Market Maker Mindreader

I came across an anomaly this morning which got me thinking and then running through a few charts which after digging deeper confirmed my initial inkling. Unfortunately I cannot tell you guys how it works but what I can tell you is that we now have another tool in our arsenal for recognizing bear traps:

Have you ever wished you could know what’s going on in the mirky minds of those medacious market makers? Well, now you can! I call it the market maker mind reader (MMMR) – and it works like this:

I wrapped an Bollinger around my mysterious plot and have highlighted most of the drops below – the big ones are of particular interest for obvious reasons. It does not work as well on the long side – well, kind of – but I personally prefer those juicy dip buying opportunities as they seem to be more pronounced. What I really like the most about it is how well it works on a medium term basis – I see a ton of excellent setups here and in combination with the Zero and our other tools this should improve our game by a notch or two.

Here’s a more normalized long term version and again the salient parts are the major dips below the BB. On the bottom of both charts of course is the SPX so you can properly correlate the signals.

I am throwing this out to everyone today but in the future this chart will only be available to my intrepid subs. Sorry, got to keep the good stuff for the members, after all I’m not running some charity here. Although, come to think – there is free soup every other Friday, but I doubt you’d enjoy it very much as it’s my method of disposing of toxic chemicals. Evil is as evil does…

By the way, did any of you buy that dip to 1220 last night when I posted it via twitter and in the comment section? I certainly hope some of you guys played those most excellent swings this morning, the Zero was extremely interesting this morning during the idiot hour shake out 😉

Now, please step into my office as I have some perspectives on the current short squeeze.
[amprotect=nonmember] Charts and commentary below for anyone donning a secret decoder ring. If you are interested in becoming a Gold member then don’t waste time and sign up here. And if you are a Zero or Geronimo subscriber it includes access to all Gold posts, so you actually get double the bang for your buck.
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It’s been one juicy short squeeze and once again keeping a cool head and following our charts/statistics/systems served us well. That push higher today (whatever triggered it – as you know I do not follow the news) got us almost through that volume Gobi desert. Today’s close however will be of major interest – if everyone drops their long positions like a hot potato then we may just stab lower one more time. So no, I do not think we are in the green zone just yet – for that I’d like to see more than a 50% retracement.

The daily S&P E-Mini is tickling what is a now expired NLBL – I still think that pushing above would be extremely positive.

The hourly panel is looking similar and if we manage to push above 1255 than there’s basically nothing but air above. If you are a bear still clinging to your short positions this should probably be your Maginot line.

NYSE A/D ratio is currently around 3.3, which is less than yesterday’s close of 4.4 – not a big deal but I would have preferred an expanding breadth to a contracting one. So be careful and most definitely do not chase this thing this late in the game.