Weekend Update…

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Monday update (for Tuesday)...

Nothing really has changed today, so I see no reason to make a new post.  The market is just waiting on the Fed's meeting at 2:30 pm est tomorrow.  After that, we should see some volatility in the market.  Which way is anyone's guess at this point.  I'd be afraid to go short with such light volume, and I'd be more afraid to go long because the market is in a topping process right now.

I certainly don't know how much further we have to go up, but until it shows a clearer picture, staying out of it is much safer.  As you can clearly see, the daily chart is still going up, and so is the weekly.  Until at least the daily starts to roll over, I just can't see any selling sticking.

Even if you miss the first wave down, getting short on the wave 2 retracement top is a better spot to be at anyway.  So, be patience bears... and let the smoke clear after the Fed meeting.  Sometimes the first move is a fake one.  Not always of course, but a quick move down after the meeting could be bought back up by the dip buyers.  It might be best to wait a little awhile before making a move.

Either way, a big move is coming soon... down or up is still unknown.  I still feel that we will go down to that 107.35 FP sometime this week, but I also think we won't start a serious sell off until early September.

Red

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Back to business as usual...

Yes, it seems that some things change and others stay the same.  The market is the one that stays the same, while the overall economy changes from bad to worst.  No matter how bad the unemployment is... it's just ignored.  There's just no worry in the market place, as it's totally disconnected from the real world.  So, the rally will likely continue.

But don't worry bears, your day will come... and soon.  First however, I think we will head on down to the 107.35 spy FP sometime next week.  Will it be after the Fed meeting on Tuesday?  Who knows?  If the market rallies up into the meeting, then I'd say yes...  but if it falls into the meeting, then we would expect a rally out of it.

While I still don't know if we are going up to DIA 118.16 into the Legatus pilgrimage in September, or down to the DOW 8300 print... the meeting will be a turning period.  I have to say that I'm bearish next week, as I'm still looking for 107.35 spy to be hit, but after that... I'll have too re-evaluate.

The weekly chart really should put a few positive histogram bars in, before it rolls over again.  Of course it doesn't have too, but my feelings are that it will... and that's mainly because of the timing of the issue.  The pilgrimage is just a month away now, and that's just enough time to put in a few positive weeks.

Because the market has rolled over on the month chart now, I don't think they will have the money available to take it back up if they go down to the 8300 dow print first.  Once this market finally starts to head down that low, I don't think we will see the April high again for quite some time.

I have many down side prints, and even without them... the stimulus money has run out.  Even if they throw more money at the market, it's not going to have the same effect as it did in March of 2009.  The most we could expect is a wave 2 back up to put in a lower high... not a new bull market.

Plus, look at this from a political point of view.  Hold the market up until September, as that's only one month away from the November elections.  Lot's of campaigning will be all over the news, as both sides run ad's 24/7... which means that a market that is selling off hard won't get as much air time as it normally would.

The ol' "look here at my right hand, while I'm robbing you with my left" distraction.  The public won't pay too much attention as the market sells off.  The media will say it's just an overdue correction.  Spin, spin, spin...  you know the game by now.

So that you all don't fall for the bear trap next week, remember the election is right around the corner.  I think most people have us pulling back to the 1090 area, and then rallying higher.  But, I believe the 1070 area will be hit... mainly because they told us it will.  DUH!

Besides that, the 1090 area is too obvious.  It would only allow the bulls a better spot to go long.  Not many bears would go short at that level, as it's not a major break of the horizontal support line coming in there.  But, if you break that support, then the bears will jump on and the bulls will sell out.

Of course once the 107.35 spy print is hit, I expect it to reverse back up and squeeze the bears out... which should also give it enough fuel to take out the 1130 area and probably the 1150 area too.  Let's also not forget that we are 2 weeks away from August option expiration.

If you go down next week, get a bunch of bears short, then you know they will rally into the follow opx week... making all the "puts" expire worthless.  Same game, different month.  As much as we'd like to believe that the market isn't manipulated, anyone reading this blog long enough knows that I've given you plenty of proof that it "IS" 100% controlled.

While they still follow what the charts say, whenever they are at the end of an up or down move... they can always stretch it out a little bit longer then you might expect.  That's how they stay rich... by tricking you out of your hard earned dollars.

Every move is planned out months and years in advance folks.  That's what the Legatus Pilgrimage's and Bilderberg meetings are about.  It's up to us to figure it out of course, but never forget to expect the unexpected... in this case, a hard rally back up, after a sell off to the 1070 area.

That would trick a lot of bulls and bears I do believe.  I'm still 70-80% bears for next week, as I was for this past Friday too.  But after the FP of 107.35 (or 107.12?) is hit, I'll probably be leaning bullish at that time.  Unless some other clues come up that change my outlook, I'm expecting the 1130 area to be taken out with a run higher to take out the next major resistance at 1150 spx.

How high, I don't know? But it's going to be more about the time factor then the actual price level.  I expect the top to be put in right before or during the pilgrimage (which again is... September 9th-20th).  Then I'll start looking for the move down to DOW 8300 to happen.

Ok, for Monday I see us going up and possibly hitting the 1131 level ahead of the Fed meeting on Tuesday.  But at some point during the week we should see a move down to the 1070 area.  Probably after the meeting, but that's just guessing.  Either way, a move down like that would give the bears a nice dinner to eat.  Just don't drop the fish in your mouth when you look at your reflection in the water, thinking there is a bigger fish just below you.

Good luck everyone.

Red

104 COMMENTS

  1. Hey Red, hope you are having a great weekend and thanks for the market update. I think you made a mistake though? The heading states “back to business as usual”, and I think you meant to say “back to bullishness” as usual? Lol

    Markets aside, I have attached 3 links just for FUN reading because what if this guy is right? The first two deal with an earthquake and Tsunami warning for tomorrow, August 9th 2010 in California, where a 30 foot Tsunami hits? Allegedly the Tsunami warning is to prepare the people for a larger quake on September 3rd, 2010? The last link indicates a September 2010 equity crash. Who knows? But I found interesting due to tomorrows date. Vacation is over and back to work on Monday, thanks and have a great Sunday!

    http://weatherbilltourupdate.blogspot.com/2010/

    http://2ww4.blogspot.com/

    http://ww3prophecy.blogspot.com/

    • I tried to find that cemetery on line with many different search engines but they buried it good, just like the people buried in it… LOL.

      Have a safe 10 days, and try not to take any unknown phone calls. You might just receive that coded phrase to trigger your programing… to do what, I don't know? He He He

      • LOL, ( shut your mouth, not shut up ) is one of the phrases.
        Hey! Where'd this hand gun come from? I guess I can't even type, shut your mouth….just kidding around.
        and thanks Red!

  2. I see a bearish engulfing candle on $RVX, and a similar candle on $VIX. These tend to be very powerful (c.f. the 3rd week of May and the 2nd week of June) so I held on to my long position.

    • The VIX is definitely ready for a breakout, but that doesn't mean it won't backtest it later… allowing for a move down to 107 first, and then a rally higher in the market. That VIX should pop out of that falling wedge sometime next week for sure.

        • No, I don't you are missing anything… at least not on the chart. If it wasn't for the weekly chart still pointing up, I'd say the market is toast. But, it really looks to me like it wants to put in at least a few positive histogram bar in before finally rolling over.

          Matching that up with the VIX is hard too do, as charting doesn't seem to be as accurate as the spx or dow. So, while I'm pretty confident that we will see the FP of 107.35 spy next week, I'm not absolutely sure that the market won't rally back higher from that level, and put in a higher print.

          We'll just have too see what the week chart shows by the close this Friday. If I see a big negative histogram bar, that's deeper then last week, then I'd probably say “yes” the high is in.

  3. Red – enjoyed reading your thinking, I have to say I switched from bullish to bearish this week, looks very weak to me, definite lack of participation (low volume) – don't see how any sustained rally can be mounted in this environment

    • Yeah, it's going to be choppy… that's for sure. But, all they have too do to rally the market is to call their bankster buddies and tell them not to sell. The little guys don't have the power to push the market down without the crooks selling too.

      They just carry too much weight in the market place. If Goldman, JPM, Citi, etc… don't sell, the PPT can hold it up until the Legatus meeting. How high they get back up, after the sell off to the 107.35 FP, is anyone's guess?

  4. Could you elaborate more on what this meeting has to do with the markets and why it's so significant? Great analysis. My market timing went semi-bearish on Friday and it could confirm on Monday. Plan on sleeping in tomorrow as the open should be fairly unimportant. It's the close I'll be watching.

    • zentrader,

      The meeting is where all the gangster go to cash their checks from all the profit they made manipulating the market higher. They sell out of their longs, and get short.

      The funnel the money out of the USA and into secret bank accounts. Once everyone has moved their money, they then release some bad news to the “controlled” media, and everyone panics.

      The market sells off hard, and a month or so later, they come back in and buy it up again at really cheap prices. Every time after one of these meetings, the market trend changes. The last meeting was February the 4th-6th of this year.

      The market bottomed on the 5th, and rallied for the next 3 months after that. That time the trend was to reverse from a low, but this time I expect the market to peak going into the meeting.

      Of course it could sell off from now until then… which would mean another bottom going into the meeting. But, I don't think that is the case this time. The market was trending up back in February, so a sell off could easily be bought back up and rallied higher.

      This time the market is trending down (on the monthly chart), so it won't be that easy to turn this ship around… once it accelerates in it's trending direction.

      So, the only choice is to hold it up until the meeting starting, and then let it sink. Once Dow 8300 is hit, they will buy it up and wave 2 rally will start. But I don't think it will get even close to today's high again.

      So for now, I wait for the meeting to get closer to see where it goes too. However, in the meantime, I do expect a move down to the 1070 area this week.

  5. Our market & media manipulates the nifty current resistance as a consolidation for the next big move, where as results & market eps both r below expectations.
    So red how much time u will give to establish the reality in this “hold as much as u can” market condition?

    • Not sure I understand your question rk318… “how much time”? Do you mean “when is the sell off”? Like I said in the video, I expect it to start just before or during the Legatus meeting next month.

  6. Fed set to downgrade outlook for US

    By James Politi in Washington

    This should help the bulls over the next few days.

  7. Vixes are up slightly positive this am so some are selling into this am open.

    it will be interesting to see how long it lasts.

    • Red,

      the market is not waiting only bears are and we are losing not being long.

      i admit i am afraid to go long but my small short positions are all losers.

    • It will break to the upside into the close most likely Robert. We have traded in this range for too long now, and not fell. This tells me that they will go up and clear the overhead stops before falling back down.

      • The vix has been positive all day today. Its very hard for a pop to occur while they are positive. It can occur while its turning however.

        I think this is a very strange day of market inaction so far. What the last hour brings who knows???

        And as I type it is popping???

    • $VIX had to have tagged or dropped below its BB on the 60 min chart. It looks like the MACD historogram bars are reverseing although its really close at the moment. I don't see how the market can drop before the FOMC meeting but who knows. Tomorrow will be 360 trading days from the March 2009 low and 67 trading days from May 6 flash crash.

  8. 1,129.24. Is that close enough for the 1130 FP? Downhill from here, or TPTB have more tricks and treats for us?

    • Woody, I don't have any FP of 1131 spx… it's just a fib. number and double top area. But I do expect a stop sweep tomorrow, either right before or just after the FED meeting. We could pop to 1140 or more?

      • D'0h! That's the SECOND time I've done that! Gah… I need to pay more attenZZZzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz…..

  9. Vixes are now over 7% Selling is much more accelerated.

    It seems yesterdays low volume allowed a few to get out and trapped others into complacency. Remember the vixes yesterday were positive most of the day.

  10. The 5 minute is turning fast. the bounce is in. vixes are calming.

    Is this a bear trap?? looks like its setting up.

  11. The market is resting right on that rising trendline that has supported this move up from the 1010 low. Until it breaks, I wouldn't expect the sell off to stick.

    Here's the other part that sucks for the bears (assuming it doesn't break between now and 2:30), the 15 and 60 minute chart will be oversold and ready to rise back up within the next 4 hours.

    Meaning, unless the FED's say something really stupid, all of the selling pressure will be over by 2:30, and that would allow a move back up to work off the oversold conditions. This assumes they don't spook the market more.

    But, on a positive note (for the bears of course… he he he, evil me), the daily chart is just about ready to rollover now (and DIE!)… LOL

  12. The 15 and 60 minute charts are oversold and trying to rise back up now, but the 5 minute chart is still rolling down. I expect that by 2:30 pm, all 3 charts will be pointed up. This could allow the FP I got at 112.50 spy, or the 113 one that Anna got… too be filled.

  13. So what happens now. The opposite of Friday after the Fed announcement. The fractals call for it although i haven't looked at charts yet. Need to see the transports chart.

  14. Whoa! Look at the spike on the 5 min chart. 50 period has dropped below 200 and this is the first spike above 200 period. According to Maurice Walker, a great time for a short entry……Transports and $XOI looked good before the spike. $XOI with a new multiday low. Falling euro has more to do with the dropping market so I don't know how a Fed announcement can have a sustainable effect. No QE 2?

    • Stealth QE…. the Fed was supposed to start selling off the QE assets. Instead, they'll be “reinvesting” the payments that the QE assets receive… into US Treasuries. Stealth QE. (and smaller, too)

  15. Boy, i thought we had a good shot at having the top in. Vix seems to want to move red and if it does bears really lose the initiative for the week

    • $vix did a gap fill along with all the stock indices. Even the euro did a gap fill. Momentum to the upside has burnt out. Breadth is still more than 2 to 1 negative. On Friday, breadth finished nearly flat.

  16. Difficult market to trade. I sold my DRN long in AH yesterday at 48.06, bought it back for 45.01 very near the low. Got stopped out at 46. Re-entered at 46.38 before the end of the session, expecting a wave 3 up to happen next and take out resistance.

    The after hours session is telling me that I got the “gap” part right, but not the “up” part.

    There is a possibility, however, that we are painting a rectangle continuation pattern. That would imply one more touch of 1105 /ES, and then we would break to the upside. I hope!

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