Pop and Drop…

By Red, on March 4th, 2010

Friday Update…

We got our POP, now let’s see if we get our drop over the next couple of weeks? More on the weekend update. Enjoy your weekend, as it seems the snow is starting to go away and warmer weather is coming back. (Just be sure you show up to work for at least one hour per week, if it snows again… that way you will still be counted as employed, as far as the government numbers go).

—————————————————————————————————-

I’m looking for a pop and drop tomorrow, as the market needs to shake out the last bear standing. Some better then expected, or not really so bad, jobs report should just do the trick. Let’s rally up to the 113.00-113.50 spy level, and close that 1127 spx gap, and be done with this stupid bull manipulated rally. I’m over it! Get it done, so the fun can begin!

Once the selling starts, I don’t see another rally like this until we tag the 200mda… which should be at about 104 (spy) by now. That would also be a double bottom. It might take a few weeks to get there, but I fully expect a sell off to start next week.

That’s it… no long drawn out post tonight. Just a call for a top to be put in tomorrow, and then a sell off through all of next week. That’s what my crystal ball tells me, and that’s what I’m expecting to happen. Of course if I’m wrong, I’ll just eat some more crow. I’m actually getting used too eating crow, and it doesn’t taste too bad anymore. (LOL)

Red :-)

Weekend Update...

97 Point Drop?…

bensjoyce

Leo & Co.

This call so far is amazing.

check out Fusijian at:

http://slopeofhope.com/2010/03/fujisan-and-the-…

http://www.reddragonleo.com Red Dragon Leo

Fujisan was dead on, wasn't she? Ha! That's perfect, now if it will only fall too…

monicadern

Evilspeculator did a post on Fuji's gartley pattern and it sounds like it hasn't been entirely accurate. Who knows though. I am still expecting for a pull back soon like you.

gcocks83

Monica, come over to HOB. OBB is down so we are all there. See TZA drop.

monicadern

Thank you. Trying not to watch TZA drop!

sundancer390

the opening is going to be very very important

IWM 65.70 level, i alerted a couple days ago that it was the level for a possible reaciton

GS- 164.01- the bear flag that wasn't

the 1127.38 gap is going to get filled @ the open so my inventory on this setup is going to be liquidated

XLF 15.01 – de-leverage area hit
Earl of

Carl Just now:

March S&P E-mini Futures: Today's range estimate is 1126-1140. The employment number came in pretty much as expected and as I write this the market is trading about 7 points higher than yesterday's pit close. I expect the market to reach 1200 over the next three months.

1016-1130 Yesterdays expected range
1126-1140 Todays expected range
Current is 1129.50 so -3.5 to +10.50 from here

Carl is long one unit of /ES

gcocks83

Good Morning Earl, What are you up to today.

Earl of

Good Morning, Gcocks.

TNA (currently $49.45) is above its pivot line ($48.30), so it's a TNA day at this point.

TNA should gap up again for the 5th straight day. If the gap gets filled (it did yesterday), maybe I can get some TNA then.

Not going to be happy if it just starts running from the open, as I have none.

sundancer390

be alert for exhaustive signs:

this is going to be the 6th consecutive gap up on the SPY

1127.38 gap is going to get filled @ the open

de-leverage area hit on financials

http://dreadwinaard.livejournal.com/profile dreadwin

I completely concur regarding the notion of exhaustion gaps. This is reminiscent of gold in late Nov. / early Dec.

sundancer390

GS daily update
http://www.flickr.com/photos/47091634@N04/44088…

GS looks like it's going to gap over it's max contain pt.
the next level where position trades could be taken is the intersection of the brown & purple lines 168 area

For the XLF, the 15.22 level

sundancer390

update 3:01 est
XLF @ it's containment pt. now 15.22 & GS @ 168

these levels are important for the close & gap on monday

sundancer390

update 4:01 est

I know the operators too damn well
XLF closed @ 15.22
GS HOD was .06 above the purple line and closed below both the brown & purple lines

gcocks83

Nice Job.

sundancer390

SPY gapped over the TL that was containing the market for the last 3 days, however did not gap over it's controlling TL
http://www.flickr.com/photos/47091634@N04/44081…
Earl of

Carl is now long second unit at 1126.50

Carl just trades 1 or 2 units, so he is maximum long.
sundancer390

general of the bull army AAPL with fresh new highs
http://www.flickr.com/photos/47091634@N04/44081…

watch the 222.83 level
sundancer390

$VIX gapped below daily contianment
http://www.flickr.com/photos/47091634@N04/44089…
sundancer390

significant $SPX index gap @ the open
past days with significant index gap:
2/16/10
1/12/10
12/21/09
12/17/09
12/10/09
12/01/09
11/27/09
11/11/09
11/06/09
10/14/09
10/08/09

SC

No one wants to say the dirty word, “BULLISH”. lol

http://www.reddragonleo.com Red Dragon Leo

It wouldn't be so dirty of a word if there was some real earnings to back up the rally. I just can't be bullish in this fake market. I choose to sit it out, and wait for the crack to wear off, and the bulls to come down from their high.

When it happens, I'll be waiting to go short. I'll continue shorting until the earnings are real again, and then I'll go long. If you can go long in this environment, then you have more guts, and and higher risk tolerance then I do.

I hope you do well being long. I just don't have the stomach to risk being caught long when the crap really hits the fan.

SC

LOL so when I say bullish then it is just chopped liver. But when Sundancer says it is bullish, it is good stuffs? LOL

http://www.reddragonleo.com Red Dragon Leo

Sorry you took that wrong. I didn't mean to imply it like that. I only meant to say that I'm not comfortable going long. If you and sundancer want to go long, then I hope you both do well. And since the market has been going up, I'm sure you both have.

It seems that you both have the ability to take the emotions out of the trade… something I haven't mastered yet. That's why I'm bearish, as I can't rationalize why anyone would be going long in this horrible economy, where the only person buying is the government.

So, quite the contrary to what you might think I meant, I actually give respect those of you who can leave out your emotions, and just trade the tape. You and sundancer have being on the winning side. I'm happy for you both.

Maybe I'll learn to remove my emotions from trading one day, and be a better trader. But for now, I'll just wait until the bulls are done, and go short.
SC

The sooner we realize that the market will do what it wants and there is no point standing in front of a runaway train with boatload of drunken fools on it, the less stressful this business becomes.

When I first started in this business, my boss shared with me two things. 1. There is nothing sacred on Wall Street. People will sell their grandma down the river in a heartbeat. 2. There is no point in being dead right. If you stand infront of a runaway train, you will be right, but you will also be dead. Being dead right is not going to do you any good.

If you keep shorting a runaway market, eventually you will be right. But by then, you would have used up a large chunk of your capital, if not all of it. You would have little to capitalize on the eventual collapse.

If your calls are not working, it isnt b/c TA doesn't work or the market is manipulated. The fault is NOT external. It is most likely internal. You have to ask yourself what it is that you are missing. The market is always right. It isn't b/c TA doesn't work. It is the set of TA you used that is not working. Your job is to find out why and maybe even necessary to discard your old set of TA and acquire new tools. There is a reason for it, and it isnt b/c Goldman Sachs screwing with you. Goldman Sachs has always been screwing with us. That didnt just started recently.

A lot of the tools/patterns people use, are garbage. These garbage tools/patterns are garbage, b/c they suffer from N= too small, and degree of freedom being too low. People look at too small a data set and derive conclusions that fail miserably in real time application. Instead of finding the truth, they blame some external factors.

I am not saying this to make people feed bad for being caught on the wrong side of the market. I am saying it, in the hope that someone may find it useful. People didn't get trap on the wrong side of the market by accident. If anything, people CHOSE to be on the opposite side of the market intentionally.
gcocks83

Nice Post and good advice.
SC

Thanks gc
Earl of

SC,

Nicely said. It's a keeper
SC

Thanks Earl

sundancer390

yeah the suckers'r'us bus has been full all week with top callers, first it was march 2nd, then the 3rd, it's gotta be the 4th, and today they're in the process of puking up their positions or the margin clerk is taking care of it for them.

the bullish setup on the monthly is dominant so a reaction for a week or two will lead to a strong monthly close

http://www.reddragonleo.com Red Dragon Leo

Are you saying that we could have another month of the bulls? Man, I'm so tired of the government pushing this market up. When this thing finally does fall, it's going to be ugly.

By the way, did you get my email? I love to hear your thoughts on where you think we're going next. It clear that I've been wrong on calling it, but your containment levels have be hit… just like you thought they would.

I must admit, you have a better understand of the market then I do. Check your email, and shoot me back on the issue when you get a chance.

Thanks… and yes I've been one of those suckers on the bus. But, at least I admit it. LOL!

sundancer390

i haven't checked my email yet

today's close will be important for the setup next week

The setup for the month of march is a close above 1115.10, the bullish parameters are in place.

Between now and March 31st it could be a roller coaster; up and down

The USO chart continues to give many important clues…

sundancer390

the 3:30 print (60&120) will tell us if there is going to be a stampede into the close
SPY 113.92 is the number to watch
SC

I bot some puts when TF hit 666. I know traders are some of the biggest practical jokers. I am not the least bit surprised that they pushed it to 666 just for the laugh.

sundancer390

it's all part of the sun ritual

yesterday i put a note on one of my posts about the low on the $SPX yesterday which was 1116.66

the high on FAZ today is 16.66

Earl of

Carl sold both units /ES at 1137.25

gcocks83

Did you buy TNA today?

Earl of

Nope. Watched like a dummy.

Had it in my head that this big surge wasn't going to happen. Not sure where the notion came from, but it kept me on the sidelines.

I remember thinking: What is Carl doing?
Answer: he was doing just fine.

gcocks83

When you ppsted his stuff this morning I was thinking the same thing. TZA is tempting at this level?

Earl of

TZA sure is cheap at $7.69. I need to do my TNA daily post. I always feel more comfortable after I've looked at things from several angles.

Something Dreadwin said — TZA bottoming is a process, rather than a V bottom. Seems like that means there will be several days where TZA can be bought at $7.71 (price change!) before it moves higher. Maybe.
http://dreadwinaard.livejournal.com/profile dreadwin

See other comment with chart.
gcocks83

Dread, You think we are not there yet.
Earl of

Gcocks,

Couldn't find anything positive for TZA. Things could change on Monday, but everything I saw today looked good for TNA.

sundancer390

i don't think I would want to be long over the weekend, the SPY currently has 6 consecutive gap ups

for those that have been following my posts for the last month, you've heard me talking about the 1127.38 gap a million times well today it finally got filled

the XLF hit is de-leverage pt. of 15.01 @ the open this morning then went on to it's containment pt. @ 15.22 and closed there, GS also went and tested 2 containment pts. and was rejected by both of them

another Sun ritual was completed today with the $RUT, notice where the closed the index at, I pointed out yesterday that the low of the $SPX yesterday was 1116.66, today the high of FAZ was 16.66, no folks it's not a coincidence

it's also not a coincidence that my handle has Sun in it

gcocks83

Very interesting. What does Sun Ritual mean. A down day Monday would probably fool the most people. since it seems it is always pump Mutual Fund Monday.

Earl of

Carl at days end:

1126-1140 estimate today for /ES
1126 -1138.75 actual today
Pretty close, for guessing.

Trades: Sold two units of /ES today
In today at 1126.50 out at 1137.50 (gain of 11)
In yesterday at 1119.50 out today at 1137.50 (gain of 16)

Grade: Brilliant

gcocks83

That's impressive.
http://dreadwinaard.livejournal.com/profile dreadwin

Days like today are why I recommended Carl's site to you all. During an uptrend, he's really good.

27 points of /ES is $1350. Just sayin'.

http://www.reddragonleo.com Red Dragon Leo

Dreadwin… thanks for posting you thoughts by the way. I need to see both sides to become a better trader.

http://dreadwinaard.livejournal.com/profile dreadwin

Carl Futia is a veteran trader, PhD economist, etc. He posts his trades online, which takes guts. Since last March, he's been really good.

Tried to post this earlier, but it got clobbered by disqus:

Is it time for TZA?

http://www.screencast.com/users/dreadwin/folder…

I think TZA finds a bottom (at least for a while) this next week. I looked at buying TZA calls right before close but instead bought a teeny tiny amount of SRS calls because the premium looked better.

Daneric thinks we can go higher, and we can, but I think $RUT is tired from leading the charge and will take a breather first. Other sectors like health care can catch up. Maybe the dow, too.

AS2009

Dread – curious what you mean when you say the premium looked better on SRS calls …

I also was looking to buy TZA calls on Friday – but I think we have a little more to go, so held off … love you chart
http://dreadwinaard.livejournal.com/profile dreadwin

I did some quick calculations before the bell on Friday, and it seemed like TZA calls were pricing in a move up, whereas SRS calls were not. We'll see how this goes… it is a really small position that I took.

Earl of

I'm growing more fond of Carl's views all the time

Earl of

TNA gapped up for the 5th day in a row. Roughly half the gap filled, and then it was off to the races. The gap up was 1.8 % and TNA closed up 5.6%.

We are in a Full Moon Trade, which favors TNA.
After five days, this trade is up 15.8%.

Volume for TNA had been trending down for 4 days, but was up today.

$RVX (VIX for $RUT) closed 6.4% lower with TNA up 5.6%.

TNA has been up 16 of the past 18 days.

The high for TNA today was $51.74, highest high since November of 2008

Ultimate Oscillator for TNA peaked at 78 nine trading days ago and has generally fallen since then but has remained above 50 and is currently 74. Indicating continued strength for TNA.

Bollinger Bands for $RVX (VIX for $RUT): today’s long black candle closed closer to the lower band and the lower Bollinger band is **off the chart** but seems to be falling. Hard to read, but looks like $RVX is falling again, good for TNA.

Bollinger Bands for $RUT: The long white candle for $RUT rose to meet the rising upper Bollinger Band, indicating that $RUT is aggressively rising. Good for TNA

Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s candle moved higher, closing at the rising upper band, in line with further upside for TNA.

http://www.americanbulls.com had TNA as a BUY on Feb 9th, and hold since then. TNA remains a hold for tomorrow.

Overall, it looks like TNA continues to distance itself from any congestion and should continue rising tomorrow.

gcocks83

That's a strong case if I have heard one. NIce Work and great post.
AS2009

Hi Earl – where you see the rating for TNA and TZA on the site ?

Earl of

Everything I get on TNA comes from this:

go to http://www.americanbulls.com
in the upper middle of the page, ticker search for TNA
I get one page of information on TNA

Earl of

The view from Americanbulls

Summary: The candles today cancelled the possible buy and possible sell of yesterday.

TNA is a HOLD (wait for a possible SELL-IF signal after the close on Monday, for a possible sell at some point Tuesday). Today was a White Candlestick, indicating a normal up day. TNA is now up 40% since the buy signal on Feb 9th. TNA was $36.69 at the time, and closed today at $51.50

TZA is a WAIT (wait for a possible BUY-IF signal after the close on Monday, for a possible buy at some point Tuesday). Today was a Black Candlestick, indicating a normal down day. TZA is now down 30% since the sell signal on Feb 9th. TZA was $11.04 at the time, and closed today at $7.70.

http://oahutrading.blogspot.com/ steveo77

How do you like AmericanBulls? I had subscription for a while. Did not bank coin.

In maybe 4 afternoons, you can learn good candles…not just “doji's”, highly suggest anyone do it. It is so old school that it is new school.

Earl of

steveo77,

I don't subscribe to americanbulls. The free stuff is enough for me.

I only use it for TNA and TZA, and in the time I've been watching it, TNA has always been a HOLD and TZA has always been a WAIT. It may be awhile before I experience enough to form a valid opinion.

I like Japanese Candlesticks in general, and I understand the basics. I am blessed and cursed with a memory that fades fast, and I like the reinforcement of reading an official interpretation of the candles.

I put it in the category of “another information source”, which I can use or ignore. Seems like it will be great in a trending environment (like we are in now) and quite painful to follow when it's choppy (which could start any time).

dreadwin

2nd try to post chart:

http://www.screencast.com/users/dreadwin/folders/Default/media/fa27be54-3055-4678-ba3b-4a9744afce3a

I think there will be more chances to buy TZA at this price. Is this the bottom? If it isn’t, I don’t know what a bottom looks like. RSI < 30, Slow Sto has already bottomed… Are there many bears left to squeeze? Previous patterns suggest that TZA takes at least 3 trading sessions to find a bottom.
http://dreadwinaard.livejournal.com/profile dreadwin

I did some quick calculations before the bell on Friday, and it seemed like TZA calls were pricing in a move up, whereas SRS calls were not. We'll see how this goes… it is a really small position that I took.
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