Waiting Again…

By Red, on March 29th, 2010

As every minute tick’s by, another grain of sand falls inside the hour glass we call the Stock Market. Eventually, the sand will all be gone and so will the rally. But when you ask? The only people that can answer that question are the insider’s in Goldman Sachs and the Government… which are basically the same entity now anyway.

I’d love too tell my fellow bears that the market is going down hard this week, but it’s not likely to happen. That jobs report on Friday is probably horrible… which is why they didn’t move it up to Thursday, or out to Monday. They want to give the Obama Gangster Gang (OGG from now on… kinda cool, isn’t it?) the long 3 day weekend to lie, steal, cheat, manipulate, fabricate, and spin the bad news into something positive, so the market won’t tank on Monday.

With that said, I still think we will see some selling next week. Don’t know how much, as we might only get to 1150, and reverse back up? Hard to say on that one. It’s again… all about volume. Big volume equals big institutions selling… and that means we are going down further as small moves down aren’t enough profit for them. They need 5-10% corrections to make it worth their time on swing trades.

Of course they still have Hal (their top secret computer trading program) that manipulates the market up and down daily to steal money from the day traders, by front running the market. Yes, it’s illegal… but who cares? They are doing “God’s” work, and seeing what trade orders that are coming down the pipeline, just split seconds before they are executed (allowing Goldman to place their orders ahead of them, at a lower price), is perfectly OK in their eye’s.

What’s the big deal anyway? Stealing a few billion dollars a year from dumb Americans who are too busy watching American Idol and Jerry Springer, isn’t really a crime… now is it? Besides, they won’t miss it… just keep them high on legal drugs that the doctor prescribes for every little ache and pain they get from such a tough life of sitting in that uncomfortably arm chair… pressing buttons on the remote control, causing their fingers to go numb as they get brainwashed from the bought and paid for media telling them that it’s safe now to go spend again.

Yes, my dear readers, it’s now safe to go back into the market and spend your last dime on some new electronic toy like the Apple iPhone, iPad, iPod, and iUnbelievably that the public is so iStupid! Needless to say… the market is likely to trade sideways to higher all week, and will probably hit 11,000 on the Dow.

Next week will have a lot of earnings coming out, and could be the bad news we are looking for? But, you must understand that the OGG isn’t the only one that can lie and fabricate numbers… so can the CEO’s of those companies announcing earnings.

A correction down to that fake print area around 1075 spx is coming… but when? Thinking outside the box, and trying to think like the OGG, would have me tanking the market in the summertime, and rallying into the fall/winter season. This is the opposite of what most people are expecting. I think we can all agree that if everyone is expecting something to happen… it won’t.

So, what if we sold off in April and rallied back in May and June to put in a double top, or maybe a lower high? Then sell off early throughout July and August… pass Stimulus package TWO in September, and rally the rest of the year. Just trying to think like the OGG…

What would Jesus do? What would the OGG do?

Red

Ugly Market...

Baby Dragon

Just a question ?

There is a big big big big bond bubble and money has nowhere to go other than stocks…

Knowing fundamentals bonds are more overbought than stocks.

If this is true then we should expect something like Dow 25000.

Reasons: Japanese bond bubble made a bubble worth 10 Trillion US$, which is called Yen carry trade.
Now you are about to watch a mad rush of $/Euro/Rm carry trade which is called mother of all carry trades.

So what economic forces hold from Dow 25000 in face of this super carry trade ?

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

Interesting…

The astrologer Mahendra (link on my blogroll) forecasted Dow 38,000 sometime last year. Of course he meant that he seen it in the next few years, but it's certainly possible if inflation starts.

Creating Jobs is the key to creating demand again. That will in turn create inflation, which could propel the Dow upward to unheard of levels. The amount of money in circulation now is the highest ever in the 234 year history of America.

So, a spark of inflation… and it's off to the races will go! What jobs will be created to cause such demand again is the real question? Every job now is being outsourced overseas, so that doesn't leave much left locally.

I think the only way for new jobs to be created is an entirely new industry to be created, that requires local people. Not that the “Green Energy” industry is new, but a massive move into that market would create those jobs.

Obama talks of “Green Energy”… but so far everything that comes out of his mouth is a lie. Maybe the next president will change something for the better?

Baby Dragon

Dear Leo.

I am also trained as an indian astrologer since age of 5 in many old schools
from east.
and I can say by looking at many traders/people's horoscope that we are
looking in to a superboom and then a superbust.
Only reason I have become a trader is because my teacher told me to do so.

stxinon

crush1618

[I am posting this feedback on all blogs I follow].

I say all blogs go on a bullish-farce posts for 1 whole week, with bullish titles, I mean absolute bullish titles, and bull pictures, and have the first para going ga-ga over-bullish, and have the rest of the blog and charts depicting real stuff. But, keep the bullish titles and pictures on main post, such that all RSS (blog list titles) look bullish. Just have FUN with the bulls…. ala Jon Stewart.

Go bulls! Da bulls! Buy the Dips! Market Oversold! Bl**mb*rg says Market sold off today (by 0.00001 %) ! CN*C says buy now! Don't miss the bull train of your life! Buy Buy Buy!

I am going to post this on all blogs I follow. Really! Lets make this a bull week.

Crush.

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

I'll put that on my “Too Do List” for tomorrows' post. Pictures of naked bulls! I'm bullish by the way… on the VIX!

By the way, I wasn't kidding on the super computer scanning the net for market sentiment… it's real.

crush1618

Never heard of super computer scanning… But hey … there are 'trader sentiment indicators' that are supposed to be contrarian! How does that work! Traders trading contrary to their opinion… !!! Amusing … but probably true…

Earl of

Carl’s morning call:

June S&P E-mini Futures: Today's range estimate is 1168 – 1180. I think a strong move upward has started. The ES should reach 1200 in April on its way to 1225 or so.

1165.25 -1171 actual yesterday (5.75 points)
1172.50 high last night
1168-1180 estimate for today (12 points)
1170.25 currently, so estimate is -4.25 to +7.75 from here (bullish)

gcocks83

Good Morning earl, Thanks for the update. Enjoying being in cash for a change.

Earl of

Good Morning, Gcocks. I'm all cash myself. Noticed the full moon last night. Officially it's today at 1:30 PM eastern.

gcocks83

Earl, I was thinking about that this morning. It seems to not be working as well these days. do you agree.

Earl of

I think the last Full Moon trade was up 23% — can't recall exactly. This New Moon Trade is a bit of a wash. Seems the market is going up right now, rather than cycling with the moon. Can't tell when the cycling will return though.
gcocks83

Up 23% was for TNA?
Earl of

Yeah — TNA was up 24% in 10 trading days in the last Full Moon Trade.

monicadern

And if we get to 1225, Carl will be calling for 1250. But, I have to say he is pretty accurate on his day ranges. AAPL incredible today. Hopefully AAPL's last day in the sun is this week.

Earl of

Monica,

I agree. Carl never seems to mean that his target, when reached, will signal a change in direction.

SC

March 29 close: No change in outlook.

Easter + Passover = paddleball week.

monicadern

Paddleball plus I have to eat Matzah. This sucks!

SC

lol

The market will break soon. In the unlikely event that it spikes up from here, the parabolic breakdown would be fast and furious. I don't expect such spike to occur. But if it does, I will increase leverage via puts, and fall on my knees to give thanks to allah, buddha, jesus and odin for the golden opportunity.

monicadern

You and me both brother!

SC

Dont stress over this, Monica. Stress is not beneficial to the baby you are carrying. Be happy. It is a joyous time to welcome a new baby. We will keep you on the right side of the market and help your portfolio recover.

Right now, being short is the correction position. When the indicators turn green, then we will go long. We may get whipsawed a bit, but that is the cost of doing business. It is the price we have to pay, in order to try to capture the bigger market moves. As long as we can do that consistenly, then we will come up ahead over time.

In short, don't worry. Be happy.
monicadern

Thanks SC! I am not changing my position it sure would be nice to know how much more pain we are in for!!! Going to go collect my tax stuff now. Have a good day!

monicadern

Interesting – GS still hasn't made new highs.
monicadern

Looks like they are trying to lure in the shorts to ram it up their $&#$#*! one more time!
Earl of

Carl just sold both units at 1168.50

He bought these yesterday, at 1168.25 & 1168.50.

gcocks83

That's interesting.

Earl of

I played the TZA gap fill this morning. I was selling TZA about the same time I noticed Carl selling his /ES. Weird feeling.

Got my first ever DRV today also, but sold it after it ran up. Back to cash again.

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

There seems to be a trade-able range between 8.50 and 8.75-ish. Naturally, that will change now that it has been identified

Earl of

I have a bid in for DRV at 8.51. It probably gets hit on the way to 8.20

monicadern

Sundancer, is it possible that today is the day or is it just a trick?
http://finance.yahoo.com/news/Apple-shares-leap…

sundancer390

tomorrow or thursday given that thursday is the Pi ritual
it's high on thursday will be close to it's high for the month of April

I'm glad Verizon is finally getting an iphone, I've about had it with my blackberry, RIM needs to get their software updated

monicadern

You mean close to it's high for the month of March?

sundancer390

yes since there is only one day left…lol

thursday is a new month, it's open thursday won't be far from it's high for the month of april

monicadern

Argh – that implies it goes slightly higher in April along with the market.
SC

“thursday is a new month, it's open thursday won't be far from it's high for the month of april”

What's your confidence level on this? Would you put it at over 90%?
sundancer390

I'll have to wait for the close wednesday to run all the inputs

If things continue to float higher into tomorrow's close its yielding good odds

My next ritual sequence comes in on 4/4 which is a Sunday so the trading day before or after the weekend has the opportunity for a reversal(4/1 or 4/5).

for those that are short, you will get paid generously in April
SC

Kaching!

“U number 1. We luv u long long. ” — Full Metal Jacket
bear/bull

generously? How much of a percentage drop do you expect?
sundancer390

$SPX 1078 minimum
http://www.flickr.com/photos/47091634@N04/44500…

the $VIX setup says much more

the good news for traders in general is volatility about to expand

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

Out of DRV with a tiny profit. Looking to reload at 8.50.

monicadern

Good for you Dread.

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

I still think that short is the place to be, but I think I have the proper concern regarding a low-volume ramp during a holiday week.

monicadern

You are probably right. I am still hanging in there.

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

Hopefully, I can find the time to do some charts after the close. The stochastics really do look ready to fall, but I am concerned about a possible “last gasp” push that would be painful to experience while short. Last week, I watched DRV go from 8.70 (my buy) to 9.01 (yay!) to 8.05 (f*ck!) back to the mid-8.70's.
monicadern

True – but it is very difficult to trade tops and even more difficult to get in at the very top.

gcocks83

Dread, let me know I might get back in at that level. I am still in cash.

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

Another idea is to “buy the breakout” which I believe should be above 8.80. There seems to be strong support for IYR at around 50, which keeps causing DRV to bounce back into a range.

sundancer390

$SPX daily containment pt. (red) still providing supply
VST containment pt. (orange) providing demand
http://www.flickr.com/photos/47091634@N04/44763…

monicadern

Close to that 16.90 VIX level.

sundancer390

$VIX closed @ LOD while the $SPX closed in the middle of it's range

monicadern

Not sure what to make of that except maybe we won't get the ramp up in the $SPX we expect.

sundancer390

you'll notice HOD in the $SPX was 1177.83

it's de-leverage pt. is 1178.50
$VIX 16.90

Round & Round we go… Most people are about to puke…
monicadern

Including me!

Earl of

Carl at day’s end:

1168-1180 estimate for today (12 points)
1164.25 -1173.75 actual today (9.50 points)
Today’s range was generally lower than Carl’s.

Trades:
In /ES at 1168.50 and 1168.25 yesterday, sold both at 1168.50 today. (gain of 0.25 points in two days)

Grade: C (didn’t lose any money)
monicadern

McClellan acting strange. Normally when there is such a clear move of the MACD below the 0 line, the market sells off if the McCLellan is below 0. Not this time. I am afraid the MACD will make it back above the 0 line without a sell off. That will be a buy signal. Yuck.
http://stockcharts.com/h-sc/ui?s=$nymo
Earl of

TZA opened down 0.5%. Gap was filled. Yesterday’s gap from $7.17 to $7.16 was not filled. TZA was up 1.2% at the high, and closed down 1.0%.

We have been in a New Moon Trade, which tends to favor TZA.
After eleven days, this trade is down 4.8%, using AmericanBulls Buy & Sell strategy. With a simple buy and hold strategy, this trade would have been down 4.3%.

We are now in a Full Moon Trade, which tends to favor TNA.
AmericanBulls has TNA with a WAIT signal. Will buy TNA when AB has a confirmed BUY signal.

Volume for TNA today and yesterday were the 2 lowest of the last 16 days.

$RVX (VIX for $RUT) was down 2.1 % today with TZA down 1.0%. No divergence.

TNA had been down 3 days in a row, but now up two in a row. Good for TNA.

The high for TNA three days ago was $58.23, the highest TNA price since November of 2008. The high today was $56.73, 2.6% below that high.

Ultimate Oscillator for TNA peaked at 78 twenty eight trading days ago and has generally fallen since then but has remained above 50 until just recently and is back above 50 today. The fall in the Ultimate Oscillator coincided with a 27% rise in TNA, forming a rather monster divergence. Indicating the end of strength for TNA, at some point. Ultimate Oscillator readings have been up for the past two days. Good for TNA, short term.

MACD on the monthly chart crossed over downwards three days ago and is moving down. This last happened 2 months ago. Bad for TNA.

Bollinger Bands for $RVX (VIX for $RUT): today’s black candle closed above the Bollinger mid line (20 day MA), re-entering an area of congestion. MACD has crossed from below and is rising. Looks like $RVX might be falling. Good for TNA.

Bollinger Bands for $RUT: The small white candle for $RUT is in the congestion area. The top Bollinger band is falling, and $RUT seems to be in a mature topping formation. MACD has crossed down. Bad for TNA.

Bollinger Bands for $RUT:$RVX ($RUT vs VIX for $RUT): today’s doji candle rose to the middle of the congestion area. The upper Bollinger Band is falling. Looks like the topping process is continuing. Bad for TNA.

TNA had a higher high, higher low and higher close – good for TNA.

Money flow for the Total Stock Market was $192 million flowing out of the market on a flat day. Neutral.

I will post the AmericanBulls candlestick interpretation a bit later.

Overall, it looks bad for TNA for tomorrow.

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

The more I look at charts, the less certain I feel about the very short term direction. The stochastics say a drop is coming, but during low volume conditions, we almost always ramp up.

Earl of

Dreadwin,

I agree. Looks fuzzy for tomorrow. The last two days, I played the morning gap fill. I guess I will be looking to do that again tomorrow.

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

I posted a chart, with notes on what I expect to see. If this is a bottom, you'll have another chance to buy TZA under 6.80 by the end of the day on Thursday.

gcocks83

Nice Post Earl, I am still in cash.

Earl of

The Daily view from Americanbulls

TNA remains a WAIT (wait for some kind of buy signal). The sell was at $55.61. TNA closed today at $55.89, up 0.5% since the sale. The candlestick today was the same as yesterday: a White Spinning Top Candlestick (complete indecision between Bulls and Bears).

TZA remains a HOLD. The buy price was $7.04. TZA closed today at $6.99, down 0.72% since the buy. The candlestick today was a Black Spinning Top Candlestick (complete indecision between Bulls and Bears).

Two recent TZA Buy signals have failed and may perhaps serve as a warning:
Buy at $7.33, sell at $7.14
Buy at $7.11, sell at $7.05
Buy at $7.04, now down 0.72%

For that matter, recent TNA Buy signals have also been uninspiring:
Buy at $55.36, sell at $55.43
Buy at $55.69, sell at $55.63

Summary of $RUT based ETFs & a few popular ETFs (Market positive):
Confirmed BUY: UWM(2x), DIA, QQQQ
Not very reliable BUY-IF (2nd day): URE(2x), IYR(1x)
Wait: DRV (-3x), SRS(-2x)
Highly reliable BUY-IF (2nd day): SPY
Hold: IWM(1x), DRN(3x)

Market Negative (no change from yesterday):
Wait: TNA (3x)
Hold: RWM (-1x), TWM (-2x), TZA (-3x)

Comment: more market positive than yesterday
Action for tomorrow: none
http://dreadwinaard.livejournal.com/profile dreadwin

My thoughts on TZA:

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

If the pattern holds, there will be a retest of the recent lows before a reversal in TZA.

Earl of

Dreadwin,

Nice Chart.

50% Fails. 3 of the last 4 failed.

Makes me a bit nervous trying to get on the right side of it.

SC

My opinion is that chart pattern analysis on leveraged instruments does not yield useful information.

Earl of

Bullshit

SC

Just trying to be helpful.

One of my mentors used to say, “If you don't agree, then do as you please and live with the consequences.” lol

monicadern

SC, you may be right and I have heard that before but again it's an instrument, just like a stock (to me a stock isn't really a company), so it's all about human psychology and how it plays into that instrument. From studying Dread's charts, I do think he has an edge. But my technical skills are lacking so who knows.

SC

Those instruments are slaved to the underlying index. Thus, analyzing the underlying index would yield better insight. Supply and demand pressure on these instruments can only result in transient distortion.
monicadern

That makes sense SC and definitely appreciate your insight. I know you weren't attacking Dread's charts. I just want to point out that his charts do tend to be useful but maybe the underlying symbol is more important. I dunno.
Earl of

Some things matter, and some things don't.

monicadern

Thank you Dread.

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

Didn't look like I missed anything today… again. Glad I'm still in cash now, what little I have left.
Earl of

The Daily view from Americanbulls

TNA remains a WAIT (wait for some kind of buy signal). The sell was at $55.61. TNA closed today at $55.89, up 0.5% since the sale. The candlestick today was the same as yesterday: a White Spinning Top Candlestick (complete indecision between Bulls and Bears).

TZA remains a HOLD. The buy price was $7.04. TZA closed today at $6.99, down 0.72% since the buy. The candlestick today was a Black Spinning Top Candlestick (complete indecision between Bulls and Bears).

Two recent TZA Buy signals have failed and may perhaps serve as a warning:
Buy at $7.33, sell at $7.14
Buy at $7.11, sell at $7.05
Buy at $7.04, now down 0.72%

For that matter, recent TNA Buy signals have also been uninspiring:
Buy at $55.36, sell at $55.43
Buy at $55.69, sell at $55.63

Summary of $RUT based ETFs & a few popular ETFs (Market positive):
Confirmed BUY: UWM(2x), DIA, QQQQ
Not very reliable BUY-IF (2nd day): URE(2x), IYR(1x)
Wait: DRV (-3x), SRS(-2x)
Highly reliable BUY-IF (2nd day): SPY
Hold: IWM(1x), DRN(3x)

Market Negative (no change from yesterday):
Wait: TNA (3x)
Hold: RWM (-1x), TWM (-2x), TZA (-3x)

Comment: more market positive than yesterday
Action for tomorrow: none
Earl of

Dreadwin,

I agree. Looks fuzzy for tomorrow. The last two days, I played the morning gap fill. I guess I will be looking to do that again tomorrow.
http://dreadwinaard.livejournal.com/profile dreadwin

My thoughts on TZA:

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

If the pattern holds, there will be a retest of the recent lows before a reversal in TZA.
http://dreadwinaard.livejournal.com/profile dreadwin

I posted a chart, with notes on what I expect to see. If this is a bottom, you'll have another chance to buy TZA under 6.80 by the end of the day on Thursday.
http://www.reddragonleo.com Red Dragon Leo

Didn't look like I missed anything today… again. Glad I'm still in cash now, what little I have left.
Earl of

Dreadwin,

Nice Chart.

50% Fails. 3 of the last 4 failed.

Makes me a bit nervous trying to get on the right side of it.
SC

My opinion is that chart pattern analysis on leveraged instruments does not yield useful information.
Earl of

Original comment: Bullshit

Revised comment: Thanks for sharing.
monicadern

Thank you Dread.
monicadern

SC, you may be right and I have heard that before but again it's an instrument, just like a stock (to me a stock isn't really a company), so it's all about human psychology and how it plays into that instrument. From studying Dread's charts, I do think he has an edge. But my technical skills are lacking so who knows.
SC

Those instruments are slaved to the underlying index. Thus, analyzing the underlying index would yield better insight. Supply and demand pressure on these instruments can only result in transient distortion.

I think the daily rebalancing and the leverage create distortion in price pattern from one day to another. I don't know if such distortion can result in wrong conclusion or not. But the risk is there. In contrast, the underlying index without the artificial distortion would yield a clearer picture.

My comments have nothing to do with Dread's or anyone's charts or capability. I wasn't thinking in terms of those factors.
SC

Just trying to be helpful.

One of my mentors used to say, “If you don't agree, then do as you please and live with the consequences.” lol
monicadern

That makes sense SC and definitely appreciate your insight. I know you weren't attacking Dread's charts. I just want to point out that his charts do tend to be useful but maybe the underlying symbol is more important. I dunno.
Earl of

Some things matter, and some things don't.
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