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I wonder could we be starting to see some de-coupling of the US$/Equities relationship. Obviously a weakening $ has been good for equities to date, but at some point, the fall will become so large that it will have a negative effect.

I say this because the futures have not been moved by as great an extent as I would have expected based on the overnight EURUSD move.

I wonder how much of this is a headfake also caused by extremely light volumes due to the holidays.

I suspect the next few days are not days to be making any long term decisions.

"Just yesterday Bob Prechter published a Special Interim Report and sent it to EWT subscribers. Interim Reports are rare -- I've seen Bob send only a few of them during my 17 years here."
--------is this just a ruse/ad gimmick to attract new subscribers, or is he confident that markets about to turn down asap!

FWIW, I think Prechter believes in what he is saying, but its very dangerous making bold calls about tops/bottoms.

i agree, especially for novice investors, who rely on his info. he should couch things in more probabilites/risks language. Mind you he does state that most investors should stay in cash, and only speculators should try to play a down-turn (but then if he is wrong, novice investors miss out on a large part of the bull-run)

fwiw, he did couch the update in very careful terms and in fact at the march bottom as well said that the safest thing for most folks to do would be to sit in cash as well as pointing out that trying to short "p3" may well turn out to be a mugs game, if it's half as diabolical as he expects, as you may very well not get paid anyway as counterparties go bust

Greek spreads just moved out another 10bps in last hour of trading. If this market is going down, this is where it is going to happen.

We are about 150 dow points from the 61.8% retrace of the putative wave (c) into the march low. Very close.

Y'know - everyone keeps saying it can't go down until next week/january/2012 cos all the big boys are out of the office - but wouldn't it be a perfect time for it to start to roll, just when the masters of the universe have stepped away from the control room for 5 mins?

Their systems are on auto-pilot. This is a bought market and a bot-market.

I think this angle is overplayed. Bots were not invented in March of this year.

True enough. Bots are only as good as the programming that goes into them and the infrastructure connecting them to the markets. But in a low volume environment, the bots should be able to keep things afloat.

I would not expect a crash during Turkey Day week. That is not to say a big dump wouldn't be welcomed by this trader . . .

nah - I don't expect a crash anyway - 1930 was a perfect h&s and if it plays anything like that, then we may well need about a year (by my rough rule of thumb) to take out the march lows

Comedybank new lows, currently at 6.25. At first I thought it was because of WestLB now I'm not so sure. Market screaming bailout.

PS. I have to wonder if they lent any money to Greece. That would explain a lot of things.

A lot of continental European banks have a lot of sovereign debt on their books. How much is Greek? Who knows but it could tear some of them a new asshole.

what's another asshole in a bank, just one amongst the crowd

I think that the PTB have succeeded! Most people blame the banks for everything...blame has been deflected from the true culprits..the govts and Central banks policy (who is kidding who about Central bank independence) of low int rates for a decade fuelling spec investment, forcing "investors" to look for returns via riskier assets/instruments. Yday on C4 (UK) City Minister was quizzed in details about UK banks..surprise surprise no real answers...but it was fun watching him wriggle!
Agree that a lot of banks have co-operated with govts/central banks on this policy, and some have even been coerced into making decisions detrimental to shareholders eg LLOYDS, but majority of people who work at banks are that..just employees!

I know, worked for a fbank for 12 years, both here and at the motherhouse, and as I always say "don't blame malice when stupidity explains", I remember talking to a guy from strtegic marketing in 2000, he was delighted that consumer confidence was at the highest level in 20 40 years, I tried explaining that it is never as dark as before dawn, that a major crisis was inevitable and we should focus on risk reduction both at application and at current custumers, and that we might start datamining prosperous custumers That might need our credit services (consumer credit) in case of a downturn... to no avail THE ONLY WAY IS UP

Dxy printed a new low afaics, 74.619. Up, up and away!!!

I wouldn't bet any money on that.

Edit: I know that must sound delusional under the circumstances (Euro close to highs, /ES close to highs) but I can't shake the feeling that something is terribly wrong here.

To clarify, I mean equities will be up, up and away. And looking at that last move in the EURUSD, I feel pretty confident about it :)

Look out! EURUSD new high.

http://screencast.com/t/MjcyZDMxM

evaporating gold...

http://www.canada.com/news/news/2261250/story.html

thank god it was not stollen, just...errr... misplaced?

well, when most of ES (except for a mad russian and a crazy hamster) are saying UP

and participation in the blog is close to one dedicated to the fascinating world of catterpilar sex

it must mean something

Anybody know what the Prechter reference was about in the post and previous one? Missed the discussion..cheers

Perhaps it relates to Prechter's 200% short call recently. If I'm 40% short when Prechter is 200%, that's about on schedule...

Dollar in the process of breaking down now. Euro about to make new highs shortly, Dxy new lows.

Dow/SPX to print new highs today for sure. It should be easy with volume being so light.

Dollar is going to 1.56 I think, Dow 11k, S&P 1150 by year end easy. I think it shouldn't be so, but at this point its hard to see what stops it. and I think I have to agree with the last paragraph of Mole's post.

well € HAS broken out of range it's been in since beginning NOV 1.48 to 1.4980...can imagine there were lots of stops above the higher price...NOW needs to see follow through above here..otherwise a drop back below may mean the "rally" was short covering,,,DAX lagging, OIL lagging..of course can change..BUT surprised that DAX hasn't broken out of range in synch with €

Nice summary bob. And as I open my screen this morning, its hard not to think the greatest probability at this point is a dollar breakdown taking it to 1.52 minimum with consequent rallies in equities.

The problem for Prechter et-al, is that their entire thesis seems to rest on a dollar short covering rally based on the fact that everyone is on the same side of this trade. Sometimes the herd is right, and is on the same side of a trade for a reason. It looks to me like this is one of those times.

The thing about short covering rallies is they require a trigger, someone who has enough firepower to get the ball rolling and force people to unwind their positions. I'm not sure who could fulfill this function in the largest market of them all, and the signals from the Fed are for things to get even worse.

I have to imagine therefore that we slowly melt-up into year end.

I totally agree but the herd are never right. The mistake many people make is their assessment of everyone being on the same side of the trade is wrong, i.e. early. It is that final move as everyone does indeed get on board that gives what already looks a crowded trade the final momentum.

I don't know if the short $ trade is over. I do know that it is crowded but there are still a lot of dollars that can be sold still. I also know that every country wants to devalue their currency so the $ has competition for weakness. And the US is undergoing a powerful cyclical recovery (at the moment) So it's not an obvious trade to me on fundamentals or technicals. Timing is all which is why I have the option to get short (literally) rather than putting my neck on the block here,

But you're right - the whole equity bear case rests on a $ rally. It's everything.

Where do you think the final momentum could take it? I wonder could a dollar breakdown now lead to an overall dollar-selling, equity buying blow-off climactic bottom/top that would quickly reverse.

Just that looking at long term eurdollar charts, theres not much between here and 1.53, and the way things are going, could revisiting 1.56-1.60 be on the cards?

1.62 would not surprise me. wouldn't target that but it's possible.

The DAX had a stop sweep this morning. Opened a couple of points above the November 23 high of 5825 and promptly dropped to first daily resistance of 5807. Pivot is seen at 5776, first support at 5738.

Even Comedybank tried to make a run for it and got sold off within 3 seconds or so. Volkswagen the weakest stock this morning, currently trading at 87 Euros.

Shorts still intact, for now anyway.

Yawn. Bring on the turkey.

I still think the market is vulnerable here but I always knew it was going to be a very tricky top to trade, hence the unwillingness to do it through anything other than options.

Most of the flow talk I hear is about buying calls for the 'melt-up'. Probably puts a cap on the market into year-end now. Always worth running through a quick check-list to make sure we are being sensible.

Growth proxies:

Nasdaq/SPX ratio - Stuck at highs, neutral chart
SOX Index - lower highs, bearish.
Small Cap relative - going down, bearish
Europe relative to SPX - well off highs, bearish
Nominal yields - lower highs, bearish
Real Yields - below March lows! bearish
Transports/Industrial Ratio - lower highs, going lower. Bearish
Credit Spreads - consolidating at lows - neutral
Greece sovereign spreads - 50bps off lows, bearish
Copper - At highs in most FX, bullish
Gold/DXY ratio - at highs, bullish but going exponential
Japan Banks - at lows, bearish
Miners relative - at highs, bullish
Industrials relative - struggling to keep up, neutral
Banks relative - has been drifting lower for 3 months, neutral
DXY - either still a downtrend or a huge inverted H&S, prob still bullish for stocks but needs watching

I see nothing bullish that isn't related to the weak $ trade. All rests on that. And the DXY chart looks binary to me. Either it is going to make new lows, or we are painting a huge, multi-year inverse H&S.

good comment..also OIL..seems to have disconnected from dollar weakness (at mo)..is it telling us something else?

I look at Oil/DXY ratio as a growth proxy. It is consolidating at the moment - looks a neutral chart to me, more bullish than bearish but nothing standout.

DAX, cup and handle?

http://screencast.com/t/MWQ1NzNm

well, with europe and futures between 0,5 and 1 % up...

we'll see prety soon

I have a whole bunch of charts like this. Intimidating, isn't it.

All they need to do now is pass the news on to this stock:

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

& this:

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

& this one:

http://tinyurl.com/yhvrapd

ikea tilted cup without handle?

damn swedish design

LOL (I don't see a rise, but then again)

It looks all too convinient, imo.

I'm confused too but what is actually happening is that this weeks upward holiday bias is creating the illusion that the market wants to go higher.

Illusion being the key word.

Ok, back to normal;;; good night

Night CD - see you tomorrow for a light trading day.

Almost looks like the Euro went above 1.50 just now.

New Frontline documentary: The Card Game.

Online now.

www.pbs.org

blogs are dead...xgiving blues?

I went to see Pirate Radio. fun flik

People are taking time off for the holidays - can't really blame them. I myself will be pretty quiet this week.

What do you think about the action in June 10 55 SPY Puts?

http://www.screencast.com/users/nakedoptions78/folders/Jing/media/cccf27d5-b88b-4cad-abab-c2303dd6aea2

Interesting, but could be simply hedging by the big boys. We've come a long way after all.

Yeah, I'm just watching but definitely on my wish list. Love to see a Black Friday Special under a dime! March 70's are on the list as well.

http://www.screencast.com/users/nakedoptions78/folders/Jing/media/429b5340-dd85-40cf-9556-cbb599d97aed

now that would be wonderful. black friday specials on puts. :-)

I don't remember hearing about this... http://benfrank.net/patriots/news/national/pentagon_missing_trillions

this and the CRU hack should keep some people sweating

Order much jeez go into toys r us inventory is so low. Nobody brought in that much Christmas Decoration ex Lowes Walmart Home depot and I have to laugh Target had Halloween and Thanksgiving Decoration at 90 percent off and the stuff is just sitting on the shelves

It's been like that in the stores all year. Walmart had walls of shelves full of those big tubs. And not stacked tubs. Each one with a lid and setting there by itself just to fill up the shelves. And this was walmart!!!

Mole, I went back and checked the charts you posted earlier today, if I remember right you had one scenario named the green churn from hell. That is what I figure will happen, not because I know anything about the market, but because THEY will want to keep the market up through the holidays so anyone, that still actually has a job and hasn't been personally hit by any of the crap that's going on, will spend - spend - spend. I figure the closer we get to Christmas, the less likedly THEY will be able to keep control of things and then there'd be a possibility of the bottom dropping out.
I don't see how retail is going to have a good christmas, they didn't order as much this year, so there won't be as much to sell. And if they think people are going to pay full price for everything, they're dreaming. They've conditioned us for years to wait for good markdowns and especially this year, people will wait for sales. There will probably be a game of chicken going on with people waiting til the last minute to shop and the stores waiting until the last minute to actually start lowering prices so they're not stock with unsold merchandise. So not only will they have less to sell because they didn't order as much, they're still going to have to mark stuff down.
Anyway, that's what I think might happen.
I held onto quite a few of the puts I had gotten earlier, except the ones that were really killing my account.

Problem is that this stuff won't be announced until about mid January. Plenty of time for my puts to go to complete shit, so although I agree with your reasoning it should not be why you're holding your puts.

oh I have to hold onto my puts, I can't believe all the crap that is going on. The manipulation, lies, fraud, etc etc etc. I don't care if I have to keep trying to hedge against losses until they expire.

no promisses and not pretching.. I mean preaching (I know, bad joke, I think pretcher hit a lot more often than people realise, only in real spx)

but, good call, I mean good puts (and so you know I'm not jocking, 1 I'm still full high leverage short, 2 read my post and see the charts

Ok, I finally have something of substance to contribute(although I'm here everyday!):

http://img42.imageshack.us/img42/7549/20091124prophet.png

I was reading something about Gann, where he took the high and the low, and divided by 8.

So I tried it with a 2-year daily chart of the SPX.

What I found was amazing.

From here, it would seem that it's back down to under 1000, or up to 1200.

A pivotal point in time indeed.

Ha! Fascinating actually! Good work - will dig around a bit on this :-)

BTW, what tool were you using for this? The fib or regression channel?

Mole, formykids:

I did it manually. I didn't know how else to do it.

I subtracted the March '09 low from the '07 high, and then divided that number by 8. And those were the increments I used.

MM-

can you clarify? I'm not following what high and low you are dividing by 8 or where/how it is showing up on the chart.

Thanks.

you can bet on that one, been saying it for a long time (but more interesting, either spx:gold to 1.2 or big drop to below .81 probably) he good news is spx:gold backtested and failed, a further down day and I'd see it as unlikely that they can ram real spx any further

werll, as I mentioned the distance to ma13 on bpspx is getting thinner

http://www.uploadgeek.com/share-5920_4B0C7BC0.html

the good news is we broke, re-broke and back tested the 38 fib on real spx,

http://www.uploadgeek.com/share-7D5A_4B0C7D44.html
a zigzag (if this is a B) now seems improbable, as per EWT in a flat B must retrace at least 70% of A so a drop of a further 32% is warranted... the bad news is that it can be a silent drop with gold doing most or all of the work

but then... just hamster talk

not a single comment on this one? hummmm

Is it me or is every trader and his turkey expecting this week to close in the green?

It is you and every trader and his turkey

...but not Mad Russians and Crazy Hamsters

RASPUTINE! my long lost friend ;-)

maybe, every trader and turkey, not hamster

this market is in for a surprise, see my comment

Heard today that an apartment in Shanghai sold for a world record $64 mil. $11,000 per sq ft. No bubble there. Ha, ha.

NPR had a good interview about the cheap dollar carry trade causing asset inflation all over the world. Possible asset bubbles in some places like Shaghai. Taiwan I think closed it's borders to foreign cash to avoid this. Heard that Brazil taxes foreign investment now to curb it.

As I said before, letting the dollar slide is a big middle finger to the world, American style. Can this end well? Or, better yet, do they know how to end it? Only so far this can be pushed before we have a full-blown currency crisis.

See everyone tomorrow.

This is mind numbing...

http://2gb.com.au/index2.php?option=com_newsmanager&task=view&id=4998

Takes maybe 15-min. to listen too, but well worth it!

Sorry to say, but I have a hard time believing anything an English peer who used to work for Margaret "General Balgrano" Thatcher, says, but that's just me.

Brezhnev took Afghanistan
Begin took Beirut;
Galtieri took the Union Jack.

And Maggie, over lunch one day
took a cruiser, with all hands.
Apparently, to make him give it back.


~ Roger Waters, Pink Floyd

Sideways to January? I won't say never, but all they have to do is push the button.

Mole
Any thoughts on the range of a possible sideways move into January?
This has been my labeling for a while on the NDX. So if 4B of a possible expanded flat has started it could end under 1660 which is a long move the way I trade futures.
http://screencast.com/t/OTAyZmRi

Mole, just reposting a response to your request for a chart from the earlier thread in case it's lost in the reposting.....My question was about a possible ED.......

Sorry should have posted a chart alongside the Q but here's what I'm looking at........

I might be stretching it a little as I'm struggling to see 5's in some instances but welcome any thoughts.....

http://i619.photobucket.com/albums/tt275/ddabasia/Chart2.png

Well, if you are looking at my current count (see last night's post) then you know that I'm still expecting a potential blow off top as part of my expanding diagonal. Not sure how your count fits into that though.

sorry boss, but if it is a new top it is a very quick one and can't outpace gold, see my charts (if you remember the old BPSPX, MA13 was hi and rise or hit and drop), and there was a prety resistence line holding spx:gold

but I want everyone to look his way, so no spaghetti this time

Hence 'blow off top' ;-)

of course, but the contained by gold (i.e. delta gold> delta equities) would be unlikely in a strong blow off

Here is my take on the current count. I use the Renko chart after each day to review where we are on $SPX.

60 min chart http://www.screencast.com/t/Yjc1MDQ2ODkt
30 min chart http://www.screencast.com/t/ZDY0OGNj
10 min chart http://www.screencast.com/t/OTQzYjg5Njc
05 min chart http://www.screencast.com/t/YTNlMDZm

This is the first time I am using the ScreenCast charts, so I don't know how they will show.

Same here re: blow off top. $COMPQ / $USD shows pretty nice wave forms. http://tinyurl.com/ybkakff

There may be some downside left to this last B before we head back up though.

I think the fractal play is still alive and kicking until it isn't.

Little more on the 3-fractal play looking at the VIX...

First VIX fractal considered took about 14 trading days to slide down to low. Took 8 trading days to reach high. Second fractal took 14 trading days on the downslope, and 6 to reach new highs. We are now on day 17 for the downslope on fractal 3. Timing wise, things would need to turn later this week or as late as Monday next week to hold the roughly 30-day cycle intact (+/-2 days or so) and pointing at end of month.

Possible study is that the lower the VIX goes, the more violent the rebound. Next target IMO is 4 days from low to high (up to 5 pt / day climb). Of course, this could still put us on a path to see a mute December, as fractal would complete by end of November - and a bounce / pause at the lower TL would not cause mass panic going into xmas.

Thoughts?

oops, meant to say that fractal would complete at the end of November - beginning of December range.

Of course, on a VIX buy signal. Merry xmas to the bulls again! and then WHAM, January hits and the shit storm starts.

spx:gold 0.94444444444
bpspx must be at ma13 (still not available at stock charts)

so the frog must jump...