Friday, June 14, 2024

Weekend Update…

It looks like the tide has finally changed!  There is no doubt now that this market has officially rolled over, and is heading down!  I have to say that this took me by surprise.  I really expected them to pull it back to 1115 spx and then rally one more time into 1160-1180 area. But,  I don't see that as possible now.

Why?  Because the tables turned on them when Scott Brown won the Senate race in Massachusetts.  That state has been a Democratic state since 1972, withTed Kennedy leading it.  He has been a very powerful voice in the Senate all those years for the Democrats, and now he's replaced by a Republican.

I now see how important that is, as I didn't put the pieces together last weekend when I charted out my forecast.  I never realised how critial that seat was.  Obama's Democrats aren't in control of the Senate anymore, and this puts his health bill at risk, as well as any other agenda that he wants passed.

This has changed the "Grand Plan" that the "power's that be" wanted.  They... I believe at least, wanted to take this market higher into the February 9th-10th time frame.  Why?  Well, not too sound like anymore of a conspiracy theorist then I already am, but I'll go ahead and spill the beans now.

Ok...

What happens with these crooks is that they decide well in advance... which direction to take the market, and for how long (you should already know that... if you've been reading this blog for awhile).  They can do this because they manage to get key positions filled in politics, with one of their buddies (aka Ben Bernanke and Tim Geithner... both former Goldman Sachs boys).  This allows them to get free money (aka the TARP funds), and to get policies and laws changed to allow them to profit more.

This isn't only about "buying up their own stock" with the TARP funds, and then issuing new shares to the retail public at the high in the market, and then taking the money and paying back the TARP (aka... our taxpayer money).  Oh NO, that's not good enough for them.  They profit from it in both directions!  Yes, the decide when to "Tank" the market too, and steal the money from the average retail investor's 401k or pension fund money too.  Lot's of "Insider Trading" and secret payoff bonus checks for "service's rendered"... whatever that is?

They are well organized and plan everything in detail.  They set up these Annual Summits where they all meet and "cash their checks"... so to speak.  Basically, they funnel all the profits they've stole from the un-suspecting public through the Vatican and into "out the country" bank accounts.  The next annual summit is being held on February 4th-6th, 2010.  In the past, after every summit (within a few days), the market has started a huge sell off.  I know this all sounds kind of "Cloak and Dagger" stuff, but the fact it continues to happen should tell you that it's real.

Essentially, the checks all clear on the following couple of days, and then the market tanks.  They release some kind of news event to cause it to sell off.  It could be anything?  I think that they had planned for Obama to release his "We're going to get tough on the banks" speech on either the 9th, or 10th?  But, losing the senate seat to a Republican forced him to move up the time line.

The one thing I didn't see when I made my forecast last week was how serious it was when Scott Brown won.  I'm sure the death of Ted Kennedy wasn't planned, but it did happen... and that changed the plan.  So, does that mean that I don't see the market crashing on February 9th-10th?  Not at all!  In fact, it sets up the perfect "Wave 3" down after a nice corrective wave 2 back up to occur over the next 2 weeks.

Tony-Caldaro-60-minute-SPY-chart-01-24-2010

Looking at this 60 minute chart of the SPY, I think we just finished a wave 3 down inside a larger wave 1.  That means that Monday and maybe Tuesday should produce a wave 4 up, and then one final wave 5 push down into the end of next week.  The target is 1080 SPX.  After that, we should have a larger wave 2 up... hopefully into the time frame window of February 9th-10th.  That allows the crooks to get their checks cleared on Monday the 8th.

I expect some bad news to be released or some bad event to occur that will trigger the larger wave 3 down.  This is the one that could go down 97 points on SPX, as I talked about a week or so back.  I don't know if that is going to be accurate, but it wouldn't surprise me if it was.

That larger wave 3 down should take us into the options expiration date for February.  At that point, I'll have to look at where we finally stop at and see if that whole move down from 1150 spx is more likely a ABC, which would end it there, or a 5 wave move, which would mean that it will fall further.

If it's a 5 wave move, then we should go up into a larger wave 4 starting the week after opx.  That might take until the end of February or so, and then finally a larger wave 5 down into early March.  But that is all just guessing at this time.  We'll have to cross that road once we get there.  For now, let's focus only on the 2-5 day corrective larger wave 2 from the expected 1080 low coming.

I do think that it will be higher then we might expect, as the bulls aren't quite dead yet.  Some news event to spark a rally is all that it will take.  Maybe they will re-elect Ben Bernanke, and the market will use that excuse to start the rally.  Of course it will also start big bear squeeze on all those caught short at 1080, which could push it higher then I expected?

Again... I will still be looking for the major turn date about February 9th-10th.  That's one of the best opportunities of a lifetime... the absolute best one will come in about a year or so.  But for now, catching a larger wave 3 inside of a Primary wave 3 inside of a Major wave 1 (the entire 5 larger wave move from 1150... to maybe 920 area?)  is still extremely powerful, and profitable... if you're on the right side?

Of course after this big move is over in late February or early March, you should expect a long drawn out choppy Major Wave 2 to take us though the summer months.  Look out for September though... (keep all windows in high story buildings locked, or you might have someone jumping out one?)

Red

Red
Author: Red

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39 COMMENTS

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annamall
14 years ago

long post Red, but good I have gone from HOB to OBB and Red to Ted! LOL

Red Dragon Leo
14 years ago
Reply to  annamall

That's just a low blow… but I'll take it! 🙂

annamall
14 years ago
Reply to  Red Dragon Leo

You are the best you know that, we are connected!

Red Dragon Leo
14 years ago
Reply to  annamall

Huh? If I was the best at forecasting the future, I'd be mega rich by now… but I not too bad! LOL 🙂

AS2009
AS2009
14 years ago

Red – great post 🙂

I love your blog posts and the theories you post – thanks for the detail 🙂 … great mix of TA, Fundamental and news all in one ….

Red Dragon Leo
14 years ago
Reply to  AS2009

Yeah, I'm a little different then most blogs, as I mix a little bit of everything in the pot! LOL!

gcocks83
gcocks83
14 years ago

Nice Post Red I agree with AS2009. It will be interesting to see how it plays out. I am sitting on 100% cash at moment.

Red Dragon Leo
14 years ago
Reply to  gcocks83

Thank's G.. I can't read the future, but I try to put the pieces together to get a better estimate of what could happen. We'll see I guess?

string01
string01
14 years ago
Reply to  Red Dragon Leo

You just need a magic 8 ball.

Red Dragon Leo
14 years ago
Reply to  string01

I just read palm leaves (and smoke em' when I'm done) LOL!

mmTesla
mmTesla
14 years ago

Thanks for posting, always look forward to reading your posts.

Red Dragon Leo
14 years ago
Reply to  mmTesla

I try to look ahead further then just one day… like Anna does! LOL! She tells me I'm crazy for trying to forecast so far out, but I do it anyway.

If I'm wrong (and I usually am), I'll just adapt and change my position. That's what trading is all about… risk taking.

mmTesla
mmTesla
14 years ago
Reply to  Red Dragon Leo

Forecasts just add confidence to your trading when you are right, if they are wrong no harm done. I think it is important to have an overall view (as long as the bias doesn't effect managing risk) 🙂

Red Dragon Leo
14 years ago
Reply to  mmTesla

Exactly… they are just a guideline, and are wrong many times. But, you just adapt and close out losing positions if your forecast is wrong.

mmTesla
mmTesla
14 years ago
Reply to  Red Dragon Leo

If we retrace to 1125 I think there will be a squeeze to 1132-1135, lots of resistance there among other things.

Red Dragon Leo
14 years ago
Reply to  mmTesla

I just don't see it happening this week. I see 1080 first, and then a run to 1130-1140… maybe?

mmTesla
mmTesla
14 years ago
Reply to  Red Dragon Leo

Possibly, I'm just thinking when we do retrace, there very well could be more downside. But if we get a squeeze to 1135, that would be oh so beautiful 🙂

Red Dragon Leo
14 years ago
Reply to  mmTesla

Very beautiful indeed!

mmTesla
mmTesla
14 years ago
Reply to  Red Dragon Leo

Pivots, VPOC's, big trendlines, just beautiful.

monicadern
monicadern
14 years ago

Very interesting, Red. Thanks for the post.

Red Dragon Leo
14 years ago
Reply to  monicadern

Thanks Monica Dear… 🙂 (I love sweet talking women)

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Since when am I sweet?! Covered all my shorts at close Friday. Now not sure what the heck to do!

Red Dragon Leo
14 years ago
Reply to  monicadern

Depends on what you trade? If you do options, then you're fine, as the theta burn could have hurt you anyway. If you do stocks, then you can go short again on Wednesday when Obama talks. I'd say that will be the top before a sell off to 1080.

At 1080 though, I'll be going long in a call spread as I expect a move up into the first week of February to last about a week. You did the right thing taking profit. Not much left on the tables if we fall to 1080 on Monday. Don't worry about it!

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Only indexes which may not be that brilliant. But, I need a plan so I'll steal yours!. We shall see. I have a feeling there are going to be lots of surprises. It's never easy. I will reshort on Wednesday but I don't think I will be going long at any point in the near term future. I just can't trade that side!

Red Dragon Leo
14 years ago
Reply to  monicadern

I have to give Anna credit… she's a master at options trading. I'll let you know what I'm thinking about as we get closer.

And I don't blame you for not trading the long side. It's hard to go long in this environment.

gcocks83
gcocks83
14 years ago
Reply to  Red Dragon Leo

Futures are pointing down at moment. It want take long to get to 1080. What type of call spread would you do? I am just starting trading options. I am interested in the vertical spreads but am not comfortable enough to trade yet. Still have a lot to learn. So far only puts or call at or ITM.

Red Dragon Leo
14 years ago
Reply to  gcocks83

I see up 5-6 points, but it's delayed about 20 minutes. What's the futures at now?

gcocks83
gcocks83
14 years ago
Reply to  Red Dragon Leo

Fair value on Dow at 10.15 down about 27.

http://www.cnbc.com/id/17689937/

Red Dragon Leo
14 years ago
Reply to  gcocks83

Well, anything can happen between now and the morning…

mmTesla
mmTesla
14 years ago
Reply to  monicadern

Sit out and wait for a good entry, and don't worry if ya miss it, always more out there 🙂

monicadern
monicadern
14 years ago
Reply to  mmTesla

Thanks mmTesla. I guess I stayed short so long that it's frustrating not to stay put now. But you are right.

mmTesla
mmTesla
14 years ago
Reply to  monicadern

Last week, you held for a long time, and you took good money off the table, call it a good week. Bears who over stay there welcome get chewed up.

monicadern
monicadern
14 years ago
Reply to  mmTesla

For the the last 10 months that has been true. Now it COULD be the other way around for the bulls.

mmTesla
mmTesla
14 years ago
Reply to  monicadern

Very true, but in my view its all about base hits, singles and doubles, the money in the middle. It would be oh so sweet if this market started working down finally 🙂

Keirsten
Keirsten
14 years ago
Reply to  monicadern

Monica- your best bet is to get some advice from Anna on longer term directional options plays, (ITM, how far out, risk management, etc.) I am not an options expert, and only put on straight 2X and 3X equity trades as a core position based on change of trend and then pyramid on those positions if/when the tape doesn't prove me wrong, so I can't help you, but I think she's your best bet in this case. G/L and best to you as we all trade this thing together. 😉

gcocks83
gcocks83
14 years ago
Reply to  monicadern

Monica, Just read ETF corner update. How do you feel about things tomorrow.

jaywiz10534
jaywiz10534
14 years ago

Hi Red
your group seems to like what yu wrote
good stuff for sure

At the jaywiz blog, I posted a chart for this week showing what to expect and it is short term oreinted so very good for option traders

Just as I posted, the day started Up, but will give it back by noon to 1pm, but closing higher

Ditto for 26th and 27th, but 27th to 29th is shown to give back even more

the OCT- Nov lows would be the next best support levels
Jay

jaywiz10534
jaywiz10534
14 years ago

Hi Red
your group seems to like what yu wrote
good stuff for sure

At the jaywiz blog, I posted a chart for this week showing what to expect and it is short term oreinted so very good for option traders

Just as I posted, the day started Up, but will give it back by noon to 1pm, but closing higher

Ditto for 26th and 27th, but 27th to 29th is shown to give back even more

the OCT- Nov lows would be the next best support levels
Jay

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