ABX nasty candlesticks. scared to be short so bought some cheap puts

Hate to jinx it , but is FAZ putting in ad inverted H&S?

THE PARADOX OF THE SURGING STOCK MARKET and the sputtering economy never has been more striking than Monday.

Following Friday's dreadful news of the U.S. unemployment rate soaring into double digits to 10.2%, stock and other so-called risk assets prices jumped Monday on Wall Street and markets around the globe.

The latest leg up in the "risk trade" came after the Group of 20 over the weekend confirmed their resolve to continue their economic stimulus programs. In addition to fiscal measures, that would keep in place the ultra-low interest-rate policies followed by most of the major central banks, notably the Federal Reserve. Not that there was any question for the U.S. central bank, which just last week confirmed its intent to continue maintain its rock-bottom 0-0.25% federal funds rate target for "an extended period."

But another Fed report released Monday shed light on why nearly free money has had so little impact on the real economy. In its quarterly survey of senior bank lending officers, the Fed found that credit conditions had tightened again, albeit less than in its previous survey taken during the summer.

Mind you, there has been no actual easing of lending standards since the screws were turned excruciatingly tight a year ago during the worst of the financial crisis following the collapse of Lehman Brothers. Nevertheless, this was greeted as yet another example of less-bad-is-good news. But, as JP Morgan economist Abiel Reinhart points out, "Lending standards have already tightened significantly, so there is limited room for further tightening."

Even so, the downward spiral in consumer credit accelerated in September, the Fed reported separately Friday. Consumer lending contracted at a stunning 7.2% annual rate in the latest month for which data are available, half again the decline in August, which was tempered by the "cash-for-clunkers" giveaway that temporarily arrested the plunge in auto loans and sales.

Non-revolving credit, which includes car loans, fell at a 3.7% annual rate in September after edging up 0.1% in the August clunkers craziness. But revolving credit, which includes credit cards, collapsed at a stunning 13.3% annual rate, the 12 straight monthly decline.

Nothing like that has been seen since the Carter-era credit controls in 1980. Nearly three decades later, once again the visible foot of government is squashing the economy.

The Fed's latest survey of loan officers included a special question about the impact of the Credit CARD Act of 2009, which was supposed to correct banks' abusive plastic practices. "As a result of the act, banks reported that they expect to tighten (or have already tightened) many terms on credit card loans for both prime and nonprime borrowers," according to the Fed.

More stringent credit requirements, higher interest rates and reduced credit limits were among the ways banks were responding to this regulatory reform. Consumers have responded to this turn of the screws by paying off their balances as fast as they can, or are forced to.

More to the point, the Fed noted that "sizable" numbers of both domestic and foreign-based banks were cutting credit lines for existing customers for loan facilities ranging from home equity lines of credit, commercial construction credit lines and lines of credit to financial firms.

Instead of making loans, banks have ramped up their purchases of securities, notably Treasuries. That no doubt contributed to robust demand for Monday's auction of $40 billion three-year notes, which attracted a massive $133 billion in bids.

It wouldn't seem that a 1.40% yield would set off such a stampede, but for banks or other investors that can finance a leveraged position at 0.25%, the 1.15-percentage point spread between the borrowing cost and the note's yield -- multiplied 20 or more times by leverage seems juicy. Who needs the hassle of dealing with credit cards and new regulation when you can lever up nearly free money in riskless government securities?

Or, better yet, purchase risk assets, from commodities to equities to foreign currencies to corporate credit? While the Fed found banks continued to tighten standards for commercial and industrial loans, blue-chip corporations such as Cisco Systems (ticker: CSCO) was able to raise $5 billion in the bond market Monday. Indeed, the networking giant could have borrowed a multiple of that amount as underwriters had to turn away eager bond buyers.

As colleague Eric Savitz pointed out in the Tech Trader column in this week's Barron's magazine, Cisco sees signs of recovery. Evidently, it's raising billions in the welcoming corporate bond market to take advantage of opportunities it sees.

Goldman Sachs economists observe that large corporations such as Cisco have access to the capital markets or the commercial paper markets, which Goldman observes have improved far more than the bank loan market.

All of which lays bare the problem policy makers face to a far greater extent than past cycles: The Fed can "print money" but it cannot create credit alone. That process requires a willing lender and an able borrower. It takes those two to tango and expand credit, which goes toward increasing business activity and employment.

Absent that, the cheap money is deployed to pump up asset prices rather than create to support real business and jobs. Wall Street enriches itself on free money while Main Street gets little stimulus while local bankers keep a tight rein on loans.

So, don't mistake improvement in the stock and bond markets with better times for the real economy. Money matters but credit counts.

C'mon GANNMEISTER........come back to the sandbox......fa_q will share one of his infected slutz.......

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duplicate entry deleted

USD will have to tank for SPX going higher IMO. Obama going to Asia to reassure USD won't go down further. We'll see how successful his trip would be.

It's never a perfect world for any trade, I prefer to focus on charts and turn blind eye to fundamentals.

I have to admit it, it is the only strategy working in this market.
For now.

For now is all we should care about, cheers.

USD is being defended.

Cocoa still grinding lower

I mentioned this short yesterday, but still worth a look. CAT short: http://screencast.com/t/NDFmZGVhMj
I got puts a little early as I was not expecting a grind against resistance like that.

no change in counts
http://screencast.com/t/NWY2MDllZDkt

DX has held support so far today. I like the volume on the last bounce off support.

moved

R2k is the weakest major on the day, as well as since the move-up began a couple of weeks ago.

fwiw

Edit: lots of crappy smaller financials in the r2k as well

Fed Officials: Weak Recovery Won't Spur Jobs- AP
Unemployment likely will remain high for the next several years because the economic recovery won't be strong enough to spur robust hiring, Federal Reserve officials warned Tuesday.

The FEDS are trying to tell us something

let me see what they say:
"If you don't see what is going on and you are still in this doomed part of the world - we got a hint for you - you phucked"

Regarding EWI and Bob Prechter. I found the site in late 2006 and was soon awakened from my bull dreams and schemes. Sold my house, took the profits and stumbled around trying to figure out some way to make coin if the market did follow Prechter's scenario which it did and my leveraged shorting worked great in 2008. Many thanks to Bob for his analysis, insights and recommendations. I owe him bigtime and will always be a subscriber to EWI. Can't make money trading on Hochberg/STU though. I am a new follower of this blog and love the posts and commentary. Thanks to all of you and good trading to all.

So do you avoid the short term stuff and just go with Bob's monthly reports for your signals?

Poor Hoch. I wish he wouldn't get so certain at times. He really gets convinced only to backpeddle so often. It's pretty frustrating to read the guy.

I have noticed many times that he will posit "alternate" scenarios or "potential secondary targets" that will play out more often than his preferred counts. They had the gold move to $1100 nailed but didn't really make the case very strongly at all ... I think sometimes they do let their long-term views unduly color what is, after all, a "short term" update.

I have large cash position and building core short positions in all of my accounts. I do short term stuff as well and have the bruises to show for it in 2009.

I hear ya. Thanks and good luck.

Just added some more Dec 1050's

Tried to short ES1094, missed by one tick. I hate chasing. maybe it'll come back up for a zero-line rejection in Woodies' terms.

Edit: Nope, I seem to have missed the boat on that little turn.

Bobthehorse, if you're out there--- what do you see here short term now that we're above 1090. I held my nose and bought yesterday morning. I sold 1/2 this morning. You've been dead right on this move, are you still long?

No - I am now flat delta and bought some Dec 1050 puts last night and a bit more again just as I just commented. There is no risk reward being long here. But I would not blindly short this market - it's too dangerous. However, if we can break 1086 ESZ9, I think 1060 is on the cards. I am playing only for a big move down, not a small one.

My gut feel is that we have topped out but I don't like to risk too much money on my gut unless it involves the purchase of beer.

Rather like Mole - I think there are two scenarios. A raging bull market (his blue and my medium-term preferred) which is why I won't just get short. Or a very whippy phase with big moves in both directions (my current play).

The simple fact is - I have no real idea what will happen. But here is where I am happy to place a bet on the short side, even if it is a bit timid.

great thanks. I got stopped out on my other 1/2 long position. Everybody is assuming new highs in the cards. I figured they might take it right up near 1100 and then pull it back. I'm about to jump short too.

Either it has already topped out or we will go right through 1100 - won't stop there again.

You don't believe in the famous triple top?

SPX double top

from David Rosenberg's morning note:

There is still a NET speculative short position in both the 10-year Treasury note of 85,551 contacts (on the Chicago Board of Trade). There are 95,648 net short contracts on the long bond too.
•
But there are 29,608 net LONG positions on the 30-day Fed funds contract —down from the highs, but it means that Fed tightening is completely off the radar screen. At the same time, there are 152,311 net longs on the 2-year Treasury note, so it would seem as though we have a crowded trade among the speculators on a bear curve steepening trade.
•
There is a significant net long position on the S&P 500 to the tune of 208,448 contracts on the Chicago Mercantile Exchange (CME).
•
There is also a huge net speculative short position on the U.S. dollar (the ‘carry trade’). For example, on the CME, we have 24,389 net speculative long CAD positions; 50,264 net speculative long contracts on the Australian dollar, and 28,036 net longs on the Euro. These are huge numbers. What happens if/when the U.S. dollar ever undergoes a countertrend rally?
•
The largest speculative long positions are in the commodity space (this is near-term bearish) … 271,564 gold contracts (a record) on the Commodity Exchange (COMEX); 44,312 net longs on silver (near-record but not quite), West Texas Intermediate oil contracts on the New York Mercantile Exchange (also a record); 10,871 net long copper contracts (a new cycle high); 5,538 net speculative long contracts on the Goldman Sachs Commodity Index.

Rosenberg Sees 13 Percent Jobless Rate
Monday, November 9, 2009 11:06 AM
Economist David Rosenberg said the U.S. jobless rate could hit a post-World War II peak of 13 percent, thanks to a sluggish economic rebound.
Already, unemployment reached a 26-year high of 10.2 percent in October
“This is going to be the mother of all jobless recoveries,” Rosenberg, chief economist at Gluskin Sheff & Associates, told Bloomberg.
“At the beginning of the year, who was calling for unemployment to go up to 10 percent?”
The effect of this recession, the worst since the Great Depression, won’t end quickly, Rosenberg said. The economy is “in a post-bubble credit collapse.”

Today's 1 day Dow chart looks exactly like the pattern from yesterday. Perfect stair-stepping upwards. The repeating patterns are so perfect, its not difficult to imagine computers running the show.

EUR coming up against 1.5 level again.

What's the site theme song.....I pick "Crazy Train"

Supposed to be Gravy Train.

I'm not talking about what I'll be having for lunch soon enough.....:)

I'm wearing a bloody Panda head.......

When the market crashes, the blame will goto capitalism.

Stupid capitalism, always taking from the producers to give to the leeches, then consolidating power in a government that work with the oligarchs to enslave us all. Rewarding people for success can never work.

Absolutely. How can an economy function if only hard work is rewarded? It makes no sense. Everyone should be paid the same amount, regardless if they work or not. Father Obama knows this and is working diligently to stop the inequality.

Good morning.........everyone wrapped in a bear carcass this morn?

Closed my (low risk) DRV trade. In at 17.84, out at 18.50 for +3.7%.

Nice

lol @ low-risk drv trade.

On days when IYR has a huge green candle in the last 5 minutes (quants covering shorts?) one can grab DRV during the last 2 minutes of the trading day, and sell in the first 1 hour of the next day for an easy 3-5%. This setup recently happened on Oct. 14th and Nov. 9th.

Otherwise, trading DRV and SRS can be like getting together with this girl: (link to the Onion)

http://www.theonion.com/content/opinion/if_im_s...

I.e. keep it very short term, and don't ever get attached.

Nice article

Not knocking the trade. I just think characterizing it as 'low-risk' is a little ...risky

The SPX has closed up 6 days in a row. This is the 7th up day. Gann said the 7th day is significant, but I don't know if stats bear this out.

There is no doubt this market is totally rigged. I don't think it will go down until there is a major event - ie. the dollar fall really accelerates or there is an implosion of the derivatives market. Otherwise, the double dip will represent the failure of Bernanke/Geithner/Summers and would spell doom for Democrats in 2010. They are all in on preventing this and will print whatever is necessary. Ultimately we know they will fail, but who knows how high the market will go at that point.

It is not rigged in the sense that somebody is sitting on a button that juices this stock or that stock index higher at key moments. It is rigged in the sense that Fed policy has made it inevitable that money (whether real, virtual or newly created) would flow out of certain asset classes and into others, with equities and commodities the primary winners and the USD getting the shaft.

GS knows when the doom and gloom will come. They are stockpiling funds for this "great" event.

Yeah, because they will be part of the triggering mechanism.

clutchshorter's mention of the strangle hold yesterday got me interested in learning how this works. in theory, i understand it perfectly. in practice, however, i don't really have experience trading options; i have a couple of options question for a dummy.

first, if i set up the strangle in TOS, for instance, it will consist of two vertical spreads. the first spread shows a 'debit' and the second shows a 'credit'. i assume the amount i have to pay for the position is the credit less the debit. is this right? so if the credit is $3 and the debit is $5, then i'm paying $2 x 100 = 200 per contract, right? now if i reverse this and the credit is greater than the debit, i actually take in $$$ for the position, correct? do i have to have a special kind of account to do this? thanks for your patience; trying to learn.

I did a backtest analysis on TOS on several SPY trades. You you will have a net profit if the position moves in either direction but people dont like the fact that it limits your reward. Given the nature of what has transpired these past few weeks, I prefer this setup at least until we ride out this storm instead of seeing my account go more negative. I think there's a way to fine tune this setup.

They are both debit spreads (Bear Put Spread + Bull Call Spread). Neither of them should be a credit.
BUT wow, that gave me a new idea. Assume we were short on SPY. Since SPY is trading at $110, we could setup a $110/$105 Bear Put Spread (DEBIT) going out 3+ months and then setup a $100/$95 Bull Put Spread (Credit) for the front month options. This way, if SPY goes up, your Bull Put Spread will lose value and you will pocket that to offset losses incurred from the long term Bear Put Spread. INTERESTING perspective....

i wonder what i have set up, then. here's what i have in ToS for my spy spreads:

the first is a vertical call spread where i sold the 98 and bought the 108. the second is a vertical call where i sold the 120 and bought the 110. one was a 'credit' spread and the other was debit. the risk profile looks like a condor with its wings spread, so i figured i did the right thing. the expected return line on the graph looks like a wide parabola with the meniscus just below zero at a price of around 106.

Vertical Call Spread should be something like Buy $112/Sell $120

Basically, you're sandwiching a PUT spread and a Call Spread around the SPY price

Looks like the risk trade is back on. USD weakening and CAD, JPY, EUR, and GBP all moving up off of their respective support (pivot) level.

Question: If we fail to break the SPY high of 110.31 today(or even tomorrow), what will the interpretation be?

we are right on support - I think (hope) it breaks and then we could get a bit of a wash-down to 1060 ESZ9

Crap - turns out support was support. Ho hum.

Meh - I'm not even watching the tape - still in bed.

and now we test resistance. best thing to do is go sit in a dark room and come out when mkt has made its mind up.

Good instance where sense of humor is basic requirement for this market!

However, I could entirely live with an explosive run-up today. I would gladly increase my short-term short position for a blow-off event. However, 7 days in a row of rally would be quite improbable. Seems to me the worst case today for the bear is a flat or late sell-off to the tune of only a couple of points. I would likely close short-term shorts at that point and go short-term long, small position though.

Bob,

Whats your downside target today on your short term trade?

this might sound nuts but I think 1060 is realistic. But to do that, we have to break minor supports which frankly it is showing little sign of doing. In fact, it is doing the opposite, i.e. rallying off them.

I won't make any money if it messes around - only if we go down 20 points minimum as then the gamma will kick in. But i won't really lose anything if it goes up either. It is possible it will go nowhere between now and Friday just to waste theta.

Anybody know what is going on with GLD this morning?

It got a big bid and now its coming off again...

gold is about to go parabolic

Dollar disjoint last 3 hours: JPY rising, EUR, CHF, CAD falling, GBP down then up, AUD in holding pattern

hmm

Don't see it as a disjoint. Earlier with the JPY falling, it looked like mild profit taking /consolidation. Now it looks like the move away from risk assets with JPY rising and USD rising.

hey gmak - can you answer my question as to how the DXY/USDX makes a new low yesterday when none of the constituents did? Is it not based on the cash indexes?

The DXY is a derived index that averages the Fx rates of 6 major world currencies in terms of the USD. I don't know the ratios used in the weighted average (I would assume it is). The weightings are what would determine how the index behaved. The weightings are actually geometric (exponents) which means that the currencies don't have to hit a new low for the DXY to do so.

See here for an explanation. You know you could have googled "DXY index definition"

https://www.theice.com/publicdocs/nybot/ICE_Dol...




________________________________

Yeah I know I know - I did and didn't find anything that would explain what I was seeing, so I just thought I might as well ask you geniuses. Thx.

So this kinda answers my question - it is being somewhat misleading at this time then to my mind at least.

Morning all,
expecting BIG reversal today
enjoy

That is the gameplan but I would settle for a doji...

Could you elaborate as to why?

My astro cycles up pressure ended
yesterday. Sell pressure through month end.

And how accurate have these proven to date? I'm not criticising or anything, just curious. I must be honest and say that of all the methods of prediction, I am most sceptical of any astro based or other types. But then again, I know some newsletters that follow this stuff have managed to outperform many traditional letters so who am I to argue? :)

I keep seeing those Gann guys miss their turn dates, after which they go away, only to return weeks/months later with a new turn date. If you thin EWT is mental masturbation then Gann is a brand new toy for you ;-)

Sometimes the turns are only for 3 to 5 days, depends on what I see the wave stucture. On that I believe we should drop to 1060ish(11-16/17) in wave B of 5 of a diagonal that began at 978 and then the final C up into at least 11-23/24 and 1107 to 1125.

You got it all wrapped up...
so you don't need me.
Good bye ES Rats !

Hi Gann,

I really appreciate your input, so I hope you will not abandon us. Good luck to you mate. Cheers.

See below on Mole Cool. Keep the updates coming. Everyone is a little Chippy here.

Oh come on - don't be silly - have you got any idea how much heat I get for using EWT? So prove us wrong! Maybe today you Gann guys have you day in the sun, my portfolio could use a bice drop. So come back here and argue your point like a big boy, don't run off in a huff - was not trying to attack you personally.

mole, i do really like your EWT charts. Although I am one of those believing in fundamental company analysis rather than anything else, I come back here so often to get a sense of risk, probabilities and edge, and sometimes using your conclusions for hedging of my long list of short positions. I would not be able to put together a chart of yours, sometimes I do not even know what are you guys are talking about. But I do know, that this analysis of yours is excellent and very very useful.

EWT is my market tool also however the turn dates on Gann keep me out of SOME trouble and give me entry points along with the EW count.

Actually my turn dates and Gann Secrets' have been pretty accurate. The tough part is predicting the direction of the mkt into the date. However I just use that date as a reversal point.

I have a turn today and expecting down into 11-16/17, a very important turning point. If I am wrong and it is a high, then I will gladly add shorts.

Goldpacker,
Jaxon, t-dub here is my e-mail address.
I'm leaving these public sites. I give freely of
36 years of market experience and they just jeer.
You guys and a few others are the only ones I will
talk with about the mkt from now on.
gannsuntoldsecret@yahoo.com

Gann

I hope you didn't take my questions the wrong way. I am actually genuinely interested in learning new methods, it would just be nice to understand a bit more the reasoning behind it, as opposed to just predictions such as "market down BIG today".

Stick around, we all take flak now and again.

Sorry to see you go gannsecret, I've enjoyed you views (mostly accurate if I remember too)

agree, hopefully he reconsiders...

Gann, don't let them get to ya....

come on Gann, even the owner keeps getting some heavy flack and you bail out on half a dozen comments?

there were others discussing with you that I could almost swear didn't make it to the list.

personaly I want to study dmark andneowaves before I go for gann, but do stay

best regards

p.s. we all made bad calls and got taken outside for some bashing, so what?

Come on - grow a thicker skin. If you get nothing out of these sites, fair enough but there is no perspective that is without value if it is based on solid research. But let's not kid ourselves that any one framework holds the key.

FWIW, a number of other time based technical analysts I know have a turn date around here as well.

Given that agrees with my current positioning, I will take heart from it!

Mole, is the SPY going to sink like the healthcare plan in the senate>? i hope so :)

Thanks for the update. Hope you are right. Bears have lost hope.

If the bears truly have lost hope then this might be a 2nd wave - those are really good at shaking out weak hands.

No difference if this is still P2?

I'll reserve my gloating until after close

You are a Gann follower as well?

LOL no...

As fun as it would be to tempt fate and tell him how full of shit I really think he is, I'd rather not say that (even though I just did) and come back for the kill later.

hang in there Gann, I appreciate your input....

I don't necessarily think EWT is mental masturbation. I don't really know enough about it. My observations however are that the EWT websites (yours included) have some of the most educated, diligent traders in the blogsosphere. However, the method itself seems to have too many ifs/buts that only seem to resolve themselves after the event, and which are not necessarily conducive to good trading.

The other observation I make is the number of EWT blogs where the traders are all predicting (correctly so far!!) much higher prices and yet seem to be unable to translate this into taking an actual long position. This makes me wonder if they either (a) doubt their method or (b) are letting an overall perception that this thing could tank at any time influence their decisions.

Excellent point. I am an EWer over in Prechter land. EW is subjective so even if I expect a drop to 980 to 1020 per my EW count after one more high, my fear is we fail( some outside iinfluence) or I am wrong as I previously thought 1101 was it.

Keep in mind that there are plenty (most) EWP bloggers who have no idea how the principal works, don't know/use proper numbering/lettering, and don't know the corrective patterns. I don't think many of them have even read the book. Feh.
Also, they try to apply EWP to individual stocks. Again, read the book.
EWP is based on psychology of market participants, I think part of the problem right now, it that with all the fed printing/POMO/etc. the market participants, and hence, the market's are not really functioning as such.

wow...just wow.

I feel so much better after reading the following little blurb! (sarcasm level infinite):

Japan Fujii: US Geithner Wants Stronger Dollar
Last update: 11/10/2009 8:43:34 AM
TOKYO (Dow Jones)--U.S. Treasury Secretary Timothy Geithner has expressed his continued desire for a stronger dollar, Japanese Finance Minister Hirohisa Fujii said Tuesday.
"Mr. Geithner has long been saying he wants to strengthen the dollar, and that point was reaffirmed today," Fujii told reporters.
Fujii was speaking after he held a one-on-one meeting with Geithner, who is visiting Japan for the first time since assuming his current post in January.

My theory about the stock market :

In the 1800s, JP Morgan, Goldman, Morgan Stanley, Bear Sterns, Merill, Lehman were all college fraternity brothers. They decided to create the biggest ponzi scheme of all time.

"Dude, let's create a stock market. We'll sell ownership of our companies to people and give them this paper. We pocket the dough and they can fight over the value of the paper. This value can go up and/or down based on how we perform"

"How do we keep making money bro?"

"Easy, we just keep selling people ownership of our company. We pocket the money, use some of it to grow our company, and live large like kings"

"I like this idea, we have to keep this a secret. But what if we things don't go the right way"

"My homie! It's all good. My fraternity brother works for the Government. We'll just ask them to print more money and help us out. No worries"

"That's an awesome plan, lets make pact that from now on, this SECRET does not get revealed. It will be passed down generations and generations to those that run our company..."


And so, the FUTURE of the stock MARKET

Sounds like too much work...I'm going to open a gold mine, look for my IPO soon...

Morning Rats!! I've been thinking about developing/training an artificial neural network that trains the system based on historical data. Most likely a backpropagation network whose inputs are stock price, volume, lows/highs, etc.. The system will use 100 years of data in various market conditions (bull market, bear market, depression, world war I/II, cold war, 9/11, tech bust, subprime mortgage). The outputs will be an indication to buy/hold/sell. Using this trainined data set, I will pass blind data (new market data) into the system to produce these outputs and to guide my decision making. The only problem is data mining/collection to train the system.

Neural networks are insidious. They will find a pattern in any data. They will ALWAYS find a pattern even if there isn't really one there that can make money.

http://www.youtube.com/watch?v=-tVOu_UjnfA
new stockmarket guru?

He makes a lot of sense for someone THAT medicated....

;->

;-) I think 'sedated' is the correct descriptor.

He's got a very cool pointer-thingy (it's got a little hand on it!)

Man, I nearly spewed when I saw that.

Major bowl being schmoked in that basement - it's like CNBC made by Bill & Ted.

Folding table and other decorative notes notwithstanding, the window treatments indicate BW is above ground. That said, I love the fact that he's out there, doing his thing - I hope he tears it up! BTW, comparing him to CNBC is an unduly harsh, uncalled for, terrible insult to him......lol

Yeah I know, awful - sorry 'bout that, BigWet, if you're out there - more power to your mickey mouse hand on a stick...

Sorry Mole - I simply have to say something about EWI. I know you have a deal with them but to my mind they are no better than the Wall Street shills. What skin do they have in the game? Nothing. They are motivated to get publicity. Publicity = subscribers = money. So they never look for a 10 tick down-move, it has to be a crash. There is never a retracement, only the start of THE BIG ONE. Prechter is not the person who has been calling the markets down for 20 years, he is the man 'who predicted the crisis'.

Prechter, Rosenberg, Roubini, Roach. They are all the same - no better than Abby Joseph Cohen. That is because there is no upside in this screwed-up world from being sensible. You have to be at the extreme to get the media attention - that is how they get paid, not from calling the market correctly. When did you last see someone on CNBC with the tagline 'gets some things right and some wrong, but on balance makes his clients money over the long-run without doing anything stupid'? No - it has to be Roubini vs. Rogers, etc. Gold is going to $2000 or $500. There is no middle ground even though that is where the professionals make their money.

I am saying this to try and help out people on this blog who are getting sucked in by these charlatans - they are not trying to make you money. They are trying to make themselves money and they do that by persuading you to subscribe. Being convincing and interesting is what matters, not being right. Bulls and Bears.

Right - rant over. Don't know why I care - just my charitable side I guess. I don't even know why I have been telling people what I am going to do - must be losing it.

Sorry Mole - I simply have to say something about EWI. I know you have a deal with them but to my mind they are no better than the Wall Street shills. What skin do they have in the game? Nothing. They are motivated to get publicity. Publicity = subscribers = money. So they never look for a 10 tick down-move, it has to be a crash. There is never a retracement, only the start of THE BIG ONE.

I am so sick and tired of hearing people call EWI useless perma-bears when they helped save me tens of thousands of dollars -- who knows, maybe my entire portfolio -- by calling the rally back in March. Yes, I would have been an idiot to stay short then, but at that point I needed a bit of help to realize it. And now we get 8 months of reflation rally and because EWI has once again unfortunately underestimated investors' capacity for self-delusion and bubbly thinking, they're supposed to be thrown under the bus. They're supposed to be judged as not just analysts trying their best but suffering a slump, but as craven shysters looking to turn a quick buck off the gullible. And all this while having told long-term investors to stay safe and in cash! Well fuck that.

Whether you sit looking at charts counting 5 wave impulses and 3 wave corrections is much less important than grasping the fundamental Wave Principle insight that the market is an endogenous herding process, and is not moved by "fundamental" developments such as "catalysts" or Fed policy or whatever.

At any rate all this crowing and Prechter-bashing amounts to a huge case of jumping the gun. It will still be a decade or more before the jury is really out on Prechter's Supercycle-plus degree forecasts.

Great comment - thanks for that :-)

Human nature is actually very predictable. One of the reasons that traffic here has gone down in the past few months is that many blame me for their losses, despite the fact that I kept them out of trouble numerous times.

People prefer to blame someone else - it's key that traders however learn to assume ownersip of their trades.

Let's also not forget that the nature of the market has changed completely as it's dominated by a narrow group of insiders. This makes for wild swings and head fakes and most retail traders will lose in this game.

I would never blame you for my losses, I only blame you for making me like Rammstein.

I've shared your views for many years. Granville was the great predictor when I got started. He had called for a crash forever and then got credit for calling the 87 crash.

Main point is one way to sell subscriptions is 2b extreme and take credit when the dramatic comes. I'm not so sure it is so deliberate with all mentioned here, but at the end of the day they are not, as you say, just trying to make steady gains without risking too much for it. They are definitely trying to swing for the fence and make the highlight reel.

Great post CD, thanks. You always find pictures that reflect your thesis perfectly.

"Prechter, Rosenberg, Roubini, Roach. They are all the same - no better than Abby Joseph Cohen. "

And you know WHO is WORSE?
Suckers who continue to wave those people names in the air helping THEM to get rich.
Then again - anyone who is "looking for investment advise" without spending own lifetime on learning and perfecting risk management - that someone deserves to lose his money...preferably to me :)

We need your opinion here. I hope you continue to share it. Investing, trading, LIFE, is all about balance.

Balance? DAMN! I got it soooo wrong.........<sigh>

I hear ya! Pretty unbalanced here as well in my investing, trading and LIFE. Do as I say, not as I do . . . LOL.

You are to a large extent on the money. I only give the STU a quick once over these days tbh and *never* trade based off of it.

To be fair to them though, their advice to the average (I assume they mean primarily US here) subscriber has been consistent for the last few years - stay in 3 month T-bills.

I do like the monthly newletter though. They dig out a lot of interesting facts/figures you don't get anywhere else and the longer term socionomic trends stuff...

As you know I'm counting my own waves and am using my own tools, the only system we share is EWT. Also, I never post their charts on this site and the only time I mentioned Hochberg's count was when I thought he was wrong ( and I turned out to be right).

I disagree with them being charlatans however - they do care a lot about their subscribers and the sad truth is that counting waves during a 2nd Primary wave is a very difficult racket.

Whatever you do - always employ your own TA - their general audience is a lot less sophisticated than most traders who follow this blog.

Whatever you do - always employ your own TA

Wise words - that I have learnt the hard way from, er, following other people's analysis & trades without fully understanding why they were making them.

And I don't believe Prechter is a charlatan, far from it. Sorry if I didn't make that clear. I don't think anyone who read Conquer the Crash would come away with that impression.

And I don't believe Prechter is a charlatan, far from it. Sorry if I didn't make that clear. I don't think anyone who read Conquer the Crash would come away with that impression.

Seriously, practically the first words in the book are, "consider my arguments carefully and *think for yourself.*" *This* is what counts for attention-whoring these days?

Looking at the open Mole, it certainly looks however that they will still be hanging on by the skin of their teeth today, with the EURUSD down and the equity futures also looking like P3 (at least in S&P) is still alive (albeit on a ventilator).

Newbie here (been lurking on ES for about 2 weeks)--thanks for the comment.

While I've only been trading for about 2 years (made some and lost some coin)--right or wrong I have formed an opinion--the market is rigged.

I don't think it is rigged but the number of people who have an interest in it going up far outweigh those who want it to go down. Why do you think hedge funds are so hated? Because they challenge the entire structure of the system - asset prices must go up to keep the wheel turning.

If only history was so kind as to deliver unto societies exactly the outcomes which are in the interests of the greatest number ....

"max pleasure" theory?

Also known as the "Spooge Index."

Really like your stuff today - thanks for swinging by.

bob:

Rigged may be the wrong word--but the market is manipulated to some degree by the Fed and large banks. Technical analysis may be right--but if you happen to be on the wrong side of a Fed announcement or a large trade (or announcement) from Goldman Nut Sacks--you can be screwed. I guess luck has something to do with it.

Anyway appreciate your and everyone's comments.

Isn't this kind of obvious? The default state of every market is up, in the absence of external factors. Particularly so in the case of the stock market. They say in the long run its a voting machine, but its a voting machine where many of the voters only have one box on their ballot paper. Sure people can sell, but I would imagine that the funds that are available to be deployed in the market, less than 10% have the ability to actually short. Therefore, in the absence of scares and a fairly steady state environment (which we have at the moment), the market will continue in the prevailing direction, until something occurs which actually forces longs to sell. Shorts alone will not bring this market down, until the long only funds & investors actually start dumping, and at the moment its hard to see what the catalyst for this is.

good to hear your views !

Bob,

Why the long face????

<snort>

Good morning rats!

EURUSD update :

We should be on a (d) wave of a LD...should retrace to 1.4930/50 and after that rally to 1.5070/1.5100 (my target is 1.5076). So we this BULLshit should last at least until tomorrow.

Daily :

http://www.screencast.com/t/MTk2ZTI0Yz

1h :

http://www.screencast.com/t/N2Y0MWNmMD

Thank you Michael.

Although we enjoy explosive returns just as much as the next guy - we at FASHOLES understand that making money in this business doesn't need to be sexy, cocky or complicated. In fact, there's nothing wrong with being downright regular.

Relax. Read. Flush. Wash. Repeat.

The market obliged our first Black & White set up yesterday and came into our ideal buy zone with FAZ. Due to the speed of descent, the eventual total position was divided into four (4) equal tranches. Three tranches were executed with an average price of 19.53.

Don't be an a$$hole - become a FASHOLE!

fasholes.blogspot.com

Interesting, how are you determining your ideal buy zone?