Waiting For Waves

Korea is still awesome – even the weather got a lot warmer in the past few days. I spent the weekend in the Sorak mountains with friends which was an amazing experience. But quite frankly, even a one way trip to Pyongyang (i.e. North Korea) would have been better than watching this miserable tape. As you remember I expected nothing but churn ahead of the midterm elections but this is ridiculous. My condolences to anyone forced to watch this paint dry – I recommend you pick up a new language instead. On that topic – my Hongul is getting pretty good actually – at least now I can read the signs, which is a big step forward toward learning Korean.

I am pretty jazzed that I picked this period for my trip as I probably would not be able to offer much in terms of insights anyway. The entire financial market (i.e. equities, bonds, currencies, commodities, oil, etc.) appears to be locked in a sideways pattern now and unless you’re selling theta there’s really not much to do. Everyone is waiting for waves and although a tsunami may hit early next year I have doubts that we see anything more than a quick correction. This is a good time for traders to sit back and wait for a push outside the current equilibrium. What we need is a harbinger of future tape to come – so if we get a fast push up it may mean that momentum is again swinging toward the long side. If we see a quick downside correction this week I’m sure that it will be bought and a floor be painted – BUT – it may be a first sign of things to come early next year. So, getting positioned on the next ramp up after that may be good medicine.

So, don’t try to force things – if it’s a ‘do nothing market’ you should be a ‘do nothing trader’ – pretty basic right? But sideways tape often traps people into enforcing their own ‘opinions’ on where things may push next. The bulls think it’s a break before a push higher and bears think that the current uptrend is running out of momentum. Maybe – but being early either way can be very costly – a lesson many bears have learned the hard way on the way up since March 2009.

Before I go I’d like to let everyone know that my trip has been extended by two more days so I probably won’t be posting anything intelligent until Friday morning. And I’ll probably be jet-lagged like hell – so I actually hope the market keeps waiting for waves until I’m back ;-)

Keep it frosty!

Cheers,

Mole

This entry was posted on Monday, November 1st, 2010 at 4:51 am. Both comments and pings are currently closed.



  • Bob the Horse

    First.

  • Wave_Surfer

    Selling options and having the decay work FOR me, is what I am doing.

  • raised_by_wolves
  • http://evilspeculator.com molecool

    Careful – make sure you are properly hedged. I'm sure you know but just in case.

  • http://iberianviews.blogspot.com/ catracho

    Europe gave up it's gains pretty quickly…let's see if we get some follow through?

  • 99er
  • amokta

    …horse past the post wins the Derby

    So are you still short-positioned, or has that all changed?

  • http://twitter.com/forexchump forex chump

    Don't forget to check the “double” barber shops before leaving Korea.

  • http://www.hotoptionbabe.com Anna

    Mole dahling! lol My weekend post was Sea Wave of Change (great minds?) Hey wish I could join you over there, it nothing but garbage politicians over here and can't wait of these stupid mid-terms to be over!!!
    Enjoy! Thinking of you oxox

  • http://evilspeculator.com molecool

    Thanks sweety – I got to tell ya, being over here feels like being part of a society on the move up, while living in L.A. feels like being part of one in decline. Everything is amazing here – the airport, the train station (and high speed trains which I took last week), the cities, the people, the dynamics of the society as a whole, I could go on….

    I was looking out of my hotel window (finally found a bigger room) and there was a Korean man throwing a cigarette bud at an ash tray outside of a restaurant. He missed and then went to pick it up to put it in. I was thinking to myself that in the U.S. they wouldn't have bothered – which is why you see trash everywhere. This place is spotless – all across – I have not seen a single piece of trash on the street since I came here. Compared with that L.A. is a dirty ugly wasteland, very depressing and I am not looking forward to coming back.

  • http://evilspeculator.com molecool

    ;-)

  • AlohaBear

    Aloha. What a feeling to wake up to a spectacular moon and stars, best part of working early mornings. will put my two cents in that the eur/usd looks interesting on the 60day 60 min has nice wedge, fan, and 200 all coming together nicely. Lookiing like a nice day to gaze at the stars enjoy your day and trade well.

  • gsavli

    nasdaq = one flew over cuckoo's nest.

  • http://evilspeculator.com molecool

    Crazy tape…

  • gsavli

    check out europe – Estoxx at -0.04% change, TecDax -0.10% and with this explosion after ISM, it went down even more. :)

    bubble anyone?

  • BobbyLow

    Sometimes I wish I could be more crazy than I already am so that I could have been net long without protection right now. My protection is eating into gains but it sure is nice not to have my account Red as we blaze upward and onward to new heights of insanity.

    However, I'm not complaining about the protection costs though because it is the only way I can be long this market and sleep at night. :)

  • gsavli

    you just can't be long unhedged this market. it's a disaster, waiting to happen.

  • BobbyLow

    Ain't that the truth.

    I look at this market as being a diseased old whore loaded with STD's. And to screw around with it without protection could be suicidal to what's left of my financial health.

  • AlohaBear

    This market weeds out the pretenders. You can not stop thinking and looking for an edge, What is weak and downgrade in an indicie one day, is cheap compared to peers the next. Ones edge is to have a system that changes with the market daily. Be smarter then the drons and don't forget to thank Mole daily for leaning the edge in our favor.

  • JDWM

    Didn't we do all this last Monday aswel?

  • Brishort

    Ok, so is this all POMO has to it?

    Euro turning down and we have closing the morning gap in progress in NDX.

    If it weren't for the zero warning us to not do anything stupid, I would be going in for a short scalp on this.

    Let's keep watching this a little more

  • http://chartsandthat.blogspot.com/ ultra

    Hey folks – hope you had a good time dressing up over the weekend.

    NDX jumped the top of the wedge I highlighted, crashed back inside and now sticking a toe through the lower diagonal. NDX:VXN looking bearish.

    http://stockcharts.com/h-sc/ui?s=$NDX&p=5&yr=0&mn=0&dy=7&id=p80603120920&a=210963724&listNum=4

  • gsavli

    floodgates are opening here. NQ about to breach lower trendline.

  • Bob the Horse

    Still short, just not excessively.

  • amokta

    Hi,
    I closed my ST rbs long & spy call out at near top today (also closed gold longs & miners) – profit is profit

    Opened SPXU etf just off the top – now when do i cover??

  • Bob the Horse

    1140 is pretty pivotal I think – if we break that then the bears have a chance. But in terms of timeframe, we clearly need to wait for Wed. The reaction to that will determine what comes next. The reality is no one has a clue, we are in uncharted waters. The ISM is at 56.9 and the Fed still want to ease policy further. It's total madness.

    Incidentally, this is worth a read.
    http://www.efinancialnews.com/story/2010-11-01/the-success-of-q-e-two-is-far-from-guaranteed

  • http://chartsandthat.blogspot.com/ ultra

    What to make of the fact that SPX narrowly failed to make a new high off the open today against crashing SPX:VIX?

  • amokta

    Thanks for the link

    Incidentally, are my lotto puts SPY Dec12 20 (lol!) likely to make any profit if vix goes up, even if spx never approaches 200!

  • gsavli

    seriously, you have SPY puts with strike 20? :))

  • Bob the Horse

    Yes, as they have some vega but not as much as you think because longer-dated vol never goes up as much as spot when you get these vol spikes. You might have a point over the next few months where you find these things have gone up by 3 or 4x but I would sell them if you get that.

  • Eva S

    Amokta bought these puts *before* he found out that the Mayan calendar Overhyped Dec 2012 apocalypse could still be decades away….

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    I find it curious that Mole thinks we'll just see a brief correction and nothing more, when every other time we've pushed to these levels we've got back down to 1010-1040 within a few weeks.

    I'm far from any sort of expert, but just amazed how the bullish sentiment seems to have conquered everyone.

    I must be the only one left thinking 1040 minimum in a few weeks, and 950 highly likely.

    Oh well, we'll see soon enough.

    EW stuff I read indicates the next wave down would be quick and violent and deep?

  • http://chartsandthat.blogspot.com/ ultra

    Hmm. I prefer to remain equally sceptical of the output of both sides.

    Hear the one about the 40km diameter comet that nearly ended human life on earth 12,000 years ago – and whose debris stream we are entering right about… now?

  • Eva S

    Clearly it's better to trade the charts. A buy signal on silver did not show up till late August. So this Zero Hedge “news” from March till Aug wasn't very useful.

  • Eva S

    No… Like I said before, I am much more concerned with my personal safety on American streets every single day than with comets and what almost happened 12k years ago.

  • http://chartsandthat.blogspot.com/ ultra

    For me it's like charting – sure, look at the 5 min and the 60, but you probably best take a peek at the daily, weekly and monthly too lest you get flattened.

  • Eva S

    I agree, but if the apocalypse does happen and/or a comet destroys the Earth in Dec 2012, how useful those SPY $20 puts will be?

  • Darkthirty

    How peaceful everything will be!

  • http://chartsandthat.blogspot.com/ ultra

    Not very! Interestingly, the apocalypse as commonly described – a deluge of fire from the sky etc and so on – does sound an awful lot like bombardment by rocks from space.

    But anyway, we digress…

  • 99er
  • Wave_Surfer

    Definitely!
    I am no fan of unlimited risk. They are bull put spreads. Almost all of the movement of 1 set of options are countered by the others.

  • http://chartsandthat.blogspot.com/ ultra

    Zzzzzzzzzzzzzz

  • http://chartsandthat.blogspot.com/ ultra

    Might as well have a chart to be going on with

    http://bit.ly/9PZb8y

  • raised_by_wolves

    Yes, this Zero Hedge news was extremely useful for anyone concerned about being informed. No, it wasn't useful like a chart is useful for trading. Zero Hedge is better than most “news” sources since (1) it is heavy on primary source documentation, (2) has no fear of leaking information, and (3) has a record of breaking stories weeks or months in advance of the Wall Street Journal (e.g. Goldman Sachs fraud) or the New York Times (e.g. bankers making a guaranteed profit in the Treasury scheme). Whereas Bloomberg has an obvious pro-banker bias (e.g. their praise of the suspension of fair-value, mark-to-market accounting since it would “improve profits at banks like Citigroup Inc. by more than 20 percent.”), Zero Hedge has an obvious anti-banker bias. An anti-banker bias is what you have to put up with if you want better, more detailed information before anyone else breaks the news (if they even get around to it). Funny thing is, despite the anti-banker bias, you actually get more primary source documents directly from the banks when you read Zero Hedge.

  • raised_by_wolves

    That was an uncharitable statement of yours. Of course, relative to charts, not even Zero Hedge is useful. (That's why I don't read news during market hours). However, relative to other “news”, Zero Hedge was extremely useful.

  • EvilTrader

    Six Doji-like candles in a row, if we make another one today in Spx. All of them inside an important previous top zone.

    Something does not smell good, definitely.

  • JDWM

    And yet there has been still lots of bullishness on here. Hmmm…

  • ds2

    This drop could just be people wanting to get in cash before the election & FED announcement.

    GO GIANTS!!

  • 99er
  • JDWM

    But the TA implies something a lot more serious.

  • Eva S

    Well there goes the neighborhood… Why did I sell my TZA on Friday?!!!

  • ds2

    If we close down here we will have broken bellow the rising channel. I am short from last week. My stop missed by a penny this am. I hope you are correct. I think Tues and Wed are going to be very interesting for sure.

  • jigdaddy

    wow, amazing they didnt take you out

  • amokta

    I dont know why i feel so relaxed having an etf long (maybe cause its a small position, plus some sort of stop). I think i am falling again into beleiving the market will go the way i want.
    Long seems to have worked since mar 2009, so why not now?

  • ds2

    LUCK only. Believe me I have been taken out by a penny more times than not. What we need now is some selling volume.

  • malverd

    who thinks we finish in the green today :P

  • Eva S

    We may. :-)

  • Eva S

    It could be because you are playing both ways at the same time. Are you still hoping that the SPY $20 Dec 2012 will be worth anything?

  • malverd

    Yep, a definite 'maybe'

  • amokta

    Yes i am playing both ways right now (but long is default direction)

    Those 'way-out-man' spy puts were just a lotto play from an option trade that went wrong – i thought id keep them (only a small amount of money in them!)

  • amokta

    If we close green, I will eat my dog (oops.. we've done the eating thing to death now)
    Seriously, im tempted to hold some longs into tomorrow?

  • malverd

    IMHO, gotta close below for bearish…

    http://img833.imageshack.us/img833/110/email138073033.png

  • malverd

    amokta, yes i'm holding some longs, but positioned more short.

  • http://chartsandthat.blogspot.com/ ultra

    Mr VIX hovering just inside the upper daily BB – you better hope he doesn't close outside…

    http://stockcharts.com/h-sc/ui?s=$VIX&p=D&b=5&g=0&id=p23819557372&a=202546768&listNum=2

  • amokta

    I can't work out the 'hedged' type of trades – im either long or short (leave aside lotto puts!), but try to manage risk as best i can

  • Eva S

    I thought we've already discussed this a couple of times: dogs are good and you should eat cats instead! If you don't like your dog, let me adopt him!

  • malverd

    Why?

  • amokta

    :-)
    anyway, Malverd's green close call is looking more probable by the second

  • Eva S

    I agree. Bears may get a doji, if they're lucky.

  • malverd

    And…..are we really surprised? Looks like that ascending diagonal support on SPY I posted below is pretty important? Same diagonal support on the NAS held. Thoughts?

  • 99er
  • EvilTrader

    Bearfest was last weekend but for equities is scheduled this week !

    http://www.blackbearlodge.com/bearfest.htm

  • raised_by_wolves

    I'd say the bulls won today based on the 10 minute chart. Sure, they lost the yellow 1.0 standard deviation, but they won the pink 10 day, 10 minute VWAP, setting themselves up for an another try at the yellow 1.0 standard deviation.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/50ff8ef5-5796-435b-82df-50c8c26c1820/00002500.png

  • raised_by_wolves

    IMHO, gotta close below for bearish. . . .

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/d5b4d998-dc90-4c9c-a826-f54df881e37d/00002501.png

    Unless that happens, I assume bullish.

  • raised_by_wolves

    As much as bulls haven't been able to break resistance, bears haven't been able to break support.

  • raised_by_wolves

    Huh? Today was hell exciting, and I mean that seriously, not sarcastically.

  • EvilTrader
  • convictscott

    Gary, The flipside of the market breaking through resistance several times over the last few months is that old resistance, is now support. The quick rise of the last few months has spawned a new animal in the ecosystem, the DIP BUYER. He has been watching this rally, fretting that he is not part of it, waiting for his opportunity to get long, and not finding it. Any drop that finds support will be bought heavily.

    Again you continually fail to understand that this market is a dynamically changing beast, every new day of tape gives new evidence and changes the odds. The predictions you made 2 months ago were probably pretty reasonable predictions back then, but that was then and the situation has changed.

    You “think” we are going to 1040 – based on what?

  • SW6

    I have been feeling the same way going back a couple weeks now. Watching all this unfold is like watching a slow motion churning of aggregate psychology; to me it's very interesting even fascinating at times.

  • raised_by_wolves

    Don't fire until you see the whites of their eyes! :-)

  • convictscott

    Currency traders around in 5 hours might want to watch the AUD rate decision, should make for interesting trading

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Sorry, but the 'dip buyers' argument cuts no ice. I'm sure the very same dip buyers were ready and waiting as the market 'dipped' from its April highs. Fat lot of good it did them! Support from 1220 down to 1010 was so strong wasn't it? Crap, and you know it.

    In essence, the market was ready and willing to fall to new lows back in August, and Bernanke rescued it. Will he rescue it again? You don't know any more than I do. But you profess to know the market is a different beast. Same old beast. The FOMC figures alone will dictate future direction, technicals will not matter a jot.

  • http://www.hervey-bay-holiday.com kea11

    Melbourne Cup Day today; Australia's biggest horse racing event. Unable to find Bob in the field though – will have to back a Kiwi horse instead – plenty to choose from, as there are 11 in the field of 24. Only 7 native Australians running; three from Ireland and 2 from Great Britain.

  • http://www.hervey-bay-holiday.com kea11

    Be interesting to see if Australia rolls over today after yesterdays Asian market surge; being that it will be a slow day – may as well be a holiday with the Melbourne Cup Carnival.

  • DudePlunger

    You've also been thinking that 1040 minimum and 950 highly likely for the last 3 months. You can hold on to that idea forever, until one month you're finally right, but it'll never make you a consistently profitable trader. You have a flawed outlook on the markets and it's beyond whether or not the market proves you right. Instead of looking at market evidence, and then formulating an opinion, you've formulated an opinion, refused to admit that it hasn't been proven correct, and find market evidence to support your opinion.

    It's not curious that Mole thinks we'll see a brief correction. If the market presents evidence to expect a crash, Mole will be the first to present a gigantic Sunday post, with 15 charts, entitled, “It's beginning to look a lot like Flash Crash.” Then people will come on this site, yell at Mole for changing his opinion, the market will meander for 3 days and then fall 1,000 points over the course of two weeks.

  • http://www.stringmandalas.com LosGatosCA

    ES indicators – 6 timeframes at End of Day:

    http://www.screencast.com/t/saD6FCCu

  • jacksoo

    the biggest and most rapid decline will come when the dip buyers have become so programmed. hey wil keep buying the dips even though the mkt keeps turn down – they will in deed be the firewood for the decline. By the time they realize its isn;t working dip buying will give them night mares – that is how deep bear drops occur.

  • grednfer

    This is where you want to be shorting the NQs………2142-2162

    Short from 2144…….but wouldn't be surprized if they took it back up into that zone.

    They streched the DOW to highs again today……..

    Tops require a lot of patience…..they hover at highs much longer than the lows……

    I wish they would just punch that ticket and turn around but they can linger for 7-10 days.

  • Biowolf

    Mole. How do you say `where is the next bordello`in korean. I am going there next wek.

  • amokta

    /es slowly ticking up – but too early to say much

    how are currencies – aus $ streengthrening??

  • http://www.portfoliotilt.com PortfolioTilt

    Glad to hear things are going well out there for you. Certainly in agreement that this tape has been brutally slow. The S&P 500 has basically formed 7 Doji's over the last 8 trading sessions. As we point out in the second chart of our recent update ( http://portfoliotilt.com/stock-market-analysis/61-weekly-market-digest/498-trick-or-treat-bulls-rally-in-october ), we are dead stuck in the 1170-1190 range. Expecting fireworks for the FOMC though!

  • 99er
  • convictscott

    Amotka, AUD is going to be a weird day, we have this horse race on here which literally stops the nation, every single business is closed down for it, happens 30 minutes after the RBA rate decision in 1 hours time.

    At this stage it looks like being a retest variation sell on 60 min charts as well as an inside bar buy signal, my plan is to take it either way, long or short, with a stop 1 tick above the high and low of the 60 min bar

  • convictscott
  • convictscott

    JDWM, today on spx was an outside bar doji. Basically what I think when I see this candle is “longs got screwed, AND shorts got screwed” This has implications going forward. An outside bar followed by an inside bar (if we get one tonight) is a high probability trade in either direction, in this context it setting up nicely for an explosive move on wednesday

  • convictscott

    Very interesting 60 min euro triangle

    http://www.masterkillers.com/wp-content/uploads/2010/11/image1.png

    At the next 60 min rollover it should be an inside bar, IMO this is worth a play both to the long and the shortside on break of the high or low

  • convictscott

    Feeling pretty clever right about now :-)

  • randomtrader

    this is bad, australia raises rates…, wednesday QE2… i guess those dollar going to be devalued by 20% rumors are gonna come true.

  • convictscott

    Gary, maybe you should look at the charts from April again. You will see that that incredible move, just like this one, spawned on weakening momentum and internals, looked ready to fall over at any time… but it didnt because dip buyers were there every time to prop it up, and the bears were so weak they couldnt even fight anymore.

    I've market on this chart the points where dip buyers rushed in to the slightest weakness. This is because the longer a bull move goes on the more participants on the sidelines are gripped with the “fear of missing out”. These stupid dip buyers bought right up to the final big dip at the top, which was obviously a disturbance in the force. Thats what dip buyers do, they buy dips in an uptrend, and they are right, until they were wrong. In April the dip buyers were right 7 times in a row, then they were wrong.

    http://www.masterkillers.com/wp-content/uploads/2010/11/image2.png

    You are completely wrong about Bernanke rescuing the market in August. The entire drop from the April highs was price going down on weakening downside breadth. Thats NOT capitulation, thats NOT the start of the mythical P3. If p3 was really starting even Prechter thinks it should have increasing downside breadth on the way down.

    That was a critical sign that the market only needed a little prop up to hold 1040, that the market was *ready* to bounce, QE or not. Fools were so intent on reloading slopeofhope.com and renewing their EWI subscriptions they didnt notice, and sheep got slaughtered. The same thing is about to happen. P3 type drop could happen now, I certainly wouldnt rule it out, but there is no evidence of it. When the next pullback starts having flash crash type days, increasing downside breadth and volume, bounces that only last 2-3 days followed by massive falls – then I'm a believer.

    Until then – why speculate without evidence? Evidence is this market wants to go up. Evidence is this market is overextended to be vulnerable to a fall. We dont know what the form of the fall will take because it hasnt happened yet. When it happens, I'll be short for it, but I wont be sitting pretty believing we are going to 950, I'll be watching for evidence to get out and get long.

    The FOMC figures dont mean jack in terms of market direction, any news event is only capable of influencing market direction if the market is vulnerable to exogenous shock. In this instance I suspect a market badly overextended to the upside

    You really dont understand markets very well at all ;-(

  • chronographics

    Just for you CS here is my 4 hourly triangle on EUR, you can clearly see the three legs in each. The last leg may not be completed as yet. Just MO
    http://screencast.com/t/o2ynX1Y0Ya

  • http://chartsandthat.blogspot.com/ ultra
  • convictscott

    Thanks mate, that shows a diff. view of a larger timeframe triangle than I was thinking of. Just jumped out of my 60 min chart euro long for a nice 2R win (long from the 60 min inside bar a few hours ago, stop at the low of the inside bar) . Been a good day while everyone else watched the Melb cup :)

    I've got no real opinion on euro atm, but I have order resting to get short on break of the daily low 138.63

  • http://chartsandthat.blogspot.com/ ultra

    That was the boring bit.

  • convictscott

    Euro seems to be stalling here (15 min view)… 5 min showing downside potential

  • chronographics

    Nice Trade :-)

    Agree seems a bit more perhaps to go on downside as well. Hourlies a bit toppy but haven't turn n crossed as yet.
    Yes a break of your level would look bearish – will be selling there as well!

  • chronographics

    ha just as I type that it pops 20 or so pips :-)

    Still feel a bit more time and downside would give a better technical picture to the next boost up -BUT the market will do what the market will do, so play it by the numbers I guess…

  • convictscott

    haha I just went and made a cup of tea and came back, saw the same thing. Still, for me it was perfect trading today, followed my rules, got out on first break of the hourly low.

    I feel like I've lost synch with the euro in the last hour or so, so I'm banning myself from trading tonight (unless it breaks daily low)

  • Bob the Horse

    Looking through my charts, 920 is still on the cards but we will need to see a weekly close below 1140 this month on ESZ0. Until then, it's just about keeping it fairly tight.

  • JDWM

    Careful. 1130 ish on SPX is 50day. Likely to rise to 20 then look out below.

  • JDWM

    Good place to short AUD v $. I can't as I haven't the capacity. :(

  • JDWM

    € didn't make 1.40 this time…

  • JDWM

    Go (down) £.

  • amokta

    Ok, thanks CS

  • amokta

    Any reason RBS, BARC, LLOyd are dipping this morning?
    Or all shares a bit volatile right now?

  • Bob the Horse

    Lloyds IMS – in line, no upgrades.

  • amokta

    Cheers
    I am finding that some of the banks seem to be moving independently of the indexes right now

  • amokta

    Folks, Long is the new Black!

  • JDWM

    I would suggest only HSBC (HSBA.Lon) is a leading indicator of the market within UK banks, though the the BKS index is useful too.

    UK BKS like US are toast. Like 2008.

  • amokta

    Yes noticed that HSBC was on the up
    Toast can taste good with generous amounts of UtterlyBernanke Butter :-)

  • JDWM

    Then again…

  • randomtrader

    with the dollar this weak how the hell do they expect to announce QE2 without a full on collapse of the dxy to 76 and below?

  • Bob the Horse

    I think it is fair to say that QE2 will not come as a surprise.

  • amokta

    Is this a sell the news or buy the rumour (or both!) event

  • 99er
  • gsavli

    it will be interesting to see tomorrow if this buying frenzy was front running the QE2 news and tape stays flat/goes up tomorrow or just some big guys' preparation for a colossal pump&dump.

  • JDWM

    I am always surprised by the stock market. I will yet again be surprised if it is anything other than pump in advance and dump

  • Bob the Horse

    I have given up guessing. The odds favour a pull-back but the reality is that it is looking increasingly likely that we are going to get a 1970's market where you get big swings, poor real performance but no significant nominal decline. Horrible market but actually not that bad for traders. The reason I am coming round to that view is because the Banks are still under-performing which suggests the inflation is not going to come in the form of house prices but food and fuel.

    But you can still get some very big downside waves within that structure. But it has to happen this month really (or at least the start of it)

  • gsavli

    when looking at naz action, it surely looks like.

    but then again – there was dotcom bubble – it's just, that i don't see the same rationale behind pumping it this time – in y2000 it was this new thing, everyone discovered that can make ca$h, called “internet” and as with all new things, there are major fluctuations, between love and hate, before they finally find their place in everyday consumption – for example new drugs – big hope, then big dissapointment, then eventually they find their place).

    But what is it this time? Iphones and ipads for everyone on this planet, every 2 years a new one? and GOOG as the only thing left on the internet? I don't know.

  • Schwerepunkt

    Thx Bob. Keep up the posts. Having a position in London gives you a very valuable perspective on the forest, for those of us in the middle of the trees here in North America.

  • 99er

    Chart: SPX
    Fuck the election. They're all liars and thieves anyway.
    http://99ercharts.blogspot.com/2010/11/spx_5857.html

  • gsavli

    exactly, if there's going to be a general inflation, then why is BAC trading at 11 for example.

  • JDWM

    Rinse, lather, repeat

  • Brishort

    Good morning all,

    Remember @ 1040 when I don't know who said “not a fu… triple bottom. Maybe I am seeing double here, but it is strating to feel like a repeat. Look at the zero hourly around 1196…

    God do I remember reading here “not a fuc… triple bottom” in August @ 1040 and not covering my short. Now… maybe… just maybe, could this be?

    A little more from VIX and Euro going down (loonie is already bottoming many times at parity now) and this is getting a confirmed short, at least for a scalp. On the oscillator side, all the weekly ones, ALL of them have already flagged SELL. Just need to see it on the daily.

  • JDWM

    VIX needs to have a close above c 22. AAPL needs a close below 300. If its going to happen ti will be tomorrow, Thu or Friday or Monday. That's what's ridiculous. It could be still 4 and a half days before we know. After all that has happened during the last 2 weeks. Look at all those narrow range bodies and long tails.

    Yet, we know that insider SELLING IS (Zero Hedge) over 400 TIMES BUYING!!!

    We know VIX has been rising. We know $ has been rising for a week or two. We know 1195 has not been taken out on the Cash after 2 attempts.

    What else do we KNOW (as opposed to believe)?

  • http://chartsandthat.blogspot.com/ ultra

    Mother is going down. My plan is to get short and then set the stop to breakeven ASAP – it's so volatile you *will* get the chance – reshort higher if stopped out.

    NDX scraped a new high today (stopping me out) – SPX failed again – and what do we know about diverging markets?

    Exactly.

  • JDWM

    Good old anti-inflationist (eventually!) Paul: “Former Fed Chair Volcker says quantitative easing may create inflation 'down the road' and the central bank will 'have to deal with it.'”

  • Brishort

    If I was not clear, I meant this feels like a repeat of the 1040 triple bottom type of environment for those that were watching the market that day of August, but this time being a triple top @ 1196.

  • Eva S

    Except in August you didn't recognize it as being a triple bottom, and now you are sure it's a triple top?

  • AlohaBear

    Anyone know who buys F seems to me it must be part of pension funds?

  • Brishort

    Of course not Eva. If I was sure of anything I wouldn't be trading but on an island. I think I have been pretty consistent at sticking to my charts indicators when posting here.

    Please do NOT confuse a problem of trading discipline looking at my indicators @ 1040 (which I referred to in my post) with trying to add value bu technical comments and technical analysis presentation of trading clues to keep people alert of the changing landscape I see.

    I do not think I said I am sure it's a triple top anywhere, why are you assuming this? I do not think either that I come across with free unwarranted statement, although I have long recognized by bearish overall bias but I control it by posting technical clues either way, bearish or stay on the sideline if indicators are more bullish (I just do not ever post “I am buying [whatever] type of comment)

  • Eva S

    I guess I must have misunderstood you. So many here called for a huge drop the past 2 months that I may be reading between the lines…. :-)
    I agree the market is overbought, but if we close above 1196 and 1200, that will be very bullish.

  • http://chartsandthat.blogspot.com/ ultra

    Colleague sent me this this morning

    http://bit.ly/aQepgM

    Just a speculative count, but interesting I thought to myself

  • gsavli

    it's been a strong, but still orderly rally for ES.

    what about NQ at pre – crash highs? is it an inflation, hedge great tech sales (also in the future) or just another bubble?

  • jigdaddy

    that was me :-(

  • Fearless

    I found something that worked really well during the past month – every morning when I get in front of my desk, I would take the keyboard and smash it against my head. The letter(s) that get stuck on my forehead is the symbol that I would buy. (Insert sarcasm.)

  • Brishort

    You do realize that you had the right comment at the exact right time for the exact bottom of the ensuing 15% rally?

    Intentionally or not, you made history that day on this blog!

    I remember so well reading your comment and hesitating. Not long after RBW made his coming out about going flat from all of his short positions.

    I just remember so well 'cause I paid attention to the comments but what overwhelmed by my bias at this time.

    I learned a costly lesson in September, but I am judging my Bear Anonymous recovery as now progressing well.

    Still a bear, just not blinded by my bias when trading :-)

  • jigdaddy

    all thanks to the zero divergence at the time…unfortunately i did not close my short until i got stopped out. so in hindsight i didnt take my own warning. what fucking sucks is that I had the plan and was looking for that type of action and i didnt act on my own plan.

  • http://chartsandthat.blogspot.com/ ultra

    Nope, I think you definitely killed it…

  • lilme

    In SF we found something that worked yesterday.

  • JDWM

    Until tomorrow through Monday, I suggest that rumours of the death of the $ are potentailly greatly exaggerated.

  • Eva S

    I wouldn't be surprised to see a dollar rally after the announcement.

  • Eva S

    Have you tried Google Translate? If you are going to South Korea and not North, these ladies should speak sufficient English to “communicate” with you. :-)

  • Biowolf

    <link href=”/telusbeta/static/deg/css/wysiwyg-3933289048.css” media=”all” rel=”stylesheet” type=”text/css”>

    the reason for my trip is to  track down Mole.

    Nov 2, 2010 09:02:09 AM, wrote:

    Eva S wrote, in response to Biowolf:

    Have you tried Google Translate? If you are going to South Korea and not North, these ladies should speak sufficient English to “communicate” with you. :-)

    Link to comment: http://disq.us/qoykd

    Biowolf wrote:

    Mole. How do you say `where is the next bordello`in korean. I am going there next wek.

    —–
    Options: Respond in the body to post a reply comment.

    To turn off notifications, go to: http://disqus.com/account/notifications/

  • ds2

    GIANTS GIANTS GIANTS!!!! Funny everyone is talking about Rentaria's hitting (which was great) but his fielding was excellent too.

  • 99er
  • 99er

    Celebrity!
    So we've had telephone calls from Leonardo di Caprio, Danny Glover, Martin Sheen…. Nice to have my fifteen minutes of fame. You?

  • Eva S

    None of the above are of any interest to me, but a call from George Clooney would be nice. :-)

  • amokta

    My UPRO long from yesterday doing ok (stop at 173.5 – hoping for 'give it to me one more time' into close)

    One thing i have learnt is scaling into a trade is better, as can keep some powder dry (i am usuallly, like prechter, too early into a trade)

    Discussion point: it takes a lot more capital to get some return with even triple etfs, while with far less capital, options seem to give the same return, plus a limit on ones overall risk (so whats the downside with options?? – are they always better, maybe prices vary a lot more, maybe they expire – but what if you only playing a short-term trade- which is better triple etfs or options re risk/reward)

  • jigdaddy

    lets hope we just saw an echo of the triple bottom :-)

  • ricebowl

    Bonds are moving in the right direction again, and stocks are putting in lower highs (and higher lows). Not quite yet time to short, but the signals are starting to fall into place!

  • BobbyLow

    I don't think there is an easy answer to your question. IMO, it still falls back to you and what you feel most comfortable with. All of the vehicles you mentioned have good and bad points.

    I despise the Triple and Double ETF's but someone else might love them.

    As far as options go, for most of the past year, I had been trading almost exclusively all options. For me the downside with options is that trading with a Bias as I did looking for that Fucking P3, my options acted like little piranha nibbling away at my account and the overall outcome was not a pretty sight. And this was even after I had a decent working relationship with the Greeks, Delta, Vega, Theta and Gamma. All my Option Knowledge in the world didn't do me much good being on the wrong side of the trade.

    Another way to sink an account is to have way too large of a position size (no matter what the trading vehicle is). Now I know running smaller position sizes probably removes the possibility of getting rich quick but it also helps or at least delays the possibility of your account being blown up as in what happens to most traders.

    So for me, I'm back to Swing Trading Single ETF's with entry and exit points based on my rules. I'm shorting Single Short ETF's when I want to go Long and Shorting the Single Long ETF's when I want to go short. (By Shorting to go Long as well as Shorting to go Short it relaxes my Margin Requirements) I also buy either Put or Call Protection at the entry point of each trade and hold on to that protection for as long as my rules tell me to.

    What I have now is a relatively slow process and a trade can last as little as 3 or 4 days or as long as 5 to 6 weeks. Before I began this particular journey, I spent a considerable amount of time back testing and I have a reasonable idea of what to expect. So far it is working and I am prepared to see it through until it provides evidence that my hard work was in vain.

    In any event, although I have a lot of respect for most traders especially those here and their different trading styles, I found that I needed a system that was my very own. And although other peoples advice is always appreciated it is a relief not to have to rely on it.

  • chronographics

    Comment of the day to you, great for you to have made that journey :-)

  • amokta

    Thanks Bobby
    I take when you say 'swing trading single etfs, you mean options on these?

    p.s. i think most of us here fell into the trap of 'Prechter-P3' for last year!

  • Schwerepunkt

    What is the old proctologist saying these days?

  • JDWM
  • BobbyLow

    Amokta, I'm actually Swing Trading the Single ETF Stock. For example, currently, I'm Short SH which is a Single Short S&P ETF and I'm Short PSQ which is the Single Short QQQ. (Being short these make me actually Long the S&P and QQQQ). These have been profitable however, because I'm waiting for my rules to stop me out, I'm still carrying December Call Options on both of these to protect against a Super Tank Job that comes from the blind side between now and a short period of time after Weds. Another example is that I'm Long the XLE ETF stock and have December Protective Puts against the position at least until after the dust settles from Wednesday's announcement.

    Lastly, I'm short UDN which is the Short Sister of UUP meaning that I'm long the dollar. By my rules, I should have stopped that one out yesterday. Again, I didn't pull the trade because of Weds and because I have UDN December Protective Calls that have a .75 Delta. The UDN trade is down but not significantly.

    I'll patiently wait for all the results tomorrow and let the market make it's spasmodic moves if it's going to. Only this time, I won't have a whole lot of angst if and when these herky, jerky moves take place.

  • Tronacate
  • BobbyLow

    Thank you. :)

  • convictscott

    Amotka, Personally I like the transparency of futures. Each full point on the es is 50 bux, so I can work out my risk/reward calculations in my head. Those triple etfs are totally unsuitable for anything but day trading, IMO the way the “triple” is calculated is deceptive and scammy. As far as options go, IMO options require a level of skill and knowledge FAR beyond stock and futures trading, simply because there is an extra dimension (time) that you must also be correct in. You can make a lot of money in options but my experience is that you must be a truly expert trader to trade them, or you end up in the situation (I think we've all been there) where you hold a short term trade, it goes against you, you look up the value of the option and find they are now near-worthless, so you go from being an active trader to holding the options as “lottery tickets”.

    For me, this is the big danger of options, encouraging me to trade like an idiot. If I tried that shit in the futures market, they would carry me out (well I did try it in 2008, and they did carry me out) . From your posts, I'm not sure you understand option greeks to the degree necessary to go head to head with the experts in the toughest market on the planet. Option markets are 99% newbie traders with small bankrolls looking to get rich quick, and 1% pros who calmly and methodically take every last dollar off them, leaving them literally without busfare home. If you dont know which camp you fall into – leave options alone IMO.

    Other people like the SPY or DIA, I think these are pretty good etfs for active traders.

    The way to work out what vehicle to trade is simple. Take your written down method (if you dont have a set of rules you follow to the letter every day, STOP, dont make another trade, simply spend the money on crack rock and hookers you will get more out of it) and backtest it across a number of instruments.

    One thing I have noticed is that a valid method will test better on one instrument than others, but should be positive expectancy on everything, like a standout number in a field of good numbers.

  • Tronacate

    scarey?

  • convictscott

    EOD ramp in es – weird

  • ds2

    Weird is right Scott. For the 2nd day in a row my stop missed by a penny. I fully expect to get taken out tomorrow. I expect there to be wide swings.

  • raised_by_wolves

    It's a beautiful pattern, isn't it? I've had my eye on it for awhile. I've been trying to decide what confirmation criteria to use before I go long-term long.

  • amokta

    Ive stopped reading the ewi stu's in detail – monday repeated the same mantra of 'big declines just round the corner'

  • amokta

    Thanks – i see what you mean (using options for protection)

    i seem to be addicted to the triple etfs – but like all addictions, this could prove fatal! (the rush of sudden price rise is like heroin?)

  • Tronacate

    Absolutely perfect……probably be a pullback at the highs…..but who knows……could just keep on rolling.

  • Eva S

    I don't doubt it's a business trip, but some Koreans are very attractive. I had a Korean boyfriend once and he had amazing skin. Mind you, I am crazy about my skin but when he took his clothes off the first time, I couldn't believe it…. Unfortunately he wanted to get married, so be broke up… :-(

  • amokta

    Thanks CS
    Yes i opened an options account for 'P3', and indeed i was up on the account on 2 occasions, but rather than bank profit i held on for 'P3' which resulted in lotto puts!

  • raised_by_wolves

    I was expecting the ramp after a triple /ES bottom above this important volume profile level.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/18e43fdf-d680-40ff-9632-565629d2add2/00002502.png

  • Eva S

    The biggest risk with options is that frequently people lose 100% of their investment, i.e. they let the option expire worthless. When you buy stocks, it's hard to lose 100% and most people would be out of the stock after losing 50-75%.

    I would recommend first becoming a good stock picker. If your stock picks are successful 70-90% of the time, then options provide excellent leverage.

  • amokta

    Thanks Eva – i know what you mean

    One problem with individual stock options is that the spreads can be wide, plus the MMs (or whoever) sometimes move the price unfavourably on 'news', only for them to lose value as the news hype settles

    p.s. any good skin moisturiser you can recomend to us :-)

  • Eva S

    I only buy options on heavily traded stocks, and where the bid-ask spread on an option is not too big.

    Re: moisturizers. For a guy, I would just recommend an ordinary shea butter.
    I probably have more creams and various types of lotions than clothes. Also I love going to spas. This could be genetic because my 2 little nephews (age 4 and 6) are *begging* me to take them along on my next spa trip. I asked the older one why he wanted to go to a spa, and he said he heard they have very good bacon and eggs there. LOL

  • http://www.mylifemytrade.com MyLifeMyTrade

    They never ran stops at 93. Gap up… Kind of confirmed up the AH action as well.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Why weird?

  • amokta

    I agree, heavily traded stocks probably best for options (unlessyou know something about the stock that it will be making a big move etc)

    by the way, i dont do much swimming, but im sure skin is rougher after swimming in chlorinated swimming pools !

  • raised_by_wolves

    I love how $NDX gained against $SPX even during (what I think of as) the ratio's correction phase.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/4e9bd921-d449-4966-911b-28de0cf06ba2/00002503.png

  • http://www.mylifemytrade.com MyLifeMyTrade

    Price patterns tell you how market will react and not the news.

    Today, esp into close, the market clearly said that it will like the election results and will gap up.

    I need to look at the charts some more.. but my read so far is that market will go up on what the Fed says and will dump sometime later this week or early next week.

  • amokta

    “Shea butter is edible and may be used in food preparation,[1] Occasionally the chocolate industry uses Shea butter as a substitute for cocoa butter, although the taste is different.[2]“

    -also useful if your hungry and have run out of food!

  • Eva S

    I used to live within walking distance to a very nice pool (BTW, Michael Phelps lives nearby) where they use salt instead of (or in addition to) chlorine. So I never had any problems with my skin. Unfortunately I moved a few miles further recently and now would need to drive… So instead of going to the gym, I became addicted to chocolate bicottis and the effects are quite visible.

  • Eva S

    You can use chocolate for various skin treatments as well!

  • raised_by_wolves

    Not that I use a moisturizer in practice, but I agree with your recommendation about using shea butter as a moisturizer on theoretical grounds. My theory is never put anything on your skin that you can't also ingest. Shea butter is edible.

  • Eva S

    I totally agree. It's better to use only natural and organic products on the skin as they do enter the bloodstream and some products can be very toxic.

  • raised_by_wolves

    Coconut oil is another edible moisturizer. Don't buy any moisturizer that isn't edible. Too toxic to ingest equals too toxic to put on your skin.

  • raised_by_wolves

    How about that; we're agreeing on something for once. ;-)

  • Eva S

    That's nice! :-)

  • amokta

    :-)

    anyway, if Mole sees us all talking off-topic for too long, he will throw a tantrum!

  • gsavli

    no biggy, we'll be there before 2011.

  • Eva S

    OMG, that's true! I didn't realize we went off-topic again.. How did we start with options and ended up with edible moisturizers?

  • gsavli

    you're going to die anyway, you know that?

  • raised_by_wolves
  • amokta

    Ok, i will drink a bottle of Oil of Olay, and report back tomorrow if its safe!

  • amokta

    Although i closed out upro eft, i did buy some gold proshares long

    (sometimes its worth rotating 'longs' if one has gone up, move to another sector?)

  • raised_by_wolves

    Yeah, Eva's going to die but she feels healthier and livelier in the meantime.

  • gsavli

    was thinking the same thing. it should be showing some signs of weakness here, if it was to fall tomorrow after announcement, not strength.

  • gsavli

    i can understand her. just drank a bottle of super organic Duvel and I feel so alive and healthy now.

  • Eva S

    Exactly. Life is short so you may as well have smooth and nice smelling skin. :-)

  • Eva S

    Consumed in moderate amounts, organic beer is considered a good antioxidant.

  • amokta

    i agree with you
    the problem has been if you end up on the 'wrong' side of a gap by holding the wrong position o/n . we had a gap up today,so in my mind, the risks are too high to hold an etf long – we can always buy tomorrow, as odd favour a drop & ramp, or a steady open (although a gap up is possible re election/Fed, and also if we are starting a new bull-streak (like from 1040)

  • Eva S

    That's a tough call as both can continue higher. I think $NDX will increase faster.

  • raised_by_wolves

    I had a Stone India Pale Ale for breakfast. It doesn't have the organic label anyway, but it does say, “Our Stone gargoyle wards off modern day evil spirits such as chemical preservatives, additives & adjuncts.” Even if you don't care about your liver like me, you don't want a beer that has that preservative shit in there because it's a tell-tale sign that it's going to be a worse than mediocre beer.

  • Eva S

    nice & healthy breakfast!

  • raised_by_wolves

    I'm going to have to add hemp to my beer for extra protein. ;-)

  • gsavli

    “Our Stone gargoyle wards off modern day evil spirits such as chemical preservatives, additives & adjuncts.” – that's just another word (or a few) for “organic”.
    On Duvel: “belgian golden ale, bottle conditioned, traditional method matured for 2 months”. What i read: “drink me, i'm organic”.

  • raised_by_wolves
  • raised_by_wolves

    I think I'll have another. Cheers!

  • Eva S

    That's easy as banks suck at the moment.

  • gsavli

    well, you know, how we guys are.

  • raised_by_wolves

    How would you pair trade them using options?

  • Eva S

    You mean pair trade banks and gold, i.e. going long one and short the other? I don't do pair trading… Besides both banks and gold can go up at the same time.

  • raised_by_wolves

    Mole doesn't throw tantrums. He does damn angel-winged cartoonish bulls to hell, however.

  • Eva S

    Yes, short attention span and can easily veer off topic…

  • raised_by_wolves

    @Eva S I mean pair trade $NDX long and banks short. I want to construct a trade that doesn't lose if both go up or both go down. I want to construct a trade that only loses if $NDX goes down while banks go up.

    @Stainless Steel Rats Does anyone know what kind of options strategy would work best for this?

  • amokta

    Tantrum was the wrong word maybe Certainly he can call the blog to order when he so chooses!
    Where is Mole by the way, i thought he was back in LA?

    p.s bollinger bands tighteningon some indexes, and MAs fanning out (ok, i just read that elsewhere..im trying act knowleadgeble!)

  • raised_by_wolves

    Remember, Mole will be jet-lagged when he returns to LA.

    Hmm, I have a feeling that Mole will be moving away from LA within a year. I recommended Lake Baikal to him, but I think he's more likely to buy or conquer a Pacific island of his own.

    P.S. I only have one TMA that is pointing down. All the others are flat or up.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/79c42737-7da4-433d-b498-46e433697fd9/00002506.png

  • amokta

    Nice colour chart – almost a work of art!
    Ok, catch up tomorrow!

  • http://practicalt.blogspot.com/ Gold_Gerb

    GOOGLE is your friend.
    http://mediaserver.thinkorswim.com/articles/TPPairsTradingArticle.pdf

    recommend you read at least page 44 regarding issues.
    good luck.

    ps. oh, there ARE banking etf's. not sure of the liquidity.
    http://seekingalpha.com/article/222378-spdr-kbw-bank-etf-in-a-world-of-hurt-will-the-broader-market-follow

  • 99er

    Chart: ES
    Is this an over-throw indicating a top?
    http://99ercharts.blogspot.com/2010/11/es_9061.html
    Only good thing about elections is that Susan Sarandon called…to legalize pot.

  • randomtrader

    we have not had 3 back to back down days in a row since september 1st, just straight up to the moon, and watching what the dollar will do at 2:15 tmrw is gonna be a helluva lot interesting, it is at lows i really don't understand how the hell they can push QE too and crash the dollar at the same time.

  • 99er

    Chart: TF
    Seldom look at Russell futures and less so daily charts but here's a possible Wolfe Wave for you.
    http://99ercharts.blogspot.com/2010/11/tf.html

  • http://www.mylifemytrade.com MyLifeMyTrade

    We spent the ENTIRE day between 90 and 93…. trapped shorts.. closed around 90.. ramp came in AH to trap the shorts … The large majority still trades between 9:30am and 4:00pm. Those folks are trapped now.

    In fact as I type this, I think we will see lower than today's low in post-fed volatility. But for fear of fed bamboo, today's trapped shorts will be forced to cover.

  • jacksoo

    you mean they're clearing the bus of bears before a drop – -?

  • DudePlunger

    Hey guys I need a recommendation for a forex broker. I'll be opening the account with $5,000, I'd like the ability to trade standards and minis (micros would be nice.) Platform doesn't matter too much, but I do want the smallest spread possible (2pips) for EUR/USD. Thanks.

  • convictscott

    This is very good commentary :)

  • convictscott

    Bobby, how is slippage and liquidity on the SH compared with shorting SPY?

  • convictscott

    IMO that “spread” instead of taking a commission bullshit is part of a non-transparent, non-regulated market, where the brokers profit is hidden from you, and more importantly the broker profits more when you lose. What about a discount futures broker trading micro lot futures, a real market you can see under everybody's skirt, regulated by the CFTC (the first time one of the big bucketshop fx brokers goes broke it will send that industry crazy)

  • DudePlunger

    It's an option. If you are free, come on skype for some voice.

  • DudePlunger

    I wanted to go with commission based FX broker, but it turns out the M6E forex contract is the micro, it's liquid, and it's $1/pip. The margin is ridiculously low, $500 overnight or so, so it seems like there may not be much of a reason for me to leave my broker.

  • Biowolf

    <link href=”/telusbeta/static/deg/css/wysiwyg-3933289048.css” media=”all” rel=”stylesheet” type=”text/css”>

    I just like to have fun with Mole. I like his twisted sense of humor. And I wouldn´t put it past him to visit a bordello. Nor would I put it past myself

    Nov 2, 2010 01:27:55 PM, wrote:

    Eva S wrote, in response to Biowolf:

    I don't doubt it's a business trip, but some Koreans are very attractive. I had a Korean boyfriend once and he had amazing skin. Mind you, I am crazy about my skin but when he took his clothes off the first time, I couldn't believe it…. Unfortunately he wanted to get married, so be broke up… :-(

    Link to comment: http://disq.us/qpvc5

    Biowolf wrote:

    the reason for my trip is to  track down Mole.Nov 2, 2010 09:02:09 AM, wrote:Eva S wrote, in response to Biowolf:Have you tried Google Translate? If you are going to South Korea and not North, these ladies should speak sufficient English to “communicate” with you. :-)Link to comment: http://disq.us/qoykdBiowolf wrote:Mole. How do you say `where is the next bordello`in korean. I am going there next wek.—–Options: Respond in the body to post a reply comment.To turn off notifications, go to: http://disqus.com/account/notifications/

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    Options: Respond in the body to post a reply comment.

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  • http://chartsandthat.blogspot.com/ ultra

    EURUSD at the top of the triangle right now

    // sorry no chart – at work

  • convictscott

    Agree, after todays price action the highest probability is a gap up on open and dump sometime later on this week or early next week like you say.

  • http://chartsandthat.blogspot.com/ ultra

    Remember the days of looking for divergences on copper? H&S too.

    http://bit.ly/bG3vhw

  • chronographics

    There you go Ultra, just for you 4 hourly. Stochs look like crossing down, but hourly just busy crossing up from low down. So go with lower time frame and trade levels :-)

    http://screencast.com/t/l8jDHliE6v0l

  • convictscott

    Thanks, I didnt notice this :) Taking the 15 min retest variation sell pattern if it triggers, looks like a good risk/reward play

    http://www.masterkillers.com/wp-content/uploads/2010/11/15min-euro-rtvs.png

  • http://chartsandthat.blogspot.com/ ultra

    Ignore the pin high and take the origin back a few candles – better fit

  • convictscott

    And I'm short euro futures @14022 stop 14035

  • http://chartsandthat.blogspot.com/ ultra

    GL

  • http://iberianviews.blogspot.com/ catracho
  • SW6

    Brishort,

    I'm off to work (no time to post chart). Take a look at a 5×1 p&f of the $spx. In particular take a look at price action since the S&P hit 1184 the first time since the 1040 climb. I see a broadening pattern* and a (likely) distribution fulcrum**.

    Reminders: *Broadening pattern – a frustrating P&F pattern that generates buy signals and sell signals.
    ** distribution fulcrum – a new direction for price that ends the old direction, a new trend for price. For
    our current situation that would mean an end to the rally from 1040. So, not a mere correction, but a
    renewed downtrend.

    So, take a look and see what you think. I know 5×1 is sensitive but i think it's a good chart to look at in addition to others.

  • amokta

    Ok, just a simple yes/no answer required – are we going up for next few days, or are we about to head down?

  • http://iberianviews.blogspot.com/ catracho

    Yes…

  • http://chartsandthat.blogspot.com/ ultra
  • boycottnow

    hmmm? let me think

  • http://chartsandthat.blogspot.com/ ultra

    On the other hand, you may want to wait until this MF turns down – surely will be all over when it does, just about the last indicator holding out…

    http://stockcharts.com/h-sc/ui?s=$SILVER:$GOLD&p=D&yr=5&mn=0&dy=0&id=p63289875053&a=203340242&listNum=2

  • amokta

    I get confused with all these 'double' charts, but this silver/gold one seems to have some substance to it !

  • amokta

    I cant make head or tail of this one, but thanks!

  • http://chartsandthat.blogspot.com/ ultra

    This one is good for the bears – price of junk vs. treasuries has fallen – the chart shows that this behaviour tends to lead SPX declines nicely.

    Likewise when junk is favoured it can foretell an imminent rise in SPX, as happened end of August.

  • 99er
  • Schwerepunkt

    Symbol of the day:

    QE?

  • gsavli

    a strong buy, this one. :)

  • Schwerepunkt

    To infinity and beyond!

  • jigdaddy

    i am not convinced until 1150 is broken with some gusto..

  • BobbyLow

    Convict Scott,

    “Bobby, how is slippage and liquidity on the SH compared with shorting SPY?”

    Slippage is minimal on SH because it is only a one time inverse of the S&P 500. Whatever slippage is fine with me because the only time I'm using SH now is to Short it to go Long. Volume on SH averages about 3.5 Million Shares and the spread is usually only a penny. I didn't have a problem getting shares to short but of course there is no guarantee that there will always be shares available. There is a problem buying protective Calls on SH to protect the short position because there is not a lot of Option Volume on SH. SH Options usually have a 15 Cent Spread so a nickel screw job is probably the norm.

    When I want to actually Short the S&P, I will Short SPY directly.

    The reason I use SH at all is because of it being an Inverse ETF and I can Short it to go Long.

    By going Short to go Long and going Short to go Short, this can make a significant difference in Maintenance and Margin Requirements.

  • 99er
  • Schwerepunkt

    I don't expect much of a range until 30-min before/after the FOMC nonsense.

  • Anonymous

    Hi Scott,
    Slippage is minimal on SH because it is only a one time inverse of the S&P 500. Whatever slippage is fine with me because the only time I’m using SH now is to Short it to go Long. Volume on SH averages about 3.5 Million Shares and the spread is usually only a penny. I didn’t have a problem getting shares to short but of course there is no guarantee that there will always be shares available. There is a problem buying protective Calls on SH to protect the short position because there is not a lot of Option Volume on SH. SH Options usually have a 15 Cent Spread so a nickel screw job is probably the norm. 

    When I want to actually Short the S&P, I will Short SPY directly. 

    The reason I use SH at all is because of it being an Inverse ETF and I can Short it to go Long. 

    By going Short to go Long and going Short to go Short, this can make a significant difference in Maintenance and Margin Requirements. 
    Bob

  • gsavli

    agree

  • http://evilspeculator.com molecool

    Glad to hear there is liquidity flowing into those micros.

  • http://evilspeculator.com molecool

    “Price patterns tell you how market will react and not the news.”

    (wipes away a tear…)

  • http://evilspeculator.com molecool

    Hi guys – I'm still in Seoul – just checking in…

    Thanks for keeping the energy going – I see great discussions in my absence which really makes me proud for hosting such a great community.

    Now back to work, bitches! ;-)

  • amokta

    Thanks!

  • gsavli

    a glimmer of hope, looks like those trading robots can still be kept on a leash by their masters.

  • http://evilspeculator.com molecool

    Guess nobody cares – LOL :-))

    GOOD! Because I may have to stay until Saturday…

  • nyxjf

    Have fun. :)

  • roncofooddehydrator

    It's not that we don't care, we're all just waiting to see what the reaction to QE2 will be…

  • 99er
  • http://iberianviews.blogspot.com/ catracho

    Is this the shake out of weak longs and bear baiting before they pump higher? Hope not…silver nice neg divergence on daily chart

  • Eva S

    Good morning, kids!

    Yen, gold, silver – lower. Regional banks – higher. Can both the dollar and the market ho higher after the Fed announcement?

  • http://www.mylifemytrade.com MyLifeMyTrade

    No I did NOT say that.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Thank you

  • http://www.mylifemytrade.com MyLifeMyTrade

    Are you extending your “pimp” business to S Korea now? LOL

  • http://www.mylifemytrade.com MyLifeMyTrade

    If I look at the SPX chart, here is what it tells me:

    1. we will spike down on Fed (below today's low so far)
    2. we will spike above 93es
    3. close barely green for the day
    4. gap down tomorrow possibly below 74es

  • http://www.mylifemytrade.com MyLifeMyTrade

    I expect SPX green, dollar green, VIX green for the day

  • Bob the Horse

    How about doing some work yourself!

  • http://www.mylifemytrade.com MyLifeMyTrade

    Bob man – whats your read for today? What does your crystal ball say?

  • http://chartsandthat.blogspot.com/ ultra

    NDX, SPX, both supported by the 24 hr SMA mid-Bollinger here

  • gsavli

    i have a feeling like it has been lowered for the ramp to succeed. NQ (NDX) went down on low volume, without any real participation.

  • http://chartsandthat.blogspot.com/ ultra

    Yup – $TICK MA has just turned up decisively as well.

    The afternoon ramp – regular as clockwork…

  • amokta

    Silver had a wobbler today – closed out my silver shorts that i bought (managed to catch the half the big dip, when i came to sell, i found i already had osome shorts i bought a few days ago, that i forgot to close, hence break evenly n!)

    has anyone forgotten about a position they had, and only remembered later?

  • http://chartsandthat.blogspot.com/ ultra

    Zero lite bullish divergence at the low I should add..

  • Brishort

    Will do. @work too and busy like hell!

  • ds2

    That'll be perfect. Take out lots of stops (mine included) and back to business as usual. F*%K it I'm going to the GIANTS parade!

  • Bob the Horse

    Well the price action into the European close tells me everyone is long. Only natural you would get some squaring of positions ahead of the statement and is clear that means selling. Personally, I expect a big stop-clearing move up following by a decline. But we will have to see what the statement says – I struggle to see how the Fed can beat expectations given that everyone expects them to leave it open-ended. Even if they announce a big number, the market will almost certainly have a period of worrying whether it will work.

    I am still short obviously so am talking my own book. But I have never known such intense focus on an FOMC statement – why anyone thinks the Fed have a magic wand is beyond me given their track record. Something has to give – if QE is going to work there is no way they can hold yields at this level. If it is not going to work, equities need to fall 20% in short order.

  • Eva S

    My best performers today are “sin” stocks, such as TAP and MGM. Could this be a good thing?

  • raised_by_wolves

    I've been using JNK:IEF instead. Whereas TLT is 20 year treasuries, IEF is 7-10 years. The average maturity of the junk bonds is a little more than 7 years.

  • raised_by_wolves

    There's about an hour before the FOMC announcement, correct?

  • raised_by_wolves
  • chronographics

    correct :-)

  • http://iberianviews.blogspot.com/ catracho

    yes a nice sharp move up that doesn't hold would be ideal….
    otherwise a fall will prob be bought and the “bears” will prob have to wait some more for a bigger correction…

  • amokta

    Thanks – will have a look later (scrncst blckd at wrk!)

    anyway, my intra-day u-turn longs doing ok so far, but could go either way?

  • Bob the Horse

    You might not get it if the statement disappoints. In fact, it is already an outside day in Europe cash, copper, etc. so technically just a close below 1080 on esz0 would be enough to give bears hope.

  • raised_by_wolves

    I've had enough spiked smoothy this morning that I thought I should get confirmation on that. Thanks.

    So far we have had open, high, low. I'm asking myself, will this close be lower than the open (normal) or higher (abnormal)?

  • raised_by_wolves

    I expect to see you at Lake Baikal. Remember our rendezvous point? (See magenta arrow).

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/fb5a3b92-9aaf-4d0d-8083-4cc592975c81/00002471.png

  • gsavli

    can't load the official page :))

    too much traffic

  • chronographics

    Well remember the odds on that one :-) Just remember that an abnormal to the upside is “higher on selling”

  • malverd

    weeeeeeeee this is fun…

  • roncofooddehydrator

    QE2 “only” $600 billion through mid 2011.

  • gsavli

    600 bill! 75 per month.

    not too bad :)

  • raised_by_wolves

    Then again, with a new high we'd have to reverse the order from high then low to low then high.

  • roncofooddehydrator

    It bears mentioning that they left it open ended “The Committee will regularly review the pace of its securities purchases and the overall size of the asset-purchase program in light of incoming information and will adjust the program as needed to best foster maximum employment and price stability.”

  • EvilTrader

    LOL.

    All the FED is going to do is to add volatility to the system, specially asset prices.

    Bank of Japan injected 100's of trillions during the 90s and so what ? A giant roallercoster equity market and zero real economic growth.

  • chronographics

    so long as close above open then normal action as you would expect in uptrend.
    Well Euro made minimum target of new high out of triangle, just on sidelines waiting for picture to clear maybe should also have spiked my smoothie this am :-)

  • jigdaddy

    sell sell sell…everyone..back to 1040 please

  • EvilTrader

    LOL.

    To fade this QE2 annoucement was the most anticipated trade in history.

    Proof markets are no efficient is that it is working, despite being anticipated.

    LOL.

  • Brishort

    Zero currently unfazed by all those short term gyrations. To early to tell anything yet.

  • gsavli

    VIX hardly moved by fed's announcement. jesus.

  • chronographics

    Go those Bonds

  • jigdaddy

    TOS news headline – new york fed is looking to buy 800-900B…WTF?

  • yudhisthira

    Went short and took a nap.
    Apparently it provided help.
    http://screencast.com/t/UY4px1cVb

  • malverd

    11/2 gap filled

  • gsavli

    what's a few hundred billions, come on.

    i have this feeling, there won't be any real sell off today.

  • Eva S

    No way, Jose. Back to 1200.

  • Brishort

    Good point, if VIX doesn't move, this think is going higher.

    So maybe we have STU's 4th wave triangle completed and a 5th that must develop and complete before anything to the downside occurs.

    Remember that tomorrow and Monday Nov 8th are the last 2 POMO scheduled per previous agenda.

    OMG, then we have to deal with 100B$ a month… oh well…

  • jigdaddy

    you are probably right…wait havent you been right for the past 2 months?

    :-)

  • Brishort

    Market flat, vix down 1 point now and Zero at…. zero. This is not looking great for bears… time to be very nimble with short positions if any.

    Currencies are oddly calm also. I can't find a good edge to read the short term trend.

  • http://chartsandthat.blogspot.com/ ultra

    Congrats to anyone who bought ES 1180 basically

  • Eva S

    If you want to be short, short the 20 & 30 year Treasury.

  • Brishort

    Currently all cash. Vix now down 1.25 point and dropping.

  • Eva S

    Thanks, uncle Ben! If you know the market is going higher, why fight it?

  • EvilTrader

    The whole problem to me is this :

    How can we go higher with this tremendous bullish sentiment already priced in ?

    Well, i bet on the bear side, but we may be pretty much stucked around this 1180-1200 level for a while.

  • amokta

    What happened – just nipped out and all the charts have some anomaly now?

  • yudhisthira

    Newer and newer lows for vix

  • malverd

    the sky is falling…..oh, wait a minute, all is well :P

    http://img230.imageshack.us/img230/8027/email138073032.png

  • http://chartsandthat.blogspot.com/ ultra

    Ha. Apologies for an obviously facile comment – I should add that if I had bought 1180 ES I would be cashing the fk out right about now. I don't think this spike is built to last…

  • gsavli

    party on in this first time ever riskless market.

  • raised_by_wolves

    LOL!

  • gsavli

    i wonder which one counts as a first direction, that one, which is usually fake.

  • malverd

    Man, they should have done this in the '30s, we could have avoided the Depression….

  • http://chartsandthat.blogspot.com/ ultra

    +1000

  • Eva S

    What anomaly? What's wrong with the V-shaped recovery?

  • amokta

    Here in UK its 7pm, and i was out for the last 1+1/2 hour – just as well, as i might have closed some longs! anyway, will this bounce back last? i agree dont fight the trend/fed, but could tomorrow be the day that 'P3' starts?

    - all will be exlplanined in ewi stu forcast today no doubt (lol!)

  • malverd

    this market is just comical. i just sit back and enjoy the ride..

  • Schwerepunkt

    Looking like Ben already bought a whack of 5-yrs . . . and have the broker-dealers already purchased SPX futures with the proceeds?

  • Eva S

    Just forget the P3 business for now.

  • http://www.mylifemytrade.com MyLifeMyTrade

    So we got spike above 93 (unlikely that we see higher than 93.75 in RH). We got our dump (we went below 80 surprised me).

    We will close somewhere near yesterday's close – most likely in red by a point or so.

    Forget P3. The only thing that will go into P3 is account balances of those who are biased bearish IMO. But before that we will get massive bull shake out – starting tomorrow. We need to wait for price pattern into close.

  • http://chartsandthat.blogspot.com/ ultra

    I have just changed into my Evil Speculator tee. It's business time.

  • raised_by_wolves

    BKX was the only index that was a positive shortly after the FOMC announcement when new lows were being made. Now that the rest of the indices are positive and new highs are being made, BKX is still leading.

  • bshah

    what i don't get , is their main objective is to get market going up only, why the fuck have the market… just have a poster, put a number and send everyone home..

    crazy.. i mean what can we say where we dropped almost 100 pts and now marching back sky high.. This is market doing it.. who in their right state of mind would agree. this is all manipulation and out in the open.. They have challenged everyone..”nothing you can do to stop us…”

  • gsavli

    they should do it every year from now on, actually. now that we all know what it takes for the markets to always go up and for society to prosper.

  • Eva S

    That's a good sign!

  • amokta

    I agree (just mentioning it as it was the focus for a long time!)

  • Eva S

    OMG, you guys are such whiners!

  • yudhisthira

    Zero seems to have a bias here.

  • malverd

    Of course. It's stupid

  • Schwerepunkt

    Get ready to put on your SPX1200 hats . . .

  • Eva S

    Can we close above 1200, please?

  • http://chartsandthat.blogspot.com/ ultra

    Sorry

  • malverd

    so far above 10/25 high

  • http://chartsandthat.blogspot.com/ ultra

    SLV:GLD is going nowhere

  • gsavli

    forums and blogs were invented to whine.

  • Eva S

    :-)

  • http://chartsandthat.blogspot.com/ ultra

    Totally off-topic but anyone else wondering whether the photo up top was taken by the Mole himself?

  • Wave_Surfer

    Actually, I think the 30's are giving us the lesson we need to learn.
    When people talk about The Great Depression they do not talk about 1930. Although the crash led to it, the big suffering that we associate with The Great Depression didn't really start until the crash was almost done. The suffering of the 30's, the unemployment, homelessness and hunger were more of a 1932 through 1939 thing.

    And yet, EVEN THERE, if you look at 1932 through 1939, other than a year or 2 among those 8 years, it was actually a RAGING BULL MARKET During the greatest suffering of The Great Depression!

    There was another crash, but it was a simple wave 2 that led to an even longer wave 3 up.

    So, during the 30's while people were unemployed, homeless and hungry, the market shot up like a rocket!

    So the 30's were like now.

    Climbing a wall of worry and suffering, the collapse happened earlier. Society had all the suffering you could count on, (world wide Great Depression and later a huge World Wide War) and yet during all those years after years of bad news and suffering the stock market shot up like a rocket!

    1932 would have been an awesome time to BUY in the stock market regardless of the fact that unemployment would only be fixed by World War II almost a decade later and the whole world would be suffering for another 15 years!

    Maybe it is us that needs to l learn the lesson of the 30s.
    Maybe we need to take a look at history.

    I thought we were going to go Dow 400, but what if the bear market already happened. It was powerful enough to create all the misery we see now and will see for the next many years.

    I am really starting to think we at the equivalent of 1933 or 1934. The market bottomed 2 years ago, and now everything is broke and most people realize it and unemployment and suffering are rampant with no break in sight.

    Separate Question from the suffering and how broken the economy is: in 1934, did you want to be short the market?

  • Wave_Surfer

    Back to our regularly scheduled program?

  • Schwerepunkt

    In celebration of the mid-term erection, Ben just opened his (our) check-book and Timmy is tea-bagging Ben. Or is it the other way around? Sorry folks for the imagery but this market is more twisted than any comments I could possibly dream up.

  • yudhisthira

    Probably. He has an eye for shots.

  • Eva S

    I'm sure it's his because he's an honest person. Otherwise he would have included credits.

  • jigdaddy

    where do you become a seller?

  • http://chartsandthat.blogspot.com/ ultra

    LOL

  • yudhisthira

    I think I saw an uptick in vix.

  • roncofooddehydrator

    I'm beginning to think the objective is to siphon more money off of the public to the banks so they can cover over the losses they're holding the forms of bad mortgages, mortgage backed securities, etc. You have to convince people to invest in the stock market, so it needs to appear as if it is heading up indefinitely. Keeping a 0% interest rate almost guarantees the money won't be saved since the returns won't be there. Then while the market is going up, all the banks can slowly edge out the back door so that when the fall comes they're all positioned short and get to take all of that money that was suckered into long positions in the first place.

  • malverd

    SHHH. they're watching.

  • raised_by_wolves

    Time for you to update your JNK:TLT chart for us.

  • malverd

    what timeframe?

  • http://chartsandthat.blogspot.com/ ultra

    Haha. Good call. You can just click the link any time you like, you know – but I suspect you already did…

    http://stockcharts.com/h-sc/ui?s=JNK:TLT&p=D&yr=1&mn=0&dy=0&id=p75298921423&a=203578736&listNum=2

    We ain't closed yet… and in any case, I can't see how this is going to be anything other than a sell the news spike – blind old bear that I am.

  • raised_by_wolves

    If $SPX (weakness) can secure new 2009 highs, I'll entry a long-term $NDX (strength) trade (long).

  • 99er
  • yudhisthira

    one minute. Being snarky, Sorry.

  • http://www.mylifemytrade.com MyLifeMyTrade

    We went beyond 93.75 – so tomorrow should likely be gap down, that the fearless bulls will buy like crazy. Tomorrow is the set up day. Today should mark the high – tomorrow we should not see higher than today's highs.

    Friday is the dump day. We NEVER NEVER dump the day after we put in new highs.

  • http://www.mylifemytrade.com MyLifeMyTrade

    The price pattern is screaming correction. Now that QE2 has been announced, Friday's data – no matter how good/bad it is can be used to correct the market.. We will get “sell the news”, but 2 days later.

  • EvilTrader

    u probably correct.

  • malverd

    “Separate Question from the suffering and how broken the economy is: in 1934, did you want to be short the market?”

    From February '34 to Sept '34 Yes Short. October '34 to December '34 Long

  • Fearless

    That's what I am expecting. Wow, I just got myself a lottery by going long TBT calls 15 minutes prior to the FED announcement. They doubled in less than an hour!

    I am actually anticipating a sell off in bonds. The 10-yr yield is reversing higher after back testing the lows and forming positive divergence on the daily time frame. However, I am still anticipating the market taking out the April highs late this year or early next year.

  • malverd

    No sure, but I like it :)

  • gsavli

    you should consult your ophtalmologist immediatly!

  • http://chartsandthat.blogspot.com/ ultra

    I'm going to look like I'm really reaching here, but what the hey. Thought maybe it was worth looking at just the JNK chart:

    http://stockcharts.com/h-sc/ui?s=JNK&p=60&b=5&g=0&id=p66332276900

    Volume mostly on the red bars..

    And TLT – here we see where the spike comes from:

    http://stockcharts.com/h-sc/ui?s=TLT&p=60&b=5&g=0&id=p58903806842

    Hmm. Is this that our investors are less interested in US govt debt post QE2 more than animal spirits for junk?

    // screenshots
    // JNK – http://bit.ly/9ijq9g
    // TLT – http://bit.ly/csU7No

  • DudePlunger

    Actually it's not entirely liquid. The price will be multiple ticks away from the bid/ask, stops get slipped, many brokers I called don't carry it because of that.

  • raised_by_wolves

    JNK:IEF is better suited for your bearish disposition. It didn't make the new high that JNK:TLT did.

  • Wave_Surfer

    And sooner or later we will have our violent dips, but over all 1932 was the start of a MASSIVE bull market that lasted almost 30 years!

    The moves down were corrections (waves 2 and 4).

    Just because millions of Americans are jobless, homeless and hungry and the world has decades of misery and suffering and 'everything is broken' does not mean we will have another leg down to new lows.

    With that that was wrong in the 1930s and 1940s do you think intelligent people were saying “No problem. Everything is oK, but and hold stocks.” ?

    And yet 1932 was the start of an extremely strong 30 year bull market. The liberal democrat President raised taxes very high and spent all kinds of money and people suffered for many years, and STILL 1932 was a great long term buying time, and 1933 was not just a bounce before new lows.

    What if this bear market is going to be worse than the 1970s one but just a tad less bad than The Great Depression. Maybe we will get into wars bigger than the Korean and Vietnamese wars but maybe the wars will be a tad smaller than World War II.

    Again, my point is we can, and we DID have all the bad stuff us bears point to as far as society and the economy and human suffering and yet, in the stock market even against the back drop of all those bearish things 1932 was the start of a MASSIVE bull market that lasted over 25 years.

    So endless unemployment, poverty, human suffering now and for many, many years into the future do NOT necessarily mean the stock market will go down.

  • bluprint
  • http://chartsandthat.blogspot.com/ ultra

    Might start plotting em both together.. ta

  • funkypenguin

    Your comments are so true re: Macro economic situation and the market. It's not the economic situation that matters nearly as much as the psychology of the market – is there fear or optimism. Seen way too many amateur economists think that since ZZZZ is so the market should go up or down – doesn't always work that way

  • yudhisthira

    John Cole:
    “I, for one, welcome our new fiscal conservative overlords.
    Because this time, they really mean it.”

  • raised_by_wolves

    I agree with you except that I'm keeping in mind the possibility that what we're going to go through may be more severe than the Great Depression and World War II combo.

  • raised_by_wolves

    Note that IEF didn't spike down as much as TLT.

  • raised_by_wolves

    I'm about to become a buyer if $SPX makes new 2009 highs and holds them. I'll be a seller when $NDX reaches about 3000.

  • Wave_Surfer

    I still think it might happen as well.
    What is new for me is the idea of considering the possibility that things will be a tiny bit less worse than the 1930s and that the coming wars will be a tiny bit less than World War II.

    Very recently, I did not consider that to be even a possibility, but now I wonder if it is possible that we have a large scale war that 'only' kills several million people? Is it REALLY a known fact that the coming war will have to worse than World War II? Can't we have smaller war that only kills a few million people?

    The truth is, this is no longer really acting like a Primary wave 2, so other wave counts might need to be considered as possible.

  • raised_by_wolves

    "The truth is, this is no longer really acting like a Primary wave 2, so other wave counts might need to be considered as possible."
    Tron and I have been eyeing this inverted head and shoulders pattern on $NDX.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/2166f7ef-5738-4b5b-b616-42ca80947bd8/00002510.png

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    oh yeah… that looks like A LOT of FUN…:)

  • amokta

    Ok, UPRO up $1.28 after hours – do these after-hours quaoted mean mush, or do they 'revert to the mean' at next open

  • raised_by_wolves
  • raised_by_wolves

    To stay in your channel, VIX has to rise tomorrow.

  • raised_by_wolves

    I have taken note of this comment, especially the “we NEVER NEVER dump the day after we put in new highs” part. If Friday isn't a dump day, maybe the uptrend still has legs?

  • http://chartsandthat.blogspot.com/ ultra

    Eyes more drawn to the divergence over here

    http://bit.ly/a2aJRw

  • ds2

    Well, the GIANTS parade was great, my stops got popped and I am now back in cash – just as I expected.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I am standing by the “gap down” tomorrow inspite of what showed up between 4 and 4:15pm. That was just some desperate short covering into close.

  • BobbyLow

    Insanity is Number One!

    After the dust settled, I stopped myself out of my Spec. Long Dollar position for a small loss after being somewhat Saved by protective UDN Calls. (My rules said to stop out yesterday but I didn't because of Fed. Weds.) :(

    My Short SH and PSQ are both doing very well and my Long XLE is doing OK. I added a Short position of TLT along with protection on it to the mix this afternoon.

    I have no idea what the market will do tomorrow and beyond. I will stick with my current positions until my rules stop me out.

    I wouldn't be surprised to see the BOJ make another move tonight to shit on the Yen like Ben has on the Dollar.

    Joe Four Pack can't wait for $4.00 Gasoline. Everybody's happy.

    Party on Garth! You too Ben!

    This is Nuckin Futs.

  • http://chartsandthat.blogspot.com/ ultra

    Harami for the day on copper on the right shoulder.

    http://stockcharts.com/h-sc/ui?s=$COPPER&p=D&yr=1&mn=0&dy=0&id=p16202645239&a=205457213&listNum=2

    Personally I think I would rather stop playing altogether than go long this shit heap for anything more than a few hours.

    *barf*

  • raised_by_wolves

    Your chart just made me more bullish! ;-)

    What evidence do you have that $SPX/$VIX has been topping instead of correcting the past couple of weeks?

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/175661fe-515b-415d-b6b0-e6d621299691/00002512.png

  • http://chartsandthat.blogspot.com/ ultra

    When even the bears go long – isn't that the final sign??

    http://bit.ly/cKK85W

  • ds2

    RBW – are you still long silver? If so, good for you.

  • raised_by_wolves

    Actually, my $SPX/SLV line overlay on my $SPX chart gave me a weak sell signal a couple days ago. Keep in mind that on this chart up is down and down is up for silver since it is $SPX/SLV instead of SLV/$SPX.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/add557ba-510d-4b5d-bf77-40df7295011b/00002513.png

    If that $SPX/SLV overlay goes below the red line I have drawn, then SLV is a buy again as long as $SPX isn't downtrending.

  • amokta

    ds2 – you seem to keep getting stopped out?
    is there any adjustment you can make to alleviate this
    -maybe review trade entry criteria
    -duration of trade (close early if market not moving in expected direction
    -take profits earlier
    -wider stops ?
    (just asking – as i suffer from this affliction too)

  • raised_by_wolves

    Even if $SPX/$VIX topped for all time, you can't play it yet until both $SPX/$VIX and $SPX start heading down, right? Currently, both are heading up and $SPX/$VIX at a faster rate. That may change tomorrow or the next day, but that is what is currently happening.

  • SW6

    …dammit… sorry Brishort, forgot to mention the time frame:

    5×1 P&F, 60min.

  • raised_by_wolves

    Here's an easy way of looking at this using three chart, this time all of them right side up.

    From most bullish to most bearish:

    (SLV)/(GLD)

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/dafaa5aa-347e-4218-9499-29df8f423cc4/00002514.png

    SLV

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/e3a941ee-c658-45f8-a6e6-a09afd6f3d48/00002515.png

    (SLV)/($SPX)

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/91186dc5-1a58-4b3f-88d5-9f0d9a25ae79/00002516.png

    Maybe my method is overly cautious, but I'm waiting for (SLV)/($SPX) to get above its double top before re-long-ing silver.

  • raised_by_wolves

    Ultra sure is ultra bearish, isn't he?

  • yudhisthira

    Daily VIX inside Bolinger Band.
    http://screencast.com/t/1I2PmaQ0uNC

  • http://www.mylifemytrade.com MyLifeMyTrade

    The dump comes when no one suspects it – neither bulls nor bears. With QE2 bigger than what most anticipated ($500B was expected), and market closing higher on that day – bulls are roaming fearless. There was sooo much talk about the “sell-the-news” that it was clear that its not gonna happen.

    That being said, market never collapses from top… So, tomorrow is almost surely not a big dump day. Tomorrow is a bulls-buy-the-dip day. There will likely be a dip… and bulls will buy it. And most of the dip will happen right at the open. If indeed we gap down, I do not expect the bottom to come within few minutes after open.

    While we all have been busy awaiting election results and ben's QE2, things on other side of the pond have gotten worse. That could be the trigger event. The other possibility is jobs data coming tomorrow and day-after – it is clear to everyone AND has been made clear by BEN himself that QE2 is not meant to help job situation. So, a bad job number will still be viewed quite negatively by the market.

    The big dump should most likely come Friday. Now is when bears are most shaken up…

    The other thing – do not assume that the ES values we see post-4pm HAVE to be seen in RH before the dump – the Jan top, the Jan CSCO earnings day top, the April top, the mid-July ST top, the early-August top —> we never saw the ES highs during RH.

    If the dump comes Friday, it will likely be an ST top and should get resolved in couple of days… The other possibility is that they may paint a more extensive top – IT top here… Again do not assume SPX 1200 a foregone conclusion – we never saw spx 1150 in Jan, spx 1220 in April, spx 1100 in mid-July ST top.

    If the dump does not come Friday, then something else is going on.

    It has been a very very easy ride for bulls. I think a shakeout for weak hands is coming.

  • ds2

    Actually I have not been getting stopped out too much. The last two days I missed by a penny. The buy signal comes from a system I follow on C2. Due to some recent losses, I have started setting my own stops to limit losses. In the time I have traded this system, I have not seen a small draw down NOT turn into a bigger loss, so I decided to set my own stops. This is the first time I have done this so we will see how it works out. As for the trade entry criteria – these are head fakes. Pure and simple break of the upward channel. Usually by the close we are back inside. I am going to be very hesitant to short this market again w/o some more confirmation – like the zero holding some negative numbers.

  • amokta

    Yes lots of 'fakes moves',some quite big, but the trend was always up since at least 1040

  • ds2

    Nice charts. Thanks RBW.

  • yudhisthira

    Great chart exchange.

  • http://evilspeculator.com molecool

    Not gonna happen, but thanks for suggesting it. Sorry, I'm busy meeting investors…

  • http://evilspeculator.com molecool

    Some really hot Asian poon down here and I'm looking for a distributor :-)

  • http://www.hervey-bay-holiday.com kea11

    Another $US600 Billion destined for laundering in Australia. When the Reserve Bank of Australia starts easing, the Tsunami will be impressive. So the Fed prints money, the banks buy $AU at best rates, demand pushes up $AU further (risk of devaluation rises with China Commodity Inventories) Banks make free money and large profits while investment in US languishes and Unemployment stagnates or rises!

  • rtlguru

    Easy ride for the bulls?? How many people do you know who went long at 1040 and has had the balls to hold through all this crap? The hard trade has been to go long and stay long. Today was no exception. I bought at 1040 and sold way too early and I've been scratching to make positive gains this past month trying to hedge my longs with shorts. Trust me, it has not been an easy ride for bulls.

    I don't use charts, and only use the most basic of technicals. What has worked for me is to ID where the herd is leaning, what the hard trade is and what will frustrate the most participants in this manipulated, computer driven environment.

    Based on that, I still favor the long side. Our buddies at CNBC were talking pullback all week long and sell the news. The best way to frustrate both bulls and bears is to continue to grind higher. Tons of bulls who sold early are hoping for 1120-1140 to get back in for the year end rally. Shorts are way down and praying for a pullback to get out. Until these two groups give up, it is unlikely Mr. Market will give both camps what they want.

    There are alot risk, which is why I'm still cautiously long, but there is always risk right? Isn't that why the long side is still the HARD trade? As for the jobs report, unless it's horribly bad, I don't think it'll cause much of a selloff. The market is slowly accepting that this is a jobless recovery. Think about the earnings most companies have posted with no job growth through cost cutting and international sales. Imagine if/when jobs actually start appearing. The bulls are now patience and accept that job growth may not come until next year.

    I don't like to make predictions, as I change my thesis about as often as Mylife does, but I like to think like the criminals. I wouldn't be surprised to see a rally into opex that gets near 1240 to blow out all remaining shorts and suck in the funds who are hoping for a dip to chase performance. Then when everyone is on the long bus, the bottom drops out.

  • 99er
  • shortcover

    actually there were a few mac-d crossover buy signals around 1040 and plenty of bearishness with the Hindenburg Omen stuff. I'm still a bear, but did hedge long there for a spell (sold wayy too soon)…if we do get massive inflation here, the markets will go up to adjust, so in reality i should be long commodities and short the dollar. being short domestic markets through levered etfs (ie my account) has not worked out over the past few months. so i keep writing calls against it…

  • amokta

    the easiest trade in 'hindsight' was going long at spx 666,going long high-beta – we would be billionaires by now – how things look so easy using the retrospectoscope

  • amokta

    Tomorrow could be the day for camp rampers to come out?

  • 99er
  • Eva S

    What happened to the blind Florida prophet and all the Hindenburg Omen watchers? They made me very confident we were going higher. Now I am a little more cautious but still all long.

  • Eva S

    I admire bears for their perseverance but it's so much more fun being a bull these days. :-)

  • Eva S

    We are having these wars today that kill “only” several million people, plus create a lot more refugees.

  • chronographics

    Well I guess thats why you have such a sunny disposition, you are having fun and being profitable! :-)

  • raised_by_wolves

    That sort of perseverance is admirable in other activities like fighting for social justice, not trading though.

  • Eva S

    I agree wholeheartedly. Instead of whining and complaining, it's better to actually *do* something about it.

  • Eva S

    SEC Bans 'Naked Access'

    WASHINGTON—The Securities and Exchange Commission voted on Wednesday to bar brokers from granting high-frequency traders unfiltered access to an exchange, a move aimed at imposing safeguards meant to prevent bad trades from disrupting the markets.

    “Naked access” lets high-speed traders and others buy and sell stocks on exchanges using a broker's computer code without requiring them to filter through the broker's systems or undergo any pretrade checks.
    http://online.wsj.com/article/SB10001424052748703506904575592243789868142.html

  • SW6

    Okay this is what I was talking about…

    the purple arrow is from oct 18. the 1181.5 fib was hit and exceeded; i shorted that day, so did RBW. As RBW put it, “risk/reward favours [our position] but the probabilities do not.” That was a perfect description of the situation. We did move to 1160 and i think this is now a possible sell area on the chart. A break of 1160 would, as you know, be a bearish semi-catapult. Also looking left of 1160, there's a nice amount of white space, no? (@ Rats more white space gives the sell more conviction)

    the highlighted portion is where we are having congestion/and a possible fulcrum (@ Rats fulcrum=reversal). Perhaps the $spx will move in to the 1200 box, which is yet another buy signal in point and figure terms, but context is everything. The congestion area is moving further away from the main bullish support each day, that's a concern if one was born last night and thinking about going long here.

    http://screencast.com/t/OYoa42c6VyM

  • raised_by_wolves

    Since the May 6th market-wide flash crash, there has been an average of more than one symbol-specific flash crash per week. It will be interesting to see whether or not that average drops significantly.

    Also, I wonder how this affects the automated traders here at Evil Speculator.

  • http://chartsandthat.blogspot.com/ ultra

    NDX weekly channel

    http://bit.ly/d8DNdK

  • http://chartsandthat.blogspot.com/ ultra

    SPX declining momentum through October

    http://bit.ly/bIwaVU

  • http://chartsandthat.blogspot.com/ ultra

    SPX:VIX needs to be heading south, yes.

  • raised_by_wolves

    For a second your chart almost had me convinced that the market can't possibly leap like a gazelle anymore. Although you have shown declining momentum during this period, aren't sideways correction with a slight upward drift known to occur? I think people say, “Working off the oversold conditions”.

  • raised_by_wolves

    Okay, good, we're in agreement about the most important things then. :-)

  • http://chartsandthat.blogspot.com/ ultra

    Sure, it is of course possible – and I am clearly horribly biased to the downside, but spike yesterday just looks like death throes.. barely made it back into the top of the channel. Of course, it could cling to life for a while yet.

    Meanwhile, check out EURJPY again

    http://bit.ly/cCT5jw

  • raised_by_wolves

    Check out the silver times copper to gold ratio. All the closes were at or above the daily BB(20,1.0) during the first highlighted period. Now they have all been above the daily MA(20). That is key.

    Daily:

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/01df6f99-b3ae-4c64-a1a7-fb4dffd3b81f/00002520.png

    Weekly:

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/b28472ab-13c5-43ac-bee1-d2d0fe453c94/00002521.png

  • raised_by_wolves

    The weekly chart of SPX times silver to gold has no signs of distribution yet since the purple TMA(3) has crossed any of the longer period TMAs. Whenever there is a pullback in the future, the question is whether this ratio can stay above the pink TMA(1597), which was resistance for an entire year. If pink were to be broken, I wouldn't rule out a crash.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/4310c356-3860-4b00-ba44-477f9988bbc2/00002522.png

  • http://chartsandthat.blogspot.com/ ultra

    Both show price losing the upper Bollinger. Daily shows doji followed by hanging man (which was in every freaking chart yesterday – no-one has mentioned this that I have seen).

  • raised_by_wolves

    As for EUR/JPY, it started losing downward momentum between May and June. In my mind the question is now whether the pair can start gaining upward momentum. To me, it's up to the EUR/JPY bulls to success or fail.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/3cbf6eb9-4b3c-4680-aa27-4d0079c90897/00002523.png

    You think the bulls will hang themselves with this hanging man? You're right it's everywhere.

  • http://chartsandthat.blogspot.com/ ultra

    No idea. I suspect yes, but I'm almost at the point of not caring anymore! Weird, I didn't give a toss last week – this week I feel exhausted..

  • gsavli

    ES went above the upper trendline and also retested and bounced from it:

    http://www.uploadgeek.com/share-B7C1_4CD25D21.html ,

    while NQ is painting a classic bull flag. Both are promising a gap and run today.

  • raised_by_wolves
  • raised_by_wolves

    Maybe it's technically too early to call it, but it looks like the two failed retests followed by new lows pattern is beginning to play out for the dollar.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/8f863300-cd94-454c-a84b-159247ab4ee3/00002527.png

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    buying Dec wheat right here @ $7.00

  • amokta

    No one is mentioning that /ES is at 1204 right now!
    Gold/slv way up

    The question is do we hold longs, or is this still a risky time aka 'topping area', so trade short-term/day-trades

  • raised_by_wolves

    What longs are you holding?

  • amokta

    right now RBS-UK (sold that at 3.7% profit – dont want to hold too long – was a recovery trade underwater posn, but might buy again) I am holding US – UPRO, AGQ, UGL

  • raised_by_wolves

    You mean silver to gold way up.

  • amokta

    meant silver & gold separately – not sure about the ratio thing!

  • raised_by_wolves

    The dollar index is well below 76 now.

  • raised_by_wolves

    Silver is the generally considered the risk asset and gold the flight to safety asset. Silver being higher than gold is usually said to be “risk on” while silver being lower than gold is usually said to be “risk off.” With silver +3.6% and gold is “only” +1.8%, risk is on. While silver is kicking gold's ass, gold is still holding its own against copper, which is also +1.8%. Lately, I've been averaging silver and copper and comparing that to gold: (3.6% silver + 1.8% copper)/2 = 2.7% silver copper average > 1.8% gold = risk on baby, yeah!

  • amokta

    I see the logic now!

  • raised_by_wolves

    The UPRO trade is starting to get really sweet on the weekly chart. Some people would be selling now that RSI(2) pushing up against the top. This is where I like to hold in case of an exponential move. Some of the best gains happen when RSI(2) is pushing up against the top. If you're trading the trend on the weekly chart, you'll need to decide what price action would trigger your exit. In my example, would you exit when the RSI(Low,2) starts to drop off or would you wait for the possible retest of the highs, hanging on until the RSI(High,2) starts to drop off?

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/e610ed00-0fa5-46cf-a16f-a32145b0ffd0/00002529.png

  • raised_by_wolves

    What's not logical is us being eight time zones apart and always being awake at the same time. :-)

  • amokta

    Its easier for us here, as US market opens our lunchtime and closes our late eveneing, so not too bad

    It means you are not getting enough sleep, or thay you need less sleep (some people only need a few hours), or you are sleeping at another time, or you are sleeping in short bursts (!)

    Will look at your UPRO chart later as no scrncst access at work

  • raised_by_wolves

    UGL . . . I see you're buying the gold dip. I'd want to make sure it didn't dip much lower using the BB(20,1.0) on the weekly chart as a guide.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/68bba190-3e16-49ef-9f1a-8751386cfeaa/00002530.png

    If you're just looking at candles, you can think of the wicks as support. That would be my downside risk for an intermediate-term trade. My potential upside reward? Infinite! ;-)

  • raised_by_wolves

    I don't have a sleep schedule to speak of. I either go to bed super early like 8 PM or super late like 4 AM. Tonight, I was going to go to bed in between those two times but somehow didn't.

    Are you lucky or unlucky to still be employed? :-)

  • amokta

    I suppose employment provides a guaranteed (while employed) income
    However, i think being employed is not a natural state, in the past people worked in family/tribal groups

  • fisheggs

    With the greatest respect Mr Bernanke, What a dick you are!

  • gsavli

    well, someone is gonna have to pay for those 600 bill, i guess :)
    and with economy improving and good ISM number, as bobthehorse said, this all is just too weird.

    anyway, bulls certainly look ready to go not through the doors in the fence, but through the fence itself at the open. With E/U going up for 2 points over night, you can say, those 600 bill are almost already covered by the poorer US citizens. On the other hand, this doesn't really help the german car makers. well, since AFAIK, US export is smaller than import, it doesn't particularly help the USA either.

  • shortcover

    love the disconnect between the S&P and the bond market. something has to give!!!!

  • 99er
  • vision_invisible

    Mole,

    Still think Gold is a bubble about to pop?

  • gsavli

    check out VIX. :)

  • amokta

    please dont keep us in suspense – give us a clue, not all of have vix chart open :-)

  • convictscott

    Internals strong on open…. smells like developing into a short covering fuelled trend day

  • LogansRun

    LOL, well I guess we don't ever need to worry about the DOW 8000 predictions we had over the summer.

  • amokta

    I now have an etf straddle in place – stop on UPRO in profit, plus bought SPXU with a stop in case down-turn

  • 99er
  • amokta

    Tempted to open a silver short, but remembered some of my rules (not sure these rules have the statistical riguer of CS's rules!) – dont overtrade/open too many poisitons & dont trade against trend unless really confident

  • BobbyLow

    Sounds like you are having some success. Congrats.

    If this is the case I would suggest that you write down what you did right and confirm with your rules.

    Also regarding confidence, I never want to have too much of it when I'm trading because when I do, I've usually find a way to give recent gains back.

    Also I have to ask why you would even think about shorting silver here? What in your rules is telling you to do that?

    If it's a trade based on gut, I can tell you first hand that in the long run these don't work. P3 and other stupid emotional moves that I've made are expensive tuition payments that remind me of this. :)

  • convictscott

    Amotka – If you are looking on related markets, the one to short is the weakest one, the one to get long is the strongest one.

    You have *absolutely no business* shorting silver, not for any reason. If you get a valid reason for shorting silver, take the same trade on gold, which is the weaker market, and statistically will fall faster than silver on the same move.

    Also, I would caution against shorting the strongest “risk on” market, at a time when index shorts are hitting key levels and forcing shorts to cover, creating a positive feedback loop of “risk on”. Human mind gets accustomed to prices at x level, when prices rise, we naturally view them through a filter of “thats unnatural, it must be about to reverse: – the lure of the counter-trend.

    Whenever you are thinking of shorting new highs in a strong market – DONT! Even if you are right once, in the long run it will destroy your account :)

  • malverd

    Well, weekly SPX is poking above weekly 200MA. Let's see if we get a close above that Friday. Possible double top forming on weely.

  • EvilTrader

    New economics 101 for kids….bernanke style.

    Teach your kids the workings of the US economy.

    http://www.youtube.com/watch?v=PkVrShL6CFk&p=06F2D23317AC0CD2&playnext=1&index=4

  • amokta

    Thanks CS – i am beginning to think more along the lines of what you are suggesting, so that positive for me!

  • malverd

    Possible double top on Nasdaq too

  • amokta

    Thanks Bobby – these are relatively modest ETF plays.
    To be honest, the problem is that very often i give back the gains – so thats an area i need to watch (i.e. over confidence as you say!).
    Yes, the silver trade would have been on 'gut'

  • malverd

    I think this is a very unhealthy situation that is happening in the market. +14% since September on SPX. Totally unrealistic, but I'm milking these longs for all they're worth. In the long term though, I think we are in for some hurt…

  • malverd

    what are some of your guys best/worst trades so far?

  • convictscott

    Amokta “dont overtrade/open too many positons & dont trade against trend unless really confident” – none of these are rules, these are *guidelines*. Especially the dont trade counter trend “unless really confident”. Experience tells me that I will always be very confident before taking a sucker play counter trend trade.

    Instead of “dont overtrade” how about an actual limit on the number of trades, or the total amount lost (in R or dollars) that can be lost in a day before you exit all positions at market and take the day off.

    Instead of “dont open too many positions” How about working out the maximum amount that you can happily lose in a day as a % of your account size (should be 1-5%, no more) and have a rule that you cannot open any more positions once you have that amount of money at risk, until your stops are at breakeven or better for your existing positions (ie so that the total risk if your stops were hit right now would not reduce your account size by more than an acceptable percentage) A rule similar to this would stop you chasing losers, but allow you to double down on winners if you were still winning.

    With me, the rationale behind giving myself loose guidelines with “wiggle room” is to allow my psyche “control” over what I do in the markets. Seeking control, psychologically speaking, in markets is very dangerous. Far better results when you admit that you have no idea what the market will do today

  • malverd

    So far I have
    NFX 10-Dec 55 CALL 56.73%
    JCG 10-Dec 40 PUT 40.91%
    MCD 10-Dec 72.5 CALL 32.04%
    AKAM 10-Dec 47 CALL 31.02%
    DOW 11-Jan 27 CALL 20.00%
    LULU 10-Dec 40 CALL 18.27%
    CELG 10-Dec 57.5 CALL 12.38%
    CNX 11-Jan 41 PUT -21.90%

  • EvilTrader

    SPY candle is totally out ou BB. Dont know if it means a top of some kind.

  • LogansRun

    I pity the fools that are long in this market – Mr. T

  • malverd

    I think we better watch out for that gap from yesterday to today on SPX. I don't think it will stay there for long. Likely we will close it by the close tomorrow. IMHO NOT a good time to initiate new longs.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Just dropped in to say that I was SOOOO wrong in my read of the markets yesterday. I hope this didn't cause hurt to anyone here.

  • BobbyLow

    Absolute worst loss in monetary terms has been achieved chasing that !@#%^&*$ P3.

    I let my personal logic and bias almost wipe me out and this was with 12 Years of experience. So WTF did I know?

    What has been firmly branded into my thick skull now is that price is the only thing that matters and that the market could give a shit less about what I think is happening in the “real world”.

  • malverd

    BobbyLow

    You are right price is the only thing that matters. I really don't think volume matters to tell you the truth. If this market was really influenced by the “real word”, we would be down around 900… Like I said, this is a pretty sad situation with a manipulated market and overall the state of the world economy. But, I have to admit, if you just follow the trend of the charts (weekly, daily,minute) you can't get in too much trouble. The trouble comes with calling a top or calling a bottom. That's where people lose their a$$…

  • malverd

    Can I get a refund :P

  • malverd

    I think we are topping (I'm not calling it, but if I see it reverse I will act accordingly) Daily, weekly, and monthly SPX are all at a resistance level

  • gsavli

    NQ wanted to make a break thorugh 2188 to new high, but was rejected immediatly, there was no follow through. It's howering here, but i don't think it can do so for long.

    shorted NQ@ 2188.00

  • malverd

    How much you willing to lose?

  • http://www.mylifemytrade.com MyLifeMyTrade

    You are long… refund for what?

  • http://www.mylifemytrade.com MyLifeMyTrade

    Retest of 2007 highs… well very likely they will gap OVER it some day.. Since you are doing futures, its okay for you. If someone was doing the ETF QQQQs, then it would have been a problem.

  • gsavli

    not much. if it goes past 2191, i am covering.

  • malverd

    good spot to cover

  • Eva S

    Thank God I was unaware of “P3″ (and still am) all of last year and this…. I knew some people were expecting a huge crash, but if you just followed common sense and price patterns, this has been a great time to trade.

  • malverd

    CNX 11-Jan 41 PUT -21.90%

    Just kidding, unless you are offering refund…. :)

  • gsavli

    oh, and target: NDX has a gap to fill, at 2158.5 or so, which makes for NQ around 2157.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Nothing offends me any more after what Ben is doing to this country

  • gsavli

    i've been scalping only for the last 1.5 months. it's my way to work around my bearish bias in an uptrend.

    today, i am looking only for a gap fill.

  • SW6

    *ouch*

  • http://www.mylifemytrade.com MyLifeMyTrade

    Be real.. no gap fill today.. On ES, we wont see lower than 1210 now…

  • gsavli

    might be, but i don't care.

    NQ still has a higher target at 2166. but i don't really care. stop is in, let's sit back, relax and see, how things develop.

  • http://www.mylifemytrade.com MyLifeMyTrade

    SOB Ben is gonna make jobless, creditless, penniless, homeless people buy overpriced commodities… Are these people gonna stick their d**k into the ATM to get money…

    This is gonna end with back-to-back flash crashes. Wait for the day dollar is up…. No business even trying to short this till you see a day when dollar ends in green. If they made you believe that flash crash happened because of HFT machines/algos, it is sooo wrong.

  • malverd

    It will come back to bite us all in the a$$. He and Timmy G make me sick…

  • http://www.mylifemytrade.com MyLifeMyTrade

    2166.. I though we are already above that

  • gsavli

    higher target for my short scalp (higher than a gap fill at 2157). sorry.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Obama will go down as the worst president to-date.. I have said this and still maintain it. The country will be in a much worse shape when his term gets over, compared to when he took the reins…

  • SW6

    I am not well informed on Dow Theory, but I imagine many of you know the transports gave a buy signal yesterday.
    My understanding is that confirmation of the signal is for $indu to close above the April high.

  • gsavli

    how's that saying “there's no free lunch”

    well, this one will cost another trillion, take or give. :)

    but no problem, you can always repay this with inflation in basics like water supply, heating, fuel, food…

  • malverd

    I agree. We've had back to back winners as presidents. I blame them both… Hope healthcare gets repealed. I'm glad Repub's got the house.

  • I_got_Prechterized

    gap fill? are you insane? these are exactly the days that always finish at HOD.

  • malverd

    So what will be the “cause” when we drop? My guess “European contagion”. :P

  • EvilTrader

    The terrible thing is that everyone knows its an equity bubble, theres no real economic support for this levels of equity indexes.

  • Fearless

    You can't have a worse day than me. I put on a short order that got filled early in the morning and then my broker's site went kaput. I can't even close a f—ing losing trade. Talk about getting screwed totally!

  • malverd

    What broker? Just curious, what did you short & why?

  • gsavli

    call him

  • Fearless

    I'm on the phone right now, but they're tied up with other pissed off clients.

    I shorted DD at $47.92 because that's the long term resistance line from 2007 (last line of defense). With multiple negative divergences I thought it was a safe play. NOOOOOO, it busted that level just as I took a bathroom break.

  • malverd

    man, i'm looking at some of the spreads on the bid/ask for highly liquid options and it's like some are $2.00 spreads or more. what a crock..

  • gsavli

    Europe is FUBAR. Greece is refusing to take austerity measures and there are other “greeces” waiting just around the corner.

    The difference in monetary politics is, that Europe is somehow more inclined towards austerity, while US towards spending its way out of recession. I don't know which one is better, I really don't.

  • gsavli

    which broker? can you give an example, so i can check with mine?

  • gsavli

    if i've learned anything trading this market, then it's that in my eyes the stupidest and most unbelievable trades will probably be successful.

  • Eva S

    The Dow Theory again confirmed a Primary Tide Bull Market as of 11/3/10, when both the Dow-Jones Industrial Average and the Dow-Jones Transportation Average closed above their closing price highs of the previous 25 months.

  • malverd

    TOS. For instance look at THOR puts. Say Dec 40 bid $4.70 Ask 8.90

  • BobbyLow

    With all due respect MLMT, that statement is short sighted to say the least.

    I first heard the term “New World Order” (NWO) stated by George Bush I. The NWO was followed up by Bill Clinton with NAFTA and destruction of American Jobs. Bush II aided and abetted the destruction of American Jobs and promoted Globalism. Now we have Obama doing the same exact thing as Bush I, Clinton and Bush II.

    Do you see a pattern here? Follow the fucking money. Who has prospered the most here? The Housing/Credit Bubble was created to help balance off the loss of our manufacturing base. Who prospered the most out of the housing bubble?

    As George Carlin said “it's a Big Club and you and I ain't in it.

    IMO, the bottom line here is that both major parties suck and have contributed to our demise. They are able to thrive getting us to fight over red meat issues that the big money centers could give a rat's ass about because all they care about is robbing us blind.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    Are we there yet?

    yes, the hamster decided to drop by and share a bit of his despair

    As far as NOMINAL SPX is concerned we've once again GAPPED UP beyond very nice resistences, BUT SPX:VIX still no fun place for Bulls.

    only truth this hamster knows is “a market can stay irrational longer than you can stay solvent”

  • Brishort

    Good day,

    So busy today, I have not read comments from this morning yet. Therefore sorry in advance if this repeats anybody else but I thought worht mentioning:

    i) the raping of VIX continues and it si outrageous. This chart says, doN,t fight it… yet. The blue line MA is getting so steep, it will cross at one point. That is the one to watch on that chart.

    http://stockcharts.com/def/servlet/SC.pnf?c=$SPX:$VIX,PLTBDANRBOPA!E20,2.618!B13DF1!3!!!2!20][J208924110,Y]&listNum=8

    ii) This is my own version of Mole SPX:TNX mean reversion he wrote a few times that had to occur at one point and was unsustainable long term. Look at it today, fuck….g unbelievable.

    http://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=6&dy=0&id=p65074466831&a=209259911

    iii) Today and Monday are POMO days, so be careful if you don't want to have to get you Vaseline again.

    iv) Very short term, the Zero 5m may be trying to imply something is wrong, but unless something significant happens on the hourly, I am steering clear of this madness.

    I just hate bubbles. And make no mistake… this really is a bubble.

  • SW6

    Yes, you are right. I always forget that April 26th was an intraday high and not a closing high.

  • Brishort

    SW6, sorry for the delay, have not been able to sit at my computer last night, will look at you P&F comments tonight if I have a chance.

  • SW6

    It's cool, life gets busy. I'll read with interest any response you make if you have a chance to do so. :)

  • Eva S

    I don't think you can single out just one president and blame him for the situation in the US. I think the problem is with the mentality of the baby boomer generation. Their parents and grandparents built a manufacturing base, built a highway system, etc. Baby boomers shut down the factories and exported the jobs. They didn't even bother to maintain the infrastructure which is now crumbling. Their biggest “accomplishment” is creating financial derivatives and polluting the world with them.

  • 99er
  • gsavli

    exactly. today's economic situation in the us has nothing or close to nothing to do with obama. but it's nice to have someone or something to bitch about. makes one feel better.

  • BobbyLow

    I've heard the Baby Boomer argument before and it probably has some merit. But again this is a very broad brush. It would be like saying that the greatest generation that got us through WWII also got us into Viet Nam.

    I would rather think that the age old nemesis of Greed got us into this mess. And this includes members from the “Greatest Generation”, “Baby Boomers”, Generation X and Y along with the current generation who are too busy on Facebook and or Texting one another to care about whats going on.

  • Fearless

    Got off the phone with my broker about 20 minutes ago but had to go to a meeting right after, jeez!

    I put in a buy order for DD NOV 48 CALL to protect my short, paid a premium for them. At least now if this pop is only a one day affair, I won't be buying at the top. On the other hand, if this pop is legit, I'll have my shorts stopped out at $49 and still cash in on those calls to reduce my loss.

    Guess what, another meeting right now. LOL!

  • Eva S

    I never understood why the WWII generation is called the “Greatest Generation”…

  • malverd

    Cause 'they' said so :P

  • Eva S

    Now I do understand. :-)

  • Eva S

    I use etrade and their platform has some problems today too.

  • Wave_Surfer

    It might have something to do with sacrificing so many young soldiers to overcome a man that came reasonably close to taking over the world and coming up with the strength to succeed even though they were living in The Great Depression. When was the last time that Americans were rationed out basics like sugar and wheat, while trying to save the world and doing all that work and sacrificing without complaining that they didn't have electricity to run their Xboxes?

  • SW6

    Anyway, today's tape says that my earlier comments are invalid.

  • malverd

    Hmmmm…..Watching BIDU

  • Wave_Surfer

    I hope it turns out ok for you.

  • Eva S

    Sounds pretty reasonable, but they didn't try to fight that man for a long time until they were attacked themselves. Then they dropped atomic bombs on Japanese civilians and “sold” 1/2 of Europe to the Soviet Union.

  • BobbyLow

    Well I guess you and I have a generation gap or two. But do you thing growing up during the great depression and people starving with no safety net and then sacrifice for another 4 years of WWII was the type of things that most generations have to go through?

    Nah, I guess it was nothing.

    http://en.wikipedia.org/wiki/Greatest_Generation

  • gsavli

    not much better at IB, with 5.10 and 8.90 now.

    obviously, they are not very liquid.

  • BobbyLow

    Wow, it seems you've had a very sheltered life. Perhaps you might want to pick up a history book or two.

    BTW, this conversation has gone on way too long and that has been mostly my fault. Plus I feel myself getting pissed off.

    So perhaps we need to get back to using this Blog as a Trading Blog for which it is intended.

  • malverd

    thanks. have you noticed many others with a wide spread? BTW, do you daytrade or swing trade? If daytrade, what you usually trade?

  • Wave_Surfer

    > but they didn't try to fight that man for a long time until they were attacked themselves.

    So, the problem with them is that there were not war mongers enough?

    >Then they dropped atomic bombs on Japanese civilians

    And then too much of a war monger??

    The truth is that 1) Sometimes when you invade multiple countries and try to take over half the world that sometimes negative consequences may come back at you and 2) if we hadn't killed 250,000, we would have lost another 1,000,000+ and they would have lost well more than 1,000,000. It is often forgotten that less Japanese ended up dead because the bombs brought a swift end to the war. 3) Even though they attacked us and only had plans to rule over us with an iron fist, we spent even more money to rebuild their society which allowed them to catapult themselves back to being a world super power rather quickly.

    If they won, do you think they would have spent all the money we did to rebuilt our society and leave us to rule ourselves?

    >”sold” 1/2 of Europe to the Soviet Union.

    Sold? It couldn't have anything to with the fact that more Russians died in WWII than the other allied countries?
    It is just that the Russians were not quite as honorable about letting the Germans govern themselves after their country was rebuilt as America and Europe was.

    However, so that this does not drag on and turn into something bad, I won't continue. Feel free to respond and you get the last word though.

    Back to trading…
    Is there a concensus that what was resistance is now support.
    I know you guys look more at SPX, but do you guys think that IWM will stay above 71 until OX?

  • gsavli

    I'm daytrading now, during this uptrend, having about equal number of long and short scalps. mainly NQ (it's been more volatile lately) , much less so ES. Daytrading is about the only thing that works for me to get around my huge bearish bias. I can't get long and just leave it. Stupid, I know.

    When downtrend comes, i'll be swing trading, then if the trend holds, i'm gonna just leave it and check for signs of bottom on daily.

  • malverd

    well, i just went long BIIB. See how that goes…

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    EVA, Bobby, etc… CUT THE POLITICS!

    You know the rules

  • malverd

    What techniques are you using for analysis? Trendlines? Indicators?

  • Eva S

    Yes, sir. I apologize. Politics and world views can be very antagonizing…

  • malverd

    how do i turn off comments from being sent to my email?

  • malverd

    found it, it was a link to turn off in the email

  • Fearless

    Too much short covering going on I guess.

  • BobbyLow

    STH,

    As a fellow Moderator myself I know the rules. I also had already posted that this conversation had gone on too far and had already stopped. I got caught up in dealing with what I thought was ridiculous Bull Shit and should have just let it slide.

    One of the great things about this board is the Lack of Politics. In any event, it's over now. However, the next time you have something to say to me, I would appreciate you using a little bit more tact.

    I'm not a child and do not expect to be treated like one.

  • Eva S

    I'm not sure if it's short covering or a breakout. For me, this is one of the best days of this year as I've been long various industrials and energy stocks going into this week.

  • 99er
  • ds2

    Where is “there” in your opinion?

  • gsavli

    both. channels and resistance/support levels as the most important and then RSI, MACD, stoch, … and market internals.

    and POMO days calendar and yahoo economic calendar as the MOST useful TA tools. :)

  • 99er
  • Brishort

    OK, I have made my bed and will have to live with the consequences…..

    I am now going short with a stop at April high on SPX. This is not a scalp, I am going to leave open with a 25 points trailing stop and hard stop @ 1220 ! ;-)

    Rationale:

    1) Overextended by all margins.

    2) My weekly signals are all still bearish. There are many but this chart shall sufffice

    http://stockcharts.com/h-sc/ui?s=$NYSI&p=W&yr=1&mn=4&dy=0&id=p34580576494&a=211150833

    3) POMO now over, the effect is in the market I think. We have now a few hours clear until Monday!

    4) STUs 4th wave triangle confirmed with enough squiggle for a 5th completed.

    5) Zero is somewhat trying to telegraph a divergence, although nothing is showing yet.

    And of course, we are at April high resistance.

    There you have it. For me the bell has just rung at the top, so I WILL listen to my signals.

    Good luck to all!

  • malverd

    Looks like we're heading down

  • 99er

    Chart: ES and ZB
    Is this what Bears are looking for?
    http://99ercharts.blogspot.com/2010/11/es-zb_4293.html

  • Fearless

    Don't jinx it!

  • Tronacate

    Just pulled up the Baltic Dry which I hadn't looked at in awhile and it is considerably lower than last year…….what is REALLY going on?

  • EvilTrader

    When asset prices disconnect from underlying reality, this is called asset price inflation, also known as bubble.

    You can imagine why is that happening now;.

  • Tronacate

    Guess the asset price inflation isn't making everyone feel rich enough yet……..Bernanke is such a fucking tool.

  • malverd

    I think key area to close above is the 4/26 weekly SPX high of 1219.80. Let's see what happens tomorrow at the close. I will be impressed if it closes above this.

  • malverd

    I don't know who's worse him or Greenspan. I'm leaning towards him…

  • Wave_Surfer

    I agree with the 4th wave triangle, but it looks to me like wave 5 might have more to go. Plus once 5 is done, won't it just go down to the previous 4 (bottom of the trading range we been in for a few weeks) and then go back up again.

  • gsavli

    i vote for greenspan.

  • Brishort

    All true, however I am giving additional value to the April Top at this point as the key potential stopping point, short term. If it goes, this is why my stop is there. We are pennies away, so not much risk.

    Vix is slightly on the rise as well, comforting the short as of now.

    We will know very shortly with the close of today.

  • EvilTrader

    read “panderer to power” book.

  • BobbyLow

    I think it's a tie. Both love Blowing Bubbles.

    In the mean time, the market is loving every minute of it like all bubbles before this one.

    I'm still net long but as the market is on-route to DOW 20,000, I shutter at what the future costs will be to the average consumer. BWDIK?

    In the mean time, I'll remain net long until my rules stop me out.

  • malverd

    I think we're gonna start lower here

  • Brishort

    Shooting stars alert on AMZN & GOOG. Any further move down by NDX which simply looks stalled at the moment will trigger AAPL as well

    ANY movement lower will be technically weak and many of the top 15 NDX 100 stock (which = 50% of NDX) components are already internally weak or seriously down. CSCO and COST are the only ones holding up the index.

  • Brishort

    Sorry, typo, meant Shooting stars, the candlestick pattern.

  • Tronacate

    CRM looking weak today

  • malverd

    In what way?

  • http://www.stringmandalas.com LosGatosCA

    ES indicators – 6 timeframes at 15:00 EST

    http://www.screencast.com/t/danQZweX33we

  • malverd

    so what do we think on the close? around the 1214 area?

  • EvilTrader

    We are due a flash crash.

    Id hope tomorrow.

  • EvilTrader

    right now on 1 min…dollar up and spx making new highs…hmmmm.

  • Nightwind

    The scary part for a bear is this could be a 3 of a 3 breakout

  • Brishort

    True, but internals don't really support it.

    This is why a stop @ 1220 on an hourly candle close (to allow for a bit of headfake) is so crucial.

    Tomorrow jobs report… we'll see.

  • malverd

    If we do, don't the 'big boys' get made whole (trades reversed) like they did last time :)

  • Wave_Surfer

    True on the risk v. reward.

  • Fearless

    Retails are on the right side of the trade for the past month! How rare is that?

  • malverd

    I'm sure the report will be crappy, so we should go up around another 20 pts on SPX

  • Brishort

    Here come the last 20 minutes.

    This will be a crucial “close” so close to the old April top.

  • malverd

    Watch tomorrow for the weekly close. If it closes above that April top I will be surprised.

  • fisheggs

    This is Sparta 2.0

  • EvilTrader

    Bernanke is destroying the dollar, the US economy.

    Theres no hope but to ride the paper money bubble and make some bucks up and down.

  • 99er
  • Nightwind

    If this is a breakout, my estimated min. target is 1260 on the spx

  • rtlguru

    Really? Who do you know (ie, parents, friends, dumb money, etc) who went long in sept/oct and have profited?

    I like to poll friends of friends who are casual small time investors. Most were shorting like everyone here. Most funds have had net outflows until recently.

  • Eva S

    I think someone here recommended F two days ago. I forget who it was, but thanks so much. I just sold my calls because it looks a little overbought.
    That was a great day…. Exceeded my expectations!

  • malverd

    WOW, it's almost like it was planned to give everyone that warm fuzzy feel for the holidays. Maybe they'll spend some $$ for the holidays?

  • Brishort

    OK, so a close no different than the day.

    On the principle: a market must stop going up before it goes down, I wonder if a flat day after a gap up qualifies?

    Pro bulls:

    Vix @ 18.5 (I am not even going to comment on that ridiculously low number)

    Pro bears:

    A brownie point if they are still alive already ;)

    Weeklys not positive.

    AAPL at the preivous high but topped @ 320 again

    AMZN shooting star but P&F breakout

    GOOG no new high but shooting star as well with an abandoned baby if market gaps down tomorrow.

    $USD not making a new low.

    Bear case is very thin. If tomorrow gaps up significantly without closing lower, this is my uncle point. No more shorts for a while.

  • malverd

    I don't trade mean reversion much, but I occasionally look at the VIX with a 10 day SMA envelope. Here are some rules that I have found know as Connor's VIX reversal. Take it with a grain of salt (that is I wouldn't load up all short, but possible consider this and indication that we are due for a pullback DUH! :P

    NOTE: Requirements for sell short were all met today:

    For Buys:

    1. Today, the low of the VIX must be above its 10-day moving average.

    2. Today, the VIX must close at least 10% above its 10-day moving average.

    3. Today, the VIX must close below its open

    4. Once Rules 1 – 3 have been met, buy the market on close.

    5. Exit (on the close) the day the VIX trades (intraday) below yesterday’s 10-day moving average (reversion to the mean).

    For Sells:

    1. Today, the high of the VIX must be below its 10-day moving average.

    2. Today, the VIX must close at least 10% below its 10-day moving average.

    3. Today, the VIX must close above its open

    4. Once Rules 1 – 3 have been met, sell the market on close.

    5. Exit (on the close) the day the VIX trades (intraday) above yesterday’s 10-day moving average (reversion to the mean).

  • BobbyLow
  • bshah

    Apart from me being screwed right now as I am short …Look what we see here in the news … Cut out from news article here…

    http://finance.yahoo.com/news/As-Markets-Soar-Theyre-cnbc-680186283.html?x=0&sec=topStories&pos=4&asset=&ccode=

    “Markets reacted jubilantly to the Wednesday announcement that the Fed would be adding another $600 billion to its $2.3 trillion balance sheet. Stocks in both US and foreign markets soared as did commodities, while Treasury prices, particularly in the five- and 10-year notes, also jumped.”

    Wow… We the people celebrated being in debt. Fed is adding to it's books as if it's 5-10 gift to my kids.. We already have almost 3 Trilllllllllllllllion on books.. And we are not done yet.. This is one hell of a time, in which only handful of folks on wallstreet / washington prosper and so many struggle to survive.. Just on a side note, not sure, if any one watches a show on National Geographic called “Border Wars”… It's about people wanting to migrate to America.. They think that the life here is good… I agree I am living OK… but not good … Even consider those agents and employees of Border Patrol force putting their life on line walking thru the rugged mountains and desert…. Oh my god…What america…? Where you will be paying taxes to keep these bastards happy… What a disparity… and what a shame..

    Congrates Ben & Team..

  • rtlguru

    Even better. This shows retail is selling/short, not long.

  • convictscott

    The bear case is NOT thin, its over, sad but true. Todays price action was caused by the very convincing shorting opportunity pre FOMC failing, causing shorts to cover. It wasnt caused by Ben, the mysterious “them”, or anyone else. The markets (which have been quite weird over the last few months) are behaving normally and perfectly again. What that tells me is that its time to make some money.

    The market making, and more significantly HOLDING new yearly highs can only be interpreted as ACCEPTANCE of those highs. There is simply no other way to objectively view this. Take that “its about to fall so hard from here” shit and stop, drunk a cup of reality.

    Long is the new short. Sorry, but get with the program or go broke.

    For those who were saying “it WILL fall after FOMC”, “its going to gap up and fall”, “They wont be able to keep it up any longer”, now you understand the foolishness of making predictions. Once the fed announcement failed to spank things down, it increased the odds that (as I posted pre market open) that today would be a trend day to the upside triggered by short squeezing. Today was a super easy day to trade, like all trend days, get long on the first 5 min candle that pulls back to between 20 EMA and 50 EMA. Hold until close.

    I had my best day in a long time because I could see easily that shorts were going to get raped and I wanted to be on the raping side as soon as possible.

    For those that are planning on giving it “one more day” – shame on you! We closed at yearly highs, do you think there are NO MORE BEARS left to capitulate? Literally every bear on the planet who has long term puts has to at least reconsider, or more likely cover their shorts.

    For those that are saying “thank god its now a double top” – shame on you. Wake up!

    For those that are blaming Ben and others for your trading losses. Thats one of the worst psychological traits there is, a sure sign of a losing trader. Stop it.

    People, todays price action is a GENUINE GAME CHANGER. Everyone who reads this board needs to stop, reexamine their personal biases and preconceptions, and start devloping a money making plan for raping the accounts of the few remaining bears.

    Theres no shame in being short up til now. I was flat, but there is no way I would have been long a week ago, and was looking for a place to get short. Now, there is no way, no way at all, I would consider a short at these levels.

    Today changed the game.

  • convictscott

    This is not the standard vix buy and sell rules, which have had rigorous quant analysis done on them and have proven to have a market edge. Never heard of this Connor, or his rules. I'd be very dubious of grabbing random rulesets off the internet without testing.

  • convictscott

    Exactly! For the record, in a day with potential short covering involved, if the gap hasnt filled by 10.30 am, the odds are 80% that it will close at the high of the day.

  • convictscott

    MLMT – you werent wrong in your read yesterday. It was a great shorting opportunity, but when it didnt work out, it immediately became an incredible long opportunity. Thats the only mistake you made, which made you then see everything in terms of your original prediction.

    This is the inherent problem with making predictions (particularly publicly), once you make them you become “invested in the outcome”, you start to “talk your own book” looking for reinforcing reasons for your own opinion.

    Speaking for myself, when my psyche becomes invested in an outcome, my ego is looking for a payoff when I am right, I become interested in being right, not being profitable. The motivating force in my psyche becomes a “fear of being wrong” – and fear based trading simply doesnt work.

    My psyche will experience emotional pain if I am wrong in this instance. My subconscious tries to “help me out” by blocking out evidence that I'm about to get market-raped, to save me that pain. Once you start making predictions the market can be flashing a big red sign saying “its going up, get long” – and you just won't see it, its impossible for you to see it.

    Emotional pain is useful, you need to know not to touch the stove because the stove is hot. Those who run from the painful emotions caused by market losses get carried out.

    I have a little routine of self-care when I take a big loss. Its important, because I know that the biggest danger after taking a loss is turning into a trading idiot travelling to the planet fuckhead (fuckranaut) and then doing real damage to my account. One losing trade will never hurt me, but turning into a fuckranaut for even a short period of time really does damage to my account.

  • Brishort

    Hi Scott,

    I respectfully disagree.

    The market may continue higher and you may be right, but your rationale about bears is surprinsingly biased and I think can be challenged.

    I was flat since Septemer 15th until today and got short today for the first time in a long time.

    Scaling into a position within the vincinity of a double top with a tight stop is a valid trade. Whether it makes money or not.

    Whether the bage has changed or not, you are inducing a long term prognostic based on one day action. This ain't sufficient. Give me a few days and I may consider it. In trading you must respect alternate scenarios Otherwise you are no better than EWI and you proclaim you know the direction.

    I am surprised by the tone of

    “For those that are planning on giving it “one more day” – shame on you! ”

    You said it: today was a typical gap trend day for short covering. I agree.

    I don't agree however that tomorrow is telegraphed. And any high made today on various indexes is not at par with my view of a top that failed.

    The USD is not lower

    The weeklys are still negative

    The breath is horrible

    The bonds are distorted

    Copper has not made a new high

    Today was a POMO day but not tomorrow.

    I only have one vote, but I think your comment deserved my countervote not approving the direction of your note.

    I am glad that you had your best day. But that does not mean you now have the power to decide where the market goes.

    Read back my previous comments, I think you will see technical evidence of what I am presenting, and even if my technical indicators turn out wrong, at least I pretend they left enough factual technical evidence to the readers to make their own judgement.

    I believe this is also what Mole does when he writes.

    Respectfully,

    Brishort

  • convictscott

    Because of the super-correlations in the current market, dow theory currently does not work. (despite prechters continuous pointing out non-confirmations as bearish)

    Dow theory non-confirmations on multiple timeframes were a major part of my trading strategy, this year they went the way of the dinosaur. Every market all the same, all driven by dollar deflation and risk on…

    SPX = AAPL = AUDJPY = SLV

    It really hurt last year to have to admit that 40% of my method was irrelevant.

  • convictscott

    I reckon you are glad you stayed away from that silver short ;-)

  • convictscott

    Amotka, one guideline I have found helpful is that

    “Any trade which is unplanned, on the spur of the moment, based on information I have just seen – IS AN ERROR, especially if it wins”

    I reorganised my principles to reward myself for trading well, and not for trading profitably. Any impulsive unplanned trading will ultimately result in me blowing up my account.

  • Fearless

    For the record – I was the one who went LONG at 1040. I sold most longs at 1130, and went 50/50 long/short on September 20. My longs had since profited, and I went 30/70 long/short at 1170. The rationale for 1170 delta negative was that it was the Flash Crash liquidation level. I speculated that the market was going to have trouble with that level.

    Fast forward to today, I thought we were going to have a gap and crap, but as soon as the first 30 minutes were over, I knew I must take emergency measures, and that's when my broker's website crashed. Too many stops were run. I don't put stops on my positions as I use options to protect them. I sell the protection options for cash if the market goes the opposite direction of my primary position, allowing me to get a second chance at my primary positions. (BobbyLow knows what I am talking about as he uses similar strategy.)

    No, I am not closing out my DD position just yet. I trade based on the daily charts, and one day close above the grand resistance does not make a valid break. If it closes higher tomorrow on stronger volume, I will close my DD short on Monday. Based on the negative divergence, I still think it should head towards $42 some time over the next little while. If I am wrong (won't be the last time), my protective options will reduce my losses.

  • amokta

    Im going on holiday for a week.Now should i stop trading, or carry on trading and spoil the holiday? What if i miss P3, or miss a trade of a lifetime?

    Feeling bad i closed longs out too early today, but still made ok profits (if id just let those stops be a bit looser…)

  • Fearless

    You won't miss P3, because there is no P3. Load up long the next time the daily Zero signal flatlines when the market closes lower, that's what I did at 1040. My mistake was I started to sell WAY TOO EARLY at 1130.

  • gsavli

    another extremely exciting day. :)

    today's action was firm, nasdaq at new highs, spx at prior high, without even a slight hint of weakness. as MLMT said – if tomorrow market doesn't go down after the numbers, it's game over for shorts. i'm leaving this chance of market plunging tomorrow just for the sake of it, actually, not that i really believe anything like this could happen. not after this action today.

  • BobbyLow

    Enjoy your holiday.

    The market will still be here when you get back. :)

  • http://zstock7.com/ zstockmiester

    APOL trade…firefox browser…google search link…
    Here's a first….
    This is a very unique way for me to post my next winning trade.
    http://www.google.com/search?q=apol+target+price&ie=utf-8&oe=utf- 8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a
    Scroll down to to Z's Stock Pro Select, and read the fine print.
    I'm on the front page, Google search. “apol target price” I'm right next to JPM's outlook on the matter.

  • SW6

    Thanks for saying all of this. It needed to be said.

  • SW6

    Yeah, I thought maybe the jury was out on that but if it no longer works then it no longer works. So you exclusively or nearly exclusively just work on a daily basis off of the candlestick system of Ivan Krastins. Does this candlestick system work on a week by week basis?

  • http://practicalt.blogspot.com/ Gold_Gerb

    Clever.
    -GG

  • raised_by_wolves

    Hey Gerb, I forgot to thank you the other day for the number four Google-ranked pair trading strategy guide. Did my laziness benefit you in anyway (like did you read it for yourself)?

  • http://practicalt.blogspot.com/ Gold_Gerb

    I guess you had to P2 eh?

    ha. srry dude.

  • http://practicalt.blogspot.com/ Gold_Gerb

    no prob dude. glad to help.
    yes I read it
    nope, no benefits.
    sitting on hands, feeling like an idiot.
    Too smart to go short, too fraid to go long.
    D@m it!

  • yudhisthira

    I think P3 is ending soon. Then 4 and 5 to a peak in January. (snark)

  • raised_by_wolves

    I double wolf dare you to buy FTBK. :-)

    http://finviz.com/quote.ashx?t=FTBK&b=1

  • http://dreadwinaard.livejournal.com/profile dreadwin

    On the other hand, this is exactly the type of sentiment I would expect near a top.

    I am 95% long, 5% short.

  • 99er

    (Reuters) – Republican Representative Ron Paul on Thursday said he will push to examine the Federal Reserve's monetary policy decisions if he takes control of the congressional subcommittee that oversees the central bank as expected in January.

    “I think they're way too independent. They just shouldn't have this power,” Paul, a longtime Fed critic, said in an interview with Reuters. “Up until recently it has been modest but now it's totally out of control.”

  • malverd

    What rules do you use?

  • ricebowl

    P3 won't come until and unless QE2 ends. We just broke the previous high which invalidates all the previous EWT counts. (I fully expect it to keep going, too.)

  • ClutchShorter

    I hope shorts aren't picking tops. The worst way to lose money is picking a top. You may have your convictions that this may rollover but you're basically trying to stop a bullet train coming at you. Sometimes you just need to change your game plan to adapt to the changing markets. We may be going higher well into 2011 and I don't see any weakness in the markets. P3 is basically gone. To think that the markets are going to simply rollover is simply absurd. It may retrace a little only to go higher.

  • 99er
  • Wave_Surfer

    I am thinking that EWI's long term wave count MIGHT possibly, be not right.
    If the bottom of the credit crisis was the end of the bear market, then it was not just Primary wave 1 of a 5 wave, but the end of a large scale bear market.

    Not that the bear market has to be totally over. Maybe the credit crisis was the end of a large scale wave A. That means we are likely to go to Dow 13K+ to 15K+ as a large scale wave B, before doing a large scale wave C.

    Or, as I mentioned earlier..what if things are like The Great Depression but not quite as bad? If you were talking to the Americans that were literally starving to death or dying in labor disputes or if you talked to the rich about all the spending that Rosevelt was doing you would see every reason for the market to go down now was there as well even stronger.

    And yet, the market went UP for DECADES *STARTING* with The Great Depression.

    Said another way, reality may say that the next Primary Wave 3 (aka P3) will be an UP wave.

    You don't want to miss a P3 wave do you??

    And again, if you point to all the things that are wrong as why the market can't possibly go up, I bet I can point the same only more as being true in the 30s and 40's.

    The market goes down when complacency rules and there is NO Fear.
    When you look out across America, do you find an America that has NO fear, No Anger, like at Feb. of 2000? If bad things happened, every Tom, Dick and Harry, would see it coming! People KNOW things are bad and people are angry!

    For this reason, we are in a season where the market will climb up a Wall of Worry.
    We are NOT sliding down a slope of hope. There is anger and fear, not complacency, lack of fear and hope.

  • jacksoo

    I love this guy – -they shld take the leash off and let him have at 'em.

  • Wave_Surfer

    Yep!
    That is basically what my intermediate term count says.
    Although Wave 3s are famous to going on until they don't feel like it anymore, so… I am less convinced that wave 3 is almost done.
    What if wave 1 was March 6 2009 to late April 2010?
    And the correction of a few months was wave 2?
    If that is true, then we could still have over a year left in wave 3 (or wave C if this whole thing from March 2009 is a big wave B).

    We could be in wave 1 of 3 with the correction that comes early next year being a wave 2.

    But, I agree with you, it appears that P3 (or PC Primary wave C) will be Up and we may have started it.

  • Wave_Surfer

    Or then again…
    EWI talks about how wave 3 is “the point of recognition”
    If we are in a wave 3 up, it can go up strong even when 'everyone' agrees it should go up, even if some people feel it has gone too far.

    Think of how bulls felt in October 2008. At some point during that wave 3, they recognized that “Gee, we are in a bear market” and many of the bulls even after recognizing that probably felt like the correction was going “too far”

    But in October 2008, it was falling, everyone knew it and for a while they were right..it was falling.

    Up markets seem to be less volatile though, so a wave 3 may just slowly climb a wall of worry, as it slowly melts up for years – esp. since there is no reason for it to and so many reasons for it not to. <- definition of wall of worry!

  • Wave_Surfer

    And if EWI is wrong in their long term wave count (which considering how successful they have been at knowing where the market will go for the last YEAR – seems to be a possibility), then the next P3 (Primary sized wave 3) very well may be up.

    After EWI being wrong about P3 starting for an entire year now, that possibility needs to be at least considered.

    They may know Elliott waves, but they are humans as well!
    And according to them, PEOPLE tend to have their emotional parts of their brains make the decision and then the temporal lobes enlist the frontal and prefrontal cortex as slaves to do the bidding of the temporal lobes (and other emotional centers). Once the emotional side makes the decision, the logical faculties are then enlisted to “make a case for it.”

    Kind of like how the whole lawyer thing works.

    Lawyers don't start out neutral and follow the facts and see where they go. That is the job for the jury and/or Judge. No, they get told what side to argue for and then they employ their logical faculties to make the best sounding argument and they twist and turn anything that can to make it fit. Having the better lawyer win doesn't mean that truth was found.

    EWI is made up of humans and it is possible that their long term count is not 100% right. The last year surely has been performing strangely *IF* they are right.

    There are several other long term counts that can be different than what they say while still not contradicting a lot of the evidence that they point to in the Theorist, FForecast and Conquer the Crash book.

    So, do yourself a favor and DON'T MISS Wave P3!

  • Wave_Surfer

    If you want, I will do some work to draw up some graphs to show what I think are the 2 most likely long term wave counts. They are kind of 2 flavors of the same thing.

  • Brishort

    This chart is from Daneric, but sufficiently good to be worth a mention.
    Interesting work.
    http://1.bp.blogspot.com/_TwUS3GyHKsQ/TNM9Q_HY91I/AAAAAAAAH_Q/euS-9h4woX8/s1600/spxdaily.png

  • Wave_Surfer

    Hmm..interesting point.

  • Wave_Surfer

    I looked at it more and it seems to be a good point.
    Even though I am new to the long term bullish camp, simply put, price does NOT like camping way outside of the bollinger band!

    Thanks for sharing!
    I will probably be trying to unwind my spread tomorrow.

  • convictscott

    EWI are a pack of idiots, wave theory has no validity to the current situation. A bullshit bullish wave count is just as invalid as the bullshit bearish count was…. wave theory is basically disproved and complete rubbish for long term forecasting

  • ClutchShorter

    It's interesting however if I may point out some fallacies that may invalidate his analysis.

    The chart is predicated on the fact that when the stock pushes above the upper Bollinger Band, the stock has exhibited downward movement. However, I see instances where the stock dropped WITHOUT pushing above the upper BB (i.e. price at 1576.09, 1523.57, 1219.80). If that's possible, it's also possible that pushign above the upper BB may not result in a retracement of the stock.

    It's easy to structure the data to support the hypothesis but the reasoning may not always be valid.

  • Wave_Surfer

    I will respectfully disagree.

    >no validity to the current situation

    either the theory is right or not.
    However, even if the theory is right, doesn't mean that everyone that attempts to apply it, will always apply it correctly.

    Again, just because someone or most or all people use it and are wrong, doesn't mean the theory is wrong.

    >wave theory is basically disproved and complete rubbish for long term forecasting
    well we very much disagree with each other here.
    And I come here because this is one of the few blogs that give respect to the theory, so I don't have to worry about getting slammed all the time and I can focus on advancing my abilities.

  • raised_by_wolves

    I for one wouldn't mind seeing what you think are the two most likely long term wave counts.

  • Wave_Surfer

    When price moves well outside of a BB, either up or down, I always see a snap back to at least around the mid-line.
    Can you show me an example where that did not happen?

  • raised_by_wolves

    What's your definition of “well outside of a BB”? Closes outside a BB without an immediate snap back happen often enough with the volatility index. That's why we have that three step VIX buy/sell rule: If (1) close outside, (2) close inside, and (3) close further inside, then buy/sell. We should definitely be on guard for a snap back, but I don't think it's guaranteed.

  • Wave_Surfer

    Looking at what seems more obvious at the longer term…

    1) I think it is fairly obvious that a 5 wave started in 1982 and ended in 2000.
    2) After the 18 year bull market is going to come a correction.

    After an 18 year bull market, you would need a proportional correction.

    Looking at the correction at the largest scale, I see
    A – The first step down is the Dot Com crash
    B – The four and a half year bounce
    C – The credit crisis

    C is an obvious 5 wave, but then Wave Cs are 5 wave structures whether the correction is a flat or a sharp.

    Again, after going up for 18 years, I see a fairly clear A,B,C starting in 2000 and ending in March 2009.

    Looking forward…
    I think the first point is that there are 2 main options if I am right about 2000-2009 being an A,B,C

    Option 1) That is the correction. Over. Done. Back to a (multi?) decade sized bull market.
    Option 2) The whole A,B,C is just the first move in the correction.

    At this point, I am completely unable to even guess which is more likely. Having an accurate wave count at an even larger scale would help, especially at the multi-Century level.

    If option 1 is the case, then the Dow may go to 30,000 or, I would think even more likely 150,000 over the coming decades.

    If option 2 is the case, then we can still have decades left in the bear market. Like the 70's but larger. This is actually what Pretcher thinks. This wave count is pretty darn close to what EWI is thinking is many ways, but has rather different consequences for 2010, 2011 which is what we are experiencing.

    Option 2, even though it is very close to EWI count, means there will be no such thing as a P3. If this is a wave B and not a wave 2, then it could turn at any time or it could go past all time highs before turning. When it turns, wave C should go down to at least as low as Wave A, or possibly lower.

    Basically my point, which is fairly strong, I think is.
    A is the Dot com crash
    B is the many year bounce
    C is the credit crisis

    and

    that means that particular bear wave down is done.
    Then again, we have bounced so much now, a new multi-year down move could happen at any time, but it might be wave 1 (the start of a new wave down) and not a Primary wave Three.

  • raised_by_wolves
  • Wave_Surfer

    Yep. True. But that is the volatility index.
    As the Daneric graph shows, popping clearly on the other side of the Daily BB, is rare and every single time (from my looking) resulted in an immediate move back inside.

    Though I do have problems convincing myself, there is another possible idea. I did do a look at a big chart that specifically looked at the daily BB during wave 3 of the credit crisis. Both the move down and the BB were almost vertical so it was real hard to see, but on a large chart that showed just a couple months on the daily, and it looks like the market spiked out and the move was so strong that it would come back and touch or move inside the BB but only for a few hours and then move back out.

    If that was happening now that would mean this would be like October 2008 but in the other direction a massive 3 of 3 of 3 (that we been waiting for but in the opposite direction).

    Either way, in the next few hours I would think there will be some fast moves.

    I still say that once you AVERAGE hundreds or thousands of different stocks as happens with indexes such as S&P 500 or Russell 2000, that the indexes really, Really, REALLY do NOT like to hang outside the Bollinger band.

    Looking back several years, I was not able to find a single day that Ever did what today did.

    Gap outside the Daily BB
    move up from there and have no part of the day even touch the Daily BB.
    I am unable to find a single day that ever did a movement that strong on large index that averages many stocks (looking at SPY and IWM).

    Who knows maybe this is all the ranting of a person that knows nothing, but – again – I have to say it gets my attention when I am completely unable to find a single day that had movement as extreme as today.

  • raised_by_wolves

    Thanks for the full explanation. Your ABC count for the dotcom, bounce, and credit crisis is considerably more flexible than the wave 1 count for the credit crisis.

  • Wave_Surfer

    True, but Silver is highly volatile AND it is a single thing.
    Getting one thing to make wild moves and silver is one of the most volatile markets, but try to get Two Thousand different companies to do the same extreme move on the same day.

    Also candles have a fair amount of width to them so they will look like they are outside more often. Lastly, moving outside for a couple hours during the day is one thing, but again..

    Getting the average of Two Thousand Different Companies to clearly start OUTSIDE the Daily BB and move up from there and close way outside the BB, that is a lot harder and I am unable to find a day – other than today – when that has ever happened.

  • raised_by_wolves

    Good points. I'll go looking for a historical close way outside the BB like today. I've never seen one either.

  • raised_by_wolves
  • Wave_Surfer

    I don't do a lot of actual graphs, but here are 2 screen shots.

    This is Russell 2000 (IWM) and showing today and how the entire day didn't even come that close to touching the BB.

    That seems pretty incredible to me, unless as time goes on, the BB changes shape a little. Next week, will today look as extreme as it does here?

    http://www.uploadgeek.com/share-3870_4CD3912D.html

    Although I think it is a lower chance, I took a picture of the October Credit Crisis to show what appears to be an example of price jumping out of the BB and kind of bouncing on the outside lines of the BB.

    http://www.uploadgeek.com/share-1CBF_4CD3925C.html

    Both of the graphs are a bit large, but seeing it at full size even shows the interaction between price and BB better.

    Well time to get some sleep in case tomorrow ends up being something for the history books. I will hopefully be back in 7 hours

  • Wave_Surfer

    Nice find!
    Thanks for all the work to find it!
    I do notice that
    1) Going back to 1987 says it is a pretty rare thing.
    2) The 87 crash was also quite rare and vertical, the fastest part of the extended part of the wave.
    3) After that day happened, the market appears to have bounced in the other direction about 15% in about 13 market hours in a powerful move back towards the mid-line.

    This does seem to agree that indexes of stocks really do not like to just sit and hang well outside of the daily BB and when they go way outside the BB even if it is a once in a decade movement, it still moves back fast towards the mid line with in hours.

    I am quite curious what Friday and Monday will hold! I will be very confused if the market neither moves up nor down quickly.

  • raised_by_wolves
  • raised_by_wolves

    9/19/2007 was entirely outside and the mild correction that followed didn't snap back all the way to the MA(20). . . .

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/35cf78c8-0c73-4d11-b9cb-cf9bb44522ef/00002538.png

  • raised_by_wolves
  • raised_by_wolves

    I missed some noteworthy dates like 03/04/2002, which was followed by a down day that stayed outside the BB.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/1978b932-23b1-4f66-b3a7-2dde66035824/00002540.png

    To be sure, moves like these are still rare but not as rare as I lead you to believe by going back to 1987.

  • Wave_Surfer

    Nice graph.
    I see 2 examples where both the open and the close are outside the BB.
    One time it lead to 2 more days of up (down really). 2 days after that was the other day where both the open and the close were outside of the BB.
    Immediately after the 2nd day like that it bounced hard towards the center line. Also the 3 of 3 of 3 of 3 of the credit crisis move happens about twice a century, so that is a pretty rare and extreme move and even there after the open and the close are outside the BB, the chances are high that hours later it will race back towards the center line.

  • raised_by_wolves

    The March 2000 blow off top shows how a powerful (and short-lived) wave 5 can spend half its time above the BBs.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/386c9561-e493-4f59-b3b8-bceba0c99b0b/00002541.png

  • Wave_Surfer

    True! Nice catch.
    It appears that it basically went sidewise for 7 days to burn off the over bought and then move up again.

    It didn't move down much but then it also didn't even come up to the high of that day for a couple of weeks, so although it was mild and sideways, that day still caused an immediate correction.

  • raised_by_wolves

    If Friday and Monday continue a powerful move up instead of pulling back, what are the probabilities that it is a wave 3 versus a wave 5?

  • Wave_Surfer

    I find this a little less amazing though because the day started well with in side the daily BB. Hitting a BB and then riding up (or down) bumping up against the BB is not unusual in the slightest and during the time while it runs up along side the BB it will fairly often peek outside the BB for a few hours or minutes during the day.

    Finding a day where there is an easy to see empty, white space between the BB and the day and the entire day is completely outside the BB without ever touching it and specifically having
    1) Both the open and the close clearly outside the daily BB
    2) Having no part of the day's price action even touch the daily BB
    That seems pretty extreme.

  • raised_by_wolves

    Thanks for the comment volley. Now, I'll let you go get your beauty sleep. :-)

  • Wave_Surfer

    Well it could be that wave 5 is the extended wave.
    I would say it would indicate that on a smaller time frame we are dealing with a powerful extended wave and on a larger time frame it is indicating that we have a lot of bullish strength/momentum and it will take a while for that lessen enough to reverse. It would indicate that we are in the meaty center of some kind of either wave 3 or wave C up.

    If it starts to immediate move towards the 1 Std. Dev or center line, then it wouldn't tell me much of anything other than indexes seriously don't like hanging outside the BB. It might be a small wave correction and then having a powerful bull wave up, or it might be the beginning of a move down, even theoretically the P3 that I finally gave up on.<grin>
    </grin>

  • Wave_Surfer

    Thanks for your work and thanks for this interchange.

  • gsavli

    I've been reading these comments and virtually everyone agrees, this will go up (including me). It's almost too consensual. Hmmm.

  • convictscott

    Wave Surfer… I should clarify. I think wave theory has many excellent points, and provides fascinating insight into future market options.

    However, the conclusion that wave practitioners draw is invalid.

    Wave theory explains price action and is useful for prediction *some* of the time.

    To try and shoehorn that into “it explains everything, predicts every bit of price action from 15 min charts to yearly” – the evidence just doesnt fit.

    I dont want to throw out the very valid insights that wave theory provides, I just disagree with the way most people use it. For example, there were points where Prechters P3 armageddon scenario was the most likely outcome, and the best count. When that didnt work out, it doesnt mean the count was wrong, but the theory does not explain certain situations.

  • convictscott

    Brishort,

    I agree with everything you say about the bearish case, up until yesterday. To me, the price action to that point was OVERWHELMINGLY undeniably uber-bearish. Objectively the market kept painting dojis, unable to get through resistance. It looked certain to either fall, or gapncrap after the announcement.

    The market has risen for a long time on shitty breadth and terrible internals. It was odds on to fall through the floor after the fed announcement, no matter what the announcement was.

    However, for whatever reason, that didnt happen, and the game changed. I *never* make predictions about market direction, and nobody would be happier than me if you are right. The odds 2 days ago favoured the bearish case, but the odds right now favour the bullish case.

    In the last hundred years, there has NEVER ONCE been a rally end with a trend day, defined as open at lows close at the highs expanded range, movement over 1%.

    Do you seriously think this is going to be the first time ever this price action marks the end of a major move?

    You say the breath is horrible – WRONG! The upside breadth WAS terrible, NOW it is 5:1 upside. Thats tremendously bullish, the strongest breadth for a month.

    You say the weeklies are negative – WRONG! The weeklies WERE negative, right now the weekly SPX shows higher low, higher high, expanded range, embedded in the upper bollinger band. If you can show me a chart where this type of candle marks the end of any sort of upmove I would be very surprised.

    You say the USD is not at new lows – Factually Incorrect, dx is currently at yearly lows.

    Objectively, there isnt really anything for bears to hang their hats on but hope at this point.

  • convictscott

    do a search on this blog for vix sell signal, the rules are there

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    f.ing amazing…wtf? does my broker share info with the exchange these crooks can know where the majority of stops are?

    euro futures just dropped like crazy in like 10 seconds and traded 6,000 contracts in like less than 30 seconds…..

    criminals need to go to jail in this country.

  • http://iberianviews.blogspot.com/ catracho

    “buy low sell high”

  • raised_by_wolves

    Banks have been downtrending and moving sideways while the rest of the market has been uptrending. Banks have been like a battleship slowly turning around. I spy an inverted head and shoulders.

    http://content.screencast.com/users/raised_by_wolves/folders/Jing/media/108274b0-d229-450e-962c-6f4434336a7b/00002542.png

  • raised_by_wolves

    Your comment prompted me to review my trades. Guess what? I win the majority when I don't use a stop loss and lose the majority when I do. (I trade stock options, not currencies).

  • http://profiles.yahoo.com/u/6NFOSGRXKB4LMGOAXV3ZY6IWZA Grainman

    some day this scam will come to an end …. and never happen again… someday…

  • http://iberianviews.blogspot.com/ catracho

    euro weekly approaching 78.6 5 retrace of move down from Nov 09…

    http://www.screencast.com/t/8clgRgst3H

    STILL only 3 waves up (so far…)

  • raised_by_wolves

    Only 3 of 5 up (so far . . .), eh?

  • raised_by_wolves

    If there is a hell and I deserve to go there, how about those scammers, huh?

  • Bob the Horse

    It will go up until it doesn't. The problem is, it is no longer a free market – it never was but now the Fed have stated it openly. Of course it can't work – if that was easy, Congress would just pass a law saying everyone had to be rich. But when does it fail? Who knows.

  • http://www.hervey-bay-holiday.com kea11

    I guess by the time we get to wave V both short and long term will be at a bullish extreme – worth a look. http://www.sentimentrader.com/

  • Brishort

    Thanks for replying, I don't want to argue too much as we are close on the issues at stake, just not the prognostic of the end game and clearly strongly differ on the technicals leading to it.

    USD:
    I stand by the fact that it is not at new low with this chart: The low is @ 74.23, regardless of the yearly reading you have.
    http://screencast.com/t/IelUDMuUh

    I also stand by the fact that the following two weekly charts I follow demonstrate weakness and divergences at the top, and this regardless of the actual print on the SPX weekly price action.

    http://screencast.com/t/SPf8djDVLVD
    & this chart
    http://screencast.com/t/janXJLbStBa

  • http://iberianviews.blogspot.com/ catracho

    Yes this “feels” and “smells” a bit like 1999/2000 when we had the “new” economy…and it was “buy high and sell higher”…it went further (ie higher ) than everybody thought it would…only when everybody was “convinced” that we were in the Utopian economy did it stop..and we all know how that ended..

  • Eva S

    Have fun (but not too much)! You may miss some great trades but don't worry about missing P3! Ciao!

  • gsavli

    E/U falling as a brick, while AUD/JPY going up after data. Don't know what to think of it.

  • Eva S

    Great jobs numbers. Poor democrats missed a good report by a few days….

  • EvilTrader

    greenback rebounding, expect to drag equities and comods.

  • Schwerepunkt

    Curiouser and curiouser. I'd scratch my head if I had any hair left . . . could it be equities will rise with a resurgent dollar? That is the traditional relationship, btw, before 2001.

  • Eva S

    The dollar has been in a major downtrend, but it may rebound a bit while equities go higher at the same time.

  • Eva S

    Depends what you mean by “resurgent”. It may only be a dead cat bounce right now.

  • Bob the Horse

    Well I have been seriously questioning the way I think about the world of late. I clearly was wrong that the Fed would fire the QE2 gun this early, and that the mkt would get this excited about a policy with a 10yr track record of failure in Japan. But what now?

    The thing is – if you look at the S&P500 in Euro terms, it has not gone up at all really. This is purely a competitive devaluation of the $. From a European perspective, that will not bail out Ireland, etc. And I think you can still be short European banks. Would I be short the S&P if I was in the US? No. You didn't want to be short the stock market in Zimbabwe and if the Fed are going to destroy the $, you don;t want to be short in local currencies. But it won't create wealth, just an illusion. Same as Zim – market went up by millions of percent but down huge in other currencies. you'll get a similar effect in the US. It's not a good place for foreign capital.

    My wife and children are Americans but the sad fact is that we are witnessing the final death throes of what was once a great nation. When Benrnake feels he has to write a newspaper article saying he is manipulating the stock market as the best way to achieve his policy aims, what does that tell you about his options? He doesn't have any.

  • 99er
  • Schwerepunkt

    I wrote a lengthy response about how there is really no substitute for the dollar; and so, it will not be destroyed. Decided no need to post it. Not relevant to short-term trading. Basically it boils down to: Euro is a joke on many levels; Yuan is a tool of a one-party state; and the commodities currencies (NOK-CDN-AUSSIE) are all too small. Maybe a basket of all of the above, but that does not solve the huge political questions in Eurozone and China.

  • Eva S

    You should post it. It should be an interesting read.
    I agree with you but it doesn't mean the dollar cannot weaken further in the coming weeks. There will be bounces too, but the downtrend is still on.

  • chronographics

    Remember these relationship last and work till they don't, it's that simple, they are interesting to watch but dangerous to trade off directly. It all depends on what the market focus is and therefore how the pillocks err sorry, traders read it.
    So keep an eye on what the big boys are focussed on :-)
    have a great day – I am off to get some shut eye….

  • Brishort

    The Euro has has a 2 cents range since 4AM this morning.

    All to the downside.

    http://www.finviz.com/forex_charts.ashx?t=EURUSD&tf=m5

    We should pay close attention to such move, regardless of the media circus on job numbers.

    US$ index is NOT at a new low, regarless of what Convict argued earlier:

    http://www.finviz.com/futures_charts.ashx?t=DX&p=d1

    On AUD/USD which was the last equivalent correlation to SPX ( as per Mole HongKong$/USD previous comment) is to me still in a high probability 1-2 squiggle configuration from a top.

    http://www.finviz.com/forex_charts.ashx?t=AUDUSD&tf=m5

    Bottom line:

    Watch the VIX & Zero at the open, the truth will first be revealed there. If this is a top a short term or intermediate top in the making, it will first show there and the $ continuing not to make a new low (74.23 being the bottom).

    Good luck to all today, and hopefully we can all get our charts clues together, because the bullish comments without charts is not re-assuring to me.

    I have never seen such a love fest of bull comments with so few charts on this board.

    Shouldn't we all stay nimble as Mole mentioned so often?

  • chronographics

    Well I think I under estimated the capability of supposedly intelligent men to take this path to this extent. You are right in your analysis, maybe you just need to look at the medium you are shorting the S&P in?
    I remember my old man telling me in the early '80's that the US one day would devalue the dollar to a fraction of what it was worth in order to repay its debt, either that or start a war. Well guess the war didn't work :-)

  • Bob the Horse

    The only good thing I have done is not short the S&P, I have been short the Eurostoxx the entire time.

  • chronographics

    Yes, remember now, sorry my mistake. Well a lot less painful then :-) I can save the vaseline just for myself after trying to pick the Euro top a few times. No big deal unless I look at what I should have made being long – thats blinkers for you err me

  • Brishort

    Zero 5m crucial here.

  • gsavli

    VIX will be 10 on Monday. :)

  • 99er
  • gsavli

    smells of correction here, at least for 1 day.

  • gsavli

    nasdaq leaders red – AAPL, GOOG, MSFT.

  • gsavli

    dip buyers bought the NQ 2179 level, now let's see if there's enough of them at these levels.

  • Schwerepunkt

    Less is more when writing, I find. Basically the alternatives are unproven, and the process of switching reserve currencies can be messy. It is akin to switching from an oil to a hydrogen economy. It took two world wars to solidify the shift from GBP to USD. I don't see anything on the horizon like that. A basket? Maybe, but that really just increases the uncertainty to my mind.

    Ever larger rounds of QE “could” substitute for two world wars if Ben really goes off the deep end, though.

  • Bob the Horse

    Well I don;t think it is crazy to look for a top soonish in the Euro – it is structurally screwed, it is only the dollar debasement that has puffed it up short-term but the reality si that the Euro will not be around in current form in 10 years time.

  • http://evilspeculator.com molecool

    This market = INSANE!

    Really not looking forward to coming back to this. Was good to take two weeks off quite frankly…

    A depressed Mole in Seoul.

  • http://evilspeculator.com molecool

    Let me tell you something. I just spent two weeks in a functioning and successful society that is on the way up. They are proud of their country and their accomplishments – they build things – they educate their children – they fix their roads – there is no trash on the street – they plan for the future …. shall I go on?

    I never thought I'd say this but this is my last night in Seoul and I'm really depressed about boarding my plane for LAX tomorrow. The U.S. has degraded into a second grade nation compared with Korea. If I could learn Korean in six months I would probably move here – at least temporary. I almost feel cleansed having been here…

    The U.S. is being sold to the highest bidders – the rats are leaving the sinking ship. They just elected a bunch of new assholes who are going to fuck our country up even further. Then two years later there will be another 'change election' which will bring about everything but change. Rinse lather repeat.

    Oh – and another thing: I made more friends here in 10 days than I made in Los Angeles in 10 years. That is not a joke.

  • nyxjf

    It's good to hear that you had an awesome experience.

  • Wave_Surfer

    Yep.

  • Schwerepunkt

    BDI looks to be heading down again after a cycle up.

    http://www.dryships.com/pages/report.asp

  • BobbyLow

    I've been riding this run for about 3 weeks now so at least my account is looking a little better.

    But I've got to tell you that I am one pissed off dude when I think about the cost push inflation that Mr. Asshole Bernanke is trying to shove down our throats.

    I remember the 70's and early 80's type inflation and back then at least you had wage inflation to help keep up with the cost push.

    How in the world is this going to create demand? It can only help the banks at the cost of middle America and down.

    This is fcking insanity at it's best.

    Anyhow, have a safe flight and it'll be good to have you back.

  • jacksoo

    you got me onboard mole – - I guess slightly cursed having lived in many different places and seeing real degradation in US since even late 90's – - can't help but be moribund about it, the US of my youth has been cluster-fucked and the frustration is that it continues with impunity.

  • jacksoo

    hey Bob – -got smacked up a bit on my ES short – -still can't feel anything but bad vibes about how this will end up. G20 getting real pissed with US/Fed speaking out of both sides of its mouth. Usual thing. Can I stay solvent long enough to hold to a conviction – - cld be right of course but timing is all wrong. Still find it real hard to take a long position.

  • Clint

    Not with the banking sector now joining the party. As well as several other things.

  • jacksoo

    US now the largest exporter of inflation – -I wonder how all the other economies under going austerity measures are going to react when food stuffs and oil sky rockets – - I guess they'll all be delighted that the US stock mkts are pumping on steroids whilst they struggle – - – perhaps I see things too black & white, the economists and Fed have it worked out i guess.

  • ricebowl

    I'm not terribly enthusiastic, myself, but I have seen several of the newly-elected representatives in Congress issue statements saying that QE2 is a bad idea. I am going to get on the phone with my Congressman and recommend the proposal of a revoke-the-Fed bill, and I'll see where it goes from there. Also, apparently Ron Paul is going to get a shot at auditing the Fed? Something like that. If in two years they fail, too, then there's not going to be another elect change day. It will be time to get pitchforks and torches and settle the score the old-fashioned way.

    Happy Guy Fawkes Day.

  • mothwhoflysbackwards

    missed you dude, I'm having exotic chat withdraw.

  • 99er

    Chart: SPX
    Looks rather toppy today.
    http://99ercharts.blogspot.com/2010/11/spx_4161.html

  • Bob the Horse

    Sounds a bit like the 1950's USA

  • Bob the Horse

    I would genuinely not be short S&P. You are fighting against the Fed and it is going to be very difficult for markets to fall in nominal terms. There is no doubt that it will end in tears but to be honest, it is better to be long gold than short the S&P as an expression of that view.

  • LilSpaniard

    Since most commodities are priced in USD, foreign countries that have floating currencies aren't as affected as the gains in the currency offset price increases. It's the the nations with pegged currencies that get hurt

  • bshah

    Is 122.70 an important level, somehow someone seems to defend that vigorously?

  • jacksoo

    I hope he doesn't have an accident or the theorists will have a hell of day.

  • Schwerepunkt

    tight bloody range today on ES since the cash opened. Only ~ 7-pt between hi and lo.

  • lilme

    My husband is a Brit and I am US, we are thinking that I should get dual citizenship in UK. And possibly transfer funds/etc. to more secure non-US location, not necessarily UK.

    This election jarred my thoughts – I thought there would be long decade of 1930's type deleveraging. But this week I wonder if 1930's Europe with its right wing politics might be more the model. Between 9/11 and two stock market crashes in a decade, there are huge fears and questions in the minds of most Americans who had been very secure for decades.

    But more to the point is that the US seems to lack any real leadership with sound future looking policies not to mention the inevitable gridlock which will result from this election.

  • lilme

    Mole, I returned from Shanghai and Hong Kong recently and they have something called J-O-B-S over there and people are walking on clean streets all over with good public transport. Yes, they are working hard and stressed with all the opportunities, but what a different atmosphere.

  • BobbyLow

    Thanks for the prompt.

    FWIW, I just called my 2 US Senators and my US Congressman to voice my reasons of vehement resentment toward the Federal Reserve and QE 2.

    On the trading front, I'm still net Long S&P, QQQQ, XLE and Short TLT.

  • omelette

    is the zero down?

  • ds2

    Looks like it might be.

  • 99er
  • Bob the Horse

    You can only get UK citizenship after living there for 5 years. But as the spouse of a UK citizen, you are entitled to permanent residency when you want it.

    I definitely think social unrest is not out of the question. This whole idea that QE will pump the stockmarket and create a wealth effect is only going to work if people already have wealth in the market! Most Americans have been wiped out over the last decade. So all Bernanke is doing is raising the cost of living. Not a good recipe – when people have no stake in the system, they have no reason to support it.

    The other insane thing is that Bernanke seems to be happy to tell people he is deliberately trying to goose the market. That means people are a lot less likely to fall for it – companies will know their shares are going up through manipulation – it won't make them rush out and up the cost base.

  • jacksoo

    did they give a rats arse?

  • jacksoo

    i moved the family to Aus 5yrs ago on the basis that economic relationships with China wld give kids greater economic opportunity

  • malverd

    anyone now if thinkorswim has indicator/histogram showing up volume and down volume separately?

  • Bob the Horse

    A Mole in Seoul doesn't have a role

  • http://pulse.yahoo.com/_HJFSNDPKKEMLPCLRW4K556EDOM Martin Leonard

    so…any ideas when we are going to roll over and give half of yesteday back?

  • BobbyLow

    Probably not.

    Of course when you call their offices you only get to speak to an intern who is supposed to relay the message to the Congressman or Senator.

    I realize that it probably didn't make any difference whatsoever. But it felt good just to give my 2 cents worth (future 1 cent via inflation) to somebody in Washington. :)

  • jacksoo

    There used to be a time when they listened – - I'm not a radical by nature

    but the older I get and the more blatant usurping of power I see amongst

    politicians the more I think we need a return to the 60's era of protest -

    they've conned everyone through compliant mass media that anyone who now

    protests Gov decisions or claims the Pres is a moron are actually attacking

    the American flag, patriotism and our way of life. They've earmarked free

    speech for someone else, its doesn't belong to you or I now, we're not

    worthy of it. People need to reassert their rights as voters under the

    democracy that was the envy of the world.

  • bshah

    All I ask for is one flash crash of 50 S&P points….. Is it too much to ask when Bulls have had their way for last 5 months.. Ben had his magic power on all of us… They have made gazzillions… why can't we make few hundreds..

  • http://pulse.yahoo.com/_HJFSNDPKKEMLPCLRW4K556EDOM Martin Leonard

    speaking of the S&P….where do you tihnk it will end today? Specifically the S&P 100 (OEX)…below 550? anyone? looking for some help. thanks!

  • malverd

    I'm watching what we close at on a weekly basis on SPX 4/26 high of 1219.80. If it closes above that, I will be impressed…

  • bshah

    I am not too optimistic @ that.. It may stay around the same level and keep screweing us up.. I think since the Weekly Options have been introduced, you all may have noticed that hardly ever few Fridays we had close in red big time ( if at all in red )

  • http://pulse.yahoo.com/_HJFSNDPKKEMLPCLRW4K556EDOM Martin Leonard

    so it seems as thought his market is playing around right now. do you feel an end of the day RAMP or DUMP will happen?

  • EvilTrader

    i hope we crash hard monday. BLACK MONDAY ! About time.

  • bshah

    I m no expert… just amazed by how much control some folks have that if they want market can go up in a snap and otherwise can be in .05 pt range for 3 hrs.. Wow.. look at this shit.. everytime it touchedflat line on S&P, boom spikes up.. As if someone has clear instructions to not let it go… This is not free market…

  • http://practicalt.blogspot.com/ Gold_Gerb

    Hope is a fickle B!tch.

  • 99er
  • malverd

    So SPX under 1219.80? What you all think?

  • bshah

    A very remote possibility looking at current condition, but hey you never know..

  • malverd

    I figure the selling should start shortly…

  • http://pulse.yahoo.com/_HJFSNDPKKEMLPCLRW4K556EDOM Martin Leonard

    I hope so, do you think people will want to hold through the weekend?

  • EvilTrader

    My wavelet model is spotting a full blown crash soon, but it is unable to nail the date…heavy storm clouds spotted. I expect them to deliver by next week.

  • malverd

    Nope

  • Wave_Surfer

    I think you will be impressed.

    >I'm watching what we close at on a weekly basis on SPX 4/26 high of 1219.80. If it closes above that, I will be impressed…

    10 minutes left and it is climbing.

  • bshah

    As I said before, I don't think ever on friday's we will see SPY close in RED. May be M-Th but not on Friday. and I am impressed.. This is the best workman ship of all times… Fuck me.. that I don't know these people.. or i will be making money too..

  • malverd

    Yes I am. To go full long, I would like to see next weeks close be a retest back to about half of todays range.

  • malverd

    I must admit that my longs are doing better than shorts :P

    How about you guys?

    NFX 10-Dec 55 CALL 5.2 9.95 91.35%
    LULU 10-Dec 40 CALL 5.2 8.55 64.42%
    MCD 10-Dec 72.5 CALL 5.15 6.9 33.98%
    AKAM 10-Dec 47 CALL 5.4 7 29.63%
    DOW 11-Jan 27 CALL 5 5.75 15.00%
    LO 10-Dec 85 CALL 4.25 4.425 4.12%
    CEG 11-Jan 35 PUT 4.8 4.85 1.04%
    TEVA 11-Jan 55 PUT 5 4.925 -1.50%
    CELG 10-Dec 57.50 PUT 5.05 4.60 -8.91%

  • bshah

    I am fucked.. just closed TZA calls with 1.5k loss.. Does that make you happy ? I think you are using reverse mentality.. but any how.. enjoy your bucks…. Ben..

  • malverd

    Now don't listen to what I have to say. For what it's worth, I took a quite sizeable loss last week too

  • convictscott

    Incorrect. There have been many times over the last few months where obvious manipulation has taken place, this is NOT one of them. The market is now behaving perfectly normally again, unlike some recent times.

    What happened over the last few days is very very simple. It was a great shorting opportunity when the market stalled into known resistance over the last few weeks. Two trading weeks of painting doji candles, not able to push up gave the bears a chance to accumulate short positions at a good defensible level.

    Every single bear stop from new positions over the last few weeks was above the resistance they were shorting into. In other words, all the stops were at the SAME PLACE. When the market failed to fall (against the odds) bears who shorted at the prior resistance were forced to cover en masse, creating the gap n go – enormous trend day with solid breadth. The strength of this push got us to new highs, where it triggered even more long term bear stops (at the old april highs)

    From a practical trading point of view its important to recognize what will happen when a great setup in either direction fails – ie where will the stops be. In that situation, if we get a gap caused by short covering, if you do not get a gap fill in the first 90 mins of trading then odds are 80% for an open at the lows, close at the highs, buy every pullback trend day. A simple mechanical method for trading this situation is

    1) Recognise potential for trend day
    2) Gap not filled in first 90 mins of trading
    3) Every pullback that paints a hammer candle on 5 min chart between 20 ema and 50 ema, place a buy order above the high, stop below the low
    4) Hold positions into close, and pyramid further trades as you have the guts.

    Also FWIW you should *ignore* momentum divergences and indicators during a trend day, they only happen 1-2 times a month, and are essentially a free money day, the game is to recognize them early and stay long.

    The big questions we have now are not about *predicting* market direction, but about whether the $spx has achieved “escape velocity” and can continue rising even without the euro/dxy helping it.

    Statistically a second close outside the bollinger band is a high probability shorting even for a mean reversion play, however that does *not* mean P3 will start at the next fall. That breakout to new highs is a game changer, and undecided longs on the sidelines will now be salivating at a chance to get in at better prices.

  • malverd

    I totally agree that a lot of this move had to do with short covering. I also agree about your view on divergences. In a strong trend, I just usually consider a divergence the beginning of a pullback with the likely hood of a continuation of the trend. If you consider a divergence a possible top or bottom in a well defined trend, you will have your head handed to you 9.99 times out of 10. Not sure on the statics there…. :P

  • http://practicalt.blogspot.com/ Gold_Gerb
  • Eva S

    I've been long calls only, and most of them are up 20-50% (or more) this week. I took some profits, but am still all long.

  • http://practicalt.blogspot.com/ Gold_Gerb

    My thought too.
    My Dad was there when they rebuilt that country from the mudhuts up.
    Guess these preserved the 50's Soldier-boy culture!
    :-)

  • malverd

    No shorts at all?

  • Eva S

    No, only after P3 starts…. :-)

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Your pontification these past 2 days is great to see, the only way is up, baby.

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    It's just a temporary bubble, it'll actually ironically be deflationary, look at the dollar up 1% today.

    This pops very very soon.

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    China then.

  • Schwerepunkt

    I will be very interested to see what Mole conjures up for us upon his return. Damage to bears has been immense. EVERYBODY says stocks are going up . . . I suppose that sometimes everybody can be right and a crowded trade is still the right trade? Or can it . . .

  • http://evilspeculator.com molecool

    “Two trading weeks of painting doji candles, not able to push up gave the bears a chance to accumulate short positions at a good defensible level.”

    Or in simpler terms: We painted a sideways correction. I don't have a stochastic here but bet you a buck that a lot of downside momentum was wasted. Price traders on the bearish side got lured in and then taken to the cleaners for the xteenth time…

  • http://evilspeculator.com molecool

    I have NO idea what happened. I just logged in remotely and the system was locked for some reason… it's working again now. Sorry – but at least we had smooth 9 days in my absence.

  • http://evilspeculator.com molecool

    Okay, you reached your snarky remark limit for this month – put a sock into it.

  • http://evilspeculator.com molecool

    Dude, you actually gave me a great idea. I'd love to live in Asia but the language barrier is a tough one. Maybe Australia is close enough for me/us to set up a base – flying to the rest of Asia from there is easy.

  • http://evilspeculator.com molecool

    Exactly – the pace down here is amazing. What took me a year to produce in the U.S. (tech product) could have been done here in three to four months. Can't wait to come back here.

  • http://evilspeculator.com molecool

    In Europe the powers that be used to fear its citizenship. I now feel that has changed – case in point are the massive but futile demonstrations in Greece, Spain, and France. Problem is that workers now have lost their bargaining chip – their labor. In the U.S. that bargaining chip has been eroded slowly over time. These days you get fired for joining a labor union.

    Anyway, where does that leave workers in the West? Violence and civil disobedience – what else? If workers are being diminished over decades then all that's left for them is to stand up for themselves the only way they can. Thus expect a lot of social upheaval in the Western hemisphere over the next decade.

  • http://evilspeculator.com molecool

    jacksoo – I already know how to read/write Hongul (Korean symbols) and give me about one year and I'll be fluent in conversational Korean. Anything is possible if you put your mind to it.

    If your country hinders your personal growth – change countries!! I've done it once 20 years ago – I'm about to do it again.

  • OldChicago

    So, P3 is dead then, until further notice?

    Dollars up, DBC, Miners are up as well. Ags & gld slightly lower, but financial is rocking, playing catch up. So we could melt up further, unless there is earthquake somewhere else. No econ news on Monday.

    Many pros projected short squeeze above April high around 1220. But, the squeeze seemed to have taken place around 1200 yesterday after the market gap up. The fact SPX held 1220 today is impressive.

  • http://www.hervey-bay-holiday.com kea11

    Wall St J today:

    By Jonathan Cheng

    Here in the U.S., some Fed watchers are convinced the central bank’s attempts at monetary easing are really aimed at pumping up the stock market. In Japan? There is no debate. The Bank of Japan made explicit overnight its desire to snap up ETFs and Japanese REITs as part of its five trillion-yen asset-buying plan. Japan’s Nikkei stock index finished the day up 2.9%.

    It may be some time before the Fed gets this explicit, but that hasn’t stopped commentators from reading between the lines. In particular focus is yesterday’s Ben Bernanke-penned op-ed in the Washington Post, which generated a small cascade of comments along these lines: if it wasn’t already clear, the Fed wants stock prices to go higher. A quick sampling of reactions:

    Alan Zafran over at Luminous Capital, a big money manager in Los Angeles, e-mailed MarketBeat to exclaim: “WOW!…When’s the last time we saw the Chairman of the Federal Reserve explicitly aim to inflate asset prices?”
    “Never did I think a Fed Chairman would admit to designing monetary policy to boost stock prices,” David Gilmore of Foreign Exchange Analytics in Essex, Conn., put it in a note. “He told [retail investors] in the Washington Post today to do what hedge funds are doing…buy equities. Forget the life cycle hypothesis and 100 minus age for share of equities…the age side of the equation was made zero by Bernanke…even if you are 80.”
    From Dennis Gartman’s eponymous letter: “The Fed is targeting the equity market and it wants the equity market to go higher, for in so doing the economy’s ‘animal spirits’ shall rise. That’s what we are down to: the Fed is now targeting a higher inflation rate; it is targeting a lower unemployment rate AND it is targeting stronger stock prices… end of discussion.”
    Okay, so we’re not quite in Japan territory yet. But if this keeps up, is it just a matter of time before the Fed starts snapping up the SPX?

  • convictscott

    Thats exactly so my friend :-(

    “God is on the side of the big battalions” – Stalin.

  • convictscott

    I'm sorry its worked out this way Gary, but there is no denying reality at this point. There really wasnt a better opportunity for bears to take control than we just had, and bears fumbled yet again.

    I was heavily short like you in my long term accounts but got out of it all at 1130 spx, losing in the process but staying alive to fight on.

  • convictscott

    Its not crowded until retail investors get back into the market, which may not happen for a long time. Its not overwhelmingly bullish sentiment when people who read technical analysis blogs (technicians are as a general rule more bearish on markets than fundamental investors) become bullish, its overwhelmingly bullish sentiment when people who dont have trading jobs start quitting to become traders a la 1999.

    Like when people quit real jobs to become house flippers. Thats what real bullish sentiment is, not whichever survey people trot out to say is 9x% bullish.

    I do believe that sentiment in USD is at an extreme that a reversal is a real possibility though

  • http://www.hervey-bay-holiday.com kea11

    Unashamed Quote from Ben Bernanke – Washington Post Opinion Piece – read it all here if you haven't already: http://www.washingtonpost.com/wp-dyn/content/article/2010/11/03/AR2010110307372.html

    “And higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending. Increased spending will lead to higher incomes and profits that, in a virtuous circle, will further support economic expansion.”

    Just buy the dips until… I got to ask why is Madoff in Prison? He only did what every Central bank in the World is now having to do in response to US monetary policy.

    No analysis of any sort necessary. Only one wave and it is a Tsunami.

  • convictscott

    Gary_UK I have one chart with they smallest smallest glimmer of hope for bears. And NO, its not betting odds

    http://www.masterkillers.com/wp-content/uploads/2010/11/image3.png

  • convictscott

    HAHAHAHAHHHAHAHAHAHA

  • convictscott

    China benefits from a weak currency, and would prefer it

  • convictscott

    Euro price action today is encouraging for bears, the silly part of me is considering a mean reversion short.

    I dont know what your definition of new lows is, but its clearly not the one the dictionary uses ;-)

    http://www.masterkillers.com/wp-content/uploads/2010/11/image4.png

  • convictscott

    Australia is the best place in the world to live mate. Stable govt and legal system, superb education system, close to asia. I used to maintain a house in Bali to go play in, and spend 3 months a year travelling Asia.

    Come visit sometime, it would be my pleasure to show you around :)

  • http://pulse.yahoo.com/_3BJAP7Q7KHLKZ7GSG7AB3JKR2A joe jones

    Greatest chart produced on this blog yet!

  • http://pulse.yahoo.com/_3BJAP7Q7KHLKZ7GSG7AB3JKR2A joe jones

    Would confirm that Denninger had a point back in July : http://market-ticker.org/akcs-www?singlepost=2139536

  • Joe_Jones

    pass 1230, watch FRN burn.

  • Joe_Jones

    Pass 1230, watch FRN burn.

  • http://evilspeculator.com molecool

    I remember that post – and don't even have to pull up the link to know what you are referring to.

  • http://evilspeculator.com molecool

    Oh really? How long have you been here? ;-P

  • http://evilspeculator.com molecool

    Pretty much…

  • SW6

    Not that it matters to our individual trading but I can't bring myself to believe that Bernanke himself really believes what he is saying. It's more comfortable for me to believe that he's really a prominent member of elite society espousing cynical and propagandistic rhetoric. He can't, HE JUST CAN'T, believe what he's saying. There has ALREADY been a controlled experiment for the position he is taking – it's called the Greenspan Years, and they were a sickening rotten failure.

    “Virtuous circle”?! What the hell is that? Do you have to go to Narnia to find it?

  • SW6

    Convict-san, you made me laugh there: “the last, last, last, last line in the sand.” :-)

  • convictscott

    Some thoughts on the dollar. Big picture first, look at the monthly chart
    http://www.masterkillers.com/wp-content/uploads/2010/11/image5.png

    Its made a break below a multi-year triangle trendline, important shit I tells ya.

    The pertinent questions are 2

    1) Is it a false break or real break? If its a real break below, then the dollar is officially fucked, technicals and fundamentals align to push the USD down in an unstoppable gangfuck. Equities get a free ride, and Prechter starts talking about how clever he is when you price $spx in real money ;-)

    2) If it is a false break, its clear that sentiment on bucky is at a state where a short squeeze could be hard and violent. In this case, has equities achieved “escape velocity” from its orbit to dollar devaluation. I got no idea about the answer to that, but I suspect its key.

    I have 2 high probability options for dxy, which painted a promising reversal candle on Friday.

    Option a) A decent retest of the lows and a moonshot caused by short squeeze
    http://www.masterkillers.com/wp-content/uploads/2010/11/image6.png

    Option b) A little more strength, probably painting a shooting star candle, followed by a plummet which would be a sell and hold to the beach type trade, there is nothing but air underneath this trendline.

    http://www.masterkillers.com/wp-content/uploads/2010/11/image7.png

    As to the probabilities of these two options, I couldnt say. And like Chrono says about correlations between currencies and equities, they work until they dont

  • http://oahutrading.blogspot.com/ steveo77

    5 hits on the triangle/wedge usually work….bit move to other side, that be up for Bucky.

  • http://evilspeculator.com molecool

    “Prechter starts talking about how clever he is when you price $spx in real money ;-)”

    You KNOW IT – he did that with gold after all, remember? It's however a little detail he kept from his subs until it was way too late.

    I'm really worried about the Dollar – hence my trip to Asia. Setting up operations down here, not just because of cheaper/better manufacturing but also as I see the U.S. go to hit in a big way. Consumers will not be able to afford jack in the coming decade. Asia is flush with cash – I saw one infrastructure project after the other here in Korea.

    I'm in the airport lounge right now and am really depressed about coming back. Nothing but drama and corruption to return to – once you set foot into a functioning society again you suddenly realize how screwed the U.S. is.

  • fisheggs

    AMERICA- Bernanke is Dick man!

    http://www.bbc.co.uk/news/business-11697483

  • convictscott

    Mate growing up here in Australia we always thought that the US would be like travelling to the future, since popular culture and TV comes from there. When I first went to LA in 96 I was amazed that the infrastructure is so substandard. Little things like the roads, the phone system, public transport, hospitals… not up to scratch.

    Its sad but also clear – the next century belongs to China and proximity to it, without necessarily being in it (personally couldnt live in China) is a huge advantage IMO.

    Korea is right up at the top of the list for smart places to move to.

    Singapore is also a good fit for someone like you that likes the “flavour” of Asia in a first world setting.

    If you like the exotic Bali offers a life of incredible, mindblowing luxury. This is my old house in Bali http://www.theistana.com it cost under $1 million, its a supreme pimp pad on the beach with 25 full time servants.

    You have the right idea

  • http://evilspeculator.com molecool

    The more we correspond the more I think you're my brother from another mother ;-)

    You are so spot on. Singapore is cool but do me a favor and come to Korea – if you don't fall in love with the people and the country then there's something wrong with you. I also think that Korean is a bit easier to learn than Chinese, Japanese, or any other Asian language. Plus they really love Americans and when it comes to business they are a lot more trustworthy than some of their local neighbors.

    I made it a personal goal of mine to be fluent in Korean in the next three years. Will learn a new word every day – plus add a language class. Korea is the future – the U.S. is the past. Period. Quite frankly I'm sick and tired of bitching every single day – at every single turn our nation is making the wrong choice and I just don't want to be part of it anymore.

  • http://www.hervey-bay-holiday.com kea11

    I agree; a new and better Bernanke bubble. That's why I call it a Tsunami, as this bubble has a massive volume and momentum at the front end, that is lifting all boats, but when it loses energy all that will be left behind will be death and destruction. This FED action is exponentially more powerful than the bubbles Greenspan presided over, however I fear the result will be of a magnitude greater unless of course he is of a magnitude smarter. Obviously Bermanke believes he has superior intellect and has the tools and the skill to deflate the bubble in a release, using a control valve that he only knows about.

  • http://www.hervey-bay-holiday.com kea11
  • 99er

    When In Rome
    With Ben's QE2 and publicly announced support of the stock market, one would think that the Dow may indeed be headed to 36,000. These gestures may actually be the last acts of a desperate man (and the oligopoly he represents) to maintain the status quo, including the USD as major reserve currency. Note, however, that the BRICs as well as France and Germany have raised their concern about the untenable export of inflation resulting from the Fed's efforts to prop up an economy basically in depression. With the G20 coming up, we may see an open split between the US and the rest of the world. Will Ben blink first? Or will the market simply tell him to shove it. How? Buy Dollars, buy bonds and sell equities.

    Dollar/DX http://99ercharts.blogspot.com/2010/11/dollar_06.html
    Long Bond/ZB http://99ercharts.blogspot.com/2010/11/long-bond_06.html
    S&P/ES http://99ercharts.blogspot.com/2010/11/es_06.html

    At heart, the “financial crisis” is a political crisis wherein the United States, a declining empire, has lost credibility and power is now clearly shifting to the BRICs and emerging markets in general. Would you have bet against the fall of Rome? Even when you heard Nero fiddling…or see Ben printing?

  • http://iberianviews.blogspot.com/ catracho

    judging by the amount of financial blogs, and the joblessness in the US one would imagine that the RETAIL investor IS in the market just this time doing it on their own…lack of trust in big financial institutions, funds etc…

  • BobbyLow

    SW6, I think it's actually possible that Bernanke does believe his own rhetoric because he is an academic. While I attended Graduate School working toward my MBA (which might as well stand for Might Be Anything :), I was very fortunate to be a Graduate Teaching Assistant in Accounting .

    I worked for Ph.D's for two years and remember that for the non-tenured professors it was “Publish or Perish” while Teaching Assistants and Research Assistants did all the grunt work.

    I would attempt to read some of their papers, and the papers for the most part would be written in such a complicated way that no one could understand what they wrote but themselves. I think that the Ph.D's within the department would compliment each other's papers as being brilliant and probably couldn't understand what the other “Dr's.” were writing either. But if it was complicated enough, it must be excellent even if it didn't make any practical sense. :)

    Bernanke was a college student until he earned his Ph.D in Economics in 1979. He then worked as a college professor from 1979 until he was appointed to the Board of Governors Federal Reserve in 2002. In 2005 he was appointed as Chairman of Economic Advisors under George W. Bush prior to being appointed to his current position as Chairman of the Federal Reserve.

    As a young adult Bernanke worked as a waiter at a restaurant located at South of the Border on I-95 in South Carolina. For those of you that have traveled I-95, this is where all the “Pedro” signs are like “You Never Sausage a Place” lol. He also did some construction labor at a hospital.

    So outside of working as a waiter and some menial labor, it appears that he has never held a real job outside of Academics and Government.

    But here we are with a another so called “Smartest Guy in the Room” having the whole world is in his hands. This is so Bizarre and you can't make this stuff up.

    http://en.wikipedia.org/wiki/Ben_Bernanke

  • 99er
  • Joe_Jones

    Been lurking for over a year now. Seen all the technical analysis, but lost loads shorting the market. As Convict said: last, last, last…If we go beyond 1230 next week, watch for a tsunami of stops being triggered. That will ring the end of FRN and remaining bears. However, if the 0.618 retracement of the 2007-2009 fall holds then the above chart if the only worth considering. JMO. Will see next week.

  • ricebowl

    To be completely fair, most people are totally uninformed and apathetic, too. A surprising number of people with whom I've talked blame the CRE for the housing mess. I'm sure it played its part, but the blow-off top might have been avoided if not for the CDO/CDO^2 market and garden-variety fraud which made bad mortgages extremely profitable.

  • Clint

    Well..one thing for sure…now all of a sudden ,every trader and their mother expects this market to go much higher. Even the die-hard bears. Whether that changes anything or not remains to be seen…but the element of “surprise” is over for Bernanke's scam to save face. George Soros and the Chinese have to to have somehow been involved in this stock/commodity 'accumulate-rotate-bid up' scheme somehow in conjunction with the FED.What a great racket. Makes Ben and Barry look like they saved the country with forced huper- inflation and puts 100 million dollar bonuses in banksters pockets again this year too. Everybody's happy…except 95% of the regular guy public which can't afford inflation on “anything” because housing,jobs,and wages are gong to stay flat to down for a long time.-But back to my point. Everybody..including the bears are on to the FED scam and ready to go long with impunity.It only took some of us 2 months to figure it out…but we're all ready to join the party now and clean up. Right ??

  • http://wealthadviseruk.blogspot.com/ Gary_UK

    Thanks for thinking of me though. Too late for me, unless it turns sharply from here. I'm done nearly. Learned a hugely expensive lesson these past few months, more expensive than you might imagine. Very silly. Indeed. Luckily life will go on, and the depression will lift eventually I guess. Sorry I had a go at you the other day.

    Amusingly, I do still think we have a brief 20% crash. I just hope I am still on board to claw back some losses.

    And yes, I knew about the 61.8% level.

    Thanks.

  • convictscott

    Gary, I feel for you, and I have learnt the same lessons you have, no doubt even more expensively. The important thing is to learn from this experience, and not allow market losses to affect the way you feel about yourself and treat yourself.

    Its an interesting phenomenon that for me, it doesnt matter how fast and hard a chart is rising, the first thing I think when I look at it is REVERSAL… wow, thats making a top.Thats exactly what I thought when I first looked at silver, spx, and sugar this morning. Probably just like you :) The difference is that I *know* my brain lies to me about this particular setup, I lost enough money with the “lure of the counter trend” that I set in place strict rules about when I can go short a top, and my position sizing for that top. A simple rule is to wait for a failed retest of a high before allowing yourself to take a short position. Another strict rule is that I *cannot* short the stronger of related markets… if I'm shorting a bank, its the *weakest* bank I can find, if I'm shorting precious metals (no way) its gold and not silver.

    If you do come back into the markets, I strongly suggest getting a method you can rely on everyday. Learning about TA and charting is not a method, it just gives you enough knowledge to be dangerous. One thing I have enjoyed recently seeing is how BobbyLow has gone from frustrated losing trader, to sanguine winning trader, by taking time off from the markets, developing and backtesting his own unique method with positive expectancy, and applying it to the markets regardless of the opinions of others.

    He is the only trader I know who stayed long through the entire rally, and if he didnt have a method it would have taken balls of steel.

    If trading holds any appeal for you thats the area you should be working on.

  • Eva S

    On the other hand, on this blog if you read this post alone, many people are asking “are we there yet?”, “is this the top?”, “when are we going to crash?”.

    I just watched Glen Beck on Fox News where he was explaining how the Dow can drop 3,000 points anytime.

    So I still think the general public is not overwhelmingly bullish, but perhaps many traders are indeed.

  • http://www.hervey-bay-holiday.com kea11

    Being a Contrarian is a valid position; but how do you know if you are taking a Contrarian position?

    Just woke up and clearing the fog. My question: “Am I the only a fool that isn't taking advantage of the bubble?” How many fools are out there – if there are lots of fools, too scared or confused to take advantage of the policy edict and mantra – “Stocks must Rise” then indeed my assessment of myself is correct – indeed I am a Fool, as it is unlikely the mob will be right.

    That would be comforting because then I would know that my thought processes and the physical reality are congruent.

    However are their few fools out there and lots of smart people who are catching the bubble and taking all they can from the Feds Xmas gift? If so then maybe I will be saved in the physical world as the bubble was but a mirage. But the downside of this is that my self assessment was wrong – I in-fact am not a fool but that leaves behind a reality of incongruence between my self image and reality.

    Hmmm what is the better proposition to be congruent and happy, confirming that I am a fool or incongruent and confused but with my finances intact and perhaps being a little insane.

    Bugger, wish the FED would stop playing with reality by distorting the truth.

  • ds2

    S&P Weekly is getting above the 200ma. We should go higher.

  • convictscott

    I like what the fly says about his VXX position on his blog “the worlds most fucktarded hedge”

  • Clint

    It was an overall rant after reading a lot of blogs. But your right..the public is not bullish…but whatever happens…I don't think the public is a factor here.At least not for the time being. It seems like the “club” in control of the market is getting richer and richer and smaller and smaller.But as usual, complaining in futile,so as always…it's adapt or die. They sure as hell ain't makin' it easy though.

  • http://mugabe.myopenid.com/ mugabe

    To the bears: even if you think this is a top on SPY, there's a hell of a lot of support in the 116 – 120 area, so any drop would actually be a small dip. In addition, the weekly MACD is incredibly bullish and bullish sentiment is not at the extreme found at imnportant tops.

    http://stockcharts.com/h-sc/ui?s=SPY&p=D&yr=1&mn=0&dy=0&id=p92008559402

    http://stockcharts.com/h-sc/ui?s=SPY&p=W&yr=2&mn=0&dy=0&id=p76661120977

    http://www.market-harmonics.com/free-charts/sentiment/investors_intelligence.htm

  • 99er

    Banana Republic

    The richest 1 percent of Americans now take home almost 24 percent of income, up from almost 9 percent in 1976. As Timothy Noah of Slate noted in an excellent series on inequality, the United States now arguably has a more unequal distribution of wealth than traditional banana republics like Nicaragua, Venezuela and Guyana.

    http://www.nytimes.com/2010/11/07/opinion/07kristof.html

  • SW6

    [del]

  • SW6

    Gary, just so you know, I meant no insensitivity to you with my comment below. I wish you well.

  • http://chartsandthat.blogspot.com/ ultra
  • http://chartsandthat.blogspot.com/ ultra

    Oh and this rather bizarre little occurrence in the House of Lords the other night – can't for the life of me see why this isn't more of a story in the MSM, it's enough to make you believe in conspiracies I tells ya. But if you Google around on this story, you can find plenty of crazy names getting bandied about.

    http://bit.ly/cae3M0

  • http://chartsandthat.blogspot.com/ ultra

    Yen/Dollar – turn window?

    http://bit.ly/bgFAgS

  • http://chartsandthat.blogspot.com/ ultra

    And a bonus Sunday track to chill you right out

    http://bit.ly/b9vzcN

  • http://chartsandthat.blogspot.com/ ultra

    And just in case that doesn't work, try this

    http://bit.ly/bzSnSW

  • http://chartsandthat.blogspot.com/ ultra

    Swiss/Dollar – basically the same chart

    http://bit.ly/9X7LUi

  • Rally_in_red

    Ultra.

    According to you, what is going on? What do you see? Is it a topping-pattern or a consolidation before taking off to the stratosphere?

  • http://chartsandthat.blogspot.com/ ultra

    In case Stockcharts is acting up, here's a screenshot – interesting long-term trend line? In any case, don't ask me – if I was such a genius I would be long right now!

    http://bit.ly/d6nEoX

  • Eva S

    Jon Hamm is so sexy. Sunday evenings are just not the same without Mad Men. When is the new season starting?

    Here's some tips for guys on how to be successful with the ladies
    http://www.youtube.com/watch?v=SItzim3WLu0&feature=related

  • http://chartsandthat.blogspot.com/ ultra

    Ha. He forgot to mention to say “what?” every five seconds.

    I know everyone raves about it, but I've actually never even seen a full episode, so can't help you on that one I'm afraid.

  • Rally_in_red

    Ultra.

    Printed out, and held up-side down in front of my mirror, the SPX monthly is a very bullish looking chart.





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