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I woke up from the nicest dream to the worst nightmare.

That bullish-happy-looking bloke pictured above with the In-n-Out Burger? He may soon get his ass chewed off if he doesn't look around...there are bears lurking here.

because im stuped, im calling for 1102 before the close

Bought TBT today the Ultra Short Lehman 20 year treasury.

Stuped your link has the next word (this) tied into the link

Hit the return so the link is totally separate

hopefully you don't need that money - you just threw it away on TBT

THANK YOU DT

AXP, COF, and many other companies report after market close today or before market open tomorrow. I don't think we're heading lower. It's up up and away now. AXP is a master of short squeeze (I know it because I was short it since October 2009, the only thing saving me was the various AXP calls since $35 until April, when I effectively raised my short sale price to $49 by selling the calls). Want to get a nightmare in your sleep tonight? Look at its chart since 2007 for that gigantic potential IH&S. I leave for vacation tomorrow afternoon, but I have already promised myself not to take any positions today or tomorrow.

And look at AXP now. See? Master of short squeeze.

es 30m chart......since wed 1061 low at 230pm est.....we need abc up....a is 3pm wed at 1067.75.....at midnight we hit b low at 1061.25....we now need 12345 for wave c to complete up...primary 1 at 630 this am at 1079....primary 2 is 1073.50 at 830am....we are in primary 3 now and have completed 123 and have completed abc down for w4 of 3....or that is a of abc for w4....we still lack a primary 3 high then primary 4 retrace and completion of primary 5/C....so 2 distinct new highs to come

Don't post often at all... only once.

Sent Mole this chart last week.... on US Steel

http://stockcharts.com/h-sc/ui?s=X&p=D&yr=0&mn=6&dy=0&id=p08447452787&a=198843638

Don't take it personal if I don't respond to a personal email containing charts. My traffic stats indicate that over 50,000 traders follow this blog. That may give you an idea on the flood of email I have to deal with. On top of that I have to trade and run this blog, which takes up most of my day.

I suggest you do what you did here - post the chart on the blog. That's why it's here. And if it's good stuff you will find a critical but receptive audience. Some really good traders here.

we all know that boss, but did you see how they ramped SPX above resistence but VIX is holding by a thread at support SMA13

but i want to see SPX 1088 broken soon, or i'll start feeling BLUE

Hater !

just kidding

Trying the trippple top on AUD/JPY:
http://screencast.com/t/NTdkYzk2YWQ

After some coiling up near yesterday's globex highs 88-89 area, ES is making a push towards today's highs.. We will get one more pull back likely from today's highs to suck in double-top crowd before a jam through spx1100 or even es1100 into close.

The future is bright - the future is orange?

http://www.screencast.com/t/OGI2ZmFhOTct......this is my first post and it may not work...if not i will keep trying

So far, we got the ~5 point pullback. I doubt if they go all the way down to 84-85 and let people in. ~88 was yesterday's globex ES high and thats where the VWAP is now. This is all the pullback we get. They will jam this higher into close to take out spx 1100 and possibly ES1100 as well.

GS and MS sucking balls-

http://www.screencast.com/users/VernontheGerman/folders/Jing/media/ed62d585-6343-4224-9d9d-b1c8f8be4122

While the cycle is about to change, don't forget that it's selloff Thursday.

Forget the health food. I need all the preservatives I can get.

Well if there was ever evidence that news doesn't matter, here is most of today's Top Headlines.

TOP STORIES
Existing Home Sales Fall 5.1 Percent- AP

"Sales of previously occupied homes fell in June and are expected to keep sinking, indicating that the housing market's troubles are likely to drag on the economic recovery."

Mortgage rates hit new record low- AP

Stocks surge on upbeat earnings, forecasts- AP

Credit card practices cleaned up - to an extent- CNNMoney

Leading indicators drop in June as recovery slows- AP

Most Americans think economy yet to hit bottom- CNBC

Job seekers' latest hurdle: Credit checks- CNNMoney
Regional bank results improve; credit woes ease- Reuters

Fed chief to Congress: Don't end stimulus spending- AP

Stocks rebound after Bernanke's 'uncertain' outlook spooks market- Tech Ticker

Reality is about to bite.

When I see headlines like that it's like watching adults talk in one of the TV episodes of the Peanuts.

Bla bla bla bla bla bla bla bla...

News is nothing but propaganda designed to keep us distracted served to us by the elite who runs the planet.

Mole, while news doesn't matter, is it possible that sometimes news is used? For instance, if GS wanted a big shakeout before this thing ramped higher, is it possible that they (and some close friends) decided to do massive selling right after bernanke comments to give the illusion to people/traders there is a panic for the door based on bernanke, which causes everyone to sell, which gives them a good price to buy back. whereas if they had just tried this on no news, they wouldn't get the intended effect (the nice selloff)?

Actually, news can be used for short term effect. For instance, let's say we were in an uptrend the last few days and further that GS used the Bernanke testimony to send the markets down -- because this action was against the trend, they only succeded for a few hours. The uptrend continued in AH and the shorts were killed in the opening hours. That's why you see spikes in one direction or the other when important numbers are released, but they never have any long term effect with regards to the current trend.

You are getting it now, my friend.

GS = MM.

MM use news to create fake moves (more often than not). A vertical move in either direction off of news is always fade-able.. Its funny that there is tradethenews.com too... I wonder what Mole thinks of that.

vs. forecasts, pretty much all the data was ahead, esp the EU PMI stuff. But this is all just noise around the stress tests - we have to to see what happens over the next few days trading

well as the mkt seems to be screwing bulls and bears alike..it would not surprise me to see it back down later today or tomorrow...looking at the DAX we are still in the middle of the range... so pretty much same for most indices.

Europe is closing. I'm all-in short here for the day on a whim. At this point there isn't just a lot of risk of upside for today.

Have you considered the possibility of ES1100.xx today?

Yes. We rallied on Euro data. Europe is closed. That is my opinion. I will either take a haircut or I won't.

I am bald :-)

good lad

Yesterday I bought Aug 46 QQQQ calls in the lower 1080s @ $82 (approx.) to hedge my position -- it wasn't a strangle, but it was close enough to satisfy me. I added Aug 45 QQQQ puts @ $112 which I sold in the PM at $134. Today I sold the calls @ $107 and rebought the puts I sold @ $88.

Last hope for the bears (?): Potential (rough) Gartley pattern on ES on the 60-minute chart. Went from 1099 to 1050, rebounded to 1080-ish (61.8% retrace of 1099 to 1050), fell to 1063-ish, rebounded to 1090-ish (78.6% retrace of 1099 to 1050). That means ES should not go materially higher from here....

A good play IMO is to buy aug ATM calls on SPY (110s), IWM (64s) on this dip.. And then when SPX 1100 gets taken out.. sell the weekly SPY 110s and IWM 64s expiring tomorrow.

IF this is abc correction of wave 1 of 3 c=a@1098...1099.25 can not be taken out or my view is wrong?

point up for screen name. Mole+asses

Was about to say the same, the descending res and the C=A would/could/should block SPX:
http://screencast.com/t/MmFkZDY0MzY

I will correct myself: Initially I said we may see 1084-85. I think we see 1087-88 at best.. 5 point pullback is max you get on a gapup-trendup day like today.

pullback to 84-85 may be in order next.

based on what?

84-85 was the RH high yesterday.. So those who bought when 84-85 was taking out need to be shaken out :-)

Gap fill happens at around ES 93... that may lead to a 10 point pullback.

However today is a buy-the-dips day.. SPX1100 may fall today.. with SPX1110 on the cards tomorrow

trying to trade the retracements is a fool's game. not saying you are. just saying i've learned my lesson with this. better to wait for it, then go long. today looks very very strong though, would not be surprised to see SPX1100 breached today (quite possibly before lunch!).

I agree. The 'bulls' ain't gonna let this one get away this time.

Yes - doubtful. They'll roast the bears a bit longer with some false hopes and then administer the death knell by tomorrow.

Hopefully soon we'll find out if the bears are the coyote or the roadrunner.

Look at my comment to my own comment. I state the same - today is "buy-the-dips" day and we see 1100spx today very likely.

no - yesterday was buy the dip day. Today is take profit and start moving into a short day.

A day like today will have some follow through tomorrow. If at all, tomorrow is time to scale into shorts IMO.

They will very likely take out spx 1100 today.. and pause short of spx1110 tomorrow IMO

that's what people SHOULD have done. today it's what people ARE doing.

Yesterday's vertical down move on berknake was meant to do a shake out... The shakeout started at 1080es level.. That level should act like a nice floor now for some time...

I expect spx 1100 first and then es1085. ES 1080 may be visited from a HIGHER level like 1110 or 1130

In other words...for the short term anyway...go long.

yep, totally agree

Very possible but I have been very patient this month and I have a lot of ammo - another 30 point rally is just giving us better prices.

I think everyone looking at 1110.. Very likely we make it past 1130 and then some shake and bake between 1140 and 1110 before a next decent sized leg down

Am on the offer to double my earlier short trades @1093. Will take my ave price to around 1084 if filled

filled. happy days.

Looks like possible C up. I'm thinking we'll peak in the 1st week of August on a weak right shoulder.

Technical Question: Fib Retracements
Is there a Cliff Notes which provides the statistical probability of a retrace level? For example, if an "expected" level is 68% but it approaches (or exceeds) it, does that mean that you're in Wave X? Thanks.

Well that's what a minor wave 2 does, it makes you think a strong sell-off is coming and then we rally 2% across the board. I'm glad I risked 5pts on my 1070 short, I was looking for 1050-1030, but it's nice to only lose 5 and look forward to August-September, when the real minor 3 should stand up.

Look on the bright side, puts are getting cheaper.

That explains the rally. The mole vacation/SPY correlative effect is in play again.

Guess I wasn't too wrong after all :) :) :)

RIP Red (I know I said that yesterday). My 2:1 long:short is working out. No new position added today. I will leave for my vacation and check back on August 18. My orders are setup to auto-fill at 1120, 1150, 1175, and 1200.

If we're really close to 1175/1200 on August 18, it's full on short.

Have great vacation! Where are you going?

Asia (Hong Kong & Taiwan).

I worked in Hong Kong for several years and recommend that you prepare yourself for weather that may be more intolerable (heat and humidity) than Houston. That city, by the way, now has a serious air quality problem; put these all together and spend your time like the locals do--in bars and restaurants--and shopping malls. Travel safe.

Indeed, a wonderful city, but the weather is tough and the air quality is extremely poor. It's hard to find a place to breath where your nose isn't burning from the pollution.

I was supposed to go to Korea but weaseled out of it.

So that's what a head fake on ES looks like! The 15-minute SPX looks to be forming an Island Reversal in order the fill the gap from earlier. Good luck trading!

Chart: ES Waves
http://www.screencast.com/t/MWI3YzA3NG

Mole, excellent post once again.
To all bears, if we get screwed again short term, so be it. I had it with the political plays.

Reading this yesterday, if any is technically environmentally right, just got my emotions requesting a seat in my trading. (Jury is out: request not granted but anger noted!!;-)

http://www.zerohedge.com/article/matt-simmons-says-gulf-clean-will-cost-over-1-trillion-sees-bp-1-says-we-have-now-killed-gom

Although P3 may not be the best scenario for the society short term, as individual investors, we are not anyway the ones in any position to stop it. So our only choice: lucidity and be positioned with our families to survive it.

Furthermore, the optimistic in me believes that a new more adequate order, political and economical, will result of P3 that will have cleaned a lot of the upsetting social lies the political class and financial worlds have been able to pass in the media and get away with without the populations reacting.

When we look at history, many centuries ago, we see how the Churches which were deem the political/ethical elite committed sins against population about which they are still making movies today. Religion is something that is personal and spiritual, but when it got too mixed with human nature and political power, nothing was wrong with the religion, but may have been wrong in the way some people applied it. Historians and philosophers have long disserted on the subject, but rarely has identifying a problem prevented its re-occurence in human history.

Same today. Nothing is wrong per se with the principles of capitalism, when weak entities die to be replaced by other stronger ones, more capitalized, with better technology, products etc. That means losses are sustained by certain participants to result in an ultimate better global economical landscape where the advantage to survive goes to the strongest entity needing the capital funds to evolve.

But we all know today politics have corrupted the landscape with privatization of profits and clearly socialization of losses. It is more than just the financial sector, sovereign states have now done it and put a serious maybe unpayable mortgage on future generations. Quantitative easing is just another way of saying you are potsponing and imposing the inevitable in time to another yet not old enough person to decide if it is ready to accept it or not.

Nothing is new in the above, but maybe this is why P3, now or later this summer will happen. Social mood cannot sustain much longer all the abuse, something has to change, something needs to happen. Abuses have occured in the past, but so have wars and revolution. In the Occident, hopefully war is never on the list again, so revolution remains. Revolutions do not have to be violent, they just imply a resulting change. Maybe P3 has to be the revolution. And right now the convergences of all the lies are just making the boiler explode....

Mole, Thank you for letting me write here if you keep this comment. If this is not appropriate, please do not hesitate to delete. But for EW social mood, I wanted to add as to why I still believe, we are inexorably at a P3 turning point.

As I finish writing this I see SPX 1086, and despite all the above, Mole, I have your note above printed in my head and my triggers ready. Thanks again for your guidance!

Just had a strange moment of clairvoyance. The EU will announce that they have done a stress test and all banks pass. Then the market will do its own stress test - but with live ammo.

yes could be a classic buy the rumour sell the news situation

Europe is now trading 1% above y'days high while ESU0 still well below. All European Bank shorts are getting squeezed out.

All losses in oil reversed today as well.

Yes we are back up to the Upper Down Trend Channel Line Again!

A Question for the Stainless Steal Rats

Can anyone Tell me what happened the Last Time we hugged the Upper Down Trendline for such a long, long time ?

Click the Link . . . check out the Daily Chart . . . What do you see . . . ?

http://www.screencast.com/users/Innovisual/fold...

That doesn't mean it will happen again . . . just worth noting.

What happened?

If you look to the left on the Daily chart. You will see in April we stayed up just under the down trend line for 7 trading days.

Then we broke down into the Flash Crash.

Right now we are testing yesterday highs if we break out a test of the 200 day Ma might actually get completed at 1111

Bears got screwed.

Trying to count the waves on EUR/USD anyone can comment on this?
http://screencast.com/t/ZmEwZTY4YTYt

Thank you!

First thing I noted was the RSI negative divergence which may put your up arrow in jeopardy. Two cents.

Just saw your post below. Sorry.

A bit late but there seems to have a nice divergence on EUR/USD 5 min:
http://screencast.com/t/MDZmNTIzODEt

Right, I've got 3 very small shorts on now at an average price of around 1074. Stepping back a bit now - will add again in upper 1080's have a bigger go around 1100 before swinging the bat at 1120.

Possible hourly H&S forming on ES, neckline @ 1066, target 1036

Oh boy, the Zero lite subscription was worth the money. Thanks Mole for the real time comments about someone trying to build a floor yesterday. Made me take profits and saved me quite a lot of money.

Has gone short SPX now at 1079.3. Half of my usual trading size. Will probably take the rest short at 1085 area.

My SPX order got filled just near Tradingmom's ES trend line.

Let's hope it does not establish itself over the line.

The market wants your beard, so don't bet on it :D
Fellow norwegian?

well had lunch with a friend yesterday..has an office in a town outside Malaga..he has not been paid for a year now by the local council for work he was commissioned to do (architect), and things in that town so bad that the utility company even cut off the electricity to the council during their "feria" ..which if you know Spain is a big day in each town/village's year..

multiply that by "x" and you can see that under the surface "the rain in Spain" has yet to fall...

The town councils have just asked the govt for a 3 billion euro credit line to payy the bills:

http://www.cotizalia.com/en-exclusiva/ayuntamientos-ico-salvar-presupuestos-20100722-55468.html

Everything under control ...

and that's just to cover the first 4 months of this year!

The important thing is that all the banks will pass the stress test. Ole!

We have this shitty bank, with total assets of few billions, which alegedly passed the stress test and is in dire need of 600mil extra capital.

:))

of course! But will they really MEAN anything?

Of course not - but the market will speak the truth. After Bernanke's comments I am convinced the equity market will take us down to levels where he is forced to do more QE. Yesterday he was just laying the groundwork by talking about how he can exit these policies (thereby pre-empting hyper-inflationistas criticism). Market is going to be volatile and whippy until these stress tests are out of the way because it is almost impossible to hold on to shorts until they are in the rear-view mirror, whatever the outcome.

Did they mean anything in the US?

Short EUR/USD here (1.2844), aware that The center of the red channel may be a support now:
http://screencast.com/t/ZjAyZDlkNDU

Good spot on ES:
http://screencast.com/t/OTFmMDliNmQt

Attila has been on again:

http://www.xtrenders.com/2010/07/oooo-really.html

Seem to remember posting that chart yesterday, but he's got a point - not that I think anyone here discounts the possibility we could rip higher. Not quite sure about trendline simpleton though - ouch.

http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=3&dy=0&id=p57880730115&a=203443508&listNum=2

One thing I would observe that is pause for bearish caution is that the uptrend in raw $NYADV (highlighted in orange) is intact, even though raw $NYDEC broke through its downtrend.

Simpleton support at the lower trendline:

http://stockcharts.com/h-sc/ui?s=$SPX&p=15&yr=0&mn=0&dy=16&id=p79647141510&a=204537153&listNum=4

Attila may be right, but its so easy to find so many publicly documented examples of him being wrong (and yet still somehow right after the fact), that its impossible to trade anything he says. Since March 2009 he made so many just-as-strong proclamations as this that didn't work out.

And yet his direct, ultra confident style has people hanging on his every word, always with his most recent "success" in their forebrain, while pushing the legion examples of failure to dim memory.

One has to admit however, the market does look like a coiled spring here and its impossible to discount a large move to the upside in the short term.

Fair points - you have to give him credit for getting so much mileage out of essentially long-term trend-lines.

If it's obvious it's obviously wrong is not a bad rubric though - there must be a rake of stops just above that line... very tempting for the MMs...

I agree with that and last years failed H&S in July (that you couldn't turn on Bloomberg or CNBC without seeing some dude talking about the major H&S formation) was probably the best example in recent memory.

The ultimate irony of course in Attila's mocking post on trendlines adherent's & moving average followers, is that the whole Xtrend's philosophy is itself...........based on some long term trendlines!!!!!!!

I mean, I know he's writing his book, and this whole thing pays in publicity, but when you distill his whole philosophy down, its a long term trendline!!!!

Which to use his own mocking tone, will always be right some of the time.

And when we zoom out far enough, any trend line loses credibility because the data is not infinite. It had to start somewhere, whether thats 1930 or 1830 or whatever.

It's not what you say, it's how you say it. That's why Cramer is probably making more money now on tv than he ever made in markets

Thats what the wife said to me last night lol

small day trade short here @ 1069.50

and again @ 1073.50

on the offer again at 1078. this is great!

followers of Gann, am I even close?
http://screencast.com/t/MTY3MmY5OWEt

Don't know Gann but I recall once seeing a post about the "roof" topping pattern; sure looks like it here. Warning: I also recall reading once about the "roof and chimney"...no joke.

Found something: the Roof is half a diamond; see this.
http://thepatternsite.com/roof.html

I know a few of you like the stars. This guy does too....

http://commoditywatch.podbean.com/

Chart: CL

http://www.screencast.com/t/MDE2YWQy

Great wrap up post as usual.
Suspecting blue. Prepared for orange with stop at today's high in case 3 "up" shows.
AUD/JPY teasing to the downside tonight. See what the morning brings.

ES now falling out of its pennant.

well, we are at juntion right now, but i'd consider that another two days fall is still in order

Thanks for another great post, Mole. It was nice to see that trendline that comes from the bowels of hell bite the big one today! Normally, I would say that what follows isn't my thing, but...there seems to be a bunch of chatter about there about some seriously abnormal astrological stuff coming up starting around Friday and and peaking over the course late Aug/early Sept. If you google Arch Crawford or Cardinal Cross you will find the info. Curious to get any opinions. Even Seeking Alpha has something on this guy...weird.

If Crawford is getting that much airplay, his pick is going to get gamed.

Cheers for the tip - will check that out - like the kooky astro stuff. Full moon is the 26th, although where they have come together, big turns seem to be more associated with the new moon... market must be teenage fan of the film franchise ;-)

http://radio.goldseek.com/nuggets/crawford07.14...

Arch Crawford audio from July 14th

Yeah, same chatter was a month ago - nothing happened. At this point I'm fading that stuff.

Thanks, must have missed the first go around.