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Where to from here?
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Where to from here?

by ScottJanuary 29, 2012

Scott here, with a belated market update.

Basically what has happened here is that we broke to the upside out of the triangle formation, retested it, and the shorts who were forced to cover started a short squeeze which has lasted until the present.

The weekly chart shows we are at a fascinating juncture. More or less the market faces a test here. If it passes, we are going to start a larger scale short squeeze, leaving the weekly firmly embedded in the upper bollinger.

In other words. If we keep going up from here, the bear case is dead.

What’s the bottom line here? Since nobody has any idea at all if we pass or fail the current test, get out of longs now, and give yourself a pat on the back. Don’t get short, but start to look for short positions if we get a retest of that high.

If you do get short, do not overstay your welcome. We have no evidence of change of trend. If the real trend is down, there won’t be any debate about it, it has to look like 2008 part deux. Anything but that, and its get your long trades on.

Scott


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Scott
  • http://doomsdayreport.blogspot.com cipher

    Interesting you say it has to be 2008 part deux. The /ES monthly is printing a TD. Sequential 13 sell. Guess when the last one was…

  • Anonymous

    Nice gap down AUDJPY

  • Anonymous

    I’m not ruling it out at this stage, but honestly severe technical damage was done to the bear case over the last few weeks. It is therefore a low probability outcome, which if it comes off should result in an outsized move

  • Anonymous

    may it never fill!

  • Anonymous

    Could get some fireworks in currencies, Aye!

  • Anonymous

    Should see some reversal action soon… the VXX got a Bullish Gartley.

    http://img542.imageshack.us/img542/2589/012712vxxdailygartley.gif

  • Anonymous

    On a shorter time scale, there is a TD Countdown completed on the 2 Day but still only on bar 5 of 9 in a new Setup Sell. Also in a Combo 12 Sell.
    The monthly is also in bar 2 of a new Setup Sell

  • Anonymous

    I’m going to let Niezsche sum up my
    trading for the month:

    “Human nature finds it harder to
    endure a victory than a defeat; indeed, it seems easier to achieve a
    victory than to endure it in such a way that it does not in fact turn
    into a defeat.”

    Some setups I’m looking at follow. If anyone
    sees a comment worth making, please make it. I’ll include links to
    charts from barchart.com.

    I’m looking at /LE’s green inside day
    on Friday. Days that make new highs are accompanied by higher volume
    than days that pull back. Momentum looks up: higher spike highs and
    higher spike lows, at least over the last month or so. The inside
    day on Friday could be a good place to get positioned for one more
    crack at the November high. I’m also wondering if it’s better to
    take the trade in the June contract, which has already made a new
    high and is not showing an inside day, but a hammer candle in an
    uptrend.

    /LE:
    http://barchart.com/charts/futures/LEJ12

    http://barchart.com/charts/futures/LEM12

    Two other questions for this setup:

    1. /GF has been trending more
    convincingly and is giving a hammer in an uptrend buy signal. Is it
    better to just be in /GF on a break of Friday’s high due to the rock
    solid trend?

    /GF:
    http://barchart.com/charts/futures/GFH12

    2. Is there an argument for taking the
    inside day in /LE short? On a longer time frame /LE isn’t trending,
    and Wednesday’s doji was right at the top of the range. Shorting /LE
    on a break of Friday’s low would be shorting the weaker of /GF and
    /LE. If I were to take it short, my plan would be to be very
    attentive to the candle on Monday. Another low volume day, maybe
    painting a hammer candle, and I’d reverse my position on a break of
    Monday’s high.

    I’m also looking at the beans complex:
    /ZM and /ZS are giving tight inside days with the smallest ranges of
    the last few bars. /ZM is the strongest of the bean related
    instruments and looks like it might take on the October spike high. I’m thinking of taking that long on a break of Friday’s
    high. The inside day is valid on the three closest months in /ZS,
    but not in /ZM. Does that observation add any value?

    /ZM: http://barchart.com/charts/futures/ZMH12

    Thoughts appreciated.

    -OT

  • Anonymous

    Am i seeing red, or do i have a red eye?
    I thought Greece was saved (for the nth time!)

  • Anonymous

    TOS futures stuck, anyone having similar issues?

  • Anonymous

    it’s got ZFX down

  • Anonymous

    Currencies are working though.

  • Anonymous

    same here.

  • Anonymous

    take 2 aspirin and go to sleep. By tomorrow morning it will be fine!

  • Anonymous

    things are working on prophet charts so you can use that.

  • Anonymous

    OK, will do.

  • 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„¸

  • Anonymous

    that push into the upper 100 BB on THursday started the drop into that red candle Friday morning which did damage on the 60 and 120 charts from a DeMark Sequential standpoint. 
    The 240 chart has a ways to go (80.8) before more serious damage The higher timeframes are mixed to bullish until we get Daily closes in the mid 79’s +/- A daily close < 81.46 would do the same technical damage as the the 60 and 120 to the Daily count.or a bounce later on yielding a green close on the Daily  bar could  give a possible RTV Sell setup

  • Anonymous

    Ok 🙂