Parabolic Thursday Rub Down

And there you have it – the 10th consecutive up day on the Nasdaq. Statistically this is tantamount to a black swan event – maybe it’s related to the solar eclipse we got throughout Asia last night – it incidentally was the longest one for the entire 21st century. I tell you rats – there’s something to this astro-cycle thing – as you know I’m a follower of Carolan (although much of his stuff is way beyond me).

Well, I’ve said it before and I’ll say it again: Talking about a bear market rally is one thing – trading through it is quite another.

I actually did quite okay today – mainly due to my prescient early morning futures trade which was followed by several very well timed geronimo scalps. Plus I added more puts at the very top and I ended up almost at zero today – profits would have been nice but considering today’s candles I think I was one lucky SOB.

However, I tell you what really worries me right now and it’s what I’m seeing on the Zero Lite. Yes, there was a nice divergence which actually led me into adding short positions. But what I really didn’t like seeing were two Zero Lite spikes below -1.3 which resulted in…. wait for it…. drums rolling….. a four point drop on the ES.

So, my point is this: We just saw 10 consecutive up days on the Nasdaq which is leading this thing. We have rallied over 100 points on the SPX and 200 on the NDX. We are extremely overbought and my 2-hr stochastic has basically been embedded for several days now. Now, when I see a final attempt by the bears to make a stand – as shown on the NQ futures – it was immediately met with massive liquidity stemming the tide at 970. Now granted – the futures just reopened and we gapped to 965. But how much do you want to bet that by tomorrow morning we’re right back where we ended today? Or more likely closer towards today’s highs?

I think I have shown almost super human resilience throughout one of the worst counter rallies I have seen in my life. But it’s not the upside progress in the tape that worries me – it’s what’s going on behind the scenes. It’s quite disconcerting to see the bulls have seemingly and effortless access to limitless amounts of liquidity and no matter where exactly that comes from (let’s not even consider manipulation or program traders) – do you want to play poker with someone who’s got a mirror hanging over your hand? Someone who never runs out of cash and can call your hand ad infinitum?

Exactly – me neither.

So, for the record – I’m pretty heavily short at this point but have no compunction about cutting the cord on all of my puts unless I see at least some profit taking tomorrow. BTW, it seems that my plans have changed and I will be around tomorrow throughout the day – I’m actually glad as I would not enjoy staying away on Friday.

Program Trading Report:

geronimo/ES: +7.5

I know I sound like a broken record but geronimo hit the ball out of the park today. Kept me out of trouble several times and if you are not trading it then that’s your loss. This sucker sniffs out program trading raids like a German Sheperd – it’s insane.

Maybe this might be the reason why. ATA-boy!! Have another snausage!! Down boy… down!!

Arrfff arffff!!!!

Maybe I should rename Geronimo to Blondi – maybe the next version 😉

Alright, nothing has changed since this morning’s wave count, which was pretty spot on. We turned right at the PPTPL – of course I cannot guarantee it won’t be busted tomorrow. The market forecast racket is a tough one these days.

9:00pm EDT: Courtesy of ZeroHedge:

That is absolutely hilarious – made my day!

BTW, here’s a heads up. My travel plans have changed again and I will actually be gone tomorrow throughout the entire NYSE trading session. Sorry rats – I hope that Fujisan will volunteer to pick up the slack or at minimum post the occasional comment cleaner for you chatty bunch. Good luck tomorrow – it’ll be a wild one I’m sure. I for one will log into my trading account tomorrow evening like a bomb squad officer – very cautiously and ready to jump for cover.

Cheers,

Mole