Headfake Or Back In The Bullish Trend?

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Update for Friday...

(to watch on youtube: http://www.youtube.com/watch?v=Xg3OPrdk5Mg)

Red

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Thursday should be interesting, as the market could either sell off hard and put in a new low, or just chop around until Friday when the overbought charts get reset and allow the bull trend to continue.

(to watch on youtube: http://www.youtube.com/watch?v=CN8Jki8ifd4)

So which one will it be?

That's a hard one to answer, as this Friday is option expiration and the gangsters always pin the market at a level that they pay out the least amount of money to put and call holders.  So which are there more of, and at what strike price?  I just can't answer that question unfortunately.

Looking at the open interest on the SPY, the 135 strike price has 156,385 call contracts and 145,187 put contracts, while the 134 strike price has 117,086 call contracts and 136,778 put contracts.  This leads me to believe that they will pin the market somewhere between those two levels.  Of course that doesn't mean that we couldn't sell off hard on Thursday and then rally back up half the way on Friday, as that could be the best choice of action for the gangsters to do.

All the short term charts are overbought (except the 60, which could go a little higher), and should roll over tomorrow.  But, that doesn't mean the market has too sell off.  The charts could dip down and reset themselves while the market trades sideways or pulls back slightly.  This would be a bull flag and allow another push up late in the day or Friday.

Not all is rosy for the bulls!

The bears still have hope as long as the bulls don't breakthrough the downward sloping trendline connecting the May 2nd high of 137.12 spy to the May 10th high of 136.11... which should be around the 135.10 spy level tomorrow.  That would be the ideal place to get short if they gap the market up tomorrow morning.

But if they gap over it they could force a short squeeze from everyone who placed their stops just above the May 12th high around the same 135 level.  Personally, I don't think it will happen.  The short term charts seem too extended right now.  Plus, the volume up today was very weak.  I think the bears will be well rested and ready to defend that line against a bunch of very tired bulls.

The bottom line...

I'm looking to get short tomorrow on any gap up or flat open (with signs of weakness).  I do think that they will reach the downward sloping trendline though.  The move up was a solid, but slow grind higher.  I expect "pop and drop" tomorrow.  Maybe some good jobs data for the "pop" (to get the retail traders long), and then a drop on the technicals (as the smart money can read the charts)... and then a flat to up Friday to close out the week.  After that... who knows?

On another note, Ben Fulford had this to say about Dominique Strauss-Kahn...

Start Quote>>>

Dominique Strauss-Kahn, the head of the IMF, was arrested last week because he was trying to steal the American people’s Social Security money to finance the Euro, according to Rothschild family sources. The charge of rape against him was almost certainly a case of entrapment by a female agent although I am sure no proof of this will ever be found. The next phase in the battle against the high level financial gangsters is expected to target Goldman Sachs and Morgan Stanley but, the closing of these criminal enterprises will only mark an intermediate phase in the battle against the criminal elements concentrated in the central banks of the West, according to White Dragon Society sources. The end result is certain to be a historical change of the sort not seen for thousands of years, if ever.

End Quote<<<

Looks like the rats are getting caught in the mouse trap.  Maybe the cheese was too sweet to pass up?  Who's knows how hot that female agent was?  LOL  Now let's see if this rat will "rat" on the other rats?

Red

 

399 COMMENTS

      • I’ve had a short position for the past two weeks, just trading bigger/smaller, and trading the triple longs at the inflection points. Any losses on the short side won’t be substantial because the HFTs & human manipulators are furiously pumping different sectors to keep this thing afloat.

        Long options have been very profitable for reversals like these, but I’m going to be super careful…I have a feeling that some weird stuff is going to happen soon. Weird weather all over, allergies going haywire all over the country. Just weird.

        Some Apocalypse humor:

        http://www.amazon.com/Ready-When-Goes-Down-Apocalypse/dp/0061998257/ref=sr_1_1?ie=UTF8&qid=1305776080&sr=8-1

        • LOL… that guy is whiter then I am!

          I’ve been in and out of short positions, but this is the first short since last week (which was a nice one).  I’m trying to be more patient for my entry’s.  I do think tomorrow should be a good day to get short again.  This relief rally is what I’ve been waiting on since last weeks’ bottom.  The only wildcard for this week is the games they play around OPX.  So it could be next week before we move back down hard?  We’ll see tomorrow I guess…

  1. So far it looks like the gangsters are holding the market up while the short term charts reset.  This it typical of opx weeks, as they have to steal your money by making your options expire worthless.

    • Yeah if you want to see a stock that seriously and obviously manipulated around OPX, check out GOOG. I’ve made a few bucks guessing what the criminals would do with it. The moves are often very large.

        • If all of a sudden SEC investigators were paid per fraud uncovered, there would be a whole lot of rich investigators. But based on what I see, they must be paid for every fraud they ignore.

          • LOL… that is 100% accurate!  The SEC people are paid to look the other way for investigations involving the banks, and instead they chase little fish like Martha Stewart.

  2. Red,  Seems a bit quite around here lately, doesn’t it?  If you could manufacture a mini-crash to wake everyone up, I’d appreicate it!  Or maybe catch a few more of those crazy FP’s like SPY 20 or VIX 349 ;-).  If you believe in FP’s that’ll get your attention!   

  3. vix almost at 200dayMA on 15min chart and RSI overbought in about an hour. So we may start to recover adn head higher into close…

  4. Leo, can u take a look at the fcx charts? There is a gap on the daily around 51.60 and the weekly rsi at 0. do u think we can close gap soon? i have calls and wanna getout lol 

    • Sorry it took so long Shark… Looking at the weekly chart on FCX it looks like a double bottom to me.  Maybe you will get your bounce to possibly the 50% fib level, but the chart looks bearish too me.

      It’s stuck in down channel too, but it could go back up to about 52 to backtest the falling trendline from the 58 high and the 56 high.  I don’t see what gap you are referring to, but anyway… a bounce to about 52 is the best I can see right now.

      • thats perfect. my breakeven is 49.5. So ill take that and then plan to go long VIX (september calls) or just buy the dam shares 

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