No Post For Friday Gang, as I'm a Happy Bear Now, and looking forward for more fun next week. I'll have the weekend post up by late Sunday Night. Go Enjoy The Weekend
And Friday Could Be The Start Of It...
From a technical point of view, a lot of damage was done today for the bulls. That late day sell off broke the rising bearish wedge on the 15 minute chart, as well as forcing the 60 minute chart to rollover and start pointing down. On the daily chart, the necktie did hold the market back and reject it hard.
Then there is the dollar (UUP), that had a huge buy candle appear in the last 10 minutes of the day, forcing a big move up in the dollar. This tell me it was "insiders" that know something is ready to happen. It was between 3:40 pm and 3:50 pm, and had 1.5 million shares bought up. Compared to the entire day, which only had about 4 million shares traded... that candle is HUGE!
Remember last week when Sundancer mentioned that he got an email from a friend at the Chicago Board of Options Exchange, telling him that a big buyer came in and purchased a ton of VIX Calls. Then what happened next? Thursday crashed, and the VIX soared.
That large buy of the dollar, of 1.5 million shares, tells me that the dollar is getting ready to explode higher. That is very unusual volume for the dollar. Something is brewing, and it's not going to be good for the market. Let's think about this from "outside the box" for a moment.
What event could cause a big move up in the dollar? Or maybe I should ask the opposite... what event could cause the Euro to tank, which would cause the dollar to soar higher? Could the rumor that Germany is going abandon the Euro, and go back to their own currency be true?
The article is up on Zero Hedge, and the link was posted yesterday by StockTech (thanks for the link). According to the article, German chancellor Angela Merkel is scheduled to give a speech to the nation on Friday evening, where she could announce a currency change from the Euro back to the Mark.
I don't know what is going to happen of course, but I find it odd that she is waiting until the market is closed, on a Friday evening. Believe me, if the news was something that would be bullish for the market, it would have been released during the market hours.
Everything is planned and timed to be released when it benefits them the most. The German crooks are no different then the American crooks. Remember, about 200 families control 70% of the worlds' wealth, and they are all part of the "good ol' boy club"... meaning that they get together and plan out future events that will benefit them the most.
The leaders of all the countries are just the puppets that are in the public eye. The real people who control each country is the multi-billionaires behind the scenes. These aren't some conspiracy theories that I'm making up... these people really DO control the planet, and especially the market.
You know that too be true, if you have been reading my posts long enough too see all these fake prints play out. Maybe not every one of them, but you have to admit that it's really strange how those intraday prints are hit within a day or two.
Of course, finding out what they plan too do next isn't always that easy, but we are given many clues. Like the big dollar buy today in the last 10 minutes. And, the fact that Gold is going threw the roof. Let's not forget that Oil is still getting hammered. These are all big clues, that tell me that we have another sell off coming before another rally into mid-summer can occur.
So, from what I can see... Friday, and next week is looking like some big selling is still coming. Could Friday be "Black Friday"? I don't know, and I don't want to call it that... as I might jinks it. So, I'll just say that I expect a down day tomorrow... how far down, I won't guess at.
Red
Next several trading days will be very interesting indeed,, btw, Merkel is a she.
Sorry, I just copies it from Zero Hedge…
as usual, love the post Red, thank you! will you be working tomorrow?
Not a chance… I would miss tomorrow for anything. We could see a big sell off into the close. I'll be here.
Hey Red – love your post – on my daily reading list 🙂
Thanks… I try to please. LOL
You do an awesome job 🙂 😉
Awesome post red, yes tomorrow will be very interesting and hopefully profitable for us bears as well.
Let's hope it is good for us bears. I'm really trying to look at all different points of view… both bearish and bullish, but I really can't see any reason to rally tomorrow.
Yet Fujisan posted these comments…
http://disqus.com/Fujisan/
I respect her a lot, as her trading skills a very good… but if I'm reading some of her comments correctly, she seems bullish into next week. I have too disagree.
But, maybe I'm not getting the whole picture by just reading what she's posting, as I don't know what the person asked her… that she was chatting with.
Anyway… enough said.
She seems to be saying that she now thinks a turn will take place at 1149 rather than 1107, will rally to 1180 instead of 1168, and will be at 1150 for OEX. Presumably it would go lower later. Yes, I suppose it could play out this way, a more extended time frame. That 1180 level is still in the operators' hip pocket.
We've got all these data points that can be mixed and matched. I suspect a plunge today after a failed rally to 1170. Those with May options might want to get rid of half at EOD if that happens. Or, we may have a gap open, a rally to1180, and end the day with a black star or hollow red candle and plunge Monday. In that case, I would go for the gusto on the plunge because the rally option would have been played.
I woke up in a sweat this morning that WE are the bagholders and that this will turn into a bull market. Trying to shake that off. One indicator I follow (subscription to wallstreetcourier.com) shows that afternoon (big) money has not participated in this rally.
I'd say big money is waiting for the low from last Thursday to be tested again, before they dive in.
Of course, a rally without a double bottom (happens sometimes), everyone jumps on board late.
I'm favoring a fake double bottom followed by another plunge, after a good-sized rally. Who knows? Best to stay flexible.
Great post Red. With any luck, this leg is wave 3 and will bring the SPX below 1000.
I think it's a wave 5, but either way… it should take out the current low.
Depends what degree..on the daily I think we are just finishing 2, and about to enter 3!
I see your deserting me for this dragon! LOL
OMG you found me, ok, I admit it, a two-timing, good for nothing son-of-a…
…OK, perhaps I should just send flowers? =)
Just send you in a box! Fedex 😉
I have a few British friends that are ecstatic that Britain never adopted the euro. Not that it is saving Britain at the moment.
The world is shaking. It may get difficult but it will be far from boring.
Yes Jim,
We should have some wild swings next week. OPX week is usually Bullish, but I think the bulls might be shocked on Monday, if Germany drops the Euro.
Bears need to be cautious. Opex week can be difficult for bears.
I would like to find out is this going to be wave 5 or did we just finish 2 and the next move is 3 (a big steep down move) How long will this take, how many days? various EW people attempt to figure this. Let us know when you find out. Many on the blog list on this site attempt to figure this.
I'm not really that good with EW counts, but this count looks pretty likely too me…
http://stockcharts.com/def/servlet/Favorites.CS…
You mean like a casket? I like this one 😛
http://image62.webshots.com/162/2/75/88/4412275…
Monthly BB has something to tell us. the upper Monthly BB has NOT been hit. If we close below the Middle BB , then the odd are that we hit the lower BB before we hit the top. Briefly, we will go down and touch the lower BB at 738 over time.
Red, I agree with you that the market is headed down, but I think the German currency story isn't real:
“Zero Hedge has added fuel to the fire by posting this from guest contributor The Prudent Investor on Wednesday:
'A web page of precious metals prices provider Kitco.com has sparked rumors that Germany will leave the Eurozone and reintroduce German Marks, sending gold to a new record of $1,244 and silver to a multi-year high of $19.64. It is this half-ready page shown below that has created excitement as it lists precious metals in Deutschmark units.'
People, we hate to break it to you. But we have it confirmed.
This is an old ghost page of Kitco’s from before the launch of the euro. Still live on the web, but no longer updated.
There is nothing to see here. You can go about your business as normal. If Germany does have a plan B, it’s very unlikely to involve a relaunch of the Deutsche Mark this weekend.”
http://ftalphaville.ft.com/blog/2010/05/13/2306…
Thanks for the update Dollar…
The technical's tell me the market is going down to probably retest the lows from last Thursday and maybe put in a new low?
As too the Germany story… who knows? Lot's of rumors are started, and this could simple be another one. But, “IF” we tank the market again… they have too blame it on someone, it might as well be the Germans. LOL
It may be the French. Just saw report on cnbc, not that they know much.
Looking good the bear this morning… so far? Let's see if 115.00 can hold, or will she breakdown through support and fall to close the gap around 111.00?
Carl’s morning call:
June S&P E-mini Futures: I think that last week's low at 1056 ended the correction from 1216. Today's range estimate is 1139-55.
1144.25-1159.50 range last night (15.25 points)
1139-1155 estimate for today (16 points)
1148 currently, so estimate is -9 to +7 from here (neutral)
I'm surprised that Carl doesn't have the gap fill area (1110-1120) from this Monday, as a possible low. Should this 1150 area break, I could easily see the market fall down and fill that gap.
Rarely does the market go inside a gap area, and not fill it. That 1139 is half way in the middle of the gap. Of course, it could stop there today and fill it on Monday… who knows? Just deal me another card… come on Ace, I need a BlackJack! LOL
Filling gaps doesn't sound like Carl. He speaks of boxes, and target areas mostly.
I guess everyone has different ways to chart the market. I use the technical analysis a lot, and try to piece it together with some EW counts, the news, and of course the fake prints. Which by the way, we still have some fake prints at 111.30 in the afterhours session from Monday. I think that is our target down, as it will also fill that gap.
I know you don't believe in them, and that's cool too. Either way, that 111.00 area is likely to be hit again, as the TA's tell me that. Today or next week… I don't know, we'll just have too wait and see.
Seems like when there's a big plunge, it goes lower second day on an intraday basis. Can't always bet on that, though.
not a whole lot of momentum yet.
It's got to break that 115.00 area, as that's great support from all week now. After that, I'd say a flush down to gap fill is next.
Yep – all of the good traders think it will stop there and maybe they are right. But if they are wrong, that will provide more selling ammo.
Just bought a few calls as cheap insurance. If this sucker takes off to 118 at least they will defray my losses. We can count on a correction at 118, I believe.
Oh, well, what's $800? LOL
Anyway, I'm above my breakeven so now I am on my second bottle of champagne!
Hey… I thought I was the only one allowed too be funny! ROFLMAO… Pour me a glass too!
I guess we shouldn't be pouring anything until we sell for a profit. Why do I always jinx myself?!
Also glad I got out of my gold short at the close yesterday. If Sundancer is right about the 6% up causing mayhem, we are in trouble.
Holding shorts in a down market is just as hard as holding them in an up market. You don't want to be greedy but at the same time, you want to be greedy!
This is so hard.
help me hang on g-d.
Just focus on those fake prints from Mondays' afterhours session. There were 4 of them on the 10 minute chart… all at 111.30! That's our target!
I am. I have a 1/3 of my positions to cover there, 1/3 at 1082 and a 1/3 at 106.
I'm starting to think we will rally to 1050 and tank through EOD.
Rip, I hope you're not long now?
Just a little, LOL. I can recoup at 1150.
looks like you could be right.
SPY @ red containment 60 min
http://www.flickr.com/photos/47091634@N04/46059…
If the dam breaks then, we go back to red containment on 120 min
Why all of a sudden did 115.0 provide no support, because it gapped below containment.
Everything in the market is a moving target!!!!!
Thank g-d you are here. Does red containment on the 120 = 105?
On Monday morning of this week, there was a fake print of 114.21 at 9:10 am. We just hit it and are now bouncing back up from it. The next fake print is at 113.52, with only one print of it showing up right at the close of the day (4:00 pm EST).
But, there are a total of 4 fake prints at 111.30 in the afterhours session. I think that is our downside target, with a bounce at 113.52 up next.
Red ,
iam having trouble setting my stops. typical.
i f spy hits 111 are you selling or are you holding through opex. iam torn over this.
I am getting rid of may puts and half of may vix calls at 1113.20 and keeping my june puts.
I'm going to sell part off my position (1/3 probably), and let the rest ride into OPX. Next week could get real ugly, if some bad news is released over the weekend.
So, I'll take some profits just in case they try to rally it on Bullish Monday, and Bullish OPX week. But, I really don't think the will. I see more selling next week.
so far seems to be holding at containment.
Should Red Containment break on the 60 min. then back to Red Containment on the 120 min
http://www.flickr.com/photos/47091634@N04/46059…
Muchisimas gracias.
Thanks a lot Sundancer.
9:30 CST Print 60 Min
http://www.flickr.com/photos/47091634@N04/46060…
Bulls trying to avoid castration…..
I am up nicely, but people are bullish. I'm not covering anything yet. Maybe some as the double bottom approaches.
Euro crumbling.
guess maybe gold won't hold up after all.
Gold should bounce here.
Still more down coming…
We are now putting in a nice bear flag on the 15 minute chart. We could continue this sideways movement until the MACD works off some of oversold conditions. It may take an hour or two? It's hard to know for sure how, because I don't know how many of these 15 minute bars are needed before another flush down will happen?
http://stockcharts.com/def/servlet/Favorites.CS…
I doubt that it will make it back above the zero line and into positive territory, as I expect it to just inch up close too it, and then fall back down. The 60 minute chart is still putting huge overhead pressure on the market, and won't be oversold until the end of the day.
http://stockcharts.com/def/servlet/Favorites.CS…
So, we could just trade like this for a few hours and sell off hard into the afternoon session. Next stop… 111.30 spy. Here's the daily chart too… if that doesn't spell disaster for next week, I don't know what will.
http://stockcharts.com/def/servlet/Favorites.CS…
It's looking pretty.
Red……are you having fun yet?
Take notice of the cash spx monthly chart and note the 20 month MA
it worked or was touched upon 5 or 6 times (in other words it worked) in 05-07 (support) and acted as resistance once in 08
So my educated guess is that next week opx for June (along with all the European problems- I heard that German unions will go on stirke?) that the $SPX will test the 20 month MA (Bollinger Bands) now at 990.
Just a logical, educated guess.
Sounds good too me Ben… I'm with you on that call. I think a lot of Bulls are going to be surprised next week.
Yeah probabilities are decreasing that gold containment will hold the $SPX in the 1050 region, & the next weekly containment is teal which is in the upper 900's.
1173.57 Local Min Value
-2.12% 1148.69
-4.24% 1123.81
-6.36% 1098.93
-8.48% 1074.05
-10.60% 1049.17
-12.72% 1024.29
-14.84% 999.41
-16.96% 974.53
-19.08% 949.65
-21.20% 924.77
-23.32% 899.89
-25.44% 875.01
Have capital to buy all the way down to the last tier
If the market goes all the way down to the bottom tier, then it will probably take the market 3-4 months to get back up and put in a new high. Could be late August, or September?
That would make for one hellova Primary Wave 3 down coming in the last quarter. Man… that is going to be ugly!
VIX long-term trend is up, so I expect that swings will be huge. Wouldn't be at all surprised if the market is mostly recovered in a couple of weeks.
We are focused on shorting today, but next is going long! Research over the weekend and make buys next week.
Is this numbers represent SPX or Gold? Thanks
$SPX
Another educated guess. Next week, After the $spx hits the low maybe at 990 and then rallies, Gold will skyrocket, nosebleed style.
I don't play gold, as it's too hard to predict. But, if fear sets in… then Yes, I could see a lot more upside. But after this sell off is done, another rally will happen in the market… probably putting in new highs.
seems that this is right. question is, how will we make new highs by jun 25?
Here's the drawing board
S&P earnings reduced by 7% – Previous top is 1220 – so market value is 1135. In order for us to get a bargain we need the market to drop from the previous low of 1050 to 980 area. But I think what is the pipeline is what they are trying to do is 1225, so a discount of 7% is 1140.
Any thoughts ?
We already below 1140 now, so 980 seems more likely now. Plus, I don't see any signs of a bottom yet, as none of the charts are even close too turning back up.
Not much real panic yet. This is very orderly.
These markets are not looking at fundamentals. if they were the march09 run never would have happened.
Most successful trading day ever, and the party's just getting started.
Sundancer, can't thank you enough for your guidance. I only went in partially, hedged and everything else because I'm a born Skeptic, but you nailed it.
Glad I could help!!
The Rituals never change!!
I have to learn more. I Googled on some of the expressions that you use, and come back to…you. I plan to review your old posts and try to ask intelligent questions.
I have a sense of the ritual as far as the emotion-tugging aspects, but to be able to plot the turns is incredible.
Kudos again.
Pete
Yes, we are all indebted to you and Red for that matter for providing this forum. Thank you for sharing your knowledge.
New from Carl:
I think the market is about to retrace most, but not all, of the rally from 1102 to 1174 which resulted from the announcement of the rescue package for Greece. Midpoint support stands at 1113 and 1116 is the midpoint of the second box for this rally. I think we shall see a reaction low Monday or Tuesday. Once the drop from 1174 is over the move to 1300 should resume.
Wow. Carl and I must be having the same breakfast this morning. lol
Damn you Carl. You had better be right, cuz I am seeing the same outlook. lol
SC,
It does make sense, but I wish Carl had been right more often lately, so I could feel more comfortable thinking he's probably right this time.
I came across a model that analyzes days like May 6. That is an outlier day. Historically, it never retestes the low. 2/3 of the time, it retests the previous high w/o a retrace. The remaining 1/3, it retraced the rebounce but did not retest the low, and then reverted back to test the high. So, the odds are strongly favourable to the bulls. But it is probably blasphemy to post this here. LOL
We either stabilize here at 112-113 or bottom at 110 Mon-Tue.
Thanks SC. I have already planned to go long 1/3 position in my 401 plan.
Agreed…
Sundancer I have learned a lot from you, and I also thank you for taking the time to teach us, and share your trading knowledge with us.
And to Rip… here's a cool avatar for you to use:
http://reddragonleo.com/wp-content/uploads/2010…
Hahaha, that would be copyright infringement, maybe. Wouldn't want to face Sundancer in court! 😛
To echo Monica, thank you for this congenial little forum, Red, and your articles. May your blog never become popular. 🙂
Rip,
Pictures are free all over the internet. Unless it clearly states that it's copyrighted, you can pretty much copy any picture you want. I certainly don't create all the pictures for my posts.
I do sometimes edit them, add text on them, and cut and paste several pictures together, but many times I will just use a cool picture “as is” on my nightly posts.
Anyway, just trying to help. If you don't want to use it, that's fine too.
I was kidding about the copyright. 🙂 Thanks!
Red, that avatar is way cool! I opened in a new tab and looked at Sundancer's chart instead. I'll use it, thanks!!
11:45CST 195 Print
http://www.flickr.com/photos/47091634@N04/46069…
Once $SPX loses the White ENV, then purple.
I'd like to see a backtest of red containment on the 60 min sometime this afternoon.
The 1111 Ritual played out like a beautiful dance.
This was the chart I posted last night
http://www.flickr.com/photos/47091634@N04/46049…
For those that don't use 195 min charts, some great setups come from that TF.
I foolishly sold my puts at EOD yest taking a mere 20 buck profit per put vs the 275 profit it could have been today- kicking myself as I was left holding calls and they are killing me … 🙁
So do you think a backtest of the 60 min containment at 114.3 would be a good point to buy some sun ?
*IF* you are trading a plan that has lower prices in it, then the area around red containment (114.3 ish) would be an entry pt.
Hi Sundancer,
So you'd like, and/or expect a move back to 1161+ this afternoon?
Thanks in advance
I think 1161 is on 195 min. For 60 min its around 1144. Thanks
Thanks!
Red containment on the 60 min
http://www.flickr.com/photos/47091634@N04/46060…
Where are all the other containment lines below it? Looks like nothing but air below…
Yeah a lot of Air on the 60 min, but you just move down the chain
120 min
http://www.flickr.com/photos/47091634@N04/46064…
My bad, thanks.
I do see a print at 114.15 @ 11:25 on the 1m.
Diablos, can you tell if red containment moves lower or higher over time? I'm thinking that this 114.15 print you saw on Friday is actually a backtest of Red containment (to come Monday) before a major plunge. On Friday Red containment was at 114.37. Just wondering if it will have shifted by Monday to that lower level?
Stepping out on an errand, see y'all later
This next step down will be a doozy.
Red, I just bought back in most of my May puts (still have the 114s plus the VIX calls) even though I know we are going lower. I just rather not take the risk that they expire worthless. If we bounce back today, I will buy more June puts.
What keeps me in is lack of premium on the options. People just don't believe that it can go any lower.
I usually get out when the fear mounts, but never go the full way. I'm going to try it this time.
Well, I had way more puts then was prudent. I still have a lot. And if I can add more June ones, I will. Just made me nervous holding May ones so close to expiration even though I believe we tank by then.
I hear you. I was a lot shorter at one time (lost track of the days) and took a profit. Nor did I take an opportunity to go shorter today. I'm like 90% sure this bear rally has two more steps in it, but don't want to risk wiping out.
Once we get by this fake double bottom, the stuff will really hit the fan until close. Got to watch out for the PPT, though. 3:45 would probably be a good time to cover. I'm doing part today, how much depends on how big the numbers are.
My husband forced me to cover but I am still have a large position. If we rally to 114.30 (and of course that is an if), I will buy June puts since they are not as time sensitive.
Usually it is the hubby taking risks while the wifey forcing him to cut back. lol
But, remember those words you said about having learned your lessons… 🙂
Thanks SC for the reminder – you sound like my husband! Yes, I am the risk taker in this relationship but imagine I would be in any relationship! Trying to curb my impulses 🙂
Tell your husband, I know how he feels. The women in my life run the shows. First my mother. Now my gf.
Don't marry her then!
lol.
Thats why I took up yoga at a late age. So i could be more in touch w/ feminine side I fell like i was in control.
By the way, the June puts I bought 2 days ago I entered in for June 30th by mistake (instead of the 19th). Does it matter?
You bought the June Quarter end puts, not the regular June puts.
They expire on the last business day of the quarter, instead of the third Friday of the month. Other than that, everything else is the same.
http://www.cboe.com/Products/indexopts/quarterl…
Thanks SC – I am assuming the downside to this is only slightly higher premium?
Correct.
$VIX Daily Containment:
Currently dancing with it's last daily containment pt. in the 33 area
http://www.flickr.com/photos/47091634@N04/46065…
and what if we break through containment?
41.23 *IF* that level fails, then
53.35 *IF* that level fails, then
68.30
wow -thanks.
i must be the only mom in the world trying to nurse and trade at the same time! talk about stress! just cut my finger and didn't even realize it!
… and people think I'm crazy! LOL
Red, sorry to say i definitely win the crazy award! man, i've gotten good at typing with one hand!
That is funny!!
Good luck to you both.
Very cool. I'm watching the VIX ticker.
And you mean what by daily containment? I assume you mean upper end of range moving to break out????
I play the VXX very closely.
Once an issue loses daily containment, a often violent move ensues
Here's a chart of the dollar that just recently lost all daily containment
http://www.flickr.com/photos/47091634@N04/46072…
Thank you for your patience, I gad not heard that term before.
Everyone get an eye out for fake prints now, and after the close. They might throw one out there to tell us their plans for next week. Look at all the charts, with different time frames, and different news sites.
Who knows? We might get lucky and catch one. It would be nice to know what the bottom is for this move down.
Profit taking should kick in any minute.
Friday before OPEX.
Its going to get real interesting
?profit takiing you mean stock go up by short covering
or stock contiune down?
I think there will be a bit of short covering. But i may be wrong today its taking a while to get going.
Sundancer, if we don't back test red containment today, you think there is any chance we back test it on Monday?
I'll have to see where we open Monday
I'll post some daily charts after the close
understand. Still dancing with containment on VIX.
Dollar is forming a bull flag….
The market is forming a bear flag…
It's Friday, and the last hour is upon us…
Tic Toc, Tic Toc…
vix gaining strength again.
vix going through containment.
VIX back below containment – sorry for the play by play.
You're an exciting girl… I like it. You keep me laughing, and entertained.
And I give my husband ulcers!
Maybe you should cut back on the coffee?
Not a chance!
I hope he trades somewhat.
Sold my May stuff about 5-10 min ago. 🙁
You still made a huge profit. Be happy!
Wasn't that much, really. A good day, not as much as I'd hoped. Lots of bullishness, big upticks, bad chart patterns. I didn't want to eat those puts on a big rally.
Still committed to the Southern cause with ETFs and June puts. 🙂
If you are interested in rolling your own, go to traders.com and search under George Reyna. He wrote an article several years ago that will allow you to plot your own version of containment lines. This is a variant Paul Levine's work from many years ago. Unfortunately he passed away before it gained mass acceptance. George sent me the software years ago and I lost it during a PC crash. It was crude and manual. I remember the concept though.
Happy hunting!
Thanks, Gere, I'll bookmark that and study it further at a time when my wife has not had so much of the stock market. 🙂
I sure would have liked to have seen S&P close in the 1127 area. Would have set up Monday nice.
now its a guessing game again especially if they get it over 1135
It's a beautiful bear flag Jim… I can't see anything Bullish right now, that would leave me to believe that Monday will gap up and rally.
Nope – this is good for us bears. Another opportunity to get in!
That took all of 8 minutes
Just shorts covering into the weekend, and bulls going long
Lots of “buy the dippers” going long into Bullish Monday, and Bullish OPX week. Someone is going to be surprised next week…
113 was the launch pad to go into Monday for sure. i was impressed they could pull that off with ease.
It's amazing, how they squirt buys and sells to move around like astronauts with the gas jets.