I’m about to fall into bed, so just a chart tonight:
The breach of 865.73 and then the touch of 881 were two inflection points that changed our wave count considerably. The bottom line is that the main trend continues to the upside – all the gyrations we had to endure in the past month were part of a sideways consolidation triangle-like pattern – I know it’s ugly. Rest assured that he exact count will reveal itself over time – but corrective ways are almost always complex and their complexities manifold.
For now the 850 level should hold even if we correct down tomorrow or Friday (blue option). As the bears have remained in hibernation over the past few weeks it’s not impossible that we might see an immediate continuation to the upside, although I currently would give the blue option a 65% probability.
Gold continues to be a cruel mistress as it’s teasing me again with what looks like another tepid drop to the downside. As I noted today – we need to see an acceleration here in a very short order, otherwise the theta burn will force my hand to finally pull my puts.
Well, I promised a turbulent day and that’s what I delivered. Let’s observe:
Great Zero day – good signals all around. The PZI got an early entry and rode it all the way up – despite the obligatory post FOMC freakiness drop into the close I’m pretty sure subscribers banked some nice coin. The Lite never blinked and was pointing up throughout all gyrations.
Even the evil.rat bros banked some humble coin today which of course would have been a lot more had it not been for that final sell off. I was tempted to tell subscribers to take profits but don’t want to make interfering with the system a habit. It’s easy to fall into that trap and before you know it you’re trading around the signal as opposed to with it.
Oh yeah – and fuck Gold – if this bastard doesn’t drop in the next day or so I’m going to have to head to the hills. Meh – you can’t win ‘em all – of course you can try
Great day today and some good trading. I’m going to be out and about this evening as I’m catching up with a very old and dear friend of mine. So if I chime in tonight it’ll be very short and brief – probably one chart and a few comments.
P.S.: You rats and I are going to need ‘to have a talk’ – based on the comments I just caught up on basically none of you shorted the market at 881. I mean – WTF – I have been preaching about that level for what – 3 weeks now? The risk/benefit ratio at that mark was HUGE – did you guys freeze up?
Seriously, I see you guys take chances all day in limbo territory – why not at such a major resistance line? If you can’t pull the trigger at such a unique moment as a trader – you have a problem. It seems we’ve got a lot of work today, ladies and leeches…
The only reasonable explanation I can think of is that you guy took the ‘lobotomy option’ in the poll all too literal ….. mmwwwuuuaaahhhaaahaaaahaaaaaaaa!!!!
UPDATE 1:30pm EDT: The dam just gave way:
And up we go:
As the old saying goes: Bear market rallies continue on bad news and reverse on good news. Let’s hope for some ‘good news’ soon
My next target is 881 but I’m not going to mortgage my house to play that line. Every freaking line in the sand of the past month has been bulldozed through by the Goldman Boys. So, there’s no end to how far those bastards can push it. And by the time it does reverse most weak hands have probably been washed out. So, yes – I am going to go short at that line – but only with very little capital. I do need my beauty sleep after all.
Anyway, we’re T minus 43 minutes from freaky hour. Put on your party hats!
UPDATE 2:22pm EDT: Freaky Hour is upon us. Here are some excerpts from the FOMC meeting notes and my take on them.
In these circumstances, the Federal Reserve will employ all available tools to promote economic recovery and to preserve price stability.
Yeah, no fucking kidding.
The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and anticipates that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period.
More free money for banks who have been enjoying ZIRP while ratcheting up interest rates on us mere mortals. Next life I get reincarnated as a bankster.
As previously announced, to provide support to mortgage lending and housing markets, and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve will buy up to $300 billion of Treasury securities by autumn.
Great – more buying on the long end of the treasury curve. Not that it has helped beyond a temporary drop in yields as bond traders sent a message to Ben yesterday – read this for details.
The Committee will continue to evaluate the timing and overall amounts of its purchases of securities in light of the evolving economic outlook and conditions in financial markets. The Federal Reserve is facilitating the extension of credit to households and businesses and supporting the functioning of financial markets through a range of liquidity programs. The Committee will continue to carefully monitor the size and composition of the Federal Reserve’s balance sheet in light of financial and economic developments.
We have found more covert means of injecting liquidity into failing banks and related pirate outfits. FYI – check out the recent POMO activity, which suddenly has surged while TOMO activity is basically dead since December. I don’t know what this means exactly. I do know that POMOs don’t have to be paid back – if you believe that (Google TOMO and Deepcaster). Some game is being played there and perhaps one of you rats can provide some insights.
Anyway, more of the same – let’s see what we get here: A sell the news event or a final push into 881.
UPDATE 2:37pm EDT: We are at target 882 was actually touched on the SPX:
Same game – went short here – if this one goes much beyond 885 – 890 there won’t be any stopping the bulls for a while.
UPDATE 2:58pm EDT: Here are the current ISEE numbers:
Remember that they are inverse to the P/C ratio – so high is bullish and low is bearish.
UPDATE 3:50pm EDT: Just took sweet profits on my boat load of SPY puts at 865 which I grabbed at 882. There is no way I’m holding anything overnight anymore as there could easily be a retest tomorrow morning.