G20 coming up next week + non farm payrolls = maximum volatility and unpredictability. Just look at oil dropping, and as I mentioned before eurusd, massive move down, (and as a previous post mentioned euryen as well) .Not good. I am sooooooooo staying out of this market. Watching natural gas though, what a move down since the inventory-report yesterday, but it is approaching 3.67, which is a solid resistance level. Might be nice to play with UNG with a very tight stop.

NEW POST!

Mole or other option traders - do you have any hard-and-fast rule for taking profits on ITM front-month options? I have some decent sized gains on some APR calls and I want to close them out soon. Trying to use the RL's as my guide.

Yes, I usually take mine off the table 10 days before expiration - and of course once they reach my target. My very last day is the Wednesday of OPEX week - if they are ATM or ITM by then I take profits.

That would be 10 calendar days or is that 10 market days? Sorry for the confusion.

New Post

damn it, I cut my hedge like 1 minute before those huge red candles.

fully long though, I like the channels XLF is printing. Long downward pointing wicks indicate lots of buying

long FAZ
short GE

I was thinking of doing a FAZ/Citi pair trade. I was thinking that one or the other should double.

Having been in that trade on and off recently, I can say sometimes it can work beautifully, but if you backtest you'll see that there are times when they move together (sometimes both move up and sometimes both move down). You need a lot of patience and sometimes an iron stomach to make money at it.

Bought FAS at 6.46, hoping for a gap fill.

hope is a bad strategy :-)
However I do think there is a high probability of atleast 50% gap fill based on the last few months of action

I hear you, I probably should have mentioned it appears there are some buy signals on the MACD, Stoch, CCI, and RSI on the 2m or 3m charts. Plus the fact there's a gap, and the recent trend is up. Oh, and the zero lite is giving me some confirmation as well.

You would be better off spending 1/2 the time posting analysis and double the time in the trench's teaching the rats how to find the cheese. Screw the lame questions people have and focus on those that post charts, wave counts. Being passive aggressive witth the rats isn't prodcutive. I post less charts here once I noticed they got zero discuourse.

I say this with respect and a need to want this be a better blog.

-P

+2

Question for any zero user:
How do you incorporate the volume component with the signal. Currently the signal is a strong negative but the volume on 5min ES is around 40k which is much lower than the average 60k over the last few weeks.
Any inputs are welcome

You can use the oscillators. Its all described in the tutorial where these are used to show how much participation is in the move.

EUR/YEN dropping hard. Usually leading indicator for the markets.

Also TrimTabs is reporting a $10.7 billion outflow in equity mutual funds during the week that ended Wednesday.

Not exactly bullish

Now that's weird we just saw a post here the other day how the retail investor was the one fronting this rally and the Institutions following. This suggests otherwise.

Bye Bye Fast Money

http://www.nypost.com/seven/03272009/gossip/pagesix/fast_flare_up_rattles_cnbc_161468.htm

That will be a big loss to a decent show. But they'll just plop some other talking head down in the chair and continue jabbering on. The network continues to make new lows IMO - last night's 'special' on Saving The Economy was one of the most pompous pieces of piffle I have yet been subjected to - and that's saying a lot for anyone who has sat through a Donny Deutsch rant. Now THAT guy should get the heave-ho, not Rattigan.

Edit: Never mind.

Looks like we just completed and ending diagonal wave 2 of 5 down. Sure didn't looks like a motive wave to me. We should start wave 3 of 5 down starting today.

Timeframe doesn't quite work out. That would make wave 5 as long as a primary wave in of itself. Wave 3 already extended too, making this extremely unlikely.

What does that mean? You are saying we are still in intermediate 5 of Primary 1 (circle.)

Yes. It is mimicking primary wave 1 in structure and time. Wave 1 took 5 month. Wave 3 took over 5 months. How did wave 5 only take 2 month to complete?

I mean intermediate wave 1.

Hey Mole, Don't hold back baby! LOL I am still learning so I am happy to be an Indian and not a chief. ;-) I will be followin my new love Zero LIte (pathetic right) to lead me in the right direction. BTW Good luck today fellow rats!

Native Indian or East Indian?

Native :-)

Ok Mole, Just saw your update , sorry if the discussion is " wearing you out " . I think that elliot Wave rules do provide for alternatives which would be as clean as your own count. I guess the uncle point on your primary count is a gap up today that is not filled am i correct in this at least ?

I am expecting gap fill on ES and NQ.

Me also , its small enough but 3rd of a 3rd are accompanied normally by a gap up that is not filled. Still there is an hour and a half to go to the bell.

ES is also at support level around 817 so it's critical, If it breaks the 817 support then there is no support till we fill the gap

No gap up today that I see, a gap down looks to be in the cards, right? S&P at 818 now.

Early days yet im sure the futures traders think we cant go up any further too in addition to a confused everybody. I was actually in the process of editing my post above as i would really appreaciate an ellitician more experienced than me addressing or discussing my concerns on time as outlined in previous posts.

I know that time is a speculative element and perhaps the lowest of the factors to be considered but this primary count was my favourite untill the time issue cropped up. It along with the NDX is th fly in the ointment. I have been trying to get an answer from somebody on the internet who knows more than me and got zip back , so im ringing EWI this morning as im a member there also.

I have a kind of bee in my bonnet about it and have also spent the evening reading the time section in the bible so my concern as per the rules is a valid one , if i am interpreting things correctly.

I do it a bit differently. I place EWs on my 3 m., 10 m., & 60 m. And guess
what, that they are all peaked. S&P has also come close to my ST target of
836. But I am playing short term and closing up shop each and every night.

FWIW your plan makes sense to me.

send me your email
katzo368 (at) gmail dot you know

THANKS. I will let you know what I do. I bought some TZA in AHs trade, probably paid too much for it but have a stop in. Am looking at SRS now, think it is real cheap!

Well, gold breached thet rendline and the eurusd has crashed through 1.3410 resistance. I went short on gold for about ten minutes and then got cold feet, making a massive (ha!) 20 $ profit. The $ breaking resistance doesn't bode well for stocks. S & P is losing momentum, IMHO, I do find stochastics very useful (and I see negative divergences all over the place), but they're not good timing instruments, I agree on that. I still think it is likely that after a pullback, we'll see one more push up to the 845 pivot, but not much higher.

While I agree in theory, the timing to short gold is not quite right yet. It is almost there, but timing is everything, especially in this wacky chart. Sometimes it pays to stay out of a trade.

And I disagree with you about my faves, the stochs. Actually I like many indicators all working in concert with each other, stochs, MACDs, EWs on shorter time frames. Made 25 % in the past three days by applying them judiciously.

There looks to be MONSTER resistance on the S&P at 830.

All you have to do is go back and look at the daily charts and you'll see that we sat there from January 14th to February 13th.

So for an entire month this year we practically hung out at current levels.

I don't know how EW theory reconciles with this mighty resistance, but I just don't see a scenario right now where we just bust through 830 as having much credit.

HOWEVER, if your short, have your stops set. If we DO bust through, I do think we'll head up to 870 farely quickly.

FRIDAY'S ROADMAP (3-27-09): SHE'S OH SO TIRED
http://www.youtube.com/watch?v=CXABr_ySHaM



http://www.screencast.com/t/ZXMdg5MoI

Hey S&P,

I feel your fatigue, lol. But perhaps a little Tuetonic ditty from Lilly Von Schtup, is more fitting for a Friday @ The Evil Lair:

http://www.youtube.com/watch?v=6-pmpgrYQgs

Now she's TIRED!

That was a good laugh, thanks.

I'll be looking to unload a bit on strength and watching 819 as possible support for today, if we break here I'll unload a bit here as well. I know many of you are itching to short, this may be a good level
to short with a stop at thursday's high. There's still a slight possibility that a furious wave 3 rally
could catch everyone by surprise but that is a less than a 25% probability at pre-open
to friday spx cash mkt. trading.

Friday is lady's night here at S&P's

so here's a song for the ladies by a lady
http://www.youtube.com/watch?v=vHqB8xuNfB8

and here's a pic of a lady for the guy's (sorry, she's fully clothed):
http://www.screencast.com/t/rVFiZzjb

Ahhh that was a nice song, thanks S&P from one of the lady rats! :-)

I'm glad you enjoyed it.

:-)

S&P, Is that who you are traveling with? Points up. LOL
She looks Italian.

Thanks S&P for your roadmap. You still on the road?

Yes mate, that's why I haven't been posting much intraday. Did you see all the points I gave
you yesterday.

Yeah, thanks. Can I take them to the bank?

Ask Telly Savalas (kojak).

Mole, if you considering a londer time frame for your waves, do you see a possibility that this rally is just a correction in the bear market that eventually will end up lower than 666 on S&P in 6-12 months from now?

From economy and hostory point of view it seems like a plausible senario - we are going through the hope phase and can push higher, but economy will not be repaired soon and once people realize it will take longer to recover we can go through the despair phase - the great depression went that way actually... Do you see a support for this fundamental scenario by any wave count over londer period of time?

Vad,
On the right-hand side you'll find what Mole calls "The Big Picture". Click on it to see where we are now. As you can see, we'll be going a lot deeper after this wave {2} up.

Thanks for posting the charts with the "useless" stochastics Mole, Shows a very bullish tape IMO. Noitce how the stochastics were just as useless on the down side - until we hit March 6 - 9th. Then trend change.

Stos that don't touch down on their bottom levels is a bullish Stochastic... They are not broken they are showing virtually no distribution. I pointed out, nearly 3 weeks ago, that the market bottomed like this back in March 2003.

This is where Elliot can let people down. What count are we in, where are we going? Are we in wave 3 or still in an ending diagonal of wave 1. Jees. By the time you've worked that out half the rally is over.

If it declines today I prefer the ending diagonal count and we see one more leg up to complete this wave 1. As Freak says below.

My real feeling is the DOW is heading for 8,000. And then on to 9.000. I will be buying any sizeable pull back. Thanks for the charts Mole.

Good luck folks.

Mole may well be right on bull side ... everyone is looking for the pullback ... often this means it doesnt happen ... as he said a few days ago cash is a position and certainly beats betting against trend

Only way I could force a bearish count now, is to call the move off 750 a diagonal 5th. This would call the intraday spike from 666 to approx 696 as 1, the move from approx 673 to 803 an extended third where the first wave of the extension is the longest (unusual but possible). After the consolidation back to 750, it's a diagonal or wedge 5th. If this is true (a) it can't go much higher (b) should break sharply lower v soon.

I play a bit more long term than most here, wanted to get long and missed the whole move up. No point chasing the move for me. If the speculative count above is right, we would get a retrace towards 750 which I'd happily buy. Otherwise, I'll sit it out and find some other market to play for a while.

So I'm looking at the news on Google tonight and had to share with all of you:

-Obama to Boost Forces in Afghanistan, Set Benchmarks

-Fargo told Red River could crest at 43 feet

-At least 50 dead in 'mini tsunami' after dam bursts in Jakarta

-Obama Goes for It All in Budget

-Japan OKs deployment of missile defense system

-Pakistani and Afghan Taliban Unify in Face of U.S. Influx


Well at least Citi was profitable....lol I'm short May's from this afternoon and this market may run higher but there is no way I could sleep well at night being long. We are near a fib and basically at the 100 MA . If we continue the ridiculousness I'll double down at the top of the blue channel which could coincide with the wall of resistance at 870. You'll notice the megaphone I have drawn but it is much cleaner if you draw it on a 20-intraday chart. I'm sleeping in, F this market. Pump it if you want, I'll be seeing you soon

https://dl-web.getdropbox.com/get/3.27sixmonth.png?w=6c06a823

megaphone:
https://dl-web.getdropbox.com/get/3.27megaphone.png?w=de4ef9e1

V,
Your links do not work for me, say I shouldn't be there. I think this will go higher, it is being pumped by everyone, but the divergences are major, major, major. Wether it goes higher today only and then fails or it works into next week i dunno. It will come down fast, but maybe with a fake out just to goose everyone a bit more.
The divergence are so strong, I can draw trend lines on my Stochs and MACDs that are respected by the move and are serving to contain it.

Stock market bears. Feeling depressed/Worried/Upset//Angry Don't worry,a reminder of what good futures look like http://tinyurl.com/akvxun

Big overhead resistance on all indices. The Dow (/YM futures) and Nasdq (/NQ) are at resistance now. The S&P has another 10 pts higher to go,

Here's the Dow (futures) http://screencast.com/t/WTIyxZZQj

-Rhett
I figure start of the down leg either Friday (tommorow) or Monday.

In order to get through this kind of shallow trendline the indices should fall and then come at the trendlines from underneath at a steeper angle.

Rhett,
I completely agree with you, this is going to leave many bulls high and dry. What an unbelievable set up, never seen is so pumped. Divergences everywhere.
Now, if we can just get the market to agree with us.
LOL

The nasty thing is you would have to be preemptive and short at end of day
Thu. since it gapped down so far today (fri).

This market doesn't keep a good setup very long!

bya

Molecool wrote this:

Violate basic EWT rules (e.g. zigzags pointing towards the current trend - I mean did you guys read a book on the subject?).


Hello Molecool,

I would like to draw to your attention this comment and ask is this statement made towards me???

If you notice i did reply to your question on the other thread (can i suggest you go an read my reply)

you stated that the Ending diagonals ie an ABC is not valid with the Trend but Ending Diagonals are 5 waves made up of ABC`s or a series of 3 that can also morph into WXY`s so waves 1,3,5 ARE with the trend waves 2&4 that are counter corrective inside the Ending Diagonal

and the B section is counter corrective against the parts of A &C of the ZIG ZAG

B waves can also be a complex pattern that can be a triangle same deal as a X wave

So my count is VERY valid as an ending Diagonal and would need to end with a abc (even if part of Y of a WXY) that was with the trend, and the choppy nature of the recent few sessions suggest this as well

Please refer to page 37 chapter 1 of your Bible Fig 1:15

Prechters book Elliot wave principle Yes i have the book read many times, i know the rules inside and out, back to front, upside down, i can write an essay on the subject

for those that want to learn Elliot the first 2 chapters are the MOST important

I am FULLY aware of Elliot and a VERY experienced counter, I came to this blog granted i was not invited but i figured it was a sensible Blog from what i saw, i was a follower for a month, and intially thought , where others could share ideas, I am an experiened trader, and willing from time to time to pass on a little knowledge to those that were willing to want to learn i can see that you have alot of traders that are new to the game of course there will always be the nut jobs, but thats part of the nature of Blogs

I generally did think that i would be welcomed to discuss ideas and counts and i have given clear, concise thoughts about the counts with detailed descriptions i cant see what i done wrong.


I am sad that you feel the need to post comments suggesting that many are showing crappy counts, regardless of this:

Is this not a place where you would want others to come and share experiences???? Or do you see this are some sort of Elite club,??? or maybe you only want a select few traders in your circle???

maybe you have had enough of baby sitting and fed up that this Blog has become a nightmare to monitor (well thats the nature of success ) but is that not a mark of how successful you blog has become, or do you not want any of that success

when i monitored this blog first i orginally though this was a great place to discuss Elliot, ideas where traders could come together and a passion at ALL levels and discuss all counts

The message from your recent comments seem to indicate its YOUR counts or Nothing (thats not really going to generate a discussion) or do you not want others from posting other Alternatives??? i understand that you dont want everyone posting counts

But maybe you should state that unless you want to post your count and understand the count, then NOT to post that count unless you understand what the count is and where you think its going and post comments to back up your count then should not post unless the poster understood the actual Elliot count he/she was posting

i further understand your frustration in that others come into your Blog and post counts taken for other blog sites yet many dont understand why they have posted the count

Maybe suggest that ALL posters if they are going to post an Elliot count to back the Analysis up with comments why they think its valid, that would get discussions about a particular count and where its wrong or do you dont want that in your Blog????

I am i no way trying to tell you what to do, its a suggestion, if you want to premote free speech and get others to understand to join in discussing Elliot patterns

There are many potential counts to the rise from 666, i know at least 3 and it you have tracked my posting i was one of the 1st on your blog to suggest the 3 of 3 count its was actually on Monday i suggested a More bullish Alternative

To my knowledge many other bloggers were looking for the wave (2) count, and looking for 750 yet i had NO price confirmation that indeed lower was needed

i stated that i want a daily close below 792, but recent price suggests otherwise hence i have my primary count as the count shown for the Ending Diagonal as the finish to wave (1)/A from the 666 low

But i am still going with my primary count and that is the Ending Diagonal, and watching to see if it morphs into either a larger expansion possible a WXY for the 5th wave unless price proves otherwise the strucitre most recenlty imo does not support the more bullish count now as its has too much chop to suggest a 3rd wave is happening, but like all counts price action is all that matters

you will further notice i have tried to convey more bullish counts due to the nature of this rise and tried to help show why becoming to bearish will hurt your account when fighting trends, like wisethe same as becoming to bullish

It is true this is your house , but if traders dont feel like they are welcome, Do you think many will carry on posting??? or do you own want a certain type of trader???

Maybe its because you are Young and not used to pressure from so many coming to your blog, but you should welcome that

or can i ask is it your way or the High way??? , and you DO NOT WANT to welcome others to post other Alternative wave counts ( i have clearly and expained the make up of my counts and given targets and what i though would happen )

Yet all i have seen so far is alot of traders trying to "top tick the top", when no confirmation of a trend change alot of your fellow bloggers are indeed fighting an up trrend, but maybe that the nature of a bear market the bears are so in grained to wanting to get short

I am saddened that you or others never got the chance to really get to know me as i have a great wealth of knowledge, i know and still do know many in the Business, ex floor and Pit traders, and by pure chance i was shown the Blog as an up-coming place were like minded traders wanted to learn

I am surprised that you feel that you had to post your comments, maybe the comments were not directed at me, but in light of our discussions i feel that your recent comments question me and my counts so felt a reply was warranted

after all i am new to your blog, but i have no AGENDA, i am not here to want to drum up business for a subscrition service etc i just wanted to share with other like mined traders some of my knowledge and any others that have a passion fro Elliot wave

Anyhow free feel to delete this post if you feel again you need to, this is YOUR blog, but i wanted you to know that i feel that you should be more welcoming to other newer traders before you get to write them off as other moon bats

Of course you are free to Ban me from posting, that is your choice, but can you show me any post where i have acted un-professionally i have acted and gave clear consice reasons what i thought would happen and reasons why, even with some relevant numbers

To my mind i think this premotes an environment for dicussions, futher more i will if you so wish, refrain from posting and go elsewhere more welcoming ( it would be a sad loss if you futher suggested others do the same) as what message are you really conveying

I further think that if you wish to discuss my post in light of free speech then you should leave this post for other to see

Make no mistake i am not hear to challenge you or anyone, i thought this was a community of traders where ideas could be freely discussed, but if i was wrong and that is not what you want, and you wish me to leave i will do so

Of the many blogs i researched your blog stood out ,and i applaud your efforts in educating others, i only wish there were blogs like this when i came into the game

Thank you

Respectfully

I come here to be (mostly) quietly educated. Thanks for posting.

This isn't xtrends here, I'm sure mole is just a little cranky
not having getting the chance to go to the Korean massage parlor
or the fact that rammstein hasn't performed live in CA in the last few
years. There has been a lot of noobs with a lot of crazy questions.

I welcome your charts and views and look forward to more, and
as long as the debate is civil see no possibility that mole would ban
you.

Can you post your current count(s)?

Thanks

Hello

xtrends????? sorry is that another blog site, you have to excuse me i am not familiar with Disqus i only joined on Monday to post on this forum

most of my prior posting was done on none Disqus sites, and that was a while back, so really trying to find my way around the system, i am not a blooger by heart i really seldom post on public forums, as they seem to bring out nut jobs

O/T i like the fact that Disqus has a history of my posts if you click the face symbol, (the square) anyone know what the points thing is about??

To answer your question, please refer to my earlier posts from yesterday my current count is the Ending Diagonal and yet to be convinced yet that we have indeed finished the 5th wave of that on both the Industrials and the SPX

the (iii) of 3 i am not jumping on that count yet, the internal structure of the count is weak for the start of an implusive wave i would of thought if its moving higher,then it lacks of substance in the count, and the chop and grind suggests the Diagonal

only problem with Diagonals is they can expand and morph into a far more corrective move and grind higher so its not confirmed we have topped

conservative traders can wait for a breach of 807/10 and in an implusive move lower in a 5 wave decline then the retrace to a fib level in a choppy 3 wave advance, here is where risk is minimal

for a top to be in place i would wait for evidence of a confirmed decline as this can grind higher, like yesterday the decline was choppy then we saw a new high

EOM dressing may see this grind higher???

Agressive traders can take a speculative trade around 834-38 up to around 841 and with perhaps a stop around 850 ish, if we grind higher it may run towards 850, but i think around 841 would be a good area

we have a confluence of Matrix resistance around 839-841

if we suddenly have an agressive up day then that goes out the window as price is always 1st patterns are second

gets interesting above 850 for sure

www.xtrends.com

Points can sometimes mean nothing, as if you are dead right and against
the crowd on a site like xtrends, they will flame you to a -600!! I almost
never post
there.

Another good site besides evil is www.slopeofhope.com

I can't speak for anyone else, but in my eyes you are one of the good guys. There is a lot of chaff in BlogWorld consisting of charts that look like they've been drawn with crayons or resemble a cartoon drawing - I do appreciate your perspective and it's concise and well thought. This site appears to be a haven for more serious investors so I expect a bit of housekeeping and sweeping out the chaff is warranted. Everyone does have to learn somewhere, but you don't send a 5-year old to secondary school and I read Mole's message to be that unless you have a releatively decent level of proficiency at TA/trading, watch & listen rather than hijack the debate. JMHO. I too hope you stick around.

That's quite a comment. I've been reading what you've been posting, but trading on technicals (more of a long term macro guy myself) is new to me, so I don't even want to touch all of that. I'm sure you'll get an interesting reply in the AM. Hope this gets worked out and you stick around.

So i got stopped out of SRS today but am still holding STLD. I got into YGE at 6.03 today because the Chinese just basically guaranteed its future. SRS is at a great entry point if you're expecting short term market drop, but keep in mind we're still in a bullish trend.

I canceled my DBP trailing stop buy since my indicators are changing for it and i'm unsure of it's direction. Instead, i'm trailing stopping into FLR because of its chart.

DBR: http://screencast.com/t/XG4DbAhhG6

FLR: http://screencast.com/t/ARLukbneZJk

STLD: http://screencast.com/t/GtgqcU4O

SRS: http://screencast.com/t/orbluFZr

agree with you trend is up... but if indeed this was only W1, a retracement back to 770's more or less would make a hell of a huge freaking mutant inverse Head and Shoulders

Tea Leaves...mole, tea leaves

More fun with fib fans... each of these are pausing at support/resistance... once they break out/down, they should head to the next fan line...

SLV -- http://www.screencast.com/t/QIYwQZS5

$BKX -- http://www.screencast.com/t/rDmj2oZpCxC

BIDU -- http://www.screencast.com/t/0XUK5g4BN

AMGN -- http://www.screencast.com/t/xgjfXeQ9zx

Stainless, what methodology are you using to determine where to place the fans? I've been playing around with them recently in a few different ways (namely just the old pick a high and low that 'look right'), but I think it would make sense lining it up with EW analysis, but given someone's 12 am EDT rant, I'm gonna hold back for a little. ;)

I ended up digging around, and found Tim Knight's explanation to using fib fans: http://www.youtube.com/watch?v=d-Kv9VEXcDg

Wait! TA that (appears to work) on Gold! Lord in heaven: http://www.screencast.com/t/aWJ8WIR5vp

I'll post some more tomorrow

That's basically what I do -- just play around with the points until I find something that seems to fit the price action. I pay special attention to gaps. I'm also exploring to see if there are particular points in the wave structure that are significant, like how you draw EW channels.

Maximus aspires to be a philosopher forecasting and describing the history of these world changing times....

But tonight, because people are looking for RESEARCH, Einstein makes his point and links to key techinical analysis and market analysis is provided....


Best to all.... (sorry if this is a repost, it looked like it did not go through the first time).....

Maximus
http://4best4worst.wordpress.com/

Here are my observation on the market:

1. NDX has almost (short by 5 points) completed a three drives pattern and due for a retracement.
2. RUT (i.e., IWM) has almost (short by a few pannies) filled the gap from Feb 17 and due for a retracement.
3. SPX seems to be forming a butterfly pattern.
3. Combust day is coming up this Friday through Monday.

Based on this, I would expect the market to turn on Friday or Monday.

Also, I noticed that there is a huge open interest in SPY 72 April put options. This is telling me that the market is expecting SPY to pullback to 72. For the fact that SPY has retraced almost exactly 78.6% and 72 is at 23.6% retracement, if we connect these two dots, that would make SPY a butterfly pattern. In fact, we can see a lot of butterfly patterns in SPY.

http://content.screencast.com/users/Fuji-san/folders/Jing/media/5b227e2c-158c-4948-bc74-4f3e6cc1b08d/2009-03-26_2101.png

Based upon the above observation, I will go short.

Fuji- not only do the Apr 72 puts have a large open interest, but the volume on them yesterday was 190K +

G/L tomorrow.

Fujisan,
Thanks for your sharing your observations. Where can I find out more about the butterfly pattern you mentioned? I googled it, but did not find much (actually the results were comical!).
Thanks

Here's another: http://www.optionetics.com/market/articles/5709
Also interesting: http://www.harmonictrader.com/gcontroversy.htm

thank you

Butterfly pattern is a variation of Gartley pattern and both of them were discussed in a Gartley's stock book wrote back in 1930s.

Here is one of the links explaining Butterfly Pattern. I think you can find it more if you put "Gartley" on top.

http://www.forextradingplus.com/gartley-patterns.htm

Interesting....thanks

I was reading an interesting thread at a message board by a guy who's in the mutual fund industry. He was predicting a vacuum up as this rally started (smart man!) because all of the mutual fund managers were under such pressure to perform after terrible numbers last year - none of them wanted to miss out on a rally, so they would probably all pile in. Well, it happened. Now, he's thinking there might be some window dressing since some of them did miss out, but need to show they didn't miss out for their end of quarter - they might want to at least show they purchased some of the hot names.

It got me to thinking - this thing could really get going to the downside for the same reason. These fund managers are really under pressure to perform right now. The last thing they want is to be holding an asset once it begins another descent.

I liked reading the thread, I'll post a link after I get some sleep and find it again. Puts some real reasons behind all this craziness.

Susannah- I read something along these lines on Minyanville yesterday, and part of the quip said that once some of the larger MWs start piling in and force their competition to chase them they pull the plug, sell size into the position and screw the other guy before EOQ forcing them to lose. Ah, the games.

Here's the thread if anybody's interested.

http://www.elitetrader.com/vb/showthread.php?s=&threadid=157204&highlight=vacuum+up

Thanks. ;-) Just thinking out loud, but I imagine stocks like AZO or HOTT probably resist gravity in times like these because these fund managers buy and hold them to tout them in their client prospectus handouts, only to dump them on retail when they're no longer useful. April/May will be an interesting month methinks.

Good thought! I'm short some AZO, might hold it longer than a daytrade because I think you're right :)

Since it is so quiet here tonight....

I just read a great new post over at Gaming The Market blog. It is more economy-related than stock market-related. But it is an excellent short summary of the state of things today.
http://www.gamingthemarket.com/2009/03/fed-hunter-killer.html

Thanks Slarty! I just brushed it up a little since rushing it out before the T-note auction this afternoon.

My fascism spidey-sense is tingling about the Fed positioning itself to nationalize large hedge funds, then roll the risk into the FDIC. I still think this is a move to package much of the nation's major debt into a service vehicle, like the FDIC, then destroy the vehicle. It's so reckless it just doesn't make sense to me.

I've been thinking about this, too, don't you think they will crash (well, I don't mean crash, I just mean make the price much lower) the gold market at some point since that's becoming the safe haven, so people run for treasuries? I think the US and the IMF definitely have enough gold to do it, and the miners have increased production. So, once the market price was lowered, it might stay low because the increased mining supply would pick up the slack when the US and IMF run out of gold to sell.

The only thing I know about gold is during periods of civil upheaval all gold sells at junk gold prices on the street. How much gold does the US have? I'd love to see more than a piecemeal audit of Ft. Knox which hasn't been done since the 70s.

NIce commentary. Keep up the good work. Love the picture.

Thanks for plugging my brothers blog! He spends 75% of his day digging up all this seedy underground info to help keep people informed. Keep spreading the word. He needs more traffic so he can expand.

seriously, which TA signals support SPX goes all the way up to 870-880 w/o pullback?
basically, none., if TA still works.

btw, I don't have shorts right now, but I am not brave enough to hold overnight long also. If tomorrow market closes in red, I might open shorts, if it breaks out (why not), I might chase for day trade.

I smell a top is close, but I won't force the issue.

Mole, as a relatively new follower of your site I am just curious how much you consider other forms of stock market analysis besides EW theory. I do not have that much knowledge of it, but it seems that at times EW is excellent at timing the market (as it has been since the start of this bear in the fall of 07), but at other times it has been rather poor in its timing, such as Prechter calling for a bear market since the 90's.

For example, how much weight would you give to the idea that just because EW has done a good job so far in timing the bear market, this does not necessarily mean that it will continue to do so going forward, and other forms of analysis may prove to be more useful?

I am just throwing this out there as an idea and am curious to get yours or anyone else's thoughts on this, since it would seem to make at least some sense to me that the most vicious of bear markets (which we appear to be in) will cause the maximum amount of people to lose money speculating in the markets and make as many forms of market analysis as possible ineffective.

Mole,

Have patience. Gold will obey.... You will have your glory soon.

Finally dumped my DLTR short today. Did not flip it around and go long due to the lack of volume:
http://screencast.com/t/E83EeCFH4
Picked up a small long position on the breakout today in PZZA:
http://screencast.com/t/3lCKwGIgZKS
Missed the breakout in PNRA today, but still like it on pullback; Stoch getting a bit extended in overbought zone and Bollinger Bands pretty wide:
http://screencast.com/t/PMQaYjbKO
No position yet, but I like SFLY long:
http://screencast.com/t/GG671qRcJ
..ditto with JCOM:
http://screencast.com/t/kMjyUd2r9D

South Park on bailout.
http://www.southparkstudios.com/clips/collections/sps_homepage_videos/222638

There is no freaking way that we're still in primary wave 1 of C.

Another tea leave for why we continue higher (3 of a) is the put to call ratio. the p/c ratio on indexes opened at 1.63 today and only dropped to 1.35 at the close. Too many people think we're way overbought. .SPX was oversold on 2/17 and still continued downward for 13 of the next 16 days.

You guys have been bitching all the way up to here - every day I keep hearing how we can't push any higher.

Seriously, you guys are starting to get on my nerves. Eventually you'll be right - just like a stopped clock twice a day. Until then you can bite my shiny metal ass.

Easy, tiger :) Peasant was actually agreeing with you and your exact count, and said that we can continue higher for some time.

Sorry Mole- I don't see any way to count todays chop as iii of 3. I think were finishing up c of A. The {2} count is very difficult to grasp for me. If {1} was 909 points {3} will take us to ? We need alot more data to keep such a bearish count in front. A (C) wave from 1441 is what I'm looking at and we are in 4 of that C.

http://farm4.static.flickr.com/3057/3388292389_7f1e03ff62_o.jpg

See my response to peasant above.

Holy Crap! I posted same numbers in previous post. Woohoo!

I meant to include the refiners in my earlier post although I've mentioned them a few times before.

IMO, This subgroup of the energy sector will report the most surprising 1st quarter numbers by far. Some of the smaller players in the refining segment are WNR, ALJ, TSO, FTO, and IOC. I've been long WNR and TSO since early March and plan to hold them thru all of primary wave 2 or July 1st whichever comes first. These companies are doing a great job of painting a bullish picture on refined products by keeping the run rates low. You can also follow the crack spreads on the Nymex.

Volume as a method to determine strong Support and Resistance levels.

Check out the past volume levels we're about to run into on the SPYs compared to the Qs.

http://docs.google.com/Doc?id=dfjr22bn_16p4r8csgm

http://docs.google.com/Doc?id=dfjr22bn_18cshw5gcz

Consider idea stolen

Hey, BalaB! Go to http://www.elitetrader.com and search for the posts by AMT4SWA. Ignore all of his conspiracy theory stuff and find his posts talking about his method for determining net delta short/long at different price points. It's like volume analysis on steroids because you know whether that volume was buying or selling, and you know when that price point is neutralized by an equal amount of volume doing the opposite trade. It's an impressive method, I bet you'd be interested, I definitely am, was going to see what I could set up soon using NinjaTrader and some of the code posted on the thread he was posting on (might have to see what quote feed I can work with though...)

I owe you some charts! Last weekend and this week were hectic with the family.

Cool. Thx for the tip. I would be interested in in checking it out.

: )

interesting - turns out the Q 31.6 level may not be all that strong afterall....and, with the Qs leading the market, it might provide impetus for SPX to break 835/840...good chart!

If we bust through the 20 week MA on the spx and indu than I'll get bullish until than I'm looking to buy puts. SPX is still in downward channel going back to october with a sub channel that containted the Nov & March lows. Did everyone forget the jobs number is next friday and I wouldn't doubt a the number at 850-900,000. That would shake the bulls for sure!

the pullback will start from tomorrow, or Mon.

I think they fake us one more time with a semi-sell-off tomorrow and then rally into Tuesday end of month/quarter and then we drop hard...

Ditto

Holy Shazzbat, Mole! 950 by end of April? and 875 by Tuesday? nice...I might believe the Tuesday end of quarter rally but 950 by end of April? Holey Guaca-mole...(pun intended)

Repost of something I put up on Slope.
Someone here gave the link earlier. Thanks.

Here's a quote from this great article from a former chief economist at the IMF, well worth the read. He obviously knows what he's talking about:

"At the root of the banks’ problems are the large losses they have undoubtedly taken on their securities and loan portfolios. But they don’t want to recognize the full extent of their losses, because that would likely expose them as insolvent. So they talk down the problem, and ask for handouts that aren’t enough to make them healthy (again, they can’t reveal the size of the handouts that would be necessary for that), but are enough to keep them upright a little longer. This behavior is corrosive: unhealthy banks either don’t lend (hoarding money to shore up reserves) or they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all. In either case, the economy suffers further, and as it does, bank assets themselves continue to deteriorate—creating a highly destructive vicious cycle."

Now this part intrigues me "they make desperate gambles on high-risk loans and investments that could pay off big, but probably won’t pay off at all".
http://www.theatlantic.com/doc/print/200905/imf...

Hmm, wonder if that's what we're seeing lately?...

Regardless, the financials are toast when the truth sinks in

Going to bed as it's late as hell here, lol

Mole, have you ever visited this guys site: http://just-charts.blogspot.com/

He has some great wave stuff on it, I only get to visit from time to time but was curious about your thoughts. good day

Ouch... push up higher with no decent sized pullback. Bears can't get out, bulls can't buy the "pulback".. Ouch.
So painful that its almost a guarantee.

Tell me it ain't so, mole..

Ding dong...... Me says 862 tops....
short till the hilt at 862 ......
zimple....

XLF is sick and oil is about to turn bear.....
so what holds the market ?
tech and retails ?

Me short @ 862

Agree with your XLF assessment, but what makes you think oil is about to turn bear?
Thanks

OIL crashed a bit today so I was right...
$ is becoming strong...
every donkey in the whole known galaxy is short on US$

US$ may shoot up... so oil goes bear and so is gold

I have an alternate that outlines we finish wave 1 of A tommorrow and start correcting. Have you even considered this as an alternate ? I have been long for a while now but this is just too, em,, fantastic. 300 points pretty much unchallenged , i keep questions about time also but nobody seems bothered. This is EWIS prefferred scenario too fwiw.

Look at minor wave 4 of intermediate 5 of primary 1. It was so subtle hardly anyone caught it. Alphahorn did I think but most including me thought that it had not occurred yet. Wave 2 of A was from 3/19 to 3/20. Wave 3 is most logical because everyone is so bearish.

Mole's analysis is awesome as usual.

Moles Analysis is just one analysis / interpreation and i mean no disrespect by that but rather that I am cautious and there are altenatives ( this is an expanded flat I4 , P2 Wave 1 completing ) . There is not an uber clear count on this chart. But its not the price acton that is the problem for me it time. Primary 1 was 14 months. 38 % of that is 5.3 months. Yet , and on the assumption that this is a zig zag we are going to complete 33% of the wave in about a month and a half , extrapulating , we would complete it /( P2)within 3 months or much less than the miniumum time expected.

I think the uncle point on the count above is an unfilled gap today and a rip your face of rally without that it is back to the drawing board.

The other thing of course is that if Wave A terminates just sub 1000 , Wave B would bring us back to 820s/ 777 ( at most ) and C up to 1150 appx again more than a 50% retrace. All is theoretically possible but difficult to imagine and all in 3 momths. I am simply stating that something doesnt from an elliot point of view add up here.

In reference to the subwaves , it is claimed that Wave 1 of this A took 12 days to complete and wave 2 took 1... again a distortion of time principal in elliot wave.

All this tell me that there should at least be some alternates on the table to the "P2 Express" with uncles points for each rather than an exclusive fantastic speculation and that people should remain open minded.

This count by the way calls for a gap up today with a 3rd of a 3rd being where we are with a rip your socks of rally .

If this for example were the termination of Wave 1 of A around here , wave 2 would retrace to appx 777 esm9 and time would begun to be smoothed out.

yes but that 4th was a minor and still it was 40 points !.

these are intermediate I mean and intermediate 2 only having 30 points? i'll stay on the sidelines and see where we go...

Kenny did call the bottom as well... I remember him saying most likely 5th would be a truncated

Here's my new post on my blog

http://tradingsigns.blogspot.com/2009/03/32609-eod-market-action.html

Comment and critics are welcome.

TIA

Nice blog Waffle.

Thanks,
Now on daily Market action videos. Stay tuned.

Thanks Waffle-looks like a great setup.

I agree!