Archive for November, 2009
Mr. TopStep Can Say It Better Then Me…
Nov 12th
I think the video below is the clue to where this market is headed. We almost hit the 1108.30 SPX mark today, falling just short of it a 1105. I expect the jobs numbers to come in better then expected tomorrow, and the market will rally one final time, hitting the 1108.30 level.
After that, I expect a sell off to begin. I don’t think we will close around the 1108.30 area, but instead only touch it intraday. Rally in the morning, selling in the afternoon… that’s what I’m looking for. That’s it for tonight’s post. Look to get short at 1108.30 tomorrow, as I’ll be waiting patiently there too.
Red
Light Volume Puts the Market to Sleep…
Nov 11th
Today was real yawner! The market basically moved nowhere… and just what’s in store for tomorrow? More of the same, with an upside bias. Yes folks, one more day of this nonsense and the market should be back to normal trading. Which means that a reality check is due. So, let’s see… is the market really that health or is it sick?
I think it’s sick with false hope, fake numbers, outright lies, and manipulation like you’ve never seen before. That means we should rally some more, right? Yeah right… and I’ve got an honest banker I’d like you to meet! Of course not folks… I’m looking for selling to take place on Thursday and Friday, as the news out on those days should bring in some bigger volume. If it’s more then 200 million shares on the spy, we should be heading down.
Like I said in yesterday’s post… 110.34 is like the “Great Wall of China”, and will not be broken easily. Closing above it is not likely too happen. I’d like to see the market move up to that level tomorrow, so I can get the best short entry position. It could do just that since it’s a holiday tomorrow. That light volume could float the market up to within inches of the wall, and possible go above it briefly to that 1108 spx area everyone is looking for. I will be pouncing on the bulls when that happens.
Others think we are going higher, until OPX and then rolling over. I think we are going down toward OPX, and then going higher. I’m going to try and filter out the noise this time. I’ve looked back at many of my own forecasts and found that I was pretty accurate on the direction, even though I missed a few ending points. Overall, if I had followed myself I would have been a whole lot more profitably then I currently am.
There again… learn to stick to a plan. That’s my lesson for myself today.
Red
Bears Get Crapped On Again…
Nov 10th
Once again, light volume equals an UP market… and what an UP we had today! Only 150 millions shares traded on the spy today. Tuesday and Wednesday could be just as light too, as there isn’t any real economic news out of a value till Thursday. I was looking for the 1080 area to hold, but the market blew past it like it wasn’t there.
This means that the next major… and I mean MAJOR area of resistance is at 110.34 on the SPY. We hit 110.31 previously and sold off hard all the way down to 103, just as I expected it to do. Well, let me say that I expected it to sell off hard, but to what level I was unsure of? I expected the 102 level to be hit again, but it stopped a 103. So, you can’t forecast everything correctly… that’s for sure!
But, I will say that the 110.34 level is comparable to hitting “The Great Wall of China”. It’s going to take a whole lot of attempts to go through it. This area is the strongest resistance the Bears have in their arsenal right now. It’s like pulling out the rocket launcher from the basement to fight off a yard full of zombie bulls! If this doesn’t stop them… nothing will!
The only way I can see the Bulls taking this market past 110.34 is to jump over it with a huge gap opening. Well, they have about 2 more days to try to do it. By Thursday the market should be back to normal (as in… normal sense, not insanity), as volume will be back above 200 million (hopefully). And you know what that means… below 200 million shares traded on the SPY equals an UP market, and over 200 million equals a DOWN market.
I would say that has been truly accurate for over 99% of the last 3 months of trading. I’d say 100%, but I don’t feel like going back and researching every day, so 99% means that there could have been a day or two that the volume didn’t match up with the 200 million rule.
Needless to say, it’s a pretty accurate way to forecast the market direction. So, how do you know how much volume each day in the future will bring? You don’t, but you can get a general feel for the market by looking at what news will be released over the coming days. How much of it is “market moving”, and how much of it isn’t?
I said that I was going to go short on Tuesday, but I might wait until Wednesday, as there isn’t any real news on that day either… hence the market could rally up some more. We actually hit 109.68 today, which is the lower boundry of the October, 2008 gap. The top of that gap is at 110.34, which is why I don’t think the market will take it out this go around. Could it eventually do it… yes, of course? But, a nice pullback is due first.
So, for tomorrow, I’d expect a little pullback or flat day. Then, on Wednesday, I’m expecting another push up to that 110.34 area. Super heavy resistance is there and every last Bear standing will be waiting at that line, just like every last Bull just jumped on the bandwagon today. This will be the battle of all battles, and the bears stand the best chance this time around.
I will be waiting there on Wednesday for the 110 area to be hit, as I will be siding with the bears to drive back the might bulls. My armour will be the year old gap that hasn’t been breached, and my weapons will be the unemployment numbers and other news that will be coming up from behind on Thursday an Friday. Yes, it will be a bloody battle, but I won’t be going alone this time. I’m sure I’ll see many of you readers standing beside me…
Red
Weekend Update…
Nov 8th
Sometimes following your own forecast is harder to do then writing it. I find that true this week, as I posted on last weeks’ “Weekend Update” that we would probably go up to 1073-1076… and we did. But, I didn’t listen to my gut and follow Scenario ONE or TWO, instead I followed Scenario THREE and went short on Thursday around 1062… only to have to sell that position on Friday for a small loss.
Why didn’t I listen to my own forecast? Who knows? Maybe because my forecast was based on logic and technical analysis’s, and I went short on emotion. This just go to show you that it’s not easy trading… even if you make a correct forecast from time to time. Your emotion will hinder your success untill you learn to control it.
I must admit that I’m not there yet. I still let the outside noise in and react to it with emotional trades. I clearly stated that Scenario THREE was unlikely, but I went short anyway. Every chart I looked at had us retracing back up to almost 1080 to form a right shoulder, then dropping. But, in the end, I’m still here to trade another day. Let’s just hope that I learn from this mistake and don’t make it again.
Next week…
I’m expecting a few more days up to hover around that 1080 area. We could see a down in the morning and back up in the afternoon day on Monday. Then more up on Tuesday, but probably a flat close. Wednesday through Friday should be more interesting as I expect more bad news to be released. The difference this week will be that the market will be up against heavy resistance and won’t be able to break through on that bad news.
So, I do expect selling to occur, and I’m still inclined to believe that we will hit 998-1000 before option expiration. It will most likely come fast and hard, and could hit it before the 20th. If so, you can expect a nice bounce off that level. If you can keep a close watch on your account you could make some quick money by going long on the first hit of that area. If could dip as low as 995 intraday, so be cautious… and be quick to jump on.
So, I’m looking to go short on Tuesday around 1080… if it makes it there? It may do so on Monday as I expect another light volume day, which of course means another UP day. But, my gut tells me that Monday will dip down early and rise back later. That will squeeze any bears that went short at Monday’s open, and get the rally up into Tuesday.
Ask yourself that question… “What would you do if you were a Market Maker”? Of course the answer is… Steal as much money from the dumb public as possible! But how specifically would you do that? I think a fake down move to tell the bears that “This is it”, only to pull the rug out from under them later in the day with a rally back.
Regardless of how it happens, I’m going to go short again around the 1080 area. I’m planning on holding these positions until opx if needed. However, I think we’ll hit at least 1020 before opx, and rally back into it.
Here’s a little bonus video for you…
Red
UUP Halted Today…
Nov 6th
The UUP (dollar index) was halted today as they released another 100 million shares into the market place. This caused the price to swing wildly, and should adjust back to normal in a few days. The markets didn’t react negatively as they usually do when the dollar rallies. This seems to be the norm these days, as the market ignores everything negative.
Moving on…
The markets rallied up today as expected, but they took out the 1060 high from yesterday. It looks like we might be going to 1073-1076 after all. This move up should be a wave 5 that will top tomorrow most likely. This should complete a larger wave 2 up from the 103.08 spy low, with larger wave one being from the 110.31 high to the 103.08 low.
However, there is a lot of resistance right where we closed today around the 1066 spx area. It might just spike up to touch the 1073-1076 area, and then reverse into the close. It all depends on the volume tomorrow. Today had 174 million shares traded on the spy. Once again, light volume equals an up market. So, at this point, I have to say that we are looking like Scenario ONE is in play after all. Friday’s usually have light volume, so the market could continue up tomorrow.
The only wild card is a bad jobs number. But, I seriously doubt that Obama will allow any really bad numbers to be told to the public. He will have his accountants get out their erasers and a new number will magically appear. Funny how over 500,000 NEW People get laid off every week, but the continuing un-employment claims barely moves up. I guess 499,000 people get hired too each week. LOL!
Anyway, expect more rallying tomorrow as the marine that killed a bunch of people reduced the un-employment numbers… which is good for the market, right? The insanity continues I guess… Of course I went short today around 1062, and I’ll look to close that out tomorrow on any dip lower. I’ll have to wait untill Monday to go short again…
Red
