Blog | Red Dragon Leo - Stock Market Trading on the Darkside | Stock Market Trading on the Darkside

The Perfect Storm Is Just Ahead…

Leo's Den

Red

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May 13, 2010

No Post For Friday Gang, as I'm a Happy Bear Now, and looking forward for more fun next week. I'll have the weekend post up by late Sunday Night. Go Enjoy The Weekend

And Friday Could Be The Start Of It...

From a technical point of view, a lot of damage was done today for the bulls. That late day sell off broke the rising bearish wedge on the 15 minute chart, as well as forcing the 60 minute chart to rollover and start pointing down. On the daily chart, the necktie did hold the market back and reject it hard.

Then there is the dollar (UUP), that had a huge buy candle appear in the last 10 minutes of the day, forcing a big move up in the dollar. This tell me it was "insiders" that know something is ready to happen. It was between 3:40 pm and 3:50 pm, and had 1.5 million shares bought up. Compared to the entire day, which only had about 4 million shares traded... that candle is HUGE!

Remember last week when Sundancer mentioned that he got an email from a friend at the Chicago Board of Options Exchange, telling him that a big buyer came in and purchased a ton of VIX Calls. Then what happened next? Thursday crashed, and the VIX soared.

That large buy of the dollar, of 1.5 million shares, tells me that the dollar is getting ready to explode higher. That is very unusual volume for the dollar. Something is brewing, and it's not going to be good for the market. Let's think about this from "outside the box" for a moment.

What event could cause a big move up in the dollar? Or maybe I should ask the opposite... what event could cause the Euro to tank, which would cause the dollar to soar higher? Could the rumor that Germany is going abandon the Euro, and go back to their own currency be true?

The article is up on Zero Hedge, and the link was posted yesterday by StockTech (thanks for the link). According to the article, German chancellor Angela Merkel is scheduled to give a speech to the nation on Friday evening, where she could announce a currency change from the Euro back to the Mark.

I don't know what is going to happen of course, but I find it odd that she is waiting until the market is closed, on a Friday evening. Believe me, if the news was something that would be bullish for the market, it would have been released during the market hours.

Everything is planned and timed to be released when it benefits them the most. The German crooks are no different then the American crooks. Remember, about 200 families control 70% of the worlds' wealth, and they are all part of the "good ol' boy club"... meaning that they get together and plan out future events that will benefit them the most.

The leaders of all the countries are just the puppets that are in the public eye. The real people who control each country is the multi-billionaires behind the scenes. These aren't some conspiracy theories that I'm making up... these people really DO control the planet, and especially the market.

You know that too be true, if you have been reading my posts long enough too see all these fake prints play out. Maybe not every one of them, but you have to admit that it's really strange how those intraday prints are hit within a day or two.

Of course, finding out what they plan too do next isn't always that easy, but we are given many clues. Like the big dollar buy today in the last 10 minutes. And, the fact that Gold is going threw the roof. Let's not forget that Oil is still getting hammered. These are all big clues, that tell me that we have another sell off coming before another rally into mid-summer can occur.

So, from what I can see... Friday, and next week is looking like some big selling is still coming. Could Friday be "Black Friday"? I don't know, and I don't want to call it that... as I might jinks it. So, I'll just say that I expect a down day tomorrow... how far down, I won't guess at.

Red

Evicted Bears…

Leo's Den

Red

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May 12, 2010

548

Are there any more bears left, or did they all get evicted today?

It seems there's never a dull moment in the markets, as you watched today's tape destroy the bears' dreams. I'm glad I wasn't around for the bear beaten' today, but instead I had to actually go work. Yes, I do work... from time to time. Today started off too be a great day... until my car broke down, an hour from home.

Arrrrggggh! So, I waited an hour for a tow truck, and then another hour to get back home. Not a good day for me. When I finally get back to the computer, I see the market squeeze more bears out, and everyone freaking out (myself including... well, just a little bit).

But gang, we all knew that the market could go up to around 1180 spx (and still can), then backtest the broken support line... we just didn't believe it could really do it! That is what shocked all the bears, as the 1,000 point drop was so bearish for the market, that everyone was only looking for a small bounce back up, and then another crash.

I include myself in that category, as I really thought the market was done yesterday. But, we should all know by now, that it's extremely hard to kill a bull. If you look at this move back up using Fibonacci percentages, then we are now at about the 61.8% level, with the possibility of the move continuing to the 78.6% level around 1180 spx. So, in the grand scheme of things, this is a typical move back up.

Let's also look at it from an Elliottwave point of view. The first 2 day sell off, from the 1220 high, to the 1180 low... would be wave 1 down. Then the next 2 days up were wave 2, and the move down to the 105.00 spy low... was wave 3 down. Now we are on wave 4 up, with wave 5 down coming next.

Will it happen tomorrow? I don't know? We could have another up day, to tag the 1180 broken support level first. The sideways chop fest that we have had for the last 3 days could be a bull flag, (an ugly one... but possible?) which could give the market one more lunge higher tomorrow.

I'm still short... painfully short, but you must endure a lot of pain in the options world of trading. Nothing is ever as easy as you plan it too be. They are always out to surprise you, and take your money.

So, if Ms. Market is listening to me right now... I'm Super Duper Bullish right now! Go Bulls! ROFLMAO now!

Red

P.S. Hang in there bears... we ain't dead yet!

Rejected At The 50…

Leo's Den

Red

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May 11, 2010

509

Slammed down in the morning, rallied back at noon, but rejected at the 50, and pushed back to even in the last quarter...

That's the story for the market today. The gap down in the morning was more fear about the Greece issue, but the market shook it off and pushed on up higher... only to hit overhead resistance at the 50 day moving average, and get sold back off into the close.

This is not a good sign for the bulls. It shows me that they don't have enough strength to rally higher yet. Once again, they need to pull back and regroup before making another attempt to rally higher. This overhead resistance at the 50 dma is soon to be double resistance, as the 20 dma moves down into it, forming a "necktie".

A necktie is simply two points (trendlines converging, or moving averages) of resistance or support that meet together at a certain point in time. They will provide great support, or huge resistance. In this case, they are overhead now, and will serve as huge resistance.

Whenever the market can't get through resistance or support, it either gaps over it, (by gapping up or down before the open), or it must pullback and rest before another attempt is made. This leads me to believe that tomorrow,or the next day, the market will pullback and then make another attempt to go through it at a later date.

That doesn't mean tomorrow will be the be sell off day, only that a sell off is coming very soon... if the market can't break through the resistance overhead. It might try to rally again tomorrow, and be rejected again. Every time the market makes an attempt to pierce the overhead resistance, and fails... it gets weaker and weaker.

At some point, it will run out of energy and collapse back down. Whether or not that's tomorrow or not, is anyone's guess? I know it's coming, and I expect it to arrive this week, but I can't tell you exact date. Since there isn't any major news or earnings this week, it could be any day this week.

Since Thursday has been bearish lately, and Friday is the last day going into an "unknown weekend", I'd give those two days the most likely days for a fall to happen. Other then the charts telling me that we will sell off within a few days, there are other clues too.

Gold rallied hard today, even though the dollar stayed flat, and didn't sell off, as the market rose. Usually, the dollar is selling off, while the market, gold, and oil all go up. Oil went down today, but the market rallied up. What is that saying to you?

It says too me that the dollar won't sell off hard because of the Greece fears... which is based on the Euro. The Euro is still weak, and is likely to stay that way until the Greece fears go away. That's not likely to happen overnight, regardless of the market's 400 point Dow rally on Monday. That was just the reason behind it, but the market was very oversold, and was ready for a bounce any way.

As you can see by today's action, the euphoria of the Trillion Dollar Bailout wore off quickly by the close today. So, the dollar isn't ready to sell off yet, and is staying strong. OK, what about gold? Why did it rally when the dollar didn't sell off? Simple... FEAR! That's why I don't trade the GLD, as it's supposed to trade opposite of the dollar, but it didn't this time because people will run too gold whenever fear is in the marketplace, regardless of what the dollar does.

How about Oil? Usually oil is rallying with the market, and while the dollar sells off. But, the dollar was flat today, and didn't sell off. What happens to oil when the dollar takes another move higher? If oil trades the opposite of the dollar, the it will fall hard if the dollar takes another leg up.

Putting all these pieces together, and you have lots of reasons for the market to fall down again hard. I would love to see another touch of the 50 dma before the sell off, as that makes for a larger drop. The market wants to hit the 50 dma at least a couple of times, before giving up and retreating lower. If it falls tomorrow, it won't go downs as far, as it will want one more attempt at touching the 50 dma line.

Think of it like a football player hitting a blocker that he can't get through. He will likely try several times to push past the blocker, before he falls back and thinks of another strategy. The market is no different. Many attempts will be made while "at the line of defense", and finally a retreat back or a push through will occur.

If we start to fall tomorrow, I do expect the gap at 111 spy to be filled before another attempt at the 50 dma is made again. It might happen in one day or several days? Regardless, I do still see another leg down, to retest the 105.00 low at least.

After that, then I could see another rally to a possibly higher high in the market. I don't know if it will happen on June the 25th, as I forecasted in weekend video. I'd be shocked if the forecast is accurate, but for now it's still possible to follow that path of a new high by late June.

So, for tomorrow... I'm bearish, but not sure if the fall comes on Wednesday, or waits until Thursday and Friday? Either day, I'm comfortable be short right now.

Red

P.S. I'll be gone all day on Wednesday gang, and won't be able to reply to any posts (no computer access). So, I leave you in good hands with the lovely Monica, and wise Sundancer. (Try not to kill all the bulls while I'm gone Monica).

Black Monday Delayed…

Leo's Den

Red

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May 10, 2010

1,612

It seems that the only Black Monday to happen was for the Bears... for they just got ran up a tree today fast!

This huge move up, is actually great news for the bears, as it means that there is a higher chance of another sell off coming within the next few days. So, I was wrong on today being Black Monday, but I still see more selling coming. Possibly another up day tomorrow, but I don't see very much of a move up possible. It could just be a flat or pause day?

Looking at the past occurrences of large sell offs, and then a big rebound, in almost every case there was another leg down, putting in a lower low. Cobra did an excellent weekend update, with a lot of charts that shows all the previous sell offs... which had another leg down almost every time.

I don't think this time will be different. The next couple of days could be held up, but I really doubt that it will last too long. We had 4 more fake prints at 111.30 spy, in the afterhours session. Those could be late fills from yesterday's close of 111.47, or they could be fake prints? It's hard too tell at this point.

There was also a fake print of 113.42 at about 12:10 pm (est), which was printed again in the afterhours session. I think that if we open flat, and go down to 113.42, and then bounce back up and go higher... then the final high is already in from April (maybe?).

I say that because I don't think the bulls will have enough power too rally up to a new high, without first making a lower low first. The bears are looking for a short entry, as many missed the first leg down. With the bears overhead lurking, there should be too much resistance for the bulls to fight through, if they try to rally higher from the 113.42 level.

If the market goes down and retests the low of 105.00, and makes a lower low, then the bulls will have enough shorts in the market to squeeze them up and put in a new high in late June as I explained in the video I did. The bulls need to get more fuel to rally up to new highs in this market, and they can't do that without more bears in short positions. Most bears missed that big move down on Thursday.

That's why there is almost always 2 moves down. The first one the bears miss out on, and get short too late. That would be your wave one down in Elliottwave terms. Then they get squeezed out like today, in wave 2 up. But, there isn't enough of them short to squeeze them higher, and put in a new high.

You need to bait them again. So, you have too have another leg down, taking out the current low. Every bear will go short and continue shorting on every move higher. They will be the fuel needed to make a new high in the market. Remember, everyone will see the massive Head and Shoulders, so the bears will continue to go short at every level higher that the market makes.

Eventually, there won't be an more bears to squeeze, and the market will run out of fuel to go higher. I still believe that will happen in late June or early July. Whether or not it happens exactly on June 25th, is anyone's guess? I thought would we sell off hard today, and then start the rally back tomorrow.

But, I was wrong, and the market decided to rally hard today... leaving me to guess at the rest of the week, as to which day the "Big Sell Off" will happen on. Could it be Black Tuesday, or Black Wednesday? I don't know yet, but I'm still very confident that another leg down is going to occur... and I expect it too happen this week.

Next week should start the huge rally up, and squeeze all the shorts in the May OPX. Then, as I said in the video, a possible couple of days of selling... to work off the over bought conditions that will occur. Then, instead of a continued fall from the huge right shoulder that will have been made, a rally up too the DIA 118.16 mark should occur.

You should all know by now that everything can change, and these are just forecasts that I'm making, by trying to put the pieces together, to give you a clearer picture of the possible future. The game can change at any time. But, if the past history shows any indication of the future... then this is the most likely outcome.

One more thing, as you may already know, I didn't go short into the weekend. I stayed in cash, because I was unsure of what the weekend could bring. I did go short today, and will stay short unless the market doesn't make the next leg down this week. That means that the past history isn't valid this time. But, next week will still most likely be a huge week up. We all know that opx is usually a bullish week.

This time around shouldn't be any different, and in fact, it should have higher odds of being bullish, as there is now a huge amount of open interest put contracts for May. They do not want to pay out on all those contracts. That's why I think we will rally into opx.

The question still remains... is whether we have another leg down first, or this is it?

Red

P.S. After I wrote this post, Alphahorn posted another chart that has me concerned. In it, he has a screen shot of the spx on the 1 minute chart, showing a low of 1056 in the pre-market session before Thursday May the 5th. I'm a little concerned as to whether or not that qualifies as a double bottom... meaning that we might only go down to 113.52 spy tomorrow, and then rally on up from there on out.

Or, was this a fake print telling everyone that the market was going down to 1056 soon (actual low was 1065 on Thursday)? I'm going to be very cautious here, because that could mean the bottom is in for now? I don't think it is, but I have too be open to the possibility that the current sell off is over for now.

That doesn't mean I don't expect the fake print of 113.52 spy to be hit, as I still see that happening. But, I want everyone to be aware of it (thanks for sharing it Alphahorn). And you might want to lighten up on your shorts at that level... unless you see the market just blow pasted it like it wasn't there of course.

Close up of the print above. Notice the StochasticFull at the bottom of the chart says 66.6667... tell me these guys don't like their rituals. LOL

Edit.......

Actually gang, credit for the wonderful catch of the fake print, goes to http://disqus.com/grednfer Many thanks from myself and others who find benefit from it... go you Grednfer. Alphahorn did mention it in his post, but I overlooked it.

Weekend Update – The Great Depression Two (Video Special)

Leo's Den

Red

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May 9, 2010

197

Weekend Update – The Great Depression Two (Video Special)

Never Did I Want To See This Day, But...

As I sat down to write this weekend update, I knew it wouldn't be like all the rest. In fact, I knew this update would be a "life changing" post for many of the readers of this blog. You see, I finally have enough pieces of the puzzle to see what is coming up next... and it scares the hell out of me!

I've decided to do a video explaining everything, as it's much simpler, and will get the message across better. This is my first video post, and I don't have a script for it, so bare with me as I might jump around some. Once you watch the video, I encourage you to pass it around to your friends, as it might help save them from the coming disaster too. Just click on the image below and a new window will open with the video...

In the video, I quote some very intelligent people, that include investors, forecasters, and economists... to name a few. The link to the website is here... It was posted by Stock_Tech, a commenter on Thursday's post. (Many thanks for the link). I'm going to copy the post, and highlight the one's that really stand out to me, and post them below...

Economic Crash Forecast for 2010

3/24/10

Secular Voices

Bob Chapman

First 6 months of 2010, Americans will continue to live in the 'unreality'...the period between July and October is when the financial fireworks will begin. The Fed will act unilaterally for its own survival irrespective of any political implications ...(source is from insider at FED meetings). In the last quarter of the year we could even see Martial law, which is more likely for the first 6 months of 2011. The FDIC will collapse in September 2010. Commercial real estate is set to implode in 2010. Wall Street believes there is a 100% chance of crash in bond market, especially municipals sometime during 2010. The dollar will be devalued by the end of 2010.

Gerald Celente

Terrorist attacks and the "Crash of 2010". 40% devaluation at first = the greatest depression, worse than the Great Depression.

Igor Panarin

In the summer of 1998, based on classified data about the state of the U.S. economy and society supplied to him by fellow FAPSI analysts, Panarin forecast the probable disintegration of the USA into six parts in 2010 (at the end of June – start of July 2010, as he specified on 10 December 2008)

Neithercorps

Have projected that the third and final stage of the economic collapse will begin sometime in 2010. Barring some kind of financial miracle, or the complete dissolution of the Federal Reserve, a snowballing implosion should become visible by the end of this year. The behavior of the Fed, along with that of the IMF seems to suggest that they are preparing for a focused collapse, peaking within weeks or months instead of years, and the most certain fall of the dollar.

Webbots

July and onward things get very strange. Revolution. Dollar dead by November 2010.

LEAP 20/20

2010 Outlook from a group of 25 European Economists with a 90% accuracy rating- We anticipate a sudden intensification of the crisis in the second half of 2010, caused by a double effect of a catching up of events which were temporarily « frozen » in the second half of 2009 and the impossibility of maintaining the palliative remedies of past years. There is a perfect (economic) storm coming within the global financial markets and inevitable pressure on interest rates in the U.S. The injection of zero-cost money into the Western banking system has failed to restart the economy. Despite zero-cost money, the system has stalled. It is slowly rolling over into the next big down wave, which in Elliott Wave terminology will be Super Cycle Wave Three, or in common language, "THE BIG ONE, WHERE WE ALL GO OVER THE FALLS TOGETHER."

Joseph Meyer

Forecasts on the economy. He sees the real estate market continuing to decline, and advised people to invest in precious metals and commodities, as well as keeping cash at home in a safe place in case of bank closures. The stock market, after peaking in March or April (around 10,850), will fall all the way down to somewhere between 2450 and 4125 during the next leg down.

Harry Dent (investor)

A very likely second crash by late 2010. The coming depression (starts around the summer of 2010). Dent sees the stock market--currently benefiting from upward momentum and peppier economic activity--headed for a very brief and pleasant run that could lift the Dow to the 10,700-11,500 range from its current level of about 10.090. But then, he sees the market running into a stone wall, which will be followed by a nasty stock market decline (starting in early March to late April) that could drive down the Dow later this year to 3,000-5,000, with his best guess about 3,800.

Richard Russell (Market Expert)

(from 2/3/10) says the bear market rally is in the process of breaking up and panic is on the way. He sees a full correction of the entire rise from the 2002 low of 7,286 to the bull market high of 14,164.53 set on October 9, 2007. The halfway level of retracement was 10,725. The total retracement was to 6,547.05 on March 9, 2009. He now sees the Dow falling to 7,286 and if that level does not hold, “I see it sinking to its 1980-82 area low of Dow 1,000.” The current action is the worst he has ever seen. (Bob Chapman says for Russell to make such a startling statement is unusual because he never cries wolf and is almost never wrong)

Niño Becerra (Professor of Economics)

Predicted in July 2007 that what was going to happen was that by mid 2010 there is going to be a crisis only comparable to the one in 1929. From October 2009 to May 2010 people will begin to see things are not working out the way the government thought. In May of 2010, the crisis starts with all its force and continues and strengthens throughout 2011. He accurately predicted the current recession and market crash to the month.

Lyndon Larouche

The crisis is accelerating and will become worse week by week until the whole system grinds into a collapse, likely sometime this year. And when it does, it will be the greatest collapse since the fall of the Roman Empire.

WALL STREET JOURNAL- (2/2010)

"You are witnessing a fundamental breakdown of the American dream, a systemic breakdown of our democracy and our capitalism, a breakdown driven by the blind insatiable greed of Wall Street: Dysfunctional government, insane markets, economy on the brink. Multiply that many times over and see a world in total disarray. Ignore it now, tomorrow will be too late."

Eric deCarbonnel

There is no precedence for the panic and chaos that will occur in 2010. The global food supply/demand picture has NEVER been so out of balance. The 2010 food crisis will rearrange economic, financial, and political order of the world, and those who aren’t prepared will suffer terrible losses…As the dollar loses most of its value, America's savings will be wiped out. The US service economy will disintegrate as consumer spending in real terms (ie: gold or other stable currencies) drops like a rock, bringing unemployment to levels exceeding the great depression. Public health services/programs will be cut back, as individuals will have no savings/credit/income to pay for medical care. Value of most investments will be wiped out.

The US debt markets will freeze again, this time permanently. There will be no buyers except at the most drastic of fire sale prices, and inflation will wipe away value before credit markets have any chance at recovery. The panic in 2010 will see the majority of derivatives end up worthless. Since global derivatives markets operate on the assumption of the continued stable value of the dollar and short term US debt, using derivatives to bet against the dollar is NOT a good idea. The panic in 2010 will see the majority of derivatives end up worthless. The dollar's collapse will rob US consumers of all purchasing power, and any investment depend on US consumption will lose most of its value.

Robin Landry (Market Expert)

I believe we are headed to new market highs between 10780-11241 over the next few months. The most likely time frame for the top is the April-May area. Remember the evidence IMHO still says we are in a bear market rally with a major decline to follow once this rally ends.

John P. Hussman, Ph.D.

In my estimation, there is still close to an 80% probability (Bayes' Rule) that a second market plunge and economic downturn will unfold during 2010.

Robert Prechter

Founder of Elliott Wave International, implores retail investors stay away from the markets… for now. Prechter, who was bullish near the lows in March 2009, now says the stock market “is in a topping area", predicting another crash in 2010 that will bring stocks below the 2009 low. His word to the wise, “be patient, don’t rush it” keep your money in cash and cash equivalents.

Richard Mogey

Current Research Director at the Foundation for the Study of Cycles- Because of a convergence of numerous cycles all at once, the stock market may go up for a little while, but will crash in 2010 and reach all-time lows late 2012. Mogey says that the 2008 crash was nothing compared to the coming crash. Gold may correct in 2009, but will go up in 2010 and peak in 2011. Silver will follow gold.

James Howard Kunstler (January 2010)

The economy as we’ve known it simply can’t go on, which James Howard Kunstler has been saying all along. The shenanigans with stimulus and bailouts will just compound the central problem with debt. There’s not much longer to go before the whole thing collapses and dies. Six Months to Live- The economy that is. Especially the part that consists of swapping paper certificates. That’s the buzz I’ve gotten the first two weeks of 2010.

Peter Schiff (3/13/2010)

"In my opinion, the market is now perfectly positioned for a massive dollar sell-off. The fundamentals for the dollar in 2010 are so much worse than they were in 2008 that it is hard to imagine a reason for people to keep buying once a modicum of political and monetary stability can be restored in Europe. In fact, the euro has recently stabilized. My gut is that the dollar sell-off will be sharp and swift. Once the dollar decisively breaks below last year's lows, many of the traders who jumped ship in the recent rally will look to re-establish their positions.

This will accelerate the dollar's descent and refocus everyone's attention back on the financial train-wreck unfolding in the United States. Any doubts about the future of the U.S. dollar should be laid to rest by today's announcement that San Francisco Federal Reserve President Janet Yellen has been nominated to be Vice Chair of the Fed's Board of Governors, and thereby a voter on the interest rate-setting, seven-member Open Markets Committee. Ms. Yellen has earned a reputation for being one of the biggest inflation doves among the Fed's top players." Schiff is famous for his accurate predictions of the economic events of 2008.

Lindsey Williams

Dollar devalued 30-50% by end of year. It will become very difficult for the average American to afford to buy even food. This was revealed to him through an Illuminati insider.

Unnamed Economist working for US Gov't (GLP)

What we have experienced the last two years is nothing to what we are going to experience this year. If you have a job now...you may not have it in three to six months. (by August 2010). Stock market will fall = great depression. Foreign investors stop financing debt = collapse. 6.2 million are about to lose their unemployment.

Jimmy "Doomsday"

DOW will fall below 7,000 before mid summer 2010- Dollar will rise above 95 on the dollar index before mid summer 2010- Gold will bottom out below $800 before mid summer 2010- Silver will bottom out below $10 before mid summer 2010- CA debt implosion will start its major downturn by mid summer and hit crisis mode before Q4 2010- Dollar index will plunge below 65 between Q3 and Q4 2010. Commercial real estate will hit crisis mode in Q4 2010- Over 35 states will be bailed out by end of Q4 2010 by the US tax payer End of Q4 2010 gold will hit $1,600 and silver jump to $35 an oz.

George Ure

Markets up until mid-to-late-summer. Then "all hell breaks lose" from then on through the rest of the year.

Prophetic Voices

Neville Johnson

As I thought and prayed about the past year I felt the Lord say to me that 2010 was a year of labor pains, with the contractions getting closer and closer together towards the end of the year.

Sadhu Sundar Selvaraj

Starvation and famine/financial problems will develop. Terrorist attacks. Banks close. Tsunami. 7 new diseases worse than swine flu.

Amos Scaggs

The ultra-rich will go broke. I don’t mean go bankrupt I mean go broke, no money. I saw ultra rich people working for food because they were broke. This will happen by mid-February 2011.

Andrey Rasshivaev

The world is going to face the total and complete economical and financial collapse in August-September of this new 2010 year.

Greg Evensen

Economic meltdown and possible martial law in the mid summer 2010.

Larry Randolph

... there is yet a seven-fold shaking of greater magnitude coming that will produce enormous and perhaps catastrophic disruptions on economic, political, geophysical, atmospheric, and spiritual levels.

Weather Bill

Huge earthquake on the west coast in early September 2010. This earthquake to come is going to start the swift downfall of America.

Harold Eatmon (1998)

I had a vision of the stock market soar and then crash. After the crash, many big business corporations and private parties bought up stocks because of the low cost to buy in. Then I saw the market begin to climb again in a short period of time. Then it crashed again bringing tremendous loss, ruin and devastation to all who bought in the first time. This is what I have labeled "Two Black Mondays" . The time period between the Two Black Mondays was very close together. I could not tell exactly how close. There are some tell tale signs indicating the season and the setting. I saw the season to be when *"the leaves fall to the ground"* then the first crash would occur."Like Joseph in Genesis, I believe America will have fat years of financial blessing. I also believe there are coming lean years of financial difficulty for America. [Note: while this doesn't give an exact date, this prophecy was dead on accurate-the markets crashed -777 points on MONDAY 9/29/08, roughly 1 week into the FALL (leaves fall to the ground.) The markets then rebounded OVER A SHORT PERIOD OF TIME (from April 2009 to October 2009 the markets rallied nearly 4000 points!) and everyone bought back in. According to this prophecy, the next huge crash will happen on a Monday. Eatmon even accurately predicted the coming 'fat years' and the now present 'lean years']

Robert Holmes

On October 21, 2008 the Lord said to me (of the global economic crisis): “It will be a dead cat bounce,” meaning it will go down fast, bounce back then fall again. In April 2009, after some growth had taken place, the Lord affirmed, “Don’t get too excited about the market news, it will crash again.” In September 2009, He commented on stock market prices (as measured by the Dow Jones), “It will be a W curve”. Though it will improve through to mid 2010, it will crash again under “the weight of debt”.

Deryn Johnstone (1/25/2010)

"We will experience a worldwide economic upheaval resulting in the collapse of our monetary system. This economic crash will come suddenly, sending shockwaves throughout the world. It will be the opening of the establishment of a new one-world monetary system under a new one-world government. When this worldwide economic disaster hits, it will be unlike anything we have ever experienced. The world will be thrown into a state of shock. Panic and fear will grip the hearts of the people everywhere. They will be confused, not knowing what to do or where to go. During this time, the people of God will be clearly distinguished from the world by God's supernatural provision in their lives. It will not be the absence of problems and adversity among God's people that will be a witness to the world, but in the midst of this financial crisis the world will see God's strong arm of provision for His people.

Robert L

What is going to happen this year? 1. The stock market in America will not only crash, it will no longer exist 2. The President of the USA will foolishly bring sanctions on the nation of Israel 3. There will be a great earthquake that stretches from the Atlantic Ocean to the Pacific 4. The greatest fear will be none of these things; it will be the lack of food men will fear most. The sad truth is that even after all these things have taken place in 2010, most will not repent and turn back to God, most will become even more corrupt as we speedily rush toward the end of time.

--------------------------------------------------------------------------------------------------------------------

Needless to say, what lies ahead of us spells DISASTER! It's not going to be fun, even though all of you reading this post will have the chance too profit hugely from it. But many lives will be ruined in the process. There will be countless people go homeless, as they lose everything they have every worked for.

I encourage you all to reach out and spread this message to all that you know. I also ask that you help those that will be needing your help in the not so distant future. If you position yourself correctly, you can become filthy rich from this coming crash. If not, then you will go broke like all the others who didn't listen.

Choose wisely...

Red

BLACK MONDAY IS FINALLY HERE…

Leo's Den

Red

-

May 6, 2010

180

No Post For Friday Gang. Go Enjoy The Weekend

It seems I missed out on all the fun, but at least I was short the market... and not long. I'd hate too have been long during the big drop down to 1065, many people were wiped out today.

Look out below, as that's a trader jumping from a tall building! I'm sure there were some suicides today, or will be tomorrow. This isn't over folks... so don't get caught long, as Monday is going to be BLACK MONDAY!

Yes, as the old saying goes... third times a charm! But this time they have told us where they plan to take it. The target is 105.00, and the date is Monday, or possibly Tuesday.

Sundancer was able to catch an after-hours print of 109.65 spy, which is probably the target for tomorrow. But, he also caught a 114.80 print too, which means that a gap up is likely, with the high being 114.80, and then selling off into the close with 109.65 being the low.

Of course I don't know if 109.65 will be hit after the 114.80 high or before it, but a gap up first... and then a sell off is more likely.

Next we have Monday... which will probably just drop all the way to 105.00, and rape everyone who goes long into the close Friday... expecting another bullish Monday. Well it ain't happening this time folks!

It's going to be a Black Monday, so get yourself positioned properly, as you will either get killed or profit like a mad man! Times like these can make you a ton of money, or wipe you out.

Once the 105.00 target is hit on Monday or Tuesday, ever bear on the planet will be awake and going short. The bulls will bailing out too, as it seems the ship is sinking.

Everyone will be calling "P3 is here", and will go short with everything they have... only to watch the market rise back up from the dead and rally without a single pullback, for weeks on end.

If you read this blog regularly, you know how many times I have said that this market is 100% controlled, and manipulated by the "powers that be". So you should know by now that this fake prints are given out to tell all their friends where they plan on taking the market.

Believe it,or not... but it's real. We have been given the road map for tomorrow and next week, as well as the final high in the market (DIA 118.16 - about DOW 11,816). The question is, do you listen to what they are telling you, or do you just call it "Fat Finger Mistakes"?

In case everyone has forgotten, I caught this fake print back in January, but when the sell off happened in February, I forgot all about the fake print. I didn't know if it was real at the time, or just an honest mistake?

I went short around 1060-1070, and got my ass handed too me when we tagged 1044.50, and reversed like a bat out of hell! That was a tough lesson for me, as I lost a lot of money. I won't make that mistake again.

If I'm able to time the entry and exit points over the next few days correctly, I'll recover all I lost and actually make some too.

I hope everyone reading this blog takes these fake prints seriously, as most... maybe not all, do come true. so lets go over the game plan for tomorrow one more time...

We are given 2 fake prints on the SPY. One is for 114.80, and the other is 109.65, and on the XLF we have fake prints at 15.58 (closing price is 15.25), and finally the IVR has a 43.16 target.

Tomorrow has higher odds of a gap up, and move up to the 114.80 area first, and then a sell off into the evening, down to the 109.65 area. But, there is no guarantee that both targets will be hit tomorrow.

We could go up and close at 114.80, and gap down on Monday and close at 109.65 area. Then sell off again on Tuesday to the 105.00 area, before we start the bull rally back up again.

The thing to focus on, is to get short around the 114.80 area... whenever it gets there. Then stay short until the 105.00 is hit next week.

At that point, you need to go long, and stay long for the next few months, as our final high is around DOW 11,816. I'm expecting the market to nearly go to sleep after this turbulence is over, and all the bears will go back into hibernation.

I will be around all day tomorrow (Friday), and Monday and Tuesday too. I've rescheduled my appointments, as I don't want to miss out on more of the fun again.

Best of trading to all of you...

Red

The Bulls And Bears Duke It Out Again…

Leo's Den

Red

-

May 5, 2010

1,057

Yesterday, the Bear "Knocked Out" the Bull cold, but today the Bear only squeaked by with a few point victory.

Tomorrow morning we get the Initial Claims and Continuing Claims numbers at 8:30 am EST, before the bell. What will they be? Will the government continue to use their magic eraser to make the numbers look more positive to the market?

Or, will they actually release the "real" numbers and cause more selling in the market? It's clear too me that they plan on taking it down to our fake print number of Dow 10,000... which will probably be about 1055 spx. But, that doesn't mean it will go straight down. There will be bounces along the way, as they'll need to squeeze out some of the shorts before the final sell off.

So where does the market bounce at? Will it be at 115.00 spy, or the next support level of 113.00? Maybe those levels will only produce intraday bounces, and the only major bounce will be at the 200 dma? Most all traders know that any moving average that the market hasn't hit in a long time, will be good for a solid bounce.

Well, the 200 dma hasn't been hit in a very long time. You can be sure that a bounce will occur there, and it should be a multi-day bounce. Currently the 200 dma is at 1094.07, and rising every day. It should be just under 1100 within the next week or so.

So, if the market doesn't sell off anymore tomorrow or Friday, then it's going down hard next week. Two more days of wild swings like today, only to put in a candle bar of indecision at the close of each day, will be the makings of a beautiful bear flag pattern on the daily chart.

That could lead to one really nasty sell off on Monday, if it plays out that way? You know how the government likes to mix in really positive news with the really negative news... confusing both bulls and bears. That's why you could see a swing higher tomorrow, and then another swing lower... only to end the day looking like today did.

It could look exactly like January 25th (compared to today), the 26th, and the 27th (which would be like this coming Friday). If it plays out like that, then Monday is going to be ugly! I don't know if it will or not, but I'm staying short for now.

I've changed my mind about going long at 115.00, as I would just feel more comfortable staying short until will hit the 200 dma. Then I might go long for a few days swing trade, and finally get back short again, looking for the final low around 1055 spx.

So for tomorrow... it's a wild card! Being short I could get squeezed a little tomorrow, but I'm riding it out... as this ship is sinking, she just doesn't know it yet. She could just drop another 200 point tomorrow? There was a nice bear flag formed on the 10 minute charts today... meaning that it should sell off in the morning. But, it could rally back up by the end of the day, as it's just a guessing game at this point...

Red

Maybe Not That Hard To Kill A Bull?

Leo's Den

Red

-

May 4, 2010

65

The Bears celebrated today by laughing and giving each other "High Fives"...

It's seems it's been such a long time since the bear has had a decent meal, that this one almost seems like a dream. The sell off I've been waiting for is finally here... but will it end today? I don't think so. Here is the same chart I posted on Sunday... now look at where we are compared to the last sell off?

Do you notice anything similar? I certainly do, and I believe that tomorrow will not bounce at all, as many of the bulls are expecting it too. I think it will open and continue selling off until we hit the 115.00 spy level, and then a bounce will occur. How much is still unknown? It could end the correction and then we are back to the slow grind up to our finally destination of 11,816 (DIA 118.16), where we have our fake print that Sundancer caught many weeks back.

However, the way the market climbed to it's current height, leads me to believe that we will continue on down to the other fake print of Dow 10,000 and 107.38 spy first, and then rally hard. The climb up is too step I believe, and a larger correction needs to happen before turning the ship back around.

Think of it as a large ship, traveling way too fast in the water. If it sees danger ahead, (like a fleet of enemy ships), it must turn the ship around as fast as possible and go back another direction. Unfortunately, it's been moving too fast for too long, without stopping for any maintenance (pullbacks in the market), and now the engines are kicked into full reverse causing the ship too turn quickly.

But, half way through the turn (the coming bounce at 115.00), the ship's engine's lock up from the stress, and a quick repair must be done (another sell off to 107 area), before she can get back up to speed and away from the enemy ship (full of an army of bears of course).

So as you can see, I'm really leaning toward fulfilling the lower target fake prints first, before the rally continues back up again. Will it play out that way? That's any one's guess? I think it will, but time will tell...

Red

It’s Hard To Kill A Bull…

Leo's Den

Red

-

May 3, 2010

266

Well, it seems that small bounce up wasn't good enough for the bulls, as they rallied back well above 50% of Friday's sell off. Those bulls are pesky and irritating creatures... to say the least. But, I knew that it was possible that they'd rally it back up, as the charts were showing that the market was oversold on a short term basis.

However, today they ended overbought. So, I do believe we will sell off some tomorrow. I'm not looking for anything major, as I think everyone is waiting on the job's reports on this Friday. That should be a big market mover. Of course between now and then, any news out of Greece or some other event, could spook the market first... and let the selling begin.

One thing of interest today, on both the 60 minute and the 15 minute charts, was how the market couldn't get above this downward sloping trendline. It is clearly putting pressure on it, and if the market wants to go above it, then a gap open over top of the trendline, is going to be required.

It's the same trendline shown in this chart below (found on Cobra's blog). Problem is, there is also a lower trendline that is supporting the market, and preventing further selling. This is looking like a symmetrical triangle (credit goes to Cobra for spotting it, as I didn't), which still has another day or 2 of room to trade in, before it reaches the apex, and must jump out.

All the other charts are still signaling that the market will pull back, but unless we get some bad news event to cause the selling, we are waiting for Friday to produce it... and that's only if the jobs data is bad. You know how the government likes to erase some of the digits on the report. It's just like giving the report card of the students grades, to the student first, and telling him to give it to his parents. Funny how easy it is to turn those "F's" into "A's"... So as much as I'd like to tell you that all the charts are pointing down, the chart above could go either way.

We are also now 3 weeks away from this months' option expiration, and although the market sentiment is still extremely bullish, the amount of puts purchased versus calls, for the month of May, is way too heavy on the put side.

That doesn't mean we can't sell off this week, and rally back hard into opx, but the chance of the market crashing into opx is very slim. Those market makers are not going to pay out on all those puts. I've seen it too many times, how they sell tons of puts to the retail trader, and then rally the market, making them expire worthless.

Of course after opx is another story, but for now, the bears have really only got this week too get a sell off to happen. The week of opx, and most of the week prior to opx is already reserved for the bulls I'm afraid...

Red

Weekend Update…

Leo's Den

Red

-

May 2, 2010

1,032

CHECK OUT THE VIDEO I DID ABOUT THE NEW LOOK

Last Friday we had a really nice sell off, which extremely rare these days. But what does it mean? For an answer to that we have to look at all the charts. So in this weekend update, I'm going to go over the monthly, weekly, daily, hourly, and the 15 minute charts.

The question that always comes to my mind, is whether or not technical analysis actually works? I've done my best to learn it, and to adapt to fit in the news, as well as the "manipulation factor". But, it's still not perfect. The reason probably lies in the fact that I might interpret the charts different then the next person.

This "difference of opinion", between myself and other people, is the exact reason I have this blog. There isn't anyway that I can cover everything, and put all the pieces together. That is why I need YOU, the reader and commenter.

By everyone posting their thoughts and comments, we all are then better informed. Hopefully, we can adapt and still make a profit from the market, even if it goes against us. Believe me... I know, as it's went against me too many times.

So let's dive into the charts, and try to figure out what's next. Below we have the monthly chart of the SPX, which now is clearly showing a "Topping Tail". That's a very bearish signal, which means that the "Top" may very well be in. If so, then it's probably down hill for the next several years. But I'm not convinced that this is the final top, as the MACD's and STO's haven't rolled over yet. That leads me to believe we will have 1-2 down months, and then back up to the fake print area of DOW11,816 by the end of this summer.

Moving on to the weekly chart, we see that we just put in a very bearish reversal candle, closing at the low end of the candle. You can also see that the MACD Histogram put in a lower candle, and that we have a bearish cross on the Full STO's. The RSI is also pointing down now, and hasn't done so since January. Notice how steep the downturn is on it. This is very bearish.

Now let's look at the daily charts. The first daily chart shows the SPX, with another very bearish red candle on Friday. Notice that the 10 EMA (blue line) is just about to cross over the 20 EMA (red line), which hasn't done so since the January sell off. Look at the RSI, as it's fell from the "above 70" area, and is now at the 50 line, and pointing down. I expect it to break soon, which will give the bears more power. The red and green ADX lines are criss-crossing, but I expect the -DI (red line) to rise back up soon, causing more selling.

Now let's look at the daily chart of the SPY, with some different indicators. The one thing that stands out is the clear break of the rising support line. The first break was on Tuesday, and then the market back tested the line on the next two days, and finally failed to get back above it on Friday, as it sold off hard. Looking at the Full STO's you notice that the black line is pointing back up and touching the red line. This indicates that the market could go up on Monday, or even Tuesday too. I expect it to fail and roll back down, not crossing the 50 level.

Let's look at the 60 minute charts now. Now this chart is from Ron Walker's site (he's "the chart pattern trader"), and he has it marked as a "head and shoulder's" pattern, but I disagree with that labeling. From what I've learned, a H&S pattern must have a rising trendline, with the right shoulder having the higher part of the trendline. Meaning that it can't be a level trendline (support line). It must slope up on H&S patterns, and slope down on Inverse H&S pattern.

Regardless, it still looks like the market still pointing down. The MACD's have rolled over and are pointing down, and are also below the zero line. The Full STO's are still going down, and then the ADX line is gaining strength with the -DI (red line) on top and rising higher. All are bearish signs, indicating that the market is likely to open down, or flat, and start selling off. The only question is whether or not it will bounce at the triple bottom or just gap down below it on Monday.

Looking at the 15 minute chart, we see it is also pointing down, with the Full STO's still going down lower, while it's already below the 20 level. This is very bearish. That triple bottom support is about the only bullish thing I can find right now. Look at the MACD, as it's still going down too, and the RSI is at the 30 level, giving strength to the bears. Plus the ADX line is rising, giving power to the DI line on top... which is the negative line.

I think that we are either going to see a gap down on Monday, and continued selling until we hit 117.50 spy for the first level of support, (which should give at least an intraday bounce), and then 115.00 spy, which should be a multi-day bounce. Or, we open flat, trade sideways for the day while the MACD's and Full STO's roll back up. If so, then I'd expect them to peak on Tuesday, and start back down by Wednesday.

The moves up should put in a nice bear flag pattern, as I don't expect the market to get back above Friday's high. Maybe a 50% retrace, but probably less. This assumes that we hold the triple bottom and don't gap down past it on Monday morning. But either way, I'm looking for the week to be down again.

Red

The Bears Are Back…

Leo's Den

Red

-

April 30, 2010

55

Great day to be a bear, as the market sold off today, erasing yesterday's gains. Most of the fear was based on the news released that Goldman Sachs could face criminal charges too. Originally, they were just civil charges... which is no big deal to Goldman, because they have plenty of money to pay any fines.

But criminal is another story, as somebody could go to jail. That's what I'd love to see, but I think it's more smoke and mirrors then actual arrests.

I'll do a weekend post that will be more in depth, with what I'm seeing for next week. I do think we will bounce up on Monday, at least in the morning. That's assuming no more negative news is released over the weekend. That's the wildcard that no one can see.

Anyway, have a great weekend...

Red

The Bulls Are Back…

Leo's Den

Red

-

April 29, 2010

1,820

At least the retail bulls were, but the big institutions didn't participate in today's rally. For many months now, the volume on UP days is low, and the volume on Down days is heavy. Why is that? Simply put... the big institutions are selling big on the down days, and sitting on the sidelines on the up days.

They buy a little bit, just to get the market jump started, and then the retail trader jumps in and pushes it up the rest of the day. That's exactly what happened today as the big boys gaped the market above the key overhead resistance, and then turned it over to the retail traders.

This really reduces the odds of nice correction now, as today's move rallied most indexes back inside key trendlines and support areas. That doesn't mean the bear is dead, but he just got a bull horn jabbed into his side today. It's a serious wound, and makes any more downside attacks limited.

I am surprise that the bulls didn't go up to the double top level at about 1212 spx today. They had the opportunity, as the volume was almost non-existent. But, since tomorrow is Friday, I'd expect them to push it up some more and at least reach that double top. The news released by the government tomorrow, will of course be manipulated to push up the market more. Any news that they control will be made up, and not accurate.

The earnings report from various companies is tougher to manipulate, but the government encourages them to lie on them, so they will look positive for the economy. So, since there isn't any major earnings report tomorrow, the only news left to report is various economic reports (GDP being the major one)... which again will be favorable.

It's looking more and more like we might be forming a sideways channel, as the bears can't seem to break the downside support levels, and the bulls can't go above the overhead resistance. It really makes more sense to manipulate the market sideways, so the crooked banksters can unload their stock slowly to the retail trader.

The dollar is also looking bearish, and should continue to fall. This will of course help push up the market, as they are still locked in sync with each other, and go in opposite directions. Without the dollar pushing up, it's going to be hard to see the market sell off hard.

So, I guess it's time to put the old green up arrow back up, as the odds of a serious sell off on Friday is very low.

Red

Same Old Speech…

Leo's Den

Red

-

April 28, 2010

26

Once again the Federal Reserve Board did nothing. Not that I was expecting them to raise rates, but it's more about what they say, then what they do (or don't do). I'm sure everyone expected them to leave the rates the same, but what are their plans for the future?

The answer is... nothing much! In other words, they didn't say anything to give the market hope, or to cause a sell off. That was one of the reasons the market was basically flat today (small up, but nothing like the down day on Tuesday). This was too be expected, as most Fed Day's are UP day's.

However, even though the market did go up a little... it looked VERY Weak today. Every time the market tried to rally today, it would quickly sell off. This is one tired Bull, and I look for it to continue selling off this week. Possibly another flat day tomorrow (Thursday), but I really doubt it on Friday. I can't see many traders holding over the weekend with all the bad news out in the market today.

Greece is still in trouble and other countries are too. Any trader that holds over the weekend, with another possible bad news event being released while the market is closed for 2 days, is gambling with fire. Fear is back in the market and most people will sell first, and ask questions later.

While another sideways day is still possible tomorrow, I think we will fall to the 117.50 spy support level by Friday. It could happen tomorrow, if the job's numbers aren't viewed positively? Either way, the odds of a large up move are slim now, as the Bears have gained back a lot of power.

Best of luck to both the Bulls and Bears...

Red

Going Down…

Leo's Den

Red

-

April 27, 2010

36

What a beautiful day it was in the stock market, as reality finally slaps some sense into it. When bulls finally run out crack, they sure do come down hard! It was certainly long overdue, I'm I glad to see it happen. It gives us option traders the volatility that we need to make some decent money trading them.

Not that it can't be done in a up market, but it's harder to do as the time decay kills you, due to the market moving up so slowly. The down moves are fast and furious, but don't last long enough to make me happy.

Anyway, I'm looking for a small bounce tomorrow to get short again, as I closed out my put spread today around the first low of the day. I missed out on a little more money, as it continued lower into the close. But, nothing goes straight down... because "Down" is a bad word in the stock market, and "UP" is all that's allowed to move continuously without dipping. (Not really, but it's sure seems like that).

Moving on...

Let's just focus on the key support levels for now, so we know about when to bail out on our short positions. Tomorrow is tough day to call. The best thing to expect is a "pause" day, meaning that after a large sell off, there is usually a day that the market goes sideways, to slightly up or down. That's what I expect for tomorrow, but it's not a guarantee as it could continue selling hard. (The futures are about flat now, so that tells me a bounce is more likely).

Assuming there is a bounce tomorrow, I plan to use it to take another position on the short side, as I don't trust any long trades at this time. That's because I don't think we have sold off far enough to get a several day bounce in the market yet. (Day trading is different of course, but I only swing trade).

So, the support levels going down are at 117.50 spy (horizontal support line), 116.25 (50 dma), and 115.00 (horizontal support line). I expect the several day bounce to come in at either 116.25 or 115.00 level. If we make it down to that 115.00 (1115 spx) level, I would expect a decent bounce.

But, we might stop on the 50 dma around 116.25 currently. We just have too take it one level at a time for now. Let's not forget the fake print of 107.38 spy from last month, and the DOW 10,000 fake print Sundancer caught too, as that might be our final target, before a summer rally?

However, I don't know if we are headed down to that area first, and then a rally into the May option expiration, or a rally into opx from a higher level (then the fake prints), and then a sell off to the fake print areas after opx is over.

Time will tell I guess...

Red

What Happened To Bullish Monday?

Leo's Den

Red

-

April 26, 2010

147

It seems that "The End Is Near" now, as the usual Bullish Monday failed for the first time still the stone age was around... or it least it seems like it's been going on for that long. Seeing a down day, (even if it is only a few points), on Monday is so rare that I can't believe it actually happened today.

Not that it means anything of value, as the trend UP is still intact. No damage has been done to the Bullish Charge, that's been going on since February the 5th, 2010. So, I'm not expecting any large down move tomorrow... so don't get all excited on me.

Yes, yes... it's a POSSIBLE end to the UP trend, but only slightly possible. We Bears should know by now that this is most likely just a small tease, and not the start of the correction we have been waiting for. However, it could be the top, but I really doubt it.

They are so close too reaching the 61.8% fib. level around 1228 SPX, that I don't expect big sell off until they hit the target they are looking for. They told us with the fake print of 118.16 DIA (about 11,816 DOW, and I'd estimate 1270-1280 SPX) several weeks ago. I thought that we would go down to the other fake print at 107.38 SPY (also DOW 10,000) first, but it looks like they are going up first.

The markets seem to be getting more and more boring everyday as the VIX settles into a low range, making trading options about worthless. Without some volatility, it's hard too trade them the way I like too do. Still good for day traders of course, but that's just not my cup of tea.

Anyway, at this point, I'm not expecting any large down move tomorrow. It's looking like it might sell off some, but only based on what the 60 minute chart shows. It might only sell some in the morning, and rally back on light volume in the afternoon, as it always does. So I guess we can expect more of the same, until the dam finally breaks.

Yawning now...

Red

Weekend Update…

Leo's Den

Red

-

April 25, 2010

83

So here I sit on Sunday afternoon wondering what to write on this weekend post? It seems (or at least feels) like I keep writing the same thing every weekend. "The market is way overbought and should sell off ASAP!" I said that last week, and the week before that, and etc, etc...

I feel like the boy who cried WOLF... for the hundredth time! Well, I'm going to cry Wolf one more time, as this FAT Bloated PIG of a market needs to shed some weight ASAP, before he explodes violently!

I don't have a lot of charts to show you, as it seems that "Overbought" can remain overbought for unknown time periods, so I'll just show you this chart of the Put/Call Ratio (courtesy of the chart pattern trader).

The percentage of Bears is now at a record low of 17.4%... which means that 82.6% of the people are now Bullish on the market. That's an insane number folks! And you and I both know by now that the market doesn't reward the side of the "majority", but instead it takes their money from them. When, of course is the question we all want answered?

If I could answer that question accurately I be filthy rich by now... so of course I have to guess at it, just like everyone else. Currently we are only a little over 10 points away from the magical Fibonacci retracement level of 61.8%, coming in around the 1228 spx level.

You know that everyone and their brother knows the significance of that level, and that in of it's self should tell you that the market isn't going to just go there, stop and wait for people to short it, and then reverse allowing the average retail trader to make money from it. It's never that easy my friends.

That simply means that we must either fall short of that level, or bust on higher past it. Since we have already been given our final upside target of 118.16 DIA, which should be around 1270-1280 SPX (guessing here), we have to calculate the odds of another parabolic move straight up from the current level to that all time yearly high.

I don't know what the odds are, but I simply can't wrap my head around the idea that the market could get through all the huge resistance overhead, without a pull back first. That would probably make the bullish percentage in the low 90's by then. I don't know if it's ever got that high before a pull back?

Logic (but again, the market isn't logical) tells me that they will take the money from those bulls way before going that high, just like they did the bears... on this insane rally up. Plus, they will actually need the bears to be heavily short, so they can use them as fuel to rally higher. Without the ability to squeeze the bears, and with no bulls left buying, they must rely solely on the PPT money... and I just don't think that will be enough to overcome the negative news being constantly released, and the huge overhead resistance.

Of course I've said that before, and been wrong before, so why is this time any different? I don't know? I only know that the odds of a correction first, before going up to the final top for the year, is even higher this coming week, versus last week. Odds, numbers, and percentages are really all you can trade on now, as the typical TA charts don't correctly tell you when the market is going to turn.

Obviously, the super computer algorithms are much smarter then the average trader, as they combine all the data in a fashion that isn't predictable by humans. I'm sure there is a reason behind the madness of it all, but I don't know what it is?

However, there is little doubt in my mind that it's all politically motivated, and of course "Financially Motivated"... meaning that they are trying to time events around key political issues, like the health care bill, and now the bank reform bill. And let's not forgot that the elections are this fall, which tells me that any correction we get will be short lived, as they need to rally the market into the elections.

After the elections are over... well, does the old saying "Katie bar the door" paint a good picture for you? Or maybe "Timberrrrrr"? I'm sure you get the picture by now. Once all the new and old Democrats and Republicans get re-elected, there isn't any reason to hold the market up until the Presidential election in 2012.

The market could fall hard all of 2011, and then rally in 2012 for Obama to look good just before he tries to get re-elected again. Of course none of this helps out our short term trading accounts, as forecasting the next weeks' move is much harder then the next year or two.

But, who ever said picking a top or bottom was easy? Could it happen next week? Possibly? I hope so, as I'm really tired of the never ending bull rampage. It's quite sicken to see so much deception and manipulation in the market.

I do know that is coming soon, as the insiders are moving to a short position, as explained in this article by ZeroHedge. A 10% (or more?) correction is planned, as these guys are the "Smart Money". I'm hanging tight, with my short position (even though it's underwater now), as still see a sell off before OPX in May.

I leave you with this chart from Cobra's blog...

Red

Rescued Bull…

Leo's Den

Red

-

April 22, 2010

2,023

No Post for Friday Gang...

I'll save it for the Weekend Post.

The Bull got rescued today, (by the PPT of course). It seems that a bear slipped up on his last night while he was sleeping, and pushed him down a hole. Hurt and bruised up a little, the bull finally got his mojo back and charged higher into the close.

These bear attacks are becoming more frequent now, and the bull is getting tired and falling asleep while standing. The bull needs to be careful where he stands as a cliff is nearby his grazing area, and one missed step could result in a one steep fall.

At this point, the bulls are up against a whole lot of resistance from multiple trendlines, all intersecting about where we are now. A big move is coming soon, because it has too... The bulls must gap above all the overhead resistance and go make a new high, or give up and jump off the cliff.

It's really that simple. Steep sell off down, or jump over the major resistance overhead. Everyone seems too be long here, as they all expect 1228 to be the next level the market is going too. That's the 61.8% fib. retracement from the March, 2009 low to the 2007 high. But, you know the old saying... if everyone is expecting it to happen, it won't happen.

So we are at a crossroads again. Either we must go above the current resistance, to trap the bears that will go short at the level, or sell off before reaching it, to trap the bulls that are waiting to sell at that level. Someone is going to get burnt... who will it be? The Bull or the Bear? (In the end, you know it will be BOTH!).

Red

Apple Fails To Rally The Market…

Leo's Den

Red

-

April 21, 2010

368

After Apple blew out earnings estimates on Tuesday evening, you would have expect a big rally on Wednesday. But, it didn't happen, as this time the Apple was rotten. Apple clearly is the leader in the Nasdaq, and carries more weight then all the other stocks in the tech sector. But even with it's overnight jump of 15-20 points, the overall market didn't rally up huge like you would have expected it too.

Most people would have expected a 100-150 point Dow move up, with Apples' great news. Since Apple carries so much weight in the market, this is clearly not a good sign for the Bulls. Who is left to rally the market now, if Apple couldn't do it?

I'm really seeing more and more signs that this market is going to fall very soon. I'm not going to stay that the "Top" is in, but the odds are much higher now. Light volume is about all that can save this market from falling. If they can keep the volume light tomorrow and Friday, then they could take out the current high with some fake jobs numbers. That is something that they can easily fake, as earnings on all the various companies is a little tougher to alter.

Looking at the 60 minute chart, it sure looks like it is ready to fall. But light volume rules as the PPT can easily push up the market when there aren't any sellers to stop them. This Goldman Sachs issue is about the only thing I can think of that could cause some serious selling.

Many people and large institutions are currently trying to get out of Goldman, as they don't want to take a chance on whatever outcome may happen from their fraud charges. This will put constant downward pressure on any rally attempts that Goldman has. However, I think someone is going to hit the panic button if the rest of the market starts selling off.

I don't know if it will happen this week or not, but you can just feel the tension in the market, as the tape struggled up some, down some, up less, and down more... all day today. Just like animals can smell fear, I think the traders are now smelling fear. I don't think it's going to be too many more days before the panic starts.

They will wait for the jobs tomorrow, and Microsoft's earnings after the bell Thursday. If that data does show some real improvement in the economy, I think the serious selling will start asap. We could have a Black Friday? I don't know how good or bad earnings will be for Microsoft, but I can tell you that most people will say that "Vista Sucks", and Windows 7 is just Vista part 2.

And since Apple is their biggest competitor, who just blew out earnings, what's the odds Microsoft will blow them out bigger then Apple? Remember, Apple couldn't rally the market today. How is Microsoft going to rally the market... without any new gadgets like the iPad? Is Windows 7 as big or bigger of a money maker then Apple's iPad? I don't think so.

That leaves it up to the Jobs numbers to be outstanding, causing another rally. Everywhere I read, more and more people are stating that they don't believe the numbers to be accurate as the government lies so much now. Nobody believe anything they say or do now. So, if the numbers are too good... will the market believe it? NO, of course not. And if the numbers are bad? Just another reason to sell off and take some profits.

You put together the NO Win Situation with the release of the Jobs data tomorrow, along with the high odds that Microsoft fails to beat estimates enough to justify a continued rally, and throw in the Goldman Sachs issue... and I'd say the odds are very strong for a sell off to occur.

And since Technical Analysis doesn't seem to work too accurately by itself anymore, I'm leaning more heavily toward the "overall" feel of the market, and what news events are coming out first... then see if it matches up with the TA's. Right now, they do match up. The TA's have been showing overbought now for quite awhile. We have just been waiting for the right news event to trigger it. Will it be the jobs data and Microsoft? I think it's the bears best shot.

Red

Bulls High On Crack Again…

Leo's Den

Red

-

April 20, 2010

1,360

It's seem that the Goldman Sachs news has been completely forgotten by the market, as the Bulls pushed it higher again today. Even into afterhours the Bulls kept buying up Apple, after they blew out earnings. Once again we are back to more of the same bullish crack high that the Bulls have been snorting for months now.

When will the market come down to it's senses and sell off to levels more reasonable... maybe never? Everyone is now expecting the 1228 spx level to be hit, before any pullback. The monthly 50ma is around 123.00 SPY, and the weekly 200ma is around 122.50 SPY. Those levels match up with the 61.8% fib at 1228 spx, which is what everyone is expecting now.

The question is... if everyone is expecting it, will it still happen? Remember, the market likes to take your money, not pay out money too you. That level is obvious to every trader out there, and that makes me believe that we will either fall short of it, and trap a lot of bulls, or pierce through it to a higher level, and trap all the bears that get short when 1228 is hit.

So which will it be? I don't know, but these charts tell me that it should fall short of that target, as they clearly show the bulls losing steam. Unless they turn around quickly, they won't have enough momentum left to get there.

Look at the top of the chart, and you can see that these last 2 days of rallying up has still produced negative Histogram Bars on the MACD. Notice at the bottom area, the volume still low, and dropping. Also, the bottom chart shows the bearish crossover already happened 3 days ago, and now both DI lines are below 80.

I know it feels like a bear trap, but it looks more like a bull trap too me. Many people will go short at the double top too, which makes it even tougher to go on up above the 122.50-123.00 level. Remember, it's not likely that they will hit that level and then reverse. They have to either fall short, or go above to the next level.

Either trap the bulls by falling short, or trap the bears by going above it. Both bears and bulls will be looking to go short at 1228, and/or close out there longs. The market isn't that giving. She wants to take everyone's money, so tricks must be played. I think they just tricked the bears with the Goldman Sachs news on Friday, and today they are tricking the bulls with the Apple news afterhours.

Maybe it's just my bias toward being bearish, or maybe I'm actually reading the charts correctly this time? I really don't know, as I've been burnt too many times to believe anything I see in the charts. Maybe I'm just seeing what I want to see? Possibly?

Or maybe I should just throw the charts out the window and call up Jim Cramer and ask him to hook me up with one of his Goldman contacts, so I'll really know what is going to happen next. Since he is so crooked and well connected with them, maybe we can use that too our advantage?

The last I heard, he was extremely bearish on Goldman, telling everyone to sell it. Why? I suspect that it's because Goldman sold all their shares (and some that don't exist too... you know "Phantom Shares"), and that they need to buy back those shares. So, if they push the market down hard, (or at least their stock), they can buy them back at a much cheaper price.

Now at some point, it will hit a level that Goldman will start buying them back at. Of course they will tell their puppet-man Cramer to continue telling everyone to sell it, so Goldman can continue loading up on every push down. Once they are fully loaded, and have bought back all the shares they want, they will pull Cramer's strings, and he will become Bullish again.

Pretty simple to read really. So, that leads me to believe that a sell off is still coming... and very soon.

Red

Still Hanging On…

Leo's Den

Red

-

April 19, 2010

94

The bulls recaptured lost ground today, as the weekend allowed the media to spin the Goldman Sachs story as a non-event. We know differently, as where there is one roach... there's always more! Nothing is ever easy in trading, and you can bet that this coming correction is going to be full of bounces along the way.

Looking at the 60 minute chart of the SPX, you can clearly see that we finally busted out of the trendline from the 1044.50 low. We are now in "backtest" mode, and will likely try to recapture the trendline tomorrow by closing inside it once again.

That doesn't mean it's over for the bears, as the daily chart tells a different story. Looking at it, you can see that the -DI line (in Red at the top of the chart) has clearly spiked higher from Friday's sell off. The +DI (in Green) is also losing power and pointing down. You can see that the RSI has dropped out of the "above 70" range, which means the up trend is losing steam. I'd like to see it fall below 50 for me to confirm that the bears are in control, but it's a start at least.

So, at this point, I'm not going to say that we aren't going back up and make a new high, as it still could happen, but the odds are slowly going down. We could have another sideways, wild swing, up and down movement similar to the November 9th to Mid-December time period.

I don't think that will happen, but it is possible. It really depends on what the "powers that be" want to do at this point in time? Do they want to go straight down to the fake print around 10,000, or drag it out sideways, and run up to 11,816 first.

Personally, I believe that the release of the news on Goldman was just a start of the coming news to be released over the next few weeks. I can't be sure, but if I recall what was "in the news" during that sideways chop fest in November and December... it wasn't anything majorly negative.

That makes me lean more on a quick 3-4 week sell off, as they didn't just release this news on Goldman for a one day event... at least I don't think they did? I'm sure it's possible, but usually they toss a bunch of negative news out there when they want to sell it off, and then pump positive news when they want to rally it up.

Bottom line here... it's all about what news and earnings come out this week. If they make them positive, the market could chop sideways for weeks, until it finally pops out of the range and goes on up to 11,816. Or, they could dump all the bad news over these next few weeks, and cause the sell off.

I'm sure that Goldman wanted their stock to tank, so they could buy it back cheaper. Who knows how much phantom stock they sold to the public? If you read the story Matt Taibbi published, that I put up on yesterday's post, you will see how they borrowed shares that didn't exist, so they could bankrupt Lehman Brothers. I'm sure this is a common occurrence for them.

But, at some point, the phantom shares must be put back into the phantom vault. That's probably why they tanked their own stock, so everyone holding shares of it would sell them at the "now heavily discounted" price.

In a way, it reminds me of a friend of mine that owned a "buy here, pay here" car lot. People would buy the car at over inflated prices, (because they had bad credit), and then pay higher then normal interest rates, with payments on a weekly basis, instead of monthly. Once they missed a payment, he would repossess the car, which would then be sold again to another sucker.

He got the car back at a discount, because the person did pay some of the weekly payments, and of course some type of a down payment. He could re-sale the same car multiple times, and do the same thing every time. Some cars he re-sold 7-8 times! He made a good living that way. Of course the difference between his business and what wall street does to the average investor, is that the people that buy the car do know the risks, and the late payment results. Wall Street lies, cheats, manipulates, and does flat out fraud to steal peoples' money. Big difference there...

Anyway, I'm expecting an up day tomorrow... but hopefully not too far up.

Red