Archive for February, 2010
Weekend Update…
Feb 14th
This has been a really tough week for me, as the expected next leg down didn’t happen. I’m now underwater pretty bad in my put spread that I purchased back on Friday the 5th. I completely forgot a post I did a month ago, showing a fake print of 1047 on the spx, or I would have known we weren’t going any lower yet. Isn’t it’s funny how we pierced that level (1044) a little, and immediately bounced back up. If that doesn’t show you that the market is controlled and manipulated… I don’t know what will.
Sundancer also caught that fake print and seems to agree with me that this is clearly the way wall street informs their buddies as to where they plan on taking the market to. By the way, thanks a lot for all the great comments you post Sundancer. I’m sure everyone will agree that you are very knowledgeable about the market, and have helped myself and many others that read this blog. So, keep up the good work…
As for next week… it could go either way? I really just don’t know at this point. I do agree with Sundancer that a gap up Tuesday is very likely… but where we go after that will probably depend on if they can hold that gap or not. How many shorts are left in the market to squeeze? I don’t know? If there is enough of them left, then it’s very possible that they run the market to 110.34 spy before selling off again.
The news on Tuesday about the Greece bailout problem could be the reason to push it up or sell it? It’s seems that there aren’t any bears willing to go short right now, for fear of being squeezed, and there also isn’t any bulls willing to go heavily long either. In fact, I suspect that most bulls are waiting for 110.34 to sell their long positions. We are truly stuck in this rising wedge or channel, and no one is taking on any large risk right now.
That’s why everyone is day trading, which produced the wild intraday swings that we had last week. Neither side knows which direction this tape is going to go in. It’s great for day traders, but murder for swing traders. I’m not going to post any charts this time as not much as changed from Thursday post, so you can look at those for reference. I will tell you that The Chart Pattern Trader has 2 video’s up, and should be watched to understand where we are, and what could happen next week.
Cobra’s Blog is also excellent, and has some interesting statistics on his weekend post. I’m certainly not too proud or self centered to try and keep you here on my blog only, and not tell you about other great chartists and blog writers. I want everyone to succeed, and if I can’t provide you with that information, I’ll do my best to guide you to sites that I think are important to read. I didn’t create this blog to get a huge following, or generate traffic. I only put it up to help others and for me to keep a record of my success, and failures.
I would be doing everyone a disservice by not informing you of others that I respect, and I won’t do that too you as I wouldn’t want it done too me. I was clearly wrong on my call last week for the sell off, as it didn’t happen. Will it happen this week, and make my calls just too early? Possible? I don’t know? I do know that the news coming out about Greece this Tuesday will make a big impact on whether we continue higher to 110.34, or sell off one more time before a nice relief rally occurs.
I will definitely be on the lookout for another fake print as to see where they want to take the market next. (Sundancer, please keep your eye’s glued to your monitor too… just in case I miss it). I do see us going down more in March, as I believe we will go down to that 900 area. But, that’s too far out now to worry about, as there will be many bounces along the way.
So, for Tuesday I’m expecting a gap up. After that, it’s up to the Greece news to determine the next move. If it’s not what wall street wants to hear, we could see some big selling. Remember, that would put us in a wave 3 of wave 3 down, and it could fall pretty fast. This is assuming that the wave count I posted on Thursday is accurate. If it’s not, then any move down would just be a wave 2, with and expected wave 3 back up to occur.
By the way, the current pain on the SPY is at 108.00, but that doesn’t mean that’s where they will close the tape on Friday (OPX). It’s been wrong many times in the past, so I don’t hold to much weight to it anymore.
Best of luck to all of us, and keep up the great comments gang…
Red
Bear Squeeze…
Feb 11th
NO Post for Friday, I’ll have my weekend post up by Sunday night…
Man that hurt today! I am so ready to bail on my position… that is now largely underwater, but just when I do… this market will tank! So, I really had to bite my tongue and hold my fingers away from the panic button today, as I was very close to bailing out. But, this stopped me…
As you can see, the moving averages have rolled over and are still pointing down. This is totally different then the last 10 months or so, as they were pointing up then. This is the real deal! This market has HUGE overhead resistance pointing down on top of it. It’s simply can’t run up too much further. The question is… will it sell off before this option expiration? I believe it will. How far down? At this point, I think 1044 is definitely likely. The next level at 1020 will be hard to break before opx. It could happen, but I just don’t know right now. That means that the 980 level has a low chance of hitting. It’s possible, but odds are against it now. Panic would have to set in probably, so I won’t rule it out. Remember, the market falls a lot faster going down then up.
I have now changed the Elloittwave count, as to the market still being in Mini Wave 2 up, of larger Intermediate Wave 3 down, inside larger Minor Wave 1 down. This is one of the things I don’t like about EW, as you always have to change your count. Just when you think you have it figured out… Bam, it expands out to a longer wave, or changes direction.
That’s why I look at the Technical Analysis first, and then try to forecast the waves that we are in. I think EW is pretty good on a larger scale, but the smaller one’s are hard too determine. Ignoring EW on this chart, and just focusing in on the TA’s, I see a Bear Flag from the sharp sell off on last Thursday to the 5 days of sideways to up consolidation that is currently underway.
You can also see that the UP Volume today was only 221.4 Million. Where are the Big Institutions? They didn’t do any buying today… did they? It looks like they did do a Lot of Selling last Thursday… look at that DOWN Volume… HUGE! Notice that every time we had a big down day, there was also big volume. Now I know that the entire rally up from the March, 2009 low was on light volume…. but, the Monthly and Weekly charts were supporting the move, as they were both point UP! Where are they pointing now? You guessed it… DOWN!
That’s the BIGGEST reason that I didn’t bailout on my short positions today. Yes, I’m underwater badly on them, but the chart still tell me that a big sell off is coming… and before OPX! Notice the downward trend line that Cobra drew on his chart. As you can see, the Bulls could break through it. By the way, Cobra’s link is on my blogroll, and you should visit his site, as he is excellent with his TA work.
Next up is the 60 minute chart from the chart pattern trader. Of course I’ve added my notes on it, (his link is also on my blogroll). You can see that the MACD still hasn’t rolled over. It almost did yesterday, but it turned back up and is still going up. The Full STO is above the 80 level and looking like it wants to turn down. These indicators can sometimes remain in overbought or oversold territory for longer then you want them too… eating away at your options.
The downward channels line were broken today and that is also of big concern. Will they fall back into the channel, or is this a real breakout? I have to focus on the volume behind it, and I don’t see it going up too much further. There just isn’t any good news left to move it up. Low volume up moves worked well when the Monthly and Weekly charts were supporting the move, but they are now pointing down.
It’s like the monthly chart is your Dad, and the weekly chart is your older brother. You are the young boy at school, and you can get away with running you mouth a little, as you have your older brother and your Dad backing you up. What happens when your Dad and older Brother are gone? Or worst, they are against you…
That’s my primary reason for hanging on in this Bear Squeeze. Good ol’ Dad and the older brother aren’t around anymore. My only fear right now is the Daily chart below. It looks like the MACD is rolling back up. Now again… it’s just like the 60 minute chart, as it too… could turn back down just like the 60 turned back up. Remember, it looked like it was going to rollover, but hooked back up today. The same thing can happen to the Daily chart. It could turn back down just as easy.
The good news is that it hit the lower channel trendline and couldn’t get through it. That’s called a backtest, and as you can see, this is the second attempt at trendline… with it failing both times. I’ll admit that the market could continue a slow grind up… walking the trendline, and not go down until after opx. But, I really think it’s running out of time, and energy. Too many resistance levels overhead, and too many trendlines from different sloping channels. This market is dying, and it just hasn’t proven to me that it can stay up here very much long.
I’m not just being stubborn here folks, the charts just don’t support the up move. If they did, I’d be bullish, and go long. Now yes… I’m a bear at heart, but I will trade the long side if the charts support it. They don’t… at least what I’m see doesn’t. The daily chart is the only chart that is still neutral, and looking bullish. But, until those MACD lines cross, I’m unconvinced. The larger weekly and monthly charts tell me that the MACD line will roll back down and allow the chart to put in 3-4 lower histogram hills, with each hill getting smaller until they crossover into positive territory.
Best of luck to all of us…
Red
The Power Of Wave 3′s…
Feb 10th
The market is certainly not giving up easily… but neither am I! It’s “do or die” time now, as every chart I can find, on all the different time frames, is now set up for a Wave 3 Down. From the smaller time frames to the larger time frames… we have a whole lot of wave 3′s coming up next. That’s what I see in Elliottwave term, but I also see the same charts forming Bear Flags from a Technical Analysis standpoint. Let’s go over the Technical Analysis first…
Technical Analysis point of view… first up, the Monthly Chart
Technical Analysis point of view… second up, the Weekly Chart
Technical Analysis point of view… third up, the Daily Chart
Technical Analysis point of view… fourth up, the 60 Minute Chart
Technical Analysis point of view… last up, the 15 Minute Chart
Now, let’s tie all the Technical Analysis charts into Elliottwave, and try to figure out the next move, as well as what wave we are now in?
Elliottwave point of view
The Monthly Chart has us in Primary Wave 3
Elliottwave point of view
The First Weekly Chart has us in Major Wave 1
Elliottwave point of view
The Second Weekly Chart has us in Minor Wave 1
Elliottwave point of view
The Daily Chart has us in Intermediate Wave 3
Elliottwave point of view
The 60 Minute Chart has us in Mini Wave 3
Elliottwave point of view
The 15 Minute Chart has us in Micro Wave 3
So, that means we now are starting down into (from the larger wave to the smaller wave) Wave 3,1,1,3,3,3… Whew! That’s a lot of 3′s! If you don’t know how powerful wave 3′s are, go do some research on it and you’ll get the big picture. I’ll really be excited when they all turn into Wave 3′s! That should start this late September, and will truly be a “Once in a Lifetime” experience.
So what’s up for tomorrow you ask, and why am I still holding my put spread? Because I’m expecting a move down to at least 1020 to start as early as tomorrow. I must admit that this has been a learning experience for me, as I’m only now starting to see how all this all ties together. I didn’t see that last week, and missed several important pieces to the puzzle.
That doesn’t mean I’m going to get every call right… of course I can’t do that. But, as I learn more and more about how TA’s, EW’s, and news events… all tie together, I’ll start getting much better entry points. I wasn’t able to see that last week, and missed out on all these smaller wave patterns developing. I could have waited until today to go short, and would have been in a lot better position.
Now, my current position is underwater due to the time decay, and the small move up. I purchased a 106/101 vertical put spread on Friday when the market was around 106 (spy), and now we’ve moved up a point, and lost 4 days of time. I would have caved in and sold them for a lost a month ago, when I didn’t understand the charts as well as I do today. But not now, as the more I learn, the more patience I become.
Since I’m learning how to read these charts much better, I hope to get a whole lot better entry point in a couple of weeks, when Minor Wave 3 starts down. Timing in this game is everything. The TA’s tell me which direction, and then I try to match the EW patterns up to match with that. I believe it’s easier now, as we have started a new trend down. During the sideways market time periods, you had might as well throw EW out the window, and use only TA’s. But, for now, they are both lining up perfectly.
It’s up to you to make your own decision as to “how to trade” this market of course, and I’m only showing you what I see. I was wrong on calling Monday a big down day, and wrong again on Tuesday and Today. This isn’t easy you know… if it was, everyone would be rich. I putting more and more pieces of the puzzle together, which should allow me to narrow down the exact time to get in short… at least for the next time I hope.
I do appreciate all you who visit, and I’m glad you have patience with me while I learn. Study the charts above and come to your own conclusion. Let me know what you see… as I see a big down move coming, starting tomorrow most likely.
If I didn’t believe in what the charts tell me, I’d have already bailed on my position now. In fact, a week ago I would have! Why? Because I’ve been studying my ass every day now for the last week, and I’ve learned a lot more about the market in that short time period then I learned in the last 6 months. Whether I’m right or not, I don’t know? But, I feel like I’m able to assemble this puzzle much better today, as everything was scattered out in pieces months ago.
Anyway, I’m just rambling now. Best of luck to all of us tomorrow… and a big thanks goes out from me to all the great chartists that I read regularly (and borrow their charts from them… hope they don’t mind?)
Red
Got Fooled On That One…
Feb 9th
I was really looking for the market to roll over hard today, and it looked like it was going too… until some news rumor was released that said they were going to bailout Greece. That news was all the excuse the market needed to rally up to that 1080 level that I thought it could go too, but was highly unlikely. The news said that Germany was going to bail them out, and then it was later reported as false. Coincidence? Maybe? Or, maybe it was designed to shake out all the bears?
I really didn’t think it had the energy left to rally up that high, but the market will fool you when you least expect it too. This doesn’t change my belief that we are going down… it only delays it for another day. Looking at the chart below, you can see that we tagged the upper trendline around 1080, and we are now getting ready to start minor wave 3 down, inside larger/intermediate wave 3 down.
Once it starts, it should fall quite fast, and not allow any bears to get short. That’s probably why they ran the tape up today too… to squeeze out all the bears, and suck in some more bulls. I didn’t see this move coming, or I would have waited for it. Of course if I had seen it, they wouldn’t have done it. Just the way they like it… trick everyone.
From looking at the charts, it appears that they must start minor wave 3 down, (inside larger/intermediate wave 3) tomorrow, as they’ve hit their upper target zone now, and must either bust threw it, or fall hard. There is no doubt that we are at a crossroads here, and either fall hard or rally hard. I have too trust the charts, and they still point down.
That’s why I remained short today, even though that ramp up put my positions underwater a little. These wave 2 up’s are always violent and are designed to shake out the bears. I remain short, and un-shaken. I still see this week as down, with a fore-casted low of 1020. No one said trading was easy, and no one is always right. I was wrong on Monday being a huge down day, and wrong again on today selling off.
Could I just be off a day or two? I believe so, and hope so… Even though “hope” is a useless emotion, and shouldn’t be brought into trading… I’m crossing my fingers on this one. The thing that keeps me confident is the Technical Analysis. It still is extremely bearish on many, many charts.
The fact that the market couldn’t break through 1080 was huge, as that resistance held firm. There are 3 different trend lines intersecting at that level. It’s going to have too gap above it to break through it. That means some commitment on the bulls, and I just don’t see it. The volume going up was so low, it wasn’t hardly reading on my charts, yet the sell off volume was huge.
That tells me that retail traders bought the Greece rumor and drove up the market, and big intitutions sold it. I’m not buying into this rally. It may seem like I’m being stubborn, but I’m not. I’m just sticking to my belief in what I see in the charts… which is bearish still.
As you may know, I use a lot of different ways to see where the market is going. I use Technical Analysis, Elliottwave, Support and Resistance Levels, and tie all those together with news events. They all still tell me we are going down. Right or wrong, I stick with my forecast. I remain short.
Red
Could War In Yeman Crash The Stock Market?
Feb 8th
On Friday I overlooked the 60 minute chart, which threw the Black Monday off by a day (that’s assuming it falls hard tomorrow, as I’m expecting it too?). Yes, it did go down today, but the larger down day should be tomorrow. It took most of the morning for the 60 minute chart to rise back up and then start to roll back over to the down side.
This formed our minor wave 2 up, inside larger/intermediate wave 3 down. For tomorrow we have the Monthly, Weekly, Daily, 60 Minute, and 15 Minute charts ALL Point Down! If this market doesn’t sell off at least 200 points on the Dow… I’d be shocked! I’m really expecting a 300-400 point sell off… a Black Tuesday instead! I should have seen that on Friday, but I review so much material that I just missed it. Arrrggh!
So, I got in a little early, but I’ll still profit handsomely as the next move down occurs. Here’s a chart of where we are now, and what I’m expecting…
It looks like we just completed minor wave 2 up, inside larger/intermediate wave 3, and are ready to start going down hard tomorrow. While it is possible that minor wave 2 up isn’t done yet, as it could make an ABC move up to 1080 or so, I don’t believe it will.
The only thing that could delay the move down is that the market could be waiting for the job’s number on Thursday. But, I really doubt that they are going to rally up into Thursday number’s. Instead, they fear bad numbers, so they would sell off before hand.
The charts are saying that we have a 300-400 point drop tomorrow, but I don’t like to call out number’s… only that the odds of a big down day is quite high. Doing the charts, and looking at the wave count, it goes like this…
- We are most likely in Primary Wave 3 down with 1150 being the final high from the March, 2009 low of 666.
- We are also in Major Wave 1 down from the 1150 high, and it should end at the fore-casted low around 980 this week. (This assumes that Major Wave 1 will only have 3 intermediate wave in it, not 5 waves… which it could have?).
- We are still in intermediate wave 3 that started at 1105 and should again complete around 980 (that’s a forecast-ed projection level, and it could be wrong?)
- Finally, we just completed Minor Wave 2 up, inside intermediate wave 3 down… or we are still in Minor Wave 2 up, and it’s going to make an ABC move up to 1080. NOT Likely, but possible. If so, then we will have to defy gravity and roll the 60 minute, and 15 minutes charts back up quickly tomorrow morning. I don’t see it happening.
So, from looking at the charts, counting EW’s, finding support and resistance levels, and tracking the MACD’s on all the charts… they all point to a large down day tomorrow! Could it be “Black Tuesday”, instead of Monday? Possible I guess?
Let’s look for news that can cause the event to happen. MobyDoc just posted this link on my weekend post. It’s talks of another terrorist attack on the 11th, or something bad? When the market reads this news, are they going to rally until Thursday to see if it happens, or sell like a bat outta hell before they get caught long? I think you know the answer to that…
http://www.foxnews.com/story/0,2933,585143,00.html?test=latestnews
http://english.aljazeera.net/news/middleeast/2010/02/20102905431956447.html
I’ve spoken about the “False Flag” events on my weekend post…. in the comment sections. I’m going to post a video here for you to watch. It’s a long video, but well worth your time…. as we don’t have a lot left. I know that some of you might find it hard to believe in Aliens and stuff… but it’s all real, and what happens affect the stock market.
There is now hundred of ships off the coast of Yeman. They are from every nation in the world that has a Navy. What are they doing there you ask? There is a Huge Stargate (yes, like on the TV show) under the sea that is opening and the world elite is worried about it, and are most likely trying to stop it. Supposedly it is going to render all the world’s weapons worthless, and not able to work anymore.
Of course the world elite don’t want that to happen as that would make everyone in the world equal, and they couldn’t use us as their personal slaves anymore. No more money needed, as the world goes through a positive transformation. This is a good thing… for everyone who is honest and good, but a bad thing for the evil people who run the planet.
We are about to go through a wonderful transformation on, or around December 21st, 2012. Call it Heaven for us good people, and Hell for those bad people. Your religion isn’t important, only what kind of person you really are “on the inside” is what’s really important.
So, how do you keep the people away from the Gulf of Aden, (which is right off the coast of Yeman)… you stage another terrorist attack, which are better known as “False Flags”. Read this…
http://www.reuters.com/article/idUSTRE6173II20100208
It keeps every one away while you all work to stop the Stargate from opening, or try to control it some how? What they don’t understand, is that the ending story was already written in the Bible… and the good guys win, the crooked banksters, gangsters, thugs, Illuminati, or whatever you what to call them… LOSE!
Of course they need to pay for the next staged war that we are going into, and how do you do that? Crash the stock market of course. Still think I’m nuts? Again, when is a conspiracy NOT a conspiracy? When it’s true of course…
Here’s on more interesting video for you… (by the way Goldman Sachs and the Carlyle group are co-owners of Kinder Morgan)
Are you starting to put the pieces together yet?
Red
