I think there is a lot of bears short right now, and all the government has too do, is to tell the banks that their not going to bother them as they previously stated.
The institutions will start buying up the banks to get the squeeze going. Then the bears will be forced to cover causing a larger rally. It's been done since this bear market rally started last year in March, and still works today.
It's all about what side of the trade the institutions are on. Do they continue selling and allow the bears to jump on board and profit on the way down, or do they steal the bears' money with a squeeze?
You know the answer to that one… they steal the bears' money again. The big institutions control what direction this market goes, and if they decide to buy for a day or so… the market will go up.
We'll see Monday I guess? Remember, a possible gap down and then rally is what I expect too happen.
I'm planning on being very careful, and only getting short on strength… Although I will be taking a partial position Monday.
The potential problem I see with your scenario is where the money to drive the market up will come from. The free Fed money is gone, the remaining stimulus will be spent to 'create' jobs (instead of going directly into the market), the bears have been beat to crap over the last several months (not much money left there), and money market funds (per Technical Take) are at really low levels… So I'm just not seeing the money.
Therefore I'll be building a core short position. I may have to weather a drawdown, but I just can't see much upside at all from here.
Basically (although I know almost squat about EW) I'm not convinced wave 5 down is done yet (maybe another 5% before a bounce, and 10-20% before a relief rally, but who knows!)! XD
I'd wait until this coming Friday or next Monday before going short (unless you are day trading of course). Regardless of how high we are going to next week, the following week is when the big fall will happen.
The 8th or 9th should start it, so I want to get short on Friday… no matter what level the market is at, I will go short. The government can manufacture any news they want to cause a rally to occur next week. All they have to do is come out an say that they aren't going to be so hard on Wall Street like they said a few weeks ago… which started this big sell off in the first place.
The banks will rally and the bears will get squeezed. If I'm wrong, then the real key level to break is to have a second closing day below 107.20 spy. I'm looking for a move down to 106.75 Monday morning, which will close the gap from Friday November the 6th to gap open on Monday November the 9th of 2009.
That means that there is a strong possibility of a gap down Monday to close the gap, and then a rally to close the day positive. Then the rest of the week should rally too, especially if so good news is released.
Look for 107.20 or lower on Monday's close, before going short. If that happens, then the next support level is at 104.00. Personally, I don't believe it will happen. I think they are going to squeeze the bears next week.
You know how they love to fake people out, and steal the money from both bulls and bears. Be careful going short next week… as I think that's a bad idea.
I'm looking for 110.34 (hoping for 112) to be hit by next Friday.
Seriously though, it does look like we're in a downward channel. I'm not sure we'll get that strong a bounce on Monday. I'm going to be starting a core short position and adding to it on strength.
This move has surprised everyone with it's speed and strength, I don't see anything other than direct government intervention that will change that. I'm thinking we probably keep that up.
Your chart really only goes back an covers this recent bull market. If you had more data available… say the last 10 years, I'd say that the 4 red weeks isn't as consistent as it has been recently.
Plus, the moving averages on the weekly chart were all pointing up during that period. We've started to roll over now, and that changes everything.
By the way, do you trade for a living full time or are you just a swing trader part time like most who visit this blog? I see you are new to using the disqus system. Do you visit other blogs too, as I visit quite a few and I haven't seen you before.
I know a lot of people just read the blogs and never comment, which is fine of course. Before I started this blog and created my disqus account, I was reading other blogs for almost a year. Then I decided to get more involved and started asking questions. The next thing I know I'm creating my own blog too.
I guess when you get heavily interested in something, you will finally get good enough to post your thoughts and opinions to inform others as well. That's basically what happened to me. I finally felt that I knew enough to help others who knew nothing… so I started the blog.
just as all moves in the market are “manufactured”, all data is also “manufactured” so the data will be whatever they want it to be
the only thing that gives me pause about next week is the weekly sequence on the $DJI, 3 red weeks followed by a green week has only happened once since the bear market started, if we get another red week next week then it'll be 4 consecutive red weeks which will mark a terminal move and then it'll be a slow grind to new highs. That would be awful as I'm sick of this slow moving market.
we'll know what the week will be by 930 on monday morning because “they” parked the market @ the crash gap on friday, a flat or gap up will be scenario number 1 or a big gap down will be scenario number 2
That would be a huge short squeeze on the bears! Almost a double top, and then a crash the following week… What a wild ride that would be!
They definitely like to play game, while hurting the most amount of people at the same time. Many shorts are going to want to short any push higher. It's going to take a lot of capital to push it back up to 114.40.
I'd like to see it though… the high it is, the further for it to fall!
What do you think about the expected bad jobs number for the month of January due out next Friday? Everyone knows that it's going to be horrible… do you see a surprisingly good number (made up of course) coming? If so, that would cause a big squeeze up on Friday.
$DJI weekly chart, as you see DJI doesn't have more than 4 weekly red bars, we're @ 3 now, what's odd is the 3 red weeks in a row is rare followed by a green week, the last time we had 3 red bars followed by a green one was 11/24/2008 and that week the $DJI was up 9.75% and closed at the high of week on friday and that sequence is the only time it has happened since the all time high on Dow during the 10/8/07 week
No, I missed the tick on Friday… what was it? (Glad to see you plan to short, and not go long into the week starting on the 8th)
On another note… Someone bought 10,000 of the July $200 calls on GS yesterday @ 1.60 per contract! I'm not sure if that means anything, because it could have been some rich guy that plans to sell them next week, or he maybe he's just a bad trader… who's soon to be a poor guy.
I was thinking that the employment figure next friday would be bad and now perhaps this is what will drive stock down starting the wave 3 down.
I think there is a lot of bears short right now, and all the government has too do, is to tell the banks that their not going to bother them as they previously stated.
The institutions will start buying up the banks to get the squeeze going. Then the bears will be forced to cover causing a larger rally. It's been done since this bear market rally started last year in March, and still works today.
It's all about what side of the trade the institutions are on. Do they continue selling and allow the bears to jump on board and profit on the way down, or do they steal the bears' money with a squeeze?
You know the answer to that one… they steal the bears' money again. The big institutions control what direction this market goes, and if they decide to buy for a day or so… the market will go up.
We'll see Monday I guess? Remember, a possible gap down and then rally is what I expect too happen.
Good Luck to us both,
Red
I'm planning on being very careful, and only getting short on
strength… Although I will be taking a partial position Monday.
The potential problem I see with your scenario is where the money to
drive the market up will come from. The free Fed money is gone, the
remaining stimulus will be spent to 'create' jobs (instead of going
directly into the market), the bears have been beat to crap over the
last several months (not much money left there), and money market funds
(per Technical Take) are at really low levels… So I'm just not seeing
the money.
Therefore I'll be building a core short position. I may have to weather
a drawdown, but I just can't see much upside at all from here.
Basically (although I know almost squat about EW) I'm not convinced wave
5 down is done yet (maybe another 5% before a bounce, and 10-20% before
a relief rally, but who knows!)! XD
Good luck to all!
I'd wait until this coming Friday or next Monday before going short (unless you are day trading of course). Regardless of how high we are going to next week, the following week is when the big fall will happen.
The 8th or 9th should start it, so I want to get short on Friday… no matter what level the market is at, I will go short. The government can manufacture any news they want to cause a rally to occur next week. All they have to do is come out an say that they aren't going to be so hard on Wall Street like they said a few weeks ago… which started this big sell off in the first place.
The banks will rally and the bears will get squeezed. If I'm wrong, then the real key level to break is to have a second closing day below 107.20 spy. I'm looking for a move down to 106.75 Monday morning, which will close the gap from Friday November the 6th to gap open on Monday November the 9th of 2009.
That means that there is a strong possibility of a gap down Monday to close the gap, and then a rally to close the day positive. Then the rest of the week should rally too, especially if so good news is released.
Look for 107.20 or lower on Monday's close, before going short. If that happens, then the next support level is at 104.00. Personally, I don't believe it will happen. I think they are going to squeeze the bears next week.
You know how they love to fake people out, and steal the money from both bulls and bears. Be careful going short next week… as I think that's a bad idea.
I'm looking for 110.34 (hoping for 112) to be hit by next Friday.
Red
Hey Leo!
Came here from Stevo's (and now Cobra's) blog.
Damn fine TA there. EW I can believe in! XD
Seriously though, it does look like we're in a downward channel. I'm not sure we'll get that strong a bounce on Monday. I'm going to be starting a core short position and adding to it on strength.
This move has surprised everyone with it's speed and strength, I don't see anything other than direct government intervention that will change that. I'm thinking we probably keep that up.
Well,
Your chart really only goes back an covers this recent bull market. If you had more data available… say the last 10 years, I'd say that the 4 red weeks isn't as consistent as it has been recently.
Plus, the moving averages on the weekly chart were all pointing up during that period. We've started to roll over now, and that changes everything.
By the way, do you trade for a living full time or are you just a swing trader part time like most who visit this blog? I see you are new to using the disqus system. Do you visit other blogs too, as I visit quite a few and I haven't seen you before.
I know a lot of people just read the blogs and never comment, which is fine of course. Before I started this blog and created my disqus account, I was reading other blogs for almost a year. Then I decided to get more involved and started asking questions. The next thing I know I'm creating my own blog too.
I guess when you get heavily interested in something, you will finally get good enough to post your thoughts and opinions to inform others as well. That's basically what happened to me. I finally felt that I knew enough to help others who knew nothing… so I started the blog.
That's my story and I'm sticking too it! 🙂
Red
just as all moves in the market are “manufactured”, all data is also “manufactured” so the data will be whatever they want it to be
the only thing that gives me pause about next week is the weekly sequence on the $DJI, 3 red weeks followed by a green week has only happened once since the bear market started, if we get another red week next week then it'll be 4 consecutive red weeks which will mark a terminal move and then it'll be a slow grind to new highs. That would be awful as I'm sick of this slow moving market.
we'll know what the week will be by 930 on monday morning because “they” parked the market @ the crash gap on friday, a flat or gap up will be scenario number 1 or a big gap down will be scenario number 2
That would be a huge short squeeze on the bears! Almost a double top, and then a crash the following week… What a wild ride that would be!
They definitely like to play game, while hurting the most amount of people at the same time. Many shorts are going to want to short any push higher. It's going to take a lot of capital to push it back up to 114.40.
I'd like to see it though… the high it is, the further for it to fall!
What do you think about the expected bad jobs number for the month of January due out next Friday? Everyone knows that it's going to be horrible… do you see a surprisingly good number (made up of course) coming? If so, that would cause a big squeeze up on Friday.
114.40
i didn't see the GS calls, but it doesn't surprise me one bit.
“they” been throwing ticks @ 175.50 for the last week.
here's another chart,
http://www.flickr.com/photos/47091634@N04/43168…
$DJI weekly chart, as you see DJI doesn't have more than 4 weekly red bars, we're @ 3 now, what's odd is the 3 red weeks in a row is rare followed by a green week, the last time we had 3 red bars followed by a green one was 11/24/2008 and that week the $DJI was up 9.75% and closed at the high of week on friday and that sequence is the only time it has happened since the all time high on Dow during the 10/8/07 week
No, I missed the tick on Friday… what was it? (Glad to see you plan to short, and not go long into the week starting on the 8th)
On another note… Someone bought 10,000 of the July $200 calls on GS yesterday @ 1.60 per contract! I'm not sure if that means anything, because it could have been some rich guy that plans to sell them next week, or he maybe he's just a bad trader… who's soon to be a poor guy.