I'm expecting a bounce now for a few days... maybe into Monday? We hit the target of 1040-1050 area as I expected. Since there is a lot of support here, and the auction tomorrow and Friday, I expect the dollar to fall for a few days. The market should rally up to 1070-1080 range, but it might not make it that high?
The jobs numbers Friday could be bad enough to stop it from a big bounce, but a small bounce is coming soon. Tomorrow could be a flat to up day, as the market finds some support here around 1040. Any bounce is just another opportunity to short.
I'm expecting 1020 or maybe even 998-1000 by option expiration. I'll be looking to go short again next week... probably Monday or Tuesday, as I expect that to be the end of any bounce that we might get. It could continue down tomorrow, but we're pretty oversold here, so I'm really expecting this to hold for now.
Today was a flat consolidation day as expected. I'm still looking for the 1040-1050 area to be hit before any decent bounce back up. That area has multiple supports from horizontal and 2 upward sloping trend lines. And the moving average is also in that area too.
That means that a bounce is almost a sure thing. Almost being the key here... as some disaster or political event could cause a big sell off. But, under normal conditions, the market should bounce in that area. After the bounce is over, the selling should continue until we hit 1020 (next support), at which time I expect a pause before breaking through.
Remember, 1020 has held in the past, but I expect it to fail this time around. Next will be the 998-1000 area. That will be the first hit, and has an 80% chance of a bounce. I would expect around 50% retracement back up from the 1102 high when that area is hit.
The fed has more auctions on Thursday and Friday. I expect that is the main reason that the dollar has been rallying. So, you could see one more push up on the dollar tomorrow, ahead of the auctions. After the auctions are over you can expect the Fed to dump the dollar again.
This means that the market should find a temporary bottom around 1040-1050 tomorrow or early Thursday, then rally as the dollar get sold hard after the auctions are over. You would think the everyone could see that the government simply props up the dollar before every auction, and then dumps it, which causes the market to do the opposite... but wall street just plays along until the party ends!
Well, it looks like the bulls finally got "bitch slapped"... It's about time! Over 242 millions shares traded on the spy today... and that means a "Down Day". As I said in my weekend post, I was looking for 1090 to be hit before any more selling. It hit it, and dropped like a rock!
Wow! I didn't see that coming. I was wrong on my gut feeling that the market go down in the morning and up in the afternoon, but I guess you can't get everything right. Anyway, I'll keep this simple... big support at 1040. Expect a bounce there for a day or two, then more selling.
Next support is 1020, then 998-1000. I think that area will be hit sometime next month. Probably by option expiration. As for tomorrow, I say a pause day is in order... but you never know? Once the bears start slapping the bulls around... they might not stop for awhile.
That sure was a nice start... Let's hope that it continues, (unless you're a bull of course). Just an update... I sold my short positions for a small profit Friday, and I'm now looking for the next opportunity. Short or Long, I don't care... but short is my favorite.
So, what will next week bring us? That's a tough call. Monday's have had very low volume over the last few months. Each time that happened the market rallied up. Once again... light volume equals an "UP" market. The magic number seems to be around 200 million shares (on the SPY). Guess how many we traded on Friday? About 240 million! And that equals a "Down" day of course.
Above 200 million is almost always a down day and below 200 million is almost always an up day. Since Mondays' have produced some of the lightest trading days of the year, I'm hesitant to tell you that the selling will continue. Yes, the morning could continue the selling... but the midday light volume could erase any gains you make. So, I'd get out early if the selling continues in the morning, and then seems to slow down and go sideways. That's usually about 11am time frame.
If it continues to go lower then we really do have another down day. That would be really bad for the market. If a light day can't get the market back up, then the heavy volume days coming after Monday should produce a hard sell off. This is one of those things were it's best to wait and see what happens on Monday morning.
There are no earnings or economic news of any importance on Monday. Couple that with light volume, and the markets should rally back up. If they don't, and instead have a flat consolation day, then look out... the rest of the week could get ugly!
If I had to choose, I would say that Monday would either be a flat consolation day or an up day. Maybe back to the 1090 area or so. I could be wrong, and the market just sell all day long. If so, then there is support at 1060, and then 1040. But, my gut tells me that we'll go down a little in the morning and rally back all day on light volume. Then close basically flat.
If the market rips higher in the morning then I'll be looking to go short at 1090 area. If it falls in the morning and rallies back throughout the day then I'll wait until the end of the day and look to go short then. If it continues to fall all day, then I'll sit on the sidelines as I would have missed a nice down move. I'm not going to chase it down, only to have it hit 1060 and rally back on me.
This are just what I'm looking for on Monday. Predicting what is going to happen is just guessing at this point. So, yes... it should continue down, but light volume could stop anymore selling temporarily, and even produce a rally back. Basically, I'm glad I'm in cash right now.
Tomorrow is a tough call to make. On one hand, the market did retrace back up as I expected... but it did it on horrible jobs numbers and with a strong push up. It wasn't a weak move by any means. As strong as that move was it could continue up tomorrow as Friday's always have light volume... which means an up market.
On the other hand, the 110.34 spy level is still holding back the market. The rally up today hit the lower point of the gap fill at 109.68, and then fell back. We could hit 110.34 (about 1108 spx) tomorrow and stall there again. If volume is really light then the market could push on through it. If that happen you will also have a big up day on Monday too, as that level is a huge resistance point.
So, my plan for tomorrow is to look for the fall down in the morning. If it doesn't happen then I'm closing out my short position, as anything can happpen over the weekend. Since I went short around 1092 Wednesday I'll be getting out about break even.
Everything says the market should fall, but it's not run by logic... it's run my crooks! Keep that in mind when going short. I'll go short again when the time seems right again. But for now, I'm really expecting another up day tomorrow, as it should have fell with the bad jobs numbers. There isn't much left to cause a down move tomorrow.
Maybe a nuclear bomb going off in New York or something... but I think the market would view it as positive and rally. That's a few million less people on un-employment! Duh! Nothing makes any sense in this rigged game.
Looks like the market hit close enough to the 110.34 SPY mark, as it quickly reversed at 110.31. I went short today and sure enough the market sold off hard at the end of the day. It took me by surprise, but I was glad I was short. Those were definitely some "Big Red Candles" during the last hour of the market.
As for tomorrow, I'm expecting the government to lie again about the jobs numbers. We could get a small bounce up if they report it under 500k, but if it comes in above 520k or so... then I expect more selling. Of course there will be small bounces on the way down, but I see 104 as a major level that should produce a nice bounce.
This is going to shock a lot of bulls and bears, but I think we are in for a sharp and fast fall. Most bears will miss it, and the bulls won't believe it. There could be very little bounces until we hit 104. Even then, I don't expect more then a few days up from it.
But, let's take it one day at a time. For today... Bulls - 0, Bears 1
The UUP had some big volume on the buy side today. That's telling me that some big players think the dollar is around a significant bottom level. Could it go lower? Yes, as rarely does anyone pick a bottom or a top exactly. But, we about as close as you could ask for.
That means that the market will soon roll over as the dollar rallies hard. It could start as early as tomorrow, but by Friday I'm pretty sure a significant high in the market will be reached, just as the bottom will be in for the dollar. I'm looking to go short tomorrow, as I expect a backtest to occur in the morning and a sell off to occur later. It could just sell off all day... but a backtest should occur, as it has done so many times in the past.
Volume was still under 200 million on the spy, which helped the late day grind back up. Once we make it above 200 million selling should be hard and fast. Hold on to hats, as this roller coaster is going straight down!
Not much to add today. Volume was light at 159 million on the spy. Of course the market rallied on the light volume. We are extremely close to a top. Maybe tomorrow we'll hit 110.34? Apples' earnings were good after hours and that could be enough reason to rally just a little bit more.
The dollar got pounded again... the PPT hard at work as usual. It's almost funny how the dollar gets sold hard about 10:30 am to 11:00 am everyday. After that, the market rallies on the light midday volume. It pretty simple to move the market higher... just destroy the dollar, and the commodities will rally, pushing up the spx.
Regardless, I'm looking to go short Tuesday or Wednesday, as I believe we will hit 110.34 and then selloff. Remember... inside information is sometimes better then charting.
I'm still looking for the market to go to 1108 spx before any significant correction down. I believe it will be reached next week by Wednesday. Option expiration was Friday for most stocks and indexes, but the VIX expiration is actually this coming week, on the 21st... which is Wednesday. That's one reason that I don't think any major sell-off will occur until after the October month is closed out.
Those market makers don't want lose any money, so they need to keep the vix low until those positions expire worthless. After that... well that's another story. November should be a down month, as I expect a nice drop to occur in the next few months. Why you ask? Well, it's not all based on Technical Analysis, Elliottwaves, Fib Levels, or Turn Dates. Nope, it's based on insider information.
You see... TA, EW, Fib's, Astro turn dates and any other method you can think off, hasn't worked too well lately. In the past... yes, they all worked well. But today things are different. Massive printing of money equals massive manipulation of the markets. So, you can basically throw all that charting out the window. If the government wants the market to go higher... it will.
With that said, I don't mean to imply that charting is worthless. Quite the opposite is true. Charting is still valuable. But, basing a decision on charts alone is foolish as the government can keep print more money to buy up any dips in the market. Just when the charts say that the market is ready to crash... BAM! Here comes the PPT to the rescue.
Going short against the government is suicide, and going long with companies that are borderline bankrupt is also suicide. So, what do you do? You wait until the government pulls the money from the market and allows it to behave normally... that's what! When that happens, it will go down of course, as the economic conditions are still horrible. If the government would just stay out the market and let it find a true bottom we would get this recession over with quicker and start a real recovery. But, crooks do what they do best... lie, steal, and cheat to get what they want.
How does that benefit us? Well, I believe that there are individuals that know what's going on... and most importantly what going to happen next. I think that one of those people is the guy known as "Mr. TopStep". He and his group of traders most likely have inside information, which they share with anyone who wants to know. All you have to do is watch their video's on youtube.
I don't think that you should throw all other methods away and only do what they are doing, but they do know more then the average trader. And after all, aren't most people who visit and read blogs every day just average traders? I know I am... how about you? If you had access to some inside information, from Goldman, JP Morgan, or some other bank "in the know", would you be looking for information on the future market direction on some blog, or would you listen to that source?
If I had that kind of information I wouldn't waste my time reading blogs everyday. I do so because I feel that many of those posters have better knowledge then me. Of course figuring out which ones is the really hard trick to do. With that said, I think that listening to someone who is trading on the floor of the S&P futures is someone who most likely has some inside information, or at least more accurate information then most do.
And, he's willing to share it with anyone who wants it. Just watch the free video's he posts on youtube. Again, I want to say that you shouldn't make your decision to buy or sell based solely on what Mr. TopStep says, but you should listen and take that into consideration before making a decision in the market. About a month ago he said that the market wants to close that gap from October, 2008. Here's the video...
As you can see, we are almost there. In the past, when the market gets inside the gap area and pulls back, it almost always trys again until it closes the gap. Rarely does it go inside the gap window and not close it. Since the market pulled back Friday, and the gap isn't closed yet (on a daily bias), I believe the market will rally one final time early next week to finally close that gap at 1108 SPX (110.34 spy). Here's Mr. TopSteps' latest video...
Then, the market should pull back to the 900 area or so, before another rally up. Now, you may be asking... will that rally up break the current high, or the future 1108 high (if it makes it there next week)?
That's up the in air at this time. If the government injects more money, then maybe is the answer.
If they don't, then "Hell NO" is the answer... Dow 4000 here we come!
But for now, let's just focus on the present... and that says that the market is going to close the gap this week and then sell off. I'm just going to sit and wait until the high is hit, then go short.
The markets are just taking a breather, before one more up swing to 1108 next week. Be ready, as once that level is hit you can expect a drop to the 900 area within the next month or so. More details on my weekend post.
The gap was filled today on the intraday low from 2008, but I'm still looking to see the closing gap filled at 110.34. Tomorrow is Friday, and usually has light volume. (Today the market only traded 170 million shares on the spy). So, I'm not expecting a major pullback yet. They will try to get to that 110.34 area, but they may not get it tomorrow? If not, then Monday should hit it.
After the market hits the gap fill (on a daily close) I'm expecting a big sell off. I posted that I believed we would hit 1100-1108 spx back on September 27th...
Of course it wasn't accurate to the exact time frame, but it looks like the target will be hit. Anyway, don't expect too much tomorrow. Another flat to slightly positive day. I'll have more on my weekend update. However, be prepared as the next couple of weeks are going to be nasty for the bulls.
Dow 10 Million! Almost sounds like Year 2000! Wow, it's seems that the recovery is real and the recession is over now that we've hit 10,000. Do you feel any richer today, then yesterday? Boy... I sure do!
Well, I said several weeks ago that I believed we'd close that gap from 2008. I just never believed my own forecast. So, what's next... more bear meat for dinner I suspect. Goldman will blow out estimates I'm sure. Then IBM, and some more manufactured jobs numbers... and off to 12,000 we go.
You know... there has always been manipulation in the market. But, never in history has it been so evident as now. This couldn't have been done in the past, on such a grand scale. The massive and I mean Massive printing of money has never been done to this extreme. The couldn't have happened back in 1929, as we were still on the gold standard. Today, we are on the Godman Sucks standard! Print more money, and give it too me NOW! I want my Billion Dollar Bonus before America goes broke! I'll need it to pay for groceries once inflation kicks in.
Sorry folks, nothing I research, rationalize, analyze, chart, or guess at comes to be. Everyone on the planet seems to be on drugs or something? It's like the 3 stooges (Obama, Geithner, Bernanke) are all one person named Jim Jones, and the world is happy to drink the poison kool-aid.
Why even try to use logic to understand this market, and forecast the next move? I'm just going to start posting an "Arrow" point straight UP everyday. I feel like a weather man in the middle of the desert. Well, today it's going to be hot, and tomorrow it's going to be hot too. Next week... hot! Next month... hot! Somebody just shoot me! This weather report is getting old!
OK, enough bitching. Back in October 2008 the tail of the candle was at 109.68 (spy), and the close was 110.34. So, that's where we are heading. Once that gets hits, you can expect a sell off to occur. That is Mega Extreme Resistance, and again... the market is not likely to get through it on the first hit. So, a sell off should occur first. How low you ask? I don't know yet? Let me call up the boys at Goldman and ask them.
Today was yet another flat day, as everyone is waiting on earnings to be announced. It feels like we have been in the eye of a hurricane, and we're slowly moving out of it, only to move back into the storm! Will the market survive? Only the next few days will tell.
I tend to believe that the next few days will produce selling, not rallying. Even though Intel beat estimates, and that the market is up in the after hours while writing this post, I still like the odds to the downside. I don't think all the earnings realised over the next few days will be so rosy. Plus, you have economic news too... like jobs reports.
I know... I know... all that numbers will be made up, and everyone will beat earnings. Maybe? But, I still went short today. Yes, it's a gamble... in a rigged casino. But, sometimes you have to take a chance. Everyone is talking about Dow 10,000 now. Seems to be a given, doesn't it? Wouldn't the market just love to give all that free money away to all those bulls? NOT!
The market loves to hurt bulls and bears alike. I don't see many bears left in the market now. That leaves mainly bulls! How would you hurt the bulls if you could? Dump the market hard the next few days, regardless of what the earnings are.
Then, rally hard next week to punish the bears. Hey... I'm just trying to think like the crooks on wall street. Everyone and their brother is long this market. They all expect 1100 on the S&P and 10,000 on the Dow. Will it happen? I really don't know. But, I'm short again from 107 today. If I wrong... well, I guess I'll just lose some money. If I right, then I'll make some money. It's just that simple folks.
This isn't a game for the conservative people, it's a game for the risk takers. Be prepared to lose big, or win big?
I mentioned that 107.65 spy was an important "line in sand" on a closing bias. It closed today at 107.68! Not a decisive break by any means. Just sitting right on the line. Not much else to say today. It went as I expected. I also expect tomorrow to be a repeat of today... flat.
Wednesday through Friday is when it's going to get crazy. Volume should pick up a lot and I'm expecting wild swings, and fake-outs. But, even if we rally to 110 spy I don't think it will be for more then a few minutes. We shouldn't close there, but only swing up and touch it. Maybe?
We could just go straight down from here? Either way, this week will mark an important top. I'm still inclined to believe that we are going to start a free fall down to as low as the 900 area before a big rally occurs again. That should be into late November, or early December.
Of course we will have bounces along the way, but the big trend is now down... not up. That 110 spy area is huge, no major, NO Mega Extreme Resistance! It won't be broken on the first hit. The odds are about as good as me winning the lottery! I'm not kidding... that's huge resistance. Don't believe those that say we are going to 1200. We might after a big correction first, but not straight up from here.
Red
P.S. Today marked the lowest trading volume on the spy in the current year... only117 million shares traded! Does that look bullish to you?
Here we sit at line in the sand. With just a few points away from an extremely important closing price of 107.65 on the spy, it seems that the Bulls might just have the juice left to get there? Monday is Columbus day, and many traders will be gone. Plus, there is NO major economic news on Tuesday either. That means light volume for sure on Monday, and nothing to push the market down on Tuesday.
So, the Bulls must close above 107.65 on Monday, and push on up to that gap fill line at 110 by Tuesday. If that happens, then you can surely expect a lot of selling at that point. On Wednesday JP Morgan will release earnings, then Goldman on Thursday and Bank of America on Friday.
What's all that mean? Heavy volume... that's what! And what has heavy volume brought us in the past? A big sell off! Light volume equals an up market, and heavy volume equals a down market. Will it happen? It depends on whether or not the market believes the funny numbers that the banks are going to report.
Make no mistake about... they will beat estimates. Probably kill estimates! But, the bar is set so low that just about any company can beat estimates. When they changed the accounting rules back in March it made it too simple for banks to fabricate their earnings. So beating estimates is a given now. But, the market wants to see them beat the "whisper numbers"... and that might be tough to do.
It's really a tough call here as the market really wants to close that October 2008 gap at 110 (spy), which would be the Dow over the 10,000 mark. That sure would look great for the 3 stooges (Obama, Geithner, and Bernanke), as it would appear that the recession is officially over! Yeah right, and I'm qualified to be president too. Hey, actually I am qualified... I coached a softball team for many years. That's about equal to "community organizer" right?
Anyway...
The big cycle turn window is in effect now and the market should roll over next week. If it makes a run for 10,000 first, then it had better do it on Monday... as that will be the lightest volume day of the week. However, I don't expect it to happen as too many people expect it... hence it won't happen. I see a flat day Monday with a slight upside bias.
Tuesday through Friday the volume should pick up quite bit. How the market reacts to the banks' fake numbers will be the real question. I'm going out on a limb and I'm going to take another short position on Monday or Tuesday as I expect that to be the top.... where ever it is!
On Friday the TBT rose again, as you can see the 2 day rise in the 5 day chart above. This not good for the market folks. Something is going on that is signaling a change. A plunge is near, that's for sure. If it's from the current level or the gap fill level around 110... I don't know. But, Tuesday through Friday should be down.
Now, keep this in mind...
Once the down moves starts the first level of support is at 1040, then 1020, and finally the 995-1000 area. I give the 995-1000 area an 80% chance of a bounce, so I'd get out of all shorts at that mark. I also expect the fall to be fast, taking out the 1040 level quickly and the 1020 level too. It will fool many bulls that buy those support levels, only to see them fail as the market falls further.
On the other hand, many bears will be fooled too, when the 1000 mark is broken (remember, the support is 995 to 1000), and they will pile on short. They will be squeezed, as a nice bounce from that level occurs. It could go back up to the 1040 area, or possibly higher? But, I think 1040 will provide good resistance, so that would be a safe place to get out of any longs you may take from the 1000 area.
However, let's play it one day at a time. I'm not saying to go short again at 1040, as I don't know how high the bounce will be. Only to take profits there and look for another place to short. We'll cross that road when will get there.
All of this assumes that the market doesn't rally to the 1100 area first. If so, then time line is off. On one hand it's worrisome as everyone is expecting the market to rally to 1100 first before tanking, and on the other hand it's refreshing to know that I'm not in the majority this time.
Well, that's about the best I can do to help guide my fellow traders. Sorry I don't have a crystal ball. Just be patient when the market does start to fall, as the 995-1000 area should be the first stop before any decent bounce. Hold on to your positions till then and get out and go long, as I will be doing so. Whether or not this happens before next Friday is anybodies guess? We definitely will have the highest chance of that happening in the coming week, as the banks reporting are big movers of the market. If the market doesn't like what they report, then the move might happen by option expiration? Let's hope so...
The market was flat today as I expected it to be. More light volume again, which means it's easy to push up. About 135 million shared traded on the SPY. I'm still short and will add more short positions on Monday, as I expect it to be flat to slightly up because it's a holiday (Columbus Day).
That should be the last opportunity to go short before heavy volume comes into the market starting Tuesday. I'll make a weekend post with more detail by late Sunday night. Enjoy the weekend everyone...
The market rallies again today as more people are kicked to the curb! It seems that nothing matters to the market, as it rises again, and again, and again, etc... etc... etc... Are the Bulls snorting crack again? What is it going to take for a serious correct to happen? I'm speachless at this point...
I'm now underwater on my short positions, but I'm still in them and will hold them until option expiration if needed. I still believe the market will go down next week. Tomorrow should be a flat day, as rarely does the market sell off on a Friday. Just another consolidation day before the next move occurs.
Since today didn't sell off as expected, and tomorrow won't likely do so either, I'm inclined to believe that 102 is about as far down as I can see the market going to before expiration. Of course all this changes if the market closes above 107.65 on the spy. Then we are off to 110 in a hurry! However, I still don't believe that to be the case. The news is still bad, and this rally is running out of steam.
Can it go to 110... yes, of course it can! But, isn't everyone expecting that now? Today squeezed the bears hard. Will next week butcher the bulls? I can't answer that for sure. But, I'm staying short, as I think the forecast is just off by a day or two... not wrong! I believe today was another trick to lure in more bulls, and scare out all the remaining bears.
There are some strange things happening in the market right now. For one, all the major movers were down today while the market was up. Goldman, JPMorgan, Apple, Google, Qualcomm, BIDU... all down! Why? The news was good right? Only 10% of America is unemployed, so the rest of us all have good jobs (Yeah, right!).
This rally was all about the dollar... that's it folks! Nothing else! Not Alcoa or the unemployment numbers caused this rally. The dollar tanked hard today, and that is the reason for the rally. The PPT is at it again. They pushed the dollar down to keep the market up on the bad numbers. It's just that simple.
However, something else happened today that is really weird. The TBT rallied hard about midday. It rallied from about 42.70 to 44.30... a huge move on the treasuries. This is really negative for the market. Is something big going to happen? I don't know, but something smells fishy too me!
It seems that 1060 held as resistance again today. The Bulls must re-capture 1060 in order to push higher. It looks like it's all up to the jobs report tomorrow. I expect it to be bad, even with made up numbers from the Fed...
Volume was light with only 150 million shares traded on the spy. Which should have pushed the market higher. Remember, light volume equals higher market... hence, heavy volume equals down market. We should have had a bigger up day today with such light volume.
What that says to me is that the market is tired and ready to correct down. Add that to the fact that the dollar seems to be finding a bottom (triple bottom at 22.60 on the UUP). That spells trouble for the market. Regardless of what others are doing, I'm still short. I will only exit if the market closes above 107.65 on the daily chart of the spy.
We are in a down cycle, and should have a short term bottom on around the 16th-19th. I'm looking for 995-1000 by option expiration on the 16th. The next level of support is at 980, then 950. With only 7 trading days left till the 16th I don't think that 980 will be hit, but you never know? However, 995-1000 will produce a bounce on the first hit down. So, I'll get out there and then look to re-enter when the bounce is finished.
I love it when a plan works out... I had hoped for 1060 and it hit it perfectly! Tomorrow is the big turn date that everyone is talking about... but, which way is the bigger question? My money is on "Down", as this rally up today was just a back test of the broken triangle.
Tomorrow should be a consolation day. I'm expecting them to try to push upwards again but I believe the high is in for now. I already went short at 1060 today, and if you get so lucky to see it push up to that area again I'd jump on the short side as Thursday and Friday should start the down move.
Today's volume was up a little to about 200 million shares on the spy. That's better then yesterday and increasing as expected. By Thursday and Friday we should be at 200-250, or more? With the negative jobs numbers expected to come out that should push the market down hard. I'm looking at 995-1000 before a decent bounce. There will probably be intraday bounces at 1040 and 1020 on the way down, but those levels aren't that strong anymore as they have be broken once already.
Going forward I believe that the tide is shifting back to the bears. Do you remember during the Goldman Sachs rally from March to September, that they always seemed to know what the jobs numbers (or any numbers for that matter...) was before they were announced? It's no surprise to anyone that Goldman has an inside track to the Government. So, of course people listened to them when they spoke. After all, they're practically the Government!
Do you also remember how they seemed to leak out information at critical times... just before the market was ready to tank. I have to give them credit for that, as they are great at this game of chess. It was perfectly timed to release little bits of information out so that the market would react slowly to each bit.
Many times they would leak out negative information on the jobs number, and then beat those estimates when actually released, only to give worst continuing claims numbers. The market was confused? They would sell off on the leak numbers only to rally when they were actually released better then expected, and then ignored the worst then expected continuing claims.
It was a game of illusions, just like a great magician keeps the audience focused on one thing in order to distract you from looking at something else. Goldman did the exact same thing last week by changing their forecast from 200k to 250k jobs lost. They did this on a huge down day (Thursday) so that when the numbers really came out the market would have already factored those numbers in and didn't continuing crashing.
Instead, the market had a slight down day on Friday, as all the bad new had already been known. But, here is where the tide is shifting. Before, when Goldman leaked out bad umbers, they could beat those high jobs numbers with slightly less bad numbers. You remember... they would come out an say that the number of job losses would be 300k and then actual numbers would 260k. Of course the market would rally, looking at the numbers better then expected.
Now, look at today.... What happened lasted Thursday? Goldman raised their forecast from 200k to 250k, and the actual released numbers were worst! They were 264k! That my friends... is a change in the tide! Will the Bulls escape? Or will the rising tide behind drown them? I hope they can swim!
I'm short and will remain short until 995-1000 area, at which time I will get out as I expect a bounce on the first hit of that major support area. Time expected... 2-5 days.
As expected, the market rallied up to 1040 and stalled. However, I was looking for one more quick down move to the 1014-1016 area before it rallied. None the less I was sitting in cash waiting for the larger down move around the 7th. This will be hard to call exactly (what isn't by the way?), but I'm expecting a flat to slight up day tomorrow as the bulls most likely used up all their energy in this one thrust move up.
Volume was light again today with only 150 million shares traded on the SPY. Couple that with NO important economic news and you can see how easy it was to push the market higher. Tomorrow doesn't have any major news either, so I'm expecting them to try and hit the 1050 area. On the 60 minute spy chart the 50ma is at 1047, and on the daily spy chart the 20ma is at 1051. So, I'm looking to start loading up on shorts around that area.
As I said on my weekend post I believe the top is in on P2 and now any 2 day rally up should be shorted. Tomorrow should close flat to slightly up. That's 2 days folks! That means tomorrow is the day to take a short position. I thought Monday would be flat to down, and Tuesday and Wednesday would be the 2 up days. But, this isn't an exact science. It's off a day, so get ready to go short!
I don't expect the 1020 area to hold on the way down, so don't look to buy it. It might stall there intra-day, or even one day, but it should break and head down to the next major support at 998-1000. That would be a good place to expect a bounce as that will be the first hit of that level on the way down. However, with that said, I wouldn't go long off it unless you are a day trader. Swing traders should just go to cash, and look to get short again later.
Remember, I'm looking for a big down move all the way until option expiration on the 16th. So, it could play out just as simple as Wednesday to Friday down to 998-1000, up/flat on Monday, and more down until Friday the 16th. Bottom line... either stay short until the 16th, or go to cash at the first hit of 998-1000 area, wait for small bounce, and re-short for a further collapse.
How far? Next support level is 980, then 955. But, let's just take it one day at a time.
