Now Reading
Friday Quicky

Friday Quicky

by The MoleJuly 9, 2010

I can’t believe tomorrow is Friday – does not compute. Anyway, I am a bit worn out tonight, so let’s do a quicky.

That t-shirt should be standard issue for all (hot) females over here in L.A. – well, just wait until I become the new governator…
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. The rest of you guys will have to wait until tomorrow – sorry. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
[/amprotect] [amprotect=1,9,5,2] I’ve gotten some heat today for talking about big market drops recently and we now just raced up again. Listen my dear permabulls – I really don’t care which way the tape swings – I wasn’t born a bear. But long term this market is screwed – period. If we don’t see new annual lows by October 1st I would be very surprised and happily wear my dunce hat.

So please accept my apologies that we didn’t book a one-way ticket to SPX 300! Seriously now – the way the tape is behaving is pretty much textbook. A lot of shakeouts and distribution in the early phases – followed by a rapid drop – you never see it coming – just like in May. What we did see coming was the potential of a short squeeze, which happens quite a bit before a H&S pattern resolves. Call it the last kiss goodbye – or the last fuck you to any weak hands dreaming about riding this bus down.

Anyway, in the meantime we’re doing wave analysis here, so let’s get to it.

Today showed a lot of progress on the bullish side which may spill into tomorrow – the futures are bumping their head on today’s highs already – wouldn’t be surprised to see them push a bit higher and complete a 5th wave tomorrow. However, very short term I think we don’t run that much further. So, what I’m seeing are two possible scenarios:

Clockwork Orange: We drop tomorrow and maybe on Monday and never look back.

Soylent Blue (i.e. bears’ worst nightmare): We drop tomorrow and maybe Monday too reel in a few more bears, then reverse around 1045 (highlighted on the chart) and over the next two weeks or so push into 1100.

There is a chance we do go straight up but we seemed a bit toppy today. But heck I have seen it happen in the past and wouldn’t bet my first born on that.

My advice – stay frosty – until 1100 that is. If we keep ramping higher from there and threaten 1130, then we can start talking about other ideas. I know it sucks – that’s the problem with the late phases of second waves and the early phases of thirds: Nothing is confirmed yet and it’s easy to get whipsawed to death.

Before I run look at my updated ISEE chart:

Pretty nifty – ain’t it? Tooncez responded to my plea of how to add a Bollinger in Excel. Actually, this is not a real Bollinger Band, as the crazy Hamster pointed out – the math has been simplified and does not account for wild swings on both sides. But you know what – this ‘Ersatz Bollinger’ actually does a bang job with reversals on the ISEE. Especially when you are able to correlate a push into the green/orange regions with a BB breach. I actually would like to get some input on this thing – so please tell me what you guys think.

As you can see we actually spiked into the orange bearish range plus outside the BB today. Which has me in a rock and a hard place. My ‘intuition’ (a.k.a. paranoia) assures me that this can’t be possibly all of the reversal. Plus, those ISEE readings often precede turns by a few days or even a week or so. Thus, even if we drop tomorrow or Monday I think that there’s more upside to come.

The AUD/JPY is still busting higher tonight – massive amounts of stops are being burned. If the bears are really screwed then this thing gets embedded above the 80% mark on my 30-min 2.0 BB. Could get very ugly there for equities, so I’m mentally prepared for some pain. Another reason I don’t think Soylent Blue is over just yet. Currency traders found their momentum and they will burn the shorts until there’s nothing left.




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.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

BTC: 1MwMJifeBU3YziDoLLu8S54Vg4cbnJxvpL
BCH: qqxflhnr0jcfj4nejw75klmpcsfsp68exukcr0a29e
ETH: 0x9D0824b9553346df7EFB6B76DBAd1E2763bE6Ef1
LTC: LUuoD6sDWgbqSgnpo5hceYPnTD9MAvxi6c