She hit the flo’

I’m going to have to do this T.K. style tonight as I’m running out of time. First up, I kicked myself for not jumping in earlier, despite Erik’s repeated calls for… well buying loads of puts! All I wound up doing was snack on some DIA and MA puts – worked out but I could have milked those suckers for so much more. Well, kudos to Erik crude inspired bearish conviction which turned out to be right. The only paltry excuse I can muster is that the intra-day tape made us all a bit jumpy (as per my intra-day updates). Despite Berk’s and my own hesitations, what does the market do int the last hour?

Would have been hilarious if the bus hadn’t been so empty. Breadth was horrendous today, easily a 90% down day. Even the trannies tanked and most secondary indexes were leading the pack. Most importantly, the Dow Jones finally slipped below the 8000 mark, which it hasn’t seen since 2003 – I actually had to wipe tears of joy off my face – a truly touching moment for us evil speculators. Not bad for one day’s work and all in all a miserable day for the mouth breathers. Hey, maybe the PPT had the day off? Better luck next time…

So, what do you know – it was the green scenario (see weekend update)! Although the wave count for today still has to be sorted out we are going down – and are far from done yet with our permabulls. But – before the real fun starts it’s my not so humble opinion that we’re going to rally up a little.
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Anyway, I see us either hit 839 or 859 – which shall be known term as our ‘Back Up Truck Zone’. If we blow past that I’ll just have to make a living washing T.K.’s fleet of luxury cars.

Our McClellan Oscillator, which is a medium term sentiment gauge, is also approaching oversold conditions. Fair to say chances are good for a counter rally, which we always seem to get before the final shoe drops.

This confirms my more longer term view which is that we are far from completing minor 5 of intermediate (3) – I want to see NH-NL’s 10 day MA closer to 600 before I start thinking about intermediate (4) to the upside. If you look a few days back – I have replicated Berk’s settings and targets, which I think were spot on. Let’s keep watching this chart in the days to come.

Then there’s the Option Put/Call ratio – definitely on the rise but not even close to what we saw during the notorious October 10th tape.

I posted this chart this morning and here’s the updated version. So, we have 2 days left in this dreaded expiration week and the price today moved away from the market maker’s sweet spot, which is around $95. What do you think they are going to do tomorrow or perhaps Friday? This is just the type of paranoia that propels me to think that we’re going to swing up first, maybe into Friday, and then drop hard next week. Hey, works for me!

So, how about it permabulls? I don’t like chasing this tape anyway and I hate expiration week. Why don’t you rustle up the rest of your mouth breathing friends, and bestow us with a good ole’ stampede so that we bears can load up on puts? Hey, we both win! You look good this weekend and we get to ride you guys into the abyss starting Monday.

Hey – one can dream. Keep it clean out there, my dear rats – you know the drill, let’s hope the tape tomorrow is conducive to our nefarious scheme. If we happen to continue to the downside (as indicated by the current candles in the index futures) try to at least wait for a rip to load up – chasing the market rarely works out. Tuesday’s and Wednesday’s long RT levels should still be valid, thus the next daily long RT level is at 776.51 – if we don’t get a rally in the morning a bounce off of this might be out last chance to load up. At least pick your victims well – Berk and I will post whatever we decide to dip into.

BTW – Gold is going down – wait for it. Dollar will continue to rally – also wait for it.

Cheers!