Weekend Update – The Recession Is Officailly Over

Midday Tuesday Update…

We only had 162 million shares traded on the spy Monday, and usually you will see over 200 million on down days… which means that this move down was more then likely just a technical correction as opposed to some real selling.

In other words, the big institutions haven’t started to dump the market yet. Maybe they are waiting until Wednesday, when the last POMO money going into the market?  But after Wednesday, with no more POMO money until October 13th, and the non-farm payroll report out on Friday… I highly doubt the market can stay up this high.

I can see some 200-300 point down days coming late this week and possibly into early next week. For you non-option players, where time isn’t against your side, hang tight as I believe Friday will be bloody!

Red

_______________________________________________________________

Now The Depression Begins…

Even though we didn’t get the sell off I was looking for last week, the market never went anywhere but sideways.  It seems like the small injection of $30 Billion just delayed the selling for a few more weeks, as it certainly didn’t produce another leg up in the market.

The Legatus Pilgrimage ended on September the 20th, and Bernanke states that no QE2 will be implemented, but that they will do whatever is needed to the support the banksters (errr…. the public).  So what really happened?  As Reinhardt pointed out on his site “a $30B rally is probably not a $800+B rally”.

I think the $30 Billion is just about gone now, and the sell off will begin next week as a lack of stimulus money means NO buyers… and that means a sell off will follow.  While it’s still possible that they will rally up on Monday, I think the high will be put in for the week on that day.

After this triangle pattern breaks up (it could break down, but Monday’s are usually bullish), it will quickly make the short term charts overbought, and ready to rollover on Tuesday (or Wednesday at the latest).  The fact that the banksters could only raise $30 Billion, instead of $800 Billion like they did the previous rally, tells me that their power and influence is weakening.

Zero Hedge has an interesting article that states that Goldman Sachs will be asking for $500 Billion in a new QE2 bailout on November the 2-3rd.  If it fails, then certainly the market will tank hard from it.  I do think it will fail, and and the market will simply react as written in the charts… which is that it’s overbought now, and ready for a serious correction down to happen.

The “failure” of the passing of this QE2 bill, will simply be the blame for the correction that follows.  It should be quick and deep, lasting 1-2 weeks of heavy selling.  The bottom should be at Dow 8300, our FP from many weeks back.  That could match up with the November 15th election, and “if” the Republicans gain back control at same time all of our FP’s are hit, then a rally will happen from it.

So, will the market hit that low on election day?  I don’t know of course, but I do believe the charts would align up perfectly of that target being printed in mid-November.  That’s about 6 weeks from now, and of course we would have short term bounces between now and then… but I think a person would have very high odds of success by simply staying short over the next 2 months with the downside target already known, allowing them a really nice profit should it all play out as expected.

No one knows for sure of course, but everything I see now is pointing to a move down to that print over the next couple of months.  Playing the stock market is nothing more then gambling, with the added benefit of being able to increase ones’ odd’s of winning by piecing together technical analysis, fib’s, elliottwave, politics, and just good old fashion “gut” feelings… and of course manipulation, corruption, lying, stealing, and cheating by the gangsters that run WallStreet.

It’s harder to do that in Vegas, as I don’t know any casino you can go to that only uses one deck of cards in BlackJack… hence counting cards now is a lot tougher with 4,5, or 6 decks mixed together.  Can it still be done?  Of course, but your odd’s of winning are still a lot lower then what they would be by applying the same knowledge in the stock market instead.

But back to the market…

I think that taking a short position now, or anywhere last week, and holding until the elections should produce a very nice profit.  While trying to catch the exact high to get short is very hard too do, and mainly for short term swing traders.  The intermediate swing trader might be wise to start positioning themselves short for the coming 6 week down move.

This is of course just what I see in the charts, and what I sense with all the other pieces of the puzzle that I’ve tried to put together.  Will it happen?  I don’t know?  I just know that the odd’s are very high of the sell starting early next week, and lasting until the elections, with a few bounces along the way… to shake out the weak hands of course.

So in the end, we must simply fold our hand, lay down what we got, or take another card.  I’m a risk taker, so I’ll take another card.  There’s bound too be a BlackJack coming my way soon!

Best of luck to us all…

Red

  • Dgtzona

    Red election day is November 2 2010–

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

    Why I am thinking the 15th? I’ve obviously got too much crap in my head. LOL…. sorry about that.

  • Mnytzfan30

    I saw Social Network and it has the Cramer Code numbers prominently displayed in one scene plus many other numbers, I am sure, with occultic significance but I’d have to watch that movie many times to be able to piece something together. Of course, a David Fincher movie wouldn’t be complete without an embedded V and even an inverse one. 969 and 560 definitely two numbers mentioned that caught my attention. Also a mention of the date February 4,2004.

  • Geccko23

    xx

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

    Well, I don’t under the Cramer Code either… so don’t feel back. Geccko has the best understand of it, but I don’t think he fully gets it either?

    Regardless, at least an oversold correction should be coming this week… and maybe more?

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

    Sorry about my stupidity… I didn’t realize you “are” Geccko until now.

    Ok, so what have you figured out in the code? What’s so important about February 4th, 2004? I don’t see anything special that happened on that date? What am I missing?

  • Mike

    Currently with a reasonable short position, the line in the sand is the 1150 level. If the bulls take it, I don’ t see a correction but some kind of a melt-up and this is some kind of low probability outcome based on all the technical aspects. But if we break 1136, we should have a substantial pullback testing again 1040. The other possibility is sideways action for many weeks in the current range bound and this scenario also does not carry much weight.

    Looking at the chart, I see a similar topping pattern on August 6 with current price.We just need another small rise to complete it and then the fall can start. So if the market goes up tomorrow around 1150 it could be the last day of this rally. If the market goes down tomorrow , it would also mean the correction has just started assuming 1150 would still hold on tuesday.Based on the duration of the August correction, we should expect a bottom around Oct 28 with a total pullback of approx 10%.This bottom could hold a few days and after that it could be disaster or a strong rally coinciding with the mid-term election.So,I believe this week Mr Market will speak loud.

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

    Agreed Mike…

    Up or down Monday, it doesn’t matter. Once the move down starts, the fall should be continuous with only small bounces along the way.

  • Geccko23

    Sorry discus messing with my id. It’s more of the numerical value in the date in my opinion. But 6years 6months 6days from that date comes close to the Cardinal Climax period of -08-7-10 to 8-9-10 and at the end of the movie the main character checks his ex-girlfriend’s facebook page and it lists her birthday as August 8(8-8)and the number 988 is mentioned prominently by one of the characters (after 969) as they count the number of visitors to the new facebook site at Harvard. As I said, I’d need to see that move several times just to piece something together.

  • coulous

    Super le CAC40 DOWN !!

    Go bear go !!

  • http://www.hotoptionbabe.com Anna
  • http://www.reddragonleo.com Red Dragon Leo

    That’s cool… it’s no big deal. Looks like the selling may start today, as the premarket is down already. Not much though, so it’s too early to tell. I’d like to see that 60 minute chart get into overbought territory first, and then the ideal short spot will show itself.

  • http://niftychartsandpatterns.blogspot.com anoopsan

    Futures chart before opening bell : CLICK HERE

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

    From the looks of the futures right now, today is looking like a down one.

  • http://niftychartsandpatterns.blogspot.com anoopsan

    Yes, As of now it is looking weak.

  • http://crashthemachine.wordpress.com/ pezhead9000

    Serge @ etfcorner has a nice 10min chart of SPY. Basically, showing a range between 114-115 with false breakouts going both ways.
    http://www.etf-corner.com/markets/2010/10/spy-playing-the-breakouts-.html

    Did you see cobra’s view:
    http://cobrasmarketview.blogspot.com/2010/10/10012010-market-recap-is-11-up.html

    any thoughts?

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

    Thanks Pez…

    I read Cobra’s report and he’s bearish for this week too, just like I am. I didn’t see Serge’s report, but after just reading it right now, I’ll say that it’s an “unlikely” scenario, but possible.

    The key to the rally, or crash will be the QE2 on November 2nd-3rd. I failure to pass it, and down the market goes… here comes Dow 8300. If it passes, then a slow grind higher will happen.

    I think it will fail…

  • http://crashthemachine.wordpress.com/ pezhead9000

    “Bernanke is jawboning” – appears that Denninger thinks the same about QE2
    http://market-ticker.org/akcs-www?singlepost=2193791

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

    I like it… especially that last line (and I quote):

    “If the Bond market is right then this divergence resolves with an S&P 500 at about 750.”

    If Bernanke is the 800 pound Gorilla, then the Bond market is Tiranosaurio Rex… I wonder who would win in that fight? LOL

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • http://www.reddragonleo.com Red Dragon Leo

    Gang, it’s now 11am and the market is likely to go into sleep mode from here on out. Light volume could take over and allow it to move back up the rest of the day. While I still see a big move down coming, I want to see the 60 minute chart get overbought, and right now it’s just below the zero level and trying to go positive.

    Until it does, I just don’t see any selling sticking. We had a premarket print of 113.96 on the SPY, and that’s likely to be the bottom for today. I base on the the fact that the 15, 10, and 5 minute charts are oversold now (yeah… I know, that’s hard to believe).

    Anyway, I’m looking for a move back up into the close today. Hopefully by then, the 60 and 30 minute charts will get overbought, giving us the best place to get short.

    This is mainly for you short term swing traders, as you intermediate term traders could short anywhere in the last week and probably still be fine. That’s assuming we are at least going down to rest the 1040, then 1010 lows possibly by the end of this week.

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

    Well, I guess not? They passed that 113.96 print and went on to the double bottom level. Let’s see if it bounces here…

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • http://www.reddragonleo.com Red Dragon Leo

    Now that trendline will be resistance (about 1134 or so)

  • http://niftychartsandpatterns.blogspot.com anoopsan

    Thats right.

  • Anonymous

    vix and rvx are over 8%

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

    That tells me there’s more selling to follow… possibly into the close? If not today, then we’ll likely chop around with a slight upside bias until the short term oversold conditions are worked off. Maybe late Tuesday or early Wednesday? Hard too tell right now? But more selling is coming…

  • http://www.hotoptionbabe.com Anna

    I said the same on my Sunday pm post as them good to hear we are in sync :)
    Vix I mentioned last night about to pop and looky! :)

  • Geccko23

    The eVent is now happening. theVixis comfortably above its 50day average.

  • Jaywiz10534

    Hi RED
    I published some new updates at the blog worth reading
    Did you or anyone here request to follow me at twitter?
    If not, then please go there and request to follow me-
    trying to get to 200, now at 155 followers
    twitter address is at JaywizFinancial
    thanks

    http://jaywiz.blogspot.com
    POSSIBLE repeat of May 6th tomrrow w no comeback
    NO guarantees, but its looking possible
    Jay

  • Guest

    hey red

    Is there any POMO activity scheduled for this week ?

    TIA

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • http://www.reddragonleo.com Red Dragon Leo

    Yes, tomorrow and Wednesday it seems…

    http://www.newyorkfed.org/markets/tot_operation_schedule.html

    That means the retracement back up from today’s sell off should peak on Wednesday morning sometime, after the last POMO money is injected into the market.

    Don’t know what level it will retrace too, but if today was some kind of wave 1 down, then wave 2 back up should go to one of the Fib’s levels.

    I suspect it might be a backtest of the breakdown from the rising trendline. But, today’s pattern is a bear flag… meaning that we might not get any backtest at all?

    We could enter wave 3 of 3 down tomorrow, with wave 1 down and wave 2 sideways happening today? It’s not looking very bull friendly, that’s for sure.

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

    I see a little afterhours buying… not sure what it means though?

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

    We only had 162 million shares traded on the spy today, and usually you will see over 200 million on down days… which means that this move down was more then likely just a technical correction as opposed to some real selling.

    In other words, the big institutions haven’t started to dump the market yet. Maybe they are waiting until Wednesday, when the last POMO money going into the market?

    Of they have been selling lightly into this rally, as all of last week went no where but sideways. I can’t see them not pushing the panic button sometime this week.

    It could happen as early as tomorrow or as late as Wednesday. But after Wednesday, with no more POMO money until October 13th, and the non-farm payroll report out on Friday… I highly doubt the market can stay up this high.

    I can see some 200-300 point down days coming late this week and possibly into early next week. For now though, get in, get out, take profits… as Mr. TopStep says…

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

    Jay,

    Make it easy for people to follow you… post your twitter direct link here.

    Red

    Of course my twitter direct link is (for anyone that didn’t know?):

    http://www.twitter.com/reddragonleo

  • Geccko23

    Just testing to see if I am having disqus problems again

  • Geccko23

    Well, I was disappointed with the amplitude with the downmove but from today’s candlestick it looks like there should be some continuation tomorrow. Crude oil (at least uso) was putting in a doji top today although $xoi was down considerably. The 4s might work with another date Jaywiz mentioned below and the Cramer 8.53 number that he touches. I did find a number that seems to be the controlling number, controlling all the events since the April high. I’ll mention it after the next dip or to the few who might be interested.

  • http://rosabarba.livejournal.com Rosabarba

    Hi, Red.

    FWIW, I think a big swoon this week is less likely than not. I agree that the volume and action today appeared corrective, and while there might be some more downside, the IT trend remains up until proved otherwise.

    Also FWIW, it would be a mistake, I believe, to expect the POMO effect to be specific to that day. Somebody crunched the numbers, anyway, and determined that the POMO edge involves the *number* of active days within a specified timeframe and extended for several months after a concentrated cluster of POMO days.

    http://www.tradingtheodds.com/2010/09/permanent-open-market-operations-pomo/

    As always, FWIW.

  • http://zstock7.com/ zstock7

    GDX topped,
    Hi Red!
    Sorry for all the self promoting inserts on the GDX chart…
    http://zstock7.com/wp-content/uploads/2010/10/gdx-10-4AAWW.jpg
    I was able to post the $USD chart here the other day…which was based on the info, on this GDX chart,

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

    Hey Rosabarba… nice of you to stop by. I haven’t backdated the POMO day’s but just briefly looking back at the last 7 days that they had them… all 7 produced a sharp spike up in the market.

    So, it’s reasonable to assume that we’ll get some spike up tomorrow and Wednesday morning too. How high is of course unknown, but a fib retracement level should be expected.

    Thanks for the link, and stop by more often.

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

    Gold is one trade I wouldn’t short. Although you can make good money with it, if you catch it right… it’s safer to just go long on a pull back, as it’s in a long term bull market and will be for quite some time.

  • Geccko23

    I just went over to Cramer’s to check out his show today and he has the controlling number on his scoreboard.

    10: 04 (date)
    30: 14 (score—whatever that means)

    The 157 number shows up again if one adds everything up (as 15.7 or 58???) Of course this doesn’t really help me predict a date. But today was 56+56 or 112 trading days from the April high and tomorrow is 40 (5×8)calendar days from 8-26 (or 8-8).

  • Johnny T.

    Geccko,

    Can you shed a bit of light on what info you are going for at Cramer’s? Are you saying he is conveying the timing of significant events? Is there an event in particular you are looking for?

  • http://niftychartsandpatterns.blogspot.com anoopsan

    Futures chart before opening bell : CLICK HERE

  • http://crashthemachine.wordpress.com/ pezhead9000

    GDX Pre-Market Real-Time: 56.85 1.30 (2.34%) – let’s see if GDX gets rejected at this level.
    “there are things we don’t know we don’t know”

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

    I think we can expect one more day of this pump job and then the real sell off should begin. Tomorrow is another POMO day, and the last one for at least October 13th… or longer?

    Once the money runs out, reality should set in… and the wonderful non-farm payrolls numbers will be the blame for the selling. LOL

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • http://crashthemachine.wordpress.com/ pezhead9000

    GDX 57.68 2.13 (3.83%) – off to the races

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

    With Benny boy still in drivers seat on the magical money machine, I just don’t have the guts to ever short gold. I’d go long only. We’ll still get a bigger pullback of course, but timing it will be tough.

    I’m assuming you are long GDX right now and not trying to short it? If you are looking to short it… good luck.

  • http://crashthemachine.wordpress.com/ pezhead9000

    neither – right now – its hard to jump on the gold bandwagon until it resets. It’s like a run away train – can’t jump on but can’t short yet

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

    Agreed… I wouldn’t touch gold until it corrects first. And then I’d only go long on it, never shorting it.

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

    Refresh page for a Midday Tuesday video update…

  • Rk318

    hi red, i think we not going to see big fall for next few days as result seasons poised to start, after that whatever the results it not respect it & fall (like a cliff????) big guys(dow s&p) never fall alon…….
    they 1st planting the bombs all over the world & then one remote- one second & …………………………..?

  • newbear

    Red, remember the fake print on SPY to 118.

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

    What they are doing right now is killing the last diehard bear. This will be over with by midday Wednesday. With NO bears left in the market, and all the bulls long… and with NO more free money (via the POMO’s), along with the non-farm payroll report coming this Friday… I’d say this is absolute the perfect setup to surprise everyone with a huge sell off!

    Afterall, after today’s ramp job, who in their right mind is now expecting a crash? No one… and that’s the point! Surprise the masses by making a false breakout to the upside just before a crash.

    You know they just cleared out all the remaining overhead stops just now. There is nothing left to support this market after tomorrow… every bull is already long. Every bear is being cooked on the grill right now. Who’s going to keep buying up this market now? No one! She’s going to fall… I’m even more confident of it now then I was last week.

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • Rk318

    hi red have u got my mail???????????& here is my own gut feelings we might see one more(actually its too much now)push on the upside target ??????

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

    When did you send it? Just now? I don’t see it? I keep my main email address open all the time with Outlook but the I don’t always have the google chat on, and haven’t check it lately (I only use that email for the chat function and rarely send emails with it).

    Use my main email and resend it…

    red at reddragonleo dot com

    The google email at…

    reddragonleo at gmail dot com

    is again, primarily used to chat with (mainly Anna, but I have few others on the chat list).

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

    FP alert… 115.20 spy!

  • DJ30

    Right on the money thank god i took the PL for shorts yesterday didnt even knew the POMO money was kicking in nice heads up on that info red especially on the time frame DJ30 seems to be stabilizing now testing its highs of 10850 and the bulls are banging on the wall right now however markets still active for the next few hours i wonder what curve ball will be coming from the markets this time.

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

    Glad you got out with a profit DJ… Tomorrow is the last day of the POMO’s and I think it will be the best spot to get short at. I estimate around 11am-1pm est will be the top.

    The “curve ball” will probably be a really bad non-farm payroll report, but it could be anything? I’m just guessing there.

  • DJ30

    Noted on that maybe i should go with a short run on the rally and keep my stops tight for the roller coaster thats coming making making a steak from the bull as it does its final dance

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

    That’s your call on that… I wouldn’t, as the “long side” is way over crowded right now. Trying to catch that last 1% move is risky. While we could possibly rally up to a double top, the odds are heavily against the bulls.

    The high may be in today, with some selling into the close, and then another ramp up tomorrow only making a double top from today. Or, it could push up to 1170 tomorrow? There’s no way to know how high it’s going tomorrow, but there’s plenty of evidence that the “high” will be put in today or tomorrow.

    And after midday Wednesday, whatever level the market is at… IMHO, will be an awesome shorting opportunity.

  • newbear

    Do you have the image?

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • Trektrader

    SPY FP at 113.75 unless late fill… but at least it makes me feel good….

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

    Being that 113.75 is so close to the open, I’d say it’s a late fill.

  • DJ30

    noted on that with that in mind im going in full steam for the bears tomorrow after the last bit of money is drained from them.

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

    Probably a doji tomorrow… certain not a another ramp job like today. Of course after the money runs out around noon or so, the selling will come. I just don’t know if it will produce a down day, or just a backoff from whatever high they can muster up in the morning session?

    Regardless, the selling coming on Thursday and Friday will feed the bears for months to come! LOL

  • Johnny T.

    Red,

    Trying to look at this FP here… On this FP, 11:05 on Oct 4th is the time/date shown on the print. Is that when you first captured the FP? If the time was really 11:05 yesterday, wouldn’t the high of the day really be ~114.83, not the 114.1108 indicated? Another thing that I found interesting is most of the FP’s you show (not all) indicate the FP at the very end of the timing period. This one occurs before the end. Just trying to piece together some clues…

  • newbear

    Agree.

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

    Sorry about the confusion Johnny. Notice the pink line, that’s just where I had my mouse at when I took the screen shot. It means nothing. The print you want to notice is the long tail down to 115.20 today (at the far right of the screen).

  • Johnny T.

    Thanks for the info. The 115.20 is fairly clear, but what everyone wants to know is when is the 115.20 going to be hit? Are there clues contained w/in the FP that would tell us? Does the position of the tail mean anything?

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

    No clues that I can figure out Johnny? But from past experience, they usually play out with 1-2 days. However, it depends on how far away the print is too. If it’s close, like this one, then 1-2 days is typical. If it’s far off, like maybe down or up 5-10 points on the SPY (50-100 on SPX), then it could take a week or more?

    Look how long ago that 105.39 SPY was that Anna caught… it’s been over a month now. It’s yet to be hit. It will though, once the market rolls over.

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • newbear

    Red, remember that FP of 118 from months ago, and you were wondering how or when it was gonna get hit? Well looks like we are on our way there.

  • DJ30

    Almost towards closing and touching 10900 before dropping abit talk about high its been a few months since ive seen it at this lvl closing all longs and waiting till tomorrow for the right time to go short.Right now the market is running on fumes and i can hear the engine sputtering right now.

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

    Yeah, but that was on the DIA, not the SPY…

    http://reddragonleo.com/wp-content/uploads/2010/04/DIA-misprint-03-31-20101.jpg

    However, maybe it was for the SPY, and only the insider knew it? There is one more gap at 118.18 spy on May the 5th that I can find, that hasn’t been filled. Maybe that’s the final upside target for tomorrow?

  • http://crashthemachine.wordpress.com/ pezhead9000

    Possible short (watch): VirnetX Holding Corp (VHC) – up 10% today – going parabolic

    another parabolic tech stock

  • http://twitter.com/2wires Robert

    Dollar whacked. Stocks up, hold your nose and buy everything……….

  • isaac123

    It is a given when all posters see no further upside ,no more QE2 money,the market is running on fumes,etc., etc that thr is at least another 30 points on S&P NOW and another 80 S&P by first quarter of 2011. Wishing for something does not make it happen.Look at gold bears calling for deep correction sine $1000 . Now a 40% percent correction will just get you back to $1000 !!! How many years will that take?? If S&P correts ao% where will you be?? Same place as in mid Sept Whooooo So what?? If market doesn`t drop at least 205 BEARS HAVE MADE ABSOLUTELY NO HEADWAY. And in the meantime BULLS have been taking it to the bank.

  • DJ30

    Well i cant disagree with what you have said however i think you fail to understand the full impact of what has happened to the market with the FEDS manipulating it to such an extent that its poised to crash.For every action there is an equal and opposite reaction.For the market on the other hand its 3 steps forward 2 steps back.Look over the current events and answer this if the movement up with no support continues what will the correction be like?As for (crash) i think its nothing more then a term we use cause anything over a few hundred points and everyone screams crash check the reports on CNN ( FLASH CRASH ) thats the term they used , not the end of the world or whatever but it was a crash.Point being made here is yes WE know the bulls have taken it to the bank so have i for that matter now its a matter of when its gonna correct itself trading these days can earn you money BOTH (BULLS or BEARS).I dont give a dam if the bulls or bears we all i give a dam about is winning BOTH of them

  • Jigsaw

    Yeah I know, who could be bearish on Gold???
    http://screencast.com/t/VFMH78Aq

  • ACP

    Check out the news bits on the newyorkfed.org website and you’ll see that the last POMO schedule was released 9/13, with the first POMO of this traunche purchased 2 days later, on 9/15.
    If they stick to this dogma after the schedule is released on 10/13, we should see the next POMO start 10/15, which would give a full 6 trading days before the next POMO traunche starts.
    Hopefully, the momentum will be great enough to jam the downward momentum by then.

  • Geccko23

    My daily Cramer update: Interesting as usual.

    Today’s scoreboard:

    10: 05 (date)
    41 : 14 (score) where does the 41 come from???Where has there ever been a 41 in football? Yesterday’s was 30:14 so another 11 for the winner. 1 or “41″ is under 1 or 10…1 of “14″ is under 5. Add the numbers from top to bottom and you get some interesting numbers. 1+41=42 or 24 (1+1 to go with 4) or 64 ie 5+1 to go with 4. 24 and 64 definitely Cramer Code and Social Network numbers. 64=8×8 64+24=88 and 64+42=106 (42 is another number mentioned in Social Network)…..
    Anyway, Cramer gives us a lesson in charting today and uses Opentable (open) as the daily example. It closed at 65.96 down 1. He talks about the key reversal recently (most likely Sept 30)(encoded in that close is a key date some are talking about and it was featured in the Cramer Code for Apple’s stock which was down 11.69 that day)and then he shows the key reversal from the summer solstice high on June 22 which coincidentally was 3 months 14 days ago today. Today is also 58days from 8-8 and 40 days from August 26 low (8-26 or 8-8).
    It is also 26 trading days up from that low today which would make it ab=cd in terms of time for both rallies from the July low rally and 66 tds from the July low.

  • ACP

    Not to mention there’s always a “data gap”, not just technical gaps. When bad news is not priced into the market, the market tends to fill in these “data gaps”, not at an absolute level, but on a relative basis.

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

    That’s exactly what I’m think too ACP. The charts are all now very overbought. With no new money to support the market, it should hard and quick… especially if the jobs report this Friday is really good.

    They will fear a rate hike on the interest rates and sell off on that fear. Or course if it’s really bad, then they could sell off there too. It’s the old “buy the rumor”, “sell the news” deal.

    I just can’t see it not selling on by Friday, no matter what the data is. A big sell off is just days away now.

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • DJ30

    anoopsan do you happen to have the DJ pre market as well im watching it slide down from overnight trading to start at about yesterdays close.

  • Sir Woody Hackswell

    Yep! Looks like time for a correction or some sideways action!

    Unless, of course, the governments interfere with free market action (again) and spook people back into Au/Ag. ;)

  • http://niftychartsandpatterns.blogspot.com anoopsan

    Dow Jones Futures broke above 10800 level yesterday. Got resisted at 10915 today. So one can look to buy above 10915 again when it moves above this level.

  • http://niftychartsandpatterns.blogspot.com anoopsan

    Since yesterday’s move was a big one. we can expect to see some sideways or negative movement before it breaks out again.

  • DJ30

    well im expecting some upward movement for today at about 10.15 to 1 and a sell off after that so im looking to get out of long either today and going short in by mid day today after the last funds of the feds have been used

  • http://crashthemachine.wordpress.com/ pezhead9000

    From fork-tongue (Cobra):
    “However for the intermediate-term, I’ll maintain the bearish view. The main reasons are:
    As mentioned in 10/01 Market Recap, the Commercial Hedgers have piled up historical high Nasdaq 100 short positions.

    Statistically, the Earning Season starting within this week may very likely underperform, because the market was up a lot in off-season.”

    note: he is short-term bullish due to the breakout yesterday.

    good chart at: http://tinyurl.com/25bb8mm

  • http://crashthemachine.wordpress.com/ pezhead9000

    Interesting that the Dow weekly is resting under the 200dma. maybe we get a false upward break – put in a double top – then wham!

  • http://crashthemachine.wordpress.com/ pezhead9000

    ProphetAlerts saying watch VHC – could be a blow-off top. looks very parabolic – only professional gamblers need apply

  • Mike

    I think we are just finishing our right shoulder of this huge HS formation of 2010. Looking at a weekly chart, we can see our left shoulder in January 2010 and the head peaking in April 2010. Now the right shoulder is almost completed. Also,if you set the chart with a solid line the pattern of this RS is exactly the same as the peak in April that eventually lead to the flash crash and the big correction from April to June. I think we should get a nasty correction any time soon.

    There are many divergences to name a few: Vix has not made a new low compared to SPY new high, Nasdaq did not confirm it by not making a new high, also DJ Transp. did not confirm either. Cobra mentionned the COT net short position, level of complacency and bullishness is at a high. The current rally essentially fueled by POMO events.

    It is not the time to buy this breakout, this is a bull trap and almost all the bears are already destroyed. We are at a top and the upside is limited. This is a perfect setup to trap all the bulls with no bears taking advantage.I believe we are ready to fall.

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • DJ30

    @Mike with that being said looks like today is shaping up to be a sidewards moving day.The last POMO should have ended by now and its only been able to float the market 10915 holds for the time being and it doesnt seem to have much momentum to break it.However its still early and anything might happen.

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

    They are doing a really good job of working off the overbought conditions on the short term charts, but the daily and weekly will take more then one day to reset back up.

    Let’s see how well the push it up tomorrow without any more money…

  • DJ30

    True its no wonder people have fallen into the mind set that everything is ok right now and in sept if you noticed the news reports that came out were all good.However this time round on one single bad news every channel jumped on it i just wonder if its a big plan to change the mindset of people before it hits.Then they can say ( look we gave you warnings ) Goldmen looks to be spreading some bad news on the economic front.Maybe its cause they need more support for their bailout on NOV 2.IMHO trading ( NOW) is not done by techs or fundamentals any more its traded on feelings (hopes and dreams).Feds have won this round cause breaking the bad Sept month for 71 years and pulling people over to that mindset where ( hey dont worry if anything happens we are here ) has in fact won over a number of people.However going against the natural flow of order will cause an imbalance which when the time comes will either cause chaos or a restructure.If trading is nothing more then a transfer of accounts ( losers to winners ) then they seriously do have a truck load of losers when the market turns around and the ones that end up winning are those that caused this imbalance and know that its coming.

  • Mike

    I think we could assist to a shake-out in the next couple days taking the shape of a M pattern where the DOW trades in a 200 point range; the purpose being to have 1 more faked breakdown and 1 more faked breakout to commit more bulls and get rid of remaining bears.

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

    Possibly Mike? But I think that once the daily chart moves below the zero level on the histogram bars… it won’t be coming back up for awhile. I think the last “fake out” to the upside is today.

    Let’s throw the charts out the window, as they haven’t been working when the government steps in an manipulates the market.

    So instead, let’s focus on the fact that they don’t have and more POMO’s planned until October 13th, which too me… means that the charts should start working properly again, and they currently don’t look like they will produce anymore upside “fake outs” beyond today.

  • DJ30

    In regards to that im currently looking at the DJ30 and the 10910 to 10915 seems to be holding.4 attempts to break from this region have all been bounced.However there is still 3 hours of trading left im just hoping it will hold to end today with a Doji.

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • ACP

    The last POMO seems to have pushed the dollar down a full one penny against the Euro, and all they’re getting out of it is 2 points on the Dow. I like that action.

  • Sir Woody Hackswell

    It’s Official: Fed Is Now Second Largest Holder Of US Treasury Bonds

    http://www.zerohedge.com/article/its-official-fed-now-second-largest-holder-us-treasury-bonds

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

    Kinda like playing monopoly with yourself, as you lend money to yourself, and borrow money from yourself… or is it more like musical chairs?

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

    Maybe that will be the blame for the coming sell off? Hey, they have too point the finger somewhere…

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • Mike

    Bollinger bands never been so tight on the VIX for a long time, we should get a strong move out of it very soon, which direction?

  • DJ30

    Thanks

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

    Mr. TopStep…

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

    We have a FP of 116.15 spy that just showed up. Not that it’s a big upside print, but it might mean that they are going back up today for a retest of the current high :-(

  • Mike

    Spy just after flash crash
    May 10: close 116.16,high 116.65
    May 11: close 115.83 high 117.36
    may 12: close 117.45 high 117.62

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

    Well gang…

    We have our “pause” day, so what’s next? Do we put in another couple of “pause” days to end the week out on Friday? Or do we have a surprise 49 handle drop over the next 4 days like Mr. TopStep stated that happened in the past when the put level was down to 12%?

  • Sir Woody Hackswell

    Nag Dabbit! They did just that!

  • http://zstock7.com/ zstock7

    FFIV, no acquisition talks in the foreseeable future, Headline = buying op, but I’d wait a couple of days.
    http://blogs.barrons.com/techtraderdaily/2010/10/06/f5-gleacher-downgrades-to-neutral-doesnt-see-acquisition/?mod=yahoobarrons
    Nobody will believe me. I shorted this yesterday. wowza!

  • http://zstock7.com/ zstock7

    I’m treating the DOW as if it’s at RSI 50…could go to RSI 70 or RSI 30…RSI 70= new yearly high +4%, RSI 30 = 6 to 10% pullback.

  • http://zstock7.com/ zstock7

    I’d say it’s more like the Titanic is sinking!

  • Geccko23

    I didn’t follow the market today. After hearing the Dow opened up 18 near the open and still there halfway through, I was expecting a doji day or a drop near the close, but looking at things, today was a really strange day. It looks like the Dow flew solo most of the day and the former leader Nasdaq closed down .8% and looks like at one point was down 1%. This session can’t be considered good for the bulls. I haven’t checked breadth but I would have to say there was decent negative breadth. Only thing is I haven’t seen October 7 as a key date although it is a new moon. Important bottoms are usually made at the new moon at the end of the lunar month so things could have inverted. The B wave in 1987 also topped on October 5.
    Well, Cramer did scroll down to 70 on his TV screen for (OPen) in yesterday’s show and for some reason started the first chart at September 23 and mentioned it in name too. The number 23 is displayed in Social Contract(as the numbers of two boats racing) during rowing race in England in a scene that seemed totally extraneous to the plot and very weird visuals were used in the seem. (it seemed very computer generated)

  • DJ30

    Well today more or less played out to the sideways movement that i stated earlier on.As for tomorrow my best guess would be a slight drift downwards followed by the strong move down on friday.

  • Geccko23

    Nasdaq big dogs breaking down. Open down to a new multi-day low and Citrix Systems took out about 2 weeks of bars today. Apple with a doji close masking the internal weekness. Today was also that key 67day cycle from the July 1st lows.

  • Geccko23

    CRM (Salesforce.com) looks like its following the Cramer Codes. It had a little Black Wednesday today. Just looking at some of these tech stocks, it’s apparent that the rest of the market should follow anytime.

  • http://niftychartsandpatterns.blogspot.com anoopsan
  • Anonymous

    here is an interesting take if you have not seen it:

  • Anonymous

    I’d like to think “No POMO” means the market is free to fall, however, I’ve followed market actions of the Fed before, and just because they take a break doesn’t mean anything (sadly). The same POMOs happened last year and once they stopped the market didn’t lose much ground at all for some time.

    As long as people EXPECT the fed to keep pumping money in, then the market will continue to melt higher. I tend to believe POMO days are as much about people’s expectations about the Fed printing money as actual money being pumped in by the Fed. In other words, they don’t have to commit any money to the markets to get a pop, as long as everyone believes they are pumping money in, which I think is a lot of the market behavior you see today.

    I am bearish and still holding bearish positions. I can easily make a bearish case but price action continues to defy all calls for a PULLBACK let alone a new downtrend.

    The biggest fear is getting into short positions too soon, and getting shaken out at the top. For a couple reasons, I’m still hanging on, but I might have to hedge a little here soon if this thing keeps popping. If it hits 1200 I can’t really make the bear case anymore.

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

    New post

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