apps – no problems at all and I have to admit, even as an avid OS X user, I really enjoy Microsoft’s newest creation. However, how this turd of a promo clip could ever make it beyond the crack stained quivering fingers of the mental retard who wrote it is simply beyond me.

BTW, where is the obligatory Asian guy/gal? I feel racially insulted! However, I have to concede that the hot MILF (second from the right if you need to ask) makes up for it a little – yummie….

Enjoy! :-)

2:53pm EDT: OMG – it even gets better!

I’m speechless – rarely happens – but this just blew my mind.

Alright – back to trading now…




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