Somethings Going To Break Soon

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1231

Wednesday Update...

(to watch on youtube: http://www.youtube.com/watch?v=3-U66me8Rjc)

Red

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Will it be another leg down for the Bears, or a rally back up for the Bulls?

(to watch on youtube: http://www.youtube.com/watch?v=Anxvvx8ACTk)

From everything I see, it looks more likely to fall down instead of rallying.  All the charts look bearish... very bearish.  I just can't find a reason for the market to rally right now.  While anything is possible, the easiest path right now is down.  I'm actually looking for a reason to go long, but I can't find one.  The charts aren't oversold yet, in fact many of them are over bought.

Does that mean that we will sell off tomorrow again?  If the market follows the charts, then yes.  If we rally against the charts, then you can thank uncle Ben and the $15 Billion of POMO money that will be injected into the market tomorrow and another $15 Billion on Thursday.  The charts say we go down, but you have to think about what the gangsters want to happen.

Will they allow this sell off to continue down to put in the 2nd leg down as most sell off do, or will they manipulate the market with monoply money?  I've gotten burnt so many times following the charts, that I just don't trust them exclusively anymore.  They are manipulated by the gangsters, and it's usually when you think that the charts are working properly again that they reverse course and pull a fast one on you.

So, I'll only say that the charts are pointing down, but that doesn't mean the market will go down.  We are coming to an apex where the downward sloping trendline is going to intersect with the horizontal line of support around 1173 spx.  A breakout move is just days away now... maybe even tomorrow?  Which way is unknown, but down is the easiest direction.

Tomorrow is the first day of December, and should be a bullish day... but the charts don't support that.  There is still lots of negative news out there, which is keeping this market from calming down enough to rally.  I do believe we will rally for Christmas, but not until a nice flush out happens first.  It doesn't have too be huge to the downside, but needs to be at least 1150, if not 1130 on the spx I believe.

After that, I believe the market could rally back up into early next year.  But for now, I remain bearish....

Red

126 COMMENTS

    • That might be manipulation, or not? It’s hard for them to control the dollar with all the “more bailouts” needed news out there for more of the PIIGS countries. So I’m not sure if they are allowing the dollar to rise or not? They might not have control of it right now. You know they are still print money, but they can’t keep the dollar down right now.

      • I think it depends on how many euros will be printed/insured to keep from letting the wealthy from taking the slightest haircut. Look at Spain’s 10yr. Talk about going vertical. How will that be resolved? All I see is complacency right now.

        Bailing out Spain & Portugal & Ireland & Greece and whoever else wants to bend over for the banks will dwarf the $600 bil by the Fed. But then again, like I’ve mentioned before, people won’t turn away from their favorite episode of Friends until the situation hits them in the face like a Mack truck. Then they’ll say, “How could anyone have seen that???”

        http://www.bloomberg.com/apps/quote?ticker=GSPG10YR:IND

  1. Our economy is bankrupt because people are morally bankrupt.This market doesn’t follow a chart and unfortunately the only way to go right now is UP.I just want you to make some money and not miss the rally UP on December 1st.

    • Completely disagree — look at a daily chart of IYT (Dow transports).

      What I see is a new high. Dow theory tells us that what should happen next if the bull is still intact is that the Dow industrials should make a new high. Russell made a new high today.

      The alternate wave count is that this is a wave 4 flat, with B setting a new high before C down. Like I said in a post to Katzo yesterday on HOB, I’ll either look really smart or really dumb in two weeks with this call.

  2. Well the way I see it they needed to drive the market down prior they got the Pomo so when they are ready to buy they will buy at discount.
    They will cash out soon and markets will dive again, at least till the next Pomo 🙂

  3. Their power I assume brances out all over the world and for maximum profit all markets were down early in the week: Asia, Europe … and now all are high up so we are merely following. The best part is that all action, up or down is hapening before the bell opens so nobody gets a chance to profit besides some crums

  4. I’m seeing an intraday FP at 119.97 spy, so we should hit that target sometime today. That should be a good spot to get out of any shorts you may have been trapped with.

  5. The crooks are after Assagne, the 39 years hacker who founded Wikileaks, they are so scared of him that they had interpol looking for him all over on some probably baseless acusation of sexual molestation and rape. His interviews to Time, I noticed, are over Skype to avoid tracking. Nobody knows where he is but I bet he is holding some very important information if they want to silence him with any price.

    Here is the article from Reuters:
    http://www.reuters.com/article/idUSTRE6B036L20101201

  6. Gotta love these fake charts. I haven’t seen such a bogus manipulation day as today since the last bogus rally!

    All the indices look like damn stepladders!

  7. The Euro is at more risk than the USD. The GDP of the USA is 14.26 Trillion. The GDP of the European Union (27 countries) barely beats the USA at 16.44 Trillion.

    Leading the GDP of the European Union is Germany (3.3 Trillion GDP) which we conquered and rebuilt in our image followed by France (2.6 Trillion GDP)

    Japan has the second highest GDP of 5.1 Trillion followed by China with a GDP of 5 Trillion.

    • I heard that Congress(or certain segments of it) was still trying to extend tax cuts. I thought it was already built into the market that there won’t be any tax cuts (unless there’s a crash). When it’s apparent that there won’t be any tax cuts, the market will panic as funds and individuals sell to capture the lower rate. I need to see when that vote is (haven’t read the article yet)

  8. ISEE all equities at a WOW! 327 reading second highest reading all time to the reading on April 15 and the call buying increased into the close when the action had tapered off (particularly in the Nasdaq). $nymo putting in the same pattern it did in late April to May 3. Let’s see if it can break out of its range tomorrow. Euro needed to bounce and it did. It could pop up to its 20day average but there aren’t any guarantees it needs to. Almost all bonds sold off hard with the exception of eeb (emerging market debt) and IIC (California muni debt) had a massive red bar reversal today.

  9. We should hit the FP on the Russell today. We are very close now, tagging 748.14 as a high on the RUT. The FP was for the futures, which trades a little low. So 749 (the FP) would probably be about 750-751 on the RUT.

    After it’s hit, we’ll have to start looking for some downside prints to show up, as I think this leg up is still only a corrective wave, with a 3rd wave down to come.

  10. We’ve hit a high of 749.20 on the Russell 2000 ($RUT), which should match up with the FP of 749 on the futures of the Russell (TF). So, that FP should now be considered “filled”.

    When hitting any FP, up or down, it doesn’t always mean that it will reverse at that level. It simply means that they plan to take it there. I’ve noticed that when they take it there quickly, (like they just have), that it usually is just a “stopping point” before deciding to continue in the same direction or reverse.

    I don’t have a clear read on percentage on how many times it reverses versus continues in the same direction. But, since we are now very overbought on the short term charts, I’d expect a pull back from this area at least.

    Whether or not it’s going to be a reversal, or just a correction with another leg back up to follow is still unknown? Remember, we still have that DIA FP of 118.16 left to go. So maybe we just dip down a little for a few days and then push higher again. I just don’t have a good read on it right now.

    • Europe is still in trouble. The last 350 points on the Dow has apparently made everyone forget that fact. These last 2 days were better than the first two days of the BS rally back in August. Can’t see this continuing to new highs, except is funds chase in desperation until EOY. Can’t really see a huge pullback either, without an “unforseen” (at least to us) catalyst.

      Seems like a “last hurrah” to me, and still see the beginning of 2011 look like the beginning of 2008.

      Rangebound for now, I suppose?

    • Heck Red at this rate we could hit the 118.16 by Tuesday. I don’t think we will but as of right now, 3.9% upside on the DIA and we are to the 118.16 FP. If we did hit it by Tuesday, you would have an answer to your question “what is the significance of the December 7th FP on the Wilshire?” Would the TPTB make it that obvious?

    • LOL… I wish I could get an accurate read on it. The link I have listed here on this blog under the “Helpful Information” section goes to the nyfed dot org site, which I’m sure is an “official” site… but ZeroHedge somehow came up with what I suspect is more accurate numbers.

      Clearly the numbers that they have listed (which show $15 Billion today and yesterday) are what’s driving this insane rally. The numbers on the nyfed site only have today and yesterday listed with $7-9 Billion each day.

      I don’t know where ZH got their info from, but I’d sure like to know that answer to. Here is ZH’s link again…

      http://www.zerohedge.com/sites/default/files/images/user5/imageroot/gono/POMO%20Estimate.jpg

      • re: I don’t know where ZH got their info from, but I’d sure like to know that answer to. Here is ZH’s link again…

        Red’ those numbers were an ESTIMATE, prior to the actual pomo schedule being released. I remember the story on zero-hedge at the time.

        It is why your POMO references have been wrong EVERY DAY in the last few weeks.

        See the treasury website, use their dates. They even give a precise range for POMO since the ‘big pomos’ began.

        Good wishes though. I very much enjoy reading all your thoughts.

        philip..in London

  11. Well, the only good thing about today is that the SP closed at 1221, a variation of the magic number and b-berries most celebrated # on 12-2-1(0). 1221 minus 666 March 2009 low ====555 while 1227-666=561 ie 111 or 560.xx if one wants to do an exact calculation. Sounds good for a secondary top (ie wave 2 top—see Ron Walker’s chart of the 2007top for a comparison). ISEE all equities in another stratospheric reading level. (When ISEE hit an alltime high of 348 on April 15 it immediately tanked the next day and went on to make a slightly higher high). For my timeline to work, market needs to tank hard tomorrow. I’ll do a more comprehensive post later.

    • Final ISEE all equities reading===296. AAII bulls 49+% bears circa 26/27%……CBOE equity put-call ratio sub .5…..$oex put call ratio on Cboe features quite a preponderance of call buying over put buying.. But it had been reported that $oex ratio was very low the last few days(ie massive call buying to put buying) but I did not see that from CBOE’s data the last few days so I wonder how sentimenttrader calculates its OEX data. That’s the current hook that has all the bears running scared but it conflicts with all of the other dumb money data…….I still have a more comprehensive post coming.

  12. Today has some cycles with a history of success. Today is 440 trading day cycles from the March 2009 bottom. 440==5×88. The market bottomed on March 6 2009 at 352 tds from 2007 top or 4×88 (352) which makes today also 792tds from 2007 high or 9×88. Add 70 to 440 (47# in there) and there are 510tds to Nov 21 low. (510 doesn’t stick out to me as anything important though). Nov 21,2008 is also 741 calendar days from today….back then the SP bottomed at 741. (ie111). Today also would have been 1147 calendar days from Oct 11,2007 high if one does not add a leap year day for 2008….11-21-08 SP low 741 minus 2010 SP high of 1227===486, a number that sticks out as something meaningful but I can’t figure out how….588 is one of Dan Brown’s favorite numbers so much so that he used it as a major clue in his latest book, The Lost Symbol, and paired it with the number 13 although 588 is interpreted to mean ssb in the book. By the Washington monument is 555 ft tall (see below)…..As for the upcoming rituals…..LeBron James and gang et al. Miami Thrice go to Cleveland tonight for LBJ’s homecoming non-reunion. Black Swan is released tomorrow (buzz is Natalie Portman will get an Academy Award for her performance). SP closed at the rescue train number to stop the UNSTOPPABLE force yesterday. 127 Hours is get extended play in the theaters and is considered another Academy Award favorite (127×4==508crash number)(the ad features an embedded inverted V—the space between the two converging cliffs—haven’t seen this one yet so can’t give a review). Next week will be 165 weeks from 2007 high (92+73) and 74 weeks from July low. Today is also 18 tds from Nov 5high which was 136tds from April 26 high……I got some inspiration from another blog which hinted at January’s high as a midpoint high. From March 6 2009 to Jan 19 2010 high ====219 trading days. From the Jan high to today===221 tds (tomorrow then 222 days another potential energy number—-Sp closed at 224 on October 19,1987 and we have seen important closes this year at 1212 on April 26 and 1222 on Nov 4 and 1221 today)…..Anyway if the market continues to ramp from here, then might as well expect a rally from here to eternity since the retail bullish numbers won’t mean a thing and I can’t see a tank job into Christmas…..
    The eVent, a show that should have been cancelled by now, had its mid-season finale this week and would have aired episode #11 next Monday. (apparently the eVent was about to unfold). NFL features week 13 this weekend.

  13. Just realized today at 154tds from April high is 77+77. 107tds from July 1 low. 107×7==749. $rut closed at 751 at one point was at 749…….$nmuni tanked hard today. Munis appear to be back in crash mode….All bonds actually dropped today though.

      • I think if anything it will be caused by a foreign event; the euro tanking or something else in combination. It was just reported that China will be moving to a tightening stance (although this doesn’t seem to be having an effect at the moment but maybe later during the European session it will) By the way, Cramer has the 127 number on his scoreboard tonight along with 711,212,911 or 121
        ie
        ……..12………2
        …….11……….7……

  14. Control macro consumption, by controlling the cost of procuring the goods….
    UGA is getting too high…RTH sector will get nervous, and sell off—That’s the only way the market is going to stop those gasoline pit speculators….After the RTH sector Panic ( lasts one or 2 days) , you will then see UGA begin to sell off….

  15. Thank the Bernank for the bad jobs report. Costs go up, jobs go down. Surprise! Lookie the biggest gain – 40K temp jobs. Wow! On our way to become Spain II, where youth unemployment is 40%.

    I bet anything Madman Bernanke uses this an excuse to bash his detractors next June after QE has a chance to really screw up the economy…”See, we just didn’t so ENOUGH QE! We need to do MORE to jump start this economy!”

    Anyway, I think there will be a pullback next week when the Euro stalls out.

  16. Dollar falling Hard:
    http://www.bloomberg.com/apps/quote?ticker=DXY:IND

    Silver about to test previous resistance levels.

    The worst thing about Unemployment is cutting the benefits. Always fuck (pardon my french) the poor over in an instant. Not that I’ve ever got unemployment but it does concern me. I’ve noticed employers wanna hire you on as an, “independent contractor” so they don’t have to pay you benefits.

  17. It will be interesting to see if they put in a double top today, or continue to hover just a few points below it. It’s sets the stage up for a gap over it on Monday, to create another short squeeze with all those over stops located there.

    Or, will they reverse hard and gap it down on Monday, not allowing the bears waiting at the double top to get a short position for another leg down? Could go either way…

    • I’d like to enter some puts but I saw on the 7th and 8th of December they are adding up to 13 Billion (back to back) on those 2 days.

      The POMO has a shorter time frame of (2.5 years to 4 years) and (4 to 5.5 years) respectively not sure if that matters.

      It’s possible that will send us up to 11,600.

      Further dollar weakening? I am not sure, the dollar index could be going towards another leg down. I did buy January 2011 23.00 puts on UUP a few days ago at 0.29. Currently at 0.41. But be careful, it could go either way.

      The safest upside seems to be SLW, SLV, GLD and other precious metal stocks.

  18. Euro has bounced enough up to its 20day average for my liking. Munis are putting in a pause day along with most bonds although some are down. LQD looks like its about to fall off a cliff. Let’s see if Dow and SP can put in that hook pattern that Atilla likes so much.

  19. WTF was that move in forex? EUR just happens to pop huge 10 mins before close? Just dissolve the SEC and save a billion a year. Unbelievable.

  20. Miami Thrice won in yesterday’s homecoming for LBJ 118-90…..which reminded me of that DIA print…..I looked at the trailer for 127hours last night and there was a shot of the climber’s watch (I assume it was Franco’s) with it at 11:59 with 4.26 beneath it and then it shows it turn to 4.27 with 7 replacing 6. I haven’t seen the movie so don’t know the context but it had me thinking of the DIA print. First the climber’s watch.
    ……..11:59……..
    w/……4.26…….beneath it. So we have the 11-5 and 4-26dates encoded in there….911 also…69from top to bottom..56also(2different ways)…..Of course that watch is about to turn to 12….definitely need to see the movie.
    DIA print was 118.16……911 encoded with 69(11)….could also be 12-6-8….
    The print was displayed 3-30??? What’s 8 months 8days from that day…8+8 to 3-30===11 11……on the line with 5:06 was 174 or 147????Today is 147 tds from 5-6….

    • LeBron James scored 38pts in his homecoming on Thursday to along with his team’s 118pts. The Thrice were 11-8 going into the games. The flash crash was 1 month 8days from the DIA print of 3-30 (I hope I have that date right) and 38days from 3-30….I also realized (which has taken me eons to figure this out) that 56×4===224 and 224×4==896(#of steps in Washington monument)…127 divided by 22.4===5.669….1 year 8 months from March 6,2009lows would be 11-5ish…..23years1month18daysfrom 10-19-87====???Red started production on 1-18……18days from 11-18===????10months18days from 1-18 is????or1-19high????

  21. Well, it looks like there was a little rally there at the end. It was an ugly slopply corrective day anyway…better that there was an end of day rally to a new high then a gap up on Monday. It ends up putting a spinning top candle. 1224 is just as good as 1221. (224 October 19,1987 SPclose). Also 1224-666===558….just as good. By the way, the market is approaching 222 and 224 calendar days from April 26……Another fun trivia fact: Washington Monument has 896 steps in its spiral staircase…896===224×4……127 hours was officially released on 11-5 and its number of theaters have been expanding each week since then. 224 one week…297 the next (792or 9x88in reverse)

    • I just saw one of the best sell indicators has triggered a sell signal. Unfortunately I saw it after the close otherwise I would have taken some action. I just have become very complacent despite my market numerology. The trigger could be delayed a few days but I doubt it. As one professional sentimentician has stated on his website, there is virtually 0 bearish sentiment.

  22. Hat Trick complete. Awesome week fellas. Long and strong, Monday going up…….Love the action in DRYS. Shippers turning into the wind. I see a double next year…………….Have a great weekend Red…………..

  23. I have long been amazed that what I consider to be “basic data” can be so hard to come by. Ask your realtor for a time series of prices in a certain neighborhood, and they will look at you like you are from Mars. Why? Well because this is a good time to sell (insert vacacious reason of whim here) and this is a good time to buy (insert vacacious reason of whim here), so historical pricing makes no sense.

    Try to get good data on the indices going back a hundred years….good luck.

    Even getting commodity prices is a feat. Wish I still had access to the full on Bloomberg, but alas that is no more. Costs around $30,000 a year, I had it for free.

    So here is the project. Search out and upload “Real Data Series” of all sorts, and post them as direct downloads on Hawaii Trading.

    You got Data? Send it over, I will post it up. Knowledge can be freedom and power. Let’s create freedom and power, for free.

    First chart / Excel is by me (Courtesy of the Perth Mint). This chart data is down-loadable in Excel at Hawaii Trading. Within 2 months, my goal is to have 25 spreadsheets with valuable data, available for free.

    The Excel format is sloppy, it took me 30 minutes to whip it into this shape as they had odd date formatting.

    http://oahutrading.blogspot.com/p/real-data-series.html

  24. I think I have to trust the $VIX price channel, and say that more volatility is ahead…18 to 23 channel, keep buying the dips, but keep some smart shorts on your portfolio..for that every week huge down day…

  25. Be careful with 2X & 3X ETF’s they decay over time.

    Unfortunately the market has to go continually in one direction to make some money on these.

    According to my ETF watchlist DRN (Direxion Daily Real Estate Bull 3X) makes a good put option.

  26. Mercury Retrograde (appearance of going “backwards”) is widely accepted by Astro followers as leading to a breakdown in communication, technology, and transportation. Dec 9 Starts the Retrograde.

    During retrograde is considered a bad time to start a new venture or enter contracts.

    You don’t have to believe it, but you should react to it. Do this one fairly simple thing.

    BACK UP YOUR COMPUTER SYSTEMS!

    Link below is a practical computer backup procedure I wrote in 2009. Don’t be intimidated by it. You don’t have to do every step. Each step that you do take, great reduces chances of a catastrophic loss.

    A drive image is SO POWERFUL. Do a drive image, even if you do nothing else!

    http://oahutrading.blogspot.com/

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