Not A Bad Start

10:41pm EDT: Now, that was a fun open in my book. I just sold the August lottery tickets I bought at the Friday bell for 150% profit – not a bad start.

In line with my Sunday post’s title we are indeed at an inflection point now. Orange Waldo is toast and we are left with either Blue or Green. At this point I actually give both 50/50 – breadth on the SPX is a horrid 15.5:1 declining issues.

The chart above shows that we are close to a nice support zone – the 975 150% fib line (as measured as multiples of wave A) also would satisfy the target zone for that little head & shoulders pattern which resolved this morning. Let’s see if the bulls decide to step in one last time here. I’m waiting for a litte counter rally to start loading up on March puts. Yes, maybe I’m a few weeks early – possible – but today’s tape shows that when this thing drops you won’t get a chance to hop onto the bandwagon.

BTW, in terms of downside potential – we might want to mix things up with some IWM puts as well. Just a thought.

Code Red Activation: I need you guys to come up with a short list of 10 symbols we can short the shit out of. At least three of them should be financial, some consumer, some trannies, etc. – mix it up and start posting charts. We have a lot of work to do and I can’t do it all – already working 90 hour weeks and I just started a 2nd company (more about that some other time).

Dollar keeps traversing higher – as expected. So far so good – pattern looks solid at this point but I get more excited once we breach 79.64 – I set an alert for that event.

The ZB is now breaking out of a medium term channel – I think we might run to 123 unless this thing turns right now and fails the break out.

Fuck me and trading Silver. Much to my shagrin I officially snoozed my entry. I need to get back into my habit of setting alerts – blogging takes a lot out of my day and don’t look at all my charts as often as I should. I have a feeling that one will haunt me for quite a while.

Whatever you do – don’t chase this one – wait for a counter push and then load up – at least that’s my plan and I’m sticking with it.

BTW, if you haven’t had a chance yet – go and check out my weekend forecast – I’m putting it on the line, so go and read it.

11:00am EDT: I just updated my BAA-TYX chart again (thanks Hui, Graham, and Kevin):

Now this is interesting – we actually started to go sideways here – while the SPX was going sideways as well. And I even see a slight curl up – could it be that that we might be getting close? It’s a bit early to read too much into this and we need more time. But this is a good sign – at least we stopped dropping for the moment.

Remember that a primary degree trend change is usually preceded by an inverse move in the BAA-TYX spread. I’m keeping my eye on this one and will report back we start pushing upwards. Oh, btw – please remind me to bring my TYX to the cleaners…

12:42pm EDT: I completely forgot to mention this – we had a POMO auction this morning:

$7 Billion were accepted – that’s $70 Billion levered up by 10 x. ZH also just posted an interesting comment about it. Anyway, be careful here – the Zero is pretty flat – feels like the quiet before the storm.

1:21pm EDT: Let’s not forget there’s another POMO auction scheduled for this week:

Good to keep in mind before betting on the short side. Remember, it’s OPX week – the bulltards could have one more nasty surprise in store for us (i.e. blue scenario).