The Wall

And we are back at the 1111 wall which thus far has remained impenetrable for the bulls:

So, it’s starting to look like Soylent Green to me quite simply because this time around there is some room left on my daily RSI_EMA and according to the old aphorism that ‘four times is a charm in the stock market’. I’m not saying it will happen right now and right here but unless the bears make a stand they will have to give up this line of defense, just like all the others they had to relinquish this year. Sad fact – same old pattern.

I have removed the orange scenario as I wouldn’t really feel comfortable counting it this way should we suddenly drop hard from here. But quite frankly, based on this setup it would be highly unusual to see this triangle fail – not to say that ‘unusual’ means ‘impossible’ in this market. Remember participation is thin, thus anything is possible and retail traders (i.e. steel rats) usually often find themselves on the receiving end of the stick when the market suddenly turns on a dime.

My advice – forget about the news and stick with your charts. I think the Dubai debacle once more proved that point which I am trying to ingrain into your rodent skulls. The market didn’t drop because of Dubai last week – the turning point was reached and the MSM was simply correlating to unrelated events. Not that the news cannot conjure up some short term gyrations – yes they can – but anything beyond a day is a pure function of investor sentiment.

At this point I suggest that everyone make very small bets going into the Christmas season – I don’t expect any major moves. If you are holding December/January puts you might be wise to start rolling them into March/June as theta burn will increasingly reduce your premium, even in sideways mode.

That’s right, I’m going old school today

3:00pm EDT: I just updated my brand spanking new ISEE chart and it’s not looking good for the bears:

This is a complete reversal in sentiment here and it seems that the prior high was reversed in a matter of two trading days, which is insane. I think at this point this market has turned into a casino. I would strongly suggest you focus on extremely long term trades (i.e. 3 months plus) or swing/scalp trading – everything in between will blow up in your face.

This entry was posted on Tuesday, December 1st, 2009 at 2:58 pm and is filed under Elliott Wave Theory, Market Outlook. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.