SPX is putting in a nice temporary bottom. the ledge is narrow and support and resistance clearly defined.

http://evilspeculator.com/?p=14513#disqus_thread

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the big X wave is over, here comes the Z wave up ... get ready for vertical take-off...

Please present proof/analysis - opinions don't cut it around here.

I bought FAS yesterday at the closing... trading on divergences (both TICK and TRIN showed them) and price action... I don't have any proof, the proof is in the pudding... :)

this is the big picture I had in mind...

http://i48.tinypic.com/2qd4w37.jpg

I'll send you a mail today, hold your horses...

How come the UK stockmarket has gone up for last 2 trading days, while US was down (Usually UK follows US market?). Maybe this means the Dow will now rally?

Friday the Dow declined and rose AFTER the UK market had already closed so it was a wash. Yesterday's decline also happened after the UK had closed and by the time the UK market opened today, the US futures had already risen substantially erasing most of yesterdays losses. But you will notice that since the US futures have weakened, the FTSE is now off its best levels.

cheers - a lot of variable i need to bear in mind!

I don't know how hedge funds tell what % long or short they are, but I remain net short with only minor fettling around the edges. This decline has now distinguished itself from all other pullbacks since March 09. It has now eclipsed the July pullback in terms of price, and its done it in half the time.

A casual glance at comments from yesterday evening re-inforces my belief that if we do have a 6000 point Dow fall, the vast majority of bears are going to conspire against themselves to capture just 3000 points of that fall in an attempt to capture 7000 points of it by being cute and trying to go long for bounces and such like. Such trading amounts to no more than coin tossing IMO, which is a valid strategy in itself if your risk management is good.

But even if its not P3, there is still clear evidence of rampant overtrading, probably brought on by fear, and repeated experience over the last 9 months, a bit like an experimental rat in a maze where one avenue leads to electric shocks.

That being said, if a bounce is going to come, it has to be from this area so I can see people's rationale, but to me this tape looks weak as Mole said, the strength of dip buying is not evident.

A question for those who think we must surely have one major bounce higher..........if thats the case, why are all the bulls not buying right now? What are they waiting for? The value is surely astonishing at these levels if you believe in the recovery? Either they now expect more downside, or value is not compelling enough yet.

Maybe theres something I'm missing; a key piece of the puzzle, an interaction of the carry trade and the bond market and other flows thats leading to a temporary vacuum in purchasing power, and the picture will clear up shortly. But to me this certainly feels different from anything I've seen in 9 months, and if I had to bet at this stage, I would be looking for more downside before this phase of selling is complete, because we don't seem to have had any sort of selling climax yet. The "event" that normally marks a bottom. Its been fairly orderly, MSM is still fairly bullish and unconcerned. I think we go down a bit more to the 9700 level before theres a strong bounce.

I have no technical basis for this, its just what I feel.

yes looking at 9700 level as possible short term low... it may be from a little higher than where we are now..then it will give people that "scary" feeling.. :)

Am currently 30% long. Just going to wait and do nothing. Technical situation is pretty clear. Strong chance of a decent bounce with max upside target all the way up at 1121. 1090 to 1080 a more realistic area.

Unless Euro breaks 1.36, that is the most likely scenario. If it breaks, will sell on weakness asap.

spx channel, http://www.flickr.com/photos/42905134@N08/4342613863/sizes/o/

this looks like ideal scenario for setting up a next leg down..shorts are covering..bulls are dipping..patience is key!

Do you have data about that or is it just an assumption?
(Got quite burnt this morning during the swing start)

nope..just charts..like BOB said if we get more short covering could run some more to upside..BUT for mo watching this..
http://www.screencast.com/t/NjU0ODYzNmYt

DAX seems to have broken (down) the upward chanel it was drawing in the 15 min chart. Very broken ;-).
Let me check how can I share my crappy graphs...

>DAX seems to have broken (down) the upward chanel it was drawing in the 15 min chart.

In which time-frame? 1 day/2 days? I wouldn't short this dip unless the banks start selling off and they are awfully strong this morning.

yes..all depends on your time frame..I only look at shorter time frames to fine tune positions..usually 2 hrs and above is the norm for me..keeping most of powder dry for the moment the market makes up it's mind

Sounds good. I prefer longer time-frames too, less noise.

Well, here's how I see the 15 min. on a multi-day chart:

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

Thanks for sharing. I checked at 10, 15, 20, 30 min. They form different patterns but all seem to agree in this right now (Tuesday 12:51 GMT+1):
DAX recovers 5490 -> stay the short term up channel.
DAX goes under 5480 -> whatever but not up for a while.

And that's good. I use 30 minutes charts as default but I try different timeframes when looking for entry/exit points. 15 min just looked nicer today.

2-days, this is an online graph, all I can produce at the moment: http://www.quote.com/global/stocks/chart.action?chartUi.bartype=CANDLE&chartUi.minutes=15&chartUi.bardensity=LOW&chartUi.size=620x300&chartUi.period=V&s=%24DAX-XET

As I retire for another night, will the Euro ramp up again for another fail?
I will dream.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aU4ua3OE7420&pos=7

Trichet leaves Sydney early

Sounds like a perfect excuse for one of those "rip your face off" rallies.

I love it. Like any of that matters. This reminds me of 2008 when everyone was waiting with bated breath to see if the corrupt congress was going to pass the bail out.

Notice that we have gone from "Things are great! XXXxx is better than expected", to "I hope they bail xxxx out then we will be saved."

Palease.

edit" Not saying anyone here is as such, but the msm in general.

Yeah we sometimes forget politicians *never* do the best for their countries. This is specially true with foreign politicians, probably because we don't know them yet. This is actually a wonderful human quality: advance confidence. But it has been abused by the marketing forces, like every social ability or mood the have been able to identify.

It sounds like Greek to me.

In technical terms, Friday’s price action is a reversal day (3pm BS-they got me good, I was expecting a late-day shake out of weak shorts then closing on new lows-like Thursday). Reversal days at are often associated with climax selling. The formation of a bottom are often contain a volatile shake down of the weak longs, as professional insiders attempt to take control of the outstanding balance of shares, referred to as the cumulative float. Top formations are typically long drawn out affairs with an up-side reversal, i.e. a failure to make a higher high.

However, for a reversal session to mark the low of a correction, buying interest must step in following the short covering reversal. In the context of Friday’s reversal, the likely area for responsive buying to support the S&P on a pull-back was at 1056, Friday’s M-period low.

Indeed at today’s open, selling pressure backed off at 1056 and the S&P rallied up to 1068. However, buying in failed (JA JA JA) on the subsequent late-in-the-day pullback and the S&P traded down to the area where protective stop loss orders typically rest 2.5 points below the opening range low.

http://screencast.com/t/MGUwNDBiNTY

ok i'm going to try contributing a chart

my short term trendline picture:
http://screencast.com/t/NGNmNDFiNz

Thanks hindy, this chart gives an alternate view which is very valuable IMO.

Nice chart. What would happen if we don't form a right shoulder? What's your short term target below?

if we fail the neckline
the target is yesterday's low for a sideways channel
which btw conveniently is the gap fill

worst case though we could be hovering at the neckline for the whole day!

If we go the red route we could cut through all support and never look back. Bounces may die.

Fed's Bullard just said he expects the Discount Rate to be raised "fairly soon," so that the difference between the discount rate and the overnight rate is 100 basis points.

I remember Bob said the markets would be gutted if that were to happen during the last FOMC. Seems to be messaging to make sure the market is not surprised when it does happen.

How goes it Schwerepunkt? How about 'ol Thain??? Kind of a financial Jesus coming back from the dead like that.

Thain is a cold, scheming SOB. Just what the world needs, a second chance for another Goldman alum. Have you ever heard the guy? He sounds like a robot, just as likely roast you alive as shake your hand. POS.

There, did I disappoint? ;-)

So where do I chase pussy? House of Bitches????.......

I hope the market takes a dump on Tuesday.....

Monday runup didn't worl out so well.........but all this "correction" talk reminds of the famous H&S everybody was talking about. However, the herd might indeed get scared and jump off the cliff and I suspect there isn't enough short interest to stop a freefall.

Keep an eye on the banks. They are leading this market down just like 2008 into 2009...

Ok - what is it with Disqust at the moment? First we have the Real-time updating is paused thing - and now today it doesn't fooking update anyway - not here, not on SOH, not nowhere!

Shonky.

i made one good decision (exiting TNA very early today) and one bad decision (not placing any shorts) anyway, i do feel it cant be all that straighforward, surely there will be one more push for the Summit, without oxygen?

I see some sort of rally brewing here.

Present evidence - gut feelings don't cut it here.

sometimes evidences are unsubmittable in the court of market depending on amount of money GS has available to defend itself.

Good reply. Keep people on track and keep this place from becoming a regular chat forum.

it already IS
I guess you missed 60 minutes and posts of this kind by moderators (they set an example, right?)
"I hope the market takes a dump on Tuesday....."

09th Feb, there is strong time cycle coming in. Which is highly correlated with reversals into the markets.

What time cycle - proof please. FYI - my moon based time cycles extend into Feb 14.

More like the calm before the storm!

I would have felt better if we could have gone up today.
Maybe I will be wrong but I think we rally quickly now.

I love those statements: "maybe I will be wrong but..."

If you're right tomorrow - will you feel like you predicted anything?

with all due respect,
if ES stabilizes between 1050 and 1055 in the next few hours
i will look for a swing long entry
with targets at 1074 and 1090

definitely not blue, definitely
Raymond

Yeah I fink not either - however, if the EUR is anything to go by, then it might be (is that?) light blue as we are breaking down out of a triangle which should mean that the move unfolding now is the last for this wave.

Anyone playing oil etf's / stocks / etc. going into the 11th? Just curious.

got some ERY's

And....we are done! Let's eat!

Green close in the VIX, inside the 2.0BB's. Nice.

Whow, trading over allready? It was just getting interesting...

Anyway, still holding on to my uber-wave-b-expanded-flat-scenario:

http://www.bearalarm.nl/wp-content/uploads/2010/02/DJIA_Elliot_Wave_5min_08-02-10.png

Isn't there an Elliot Wave rules that B is never higher then 5?

(or in the case of your chart, B is not lower then 5.)

As far as I know, there is a rule that says b CAN be longer than 5. This is called an expanded/irregular (not sure which one) flat. These flats typically occur when the downtrend is very stong. I know it looks ugly, but the internals line up quiet well.

true, I still have some doubts if march wasn't a B of 4

I think most of your doubt will be taken away when you look at the Nasdaq. The rally since march has exeeded the 61,8% retracement and overlaps with (1), which should not be possible if we're still dealing with a (4).

Hmmm I thought i read that as a fallacy of the times Elliott lived in 5th of 5th of 5th; in Elliott Wave Principle, I'll hafta check.

Tried to look it up in Elliot Wave Principle, but could not find it. Not much guidelines either though, however it says flats in two´s are not very common. If you find something, let me know :)

Aye, I'll find the page number.

Basicly it came down to that any -Illregular Flat with a B that exceeds 5 in either direction can be relabeled by replacing the B with 5 - Creating the True Top/bottom.

I'm willing to accept that b-e can be higher in some triangle that is expanding up/down. But a lone B wave that exceeds a 5th is incorrect (If I'm right... then I'm right lol)

At least the logic I've programmed would not consider that a 'form fitting' wave.

0<2<1<4<3<5
A<b<br>C<b<br>B<5
1<a<br>0</a<br></b<br></b<br>

I think the point you're trying to make is not applying to this count. The error Elliot made labeling an irregular flat was after a fifth wave extension (in fact, the 5th was not extended, but the 3rd). Elliot Wave Principle starting on page 57. This is not the case right now.

Do I understand you right, or am I talking about completely something else? :P

In all honesty, this is kinda why i've written Elliott Waves off.

They look very nice, and on a very large time frame its easy enough to figure out where your at in the BIG picture.

After that, I'll take my SMA & EMA.

I'll check, I'm at work atm, it very well might be.

That might be it, but what I took away from it was that any count that has B being placed passed a 5th was incorrect. (Perhaps this is my error)

B waves can do pretty much whatever they want. The 2007 top was a b wave according to the "orthodox" EWI count.

maybe c of B if you get my drift

I wonder if the boyz are saving their ammunition for the last 5 minutes again.

Apparently not.

"Little Red Riding Hood: But grandma, what big shell casings you have saved up?

Wolf/Goldman Trader: Ah, my dear, all the better to shoot myself in the face with come 3:40..."

LOL

One more quick hourly low 1050/ 1054 to complete a B wave in the a.m. then a C back to 1071 at least OR the ABC up was complete this morning and 1043 here we come.

Wow - I really like what I'm seeing. I dialed back to 85% short this morning but if there is no rally to be then so be it. We will be flirting with the gates of hell before long at this rate.

market breadth is pretty weak here. Turnaround Tuesday?

approx. 50% retrace of the move up on $spx

There we go!

highest / lowest still open short position on spx
highest : 1125
lowest : 920

anybody else ?

In my IRA I put 50% of my account in SDS at 1114 in mid December and then another 50% at 1144 in early January. Now I'm just sitting on it - so far a gain of almost 11%.

EURUSD breaking down out of wedge.........

about a time :)

They have held WFC - piece of turd up forever. Is it now breaking? 25 and should trade 22.

KO reprots 2-9, they may start complaining about the $USD. then PEP 2-11, watch for a $USD fireworks show.

ENER, avoiding.

broadening ascending right triangle
BAM

screencap'ed
http://screencast.com/t/NTFiOWEy

Anyone on the US east coast, are all the traders out shoveling snow? Today seems so slowwwwwwwwwww...no?

COVERED my 1063.75ES short @ 1056.5
FLAT

Is it too late to say "me too"? Mine was closed at 1057. The limited order was hit while I was away. Congrats to all.

LOL i followed you on that short. Shorted 1061 covered 1057.75 (because I'm a pussy). Congrats, you fickle omen you...

Seriously, though, you have my respect.

i'm glad you covered.
check out the broadening ascending right triangle we're in

can you cap it?

just posted the screencap

Oh hindy hindy hindy hindy... missed the easy reshort for that last little
dump. Not going to get cute into the close by fucking around... just gonna
wait it out.

Will tackle this tomorrow. Should've just trusted that wedge breakdown in
retrospect. When a range expands bc of a pattern, it continues expanding --
ie, trust the pattern, not the range (my fault).

hey you're in good company.
i didn't take the re-short either
for fear that it would touch the pivot and explode higher
and as you said, shit happens at the close.

looks like the right triangle got upgraded to a broadening symmetric triangle
i'm glad i was flat most of today. this kind of formation is meant to shake out momentum traders

my pleasure
and thanks to you for the heads up on that ascending wedge. saved me a point stop

Nice! glad to see some symbiosis then amongst us. Would hate to leech off
you. Really serious about that respect -- very impressed with your fades.
Excellent view on exits too -- your batsense is important to develop (thus
bravo to you, too). Good to see us both closing at similar points, too,
showing we're on the same wavelength.

Hey, thanks for the lesson on VWAP. I'll add those 1.0 standard deviation bands on intraday too. However, I think I'll keep my monthly bands since SLV was riding them down in January (and may continue to ride them down this month?).

hmm, looks like many shorts(including me) are on the sidelines. No short covering support could really flush this turd market lower.

Don't project your POV towards others.

mole, how about an a-b-c waves up off friday's low with b being the retrace we're in now?

Do you think "B" will end here, ~ 38.2 and right at the main pivot, or down to 1050 ES?

really it could end right here without going to the pivot
we are in a broadening ascending right triangle.

Looks like we are trading a B wave flat here; down to 1054/56 in SPX for c of B then back to 1070 at least for an ABC up

Thanks for the post, Mr. Mole, I really need something to entertain myself while I cross fingers and pray that I don't miss any serious move outside my trading hours... Come on, only 47 min left, we can wait another day can't we?
Edit: Entertain AND educate!

Thanks Mole. I appreciate the wisedom!

PRS your wedge broke

times like these I wish I spoke Elliott-ness.
still, an excellent chart to map out one's strategy.

gerbil, if you want check this out, the rules are mostly ok, except on diagonals that may have quirks, and the guideleines are untested but interesting

advantage, just a couple of pages

http://www.scribd.com/doc/23363645/Elliott-wave-rules-and-guidelines

not the Bible but a reasonable Vulgata

EUR may be succumbing to the dark side here.............. mwahahahaa

http://content.screencast.com/users/ultrabear/folders/Jing/media/8eea8733-0f54-4bc4-8c40-a2009b675dad/EURUSD_5min_2010-02-08_2010.png

p.s. great chart mole - nice..