Bernanke Speaks And The Markets Sell Off…

By Red, on July 21st, 2010

Oh NO! What Did I Say Wrong?

You gotta love it! Just as soon as Ben Bernankes’ FOMC minutes are released, the market tanks. Of course from a technical point of view, it was ready to sell off anyway… but someone has to be blamed, right? LOL. Well, tomorrow should also be a down day too, as the 60 minute chart has now rolled over and is ready to cross the zero level.

The daily chart put in a lower histogram tower, and the MACD lines are getting closer to crossing back down again. The weekly is now sitting with a topping tail on its’ candle, but of course the week hasn’t ended yet… so that could all change.

The 15 minute chart is oversold and pointing slightly back up, but the 5 minute is over bought… meaning that any move back up will be short lived, as both charts re-align themselves to point back down at the same time. With the 60 minute chart putting downward pressure, I can’t really see the 15 minute chart pushing the market back up very far.

The sideways action for the last couple of hours put in a bear flag on the 5 and 15 minute charts. While it’s possible that we go up a little, allowing the 15 to work off its’ oversold condition, we could just as easily continue to fall lower while it does it.

Overall, we are still in the falling channel, and until we get outside it… I’m bearish. I was short term bullish last week, but today turned me to short term bearish. I’m not sure how far we will sell off too, but we should see some more downside for at least tomorrow morning.

Red

Wow! What A Rally!

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

Cobra spotted a fake print today.

http://lh6.ggpht.com/_APmrYvpA45s/TEdgrKqevFI/A…

Looks like around 108.25 on SPY. Could just be a late-reported trade, however.

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

I think it's just a late print Dreadwin, as we traded in that range most of the day.

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

We'll find out tomorrow for sure

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

That Anthony Allen is calling for a 50 point SPX rally! I don't know what he's smoking, but he's got too be high on something. What kind of news event could cause that?

http://stockcharts.com/def/servlet/Favorites.CS…

We might go back up some, but the daily chart looks ready to roll over soon, and the 60 is pointing down too. Anything is possible, but not likely…

jimhobson

All our shorts are gonna get pounded today.
A few earnings that are due to major cost cutting and the futures go nuts.
http://dreadwinaard.livejournal.com/profile dreadwin

I gave Tony the nickname “Mr. Bear Porn” because his charts and bias were so bearish for so long.

The reason we're going to break through the trendline this time has to do with Europe's “stress testing” of their banks. What happened when we did that to ours? Markets went up. Why? Gov't was putting their “stamp” on the capital ratios, etc. Don't trade reality (except when you should). Trade sentiment (except when you shouldn't).
http://www.reddragonleo.com Red Dragon Leo

Ok… now my head is spinning. Are you bullish for the rest of the day and tomorrow (short term), or are you bearish. Same question for the next few weeks.
http://dreadwinaard.livejournal.com/profile dreadwin

Sorry I was short via FAZ when Tim Geithner released the “stress test” results for US banks last year. I got my ass handed to me. So, the lesson learned is that you want to be long “stupid” (ideally, a European financial sector fund, i.e. fundamentally unsound, i.e. “stupid”) when bank stress-test results are released.

CAC and FTSE ramped up in anticipation of the banks being given a clean bill of health. (extend and pretend). However — one thing that happened as a result of our stress test is that some big banks sold assets to raise capital. Some allocated more capital against future loan losses. Some recapitalized by selling more shares. So, as part of the process of “passing” the stress test, the banks agreed to do fundamentally sound things that they should have been doing all along.

The assumption is that the European banks are undergoing the same process. When the banks “pass”, their stocks are going to go up up up in Europe. What they'll do (just like our banks did last summer) is offer more shares at these new higher prices. The stocks will (counter-intuitively) go even higher because this is good news (i.e. they're acting responsibly) even though mathematically it is a share dilution. There will be a shortable pop, but I'm not gonna go there.

Short term: stupid bullish. We have broken above the trend line, and I'm pretty sure we're gonna close above it. Short-covering-palooza will follow.

If this crosses over the trend has changed:

http://stockcharts.com/def/servlet/Favorites.CS…

I got long DRN yesterday. That's our own version of “stupid” (3x commercial real estate). We're trading in Bizarro world.

http://www.hotoptionbabe.com Anna

Hey dread looks right on babe thanks for sharing I added longs yesterday before the close

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

I got long a little bit early yesterday, but I'm solidly in the green now.
http://www.hotoptionbabe.com Anna

watching for 1088 spx to see if this holds
Tna

sure you did
http://www.hotoptionbabe.com Anna

Trolls everywhere LOL cowards!

http://myequitytrades.blogspot.com/ Jason_70

I have always believed that News follows price and NOT the other way around.

So basically, SPX did what it had to do. Media just used Ben's statement as an excuse to cover what was already planned for.

We have been short between 1070 and 1098 and will hold for 950.

http://myequitytrades.blogspot.com/2010/07/shor…
jimhobson

Ell our shorts are gonna get pounded today.
A few earnings that are due to major cost cutting and the futures go nuts.

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

Looks like that FP was real that Cobra posted yesterday.

jimhobson

Jobless claims jumped sharply and market flies because they are unemployed.

earnings are due to layoffs.

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

It's one crazy market Jim…

jimhobson

Has VIX ben developing a serious bull flag??

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

On what time frame?

jimhobson

Top of pole is may 25th

jimhobson

I hope some profit taking shows up pretty soon.

Its pretty bloody. Even my stops hurt.

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

It's not looking for the bears Jim… that's for sure. I guess we will go to that 109.79 FP after all.

http://niftychartsandpatterns.blogspot.com anoopsan

Dow Jones futures chart
http://niftychartsandpatterns.blogspot.com/2010…
http://www.reddragonleo.com Red Dragon Leo

From the looks of this breakout San, it wouldn't surprise me if it closed near the high.
http://www.reddragonleo.com Red Dragon Leo

The daily chart turned back up with today's move, so we could also be heading to 112.41 (the other FP), but not today of course. Tomorrow or next week seems more likely at this point.
Sjack123456

look at the comments over the last week===the markets going up, no the market is going down, no the marketis… charts are not working well, reminds me of mid 09. call it what you want but there is no rational to the moves, vix is bottom at support, when the market shows where it is headed we will get a big move. 1500 points or more in a hurry, who thinks we are going to 11800? I do not. Staying short untill Aug expiration. Good luck trading,

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

Yes Jack,

I agree with you. I've changed my outlook from bearish to bullish almost daily now. The charts are worthless sometimes it seems. This is one of those times.

Everything I seen pointed down today, yet the market rallied hard? Even the news out was bad… talk about manipulation! There is no question in my mind that this was another short squeeze.

Will it continue higher tomorrow? I don't know at this point? We'll just have to look for the FP after the close today, as that's about the only thing accurate at this point.

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

We hit the first fake print of 109.79 spy… now what? Do we keep on rallying to the 112.41 print, and have a 50 point rally like Anthony Allen called for… or save that for another day? (I got to hand it to him on calling that call correctly… I never expected such a powerful rally today).

jimhobson

I do not think anyone expected a rally today red.
news is negative outpacing earnings and tomorrow is a possible avalanche due to Euro bank news???
http://www.hotoptionbabe.com Anna

red seriously do you think we can go 200 points today on the Dow????

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

No Anna… I was just saying what Anthony Allen stated. I think we will fall back down to gap window today, but still close higher. Tomorrow… I have NO clue.

http://www.hotoptionbabe.com Anna

bearish divergence on daily 15 and 30

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

We are outside the channel from the April high now, but it should backtest the trendline before rallying higher next week (or tomorrow… or never. Who knows?)
http://www.hotoptionbabe.com Anna

down past 1088 bearish

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

That would be one of the “gap fills”, and of course the morning gap is down around 1070.
jimhobson

Iam amazed that they have been able to keep this up this long today.

looks like the 5 minute charts are turning up again, while 15 minutes is still strong bull.

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

Yeah, it looks like they will pop it higher into the close today.

jimhobson

The vix is less than65 so this is not supported by big buy volume. anyone have a better handle on this am volume?
jimhobson

This is going to the moon folks.

Cannot even move long without chasing. so will be out of market in a bit.

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

It sure looks like it Jim. The next print up is 112.41 spy… after that, who knows?

http://zstock7.com/ zstock7

Hi Red,
unloaded some more of my longs.
AAPL,CME,RGLD…savage profits.
KGC,IWM, LONGS , medium savage profits.
IBM long, I played earnings with a 125 stop, stupid thing never stopped out, 3% stop. taking a small loss, 1%

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

You made a good call on going long yesterday… I certainly didn't see this coming.

http://zstock7.com/ zstock7

Thanks Red, I'm using summer rally theory. Thursday's are usually up 200.

http://www.hotoptionbabe.com Anna

daily hourly has to reset that's all I will say

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

You mean they have reset to bullish mode now. LOL

http://www.hotoptionbabe.com Anna

sell the rallies buy the dips DOH!

Ggg

Anna flipflops more than John Kerry.

Sir Woody Hackswell

Yes… but she's making money….
Ggg

or she wants to lead you to believe that. wonder how her BP puts etc and etc are doing?
http://www.reddragonleo.com Red Dragon Leo

Don't come on this site bashing Anna… you will get banned in a heartbeat! She makes good calls and bad ones, just like everyone else does. No one is perfect. As for her BP puts, they are long term ones, and I'm sure she'll do just fine with them.
http://www.hotoptionbabe.com Anna

They are trolls all had same IP address, nothing more nothing less

don't even bother I laugh all the way to the bank and now on to tracking their IP

Might be Mike Vadon back again if so I sick my attack dogs on em
newbear

For your information I rode BP down from 48 to 27 thanks to Anna.
http://www.hotoptionbabe.com Anna

oh 3rd handle same IP three guys all together on each other eh?
http://www.hotoptionbabe.com Anna

thanks Woody sure am I picked NFLX before the close yesterday and nice one today they are just trolls!
http://www.hotoptionbabe.com Anna

Trolls are cowards and they hide because they are hahahahha

jimhobson

You can bet this is shaking out a bunch of fence line shorts today. If i had brassier balls I would buy into the shorts on this but the swing has me looking past 1100,

http://zstock7.com/ zstock7

Hi Jim,
I'm short BRCM,FFIV,HCP…
FFIV, earnings might get FFIV to 85.

http://zstock7.com/ zstock7

I was looking at Morrise's charts, yesterday
here's his chart
SPX…
http://screencast.com/t/YTZkYzVmYz
He see's a 50 day, bear signal, but there's another signal embedded in this chart, that he failed to recognize.
It's a bull pennant, with the pennant ending at 1140.

jimhobson

I see a possible bull fag but a pennant???

http://zstock7.com/ zstock7

Thanks Jim,
bull flag, thanks…I wasn't sure what you called the pattern. I just knew it was bull &%#4%, something. I'm going to find something to short now.

jimhobson

Good plays if we get the turn on earnings.

Right now things are flying on air.
jimhobson

Iam not sure that actually qualifies as a bull flag pattern due to the shape of the pole, not having the upward or verticle positive close stick.???

Someone better than I would have to make that call.

Regardless it may be playing out as a bull flag as of today.

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

It's look's like we'll go higher again tomorrow I guess. We should backtest the falling channel trendline (around 1080), that we finally busted out of today… but there's no guarantee on that. We could continue much higher tomorrow?

newbear

remember my email

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

No news my friend…

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

Those Trolls live here…

IP Address: 75.150.250.145
Hostname: 75-150-250-145-Illinois.hfc.comcastbusiness.net
IP Country: United States
IP Country Code: USA
IP Continent: North America
IP Region: Indiana
Guessed City: Syracuse
IP Latitude: 41.4094
IP Longitude: -85.7353
Organization: Comcast Business Communications
ISP Provider: Comcast Business Communications

http://www.hotoptionbabe.com Anna

let's go get em and let's Disqus know !

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

LOL… just look under the bridge, where all the Trolls live.

http://www.hotoptionbabe.com Anna

UGLY LITTLE MEN!!!

http://www.google.com/imgres?imgurl=http://0.tq…

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

LOL, and they have such pretty hair! All Pink, Purple and Orange!
Sir Woody Hackswell

the 80's are coming back; I'm tellin ya!
jimhobson

Looks like 1180
http://www.hotoptionbabe.com Anna

and really FUGLY!!!! that's freaking ugly!

remember Drekitude!

http://www.hotoptionbabe.com Anna

BTW for those who are fond of BP it's rolling over now
http://www.hotoptionbabe.com Anna

Hey gang for those clueless trolls (gove.) BP is red! ROLFhahahah
http://www.reddragonleo.com Red Dragon Leo

LOL… We just got a 108.97 FP! Watch that one hit into the close today Mr. Troll. Thanks for posting it!

newbear

We were already at that level today red, it could just be a late fill. FP usually are out of the daily range.

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

Maybe? But I think it will hit today.

http://zstock7.com/ zstock7

Hi Red,
You might want to check out the summer rally Theory, Video after market close.
Here's the link to that post.
http://zstock7.com/?p=3021
I'm afraid to post links at sites, Where I'm a relative new comer.

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

You're not a new comer here Z… post any link you want.

http://zstock7.com/ zstock7

Nobody ever talks about the Treasury Dept's toolbox.
They have a nuclear option in that toolbox, that averts a double dip recession.
http://www.reddragonleo.com Red Dragon Leo

Hey Mr. Troll… Flagging a comment that Anna made is useless. She's a personal friend and will never be banned! What an idiot you must be… don't you know that the moderators get an email to approve/remove all comments that are flagged?

I'm the site owner (and of course a moderator), and Anna is a moderator too. You guys are clueless sometimes! ROFLMAO
http://zstock7.com/ zstock7

COST rounded top, supposed to be bearish, took off, up 2.5%. SoaB
Sir Woody Hackswell

SPY 109.79…. (109.92 actual top)…. close enough for government work.

Great call, Leo!

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

Thanks Woody…

I knew we would get there eventually… but I didn't expect it to be like it was with the sell off yesterday and gap up rally today. I thought we would hit it after the FOMC meeting and sell off today. So, I was still fooled.

Gere64

C'Mon Red. Take it while its there. Tommorw will another chance to get it wrong!

Trust me, I do it all the time!!!

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

Ok, I'm patting myself on the back now. I called for 109.79 and got it today (better late then never). Tomorrow should be interesting too. Do we rally on up, or fall back into the channel?

Sir Woody Hackswell

Avg length of unemployment chart:
http://research.stlouisfed.org/fred2/data/UEMPM…

But don't worry… this is a jobless recovery… (and growthless… and houseless… and…. )

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

LOL… looks like it blew right past the “recession” grey area, and entered “depression”.

http://www.hotoptionbabe.com Anna

NFLX my short trade of the week

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

Anna,

What are you showing as the low of today on the SPY? Both pre-market and regular hours please.

http://www.hotoptionbabe.com Anna

108.33
http://dreadwinaard.livejournal.com/profile dreadwin

108.25 was the possible fake print I brought to your attention yesterday. We opened at 108.33 today. Could just be coincidence.

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

Nothing is a coincidence…
http://www.hotoptionbabe.com Anna

No hats off to for pointing it out

Sir Woody Hackswell

I just wish I had capital left. I'm always medium-term investing… and never have FRN$ left for fast-movers.

http://www.hotoptionbabe.com Anna

bidu short the long didn't net me a ton but the puts will
http://zstock7.com/ zstock7

MO 21.75 short sell price alert, just went off. Decisions, Decisions. I'll go for it.
Geccko23

Dow and SP broke through the bottom of that ending diagonal that's been going on most of the day. Couldn't get above the highs of July 14,15. Yeah Yeah Yeah. Let's get some more selling into the close. We have a date with another flash crash Monday and can't get one until we get some selling ahead of it.

Geccko23

Astro has July 26 as bad day(Opening day for the grand cardinal climax). It's also 55 trading days from May 6, flash crash day. July 14 was 55 trading days from April 26 high. It was posted over at Jaywiz's that someone else noticed a similarity to the April top fractal. Today's action was a technical reaction for an indicator I can't really discuss. But if the rally continues tomorrow and there is a close above last week's highs then it won't be so pretty for the bears.
Some are calling for a top on July 26 while others have indicated that Arch Crawford is calling for a rally into July 30 which contradicts some other things I have read and muddies things.

Geccko23

NYSE has the highest tick close today going back 6months according to stock charts and closed on the high tick of the day. 2 days ago there was the huge intraday tick reading which doesn't forebode well for the market over the next few weeks or months accoring to Cobra via Bespoke.

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

It will be interesting to see what Cobra posts tonight too…

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

Well, I guess we rally more tomorrow gang… The recession is over now.
Pzy5t0

Red, just sent you an email.
http://www.hotoptionbabe.com Anna

Traders Lounge @ HOB
we took 110/105 put spread!!

wheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeee
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Bernanke Speaks And The Markets Sell Off…

Oh NO! What Did I Say Wrong?

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Bernanke Speaks And The Markets Sell Off…

Oh NO! What Did I Say Wrong?

FEEDS

SEARCH THE BLOG

Feed The Dragon

Google Translator

Popular Posts

Calendar

Blogroll

Pages

Indicator Sites

Helpful Information

Stock Charts

Red Pill Sites

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