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Wednesday Update... Happy Thanksgiving everyone!

(to watch on youtube: http://www.youtube.com/watch?v=A-i2BXQpaxg)

Red

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Wow, what a surprise today!  I certainly didn't see it coming!

(to watch on youtube: http://www.youtube.com/watch?v=z8e_iAuuUeI)

I knew there was a possibly of another "Dubai Surprise", but I thought it would be this Friday, not Tuesday.  I expected the usual grind higher, but instead they decided to sell it off and fool many bulls and bears alike.  While I did mention that we could be forming another "MA" pattern, which would have had us sell off like we did today, I really didn't think it would play out.

Well, I guess that's why us sheep are still sheep... and not wolves, because they seem to pull these little tricks when not many are expecting it.  It's the perfect time to sell off the market, as the light volume holiday week will allow them to take it down slowly without a panic, to reset the charts again.

Then they can rally it up for all of December to make Santa happy.  Yes, I do believe we will still get a Santa Rally.  This North Korea/South Korea event was timed perfectly.  Just do it during the America Thanksgiving holiday's as most of the traders will be gone and the light volume will be easy to manipulate by the gangsters.

However, I believe the likelihood of us starting a major move down here are slim.  This sell off it too controlled... no panic whatsoever.  I don't think this is the start of wave 3 down in a 5 wave pattern.  I think it's wave C in an ABC correction down to make up wave 4, with wave 5 up still to come.

I think wave 5 will take us up to the DIA FP next January/February for the final high of Primary wave 2.  After that, P3 should begin down, and all hell should break loose.  This should have started this year I believe, but some how they must have extended it for some unknown reason?  Possibly to get though the November elections and the Christmas/Thanksgiving holidays?

Moving on...

Right now, as in tomorrow, I'm expecting a slightly up day or "pause" day.  It's common to see them after such a large move down, or up.  After that, I don't know?  Friday is only a "half" day, so it could be another pause day, or a surprise big down day (from some other unknown news event)?

This week was a wildcard week anyway, as most people thought it would be a flat to positive week.  I'm sure there weren't many bears that were short the market today, and that's exactly how they planned it.  The luck ones that were short, and did profit from it, probably closed their positions out too early as they too were shocked that we actually sold off as much as we did.

Well anyway, I'll just have too eat some more mud again I guess, but I'm expecting the rest of the week to be flat to slightly up.  (Now I know it's going to tank... LOL).

Red

117 COMMENTS

  1. Boiling point day tomorrow. Day 212 from April high. Of course,it could be better applied to May 6 when I think the markets will be truly embroiled in a fever pitch. 1 Pi from the big August 10 down day tomorrow and very interesting that today seems like the small red bar that preceded the big red bar at the August high. Really the market is waiting to crater once it drops below the 50day average. It did that on May 5. JNK had a big plunge today and made a new multi-week low dropping below its 50day average. The muni bond funds look like they put in doji or hanging man tops today and have corrected up to near their downsloping 20day averages. IIC, a California muni bond fund was down decently though. EEM,EWZ,FTSE were all down decently and making new lows for the move and dropping below their 50 day averages. These former leaders to the upside are now pointing at the near term direction for the markets. McClellan Oscillator is now reverseing back down of course and will exceed the -263 reading on this leg down in wave 3 big spike down. Currently at -150; can’t expect a panic today with $nymo only at -60. I want to say that markets could do another chop tomorrow ala May3 but that wouldn’t fit with $nymo action.

  2. By the end of the day, I’d say the short term charts will be over bought again, which could be another opportunity to go short. Who knows what holiday surprise they might give us? Dubai last year… Korea this year… different story, same result.

  3. I don’t buy this rally… I think will be short lived,
    I am still a bear
    But I got fooled too, I assumed this little up will happen yesterday at close as a relief…

  4. The funny thing is I saw a fake print for spy this mornig at 11!!!!
    I had my chart open and I saw a drop like a transaction had occured for that price. I tried to extend the chart for more days to see it better but it disappered

    • The dollar has barely dropped with this rally in the market. That should say that this rally is likely short lived. I think the dollar is in the beginning of a wave 3 up, and will continue up after a brief pause day like today.

  5. I can’t, I have a live chart and it was opened for 1 to 60 min, I mostly keep it at 5 min to 1day. I tried to save it can’t be done

    • You can get a screen shot of your computer by holding down the “shift key” and pressing the “PrtSc” key at the same time. Then paste it into a word document and save it.

  6. the creepy thing is that it disapears! if there is a market order filled for an outrageous price it shows, and it doesn’t go away, I have seen happened with other stocks, mostly penny stock when mistakes with the zeros can be done more easily

  7. I followed the link and tried with Alt as opposed to Shift as recomended here, but still no succes, my arrow key just jiggles while I am doing that. It could be my keyboard is faulty….
    But regards to the bears, it seems there are still a lot out there.
    There are 27,889 contracts sold on weekly put for spy 119 and only 9,086 on the calls

  8. The first FP was at 10.30 and the second was at 10.50 maybe the guys with numerology will make something out of it.
    Come to think about it there was a video of the Simpson with a new interpretation of the clock and that was 10.30 is the supposed EVENT
    But most likely is nothing just our wild imagination running on steroids

        • true and im waiting as well if you threw a fibo on the up trend right now we can see clearly its banging against it.Im actually hoping for a retrace to work off those conditions before another leg up.Its either that or we can just fall flat right into close .Right now its still 50/50 but more bais to the bulls at this point

          • O and one more thing is that im looking at a res zone of about 11160 to 11170 unless it breaks that cleanly it might just pop up and do a reversal if it takes that out then it has alot of clean area to move up.Are the cloud charts looking the same or are they pointing some where else.

          • hmm 11200 that seems like a reasonable mark but after the days rally and at mid day trading unless its a really late rally to close at that region today and carry on tomorrow i dont think we will see a huge break to the upside even if we do hit 11200 before todays close.It might just flatten out there

  9. Funny thing is, if you compare the charts to end of April/beginning of May, they look eerily similar, except that the timeline now is stretched a little as opposed to back then. Don’t think we’ll have a huge down move like earlier, but the end result will probably be similar.

    Based on the muni & European implosions, my guess is that 2011 will be somewhat similar to 2008.

  10. I don’t see any powerful catalysts that would send the dollar index up enough to crash the market (at least in the short term).

    I’d start to worry when the market can go down with the dollar going down OR the prices of Gold and Silver are up a significant percentage on a daily basis.

    Continuing to print money out of thin air will cause commodity prices to soar since many commodities like Oil are priced in USD. You can’t buy Oil unless you own USD. I suppose it’s possible that commodity prices could based on something other than the USD like the Euro.

    Some people think that Gold and Silver are so volatile because it’s priced in USD.

    The Weimar republic printed so much money that the mark was not worth the paper it was printed on. Think about it, Would you rather own paper printed out of thin air or Gold and Silver?

    • good point but on rare cases the inverse relationship between the two can unhinge causing both to move in tendon one might move slower compared to the other but in the same direction.Case in point was just after the elections where everything moved up in tendon totally ignoring rules.

        • I thought the same, yesterday after the drop I sense there will be a recovery, but didn’t get the courage to stay overnight and I missed … but in the morning the up seemed all it will be and I tried going short again, but now I am scared, they are doing a good job in confusing the hell out of everyone, so I am out, this time with loss, but it seem wiser to stay out till there is a clear way up or down

        • hahah true but we will never know what insiders do unless we are one of them or they get caught hahahaha.To prevent (take note) im talking about prevention instead of playing counter trend is cause the way the market is right now going against the crowd is considered suicide one would be better taking the money to the casino.Stop lost is something i learned the hard way which looking back is the hardest pill to swallow but it can save your account. One more important lessons is to never fight the market cause just think about it (how much money can you use to fight it ??) it can easily put up 1000X your amount to wipe you out.Cramer said on mad money which is kind of true ( TRADE WHAT YOU SEE ) everyone whos been trading will at one point of time become obsessed with either finding the holy grail of indicators or trying to predict where it will go in 5 mins 10 mins or 1 day from now.Slowly as we fall into that trap we find our self doubting and wondering what happened when it didnt work out the way we saw it playing out.Honestly when i came here a few months back and after going to hot options jumping here and there i have noticed one thing in common.

          Everyone is unsure either about their trading style or the market or something and we all try to search for the one answer that either (suits) us the best or the answer that we (want) to listen to.I took a couple of days off to get really back to basics and i banned myself from going anywhere to listen to how others view the market and reviewed my own system inside and out.During those days i strictly followed my own rules and the results surprised me. Dont get me wrong im not trying to say dont listen to anyone or stop coming here or whatever.Its just that i have learnt the hard way that by putting more information into your head it only ends up confusing you even more.The faster a trader comes to terms with win lose rations and money management the easier one finds trading.You know for a fact i was on a mission to find every single thing and piece things together and conclusion to that was total failure.

          I looked at news and reports and charts and so on day in and out.I ended up with 80% lost ratio due to that.Even when i called the market and it ended up going in that direction i was watching on the sidelines as that happened cause i was (too fearful) to trade.The point im trying to make is we DONT know and we will NEVER know what insiders are doing cause we are NOT insiders.With our tiny accounts we can only hope to take sips out of the market to give us a decent living and run with a profit.So for now im going to take sips and build my account up to something sizable before even thinking about counter trends or what insiders are doing.If anyones account here ranges in the millions trust me you wont need to know cause you ARE an insider hahahahhahahaha then if you want to give us tips please do so.

          • Hey, you just told my life story here LOL
            I agree with you, everytime I listen to my inner self, I am a winner, but mostly I end up loosing when I get influenced, so I know what you are saying, listen to all but do like your self right?

          • hahahah the most important person to trust is no one other then yourself.In the worst case you can only (blame) yourself if it goes wrong and not anyone else hehehe.If something isnt working right then STOP what your doing right now sit back and think about why and what happened to change your winning trades to losing ones.There is no such thing as a holy grail or predictions or sure wins.What works for you might not work for someone else but one things for sure is that if it works for you and its earning money then by all means DONT STOP hahahahah

        • $oex put-call ratio spiked to one of its highest levels on record on Monday. Cobra mentioned this. $oex is considered smart money and usually correct. 10day average spiked a few days before the April high. Meanwhile, call buying on ISEE indexes is quite exuberant.

    • Looks to me that there’s still room to run down. We may not have reached the peak yet, and even if it’s close, the peaks look like they start about 1/2 way thru the downturn.

      Look at the graphs from the latest BS run-up and the Mar-Apr BS run-up. Totally different options ratios. This doesn’t look to me like it’s done.

    • Don’t know about Friday Robert, but I do see us moving higher for the Santa Rally. I still say we are going up to the DIA print and then crash. Probably sometime in January I believe. Happy Thanksgiving to you too.

  11. Reuters is reporting that the Nikkei is going to eliminate their version of the uptick rule because Shanghai is taking their trading volume. Any ideas on what this may mean?

  12. Friday has some interesting hits. 777calendar days from October 10,2008 low (I always thought the 777day cycle made more sense with this date) and 77trading days from 8-9-10. Also 7 months from the April 26high. Probably some others that I can’t remember but there are a cluster of hits over the next week. It’s hard to believe a hard down reversal can occur on a half day but we did have the Dubai Suprise last year (1 year anniversary date??) and these foreign countries like to get their dirty business out of the way when the US market is closed. Spreads continue to widen with Spanish,Portugese debt vs German and Ireland’s situation has not been resolved since its coalition govt collapsed on Monday (a little fact I haven’t seen mentioned anywhere on the internet). Dollar even rallied today with the stock markets. ISEE equities hit the high level seen at the Nov 5 top area today while $cpc was severely puttish at 1.06 finish. MUB was down hard today while other muni funds rallied but all other forms of bonds tanked hard today (corporate LQD,AGG,TLT) and Jnk had a weak rally day. 50 day average has now risen above the area of the lows from last week so we don’t need to worry about the markets making new lows to get to their 50day averages……….Miami Thrice/Jennifer Grey update later (The 3 Kings are currently playing…..look for Riley to take the head coaching job soon)

    • Another loss for Miami Strife dropping them to 8-7. Could this be the ritual??Dow did close at 111(87) today. I find it extremely hard to believe that they could fall to 8-8 by losing to the woeful Philadelphia 76ers on Friday. If that happened, the media hysteria would hit a fever pitch and there would be immediate regime change. I guess Phil Jackson, undoubteably a brother to Riley and (L. James—I hear James and W. Buffett are Lodge bros) is piping in that Spoelstra needs to be fired if the Strife don’t immediate produce…………and on to Jennifer Grey: when I saw that there was a Dancing with the Stars winner: I immediately knew it would be Jennifer Grey and of course she won. Grey’s greatest claim in life is that she starred in Dirty Dancing which was released on August 21,1987 within days of the 1987 stock market high. I had seen her on a People cover recently (or one of those mags which was bringing up the old Dirty Dancing /1987 connection). Just another helpful reminder by the insiders on how things should play out. More to investigate later.

    • Cool video… but that could happen early next year, not in 2012. It’s probably already happening as China isn’t buying our dollars anymore… the Fed is! Sad be true… thanks for the link.

  13. Happy Thanksgiving Red!

    Between Copper trade and USD future trade I am up 25% in one account this week. Not bad, but have done the same in the past and then saw all profit whittle away by tilting at the same old windmills.

    Short copper again, based on macro and micro and my own personal bias, and that SPX was up big, while USD barely changed, DR. Copper is going to be prescribing himself some anti-biotics soon.

    http://oahutrading.blogspot.com/

  14. Sometime next week, you gonna get a pullback / sell-off in the airlines…So there’s at least one big down day on the DOW, next week. Tuesday is double punch Tuesday—Not only are every Tuesday’s down, This next Tuesday is on the last day of the month, which is usually always down….Hope you got shorts, On next Monday…and then look for that airline stock crash—-makings for 2 down days, next week.

  15. Hi Red!Video correction…your $15B pomo money comes in On wed Dec 1, not Tuesday, the lat day of the month…
    Oh man, I’m salivating….Buy shorts Monday, buy longs Tuesday…

  16. I don’t see any particular reason why we rallied.

    Personal income slightly rose 0.5% compared to 0.4% that was expected.

    The market totally wrote off a big drop in durable goods for October.
    Durable goods was -3.3% compared to -0.3% expected.

    New home sales declined as well, but that is nothing new.

    It could be that people just don’t wanna worry about the market on a holiday. We could easily give up these gains on another day.

    • Short term charts are pointing down Robert. I doubt that this gap will be filled today. The 60, 30, and 15 minute charts are all going negative now. Maybe a rally into the close, but I don’t see any gap fill today.

  17. I’m surprised how far they rallied it back up. Who knows? They just might get “gap fill” today? Seems unlikely with the charts pointing down, and the dollar rallying, but the light volume still makes it easy for them to manipulate it higher.

  18. Yes, nice little rally off lows. Lots of risk right now and uncertainty. Might see a dive for the next few days….added a few shorts………..Go Auburn………..

    • You were pretty close on that call for a “gap fill”. She almost made it up there. But now I believe we will sell off until about Wednesday of next week. Good call though…

  19. Pomo Schedule:

    11/29 – Tips – 1.5% – $2 Billion
    12/1 – 7-10 yrs – 11.5% – $15 Billion
    12/2 – 5.5-7 yrs – 11.5% – $15 Billion
    12/6 – 17-30 yrs – 2.0% – $2.6 Billion
    12/7 – 2.5-4 yrs – 10.0% – $13 Billion
    12/8 – 4-5.5 yrs – 10.0% – $13 Billion
    12/9 – 1.5-2.5 yrs – 2.5% – $ 3.3 Billion
    12/13 – 10-17 yrs – 1.0% – $1.3 Billion
    12/14 – TIPS – 1.5% – 2.0 $2 Billion

    One thing should stand out very clearly… Wednesday and Thursday of next week are highly likely to be “rally days”.

      • I don’t know? It only says that the Fed’s are basically giving money to the banks for treasuries. What the banks do is unknown? Most of the time they are told to use the money to buy up the market (while they secretly sell their own shares), but it’s not a guarantee.

        • It’s an auction, I think!…I imagine you have to take ownership right away. anyway, the banks borrow $30 billion, at zero% interest, buy the Treasuries for an instant 3% gain. Banks UP!!!!

          • Pre-market Monday—look at RTH…it should be up… 3% gap up…You might want to fade the gap up, at lunch time, ny,ny time..
            My IWM 15 min…chart says Higher high on Monday…possible 74.6—
            I follow the DIA,QQQQ,IWM—they give off much more reliable signals by far, than the SPY…lesson learned in my ancient times…You should follow all 4, and you should see the difference, after awhile…You’ll probably drop SPY, cause it’s always out of place…
            VIX 21, anything can happen–That’s a high enough VIX for huge moves, either direction.

          • I did so many edits on the comment—–Yes! I’m going to 70% shorts going into Tuesday—last day of the month, Usually down, and XLE, gets so nervous on Tuesday’s ( sell off) ….ahead of the oil report WED…We are in this XLE nervousness cycle for at least 3 or 4 more weeks.

          • I’ll probably be joining you. I’d like to see where Monday ends up first. The short term charts are mixed, so it could just chop around all day, and close about flat? Hard to say right now…

      • QE2 does NOT create any new money as it did in QE1. Hence, the success rate of market rallying on QE2 POMO days has been extremely bad. The front-running that is. QE2 is primarily balance sheet adjustment and nothing else. No new money is being handed over to the banks. They are just carrying forward long/short treasuries in lieu of the other to make a dent on the yield curve. Alas, it worked like a charm, just in the opposite direction. 🙂 So POMO days will and should have no significance with regards to equity markets IMHO.

    • I like to see that it shot up that much. But it is just as bearish when it reaches a bullish extreme and then drops hard. It seems like buying the dip was the mantra this week although I didn’t follow today’s action and I need some catching up to do.

      • I’m looking for 1150 spx for the first downside target, and then 1130, if it gets that far? I think it will happen by the close Tuesday or Wednesday morning. Then a POMO rally until the end of the week. After that… who knows?

  20. The 15 minute chart is turning back up now. Looks like we’ll rally a little into the close. The 60 is still pointing down, and should allow for a possible gap down on Monday morning. It could also be filled though, as the 15 and 30 could turn it back up. Hard too say?

    • I don’t know about that Z… the 60 minute chart is pointing straight down now. We should at least sell off at the open. Maybe they will rally it into the close, who knows? If so, then it could get overbought again allowing for your Tuesday down day.

  21. ISEE all equities did another finish above 200 at 209 on a all day down day keeping alive the buy the dip mantra. As per Cobar $oex putcall ratio had another large number on Wednesday so the big boys are fading the retailers. $vix had a large jump today not commensurate with the move down and closed well above its 50day average. Today should be 111trading days from the Summer Solstice high as well as being 77tds from 8-910 and 777calendar days from 10-10-2008. Wall Street 2 released on 9-24-10 or 2 months ago but 63days ago (or 9×7) and Social Network,10-1, or 56days ago(or 8×7). Unstoppable released 14days ago or 2×7. Wall Street 2 released 7×7 or 49 days from Nov 5 high. LeBron James out with a new logo shaped in the form of a crown and 2 jays. Something the occultic experts should take a look at.

    • Sorry, 6 weeks from Wall Street 2’s release to Nov 5 high. Today also is 47 calendar days from 10-10-10, 47 being a prominent crash number (market did bottom at 47tds on July 1st(which was 333tds from March ’09 low) and top this week at 74tds from 8-9-10 high? This week is also 90 weeks from March ’09low, 90 being a prominent Gann number. The April high occurred at 60 weeks, the week before freefall, or 30 weeks ago. Today is 63tds from August 25low making Monday 64tds or 8×8 while making Monday also 66calendar days from Wall St 2s released date.

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