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Patience Is Key
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Patience Is Key

by The MoleMay 21, 2010

Public Service Announcement: I’m going to be working on a project this weekend and thus my Sunday forecast will be very quick and dirty. Which is why I plan to dig up more charts during the remainder of the session and present evidence as I come across. So, if you are a sub please continue reloading this post about once every 30 minutes or so.

The ever diminishing negative momentum on the Zero Lite has finally caught up with the bears. In typical OPX Friday fashion we jumped from a NYSE A/D ratio of 0.05 yesterday to a current reading of around 3.5. Schwinggg!! And not before pushing the tape down below the May 6 lows just enough for weak hands to cover in panic.

Wow, I gotta give it to those market makers during option expiration – they don’t take prisoners – gotta respect that. First you screm them bulls, then you screw them bears – everyone is getting some of that cattle prod today 😉


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Charts and commentary below for anyone donning a secret decoder ring. The rest of you guys will have to wait until tomorrow – sorry. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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Of course leading the advance is the EUR/JPY – my new best buddy. As you can see the stochastics are now pushing to levels where we should expect an attempt to push it into overbought territory (either 80% or 90% per your definition). This could easily propel this thing to the 116 cluster and 118 is not impossible.

I am not sure this will result in an equally strong move over in the crazed world of equities – we shall see. But yes, I fear at least for a few days the fun time is over for the bears. Time to regroup and to find a new resistance level.

FWIW – I found today’s push down encouraging as it officially killed Soylent Green as we know it. However, just for the record, there is another bullish scenario – let’s call it Son of Soylent Green – which reads the recent drop from the top as an a-b-c zigzag correction, which then would be followed by a veritable bear carnage period pushing us above this year’s high.

The main reason I’m bringing up this scenario is my CPCE 10-day MA chart above, which quite frankly is a cause for concern. Yes, I hate having to spoil the party guys but we are at readings now which could at least produce a deep retracement, maybe even more. Market tumbles happen in deeply oversold conditions, granted – but are we really there yet? Frankly, I don’t know – which is why I will simply hang on to my long term puts and ride this thing out – for the better or for the worse.

The NYSE Adv/Dec Volume chart is finally painting that divergence we have been waiting for. But wait – not so fast! The stockcharts grab only shows closing prices – thus the long spike down on May 6 is not on this map (which is why I drew it). Based on that there may only be a slight divergence and we may still be in the middle of a move. Plus we snapped back by quite a bit already, a lot of energy is being exerted on this OPX Friday. Nevertheless, we are closing lower than on May 6th today – so we should take this chart seriously. If you are positioned short term I suggest you take profits today. Again long term I’m sticking with my guns – plenty of time left on my theta ticker.

One more for the road – TRIN 20-day SMA chart is pushing into very extreme readings. We are around levels that occurred during the 2008 crash – remember those days when we actually saw some real downside?

Listen, if I’m wrong and we drop like a rock from here, great – that’s the overall plan, right? But if I scale out right here hoping to reload at somewhere further up I may find myself missing the train altogether. It’s a worry something the bears constantly have to deal with and I won’t take that risk until I am more confident that Intermediate (1) is nearing completion.

So, is Mole getting bullish? No, not at all – but I am considering the possibility of a more meaningful retracement, that could ‘possibly’ turn into something else. Which brings me to the ‘patience’ part – and the statement I keep repeating over and over again: Anyone who claims to know how exactly this thing will play out has a bout of extreme mythomania. We may go straight down from here or we may bounce around for a while and then suddenly drop. In case you haven’t noticed yet – things are quite volatile and will remain so for the next few months.
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Cheers,

Mole


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at various social media waterholes below.
  • http://evilspeculator.com molecool

    OKAY – I had an opportunity to finish my post now…

    Hey, where is everyone?

  • nyse

    Good post. I think convictscott mentioned this the other day, but I feel compelled to reiterate how valuable the unbiased analysis here is. It has helped me to remain agile and not get too stuck in my way of thinking.

    If anyone has ever taken a drawing or painting class, you know the importance of drawing what you actually see, not what you think you see or how you think something should look. I think trading is like that in a way; sometimes I have a view on how thing “should” pan out, and if Im not careful, I can find myself looking for support of my thesis instead of looking at what the market, charts, whatever is really telling me.

    To be sure, I dont think this negates the med- long-term “bear case”, and a quick study of market history shows that the move down or up is rarely orderly, but staying agile, especially in todays market where we really have some many options and different vehicles to take advantage of moments up or down, is crucial. Stay on your toes and bend with the wind, zen style.

  • raised_by_wolves

    I'll post a response as soon as I finish devouring this coyote:

    http://www.youtube.com/watch?v=fAoszVLRP6U

  • nyse

    Ha ha! Got 'em!

  • http://www.mylifemytrade.com MyLifeMyTrade

    Hey mole – nice post…

    The fact that they went back and tested a price point 170 points below the high and bounced so hard from there tells me that this intermediate down move is over.. We will now likely continue to melt up for few months to put in new highs… some where in the region of 1260…

    Why 1260? I recall from sep 2008 that when we were going down, 1260 was a critical level.. and when it went, all hell broke loose.

  • http://channelsandpatterns.blogspot.com/ springheel_jack

    BTW Mole. Love that EURJPY cross.

  • momac

    What a disappointing day. I should of slept late and missed all of the wildness this morning so I wouldn't be down so much from thinking I had to load up on spxu first thing. I have the patience of a gnat and jumped the gun too early

  • Long_John_Silver

    I was planning to sell my SPXU this AM and got up too late – 1st time ever – now it's d*****t …

    But don't be disappointed. That's emotion. D*****t happens, we just have to move on –

  • Long_John_Silver

    Excellent post mole – your case is persuasive as usual – you've been very helpful & the zero lite is an awesome tool.

    Now if I could just get my trading in line with all the good advice …

  • http://www.mylifemytrade.com MyLifeMyTrade

    Exepecting to see FAZ and DRV/SRS get absolutely clobbered and man-handled into close… may be a small headfake on the way.

  • raised_by_wolves

    Jack, here's an update on ($SPX/$VIX). The 100% fib of the gap has been retested, and this internal trend line is currently acting as resistance.

    http://content.screencast.com/users/raised_by_w

    Extreme Gap Up 2.0 or Black Monday?

  • raised_by_wolves

    Copper futures still uptrending of course but also up against resistance:

    http://content.screencast.com/users/raised_by_w

    Watch the line!

  • yudhisthira

    Looking at 3.05 copper from your chart by day's end.

  • yudhisthira

    Testing ES vwap now. What does GS want?

  • raised_by_wolves

    Mole, that $CPCE is strongly hinting that this may be yet another dip. I'm only reading it as a potential buy signal though.

  • raised_by_wolves

    The 30m chart of ($SPX/$VIX) still looks bearish to these wolf eyes.

    http://content.screencast.com/users/raised_by_w

  • Tooncez

    Hey, did I just see the leetleast bullish divergence on zl?

  • Tooncez

    Or am I squinting too hard?

  • http://channelsandpatterns.blogspot.com/ springheel_jack

    Beautiful chart mate. :-)

    Not convinced we've seen the interim bottom yet. Might take another day or two.

  • http://www.mylifemytrade.com MyLifeMyTrade

    No you are not squinting too hard.. there is a bullish divergence.

  • http://www.mylifemytrade.com MyLifeMyTrade

    AAPL near 240; RIMM near 61 (getting pulled towards 60) and GS near 141 (getting pulled towards 140) might influence market action into close.

  • yudhisthira

    Oops. Not quite a zero signal yet. I'll take it though.

  • raised_by_wolves

    If you were them, would you want to stay a public company or buy back all of your stock to re-privatize?

    Here's GS . . .

    http://content.screencast.com/users/raised_by_w

    Here's (GS*(SLV/GLD)) . . .

    http://content.screencast.com/users/raised_by_w

  • BobbyLow

    What do ya think? This a head fake or are we going to dump into the close?

  • jigdaddy

    my own thesis: everyone jumped on bull wagon today due to oversold conditions, we sell off to cause max pain

  • psycho_puppies

    Mole, R.I.P Soylent Green. ??? This market is beautiful.

  • raised_by_wolves

    If there is a retest of those trend lines but no break or bounce occurs today, then copper leaves us in the dark about Monday, eh?

  • gsavli

    mole, how do you interpret strong move on no momentum on zero?
    Possible head fake or something else?

  • yudhisthira

    Head fake. I would believe it.
    Maybe fake upon fake for the next hour.

  • gsavli

    well, it is opex friday after all.

  • raised_by_wolves

    This is a fuckin' important line:

    http://content.screencast.com/users/raised_by_w

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

    As is this, I'd say…

    Tagged the down-sloping trend-line from the 07 top like we thought it might – what chance they ramp just enough to close bullishly above it now?

    SPX 1089 for the close if so.

    http://tinyurl.com/2udqzlq

  • raised_by_wolves

    Yeah, baby, yeah!

  • http://evilspeculator.com molecool

    SUBS: Please reload this page for some updated charts!

  • http://evilspeculator.com molecool

    Really tough to say as it's OPX Friday. But the PZI is *above* the zero mark and that does worry me a little.

  • http://evilspeculator.com molecool

    Say hello to Son Of Soylent Green? LOL 😉

  • jigdaddy

    god i love the F word!

  • bananaben

    I knew it! Everytime I clear the way for the bull he rolls over and dies. Dammit! This market is done – no 1180 or any of that shit. It is in critical condition and on Fed life support. They are trying to limp through to the weekend and figure shit out. Monday will be telling.

  • Clint

    Thank You for that !

  • yudhisthira

    72 points above dow 10,000
    Is that the goal today? All for a hat?

  • BobbyLow

    Coming up on 2X Volume on SPY for 3 Points on the S&P?

  • Tooncez

    completely flat FTW?

  • Alpha

    Maybe the market is simply painting an inverse h&s pattern.

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

    PPT fallen asleep or what?? Weak, weak, weak..

  • Tronacate

    Big phat doji on the daily?…….

  • gsavli

    opex friday.
    look at the big names: pinned all of them
    aapl, goog, gs….

  • jigdaddy

    i think you just woke them up. boo

  • gsavli

    wrooong

  • amokta

    has anyone ever made money on the etfs – another mini-fail day for me for BGU& zsl. Scaled out of some puts also, only to see market fall!
    However, i do feel there will be a push up monday (we have had steep falls, so there has to be some significant re-trace??)

  • jigdaddy

    no participation on bunce

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

    Knew they wouldn't disappoint – they were just leaving it late, the big teases.

    Wedge should be bullish for the close, if we can just jump the fence here..

    http://tinyurl.com/36hzfmn

  • roscoe_casita

    LOL a zorus!!!!!

    TOS is disfunctionally broken.. again… on a sell off.

    WOW thats a 8 point move in 3 min, nothing like getting to DOW 36,000 in 1 DAY!

  • n2thezonez

    No choice but to save it for late, any earlier and they risk it being sold

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

    True 'nuff..

  • gsavli

    tr00

  • raised_by_wolves

    Looks like they'll close $NDX above this fucker. I for one will not being holding any June puts over the weekend. I would miss a gap down, but I will would also miss a gap up, which seems more probable to me. Even if the short-term down channel seen on the far right of the sceenshot stays in tack such that a Soylent Bear plays out instead of Soylent Son of Green, there is plenty of room to traverse the entire channel length upward.

    http://content.screencast.com/users/raised_by_w

  • amokta

    looks like we'll be making new highs for 2010 today!

  • http://evilspeculator.com molecool

    Agreed.

  • http://evilspeculator.com molecool

    Yupp – did you play that?

  • http://evilspeculator.com molecool

    Huh? Can we try to be productive here? Bitching and sarcasm does not lead to profits.

  • gsavli

    I didn't know, where they would pin them, but I played accordingly to opex friday (move up, then down or viceversa and doji day – today is a bit different with this EOD ramp because PPT stepped in).

  • amokta

    just ironic, that we push up so much in last few minutes of the day!
    im still short with longterm puts

  • http://evilspeculator.com molecool

    HOW long term are those?

  • amokta

    some sept10, some dec10
    do i need to buy longer on a bounce up?

  • jigdaddy

    great questions, i have Dec10s as well….

  • yudhisthira

    TOS got stuck on the zero png there at the end.
    Good bounce.
    Bailout weekend?
    Mutual fund Monday?
    Still long term but improved positions on bounce today.

  • gsavli

    There was a big probability, that today at some point (of course, eod is the best choice) PPT will step in and intervene.

    It was quite obvious yesterday in the AH – those of you, who were watching level 2, know what I'm talking about, that they are here. Today they put a nice floor under the market in the morning and this ramp was to be expected.

    With time and with constant observing the shit going on, you will eventually start to see things (and yes, I know, this can have an alternative meaning 😉 )

  • Tooncez

    completely flat for the Fail.

  • amokta

    point taken re productive comments!

    you can buy longer exp (leaps?) for index puts, but cost more etc??
    for some of the individual stocks, they didnt have longer expiry puts than sept10

  • gsavli

    just stop worrying so much and think about it over the weekend, while strolling in the park.

  • raised_by_wolves

    Are you 100% loaded with those long term puts? Mole may keep his long term puts too, but I guarantee you he is nowhere near 100% loaded up. Something to think about.

    My first memorable trade was going 100% short WAMU at $2. I was right that it was going to $0. My timing was wrong, however. There was no recovery for me when WAMU got short squeezed to $4. I was unable to participate in the rest of P1. I don't think you're setup to blow up as hard and fast as I did, but I still want you to realize what's at stake if you are wrong before you are right.

  • http://evilspeculator.com molecool

    Absolutely not loaded up 100% – I may be at 80% at the peak of Intermediate (2) – not yet.

  • raised_by_wolves

    See, amokta, Mole thinks it is way to early to be 80% loaded up much less 100%. Fact is, Mole will never go 100%.

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

    Meanwhile, more rumblings in Iceland

    http://tinyurl.com/34tq2zm

  • amokta

    Well the max i put into derivs is 20% of my capital (saving rest to 'buy' at the 'bottom', having missed march 2009 bottom), so now im 70% short with 20%, but up on profit, so could bail-out break-even if market suddenly turns (HTZ & GMCR puts done well). closed spy puts yesterday & closed MGM put today

    anyway, lets see what monday brings – i have memories of failed Prechter tops calls x3, so will not hold if things start going hugely upwards

  • amokta

    Yes, lets relax this weekend, im sure everybody is in profit over last week or so!

  • BobbyLow

    Well that sucked. I was puckered up pretty good with my Long Day Trades while waiting for the expected head fakes to take its course.

    I made enough on IWM to buy Pizza tonight but then they shook me out about 8 minutes too early on SPY so I lost about 3 Pizzas on that one.

    Was it worth it? No. I think I made the right play but failed in execution by not making it through the very last head fake.

    I was guilty of submitting to the pressure of “hey it was only a day trade and your losses have been cut by 75% so get the fuck out.

    In reality on days like today you need to have the balls of a River Boat Gambler to play into the last few minutes of the day.

    It was a small loss. But all and all it's been a great week so I need to leave it at that.

    Y'all have a great weekend.

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

    DAX 2 hrs “LOOKS” like we are in a wave iv of 3, any thoughts?

    http://www.screencast.com/t/M2E5MDJjM
    It seems a bit obvious that we bounced at s&P 1050..methinks we may get a 2nd test next week..

    covered most shorts, ahead of weekend..

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

    Or…..

    http://tinyurl.com/3ynsq3k

    And there is the massively bullish divergence versus SPX – DAX didn't make a new low today.

    Just sayin'.

  • DistressedWineVulture

    You could have made that all back today, on the WAMU pink slip,, up over 20% LOL,

    http://bigcharts.marketwatch.com/quickchart/qui

  • http://pitch3.zstock7.com/ zstock, Pro Select!

    WOW! disqus is working here again. For some reason, it wouldn't allow me to post comments here, for the longest time.

  • http://pitch3.zstock7.com/ zstock, Pro Select!

    Check out this WFC chart–Right on the money.
    WFC Chart woot, today's low 28.0

  • juju2

    IMHO, AUS/USD is THE commodity play and is as good or better than the EUR/JPY for correlation purposes.
    Aussie ran up today, the Eur/jpy closed down.

  • FranceHasTheBomb

    When Cramer is saying this, you know it has become a bit too obvious:

    “I want to make it clear to everyone that I thought the last 15 minutes up was outrageous and shows how broken everything is. Just ridiculous… And should be investigated.”

    http://www.zerohedge.com/article/even-cramer-no

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

    yes..open mind!! cheers

  • amokta

    for info (baminvestor.com model):….expects to see stocks crash, Bonds rally sharply higher (on a flight to safety) Gold sell off hard into June (targets as low as 888), Crude Oil sell off hard into June (55 target), and the US Dollar to also back off as the YEN moves up very sharply

  • EvilTrader

    these guys called a crash for late 2009, i remember well, they also gave the specific week of the crash and nothing happened.

    We are in volatile years, so crying wolf will many times in a row eventually makes you a genius.

    A broken clock is right twice a day.

  • amokta

    yes, i agree, just put it out for info. they were specific about may & this week, so lets give them some credit for at least sticking their necks out!
    Lets not forget the dud prechter calls too!

  • OldChicago

    Then, there is Dowtheory folks calling a crash the other day. In fact, Prechter began calling a double bottom since May 2009 when his new book was publish. So, that is 3 strikes. Perhaps we'll see a double top based on those calls. Hope not…

  • http://evilspeculator.com molecool

    So true…

  • http://evilspeculator.com molecool

    You mean AUD/USD?

  • Clint

    Broken clocks are a hell of a lot better than some of these prognosticators. Being right twice in their life is good enough for some of them. Once makes some of them a legend in their own mind and ready to write a book and speak for fees on the lecture circuit.

  • juju2

    SPX-15 minute: inverse H&S

  • Gold_Gerb
  • raised_by_wolves

    This is one example that shows how people are being distracted. The media informs people more about the damn vole than the damn vote.

    Today, I asked some guys on the street who turned out to be a group of business majors about their expectations for the stock market. They pretty much all agreed that over the long-term, they can expect the stock market to continue averaging 8-12% returns. When I explained how they are assuming future results will fall within a normal distribution but that the normal distribution model is a poor fit for reality, they stopped listening to me because that's not what they wanted to hear from an uneducated person like me. They must not have been assigned to read Nassim Taleb. If they had been, they would have had something more to say besides, “What are you talking about? Dude, keep your pessimism to yourself.”

  • vision_invisible

    There is one way in which the thugs that are the TPTB and the sheeple (these students and their 401-k contributing parents) can actually be on the same page. The TPTB know they will go to the ends of the earth to instill inflation, to avoid pain for themselves, and to literally thug the sheeple as much as needed to stay “TPTB”.

    There will need to be crisis sure, but only for more thuggery. Now suppose the US could “rearrange expectations” and renege on the promises of Medicare and Social Security (http://www.usdebtclock.org/) which come to $108 T dollars long term…(those contributions you made every pay check which for your retirement, they already went for destruction in Iraq and are now funding cucumber sandwiches and high tea for the Bush Crime family)…expect austerity on the sheeple is what I'm saying. There are already republicans talking about moving towards a balanced budget blah blah, haha, expect FEW cuts to government, and LARGE austerity because as you know …it's the taxpayers fault for the mess we're in. The sheeple are easy to deceive and they look around at the other sheeple distrustingly and think “well, we gotten tighten our belts. As long as we clean it up this time…we gotta do what we gotta do…” (or worse, they find the scapegoat in a mexican immigrant, or a union employee or a muslim). Fact is, TPTB have an unlimited credit card from sheeple to never cut a dime of funding on whatever they want…which is how you can borrow $700 billion in a rotating credit line from them…after you fraudlently snow-faced the sheeple with teaser-credit on Mansions and CDOs and ABSs). You have to look at reality here people. There are criminals out there, and they are mostly not the ones in jail.

    Nobody truly cares though, sheeple have learned that the coping strategy is to think long-term and forget about it…and that sticker prices on these stocks goes up 8-12% because of the all-out thuggery by TPTB. And you know what, they just might be right.

    The key to this game is not Elliot Wave my friend, it is understanding where we are in the thuggery deflate / thuggery inflate cycle. As I said on Thursday, they seem to be wrapping up Financial reform – so one less risk to TPTB. There probably will be more crises this year, so we can fix the States problems with as little money printing and as much austerity as possible. But long term, I think you should listen to those students.

  • lilme

    FT Authers new book: critiques markets and investment/portfolio approach (i.e. how millions of retail investors are getting the shaft) and proposals re what to do.

    http://www.ft.com/cms/s/2/6d6ad426-63ac-11df-a3

  • http://evilspeculator.com molecool

    Explain to me how EWT is different from the 'thuggery inflate/deflate cycle'?

  • http://evilspeculator.com molecool

    Wow – no comments at all! Should I even bother posting tomorrow?

  • Kudos

    Yes. No comments means you gave us some clarity. It also such a nice weekend and its important to take a break to clear your head. I only sleep well when the market is closed.

  • lilme

    Mole what is that 'thing' below – chicken liver?

  • yudhisthira

    I was hopped up last night and was looking for more buzz here.
    Since everyone was gone, I figured I needed the discipline of walking away for the weekend at least.

    I am looking at a 4th wave to finish Monday 10min spx
    http://screencast.com/t/Y2VlYjlhMz

    10 min RUT count showing an endless series of 1,2 1,2 1,2 etc,
    which I am not banking on:
    http://screencast.com/t/MjIzMGEwNWM

  • juju2

    VIX: massive bearish engulfing candle.

  • Scoops
  • BobbyLow

    “It also such a nice weekend and its important to take a break to clear your head.”

    Absolutely agree. Being retired and a self described “Stock Market Junkie” I try to limit myself to 60 Hours a week in this business. LOL

    So from Friday evening until Sunday evening, I need to clear my head. I also need to spend some quality time with my wife who happens to be very supportive of her Stock Market Junkie Husband. :)

  • KevieKev1

    First time posting here (I believe). Keep up the good work Mole. Your sight is great.

  • amokta

    any chance of gold gld falling to 110 -my puts would start looking healthy!

  • katzo7

    I get 113, below 112 breaks the EWaves on the 60 and is very bearish.

  • katzo7
  • yudhisthira

    What are the rules for this kind of charting?
    This shows a projection to 940? Some sort of channel?

  • amokta

    ok, lets see, its been going down, whilst stocks going down too!

  • yudhisthira

    Thanks for the long term projection.
    1125-26 ES move for EW2? That is counting the entire decline so far as EW1.
    I am going to try to use my mental powers to peg bounce to 1113-1120 spx.
    http://screencast.com/t/ODc1NzdkN
    1102 would be fine.

  • katzo7

    Yes, only if EW1 decline is over and my lower time frame charts say yes. See my ES chart, if the MACD on the 60 breaks the zero line we go up.

  • Scoops

    Hit up the stockcharts tutorial it's pretty good!

    Sent on my iPhone

  • http://evilspeculator.com molecool

    Can someone PLEASE tell me how to make my stockcharts.com charts horizontally larger?

    Here is an example that someone sent me a few weeks back:
    http://stockcharts.com/h-sc/ui?s=$CPCE&p=D&st=2

    I am signed up with stockcharts.com but can't figure this out – grrrrr….

    Thanks in advance for any help.

  • yudhisthira

    Another setup to a VIX buy signal.
    Steps 1-2 out of 3.
    http://screencast.com/t/Y2NjOTQ3Z
    I'd like to see it fail again until the third such signal (assuming this one completes.)

  • yudhisthira

    Thanks. Price matters.

  • amokta

    could try 'landscape' option in chart settings below chart?- you must have tried this already?

  • vision_invisible

    EWT basically states that historically there are patterns and these patterns exist over various scales, and they could represent the behavior of people – or psychology. I would say fine and dandy, I believe you and that is a useful tool given a certain set of assumptions.

    However, the thuggery which I claim is more like a non-linear force, is not a pattern of behavior of people. It is easy to show what I mean in extremes. If an earthquake took out NYC, that would represent a non-linear force which would impact the market, and that is not something that follows from psychology or cycles. Same with the thuggery, it is a non-linear force, and my basic thesis is that now that the system is on-auto-debt-collapse mode, the non-linear forces of thuggery (intervention, manipulation) will take more precedence. That is not to say they control the outcome, or there is a global script, it is a more like a constant cage-match between various competing forces.

    Does this make sense?

  • katzo7

    Heavy dude. You have a point but is is about entropy, nothing is created. look at the oscillator, all the thuggery did not stave off this move down, a major move if you compare the oscillator actions. EW4 has topped IMO on the MONTH, oscillator will dry up on the EW5 move next year setting the seeds for the next move up.

    http://www.screencast.com/users/katzo7/folders/

  • http://evilspeculator.com molecool

    No, I am talking wide charts – not just landscape charts. ANYONE??

  • http://evilspeculator.com molecool

    IMNSHO this is mental masturbation, no offense. Quite simply your assumption is based on a singular notion which is that thuggery did not happen back in the days. My point is that it is thuggery is part of EWT – as a matter of fact, it defines it. When manipulation and plundering pushed beyond the second or third standard deviation line you get more volatile and pronounced wave counts.

  • http://evilspeculator.com molecool

    Anybody? Tens of thousands of traders read this blog – someone's got to know how to do this…

  • jacksoo

    AT LAST!!!!!! this is what I've been waiting to see (P.S. whilst confirming my bearish views this worries me deeply by the way). Some may recall how I've jawboned about the massive increase in public sector employment over the last 10-12 yrs, that being the last resort of Govs hiding true unemployment data as real jobs have been shifted abroad : well now get ready fro the fall out;

    300,000 jobs in public sector face the axe http://www.timesonline.co.uk/tol/news/politics/

    I expect to see this replicated through many countries over the next weeks/months and hence my call that we'll see summer time riots.

  • KevieKev1

    Nice charts Katzo. Thanks for your insight

  • psycho_puppies

    Size – Sets the horizontal width of the chart. The “Portrait” and “Landscape” sizes fix both the horizontal and vertical sizes (for printing purposes). Extra members can create charts up to 1600 by 1200 pixels using the “Custom” size choice.
    http://support.stockcharts.com/forums/30077/ent
    I don't see this option when I try it but if you're an extra member it should give you that option.

  • http://evilspeculator.com molecool

    Oh, you have to be an 'extra' member for that? I'm only a regular member – too bad…

  • Tooncez

    You can edit certain parameters on the chart by adjusting the address. For example the dates are fairly easy to change (http://stockcharts.com/h-sc/ui?s=%24CPCE&p=D&st…)… well that's all I've got for now…

  • Onorio

    Since EURJPY is the leading indicator now, you rats might be aware of this….

    http://www.screencast.com/t/MWNhMjM0Yj

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

    Was just reading this over on ZH – http://tinyurl.com/323lsno

    Now you don't have to agree with his w4 count (it's only an exercise in contingency thinking anyway), but it got me thinking. There is the nagging suspicion that the fall into May 6 is an abc – then I noticed this – http://tinyurl.com/33djtqb

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

    Indicators from the Evil stable are mixed right now – there are plenty of divergences, but it's about 50:50, so this may only signify a short-term low Friday.

    This chart has got me pretty excited though – and it's saying wait for it (to go swing long) or sell the rip (to go short-term short)

    Hat-tip to Mole for originally alerting us to the indicator potential of ATR

    http://stockcharts.com/h-sc/ui?s=$ONE:$SPX&p=D&

  • katzo7

    Watch the VIX, it is going into a ABC move IMO. These moves are integral in EW4 moves and basically hurt both bulls and bears. Complacency about an extended sell off cause these. If you look at the oscillator, it shows no real strength at this point. Whipsaw city. Also note the stochs, stopping in mid air and reversing. It looks like the VIX might have a fairly quick trip to 37 and then a blast off to about 50.

    http://www.screencast.com/users/katzo7/folders/

    Also, I called in an earlier post for one of the biggest gap ups I have ever seen on Monday based on late Friday action and some indicators I have been exploring and applying. I have been about 80% correct with this method, nothing is a sure thing. If I am seeing this correctly, at this point I am seeing a hair raising move up in the S&P, lots of press about the correction being over, and then a major EW5 sell off that will amaze and shock many. This move might take until about the end of May to conclude.

    http://www.youtube.com/watch?v=V8rZWw9HE7o

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

    VIX is one of several previously reliable indicators showing no divergence at present

    http://stockcharts.com/h-sc/ui?s=$ONE:$VIX&p=D&

  • http://thetickerstreet.blogspot.com/ TickerStreet

    What do you mean by one of the biggest gapups? 2 weeks back we got +50 gap up.

  • katzo7

    My charts say it might be even bigger than that. It may be as big, I did say one of the biggest. My charts are right 80% of the time, wish it was 100%.

  • http://thetickerstreet.blogspot.com/ TickerStreet

    Thanks anyways.

  • Onorio

    So you`re calling a +50pt gap up Monday, with the VIX in a W4?

    The VIX W4 will match my call for W4 on ES to arround 1097 follwed by a final 5th to bellow 1050. At this point i dont see that monster gap up on Monday but i might be wrong :)

  • katzo7

    I may be wrong O, but my charts are set up that way, calling what I see. Also there is a gap on the VIX on the 60 that measures to 35.40, maybe that will be a part of this move I see “that might be.” We also had an engulfing candle in the VIX on longer time frames~ a sign of change?
    And finally, the indicators are turning down on the longer time frames. Just a PITA move for the bears (pain in the a**).

  • Onorio

    If the VIX dips monday than we could be sub-dividing, could be a 1.2.i.ii that`s worse for the bulls…the best cenario for the bulls right now is finish this impulsive down and pray that this was a ABC.

    If we go much higher than 1100 than we might be extending waves, and if you look to the EURJPY chart that i post bellow, things aren`t pretty for the bulls.

    Either way im playing one day at a time and right now im short till 1040 or to a break of 1105.

  • http://www.mylifemytrade.com MyLifeMyTrade

    i dont think we will gap up big.. but the point gain by EOD may be HUGE…

  • amokta

    22nd May: U.S. President Barack Obama called German Chancellor Angela Merkel on Saturday to congratulate her on parliamentary approval to contribute to a 750 billion euro ($945 billion) emergency fund to stabilize the European economy

    -the el presidente has spoken – expect bull market monday?

  • gsavli

    that's more likely.

  • http://evilspeculator.com molecool

    You know my standard response to this. For some reason it's a lesson very few want to learn.

  • Kudos

    News isn't technicals.

  • amokta

    I used to spend time 'reading' the financial times/financial media, looking to get 'ahead'. As you say fade the news 99% of the time (and save yourself a headache). The only tradeable news is insider info on individual stocks, and how likely is 'average joe' to know that, leave aside it might be illegal!
    i still read the MSM, but more for the macro economic picture & sentiment etc

  • yudhisthira

    It looks like a lot of divergences there in the “for sake of balance” charts.

    That nyupv:nydnv hardly budged on last leg down.
    Makes it close this upper trendline on your chart.
    http://screencast.com/t/ZmFiYzIzYz

  • Bob the Horse

    That scenario would require a collapse in Vol in Europe pre-US open which would put a huge bid in the future. Not totally crazy. The V2X (europe version of the Vix closed Friday at 46.17, well off the highs (54.5) but still a very elevated level. In the absence of something actually going wrong (i.e. a bank of Greek type crsis) you can;t sustain vol at those levels. And the weekend has seen no bad news. In fact, given the recent bail-out, even if you are bearish, there is no prospect of a sovereign default for at least 18 months. So what if the V2X got crushed all the way to 30 (still a pretty high level), I make that taking the Estoxx to 2800 vs. around 2580 at the US close on Friday. That could take ESM0 to 1170. So not totally crazy to think the bulk of that is done in European hours (Eruope is the main driver of mkts right now). So a big gap up for the US it would be.

    I wouldn't predict it but it's clearly a potential scenario – it would essentially mean everyone starts dumping the incredibly expensive protection tey bought last week – could happen. Buying puts at vol north of 50 is rarely a good trade. I would make a staggering amount of money if this actually occurred so I for one would love it!

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    My May 14th’s DO long chart was stopped out. 69.5 entry stopped out at 68…(2.5% stop)
    Click here, Here’s my second attemptat trading DO.

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

    Nice spot! Missed that – thanks. Yep there are a lot of divergences. Intrigued by the fact that not everything is diverging – suspect it might mean we haven't seen the low yet. Very much waiting to see what happens next.

  • spudthorpe

    That matches my point of view. I have no trouble believing a monster rally is coming, but I would have thought it would be at least temporarily contained by the 200MA around 1100 ES, plus trendline resistance there, plus C=A of the rally off 1151 ES. Also there is a gap fill at 1115 that would be a likely stopping point. I would think one more low is likely after we hit the 1100-1115 area before a rally above that.

  • elliott_surfs

    if you are playing this for a gap or day trade, then the news is tradable. for example, POMO days. they're tradable for about what, 15 minutes? after the initial spike, then fade, etc, it's done. so in a sense, yes, the news is tradable…albeit one small window of opportunity. pay attention to the most recent trend and play these important announcements accordingly =D but don't expect them to have an effect for longer than one trading session

  • http://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • http://evilspeculator.com molecool

    WADR – your comment sounded quite like the opposite 😉

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

    “the rest will have to wait untill tomorrow”? boy that was two days ago, have you forgotten to unlock this one?