Man Up!

This was the perfect day to run my errands and catch up with meetings – I didn’t miss a thing! Looking at those candles on the Zero chart I’m actually proud that it only got faked out once – and even then I hope you guys took some profits once that signal went flat 😉

I have to make a statement though and some of you won’t like it. When catching up on my favorite blogs I saw a lot of folks bitching and moaning about the recent tape. Consensus is that it’s been one nasty, spasmodic nightmare of a whipsaw.

SO WHAT??

One big lesson we need to learn is that the market will have it’s ‘period’ every once in a while (oh, I can already sense the shitstorm I’m unleashing with my female readers…. no, he didn’t just say THAT – did he??). Seriously, you want to be some bad ass trader who rides the bear into the abyss? Better know a thing or two about T-I-M-I-N-G and how to not force trades in a lose/lose environment. I’m sure daytraders had a field day today but the rest of us rats need to learn when to just sit and W-A-I-T. This is something I’m trying to drill into your tiny little skulls – and I hope that eventually, maybe by the end of this damn decade, this particular lesson sticks. Come on – lurking in the dark and waiting for an opportunity to strike at some hapless victim should be 2nd nature to any evil speculator. Work on that!

So, seriously – I don’t want to hear another word about it. The Zero has been pretty blatant about the state of the market lately – just look at the signal reading. F-L-A-T as Delaware (Florida is flatter but it’s not as funny) – so, sit back and wait for it. Use the time to look for victims for each scenario. The market breaks to the upside? I want to see 20 symbols that will benefit. Market breaks to the downside – well, you know the drill.

Real quick, because I’m about to grab dinner:

Orange triangle scenario: Getting very stale by now – needs to break tomorrow otherwise it’s toast in my mind. The 38.2% fib is my line in the sand for that one, which is around the 860 level (futures are already at 850 right now).

Green scenario: Still a possibility – should however break at the 38.2% or 50% fib line. So the turning points here are between 860 – 875.

Blue scenario: Starting to look better and better to me. If we bust higher tomorrow after the FOMC minutes then I’d say we might have a winner here. Mission accomplished around 1020 – I would sell my first born for that one (damn, I already did).

Gold seems to be hugging 900 and I think 940 will be the next battle front. I might try my luck with some puts again if we get there. No, I don’t want to play it long until then.

The Dollar retraced a bit – as predicted (I should trade *&@%# currencies) – and I expect it to continue to the upside in a very short order.

The TLT has pushed back – also as predicted – and I’m glad I took profits last week. I think we see more upside here in the coming days, as I expect an a/b/c correction after that motive wave down. However, I’m a bit curious as to how this would work if equities decide to rally. Then again I hear rumors that Bernanke is “contemplating” buying the long end of the Treasury Curve due to “bond market instability.” I’m not as educated as Karl Denninger on that subject, so read his POV if you’re trading those markets.

Finally, the CPC (CBOE Put/Call ratio) is still ridiculously low, which flies in the face of the blue scenario, but in term of price movement appears it’s the most probable, right? But if we really rally from here – where is the CPC going to drop to? Strange things are afoot and I have not seen (or could make up) a good explanation for this. Did I miss something and the did the Dow just rally 400 points? Plus, remember my stochastic grid chart I shared this morning? We are now nicely above the 80% mark on all averages, so the bulls are running out of time to push this market higher. Chop chop chop (and in a british sense as in ‘get a move on’).

In the end however we should not care. Price is the ultimate indicator and we have our mission briefing (see Sunday post). When we reach particular price points – that’s when we take action. Everything in between is just….

N-O-I-S-E

Cheers! 😉