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Skeptical Bear Monday Rub Down
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Skeptical Bear Monday Rub Down

by The MoleOctober 26, 2009

It was a good day for the bears, but yes, I’m a bit skeptical here. Why? First up we pressed against the multi-month support line but did not breach it with conviction – the bulls were able to make a stand thus far. Of course we could see a large gap to the downside and I’m sure that’s the trade many rats were taking today. But wouldn’t that be a bit too easy? Perhaps I’ve become a bit too paranoid – possible but you can’t survive in this racket without a healthy amount of caution. But the real reason why I’m still cautious here is the Zero Lite today:

What I see is a slight divergence here – is this really what we should see if we’re embarking on a big drop? I’m just not convinced yet. Maybe this is nothing and we’re in Primary {3} with more downside to come this week. Or this is yet another bear trap as suggested by Berk’s fractal as well as my Euro left chart this morning.

Program Trading Update:

evil.rat/ES: -2.5
evil.rat/NQ: -2.25
resident.evil/ES: -.75
resident.evil/NQ: -7.5
geronimo/ES: -11.5

A truly horrible day for all black boxes today. On the geronimo side we will implement a change that most subs will find very welcome as it contains the emergency parachute plus a tightened stop. More on that subject later – the new version will either be available tomorrow morning or on Wednesday morning. I will shoot out a message to all geronimo subs when the update has been put into production.

Before I go – here’s my take on the fractal situation Berk mentioned. The similarity in the pattern is quite obvious and if we bust higher then it’ll probably happen soon. The breach we bears want to see is marked on the chart – we need to see 1050 and even better 1040 on the SPX. Now that would be a drop that would be uncomfortable to the bulls – as it would probably trigger some panic selling. Today was a great step forward and if you’re not short yet, don’t despair – we are only 34 SPX points from the peak – don’t let greed get the better of you and base you trading on TA and not on ‘worried about missing the drop’.

Cheers,

Mole


About The Author
The 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 the usual social media waterholes.
Enjoyed this post? Consider a small donation to keep those evil deeds coming!

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  • formykids

    Curious for thoughts on Mole's previous Dollar post – Wasn't today the high volume breakout out of the Wave 5 ending diagonal that we've been waiting for to signal the bottom is in on the dollar? That is the way it looked to me on UUP. Not sure why Mole and others were recommending such close in profit targets. I've got a stop under the low and want to let it ride for months….

    what am I missing?

    Thanks!

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

    there are counts that would be giddy-giddy prety with an extra wave up. The upside could be 1190 (no I don't believe in 1200 but there's a close threat)

  • molecool

    BTW, for a bearish day it's inexcusably slow in here today.

  • ACJ

    Nobody wants to cheer yet, I don't blame them. For months when they opened their mouths to cheer a big bull *)#*(& was shoved into it

  • amokta

    hope tomorrow is up for a bit – bought some rbs shares at low, need them to bounce up to make profit! – does the ftse spike up on its own, before usa opens?

  • Blind_Squirrel

    Disqus acting up all day for me and others. Why does it seem disqus goes out only on down days?

    Does Bernanke have a switch??

  • molecool

    Wasn't talking about cheering – obviously I'm skeptical myself – but ANY thought at this point would be welcome. How come Berk and I are the only ones issuing a warning right here – seems everyone else thinks this is it. Are we nuts and are we going to miss the opportunity we have been waiting for?

    Plenty to talk about quite obviously…

  • Columbia1

    I have a count of i of 3 completed today, and starting in ii of 3 at the close, it would be the perfect combo to have a bounce off of the trendline before breaking through with the power of a iii of 3. Here is what I am counting for the day. (the dollar chart is starting to show some signs of life, LOL)

    http://ewtrendsandcharts.blogspot.com/

    Thanks for all the charts you guys posted over the week-end, it took awhile to digest them all!!

  • molecool

    Disqus completely sucks but I have bigger fish to fry right now – not going to make a switch this week but it might be coming. Folks are getting stressed out.

  • Blind_Squirrel

    I agree, think this very well could be another fakeout for the bears.

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

    I think we are going to put in a new high, test the trendline, make a lower high…then whoosh. So yes this is the mother of all bear traps if it isn't just buy your puts on the break of the March trendline…maybe even wait for the retest of the trendline if you're a patient type.

  • Hanuman

    Mole,

    I truly appreciate your educative posts. You are teaching TA inexperienced ratlings like me, how to fend for ourselves and take the right trade even when the Disqus dies on us, suddenly.

    I have been emailing your site to all my friends, who are a little bit inclined towards trading in the stocks.

    Thanks for all the great work.

  • ACJ

    I don't wanna jinx it……

  • amokta

    thanks. i only watch and ask questions, as im not mathematical! i was caught out at late june dip, when i went into cash, but markets soared. So the question is whether this is another 'fake', to be followed by prompt rise upwards – can TA help or do we just rely on prechters 'top' call based on sentiment indicators/EW analysis

  • onorio

    Im a bit skeptic too mole, but after 7 months of anal probe who isn`t…

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

    Mole, though I'm waiting to see what happens I have my doubts (and even in the answer to fomry states that)

    I could live with the fractals, they seem to be reducing to 0,6 each time, perfect round top on this side of the scene. Nevertheless there is a worse fate than repeating fractals, it's the “lane shifting” a pump beyond the fractal can place us in a new anchor point for the support and resistance (tried showing that on my green pill option)

    Yes, without a confirmation we're all canned bear meat (I've got some in my kitchen from a trip to finland so you can call me a canibal).

    But I think you know all that (BTW, berks GOLD/SILVER ratio doesn't make me more at ease right now)

    best regards

  • PRSGuitars

    Epic post coming, I promise (for anyone who sticks around).

    The 133 is haunting me. Steve (v8muscle) just scared me half to death with one on AMZN. Exciting stuff…

  • gsavli

    And that explains the quietness here probably too. God knows how many bears missed this move, how many shorted it to late and how many of us just don't know what to think/say about tomorrow.

  • http://dreadwinaard.livejournal.com dreadwin

    DRYS posted solid results, is up after hours.

  • gsavli

    was up even more, but it declined somewhat. only +1% today.

  • http://dreadwinaard.livejournal.com dreadwin

    It hadn't even occurred to me that this was anything BUT Yet Another Fake Out. I cite the strength in IYR (it didn't touch the 50 MA, while XLF did). I have no explanation for the relative strength in IYR, other than “somebody must know something I don't.”

  • TimV

    I was only down 7.5 on Geronimo. It was impossible to buy it for the open price…and I got out 2 points higher than the sell price, even though I had a stop mkt right on the sell… TOS must be looking out for me.

    The second one was pretty cut and dry.

  • onorio

    A short last friday above 1090 with a stop at 1100 was a low risk trade, but no bear seem to have balls to risk, that`s why probably many missed this move, and many of those who dare to short the market last friday were shaked with this morning bounce.

    Like i said after +6 months of anal probe many bears dont have the guts to short, that`s why the maiority of them will miss the big move…but that`s the way the game is played.

    The luck is for those who dare.

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

    BTW, fractals have played the .6 enough

    if this was bottom (or close to it) next fractal will have 2 weeks to play and be in such a tight channel that it must break one way or the other

  • vision_invisible

    Junk stocks I follow down hard, big names not so much.

    Isn't Oct31 coming up, which is end of year… I think we stabilize here, implicit support from year end at mutual funds.

  • molecool

    Well, we count the signals as they are not as we wish them to be. If you guys lost less today then good – but we are working on implementing changes that will minimize the risk going forward.

  • KidDisco
  • molecool

    Thinking has never jinxed anything.

  • onorio

    Im playing that bounce, but im not confident we go way above 1.4940.

    Im looking for a wave (ii) retracement to reload shorts between 1.4950 and 1.4990.

    IMO USD has bottomed.

  • Blind_Squirrel

    BIDU getten beaten silly -45.00

  • AS2009

    Based on pure TA – I am thinking that we should touch the LT trendline on the SPX and then bounce … @ 1058 … this will be the second hit of that line and we should see a bounce there ….. next time, the hit should be deadly …

    Note – my lines are on the linear not log scale ….

  • PRSGuitars

    1.4925 is pivot for hte day, though 1.495 on a throwover — look for DX to play nice with 76 unless this is a straight correction (like a rapid B wave in an ABC down, the A of which was today)…

    I did say the DX bottomed but that was more in jest. It appeared to have worked, however, as the /DX popped its channel today: http://screencast.com/t/jb0h5Hkkbc

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

    It has been official decided to rename BIDU (as well as other “New Deal Chinese Stocks”) to “BooBoo” and sent it right where 5/6 letter stocks belong

  • http://www.hotoptionbabe.com annamall

    Yes 🙂

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

    From the very morning, as I promised to Berk yesterday I've been hammering stocks and index futures and all you “intellectual rats” did – wasted your time with yet another plan for taking over the world.
    Stop planning – start shorting – I cannot do everything for you.
    Mole is bull, Tim is bull, Kneale is bull – I cannot take care of everything.
    Straight up no chaser please

  • gregn

    By my drawing with support @ 1065, there was not a breach of support today. Mondays are typically strong selling days so I would not be surprised to see a pop tomorrow unless we gap down — which as Mole has stated is not out of the question. In addition to my gut feeling, there is some positive momentum divergence on $SPX 15 minute with 38-period momentum. We shall see tomorrow…

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

    Here is something completely different – who knows what my avatar stands for?

  • pramood

    Hi Anna,

    Congrats! Bought 75% Nov 460 puts and 25% Nov 440 Calls. The Nov 460 Puts will be a double. 35-40% profit in one day. weeeee……

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

    where is everybody?
    I am scared to be alone!

  • PRSGuitars

    Is that the hall of fame of legitimate companies where the 5/6 letter tickers go?

    I've heard of this valhalla of vega, these 'crazy tickers', you speak of…

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

    I'm not concerned about all hell breaking loose,
    but that a PART of hell will break loose… it'll be much harder to detect.
    George Carlin

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

    this is where dead WorldComs go – just like dead fish goes to RedLobsta

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

    If we could just find out who's in charge, we could kill him.
    George Carlin

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

    Mole – I am exhausted working on comments count!!!

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

    May the forces of evil become confused on the way to your house.
    George Carlin

  • Anonymous

    He’s not bright enough to have a hidden agenda. He’s a troll that was posting on Slope until he was banned.

  • faafa

    Via Clusterstock: October breaks down against September
    http://tinyurl.com/ykarfxr

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

    what is the definition of a “troll”?
    multiple unrespectful meaningless posts?
    Am I troll?
    Are you calling me troll? Troll HOW?

  • http://www.hotoptionbabe.com annamall

    BIDU i have officially named DONTBI LOL

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

    dontblong

  • Anonymous

    He would show up on days the market was up and give everyone a lot of grief. He was actually trying to get banned so he could wear it as a badge of honor for his blog we believe.

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

    I drive way too fast to worry about cholesterol.
    Steven Wright

  • ckeltner

    dontblong

  • ckeltner

    Precisely why most bears missed the move down and will continue to miss the move down until its too late and by the time they get convinced and get on the bus it will be too late and they will get burned again.

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

    oh
    that is really serious assholOtrollO thing to do – he might be in “that other guy’s skin” today

  • Iguanadon

    I was walking down the street one day and suddenly I couldn't see. The prescription ran out on the glasses I was wearing.

    Steven Wright

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

    today's shake off was PERFECT – I shorted /NQ at 1772.25 and /es at 1088.25
    covered way too early (but this is day trading account) @ 1752.25 and @ 1071.25
    the moment I covered – plunge resumes
    this market's “extremeness” is truly amazing – it printed w2 at precisely 100% retrace of w1 without resetting it – talk about shaking weak hands
    http://screencast.com/t/1DLdOTaJRVRP

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

    thank you iggy – now i can go, i'm leaving this blog in good hands

  • https://www.evilspeculator.com berkshire

    You're doing a great job though…

    Skål!

  • mmTesla

    As a short I would be patient and wait for a retracement, then if the swing highs were lower highs then i would short it.

  • mmTesla

    Hopefully they are busy pocketing profits 🙂

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

    Ah-ha!
    I knew you were behind the curtain!
    Come on out – lets settle it!

  • Bart7

    gotta see this, hysterical video on trading (Carrie Underwood Parody)
    http://www.youtube.com/watch?v=dnTzH0EF1x0

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

    +1

  • Wave_Surfer

    Maybe because you convinced most people that this is just bear trap #174 and everything is the same boring business as usual. This is not really a real bear day, only a bear trap. A day filled with bull$h!t with artificial honey scent added and the bears are tired and bored having the same stuff happen.

  • Wave_Surfer

    Maybe like you and like me, they are waiting for a clear break of the channel from March and without new highs and without the March channel breaking maybe there is not much to say or do for the disciplined trader.

  • ultrabär

    Now this I like – managed to get a fill right at the top of that bounce into the close.

  • Wave_Surfer

    So comment counts are important.
    I can write comments.
    I can even write comments filled with words that don't really say anything or add to the conversation if that is what is preferred.

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

    and after clear break it will get back into the channel pronto and bear will say “failed breakdown” and cover and then it will fall again and bears will say “bear trap” and will stay away etc etc etc
    A lot of people here over thinking trading – set your entry, know your stops and just take a shot – one time market WILL be with you

  • Wave_Surfer

    Or another option is to bring in non-trading stuff. That is done CONSTANTLY on blog comments especially ones with high comment counts.

    For instance I can make reference to music.
    Not only do I want you guys to agree with my wave counts, but I also want you to like the music I do. Or maybe I know that you guys love me – REALLY LOVE ME – so much that you are all sitting around wondering what kind of music I like.

    No need for me to actually mention what music I like, because I am sure it is the same stuff you guys like too! 🙂

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

    lets do it together
    there are a lot of comments which don;t say nottin or say same crap over and over and oBer again
    lets do lots of those

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

    Some Russian strippers would be nice – pretty please?

  • mmTesla

    Thanks for posting

  • Wave_Surfer

    I can also bring in a tangent where I mention what I like to drink.

    Before getting too mad at me, just think about the only thing that is different between this and so many other comments is that I am not actually mentioning what music and what drinks I like.

    And honestly, are you capable of caring less about what I listen to or drink?

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

    we just about to get banned 🙁
    Mole called me – he is mad more than Mad Russian 🙁

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

    Some other bloggers really care for people to know “what next car tey are going to buyt”

  • momac

    Well, I went into the weekend short, and thank goodness I slept late or I would of freaked out and sold it all at a loss. I am still short going into tomorrow except for a little bit of upro for a small hedge. I'm trying to do my part. 🙂

  • Wave_Surfer

    Speaking of 'my house' …
    I am looking forward to the day where I can buy a house with cash.
    Then I can get a dog. I like dogs but can't have one now.

    Dogs are EXPENSIVE!
    I figure I will have to have well over $500,000 cash before I can get a dog. I know others can do it for less, but we each have our own situations. And what will the taxes on $500,000 in short term profits be. After taxes take out another $200,000 so I can still have some cash to continue trading with. Then there is giving to charity. What is left after those 3 things is not that much to pay for a house with cash.

    But I am hoping that my payday will come if I am patient, disciplined, intelligent and lucky enough.

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

    don't forget that you will need to set aside some money “to punish with all available personal wealth power and corporation behind” those who disagree

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

    who is “vadon” and did not he have hidden agenda?

  • Wave_Surfer

    Actually I agree with you. I am on the same page.

    On the Friday before last, I moved into a Put spread on IWM (which seems to be the weakest of the big indexes). My thinking is that while there might be some new trivial highs, it was not going to go a lot higher and stay a lot higher and so a Put spread was great. That way even if it goes no where (or charges up and then charges down as it has been) I still get maximum profit.

    I am as happy and comfortable as I am able to be with my current position.

    Again, my personal opinion is that we have already topped out and we are in P3 now. However, I also knew that the market would like a week or 2 to at least dance around 10,000. I didn't think they would hit 10K and then the next day leave it and be content to never see it again, so I saw that it might grind sideways for a while as it tried to hold on to 10k Dow. There was also the chance that it would go up and get yet another new trivial high before going back down. Adding up these different possibilities, again, I think a Put spread where I buy an ITM put and sell at ATM put, this way I get maximum profit if it goes NO WHERE for week after week. I get maximum profit if it goes up for 2 weeks, just so long as it goes back down after a few weeks. I get maximum profit if it goes down.

    So, I really like the how the position works with what I see are the various possibilities.

    However, I think that Mole and Berk and others have really good points and they might be right that it is another fake out and we may have another 2 to 5 weeks of up. I see no problem in their thinking so although I am not sold on it, I don't want to say anything negative about it.

    In the end, I don't have anything new to say that hasn't already been said by either Mole, Berk, Anna, DavidDT or the other good posters on this board, so I don't say anything. That is why you don't see my posts here. I am just sitting here and waiting to see which direction it will break out too, and while I am waiting, I am banking Theta decay and trying to not be afraid of having Russell 2000 be over $62.50 a month from now.

    EWI STU mentions that we might be on a verge of a Wave 3 down. I don't know. I can see it going any direction from here, but if if it charges down in a wave 3 then I may sell out of my Put spread as I will be happy with how close to maximum profit I will be without having to wait until the 3rd Friday of November.

  • BigHouse(Aka Mr Vix)

    http://screencast.com/t/1YOTwAGJ

    For those who want to catch Primary Wave 3 but are afraid to buy the March puts b/c you might think its not enough time…. check out the DEC 2010 spy 70 puts. This will for sure give you enough time to be right. I will begin to load up on these babies

  • davosdax

    Your site seems to crush my browser during the day. That's why I usually read it out of market hours.

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

    iv of 5 up?

  • Wave_Surfer

    Good point. Take advantage of the low IV that options have now.

    Personally, I think I am gonna use bearish spreads through Wave 1 (which I think started) and then use bull spreads for Wave 2 and then as Wave 2 ends, then move into pure Puts for Wave 3.
    That would be Wave 3 of Wave (1) of Wave 3 (circle) that I am talking about. And then use spreads for Waves 4 and 5 and then more spreads for Wave (2) and then pure Puts in the Mother Tsunami Wave (3) of Wave 3 (circle).

    I like the idea of spreads because every now and then I don't predict the market perfectly. I like the extra cushion that the spreads give me. I can make more profit as it takes longer than I expect for waves to unfold or in case I don't have perfect timing.

  • charles_smith

    It looks to me like Mr. Market dropped to the 20-day MA which is offering resistance–which is normal. Financials busted thru the 20-day which is bearish. A brief last stand at the 20-day would be typical, followed by a drop to the 50-day and finally the lower bollinger on the weekly.

    I like the skittishness–that's a good sign.

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

    a duck? someone with a torch? and angel(fallen or not)? left shoulder and head of a shampoo?

  • KidDisco

    something like that. i don't believe this market will go out with a
    whimper like this.

    i need blow off tops in the euro, oil and gold. capitulation selling
    in the dollar. touches of the 50% fib from top to bottom etc…

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

    you have a problem on the euro, you're prety close from droping below the start of the previous wave… that would send good old buck to shitland….

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

    not banned, but one of this days that I'm feeling lonely and hit the botlle I promise you that I'll spend some hours at trading to win… do you like science fiction? I've got 2 or 3 thousand books… I'll bore everyone to death on that…

    LOL

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

    one thing that I just mentioned to kiddisco…

    euro might be missing a wave, but it's damn close from breaking the assumed start of the wave up… comments?

    Truncation in order?

  • T_dub

    Folks,
    Not sure if you have forgotten ErikD already… but check out the action from Oct 14th to today. Now THAT is what you'd call a roof-top pattern !

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

    Here's something to reflect on… Baltic Dry Index

    Broke some very interesting lines….

    http://www.imageuploadnow.com/images/1256603022

    slightly less cramped noodles

    http://www.imageuploadnow.com/images/1256602752

  • de3600

    Call it bullshit I have been following this web bot thing because it intresting funny thing today they claimed this to be a turning point in the market.They had an event that would change the market at 5:12 am today with a six hour time frame because it cant get time zones right.Now whats funny market started ripping higher and at 11:10
    we started a reverse 230 pts.I dont know thought I would share kinda strange

  • Bullturnedbear

    Last night could have been a C wave (currently in wave 4 of C).

    Here’s my guesswork prediction for tomorrow. Market gaps lower. Bears pile on thinking this is it. Market then finishes off wave 5 of C down and heads up in wave 1 of the final 5 of 5 of C of Y of 2. Wave 1 retraces only part of the previous fall before falling in wave two. This keeps the bears hanging on hoping that wave 3 down is about to start. Then bingo, wave 3 of 5 up starts in dramatic fashion and all the bears get run over by huge trucks. They all stop out and are freaked out by the strength of this wave up. At this stage all the bulls charge in and push wave 5 of 5 in a blow off. All the bears lick their wounds and go back to the drawing board, but stay on the sidelines waiting for the right signals.

    The market top is then in. This scenario would allow for a blow off bottom in the dollar, blow off top in gold, silver and oil and a blow off top in equities. The market loves to keep us all guessing. It is never easy. Except during wave 3 when you are deep in the channel and deep in the money. But getting to that point takes lot of stress every time there is a one two.

    By the way. Yes! this could be a bunch of one twos and we are heading lower and lower and lower. Time will tell.

  • http://www.anomalousmaterial.com CastorTroy

    Breaking SPY 107.50 today set up a short-term downtrend. Any bounce needs to be contained below today's high. The unfaded gap immediately below is also a 50% fib from the SPY 102 swing low to high.
    http://tinyurl.com/ykzw6j4

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

    well, looks like the rest of europeans just went to sleep and americans are either having dinner or elsewhere… should I do a DavidDT act?

    I already posted BDYI and some stuff, but here's something until Mole decides to make his wrap-up post (don't say it's a one way street Mole, You,ve got Berk killing browsers for you, Berg's counts, the morning executive summary by gmak (I think), davidDT spends almost longer here than at home and you have a crazy hamster that sharesis mind, twisted as it may be)

    nopes I'll just post something that was ready when the berkmeister decided, unknowingly, to shut me up with his mega-post.

    ok, some reflextions; EWT was created in times genltler for us rats. No PP team, no high speed program trading, no QE, POMOs and tv hadn't rotted away the brain of everybody.

    we call ourselves rats, stainless steel ones to boost, we are supposed to find the crevices between these hard walls, not weep because ancestral techniques that worked on wood seem faulty when we hit concrete.

    let us accept that market pumping is a fact. let us also accept that they do fail under certain circunstance (otherwise let's all go crazyly long and be done with it, but 2000 and 2007 and 2008 say otherwise)

    I have already discussed some of the ways it is done (at least how I see it, the 5's getting overexcited abc to impulse, etc ad nauseum)

    We have plenty of history to teach us. The “recovery” of 2003/2007 is a fractal from the 87/2000 (until 1997, it shows what would happen if the 97 booost had failled, it also tells us what the market wants, to finish the correction we have postponed since 87, a drop to 160 in 1987 dollars, target 0.6 below the 230's of 87) BTW THIS IS WHAT SHOULD HAVE HAPPENED http://www.chartsrus.com/chart.php?image=http:/… and they are still heding for 3000

    Past a certain level it seems to require 2 things.

    1. supposed impulse 1 up MUST go beyond the end of previous line
    2.no down retrace of significant importance can hit a 38% retrace
    3. consolidation happens with 2 bounces from previous resistence line

    why? I think they're scared, july did'nt succeed because the count for a colapse right there was flimsy (that B couldn't pass for a 5) but bears rushed in and ALMOST did it (hey PPT isn't the only one capable of screwing things up, january should have posted slightly higher higs)

    SO, I want critics and contributions on POST PPT EWT

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

    15 minutes and not even an insult (I'd even accept raised by wolf busting my balls calling me crazy) let alone a comment…

    Mole I guess I empathize with your bad days… but let's have patience, SOMEONE (anyone?) will make a smart remark that will make it worthwhile….

  • TheCrowe

    I don't know what it means, but RealMoney had a columnist conversation with real EWT charts. Rather than the usual hand waving, at worst, and TA charts (with 2 points connected together passing as a trend), it appeared that someone put some real thought into the analysis. Shocking. Best, Richard

  • charles_smith

    SSH, me only pawn in TA game of life and so smart comment beyond me. Can only make dumb comment that now is not normal or the new normal and gut feeling is market ready to waterfall, no consolidation, no final blow-off, just loud roar then ahhhh! over the edge. Maybe waterfall has three levels, maybe not. Me saw BIDU canoe just go over edge, poor dumb Bulls inside screaming… other boats right behind. Smart money has sold into liquidity so no need for consolidation or anything fancy. Straight drop fine with GS now that they're short. Boats of retail traders rowing like crazy but they not strong enough to escape current. BIDU boat was full of Bulls, now broken wreckage at bottom of whirlpool.

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

    if I was religious I'd be praying you were right… This time no pictures (charts), but that's what we call “bear porn”… gets us dreaming in no time.

    BTW, don't ever say “a pawn on TA” you've got two eyes (I assume, but one should be enough) and a brain between them. Go to google finance or anywhere else and “eyeball” 87 onward and the 2003 to 2007. And then ask away, no questions are stupid, stuborness can be (mea culpa) but learning is seeing and asking.

    best regards

    p.s. you better learn (from others but ending in) by yourself, when you trade it's your call, trust yourself or trust no one (and leave trading alone and go to a casino, much more fun and same end result)

  • Bearinator

    Agreed. Except I think that all happened already.

  • http://www.portfoliotilt.com PortfolioTilt

    1050 looks likely, maybe 1020 after? We have a rising 50 day EMA that isn't far below though and the bulls will defend that level in full force. After that, we have the 200 EMA but that's a ways down… http://bit.ly/UsSZT

  • cramar

    SSH:

    I have seen this idea many times that EWT does not work now because of market manipulation. To me it is just an excuse to rationalize why the market is not doing what our pet EW prediction says it should. When we figure the market should go down (or up), and it does the opposite then it can be blamed on outside forces forcing the market (the implication is against EWs). This wasn't the case 80 years ago so it had to be perfectly predictable back then compared to now. I say nuts!

    If EW is valid and is based on the laws of the universe, then it cannot operate outside of the laws of the universe. Which means that regardless of whether the PPT is real or not nobody can change the laws of nature.

    I've come to see that EW is both extremely powerful, yet extremely useless and dangerous to try and profit from it consistently. I've come to see that the markets will:

    a) Always trace out EW patterns since patterns are bound by the laws of the universe, and;

    b) Those EW patterns are rarely clear in advance, most times unclear, and sometimes absolutely impossible to know until long after the fact.

    Witness from maybe June to now. What is the predictive accuracy of most EW experts (who are mostly bearish)? Probably something like 5% or 10%. How can you have that, when throwing darts blindfolded at an up/down target will yield 50%? The market can only go in one of two directions anyway! You have a 50% chance of getting it right whether the market will be up/down tomorrow, next week, next month, next year! So why do we put so much faith in the predictive power of an EW count? Isn't traditional TA better at predicting than 50%?

    The way I look at it.

  • Bearinator

    When you do give to that charity, I suggest the Bearinator Went Short Too Early But You Have to Be Kidding Me That This is Still Going On Fund for disadvantaged bears.

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

    though you might find it strange I agree with most of what you said.

    1. it follows EWT patterns
    2. falling into those patterns happens regardless of manipulation

    NEVERTHELESS

    3. Fiat money allows NOMINAL disruptions of rules and certainly guidelines
    4. Movements can be LED TO one of the available choices (even thouh in the long term real targets have to be met even if latter)
    5. Yes we can err, and lately (some could say from the 87 crash onward) you might say errors became statisticaly significant. How can it be? 50/50 error would throw me off EWT more easyly than the situation we live in.

    6. EWT deals with masses, those that compose 30% of the current market will be led even without having heard of EWT. But what rules, abilities and limitations do the individual “brains/bots” behind 60% of the market? It's not Terminator but close, there's no calculation that we can do, nor speed were we can beat it, but machines never were capable of beating humans in GO, we have a higly paralel, holistic aproach coupled with the finest analog calculator available. We should be able to find the rules, twist them and win

    7. by wining I don't mean disrupting the choice taken by PPT. The extensions provided may well save us till 2160 or 2300 and that might be enough for finding a solution to a problem in human psyche that forces mid-term heavy corrections on the market. I jus mean knowing where and when things are leading us.

    8. EWT has limitations, but classic TA is all but useless (except for the beloved ruller when things go up), H&S is a shampoo, triangles and edges breack whichever sense they desire, distribution takes place in upward sloping events. EWT is the least of traders problems.

    9. this blog has very capable people who go often beyond the usual, maybe not someone, but the all of us will end up finding something.

    10. we'll never be any poorer for thinking and trying to find something outside the box

    Best regards

    p.s. in july I expected the 5th wave but thought I might have miscounted it, yes I droped my longs ASAP when there was apullback because I feared a truncated 5 there.

    p.p.s. You took the time to make a valid comment to which I hope I have answered to your satisfaction. That's brain and motivation, care to try and give some reflextions on this “what if” scenario?

  • Bearinator

    Asia just opened way down — Hang Seng down 2.3%. Someone remind me why I don't just forget about the U.S. — Asia seems to just follow what we do exactly. I wonder what the correlation is?

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

    might as well ask santa berna and baby jes.. baby Obama for a little TARP for bears…

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

    well, Disqus is at it again… your comments and replies are not being updated…

    see you all tomorrow

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

    very, and a 1,5X sensitivity that's why I shorted emerging markets

  • harveydent

    evening guys – looking for any opinion on my current positions if possible.

    short AMZN via 115 puts
    short Chevron via 70 puts
    long FXP via 11 calls
    long SPY via 109 calls as hedge

    thanks 🙂

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

    well, one more comment and I'm going to bed

    1068 is a fine fib to end wave 5 (let's leave the discussion of orthodox tops aside)

    So I wouldn't be surprised if after a nice drop we'd go back to 1069 and start selling hard.

    Any takers on this one? Comments»? Critics?

    p.s. it would align well with a retest of resistence in some weeks

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

    date of options?

  • harveydent

    amzn + cvx are NOV
    FXP + SPY are DEC

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

    spy under 106
    bounce 107.50, test of 105 – if breaks, next stop 102
    where r u going? you cannot go
    we need to hold the fort while mole and berk are fixing black boxes

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

    so you're short november and long december… might actualy work… or not, theta burn will hit your shorts fast if you're “early”

    on the other hand, just noticed one of your longs is realy a ultrashort on china…

    everything is clearly OTM on the short side…

    and the long is far from having a decent leverage compared with your short bets.

    Well, it's a nice lottery ticket IMHO. Hope it's money youi can loose because it's the most probable outcome.

    I don't mean to offend, just giving my opinion (and as I stated… It might actualy work, in my blue scenario it should turn a profit)

  • AS2009

    Guys – just saw something on the fractal that everyone has been talking about …. I think this is HUGE !!

    Note how in the last time …after the sustained push up – we saw a 3 day mini dip, 1 small push up to double test the high, then the 3 big candles down, 1 big candle up, then 3 more big candles down and 1 small down candle that came to a MA – from there we bounced and did not look back…

    Now let's see what is happening now … after the sustained push up – we saw a 1 day mini dip, 1 decent push up to double test the high, then the 2 big candles down, 1 big candle up, then 2 more big candles down (TODAY), …

    … that leaves us with one small candle down tomm, that would touch the Mar trendline @ 1059 and bounce back to a MA …. the level we reached today is the 20 MA on the daily, the 200 MA on the 60 min as well as gap window support on the 60 min …

    So, if we say this is a fractal, it is essentially a rushed version of the previous one …. and based on that we could see a down day tomm with the bounce start tomm that may just be it for the correction ….

    Hope this helps ….

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

    yeps, but I was talking of the rebound from 980-1010 to 1069 (wave 5 failure)… it would be after the move you described.

    I'm going to bed, I'm at GMT, zulu time, and you can hold the fort for a while, either getting your ass banned (LOL) or taking a look at what I posted down there.

    Seriously, I'm wasted, this last month I barely sleep

    take care

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

    you skiped a fractal in between but the reasoning holds… if it is a proportional fractal, if it is at an higher magnitude wave… it goes way down to another trendline

    BTW if you are right the next cycle (including rise and drop to current trendline) is about 2 weeks as I mentioned earlier

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

    hey! still there or what? I was jocking on the ban (you started it) get back here and leave an old hamster get his rest 😉

    p.s. and thanks for holding the fort

  • AS2009

    SSH – I was looking at it on the daily – were you looking on some other timeframe ?

    Also, can you share more info on the cycles that you were mentioning … chart or something ?

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

    seriously, don't you think I gave people enough to think of (if they so choose to do)?

    just tell me you'll keep the flame so I can leave… Pleeeease

  • AS2009

    So essentially you are saying that P3 has started ?

  • Trader_Steve

    I see only three bearish engulfing patterns since the March low. Like the rest of TA there has been no follow-through.

    We have one working now. I think where we stand at the close of Wednesday will tell us if the trend has change. Off course, 500 Dow points down tomorrow would be a good start too (g)

    http://www.screencast.com/users/mkt_ronin/folde

    Steve

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

    not perfect fractal but try this

    initial fractal from march low to july low
    from july to beggining of october low that's fractal 2, aprox. 0.6 size and time of original
    from the beggining of october low onward fractal 3, still 0.6 of prevous , about .3 to .4 of original (as you identified)

    best I can do right now

  • harveydent

    thanks – yeap no offense taken at all. i asked for opinions.
    im taking quick profits anyway, dont intend on holding until expiration. quick 1 or 2k is all i take and run.

    g'night!

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

    I would love to see 1090 again, thats for damn sure

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

    was doing quick SPY video, dog tired, good night all

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

    not realy, a wave 5 might be missing, but it could be just a truncated that rises from 1000 to 1068.

    Might be a new channel shifting and this was just i of 3 up.

    And it can be a wave 4 and not P2

    For me the drop should have taken place in april or in august… right now? doesn't sound ok, so maybe they'll use that to make an harmless intermediate correction

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

    what time zone are you on?
    good night

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

    don't mention it, and this is as it should be, devils advocate (though I mellowed it because of my blue pill scenario… darn)

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

    End of 3's?

    End of Wave 3
    end of iii of 3 of wave 5
    end of 3 of wave 5

    They just let “harmless” 4's get away with it?

  • trader69

    Pegasus?

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

    I'd rather if we didn't, and would probably turn bulish till 1190's if we did….

  • Trader_Steve

    >>If EW is valid and is based on the laws of the universe, then it cannot operate outside of the laws of the universe. Which means that regardless of whether the PPT is real or not nobody can change the laws of nature.<<

    You are stating a principle as if it were ordained by Descartes. Your statement above attributes a preordained action. And while I have bought the dead low or sold the dead high and predicted where the market must then go, it often taakes quite a bit o churning until that traade becomes clear. And I have the bonus of knowing where my alternative count must bee defaulted to.

    What do you think happens tomorrow if a large firm states that due to its investments, it will only pay 95 cents on the dollar? That was what started the collapse back in Septemer of 2008. How did it fit into “nature”? It seems to have caused wave 3, but likely, any bad news would have caused the drop as that was the setup that was developing.

    If you look at time-frame and volume, one individual in a quiet market can screw up a wave count because I used to do it in the sugar pit when it was quiet. 4 can't overlap the top of 1 in EWT in a 3rd wave, right? (you should know that answer without looking ). Well what if the it's quiet and I can stuff a print up on the board below the top off wave 1? Did I just invalidate the entire theory? Was some Tesla device to have generated a force field preventing me from “screwing with nature”?

    If you have not read the article this weekend on ZeroHedge about the money banks got and what they did with it I highly recommend it. This is NOT a natural time. There is a void in “the force” so to say. And that is what has been making using any method that has worked in the past more difficult.

    Kondratieff believed in long-term cycles (and we may well be in a massive down one now) and Stalin believed he determined the prices. Who won? I'd say Stalin. He had more money, more power, and put a bullet in Kondratieff's head.

    EWT works….but unfortunately, there are times when someone with enough money to overcome the natural transactions of humans runs the table. EWT dos not fit under hard laws of physics as if on a Periodic Table. They might need to manipulate the market with 50,000 SPY contracts at just the rght time compared to my 5 lots of sugar, but they do it. To think that any of these firms do not have a dedicated department that is looking at all EWT newsletters and acting accordingly is not giving credit to a firm such as Goldman Sachs who makes $100 milion+ on more trading days than it doesn't.

    If this didn't make sense to you, or you disagree, I'd say you have not followed EWT long enough. I've watched it for over 20 years. I see nothing better.

    >>I've come to see that EW is both extremely powerful, yet extremely useless and dangerous to try and profit from it consistently. <<

    Might I suggest you look at charts prior to 2008 and see if you have the same opinion.

    >I've come to see that the markets will:
    >a) Always trace out EW patterns since patterns are bound by the laws of the universe, and;
    >b) Those EW patterns are rarely clear in advance, most times unclear, and sometimes absolutely impossible to know until long after the fact.<

    My answers to the above:

    A- incorrect…there is no force field demanding a mkt do something in the time frame you desire.

    B – Incorrect…for example, watch tomorrow. Can you tell me anything better to trade with that knowing we have either completed a ZZ correction and will reverse, OR, that the 5 wave move down completed from today's high, a 2nd wave was done, and the market might collapse? Either allow me to trade AND define when I am wrong. The rest is money management and self-management. That's why fewer than 10% make money trading. Aside from commissions, it's a zero-sum game.

    ZigZag possibility:
    http://www.screencast.com/users/mkt_ronin/folde

    If you have something better I'd love to hear it. But it sounds like you have traded poorly with it and a system is pretty much the last item involved in making money. Modern Portfolio Theory books that teach “buy and hold” and diversification should be tossed out the window, so what do you suggest?

    Steve

  • Trader_Steve

    >>nice find, it fits and gives objective status to my prefered count<<

    And what would that count be?

    I think it's clear that we either did a ZZ (but I would have expected it to close strong) or all that noise after the drop was a posssible 2 and it's a 3 down tomorrow.

    Steve

  • dullmind

    Hello Mole, just reading this now, thought I would share a thought. Generally it is thought that the last several
    months of the rally have been driven by bear squeezes. As a high profile bear, you do realize that you are the
    leader of a herd of bears? That does not mean that I think that you need to miss the opportunity we have been
    waiting for, but if you and your herd of followers (of which I am one also) jump in too soon, with good loss
    management, then that could provide the fuel for another rally. Conversely if you advise your many followers (even
    if they are not posting) to wait, then any rally attempt will have no fuel and will fail.

    Of course your analysis could be right, in which case I will probably go broke, (bad loss managment), you
    will still have your capital, and when the market finally heads down, the truck you back up will
    be a lot larger than anything I have left. As you said back in July(?), its all about capital preservation
    through the months of grind to come.

    Hang in their tough guy, one thing am certain of is you will be the Last Bear Standing

  • molecool

    That's pretty much what Berk and I have been suggesting, yes.

  • Trader_Steve

    AOh sure! The wheel stops spinning in the cage and you go sleep on it! What about me? I need to know where the mkt iss going in a SSH world.

    Steve

  • PRSGuitars

    Wow, and disqus doesn't *actually* put up my (previously self-asserted) 'epic' post…

    here's what I can scrape together from my screencast account(s) and (green, but slightly burnt) memory…

    ————————-

    Where to begin…

    Not to toot my own horn, but since we discuss lack of participation here rather often, I'd like to point out that I offered this this afternoon:

    At 2:40 pm EST:

    PRSGuitars
    Pretty sure that was the divergent push lower on EUR — and the DX top for the day — just a guess… might get Annas squeeze though soon.

    Screencap: http://screencast.com/t/c1S6XKFyk2ku

    PRSGuitars
    Another heads up — SPX bounce trigger — met the 133.3 extension criteria to downside of the bottom half of THE WHOLE BIG RALLY CHANNEL — ie, this was a fakeout unless we push lower here.

    HEAR ME YOU BEARS — BEWARE UNTIL THIS THING SHITS ITS BED FOR SURE. I just don't want to get boned once more!

    http://screencast.com/t/kPVlvQiw2

    closeup– http://screencast.com/t/20P9ZALULyh

    … and that's where we ended up for the day. Hrmph.

    The mystical /DX channel: http://screencast.com/t/jb0h5Hkkbc

    Some SPX alternative view: http://screencast.com/t/NLV9LfPF

    So Mole and Berk — believe me, there are others on the board who are skeptical! Holy hell everyone is skeptical… we're also just hopeful…

    SPY and DIA are right on their monthly VWAPs, Qs are significantly above and IWM is a good 2% beneath its VWAP for Oct.

    If stocks like AAPL and AMZN are blasting off to new highs while the NQ gets left in the dust, what does that mean for the NQ when AAPL and AMZN correct and fill those gaps? Yup. NQ catches up to the downside. Might've just found my next victim on a rally towards 1755 (cannot BELIEVE I didn't pull the trigger at 1771-1773) where i last shorted 1753.75 for 75 points. Muahaha. I think there might be outperformance on a pop to 1755 AT LEAST where we can take an easy entry against the weekly (and, apparently, continuous from last week's weekly) VWAP short, targeting 1725 (monthly VWAP) and then lower, 1675-1700 if you wish with a trailing stop.

    I should also mention the 1780 level on /NQ is a 61.8% retrace of the 08 bear market and a 78.6 retrace of the Aug 08 – Nov/Mar crash wave/double bottom. So — 1780 is now, for those of you who can't tell from wicks like this: http://screencast.com/t/N6NFeXewYZqb, that thats a good sign of topping action.

    AMZN 133 extension on daily and monthly timeframes, credit v8muscle — aka “Oh, great, just what I wanted, more 133's to deal with” — http://screencast.com/t/bmfhSmpdot
    ————–

    If i can come up with more in the meantime I'll throw it up on the board. Thinking 1075 for weekly vwap or so before more downside, that's my guess. If we drop hard from here we'll accelerate on SPX through the downside TL and I suspect there's a two-way trade here at least for another day or so… 1058-1062 bottom, 1075ish, then 1040s at least — if the currency situation cooperates.

    Atilla made a decent point though, that there's very little to suggest this lets up other than the expectation that we get a technical bounce (and/or POMO or GDP pump, but thats par for the course).

  • tradejane

    No, you're not the only skeptical bear here. I closed shorts positions when the DAX blasted through its 3rd support of the day and I even picked up a couple of really small US-longs later. Real Estate has held up pretty well over there the past couple of days and I always get suspicious when that happens. Especially when there's important RE numbers coming out this week.

    The DAX sustained quite a bit of chart damage yesterday and could easily drop another 70 pts from its current 5.650 area. Last line of support for Commerzbank is 7.40. The situation looks very grim for the bulls but they've dug themselves out of worst patches than this.

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

    I do continue to see potential for a sell-off. The banks sold off hard. The banks and financial institutions acting as banks are the ones driving this rally with POMO money in order to distribute stocks to others at the highest prices they can get.

    No doubt…distribution is going on. Strong hands selling to weak. There are trillions to be distributed. It takes time, perhaps several rallies and pullbacks.

    This is the biggest rally in 100 years. The administration doesn't understand financial systems, and the old school cronies that created this mess, or call it thievery if you wish, are advising the administration.

    Platinum dropped like a rock today, as did the banks if I may say again.

    6 Charts below. These are sufficiently clear that if you need to ask what they mean, you should maybe, not trying to be insulting here, but maybe you ought not to be playing this market right now, because the sharks are big and hungry.

    http://oahutrading.blogspot.com/2009/10/few-cha

  • raised_by_wolves

    Dear Stainless Steel Hamster,

    I thought you were the one busting my balls lately.

    Let's have a talk.

    You must understand that I'm one of the most civil people on YouTube. Although I visit YouTube comments everyday, I've never hinted an insult to anyone there much less made one directly or returned one even though many are deserving for their rude remarks, uninformed opinions, and, above all, atrocious taste in music. They are strangers to me. I don't insult strangers. They aren't worthy of my keystrokes.

    In contrast to YouTubers, Evil Speculators are like extended family to me. Rats are generally worthy of my keystrokes. You, Hamster, are especially worthy. This is going to sound like “I hurt the people I love most,” but I have been known to show affection through insults. For instance, today, I wanted to send Anna a cleverly constructed insult I thought up. I decided against doing so because I worried you would ban my ass. Now, I find it interesting that you wanted to be insulted by me when you were awake a few hours ago and feeling hungry for conversation. Were you consciously or subconsciously catching on to my way of conveying endearment?

    Alright, now that I've gone soft and mushy on you, I need you to imagine me as the punk I am (or need to appear to be). Guess what? How timely. This incident from earlier tonight will illustrate my punchiness. I actually got into a fight and won. I always stick up for myself and for the innocent. I figure I always get an “A” for effort and sometimes for results. I'm the skinny guy that fights to the burger. I don't win many fights but don't lose many either. Mostly draws. But tonight, wow, I beat the shit out of some guy fifty pounds my superior who should have been able to take me down. Maybe I'm improving my fighting technique, or maybe I got lucky when I threw my left elbow at his temple and he went down. Anyway, what was the point of my story?

    Sorry, if I'm writing non sequiturs. It's late, and I have less than five hours sleep available.

    In conclusion, if I were to say “I love you man,” I would add, “That doesn't mean I always understand what the hell you are talking about.”

    Respectfully,

    Raised By Wolves

  • raised_by_wolves

    P.S. I now subscribe to your DISQUS comments.

  • tradejane

    Commerzbank slid through 7.40 like a hot knife through butter. This practically guarantees that US-banks are gonna get cremated today. I sure picked a great time to be skeptical. 😀

  • MariAroma

    From Terry Laundry of T Theory —

    “Oct 26th Comment: No change to forecast of mid Oct top- late November low. Todays down turn further confirms the top. Mid channel (1037 in the table) is the current down side objective before a rally. Terry”

    http://www.ttheoryfoundation.org/t-theory-calcu

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

    In Europe so far looks like we are consolidating yesterday's fall, BUT we have seen this before, instead of another leg down we see a slow grind up all day…DAX idf it can get above 5700 (more like 5720) then we're back in a channel since early OCT…BUT GUT INSTINCT says one more leg lower to 5520…top of GAP..
    http://www.screencast.com/t/eyXPCRPO8Vyy

  • tradejane

    I totally agree with your instinct. Consolidation is a sham with out the banks.

  • K.I.M.

    Good day. One comment about trendline in SPX daily posted by Mole. My chart looks like http://www.flickr.com/photos/42905134@N08/40488… There's a big difference and it's not near trendline. Comments ?

  • john_matrix

    amzn looks like it will go back to the top of the GAP at 110

  • defenderyou

    I appreciate reading a concise “this is what may be next” type of analysis funny how many trader bloggers cant seem to do that when it counts – like now. Two things to add: I calculate the trend support line back to March at 1060 and prior resistance which is now support at 1058. I would also like to say that the 50 day simple MA is at 1043, so once we get through 1060 we will be talking about anther 15 to 20 point drop before confirmation I am afraid. The other thing which makes me somewhat bearish (I have been in cash or hedged with covered calls for two days now, and with only short-term day trades) is the fiasco happening to banks: ING down another 10% today after 18% yesterday – Neelie Kroes, the Euro competition commissioner told ING what to do is scaring the crap out of everyone here in Europe, enough so that even the very strong positive earnings results from BP can't keep the markets green over here. Similar fears today about Frank's plan I am afraid will undermine the good earnings stories we are seeing and surely make us test these two support levels – at least the 1058-60 area. With that only 6 points away I think the bull's only savior today could a suprisingly upbeat Shiller Home Index report, but who knows. Bad news there and I doubtful we will hold the 1040-45 support. So like it or not I think the odds are looking pretty good for the bears. Thanks again

  • defenderyou

    Drawing these bloody lines is an art form. Your's just touches the two bottoms in March and July. In that case the intersection today is at the 50 day MA at around 1043 thereabouts. Personally, if I have three bottoms and can fudge a trend line that hits all of them I consider that to be the more reliable support. Maybe someone with a more scientific answer can give us some advice on this. I think the impication though is what I said above – support is between 1040-45 to 1060.

  • molecool

    Are you using a log chart? I will redraw using TOS or Ninja as soon as I fall out of bed. Thanks!

  • raised_by_wolves

    Oh no! I read Mole's title as Spectacular Bear Monday Rub Down. You mean, I'm supposed to be skeptical!?! 😉

    Hey, skepticism is great and all but everyone needs to relax around here while they're being skeptical. Maybe relieve some stress by deciding what you're going to do ahead of time. If you held short positions last night and feel like you may want to cover them tomorrow if the tape moves up, how about picking a line or number for your stop. Why not choose targets ahead of time too? Oh, and simplify. I've stripped down to some horizontal price levels with just a hint of a channel in the background.

    http://screencast.com/t/I8Pj9oK2S

    Nothing special. That's the point.

  • raised_by_wolves

    Can't sleep? Decided to wake up early?

    I got carried away playing online chess.

  • defenderyou

    Read my reply below – he just connected March and JULY lows leaving out Oct 2 low – that gives support right on the 50 day at 1043 or so. Nothing to do with logs – trust me

  • molecool

    Trust needs to be EARNED!

    Just kidding – I'll take a look in the morning – typing this in bed right now…

  • molecool

    Stop giving me a hard time folks. I did not have the time to do another more elaborate post last evening – was stuck in meetings for the remainder of the day. Plus Eric and I worked into the night to finalize a new Geronimo release. I can only do so much and my subs come first.

  • onorio

    EURUSD is correcting from yesterday free-fall, i`ve a target for this correction arround 1.4947.

    We should have started (c) up. Above 1.4940 i close my 1.4860 long and reload shorts.

  • molecool

    Can't sleep because IRS so fucking hot here in L.A.

  • raised_by_wolves

    I'm not giving you a hard time. I'm just astonished that another West Coasty would be awake at this hour. If you don't want to elaborate, that's fine. I'll go back to playing chess.

  • PRSGuitars

    Heads up — if the DX is flagging to the upside (this being the triangle at the top of the pole now) we'll need to pop now:

    http://screencast.com/t/v39Y1VIl7Twv

    We've got monthly and weekly VWAP on DX below to support us and we're at the CRUCIAL 76 level. Just a heads up to you overnight FX'ers (onorio, ahem!)

    Not calc'ing EUR targets just yet but I figure the perfect snap of 1.4928 today (pivot! to the pip) is a good indication that this retrace will play nice with fib targets. It was a 38.2% retrace of the move down top to bottom so far (from 1.5062 or w/e) and also pivot + some SMA…

  • PRSGuitars

    Did you scalp out any at the pivot? I was surprised it hit thepivot dead on like that, usually there's some pip or two throwover. This (tonight) was uncanny, right to the pip… was thinking of you, hoped you locked a little profit…

    as i said above, was also a 38.2% retrace of top to bottom of last day's drop

  • PRSGuitars

    I, too, find the US tax code sexy

  • PRSGuitars

    naked jan 110 puts here, will resell previously covered short 105 jan put once we hit 112 or so to capture some spread, if it's really dropping i'll try to wait it out until 105…

  • raised_by_wolves

    Damn real-time updating (which I actually like) made me confuse your which post of mine you were replying to. My “Oh no! I read Mole's title as Spectacular Bear Monday Rub Down” one isn't directed at you, Mole. In this case, you're not my audience. By the way, you don't owe me anything, and you give me far more than I deserve. I'm just trying my hand at 3 AM humor and getting myself into the right state of mind to trade in a few hours. If people are still agitated, I'm encouraging them to calm down. If we gap up, I'm going to be calm about it.

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

    damn it
    you woke me up – do u ever sleep?

  • onorio

    No im long since yesterday and planing to keep till 1.4940, dont wanna scalp corrective moves.

    It was fun how the first move stoped right at 38% retrace, but i still looking for 50% at least.

  • raised_by_wolves

    Yeah, I nap here and there whenever and wherever I can find a warm, quiet place to sleep away from librarians, policeman, and gangbangers. For instance, I plan to sleep three or four hours in one of the wooded parks after market close this afternoon.

  • ultrabär

    Quote of the day

    Wall Street… is like a lovely and accomplished woman who must wear black cotton stockings, heavy woollen underwear and parade her knowledge as a cook because, unhappily, her supreme accomplishment is as a harlot.

    J.K. Galbraith
    The Great Crash 1929
    [nod to TS – a great read]

  • PRSGuitars

    that's a shame — i always hate when i realize i'm holding out for something that ends up being 10, 12 pips from where I've targeted… so I don't fill, and kablooey. You know the rest.

    Just remember, if the DX squeeze does begin, then beware. That's all. Best of luck!

  • raised_by_wolves

    Actually, the above was mostly a pep talk to myself.

  • onorio

    Im targeting 1.4947 but i will unload above 1.4940 lol…

    I waiting for that squeeze as a 3rd wave, we should be in 2nd, first let me dump longs and reload shorts than let the fun begin!

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

    I think I read a GS paper where bear covering was considered 20% of the induced rise, not enough to realy matter as compared to the rest

  • ultrabär

    Yeah that looks good to me – 50% retrace and (a)=(c) colliding around 1.495 – http://screencast.com/t/0Hns5Z5OwzL

  • ultrabär

    Cable seems to be leading by a day in the dollar pairs – traced a slightly different pattern too, an expanded flat if the fibs are anything to go by. By that measure, it's already at the target we have for EURUSD now, so interesting to see what it does from here – http://screencast.com/t/SMHPmjzHpWfq

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

    Steve, your A's (engulfing black candles) happen to be at the start of wave 4, iv of 2 of wave 5 and 4 of 5 of what to me is C of 4 of P3.

    Is it clear now?

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

    And so I woke up and answer you… mid 1070's before any decision

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

    LOL that would be what I expected, and yes, I was saying that I count on you to comment on things (even if to say “I don't get it” or “you're crazy”) so now get some sleep and read things again.

    p.s. I weigh 200 pounds of which 160 could be considered lean, have half a dozen years of karate, whenever necessary never ran from fights but I'm quite proud of 99% of the times having had my fights without actualy fighting (sometimes a look, a word or a small bump wll do the trick)fighting can turn bad, try using your courage in a way where you win/draw without fighting

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

    thanks, I'll try and make it worth it 😉

  • onorio

    Or the EUR rallye 70pips from here or is in deep shit…

  • ultrabär

    Just completed a zigzag abc down on the 1min – should rally from here…

  • Bearinator

    MarketWatch contrarian indicator says that we will be down today — with the futures flat and the headline “Whiff of a Street Snapback”

  • gmak

    Pre-Market warm up
    First off, I made a rooky mistake yesterday and reacted to what I thought the market would do (based on prior months) in the EUR, instead of what it was actually doing. This turned an excellent trade into a big losing trade. I'm taking a TO for a while until I can get my head back on straight. As you read my posts, bear in mind that I no longer have any skin in the game. Thes lesson is to play the market in front of you, not the one behind you. Now onto more interesting matters.

    Yesterday, the USD popped – there really is no other word for it. Overnight, DXY gave back around 17 bps with all currencies strengthening a bit. Just what one would expect from profit taking. A lot of stops in FX got run over and no CBs came in to buy. To me this suggests that the FED was draining liquidity from the US financial system in some way. We'll only be able to see Thursday after close when the Wed B/S is released here:
    http://www.federalreserve.gov/RELEASES/H41/

    When you're looking at the figures, look at the last column. All the rest is a daily “average”. MBS is at 776BB (even tough I've seen some bloggers say we are at 960+). This is out of a 1.2 bb program. You've probably seen my computation using the Pareto 80/20 rule to come up with a possible target on the SPX of 1122, from the leverage provided by the FED's MBS purchase program.

    QE is expiring. MBS runs out in March 2010. Where is a desperate FED to get the ability to reflate after this? Clearly, they need a market event to create fear in CONgress in order to get permission to forge ahead. The last time they needed action, the FED pulled liquidity from the financial system which was instrumental in initiating the last crash – although things did seem to run away from them. Ticker Forum has talked about this many times so I won't get into it. The equation is: FED pulls liquidity from financial system = accelerating withdrawals from risky asset classes = fall in price in equities and comodities (etc).

    Equity
    Asia closed red by 1.5 – 2%. Europe is mainly green with the DAX up 0.5%; It's been a steady climb since bottoming at around 5632 at 6AM EDT. The observation is that there is no carry through from the US markets, which suggests that it was a short-term finger of instability. This means that there may be some minor echoes of weakness, but that it will likely be business as usual in SPX. I would pay attention to the TNX and to the Tbill and Tnote auctions going on this weak. Poor auctions will imply the POSSIBILITY of rates in the belly and long end of the curve rising more. This will make risk assets less attractive = decline in price.

    SPX
    SPX finished below the mid-bollinger. I would expect SPX to claw back above that 1070 level – but not with conviction – i.e. no blow out. TD pressure has not yet gone below the oversold signal line (although it can go up from here). This suggests a day or two or possible weakness, but EUROPE and FX leads me to believe that it will be tepid (unless the FED continues to pull liquidity from the US financial system).

    If we do continue down, the lower Boll. is at 1029ish. Before that, there is a TD risk level at 1050 – which acts as support – and the long term trend line is just above that at 1052ish. These would be support levels.

    From a risk management point of view, if one were to go short here, and the market moved up, there are ES pivots at 1072, and 1083 – which is quite a distance before one could conclude that the trade is wrong. If one were to go long here, support below is where I mentioned for SPX, and at 1056 and 1045 for ES.

    So it seems we are right in the middle of where a wrong decision could be verified. Not good odds which says now is not the time to put on a long or short position unless you are scalping or doing intra-day trades. IMHO

    FX
    USD (DXY) is at 76ish, off the high. Note that Asia did not come in an thrash it. CAD, JPY, and GBP are mildly stronger. EUR is mildly weaker (essentially flat).

    It looks like no one believes that yesterday was the start of a trend. EUR did make a run at the pivot at 1.4928 overnight, but sold off at the European open.

    EUR pivots:

    R1: 1.5011
    Neutral: 1.4928
    S1: 1.4793

    Watch the US Tnote auctions. Given how the 10yr rate is above 3.5%, and how it was done in expectation of the auctions, I would suggest that rates will come back after the auction (fall somewhat) – providing a nice leveraged return. The difference here is that the FED has very little money to buy back the Tnotes, so the demand may not be as strong given that there is no secret exit from the burning room.

    If the auctions are successful and the 10yr falls post-auctions, I would suggest that this would lead to a weakening of the USD. If the auctions aren't successful, then risk assets will fall in price. I don't know what will happen to the USD, but it may strengthen (or not, correlation is not causation).

    I'll let you know when I decide to go back into the markets. It may be in a week, it may not be for a couple of months. The market will do what it was going to do anyway. I'll just watch until I figure out why I made such a stupid move yesterday (some psychological flaw that will lead to more losses if I get back on the horse right away, no doubt!).

    Cheers.

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

    “He had more money, more power, and put a bullet in Kondratieff's head. “

    LOL

    true enough

    did you read my answers to him?, I think I also had covered most of your comments, herds follow EWT, individual brains with the largest pockets have a different role.

    p.s. And yes, kondratieff is something I always loved from the time I took my degree in economics, I have a soft spot for heretics with a good cynical view on human beings, remember thorstein veblen?

  • AS2009

    Yes you have … just wanted to share the perspective from a daily chart perspective into tomorrow 🙂

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

    good luck on your break and thanks for all the fish..err.. data

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

    well, hope everything turned out right on the black box front. Things went calm here, guess skeptical bears are moody and broody bears.

    Get some sleep before trading time is upon you.

    best regards

  • innatedc

    Agree with you GMAK, we're at a place known as no man's land….where people would rather wait and see and no one wants to dive in first.

  • innatedc

    That's called subliminal messages for the retail investor.

  • tradejane

    Thank you gmak, much appreciated. Very wise of you to take a break at this point, I hope it goes well for you.

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

    subliminal? That and saying the bombing of hiroshima was a subliminal message to the japanese LOL

  • innatedc

    LOL

  • PRSGuitars

    EUR just bottomed — heads up — 61.8 of last corrective wave

  • 9pins

    Gmak great post thxs for the premarket. here's to getting your mojo back asap.

  • onorio

    Extension? 1.4970?

  • gmak

    FWIW:

    TD has a retracement (actually two of them) at around 1.4845; This bounce looks weak – especiallly in light of the fact that (on a 3 min chart) we have seen lower highs and lower lows since Europe opened at 3AM. I think we will see overhead resistance come to bear around 1.4873 – 78ish and a move lower. IMO. Remember, no skin in the game at the present time.

    Looking at the 30 min chart, we have bounced off of an important TD support level, and the lower Bollinger. Plus the TD pressure is indicating a low risk buy – but the current bar needs to close for this to be valid (without the price falling much). It doesn't close until 9AM

    All this suggests to me that in the very short term we may still have a lower low. This would imply breaking the bottom of a wedge (bearish wedge, but….).

  • bevets

    like a compass in the fog

  • PRSGuitars

    what do you mean? as in, is there an extension targeting 1.497?

  • Trader_Steve

    I don't recall veblen…will have to look him up.

    Steve

  • onorio

    Forget it, i didn`t understand what u mean at the first time. But yes 1.4979 is 61.8% of yesterday impulse.

  • PRSGuitars
  • charles_smith

    The cliche is “just watch the tape.” but in situations such as this (just read the posts below for the general sense of indecision) then the tape itself says very little. I am sensing a change in trend that will lead the tape. We have finally reached the point where “good news” will be sold off regardless of how “good” it is. As noted by other posters, financial sector is weak. They led this move up, and they will lead it down. Long calls in FAZ plus 2X inverse ETFs. This is the point to be all in short IMO. Just an opinion. It will be easy to be very right or very wrong and I think we'll know by Thursday.

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

    his woks on conspicuous consumption is, 100 years latter, still top notch. And his view of engineers vs predatory “businessmen” is quite interesting.

  • gmak

    0 for 2, I guess. Momentum took the EUR up to the upper bollinger instead of getting stopped at lower resistance levels. Top of minichannel is at around 1.4900 but price momentum is waning. We have a low risk SELL with stop at 1.4891 (on EUR not futures) being st up. Need EUR to stay below 1.4887 for this to be valid on a 3 min chart (on this bar only – which closes at 9:39)

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

    in financials I think you may be right feels like we had i of 3 down (of a first leg?)

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

    though I have them in paperback, his books are public domain

    http://www.gutenberg.org/etext/833

  • Trader_Steve

    Thanks…I boomarked the site. When I will get to it I'm not sure. I think I need a book on how to gut deer and smaller animals…!!!!!

    Steve

    P.S. My wife was directly next to Barney Franks at LaGuardia yesterday. She had to do all she could to not spit on him.

  • gmak

    Great chart!

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

    Couple of questions for you guys…

    What do you think auctioning off of 123 Billion in T-bills will do for the dollar & how do you think the market will react to this?

  • TheMacroEconomist

    Looks like I still got an account left after selling my IWM puts near the close, holding USO overnight – and then like a real nut, buying some Q's in late AH playing a dip on the Ask price.

    Have to say, I think the first two 30-minute bars after the NYSE open are going to show one helluva battle. Especially with the Consumer Confidence report smack in the middle. Already got conditional orders in to get those IWM puts back. Hold your hats… 🙂

  • dollar

    9:04 AM Aug. S&P Case-Shiller Home Price Index: -11.3% vs. -13.3% in July and -11.9% consensus. Nationally, home prices are at levels similar to fall 2003.

  • gmak

    It's not the auction but the results (participation etc) and how the yields behave post auction. If they rise, it may be bullish for the USD, but not for risk assets.

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

    I would hope so…lots of volatility and hopefully volume, those are the things of market tops….

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

    Last Auction….

    “The Fed has been in the bond market since March, buying up to $300 billion Treasurys in an effort to help keep consumer-borrowing rates low. The central bank is expected to complete the buying this week”

    The bottom now in place needs to get tested…this ought to do it.

  • TheMacroEconomist

    That's more or less my take. CL futs and USO been tracking Euro pretty closely of late, we'll see!

  • gmak

    What bottom?

    Yields have been higher. What is noteworthy is that the players in these auctions are still playing the same old game, even as QE comes to an end. They push the yields up to ensure a better price for themselves in the auction, and then sell to the FED at a higher price post auction (yields come down).

    Watch the yields from the auction (did they go higher, stay the same, or lower) to see how participation was. Then watch what happens after the auction (over the next day). If yields stay high = bad for risk assets (equities etc). If yields come down = possible boost for risk assets. If yields don't change, see what happened to them in the auction to see if it is good or bad for risk assets. Also watch MOODCBAA index vs the 10year. A widening spread is bearish for risk assets, and vice versa for a narrowing spread.

  • TheMacroEconomist

    Yup, last one on Thursday – unless the FOMC changes its collective mind next week (unlikely).

  • gmak

    We have the lower low on EUR and are sitting on a short term trend line and the lower bollinger, as I type. I still see my original retrace level as a highly probably target (1.4845ish).

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

    Dollar has a bottom in I believe…now that we have come off it a bit it should probably be retested. But tomorrow is Wednesday and as we know Wednesday is “Anything can happen day”

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

    *Groan* I don't like the timing of the FOMC meeting…..

  • onorio

    seems like EUR didn`t had finished the 5 waves down, we should be in the 5th now with a lower low before a correction to 1.4940

  • gmak

    My 30 min chart now has 1.4818 as a price exhaustion target on the EUR (TD propulsion /momentum indicator). Just need to close below this 1.4858ish support in the next 30 minutes for it to be qualifed /valid. – This level at 1.4858ish is also short term support from yesterday.

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

    nasdaq almost at yesterday's close… might just work…

  • Eva S

    We all agree we need a leg down. The question is whether we made the top of the bull rally off March lows…. or are we going higher and then drop…. There is key support @ around 1065 on SPX.

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

    closed out most longs and shorts, still have some qqqq call spreads just in case because im short tech pretty heavily. i dont think im going to trade much today, just watch and wait for a good short entry

  • Sleepynaptime

    DTG down more than 3%, here.

  • PRSGuitars

    Just a thought — if we dip to vwap near 1066 again and rally, that'll make a great inverse head and shoulders pattern (as we had like, last wed. just before the rip-roaring afternoon rally that f***ed many a bear). Beware.

    Consumer confidence numbers in 5 minutes…

  • K.I.M.

    It's not logaritmic. I just can't draw your version on my charting platform. Another example http://www.flickr.com/photos/42905134@N08/40493… . Your welcome. Some really nice and hard work from your side. Good trading!

  • dollar

    Whoops: 10:00 AM Oct. Consumer Confidence: 47.7 vs. prior 53.1 and consensus of 53.2. Expectations 65.7 vs. 73.3 in Sept. Present situation 20.7 vs. 22.7.

  • http://www.hotoptionbabe.com annamall

    Morning all bought Bidu put spread 3.50 sold 9.50

    FSLR http://tinyurl.com/yjs7gfe

    Just a heads up on this stock, going sideways for a while, chart is not clear could go either way. but that gap to fill
    has me wanting to either do an OTM bull call spread or a strangle.

  • fa_q

    Covered 50 ES short at 1058.50

  • dullmind

    Thanks SSH, I just finished fetching the html version, oddly it was not on the mirrors, only the main site.
    Downloaded the zip ver, extracted file has a date of Aug 6, 2008, no idea why it was not on any of three
    mirror sites I tried. Can't see my self trying to read however until next week, too much going on this week.

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

    I love the smell of napalm in the morning, it smells of victory…

    but wait a while, still on danger zone

  • Bart7

    nice move, you looking for a decent bounce?

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

    my pleasure, read when the tape is drying 😉

  • omelette

    bid/ask on long term spy options is ridiculous right now.

    Mar 70 is .33 bid/.42 ask… i don't trust this turd.

  • dollar

    “Consumers' assessment of present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment. In fact, the Present Situation Index is now at its lowest reading in 26 years,” Conference Board says.

  • dollar

    10:04 AM October Richmond Fed Manufacturing Index: down 7 to 7, vs. consensus of 14. Central Atlantic manufacturing activity expanded for the sixth straight month, with broad indicators continuing to grow but well under September's pace. Backlogs fell further into negative ground. Business prospects for next six months were more positive. Prices expected to grow at quicker rates.

  • PRSGuitars

    NEXT WARNING–

    SPY @ LOWER TL OF THIS WHOLE DAMN RALLY

    also, though, DX above 20 day sma + channel upper TL… hrm…

    Just alerting as usual…

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

    there is one possible fib for this drop going straight to 1030-1035 (compare today to yesterday, first drop 7 vs 4.5 aprox. fib 1.6)

    this could be the iii of yesterday's i

  • AS2009

    David – reached your 22.65 tgt on UUP …. now what are you seeing as downside ?

    Berk / Mole – X broke the H&S …

  • Bart7

    you looking for a substantial bounce here?

  • PRSGuitars

    Very much so, SPX and SPY and others hitting major TL from march rally — also plunged after consumer confidence numbers and then rallied hard on volume (likely reversal).

    Also hitting downsloping lower TL on SPX and almost hit the top of the 1055-1060 gap that we need to fill eventually — my guess is we see 1075ish next (later today) and then drop towards 1050 into next week.

  • skynard

    Definately filled some gaps to the downside. Looking at that gap now from yesterdays open to get filled. Make a lower high and if we have topped continue the decline. JMHO

  • gregn

    Thanks for posting about X, I was just about to do so. Target is 30 for X.

  • TheMacroEconomist

    For now this Consumer Confidence number probably ends speculation in the press about the Fed pondering an exit strategy. That weighed on bonds yesterday.

    Of course on the FOMC knows what the FOMC will put in their statement and minutes next week. 😉

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

    as for the “gut deer and smaller animals” Il be looking for GS's program trading manual and best practices… will get back to you as soon as I find it

  • PRSGuitars

    That'll do, pig, that'll do…

  • PRSGuitars

    (for a bounce, though, this will likely keep on truckin' for some time… 1075ish /es?)

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

    bears, don't panic on the s&p, watch nasdaq

  • newbear

    thanks to AMZN today.

  • ultrabär

    Just in case it does start heading south again, be aware of the 161.8% extension/S2 confluence just above 1.47 below us

    http://screencast.com/t/0pdtqFP2Roxh

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

    not only, nasdaq has been easier to count and seems to e leading

  • anotherone

    Very interesting post just went up at Zero Hedge that illustrates just what kind of fumes this rally has been running on. He shows how far the SPY is from the daily VWAP. Currently, it's 150 points.

    http://www.zerohedge.com/article/spy-hits-3-sig

  • CorporalCarrot

    Also an interesting divergence today…….DXY and Equities both up. I wonder is a decoupling about to start……….but I suspect equities are going to tank at some stage.

  • killafox

    hi there EuroDollar is leading the down move we can see a rebound in this area, bulls will try to reconquer the previous trading range, lets see…. check out at http://followmarketrend.blogspot.com/, regards and good trades to everyone

  • http://www.hotoptionbabe.com annamall

    Got Filled on FSLR for 1.97

  • TheMacroEconomist

    Exited USO at $40.60. Oil defied gravity as DX went parabolic for a bit. I won't stand in front of that Acela Express train.

    If the USD comes back to earth or the rumors about this afternoon's API inventory report build maybe I'll buy it back.

  • PRSGuitars

    Here's that right shoulder of an inverse H&S on the /es… everyone prep yourself, brief dip then back to 1068 and 1072-1075 by EOD…

    massive migraine so might not be posting as much today, good luck all!

  • TheMacroEconomist

    The zig-zags in the tape the last few days will do that to one. Grabbing the Ibuprofen myself!

  • KidDisco

    goldman looks like its coiling. if i were a betting man, and i am, i'd have to bet on a move to the upside.

    so goes goldman, so goes the market…

  • CorporalCarrot

    Over the past 4-5 weeks, beginning on 23rd September with the FOMC meeting, there have been a number of days where the market has literally tanked 150-200 Dow points in the space of half an hour. This is so suggestive of topping and one of these days, the dip buyers will not be there. I really feel at any time this could happen, so I'm maintaining a core short position here, while waiting for full confirmation of the downtrend before going all in.

  • TheMacroEconomist
  • Meshugga

    H&S on the 1 minute…see if it plays

  • TheMacroEconomist

    Day job stuff for me now. In case the tape gets slow, check this out re. SEC looking into HFT: http://www.marketwatch.com/story/sec-to-study-h

    Institutional traders hate HFT, I'm surprised they didn't pressure the SEC on this before.

  • 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„¸

  • thunda72

    nice….

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

    Anyone have any good earnings calendars for this week?

  • goldpackers

    Go to Robin Hood Trader's website. they are listed at the bottom for each day of the week.

  • charles_smith

    The cliche is “just watch the tape.” but in situations such as this (just read the posts below for the general sense of indecision) then the tape itself says very little. I am sensing a change in trend that will lead the tape. We have finally reached the point where “good news” will be sold off regardless of how “good” it is. As noted by other posters, financial sector is weak. They led this move up, and they will lead it down. Long calls in FAZ plus 2X inverse ETFs. This is the point to be all in short IMO. Just an opinion. It will be easy to be very right or very wrong and I think we'll know by Thursday.

  • gmak

    0 for 2, I guess. Momentum took the EUR up to the upper bollinger instead of getting stopped at lower resistance levels. Top of minichannel is at around 1.4900 but price momentum is waning. We have a low risk SELL with stop at 1.4891 (on EUR not futures) being st up. Need EUR to stay below 1.4887 for this to be valid on a 3 min chart (on this bar only – which closes at 9:39 [EDIT: I meant 9:09])

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

    in financials I think you may be right feels like we had i of 3 down (of a first leg?)

  • gmak

    Great chart!

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

    Couple of questions for you guys…

    What do you think auctioning off of 123 Billion in T-bills will do for the dollar & how do you think the market will react to this?

  • TheMacroEconomist

    Looks like I still got an account left after selling my IWM puts near the close, holding USO overnight – and then like a real nut, buying some Q's in late AH playing a dip on the Ask price.

    Have to say, I think the first two 30-minute bars after the NYSE open are going to show one helluva battle. Especially with the Consumer Confidence report smack in the middle. Already got conditional orders in to get those IWM puts back. Hold your hats… 🙂

  • dollar

    9:04 AM Aug. S&P Case-Shiller Home Price Index: -11.3% vs. -13.3% in July and -11.9% consensus. Nationally, home prices are at levels similar to fall 2003.

  • gmak

    It's not the auction but the results (participation etc) and how the yields behave post auction. If they rise, it may be bullish for the USD, but not for risk assets.

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

    I would hope so…lots of volatility and hopefully volume, those are the things of market tops….

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

    Last Auction….

    “The Fed has been in the bond market since March, buying up to $300 billion Treasurys in an effort to help keep consumer-borrowing rates low. The central bank is expected to complete the buying this week”

    The bottom now in place needs to get tested…this ought to do it.

  • TheMacroEconomist

    That's more or less my take. CL futs and USO been tracking Euro pretty closely of late, we'll see!

  • gmak

    What bottom?

    Yields have been higher. What is noteworthy is that the players in these auctions are still playing the same old game, even as QE comes to an end. They push the yields up to ensure a better price for themselves in the auction, and then sell to the FED at a higher price post auction (yields come down).

    Watch the yields from the auction (did they go higher, stay the same, or lower) to see how participation was. Then watch what happens after the auction (over the next day). If yields stay high = bad for risk assets (equities etc). If yields come down = possible boost for risk assets. If yields don't change, see what happened to them in the auction to see if it is good or bad for risk assets. Also watch MOODCBAA index vs the 10year. A widening spread is bearish for risk assets, and vice versa for a narrowing spread.

  • TheMacroEconomist

    Yup, last one on Thursday – unless the FOMC changes its collective mind next week (unlikely).

  • gmak

    We have the lower low on EUR and are sitting on a short term trend line and the lower bollinger, as I type. I still see my original retrace level as a highly probably target (1.4845ish).

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

    Dollar has a bottom in I believe…now that we have come off it a bit it should probably be retested. But tomorrow is Wednesday and as we know Wednesday is “Anything can happen day”

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

    *Groan* I don't like the timing of the FOMC meeting…..

  • Onorio

    seems like EUR didn`t had finished the 5 waves down, we should be in the 5th now with a lower low before a correction to 1.4940

  • gmak

    My 30 min chart now has 1.4818 as a price exhaustion target on the EUR (TD propulsion /momentum indicator). Just need to close below this 1.4858ish support in the next 30 minutes for it to be qualifed /valid. – This level at 1.4858ish is also short term support from yesterday.

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

    nasdaq almost at yesterday's close… might just work…

  • Eva S

    We all agree we need a leg down. The question is whether we made the top of the bull rally off March lows…. or are we going higher and then drop…. There is key support @ around 1065 on SPX.

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

    closed out most longs and shorts, still have some qqqq call spreads just in case because im short tech pretty heavily. i dont think im going to trade much today, just watch and wait for a good short entry

  • Sleepynaptime

    DTG down more than 12% here.

  • PRSGuitars

    Just a thought — if we dip to vwap near 1066 again and rally, that'll make a great inverse head and shoulders pattern (as we had like, last wed. just before the rip-roaring afternoon rally that f***ed many a bear). Beware.

    Consumer confidence numbers in 5 minutes…

  • K.I.M.

    It's not logaritmic. I just can't draw your version on my charting platform. Another example http://www.flickr.com/photos/42905134@N08/40493… . Your welcome. Some really nice and hard work from your side. Good trading!

  • dollar

    Whoops: 10:00 AM Oct. Consumer Confidence: 47.7 vs. prior 53.1 and consensus of 53.2. Expectations 65.7 vs. 73.3 in Sept. Present situation 20.7 vs. 22.7.

  • http://www.hotoptionbabe.com annamall

    Morning all bought Bidu put spread 3.50 sold 9.50

    FSLR http://tinyurl.com/yjs7gfe

    Just a heads up on this stock, going sideways for a while, chart is not clear could go either way. but that gap to fill
    has me wanting to either do an OTM bull call spread or a strangle.

  • fa_q

    Covered 50 ES short at 1058.50

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

    I love the smell of napalm in the morning, it smells of victory…

    but wait a while, still on danger zone

  • Bart7

    nice move, you looking for a decent bounce?

  • omelette

    bid/ask on long term spy options is ridiculous right now.

    Mar 70 puts are .33 bid/.42 ask… i don't trust this turd.

  • dollar

    “Consumers' assessment of present-day conditions has grown less favorable, with labor market conditions playing a major role in this grimmer assessment. In fact, the Present Situation Index is now at its lowest reading in 26 years,” Conference Board says.

  • dollar

    10:04 AM October Richmond Fed Manufacturing Index: down 7 to 7, vs. consensus of 14. Central Atlantic manufacturing activity expanded for the sixth straight month, with broad indicators continuing to grow but well under September's pace. Backlogs fell further into negative ground. Business prospects for next six months were more positive. Prices expected to grow at quicker rates.

  • PRSGuitars

    NEXT WARNING–

    SPY @ LOWER TL OF THIS WHOLE DAMN RALLY

    also, though, DX above 20 day sma + channel upper TL… hrm…

    Just alerting as usual…

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

    there is one possible fib for this drop going straight to 1030-1035 (compare today to yesterday, first drop 7 vs 4.5 aprox. fib 1.6)

    this could be the iii of yesterday's i

    EDIT but go easy, I expected mid 1070's+ before this drops, tape chassing can kill

  • AS2009

    David – reached your 22.65 tgt on UUP …. now what are you seeing as downside ?

    Berk / Mole – X broke the H&S …

  • Bart7

    you looking for a substantial bounce here? Market seems to be shaking off the consumer confidence shock..

  • PRSGuitars

    Very much so, SPX and SPY and others hitting major TL from march rally — also plunged after consumer confidence numbers and then rallied hard on volume (likely reversal).

    Also hitting downsloping lower TL on SPX and almost hit the top of the 1055-1060 gap that we need to fill eventually — my guess is we see 1075ish next (later today) and then drop towards 1050 into next week.

  • skynard

    Definately filled some gaps to the downside. Looking at that gap now from yesterdays open to get filled. Make a lower high and if we have topped continue the decline. JMHO

  • gregn

    Thanks for posting about X, I was just about to do so. Target is 30 for X.

  • TheMacroEconomist

    For now this Consumer Confidence number probably ends speculation in the press about the Fed pondering an exit strategy. That weighed on bonds yesterday.

    Of course on the FOMC knows what the FOMC will put in their statement and minutes next week. 😉

  • PRSGuitars

    That'll do, pig, that'll do…

  • PRSGuitars

    (for a bounce, though, this will likely keep on truckin' for some time… 1075ish /es?)

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

    bears, don't panic on the s&p, watch nasdaq

  • newbear

    thanks to AMZN today.

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

    Just in case it does start heading south again, be aware of the 161.8% extension/S2 confluence just above 1.47 below us

    http://screencast.com/t/0pdtqFP2Roxh

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

    not only, nasdaq has been easier to count and seems to e leading

  • anotherone

    Very interesting post just went up at Zero Hedge that illustrates just what kind of fumes this rally has been running on. He shows how far the SPY is from the daily VWAP. Currently, it's 150 points.

    http://www.zerohedge.com/article/spy-hits-3-sig

  • CorporalCarrot

    Also an interesting divergence today…….DXY and Equities both up. I wonder is a decoupling about to start……….but I suspect equities are going to tank at some stage.

  • killafox

    hi there EuroDollar is leading the down move we can see a rebound in this area, bulls will try to reconquer the previous trading range, lets see…. check out at http://followmarketrend.blogspot.com/, regards and good trades to everyone

  • http://www.hotoptionbabe.com annamall

    Got Filled on FSLR for 1.97

  • TheMacroEconomist

    Exited USO at $40.60. Oil defied gravity as DX went parabolic for a bit. I won't stand in front of that Acela Express train.

    If the USD comes back to earth or the rumors about this afternoon's API inventory report build maybe I'll buy it back.

  • PRSGuitars

    Here's that right shoulder of an inverse H&S on the /es… everyone prep yourself, brief dip then back to 1068 and 1072-1075 by EOD…

    massive migraine so might not be posting as much today, good luck all!

  • TheMacroEconomist

    The zig-zags in the tape the last few days will do that to one. Grabbing the Ibuprofen myself!

  • KidDisco

    goldman looks like its coiling. if i were a betting man, and i am, i'd have to bet on a move to the upside.

    so goes goldman, so goes the market…

  • CorporalCarrot

    Over the past 4-5 weeks, beginning on 23rd September with the FOMC meeting, there have been a number of days where the market has literally tanked 150-200 Dow points in the space of half an hour. This is so suggestive of topping and one of these days, the dip buyers will not be there. I really feel at any time this could happen, so I'm maintaining a core short position here, while waiting for full confirmation of the downtrend before going all in.

  • TheMacroEconomist
  • Meshugga

    H&S on the 1 minute…see if it plays

  • TheMacroEconomist

    Day job stuff for me now. In case the tape gets slow, check this out regarding SEC looking into HFT: http://www.marketwatch.com/story/sec-to-study-h

    Institutional traders detest HFT, I'm surprised they didn't pressure the SEC sufficiently to act before.

  • 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„¸

  • thunda72

    nice….

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

    Anyone have any good earnings calendars for this week?

  • goldpackers

    Go to Robin Hood Trader's website. they are listed at the bottom for each day of the week.