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http://evilspeculator.com/?p=12744#disqus_thread

Skål!

There is an old zen that to know victory, you must first live defeat. The simple fact of the matter is that no matter how much TA one uses, how many waves are counted, how many naked virgins dance under a full moon, the market is moved by money. And, there is still more money to be thrown at the SPX.

That being said, here is a view of my daily chart to put the trend lines I've drawn in perspective. I've removed BIG YELLOW, and the two red scenarios that I had previously. Nothing else has changed.

http://screencast.com/t/NGJhMmQ4N

And now, zoomed in to be easier to read.
http://screencast.com/t/MmE4MmY3Yz

One can clearly see that the SPX put a pin through the BIG WHITE trend line but bounced up off of the ULTRAVIOLET trend line (drawn from the low in March 2009).

SPX could just as easily test BIG WHITE again, or test ULTRAVIOLET again. It's a question of sentiment, and money. Even if the market is getting nervous, the FED still has lots of money to throw at the financial system. To me this is the deciding factor, and the intra-day movement is just noise.

Trend lines always look obvious in hindsight, but it is much harder to look at which ones apply in the heat of the moment (so to speak).

Looking at my zoomed-in chart, one can see BIG WHITE above, then the Upper Bollinger at 1114; a recent trend line from September 17th (dotted white line) which crosses the long term 50% FIB at 1121. Above that are two longer term trend lines in solid yellow and violet that represents where the top of the long term SPX channel might be - both valid, depending on where one wants the line to touch SPX, and both the states of Schroedinger's Cat (both states and neither state are valid until the box is opened and the Cat observed. One won't know which is valid until it is).

What favours the market moving up from here? The FED throwing money. TA says that we haven't had either a lower high or a lower low. SO the trend is still up. SPX needs to get below 1029.38 for a lower low (down around the Lower Bollinger and the lower dotted white short term trend line).

What favours the market moving down from here? Some TA. TD Pressure has moved below its red signal line saying that SPX is headed down. Volume has been falling off since the last low. ALl that is missing is the parabolic blow off. One could argue for distribution given the red bars inter-spacing the white.

Remember, it is much easier to ride the sled down from the top of the mountain after its over the top than it is to try to ride it down before it's reached the top. In other words, wait for the turn. Why churn Theta (time value of options) trying to catch the turn as it happens?

Cheers.

Thanks for the charts, gmak. Like the TD pressure oscillator.

the intra-day movement is just noise

I disagree on this point - this is where I think Elliott can give you an edge. Twice now in the last few weeks, I've been able to pretty much dismiss the much-fabled scenario earlier than many based on the Elliott wave structure. Even if I did get a bit overexcited first. The second of these cases was based on Elliott count on an intraday 1 min chart.

So, for me at least, what I see leads me to believe that no matter what the manipulation going on, if you look at enough (or maybe just the right) charts, then the market will give you enough of a signature to recognise what is probably - or, just as valuable, probably not - going on. If you're not too blind or blinkered to see it that is. This last bit I am constantly working on.

BTW, try ultraviolet upper through november 11 magenta, january green 9

We seem to be on the same wavelenght

but it's a question of turn points with increasing probability)BUT market sentiment is shown i dollars at the right moments, GOOD EWT BALCKBOXES with plenty of ammo (courtesy of the FED) can postpone.

see a couple of posts down , but I also say

NEVERTHELESS gold is harder to manipulate in the global market (specialy with phycal deliveries) Therefore, when bulls try to peg gold down and boost equities... you've got october 2008. That's why I consider that SPX:gold works as a constraint at this time

Possible on the Gold: SPX; but I think the limiting factor is the ability of the FED to monetize air. Once that ends, those doing God's work will bail, IMHO.




________________________________

adn the signal that they're monetizing air would be gold close to 1500 (I agree on our market ronin's assessment on that one... BTW any news from him?)

A possible count of the $BKX. The banks are lagging, a completion of a zig zag could push the market to new highs while the banks diverge from the overall market in a 2nd wave.
http://www.screencast.com/users/Cerebro82/folders/Default/media/f7e45dca-eb1c-4e40-a1b9-72c995bee351

thoughts?

Another reason why I think that there is more upside left overall is if you zoom out on a $BKX chart. It still hasn't even retraced 38.2% of the decline. IF the banks catch a quick bid into year end, things could get real ugly for the bears.
http://www.screencast.com/users/Cerebro82/folders/Default/media/14d2e78a-2664-4648-99f8-a47f2f00fae6

Am i the only one thinking all this P3 talk is cloud-cuckoo land?
Prechter (the second coming of Elliott) has called it wrong just recently, but more importantly in also the past (?2000 was meant to herald depression-esque crash, but went up instead (explained by some big a\b\c till 2090). Agree he has himself stated that he tends to a bit early, but that is of no help if it moves outside of a tradeable time-frame.

I think EWI calls are 100% accurate on the fundamentals. They just need to work on their technicals.

P3 is coming only a matter of time my friend. Whats going on In Washington and Wall St is cuckoo land. Timing this is brutal but I just went out long term and bought my puts

I get the feeling that based on EW it is hard to pick an exact turning point in this last wave of a corrective move. Doesn't EW allow for blow off tops? This situation would seem to fall under that scenario. The government and criminals can keep juicing this puppy up, so picking the final top is almost impossible. All we can do is make educated guesses as to where that top will be and then act accordingly when it does not work. What EW says though is that eventually it must come down and the only thing written in stone is that we can not go above the Oct '07 high.

"the only thing written in stone is that we can not go above the Oct '07 high."

errrr... not realy, then 2007 was minor b and this top major B (to be followed by 5 waves down to probably (-0.61 beyond A=666) 111 if same taste for repeats and delta for B very close to b

sorry :-(

p.s. if I'm saying something wrong, seasoned EWTers please correct me

Sorry, far from a pro at this. My only point was that it appears that EW allows for market manipulation by the government and banksters. There is ample room for the market to keep going higher under EW theory, that was my point.

I have said many times not only that EWT works, but I also mentioned my firm belief that it is the weapon of choice of the PPT

What is really amazing with all of our technical indicators and mathematics, no one can pinpoint a market top but we can estimate within 10mm how far the moon is at any given moment in time. Human greed and fear are truly immeasurable. LOL

BIDU

http://screencast.com/t/Mzc4NWE1

/ have mercy

and of course it can drop any second now

dead man walking, but this succker still has it in him for a 10% rise for the tradicional stop loss kicker or for the proverbial melted lead enema for anyone shorting this bitch without due respect or margins.

Looks just like my chart. At the angle the trend line is drawn the stock can stay below the line and still trade to the moon. Which of course would make sense because that last quarterly report was a thing of beauty that just provided bulls with a 70 point drop to dip buy. Amazing how these lines work, a broken stock regardless of being broken trades right up to the line. Looks like an amazing short opportunity with a very defined stop.

On the other hand, 90% of my charts all look like this one, clear trend lines with the stocks fighting up against the trend. When we were at 1030 it was hard to believe that some of these stocks would make it back to challenge the trend line but now they have. This is why I am bearish on the market in general, the stock charts are not looking very healthy. Then you add in the non existent volume that only increases on down moves. You would think with the bullish sentiment the volume would support it.

Yeah, you don't lie, probably not cooked just yet - from the daily of the last month's action it looks for all the world like it's in w5 from an Elliott perspective (and within that, in (iv) at the moment after a (iii) with rising volume, consolidating for one last hurrah - mini bull flag if you prefer - maybe even as high as 470 for (v)=(i) if it doesn't fall any from here first).

Sideways last couple of days or so, and enthusiastic into the close Friday.

But still, tell me it's not just getting sweeter with every uptick...

The world see's us for what we are "greedy assholes" bubble meisters...

Nov. 16 (Bloomberg) -- China’s banking regulation chief joined Hong Kong’s leader in blaming the Federal Reserve’s interest-rate policy for fueling speculative capital flows that may spur asset-price inflation.

“The continuous depreciation in the dollar, and the U.S. government’s indication that, in order to resume growth and maintain public confidence, it basically won’t raise interest rates for the coming 12 to 18 months, has led to massive dollar arbitrage speculation,” Liu Mingkang, chairman of the China Banking Regulatory Commission, said in Beijing yesterday.

Liu spoke two days after Donald Tsang, the chief executive of Hong Kong, said the Fed’s policy of keeping rates near zero risks sparking the next financial crisis. Fed Chairman Ben S. Bernanke has pledged to hold down borrowing costs for an “extended period” to secure a U.S. economic recovery.

Low rates and the dollar’s tumble have “seriously affected global asset prices, fuelled speculation in stock and property markets, and created new, real and insurmountable risks to the recovery of the global economy, especially emerging-market economies,” Liu told reporters in Beijing at the International Finance Forum.

The debate over the Fed and asset prices comes years after some analysts criticized the U.S. central bank for holding down borrowing costs for too long in 2003 and 2004. Dallas Fed President Richard Fisher is among those who have said the Fed’s actions unwittingly contributing to the housing bubble.

Tsang ‘Scared’

“I’m scared and leaders should look out,” Tsang said in Singapore Nov. 13. “America is doing exactly what Japan did last time,” he said, adding that Japan’s zero interest rate policy contributed to the 1997 Asian financial crisis and U.S. mortgage meltdown.

Zhao Qingming, a Beijing-based analyst at China Construction Bank Corp., said yesterday that low borrowing costs in the U.S. have spurred a carry trade with some currencies, notably the Australian dollar after recent rate increases by that nation’s central bank.

“The carry trades will further drive down the dollar’s value and fuel commodity prices,” Zhao said. “The dollar’s depreciation has also caused excessive liquidity in the global market.”

In a currency carry trade, the investor makes money by borrowing in a country with low rates, converting the money to a currency where borrowing costs are higher, and lending the money at that higher rate.

Dollar Drop

The dollar fell against most of its major counterparts at the end of last week as a report showed the euro nations emerged from their worst recession since World War II, encouraging investors to buy higher-yielding assets.

The euro advanced for a second week against the dollar and approached its highest level since August 2008 before stalling just short of $1.5050. The dollar dropped for a third week against the yen, falling 0.2 percent to 89.66, from 89.88.

Bernanke, a scholar of the Great Depression, has overseen a record injection of liquidity into the world’s largest economy, pledging not to make the mistake of the 1930s, when officials tightened policy.

U.S. Treasury Secretary Timothy Geithner reiterated his commitment to a “strong” currency on a trip to Asia last week. “It’s very important to the United States, to the economic health of the United States, that we maintain a strong dollar,” he told reporters in Tokyo Nov. 11. He also underscored the U.S. intention of reducing budget deficits.

‘Biggest Influence’

“The dollar’s devaluation has the biggest influence on China among emerging market economies,” China Construction Bank’s Zhao said. “China has huge amount of investments in dollar assets; their safety is threatened.”

China is the biggest foreign holder of U.S. government debt, with almost $800 billion of Treasuries, in part a consequence of its controls on its currency. Premier Wen Jiabao’s government has sold yuan and bought dollars to keep his nation’s currency fixed around 6.83 per dollar since July 2008. It gained 21 percent in the previous three years.

President Barack Obama may discuss China’s currency during his visit to China, scheduled to begin late yesterday. Geithner said last week the region has shown a commitment to adopting “market-oriented” exchange rates.

China triggered speculation on Nov. 11 that the yuan may rise when policy makers dropped a pledge from their monetary- policy report to keep the currency “basically” stable.

Juicy AAPL

http://screencast.com/t/MjU2ZmY3O

the crazy hamster is back

Spent a lot of time trying to make sense of very disparate signs, nominal spx, real spx, bulish percentage index

with all due respect I see this count as something that would make elliott puke in his sleep with his worst nightmare, but when he made his observations there were no GS bots pingponging with free billions.

IF (and that's that's the crux of it all and why higher interest WILL try to stop it at any cost) the trend and EWT unfolds we'll see s&p pulverised to 0.45 ounces in few weeks/months (topped at 1.1 in august) in a (iii) of iii of P3 (I know, strange stuf), don't count on much of a drop on the 5's but should slowly grind things lower and send VIX skyhigg

Yes Mole is right, in nominal terms it will look like P3

two drops in real s&p LOOK inevitable, 0.9 or even 0.8 are forswoorn conclusions, the rest is WAR

don't know i it helps someone, but that's te hamster call

Hey hamst - so let me just make sure I got this straight... you think there's a... catastrophic drop... in the stock market a-comin'?

What the deuce?

IF it is not stoped (alt counts were created end of april, end of may, mid july and late august) EWT shows possible nexus, market sentiment chooses (yes, for those wo have payed attention to Mole's sylents there is no inevitable future at any given moment, but it's a question of turn points with increasing probability)BUT market sentiment is shown i dollars at the right moments, GOOD EWT BALCKBOXES with plenty of ammo (courtesy of the FED) can postpone.

NEVERTHELESS gold is harder to manipulate in the global market (specialy with phycal deliveries) Therefore, when bulls try to peg gold down and boost equities... you've got october 2008.

That's why I consider that SPX:gold works as a constraint at this time, although it has done a 20% retraction (barely minimum by EWT) for a WB, it is far from satisfactory for a W2, therefore a 50% retracement would be desireble to fake a continuing up movement.

AND accepting an aditional 200 or 300 usd rise for gold would scare the chickens. Therefore nominal s&p must contribute a bit like in august,.

980 or 900 could be acceptable losses at this time and compatible with a controlable gold price in the 1100/1200 range.

This is highly speculative an personal, only trade this if you feel it is your trade (more so than regular warnings)

best regards

I believe EWI has gold dropping to 680 at a minimum.

IMPOSSIBLE ! the lower channel is now at 745, we are dead on the middle trendline.

with monthly values since 2000 it's an exponential witha an R2 of 96%, if I don't trust something with a 98%R I quit)

EWI had a bias for an ending soon comodity bull due to deflation bias, they therefore conunted as 4 something that was a (iv) of iii or even lower(if I recall correctly my count... have to search)

In hyperflag commodities-stagflation scenario gold rises to 5 - 8 k

Next week has plenty of econ data as well as OPEX so expect a lot more volatility than what we saw last week.
http://tinyurl.com/y8mhuka

Interesting read for the gold bulls - another reason why if you are into gold you may well want to take delivery and be wary of the ETFs - cannot vouch for the veracity of anything contained herein, but my oh my would this be a juicy scandal to kick off P3

http://news.goldseek.com/GoldSeek/1258049769.php

/ edit - marketsniper over on SOH assures that this is a load of arl rubbish, a very old scam that would be seen through in an instant - which just begs the question, why the hell is this guy writing an article on it? hey ho...

warning - some sort of trojan-ware virus on that site

With the dollar's double top target at 65, how badly can the market correct? Well, as long as dollar correlations hold, not much. (Yes, I agree a correction is in order here soon.)

Unfortunately, Elliot Wave has made some very bad predictions of late, and in the end, I have a feeling they will be rendered somewhat suspect by the end of this "bull" market. There is something to Elliot Wave, but I am not confident enough to trust them. Prechter was out two months ago saying that P3 was at hand. If the markets hit 1246+ (which could happen from a TA point of view), his reputation will be badly bruised, and the whole organization will take a serious hit. In fact, I don't even believe their counts are correct. At best, we're in wave A of 2.

you are correct. although wave 2 can retrace upto wave 1, the point of an elliott wave subscription is that they should help translate elliott-wave theory into tradeable opportunities by making turning-point calls/targets (or at least if they make a call, it should be correct). Yes, this is all down to probability/likelihoods, but if they get it wrong on too many occasions, then what is their purpose, other than as historical chronologers

You might be surprised that I'm saying that but I must agree with both of you. P2 waves are admittedly difficult to predict but I am in the same racket as EWI, except that my analysis is available for free. And on my end I have been watching the junk spread and the fact that it has not been budging in the past three months should make any bear very nervous. Which is why I continued to do what some readers here were complaining about, which was to offer a bullish alternative until clear trend lines were breached. It is WAY too premature to remove any bullish labels from your charts until the Dollar breaches some clear resistance lines, and that even assuming the notion that the inverse correlation might soften for a while.

Rather than indicating further weakness the end of october selloff and then recovery so far looks similar in pattern and depth of weakness in indicators to the mid june - early july selloff. We had a rally from 880 to 1100 then, before this selloff from mid-october to 1030. The index looks set to rally on that basis. Even 1/2 of that advance would suggest 1140 as near term target area.

What do you guys make of the possible H&S topping pattern being formed on the cumulative $NYAD? Or could it be that the cumulative $NYAD is bouncing off a double bottom at the H&S neckline? When it comes to trading, I guess TA is no better than flipping a coin except for the understanding (in hindsight) of why heads or tails came up.

If I were a gambler, I would bet on the H&S pattern because of the declining MACD and full stochastics. For confirmation, the cumulative $NYAD has to start falling hard right out of the gate on Monday ... and no lolly-gagging around with sideways action during the week. (Note: I don't know anyone named Lolly and I'm not equipped to make anyone gag.]

Whichever way the stock market goes this week, one thing is sure: I'll be on the wrong side of the trade!

From Tony Caldaroew @ Elliott Wave Lives ON, Friday after the close --
"Short term momentum moved up from oversold levels finishing the day around neutral. Today's retest of SPX 1085 signalled that wave 4 could have completed at today's oversold levels. The market did rally to SPX 1098 but pulled back to 1088 during the afternoon. Expecting another run at the OEW 1107 pivot next week. Best to your weekend!
MEDIUM TERM: uptrend
LONG TERM: bear market rally
CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987

I clipped the chart at the bottom, so you can only see it down into the 20s, but let me let you in on a little secret… ALL those MAs stayed below the 10% level for 6 months during the last move down…

In the interest of market symmetry, that could mean we have a few more months to stay above 90. Just sayin'.

Assuming you expect P2 to retrace more than 50% in time of P1. It is a possibility, but in interest of market symmetry, the 50% mark is pretty interesting.

Skål!

Big Picture linked to a new Prechter interview.

http://www.minyanville.com/articles/prechter-bob-depew-kevin-bears-elliott-wave-international/index/a/25382

Prechter has been giving interviews to everyone lately and in each one I've seen, Prechter mentions his targets of SPX 1000-1100 and DOW 9000-10000 being hit. I'm anxiously awaiting arrival of my copy of "Conquer the Crash" to understand exactly what he means by the term "cash equivalents." If Prechter is wrong or crying wolf two years too soon, then I'll miss out on some more of the rally ... but then again, what's new?

Thanks for the Prechter link - when he alluded to the tv show Dexter, I think I became a full-fledged EWI fan lol

On 9/22/09 I wrote the comment below:

"Dollar and $SPX

Just did a little math and found the result interesting:
From July 08 to March 09, Dollar index rallied from 71.5 to 89.62 a 25% rally, $SPX sold off from 1200 (Jul. 15 08) to 666, a 45% sell off.
From Mar 09 to today, dollar index sold off 15% to 76.08 while $SPX rallied 61%. Dollar index should get support at 74 which means 17% from its high. Using a linear repression, that means $SPX could goes to 1125.54. If Dollar index goes back to this July 08 low at 71.5, I have a $SPX target of 1205.46.

So watch dollar. It seems dollar could find a floor at 74. If not and dollar index falls below 71.5, this equity rally could really go to 1300+ area."

Now the key question is how low the dollar could go and more importantly how long it will take if dollar continues falling. Before we guesstimate any possible answers we need to agree to this logic assessment that although dollar has been weakening and its status of world reserve currency is in jeopardy The dollar will not crash as many would assume. The whole world economy will be severely destroyed if dollar collapses. It will be like a nuclear winter to world economy if dollar becomes worthless.It's reasonable to assume the police makers in DC will do whatever it takes to prevent that to happen. As long as US Gov. is able to borrow very cheaply from the bond mkt and as long as the inflation is not high enough to drag US economy into double dip recession, the police makers will not be concerned with weak dollar and as a matter of fact they even consider a weak dollar is a good thing for US. So the question becomes at what gas price the FED has to raise rate to stop dollar's free fall? How about $100 crude? Which means $3.25 to $3.5 gasoline which is higher enough to bring US economy into down turn again. That means $usd will fall to 69.9/70 area and it will take about 75 trading days that is around end of Feb. next year at that time $SPX will trade around 1250 to 1289 which means more that 25% gain from here. So forget all the TA's you are looking at. Short until the first of week of March 2010.

Good luck everyone and I will not post again until Mid March 2010.

Yo Dollar lead the dance. I do not hold any $us !!! I believe it will collapse more. Gvt is&will massively print. Fed is also insolvent and unauditable. Commodities prices will go up and will be the new growth control. I see gold goind up to 1200, I have lock profit and looking forward to get more.
The cheap borrow will end. Rate will go up sooner or later. This will try to give strengh to dollar. Unemplyement is too big for recovery. US will drop from 40% to 20% of wolrd economy.
I'm massively short now since we are over 1100 on SP.

I'm smoking some good stuff. The greenback has bottomed just in time. Obama can greet the Chinese with a straight face and say "see we do have a strong dollar policy". It's amazing to me that most world markets have EDT patterns including the $$$. Looks to be showtime folks.

EURUSD update :

No words today, only charts :)

DXY : http://www.screencast.com/t/MWRhZTUyND

EURUSD 30m : http://www.screencast.com/t/MjNjNjIwNzM

EURUSD 4h : http://www.screencast.com/t/N2Q3N2ZkM

Anyone have any feedback with Berk's trading system? I back-tested it on various high beta stocks like GOOG, BIDU, ISRG, PCLN, AAPL and it seems to work well. There are still some things that need to be worked out especially with employing a stop that overrides the system. For example, BIDU reported earnings late in October and the stock gapped down 80 points when it opened the following day. If you entered a trade in July, slowly adding units, would you have cut your losses even though the system did not signal an exit. BIDU eventually recovered but you wouldn't have known that.

That is one of the unfortunate works in the plan, and why I incorporated an extreme movement exit. However, it doesn't have a rule for that slow melt-up type process. Like I showed in the example though, that first unit of BIDU (the 0.50 entry) would still be on and will be a winner of at least $130 unless we get a huge gap.

Do you have the results in a file, or did you just test visually. If you have a file I would be quite curious to see how it did. Funny too, I was looking through my list of 20 stocks to trade on the system, and all five of your mentions are on it. :-)

Skål!

BIDU traced out a EDT and proceeded to drop back to where the triangle started. Sometimes the drop will retrace when the "news" was unexpected and kiss the bottom of the triangle good-bye. Such could be the case now with BIDU,a possible put candidate with a close stop above the top of the triangle.

Not to speak for Berk but as I used to trend trade with him let me say this: make sure you pick symbols which are in a clean trend, look at the Eurodollar for a perfect example. Anything that's too high beta to the market will not work - you want those boring ones but the ones with a daily ATR over 3%.

The 3% stop loss is especially effective. If I miss my entry by that much, the stock is probably headed 5% to 8% lower, after the stop out, because the market likes DRAMA!

The 3% stop loss is especially effective. If I miss my entry by that much, the stock is probably headed 5% to 8% lower, after the stop out, because the market likes DRAMA!

I am supplying a spreadsheet that does simple square of nine calculations

http://ethicalcheating.blogspot.com/2009/11/squaring-time-price-exotic-methods-for.html

Interesting. That also looks like it took a bit of work... Thanks for posting it.

Skål!

Well, it does look interesting - but it overlaps with my simple 2.0 BB chart. Any thoughts on that? Either way - thanks for posting it and for putting in the effort.

did the dow jones lose most of its gains in afterhours trading?

Some have been asking what event could be the next so called reason or whatever to cause a turn down. Well one thing that I think the AP would love to use as a "reason" would be the trader tax, and possibly people and those that do God's Work hitting the exits to get out before "....a 0.25% transaction tax on the "sale and purchase of financial instruments such as stock, options, and futures" kicks in."

Some have been asking what event could be the next so called reason or whatever to cause a turn down.
----------------------------

Well, how about this:

CIT default swap auction to be held on November 20

http://www.reuters.com/article/smallBusinessNews/idUSTRE5AB4RQ20091112

Great points. Retail may comp well from last year because of the number of days in the shopping season. City and states generally close their fiscal year on June 30, 2009. Many are going to be in aweful shape. I am looking at this as the potential catalyst to cause UST rates to rise as they have to bail out these guys. (How do they not) When rates rise this game is over, housing will turn back down and the cycle starts over. I can imagine what happens if 30 yr mort moved up to 7%. I think it would be lights out.

TRLG is now being sold at Costco, good bye high margins and multiple.

I am guessing the event that will really get things rolling will be consumer spending numbers going into the Christmas season. Less then two weeks is black Friday, the day after Thanksgiving, the biggest one day shopping spree of the year. If those numbers do not reach expectations, I could see a real quick sell-off of the markets.

it is highly unlikely that anyone really cares about "sales numbers" - I think public/investment community is more interested in betting on number of people killed this season when doors will be stormed for Chinese garbage

On October 27, 2008 the SPX was at 849
On November 4, 2008 it was at 1005
On November 20, 2008 it was at 752.

Just saying. And that was P1.

Don't make me link to my "Put your chin up" poster again.

Please don't do that.

Well said...

Skål!

I made up a Russell chart, since it seems to be the leading index for now, much more bearish looking then the DOW or SPX. It goes well with all the charts you layed out, less risk, and more reward at this time by being short, or in cash. Things now are starting to break down quicker and quicker!!
http://ewtrendsandcharts.blogspot.com/

great chart. i'm long TWM... i feel safer holding it long term than the 3X bear ETF.

"i'm long TWM... i feel safer holding it long term than the 3X bear ETF."
- thought twm is a short bear etf or do you mean you hold twm call options?

long TWM = 2X short $RUT

You mean the 'lagging' index, right?

RUT is the "leading" index, if you are looking for a down direction, on the other indexes.

LOL, took me a second to get it!!

Nicely laid out Columbia...

Skål!

Probably the canary in the coal mine here. Looks like the oxygen is about to run out as the bear flag has broke down. This indicator solidly signals deflation dead ahead.


http://research.stlouisfed.org/fred2/series/MULT




The stats since the crash.
2008-08-13 1.609
2008-08-27 1.582
2008-09-10 1.605
2008-09-24 1.528
2008-10-08 1.451
2008-10-22 1.239
2008-11-05 1.190
2008-11-19 1.010
2008-12-03 1.021
2008-12-17 0.950
2008-12-31 0.944
2009-01-14 0.914
2009-01-28 0.884
2009-02-11 1.010
2009-02-25 0.956
2009-03-11 1.000
2009-03-25 0.902
2009-04-08 0.913
2009-04-22 0.862
2009-05-06 0.917
2009-05-20 0.867
2009-06-03 0.892
2009-06-17 0.938
2009-07-01 1.011
2009-07-15 0.969
2009-07-29 0.966
2009-08-12 0.996
2009-08-26 0.931
2009-09-09 0.925
2009-09-23 0.902
2009-10-07 0.882
2009-10-21 0.852
2009-11-04 0.831

GDP=MS*V (or close to it)
As velocity slowed dramacilly they expanded the money supply to offset it. Look at M2.

Now the problem is; if V picks up how do you pull the supply increase out? That is the reason I am worried about inflation in the nxt 3-5 years which may even start sooner if states have to be bailed out next.

The Velocity has actually had a uptick but nothing to write home about.

The Multiplier has nothing to do with velocity. The Multiplier the factor money base x M1 supply. The present trend typifies the total lack of credit worthiness on both sides of the debt pyramid. Both lenders and customers are hoarding cash or there is very little credit expansion going on.

Without any credit expansion GDP will stagnate and borrowers will default. So the government and the fed have come close to the precipace here.

During the depression the multiplier dropped from 6.00 down to 3.00. It did not go to below one because the system cleared itself with defaults and bank closures.

This time "no clearing" was allowed so the system is still plagued with high debt. The question is how low will it go? Iceland went to zero and the system collapsed.

I look for the carry trade to implode again and this time the phuckin shit will really hit the fan. 3rd waves are a thing of beauty to behold. hang on to your cash because it will be king very soon.

For a explanation of the Multiplier here is Ben Bernanke's explanation during the 1929-38 Depression.
(1) The "money multiplier," M1/BASE. In fractional-reserve banking systems,
the total money supply (including bank deposits) is larger than the monetary
base. As is familiar from textbook treatments, the so-called money
multiplier, M1/BASE, is a decreasing function of the currency-deposit ratio
chosen by the public and the reserve-deposit ratio chosen by commercial
banks. At the beginning of the 1930s, M1/BASE was relatively low (not much
above one) in countries in which banking was less developed, or in which
people retained a preference for currency in transactions. In contrast, in
the financially well-developed United States this ratio was close to four in
1929.

However, in 1931 and subsequently, the large declines in the money-gold
ratio that occurred around the world did not reflect anyone's consciously
chosen policy. The proximate causes of these declines were the waves of
banking panics and exchange-rate crises that followed the failure of the
Kreditanstalt, the largest bank in Austria, in May 1931. These developments
affected each of the components of the money-gold ratio: First, by leading
to rises in aggregate currency-deposit and bank reserve-deposit ratios,
banking panics typically led to sharp declines in the money multiplier,
M1/BASE (Friedman and Schwartz 1963; Bernanke and James 1991). Second,
exchange-rate crises and the associated fears of devaluation led central
banks to substitute gold for foreign exchange reserves; this flight from
foreign-exchange reserves reduced the ratio of total reserves to gold, RES/
GOLD. Finally, in the wake of these crises, central banks attempted to
increase gold reserves and coverage ratios as security against future
attacks on their currencies; in many countries, the resulting "scramble for
gold" induced continuing declines in the ratio BASE/RES.

solid post: GDP=MS*V

Most financials look bearish ST. Hedge fund guru Paulson out after the close saying he sold GS, BAC, JPM. Could fullfill downside on these Monday.

Monday Tuesday should provide a big move - 1072 or 1111??????????????

No rant here....its simply, final distribution from manipulative hands to government retirements funds.....lot of news and fanfare/

Would love to hear some feedback as this is very rudimentary testing, and I'm not very experienced at it. Below is a simple chart applying Berk's bollinger band stratification system for SPY entries. I kept some of my DEC puts today to see if it will work down to the (200, 0.75) band as it has bounced off of it the last couple of times the price has touched. See August fractal. Berk is onto something as even this newbie can plan a series of simple entry and exit points. Let's see if the pattern will continue again next week to ~1060. Have a great weekend all. I'm off to into the wilderness tomorrow.
http://www.screencast.com/t/OTNkMjJiYmEt

Interesting, have ~1072 spx target for a low on Monday/ Tuesday

Out of the big 4 indexes--RUT , I think is the leading indicator--notice how it didn't get back to it's 62 high's? That's a tell!
click the link if you don't know what a tell is!
http://www.playwinningpoker.com/poker/tells/

we are bullish too but are entertaining the idea of more upside, if anyone is interested: http://tewp.blogspot.com/

"we are bullish too but are entertaining the idea of more upside"

Huh???

yea that sounded stupid, I mean my interpretation of the wave structures means there is more than just one minute wave five left

a v a 4 and a 5?

This 3 part interview needs to go viral.
http://therealnews.com/t/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=4458

I did a video reviewing today's trade.
Comments / advice / heckling / etc. are welcome
http://implicittrading.blogspot.com/2009/11/1113-end-of-day-review.html

Awesome BalaB, thanks for sharing. Gonna add you to the blogroll.

Obama eyes domestic spending freeze

http://news.yahoo.com/s/ap/20091113/ap_on_bi_ge/us_obama_deficit

http://www.safehaven.com/article-15000.htm
all about tops

Mortgage backed securities climbed today and are at yearly highs. Clear divergence with the rising market.

VIX JAN calls 25 and 27.5 strikes are working--all you do, is get the intraday direction correct, and these strikes will pay off--like a Vegas slot machine

I was on about a fractal earlier, but I think I was looking at the wrong comparison. We retraced to 100% of last high then corrected to 23.6 of recent low to recent high. This was exactly what we saw back in October around the 12 and onward. I expect to gap up on Monday: http://screencast.com/t/ZTllNjZjYTAt

Gap up then rally to 133% extension of 1100... which is about 1125ish.

Us next week: http://bit.ly/Qs6eT

That's awesome! +1

Nothin like wearing a diaper and trading from the closet my parents keep me in.

I might just keep my trading simple. Pop up a 13/34 EMA moving average on daily. Pop up 12/26 MACD chart. If 13 crosses over 34 EMA and 12 crosses 26 on MACD, then buy with a defined stop loss. Simple, easy

I'm sure someone on this blog has some connection with a trader/investor working for a large firm (GS, JPM, MS, etc..) Any insights to the action going on?

I would say that we would typically have kept going down into EOD, but we have a typically bullish OPX week coming.

No wrap up post today - I'm busy.

geronimo/ES: -7.25 (stopped out)

Yet again i see top calling - people were likely calling the 'top' in may, june, july, august, sept, oct. What reason is there to place any credibility that dow will only go up max by 200-300 pts from here. Is it not better to say we 'hope' for 'the' top, but we have no knowledge that one is immminent - unless one is relying on the synodic moon cycle

At this point, I think the odds are favoring the shorts but I'm not sure how long we will be at these levels before we correct. There is major resistance above 1100 on the SPX and we failed to maintain that level two times already (once in October and November).

I look at AMZN, APPL, BIDU, and GOOG and it amazes me how nonexistant gravity is for these companies. I doubt retail investors have that much buying power to keep pushing those stocks up. I think it's a game right now between all the large institutions to see who can keep pushing it higher and higher.

I wasn't calling the top in May, June, July, August. I started to consider the possibility in August but was very cautious about it and got everyone out when we were painting a bear trap.

I understand that you probably lost money and your frustration is talking - in that case - join the club ;-)

thanks for thefeedback. Im just stimultating debate. I am thinking it may not be best to try to predict the market long-term, but just to trade on short-term momo plays etc.

Everyone grab a beer!

Hell, you were calling a top on March 9th.

Actually I was expecting Dow 10,000 that day - go back and check.

As you can afford it.

Just eliciting some sardonic humor at the expense of our favorite German.

Don't give up your day job (whatever that is).

Too late, I am packing up my office right now.

The paint is dry. Thanks Mole and Berk for the excellent charts. Good weekend all!

could even reach 1065

Believe we are in B of wave 5 and need a gap down to 1075 ish monday to complete B then up into 11-24 for C of 5 and hopefully this thing is DONE for now, at least back to 1030

You should probably buy the EWP book. What you just wrote makes no sense.

He meant C# Minor.

Right. I always get those mixed up with the D flat implosive waves.

that's funny

Headed out early for the day. I will be around this weekend to post some killer charts.

Hope everyone has a wonderful boring-ass Friday, and a great weekend.

Skål!

$CPCI is @ 2.57 !?!?!?

Economists Predict Fed's Interest Rate Hike
Nov. 12, 2009
Kelly Evans and Phil Izzo discuss the findings from the latest WSJ economic forecasting survey, in which most economists predict that the Federal Reserve will start raising interest rate next September.

Awe could finish red today......easily

I was wondering if Prectcher had anything to say about P3 wave?

Doesn't like to talk about it, apparently...

Thanks for the informational posting, but what are we bears supposed to do if we don't have two IQ points to rub together? You see, the bulls ripped mine off in this stock market a long time ago which has left me a eunuch bear.

Long ES1087.25 with a stop right there that I moved up after my initial placement. This is just a scalp until EOD or I get stopped out at breakeven.

Edit: moved up my stop again to 1088.25 and got stopped out.

Assuming that intra-day correction was a wave ii of some degree (as I am), it has accomplished its goals. 5 minute RSIs are oversold and it retraced a bit over 61.8% of the first move up today. Looking for a pump into the close that will carry over on Monday.

funny that oversold conditions are then translated to pump up, but overbought or out of whack technicals on so many of those, don't attract selling and profit taking.. I wonder why..

A funny thing happened on the way to rallytown today

LMAO :-)

Conditions are actually worse out there than Wall Street and the goverment lets on. It's in the #s.

1) Unemployment up
2) Consumer Sentiment down
3) Retail sales down

You can't have an economic recovery without jobs and without consumer spending. Sure, they'll you that the devaluation of the dollar is good for America because exports are attractive to foreign countries but what about buying power for American consumers. $5 milk? $5 for dozen eggs? Salaries aren't going up any time soon. Get real...

All these companies beating earnings, especially the banks are playing accounting games.

All true my friend. But, in the end, fundamentals and technicals will lead. One of the most prominent divergences of all right now. Dollar is key here IMO. Seems funny also to me that Obama's timing for trip to ASIA is about the same as it seems we are reaching a potential dollar crisis. Me thinks it is time to attempt to reassure our creditors that the dollar is not in trouble, we will pay our debts, the check is in the mail, etc.

That is exactly why he is going over there. But it is all news. Do you really think Asia has no clue what we are doing or that their reminding us will make a difference? It is all a show for the sheeple who think that our economy is recovering because the market went up.

Yea, China knows what we're doing. Look what happened to the Shanghai index in the summer. China began to withdraw liquidity and the system fell apart.

Dog and pony show for sure. Wasn't it Timmay that got laughed at by Chinese students earlier this year though? I am sure Obama does not want a repeat of that on his hands though. But not so sure everything is so transparent though. There simply has to be tremendous heat from what is equivalent of giving the G20 and rest of the world the big middle finger!

Er.... you watching that? Don't look that corrective to me right now. Wonder if the low is going to hold....

Friday choon - just fancy this one for no particular reason - sorry, not metal, still good tho - http://www.youtube.com/watch?v=Hvi4iA3PnKE

3 day descending channel on XLF... target 14.50 by close. then maybe a bounce.

Easy innit - we're talking highs/lows right? So what you are seeing above is an almost binary flip from confidence being in the toilet to genuine belief that everything just might against all the odds be okay really... to back in the toilet again.

Did someone say top?

Looks how similar to last mini crash: http://screencast.com/t/ZDE4ZTk1

Berk, that chart I posted played out.

Sure did... Should be getting close to bounce time...

Skål!

If we follow last time, no bounce here, we pass today low then find support which we break.

Yes. EW says we should get a bounce around here, wave B in ii of V of P2...

That's what I am looking for. Modest bounce, and some more pull-back... before ramping higher.

Skål!

We already retraced 76.4% in SPY and you want more?