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Zero Wrap Up

by The MoleMarch 4, 2009

Today was a pretty good day for the Zero despite the intra-day whipsaw:

We got a solid long VTA which remained active even through the drop down to 705. I think the addition of the Zero Lite probably helped a lot of folks take profits at the top. If you look carefully you can see another divergence in that the price pushes up once more but the Zero signal is already pointing down. Of course at that point you have to get in right away – and you don’t know if it busts higher. That’s why RLs, fibs, and good old TA (not tits & ass – technical analysis) are helpful in identifying resistance/support zones. And that’s why you step in – the Zero just confirms your position as the signal degrades.

I’ll chime in later today once I pour over my charts a bit more. I think it looks bad for the bulls right now, but this might not have been it just yet.


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.
  • katzo7

    Mole,
    Please do something about the appearance of a new troll, or an old troll in new sheep's clothing.
    Let me revisit some comments he iterated towards posters here:
    it takes two to make a market asswipeh
    Jabba-the-hut calling for a crash?
    i don't know about you – but i don't like my ladies to have balls.
    AND many more all day.

    AND HIS COMMENTS
    do you see me hassling anyone?
    Jesus you guys are babies

    DON”T LIKE FEEDING THE TROLLS BUT THIS NEEDS TO BE LOOKED AT IMHO

  • Vardoger

    megaphones galore on the /es lately. the rest of the week should be active….

  • Vardoger

    megaphones galore on the /es lately. the rest of the week should be active….

  • http://gemstowear.etsy.com Jan

    Zero lite saved me from an ass ripping…..

  • J-So

    Keirsten upon reviewing the pattern I thought to be a bear flag I believe that pattern is STILL IN PLAY. When I compared today's action to that over the Feb23-26 flag there are a distinct similarity in how they ended. On Feb 26 the SPX pierced the upper limit of the flag AND the upper bollinger band and then reversed downward. It appears that the same thing happened today. We dropped 50 SPX points from the top of the flag that time.

    http://stockcharts.com/def/servlet/Favorites.CS

  • fadethetrend

    you have to be kidding right?

    maybe mole reads everything or maybe he doesn't – but that's about as accurate as the intelligence for the war.

    taken completely out of context.

    man do you need some focus – going through my comments and taking the juicy parts without the prequel commentary. you my friend have too much time – or was on the wrong side of the tape today.

    for the record i have not hassled anyone that hasn't hassled me. get a grip and stop wasting the boards time with our own argument. wholly cow. justice would be served if mole banned you guys for being such babies. christ!

  • KC

    Hi mole – newbie / first time poster here. took a chance and went long SRS when zero lite was at +2.4. Went in a bit too early but I did made a tiny profit out of it. : )

  • Keirsten

    Hey J-So- responded to you on the last post. 😉

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

    Those who are long READ THIS.

    If /NQ breaks the 1095 support then there is no support till 1055 for /NQ. Be very careful with your long play and please use stops.

    I will post some chart and tomorrows P-P later tonight.

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

    If you are not a troll you should get an icon.

  • ptthaas71

    Jan, Could you please explain how to use Zero lite ?
    Thanks!

  • ZigZag

    SPX hourly formed my most reliable “TIMMY” pattern at the close..

    http://tinyurl.com/atml4c

  • ptthaas71

    Nevermind, I just saw the tutorial up above

  • J-So

    Thanks. I look forward to your analysis.

  • http://zstock7.com/ zstock

    This has to be the world's biggest falling knife ever, and it's finally reached the bottom—
    EIX hit my $24 entry price

  • Duuuuuude

    By 15 hours, does the chart mean trading hours?

  • jacksoo

    Hi Zig – sat out the nonsense today, slept mostly, big five figure draw down but reversed quite a bit last 10 mins – helps to have 'seen this' before – I've got my sell orders in at around 675 which i think is quite conservative – was thinking of 665 but don't wont to be greedy. Question I had for you (a) the hours you mentioned are based on trading hours or are you saying numbers of hours from now?

  • http://www.triathlontrading.com TriathlonTrader

    That is a sweet chart…..

    Is this your prediction for tomorrow?

  • Keirsten

    I love your charts Zig- they make me LOL every time.

  • beafradebearaid

    Thomas Lee, US Equity Strategy at JPMorgan writes: “Believe or not, retracing 12-year lows for the Dow is an incredibly rare event. Besides the retest of 1997 lows seen on Monday, this has only happened two other times, on April 8, 1932, and December 6, 1974.”

    Given the rarity of the event, it is worth taking a closer look at the past instances: The 12 year low in 1932 was ~three months before the end of the bear market. In 1974, it was exactly the low for that bear market.

    Dan Greenhaus of Miller Tabak adds, in both cases, “the economy continued contracting beyond the bear market bottoms; this is typical of rrecessions. Unemployment continued rising and GDP remained weak. The 1974 Bear market ended in December, but GDP contracted even in the Q1 1975 at a 4.7% clip — the worst GDP Q of that entire recession. Despite this, the Dow managed to rally 24.65%.”

    Hitting a twelve year low is by no means is proof the bear market is over. And, two prior examples does not a sufficient sample make. Financial and housing sectors remain in a state of paralysis, and while substantial levels of stimulus are coming, eveer larger deficits are coming too.

    Regardless, the oversold nature of the market, as well as the virtual straight down drop that brought us here, does present a real possibility of a strong market rally.

  • beafradebearaid

    Thomas Lee, US Equity Strategy at JPMorgan writes: “Believe or not, retracing 12-year lows for the Dow is an incredibly rare event. Besides the retest of 1997 lows seen on Monday, this has only happened two other times, on April 8, 1932, and December 6, 1974.”

    Given the rarity of the event, it is worth taking a closer look at the past instances: The 12 year low in 1932 was ~three months before the end of the bear market. In 1974, it was exactly the low for that bear market.

    Dan Greenhaus of Miller Tabak adds, in both cases, “the economy continued contracting beyond the bear market bottoms; this is typical of rrecessions. Unemployment continued rising and GDP remained weak. The 1974 Bear market ended in December, but GDP contracted even in the Q1 1975 at a 4.7% clip — the worst GDP Q of that entire recession. Despite this, the Dow managed to rally 24.65%.”

    Hitting a twelve year low is by no means is proof the bear market is over. And, two prior examples does not a sufficient sample make. Financial and housing sectors remain in a state of paralysis, and while substantial levels of stimulus are coming, eveer larger deficits are coming too.

    Regardless, the oversold nature of the market, as well as the virtual straight down drop that brought us here, does present a real possibility of a strong market rally.

  • unSane

    And if you are a troll you should still get one.

  • unSane

    And if you are a troll you should still get one.

  • bullethead

    board is dominated by bearish sentiment – so I tend to think it is good to have a little counterpoint. variety is the spice of life. not sure about your euro comment, but it did trigger one of my remaining braincells to noodle over it this evening. cheers (disclosure – I closed out my shorts at 705 earlier this week, nibbled on FXP today and have a hard time seeing the bull's point of view at this juncture)

  • jaxon

    Mole-You and 2Sweets are the bomb. Was able to play it both ways. As for grabbing puts, my thought was if it continued up I'd just keeping adding to them. WTF, there is no catalyst to keep this thing up. In addition, it was such a steep ramp under the circumstances.

    I think people are finally beginning to realize that this thing is way out of control. The debt is staggering and growing. The Fed & Treas. are whisling at the graveyard gate while pissing in the dark into a very strong headwind with their fingers crossed. Honestly, why would anyone want to buy our debt. My thought is that things are going to fall apart much sooner than later.

  • slartybardfast

    You crack me up.

  • ZigZag

    Hi Duuuude,

    Yes, but it can go there actually at anytime….The time to target is my least favorite.

  • Phantomflash

    Hmm, this is curious — just an observation, but I'm pretty sure there was another green buy line coincident with the 2-3 PM bar (Eastern time ) which stayed after the bar was complete, but in the end-of-day version, it's gone. Also, right after the 1-2 PM bar was completed, the white line was touching zero before it turned up, whereas in the final image it approaches zero but stays 7 or 8 pixels above it. (I wasn't watching closely enough to know exactly when these changes happened.) Occasionally I've seen these kinds of after-the-fact changes in other indicators, but of course the less it happens, the more useful the indicator. Have you noticed this before, and Is this something that happes very often in the Zero?

  • jigdaddy

    duuuuuude,

    where is the CCI 50 on tos prophet charts under studies? couldnt seem to find it, all i see CCI w/ breakout signals. Thanks!!

  • nyse

    Thank you sir. Quality as usual. Do you happen to have an update of the VIX chart you'd like to share. Thanks if you do; thanks if you dont.

  • katzo7

    Nice! How come he is looking at the audience, have never seen that.

  • malusDiaz

    thank ya, i'll be watching =)

  • katzo7

    Is there a difference between having an opinion and demeaning others who differ, right?

  • http://gemstowear.etsy.com Jan

    Looks like mark to market may be their last bullet. This could have a major market impact if MSM talks it up before the hearing:

    http://tinyurl.com/dggol8

  • de3600

    yes buy the rumor time

  • TomOfTheNorth
  • gagelle

    Check out how GE is being taken apart by CDS speculators on Karl Denninger's web site.
    http://market-ticker.denninger.net/

    Then look at how these unregulated instruments were pushed through the day before Christmas, 2000, on Wikipedia (CDS History) This law was made for wealthy speculators to get around any form of regulation. Again, the little guy (common stockholder) is screwed. By the way, this CDS regulation was signed by Clinton. So far Obama has done nothing about it.

    I'm an Independent. Just angry about the way our nation is being raped by crooks from both parties.

  • ZigZag

    Hi Jacksoo,

    Well, you picked a good day to sleep. :-)

    The time to target is trading hours, but it can happen at anytime before that actually….

  • Erikd

    he is reincarnated CNBC08

  • GoingForBroke

    Ist day with zero and my monthly fee was paid back at least ten fold when it kept me out of FAZ when XLF broke down below Eriks support, only to reverse in the eod rally.
    Thanks Mole.

  • katzo7

    He is?
    New this was smelly

  • StainlessSteelChicken

    Got stopped out of FAZ at $83. Had to be out of the house for several hours so I set a pretty tight stop before I left. Not sure yet how I feel about it since I still need to autopsy today's tape, but I guess I can't be too upset at a 55% gain. I rode this trade a lot longer than I would have just a few months ago — primarily because folks on this blog have really helped me to trust my eyes and not my emotions. Regardless of whether I made the “perfect” trade or not, I know I'm making progress. So thanks guys.

  • molecool

    Okay, where are the remaining 9 months of subscription? I'm waiting…. 😉

  • molecool

    Where have you been?

  • http://evilspeculator.com molecool

    SNORT!!! :-)

  • http://evilspeculator.com molecool

    SNORT!!! :-)

  • http://evilspeculator.com molecool

    Nice – money is money.

  • http://evilspeculator.com molecool

    Nice – money is money.

  • slartybardfast

    katzo,
    I am on your side, but you are replying to the same troll.
    bullethead = fadethetrend
    The first troll (fadethetrand) had 2 days history on disqus.
    bullethead has less history on disqus.
    Would this be a coincidence that one is backing up the other?

    Best not to feed them. But we should challenge any future contributions.

    I fed this toll before I knew he was a troll.

    Hopefuy mole will ban both soon.

  • molecool

    I think you can fit a few more lines on that one.

  • http://wadecapitalmanagement.typepad.com/blog/ Duuuuuude

    Well, you could do it in Prophet doing this: http://screencast.com/t/i5dESzcM

    Or you could do it under TOS by doing this: http://screencast.com/t/yyX6anfb

  • http://wadecapitalmanagement.typepad.com/blog/ Duuuuuude

    Well, you could do it in Prophet doing this: http://screencast.com/t/i5dESzcM

    Or you could do it under TOS by doing this: http://screencast.com/t/yyX6anfb

  • slartybardfast

    exactly what i was thinking

  • slartybardfast

    exactly what i was thinking

  • ZigZag

    Hi TT,

    Yes, I'm thinking either tomorrow or by Friday…..As long as the SPX stays below $725, this target should work..

  • GoingForBroke

    Hey, I might go bust tomorrow, and I'll need that 9 months to drown my sorrows.

  • jaxon

    the problem, of course, is that NO ONE knows how to price these derivatives-or what they are going to be worth. we may very well be only a little more than half way through the housing mess. in addition, the dynamics speak to a spiral downward. i read a stat that somewhere near 50% of people fear for their jobs. where does this leave the consumer. mortgage debt. car loans. credit card debt. retail sector. commercial real estate. manufacturing. in addition, the proposal for an overhaul of the tax code is way unsettling.

    add to this, an administration that is going to cut the deficit in half while spending 3.6 TRILLION. reality check PUHLEEZ. did we all just fall off the turnip truck, or what?

  • molecool

    Consider it done – banned his IP. If he comes back he'll take it up the ass again – I can do this all day.

  • http://www.triathlontrading.com TriathlonTrader

    I love it. I will sit tight then. GREAT Chart.

  • slartybardfast

    keeps showing up under different, but new, aliases

  • http://gemstowear.etsy.com Jan

    It's all they've got left to keep the garbage propped up. This is all becoming a bit frightening to me.

  • Erikd

    he still cannot post a chart after his reincarnation..

  • slartybardfast

    Thanks Mole.

  • Erikd

    you remember what happened last time when he tried to fade me..

  • http://gemstowear.etsy.com Jan

    that, plus removing the mark-to-market rule in favor of the banksters.

    if GE goes down, we all go down.

    yea, where have you been?

  • jigdaddy

    Thank you!!

  • jaxon

    we have every reason to be frightened. take solace in the Chinese curse/blessing: “may you live in interesting times”. how’s that for irony?

  • Erikd

    XLF EOD wrap up.. want to see why the .09 down today on XLF is oh so big and makes all the difference.. take a look at these 2 charts and look at the daily green trend line from the nov lows.. look how it closed on it yesterday and below it today. i bet you never thought that .09 cents could make that kind of difference, you will see what .09 cents means tomorrow…
    XLF http://screencast.com/t/tY36mvrkGjK
    XLF http://screencast.com/t/qI7dUG7o19
    take a closer look at the second chart that lets you take a peek into my world of TA… no crystal balls just price action and lines on a chart… 8>)

  • jigdaddy

    you would of been proud tof me today coach :-)

  • Erikd

    you will be rewarded for it…. look at my post above and you will sleep dreaming about the possibilities looming. 8>)

  • alphahorn

    nice trade you'll have plenty of time tonight or tomorrow to get below 83, and i would!

  • http://www.triathlontrading.com TriathlonTrader

    Moody's cuts J.P. Morgan Chase rating outlook to negative

    http://www.marketwatch.com/news/story/moodys-cu

  • Red

    Denninger has it wrong here. He's mistaken on a few points that are significant:

    1) GE CDS trades do require an upfront payment, no different than the margin they would have to post if it was on an exchange. Today that amount ranged from 20% to 15%. All the indignation in the world cant change it, he simply doesnt know what hes talking about.

    2) Its not a self-reinforcing loop like he describes. He missed the original demand. The fact that the buyer of the CDS is willing to pay a ton for the protection for their bonds means they are very concerned with that risk. As it stands they can can buy a CDS and transfer that risk. If CDS's didnt exist the bond holder (usually the CDS buyer) would still dump that risk somehow, they would either sell the bonds outright or hedge them by buying puts or shorting common. The same heavy selling of common would occur.

    Blaming CDS's is as stupid as blaming short sellers. Especially in the case of GE, they arent a bank that can experience a virtual run when confidence is eroded by a plummeting stock price. Denninger is a solid provider of the increasingly popular 'pessimism porn' but there is a reason he'll never get farther than the fringe media.

  • katzo7

    Thanks Mole. We all appreciate it. Guess I can be looking forward to getting a letter bomb. LOL

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

    I'm so confused… I've never seen anyone else draw trend lines like you do.

  • jigdaddy

    thanks for letting me figure it out today, even though i needed reassurance, i appreciate you letting me figure out today for myself…now don't ever do that again 😉

  • alphahorn

    now that's funny

  • alphahorn

    Cain needs medication

  • http://www.mylifemytrade.com MyLifeMyTrade

    FAZ did close below 83… but I dont think there will be too much time to get into it below 83.. Tomorrow FAZ takes out 90… possibly get to 92..

  • http://www.mylifemytrade.com MyLifeMyTrade

    That should help with the FAZ and SRS calls that I got.

  • MyLifeMyTrade

    I am guessing you mean to say that now that we are under that trendline.. we do not look up …. only down.. I would love that even if that is true for a few days.

  • alphahorn

    i think she is perspective

  • alphahorn

    thanks Mole

  • TomOfTheNorth

    Oh, no doubt! What did he lose, $950 million??

  • katzo7

    We put up with some BS today, all resolved now Alpha

  • katzo7

    I'll be there

  • Erikd

    pull a trendline from the low close on 11/20/08 to the low close on 2/23/09 and extend the line. then pull up a 2 day 2 min chart and you will see the magic of trendline analysis…. its only one line to pull… 8>)

  • http://www.triathlontrading.com TriathlonTrader

    yes, this and Erik’s analysis should juice them good.

  • Artrader

    took everything I had not to exit my position early today. but stuck to the plan and spent the day cut and pasting your old comments. It will be a quick reference note book. Maybe I can send it to you when I'm done and you can glance at it to make sure I didn't miss anything?

    thanks,

  • http://www.mudia.com/ hammerma

    Mole, great site. Thanks.

  • alphahorn

    Mole, I'm sure I'll get flamed for this and it's right before my nose, but for the life of me I don't see someone who wants to sign up and pay for the ZERO can do so, is it on every page? if so where? thanks, but if I can't well maybe there's someone as blind as me out there.

  • lester

    Erikd – what does the 8> mean on you post and on the graph. Great analysis BTW.

  • Erikd
  • Erikd

    had company today and was in and out, hope everyone stayed short today, you will be rewarded for working the plan the plan the plan….

  • Artrader

    you got it, I'll clean it up and get to you on the weekend.

  • Anonymous

    Anyone have any thoughts on the HUGE declines EOD on HYG and JNK? They sold off much harder than the SPX. Could this lead us lower?

  • http://www.mylifemytrade.com MyLifeMyTrade

    In fact right now, AH, FAZ just dipped below $80… the pig XLF just went positive.. I wonder what happened…

  • http://www.mylifemytrade.com MyLifeMyTrade

    I think we ended neutral… tomorrow and day after is the tell…

  • willc

    We shall see if we have buy the rumor (today) and sell the news (tomorrow) reaction to China's stimulus plan. Big fight between commodities vs. financial today.

  • StainlessSteelChicken

    la la la la la I can't hear you, I can't hear you

  • AKJ

    Alpha,

    Go to the actual sign up page. Above all the information you need to submit, you will see a “pay manually via paypal” link.

    It's not all that intuitive and I initially signed up and then had to navigate back to that page and then click on the link. It is not something you will be prompted to do after signing up and submitting your information.

    Hope this helps.

  • http://www.mylifemytrade.com MyLifeMyTrade

    I did not understand what you are trying to say

  • BigHouse(Aka Mr Vix)

    It means hold your teddy bear tight tonight lol

  • http://gemstowear.etsy.com Jan

    It's a smiley face, lester.

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

    8> = heart.

    You can also interpret it as Boobs from side view.

  • molecool

    No after the fact changes. When I added the Zero Lite this afternoon I accidentally left the left side (Zero Senior) linked to the ES. I then mapped it to the SPY after noticing the discrepancy – that's probably what you saw.

  • Dutch

    Hey Sgt, I heard you like it up the ass.

    (my fav line from Saving Pvt Ryan) Had to throw it in!

  • molecool

    “a solid provider of the increasingly popular 'pessimism porn'

    Damn, why didn't I think of that one. The genesis of a new genre :-)

  • Erikd

    perspective was long FAS at around 5.12

  • molecool

    Jeezzz – it's 1995 all over again….

  • de3600

    When McCain was asked to name the No. 1 porkiest project in the bill he said it was the $1.7 million for pig odor research in Iowa … no joke.

  • alphahorn

    which page is the sign up page???

    Just a note to Mole, i'd put a button on every page that links someone to the Zero sign up page

  • MyLifeMyTrade

    WFC going into death spiral..

    Early last year it was BSC, in Oct it was LEH, in Nov it was C, in Mar, it will be WFC/JPM… Come to papa… Erik, I am having serious doubts about your predictions on XLF… IMO, it goes much below $4.

  • molecool

    We're having fun over here – drop by more often.

  • molecool

    Let's not trade the news, shall we?

  • lester

    Well this was an interesting day to say the least. Started day 50% short and down 10% overnight. Worked my way back to 5% gain in first couple hours. Added a bunch of FAZ Calls as XLF went below 9.85. Then got hammered as XLF did not drop much more and rose above 7.1. I had to leave at 3:15 for meeting and was 20% down. Came back form meeting at 6 PM and see finished 7% down. I would have actaully had a nice up day if I had added the FAZ Calls in before 10 AM, but I try not to make any decision before then. Even though I am 95% short, I think I will sleep OK because I am up by 30% compared to 2 weeks ago. So even if I give some more back I will still be OK. Sorry to bore you with my story but I saw that a number of you had responded to my earlier posts.

  • molecool

    Well, it just happens that industrial cattle <a href=”http://www.scribd.com/doc/6428321/Air-Pollution-and-Odor-in-Communities-Near-Industrial-Swine-Operations”produces a huge chunk of odor which affects the health of people around them. I know it sounds funny but it's actually a big problem.

  • Count_de_Monee

    Mark to market BS, again.

  • NinjaPenguin

    Hi Alpha,
    If you click on the Zero image on the top right, it'll take you to the sign up page.

  • StainlessSteelChicken

    I'm in denial — I don't like what you said, so I pretended not to hear

  • Keirsten

    Nah- it's Erik in his shades. You peeps need to get your emoticons down.

  • Squidman

    I have to confess that I reverse engineered your line drawing early last week and have been amazed at the accuracy. Thank you again–hope I get a chance to reload with the profits I've made since!

  • MyLifeMyTrade

    BAC went into single digits on Jan 14 – 3 days later it was trading near $5.. SKF went from $140 to $200.. FAZ went from $53 to $87.

    C went into single digits on Nov 11 – 7 trading days later, it was trading at $3.xx … SKF went from $164 to $300 … FAZ went from $63 to $200

    WFC went into single digits TODAY – imagine the possibilities of what is going to happen by the next weekend… And guess what, we have a double play this time around… By the time WFC is in $5… JPM should be teetering on edge of single digits…

    Come to papa…

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    When bad things happen to good traders…
    http://tinyurl.com/2yhvfb

  • Keirsten

    Alright, before I start making dinner over here… very interesting candle pattern on both SKF and FAZ for you junkies. I need to look at this a bit more, but you have two possibles, and if anyone else wants to chime in, jump in…. You've either got three white soldiers (bullish going into tomorrow) OR you've got an Advance Block (bearish) . IOW- change 'o direction. Bulkowski says the Advance Block is a failure 64% of the time anyway.

    Here's the patten on the last three candles EOD today:
    http://stockcharts.com/h-sc/ui?s=FAZ&p=D&b=5&g=

  • unSane

    +1

    Denninger is the king of not knowing what he's talking about but sounding like he does.

    EG all that crap about massive June puts on GE. It was a tiny proportion of the float and could simply have been a large institutional holder hedging.

  • slartybardfast

    Maybe for lester it is 😉

  • Erikd

    LMFAO

  • gagelle

    Didn't know that Denninger had it wrong. I don't know enough about the topic to be able to judge Denninger's knowledge of the subject. Thanks for your input.

  • Keirsten

    Indeed. Ever been driving near Chino with the windows down?

    http://www.pamibe.com/2008/12/epa-to-tax-cow-em

  • unSane

    M2M is a big problem because the valuations which a marked to market may vastly underestimate the real economic worth of the underlyings, simply because the market in these things is completely fricken' broken. You can have a tranche of good-performing debt but you have to mark it to market at whatever a bean counter decides is comparable. Clearly there is an ocean of junk debt out there and I am not convinced that suspension of M2M is the solution, but M2M has certainly become part of the problem.

  • gagelle

    Sorry molecool. I'm saddled with personal problems and haven't been able to participate, trade or do much of anything. All I can say as advice is: don't get divorced. It's emotional and financial disaster.

  • MrTrader

    From B.Ritholtz

    Regardless of your long-term views (mine, as it happens, are bearish), it’s hard to look at the accompanying chart and not feel like the market is setting up for some sort of corrective bounce.

    As of now, the S&P 500 index is about 35% below it’s 200-day moving average, which is not far below the one-day gap of 39.65% seen on November 20th — just before the market staged a 5-day, 19% rally — as well as the record differentials hit during the Great Depression, which also proceeded powerful upside reversals.

    http://www.ritholtz.com/blog/wp-content/uploads

  • alphahorn

    I own far too many FAZ to be objective, but i'm going w/ 3 soldiers. the volatility of this market is going to produce shadows on any daily, but the length of the bodies day 2 and 3 are somewhat convincing in my jaded opinion

  • de3600

    I got 120s puts April I am just waiting the pig always falls down funny part throw it out on a 10 year chart head and shoulders hmmm looks clean to me

  • http://www.triathlontrading.com TriathlonTrader

    no way. not touching the financials.

    What do you think of shorting OIH? Every rally got sold. Crude oil rallied today, but will get sold off soon enough. There may be a lot of meat on this bone yet.

  • http://www.TheTailDoesNotWagTheDog.blogspot.com/ dnarby

    It’ll be nice to get that out of the way.

    Then we can have our final bear rally into the Summer, and do this alllll over agaaaaain…

  • Anonymous

    I agree. But not yet.

    I think we need to see capitulation before entering a multi-month rally. Could be within a few weeks?

  • GMunni

    And she cooks too? Is there anything she can't do?

  • katzo7

    And methane. They fart more than any animal.

  • molecool

    Well, look at what happened last time:

    http://screencast.com/t/NhbxcW1bXxc

  • http://www.bostonwealth.net MrTrader

    IMO FAZ is below 50 at march opex

  • katzo7

    Boy do I feel stupid, shoulda watched Keirsten's video prior to my statement. She always beats em to the punch.

  • katzo7

    How'd ya know that, you been peeping through Erik's windows again, Keirsten?

  • katzo7

    Only you would have that knowledge TW. And don't forget, I gave you a very hard time about your original screen name. LOL

  • katzo7

    Trust me BigHouse, it will all work out.

  • de3600

    CLASSIC A MUST READ!!!! http://www.cnbc.com/id/29513414

  • katzo7

    Nice!
    You have to understand though that when you have a Viking six-burner, you cannot live without it.

  • ZigZag

    Hi nyse,

    Here's todays VIX pattern. Looks like the VIX is just waiting for an excuse to ramp up soon….

    http://tinyurl.com/b9wddk

  • ZigZag

    Drugs… :-)

  • alphahorn

    might i say that jan. 20 scenario is even more “evil”

  • Erikd

    dude, yesterday you were going long XLF now the XLF is going to zero. my target was based on the ST 2-3 weeks you can see that in my history in regards to time frame. you need to balance out your emotional trading analysis and become more stable and consistent, steady your ship in the waves of the market and you will enjoy trading alot smoother on the ocean…

  • katzo7

    I go with door number 1 as I am second only to Alpha in shares owned in FAZ. Basically we control the market. Now, if we could just figure out who to sell all this shit to to make a profit right Alpha?
    And
    What's for dinner Keirsten?
    my wife made Plumrose baby back ribs which reminded me of MichaelBob's in Naples, FL. They were awesome.

  • http://greedangerignorance.blogspot.com DJ

    You know what my motto is now?

    Plan the Trade and Trade the plan.

    AND I stuck to it. I noticed that xlf not only closed the gap but closed below yesterday's close. Volume was low and I followed the plan. I am glad I did. I even bought spy puts and invested heavily in usd through various currency pairs which were going up.

    Eric, Thanks for teaching us about : “Plan the Trade and Trade the plan” I was not confused today.

  • de3600

    i know silly me

  • Squidman

    Or her view at 69

  • http://implicittrading.com Implicit Trader

    Ever sit next to my Uncle Willie after Thanksgiving Dinner?
    Ugh…….(shudder)……

    That guy’s farts can end a marriage.

    : )

  • alphahorn

    here's the FAZ version for tomorrow :)

  • ZigZag

    LMAO!

    Now, why would Cayne say that? :-)
    http://tinyurl.com/baor5l

  • BalaB

    Sorry Gagelle….I've been there man

  • DZZ

    Below is a link to the exact details of TG's attempt to halt the housing foreclosure portion of the problem.
    http://treas.gov/press/releases/tg48.htm

    The links on the bottom of the press release are very clear.

  • katzo7

    I always thought Uncle WIllie was gay? LOL

  • http://alphahorntrading.blogspot.com/ alphahorn

    go down and look at Mole’s post and my response, tomorrow should be very nice for FAZ holders

  • katzo7

    Shit, I'm still on my first wife.

  • alphahorn

    i won't care by then, in my opinion it sees triple digits tomorrow

    http://www.screencast.com/users/alphahorn/folde

  • etechpartner

    Now thats funny!

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

    Alright guys,

    Here's my target for /NQ & /ES

    /NQ

    R3 1167.00

    R2 1146.00

    R1 1123.50

    S1 1080.00

    S2 1059.00

    S3 1036.50

    For /ES

    /ES

    R3 749.92

    R2 736.83

    R1 722.67

    S1 695.42

    S2 682.33

  • katzo7

    Saw it. Thanks.

  • DZZ

    link of actual pigs details instead of pigs summations :)

    http://treas.gov/press/releases/tg48.htm

    The links on the bottom of the press release are very clear. Include 2nd forgiven.

  • BalaB

    Second's the best!

  • TomOfTheNorth

    Undergoing the same process myself – but in my case it has done wonders for my p & l.
    Nothing like the prospect of being homeless & penniless to refocus one's efforts lol

  • fuzzygreysocks

    I honestly don't understand the media fascination with how any of any of this money is being spent.
    Seriously.

    Lettuce say you're throwing a pool party with you best hundred-fifty friends & family.
    The swimming pool isn't filled with water.
    Instead it's filled with… green bananas. (I'm a gorilla. Allow me.)
    Everyone gets some green bananas.
    Then everyone wearing shorts is passed one banana.
    Anyone wearing a bikini is passed three bananas.
    Anyone wearing a hat loses a banana.
    Anyone holding a beer loses two banana but gets another beer.
    We can play this stupid redistribution game all GD day long like some freaking Monopoly game from hades.

    None of this dumb who-gets-taxed or who-has-leins-forgiven sh!t matters.

    If welfare moms earning no income get a $2,000 taxpayer check and double the government cheeze (paid for by the taxes on the top 10% of American incomes) where's the money gonna go?
    To WalMart.
    To the dairy farmer.
    Well… what are they gonna do with that money?
    Spend it WalMart & Tractor Supply Company.
    Well… what are they gonna do with that money?
    Spend it at Dollar Tree & the utility company?
    Well… what are they gonna…

    See?
    This stupid game goes on forever.

    WHY DOES ANYONE GIVE A SH!T WHO SPENDS THE MONEY?!
    IT ALL GETS SPENT.
    OVER AND OVER AGAIN!

    G!
    D!

  • TomOfTheNorth

    Jim Rogers on Kudlow ripping Turbo Tim bigtime now

  • katzo7

    I married a yid kid.

  • katzo7

    Oh yeah I get it Fuzzy. A bikini wearing girl with a hat and shorts gets, ohhh never mind.

  • gagelle

    That's funny. Thanks everyone for cheering me up.

  • ZigZag

    Oh Shoot! I missed it. Yeah, Jim Rogers does not like that office clerk Timmy at all..

  • jigdaddy

    LMAO!!!

  • katzo7

    Yeah, drop it here, we will cheer you up.

  • jigdaddy

    too much noise about xlf and faz…everyone stop, breathe, relax, go have a glass of wine, smoke a bowl, workout or do something, i just got done surfing and feel much better, but now i think i need to go back out since freakin mole posted his view on XLF (just kidding mole, thanks for that chart, i now know what to look out for) alpha, i like the response, erikd – the party is just starting…

  • BalaB

    per Gary: $805 Million outflow from the SPYs today.
    Lately it only take $250 Million +/- to signal a swing high

  • AKJ

    For those who haven't seen it, SPY topped selling on strength today with -$805 million. Most of the other names were energy related… the source of much of the strength today.

    Just another piece to add to the puzzle.

  • Thrownaway

    Oh, you guys are going to absolutely LOVE this one:

    http://www.telegraph.co.uk/finance/financetopic

    Ambrose Evans-Pritchard's article from today.

  • unSane

    bear sites are fricken' SILENT tonight

    TK, Evil, xT

    /crickets

  • alphahorn

    jigdaddy i have my own PTR, (post trading routine) when the market closes i go workout, then marinate some ice cubes in the hot tub. surfing sounds awesome!

  • katzo7

    It is EVIL's night off.
    And everyone read Thrownaway's article (just below), especially the last line. Where is market going?

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

    GUYS LOOK AT THE FUTURES.

    WOOO HAAAAAA……

  • jigdaddy

    ice cubes in a hot tub? yikes…if your ever in san diego, i'll take you out anytime, it truly is a beautiful thing..plus i live walking distance from some of the best waves down here…if you've ever been here i live in a town called cardiff by the sea, next to del mar..

  • HardTimes

    Best advice, something I've solidly learned specifically from you, and one of the most important things to keep in mind that there is.

  • ROMERO

    Just stalking our prey, positioning for the pounce.

  • http://forkoholic.com Forkoholic

    $NYMO around cycle low and shows what looks like possible divergence
    Volume is at levels where lows usually arrive
    CPCE is in very strange triangle – what the heck is that?
    so 2 out of 3 signaling the low is somewhere near
    http://forkoholic.com/images/spx030409b.jpg

  • katzo7

    I don’t see them down so much TW?

  • unSane

    ECB rate cut = strong dollar

  • alphahorn

    the ice cubes are in my glass and i'm in the hot tube 😉

    been to La Jolla too many times to remember, staying too many nights at the Valencia and not eating enough at the Cove. but all on business, need to come for fun!!1

  • phoneymoney

    Sorry to hear that, G. Hang in there.

  • katzo7

    Wow.

  • BigHouse(Aka Mr Vix)

    For those stuck in a bar.ES overnight

    http://screencast.com/t/ENeq68Rbjr2

  • slartybardfast

    I think the bears must be taking a smoke break.

  • Vardoger

    Your really talking smack on KD? He's a trader and an activist, what are you doing to try and make a difference?

  • molecool

    NEW POST!

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

    /ES is almost 8 handles down. and sliding.

  • jigdaddy

    thats what every one said right after close yesterday, and it climed 35pts..don't trust low volume futures tape…but for my sake i hope your right :-)

  • Vardoger

    Anyone know what blew up? that wasn't anything to do with a rate cut imo

  • http://greedangerignorance.blogspot.com DJ

    Q: Why would you not connect low close of 01/20/2009 to low close of 2/23/2009 vs. nov low close? For my learning……

  • BalaB

    No. You're thinking of Aunt Fred

  • katzo7

    Yeah, just saw BigHouse's chart. Thanks TW. There was huge outflow out of
    the SPY today, smart money pulling out at the top.

  • katzo7

    Speculation that GE will ask for a bail out?

  • Vardoger

    JPMorgan, Bank of America, Wells Fargo May Have Ratings Cut? That kind of dump (although only a couple thousand shares) hasn't recovered which is interesting… Margin call? Asia dumped a bit too but stabilized. Interesting, tomorrow is going to suck for either the bulls or the bears imho. How's CT tonight? turning to slush yet, lol?

  • Erikd

    you do. that is the reason why price stopped today where it did. got thru one daily trendline today, one down one to go… take a look at both trendlines on how they look on a up close 2 day 2 minute chart. always a method to the madness.. i only showed the one to not complicate the illustration and not open up to much discussion and confusion about trendlines. trying to not over complicate and over think it, if i showed all the lines people would think it was drawn by my 6 year old princess.. nice read, no more lines of any relevance now to blow thru below..
    take a look at both daily trendlines XLF http://screencast.com/t/ArR5KeR2L

  • fuzzygreysocks

    EGG-ZACTLY!

    “Ohhh never mind” is the exact approach because it doesn't matter who has what at any given point.
    The whole point of having cash is to spend it, and the moment it's spent it goes to someone else who will… SPEND IT!

    Only a simpleton would give a sh!t.

    When those dumb-ass Senators & congress people give Bernanke / Paulson / Geithner the third degree about pork barrel projects and banks getting bail outs and blah blah blah you can see it in their primitive little pig brains that they don't understand that one city's ear-marked/pork barrel project simply redistributes cash to the area, then those people spend it on supplies outside the area and on labor inside the area. The local beneficiaries spend their paychecks locally multiple times while some goes ex-local. The ex-local materials supplier beneficiaries spend their paychecks in their own localities multiple times and even ex-local twice removed.

    So whatsit matter if $700B tax dollars are spent or $700B bank credit dollars are spent?
    I can save my future tax dollars, allowing the entire economy to crash into the 1950s of one-car-garages and questionable quality of life.
    Or I can spend my future tax dollars, promoting the preservation of the current standard of living until banks can re-extend credit while the government retracts credit.

    This is so f^cking simple.
    I don't understand the anger and angst directed towards “The guilty parties”!
    OMG!

  • http://greedangerignorance.blogspot.com DJ

    Thanks. Actually, there may be one more daily trend line it needs to blow.

    – from 02/23/2009 to 03/04/2009, it will become relevant tomorrow

    that means tomorrow's close should be below 6.82 then.

    Correct? or am I making it too complex?

  • Erikd

    3/4 2009 date irrelevant for tomorrow other then a possible retracement level to provide new resistance level on any bounce back from below. this is what the chart should look like relevant trendlines in regards for tommorrow for the downside http://screencast.com/t/oh8FAykA

  • Artrader

    you have mail. … I know I said the weekend but I couldn't wait.

    Thanks,

  • Artrader

    you in southern Cal?

  • jigdaddy

    Yep in San diego area. U?

  • MrTrader

    Excellent point – Its all about your time horizon.

  • Artrader

    Claremont Calif. its in LA county

  • http://greedangerignorance.blogspot.com DJ

    OK.

    I was able to draw weekly lines like yours but what is weekly wick tip line on your chart?

    Another Q: If any equity breaks daily TL, you wait for 2 days to confirm that daily TL was really breached?

    ________________________________

  • Erikd

    weekly candlestick wick (lowest/highest price in the weekly price movement outside of the open or close of that candle)
    no i do not wait for 2 days to confirm on TL's, i reference where price is in regards to weekly/monthly trendlines and support/resistance lines. i look at the potential risk/reward at that moment. price will bounce at these TL's or move thru them.

  • Smeagol

    Can you please share, after Erik's review? My email: smeagol at trustic . eu

  • willc

    Can I ask how your weekly line was drawn? I couldn't duplicate it. Thx

  • Erikd
  • Artrader

    I'll ask him if its ok to send out and get back to you,

  • Erikd

    you know what the plan sez….

  • Erikd

    edit: the only one that has a crystal ball is T.B.Aurelius – “2crystalballs”

  • Artrader

    send me your email address and I'll get it to you.

  • Erikd

    they have seen my picture and must know what i am holding….

  • Smeagol

    So the weekly line is drawn from the closing price of week n-2 to the high price of week n. Correct?

  • Smeagol

    smeagol at trustic . eu

  • Erikd

    not clear what you asked

  • Smeagol

    I made a mistake, it's edited now. I wanted to see if I understood how you are drawing the weekly lines. Looking at the above chart posted by you, I noticed that the weekly line is connecting the 7.44 (close price from wk ending 17.02) and 6.70 (lowest price from wk ending on 02.03). Is this correct and how you're drawing the wk lines?

  • Smeagol

    So week n is the last completed week, and n – 2 is 2 weeks before that.

  • Smeagol

    So week n is the last completed week, and n – 2 is 2 weeks before that.

  • Erikd

    weekly blue TL is the closing price 1/20 weekto 2/17week then extend
    weekly dashed horizontal line is 2/17 weeks- lowest price

  • Fishrman

    You're right. Just found it interesting how these things dumped SO hard at the close. I don't know if you have ever studied them but I am wondering if they may be leading the market along with your weapon of choice, XLF. Thanks for the trendline teaching session today. It was very helpful! Added it to my “Great Lessons from Erik.” Another chapter for your book. :) Sounds like Art has a collection of your advice too. It would be interesting to compare notes. I have been short for quite a while (thanks in large part to your great analysis) and am staying that way. Hopefully next time we talk XLF will be in the abyss! Have a good rest of the night!

  • Fishrman

    So it seems that you really only focus on the most recent lows/pivots in drawing your weekly and daily TLs. Is this correct or do you also draw these TLs using lows/pivots going back years or more? I assume you also use highs as well as lows when the time calls for it. Is this correct? Thanks!

  • Douala

    ErikD

    Hope you see this post…

    You are GOOD at what you do…. And you are “The Prophet” !

    Wish our paths would of crossed earlier.. It would of saved myself a world of pain. I have Learned a lot from you.Thanks!

  • katzo7

    I am in south coast of MASS.

  • Artrader

    I'm new here so my notes are fairly new.. I'll send you mine if you send me yours…lol
    al_haveone@yahoo.com

  • Phantomflash

    OK, if I see anything like that again I'll check to see if it's SPX or not. Looks like you intend to have SPX on the left and ES on the right. (It's SPX on the left this morning–I guess that's what you meant instead of SPY.)

  • Artrader

    send me your email and I will send you what I have. if you want to compare notes.

  • katzo7

    I am in south coast of MASS.

  • Artrader

    I'm new here so my notes are fairly new.. I'll send you mine if you send me yours…lol
    al_haveone@yahoo.com

  • Artrader

    send me your email and I will send you what I have. if you want to compare notes.