Are We There Yet?

By Red, on March 9th, 2010

Another light day as the market rose up slowly to reach 114.99… just shy of a double top at 115.14 (spy). Will they get there, or will they start a sell off from this level? Seems to obvious too me that everyone and their brother is waiting to sell their longs at 115.14, and go short… which is why it’s unlikely too happen.

I think we will either start the selling from this level, or pierce through the top about another .50 cents to 1.00 (5-10 points SPX). It makes perfect sense when you think about it. If you sell at this level, the retail traders will be stuck in their longs, still waiting for the double top to get out. They will also miss the chance to go short.

If on the other hand, the big institutions decide to take it to a double top, and allow the longs to get out and go short, I suspect that they will squeeze those new shorts by rallying higher to 116.00 or so. Then, they will sell off the market… after the retail trader bails on his shorts and go long again. Trapped again… that’s how the big boys play the game.

So, tomorrow could either rally on through the 115.14 level, to put in a higher top (and then sell off), or just start selling off tomorrow. We really need some news event to come out, so they can have something to blame it on.

Yesterday there was a large block of 3 million shares bought on the VIX, and today another large block (1.5 million) of shares sold on Goldman Sachs. Someone knows something… that’s for sure! Since Goldman basically “is the market”, the large sell order there is something worth paying attention too. If they had an average price of $170 per share, that’s $255 Million Dollars worth in one 10 minute period.

Combine that news with the VIX buy on Monday, and I think it’s clear which direction they plan on taking the market. When is the real question? Will it happen tomorrow, or will they wait for the jobs info on Thursday or Friday? I don’t know, but the pressure is building up… that’s for sure.

Do they have enough steam left for a quick head fake to 116.00 area, before the selling starts, or will it be from today’s 114.99 high? We’ll see tomorrow I guess…

Red

Grinding On Up...

No related posts.

monicadern

Thanks for all the good info Red. From my guestimate based on Jack's cyclical cycle, we could start selling off as early as tomorrow or as late as early next week. I have the same thoughts as you – either they sell off from here, or they take it to a point above 1150 where many will be forced to cover. I would imagine that would send the S&P to at least 1160. Hope it's the first scenario. Whichever one it is, I believe the market is headed lower in the coming weeks. P3 theory out the window if we make new highs.

monicadern

Also huge put volume on the SPY today but it could be a hedge as well which could be bad for bears – just depends on whether it was a straight position or a hedge.
http://www.reddragonleo.com Red Dragon Leo

As for the SPY put volume… I wouldn't rely too much on that as you are right, it could be just a hedge. However, that large stock, (not options), sell of Goldman is telling us that they, or someone, is locking in profits before a possible sell off.

After the sell off is over, I do think we could see new high over the spring and summer though….

redvetttes

what your take on option ex. week?

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

At this point… I don't know if we are ever going to go down?

Earl of

Carl just now:

March S&P E-mini Futures: Today's range estimate is 1136-1150. I expect the market to reach 1200 over the next three months. Remember that activity will begin to move into the June contract at tomorrow's pit opening.

1131-1145 Yesterdays estimate range for /ES (14 pt range)
1136-1150 Todays estimate (14 point range)
1139.50 now, so -3.5 to +10.5 from here

Not real sure what “activity will begin to move into the June contract at tomorrow's pit opening” means.

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

The current /ES contract (March?) will be expiring, if I'm not mistaken.

monicadern

Hi Dread, but what does that mean in terms of direction?

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

You might see a very short term dip (a few points) as traders dump the March /ES.

monicadern

Thanks!

Earl of

I thought maybe he was trying to say his /ES numbers would be switching from the March contract to the April contract. But I hated to just guess.

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

His /ES numbers will be switching to June.

By Opex, the /ES and $SPX should have parity i.e. no difference between the futures price and cash price. The new June contract will have a several-point (usually 3-4 if memory serves) premium over the cash price.

Earl of

So there is no April. LOL

The stuff I don't understand goes on forever
http://dreadwinaard.livejournal.com/profile dreadwin

http://cfe.cboe.com/Products/Spec_VT.aspx
Earl of

Thank you very much !
http://dreadwinaard.livejournal.com/profile dreadwin

Actually, looks like I sent you the link to something else… but the point was that (for whatever reason) they go in three month increments.
Earl of

I know so little about futures that it looked fine to me

I don't trade futures, so (as they say on American Idol) I am safe.

monicadern

Man, Carl seems good. Have you ever seen him wrong?

Earl of

Dreadwin said he is pretty good in an up market, pretty bad in a down market. I don't have a long history with him. For me it's all been brilliant except when some news event jars the market.

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

His model works best under lower levels of volatility.

Earl of

Carl is Long one unit /ES at 1140.75

gcocks83

What are you in?

Earl of

Got into TNA right before the open.

Seems to be going up again.

gcocks83

Great move good for you. I have some spy calls that are doing well. But that is it.

Earl of

Feels like I am really pushing this TNA to and beyond it's limits.

Well, not me. Somebody.

gcocks83

It is funny when it is uncomfortable watching something go up. By the way still better than watching it go down.

sundancer390

I posted this chart of the $RUT monthly back on 2-22-2010
http://www.flickr.com/photos/47091634@N04/44227…

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

I sure wish they would hit that level and get it over with. This is as boring as watching paint dry…

SC

It will be over on March 22. I know it b/c I have some March puts. That is how I am sure it will keel over on March 22.

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

LOL! Yes, it will be over when I'm finally broke.
gcocks83

SC Me to.

Earl of

Carl sold long unit at 1146.75
Earl of

Out of TNA
monicadern

Sundancer, do you know what that actual number of what the $Rut would be on that rad line? Trying to ascertain if we bust through it.

sundancer390

679.75

monicadern

Muchas gracias.

sundancer390

co-relational controlling TL on the 60 min setup is almost complete
1-2-3 dance with the TL
SPX 1103.69 1/26/10
SPX 1071.59 1/29/10
= 32.1

1-2-3 dance with the TL
SPX 1116.66 3/4/10
SPX 1148.26 3/10/10
=31.6

1148.76 co-relational

http://www.flickr.com/photos/47091634@N04/44221…

monicadern

Sundancer, call me deft, but what the heck does this mean? That the run up could be complete at 1148.76?

sundancer390

it could have broader implications, but 1148.76 is the terminal point for this setup

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

Topping tails on the $RUT?

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

Earl of

Stronger case if they were side by side or working lower.

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

Agreed. The bottoming tails were pretty much textbook.

Earl of

Carl at day’s end:

1136-1150 estimate today for /ES (14 points)
1139.25 -1145.25 actual today (6 points)
Well within Carl’s range for today

Trades:
Bought 1 unit of /ES at 1140.75, sold it at 1146.75 (gain of 6 points)

Grade B
sundancer390

day 2 of the SPY backtesting it's old dance partner
http://www.flickr.com/photos/47091634@N04/44226…

SPY has chewed up ~441,000,000 shares to advance .94 from it's friday high

$SPX currently has 5 consecutive higher closes than opens on it's daily

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

What's the record or average for consecutive higher closes then opens?

sundancer390

since march 6, 2009 $SPX hasn't had more than 6 consecutive higher closes than opens

gcocks83

Do you give that any merit to the current move.

sundancer390

yes and given the action over the past 3 days a reaction for a couple days is likely, the $SPX 1131.56 gap is the first stop

sundancer390

XLF has a date with $15.82
http://www.flickr.com/photos/47091634@N04/44234…

sundancer390

XLF won't hit this number until ***the top*** time wise, for those that don't trade the XLF it will be a good point of synergy relative to other sector price levels

Scraoppy

Sundance – are you saying when XLF hits $15.82 – that would be a sign of market top?

thanks
monicadern

THE top or an interim top, you think?

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

I don't think anyone knows where the final top is? I suspect he meant the short term top.

monicadern

I think Sundancer knows!

Earl of

TNA opened up 0.3%. 7th up opening in 8 days. Left a 5 cent gap and was up 4.1% at the high. TNA closed up 2.5%.

We are in a Full Moon Trade, which favors TNA.
After eight days, this trade is up 23.9%.

Volume for TNA was fairly high (highest in 20 trading days)

$RVX (VIX for $RUT) closed 2.3% higher with TNA up 2.5%. 3rd divergence in a row, as these normally go in different directions.

TNA has been up 19 of the past 21 days.

The high for TNA today was $54.56, highest high since November of 2008

Ultimate Oscillator for TNA peaked at 78 twelve trading days ago and has generally fallen since then but has remained above 50 and is currently 64. Indicating continued strength for TNA. There was a divergence as the Ultimate Oscillator dropped nearly 5 points while TNA rose 2.5%, but that sort of divergence happened last week and TNA continued to rise. Three days in a row for this divergence, but the size of the divergences is growing. Surely, this means TNA is in thin air here, and may fall soon.

Bollinger Bands for $RVX (VIX for $RUT): today’s candle closed higher & farther from 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 rising, bad for TNA. This very thing happened last week and TNA kept rising. 3rd day in a row for this. Thin air.

Bollinger Bands for $RUT: The white candle for $RUT rose along side the rising upper Bollinger Band, indicating that $RUT is rising. Good for TNA.

Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s candle dropped, the 3nd such drop in 11 trading days, and 3rd day in a row. Not sure what to make of this. Perhaps this indicates TNA might drop tomorrow (same warning for 3 days now).

Overall, it looks like TNA continues to distance itself from any congestion and might continue rising tomorrow. Divergences keep stacking up to the point of weird, but TNA keeps rising.
Earl of

The view from Americanbulls

TNA is a HOLD (wait for a possible SELL-IF signal after the close on Thursday, for a possible sell at some point Friday). Today was a White Candlestick, indicating a normal up day.

TNA is now up 46% since the buy signal on Feb 9th. TNA was $36.69 at the time, and closed today at $53.70.

TZA is a WAIT (wait for a possible BUY-IF signal after the close on Thursday, for a possible buy at some point Friday). Today was a Black Candlestick, indicating a normal down day.

TZA is now down 33% since the sell signal on Feb 9th. TZA was $11.04 at the time, and closed today at $7.37.

Summary: The candles today changed nothing.
sundancer390

it could have broader implications, but 1148.76 is the terminal point for this setup
Earl of

Carl at day’s end:

1136-1150 estimate today for /ES (14 points)
1139.25 -1145.25 actual today (6 points)
Well within Carl’s range for today

Trades:
Bought 1 unit of /ES at 1140.75, sold it at 1146.75 (gain of 6 points)

Grade B
gcocks83

SC Me to.
sundancer390

day 2 of the SPY backtesting it's old dance partner
http://www.flickr.com/photos/47091634@N04/44226…

SPY has chewed up ~441,000,000 shares to advance .94 from it's friday high

$SPX currently has 5 consecutive higher closes than opens on it's daily
http://www.reddragonleo.com Red Dragon Leo

What's the record or average for consecutive higher closes then opens?
sundancer390

since march 6, 2009 $SPX hasn't had more than 6 consecutive higher closes than opens
sundancer390

XLF has a date with $15.82
http://www.flickr.com/photos/47091634@N04/44234…
Earl of

TNA opened up 0.3%. 7th up opening in 8 days. Left a 5 cent gap and was up 4.1% at the high. TNA closed up 2.5%.

We are in a Full Moon Trade, which favors TNA.
After eight days, this trade is up 23.9%.

Volume for TNA was fairly high (highest in 20 trading days)

$RVX (VIX for $RUT) closed 2.3% higher with TNA up 2.5%. 3rd divergence in a row, as these normally go in different directions.

TNA has been up 19 of the past 21 days.

The high for TNA today was $54.56, highest high since November of 2008

Ultimate Oscillator for TNA peaked at 78 twelve trading days ago and has generally fallen since then but has remained above 50 and is currently 64. Indicating continued strength for TNA. There was a divergence as the Ultimate Oscillator dropped nearly 5 points while TNA rose 2.5%, but that sort of divergence happened last week and TNA continued to rise. Three days in a row for this divergence, but the size of the divergences is growing. Surely, this means TNA is in thin air here, and may fall soon.

Bollinger Bands for $RVX (VIX for $RUT): today’s candle closed higher & farther from 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 rising, bad for TNA. This very thing happened last week and TNA kept rising. 3rd day in a row for this. Thin air.

Bollinger Bands for $RUT: The white candle for $RUT rose along side the rising upper Bollinger Band, indicating that $RUT is rising. Good for TNA.

Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s candle dropped, the 3nd such drop in 11 trading days, and 3rd day in a row. Not sure what to make of this. Perhaps this indicates TNA might drop tomorrow (same warning for 3 days now).

Overall, it looks like TNA continues to distance itself from any congestion and might continue rising tomorrow. Divergences keep stacking up to the point of weird, but TNA keeps rising.
Earl of

The view from Americanbulls

TNA is a HOLD (wait for a possible SELL-IF signal after the close on Thursday, for a possible sell at some point Friday). Today was a White Candlestick, indicating a normal up day.

TNA is now up 46% since the buy signal on Feb 9th. TNA was $36.69 at the time, and closed today at $53.70.

TZA is a WAIT (wait for a possible BUY-IF signal after the close on Thursday, for a possible buy at some point Friday). Today was a Black Candlestick, indicating a normal down day.

TZA is now down 33% since the sell signal on Feb 9th. TZA was $11.04 at the time, and closed today at $7.37.

Summary: The candles today changed nothing.
gcocks83

Do you give that any merit to the current move.
sundancer390

yes and given the action over the past 3 days a reaction for a couple days is likely, the $SPX 1131.56 gap is the first stop
sundancer390

XLF won't hit this number until ***the top*** time wise, for those that don't trade the XLF it will be a good point of synergy relative to other sector price levels
Scraoppy

Sundance – are you saying when XLF hits $15.82 – that would be a sign of market top?

thanks
monicadern

THE top or an interim top, you think?
http://www.reddragonleo.com Red Dragon Leo

I don't think anyone knows where the final top is? I suspect he meant the short term top.
monicadern

I think Sundancer knows!
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