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Process of Illumination (bearcare for dummies)
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Process of Illumination (bearcare for dummies)

by MoleNovember 10, 2009

(your friend) Michael Davey again…

Conviction is a bitch, eh?

Bears hate life again tonight – heads hanging low (those not rolling on the floor); eyes reddened and bleary; shouts of could’ve, would’ve and should’ve murmuring in the midnight air.

So boring.

Still, I can’t help but think I should lend a hand. It’s been a long and hard struggle and no one should fight this forever. Let me have a swing with that axe Eugene.

Yes, it may be early (snort!) and indeed, it may be just a little trade for the time being. But by a simple process of elimination I’ve been green-lit to take a walk now on the short-side.

1.) There is an ugly divergence at present. The back-of-the-coaster DJIA (the only major index to reach new highs today) is out-performing leadership; which is clearly lagging. The daily charts of the NDX (a leading index), the Russell 2000 (a broad index of smaller, growth and financial companies), GS and AAPL (two bellwether generals which have led the market higher with Swiss-watch precision up until this last advance) all tell the sordid story when compared to the 30-stock Dow.

2.) Because of #1, I am not allowed to increase longside exposure (indeed, leadership growth in general and everywhere, is flashing the same negative divergence). And…

3.) I’m not really interested in a vacation just now (which is what I’d be in store for if I was not willing to get a little in front of this trade).

If P, then Q = I’m going to take a stab short (for relevant accounts).

I know it’s sick, but I know so little. I can’t say it’s perfect, but now seems like a dandy time (what with you drooling incontinent). For the moment at least, let me hold your position and you can catch your bearings.

While I won’t make any Kondratieff predictions here, I have that much on my side. Further, when the market turned lower the week of October 19th, I had no substance to predict any terrible downside, but I wasn’t any genius to interpret momentum had topped (for the intermediate-term at least). Prices may or may not see higher highs following such an occasion, but the shift in momentum generally means that selling strength is +EV going forward.

Now we see momentum at lower highs (no shock there), while the Dow-30 diverges as the only index at new price highs. In other words, we have a top in momentum, combined with a rather daunting divergence.

Beartards who study the history will find the good old Dow is commonly the only index to snap-back to higher price highs following an initial break in price and a top in market momentum. True for both major and intermediate-term tops; commonly.

If P, then Q.

Easy game.

Note: SPX and NDX closes at higher-highs will be my benchmark for failure (intraday highs are okay, depending, but closing above previous, October highs will mandate my exit and put me to shame for coming on here and suggesting such foolishness).

12:20am EDT: Thought in the spirit of Michael’s post I offer a little ‘Zugabe’:

Now remember – this is a weekly chart and a weekly stochastic. But it rarely lies and based on what I’m seeing this rally is in its final throws. Of course until this bitch resolves there will be more pain – if you are not prepared to endure this go into cash.


About The Author
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 various social media waterholes below.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    Count me in, I posted the BPSPX chart, even with prety red arrows showing this fall isn't over yet.

    SPX:gold says bulls haven't broken the down trend

    best regards and good night

  • molecool

    Always first in line ey, you crazy hamster 🙂

    BTW, where is the crazy chicken?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    was here in the afternoon, but still has a lot to do and this market's killing him

  • Graphite

    Nikkei's bounce was pretty tepid and we're starting to get some nice moves in the currencies.

    Wake me up if the $RUT or $SPX hit new highs, otherwise all the Dow's high today does for me is set up a nice divergence …

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    Dollar getting a little bid here; BR Pound especially, is the whipping boy tonight

  • molecool

    Reload – I posted a chart above..

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    helpful, thanks. i'm short on the bells and whistles, but that illustrates the point

  • Scoops

    Benny: [to Mary, the three-breasted hooker] Baby, you make me wish I had three hands.
    Douglas Quaid: If I am not me, then who the hell am I?
    Douglas Quaid: I'll be back!
    Lori: Doug, honey… you wouldn't hurt me, would you, sweetheart? Sweetheart, be reasonable. After all, we're married!
    [Lori goes for her gun, Quaid shoots her in the head, killing her]
    Douglas Quaid: Consider that a divorce!
    Benny: You ever fuck a mutant?
    Vilos Cohaagen: [after Cohaagen's team kills Kuato] Well, my friend…
    [puts his hands on Quaid's shoulders]
    Vilos Cohaagen: …you're a hero.
    Douglas Quaid: Fuck you!
    Vilos Cohaagen: Don't be modest. Kuato is dead. The entire resistance force is wiped out and you were the key to all of this.
    Douglas Quaid: [to Melina] He's lying.
    Melina: [to Quaid] You two-faced bastard!
    Vilos Cohaagen: You can't blame him, princess.
    [His finger grazes Melina's face]
    Vilos Cohaagen: He's innocent. You see, Quaid, none of my people could get close to Kuato. Those fuckin' mutants could always sniff us out. That's when Hauser and I sat down and invented you: Douglas Quaid, the perfect mole.
    Douglas Quaid: You know you're lying. Hauser turned against you.
    Vilos Cohaagen: Uh-uh. That's what we wanted you to think. The truth is, Hauser volunteered to become “Doug Quaid.” It was the only way to fool the psychics.
    Douglas Quaid: Get your story straight.
    [Points to Richter]
    Douglas Quaid: This idiot has been trying to kill me ever since I went to Rekall. You don't send your own men to kill a mole you're trying to plant.
    Vilos Cohaagen: Richter wasn't in on it. You set him off by going to Rekall.
    Douglas Quaid: So, why I am still alive?
    Vilos Cohaagen: Because we gave you lots of help.
    [points to Benny]
    Vilos Cohaagen: Benny here…
    Benny: [to Quaid] My pleasure, man.
    Vilos Cohaagen: The guy on Earth with the suitcase containing the mask, the money, the message from Hauser. All of that was set up by us.
    Douglas Quaid: Sorry. I still don't buy it. It's too perfect.
    Vilos Cohaagen: Perfect, my ass! You go to Rekall and pop your memory cap before we can activate you. Richter goes hog-wild trying to kill you, drawing a lot of attention to us… and screwing up everything that I spent a whole year planning. Frankly… I'm amazed it worked!
    Douglas Quaid: Well, Cohaagen. I've got to hand it to you. It's the best mind-fuck yet.

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    going to nap early for a change. see you guys early

  • BigHouse(Aka Mr Vix)

    F the dow….If the Wilshire 5000 makes a new high its bad news for the bears… I will take its word over 20 stocks…

  • http://retracementlevels.zstock7.com/ zstock

    You see that 4 day WHITE soldier DIA?–Shorting that is risky,imo–
    any stock that's not up, is lagging, and will be up next few days–example APOL.

  • MariAroma

    Apparently Terry Laundry has given up his November correction scenario and is now expecting continuation of the bull for another 3 months.
    “Monday Nov 9th Comment: New T formed unexpectedly. Note double bottom in green AD Line along with the oscillator upside breakout of Cash Build Up line. That is sufficient to confirm a new T.”
    http://www.ttheoryfoundation.org/t-theory-calcu

  • MariAroma

    EWI “FREE” from last Wednesday to this Wednesday. Here's a quote from Hochberg's STU tonight.
    “But today’s not the important day in analytical terms, it’s tomorrow, the “day after.” If the market remains internally strong through tomorrow’s session, then Primary wave 2 (circle) up from the March low will have a new lease on another rally phase. If tomorrow shows little or no follow-through, then today is likely a one-day short-covering squeeze that runs the bears out of the market just in time for the next leg down.”

  • http://retracementlevels.zstock7.com/ zstock

    Nice chart Mole, of an inverse H&S with a 12,800 top. Can you see it too?

  • MariAroma

    On the other hand, Stephen Puetz just released his latest Unified Cycle Theory news letter (by subscription). Given the unfolding wave pattern, he sees the beginings of the next market crash on or around 11/18 (+/- a week) and an acceleration of the down trend on or around 12/16…….

    http://www.uct-news.com/

  • http://trading-to-win.blogspot.com/ DavidDT

    it seems that most of screwed up (time and again) technicians who uses obsolete/never proven/not working no more analysis have the very same press release people writing very same STU every day, can be just carbon copied to save on salaries, something like:
    “We anticipate for something to happen sometimes by the next short or long term event descending on the spiral of magnetic dates transcending over the eye of the arc falling into retrograde of smelly planet and using increased probability of posting opinions of 23 and 1/4 technicians on the same page sooner or later someone will produce something remotely resembling partial result ….blah blah blah”

    Funny – grown up (?) acting like special children…sticking with the crap that has never been proven to work…
    good for me…

  • http://trading-to-win.blogspot.com/ DavidDT

    THAT what I was talking about 🙂

  • JBMorgan

    That would be a nice Christmas present to make up for the previous 6 month beating we've all been taking…

  • http://trading-to-win.blogspot.com/ DavidDT

    are you talking about the first thing or the second thing?

  • http://trading-to-win.blogspot.com/ DavidDT

    are you talking about the first thing or the second thing?

  • JBMorgan

    i'm with you on that, plus price-weighting of Dow is just silly for computational purposes. i'm with mole and letting my mar 90s expire in the money or worthless, but have hope given Nasdaq and Rus2000 have been laggards to the other major indices.

  • JBMorgan

    referring to the downtrend accelerating in late December…

  • JBMorgan

    But I hear your point about forecasting…

  • http://trading-to-win.blogspot.com/ DavidDT

    CD “Conviction is a bitch, eh?”

    How about “Anticipation is a bitch, eh?”

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    lately “participation is a bitch”

  • http://trading-to-win.blogspot.com/ DavidDT

    you were always the smart one in the family

  • http://ethicalcheating.blogspot.com/ The_Grim_Reaper

    I just wanted to refute the idea that the Dow is not a leading index — wrong, it is a leading index in this rally. It always makes lower lows and higher highs ahead of the S&P and Nasdaq. So in my opinion it goes without saying the S&P will make new highs soon.

    Here's the proof

    http://stockcharts.com/def/servlet/Favorites.CS

  • MariAroma

    Nice 25-minute MP3 with very clear short-term analysis and charts for equities, dollar, gold; and some “watchlist” stocks.
    http://breakpointtrades.com/controls/preview.ph

  • PRSGuitars

    You really are the grim reaper to show up here and say that!

    Kidding — nice find. Thanks for the info!

  • Teich50

    In addition, the Dow is price-weighted, not market-cap weighted. If IBM drops $1 while INTC goes up $1, the Dow stays at the same level but $SPX drops.

  • Teich50

    In addition, the Dow is price-weighted, not market-cap weighted. If IBM drops $1 while INTC goes up $1, the Dow stays at the same level but $SPX drops.

  • PRSGuitars

    Also an excellent point. +1

  • PRSGuitars

    Don't mean to sound obsequious but Im happy to have you posting here too, Teich. You're someone I can recall having read for a little while now and I always appreciate the commentary.

    I won't be on Nandu's board anymore because I won't be paying for the market commentary… no offense to either party, as I enjoy them both, but Mulli/Nandu were a wonderful combo and I dont think I want to pay for a board that doesn't give me what I've had for the past few months…

    Really miss Aesus/Az/nandu's take on things already — if you're still there say hi to the boys for me!

  • molecool

    'in his litter' you mean…

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    his compliment is more extensive

    all those in my litter bellong to my family, the inverse is not true

  • http://www.facebook.com/screasy v8muscle

    EUR/USD will top out on Thursday at 1.51
    http://screencast.com/t/YTVXxhP6f7

  • http://oahutrading.blogspot.com/ steveo77

    Could you show that on a chart or some overlapping circle diagram please…..hehe

  • http://oahutrading.blogspot.com/ steveo77

    What would are founding fathers say about this final ramp job?

    http://oahutrading.blogspot.com/2009/11/es-pers

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    LOL

    should have known… if ES was behind the monolith leading men into civilization, neither talking nor writting woud've evolved

    but every single rock on this planet would be covered by a chart

    and cultural apex would be bear-bullfight

    p.s. now that I've had my second 2001 moment of the evening I might as well call it a night

  • http://oahutrading.blogspot.com/ steveo77

    Put this is your pipe and smoke it
    http://screencast.com/t/CrbVijAuu

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    We the Masters of the People of the United States, in Order to form a more perfect Union, mantain injustice, insurer's domestic tranquility, provide for the common defence sector, promote the Obama Welfare System, and secure the Blessings of profit to ourselves and Posterity to our chums at GS, do ordain and establish this Constitution for the United States of America.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    nice stuff… getting the munchies…

  • bobthehorse

    Right, have come in to the day flat delta with some S&P Dec 1050 puts. There is a chance of a decent move lower as the first support I can find is 1060/59 on ESZ9. Even testing that would feel like a bear market! If it breaks, then we are back in corrective mode and targeting 1000 then 920.

    To be clear, I am not eyeballs out short. My delta will turn positive if the market rips higher as the puts collapse. I will make a nice small profit if we go lower and if the market proves itself, there will be loads of chances to get short in size.

    A lot of moaning on this blog. In my view, people need to stop thinking about P3 and start thinking about P&L. At the moment the capital we risk on a short trade is 10% of what we risk on the long side. If you are doing your nuts as the market rallies, you are an idiot. This is a roaring bull market – treat it as such.

    Having said all that, I do think there is a chance of a decent correction as I have said. But people need to dispel this myth that when it comes you won;t be able to get on board. That is nonsense – last year there were loads of chances to get short. Where you lose everything is trying to have a full position at the top tick – it will never happen.

  • tradejane

    I can't answer that because I just finished reading that interview from the guy who's “doing God's work” and I'm too stunned to say anything right now.

  • http://oahutrading.blogspot.com/ steveo77

    Did you notice top of the green is a gap fill from 2001? It is in real small text…

  • http://oahutrading.blogspot.com/ steveo77

    Who is doing God's work? As TK once stated, atheists make the best Christians….

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    I did and I didn't understand, tha gap has been filled in both senses since.

    or am I missing something-?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    torquemada did god's work, burned heretics
    GS does god's work, burns bears

  • onorio

    Hey V.

    I`ve targets of 1.5060 or 1.5110, probably tomorrow too.

  • http://stainlesssteelchicken.blogspot.com/ StainlessSteelChicken

    Yeah, that guy was rough – once his mind was made up, you couldn't torquemada anything.

  • http://oahutrading.blogspot.com/ steveo77

    Well, not a gap student….but thinking just cause it was filled once by a bubble doesnt mean that it doesnt still carry weight. After all, a bubble doesnt have much weight. Is that perfectly clear?

  • http://oahutrading.blogspot.com/ steveo77

    who has the time to look, but I would love to look at a synopsis of 10 rallies…..

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    one bubble, two bubbles… so?

    furthermore, in deflated dollars I'm not sure we ever filled that gap, and almost certain that if we didn't it will remain unfilled for at least a decade

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    so iron carbon chromium dinausor descendent, how are things going?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    small reflection

    we have seen a rally with hardly any crashes… this means we have GS and friends, some hedge funds… but wouldn't a sustained drop be a distribution oportunity? passing along “bargains” to joe the plumber?

  • tradejane

    DAX moment of truth will soon be known. Imo, if it makes a clean break above 5650-5670 area that would violate a resistance and the downtrend line from the 5888 top. In that case next target would be 5750.

    Commerzbank is trying to repeat the bullish “fractal” from June/Juli, hasn't gone above the trendline yet.

    http://www.screencast.com/t/4SOAWyUNr

  • ultra

    TK had a great post over the weekend on the nature of good versus evil, scotching the all too common misconception that shorting is inherently A Bad Thing.

    Why do people think this when they should be blaming – if anyone – the fools who bid it up in the first place?

  • http://oahutrading.blogspot.com/ steveo77

    http://screencast.com/t/pfqTvwFK

    Anyone awake, Nikkei futures—mini crash

  • http://oahutrading.blogspot.com/ steveo77

    I used to think that way in like 1991…..it is part of social conditioning

  • ultra

    Wash… rinse… repeat….

  • http://oahutrading.blogspot.com/ steveo77

    I know its a tough question. The mind remembers numbers, and people based their strong avoidance over taking a loss on numbers, and also close their trade if they get back even…

    So numbers do matter. I also agree that modeling the inflationary (or delationary) aspects of market in relation to fiat currency or real currency (if you have to ask, dont ask), is problematic also. So what is a chartist to do?

  • ultra

    you are an idiot

    LOL. Have we met?

  • http://oahutrading.blogspot.com/ steveo77

    And dont forget Nickel….nickel gets a bad rap cause its only worth a nickel, but nickel is crucial in the over scheme of things.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    trading is beyond good and evil

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    hamster says mini mini mini

    p.s. and it broke 10000 before droping… bad news

  • ultra

    Yarp. This was I think his point – you might as well howl at the moon or whatever – morality doesn't enter into it, unless you are… ooh I dunno… say, deliberately bankrupting a competitor in order to get 100 cents on the dollar back from the taxpayer.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    if I have to ask? I'm the voice in the wilderness who says spx:gold several times a day.

    the one talking about 2005's silent leg down

    what to do? look at both and have fun. I was scared of the gold count and form and hoped this would be a nominal drop so I went short equities only knowing that real s&p islikely to fall. Gold climbed, should have done a 50% long gold, 50% short equities.

    as for numbers, you are right (or very close) monetary ilusion exists but some people might sell at a small loss when they feel a repeat of 2007, that should get things going

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    he saw you on tv when he was a kid… still has nightmares

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    just included mandatory elements for stainless steel

  • ultra

    hehehe – I think you'll find Geoffrey was the genuinely scary one… apparently he can be found driving cabs around SE London these days

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    that's cheating, that's state big business promiscuity, that's covert corporatism and fascism.

    that's the situation that's been brewing in the states for over two decades

    and elsewhere

    that's…

    do you know the three critical boxes for a republic?

    the soapbox for stating your point to politicians
    the ballot box for making your point known to polititians
    the ammo box for point blank shooting of polititians

  • jacksoo

    the shit-house box for all the bollocks you spout

  • ultra

    To a certain extent, but I'm more in favour of being a little cleverer than just shooting the fkers, however tempting that may seem – civic disorder/violence is what *they* probably want as it will give them an excuse to declare a state of emergency and take the tanks for a spin innit.

    *dusts off tinfoil Dow 10,000 hat*

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    I was a bit theatrical, but I stand on my two man points.

    1.Plunge protection + fostering and protection of “too big to fail” created a situation very difficult to defuse without major problems
    2. govenment has lost all accountability and shame

  • http://oahutrading.blogspot.com/ steveo77

    Agreed, thats old school mandatory, but —nickel makes it rock. And nickel makes it non-magnetic, just in case you were interested how that played out. Non-nickel containing stainless steel critters are either ferritic structure (like steel) or Martensitic (with carbon).

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    it was a joke the most lethal things I own are knives in the kitchen and some of my CDs

  • jacksoo

    LOL – not aimed at you mate – talking 1st party as though the politician –
    sorry for confusion. Love your comments.

  • ultra

    *snort*

    have you ever had a go at speaker's corner in hyde park, ssh?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    oops you lost me there, my degrees are in economics and BA.

    but I though steel was carbon iron and the stainless quality was most often obtained through chromium doping

    so care to explain the martensitic and ferritic stuff?

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    you got me worried for a while, I may joke but try not saying BS

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    nopes, didn't even care to visit it.

    p.s. but if I ever do I'll make a PETA speech and accuse the royal family of fostering animal abuse. You're supposed to ride horses, even eat horse meat might be accepted, you're not supposed to have sexual intercourse with and marry one… but then again it must be a tradition, dumbo was probably his father.

  • http://oahutrading.blogspot.com/ steveo77

    Different ways that the molecules form into matrixes with each other. Small changes can impart vastly different properties. Also in processing and heat treating this steels, time and temperature are very important, if you get it wrong, you can get it way wrong. Different alloying elements like nickel also can have a vast effect. Incredibly interesting stuff…I mastered in Material Science and Thermal Fluids.

    In this way a true SSR (sorry SSH) can relate to the fact that not just price, but time is important in the markets.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    SSR?

    As for the rest, yes, temperature and speed of temperature increase and decrease, and even nature and flow speed of dopping agents, that I knew about… was asking about was the “ferritic structure like steel” implicitly without carbon?

    p.s. you're on solar energy (not necessarily photovoltaic) aren't you? Is anything realy promissing or are we still on green wishful thinking outside of thermal colection?

  • ultra

    Dollar watch: seems to me the ole buck may be twitching an eyelid back there in the coma ward.

    The action yesterday – and I am still confused as to how the DXY makes a new low for the year when so far as I can see AUD was the only pair really correlated with the equities – explanations welcome

    GBPUSD: nowhere near its summer high, in fact fell short of the fib I highlighted yesterday, fell quite nicely since and overnight
    EURUSD: had its face pressed against the glass ceiling all day long but didn't really go anywhere
    AUDUSD: new high, but fallen since
    USDJPY: recent low held (way off the year's low), rising
    USDCAD: waaaaay off the recent low, rising
    USDCHF: recent low held, rising
    USDSEK: recent low held, rising

  • http://oahutrading.blogspot.com/ steveo77

    Tax credits make it a business plan that makes sense, minimal 15% annual return….maybe up to 20%. In Hawaii. Better than giving your money to Madoff.

    The real cost of oil and other fossil fuels is far higher than the going rate of $80/bbl….throw in a few foreign wars, possible global warming, and just being dragged around by our balls…and oil gets real expensive, that corrected price should be the comparator.

  • http://oahutrading.blogspot.com/ steveo77

    SSR SSC SSH, all the big SS critters…

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    of course, stainless steel rats, our colective, must get some sleep—-

  • MariAroma

    Short daily video update on the “cloud” charts: S&P, uptrend continues; Dollar, downtrend continues.
    http://www.ichimokucharts.com/login/?returnUrl=/

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    you have fossil fuels for centuries below 80/bbl (see oil shales and horizontal drilling), nuclear for milleniums, global warming is most likely overestimated by a magnitude, war are fought for CHEAPER energy and other geopolitical considerations.

    so basicaly solar is strickly thermal solution…

    was asking because of some hype on nanomaterials for increasing energy efficiency on hotovoltaics… seemed still on a drawing board stage.

  • http://iberianviews.blogspot.com/ catracho

    yes DAX at crucial point…very short term looks like pullback needed..but if it doesn't get”legs” not looking good for bears..above your levels and we are back in that wedge..
    http://www.screencast.com/t/jPwVREfC

  • ultra

    See the trendline, but a 76.4% retrace would still give us a perfect H&S. Obviously, I am hoping we don't get anywhere near it though.

  • ultra

    EURUSD 5min channel, double top – http://screencast.com/t/XizhKxsS
    GBPUSD 5min channel – http://screencast.com/t/wjtPjHAHQ29

  • http://iberianviews.blogspot.com/ catracho

    yes me short gbp stop above that channel…re test the lows…below 1.66 1.65 🙂

  • amokta

    Ok, today is decision day, as to secular bull or bear market in the making

  • bobthehorse

    don't be so dramatic – it's just a day to trade like any other.

  • amokta

    true, i think a philisophy of trading the tape as it unfolds, but with an eye on the macro-picture makes sense. Its just the folks at EWI are saying todays action is important in deciding if still in P2 or P3 now in play (although i agree trying to make such 'top-calls' has not so far been sucessful)

  • ultra

    Yeah, me too. Should get a few pips at least.

    GBPUSD hourly channel – not quite so bearish – http://screencast.com/t/dnNO7Fqx

  • bobthehorse

    EWI will not make you money – do yourself a favour and cancel the subscription.

  • goldpackers

    I thought 1101 ended the diagonal that begin at 978 however that appears to be only wave 3 of the diagonal. 4 bottomed at 1029 and now ending A of 5. Should peak here and pullback to 1160ish into 11-16/17 for B of 5. Then the final C of 5 up into at earliest 11-23/24 and 1107 to 1125 . Once complete, diagonals tend to retrace to their origin. Black Friday should be interesting.

    Believe yesterday's rally was too strong for a B or X wave which would call for a top here and a retest of 1029. Bradley high today and I have a Gann turn today. Unless there is prompt and heavy buying of $s, don't see this as the top, maybe the momentum but not price top.

    GL

  • vanilango

    Dollar index, after breaking the channel briefly last week( a “iv”th), falling to end its final fall.. with an “ending diagonal”..??
    Most of the bears are turning to bulls and doubts all over..What better indicator.!!

  • Schwerepunkt

    EWI is free this week. You will see much about EWI on blogs for this time period. I would never buy a subscription.

  • Schwerepunkt

    But you will drop your shorts at 1097ES, depending on the action?

  • amokta

    yes, at next renew-point, might cancel. good to see how they apply ew analysis though

  • bobthehorse

    Well, I am not very short. More like flat with some 1050 puts. but above there yes, i would be reassessing and looking for a support to buy again. I think the market will go down but I am not going to risk much capital on that right here. a) we are up 4% mtd; b) we don't have to. If the market breaks down from here, we will be able to find a level to get shorter even if it as at a lower level. c) the puts will kick in anyway.

  • amokta

    whats up with barclays uk – went down somewhat today?

  • gmak

    Pre-Market warm up

    If one were to put on a trade in SPX right now, (say through ES), and the trade moves into the red, at what point is the trade wrong?. If you go short, you don’t know if you’re wrong until between 1105 and 1110 which are the BIG WHITE long term upper trend line (from the peak in 2007), and the upper Bollinger (21,2). If you go long, I would guess that you would know the trade was bad, only if SPX went below the July violet trend line – if it is still valid. I am not talking intra-day here but longer term.
    TD Pressure is overbought, still.
    Here is some of what is happening today and will affect the emotional context of the market:
    [EVENTS]
    • 09:15 Atlanta Fed President Lockhart on the economy
    • 10:30 Fed agency coupon purchase (Nov 15, 2010 to Oct 15, 2011)
    • 11:00 SF Fed President Yellen on outlook for economy and real estate
    • 11:15 Boston Fed President Rosengren at Euro Econ and Financial Centre
    • 15:30 Fed Governor Tarullo on resolution authority
    • 19:30 Dallas Fed President Fisher on current and future economy
    [ISSUANCE]
    • 11:30 Treasury auctions $30 bln 4-week bills
    • 13:00 Treasury auctions $25 bln 10-year notes
    IMO, the keys to th kingdom are in the agency coupon purchase and the 10 year auction. There was lots of action in yesterday’s 3 year auction with foreign investors taking most of the sweet stuff and leaving the IBs to actually lose money on the trade. I guess it’s a hard life when the FED won’t POMO you with profits.

    Equity
    Asia was green. Europe is mixed and near flat when it is green. The DAX is doing well in Consumer goods, HealthCare, Industrials, Financials, and Basic Materials. This is across the board for the economic growth story. It is bizarre given that the German investor confidence declined in November on weaker economic outlook. It’s a case of “do as I do, not as I say”. SO far we’ve seen a double top in the DAX this AM. Uncertainty is in the air.

    ES pivots:
    R2: 1110 = Up above where my personal “top of the mountain” is for SPX. If ES gets past this, then there is a run for SPX = 1121 (the 50% FIB from the ultimate Hi – Low); and also SPX > 1150 which is where the channel top is (at the present time) that we’ve been running in on a daily basis.
    R1: 1101 = plausible target based on liquidity still to come between now and March
    Neutral: 1083 = launch pad for the PM thrust in ES yesterday.
    S1: 1074 = around where the pop started at 8AM yesterday
    S2: 1057 = seems to have been the trigger and floor on Friday, that started the latest pop.

    FX
    USD is slightly stronger and has somehow managed to hold above DXY = 75; CAD is a bit weaker; JPY is weaker; EUR and GBP are weaker. So, it looks like some profit taking across the board before the next bucket of cold water on the USD. With the G20 deciding to stimulate economies no matter what the cost to the middle class, some traders are targeting EUR = 1.5285 with entry at 1.50 and stop at 1.49; This is inter-day not intra-. Note that the EUR recovered easily after weakness from the German ZEW (confidence) numbers.

    EUR pivots:
    R2: 1.5125
    R1: 1.5062 – This was the roof back in October 26th and the peak before the drop. BTW, the moves since then sure looks like a ragged cup and handle pattern, with EUR just finishing the handle. I don’t know how smooth the cup needs to be – but the shape is there.
    NeutraL: 1.4958 – didn’t even get here when the ZEW number came out. This would be a surprise if reached – and probably due to a stop run and a flurry of long covering from inter-day traders.
    S1: 1.4895 – just a whistle stop on the ramp up on Friday. It looks like there used to be some resistance here, but the 50% FIB from the Oct 26th peak was in the area as well.
    S2: 1.4791 – below all the activity since post –November 4th.

    NEWS
    German Investors not as confident
    Tight bank lending standards are being touted as one of the reasons ben is going to keep rates low.
    Former BoE policy maker Buiter said that the FED is likely to raise rates late next year so to avoid treasuries. 10 year yields were weaker indicating demand in the front of the auction. Guess some are still trying to play the POMO game even when it’s over.

    The Dutch aren’t worried about the strong Euro. (Are they net importers or something?)

    Data
    a trio of optimism /confidence numbers during the day.

    They say that if you want to predict the weather, just make your prediction for today equal to what happened yesterday. If the same is applied to the markets, we are going up today. But, I’m not in the prediction game. However, today looks like a consolidation day to me.

    Cheers.

    p.s. From the sounds of things, when bears say they see the SPX reaching 1110 or 1120 or 1200 even, it looks like they don't believe it. Bears seem to say the right thing, but do the wrong thing. A good way to lose money. Wait for the turn, don't anticipate it and the Bulls will have less money to take the market higher.

  • bobthehorse

    results were only in line – lot of buying into the numbers

  • fazhole

    Although we enjoy explosive returns just as much as the next guy – we at FASHOLES understand that making money in this business doesn't need to be sexy, cocky or complicated. In fact, there's nothing wrong with being downright regular.

    Relax. Read. Flush. Wash. Repeat.

    The market obliged our first Black & White set up yesterday and came into our ideal buy zone with FAZ. Due to the speed of descent, the eventual total position was divided into four (4) equal tranches. Three tranches were executed with an average price of 19.53.

    Don't be an a$$hole – become a FASHOLE!

    fasholes.blogspot.com

  • Duuuuuude

    Thank you Michael.

  • onorio

    Good morning rats!

    EURUSD update :

    We should be on a (d) wave of a LD…should retrace to 1.4930/50 and after that rally to 1.5070/1.5100 (my target is 1.5076). So we this BULLshit should last at least until tomorrow.

    Daily :

    http://www.screencast.com/t/MTk2ZTI0Yz

    1h :

    http://www.screencast.com/t/N2Y0MWNmMD

  • amokta

    ok (i was trying to read too much into it – i seem to be seeing P3 round every corner – best if i cancel that ewi subscr!)

  • bobthehorse

    Sorry Mole – I simply have to say something about EWI. I know you have a deal with them but to my mind they are no better than the Wall Street shills. What skin do they have in the game? Nothing. They are motivated to get publicity. Publicity = subscribers = money. So they never look for a 10 tick down-move, it has to be a crash. There is never a retracement, only the start of THE BIG ONE. Prechter is not the person who has been calling the markets down for 20 years, he is the man 'who predicted the crisis'.

    Prechter, Rosenberg, Roubini, Roach. They are all the same – no better than Abby Joseph Cohen. That is because there is no upside in this screwed-up world from being sensible. You have to be at the extreme to get the media attention – that is how they get paid, not from calling the market correctly. When did you last see someone on CNBC with the tagline 'gets some things right and some wrong, but on balance makes his clients money over the long-run without doing anything stupid'? No – it has to be Roubini vs. Rogers, etc. Gold is going to $2000 or $500. There is no middle ground even though that is where the professionals make their money.

    I am saying this to try and help out people on this blog who are getting sucked in by these charlatans – they are not trying to make you money. They are trying to make themselves money and they do that by persuading you to subscribe. Being convincing and interesting is what matters, not being right. Bulls and Bears.

    Right – rant over. Don't know why I care – just my charitable side I guess. I don't even know why I have been telling people what I am going to do – must be losing it.

  • TomOfTheNorth

    Bob,

    Why the long face????

    <snort>

  • amokta
  • amokta

    good to hear your views !

  • clutchshorter

    Morning Rats!! I've been thinking about developing/training an artificial neural network that trains the system based on historical data. Most likely a backpropagation network whose inputs are stock price, volume, lows/highs, etc.. The system will use 100 years of data in various market conditions (bull market, bear market, depression, world war I/II, cold war, 9/11, tech bust, subprime mortgage). The outputs will be an indication to buy/hold/sell. Using this trainined data set, I will pass blind data (new market data) into the system to produce these outputs and to guide my decision making. The only problem is data mining/collection to train the system.

  • labdude

    Newbie here (been lurking on ES for about 2 weeks)–thanks for the comment.

    While I've only been trading for about 2 years (made some and lost some coin)–right or wrong I have formed an opinion–the market is rigged.

  • roncofooddehydrator

    Interesting, how are you determining your ideal buy zone?

  • ultra

    You are to a large extent on the money. I only give the STU a quick once over these days tbh and *never* trade based off of it.

    To be fair to them though, their advice to the average (I assume they mean primarily US here) subscriber has been consistent for the last few years – stay in 3 month T-bills.

    I do like the monthly newletter though. They dig out a lot of interesting facts/figures you don't get anywhere else and the longer term socionomic trends stuff…

  • Schwerepunkt

    We need your opinion here. I hope you continue to share it. Investing, trading, LIFE, is all about balance.

  • TomOfTheNorth

    He makes a lot of sense for someone THAT medicated….

    ;->

  • Schwerepunkt

    😉 I think 'sedated' is the correct descriptor.

  • TomOfTheNorth

    He's got a very cool pointer-thingy (it's got a little hand on it!)

  • TomOfTheNorth

    Balance? DAMN! I got it soooo wrong………<sigh>

  • clutchshorter

    My theory about the stock market :

    In the 1800s, JP Morgan, Goldman, Morgan Stanley, Bear Sterns, Merill, Lehman were all college fraternity brothers. They decided to create the biggest ponzi scheme of all time.

    “Dude, let's create a stock market. We'll sell ownership of our companies to people and give them this paper. We pocket the dough and they can fight over the value of the paper. This value can go up and/or down based on how we perform”

    “How do we keep making money bro?”

    “Easy, we just keep selling people ownership of our company. We pocket the money, use some of it to grow our company, and live large like kings”

    “I like this idea, we have to keep this a secret. But what if we things don't go the right way”

    “My homie! It's all good. My fraternity brother works for the Government. We'll just ask them to print more money and help us out. No worries”

    “That's an awesome plan, lets make pact that from now on, this SECRET does not get revealed. It will be passed down generations and generations to those that run our company…”

    And so, the FUTURE of the stock MARKET

  • fazhole

    They were determined in advance of the trading week using the FASHOLES proprietary trading system. We do not disclose our methods of determination – but will post our results.

  • http://trading-to-win.blogspot.com/ DavidDT

    “Prechter, Rosenberg, Roubini, Roach. They are all the same – no better than Abby Joseph Cohen. “

    And you know WHO is WORSE?
    Suckers who continue to wave those people names in the air helping THEM to get rich.
    Then again – anyone who is “looking for investment advise” without spending own lifetime on learning and perfecting risk management – that someone deserves to lose his money…preferably to me 🙂

  • ultra

    Man, I nearly spewed when I saw that.

    Major bowl being schmoked in that basement – it's like CNBC made by Bill & Ted.

  • senrex

    Thanks, gmak, for these daily briefings. They truly help to set the day in context.

  • Schwerepunkt

    I hear ya! Pretty unbalanced here as well in my investing, trading and LIFE. Do as I say, not as I do . . . LOL.

  • http://trading-to-win.blogspot.com/ DavidDT

    Are you Madoff?

  • Schwerepunkt

    I feel so much better after reading the following little blurb! (sarcasm level infinite):

    Japan Fujii: US Geithner Wants Stronger Dollar
    Last update: 11/10/2009 8:43:34 AM
    TOKYO (Dow Jones)–U.S. Treasury Secretary Timothy Geithner has expressed his continued desire for a stronger dollar, Japanese Finance Minister Hirohisa Fujii said Tuesday.
    “Mr. Geithner has long been saying he wants to strengthen the dollar, and that point was reaffirmed today,” Fujii told reporters.
    Fujii was speaking after he held a one-on-one meeting with Geithner, who is visiting Japan for the first time since assuming his current post in January.

  • fazhole

    We get access to computers here in West Virginia. This is the best I can do with the tools available. Could you come visit?

  • dollar

    Thanks gmak

  • http://www.genxantihero.blogspot.com LostIllini

    wow…just wow.

  • http://www.genxantihero.blogspot.com LostIllini

    Sounds like too much work…I'm going to open a gold mine, look for my IPO soon…

  • gannsecret

    Morning all,
    expecting BIG reversal today
    enjoy

  • CorporalCarrot

    Could you elaborate as to why?

  • bobthehorse

    I don't think it is rigged but the number of people who have an interest in it going up far outweigh those who want it to go down. Why do you think hedge funds are so hated? Because they challenge the entire structure of the system – asset prices must go up to keep the wheel turning.

  • http://www.genxantihero.blogspot.com LostIllini

    That is the gameplan but I would settle for a doji…

  • TomOfTheNorth

    Folding table and other decorative notes notwithstanding, the window treatments indicate BW is above ground. That said, I love the fact that he's out there, doing his thing – I hope he tears it up! BTW, comparing him to CNBC is an unduly harsh, uncalled for, terrible insult to him……lol

  • CorporalCarrot

    Isn't this kind of obvious? The default state of every market is up, in the absence of external factors. Particularly so in the case of the stock market. They say in the long run its a voting machine, but its a voting machine where many of the voters only have one box on their ballot paper. Sure people can sell, but I would imagine that the funds that are available to be deployed in the market, less than 10% have the ability to actually short. Therefore, in the absence of scares and a fairly steady state environment (which we have at the moment), the market will continue in the prevailing direction, until something occurs which actually forces longs to sell. Shorts alone will not bring this market down, until the long only funds & investors actually start dumping, and at the moment its hard to see what the catalyst for this is.

  • ultra

    Yeah I know, awful – sorry 'bout that, BigWet, if you're out there – more power to your mickey mouse hand on a stick…

  • ultra

    Dollar disjoint last 3 hours: JPY rising, EUR, CHF, CAD falling, GBP down then up, AUD in holding pattern

    hmm

  • AudioTactics

    Anybody know what is going on with GLD this morning?

    It got a big bid and now its coming off again…

  • http://venespeculador.blogspot.com Holl
  • gannsecret

    My astro cycles up pressure ended
    yesterday. Sell pressure through month end.

  • CorporalCarrot

    And how accurate have these proven to date? I'm not criticising or anything, just curious. I must be honest and say that of all the methods of prediction, I am most sceptical of any astro based or other types. But then again, I know some newsletters that follow this stuff have managed to outperform many traditional letters so who am I to argue? 🙂

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    I've shared your views for many years. Granville was the great predictor when I got started. He had called for a crash forever and then got credit for calling the 87 crash.

    Main point is one way to sell subscriptions is 2b extreme and take credit when the dramatic comes. I'm not so sure it is so deliberate with all mentioned here, but at the end of the day they are not, as you say, just trying to make steady gains without risking too much for it. They are definitely trying to swing for the fence and make the highlight reel.

  • molecool

    As you know I'm counting my own waves and am using my own tools, the only system we share is EWT. Also, I never post their charts on this site and the only time I mentioned Hochberg's count was when I thought he was wrong ( and I turned out to be right).

    I disagree with them being charlatans however – they do care about theri subscribers and the sad truth is that counting waves during a 2nd Primary wave is a very difficult racket.

    Whatever you do – always employ your own TA – their general audience is a lot less sophisticated than most traders who follow this blog.

  • CorporalCarrot

    Bob,

    Whats your downside target today on your short term trade?

  • CorporalCarrot

    Looking at the open Mole, it certainly looks however that they will still be hanging on by the skin of their teeth today, with the EURUSD down and the equity futures also looking like P3 (at least in S&P) is still alive (albeit on a ventilator).

  • Graphite

    Sorry Mole – I simply have to say something about EWI. I know you have a deal with them but to my mind they are no better than the Wall Street shills. What skin do they have in the game? Nothing. They are motivated to get publicity. Publicity = subscribers = money. So they never look for a 10 tick down-move, it has to be a crash. There is never a retracement, only the start of THE BIG ONE.

    I am so sick and tired of hearing people call EWI useless perma-bears when they helped save me tens of thousands of dollars — who knows, maybe my entire portfolio — by calling the rally back in March. Yes, I would have been an idiot to stay short then, but at that point I needed a bit of help to realize it. And now we get 8 months of reflation rally and because EWI has once again unfortunately underestimated investors' capacity for self-delusion and bubbly thinking, they're supposed to be thrown under the bus. They're supposed to be judged as not just analysts trying their best but suffering a slump, but as craven shysters looking to turn a quick buck off the gullible. And all this while having told long-term investors to stay safe and in cash! Well fuck that.

    Whether you sit looking at charts counting 5 wave impulses and 3 wave corrections is much less important than grasping the fundamental Wave Principle insight that the market is an endogenous herding process, and is not moved by “fundamental” developments such as “catalysts” or Fed policy or whatever.

    At any rate all this crowing and Prechter-bashing amounts to a huge case of jumping the gun. It will still be a decade or more before the jury is really out on Prechter's Supercycle-plus degree forecasts.

  • ultra

    Whatever you do – always employ your own TA

    Wise words – that I have learnt the hard way from, er, following other people's analysis & trades without fully understanding why they were making them.

    And I don't believe Prechter is a charlatan, far from it. Sorry if I didn't make that clear. I don't think anyone who read Conquer the Crash would come away with that impression.

  • labdude

    bob:

    Rigged may be the wrong word–but the market is manipulated to some degree by the Fed and large banks. Technical analysis may be right–but if you happen to be on the wrong side of a Fed announcement or a large trade (or announcement) from Goldman Nut Sacks–you can be screwed. I guess luck has something to do with it.

    Anyway appreciate your and everyone's comments.

  • molecool

    I keep seeing those Gann guys miss their turn dates, after which they go away, only to return weeks/months later with a new turn date. If you thin EWT is mental masturbation then Gann is a brand new toy for you 😉

  • Graphite

    And I don't believe Prechter is a charlatan, far from it. Sorry if I didn't make that clear. I don't think anyone who read Conquer the Crash would come away with that impression.

    Seriously, practically the first words in the book are, “consider my arguments carefully and *think for yourself.*” *This* is what counts for attention-whoring these days?

  • bobthehorse

    we are right on support – I think (hope) it breaks and then we could get a bit of a wash-down to 1060 ESZ9

  • Graphite

    If only history was so kind as to deliver unto societies exactly the outcomes which are in the interests of the greatest number ….

  • CorporalCarrot

    I don't necessarily think EWT is mental masturbation. I don't really know enough about it. My observations however are that the EWT websites (yours included) have some of the most educated, diligent traders in the blogsosphere. However, the method itself seems to have too many ifs/buts that only seem to resolve themselves after the event, and which are not necessarily conducive to good trading.

    The other observation I make is the number of EWT blogs where the traders are all predicting (correctly so far!!) much higher prices and yet seem to be unable to translate this into taking an actual long position. This makes me wonder if they either (a) doubt their method or (b) are letting an overall perception that this thing could tank at any time influence their decisions.

  • gannsecret

    You got it all wrapped up…
    so you don't need me.
    Good bye ES Rats !

  • bobthehorse

    Crap – turns out support was support. Ho hum.

  • molecool

    Great comment – thanks for that 🙂

    Human nature is actually very predictable. One of the reasons that traffic here has gone down in the past few months is that many blame me for their losses, despite the fact that I kept them out of trouble numerous times.

    People prefer to blame someone else – it's key that traders however learn to assume ownersip of their trades.

    Let's also not forget that the nature of the market has changed completely as it's dominated by a narrow group of insiders. This makes for wild swings and head fakes and most retail traders will lose in this game.

  • Bart7

    hang in there Gann, I appreciate your input….

  • gmak

    Don't see it as a disjoint. Earlier with the JPY falling, it looked like mild profit taking /consolidation. Now it looks like the move away from risk assets with JPY rising and USD rising.

  • gmak

    Neural networks are insidious. They will find a pattern in any data. They will ALWAYS find a pattern even if there isn't really one there that can make money.

  • molecool

    Really like your stuff today – thanks for swinging by.

  • bobthehorse

    and now we test resistance. best thing to do is go sit in a dark room and come out when mkt has made its mind up.

  • derekste

    I'll reserve my gloating until after close

  • derekste

    Question: If we fail to break the SPY high of 110.31 today(or even tomorrow), what will the interpretation be?

  • Bankster

    Thanks for the update. Hope you are right. Bears have lost hope.

  • molecool

    Oh come on – don't be silly – have you got any idea how much heat I get for using EWT? So prove us wrong! Maybe today you Gann guys have you day in the sun, my portfolio could use a bice drop. So come back here and argue your point like a big boy, don't run off in a huff – was not trying to attack you personally.

  • molecool

    Meh – I'm not even watching the tape – still in bed.

  • molecool

    You are a Gann follower as well?

  • gmak

    Looks like the risk trade is back on. USD weakening and CAD, JPY, EUR, and GBP all moving up off of their respective support (pivot) level.

  • molecool

    If the bears truly have lost hope then this might be a 2nd wave – those are really good at shaking out weak hands.

  • insite

    clutchshorter's mention of the strangle hold yesterday got me interested in learning how this works. in theory, i understand it perfectly. in practice, however, i don't really have experience trading options; i have a couple of options question for a dummy.

    first, if i set up the strangle in TOS, for instance, it will consist of two vertical spreads. the first spread shows a 'debit' and the second shows a 'credit'. i assume the amount i have to pay for the position is the credit less the debit. is this right? so if the credit is $3 and the debit is $5, then i'm paying $2 x 100 = 200 per contract, right? now if i reverse this and the credit is greater than the debit, i actually take in $$$ for the position, correct? do i have to have a special kind of account to do this? thanks for your patience; trying to learn.

  • derekste

    LOL no…

  • cramar

    No difference if this is still P2?

  • ultra

    hey gmak – can you answer my question as to how the DXY/USDX makes a new low yesterday when none of the constituents did? Is it not based on the cash indexes?

  • bobthehorse

    this might sound nuts but I think 1060 is realistic. But to do that, we have to break minor supports which frankly it is showing little sign of doing. In fact, it is doing the opposite, i.e. rallying off them.

    I won't make any money if it messes around – only if we go down 20 points minimum as then the gamma will kick in. But i won't really lose anything if it goes up either. It is possible it will go nowhere between now and Friday just to waste theta.

  • centerline

    Good instance where sense of humor is basic requirement for this market!

    However, I could entirely live with an explosive run-up today. I would gladly increase my short-term short position for a blow-off event. However, 7 days in a row of rally would be quite improbable. Seems to me the worst case today for the bear is a flat or late sell-off to the tune of only a couple of points. I would likely close short-term shorts at that point and go short-term long, small position though.

  • string01

    Keep in mind that there are plenty (most) EWP bloggers who have no idea how the principal works, don't know/use proper numbering/lettering, and don't know the corrective patterns. I don't think many of them have even read the book. Feh.
    Also, they try to apply EWP to individual stocks. Again, read the book.
    EWP is based on psychology of market participants, I think part of the problem right now, it that with all the fed printing/POMO/etc. the market participants, and hence, the market's are not really functioning as such.

  • clutchshorter

    I did a backtest analysis on TOS on several SPY trades. You you will have a net profit if the position moves in either direction but people dont like the fact that it limits your reward. Given the nature of what has transpired these past few weeks, I prefer this setup at least until we ride out this storm instead of seeing my account go more negative. I think there's a way to fine tune this setup.

    They are both debit spreads (Bear Put Spread + Bull Call Spread). Neither of them should be a credit.
    BUT wow, that gave me a new idea. Assume we were short on SPY. Since SPY is trading at $110, we could setup a $110/$105 Bear Put Spread (DEBIT) going out 3+ months and then setup a $100/$95 Bull Put Spread (Credit) for the front month options. This way, if SPY goes up, your Bull Put Spread will lose value and you will pocket that to offset losses incurred from the long term Bear Put Spread. INTERESTING perspective….

  • bananaben

    There is no doubt this market is totally rigged. I don't think it will go down until there is a major event – ie. the dollar fall really accelerates or there is an implosion of the derivatives market. Otherwise, the double dip will represent the failure of Bernanke/Geithner/Summers and would spell doom for Democrats in 2010. They are all in on preventing this and will print whatever is necessary. Ultimately we know they will fail, but who knows how high the market will go at that point.

  • goldpackers

    Actually my turn dates and Gann Secrets' have been pretty accurate. The tough part is predicting the direction of the mkt into the date. However I just use that date as a reversal point.

    I have a turn today and expecting down into 11-16/17, a very important turning point. If I am wrong and it is a high, then I will gladly add shorts.

  • bobthehorse

    Given that agrees with my current positioning, I will take heart from it!

  • KK_KK

    GS knows when the doom and gloom will come. They are stockpiling funds for this “great” event.

  • goldpackers

    See below on Mole Cool. Keep the updates coming. Everyone is a little Chippy here.

  • cramar

    The SPX has closed up 6 days in a row. This is the 7th up day. Gann said the 7th day is significant, but I don't know if stats bear this out.

  • insite

    i wonder what i have set up, then. here's what i have in ToS for my spy spreads:

    the first is a vertical call spread where i sold the 98 and bought the 108. the second is a vertical call where i sold the 120 and bought the 110. one was a 'credit' spread and the other was debit. the risk profile looks like a condor with its wings spread, so i figured i did the right thing. the expected return line on the graph looks like a wide parabola with the meniscus just below zero at a price of around 106.

  • tradejane

    Heh, seems the bears are winning it so far. 🙂 DAX couldn't go over 5650, nor is it impressed by the $dji action as of now.

  • http://dreadwinaard.livejournal.com dreadwin

    Closed my (low risk) DRV trade. In at 17.84, out at 18.50 for +3.7%.

  • goldpackers

    EWT is my market tool also however the turn dates on Gann keep me out of SOME trouble and give me entry points along with the EW count.

  • goldpackers

    EWT is my market tool also however the turn dates on Gann keep me out of SOME trouble and give me entry points along with the EW count.

  • Schwerepunkt

    It is not rigged in the sense that somebody is sitting on a button that juices this stock or that stock index higher at key moments. It is rigged in the sense that Fed policy has made it inevitable that money (whether real, virtual or newly created) would flow out of certain asset classes and into others, with equities and commodities the primary winners and the USD getting the shaft.

  • PRSGuitars

    “max pleasure” theory?

  • Schwerepunkt

    Also known as the “Spooge Index.”

  • goldpackers

    Sometimes the turns are only for 3 to 5 days, depends on what I see the wave stucture. On that I believe we should drop to 1060ish(11-16/17) in wave B of 5 of a diagonal that began at 978 and then the final C up into at least 11-23/24 and 1107 to 1125.

  • Tronacate

    Good morning………everyone wrapped in a bear carcass this morn?

  • gregn

    Great post CD, thanks. You always find pictures that reflect your thesis perfectly.

  • gregn

    When the market crashes, the blame will goto capitalism.

  • Tronacate

    I'm wearing a bloody Panda head…….

  • Tronacate

    What's the site theme song…..I pick “Crazy Train”

  • Schwerepunkt

    EUR coming up against 1.5 level again.

  • Schwerepunkt

    Supposed to be Gravy Train.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    gold is about to go parabolic

  • Schwerepunkt

    Yeah, because they will be part of the triggering mechanism.

  • CorporalCarrot

    Today's 1 day Dow chart looks exactly like the pattern from yesterday. Perfect stair-stepping upwards. The repeating patterns are so perfect, its not difficult to imagine computers running the show.

  • http://dreadwinaard.livejournal.com dreadwin

    Jane, are you still tracking the financials closely? IYR is telling me that we go sideways and consolidate or down.

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    lol @ low-risk drv trade.

  • TomOfTheNorth

    from David Rosenberg's morning note:

    There is still a NET speculative short position in both the 10-year Treasury note of 85,551 contacts (on the Chicago Board of Trade). There are 95,648 net short contracts on the long bond too.

    But there are 29,608 net LONG positions on the 30-day Fed funds contract —down from the highs, but it means that Fed tightening is completely off the radar screen. At the same time, there are 152,311 net longs on the 2-year Treasury note, so it would seem as though we have a crowded trade among the speculators on a bear curve steepening trade.

    There is a significant net long position on the S&P 500 to the tune of 208,448 contracts on the Chicago Mercantile Exchange (CME).

    There is also a huge net speculative short position on the U.S. dollar (the ‘carry trade’). For example, on the CME, we have 24,389 net speculative long CAD positions; 50,264 net speculative long contracts on the Australian dollar, and 28,036 net longs on the Euro. These are huge numbers. What happens if/when the U.S. dollar ever undergoes a countertrend rally?

    The largest speculative long positions are in the commodity space (this is near-term bearish) … 271,564 gold contracts (a record) on the Commodity Exchange (COMEX); 44,312 net longs on silver (near-record but not quite), West Texas Intermediate oil contracts on the New York Mercantile Exchange (also a record); 10,871 net long copper contracts (a new cycle high); 5,538 net speculative long contracts on the Goldman Sachs Commodity Index.

  • EVAN

    mole, i do really like your EWT charts. Although I am one of those believing in fundamental company analysis rather than anything else, I come back here so often to get a sense of risk, probabilities and edge, and sometimes using your conclusions for hedging of my long list of short positions. I would not be able to put together a chart of yours, sometimes I do not even know what are you guys are talking about. But I do know, that this analysis of yours is excellent and very very useful.

  • Tronacate

    I'm not talking about what I'll be having for lunch soon enough…..:)

  • Bart7

    Rosenberg Sees 13 Percent Jobless Rate

    Monday, November 9, 2009 11:06 AM

    By: Dan Weil Article Font Size

    Economist David Rosenberg said the U.S. jobless rate could hit a post-World War II peak of 13 percent, thanks to a sluggish economic rebound.

    Already, unemployment reached a 26-year high of 10.2 percent in October

    “This is going to be the mother of all jobless recoveries,” Rosenberg, chief economist at Gluskin Sheff & Associates, told Bloomberg.

    “At the beginning of the year, who was calling for unemployment to go up to 10 percent?”

    The effect of this recession, the worst since the Great Depression, won’t end quickly, Rosenberg said. The economy is “in a post-bubble credit collapse.”

  • goldpackers

    Excellent point. I am an EWer over in Prechter land. EW is subjective so even if I expect a drop to 980 to 1020 per my EW count after one more high, my fear is we fail( some outside iinfluence) or I am wrong as I previously thought 1101 was it.

  • I_got_Prechterized

    Bobthehorse, if you're out there— what do you see here short term now that we're above 1090. I held my nose and bought yesterday morning. I sold 1/2 this morning. You've been dead right on this move, are you still long?

  • bobthehorse

    Just added some more Dec 1050's

  • clutchshorter

    Vertical Call Spread should be something like Buy $112/Sell $120

    Basically, you're sandwiching a PUT spread and a Call Spread around the SPY price

  • http://dreadwinaard.livejournal.com dreadwin

    On days when IYR has a huge green candle in the last 5 minutes (quants covering shorts?) one can grab DRV during the last 2 minutes of the trading day, and sell in the first 1 hour of the next day for an easy 3-5%. This setup recently happened on Oct. 14th and Nov. 9th.

    Otherwise, trading DRV and SRS can be like getting together with this girl: (link to the Onion)

    http://www.theonion.com/content/opinion/if_im_s

    I.e. keep it very short term, and don't ever get attached.

  • clutchshorter

    Fed Officials: Weak Recovery Won't Spur Jobs- AP
    Unemployment likely will remain high for the next several years because the economic recovery won't be strong enough to spur robust hiring, Federal Reserve officials warned Tuesday.

    The FEDS are trying to tell us something

  • bobthehorse

    No – I am now flat delta and bought some Dec 1050 puts last night and a bit more again just as I just commented. There is no risk reward being long here. But I would not blindly short this market – it's too dangerous. However, if we can break 1086 ESZ9, I think 1060 is on the cards. I am playing only for a big move down, not a small one.

    My gut feel is that we have topped out but I don't like to risk too much money on my gut unless it involves the purchase of beer.

    Rather like Mole – I think there are two scenarios. A raging bull market (his blue and my medium-term preferred) which is why I won't just get short. Or a very whippy phase with big moves in both directions (my current play).

    The simple fact is – I have no real idea what will happen. But here is where I am happy to place a bet on the short side, even if it is a bit timid.

  • Schwerepunkt

    Tried to short ES1094, missed by one tick. I hate chasing. maybe it'll come back up for a zero-line rejection in Woodies' terms.

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    Not knocking the trade. I just think characterizing it as 'low-risk' is a little …risky

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    R2k is the weakest major on the day, as well as since the move-up began a couple of weeks ago.

    fwiw

  • WTFed

    So do you avoid the short term stuff and just go with Bob's monthly reports for your signals?

  • WTFed

    So do you avoid the short term stuff and just go with Bob's monthly reports for your signals?

  • http://gemstowear.etsy.com Jan

    DX has held support so far today. I like the volume on the last bounce off support.

  • http://trading-to-win.blogspot.com/ DavidDT
  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    Nice article

  • gannsecret

    Goldpacker,
    Jaxon, t-dub here is my e-mail address.
    I'm leaving these public sites. I give freely of
    36 years of market experience and they just jeer.
    You guys and a few others are the only ones I will
    talk with about the mkt from now on.
    gannsuntoldsecret@yahoo.com

  • gannsecret

    Goldpacker,
    Jaxon, t-dub here is my e-mail address.
    I'm leaving these public sites. I give freely of
    36 years of market experience and they just jeer.
    You guys and a few others are the only ones I will
    talk with about the mkt from now on.
    gannsuntoldsecret@yahoo.com

  • gregn

    I mentioned this short yesterday, but still worth a look. CAT short: http://screencast.com/t/NDFmZGVhMj

  • http://trading-to-win.blogspot.com/ DavidDT

    let me see what they say:
    “If you don't see what is going on and you are still in this doomed part of the world – we got a hint for you – you phucked”

  • Tronacate

    Cocoa still grinding lower

  • Me_XMan

    USD is being defended.

  • Tronacate

    Nice

  • Tronacate

    Nice

  • http://iberianviews.blogspot.com/ catracho

    yes..looks like it…forthe mo..but wouldn't rule out one last push to 5675 area..

  • standard_and_poor

    Morning rats.
    Waiting for a red day to add to longs.
    Best of luck to all, ciao.

  • joeynickels

    I have large cash position and building core short positions in all of my accounts. I do short term stuff as well and have the bruises to show for it in 2009.

  • newbear

    I have to admit it, it is the only strategy working in this market.
    For now.

  • Me_XMan

    USD will have to tank for SPX going higher IMO. Obama going to Asia to reassure USD won't go down further. We'll see how successful his trip would be.

  • bobthehorse

    Come on – grow a thicker skin. If you get nothing out of these sites, fair enough but there is no perspective that is without value if it is based on solid research. But let's not kid ourselves that any one framework holds the key.

    FWIW, a number of other time based technical analysts I know have a turn date around here as well.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    come on Gann, even the owner keeps getting some heavy flack and you bail out on half a dozen comments?

    there were others discussing with you that I could almost swear didn't make it to the list.

    personaly I want to study dmark andneowaves before I go for gann, but do stay

    best regards

    p.s. we all made bad calls and got taken outside for some bashing, so what?

  • Bart7

    Gann, some jeer, but don't let them get to ya….

  • standard_and_poor

    For now is all we should care about, cheers.

  • I_got_Prechterized

    great thanks. I got stopped out on my other 1/2 long position. Everybody is assuming new highs in the cards. I figured they might take it right up near 1100 and then pull it back. I'm about to jump short too.

  • outsider99

    Sorry to see you go gannsecret, I've enjoyed you views (mostly accurate if I remember too)

  • tradejane

    Just saw your question, yes of course, I *always* track the finacials closely. They agree with your assessment. 🙂 The only problem is that IYR did bust above 42 and that was my line in the land. About the only thing keeping me bearish for now is the weakness in the German markets.

  • WTFed

    I hear ya. Thanks and good luck.

  • molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • Bart7

    agree, hopefully he reconsiders…

  • standard_and_poor

    It's never a perfect world for any trade, I prefer to focus on charts and turn blind eye to fundamentals.

  • Tom_27

    Hi Gann,

    I really appreciate your input, so I hope you will not abandon us. Good luck to you mate. Cheers.

  • Tronacate

    C'mon GANNMEISTER……..come back to the sandbox……fa_q will share one of his infected slutz…….

  • bobthehorse

    Either it has already topped out or we will go right through 1100 – won't stop there again.

  • http://dreadwinaard.livejournal.com/profile dreadwin

    I expect IYR to consolidate at 42 (at worst, the 50 MA at 41.7ish), and then make a stab at 43 later this week.

    As I type this, IYR just lost support at 42. Still some hope for the short-term bear!

  • CorporalCarrot

    Gann

    I hope you didn't take my questions the wrong way. I am actually genuinely interested in learning new methods, it would just be nice to understand a bit more the reasoning behind it, as opposed to just predictions such as “market down BIG today”.

    Stick around, we all take flak now and again.

  • Me_XMan

    SPX double top

  • Publius Federali

    I would never blame you for my losses, I only blame you for making me like Rammstein.

  • Publius Federali

    Stupid capitalism, always taking from the producers to give to the leeches, then consolidating power in a government that work with the oligarchs to enslave us all. Rewarding people for success can never work.

  • gmak

    The DXY is a derived index that averages the Fx rates of 6 major world currencies in terms of the USD. I don't know the ratios used in the weighted average (I would assume it is). The weightings are what would determine how the index behaved. The weightings are actually geometric (exponents) which means that the currencies don't have to hit a new low for the DXY to do so.

    See here for an explanation. You know you could have googled “DXY index definition”

    https://www.theice.com/publicdocs/nybot/ICE_Dol

    ________________________________

  • Publius Federali

    You don't believe in the famous triple top?

  • Graphite

    I have noticed many times that he will posit “alternate” scenarios or “potential secondary targets” that will play out more often than his preferred counts. They had the gold move to $1100 nailed but didn't really make the case very strongly at all … I think sometimes they do let their long-term views unduly color what is, after all, a “short term” update.

  • Me_XMan

    THE PARADOX OF THE SURGING STOCK MARKET and the sputtering economy never has been more striking than Monday.

    Following Friday's dreadful news of the U.S. unemployment rate soaring into double digits to 10.2%, stock and other so-called risk assets prices jumped Monday on Wall Street and markets around the globe.

    The latest leg up in the “risk trade” came after the Group of 20 over the weekend confirmed their resolve to continue their economic stimulus programs. In addition to fiscal measures, that would keep in place the ultra-low interest-rate policies followed by most of the major central banks, notably the Federal Reserve. Not that there was any question for the U.S. central bank, which just last week confirmed its intent to continue maintain its rock-bottom 0-0.25% federal funds rate target for “an extended period.”

    But another Fed report released Monday shed light on why nearly free money has had so little impact on the real economy. In its quarterly survey of senior bank lending officers, the Fed found that credit conditions had tightened again, albeit less than in its previous survey taken during the summer.

    Mind you, there has been no actual easing of lending standards since the screws were turned excruciatingly tight a year ago during the worst of the financial crisis following the collapse of Lehman Brothers. Nevertheless, this was greeted as yet another example of less-bad-is-good news. But, as JP Morgan economist Abiel Reinhart points out, “Lending standards have already tightened significantly, so there is limited room for further tightening.”

    Even so, the downward spiral in consumer credit accelerated in September, the Fed reported separately Friday. Consumer lending contracted at a stunning 7.2% annual rate in the latest month for which data are available, half again the decline in August, which was tempered by the “cash-for-clunkers” giveaway that temporarily arrested the plunge in auto loans and sales.

    Non-revolving credit, which includes car loans, fell at a 3.7% annual rate in September after edging up 0.1% in the August clunkers craziness. But revolving credit, which includes credit cards, collapsed at a stunning 13.3% annual rate, the 12 straight monthly decline.

    Nothing like that has been seen since the Carter-era credit controls in 1980. Nearly three decades later, once again the visible foot of government is squashing the economy.

    The Fed's latest survey of loan officers included a special question about the impact of the Credit CARD Act of 2009, which was supposed to correct banks' abusive plastic practices. “As a result of the act, banks reported that they expect to tighten (or have already tightened) many terms on credit card loans for both prime and nonprime borrowers,” according to the Fed.

    More stringent credit requirements, higher interest rates and reduced credit limits were among the ways banks were responding to this regulatory reform. Consumers have responded to this turn of the screws by paying off their balances as fast as they can, or are forced to.

    More to the point, the Fed noted that “sizable” numbers of both domestic and foreign-based banks were cutting credit lines for existing customers for loan facilities ranging from home equity lines of credit, commercial construction credit lines and lines of credit to financial firms.

    Instead of making loans, banks have ramped up their purchases of securities, notably Treasuries. That no doubt contributed to robust demand for Monday's auction of $40 billion three-year notes, which attracted a massive $133 billion in bids.

    It wouldn't seem that a 1.40% yield would set off such a stampede, but for banks or other investors that can finance a leveraged position at 0.25%, the 1.15-percentage point spread between the borrowing cost and the note's yield — multiplied 20 or more times by leverage seems juicy. Who needs the hassle of dealing with credit cards and new regulation when you can lever up nearly free money in riskless government securities?

    Or, better yet, purchase risk assets, from commodities to equities to foreign currencies to corporate credit? While the Fed found banks continued to tighten standards for commercial and industrial loans, blue-chip corporations such as Cisco Systems (ticker: CSCO) was able to raise $5 billion in the bond market Monday. Indeed, the networking giant could have borrowed a multiple of that amount as underwriters had to turn away eager bond buyers.

    As colleague Eric Savitz pointed out in the Tech Trader column in this week's Barron's magazine, Cisco sees signs of recovery. Evidently, it's raising billions in the welcoming corporate bond market to take advantage of opportunities it sees.

    Goldman Sachs economists observe that large corporations such as Cisco have access to the capital markets or the commercial paper markets, which Goldman observes have improved far more than the bank loan market.

    All of which lays bare the problem policy makers face to a far greater extent than past cycles: The Fed can “print money” but it cannot create credit alone. That process requires a willing lender and an able borrower. It takes those two to tango and expand credit, which goes toward increasing business activity and employment.

    Absent that, the cheap money is deployed to pump up asset prices rather than create to support real business and jobs. Wall Street enriches itself on free money while Main Street gets little stimulus while local bankers keep a tight rein on loans.

    So, don't mistake improvement in the stock and bond markets with better times for the real economy. Money matters but credit counts.

  • goldpackers

    Hate to jinx it , but is FAZ putting in ad inverted H&S?

  • goldpackers

    ABX nasty candlesticks. scared to be short so bought some cheap puts

  • ultra

    Yeah I know I know – I did and didn't find anything that would explain what I was seeing, so I just thought I might as well ask you geniuses. Thx.

    So this kinda answers my question – it is being somewhat misleading at this time then to my mind at least.

  • gregn

    Absolutely. How can an economy function if only hard work is rewarded? It makes no sense. Everyone should be paid the same amount, regardless if they work or not. Father Obama knows this and is working diligently to stop the inequality.

  • http://fasholes.blogspot.com FASHOLES

    Although we enjoy explosive returns just as much as the next guy – we at FASHOLES understand that making money in this business doesn't need to be sexy, cocky or complicated. In fact, there's nothing wrong with being downright regular.

    Relax. Read. Flush. Wash. Repeat.

    The market obliged our first Black & White set up yesterday and came into our ideal buy zone with FAZ. Due to the speed of descent, the eventual total position was divided into four (4) equal tranches. Three tranches were executed with an average price of 19.53.

    Don't be an a$$hole – become a FASHOLE!

    fasholes.blogspot.com

  • Duuuuuude

    Thank you Michael.

  • Onorio

    Good morning rats!

    EURUSD update :

    We should be on a (d) wave of a LD…should retrace to 1.4930/50 and after that rally to 1.5070/1.5100 (my target is 1.5076). So we this BULLshit should last at least until tomorrow.

    Daily :

    http://www.screencast.com/t/MTk2ZTI0Yz

    1h :

    http://www.screencast.com/t/N2Y0MWNmMD

  • bobthehorse

    Sorry Mole – I simply have to say something about EWI. I know you have a deal with them but to my mind they are no better than the Wall Street shills. What skin do they have in the game? Nothing. They are motivated to get publicity. Publicity = subscribers = money. So they never look for a 10 tick down-move, it has to be a crash. There is never a retracement, only the start of THE BIG ONE. Prechter is not the person who has been calling the markets down for 20 years, he is the man 'who predicted the crisis'.

    Prechter, Rosenberg, Roubini, Roach. They are all the same – no better than Abby Joseph Cohen. That is because there is no upside in this screwed-up world from being sensible. You have to be at the extreme to get the media attention – that is how they get paid, not from calling the market correctly. When did you last see someone on CNBC with the tagline 'gets some things right and some wrong, but on balance makes his clients money over the long-run without doing anything stupid'? No – it has to be Roubini vs. Rogers, etc. Gold is going to $2000 or $500. There is no middle ground even though that is where the professionals make their money.

    I am saying this to try and help out people on this blog who are getting sucked in by these charlatans – they are not trying to make you money. They are trying to make themselves money and they do that by persuading you to subscribe. Being convincing and interesting is what matters, not being right. Bulls and Bears.

    Right – rant over. Don't know why I care – just my charitable side I guess. I don't even know why I have been telling people what I am going to do – must be losing it.

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    Bob,

    Why the long face????

    <snort>

  • amokta
  • amokta

    good to hear your views !

  • ClutchShorter

    Morning Rats!! I've been thinking about developing/training an artificial neural network that trains the system based on historical data. Most likely a backpropagation network whose inputs are stock price, volume, lows/highs, etc.. The system will use 100 years of data in various market conditions (bull market, bear market, depression, world war I/II, cold war, 9/11, tech bust, subprime mortgage). The outputs will be an indication to buy/hold/sell. Using this trainined data set, I will pass blind data (new market data) into the system to produce these outputs and to guide my decision making. The only problem is data mining/collection to train the system.

  • labdude

    Newbie here (been lurking on ES for about 2 weeks)–thanks for the comment.

    While I've only been trading for about 2 years (made some and lost some coin)–right or wrong I have formed an opinion–the market is rigged.

  • roncofooddehydrator

    Interesting, how are you determining your ideal buy zone?

  • http://chartsandthat.blogspot.com/ ultra

    You are to a large extent on the money. I only give the STU a quick once over these days tbh and *never* trade based off of it.

    To be fair to them though, their advice to the average (I assume they mean primarily US here) subscriber has been consistent for the last few years – stay in 3 month T-bills.

    I do like the monthly newletter though. They dig out a lot of interesting facts/figures you don't get anywhere else and the longer term socionomic trends stuff…

  • Schwerepunkt

    We need your opinion here. I hope you continue to share it. Investing, trading, LIFE, is all about balance.

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    He makes a lot of sense for someone THAT medicated….

    ;->

  • Schwerepunkt

    😉 I think 'sedated' is the correct descriptor.

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    He's got a very cool pointer-thingy (it's got a little hand on it!)

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    Balance? DAMN! I got it soooo wrong………<sigh>

  • ClutchShorter

    My theory about the stock market :

    In the 1800s, JP Morgan, Goldman, Morgan Stanley, Bear Sterns, Merill, Lehman were all college fraternity brothers. They decided to create the biggest ponzi scheme of all time.

    “Dude, let's create a stock market. We'll sell ownership of our companies to people and give them this paper. We pocket the dough and they can fight over the value of the paper. This value can go up and/or down based on how we perform”

    “How do we keep making money bro?”

    “Easy, we just keep selling people ownership of our company. We pocket the money, use some of it to grow our company, and live large like kings”

    “I like this idea, we have to keep this a secret. But what if we things don't go the right way”

    “My homie! It's all good. My fraternity brother works for the Government. We'll just ask them to print more money and help us out. No worries”

    “That's an awesome plan, lets make pact that from now on, this SECRET does not get revealed. It will be passed down generations and generations to those that run our company…”

    And so, the FUTURE of the stock MARKET

  • http://fasholes.blogspot.com FASHOLES

    They were determined in advance of the trading week using the FASHOLES proprietary trading system. We do not disclose our methods of determination – but will post our results.

  • http://trading-to-win.blogspot.com/ DavidDT

    “Prechter, Rosenberg, Roubini, Roach. They are all the same – no better than Abby Joseph Cohen. “

    And you know WHO is WORSE?
    Suckers who continue to wave those people names in the air helping THEM to get rich.
    Then again – anyone who is “looking for investment advise” without spending own lifetime on learning and perfecting risk management – that someone deserves to lose his money…preferably to me 🙂

  • http://chartsandthat.blogspot.com/ ultra

    Man, I nearly spewed when I saw that.

    Major bowl being schmoked in that basement – it's like CNBC made by Bill & Ted.

  • Schwerepunkt

    I hear ya! Pretty unbalanced here as well in my investing, trading and LIFE. Do as I say, not as I do . . . LOL.

  • http://trading-to-win.blogspot.com/ DavidDT

    Are you Madoff?

  • Schwerepunkt

    I feel so much better after reading the following little blurb! (sarcasm level infinite):

    Japan Fujii: US Geithner Wants Stronger Dollar
    Last update: 11/10/2009 8:43:34 AM
    TOKYO (Dow Jones)–U.S. Treasury Secretary Timothy Geithner has expressed his continued desire for a stronger dollar, Japanese Finance Minister Hirohisa Fujii said Tuesday.
    “Mr. Geithner has long been saying he wants to strengthen the dollar, and that point was reaffirmed today,” Fujii told reporters.
    Fujii was speaking after he held a one-on-one meeting with Geithner, who is visiting Japan for the first time since assuming his current post in January.

  • http://www.genxantihero.blogspot.com LostIllini

    wow…just wow.

  • http://www.genxantihero.blogspot.com LostIllini

    Sounds like too much work…I'm going to open a gold mine, look for my IPO soon…

  • gannsecret

    Morning all,
    expecting BIG reversal today
    enjoy

  • CorporalCarrot

    Could you elaborate as to why?

  • bobthehorse

    I don't think it is rigged but the number of people who have an interest in it going up far outweigh those who want it to go down. Why do you think hedge funds are so hated? Because they challenge the entire structure of the system – asset prices must go up to keep the wheel turning.

  • http://www.genxantihero.blogspot.com LostIllini

    That is the gameplan but I would settle for a doji…

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    Folding table and other decorative notes notwithstanding, the window treatments indicate BW is above ground. That said, I love the fact that he's out there, doing his thing – I hope he tears it up! BTW, comparing him to CNBC is an unduly harsh, uncalled for, terrible insult to him……lol

  • CorporalCarrot

    Isn't this kind of obvious? The default state of every market is up, in the absence of external factors. Particularly so in the case of the stock market. They say in the long run its a voting machine, but its a voting machine where many of the voters only have one box on their ballot paper. Sure people can sell, but I would imagine that the funds that are available to be deployed in the market, less than 10% have the ability to actually short. Therefore, in the absence of scares and a fairly steady state environment (which we have at the moment), the market will continue in the prevailing direction, until something occurs which actually forces longs to sell. Shorts alone will not bring this market down, until the long only funds & investors actually start dumping, and at the moment its hard to see what the catalyst for this is.

  • http://chartsandthat.blogspot.com/ ultra

    Yeah I know, awful – sorry 'bout that, BigWet, if you're out there – more power to your mickey mouse hand on a stick…

  • http://chartsandthat.blogspot.com/ ultra

    Dollar disjoint last 3 hours: JPY rising, EUR, CHF, CAD falling, GBP down then up, AUD in holding pattern

    hmm

  • AudioTactics

    Anybody know what is going on with GLD this morning?

    It got a big bid and now its coming off again…

  • http://venespeculador.blogspot.com Holl
  • gannsecret

    My astro cycles up pressure ended
    yesterday. Sell pressure through month end.

  • CorporalCarrot

    And how accurate have these proven to date? I'm not criticising or anything, just curious. I must be honest and say that of all the methods of prediction, I am most sceptical of any astro based or other types. But then again, I know some newsletters that follow this stuff have managed to outperform many traditional letters so who am I to argue? 🙂

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    I've shared your views for many years. Granville was the great predictor when I got started. He had called for a crash forever and then got credit for calling the 87 crash.

    Main point is one way to sell subscriptions is 2b extreme and take credit when the dramatic comes. I'm not so sure it is so deliberate with all mentioned here, but at the end of the day they are not, as you say, just trying to make steady gains without risking too much for it. They are definitely trying to swing for the fence and make the highlight reel.

  • https://evilspeculator.com molecool

    As you know I'm counting my own waves and am using my own tools, the only system we share is EWT. Also, I never post their charts on this site and the only time I mentioned Hochberg's count was when I thought he was wrong ( and I turned out to be right).

    I disagree with them being charlatans however – they do care a lot about their subscribers and the sad truth is that counting waves during a 2nd Primary wave is a very difficult racket.

    Whatever you do – always employ your own TA – their general audience is a lot less sophisticated than most traders who follow this blog.

  • CorporalCarrot

    Bob,

    Whats your downside target today on your short term trade?

  • CorporalCarrot

    Looking at the open Mole, it certainly looks however that they will still be hanging on by the skin of their teeth today, with the EURUSD down and the equity futures also looking like P3 (at least in S&P) is still alive (albeit on a ventilator).

  • Graphite

    Sorry Mole – I simply have to say something about EWI. I know you have a deal with them but to my mind they are no better than the Wall Street shills. What skin do they have in the game? Nothing. They are motivated to get publicity. Publicity = subscribers = money. So they never look for a 10 tick down-move, it has to be a crash. There is never a retracement, only the start of THE BIG ONE.

    I am so sick and tired of hearing people call EWI useless perma-bears when they helped save me tens of thousands of dollars — who knows, maybe my entire portfolio — by calling the rally back in March. Yes, I would have been an idiot to stay short then, but at that point I needed a bit of help to realize it. And now we get 8 months of reflation rally and because EWI has once again unfortunately underestimated investors' capacity for self-delusion and bubbly thinking, they're supposed to be thrown under the bus. They're supposed to be judged as not just analysts trying their best but suffering a slump, but as craven shysters looking to turn a quick buck off the gullible. And all this while having told long-term investors to stay safe and in cash! Well fuck that.

    Whether you sit looking at charts counting 5 wave impulses and 3 wave corrections is much less important than grasping the fundamental Wave Principle insight that the market is an endogenous herding process, and is not moved by “fundamental” developments such as “catalysts” or Fed policy or whatever.

    At any rate all this crowing and Prechter-bashing amounts to a huge case of jumping the gun. It will still be a decade or more before the jury is really out on Prechter's Supercycle-plus degree forecasts.

  • http://chartsandthat.blogspot.com/ ultra

    Whatever you do – always employ your own TA

    Wise words – that I have learnt the hard way from, er, following other people's analysis & trades without fully understanding why they were making them.

    And I don't believe Prechter is a charlatan, far from it. Sorry if I didn't make that clear. I don't think anyone who read Conquer the Crash would come away with that impression.

  • labdude

    bob:

    Rigged may be the wrong word–but the market is manipulated to some degree by the Fed and large banks. Technical analysis may be right–but if you happen to be on the wrong side of a Fed announcement or a large trade (or announcement) from Goldman Nut Sacks–you can be screwed. I guess luck has something to do with it.

    Anyway appreciate your and everyone's comments.

  • https://evilspeculator.com molecool

    I keep seeing those Gann guys miss their turn dates, after which they go away, only to return weeks/months later with a new turn date. If you thin EWT is mental masturbation then Gann is a brand new toy for you 😉

  • Graphite

    And I don't believe Prechter is a charlatan, far from it. Sorry if I didn't make that clear. I don't think anyone who read Conquer the Crash would come away with that impression.

    Seriously, practically the first words in the book are, “consider my arguments carefully and *think for yourself.*” *This* is what counts for attention-whoring these days?

  • bobthehorse

    we are right on support – I think (hope) it breaks and then we could get a bit of a wash-down to 1060 ESZ9

  • Graphite

    If only history was so kind as to deliver unto societies exactly the outcomes which are in the interests of the greatest number ….

  • CorporalCarrot

    I don't necessarily think EWT is mental masturbation. I don't really know enough about it. My observations however are that the EWT websites (yours included) have some of the most educated, diligent traders in the blogsosphere. However, the method itself seems to have too many ifs/buts that only seem to resolve themselves after the event, and which are not necessarily conducive to good trading.

    The other observation I make is the number of EWT blogs where the traders are all predicting (correctly so far!!) much higher prices and yet seem to be unable to translate this into taking an actual long position. This makes me wonder if they either (a) doubt their method or (b) are letting an overall perception that this thing could tank at any time influence their decisions.

  • gannsecret

    You got it all wrapped up…
    so you don't need me.
    Good bye ES Rats !

  • bobthehorse

    Crap – turns out support was support. Ho hum.

  • https://evilspeculator.com molecool

    Great comment – thanks for that 🙂

    Human nature is actually very predictable. One of the reasons that traffic here has gone down in the past few months is that many blame me for their losses, despite the fact that I kept them out of trouble numerous times.

    People prefer to blame someone else – it's key that traders however learn to assume ownersip of their trades.

    Let's also not forget that the nature of the market has changed completely as it's dominated by a narrow group of insiders. This makes for wild swings and head fakes and most retail traders will lose in this game.

  • Bart7

    hang in there Gann, I appreciate your input….

  • gmak

    Don't see it as a disjoint. Earlier with the JPY falling, it looked like mild profit taking /consolidation. Now it looks like the move away from risk assets with JPY rising and USD rising.

  • gmak

    Neural networks are insidious. They will find a pattern in any data. They will ALWAYS find a pattern even if there isn't really one there that can make money.

  • https://evilspeculator.com molecool

    Really like your stuff today – thanks for swinging by.

  • bobthehorse

    and now we test resistance. best thing to do is go sit in a dark room and come out when mkt has made its mind up.

  • derekste

    I'll reserve my gloating until after close

  • derekste

    Question: If we fail to break the SPY high of 110.31 today(or even tomorrow), what will the interpretation be?

  • Bankster

    Thanks for the update. Hope you are right. Bears have lost hope.

  • https://evilspeculator.com molecool

    Oh come on – don't be silly – have you got any idea how much heat I get for using EWT? So prove us wrong! Maybe today you Gann guys have you day in the sun, my portfolio could use a bice drop. So come back here and argue your point like a big boy, don't run off in a huff – was not trying to attack you personally.

  • https://evilspeculator.com molecool

    Meh – I'm not even watching the tape – still in bed.

  • https://evilspeculator.com molecool

    You are a Gann follower as well?

  • gmak

    Looks like the risk trade is back on. USD weakening and CAD, JPY, EUR, and GBP all moving up off of their respective support (pivot) level.

  • https://evilspeculator.com molecool

    If the bears truly have lost hope then this might be a 2nd wave – those are really good at shaking out weak hands.

  • insite

    clutchshorter's mention of the strangle hold yesterday got me interested in learning how this works. in theory, i understand it perfectly. in practice, however, i don't really have experience trading options; i have a couple of options question for a dummy.

    first, if i set up the strangle in TOS, for instance, it will consist of two vertical spreads. the first spread shows a 'debit' and the second shows a 'credit'. i assume the amount i have to pay for the position is the credit less the debit. is this right? so if the credit is $3 and the debit is $5, then i'm paying $2 x 100 = 200 per contract, right? now if i reverse this and the credit is greater than the debit, i actually take in $$$ for the position, correct? do i have to have a special kind of account to do this? thanks for your patience; trying to learn.

  • derekste

    LOL no…

    As fun as it would be to tempt fate and tell him how full of shit I really think he is, I'd rather not say that (even though I just did) and come back for the kill later.

  • cramar

    No difference if this is still P2?

  • http://chartsandthat.blogspot.com/ ultra

    hey gmak – can you answer my question as to how the DXY/USDX makes a new low yesterday when none of the constituents did? Is it not based on the cash indexes?

  • bobthehorse

    this might sound nuts but I think 1060 is realistic. But to do that, we have to break minor supports which frankly it is showing little sign of doing. In fact, it is doing the opposite, i.e. rallying off them.

    I won't make any money if it messes around – only if we go down 20 points minimum as then the gamma will kick in. But i won't really lose anything if it goes up either. It is possible it will go nowhere between now and Friday just to waste theta.

  • centerline

    Good instance where sense of humor is basic requirement for this market!

    However, I could entirely live with an explosive run-up today. I would gladly increase my short-term short position for a blow-off event. However, 7 days in a row of rally would be quite improbable. Seems to me the worst case today for the bear is a flat or late sell-off to the tune of only a couple of points. I would likely close short-term shorts at that point and go short-term long, small position though.

  • string01

    Keep in mind that there are plenty (most) EWP bloggers who have no idea how the principal works, don't know/use proper numbering/lettering, and don't know the corrective patterns. I don't think many of them have even read the book. Feh.
    Also, they try to apply EWP to individual stocks. Again, read the book.
    EWP is based on psychology of market participants, I think part of the problem right now, it that with all the fed printing/POMO/etc. the market participants, and hence, the market's are not really functioning as such.

  • ClutchShorter

    I did a backtest analysis on TOS on several SPY trades. You you will have a net profit if the position moves in either direction but people dont like the fact that it limits your reward. Given the nature of what has transpired these past few weeks, I prefer this setup at least until we ride out this storm instead of seeing my account go more negative. I think there's a way to fine tune this setup.

    They are both debit spreads (Bear Put Spread + Bull Call Spread). Neither of them should be a credit.
    BUT wow, that gave me a new idea. Assume we were short on SPY. Since SPY is trading at $110, we could setup a $110/$105 Bear Put Spread (DEBIT) going out 3+ months and then setup a $100/$95 Bull Put Spread (Credit) for the front month options. This way, if SPY goes up, your Bull Put Spread will lose value and you will pocket that to offset losses incurred from the long term Bear Put Spread. INTERESTING perspective….

  • bananaben

    There is no doubt this market is totally rigged. I don't think it will go down until there is a major event – ie. the dollar fall really accelerates or there is an implosion of the derivatives market. Otherwise, the double dip will represent the failure of Bernanke/Geithner/Summers and would spell doom for Democrats in 2010. They are all in on preventing this and will print whatever is necessary. Ultimately we know they will fail, but who knows how high the market will go at that point.

  • goldpackers

    Actually my turn dates and Gann Secrets' have been pretty accurate. The tough part is predicting the direction of the mkt into the date. However I just use that date as a reversal point.

    I have a turn today and expecting down into 11-16/17, a very important turning point. If I am wrong and it is a high, then I will gladly add shorts.

  • bobthehorse

    Given that agrees with my current positioning, I will take heart from it!

  • KK_KK

    GS knows when the doom and gloom will come. They are stockpiling funds for this “great” event.

  • goldpackers

    See below on Mole Cool. Keep the updates coming. Everyone is a little Chippy here.

  • cramar

    The SPX has closed up 6 days in a row. This is the 7th up day. Gann said the 7th day is significant, but I don't know if stats bear this out.

  • insite

    i wonder what i have set up, then. here's what i have in ToS for my spy spreads:

    the first is a vertical call spread where i sold the 98 and bought the 108. the second is a vertical call where i sold the 120 and bought the 110. one was a 'credit' spread and the other was debit. the risk profile looks like a condor with its wings spread, so i figured i did the right thing. the expected return line on the graph looks like a wide parabola with the meniscus just below zero at a price of around 106.

  • http://dreadwinaard.livejournal.com/profile dreadwin

    Closed my (low risk) DRV trade. In at 17.84, out at 18.50 for +3.7%.

  • goldpackers

    EWT is my market tool also however the turn dates on Gann keep me out of SOME trouble and give me entry points along with the EW count.

  • Schwerepunkt

    It is not rigged in the sense that somebody is sitting on a button that juices this stock or that stock index higher at key moments. It is rigged in the sense that Fed policy has made it inevitable that money (whether real, virtual or newly created) would flow out of certain asset classes and into others, with equities and commodities the primary winners and the USD getting the shaft.

  • PRSGuitars

    “max pleasure” theory?

  • Schwerepunkt

    Also known as the “Spooge Index.”

  • goldpackers

    Sometimes the turns are only for 3 to 5 days, depends on what I see the wave stucture. On that I believe we should drop to 1060ish(11-16/17) in wave B of 5 of a diagonal that began at 978 and then the final C up into at least 11-23/24 and 1107 to 1125.

  • Tronacate

    Good morning………everyone wrapped in a bear carcass this morn?

  • gregn

    Great post CD, thanks. You always find pictures that reflect your thesis perfectly.

  • gregn

    When the market crashes, the blame will goto capitalism.

  • Tronacate

    I'm wearing a bloody Panda head…….

  • Tronacate

    What's the site theme song…..I pick “Crazy Train”

  • Schwerepunkt

    EUR coming up against 1.5 level again.

  • Schwerepunkt

    Supposed to be Gravy Train.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    gold is about to go parabolic

  • Schwerepunkt

    Yeah, because they will be part of the triggering mechanism.

  • CorporalCarrot

    Today's 1 day Dow chart looks exactly like the pattern from yesterday. Perfect stair-stepping upwards. The repeating patterns are so perfect, its not difficult to imagine computers running the show.

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    lol @ low-risk drv trade.

  • http://outsidethe-cardboard-box.tumblr.com/ TomOfTheNorth

    from David Rosenberg's morning note:

    There is still a NET speculative short position in both the 10-year Treasury note of 85,551 contacts (on the Chicago Board of Trade). There are 95,648 net short contracts on the long bond too.

    But there are 29,608 net LONG positions on the 30-day Fed funds contract —down from the highs, but it means that Fed tightening is completely off the radar screen. At the same time, there are 152,311 net longs on the 2-year Treasury note, so it would seem as though we have a crowded trade among the speculators on a bear curve steepening trade.

    There is a significant net long position on the S&P 500 to the tune of 208,448 contracts on the Chicago Mercantile Exchange (CME).

    There is also a huge net speculative short position on the U.S. dollar (the ‘carry trade’). For example, on the CME, we have 24,389 net speculative long CAD positions; 50,264 net speculative long contracts on the Australian dollar, and 28,036 net longs on the Euro. These are huge numbers. What happens if/when the U.S. dollar ever undergoes a countertrend rally?

    The largest speculative long positions are in the commodity space (this is near-term bearish) … 271,564 gold contracts (a record) on the Commodity Exchange (COMEX); 44,312 net longs on silver (near-record but not quite), West Texas Intermediate oil contracts on the New York Mercantile Exchange (also a record); 10,871 net long copper contracts (a new cycle high); 5,538 net speculative long contracts on the Goldman Sachs Commodity Index.

  • EVAN

    mole, i do really like your EWT charts. Although I am one of those believing in fundamental company analysis rather than anything else, I come back here so often to get a sense of risk, probabilities and edge, and sometimes using your conclusions for hedging of my long list of short positions. I would not be able to put together a chart of yours, sometimes I do not even know what are you guys are talking about. But I do know, that this analysis of yours is excellent and very very useful.

  • Tronacate

    I'm not talking about what I'll be having for lunch soon enough…..:)

  • Bart7

    Rosenberg Sees 13 Percent Jobless Rate
    Monday, November 9, 2009 11:06 AM
    Economist David Rosenberg said the U.S. jobless rate could hit a post-World War II peak of 13 percent, thanks to a sluggish economic rebound.
    Already, unemployment reached a 26-year high of 10.2 percent in October
    “This is going to be the mother of all jobless recoveries,” Rosenberg, chief economist at Gluskin Sheff & Associates, told Bloomberg.
    “At the beginning of the year, who was calling for unemployment to go up to 10 percent?”
    The effect of this recession, the worst since the Great Depression, won’t end quickly, Rosenberg said. The economy is “in a post-bubble credit collapse.”

  • goldpackers

    Excellent point. I am an EWer over in Prechter land. EW is subjective so even if I expect a drop to 980 to 1020 per my EW count after one more high, my fear is we fail( some outside iinfluence) or I am wrong as I previously thought 1101 was it.

  • I_got_Prechterized

    Bobthehorse, if you're out there— what do you see here short term now that we're above 1090. I held my nose and bought yesterday morning. I sold 1/2 this morning. You've been dead right on this move, are you still long?

  • bobthehorse

    Just added some more Dec 1050's

  • ClutchShorter

    Vertical Call Spread should be something like Buy $112/Sell $120

    Basically, you're sandwiching a PUT spread and a Call Spread around the SPY price

  • http://dreadwinaard.livejournal.com/profile dreadwin

    On days when IYR has a huge green candle in the last 5 minutes (quants covering shorts?) one can grab DRV during the last 2 minutes of the trading day, and sell in the first 1 hour of the next day for an easy 3-5%. This setup recently happened on Oct. 14th and Nov. 9th.

    Otherwise, trading DRV and SRS can be like getting together with this girl: (link to the Onion)

    http://www.theonion.com/content/opinion/if_im_s

    I.e. keep it very short term, and don't ever get attached.

  • joeynickels

    Regarding EWI and Bob Prechter. I found the site in late 2006 and was soon awakened from my bull dreams and schemes. Sold my house, took the profits and stumbled around trying to figure out some way to make coin if the market did follow Prechter's scenario which it did and my leveraged shorting worked great in 2008. Many thanks to Bob for his analysis, insights and recommendations. I owe him bigtime and will always be a subscriber to EWI. Can't make money trading on Hochberg/STU though. I am a new follower of this blog and love the posts and commentary. Thanks to all of you and good trading to all.

  • ClutchShorter

    Fed Officials: Weak Recovery Won't Spur Jobs- AP
    Unemployment likely will remain high for the next several years because the economic recovery won't be strong enough to spur robust hiring, Federal Reserve officials warned Tuesday.

    The FEDS are trying to tell us something

  • bobthehorse

    No – I am now flat delta and bought some Dec 1050 puts last night and a bit more again just as I just commented. There is no risk reward being long here. But I would not blindly short this market – it's too dangerous. However, if we can break 1086 ESZ9, I think 1060 is on the cards. I am playing only for a big move down, not a small one.

    My gut feel is that we have topped out but I don't like to risk too much money on my gut unless it involves the purchase of beer.

    Rather like Mole – I think there are two scenarios. A raging bull market (his blue and my medium-term preferred) which is why I won't just get short. Or a very whippy phase with big moves in both directions (my current play).

    The simple fact is – I have no real idea what will happen. But here is where I am happy to place a bet on the short side, even if it is a bit timid.

  • Schwerepunkt

    Tried to short ES1094, missed by one tick. I hate chasing. maybe it'll come back up for a zero-line rejection in Woodies' terms.

    Edit: Nope, I seem to have missed the boat on that little turn.

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    Not knocking the trade. I just think characterizing it as 'low-risk' is a little …risky

  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    R2k is the weakest major on the day, as well as since the move-up began a couple of weeks ago.

    fwiw

    Edit: lots of crappy smaller financials in the r2k as well

  • WTFed

    moved

  • WTFed

    So do you avoid the short term stuff and just go with Bob's monthly reports for your signals?

    Poor Hoch. I wish he wouldn't get so certain at times. He really gets convinced only to backpeddle so often. It's pretty frustrating to read the guy.

  • http://gemstowear.etsy.com Jan

    DX has held support so far today. I like the volume on the last bounce off support.

  • http://trading-to-win.blogspot.com/ DavidDT
  • http://centrifugaldeforest.blogspot.com/ Centrifugal_Deforest

    Nice article

  • gannsecret

    Goldpacker,
    Jaxon, t-dub here is my e-mail address.
    I'm leaving these public sites. I give freely of
    36 years of market experience and they just jeer.
    You guys and a few others are the only ones I will
    talk with about the mkt from now on.
    gannsuntoldsecret@yahoo.com

  • gregn

    I mentioned this short yesterday, but still worth a look. CAT short: http://screencast.com/t/NDFmZGVhMj
    I got puts a little early as I was not expecting a grind against resistance like that.

  • http://trading-to-win.blogspot.com/ DavidDT

    let me see what they say:
    “If you don't see what is going on and you are still in this doomed part of the world – we got a hint for you – you phucked”

  • Tronacate

    Cocoa still grinding lower

  • Me_XMan

    USD is being defended.

  • Tronacate

    Nice

  • standard_and_poor

    duplicate entry deleted

  • joeynickels

    I have large cash position and building core short positions in all of my accounts. I do short term stuff as well and have the bruises to show for it in 2009.

  • newbear

    I have to admit it, it is the only strategy working in this market.
    For now.

  • Me_XMan

    USD will have to tank for SPX going higher IMO. Obama going to Asia to reassure USD won't go down further. We'll see how successful his trip would be.

  • bobthehorse

    Come on – grow a thicker skin. If you get nothing out of these sites, fair enough but there is no perspective that is without value if it is based on solid research. But let's not kid ourselves that any one framework holds the key.

    FWIW, a number of other time based technical analysts I know have a turn date around here as well.

  • http://sshamster.blogspot.com/ Stainless_Steel_Hamster

    come on Gann, even the owner keeps getting some heavy flack and you bail out on half a dozen comments?

    there were others discussing with you that I could almost swear didn't make it to the list.

    personaly I want to study dmark andneowaves before I go for gann, but do stay

    best regards

    p.s. we all made bad calls and got taken outside for some bashing, so what?

  • Bart7

    Gann, don't let them get to ya….

  • standard_and_poor

    For now is all we should care about, cheers.

  • I_got_Prechterized

    great thanks. I got stopped out on my other 1/2 long position. Everybody is assuming new highs in the cards. I figured they might take it right up near 1100 and then pull it back. I'm about to jump short too.

  • outsider99

    Sorry to see you go gannsecret, I've enjoyed you views (mostly accurate if I remember too)

  • WTFed

    I hear ya. Thanks and good luck.

  • https://evilspeculator.com molecool

    ¤ø„¸¸„ø¤º°¨¤ø„¸¸„ø¤º°¨
    ¨°º¤ø„¸ N E W „ø¤º°¨
    ¸„ø¤º°¨ P O S T “°º¤ø„¸
    ¸„ø¤º°¨¤ø„¸¸„ø¤º°º¤ø„¸

  • Bart7

    agree, hopefully he reconsiders…

  • standard_and_poor

    It's never a perfect world for any trade, I prefer to focus on charts and turn blind eye to fundamentals.

  • Tom_27

    Hi Gann,

    I really appreciate your input, so I hope you will not abandon us. Good luck to you mate. Cheers.

  • Tronacate

    C'mon GANNMEISTER……..come back to the sandbox……fa_q will share one of his infected slutz…….

  • bobthehorse

    Either it has already topped out or we will go right through 1100 – won't stop there again.

  • CorporalCarrot

    Gann

    I hope you didn't take my questions the wrong way. I am actually genuinely interested in learning new methods, it would just be nice to understand a bit more the reasoning behind it, as opposed to just predictions such as “market down BIG today”.

    Stick around, we all take flak now and again.

  • Me_XMan

    SPX double top

  • Publius Federali

    I would never blame you for my losses, I only blame you for making me like Rammstein.

  • Publius Federali

    Stupid capitalism, always taking from the producers to give to the leeches, then consolidating power in a government that work with the oligarchs to enslave us all. Rewarding people for success can never work.

  • gmak

    The DXY is a derived index that averages the Fx rates of 6 major world currencies in terms of the USD. I don't know the ratios used in the weighted average (I would assume it is). The weightings are what would determine how the index behaved. The weightings are actually geometric (exponents) which means that the currencies don't have to hit a new low for the DXY to do so.

    See here for an explanation. You know you could have googled “DXY index definition”

    https://www.theice.com/publicdocs/nybot/ICE_Dol

    ________________________________

  • Publius Federali

    You don't believe in the famous triple top?

  • Graphite

    I have noticed many times that he will posit “alternate” scenarios or “potential secondary targets” that will play out more often than his preferred counts. They had the gold move to $1100 nailed but didn't really make the case very strongly at all … I think sometimes they do let their long-term views unduly color what is, after all, a “short term” update.

  • Me_XMan

    THE PARADOX OF THE SURGING STOCK MARKET and the sputtering economy never has been more striking than Monday.

    Following Friday's dreadful news of the U.S. unemployment rate soaring into double digits to 10.2%, stock and other so-called risk assets prices jumped Monday on Wall Street and markets around the globe.

    The latest leg up in the “risk trade” came after the Group of 20 over the weekend confirmed their resolve to continue their economic stimulus programs. In addition to fiscal measures, that would keep in place the ultra-low interest-rate policies followed by most of the major central banks, notably the Federal Reserve. Not that there was any question for the U.S. central bank, which just last week confirmed its intent to continue maintain its rock-bottom 0-0.25% federal funds rate target for “an extended period.”

    But another Fed report released Monday shed light on why nearly free money has had so little impact on the real economy. In its quarterly survey of senior bank lending officers, the Fed found that credit conditions had tightened again, albeit less than in its previous survey taken during the summer.

    Mind you, there has been no actual easing of lending standards since the screws were turned excruciatingly tight a year ago during the worst of the financial crisis following the collapse of Lehman Brothers. Nevertheless, this was greeted as yet another example of less-bad-is-good news. But, as JP Morgan economist Abiel Reinhart points out, “Lending standards have already tightened significantly, so there is limited room for further tightening.”

    Even so, the downward spiral in consumer credit accelerated in September, the Fed reported separately Friday. Consumer lending contracted at a stunning 7.2% annual rate in the latest month for which data are available, half again the decline in August, which was tempered by the “cash-for-clunkers” giveaway that temporarily arrested the plunge in auto loans and sales.

    Non-revolving credit, which includes car loans, fell at a 3.7% annual rate in September after edging up 0.1% in the August clunkers craziness. But revolving credit, which includes credit cards, collapsed at a stunning 13.3% annual rate, the 12 straight monthly decline.

    Nothing like that has been seen since the Carter-era credit controls in 1980. Nearly three decades later, once again the visible foot of government is squashing the economy.

    The Fed's latest survey of loan officers included a special question about the impact of the Credit CARD Act of 2009, which was supposed to correct banks' abusive plastic practices. “As a result of the act, banks reported that they expect to tighten (or have already tightened) many terms on credit card loans for both prime and nonprime borrowers,” according to the Fed.

    More stringent credit requirements, higher interest rates and reduced credit limits were among the ways banks were responding to this regulatory reform. Consumers have responded to this turn of the screws by paying off their balances as fast as they can, or are forced to.

    More to the point, the Fed noted that “sizable” numbers of both domestic and foreign-based banks were cutting credit lines for existing customers for loan facilities ranging from home equity lines of credit, commercial construction credit lines and lines of credit to financial firms.

    Instead of making loans, banks have ramped up their purchases of securities, notably Treasuries. That no doubt contributed to robust demand for Monday's auction of $40 billion three-year notes, which attracted a massive $133 billion in bids.

    It wouldn't seem that a 1.40% yield would set off such a stampede, but for banks or other investors that can finance a leveraged position at 0.25%, the 1.15-percentage point spread between the borrowing cost and the note's yield — multiplied 20 or more times by leverage seems juicy. Who needs the hassle of dealing with credit cards and new regulation when you can lever up nearly free money in riskless government securities?

    Or, better yet, purchase risk assets, from commodities to equities to foreign currencies to corporate credit? While the Fed found banks continued to tighten standards for commercial and industrial loans, blue-chip corporations such as Cisco Systems (ticker: CSCO) was able to raise $5 billion in the bond market Monday. Indeed, the networking giant could have borrowed a multiple of that amount as underwriters had to turn away eager bond buyers.

    As colleague Eric Savitz pointed out in the Tech Trader column in this week's Barron's magazine, Cisco sees signs of recovery. Evidently, it's raising billions in the welcoming corporate bond market to take advantage of opportunities it sees.

    Goldman Sachs economists observe that large corporations such as Cisco have access to the capital markets or the commercial paper markets, which Goldman observes have improved far more than the bank loan market.

    All of which lays bare the problem policy makers face to a far greater extent than past cycles: The Fed can “print money” but it cannot create credit alone. That process requires a willing lender and an able borrower. It takes those two to tango and expand credit, which goes toward increasing business activity and employment.

    Absent that, the cheap money is deployed to pump up asset prices rather than create to support real business and jobs. Wall Street enriches itself on free money while Main Street gets little stimulus while local bankers keep a tight rein on loans.

    So, don't mistake improvement in the stock and bond markets with better times for the real economy. Money matters but credit counts.

  • goldpackers

    Hate to jinx it , but is FAZ putting in ad inverted H&S?

  • goldpackers

    ABX nasty candlesticks. scared to be short so bought some cheap puts

  • http://chartsandthat.blogspot.com/ ultra

    Yeah I know I know – I did and didn't find anything that would explain what I was seeing, so I just thought I might as well ask you geniuses. Thx.

    So this kinda answers my question – it is being somewhat misleading at this time then to my mind at least.

  • gregn

    Absolutely. How can an economy function if only hard work is rewarded? It makes no sense. Everyone should be paid the same amount, regardless if they work or not. Father Obama knows this and is working diligently to stop the inequality.