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Spring Forward
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Spring Forward

by The MoleMarch 8, 2009

I had to look no further than the Slope to find my muse for today’s title – Spring Forward (Tim’s was ‘Fall Back‘). Just in case you are a ‘furreigner’ and live abroad – over here a handy rule for remembering how to set your clock for Daylight Saving Time (no, there is no ‘s’ at the end of Saving) and then back again is the expression:

Spring foward – fall back!

So, in spring you set your clock one hour forward, and in fall you set it one hour back – simple. A handy little mental reminder for memory impaired knuckledgraggers like myself. But there is another change in the air, one that is also guided by seasonality and repeating cycles: Urania, one of the nine muses, will soon bestow us with a new economic cycle in our financial markets – according to our current EWT count this will be Primary wave {2} of Cycle wave c.

Tim was just taking a stroll down memory lane, reminiscing about his experiences playing Cassandra (yes, I’m full of mythology today) over at the Slope and calling for a major bear market way before it was en vogue. I can only imagine how he must have felt taking flak back in 2005. I myself got kicked off a popular trading blog (which shall remain nameless) not even so long ago – back in July 2008 – for warning anyone who wanted to listen that the Dow Jones would trade below 10,000 by the end of the year.

Well, now I’m telling you guys that we will see the Dow trading at 9,000 again by the end of the summer, and maybe – just maybe – we might even revisit the 10,000 mark. Yes, you heard it here first (and maybe on the Slope – damn you T.K.). Markets never move in one direction for very long – even though the last few months might have felt that way.

Minor 3 of Intermediate (5) started like clockwork at the beginning of January. It’s been downhill since then and the first nine weeks of 2009 gave us eight downers and only one week closing in positive territory. That’s further confirmation that this is a third wave – there was little opportunity to jump in if you didn’t catch it at the top. Remember 944, when we bought those June puts? That feels like ages ago now.

The circle is where we are right now – actually we’re a bit further down in that we are close to completing Intermediate (5) of Primary wave {1} of Cycle c. It might be worthwhile to refresh your minds with the time intervals at each degree of the wave cycle:

  • Grand Supercycle: Centuries
  • SuperCycle: Decades
  • Cycle: Decades/Years
  • Primary: Years/Months
  • Intermediate: Months/Weeks
  • Minor: Weeks/Days
  • Minute: Days/Hours
  • Minuette: Hours/Minutes

The the last trading day of Cycle wave b was October 11th, 2007 with a peak at 14,198.10. Since then Primary wave {1} of Cycle wave c has lasted 515 days and shaved 7,571.16 points off the Dow Jones index. That’s 53.3% – a massive loss in accumulated wealth indeed. Many long rooted pillars of our financial system like Bear Stearns, Lehmann Bros, Citibank, or AIG have either tumbled and disappeared since then or are financially insolvent and on the brink of extinction – requiring recurring infusions of tax payer bailouts to the tune of hundreds of billions to artificially maintain a shadow of their former self.

Of course we Elliotticians saw this catastrophe coming years ago – back when nobody wanted to listen. I personally attempted to save several of my friends from losing their shirts in the market and told them to pull out repeatedly. Of course, none of them listened. Like many others they had been seduced by a Supercycle bull market that had lasted decades and bestowed us with a seemingly never ending cycle of growth and prosperity. It actually ended back in 2000, but due to the devaluation of the Dollar we seemingly eclipsed that mark in October 2007. Go here for an inflation adjusted chart or see shadowstats.com.

So, besides bringing the noobs up to speed, why am I telling you rats all that? Do we really care about those ‘galactic cycles’ when trading on a daily, weekly, or monthly basis? Yes we do – because in a few weeks the nature of the market will begin to change. Initial cautious bullishness will quickly lead to euphoria and calls declaring the bear market as done and dead. I doubt that Primary wave {2} will last 500 days – after all this is a consolidation wave as part of a larger degree motive wave (see graphic above or in the sidebar on your right). But at minimum it will be measured in months and the characteristics of our daily trading reality will shift back to a climate resembling 2007. The pundits and politicians will exploit a market recovery as a sign that ‘the stimulus plan is working’ and that we are on the road to recovery. Do not be seduced and plan your trades accordingly, no matter at which degree of the wave cycle. The old buy and hold paradigm will only serve you well if your investment window is measured in months or weeks – not in years.

For us traders this presents us with an opportunity to play the long side, nothing else. As an added benefit we might actually see the options market become …. well … an option again. Volatility will eventually breach below 30 again, and that will change how options are priced and also decrease some of those nasty bid/ask spreads. A few months down the line, as we reach the peak of Intermediate (A) of Primary wave {2} we’ll be able to load up very cheaply at the top and ride Intermediate (B) down for a few hundred Dow points. As usual, it’ll be all about the right timing and I’ll be here to steer you rats along with my wave counts.

Let’s now divert our attention to the present – here’s what I see in store for us for the next two weeks:

Blue: We completed {v} of 3 and are pushing towards the 750 region. There is some resistance in between around 720 based on a prior diagonal, which was touched three times. We peak at the 38.2% fib line and then descend into 5 of (5) – completing Primary {1}.

Orange: That is my preferred count as the fib relations and the wave patterns would be almost perfect in this scenario. We drop a bit more and bottom in the 650 zone. Then we push into 4 of (5) which completes roughly around 730 but we could push a bit higher and test 750, as in the blue scenario. There’s also a similar bump in the road around the 700 line as we touch that prior diagonal mentioned in the blue scenario. After that we drop into 5 of (5) and complete Primary {1} around 610.

Here’s a larger perspective which shows you where I draw some of those support/resistance lines from. Also note the green channel, which at this point is highly speculative, but I wanted to throw it out. Let me quote from our EWT Bible, psalm 87:1:

Wave 5 often ends when meeting or slightly exceeding a line drawn from the end of wave 3 that is parallel to the line connecting the ends of waves 2 and 4.

Now, obviously we have not even completed wave 4 of (5) just yet, but we have a good idea of where it’ll take us. This, in combination with prior intermediate wave relationships gives us an idea of where the bottom of Primary {1} will be. What I also like about those two targets is that in both, the orange and blue scenarios, 5 of (5) would measure about 61.8% of Intermediate 3 of (5). This would be a very fitting end to what has been an almost perfect Primary degree motive wave.

Finally, there’s the psychologically sensitive 600 mark – if we get close to that I strongly believe that the bulls will make a stand there.

The NYSE McClellan Oscillator also supports the notion that a bounce is in the works, even if it’s just for a few days.

The longer term NYSE Bullish Percent Index is clearly in oversold territory, but there’s sufficient space left to afford a completion of 5 of (5).

Finally, the spread between the 30-year T-Bond yield ($TYX) and the Moody’s BAA Corporate Bond yield was roughly around -4.5 on February 15 and has actually increased to -4.85. This also supports my current wave count as it has been a fairly reliable long term indicator throughout 2008. Once we see this spread decreasing it will be an early warning sign that we are nearing the end of the current Primary wave cycle.

I saved this chart on Friday so that I wouldn’t forget to talk about it today. This is a chart of the crack spread, which is the spread between the U.S. Oil and Gasoline funds. In other words – it’s the profit margin for refiners. What you see is a clumsy attempt to put some EWT labels on the last few quarter of price action. I wouldn’t bet big money on this, but it seems to me that we are completing an a-b-c consolidation and that we might push to the upside here very soon. Either that, or we drop a lot further as part of a large b-wave to the downside. I’m not sure where the cut off point would be but take note and maybe correlate this with your own count in the crude market. I personally do not trade crude and do not want to suggest a pertinent count.

I think the way to play this is to watch for a two day rally to the upside and then go long refiners. This would give us at least some confidence that the c-wave is complete and that we might enjoy a long motive to the upside. Of course it’s also possible that we are embarking on a 5th wave as part of the current push up – but in terms of picking trades that would not matter as 5th waves in commodities often extend quite a bit.

Gold seems to be at a great spot for a reload in puts or short positions. As I stated on Thursday – if we breach 960 I might get nervous as I don’t expect a strong retracement at this point. I will keep you rats abreast of any changes in my precious metal trades – but at this point I expect further downside in both Gold and Silver very soon.

That’s all I got for tonight – see you on the other side, ladies and leeches!

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.
  • Anonymous

    Wheew – what a great education. Thanks

  • Anonymous

    Mole

    I have been studying your info on the zero and I had a question.

    Since the concept is to always be invested (as I understood it), do you have some sort of a “back up” system if your server or the zero become nonfunctional? (perhaps email updates?)

    let me know as I am interested in the zero, but trying to assess any potential risks involved., other than the obvious market risk….

    thanks

    Maximus
    http://4best4worst.wordpress.com/ (new 4best 4 worst published Sunday for interested readers)

  • katzo7

    Isn’t it March 10th Keirsten?

  • Royal With Cheese

    Great work Mole !!! 😉

  • Count_de_Monee

    As usual, a masterpiece.

    You spoil us too much.

  • todd

    I agree, what a great education in EWT.

    Thanks much,

    T

  • The M

    You are The MAN Mole! This is an outstanding example of “molarian fever”. Thank you.

  • Count_de_Monee

    And I see you did not miss the astrological angle.

    Venus is in retrograde which means we are more likely to examine the true value of things (relationships, goals, M2M??).
    Don't know much about astrology, but humble enough to realise it may have a greater impact than we think.

    I think this week we may finally see panic capitulation to SPX 600 or lower before a hefty rebound.

  • Keirsten

    Thanks so very much Mole! You top yourself every day.

    Sharing additional info on the oil game- here is the current rig count (scroll down the page until you see the table market “Recent Count.”

    http://investor.shareholder.com/bhi/rig_counts/

  • Keirsten

    And you've got a full moon March 11th.

  • katzo7

    Have I by accident clicked on the wrong site? I went back and read it twice. No, it was either Mole or someone who has possessed his body (thoughts-Cramer, a Dallas cowboy cheerleader, even Tim Geithner??)

    No, in all seriousness, something is up. I went into cash not that I am the most clarvoiyent in this stuff, I will leave that for you Mole le cool. But when a knuckledragger like me can make 35% in a few days, look out. And I was using a dart board for my choices. LOL

  • http://www.twitter.com/TraderTamas TraderTamas

    Finally the Obama Rally is nigh. LOL

    I think commodities and agriculture stocks will be great investments for the coming wave up. Also, puts on inverse ETFs will probably be the most profitable trade when we get to SPX 600.

    DXO will be the number one most used ticker on StockTwits in the wave up IMO.

  • rhae

    See the Full Moon is timed at March 10 @ 9:37 p.m. … Is that ZULU ( GMT) or wall street time? Probably GMT… if so the we can time shift it to Wall Street time for the 11 th… Be on your gaurd that moon can get real complicated… lol

  • Yux

    Du bara ökar min länksamling!
    Tack återigen 😉

  • GeoMay22

    As of now (which, is only about 1 1/2 hours into the Sunday evening trading session) the dollar is down vs. every currency in my TOS FX watch list… this gives support to Mole and Tim's analysis for an upcoming stock market rally.. just bought some /6J as a play on the dollar's weakness and the fact that the yen has been beaten to a pulp in the past couple months.. Should be an interesting week and great post!

  • Count_de_Monee

    Mar 11 02:40 GMT Wednesday, which means it starts tuesday night NY time.
    Any influence should mpact wednesday trading day I believe.

  • katzo7

    Sold my FXP as well as everything else right at the low of Thurs. at 3:30 PM partially on a read of the charts and partially on the fact I had a meeting at 3:45 and didn't want the PPT getting active and destroying good profits. Thanks Royal for your advise in FXP.

  • BalaB

    Hey K.
    Did Mole get you the SoS map?

  • BigHouse(Aka Mr Vix)

    Thanks Mole for the time you spent putting together tonights update. I know putting together updates is a pain in the ass.

  • Anonymous

    I agree – the dollar will continue to go up – but I think it likely the market will go up first.

  • Scoops

    Hey Mole, with your count, where do you pin the start of the bear market and the bottom of primary wave A. Reason is that I've seen some other counts that measure primary wave a still underway and could end at any time, and then move to the primary b wave rally. By your count we've already seen the primary b right? Still noobish to ewt, so I may be missing something here.

  • OJuice

    Fantastic EWT breakdown. Thank you.
    I agree with Tamas, commodities could have a nice bounce if/when a short rally and USD weakness play out.

  • Yux

    Thanks for all your hard work Mole. Keep that Evil eye of yours pointing at the markets.

    Started easing into longs (not for the squeeze itself)
    RSX (SRSfinance may disagree)
    XLE
    KOL
    TBT

    Percentage wise market hasn't been this bearish positioned since the the thirties. let's see if the market is democratic and lets majority rule.

    Deflation discussion: Watch the long treasuries and the dollar. Bank Of England just started buying bonds. Who's next?

  • Susannah

    I've been looking at AGA and DAG trying to plan a trade.

  • http://trading-to-win.com/ DavidDT

    [speaking Maria Bartiromo voice]
    It is amaaaazing how different technical analysis arrive to the very same conclusion (Some are a little earlier than the others [modestly clearing my throat] )
    Now, just for fun – how soon poor beaten up retail investor will jump into the moving train? We need a poll for that. Poor bagholders…

  • Susannah

    We're also still in a Puetz window next week from what I could figure out since the window is described as a period around a full-moon up to six weeks after an eclipse. The eclipse was less than 6 weeks ago. I guess that means there's 2 Puetz windows corresponding to each eclipse.

  • Susannah

    Great piece from John Mauldin about mark-to-market, capitalization requirements for the banks, and faulty ratings systems (more suited for corporate bonds than mortgage-backed securities). I cut and pasted it to a blog since you have to sign up for the newsletter to read it at his link (and you're allowed to republish it):

    http://susannahscratchpad.blogspot.com/

  • molecool

    So, how am I to interpret this information?

  • http://www.twitter.com/TraderTamas TraderTamas

    Check out DBC and UNG. I will have positions in these. Also, HK, JRCC and MEE.

  • molecool

    I forgot – sorry. Can you send it to me again?

  • molecool

    Good move – I think the Yen is going to push up harder. Would have loaded up on FXY options on Friday put the bit/ask spreads are horrible.

  • molecool

    That's my count – you are free to follow that of others.

  • BalaB

    Done

  • MayDaze

    Great post, Mole, I really appreciate your updates.

    I agree that the orange scenario seems the most likely by straight EW standards, but sold off my short positions (BGZ, TZA, FAZ) Friday (+58%!) when the S&P hit 670 for the second time, because of the surprising (at least to me) weakness of the dollar vs the euro. Blue therefore seems very plausible – if I had been convinced I would have gone long at that point but I was unwilling to risk a further decline. In cash, awaiting further developments.

  • molecool

    “because of the surprising (at least to me) weakness of the dollar vs the euro.”

    The Dollar is just consolidating a little – it'll continue its push to the upside in a week or two.

  • GeoMay22

    Just out of curiosity (I'm still learning about the pros/cons of different trading vehicles) is there a reason you prefer FXY options to futures such as /6J?

  • willc

    Are you so bearish on gold because of your expectation of stronger dollar? I have the same 2 lines on gold, and it shows that gold is in the uptrend, and just regained the the breakout line. If you are purely trading on chart, won't you want to long that yellow stuff?

  • GeoMay22

    I suppose I could answer that one for myself… looks like FXY April 105 calls were up 40% (from 1.00 to last purchase at 1.40) on Friday… but not as much option volume overall as I might have expected (which i suppose explains the horrible bid/ask spread). Thanks and keep up the great work!

  • ISLDGUY

    I've been buying April 55 puts on AMZN. Here's the chart I'm looking at:

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

  • mtst

    Fully agree bout Dollar -wich enhances orange scenario play even more- and bout your vew of the Mkt.

    Like also your Orange scenario going nicely with Erik`s “da monster” positions… -a guy you never want to bet against lol

    Thanks Mole

  • Fujisan

    Here is my revised GLD chart with revised wave counts. I see a H&S pattern with another leg down. This is more in line with Mole's gold analysis.

    http://content.screencast.com/users/Fuji-san/fo

  • BalaB

    I interpret the SoS data as:
    Whenever outflows exceed $200 (plus) Million on the SPYs, a short term top is very likely to have just occurred. Outflows below this threshold do not signal a top.

    Furthermore, the huge outflow ($805M) that took place last week is ominous (imo) because it did NOT occur on a swing high. Does this signal selling pressure is increasing or was that capitulation?

  • salvadorveiga

    Excellent post… I don't come here often but I see I have to start to come more often… I'm 19 yo, and have the same view as you…

    One question remains though and I've been having difficulties regarding that… we are in Wave 3 of Intermediate 5. Within that wave 3 there have been many doubts: has it finished, will it be extended, etc… With rough calculations I got a target of the end of wave III at 655 (1.618 * Wave I, which was 70+ points if I'm not mistaken…)

    What is your view on the very short term? I think right now, we're in no man's land… someone going short could get caught in the middle of Wave IV, someone going long could get still get caught in the ending of Wave III… what do you think?

    Thanks

  • MikeT

    “So, besides bringing the noobs up to speed”

    A simply great post which us noobs appreciate and with your explanation, Im finally seeing the EWT counts better now.
    Avid follower and admirer of this website and its contributers/posters.

  • de3600

    And the winner for the 2002 2006 real estate award goes to http://www.screencast.com/users/reggiebar/folde:)

  • salvadorveiga

    i think that I can asnwer that one since I usually follow EWT analysis from one of those guys… In the big picture it's pretty much the same, the only thing that one differs from the other I think is with moles' count wave 2 up cannot intersect some other down wave, while if you consider the next up move to be a bigger degree B up move it can go higher than 1000 SP points for example… but that is a thing that EWT traders tend to then adjust…

  • Paul

    Mole, I have to say that you have me a bit frightened with the take that we're only just finishing 1 of C (until now I've been operating under the presumption that we're pretty close to the end of C altogether.) How deep do you see 3 and 5 going? Is it time to stop trading and start investing in bullets and soap?

  • GMunni

    Just note that moon phases have been inverted to the market for a few months now.

  • salvadorveiga

    He has the same count as Robert Prechter… so we're in good hands 😀

  • Dragonsbane

    Hey Mole,

    Just out of curiosity, what will happen to the dollar if the DOW pushes back up towards the 9,000 to 10,000 level?

  • Pone

    Mole- On todays news they were talking about how the EURO was under pressure because some countries in the EU were dragging the others down during this world econ crisis. There may be some pressure to desolve the currency by some in the EU?? Anyway the Dollar does not have this pressure.

  • Osso

    I still see SPX 688 as max. bounce……then new lows at 644 /49 to end 3 of 5 of 5….btw monday or tuesday…. Watch NDX for suprises down…..needs to at least, in wave 3….re test Nov. lows….and fridays lower lows than thursday…calls for lower lows…at least some Indexes…..in this coming week….imo

  • v8muscle

    Futures getting shorted down overnight…Asia continuing its decline….

    not lookin good for tomorrow

  • Pone

    There is less demand for oil drilling equipment and oil processing equipment because of the rig count going down. Drilling activities become less profitable because of declining oil prices. This decrease in drilling and processing will reduce oil supply. In turn, less supply causes oil prices to go up. Oil futures should be going up because of this news. But what do I know.

  • http://www.ryanbarr.com Covered (kzhat)

    I'm short the /ES as well. My rational and targets for this overnight trade are here: http://www.ryanbarr.com/trading/short-es-for-an

  • maple

    'Let me quote from our EWT Bible, psalm 87:1:

    Wave 5 often ends when meeting or slightly exceeding a line drawn from the end of wave 3 that is parallel to the line connecting the ends of waves 2 and 4.'

    …on either an arithmetic or log scale – I thought this was important enough to add.

  • Susannah

    Thanks for the suggestions!

  • rhae

    I agree completely, the Moon adds to my SPY twilight zone chart which I posted on the last page… the arrow points to around noon on Wednesday for a happening…

    What will happen? Maybe nothing… I dunno, much of the fun with TA is watching to see if your own projections pan out…

  • molecool

    Most of us are looking at log scales these days – but yeah. Also, this is not a big factor on a minor degree scale.

  • http://spyswing.blogspot.com pokerden

    Why are you 870 area for the 100% retrace instead of the 940 area…since 940 started wave 1.

  • molecool

    Similar – not the same.

  • http://spyswing.blogspot.com pokerden

    Why are you using the 870 area for the 100% retrace instead of the 940 area…since 940 started wave 1.

    correction 😛

  • http://www.aggressivelyuninformed.com nepharis

    Unless you're charting Citi.

  • slartybardfast

    I believe that's because he is measuring a retrace of just wave 3 – not waves 1 though 3.

    Wave 3 itself began at around 875. This is where wave 2 peaked. So that's why the 100% line is set there on the fibs.

    Hope this helps.

  • http://www.slopeofhope.com Tim Knight

    Marvelous work, as always; thank you.

  • hockeyfan

    does anyone see oil up gld down in the coming weeks, thanx in advance

  • slartybardfast

    I agree it is a little scary, but then again, I like to try to think of this admittedly gloomy long term EWT forecast as an opportunity – to get positioned to create profits from future downward waves. To protect existing assets. To try and help my family and friends get themselves protected.

    On the last point, I find it very difficult to convince my family and friends that things are going to ultimately get a lot worse then they are today. I would have to say almost everyone I talk to seems to think that the powers that be are doing what needs to be done, and we'll all going to be OK. They worst is essentially behind us, they think.

  • salvadorveiga

    really? His count is we're in primary wave 1 within C… how does that differ ? within that primary 1 he says we're in 3 of 5

    best regards

  • slartybardfast

    Thanks for the fantastic analysis Mole, this is really helpful. I am on board with your wave count, and also shorting some SLV with you, so look forward to your updates as always.

  • finalbull

    a lot of work to put this update together. i just wanted to say thank you mole and great as usual.

  • moneyfarm
  • finalbull

    hi tim i'm short azo and this thing does not give up. are you still short azo

  • v8muscle

    This bounce looks very shortable, as TK has posted on his blog. I'm kinda confused about the bullishness of Mole but i guess he has been pretty dead on so far…. but still i dont think this rally will go too far. Max pop i can see on the charts is 710 but thats just me

  • fuzzygreysocks

    I'm pretty slow to this wacky EWT stuff (I'm a SloStochs, MACD & diagonal trend line sorta guy), but did I do this right?
    http://tinyurl.com/b5z5nk

    If so: OMFnG!!
    WTF is that last “c” gonna be on the SPX? http://evilspeculator.com/wp-content/uploads/20
    SPX five hundred penny stocks?
    SPX zero?
    SPX MadMax & Beyond the Thunderdome? http://tinyurl.com/dlu9w9

    Goooood gravy!

  • Flatlander

    On the SPX, Wave 2 ended around 1305, Wave 3 ended around 1300 and Wave 4 ended around 935. Drawing the lines as you explained leaves us with a Wave 5 targe below 510.

    Or am I constructing it wrong?

  • standard_and_poor

    MISSION ACCOMPLISHED: Bloody market moves in mysterious ways (3 days late).

    Wave 3 of 5 of intermediate wave 5 likely ended at 666.79 (the ROAD TO HELL) on friday 3-6-09 at 3:25 p.m., but big blooming deal bloke what's next:
    http://www.screencast.com/t/8rgnEbL7Jz
    http://www.screencast.com/t/tuyKDh0URZD
    http://www.youtube.com/watch?v=jejpb0M0w_I

  • jacksoo

    Congratulations S&P some excellent calls over the last few weeks. Good luck with your trip, sounds like a lot of fun – although having watched the recent Hog road-trip movie starring John Travolta you might want to watch out for rogue cops…….

    PS – my original stop tgts were 666.66 – softened them to 670 and eventually bailed out at 673 on Friday – just too darn tired to stay with the mkt any longer. Pulling these all nighters really gets to me after about 3/4 in a row.

  • flipper

    hey anyone else having trouble getting prophet to run?

  • salvadorveiga

    mole, I have one question regarding EWT… Considering primary 1 of cycle C ends at 610 that's 950 points of length…well we know that primary wave 3 cannot be the shortest. I'm doing some math here, let's say we retrace 61.8% during wave 2. That would put us around 1185.

    So, wave 1 is probably gonna be the longest? Even if wave 3 = wave 1 that would put us at 235 points on S&P, still with wave 5 to go….

    I know this is still a long way ahead but just wanted to understand this part…

    thanks

  • Royal With Cheese

    Good for you katzo ! 😉
    I still think that FXI will go below $20 .this month …. unless we have a furious bear market rally that comes out of nowhere !!

  • katzo7

    In your first chart, IMHO (God Katzo, WTF are you doing correcting the iconic fuzz) the ABC count could be labeled as a 1-5 count. My defense is the angle of EW5 is usually steeper than three. So, the 3 to 4 corrective phase would be labeled in mid 2006 area. A would =1, B would=2. Also the first set of EWs you labeled on the chart the proportions are all wrong of the length of the EW3 wave. I tried pushing the EW3-4 corrective phase down the chart to the next pivots but that does not work either. If you move the Ew2 over to left and comparably move the EW1 to a related spot, that would lengthen the EW3 wave but still the EW3-4 becomes problematic. But this does lengthen the EW3 wave.
    And in where we are now, pertaining to the bracketed EWs, what if we now embarked upon a new set of EWs to the up side, meaning the sell off on Friday becomes the new EW5 and we proceed up to form a new set? Pure speculation though.
    As they say, the EWs conform to the charts, not the other way around. And if you had 10 EWers in a room you would have 15 different chart patterns labeled.

  • katzo7

    Ask Keirsten about AZO. It is the devil.

  • Blind_Squirrel

    That is a mind boggling question!!!

    The one thing I can add under my understanding of EWT is that yes, 3 cannot be the shortest,
    so 5 then if that count is correct would have to be the shortest.

    Still a scary situation for sure.

    BWDIK

  • salvadorveiga

    where do you see bullishness from mole? I don't… short term can be either way, either we're done with wave 3 or not…. he's only bullish for wave 4 and then for primary wave 2 of cycle C…

  • isaiah64v4

    S&P

    Your 2 graph links are not working.

  • NinjaPenguin

    Have a great trip. Thanks for all your charts!

  • Lordted

    Have a great Trip S&P – you may even have gone already… What a mnice bloke and he picks a lot of UK bands… Must be good.

  • Harmon

    A QUESTION I AM SURE EVERYONE WOULD LIKE TO KNOW

    What would invalidate your count
    TK had posted a chart last week with an 825 posability… Although a reach, that would still keep the count valid corrrect
    tks

  • http://gemstowear.etsy.com Jan

    i'm having problems placing a market order on two different platforms

  • http://tradingsigns.blogspot.com/ T. Waffle

    Morning Ladies,

    How was everyone's weekend?

  • Count_de_Monee

    Morning rat plebes.

    Hope everyone had a good weekend and is ready for the rollercoaster ride to continue.

    I sure am glad I reshorted ES at friday's close.

    Anyone else coming along for the ride?

  • v8muscle

    hell of a gap down, watch out for the attempt at retracting

  • peterey

    Some EW and fib proportions on SPX daily:

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

  • http://gemstowear.etsy.com Jan

    i've been trying to buy QID on three diferent platforms with no fills. anyone else having problems? am i in the twightlight zone?

  • http://tradingsigns.blogspot.com/ T. Waffle

    LONG FAS @ 2.47

  • Vardoger

    not covering call spread until we see a retest or the 650's fwiw. Let's get it over with. Will be long ERX, TNA, FAS calls off target levels

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

    That will be why QID is down over $2 since the open. Gap up then aggressive take down by not filling orders.

  • jabber

    The EWP says to use percentages in cases like that. Use both points and percentages though, not just one or the other.

  • TomOfTheNorth

    I'm showing a 5 tick market w/only 300 up – were you using limits or market?

  • lester

    Erikd da Bear,
    I am sure you are out there watching. Appreciate your updates. If you see a good reload level in the XLF short play today, I hope you can post it. I locked in all my gains on Fri but hope to reload today if the price is right.

  • annamall

    I went net long Friday late p.m. Wow what a reversal this a.m. Hope everyone's weekend was great.! In Tampa it was Chamber of Commerce Weather! Fantastic

  • v8muscle

    wow these buyers are busting a nut here…. but with every parabolic chart there is a similar drop

  • Lordted

    Futures are lagging well back here… Not a good sign for longs at present

  • Squidman

    Absolutely incredible zero performance out of the gate!

  • Basilfawlty

    Molecool:

    Thanks for a wonderful site. I have been a silent observer for the past month.
    I must say I am also obedient; “obeying” and “again obeying”.

    I also enjoy reading comments by Ericd, Count, de Monee, T waffle, Standard and Poor, Keirsten to name a few.

    Thanks for the useful comments and guidance.

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

    Trading with a Force 4 Hurricane 200km to the East of us here in Hervey Bay Queensland. Heavy rain at the moment. Did the MM's miss the opening gap because they sure closed it in a hurry. SPX's opening rise mirroring Fridays close on the 5min.

  • lester

    Basil Fawlty – one of faves

  • BigHouse(Aka Mr Vix)

    The bull market is back lol

  • annamall

    Closed out 1/2 SKF puts for a nice gain! Thanks for the suggestion on Friday!

  • Douala

    Looks like Blue is coming into play. Or is it too early too tell?

  • Basilfawlty

    I knew I forgot someone.
    I enjoy your comments on this site.

    And yes, I still own the hotel; and Manuel still works there. Drop in sometime.

  • Stretch

    ErikD, I saw your earlier charts on XLF dipping below the channel. What is the expectation today? Back in the channel or are we going above it? Or something else?

  • Vendrell

    Too early to tell. At a minimum, we need hourly confirmation over 700.

  • Zeusmith

    Good call on gold being weak Moley. Picked up a few thousand shares of DZZ at the open. I know there are more lucrative plays out there, but this one seemed like a no-brainer. I like the fact the the entry and stop points are clearly defined, and the risk/reward is fantastic, although may not be most lucrative play for market rally.

  • katzo7

    Bought FAS and DDM
    Look at 10 min. SPX w/ MACD, crossing zero line.

  • Vardoger

    2-4 trendline will break at roughly ~706 spx

  • http://www.srsfinance.com SRSFinance

    Blue may be in play. Smart money turning bullish: http://www.srsfinance.com/stock-market-commenta

  • lester

    30% position in FAZ Calls for daytrade.

  • Rmunsun1

    TraderTamas,

    Why are you so certain energy is going to lead the charge back up?

    Thanks.

  • http://www.srsfinance.com SRSFinance

    I'm not chasing there though. I just exited my FAS opened late Friday. Will look to reload at lower prices. These early Monday spurts usually end up getting faded. If I miss more upside, NBD.

  • http://tradingsigns.blogspot.com/ T. Waffle

    All long position closed now shorted /NQ @ 1083

  • katzo7

    IMO, be careful right here. If we go higher things have changed (IT). If we go lower, still in a down trend.

  • v8muscle

    buyers are MIA

  • fuzzygreysocks

    Bought SWVOP SPY MAR 2009 $68 puts @ $2.10 : http://tinyurl.com/ata54o

  • http://www.srsfinance.com SRSFinance

    Bought a small QID position. It's probably a day trade but if it does well I may keep it until tomorrow morning.

  • HardTimes

    Not sure if I want to speak too soon but that may have been a successful test of 6.43 on XLF…

  • rhae

    I see nothing on the events calandar today… could be a sloppy day

  • Vardoger

    Gartley pattern?

  • lester

    bought Mar QQQQ Puts for daytrade. I will not hold any March options overnight. I am buying March instead of April because potential gain is greater.

  • mtst

    Define succes lol

  • Vardoger

    +1. hit em all day long T. keep the comments coming, I think you are on it. hedged but looking to get very active off the lows.

  • lester

    You mean that down trendline is still intact, correct? XLF will not trade over 6.43 at least today, unless news breaks.

  • jabber

    H&S on the 1minute /es.

  • molecool

    NEW POST!

  • Lordted

    What index you seeing a Gartley on? – QQQ?

  • http://tradingsigns.blogspot.com/ T. Waffle

    Thanks man,

    I will keep you guys updated.

    I am holding /NQ short right now.

  • BigHouse(Aka Mr Vix)

    Looks like Silver is going down as planned. I will stay short until the $9 level.At least. long term hold.

  • fuzzygreysocks

    Thanks, Katzo.
    >> And if you had 10 EWers in a room you would have 15 different chart patterns labeled. <<
    I knew there was a reason why I had a hard time with EWT.

    Since I'm learning and asking I consider your guidance as directive rather than corrective, as such, I do appreciate your help.
    And if being a mean, onery SoB that just sticks around like a bad rash = iconic, then… Hi!
    I'm Fuzz the icon!
    LOL!!!!

    You gonna be an icon too? <chuckling>

  • katzo7

    In your first chart, IMHO (God Katzo, WTF are you doing correcting the iconic fuzz) the ABC count could be labeled as a 1-5 count. My defense is the angle of EW5 is usually steeper than three. So, the 3 to 4 corrective phase would be labeled in mid 2006 area. A would =1, B would=2. Also the first set of EWs you labeled on the chart the proportions are all wrong of the length of the EW3 wave. I tried pushing the EW3-4 corrective phase down the chart to the next pivots but that does not work either. If you move the Ew2 over to left and comparably move the EW1 to a related spot, that would lengthen the EW3 wave but still the EW3-4 becomes problematic. But this does lengthen the EW3 wave.
    And in where we are now, pertaining to the bracketed EWs, what if we now embarked upon a new set of EWs to the up side (Mole le cool's new posty thingy), meaning the sell off on Friday becomes the new EW5 and we proceed up to form a new set? Pure speculation though and if we continue down, everything could get relabeled making the proportions more palpable.
    As they say, the EWs conform to the charts, not the other way around. And if you had 10 EWers in a room you would have 15 different chart patterns labeled.

  • katzo7

    Ask Keirsten about AZO. It is the devil.

  • Blind_Squirrel

    That is a mind boggling question!!!

    The one thing I can add under my understanding of EWT is that yes, 3 cannot be the shortest,
    so 5 then if that count is correct would have to be the shortest.

    Still a scary situation for sure.

    BWDIK

  • http://jogarembolsa.blogspot.com salvadorveiga

    where do you see bullishness from mole? I don't… short term can be either way, either we're done with wave 3 or not…. he's only bullish for wave 4 and then for primary wave 2 of cycle C…

  • isaiah64v4

    edit : never mind .. got them

  • NinjaPenguin

    Have a great trip. Thanks for all your charts!

  • Lordted

    Have a great Trip S&P – you may even have gone already… What a mnice bloke and he picks a lot of UK bands… Must be good.

  • Harmon

    A QUESTION I AM SURE EVERYONE WOULD LIKE TO KNOW

    What would invalidate your count
    TK had posted a chart last week with an 825 posability… Although a reach, that would still keep the count valid corrrect
    tks

  • http://gemstowear.etsy.com Jan

    i'm having problems placing a market order on two different platforms

  • http://www.tradingsign.com/ T. Waffle

    Morning Ladies,

    How was everyone's weekend?

  • Count_de_Monee

    Morning rat plebes.

    Hope everyone had a good weekend and is ready for the rollercoaster ride to continue.

    I sure am glad I reshorted ES at friday's close.

    Anyone else coming along for the ride?

  • http://www.facebook.com/screasy v8muscle

    hell of a gap down, watch out for the attempt at retracting

  • peterey

    Some EW and fib proportions on SPX daily:

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

  • http://gemstowear.etsy.com Jan

    i've been trying to buy QID on three diferent platforms with no fills. anyone else having problems? am i in the twightlight zone?

  • http://www.tradingsign.com/ T. Waffle

    LONG FAS @ 2.47

  • Vardoger

    not covering call spread until we see a retest or the 650's fwiw. Let's get it over with. Will be long ERX, TNA, FAS calls off target levels. energy stronger this morning

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

    That will be why QID is down over $2 since the open. Gap up then aggressive take down by not filling orders.

  • jabber

    The EWP says to use percentages in cases like that. Use both points and percentages though, not just one or the other.

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    I'm showing a 5 tick market w/only 300 up – were you using limits or market?

  • lester

    Erikd da Bear,
    I am sure you are out there watching. Appreciate your updates. If you see a good reload level in the XLF short play today, I hope you can post it. I locked in all my gains on Fri but hope to reload today if the price is right.

  • http://www.hotoptionbabe.com annamall

    I went net long Friday late p.m. Wow what a reversal this a.m. Hope everyone's weekend was great.! In Tampa it was Chamber of Commerce Weather! Fantastic

  • http://www.facebook.com/screasy v8muscle

    wow these buyers are busting a nut here…. but with every parabolic chart there is a similar drop

  • Lordted

    Futures are lagging well back here… Not a good sign for longs at present

  • Squidman

    Absolutely incredible zero performance out of the gate!

  • Basilfawlty

    Molecool:

    Thanks for a wonderful site. I have been a silent observer for the past month.
    I must say I am also obedient; “obeying” and “again obeying”.

    I also enjoy reading comments by Ericd, Count, de Monee, T waffle, Standard and Poor, Keirsten to name a few.

    Thanks for the useful comments and guidance.

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

    Trading with a Force 4 Hurricane 200km to the East of us here in Hervey Bay Queensland. Heavy rain at the moment. See Hurricane track here: http://tinyurl.com/3k839.
    Did the MM's miss the opening gap because they sure closed it in a hurry. SPX's opening rise mirroring Fridays close on the 5min.

  • lester

    Basil Fawlty – one of faves

  • BigHouse(Aka Mr Vix)

    The bull market is back lol

  • http://www.hotoptionbabe.com annamall

    Closed out 1/2 SKF puts for a nice gain! Thanks for the suggestion on Friday!

  • Douala

    Looks like Blue is coming into play. Or is it too early too tell?

  • Basilfawlty

    I knew I forgot someone.
    I enjoy your comments on this site.

    And yes, I still own the hotel; and Manuel still works there. Drop in sometime.

  • Stretch

    ErikD, I saw your earlier charts on XLF dipping below the channel. What is the expectation today? Back in the channel or are we going above it? Or something else?

  • Vendrell

    Too early to tell. At a minimum, we need hourly confirmation over 700.

    disclaimer: adding ES shorts at 692ish

  • Zeusmith

    Good call on gold being weak Moley. Picked up a few thousand shares of DZZ at the open. I know there are more lucrative plays out there, but this one seemed like a no-brainer. I like the fact the the entry and stop points are clearly defined, and the risk/reward is fantastic, although may not be most lucrative play for market rally.

  • katzo7

    Bought FAS and DDM
    Look at 10 min. SPX w/ MACD, crossing zero line.

  • Vardoger

    2-4 trendline will break at roughly ~706 spx

  • http://www.srsfinance.com SRSFinance

    Blue may be in play. Smart money turning bullish: http://www.srsfinance.com/stock-market-commenta

  • lester

    30% position in FAZ Calls for daytrade.

  • Rmunsun1

    TraderTamas,

    Why are you so certain energy is going to lead the charge back up?

    Thanks.

  • http://www.srsfinance.com SRSFinance

    I'm not chasing there though. I just exited my FAS opened late Friday. Will look to reload at lower prices. These early Monday spurts usually end up getting faded. If I miss more upside, NBD.

  • http://www.tradingsign.com/ T. Waffle

    All long position closed now shorted /NQ @ 1083

  • katzo7

    IMO, be careful right here. If we go higher things have changed (IT). If we go lower, still in a down trend.

  • http://www.facebook.com/screasy v8muscle

    buyers are MIA

    trend break confirmed. should move lower now. big volume spike on ES also

  • fuzzygreysocks

    Bought SWVOP SPY MAR 2009 $68 puts @ $2.10 : http://tinyurl.com/ata54o

  • http://www.srsfinance.com SRSFinance

    Bought a small QID position. It's probably a day trade but if it does well I may keep it until tomorrow morning.

  • HardTimes

    Not sure if I want to speak too soon but that may have been a successful test of 6.43 on XLF…

  • rhae

    I see nothing on the events calandar today… could be a sloppy day

  • Vardoger

    Gartley pattern?

  • lester

    bought Mar QQQQ Puts for daytrade. I will not hold any March options overnight. I am buying March instead of April because potential gain is greater.

  • mtst

    Define succes lol

  • Vardoger

    +1. hit em all day long T. keep the comments coming, I think you are on it. hedged but looking to get very active off the lows.

  • lester

    You mean that down trendline is still intact, correct? XLF will not trade over 6.43 at least today, unless news breaks.

  • jabber

    H&S on the 1minute /es.

  • http://evilspeculator.com molecool

    NEW POST!

  • Lordted

    What index you seeing a Gartley on? – QQQ?

  • http://www.tradingsign.com/ T. Waffle

    Thanks man,

    I will keep you guys updated.

    I am holding /NQ short right now.

  • BigHouse(Aka Mr Vix)

    Looks like Silver is going down as planned. I will stay short until the $9 level.At least. long term hold.

  • fuzzygreysocks

    Thanks, Katzo.
    >> And if you had 10 EWers in a room you would have 15 different chart patterns labeled. <<
    I knew there was a reason why I had a hard time with EWT.

    Since I'm learning and asking I consider your guidance as directive rather than corrective, as such, I do appreciate your help.
    And if being a mean, onery SoB that just sticks around like a bad rash = iconic, then… Hi!
    I'm Fuzz the icon!
    LOL!!!!

    You gonna be an icon too? <chuckling>

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