Nine Little Piggies

I’ve been working almost non-stop since Saturday morning and quite frankly, I’m exhausted. However, I can’t have my rats linger in utter confusion or ignorance, so here’s an update on the wave count:

I’m counting nine little piggies to the upside - making this most likely a motive count. As if today’s breadth would leave very little doubt about that - advancing issues led declining by a ratio of 10:1 - it was even higher intra-day.

The Friday low is too meager to be counted as {ii} of (A), plus the motive wave looks a lot cleaner now. Thus it seems very likely that we completed a monster {i} of (A) of {2} today if you favor the orange count - or a {i} of C of (4) of {1} if you’re feeling the blues.

We’re dropping in the ES futures right now but I’d almost be disappointed if we didn’t complete filling the tap I marked on the chart. At that point I’d feel pretty comfortable loading up on some puts as I think we’re due for a retracement to about 765, the 38.2% fib line. My line in the sand would be the 835 zone - if we get there that.

Well, by now we all know how the game is being played. Either we fill the gap at the open or, depending on the hype overnight, we gap lower and would then have to find a good spot to go short. It’s been very tough doing that lately as the whole fucking game is rigged. If you dip into this market make sure you come with the expectation that your resolve will be tested - it’s probably best if you can afford to lose your entire premium and not lose any sleep over it.

Judging by some of the comments I think today was very educational to a bunch of rats here. The learning experience is that doubling down on a bad trade does not work. And maybe this also teaches those guys among you a lesson who last week were convinced that there is ‘no way this market could pop any higher’. Now you guys know why I operate very cautiously in this environment - what helps matters is that I don’t have a gambling bone in my body.

Okay, remember when I posted happily about Gold finally having breached that diagonal? Well, I was a bit too forward as we never closed below it - as a matter of fact last Wednesday we dropped below and then snapped right back, finishing right around support.

This bothers me.

See, until I see a ‘close’ below that trendline we are still officially in an uptrend. Some of you did a great job daytrading the precious metal today but I hope you guys got out because I start having the feeling that we’re starting to climb up that line again. We have been at this convergence zone for about two weeks and just looking at this I onl see a lot of whipsaw - it’s not breaking. So, as a technician I can draw tons of lines and fibs all over the place and talk myself into reason why a short position is justifyable. But all that means nothing until we officially bust through this fucking diagonal - not dip below it and recover right away. Close below it and hopefully with some confidence. Then maybe push back up for a re-test - at which point I would feel comfortable dipping into short positions again. For now however I’m staying out despite the fact that my stochastics and MACD are pointing downwards.

Alright, that’s all for tonight - you’ve been briefed - so, now go out there and find me some kick ass puts for tomorrow

I leave you with this:

UPDATE 12:00am EDT: Go here for a nice summary of what’s been going through my head as well in the past week or so.

This entry was posted on Monday, March 23rd, 2009 at 7:42 pm and is filed under Market Outlook. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.