Weekend Update – P3 Is Here!

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Monday Update...

(to watch one youtube: http://www.youtube.com/watch?v=MidBWdQRGJA)

Red

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Wow!  What an ugly sell off on Friday... so what's next?

[pro-player width='425' height='344' type='video']http://www.youtube.com/watch?v=hS2HfjR9oPM&feature=player_embedded[/pro-player]

(to watch on youtube: http://www.youtube.com/watch?v=hS2HfjR9oPM&feature=player_embedded)

The answer... One Ugly Week!  While I still think Monday will be an UP day, the overall week should be down hard.  I know that seems strange to say, but after such a large move down there is usually a bounce... even if it's only a small bounce.  Think like a gangsters, and you'll figure out that most amateurs went short into the weekend, thinking a crash is coming on Monday.

So what would you do to steal there money?  I'd gap it up on Monday and create a short squeeze... but I'm not saying that's what is going to happen, as I really don't know (I give that about a 1% chance of happening)?  The market could fool everyone and gap down and crash as Atilla seems to think.  He could be correct on this, as that would fool the amateur bulls.

(to watch on youtube: http://www.youtube.com/watch?v=xmxLaYUWVc8)

So what are there in the market... more amateur bulls or bears?  I don't know?  Cobra gives Monday a 81% chance of closing up from past statistics when the Vix rises more then 18% in one day.  Will this time be different?  It seems too me that the first sell off (wave 1 down) is usually retraced very heavily to squeeze out the bears, before the real multiday move down happens (wave 3).

The question isn't whether or not this is a wave 1 down, as that's obvious.  The question is where it ends?  Did it end on Friday, with Monday and possibly Tuesday having the wave 2 up retracement wave to follow?  Looking back at other similar periods there was an up period everytime at some point in the following week, before that week close out down hard.

I'm thinking that Monday will be up just a little bit, (maybe a spinning top, or "pause" day), and then a squeeze up on Tuesday... followed by the rest of the week selling off hard.  How far up, I don't know?  I'll be looking for upside FP's, but right now I don't have any.

Make no mistake about this forecast, I DO expect this coming week to be down hard... but it shouldn't be straight down yet.  That shouldn't happen until we are in a wave 3 of 3 of 3, etc... which isn't here yet, and might not be here for several months.

Now, there still is the possibility that TPTB cause something to happen before Monday which would just cause a gap down and crash on Monday.  Anything is possible here, but the past statistics say they we will go up on Monday and/or Tuesday before moving back down into wave 3 (which could easily hit that 1150-1200 range that Atilla mentioned).

These riots in the middle east are growing, and could spark the "crash" that TPTB have been planning, while us sheep try to predict the date.  We could very well open on Monday and drop like a rock!  I can't answer that?  I can only look at past history, and state that it's more likely to bounce back up with a wave 2 first.

If I allow myself to get caught up in this news, I'll likely be one of the bears trapped during a squeeze.  I've did that before in the past, and I always got burnt.  They want to distract you with the news, so you will get long or short when they want you too.  Right now, I think there are a lot of new retail shorts in the market from Friday's sell off, which was simply panic from the "unknown" situation in the news.

There "will be" a "news event" or false flag that will cause the crash... this middle eastern crisis could very well be it?  I don't know "what" it is, only that something will cause the crash.  TPTB have that already planned out, and I'm sure they have their evil little minions helping to fuel the riots over there.

So, I really don't know what is going to happen on Monday, but if things play out like they did in the past, then Monday and possibly Tuesday will be UP days.  If the past does work, the we can safely say that "this time it's different" and actually be right for once.  So for now, I'll wait for a bounce to get back short again... and hope I get the chance?

For those already short, I'd just sit tight a wait out any bounce (if we get one?) as by the end of the week the market should be a whole lot lower.

Good luck everyone...

Red

P.S.  Thanks go out to Richie and Andy who made a donation to "Feed the Dragon"!  For the other 998 to 1998 people (the blog average 1,000 to 2,000 readers per day), if you make a nice profit this week on the coming crash, and this blog helped guide you... (you'll figure it out)  🙂

1179 COMMENTS

  1. Sudden upward moves in Silver prices usually happen after a gradual correction downward, and they tend to take the inexperienced metal investing public by surprise.

      • I’m puzzled by Silver too, as I don’t have any downside FP’s on it… so I don’t know where it’s going when the market tanks? But, if JPM has anything to do with it, they will push it down to cover all the shorts they have. Once they close up all their shorts, maybe then we can go up to the 84.30 FP?

      • Uncertainty is a driving factor. Interest rates are also important in relation to silver.

        There are technical reasons why Silver should go down with the market and the rising dollar. However, one should not ignore the fundamental reasons why Silver should be worth much more.

        I say, buy on the dips. Hold the physical stuff and you will be rewarded in the long term of things.

        Most of us already know this recovery is a failed attempt. This farce can only continue for so long…

    • Yeah, I know now… sometimes I don’t know one day from the next. I’m still getting used too 2011, so being one day off isn’t really that bad (compared to a year… LOL)

  2. Gang, for some reason the site was loading really slow, but the tech guy at my hosting company said it was having delay issues loading PayPal. Are all you guys (and gals) overloading PayPal trying to donate? LOL… just dream here.

  3. As expected, the long tentacles of the Fed are spreading overseas in order to pump all the markets that open before the US. ES futures also. Gold down while the dollar is up. 7 1/2 hours to the open…Madman Ben must have bags under his eyes trying to find creative ways to pump the entire world…

  4. “…protesters are taking to the streets with knives, bats and golf clubs…”

    Good to see the middle class is involved.

  5. lots of dow 30 stocks report this week. I think that limits the downside on the Dow, for this week.
    the egypt news is the ganst’as new signal for sell off days, so sell off days, can happen at their whim, next couple of weeks, is how i’m playing it. 40% shorts going into each overnight for protection is a good idea. imo.

  6. well red,

    you were right again…. a small bounce come monday morning!! my “expect the unexpected” warning was ‘off base’….. lets see how this transpires out. there seems to me so much ‘risk’ that is far from being priced into the market, which will need pricing in as events unfold.

  7. There is still the possibility that we go down one more time to lure in more bears, but the first couple of hours are where it should happen (if it happens) as that’s where the most volume is.

    The last hour is also important, and could give us the “B” wave down in this suspected ABC move up (to a 50% or 61.8% Fib. level, I’d estimate), with A taking most of the day, and C likely to happen tomorrow.

  8. Not sure what this means, but I watch the SQQQ (3x short NASDAQ)….its got 2.1 million shares of float, it had buy volume of 720k shares the first hour of trading today. 1) Could have been people closing positions or 2) could have been new positions….either way, it says the big boys are not likely long the market any longer or may have established massive short positions…IMHO.
    BTW, this is the largest volume ever recorded in an hour for this trading vehicle (SQQQ)

    • Thanks for the update. I agree, it’s not a time to get long. While I still think that we will go up for a wave 2 in the next few days, that’s only short term, and these big boy’s can’t get in and out at that quickly.

      So they have to inch their way in, day by day. I bet there has been similar (but smaller) long positions taken on the 3x bear share on the qqqq’s within the last several weeks.

      This is just one more nail in the coffin saying that the rally is officially dead, and just breathing its’ last gasp of air right now before finally dying.

  9. red,

    would that be a little baby bull flag i am seeing on the spx right now??
    kinda looks like a bull, and smells like bull – well then its probably BULL!! LOL

  10. So on a more philisophical note – does anyone else out feel like they are being “induced” into a ‘trance – like hypnotic’ state since the 09 bottom, just by daily watching the melt up of the markets??/ or am i the only one?? i personally hate trances and illusions!!

    • LOL… just sit back and wait Richie. By Wednesday I believe she will be topped. It’s a beautiful day outside here in Florida. I’ve opened up the windows to let the fresh air in. It helps to clear out my thoughts. Sorry for everyone still stuck with cold weather up north… bummer. That’s why I moved to Florida in 1989.

      Just hang tight Richie, and sit on your hands. Worst case scenario is that we go up past the 50% or 61.8% Fib level (around 1288-1290 spx) and hit the questionable FP of 130.01 spy from Friday. Either way, this week should end a lot lower.

      • Sorry, I’ve been saying SPX… I mean ES, which is about 5-6 points lower then the SPX right now, but they have previously be in sync with each other.

        When the ES hits 1288-1290, (whatever level the SPX is at), I think the bounce should be about over with. But, time is important too, and I don’t see that happening before Wednesday.

      • Whereabouts in Florida Red? Gulf? Best side, or used to be. I went to school on a tennis scholarship in Florida. Loved it, but missed outdoor hockey.

        Waiting for the C wave up here.

        U know, if my theory of distracting us before 2012 is correct, this may be a bear trap. It would be good for me overall, but I like shorting so…………..

        • Jacksonville Florida (technically Atlantic Beach, but the big city is Jax).

          And yes, this is looking like a small B wave down now. I think we’ll see the C wave up tomorrow. I wish I knew the exact target, but I’ll just be looking at the ES for a move to around 1288-1290, and then short the spy… where ever it may be at?

    • Could be a FP? It just had on large candle down to 17.10, but the next candle is at 18.25+… very strange? I’d say we will revisit that 17.10 level by Wednesday at the latest.

      But, a crash is coming… and I expect it to start by this Thursday and continue into next Monday, as well as the rest of next week.

      The Legatus Pilgrimage will happen this February 3rd-5th, so next week we should see the market turn down hard.

  11. Red, any chance you think the 38.2 retracement from Friday’s move might be all we get? Just a thought.

    • Not likely Dee. Most wave 2’s seem to make a ABC move up. This only has only had one way up now (the A wave), and seems too be making a B wave down now. I still do expect to see a C wave up tomorrow, taking us up to about the 50% fib. level on the ES.

      • Problem is RED, that is TOO expected, your prognosis. You have been following the casino for quite some time now. Pretend you OWN it.

        This may very well be all it gets. OR it goes straight UP and over and up for miles. But we will not get the abc A abc B abc C that every rank amateur Elliott trader is waiting for.

  12. If all goes as planned, we should go up again tomorrow. But again, this is only a wave 2 bounce, and wave 3 down should start by no later then this Thursday on the job’s data or some other news. A big move down is coming, and it will likely be called a crash.

    • I have two scenarios:

      1. wave 2 is contained at 1292 on $SPX (A went to the highs, B back to 1282, C comes tomorrow), certainly no higher than 1296.
      2. you’ve been fooled again, and we gap n go to 1315.

      $CRB (commodities index) set a new high today, eclipsing the old one by over 1%. Copper will probably set a new high tomorrow. Recently, copper has been a leading indicator.

  13. At 4:16 pm CST I had a FP for SPY of $34 and change come accross my screen….it stayed there for about 1 minute. Can anyone verify on their end ?
    Thanks

  14. Spy fp of 34? That is crazy. Seriously? Did you capture it? And on what medium?

    I find the oil price tearing up, vewy, vewy intewesting. Maybe an oil refinery incident coming?

  15. i think julian assange is a lying bag of fresh brown steaming dog doodoo!!! it is jan 31, and he made a statement to the world whereby he would RELEASE information about a money center bank here in the USA – sometime in january!!!! really julian – REALLY _ JANUARY!! well unless he releases it in the next 2.5 hours, my characterization of him will stand!!

    • Hard to believe that it can go much higher. The last 3 weeks has been 100% dollar driven upwards. Hammering the dollar every day except Friday, which was dollar strength. They would have to spend a crazy amount of money to drive the dollar down significantly upwards.

      I think people caught on to the desperation of POMO on Wed & Thurs because offers to sell were on the overly large side. Hard to say what will happen now. RSI only recovered a bit today.

  16. I ran across a F/P several times. Not sure if I decoded it right but it could point to 0212011 OR 02112011.

  17. RED,

    could that FP be a directional print, something that will be filled in a year or so??? just like the DIA print took close to a year to fill, this could be the same?? the time stamp is interesting too… 4:59 or (4+5=9)9 or 99……hmmm….. this is no mistake. the date is 1/31/11 and the volume is 13,387,217 which looks to me like 13, (3+8=11)7,(21=7+7+7)7 or 1311 77777….. isn’t this level where we would have GS at 13/share??? :-)) just thinking out loud

    • OH YEAH RED,

      FORGOT TO ADD THAT 34.65 WOW!! (3+4=7) AND (6+5=11). THAT GIVES US 711….. (and i dont think they want us to go get a slurpee either!!)

  18. Got a FP of 128.67 three times on SPY premarket at 8:57, 9:05 and 9:08
    because of the type of charts I have I can’t do a screen shot – can someone check their programs and see if it shows up there

  19. Red,

    refresh the short term FP’s now?? we have one to the downside now?? i think you mentioned it somewhere??

    • 1313-1315 is def. in the cards now. Maybe even higher. I’m done shorting or trying to short this market. Even if we drop 100 points in 1 day, i’m just going to buy the market. Just absolutely ridiculous

    • maybe red,

      if you pull back to the daily on the spx, you can see how many times during the topping process we have seen that intial sell off, and then full retrace, and then second sell off and the then the cliff dive…so as you said many times in your videos, this time is no different…… it is real hard to toptick, and to be 100% during the topping process…. but this definitely looks like the topping process – divergence of indexes (see russell)…….. believe me, i am grinning and BEARING it!!! LOL

        • This is not going to be a double top. We are headed higher. Unless the jobs report completely drops the ball, there’s not stopping the Fed and the all the free POMO money flowing in.

        • red,

          profit or loss is the reponsibility of the individual. All you can do is make the best call you know to make with the information you have – and i think it is pretty darn good.

          the funny thing is this is so frustrating to the bears that the next dip we will see the btfd (buy the f*ckn dip) crowd come in – and they will buy each dip thereafter…… all we can do is wait…. i personally am underwater on the day, but i will wait it out and see what happens through the week.

        • red,

          profit or loss is the reponsibility of the individual. All you can do is make the best call you know to make with the information you have – and i think it is pretty darn good.

          the funny thing is this is so frustrating to the bears that the next dip we will see the btfd (buy the f*ckn dip) crowd come in – and they will buy each dip thereafter…… all we can do is wait…. i personally am underwater on the day, but i will wait it out and see what happens through the week.

    • Yes… exactly! I’m thinking April 29th (hoping, more like it), but I really just don’t know? The ADP jobs numbers will be extremely important for tomorrow, so maybe they don’t actually lie this time and simply tell the truth?… which would tank the market of course.

    • Yes… exactly! I’m thinking April 29th (hoping, more like it), but I really just don’t know? The ADP jobs numbers will be extremely important for tomorrow, so maybe they don’t actually lie this time and simply tell the truth?… which would tank the market of course.

  20. Congrats America is bankrupt. We can never pay our bills. 48 million on food stamps. Unemployment up. America is #1 exporter of debt. Bernanke turning the dollar in to toilet paper.

    Stop the POMO if our economy is in such great shape.

  21. From the ISM report:

    “The prices paid index, which measures whether manufacturing companies are paying more for raw materials, jumped sharply. That’s a sign that inflation could pick up soon. If manufacturers are unable to pass on the higher costs, it could cut into their profit margins.”

    • “…could pick up soon.” <—what ISM genius wrote that? The last time cotton prices were this high was the Civil War. It took a Civil War! The 70s have nothing on today's 20-80% food inflation. Does everyone in every analysis agency now work for Madman Bernanke?

  22. SP 1313 seems a good bookend to 666. 1307 works also. Dow now has a lower RSI with a new high if it stays here. Today should be 696 days from 3-6-9.

      • SP’s high of 1308.58 very interesting. ie 111.58 (58crash number in both directions). The market probably needs to do a doji top tomorrow or Friday.

        • Yes, there should be one more quick pop higher, as the vix still hasn’t hit it’s 17.10 FP from yesterday. I suspect it will hit into the close today or tomorrow morning.

          However, I’d like to see it hit today, and some bad ADP numbers to tank the market tomorrow morning instead of waiting for Friday.

          • Gotta watch the dollar. Dollar strength tanked teh market Friday. Yesterday and today the dollar has undergone some obvious manipulation, which is unsustainable, being that it’s now taking about 1 penny vs euro to PUMP the dow 100 pts. Once they decide to dump euros, end of story.

          • UUP is hitting the 30 RSI support area today. My cryptic forecasts are based on the dollar. In fact, I have been more interested in gold,silver, and the dollar/currencies than the stock market lately…….

  23. In the past, he S&P would backtest the lower trendline before reversing, but today the gangsters blasted right through it and are now back into the bullish trend. Are they just taming the bears so they can sell into an orderly correction that will not bounce? I think so. Like Leo says, they won’t let any bears on if they can help it. What a better way than to trian ’em a little more…

  24. the way i see it is that we need to draft a serious letter to ben bernake detailing our invoice to him for shorting this market. it is because of our shorting efforts that we afforded ‘short squeezes’ and in turn allowed for our unrelenting market ‘melt up’ to occur. This service comes at a cost, and our letter will detail that cost – PAYABLE UPON RECIEPT!! who wants to add there name to it?? anyone???

  25. It’s gonna close at the top of the range,…talk about pain for any bears still holding on for some resemblance of a pullback. Fraudsters do it again.

  26. Meanwhile some kid that I taught how to forex trade took a 50k account and turned it into close to 700k in less than two months. Doing, basically the opposite of what I have been doing. YIKES. I feel poor AND old.

    He offered to send me some money today, as he is taking 7 of his buddies down to South Carolina for a big celebration. Might take him up on it. LOL.

  27. Keep in mind there is a huge winter storm in the Midwest. Expect very light participation in the futures pits. I.e. volume could be as bad as Xmas holiday week.

  28. All,

    Remember the extra $5 billion a day — in addition to POMO — as the Treasury winds down its Supplementary Financing Program…it starts this Thursday and will PUMP the market with $5 billion a day until the program is wound down to from $200 bil to $5 bil.

  29. JPM down, Spy down. next op to short the indexes.
    JPM 48 double top, that’s a good short. based on the last time I checked its eps numbers, about 2 weeks ago.
    WFC at 34.5 confirms.

      • I don’t think in SPY numbers, I’m trying to…I have to convert the SPY into DIA,QQQQ,IWM numbers, and then get back to SPY questions…( weird) I’m not ruling out the qqqq’s will get to 60 eventually, mid feb or early Mar. ( or late in the year) 57 + 5% = 60, so SPY 5% higher. I think there will be more down 1.5% Dow, spy days, ahead. (VIX is gaining strength)

  30. I also have a QQQQ FP at 59.95, which I suspect will happen within 5 weeks.
    and coincidentally 60 QQQQ equals the amount of POMO money being pumped into the qqqq.
    btw, there are no coincidences…It’s the gansta’s master plan to enslave you!

  31. Hey Red,
    Is this P3 going upwards…LOL
    Anyway, the longer this goes, the likely we are to see 1987 style crash…they will not let any bears in when it happens…I think all TA is useless at this point, nothing that could be trusted in the past is working any longer…All I see is short squeeze after short squeeze, most obvious being a Euro…
    The only thing that hasn’t failed yet, is playing this a black swan way, which is be prepared to lose put premiums until you hit a jackpot…because, crash is coming, it just that no one will be able to get in an short in time to make a profit (long won’t be able to get out, which is worse I guess)…even Gann turning dates were violated, although, they are still holding for Russell and Nasdaq
    Good luck to all, flipping a coin would give better results than traditional TA lately.

    • Dollar needs to rise. Who’s gonna buy our currency? New highs = new buyers.

      Ireland and Greece are in the biggest trouble.

      Crash coming when the POMO money runs out and I hope that is NOT the case and it happens sooner.

      • I think the chance that POMO runs out is basically nil. The more POMO money that gets pumped into the market, the worse it will become. Bernanke will say that it “wasn’t enough” and pump more into the stock market. I called this the End Game when QE2 started, and I still believe it. With asset & commodity prices going up while the dollar goes down, an exponential amount of money will be needed.to keep just the status quo.

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