You Ain’t Seen Nothin’ Yet

Here’s the short term skinny on the spoos – successful trading need not to be complicated. As Scott put it the other day – once you find your groove 15 minutes a day ought to get you on the right side of the tape:

The 1103 sell net-line was never touched and we pushed across three consecutive buy net-lines and are now even above the upper 25-hour Bollinger. I’d say we have a decent chance of reaching my first target at 1203. No guarantees but at least now we got some support levels to work with.

Now on to the really good stuff – we are talking long term outlook. I updated ye ole’ POMO chart and from that we can draw some profound (and perhaps most profitable) conclusions:
[amprotect=nonmember] POMO chart and commentary below for anyone donning a secret decoder ring. 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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Where I was wrong was that the rolling outstanding would have to come to zero before we would see some major movement in the tape. Clearly as soon as the Fed started to drain the swamp all hell broke loose and we now find ourselves 200 handles lower on the S&P cash. But if you think this was bad then wait until we reach a flatline on this chart which should happen rather soon – unless there is another auction we should reach the zero mark on…. (drumrolls!) … Tuesday, September 6th.

So this is what I think is going to happen: If the tape can at least hold the current levels we most likely will see a bounce higher into early to mid September. It’s possible we’ll see one final drop that then gets short squeezed to produce a major push up. The proverbial excrement will however hit the fan sometime in September and I’ll be there waiting with a fleet of trucks.

Caveat: Of course if the Fed produces some behind the scenes non-POMO QE3 then our time table may yet again shift. Which is why we always have to think on our feet and not get married to any particular time table, setup, directional conviction, etc.

Open positions: Long patience – short emotion.

Cheers,

Mole
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