The Bear Squeeze…

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Thursday Update...

Red

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Wow, what a rally!

I have too admit that I was doubting the bulls there for awhile, and was ready to eat crow on my call of a move to the FP of 111.17 spy... but today's action makes it look like that level could still be hit.  Of course that doesn't mean we are going straight up there... without a pullback, and we may have that pullback this Friday?

We had a FP of 105.39 spy today that I seen on my charts, but it disappeared too quickly to screen capture it.  Fortunatly, Anna caught it and here is the link for it.  Woody and Shaan also seen it, so it's a downside target for sure... the "when" is just something I'm guessing at.

Because the Non-Farm Payroll is out Friday morning, I get the feeling that it will be bad... which will cause the sell off to the FP level.  The other reason is the open interest on the calls and puts for this Friday's opx... which leads me to believe they will pin it between 105 and 106 area.  So the FP of 105.39 is spliting the difference, and may be the ideal spot for the crooks (errr.... market makers) to close it, so they don't have to pay out on all the "puts" that expire this week.

Of course this was just a normal technical bounce and the fact that opx was this Friday had nothing to do with (and the Sun is really a big ball of ice too... LOL).  We all know the truth there... Yes, we needed this rally to squeeze out the shorts, but the timing seems to happen around opx a lot?

Ok, from looking at the charts from today, I see a bull flag on the 60 and 15 minute... meaning that tomorrow could gap up quickly in the morning to squeeze out today's new shorts, but it should turn back down and close flat or lower.  That's a big "could", and not a "will" gap up... as the market is very overbought on the short term right now.

Usually a doji will follow such a large up day, but with the Initial Claims and Continuing Claims out in the morning tomorrow, the market could just reverse and gap down?  There is no way to know if the numbers are going to be good or bad?  One the FP tells us that they are going down at some point soon, and it's usually within 1-2 days on the intraday FP's.  Will this one be different?  I don't know?

But right now the open interest, and the FP tells me that we are likely going to hit 105.39 by this Friday's close.  No guarantees... on speculation on my part.  The charts are saying that we go up to finish the bull flag, but we did pop into the close today... so maybe that fulfilled the pattern?

There isn't any set rule on how high you go from a bull flag, only that it will likely pop higher at some point.  Well, we popped higher into the close... is that it?  The 15 minute charts aren't giving us any clues as they are rising up toward the zero level on the histogram bars, but the Full STO's are almost overbought.

Then the 60 minute chart is about peaked out now, and could turn down at any point.  Since it's the more powerful charts, that leads me to believe that any pop higher tomorrow won't last and the day should end with a doji or down.  The daily chart is pointing up now, so that tells me that we will likely go up next week, but that doesn't mean we won't sell off for a "B" wave down, if we are in an ABC (wave 2) up now... with a final target of the 111.17 spy FP level.

Of course this assumes the daily chart doesn't turn back down if we sell off on Friday... which I don't think it will on only a "one day sell off".  That would leave the 3 day weekend to calm down the bad NFP numbers and a rally back up next week could happen.

I'm basing this on the charts I see now, and things could changes of course, but I think that we need a positive close on the weekly chart before a large sell off.  Having 4 straight weeks down without an UP week is rare, and if we close down this week then that will make week four.

Ok, that's about all I got for now... good luck everyone.

Red

1012 COMMENTS

  1. TLT and the Japanese Yen (at least FXY) are tracking each other almost identically. Yen was crushing the dollar leading up to 1987 crash.

  2. I think a lot of bears and bulls are forgeting, or ignoring the Non-Farm payroll report tomorrow. They are assuming it is good, and won’t affect the market.

    Wouldn’t it surprise everyone if it came out horrible? A lot of new bulls would get crushed right here.

    While I still think we could go up to the FP of 111.17 spy next week, we should still have a “B” wave down in this presumably ABC (wave 2) up…

  3. I think we are going to get toasted tomorrow. the numbers will be better than expected. probably manipulated as usual.

    The housing number today surprised me along w/ mfg yesterday.

    Who is buying??

  4. I’m thinking the opposite Jim. I think everyone now assumes that this rally has factored in the numbers, and tomorrow will be a “non-event” day.

    But, tomorrow opx (on the weekly’s) and they will pin the market where it makes them the most money. Look how many calls are sitting at the 107 level…

    http://bigcharts.marketwatch.com/quickchart/options.asp?symb=spy&sid=9864&time=8&bars=2&bars=3&bars=1

    I don’t think we will close above 107 tomorrow…

  5. Love the upside today. Took off my rally cap now. My bear cap is now on and I’m looking for some ugly numbers tomorrow. The bulls are giddy again and its time for a reality check. It does seem like the market wants to go up no matter what the numbers are. Thats what stops are for.

  6. Can the fast line on the 60min MACD get any higher? MACD is higher here than the last time it was at 1090 leaving a lot of room on the downside. It will be interesting to see if it can really gap higher tomorrow. 20 week average at 1098 will provide cover. One of these days these big upside days will be reversed by an ever larger downside day ala 1987 or 2008.

  7. Here are some cycles for tomorrow. Sept 3 will be 27 days from August 7 which was 666 days from October 10,2008 financial crisis low. July 8,2009 low to Feb 5,2010 was 147 trading days and Feb 5 low to Sept 3 is 147 trading days. SP closed at 1090.10. The Sp closed around this level ie (1092) on 09-10-01 before it plummeted. Todays date is 09-02-10. There is also a connection to May 6 that some of you might know. But I just can’t see how a major low can come in on this date with the technicals as they are or a major meltdown unless its one of those initiation thrust downside days. Its also a fib 377 tds from March 2009 lows as Jaywiz has been mentioning and it will be 92 (11) trading days from the April 26 high.

  8. Wow gang…

    I was wrong that call. I thought we’d go down first and then rally to 111.17 spy. But it looks like we’ve be on a rocket the last 3 days, and 105.39 will have too wait until next week.

    Total manipulation these last 3 days. Those job’s numbers will be revised next week for sure. More bullshit…

  9. Could be? They don’t always hit it exactly. Sometimes they fall short, or overshoot a bit… but the way the market is creeping back up now, they could push up to it before the close today.

  10. After I refreshed the page for the new posts it was gone. It has appeared at the top of the posts, off and on, for the past two days – with an indication that the post was 2 years ago. Has anyone else noticed this?

  11. I forgot 1930 market topped out on September 3. It bottomed late June and rallied into Sept 3. It dropped harder then and then rebounded harder. From Sept 3 it dropped to the 1929 stock crash lows in the fall. July 9 2009 to Feb 5 2010 lows to Sept 3== George Lindsay low-low high cycle? TLT and $fxy (yen) put in big barred hollow reversal candles so far.
    The market could go higher today and get a divergence on 60 min RSI. I typed that to hopefully jinx the market.

  12. old thread, SKF is about to break to the upside. Maybe Monday if not, then surely Tuesday. The bands on my overnight charts are stretched to their limits.

  13. This is the worst week I have had in years.
    That drop yesterday blew through my stops so fast it hit my downside limits. So noww iam am stuck with short portfolio. and it looks like

    the next levels are 1115 at 200 ma and then 1129 hopeful resistance.

    ADX just went green on daily so it will not turn quickly.

    I know a cuss word I will not use.

  14. Hang in there. The ISM report was really weak – from what i read. I thought this thing would roll-over this afternoon but it didn’t.

    The underlying economy is still very weak. We’ll just have to watch this disconnect and decipher the market action.

  15. The currencies, Cable and Euro, have not followed SPX as expected. However my long call on SPX

    (/ES futures) was spot on. Not sure if it has more to run.

    My call on today’s Jobs Report as being “not as bad as expected” and a 1.5% rally today, was pretty good.

    It’s time for a weekend. From my point of view, it is quite obvious that people are just getting more and more whacked out, completely losing their senses.

    It is very interesting to observe this mass social psychosis, as an observer with “skin in the game”.

    Astro was implying a SPX run to 1105, and a blog reader emailed in this chart of the Russell.

    http://oahutrading.blogspot.com/2010/09/bearish-hardly-cable-and-euro-have-legs.html

    The overthrow looks perfect, the Astro is completed, but currencies seems to still have legs.

    Tim Knight closed the last of his short positions yesterday….the perfect wave 2, tiring out bears by time and price, with a final push up to make even the most strident bear capitulate. PS holding QID from 17.8, but now that my ES futures long “hedge” is gone, The QID could stress me out if market continues higher next week.
    This is odd.

    But here is the scary part for bears…EWI released a new monthly Financial forecast. Of course they are predicting imminent doom, and we all know how the MM’s HBB games EWI, ramping against their calls to take money from the bears.

    Think of it, how many retail, buy and hold type, long only type, are still playing this market after being whipsawed around for a whole year. Almost none. The only source of fresh money for HBB is to game the bears, who are committed as “smart observers” who realize the horrific fundamentals that this country and the whole world face.

  16. This is aggravating since I know one guy”s service is going to go raving lunatic bullish over the weekend although his weekly trends are down. He has been calling for oil and euro to rally and bonds to sell off. One of the few good things about today was oil was down today and at one point down $2 off its high although that didn’t stop Chevron from closing on its high. Another trader with a good track record claims this rally has furthur to run although he is currently short.
    I just did some research and saw that the 1930 bear rally off the June low ended on September 11 with a .3% rise. In 1929, it topped on Sept 3. My trading day cycles for today might be off by two days as it appeared I might have double counted one trading day from the Jan high. Theoretically, one could start the count on 07-07-09 and it will work as it was a similar low but that’s a little hokey. But this week
    is 60 weeks from the July low and 30 weeks from Feb low. The stock market topped at 60 weeks off the March 2009 low in late April. It is also 18 weeks from the April high (666)(March 2009-July 2009low was 18 weeks) and there has been a consistent 9 week swing cycle going back to 2008 although it has been muted at times. The last 9 week cycle was at the late June lows.
    ——Another sign of capitulation: Apparently Jim Miekka, creator of the Hindenburg Omen, was on CNBC today declaring that he was going to ignore the HO signals until the McClellan Oscillator breaks down.—-
    T Theory Dude apparently has extended his T until the end of the year or created a new one.

  17. Trin has a very low 4 day reading, .47 and 4 day Tick is at a yearly high. So some signs of exuberance. $vix also closed outside of its lower BB.

  18. What a day. I should have left my rally cap on for 1 more day. Hopefully we see some retracement Tuesday. I don’t see any major selling till mid month.Unbelievable how the market can rally on such weak numbers. Have a great weekend everyone……….

  19. Z, your site is very slow. I tried getting in since Friday, but could not get the page to load up. Did you change anything recently

  20. I added like 10,000 ads and you tube video’s…That can’t be helping any.
    Try firefox or chrome browser. IE never seems to work very fast at my site.

  21. http://zstock7.com/?p=3242
    only 2 places to short FCX….
    80 or 82.9–
    You have GDX double top imminent failure, so that sort of takes out 82.9.
    I’ll bet you, ( any amount) if you ask 95 ( so-called)experts, should you short FCX right now, they will will just look at you, like a “Deer in the headlights”.

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