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Shut The Door Have A Seat
102

Shut The Door Have A Seat

by The MoleAugust 22, 2010

Most of you steel rats are probably under 35 and hence your brain is wired quite a bit differently from that of your parents or grandparents. Let’s face it – you are all ADHD inflicted information junkies on a high sucrose info diet who can’t sit still for five minutes without as much as glancing at your fucking mobile phone. You are a bonafide information junkie and should you ever have the misfortune of finding yourself stranded in a barren desert (without cell reception – the horror!) you most likely will die from info-deprivation long before any signs of dehydration set in. Yes, you are on the move – you live on the edge – nothing escapes you – every minute of your waking hours is accompanied by a never ending stream of data keeping you up to date, in touch, and well informed. You are a black belt master of the info universe and the more you know the better.

Well, guess what – when it comes to gaming the market – you are in the way. So shut the door, shut your trap, and have a seat!

One of the most famous and at the same time most ignored Livermore quotes quite succinctly captures my outlook for the next few weeks:

After spending many years in Wall Street and after making and losing millions of dollars I want to tell you this: It never was my thinking that made the big money for me. It always was my sitting.

Spot on. Here’s another one, which speaks to the lack of patience, a quite common affliction back in days and even more so today:

The market does not beat them. They beat themselves, because though they have brains they
cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the
courage of his convictions but also the intelligence and patience to sit tight.

And finally – one of my favorites, as it debunks an old myth I never bought into:

They say you never go broke taking profits.  No, you don’t.  But neither do you grow rich taking a four-point profit in a bull market.

I could go on as there are plenty of classics to pick from, but I’m sure you’re getting the point by now. So beyond my rehashing of old Jesse quotes – what’s all this about?

Well, the financial markets have a knack for bringing out the worst in people and although there are many vices and cognitive biases to pick from one stands out among all others, and it’s a systemic lack of patience. Quite frankly, the final lesson the next six months will teach you will be to do nothing, nichts, niente, nada, zilch. Am I coming in loud and clear?

Do nothing – check!

It should be so easy to do, right? Just get positioned and walk away, then cash out and focus on getting lap dances from the gold digger of your choice. Turns out it’s one of the hardest things to do and the need ‘to do something’ kills traders on an ongoing basis. Of course this has always been a case, but overcoming this mental trap will be essential in making it through what we currently count as Primary wave {3} of cycle wave c.

The Wiggly Waves

A new glance at the long term picture – now you know why I bought December puts. The long term wave count has us moving toward a mudslide that will quickly separate the bulls from their ill-gotten gains in a pretty scary move – one that should unfold over the next two months. Yes, it’s pretty much black&white at this point and the wave count is only giving me two distinct choices. Either we slide – and that hard – or the count is wrong and we’ll get something completely different Monty Python style.

As you can see we are currently in the humble beginnings of Minor 3 of Intermediate (1) with a rough target of in between 9,000 to 8,500 on the Dow. On the S&P 500 cash this translates to roughly between 975 to 925 – give or take a few panic sessions. Since we had a pretty complex and tormented correction we should then see a zigzag (or flat) to the upside followed by a slide to 8000 on the Dow. Some fellow Elliotticians may disagree here, rightfully pointing toward the current flat as being ‘simple’ – thus something more complex could transpire (which for us traders translates into theta burn and sideways strategies). Well, I am pretty open to that and my current POV on the subject is that we’ll cross that bridge when we get there.

More medium to short term we have quite a bit of work ahead of us. In order to even think about any significant downside we first need to overcome the three stooges, with Larry spoiling the fun at 1,065, Curly ready to cause havoc at 1040, and Moe to whip you into submission at 1010. Once we’re clear those three things should accelerate quite nicely to the downside.

If we push up in the coming week – and as you can see a little correction is expected – we should however not pass SPX 1,100 – although it would not kill our overall wave count as we could still paint a running or expanded flat of some sort (although rare at this stage and after an ending diagonal). However, the line we must not breach is 1129.24 – that’s our line in the sand. If that happens then it’s most likely back to the ole’ drawing board for Mr. Mole as the medium term scenario would lose a lot of credence.

As a side note – the preferred scenario at this point is for this current wave to keep sub-dividing, which would lead to an acceleration to the downside. This implies that any upside correction should be quick and relatively shallow. If we hang around too long here or slowly crawl up for weeks on end then there is probably trouble in grizzly paradise.

As per additional evidence: I could post dozens of charts this weekend but decided against it as there is not much additional that I have not shown in prior updatest. Most of my long term charts continue to strongly point toward a deep drop to the downside. And the short to medium term charts are a bit mixed but do entertain this outlook. So nothing new to work with and thus there is nothing new for us to do except for doing nothing (see above) and wait things out.

And Until Then?

If it happens it will happen soon – until either proven wrong or right there is not much to do right now. You can play the swings Zero or Geronimo style a little if you like, but don’t get too overzealous and caught up in the daily gyrations. If we get what the charts are proposing the long con is the right play here.


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.
  • marketsniper

    You must be closer to my age, 62. All that “information” now gets in the way of solid decision making in my book. I do not have a cell, a laptop or even a TV that is hooked up to anything but a DVD player. As far as the “information” being fed us, I like to harken back to the words of Herr Goebbels..alwasy to review the FULL quote. the first sentence is always the one quoted. When you read the quote in full, you then know WHY the quote stops there!

    “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”

  • Vishwaksenudu

    did you just say nohting..

  • http://evilspeculator.com molecool

    Pretty much.

  • http://evilspeculator.com molecool

    I'm in my early 40s and had to learn the hard way.

  • marketsniper

    Ah, to be in my early 40's and know what I know now…wait a minuite, already starting to forget what I know now. LOL

  • Vishwaksenudu

    I am 31 and I am one of the ADHD inflicted information junkies that mole's talking about. Almost every time I pick the right ones .. but I sell them one day too early .. :).. Patience .. what patience?

  • marketsniper

    Here is how you fix that. Have a deal with your broker(s)..when you hit any exit on a trade, have them delay execution by 24 hours. That should fix it….know why traders are NEVER happy? 1) They missed the move; 2) They caught the move but are on the wrong side of the move; 3) They caught the move, are on the right side of the move but got out TOO early and 4) Caught the move, right side of the move, perfect entry and exit BUT then their size was TOO SMALL!!!! ROFL! Yep. The way of the world.

  • Vishwaksenudu

    Yep .. that should do it .. LOL

  • yudhisthira

    I would prefer not to sweat pass the “should not” line.
    Perfect target for GS to shake off some bears.

  • yudhisthira

    AUD/JPY drop (-.66%) doesn't seem to hurt ES yet.

  • http://theperplexedinvestor.blogspot.com/ Leisa

    The tender mercies of Mole!

    Everyone's brain is wired the same; it is simply a difference of where the dial is tuned.

  • red_clay

    As much as I appreciate Jesse Livermore's quotes / trading philosophy and Reminiscences of a Stock Operator is like the bible, we probably shouldn't forget that he ended up blowing his brains out after blowing up his account. Testament to how tough the game is and even he couldn't follow his own rules.

  • yudhisthira

    Just a question. Doesn't the clock on the zero png update during the night?
    New York time shows 16:17. Can't remember if that is usual.
    Of course, I am not fretting about zero being stuck in the morning.
    Well maybe I am.
    Good night and Good morning to European traders.

  • Brishort

    Thank you Mole for the options piece this week-end and your note above. In full agreement with the latter.
    Options wise, I am not so much into ladders, but your write-up of it was well done.

    I am very excited about the upcoming week. I am fully cash as of Friday options expiry and looking to leg into something this week with my short term leverage account. A little bounce helping, I could prepare a positive perfect storm of option positions.

    I still like my backspreads as my most desirable approach. Buy not too much in the money calls by paying as little of anything other than intrinsinc value and sell extremely deep in the money. If the movements are to be big as expected, this strategy can go a long distance with very little risk and cash layout with extreme firepower on (I am not super with the greeks yet) I think it is the vega, i.e. the $ movement of your option premium for every index dollar. Since NDX is an 18xx$ value, it goes a long way.

    Because the strategy is fully covered, you could even be able to pyramid your positions (re-use your money not affected by the backspread), depending on your broker and their margin treatment.

    I may go straight to NDX or MNX options, as NDX is they are the ones that allow you the lowest cost on not paying a lot of premium for slightly in the money and catching the entirety of the move expected down.
    If the market goes up, you are hedge and can sell the now more deep in the money for less deep in the money and pocket the hedge “profit” (that you lost on your deep ITM sold, but timewise if you believe the market goes down, this is irrelevant.

    Pratical example with Bigcharts available Sunday quotes as of Friday:

    Buy call MNX Oct 180 @ 8.5 (mid-point of spread)
    Sell call MNX oct 160 @ 24 (slightly lower than mid-point of spread)

    Maximum loss(or margin required by your account): 4.5$ per contract or the equivalent of 45 Nasdaq points that is, if NDX moves at least 45 points or 2.4 % between now and expiry in October, you will have a gain somehow. I won't do all the graph of break even, profit etc, but you will have the idea of the strategy.

    This is your cheapest entrypoint to have the highest leverage on any NDX point movements for the least investment and risk.
    Although not the highest beta options strategy to NDX it is not more expensive than outright put. to pay 4.5$ you need to go down to mnx 175, whereby with the volatily gains of in the money options, your profit curve is higher and your losses chances reduced by the backspread.

    My own decision to make this week:
    Go with the safe spread approach on options, or for once, with the expectation of a iii of (iii) go for straight hit and run long puts in the money and gain every single penny of downfall to come…. Experience in getting burned with such approach if wrong (Mole still has some should and must on the charts!) is leading me to refrain, but god, there is a little evil on the left side wanting to try it as well.

    Good luck to all this week!
    And remember, there are no right or wrong options strategies, there are only improperly oversized trades that kill you….but when comes the time to leverage and gain from a trade, hopefully my little write up was not too confusing and could assist you in hitting the ball a little stronger for not too much added risk. Beware that premiums on AAPL and GOOG for equivalent trades would kill you on the premiums and how deep in the money you would need to be to achieve a reasonable level of risk, or even profit from any movement. To my knowledge, NDX & MNX (10 times smaller) are the gems….

  • bananaben

    Tony Robbins calling for economic collapse:

    http://theeconomiccollapseblog.com/archives/eve

  • jigdaddy

    fucking great post!

  • chronographics

    Old enough to be dangerous then :-)

  • Bob the Horse

    FWIW, I think we will likely squeeze a bit. I am very very small long from Friday but in reality I am going to be treading water until either next month nor until the market squeezes back to a level where the risk reward is good again. I am looking for the S&P to hit 920 by late Sep but we may have a chance to reload from around 1100 area

  • chronographics

    You still holding your short Euro? I am still short although have been jobbing in and out on portion of it – keeps the boredom from making me do silly things.

  • chronographics

    Just sold some more at 1.2727 lets hope this keeps going down

  • Bob the Horse

    No, I am currently out.

  • jacksoo

    low vol flat day on ES – – firmly back in no mans land between 1100 and 1050 – – -could just bounce around here until next month.

  • convictscott

    That AUDJPY / ES U0 divergence is happening again, its been reliable of late

  • jacksoo

    small short placed at 1076.50 on the ES – -smal enough to let ride without concern.

  • convictscott

    If anything other than a fall happens from here the ENTIRE bearish thesis is called into question. In other words, if the market manages to rally, despite every technical method… moving averages, MACD, hindenburg omens, EWT, carolans spiral calendar, candlestick patterns, sentiment, COT data…..saying that the market *should* fall like a stone from here…

    Then thats a signal of its own. Basically, the market starts to go down within 3 trading days and accelerates on the way down, or I must abandon my thesis altogether and sell all my long term insurance.

  • jacksoo

    i hear u – at some stage it becomes just too unbelievable, by then i think only the computers are trading.

  • Bob the Horse

    I think you are looking too small picture, the mkt can just mess around into month end and it doesn't really mean anything. It is often when everything bearish is visible that the mkt struggles to go down and instead must force shorts out before dropping. If the mkt does does not collapse before month end, it will make no difference to my view that we are going to 920.

  • chronographics

    It will be Dollar driven, I think (in MNSHO) that if you watch the Euro/USD it will tell you when the Equity Market will tank. The fact that so many pundits are aware of downside risk tells me we “may” have to wait. In 30 plus years of trading I have never seen the masses make money so something will happen to fade out the shorts before we go down, or there are far fewer shorts that have positions than I think.

  • sloth_bear

    Hi rats,
    I'm back from vacation, ready to take a huge overdose of info (Had a lot of fun with your post Mole)… Just opened TOS and will soon spam this place again :-)

  • jacksoo

    just had a heads up from a mate – Four Corners tonight ABC1 – all about the financial meltdown and i think how it plays/cld yet play for Aus.

  • amokta

    Looks like the index futures are heading up – crash over folks, Dow 32,000 by October?
    Or perhaps a dead-fish bounce upto 108x, or will it be 11xx?

  • chronographics

    1079/84 should be resistance on Cash, be an interesting day for what it may do as much as for what it may not :-)

  • amokta

    lets see ! In a way, its reassuring if futures go up, as could be fake-out.

    by the way, issues with disqus, more so on this site than other sites (often logs out, keep having to re-log, also cant enter text into box sometimes, also need to re-log if refresh etc). Wonder if there is some interface issue between disqus – evil site ??

  • DarthTrader

    I disagree, I think a totally insane rally from here would be very bearish . . . because there is nothing to rally about . . . it would be a manic phase Blowoff top. The Bear in me would begin drool In fact that is what I have been looking out for . . . Carolans work has 10/10/10 as an important date. He says in 2008 it was the point of recognition but earlier this year he was thinking maybe a bottom. I'm postulating a Top and think he may be moving over towards view himself

    Hmmmm

    Drooling Bear, Shitting Bull

  • legobear

    And to be concrete, this particular insane rally could easily take DJI to 20K. No, I'm not trolling. Seriously :)

  • DarthTrader

    I don't believe that . . . you're talking 100% move in a couple months.

    What I do know is I got long on Friday if we have a big rally today I will take initial profits (Stash in March Bear Options) then let the rest ride with liberal stops in place.

  • legobear

    No, not months – this will take more time than that, but still – look back at the oil price and how it managed to rally from 70$ to $140 in a short time span. When stuff like this happens, it can gain a ridiculous momentum.
    I'm not saying this will happen for sure, just that it's one of those things that could happen that would really screw up the bears and the big boys who are concentrating on T-bonds and stuff like that.
    I'm following the same path as you, hoping to bank some profit on stocks I've bought last week. Mostly in cash though.

  • Bob the Horse

    I think that will happen . . but from 920.

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

    Gold:silver buy signal on Friday

    http://stockcharts.com/h-sc/ui?s=$GOLD:$SILVER&

  • convictscott

    You could be right there, maybe I'm being a bit hasty in my analysis

  • OldChicago

    This is a distinct possibility as much as I hate it. I've looked and looked and just couldn't find any evidence that will create a panic here, short of some war breaking out. Here are bullish forces –

    * Bond potentially bubbling.
    * Charts looks up for Europe, China, and Japan.
    * Yen's rising has caused Japan's pain. They have threaten to do something for a couple of weeks now.
    * too much cash = buy back, M&A
    * Breadth is bearish, but not far from the previous low.

    Traders are on the beach so the junior HFT are in the ball park. We could churn more …

  • sloth_bear

    This is it?
    Maybe we have just seen the top of this w2 on ES:
    http://screencast.com/t/NmQwMTIx

    Just read the EW book, and trying to put it on practice…

  • OldChicago

    This is a good contrarian point of view. The sentiment is also poor enough that it must rally or churn a bit until everyone is bullish.

    In that light, all steel rats must chant bullish tune :) I am sure someone is watching this blog!

  • Darkthirty

    looks better as b of C. a = c @ 1081.81 and 618 correction

  • legobear

    Well, I got me some thousands of dollars of dividend money coming my way so I'll keep my long position a little while longer – until (if) I see “the great souring” that will take ES below 1000.

  • sloth_bear
  • http://www.mylifemytrade.com MyLifeMyTrade

    Above 1100, bulls get out of jail.

    We may go revisit 1098-1099 area.. because we hit that twice intra-day and it must have let a LOT of bears back on the bus.

  • Darkthirty

    Yup, but pull your retracement from the high to low of the previous wave

  • legobear

    Sure about 1100? Would think the market would need more – like 1150 or something, seeing as we've been above 1100 a few times and got beaten down before the bulls managed to gain a proper foothold.

  • legobear

    I've seen a lot of you guys mentioning TOS. What is that exactly?

  • sloth_bear

    A trading platform called Think Or Swim (TOS):
    http://www.thinkorswim.com

  • shortcover

    writing covered calls on SDS, XLF…have some UNG, FAZ, SRS open…will hold for now…

  • legobear

    Thanks – I've a similiar trading system (after seeing the link) but it was ridiculously expensive. I see you can do autotrading with platform, verrry interesting :).

  • derekste

    what's up with the zero? signal is odd as hell

  • jigdaddy

    was just gonna ask same question…never seen a flat positive signal

  • ricebowl

    Minimal retrace was completed around 09:52 @ SPX 1081, the 20-SMA on the daily chart. NASDAQ is negative… huh?

    I've never seen a slow, steady grind down like this before. Every pop gets sold, but there isn't enough selling pressure to pull it down.

  • Tooncez

    Speculation: TOS not giving zero what it needs to do its thing.

  • amokta

    Holy Mole-y (no pun intended!) – futures hav dropped down??

  • 99er

    Chart: SPX
    Price action this morning provided a textbook example of the shorting opportunity provided by the Gartley Pattern and since fractals repeat, there should be multiple chances over the coming months to profit from it. Easy recipe: (1) Look for a “W” pattern in a downward trend; (2) when the formation is about to complete its pop above its previous “lid,” go short. Good luck, folks.
    http://www.screencast.com/t/N2U4Mzk5

  • Brishort

    Although I don't want the bus leaving without me, I am not shorting yet, believing we are only in b of something of an abc or ABC squiggle move.

    Furthermore, P&F 1 box allows until SPX 1089 (link below) on the upside while respecting the downtrendline. Notice, currently all 3 major indices are in SPX, retracement “x” upmove signals.

    Holding still for the moment, ready to short with prejudice when at least a squiggle abc feels complete. So far “ab” only showing…better sit on my hands then.

    http://stockcharts.com/def/servlet/SC.pnf?chart

    http://stockcharts.com/def/servlet/SC.pnf?chart

    http://stockcharts.com/def/servlet/SC.pnf?chart

  • DudePlunger

    Perfect move this morning to touch 1080 and now a powerful reversal this hour all the way down to 1069. I'm letting today play out, and then I'll put in an order to get short below today's low. Keeping it simple, because we are in what I like to refer to as, “The zone of lies and deception.” AKA 1060-1100.

  • nyxjf

    Can anyone wake up mole?

  • derekste

    if Tooncez's speculation is correct (likely), Mole might not be able to do anything besides get on the horn with ToS and bitch. When you pay for your membership, a phone number appears in paypal after checkout. I'm afraid to call 😛

  • WTFed

    P&F chart breakdown just happened at 1070. I would say we're heading down.

  • Brishort

    I don't know if this can assist but intraday charting since this morning on stockcharts refreshes extremely irregularly and hangs….

    Call conspiracy theorist right now! If they start not giving bears accurate public feed quotes on top of it… LOL!

  • WTFed

    Scratch that. my bad. we need 1060.

  • Brishort

    But the point remains very valid once we touch 1060.

    For those interested:
    3 box reversal view:

    http://stockcharts.com/def/servlet/SC.pnf?chart

    1 box for more feeling on the move:

    http://stockcharts.com/def/servlet/SC.pnf?chart

    Conclusion:

    Unless we touch 1080 or 1060, please re-read Mole post above, it is really the best advice you can get!

    Mole has this 6th sense of what is required, his timing in addressing market psychology and traders psychology is really incredible… especially these days. Not that he did not cross the five circles of hell of tape gyrations…we all did, but it's certainly more comfortable going through these circles with him! 😉

  • Brishort

    Me bad now.. it's 1090 or 1060 for P&F triggers. So up to 1089, it's perfectly normal bear retracement move.

  • BobbyLow

    I think I actually understood what you guys were talking about this time.

    That's a very good sign. :)

  • finansreven

    Got short this morning (European time) before going to work at 1073.5 SPX, but not quite sure how to play this one. Thinking about placing a sell on half position at 1063.5 and then put the stop on the rest at 1083.5.

    I am having some huge problems with the exits of my trades (quite happy with entries, but see profit slip away again and again and again).

  • Brishort

    Squiggles if 1069 holds, this is beautiful:

    a = 1081.58-1063.91 = 17.67
    current b (if it holds) = 1081.58-1069.43 =12.15
    b is currently .687 of a.
    If c = a you have a target of: 1087.1
    Work the extensions from there.

  • BobbyLow

    Here's an interesting little factoid that I stole from another site.

    The Hindenburg disaster that destroyed the German Passenger Airship occurred on Thursday, May 6th 1937.

    The Flash Crash on the NYSE occurred on Thursday, May 6th 2010.

    And more coincidental is the Two Confirmed Hindenburg Omens that followed.

  • amokta

    Ok, when do i exit my shortened oil etf?

  • gibbsfe

    We need like a bat signal or something.

  • nyxjf

    That's exactly what I was thinking about. Well, he's back now

  • EvilTrader

    did we get a second HO last week ?

    do we have a confirmed Omen ?

  • BobbyLow

    I think so if I'm reading this correctly.

    Submitted by Tyler Durden on 08/19/2010 15:37 -0500

    McClellan Oscillator

    Today we got our first Hindenburg Omen confirmation. The number of new highs was 136, and new lows was at 69 (per the traditional WSJ source). Granted this particular criteria set was a little weak as the 69 is precisely on the borderline for confirmation (the 2.2%), and the new highs number was not more than double the new lows (although it was close). Less gating were the McClellan oscillator which was negative at -83.6, and the 10 week MVA, which rose, which were the two remaining conditions. The first omen was spotted on August 12 – a week later the H.O has been confirmed. The more confirmations, the scarier it gets from a technical perspective, not to mention the conversion into a self-fulfilling prophecy (like every other technical indicator).

  • SW6

    Check back 1-2 threads ago, look for comments by Darth Trader.

  • Tronacate

    That is one wierd looking ZL flatline…..

  • OldChicago

    Are u able to get $tick or $trin, $advn from TOS? Of all days, they're broken on my system!

  • OldChicago

    The Jury seems to be hung at the moment. The breadth data is a tad strong – ISEE strongest in several days, $VIX (-3% from open), $TRIN (0.8-0.97) were bullish. Feels like accumulation in progress. Guess 1070 is a good buy point. The tape had better drop soon to get some fears. As someone said earlier, churning summer fest.

  • Darkthirty

    You know how to tell if a lawyer is well hung?… you can't get your finger between the rope and his neck

  • DarthTrader

    Careful of these Hindenburg Omens they have like 40 days to work and after the initial publicity and Liteweight Bear InFlux I expect Bulls to dine on their inexperienced Capital stepping in early…

    Hindenburg Omen is Like a Slaughterhouse Call for Neophyte Bears

  • http://evilspeculator.com molecool

    Interesting but most likely coincidence – if take all crashes in market history I'm sure you can correlate them with various natural and man made disasters.

  • Brishort

    IF this is a 5-3-5 zig zag correction at squiggle level, we have completed since this morning a & b and are working on 2 of c, with 3 of c up pending….

    (for back-up literature on zig-zag towards the middle: http://www.market-harmonics.com/elliott_wave1.htm)

  • http://www.mylifemytrade.com MyLifeMyTrade

    I just hear the talk of HO backfiring.. I haven't heard of any one getting excited and shorting because of HO.. inspite of it having a higher success rate than the sucker TA like H&S and wedges

  • http://www.mylifemytrade.com MyLifeMyTrade

    1073 is where we took off from this morning in RH. On the downside, breach of 1073 is an obvious short point.. I got my stop run of those who shorted 1073. I will look for a gradual drift down into close with a bounce in last 30 mins from a level higher than Friday lows..

    I don't see us collapsing into close and taking out Friday lows. But if that happens, I will view that as bullish.

    Similarly, if we close above 76 level, that is considered quite bullish too.

  • OldChicago

    TLT traded up since early morning. SPX correction (the dip buyers) did not bring down TLT. Someone has to give, in the long run.

  • Brishort

    At this point HO, with all due respect, is like saying your girl will get pregnant because you had sex during her fertility period. Then everyone starts having an opinion as to whether or not she must take the day after pill, etc…. necessary or not etc.

    Well, this is to me the stage where the media is, just like preagnancy, HO is a waiting game. And in case of pregnancy, it is a 30 days cycle, only then can you be sure the girl is ready or not. Same for HO.

    But if I may reuse Mole expression, Attention Deficit Disorder media and news hungry clueless traders are playing the HO like a freaking football pre-match roundtable.

    We will all know if we are ready to wait. HO to me is not a trading tool, more a fun “name dropping” item with “cardinal climax” that is good to keep in the back of your mind but nothing more at this point.

    BTW, did you know Cardinal Climax will have a planetary alignment confirmation on Sept 22?

  • Turps

    Mole, I've been thinking about the Zero and how the daily Zero buy signal (selling exhaustion) seems to jump out at you compared to a sell signal (buying exhaustion). I s it possible to do an “inverted” zero like you do with the A/D, D/A graphs that you display from time to time?

  • Brishort

    If this market was a computer, I would reboot it. It is hanging!
    I am sitting on my hands, but they are starting to suffer from blood asphyxia!

    Logging off for the day. See you tomorrow, there are so many things to enjoy besides this market.

    A parte: Mole, you really need to start charting this blog participation agains SPX, it is the best harbinger of all!

    We have not even seen RBW here today, that was the omen that it was going to a non-event day ;-p

  • raised_by_wolves

    I'm in a meditative mood. I'm contemplating these two scenarios for ($SPX*(SLV/GLD)) . . .

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

    If you can't do a P&F for this three-component ratio, could you do one for (SLV/GLD)?

  • Brishort

    Never looked with stockcharts for three components, will look at it tonight.
    Here is the beginning with slv: gld
    I tackled BB bands on it, as they are relevant on P&F.

    1 box reversal view: It is coiling and BB bands are pinching but going nowhere yet:

    http://stockcharts.com/def/servlet/SC.pnf?chart

    3 boxes reversal view: (I will need to meditate on that one, I don't know it if means anything by the look of it right now.)
    http://stockcharts.com/def/servlet/SC.pnf?chart

  • Brishort

    Try this one with Price by volume added, if I am not mistaken, I've seen you use price by volume (horizontal bars starting from the left)
    http://stockcharts.com/def/servlet/SC.pnf?chart

  • Brishort

    I have a little document on P&F for you if you want. Email me at my name on the google equivalent of yahoo mail while adding 11 after my name.

    Please acknowledge if you got this and I will edit the post right away to remove my email info to avoid computer bots spamming.

  • raised_by_wolves

    I assume the red is resistance and the blue is support. If that's the case, I see a lot of resistance overhead. Where's the support? The only support I see is that BB of yours. Since I'm new to P&F, would you mind correcting my interpretation if needed and mentioning anything I missed (for instance, I didn't even use the word box)?

  • Brishort

    Will clarify after work tonight. Did you get my “riddle” email below so that I can edit the post?

  • raised_by_wolves

    Yeah, got it, and you got mail.

  • Wave_Surfer

    I guess you did reboot the market. hehe

  • raised_by_wolves

    Try BB(13,2.618). On your 3 boxes reversal view, notice how the top BB hugs the boxes . . .

    http://stockcharts.com/def/servlet/SC.pnf?chart

  • Brishort

    NICE!!!!!!!!!!!!
    I recognize your touch of tweaking the numbers 😉

    BTW go to p. 427 NOW!

  • raised_by_wolves

    I borrowed BB(13,2.618) from Stainless Steel Hamster. Notice that Plessis is using MA(13) on page 428.