Saturday, July 13, 2024

Another Bearish Monday…

Is it time for the bears to start dancing again?

Not so fast... we need more evidence before celebrating I believe.  While today's move up and back down covered about 30 points on the swing (spx), it still had low volume on the spy.  That tells me that this was just a controlled sell off, not some type of panic, or the big boys unloading.

So, we need to see a follow through tomorrow... and with some real volume behind it.  Or, we may just be walking our way down to the 1080-1090 area, to put in a "B" wave down, with a "C" wave up after it.  Don't get me wrong, I'm not turning bullish... but the charts tell me that this is likely only a pullback, before moving higher.

The weekly chart is still moving up, from oversold territory.  The daily chart is very overbought now, so a pullback is overdue.  But we need to see the week roll back down before I'll believe a move down below the 1040 level is coming.  Look at the ADX lines on the daily chart.  You can see that it is moving lower, indicating that there isn't any "strength" behind the sell off (or the rally).

So, daytraders should do well in this large range bound trading, but I believe a big move down isn't here yet.  When the ADX line retests the previous low around 20, and starts to curl back up... that's when a big move is coming.  Depending on which DI line is in control at that time, will tell the next move in the market.  That should happen by this Friday at the latest.

This week I'd like to see a close outside the rising channel... ideally below 1080 spx.  So while I think this week will still close down, I don't think we will see a big sell off tomorrow.  The trendlines drawn in on this chart shows the 1080 area as the break point that would put market outside the channel.  If we see that broken, I think she'll fall hard...

So for tomorrow, it could go either way?  I'm not seeing any clear cut direction in charts.  The 15 and 60 minute charts are in oversold territory and could go deeper, or rise back up and push the market up with it.  The daily is very overbought and again... should pull back.  But the weekly is pushing up now, and could contain any big move down.

The market really needs an "event" to cause the big sell off to start.  Could be anything... maybe good ol' Ben Bernanke will raise rates this Wednesday and collapse the market?  I doubt it, but anything is possible.  Expect the unexpected, I say.

Red

Red
Author: Red

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steveo77
14 years ago

This is more based on pattern and emotion than pure EW, however,

http://oahutrading.blogspot.com/

ES Perspective, looks like a no-brainer to me.

anoopsan
14 years ago

US Markets view before opening bell
http://niftychartsandpatterns.blogspot.com/2010

Red Dragon Leo
14 years ago
Reply to  Anna

So what's your thoughts about today Anna?

Anna
14 years ago
Reply to  Red Dragon Leo

Most likely a slightly down day, I am looking more towards end of week for some real selling. So far they have not given a sign of things to come

Red Dragon Leo
14 years ago
Reply to  Anna

Yes, I agree…

I'd like to see that channel broken by the end of the week (below 1080), before I'll believe we are going down hard.

Red Dragon Leo
14 years ago

Looks like we are going up to the 112.27, and 112.34 spy prints from afterhours yesterday.

anoopsan
14 years ago

Bearish engulfing in apple Inc
http://niftychartsandpatterns.blogspot.com/2010

Red Dragon Leo
14 years ago
Reply to  anoopsan

Apple is so over-hyped. I'd love to see a big sell off in it.

anoopsan
14 years ago
Reply to  Red Dragon Leo

If the 50DMA is taken out this time you can see a big sell off.

monicadern
monicadern
14 years ago

Good morning gang. Hope you are all well.

Red Dragon Leo
14 years ago
Reply to  monicadern

Good Morning Monica. How are you today?

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

I'm OK – based on Serge's chart, the 111 is critical to break through for a ST bear case.

http://www.etf-corner.com/markets/2010/06/spy-s

Rip Van Trader
Rip Van Trader
14 years ago

My trading strategy is based on an aggressive retracement of NYMO and also based on call-put ratios marking a top yesterday.

I'm projecting a big red candle today (some would say out my @$$) down to 1090-1095, and a reversal tomorrow at 1075-1085.

Red Dragon Leo
14 years ago
Reply to  Rip Van Trader

I agree with you Rip on going down to about 1080, although I'm not sure if today will end up or down? So far it looks like it's going to be down, but even if it rallies back later today, this week still should be a down week.

Rip Van Trader
Rip Van Trader
14 years ago
Reply to  Red Dragon Leo

We could have a green day today, but I would see it as a delay of the inevitable. I'm picking the 23rd and 26th as turn dates based on solar and lunar cycles.

The pattern I'm following is essentially Nov/Dec 2007. I think what will be unique about this time is that the market will not put up much of a fight when the MAs converge over the next few days. The will close overhead like water over a rock dropped in a pond. Ker-plunk.

That's how I'm visualizing it. Could be wrong, of course. If I were right all the time I would not have had a big pile of TZA calls for dinner last Friday.

jimhobson
jimhobson
14 years ago

Home Sales Unexpectedly Dip 2.2 Pct Despite Tax Credits-

Who are the idiots that did not expect this???

Red Dragon Leo
14 years ago
Reply to  jimhobson

That's a NO-Brainer for us Jim, but you'd be surprise how many idiots there are out there… and most are paid to be on TV!

Dumbocracy
Dumbocracy
14 years ago
Reply to  jimhobson

Morning all…no doubt Jim. When suddenly there's no longer 8000 carrots dangling in front of the would be buyer, he /she loses interest…

monicadern
monicadern
14 years ago
Reply to  Dumbocracy

sorry I didn't respond to you last night. Your point is well taken.

Dumbocracy
Dumbocracy
14 years ago
Reply to  monicadern

No worries….you gotta unplug after a long day at the monitor..hehe…
My life is nuts and I do not usually get large chunks of time to follow the markets and be on forums.
So I have been getting my fill this past week while on vacation

monicadern
monicadern
14 years ago
Reply to  Dumbocracy

This is not a good vacation!

Dumbocracy
Dumbocracy
14 years ago
Reply to  monicadern

When you travel for a living, stationary is GREAT!

anoopsan
14 years ago
monicadern
monicadern
14 years ago

Can't seem to crack the 111 level.

Dumbocracy
Dumbocracy
14 years ago

Red,
I am still mulling over your concept on the fake prints and have never noticed dates before until you pointed them out. Very telling. I had always assumed massive spikes like that, esp in currency trading which I trade, that these spikes were institutional buys or sells. In other words, very high volume.
In FX there's no date per se on one's charts so I am wondering if in FX these spikes indicate a potential direction they plan to take the market or if it is just too vast of a market to be affected the way US stocks are? Seems that FX is just too global and too many factors. Any thoughts?

Red Dragon Leo
14 years ago
Reply to  Dumbocracy

I haven't followed the FX for any prints, so I couldn't tell you anything about it. But I agree with you, that market seems too large to be controlled.

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

There's no way to just control one market without controlling the whole thing (if it is controlled).

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

I disagree.

Red Dragon Leo
14 years ago
Reply to  monicadern

Maybe? I don't know how much control they have? Controlling the currencies market worldwide seems like it would take a whole lot more people to all agree together. I just don't know if it's under their control too?

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

we will never know the answer!

monicadern
monicadern
14 years ago
Reply to  Dumbocracy

Not sure if FX counts but if it does, then it is the potential direction. And, the world is global so I wouldn't be surprised if they do count.

monicadern
monicadern
14 years ago

someone/thing is defending this 111 level with everything they got.

Red Dragon Leo
14 years ago
Reply to  monicadern

The double bottom is at 110.80 spy, so even if 111.00 breaks, it will probably bounce back up at the double bottom. Remember, we still have light volume today… meaning every move is easily manipulated and very well controlled.

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

yep.

Dumbocracy
Dumbocracy
14 years ago

Ok, slightly off topic and I promise I will stay on trading but this is just so weird and, well, blatant.
I just checked one of my fav news sources and it seems Bilderberg Group feels comfy enough now to actually broadcast themselves by having a website. It's bare bones, maybe a hoax but dunno…weird. Take a look
http://www.bilderbergmeetings.org/index.html

Red Dragon Leo
14 years ago
Reply to  Dumbocracy

That's actually “Not-Off-Topic”, as they decide where to take the market, and the economy. So having more information about what went on in their meetings is always helpful.

monicadern
monicadern
14 years ago
Reply to  Dumbocracy

interesting.

Dumbocracy
Dumbocracy
14 years ago

I know the trading day is young but this market really seems to want to get up to your fake print of 11816. I mean, the financial reality (not the news) is total crap in every way economically possible.
But up we go…

Red Dragon Leo
14 years ago
Reply to  Dumbocracy

I do think we will go up to that print first, before the market really collapsed for good.

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

I don't.

Red Dragon Leo
14 years ago
Reply to  monicadern

I hope not… for your sake. But I just feel that once the market finally heads south, is not coming back up and making a new high.

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Well, that low will be higher than the low in 2008 so it makes sense to me that we would then go put in a high that is higher than our high this year. After that though, who knows.

Red Dragon Leo
14 years ago
Reply to  monicadern

That is possible Monica, but MA patterns don't usually play out like that.

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

i guess time will tell.

IlliniKap
IlliniKap
14 years ago

This price action sucks. Just trying to squeeze both bears and bulls.

Dumbocracy
Dumbocracy
14 years ago
Reply to  IlliniKap

Indecision days are so frustrating. I sat through a bunch of static and chop last night trading London FX only to get price movement as I went to bed.

Missed out….patience is a virtue but hard to come by…at least for me

Dumbocracy
Dumbocracy
14 years ago

and so we dip negative…

Red Dragon Leo
14 years ago
Dumbocracy
Dumbocracy
14 years ago
Reply to  Red Dragon Leo

Red,

Interesting clip…for reams of data backing up what this man is saying, get the book The Dumbing Down of America by Charlotte Iserbyt. She was a prominent figure in our Dept of Ed years ago and spent 18 years abroad studying communist school systems. She came home only to find our schools more involved in propagandizing than the Euro bloc countries.

Whilst they were disentangling from Communism, over here it has been ramping up. It's hard to reach people nowadays about limited govt and Constitutionalism because they have no backdrop or point of reference from which to understand it. As long as they receive public largesse from the coffers of the latest administration they will label anyone who adheres to Constitutional, limited government as wacko.

Rip Van Trader
Rip Van Trader
14 years ago
Reply to  Red Dragon Leo

Check out 'Century of the Self', a BBC series about propaganda on Google video. It is itself propaganda, but so is the Griffin production.

Politics in our world are very, very, deep.

anoopsan
14 years ago

EUR/USD trading under the cloud from 1.47
http://niftychartsandpatterns.blogspot.com/2010

Dumbocracy
Dumbocracy
14 years ago
Reply to  anoopsan

cool chart…I trade g/j and cable but use trend lines and pivot pts…not familiar with ichimoku….

anoopsan
14 years ago
Reply to  Dumbocracy

Ichimoku is very effective when used in larger time frame. Look at the chart of euro the cloud is still holding it from reversing.

Dumbocracy
Dumbocracy
14 years ago

anyone ever seen one of these fake prints in currency trading charts? anoop, have you?

IlliniKap
IlliniKap
14 years ago

Market keeps getting crazy pumped everytime we get near 1105 on the ES. Absolutely ridiculous. Must be where the buy programs are set to make sure we don't head under.

Dumbocracy
Dumbocracy
14 years ago
Reply to  IlliniKap

Hey Kap…you mind me asking about your call sign and what it means? I'm from Illinois and a huge Illini fan!

IlliniKap
IlliniKap
14 years ago
Reply to  Dumbocracy

yup, Illini grad myself. Huge fan as well, but worried about the football season coming up. It's a trainwreck!

Dumbocracy
Dumbocracy
14 years ago
Reply to  IlliniKap

Yep…that's why I'm holding out for Bball! Lol

IlliniKap
IlliniKap
14 years ago
Reply to  Dumbocracy

Def!

bensjoyce
bensjoyce
14 years ago
Reply to  IlliniKap

1105 level is where Mole of evil speculator (blog list) has the line drawn as a pivot. below this and we go lower. that post was for subscribers or wait till tomorrow to see it.

monicadern
monicadern
14 years ago

finally!

IlliniKap
IlliniKap
14 years ago

Its good to see all green on my account for once, but I believe we probably won't sell-off much more. Manipulators will come in right before the close to ensure we close above the 200 SMA on SPX and we blast off from there. There is just not enough sell-side pressure and we've had plenty of news to fuel the bears, but nothing.

monicadern
monicadern
14 years ago
Reply to  IlliniKap

Don't be so sure. We go up, we go down. I think this is the time to go down. Nevertheless my account still shows red for the day despite the down move. I can 't win!

Geccko23
Geccko23
14 years ago

Dow needs to close below 10400 to end its daily TD upcount before it gets to 9 but every other index has already ended its TD count so it should happen. Dow is really masking overall weakness. Breadth is nearly 2 to 1 negative. They are having a hard time holding the market until the Fed release.

I am the eggman
I am the eggman
14 years ago
Reply to  Geccko23

I wrote a progam to test TD points a few years ago. They do not test well. Just FYI.

Geccko23
Geccko23
14 years ago

No they don't really work well timing the market(at least the daily) but they are an interesting way at gaging the market. I am following the SP weekly closely though. After hanging out with DeMark and his associate recently I picked up on some of the nuances and qualifiers they use for buy and sell signals.
Getting to an up 9 count would invalidate the current downcount (buy setup or whatever the terminology is)

Geccko23
Geccko23
14 years ago
Reply to  Geccko23

It's a 2 day Fed Meeting so feel free to plunge now.

I am the eggman
I am the eggman
14 years ago
Reply to  Geccko23

LOL!!!!!!!

I am the eggman
I am the eggman
14 years ago
Reply to  Geccko23

You are lucky for that kind of opportunity!

RecnadnuS
RecnadnuS
14 years ago

I have tested them as well. You are correct but he did not publish all of his work. Much of it is subjective and hard to program.

I discovered an interesting anomaly in the NAMO and McC Osc on stockcharts.com. It will be interesting to see how it plays out. ALos, it appears that there is a divergence between the $CPCE and $CPC.

IlliniKap
IlliniKap
14 years ago

We're oversold, hitting channel support as well MA support. Likelihood for a short-term move lower is highly unprobable. Today was Bears turn to follow through on yesterday and they have failed utterly as they have the last 2-3 weeks.

anoopsan
14 years ago

SP 500 Trading near important support zone
http://niftychartsandpatterns.blogspot.com/2010

monicadern
monicadern
14 years ago
Reply to  anoopsan

Thank you san – I think we will probably have a short term bounce off that level only to head lower – I hope anyway.

anoopsan
14 years ago
Reply to  monicadern

A short term bounce is quite possible if it the support area holds.

Rip Van Trader
Rip Van Trader
14 years ago
Reply to  anoopsan

You rock, San!

anoopsan
14 years ago
Reply to  Rip Van Trader

R u still holding the july puts that u bought

Rip Van Trader
Rip Van Trader
14 years ago
Reply to  anoopsan

I had some June puts that I took a loss on, but I have shares of TZA so am making money.

anoopsan
14 years ago
Reply to  Rip Van Trader

Great

monicadern
monicadern
14 years ago

Believe a bounce is coming now. Still hanging onto my shorts.

I am the eggman
I am the eggman
14 years ago
Reply to  monicadern

We just went negative on my screen.

IlliniKap
IlliniKap
14 years ago

A close below 1100 (10 SMA) would be huge.

monicadern
monicadern
14 years ago

OR NOT! That's fine too 🙂

monicadern
monicadern
14 years ago

This is where we got in overnight futures. I expect a bounce.

monicadern
monicadern
14 years ago

i think 1090 next.

anoopsan
14 years ago

The effect of bearish engulfing on S&P 500
http://niftychartsandpatterns.blogspot.com/2010

IlliniKap
IlliniKap
14 years ago

Like I said, 1100 is key and we are now bouncing of the daily 10 SMA on the ES and SPX. I plan on closing out my shorts and buying some SSO calls at the end of the day if we don't look like we will close under the 10 SMA

monicadern
monicadern
14 years ago
Reply to  IlliniKap

I believe we are headed straight down into the murky depths 🙂

jimhobson
jimhobson
14 years ago

Change of trend looks like its forming. I think i see some more selling through Friday.

Bounce at 1080 +- possibly slightly lower. then back up to finish rs is my bet.

IlliniKap
IlliniKap
14 years ago

The end of day ramp job is starting. Watch for the typical stick save to close above the 10 SMA around 1100 and even possibly pushing it up above San's level of 1104.

Red Dragon Leo
14 years ago

I had to leave for a few hours, and I come back to see that someone kicked the bulls in the groin… LOL. It's about time!

monicadern
monicadern
14 years ago
Reply to  Red Dragon Leo

Yes, it feels good to be on the right side for a change.

Red Dragon Leo
14 years ago
Reply to  monicadern

Looks like we are headed to the 1080 lower channel line. Tomorrow might be a “pause” day though, as today sold off pretty hard. Isn't the FOMC meeting tomorrow? I think it's at 2:15pm. So maybe it will continue down into the meeting and reverse on it… or rally before it, and sell off on it? It's usually a turning point in the market.

anoopsan
14 years ago

The False breakout of Dow Jones
http://niftychartsandpatterns.blogspot.com/2010

jimhobson
jimhobson
14 years ago

You will notice in the last hour the vix moved above 6%. that was a good sign for shorts. If the vix goes above 65 tomorrow something is brewing.

Red Dragon Leo
14 years ago
Reply to  jimhobson

What do you mean Jim? 65? you meant 6.5… right?

jimhobson
jimhobson
14 years ago
Reply to  Red Dragon Leo

I meant 6%.

i cannot type worth beans

anoopsan
14 years ago

dow jones end of day analysis
http://niftychartsandpatterns.blogspot.com/2010

Dumbocracy
Dumbocracy
14 years ago

While I have no great love for BP particularly or any global corporation, it was nice to see a judge rule with some common sense against the moratorium. Oil companies will always profit but no gulf drilling would have been a shove off the cliff for our economy instead of the slow deliberate suicide march up the mountain before finally deciding to jump off the ledge.

http://www.cnbc.com/id/37857843

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