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Focus On The Long Term
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Focus On The Long Term

by The MoleAugust 26, 2009

2:30pm EDT: I’m not really watching this mess of a market today as I’m preparing for my three day trip to San Diego. As an added highlight it turns out that T.K. will be in SoCal this weekend and I’m planning to finally meet up with him in person 🙂

In terms of charts – this is the one I want you to focus on – forget about everything else. You know what this is called? The great ‘big boys are unwinding their positions pattern’ 😉

You know what to do – forget about those short term gyrations – focus on the long term. IF we are so lucky to get another rip to the upside today I will use it to add to my growing list of long term OTM puts (about 4 – 6 months out).

Nothing else to say about this mess – it’s the whipsaw before the storm.

There won’t be a wrap up post after the bell today as I don’t have the time. I might chime in late tonight for a quick update however.


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 the usual social media waterholes.
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  • gmak

    My charts show that today is a traders’ day, meaning that there will likely be reversion (over and over) to the “market’s fair value), which at this tim is in the range of SPX = 1026 – 1026.50 (histogram is in .50 increments). This is using the MKTP funciton on Bloomberg which shows both volume and price action overlayed in histogram and mapped against a normal distribution. FWIW.

  • gmak

    MKTP on Bloomberg shows that today is more of a traders’ day than big positions (“investors”) day. As such, there is expected to be a reversion to the so-called fair value of the Market (Traders sell expensive and buy cheap). That fair value is about 1026 – 1026.50 (I have 0.50 increments on the histogram).

    The function maps volume and price action over time against a normal distribution. A histogram resembling a normal distribution means traders in charge. Fat tail(s) indicate longer term positions in charge (more than a day horizon – ie investors/institutions).

    Cheers

  • bshah

    if i may… ( Repost )
    so getting back to basic in ref. to POMO… Is it that who so ever gets the almost free money from Fed, can use it anywhere / anyhow ? And that's why everytime there POMO, we see this action, because they use to get % diff on that ?

  • annamall

    Mole on every bounce I am adding long term puts. Enough said! 🙂

  • Royal With Cheese

    Give T.K a tap on the shoulder for me !

  • http://twojackstrading.blogspot.com TwoJacks

    these charts are right. my short-term trading goes into the sh|tter everytime one of these patterns emerge, and then once the new direction is set I'm good again. it doesn't matter where it happens, tops or bottoms, I get beat up until the new direction emerges. And as I said earlier, my TRIN-Osc is telling me that a turn is upon us.

  • annamall

    Give him a kiss for me! LOL

  • TonyMontana

    Ana,

    What do you think of FAZ Jan 2011 OTM Calls as a Lotto play?

  • CandleStickEmUpper

    “Artificially Sweetened” Market Could Face “Seismic Readjustment”

    http://finance.yahoo.com/tech-ticker/article/31

    Amen to that.

  • PRSGuitars

    I'm bearish as all get-out but I'm taking the SPY Mar 80s now (might get more OTM if we continue to hover and I really put on my Smokey suit). You're taking Mole's side with the 70/65 area?

    I only fear being right but not right enough… and I really do want to see the decline through (no disrespect to 'the plan', Mole). Just getting thoughts.

    Thanks Anna!

  • Douala

    Anybody use Scottrade here?
    I always have a problem with them trying to get shares to short. Does anyone else have that problem here. Since I am not an option trader is there another way to play the short side on a particular stock?

  • PRSGuitars

    Just being clear — I am getting that pit in the stomach feeling when I look at the money flow index indicators on a lot of charts (fin's included). It seems like we're really on the verge of just what we're after — all the reason to be on the defensive. Expanding my delta into the negative by starting a load of Mar 80 SPY puts and adding to Sep/Oct SPY 103s. Creatively hedging (basically trading /es exclusively long when appropriate) to make some dough on this weeeeeird day.

    Best of luck people — I think the volume right now (3pm–) is scaring me most (weak). If they take it away from us, they'll do it right about now…

  • annamall

    I am having so much fun today!! I added SPY puts everytime we bounced higher!
    Yee hahhh nice to have a bear on board PRS. I am doing Octobers as i think we have that retail investor before end of year wave, I believe it is a wave 5 .
    🙂

  • Trader_Steve

    Well they got the stops over the trendline.

    In Fideity I can see order price and size fly by. Does anyone know if the big firms have access to the entire deck including where stops are placed?

    Steve

  • annamall

    Hi T, I don't trade FAZ much, I would look for high Open Interest, tight spread for the one I did pick. I will go check it out and see if anything pops out.
    🙂

  • unibummer

    I use scottrade too, run into the same problem about 75% of the time

  • fuw
  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    Just FYI, Chicken Oscillator is showing a possible “bleed off” set up forming. Just letting you know what I'm seeing – I'm not going to be jumping into any new long trades here.
    http://tinyurl.com/ltpuao

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

    Todd is a very good trader, he was responsible for Cramer&Bercovitc hedge fund gains in 2000 collapse.
    Just bear in mind – he operates with different amounts and does not time his trades as we have to

  • Douala

    We must be getting ready for a fall. Every good stock or ETF I go to shore there are no shares.
    %@#!$^. 🙁

  • PRSGuitars

    They do, but why care unless its a boatload of stops? The obvious places for stops get 'ran' often, but thats just habit — not b/c there's money to be made screening stops of small retail clients like you and I.

    It'd take 10x the amount of money they'd be trying to make, just to push the market around enough.

  • Douala

    unibummer

    See my above post… EVERYTHING good is taken ..TYH…NVR…IYR etc… THIS SUCKS!

  • unibummer

    LOL I wish they had been out of shares on COH and AMZN earlier this summer, would have saved me a world of hurt.

  • prescient11

    For the love of everything holy, can we just see a selloff one of these fucking days. I mean, it's been almost two weeks with nothing but green…

  • annamall

    We are are same page, Jack, that's why I keep adding those puts on every bounce! :)))

  • PRSGuitars

    Sorry — i wasn't clear enough — just asking if you're equally as OTM with the long-term puts. I'm in the SPY 80s (Mar), will change things around/add strikes and expiries as necessary…

  • mrclam

    Kind of wish I had sold some put spreads as well now to neutralize some of the theta burn I'm eating now! I still think that this eventually will resolve to the upside.

  • TonyMontana

    Like I said, this is a Lotto Play, and I'm fully aware of the decay characteristics of these 3X ETF's…..however if we do eventually get a market correction/crash (Primary 3), then it “may” yield a significant return as investors start piling into this particular ETF…..think SKF earlier this year and late last year 😉

    Disclosure: I'm long FAZ Jan 2011 50 (Lotto) Calls

  • mrclam

    If you look at bearish sentiment here on ES and slope, that could also be a sign a big squeeze is about to happen 🙂

  • disrespekt

    You guys know I love to harp on the oil situation…here's more bad news:

    http://seekingalpha.com/article/157824-mexico-s

    Cantarell was, at its peak, the 2nd largest oil field in the world (reserves are irrelevant, production is what matters). It has fallen off of a cliff. We've shed almost 2mbpd of production from this ONE field alone in the past 4 years.

    Demand has fallen due to recession, but so has supply. Satellite photos above Saudi Arabia's supergiant fields apparently show that the ground is collapsing. Position yourselves accordingly.

  • PRSGuitars

    Not to just jump in, but I forsee FAZ going the way of the dinosaur relatively soon. Decreased trading volume due to popularity (or crazy split tactics, regulation, or general wackiness and us getting sick of the levered ETFs…) would RAPE those options.

    Please be careful — you're dealing with derivative contracts based on ETFs that use derivatives and leverage to give you returns comparable to — gasp! — a crazy synthetic crack den of options BS. I understand it's lotto, but just saying — you might be better off with a straight up XLF put (or a JPM put or something).

    Look for the WORST case scenario — like, way back in 2007, I was looking into LEAP options (like you are now) for AAPL — 250, 300 strike. Wtf?

    This type of market — or ANYTHING except for an explosive bull — would've destroyed my plan simply via theta alone. Just throwing that out there (and yes, what a crappy bull trader I was…that was pre-trading, really, just saying, I've done my stint of nubbiness…)

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

    think about it – those who are selling now – how selloff will benefit them to unload at the best prices?
    I doubt we'll see REAL selloff until it is too late

  • PRSGuitars

    True — I too am using /es to hedge because it's simple and I can operate AH. But only because I will spread the Sep/Oct puts as soon as we drop 2 SPY points or something significant… then my plan will come to true fruition!

    Seriously, though, you're right. Good theta makes me a happy camper…

  • Vardoger

    I am wondering the same thing. One last squeeze? Very difficult to read here, looks as though we are in a wave 4 and it should resolve to the upside IMO but with GDP, initial claims in the am and big % stocks like XOM at major resistance the case can be made for both sides.

    I don't like the tri-star either..

    Flat for now, will play upside breakout with fut's, otherwise looking to buy my DEC SPY 85's, QQQQ DEC 35's and some xlfs, iyr, etc..

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

    I prey for that to happens ASAP – we'll hit targets then and will be short happily ever after.As it is stands right now – soem pullback for about a week and then another take off possible
    http://screencast.com/t/c1GNPo7WC

  • Vardoger

    Ground collapsing huh

    Flow of funds temporarily, unwind vicious when it does happen

  • PRSGuitars

    Just saw this post (and can see you know what you're getting into). Best of luck TM!

    I too have thought often of the lotto play — if my account were slightly larger I'd be able to reasonably segregate speculative capital as opposed to core trading strategy capital only (it's a tough world out there for us just-over-25k'ers…).

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    $CPC up 34% today as of right now… everybody and their dog loading up on puts…

  • MJSgl

    Guys and gals, I'm pretty much all-in on long term puts here, but I have to say I feel a big short squeeze is coming up. There are still some more bears who need to give in. Not that I'll mind, because I will just add to my puts, but just warning, have a feeling we're not done yet on the upside.

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

    IF qqqq closes above 40.37 – it will print combo sell daily without violating risk zone – would be nice
    overall – I don't care where it goes up or down – we are in correction already

  • bshah

    God almighty….
    once in for all, have mercy… Enough we had it… Let us be happy now…

  • Keirsten

    It's not really a true tri-star either. The body of the middle candle would technically need to be above the others. It could play out that way, but just sayin'… I'm watching that bearish wedge most of all at this point.

    I think we're too close to EOM window dressing to see any mega tank, but I'd love to be surprised as you know. 😀

  • annamall

    No I am in 100's 99's now that's ok ;-D

  • AS2009

    Bleed off = up move ?

  • Joe8888

    Oh Please,,, Man are they desperate , They now got- Jamie Dimon on CNBC ,,,,,Trying to help with the rally….

    F*&^in , give me a break…..!

  • mrclam

    I'm not as experienced as most here, I can't tell if this is distribution, or consolidation. brinkley over at moo's site is seeing a lot of bullish continuation patterns, and as we know, moo's mob makes money!

    anyhow, i have some long dated puts, and am long some quarterly vertical spreads. I think that this will resolve to the upside, but its all a matter of timing to me.

  • annamall

    I hope it goes deep deep in the $$$ for you Tony!! 😀

  • annamall

    Tomorrow economic calender that is important

    8/27/2009 12:30 US Initial Jobless Claims 22-Aug 576K 565K
    8/27/2009 12:30 US Continuing Claims 15-Aug 6241K 6230K

  • PRSGuitars

    Mar 100s and 99s? Ahhh, I see, much more skeptical than I… way to play safe (if you're referring to your Mar's — that's what I was talking about with my 80 puts [duh], sorry, I know this is overly complicated…)

  • Bankrupt

    do you buy into the theory that they engineered the financial crisis on purpose as it was obvious that oil is peaking? With crisis they were able to profit handsomely before the meltdown.

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

    ignorance is a bliss 🙂
    like I said – I don't care right now

  • prescient11

    this market is ridiculous. really, only recently has there been any changes intraday.

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    Yes, if the set up is confirmed by the short term oscillator crossing over. Hasn't happened yet, so as of right now it's merely something I'm on guard for. If you look at the chart it shows two previous instances of this set up playing out — the green boxes show the point of confirmation.

  • mrclam

    I hope we move higher too, I have much more capital I want to get short with…

  • Iguanadon

    SPY Closing Prices

    Friday – 102.99
    Monday – 102.94
    Tuesday – 103.16
    Wednesday – ???? If it's 102.99 I'm going to have to hurt somebody.

  • Stainless_Steel_Hamster

    and with my “yes” vote you have reached 333 prospective customers

    333 being half of 666 I say we do the wave down RIGHT NOW

    BTW

    this should have started in june

    BTW2

    This will be wave 5 of P3

    BTW3

    I just play ETF's and currently losing over a dollar (each) on my 10k EEV, but as mole says, there are times when short term can't matter

    BTW4

    I still see this sucker doing 1040's before the drop

  • TonyMontana

    Thanks Ana,

    If it does, rest assured that I'll be sending a bottle of your favorite wine 🙂

  • http://thetickerstreet.blogspot.com/ TickerStreet

    Puts on 3X ETFs vs Calls on inverse 3X ETFs:

    I know calls can go up unlimited but they are priced accordingly. Plus the reliability of these 3x ETFs decaying is high which is why I would just go with puts on ETFs rather than calls on inverse ETFs.

    Buy puts on both FAZ and FAS, you will make a ton of money either way. That is guaranteed.

  • Trader_Steve

    Can the government squeeze the government? That's been most of the buying and I've read most fund managers exiting caused the rally we have seen already. Who is left, I wonder?

    Steve

  • TheMacroEconomist

    Tomorrow I'll be on a trip to Boston the entire day. Knowing my luck those numbers will come out ugly right when I'm flying over New Jersey or something and the crash happens without me. 😀

    Actually I'm net 25% long right now (per my intermediate term swing system, if I can follow it this time) but in a big synthetic straddle on the rest.

    So with one push of the button I could go 50% short or 75% long. But very disinclined to do either ahead of tomorrow unless we get a BIG signal here today. 😉

  • http://zstock7.com/ zstock

    INFY this year, doesn't have the revenue or the eps to get to last years high $49, next year it'll go higher than $49

  • St Deluise

    maybe another 9 point stop swing? should be an excellent opportunity to reload a short position.

  • PRSGuitars

    GDP, 830 AM EST…

    http://fidweek.econoday.com/

  • TheMacroEconomist

    Knocking the heck out of the VIX, this flat trade…

  • Trader_Steve

    Are the use of contour readings of the surronding levels accepted technology for predicting issues with the supply of a field?

    Maybe this is why Chinese solar stcoks have rallied.

    Steve

  • TonyMontana

    Thanks PRS!

    Best of luck to you as well!

  • PRSGuitars

    Better than the crash happening 'with' you (since you're, uh, flying and all…)

    Be safe and good trading, buddy… went to school just outside of Boston (@ Tufts University…medford/somerville). Sweet town.

  • dollar

    Initial Claims and GDP tomorrow morning…

  • fuw

    My gut tells me that we might get a big overnight move, but I have no idea in which direction.

  • TheMacroEconomist

    Did you see, a number of economists revised that estimate down today. Consensus dropped to -1.5%.

    This way the actual GDP report can exceed it and boost CNBC's ratings a bit more.

  • Trader_Steve

    Don't pick me…I always carry and I would hate to have to harm a TV star I liked (g)

    Steve

  • dullmind

    Get your self options privileges. Buying puts gives you much of the same down side gains as shorting the
    actual stock, does have the advantage that your maximum loss is the price you paid for the option. Shorting
    the actual stock does not have any 'theta burn', but these days the big boys are playing games to force out
    people shorting stock as a loss. Just my humble opinion.

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

    I just sent a proposal to FED – always publish better than real numbers – they will be able to sell all the shares of all financial (as well as so called “industrial” – 'cause there is NO industry here no more) junk

  • steveo77

    http://screencast.com/t/BDOuyDptq

    ? Anyone want to scalp a short short term move on Dollar?

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

    down down down – China is going to raise oil price and stop buying US bonds!!! (this si NOT an insider info)

  • TheMacroEconomist

    Thus the big straddle.

    BTW Lester: if you're reading those percentages I wrote they're based on underlyings. Not near the money options. 75% of your account invested in options pointing all the same direction would easily exceed the risk profile of doing all of it with futures.

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

    YES- gimme green NDX close! YES!!!

  • MJSgl

    Bought Sep 105 SPY calls at 1.25. Going to hold overnight and likely sell on gap up tomorrow.

  • Douala

    dullmind
    Thanks but I have zero option experience and from what I heard it is a dangerous game to play especially for the inexperience. If I tried it especially now I would have to change my name from “Douala” to “Mindless”.

  • Bankrupt

    ok this baby just begs to be shorted on the close

  • dynamo

    I'm done watching the tape. I am 80% in with Mar SPY 80 and 70 puts, Mar QQQQ 30 puts, Jan SLV 13 puts, Mar 24 and 25 UUP calls to focus on the longer term as Mole suggests.

    I am going to try and look away for a week and deploy the remaining 20% at a later date!

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

    and he huffed and puffed at futures and could not bring brick wall of selling down

  • ckeltner

    What is the turnaround time on the sell signal if it confirms, the next day or just a longer term signal?

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

    hope you have some cash left to add on Sep15th at higher levels (not teasing – that is just what I am thinking)

  • bshah

    fuckers… brought it to Positive again.. what the

  • mrclam

    after listening to your videos, i'm just picturing you screaming yes right now 🙂

  • Keirsten

    Nice calls today DDT. 😉 It just didn't set up a good pattern for a wholesale sell-off today.

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

    I am looking at my charts – these are not HUMANS trading – these are ALGOS
    the moment the very next, no matter what time frame or kind of signal popping up – there is a freaking meaningless moves all over the map.
    Going to end REAL bad very soon
    At least I might get my 40.37+ close on QQQQ
    see you gang

  • TheMacroEconomist

    Later on when I get a minute I will check your blog. Want to see what D-Wave says when I'm looking at EW.

    Without counting, this action looks like a triangle sort of consolidation. Flats usually have more swing than this tape.

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

    shorting small into close right now

  • Keirsten

    I keep trying to tell him, his voice is prrrrrrrrrrrrrrrrr. But that's from a girl's POV, so ignore my comment.

  • annamall

    I am right there with you David! The higher it goes, the harder it falls! LOL

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

    OK – I did get my Combo Sell 13 today on QQQQ 🙂
    night

  • Keirsten

    Good idea. I grabbed more XOM. Took myself out of the daytrade on it earlier though. Too anxious on that entry, so left before it took me down.

  • annamall

    Can you say lower highs everyday now, trend reversal!

  • innatedc

    Bought some spy calls EOD for the numbers tomorrow…..they need something for this last push up so why not lie about some more data…

  • TheMacroEconomist

    I was thinking the same thing! That maybe a neutron bomb went off at NYSE and the computers were just trading back and forth.

    Lots of noise, little signal. 1 really good day trade setup on SPX, one pretty good.

    And was this close deja vu or what? For 2nd day in a row, an attempt to park the close at the open. 😛

  • Lordted

    Any of you guys use ADX there is a BIG move coming soon… I use 10 min ADX and it is settling at 10% on what appears to be a correction by that indicator. That means a ReSet. If it breaks up we get a Big move IMO

  • pricey

    What happened with AIG?

  • Douala

    StainlessSteelChicken
    A real stupid question and NOOOO I am not blond. Have you posted what your chicken oscillator is, or is that a well gaurded secret like KFC's recipe is? I'm just saying…I mean… just asking!

  • cramar

    Marketwatch is proclaiming “Dow industrials' winning streak hits seven as U.S. equity indexes eke out gains”! You just know this thing is going to bomb! Just one more morning high…pleeze!

  • FormulaXTrader

    Me too!

  • TheMacroEconomist

    But we need more price movement! If we do 3 cents on SPY each day every day it will take 1216 trading days to get to 66.66, lol.

  • http://www.mylifemytrade.com MyLifeMyTrade

    Another “sitting on the hands” day – did a bit of repositioning. Closed OIH and FCX puts early on in the day (soon after open). Closed RIMM and AAPL puts near noon time ET.

    Added calls on FAZ, SKF & SRS – not at the best possible time.. Ended the day in green.

    Still holding on to my SPY, IWM, TNA, DTG puts

  • loaf_of_bread

    Look for losers ,soon to be winners. like ek

  • de3600

    No one on this board would even dare to argue with you 🙂

  • Hinkognito

    Very nice. I’m waiting for a lil pump in IYR to get my puts in as well.

  • mmTesla

    Today didn't take off like I thought it would, will check my charts again tonight for those HFT patterns, to see what is probable for tmro. Until then have a good one friends! 🙂

  • chumprop

    Jesus christ, look at AIG in the last 20 mins…

  • Keirsten

    Take a look at AIG in AH.

  • TheMacroEconomist

    See that? They finshed tallying up the Market On Close orders and SPY closed UP a cent at 103.17.

    Looks like final on the QQQQ was 40.30, so they are down.

    $DJI close 9,543.52, +4.23.

  • TheMacroEconomist

    See that? They finshed tallying up the Market On Close orders and SPY closed UP a cent at 103.17.

    Looks like final on the QQQQ was 40.30, so they are down.

    $DJI close 9,543.52, +4.23.

  • Vardoger

    They pumped that with crap like AIG into the close. Still think that was a wave 4 and we will break to the upside off some rigged numbers. If I'm correct and we rip up tomorrow I'm going shopping for my short portfolio:

    35% SPY DEC 85

    35% QQQQ DEC 35

    10% XLF DEC 11

    10% either IYR puts or SRS calls

    10% UUP MAR 26

  • springheel_jack

    Definitely looks like a topping formation here Anna

  • Vardoger

    That's how they do it lately, FNM, FRE earlier in the week.

  • bshah

    up another $2 in AH.. Any news….?

  • TheMacroEconomist

    And there's no liquidity AH for a rush to the exits.

    Those AIG longs holding the ASK have all the power attm.

  • dynamo

    Let it rip and my 20% cash will be ready! Hoping for a last push up to buy some higher delta Dec puts. Why Sep 15? Sorry if I missed a post of yours, very helpful by the way. Will look for your answer then look away !

  • Keirsten

    Very little overhead supply at this level too. They may take it to 44 on the squeeze before it's all said and done- not today, but it's feasible.

  • springheel_jack

    Don't know about the other systems but if Mole isn't doing a wrap-up post tonight I should mention that Geronimo/ES was up 2.75 points today.

  • Keirsten

    Quite a bear trap, and probably lots of peeps looking for a bottle of Pepto right about now.

  • DoubleNaughtSpy

    Yep. I still own my FNM I bought at $1.00. I don't know if there is another pop left in it, but it's a lottery ticket so I'm going to let it ride for a while.

  • ablebonus

    Anyone giving any credence to the tri-star doji pattern?

  • springheel_jack

    After all the talk earlier about the possibility of a shooting star today, I had a closer look at the SPX chart & saw that we did one yesterday.

    A classic shooting star actually, gapped up & long upper shadow. Am I wrong? Keirsten, what do you think?

    I'm wondering more and more whether this up move has already peaked.

    On that subject we now have three doji days just under the top channel line of the massive SPX bear wedge that has been building since March. A big move up would break out of the wedge to the upside which seems most unlikely. The next big move is likely to be down IMO.

    You be the judge!

  • AS2009

    David – can you elaborate on what you are seeing on Sept 15th timeframe ?

  • ACJ

    conditions are ripe for the mother of short squeezes though. BE CAREFUL

  • springheel_jack

    Looks like an awesome short from here though, doesn't it?

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

    the BIG move is down, but it sure looks like there will be a move to around 1044 first. triangles are wave 4 patterns before the last impulsive move. so tomorrow and friday should mark the end of this damn rally

  • springheel_jack

    Looks like a topping pattern at a channel top. Hell yes.

    I'm just hoping we see ES 1035 again tomorrow morning.

  • springheel_jack

    God I hope so alpha. I am truly sick of this rally.

    I'm sure you're right, there is room in the wedge for a move there Friday or Monday before the fall.

    If there is a big move up from there and the wedge breaks to the upside, I will eat my bear suit.

  • Keirsten

    It does … but that's what the last bears said. Far too risky for me to short right here. 🙂 Eventually somebody will clean up on it, I'll just cheer them on from the sidelines.

  • Joe8888

    SPX ……Daily Chart,,,,,,3 Amigos are Back….

  • Keirsten

    I sent you a reply on SOH, Jack. 😉

  • disrespekt

    When the ground is collapsing on near-surface fields, it’s a sign of field pressure decreasing. The oil was holding up the ground.

  • Stainless_Steel_Hamster

    if you blend them you have a spinning top

    indecision yes, bulls feeling a bit stressed? yes

    but no cigar without some looong black candles afterwards

  • springheel_jack

    Very wise. 🙂

  • disrespekt

    No…the crisis was a response to the spike in oil and the realization that the economic growth needed to backstop present debt would not manifest itself. Our entire system is predicated upon future growth expectations. Debt lets us pull that into the present and pay for it over time with more activity to account for the interest component.

    If and when economies can no longer grow due to energy inputs not growing, the entire system of what we call western industrial economics is at a rubicon.

  • mrclam

    If you don't mind me asking, how high are you willing to tolerate losses up to?

  • springheel_jack

    Are you related to the stainless steel chicken?

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

    I have exited ALL longs and am 100% short, so God help me if it doesn't!!!!!1

  • springheel_jack

    I'm building my short position. I'll have finished by Friday EOD I think & then I'm just waiting.

  • TheCrowe

    3 Amigos? Many dojis? Would you say we have a plethora of doji's?

    http://www.youtube.com/watch?v=-mTUmczVdik

  • Iguanadon

    Guys and gals, if you want something funny to read, check this out. My wife stumbled across it and it's a riot. It's updated when needed.

    http://twitter.com/shitmydadsays

  • springheel_jack

    Quick Dow Theory update.

    The transports have not confirmed the new high in the Dow. 2 points short yesterday and down further today.

    Richard Russell has a question mark over his secondary trend indicator. Primary trend still bearish of course.

  • MJSgl

    Forget AH. Look at that EOD rampup job!

  • Osso

    there is a pattern where you 1st. have a big move up , which is fake, and then, the real move comes. to the downside. Bulkovski had it explained once on bearish wedges.

  • MJSgl

    Yep, inna, I'm thinking same thing.

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    I will gladly tell you the secret formula for… *sticks tip of wing into corner of beak*… one billion dollars worth of grain!

  • Osso

    one more move up to 1045 circa.

  • MJSgl

    I agree. Fully invested in my long-term SPY puts, but just in case we get a massive squeeze on the numbers tomorrow, I bought some Sep SPY calls before close. At worst I get stopped out for a small loss if we begin P3 plunge, otherwise I'm hedged on my puts. Just think the bulltards/Fed have one more push up left in 'em.

  • springheel_jack

    That will be a great short entry. Thanks Osso.

  • BigHouse(Aka Mr Vix)

    AIG going ape shit AH

  • nugent

    can somebody explain the chart mole posted? i have no clue what to look for or to even search to understand it. thanks all

  • http://twojackstrading.blogspot.com TwoJacks

    wow that is some funny stuff. thanks

  • Iguanadon

    Don't take my word for it, but I believe he's eluding to the big boys selling their positions. Every time there's a move up, they start selling which brings things down and then the “buy the dip” folks take it back up again and the big boys start dumping again. Chop, chop and slightly lower highs as we go. Doesn't mean there won't or can't be another blow off top move up to finish things off.

  • Osso

    it confirmed the new high…but not the close..

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    MCD is close to completing a contracting triangle that will finish off Primary Wave B as well as a massive diamond top pattern that is 2 years in the making. Anyone got any recommendations on Month/Strike combos??
    http://tinyurl.com/mpranw

  • MJSgl

    Pretty funny. My favorite: “The dog is not bored, it's a fucking dog. It's not like he's waiting for me to give him a fucking rubix cube. He's a god damned dog.”

  • thunda72

    Interesting article from Mr. Mort Zuckerman:

    http://www.usnews.com/articles/opinion/mzuckerm

    Mort, BTW, is a regular panel member on my favorite political talkshow, The McLaughlin Group, on public t.v. And…. he was one of the few to call the credit crisis early on and knew how deep it would go . So I put much credence in his opinion. Plus, he's BIG into the commercial real-estate market, and we know what's happening there….

  • Stainless_Steel_Hamster

    no

    Mole used to call stainless steel rats to visitors of his blog.

    I like the H.H. novels… so

  • bist

    I wish I could be disciplined and just hang on to one AIG call all the time

  • malusDiaz

    http://tinyurl.com/ldrzl7

    Loaded up today.

  • springheel_jack

    Ah, another HH fan. Always enjoyed those books.

  • annamall

    🙂 I am so sick of this rally, i feel like puking bull juice! hahahaha

  • Joe8888

    THX,,Man,,,that was a funny clip…….

  • MJSgl

    Mole, if you get a chance could you post updates on the Baa:30yrTreas chart and the Gold:Silver chart? Much obliged!

  • OldManRiver
  • http://robstradeblog.wordpress.com/ Master Shake

    It is a good article. Do remember that he's also right in the center of a dying industry–which he is well aware of–so he may be carrying additional biases.

    So here's a question back to you:

    What will you be looking for to indicate that these macro factors are starting to reassert themselves?

    My sense is that index price will *not* be a leading indicator of future weakness. Bull markets typically roll over with obvious cracks starting to develop that are simply ignored while price goes on to make new highs. Breadth studies typically make this pretty clear.

    Here is $NYHL with $SPX below. The divergence is blindingly obvious.

    http://stockcharts.com/h-sc/ui?s=$NYHL&p=D&yr=3

    The warning shot was fired when those 2 BSC hedge funds collapsed in the summer of '07. I wasn't paying a lot of attention to the markets at the time and it was pretty obvious that some bad shit was coming. It just took a while for that divergence to manifest itself in lower lows.

    If we are to move significantly lower from here, it might might be reasonable to expect the same kind of long, slow topping process.

    Just a thought…

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

    posted in Minyanville as discussion with Kevin Depew
    http://www.minyanville.com/community/Discussion

    08-12-2009, 12:33 am
    Kevin, when you analyze TDSequential you never mention TDCombo, but in fast moving markets TDCombo, quite often makes better and more timely calls.
    Speaking of TDCombo SPX weekly, week ending August 7th was, in fact #11 for Combo.

    Shall we post NEW higher high/higher close tomorrow (due to FOMC effect) TD D-Wave daily W3 will satisfy minimum requirements and will play well with impeding correction indicated buy completions of TDCountdown AND TDCombo Sell daily during last 2 days.

    That will allowed 2 weeks correction into OPX, two weeks move up after that and completion of W4 target of 1040 (same retrace as 50% W2) area by mid September – right into G20, foreclosures burst (no more 180 delay), FAS157 revamping by Sep30th (IF) etc

    http://screencast.com/t/arLvU3ZVl

    Cheers
    DavidDT
    ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
    hat I expect by mid September, in simple terms (not the ones I don't understand myself) is that a lot of “smallish” technical and geopolitical events will come together.
    One of “technical evens” that might be completed by Autumn Equinox (22nd) might have been completion of TDSequential Sell Countdown weekly (but now looks like it might take more time)
    All that said – it is at least second part of September I am looking for any meaningful correction.
    Unfortunatelly…just correction – UNLESS UP wave weekly (see my site http://trading-to-win.com/Roadmaps.aspx ) is just a fluke and it is really weekly abc just finished.

  • romeobravo

    SSC, one think you can try is something Mole suggested last summer (if I remember correctly.) That is to buy puts, for several months out but also SELL puts one or two strikes further out of the money and sell about 10% more than you buy. This should bring you fairly close to delta neutral. You can ride out any advance fairly easily and when it comes time to drop the puts you sold (buy them back) you may have earned a few bucks on them as well. This does have a bit of timing element to it but the sold puts don't screw you up as much as you think if the market drops a bit before you have a chance to take off this short hedge. To research this more, just put “summertime”, which was the title of the post in the search box of EvilSpeculator.

  • itsgold

    Karl Denninger has been recommending leap puts on the SPY. He didn't say specific strikes, but I think he means Dec 2010 or Dec 2011.

    Mole is buying SPY 75 March 2010. Mole also previously recommended SPY Dec 72
    SPY Dec 69 back in July. I'm not sure which one to go for.

    As for myself, I've picked up SPY 87 DEC 2009, 95 DEC 2009, June 2010 80, March 75 2010 puts. I still have 50% cash to work with and am mulling over whether to add more or not.

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

    there is a saying “retail open funds close”

  • ropey

    how can you have the mother of short squeezes when the $CPC is at record lows…

  • fuw

    Euro/usd seems to be caught in a downdraft, which should put pressure on stocks. Funny how you sometimes manage to catch channels that works like magic (for a while). Main lines were drawn yesterday at 11.00:

    http://www.screencast.com/users/fuw/folders/Jin

  • amokta

    novice question again – will bank/financial stocks go back 'meltdown' jan/feb prices if wave 3 materialises, or will they not go to such low?

  • jamesmarkii

    As far as i know Commercial Real Estate Loans are the FInancial Atom Bomb…….

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

    voice…
    when I was in 7th grade I was singing in the girls’ choir 🙂

    Now when I am drunk and driving…ehh …sitting in the car alone – I can sing Shalyapin’s arias http://en.wikipedia.org/wiki/Feodor_Chaliapin and I don’t have to use my cars horn 🙂
    http://en.wikipedia.org/wiki/Feodor_Chaliapin

    http://www.youtube.com/watch?v=_z6QhsMHfYQ

  • Iguanadon

    And this time around it'll be regional banks that get hit the hardest due to their exposure to commercial real estate loans.

  • dasbof101

    And we have to out of stimulus. I agree many regionals will fail. FDIC is almost out of funds. The stock market this week is whistling past the graveyard. – bof

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    Thanks, I'm talking specifically about MCD puts though

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    I'll check it out, thanks!

  • marketmaker

    Am I seeing things, or has there been a sharp sell-off in AH futures?

  • http://anomalousmaterial.blogspot.com CastorTroy

    On tap tomorrow morning: Prelim GDP, Unemployment claims, 7-yr notes auction. This could move us of the tight range we have been in the last few days
    http://tinyurl.com/l7tgbn

  • disrespekt

    More and more it looks as if TARP really *was* to liquify the PDs so that they could absorb this year's Treasury supply.

    The question is how the hell do we get through next year once the foreign CBs have swapped all their junk agency paper for USTs. This whole game has been for the Fed to absorb the toxic paper and swap it for USTs, essentially at par, from the banks and now from the CBs. So the Fed is going to load up with 4, 5, 6T worth of shit paper, and then everyone has USTs and then what? They going to kill SS and Medicare? Bc as far as I heard 2008 was zero surplus for Medicare and SS is looking like it's this year or next given the massive decrease in tax receipts due to unemployment. A jobless recovery means these programs go dramatically into deficit from now till infinity. The deficit projections of level $1T per year reliably have to be total horseshit.

  • BullTart

    That's the fuse.

    The Atom Bomb is the quadrillion dollar global derivatives market.

    That is when shiet will really hit the fan and force the hard reboot of the system.

  • Stainless_Steel_Hamster

    Stainless Steel Rat series is funny but on the light side

    I prefer (in the classics) P.K..Dick (though I've read and loved most of the other authors… hummm e.e.doc smith as a guilty pleasure)

    But recently? Neal Asher, John Wright, Neal Stephenson, Ian Banks, Ian McDonald…

    Haven't counted my SF books in a long while, should be getting close to 3 or 4 K.

    Best regards

  • disrespekt

    No…the government owns AIG and has called physical on its shares. Same with C and the other companies it owns.

    That is what started this rally. They own so much of the banks right now that they can bully the market around. The only way AIG falls is a no-bid situation.

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

    from [Mad]Russia[n] with love
    http://www.youtube.com/watch?v=_z6QhsMHfYQ

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

    volume is lsightly unusually high, is not it?
    Or it is just bottle of Courvoisier talking?

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

    I've got plenty of non perishable food and vodka stashed away – everyone is invited

  • mmTesla

    So far I am seeing being an up day, in 2.5 hours I will confirm what I think for tmro, but until then I am bullish (short term)

  • sirgiyan

    Thanks BRO!
    http://www.youtube.com/watch?v=wm9shEC_kIo&e
    That's the way russian pop music sounds nowadays

  • GreenBear

    futures nice and RED…everyone gets a big bear hug tomorrow.

  • http://www.portfoliotilt.com PortfolioTilt

    Still sideways in the short term after the breakout last friday but I expect this thing to move higher soon http://bit.ly/VUdAv

  • BullTart

    I've got a biiig hole I dug in my backyard you can store your bullion in.

  • Hinkognito

    test

  • Trader_Steve

    4 handles is not, IMO, much at all. Not in a world where it's down 10 at 3 AM and you go to bed and with no news they have reversed all of it.

    Steve

  • BigHouse(Aka Mr Vix)

    RIMM

  • prescient11

    God don't jinx it man, when I wake up I bet we are 10 points in the green on the snp, sob.

  • Trader_Steve

    If banks are forced to mark2market the banking system is in serious trouble.

    My personal opinion is that no individual who, IMO, is running America and who fits in better with the Black Panther Marxist movement has really fixed a damn thing. What tools have then next? The only one I see is Weimar printing of money and I don't think that will be tolerated. No geeneration has ever escaped a depression in American history and I think we have the perfect storm here for ours. Sorry, but that's how I see it. The chart in 1932 looked real good….until it finally cracked and 55% of the mkt valuation was lost in 10 weeks.

    Health care is about control of the poor and most of the middle class. Feeding banks is about, like Bush, letting them know where their bread is buttered.

    We had best not be hoping for the top of P2 to be seen soon and a sub 500 S&P just to make money. We need to hope it happens to save America as we are living under an increasing tyranny. Anyone not yet reading the 1 million copy seller “Liberty and Tyranny” by Mark Levin should take the 205 pages and inhale them because we are finished as a nation if this coup takes place as is happening.

    Please don't just take my opinion.

    In the May Atlantic Monthly: “The Quiet Coup” written by 2007-2008 IMF president who states, “This feeding of the oligarch class always ends badly.”

    http://www.theatlantic.com/doc/200905/imf-advice

    “The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.”

    Steve

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

    I feel sorry for my country – don't know what is worse – clip or comments

  • ColdC

    Agree. Nice charts. Although I hope I’m scaling into the top. Dangerous practice….
    Price action since the bottom looks “corrective” to me and looks like distribution is now occurring.
    Spin the fundamentals to fit your argument……

  • http://forkoholic.spaces.live.com/ Forkoholic

    >I’m preparing for my three day trip to San Diego.

    Molemobile-clunker takes 3 days to drive to SD?

  • ablebonus

    From acrossthecurve comments:

    Rumor around the market that AIG would be bought … Hank Greenberg led buying consortium with the US federal government maintaining control of the derivatives book. AIG rallied $4/ share into the close, though
    there’s no confirmation I’ve been able to find about this speculation- either
    what appears an outrageous purchase price so far above the prevailing market or
    the actual substance of a deal.

  • PRSGuitars

    Any currency hotshots — EUR/USD long, before a larger timeframe short?

    MAJOR inflection point from the combo bottom channel line and separate channel midline — check it out!

    http://screencast.com/t/78oGclzZA

  • Joe8888

    Update on the Transport Daily chart…

    .

  • DancesWithBears

    Hey whats going on in SD I am a few miles down the road?

  • devildowg

    I have a long trade in progress hoping to touch near 1.4330. Lots of German data coming this am that will probably be on the bullish side since everyone's econ. data is improving. However it may bounce back down after hitting 1.4275.

  • Keirsten

    I just received the link for the book. Thank you! 😉

    I'll bring Armagnac and saltines to your bunker as a gift in kind when the time comes.

  • BigHouse(Aka Mr Vix)

    Lester will be in the back seat day trading….

  • Joe8888

    VIX Monthly Chart,,Bouncing off lower channel..

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

    my favorite!
    when I was on the market for sail boat (never got it – my ex wife did ) – I liked that beauty so much that all I could say was “as smooth as Armagnac”

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

    way to go! If you don't mind I plug it into blog 🙂

  • sirgiyan

    Same here, in Toronto

  • 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„¸

  • molecool

    One Dollar blow jobs.

  • BrassMonkyBalls

    i still think we have a downturn before we reach much higher and thinking 1005 before spike back up. I have 61.8% fib at 1058 so after the dip then the melt up and thinking September is where we see it. Usual SPX chart updated

    http://screencast.com/t/00nfFWXzTku

    Then again S&P where you at?

    http://www.youtube.com/watch?v=1x28jaeyX2s

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

    man knows how to bargain!

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

    and some fib fans to boot
    http://screencast.com/t/dSJp2l69

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

    I am taking bets – 978

  • mrclam

    I'm assuming that you're aware that our futures fluctuations overnight are usually a result of the european markets trading?

  • malusDiaz

    How? HTML tags let you insert it directly?

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

    just took a pic of it

  • springheel_jack

    Man after my own heart. Read all those authors as well.

    Also have storage issues with thousands of books!

  • Stainless_Steel_Hamster

    tell me about it, a wall double depth filled, all the closets, under the bed, can't keep my table without 1 or 2 piles, and they crawl all over the bedroom….

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    tell me about it, a wall double depth filled, all the closets, under the bed, can't keep my table without 1 or 2 piles, and they crawl all over the bedroom….

  • Douala

    SSC

    Ok when I get the grain I'll sent you an email. Thanks! BTW…great call on the “bleed off”.