Bernanke To The Rescue…

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Did Ben Bernanke cause the late day sell off?

(If the video doesn't play, here is a direct link to it on youtube)

I doubt it... but maybe the media will blame something he said in the testimonial today, as the cause of the sell off?  Who knows what reason they will come up with?  There are plenty of negative things in the news right now... from the oil disaster that's still going on, to the debt crises that is hiding the closet, just waiting for the right time to get out.

Ultimately though, the sell off was all just simple technical analysis... as when the charts are all pointing down, the market can't do anything else but sell off.  Tomorrow should be a continuation of today, only without the morning rally part.

Since the continuing claims and initial claims data will be released before the market opens at 8:30 am, I expect that news to be the reason to gap down below the 1040 spx support level.  The charts tell me that tomorrow should be a down day, and all that's left to make it happen, is somewhere to direct the blame at.

If not the jobs data, then some other reason that might come out overnight or in the morning... will be the blame.  The talking heads on your favorite TV stations have too have something entertaining to blame the sell on, or else they would be out of a job.  You don't really think they are going to say that the sell is just based on what the technical indicators are saying, and that NO news event is needed to cause it too happen?

Anyway, I guess we all need entertainment... as technical analysis is a whole lot more boring then the excitement we get from going long on Apple when they beat estimates because of a new gadget... making everyone's life better and your long positions more profitable.  Or the anger we feel from the disastrous oil spill that BP did, while profiting from our short positions on them too of course.

Speaking of the oil spill, I found this video on Steveo's blog (http://oahutrading.blogspot.com), and thought it deserved too be re-posted.  I never knew that the same oil spill happened back in 1079, or if I did know... I forgot about it.  They did the same thing to stop it, as they are doing now.  Talk about stupid people... this takes the cake!

Red

347 COMMENTS

      • It is. i notice Ron Walker is still calling for a right shoulder and is placing a lot on the MACD positive divergence.

        I have a hard time with all the other indicators not supporting the MACD positive at this time. Could be just the timing as usual.

        I think we go sideways for a while and then rally through OPEX. Not sure if i will hold my shorts. my proces are awfully good and I hate chasing down if it continues.

        • Yes Jim,

          I totally understand. This is getting very tiresome, and it's wear me out too. These wild swings are meant to do just that… get every bull and bear out of the market.

          We should have already tanked by now, and this delay is killing my position. Of course that's what they want too do. It's looking more and more like they are going to hold it up this week now.

          I don't know about the right shoulder being developed or not? Seems too obvious too me. But maybe there are too many bears in the market right now, and that's what is causing the delay?

          I still see a lot of bulls out there too, it's just that the sites I visit are bearish… but many others are bullish. Many think that we will go higher to make that right shoulder now, because we held the 1040 support level.

          However, we did not make a lower low… only a higher low, as we stopped short of the previous low by a couple of dollar. There must be a lower low, as I've never seen a rally last on negative divergences.

          Go look at Cobra's post from last night. Money is still leaving the market, and we still don't have a positive divergence yet.

  1. So, every day for the past week, we have reached the low in overnight futures at some point. Last's night's low was 1052.20 (just like yesterday). So it looks like another day of the same, perhaps. I will be anxious to see what happens when we get the VIX gap fill at 29.70. I may switch my june puts for july puts.

  2. trying to “pinpoint” a crash is nearly impossible. It appears you can only project a window of time, hence the facility of options. I admit I am not good at it. I think this “crash thing” will work by a few days before opx, maybe tomorrow friday.

    attilla yest said break well below 1000 s&p

    Mole at Evil Spec. sees three scenerios. the bearist is soylent blue BUT
    “On the Soylent Blue side we pained one long ass a-b-c which looks better on the Dow IMNSHO. But today’s drop has increased its chances and we will also keep in as a top contender until 1077.74 (not a penny less) has been breached.”

    so if we go above 1077.74 soylent blue is out. We now are at 1073. Feel like throwing up. Should have sold on the good claims #, doesn't look good for soylent blue

  3. Believe it or not guys it's looking good – we are getting closer to that VIX fill and GS is getting near it's support level of 135 (down today – imagine that)!

  4. Shows the weakness of teh analysis.

    Not one chart last night pointed to this kind of strength.

    Question is is it add time??

    Iwill wait till next week I think

  5. Interesting point about jobs numbers.
    Out of 3.2 million college graduates in may over 80% are jobless. But the majority of them do not qualify for unemployment so are not yet counted in the official stats.

  6. This is the perfect example day, as to why technical analysis doesn't always work. We had every chart pointing to a down day today, and we gap up? WTF?

    I sure hope this squeezes out all the bears, so we can finally go back down!

    • Yep, this and Diablo's are the ones to watch.

      My $0.02 is that volume on this morning's rally was not that incredible, nor was the money flow. Volume is higher on the sell-off.

      The news is BS. WTF, China isn't affected by the Euro problem. Also, the new unemployment claims didn't go away; the 'unemployed' number is very unreliable and was probably affected by the census workers.

      If we can hold our current high, this market is toast.

      Pivot point is 1061.9.

      • The market will get to at least 1052.2 as indicated again by the futures last night. The market is toast, just not sure my account will recover.

  7. As soon as we cross 135 on GS (and I believe we will today) , I think the market will come barreling down.

      • I agree. Enough already. Fifty sites with fifty different patterns and then another fifty posters with their patterns or interpretations of patterns. None calling it correctly. We are in a constant state where any single news event can cause a dramatic change in the market at any single point in time. THERE IS NO PREDICTOR of the future. In the market or in life. We are all at the mercy of things beyond our control. Best we can do is roll with the waves and try to capitalize as best we can and try to avoid disaaster as best we can.

          • Well it depends on your point of view but like I said controlled by powers beyond your control. Truly a crapshoot. As is life in the final analysis. We all are merely speculators, shooting from the hip and playing the odds. Just when you think you have it figured out you find out you know nothing. When life is rosy and everything is rolling along great that is when something happens to turn it upside down. There is gret truth in highs and lows, Ying's and Yang's, Bulls and Bears, etc. Everything in our existence is a study and experience in opposites (Spring/Fall, Winter/Summer, Day/Night, etc). We are truly just a bunch of insignificant nothings running around in a world that makes no real sense and that we have no true and real understanding of (look up in the sky and night and ask yourself what the heck this is all about). Try to be protective of what you have, be reactive to what you are confronted with and be opportunistic to the chances that can better things for you and yours.

          • Yes VinylMan…

            When I look up to the stars I wonder how many of those planets I've lived on in previous lives. They I wonder if I struggled as hard there to survive, as I do here? If only I could remember those past lives, then maybe I could learn something from them…

  8. This is a good example of Tech Anal. vs the fundimentals.

    The fundementals cannot be ignored

    We have been following the technicals obsessivley. To say “ignore the news” is not right. The technicals wait around for a trigger and it's the fundimental news that does it.

    Today the fundimental news was 1) Good news from China 2) jobless claims. The market went up for a few min then down for 15 min or so. When that bear move failed I should have jumped on the rally.

    long term still a bear but when I get my 5min renko chart going (ain't got no money) I will leave “them” in the dust

    • fundamentals crundamentals. TA my #$&*&$! It's all horseshit 🙂
      This is going to be an exciting day!!!!!!!!!!!!
      Red, my attitude is the only thing that gets me through!

    • Yes Ben,

      TA and the news can produce different results, from each other. I'm just able to cover a small part of the TA's, and the other missing piece's would have probably told me this squeeze was coming today.

      But, I'm just one person and I can't see every chart, or every piece of data needed to make it all work perfectly. I sure wish I could, but that's not reality.

    • Ben,

      The fundemtals a god awful. Employment was not good and did not include millins of college grads that cannot find anything.

      Inflation is skyrocketing therefor PE ratios will adjust.

      Debt is uncontrolled.

      Days like today are sell opportunities for longs that got stuck and buy opportunities for bears. gotta have them

    • I like it San…

      It's been in that channel since the April high. As long as it stays in it, the next move down should be some type of wave 3 inside of another wave 3.

      Where is EW guy now?

      • Red,
        Atleast the sequence I am seeing for last 2 months – “things happen when no one expects that to happen”. Today many people are exiting thinking market might tank – so I don't think market will tank, not even tomorrow morning – it might show some more strength – I think tomorrow afternoon when bulls feel very comfortable market will tank and go down to where it was by Monday market close. Unbelievable but this theory is working for last 4 to 5 weeks.. – general observation though..

        • you could be right although gs is very close to breaking through 135 and if the market goes down even slightly today we will get through it. we also have the treasury auction at 1est which usually takes place in a down market.

    • That's right leo and that down move may come any time. on the contrary the possibility of a complete reversal cannot be ruled out of this channel cannot be ruled out as well.

  9. Here's and interesting fact that was just posted on Mr. Topsteps' Twitter page…

    “Today is the largest gap up on any rollover in history.”

    That means there were a TON of bears that just got squeezed out! Let's hope they stay out, so we and tank this puppy.

    • you know that whenever they show that oil leak on CNBC that they are getting ready to tank the market!

  10. I am 100% short, actually 102% because I wanted a round number of shares and used a soupçon of margin.

    Screw Wall Street and Washington. I fart in their general direction.

  11. Well personally I not only see no trend change but further validation. Simplistically we took out the 1200 S&P level on 05/03, the 1100 level, despite the 05/06 crash, still held on a closing basis until 05/20. The 1000 level has now dominated since. We had a single breach to 1103 the week of 05/24 (on a Thursday, high for the week). We had a single breach to 1102 the week of 05/31 (on a Thursday, high for the week) and this week we have yet to breach it and with today, another Thursday, and so far again the high of the week, not only have we not breached 1100 we haven't yet breached 1080. So why all the fear and trepedation suddenly? I feel more encouraged this week than last.

  12. The vix percentages are not supporting this Bull. less than 12% in fact less than 10%..

    no conviction.

    I would not be surprised to see yesterdays swing all over again.

  13. one thing I find strange is that the treasury auction is at 1:00PMEST. I assumed the market would tank into. Maybe it's not the government who is running this thing after all!

      • Monicadern I was just on Attillas site and responded to you but I may not be registered.;

        Attilla said yest on his blog that we are going much below 1000 on the s&p based on Wed's action.

  14. Doesn't look like very much volume in the market today. The charts are now starting to looking bullish on the daily. It's not making me feel good about being short.

    A gap up tomorrow (on NO news or valid fundamental reason of course) would get the market outside that falling channel and the right shoulder could form, that everyone is looking for.

    But, I seen the charts as bearish going into today, so seeing them as bullish for tomorrow may be exactly what I need to see, for it to tank?

  15. I have a feeling the sh$t is about to hit the fan. Treasury auction results announced shortly.

  16. Deepcaster sent me the following but I don't have a subscription. they tend to be correct and do catch big moves but I don't know what and which direction. maybe shouldn't have posted this, just gets people worked up.

    or maybe someone knows what they are talking about

    Greetings!

    We expect our Forecast MEGA Move to launch in the next few Days to very few weeks.

    If the MEGA move materializes as Forecast, we expect one Sector to experience an especially Massive Move.

    Today, we recommend a Play designed to profit from such a move.

    To see this Recommendation, go to http://www.deepcaster.com and click on ‘Alerts Cache’.

    Best regards,

    Deecpaster
    June 10, 2010

  17. it is really a tough spot to call, on one side, Finalcial, rut & Q are lagging, on the other side, TRIN is at 0.24, and today's high so far only 0.43, virtually no selling

  18. Broke through intraday MAs and headed for 1080 now. Hope it holds!

    Funny thing about watching market action today is that it seems like a battle of life and death as far as the averages are concerned, but it's a bunch of low volume BS.

    • There isn't any money left Rip…

      Go read Cobra's post from last night, and look at the bottom 3 charts. The free money from the TARP is gone, and the big boys are selling into this.

      Plus, there isn't any mutual fund money to use to buy up the market either? Where is the money going to come from to support another big move up? The thugs aren't going to use their own money to buy the market at these levels.

      They want the public's mutual fund money, or the free stimulus money… and without it, the market will fall.

      http://cobrasmarketview.blogspot.com/2010/06/06

  19. mole on evil spec. says soylent blue (straight down) is dead.

    two other plans, one say 1090, then down, the other say 1030 then down

    • Well Mole is forever Bearish… much like myself. I'm thinking the same thing, as it looks like a perfect wave 3 of 3 coming next. Let's just hope Mole and I are both right on this one, and our Bearish nature isn't clouding our judgment.

  20. If you want to know more about what “TPTB” decided to do over the June 3rd-6th meeting, here is the link…

    http://seeker401.wordpress.com/2010/06/10/bilde

    If you want a list of the people in the group, here it is…

    http://www.bilderbergmeetings.org/meeting_2010_

    It's public knowledge that these people make the decisions the rule the world, but what they are deciding next for the stock market is unknown.

    However, considering the fact that money is being sucked out of the market faster then the oil spill sucking machine… I'd say it's not going to be another 2,000 point rally right now. Maybe after a large fall, then I'll believe in a large rally, but not from these levels.

  21. 3 reasons I am staying short. GS can't get a bid, we haven't gone below the VIX gap, and we haven't gotten above 1085 yet (Attila's line in the sand).

  22. Do not know about a big down. It is impossible to predict. All you can do is follow the money.

  23. What do you mean by this statement? ???

    Remember, the key to TA is to use the indicators 180 degrees out of whack with how they were intended.

  24. This is what Atilla said 20hrs ago after the late day drop yest Wed.

    “It appears to be todays intraday bounce affected the intermediate term structure,
    SPX 1000 area will not hold anymore, the first low will come from much lower levels

    this level will be clear as we proceed”
    (Edited by author 20 hours ago)

        • Guys,
          I just added some (10%) July SPY puts, just going by the vol.. pretty pathetic (i don't see anyone buying this rally) and lot of indicators pointing down. Will add more if it spikes up tomorrow. Going by all the comments and historical observation of last 2 months SPX should be around 1040-1050 by Monday, hopefully by tomorrow.

      • I'll explain it on better on tonight post, but basically the move from the first low of 1040 (May 25th?), to the first 1100 high (May 30th?) is the left side of the “M”.

        Then, the move down from the 1100 high to the 1070 low was the middle of the “M”, and then back up to 1110 again, and finally down to 1040 (June 9th?) formed the right side of the “M”.

        The move up from 1040 to today's high formed the left side of the “A”, and we are now looking for the right side of the “A” to form next… but it's usually twice as long as one of the sides of the “M”… meaning about 80-100 points down from here.

  25. Oh that was fun. If it is any consolation, last time they put the financial short sale rule into play, the market crashed. Tomorrow they will start to implement the breaker rule but only in some stocks.

    • Pzy5t0,

      Too many “blue pill” takers to believe the real truth about what we really are. They won't believe anything on that website, although much of it is true. They are still trapped in the matrix unfortunately.

  26. Red,
    I shorted NFLX, 118.7. I can't figure out my stop, because I want to short some more at 122. ( 122.26 is a 3% stop) So, accumulating puts. Retail numbers FRI, NFLX Tank, possible.

    • Hey Z…

      Painful day for bears… that's for sure. I think we could tag the 1093.56 EMA level on the SPX, before we tank… which will likely be put off until next week. So, you might get your 122 NFLX level tagged tomorrow… if you're lucky.

      • Yesterday, I had a few signals predicting today might be a huge rally day. For Friday's action, I don't have a clue!
        Either it's gap up. or down a smidge. or both. VIX over 25, says Volatility rules each day.

  27. by the way 1089.blah blah (decimal) is the 20dma for the Bollinger Bands

    the latest fro Atilla …….drum roll……..millions (i hope not, were supposed to be a small exlusive enlightened club)

    Thursday, June 10, 2010
    The ending will be worse as they delay
    I can not describe how messed up the market will look when this is over.

    This delay only broadens the overall pattern which will extend the sell off and the magnitude of the eventual selling climax. In other words, the market is spending more time in the lower range, congesting, accumulating more selling power.

    Todays gap up has invalidated Flux signal, we had to gap down instead. This is an extremely rare situation which is another sign for what we are going to see in near future. I expect another signal in a week or so.

    After todays rally, it appears to be SPX=920-940 area should be the first low, followed by a rally to 1050 that should lead to the second low around SPX=870.

    I am short from 1210, and pyramided up at 1160 and 1100 areas.

    The best is yet to come.

    • Congrats for shorting right on the top. In your case I would take my profit now and reestablish new short positions later. We may see new highs very soon.

  28. Attila say “another signal in a week or so” Maybe that means that my option put for opx june is blown out. oh well.

    Presevento was wrong, Atillas signal was wrong, Bam is wrong and most everyone we listen to……….

    • it seems like that he lost the signal for this big quick dive , but still feels that we are going to see some weakness in the coming days

    • That's exactly what they want Ben… for all the people calling a crash to be wrong. Now everyone is expecting 1100 or better to form the right shoulder.

      Guess what? They want them to be wrong too… Tomorrow will most likely be a pause day, but next week will only have Bulls in the market, as the bears are now extinct.

      I really don't think they will allow the bulls to escape either… but we will see next week I guess.

      • I guess we should all stop listening to other people. It's not doing us much good. Unfortunately, there are no answers.

        • Timing a big sell off is hard Monica, and since we don't have the luxury of time on our side, we should trade in an out more in the future. For now, we are both stuck in a short position that's underwater now.

          But, I think we will see dry land next week, and probably some high mountains too. I'm hanging in there, as I firmly believe we will fall hard next week.

    • Bens,
      I am not sure when you have got these puts, if it not well out-of-money you can just hang in there or rollover to July or Aug puts – Though it is pretty rough the bearish trend is still alive. Broad picture of the world didn't change much – we still have european crisis, war threats, volatility is high n techincals are completely broken on many charts. The first 10% of correction was pretty quick, but the later 10 or 20 or 30 or %%… correction is going to take some good time and sharp snapbacks… — patience pays…

      • Bought the 990 June put e mini s&p for 3.00
        traded up to 10.00 now back down to 1.45
        why sell the 10 when “the crash” was just dead ahead.
        been looking at Jaywiz and he appears to vaguely be correct but wierd system to say the least.

        Retail sales and consumer confidence out tomorrow. With all that oil floating around who wants to go shopping and feel consumer confidence.
        These two numbers, I think will be bad, but numbers releases really don't cause crashes. these number will come out bad and everyone on this site will be yelling “crash” then the s&p will bottom, turn around and rally breaking the middle BB now at about 1085 and probably visit the top BB next week.
        Crash longer term. Nenner says Nasdaq “tops” thurs June 17.
        Some are calling for a down friday next week.

        (I think)
        I'm going to sell my put when the s&p is down 15 pts or so and buy a call or two expecting 1120 next week early

        • Bens – go back and look at what happened between sept 18 and oct 27th 2008. Volatile swings daily but ultimately much lower. You have to expect that. that's why leverage is so difficult. Switch your puts for ones further out but stay away from calls.

  29. What we have to realize is profitable trading is NOT catching a crash but a day to day grind that is conisistant. I'm going to do this with a 5 min renko chart someday soon and I'll let you all know what my performance is.

  30. A Really big IF

    If retail sales is REALLY bad +.2 expected and it comes out -.5 AND U Mich. cons. confid. comes out 4 pts lower or so then expected then maybe the S&P can crash tomorrow. But Don't expect such rarities. It will probably come out sort of bad so the S&P only makes a huge drop ?20pt to support around 1064 and then rallies.

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