A Day Of Rest…

162
1209

for the Bears at least...

Today end up being a "pause" day, or basically flat.  The market sold off in the morning on the horrible housing data, but slowly inched its' way back up to close down only a few points.  The Fed's kept the rates the same (not like I really expected them to raise them), and nothing else major happened throughout the day.

There was an quick move down, and hard reversal back up, when the meeting minutes were released at 2:15pm est.  I'm sure that shook out a lot of bears and trapped a few bulls.  But in the end, the market just basically traded sideways the rest of the day.

Ok, so here's a pop quiz for you... what kind of pattern did today put in on the 60 minute and 15 minute charts? Do do do do, do do do... do, da-do, do, do do do.... time's up.  Yes, it's a bear flag!  You win today's Jeopardy grand prize... a nice move down tomorrow.

Well, of course nothing is written in stone, as the market could continue sideways to up tomorrow... but I think there is a really good chance that the bear flag plays out tomorrow, and maybe Friday too?  We still haven't went down and touched the lower channel trendline on the 60 minute chart, which is around 1075-1080 area.

If that level breaks, then we should fall on down to retest the 1040 level.  Since we hit that area of support several times now, if we hit it again, it will likely fail.  Then I would look for the monthly 20ma (currently at 994) to be then next major support.  I do believe that a move below 1040 area is going to panic a lot of bulls.

Which means a lot of selling, and that means that minor supports will be broken quickly.  That's why I mentioned the major support level from the monthly.  Of course there will be intraday bounces going down, but they probably won't last too long.  Once the bulls start running for the exits, they don't usually stop to take a breather.

Now, with all that bearishness, let's look at the bull's point of view too.  If the 1075-1080 holds tomorrow, then a bounce back up to finish the wave C up in an ABC move could start at that point.  That would be the move up to make the right shoulder around 1150 that everyone and their brother is now looking for.

Let's just be honest with ourselves a little here.  Do you really think they will make it so obvious, and allow everyone to get in just at the perfect spot?  I think you know better then that by now.  We all know that they will likely trick everyone... both bulls and bears, and not allow either to make any money from whichever direction they decide to take the market.

So for tomorrow, I'm expecting the market to fall through the 1080 support area and continue on down south.  Others say we bounce, and go make wave C up.  I disagree... but no one now for sure, as we could both be wrong?  You just never know.  But the charts tell me more selling coming.

Best of luck to both bulls and bears tomorrow...

Red

162 COMMENTS

    • I believe it could go up a little more tomorrow morning, but at some point I believe the bear flag it's making will play out, and another move down will happen.

      • The daily trend which has been up for many days has turned down now. and when an index or stock trades below 50 and 200 DMA's Short would be the ideal and safe trade to go. But there are some supports in daily chart which need to break.

  1. Bulls are waking up in hell today.

    The news headlines re: housing starts and FOMC seemed rather bland yesterday afternoon, but this morning are causing shock and awe across the globe.

    I was pretty sure the top was in on Monday because of CPCE trend (see Cobra's site) but thought we'd be farting around with a little rally today. Turns out it will be a gap down unless something really amazing happens by the opening.

    Retail is being informed of impending doom so that they will have an opportunity to sell near the bottom, I think. I'm planning to cover Monday, but may move it up if we we have a very stunning day today, Fat Freddie style.

    After this sell-off, I am looking for a rally up to the MAs one more time, but will stay 50% short at all times.

  2. In a way I hate to bring these guys up but Preservento is looking for a huge down move around the 28th. Who can get details? What about BAM?. Attilla has some usual intellectual generalizations but doesnt seem like your going to learn much from him.

    These guys really threw me off 2-3 wks ago but where are they now?

    • Atilla said in a post that 1130 will look like everest by the end of next week. He did call for a gap down this morning. However, who knows if we retest that high early next week?

  3. TZA is swooping down pre-market from some high place. The feeling is like if your woman were to come home at 7am smelling of aftershave and whiskey, but insisting that she was taking care of a sick friend.

    • I think that's the UK equivalent of yesterday's 2:15 stop loss ripoff.

      They copy us in slavish detail sometimes.

    • Thank you very much Diablos. Can't thank you enough. The question is when?! Maybe today, tomorrow, next week?

          • K – it's so hard to know. When they do take it down, all the technicals will probably be out of wack anyway. The fact that they gapped it below support though, makes me think they are leading the bears in so they can take it higher on last time. Remember Red's print way back when though that took place on 6/25? Makes me think tomorrow morning will be a low before they rip it higher.

          • Do you see the whole day down, or have you changed your mind, and see a possible move up to 1092 today? That fake print of 112.41 isn't likely to play out today. But on our way back up, we should look for it. I saved a copy too.

  4. Good Morning everyone.

    We hit 1077 ES in the pre-market this morning (twice), so we should at least get back to that point today. Since the 15 minute chart is pretty overbought, and looking to roll over, I'd say that we should move down first, in the morning… and then back up in the afternoon.

    This all assume we are going to tag the lower trendline of the rising channel (around 1075-1080 spx), and go back up and make in a C wave, to finish the right shoulder. But again, should that trendline of support break, then I expect a retest of 1040.

  5. 10 year T bills breaking out to a new 52 week low this morning.

    Yes, indeedy, today will be a wild ride.

  6. Do you see the whole day down, or have you changed your mind, and see a possible move up to 1092 today? That fake print of 112.41 isn't likely to play out today. But on our way back up, we should look for it. I saved a copy too.

  7. I sold spxu typ vxx into theis expecting a bounce.

    All oscillators are still bullish. Got feeling next week is a bull week.

    • That I agree with you on Jim. But it all depends on where we close tomorrow. We need to close above 1080 to remain bullish into next week. A close of 1079 or below will cause more selling I believe.

      • I agree.

        Figured I would take some nice profits here because I have a wedding party in town and cannot pay as close attention tomorrow.

  8. Looks like we may have bottomed for awhile, and should go back up for several hours to allow the 15 minute chart to reset from oversold to overbought.

    That means we could sell off into the close, if they plan on taking out the 1075-1080 lower trendline support on the rising channel. If not, then we could continue to climb back up in that C wave that everyone is looking for? Hard to say which at this point?

  9. 1072.18 is the 61.8% fib pullback frm the 1036.75 low to recent high of 1129.5 on the ES. I would expect some sort of bounce here. Not sure how much, but I would expect a pullback to atleast 1083-1084 or 1092-1093 on the ES.

  10. I'd go long at the close if the VIX can't close above 30. It's been flirting with 30 this morning, but hasn't pierced it. Close above 30, and it might bring in more Vix and Put buyers before volitility shoots up even more.

  11. Look at the last 4 hourly candles on the ES. Just plain Ugly. Bulls getting smacked in the face with a bear claw everytime they attempt to retake the hourly 10 SMA. Sadly, my stop on SDS was hit when we went up to 1078.

  12. We have low volume right now, but the market can't seem to catch a bid? Not very bullish, in my opinion. Once volume picks up into the close, what's the likelihood it will be buying volume versus selling volume?

      • Speaking of the CPT, how much $ does it cost to run a site. He is always soliciting for $ and I have sent in what I can as I follow him but I am beginning to be skeptical. Can you give me an idea?

        • He probably has too play for the video hosting with Veoh or something? Youtube is free up to 10 minutes… after that I don't know, but I'd assume you have too pay for it.

          As for the hosting fee for a website, it's not too much. Even with a lot of traffic, it might only be $20.00 per month. But, it's the time that is costly. He probably subscribes to a lot of different services to provide the info he has?

          Sometimes I can spend all day on a weekend post… especially when you do video's, and have to upload them and stuff. Time is the big factor, and he is quite good with his forecasts. Of course no one is always right, and he stated on yesterdays' video that if we break outside the 1075-1080 upward channel, then the C wave could be dead.

    • I think we are about to break on up to your fake print but I'm staying short nonetheless. VIX isn't going down commensurate with the move up and to repurchase puts will be more expensive.

  13. I don't know when the print will play out, or if it will play out? But intraday prints usually play out the day the show up, or the next day. When volume returns to the market, (around 3pm), will they be buying or selling?

  14. Someone dumped a few hundred thousand shares of TZA and it went down near LOD even though resistance is holding – weird.

    • That sounds like that person is now bullish on the market. Large volume player usually now something, but sometimes they don't. We'll see when 3pm comes around I guess.

      • Some e-wavers have 5 waves down if the markets put in a new low today so ther could be a decent bounce back to the 50 period average on the 60 min. Not saying it's going to happen but it's a possibility.

    • During bear markets, RUT performs worse than SPX, but during bulls is much better. I was surprised to see the effect of a few points on TZA volatility today.

    • Huge volume spike. Made .5 back already. As someone else said here, stops dont work except for the MM's!

  15. OK, 1085 broke but isn't resistance at 1090? ROFL Hmmm, 2:00 again, must be time to troll for stops.

    We have negative divergence on STO for SPX.

  16. Did any of you folks see that as of the close AAPL made up 80% of the NAZ! If they play games with AAPL the NAZ is coming down hard!

  17. Most Banks look like short sells, ( falling knives) The Slow sto is turning into a downtrend..Some banks are at the lower bb band…the battle is on, between the slo sto and the lower bb band.

    • I think it already broke on the SP. Forget about any rallies the rest of the day to 50 period average. 50 period average on the 15 minutes was about as far as it goes.

  18. keep you eyes on Lower BB at a potential stopping point for a least a bounce now at 1044 es june

  19. Post close ramp job is starting. I have a feeling we will atleast open with a Gap UP tomorrow.

  20. We closed below the 20 day average in every index today (except a few which had already dropped below the 20day) 10 day and 20 are still moving up to flat. This is only the beginning. The red bars will get bigger and bigger as the McClellan Oscillator gets more deeply negative. It's still a gift to enter short/ inverse positions from these levels.

    • As I said yesterday, the MO is wrong by a day on Stockcharts. This will be the third day in the red.

      • I don't use the ratio-adjusted version that stockcharts uses. I use the original raw version. Yesterday was -3. today should get to -100+ and once it gets above -200 the declines should get spectacular.

        • Good for you!

          They are doing something else hokey as well. I was amazed at its accuracy when done correctly.

          • It's on Tom McClellan's website—mcoscillator.com—-Sherman McClellan told me last year both versions have their use but I don't like ratio-adjusted. Ratio Adjusted Summation Index has been below the o line for over a month while the raw version barely crackedt it in early June. Below the 0 line is where all the big action takes place and ratio adjusted version would have fooled many although the original version gave a little headfake there early in June but now its reset for a multi-week move.

    • Man, you guys are blowing my mind with this stuff. Wish I could find one. I feel like it's an easter egg hunt. Does anyone have any data on how many of these play out? I mean, it's cool, to find them but if they are just institutional trades that temporarily spike the index it doesn't help us.
      Just curious…thx

      • They all play out at some point… when is a question I can't answer. But should we tank tomorrow, I'd be looking for one of those prints to be hit. The 100.72 spy print could hit next week, next year, or tomorrow? No one knows… but consider them like support and resistance levels, as when you are getting close to one, it should be tagged before leaving in the other direction.

        • I understand…I admire your deductions about them and feel it is not an unwarranted assumption but was hoping to hear that someone has found them to be x% accurate within a said time span or in reference to the date it is posted with(like your 6/25 one).
          I have a proclivity to believe in the premise of the fake prints based on market manipulation but I feel without more statistical data we are just grasping at straws. Not that I am beating up on you here, it is just that anyone can arbitrarily pick a date and say at “sometime” the market will go there. Probability agrees with that.
          Otherwise we look like we are trying to fit data to our theories versus proving our theories with data. At the very least, my goal is to be able to understand them. thanks

      • Hey Dread, what's your opinion on that Anthony D. Allyn blog, and his charts? He's very bearish, and was calling for 47 points down one day last week, and then it went up the next day… and then he called for a 57 point down day after that.

        Doesn't he know the market is always manipulated… especially during opx weeks! Everyone that's be around for at least a year, knows that opx week is controlled and pinned on a level to pay out the least open interest contracts.

        In this case, the market had a ton more puts in June, then calls. Volume dried up, allowing them to move it up every day until Friday. Calling for a big sell off on opx week, with the puts way out numbering the calls, is not a wise call.

        Sure, I wanted it too go down 57 points, but I knew it wouldn't. I've seen too many opx weeks, and they always squeeze out the side with the most open interest contracts… usually the bears.

        Other them him not including important factors into his analysis, his charts are pretty good. But I can't simply turn a blind eye to opx week, and assume it will fall based on elliottwave patterns or technical analysis… I know better then that.

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