Weekend Update…


Monday Update...

No long post today, as nothing has change.  We had a another "pause" day, and anything could happen tomorrow.  The 60 minute chart has now become overbought , and can rollover at anytime.  The daily chart is forming a bear flag, and could drop another large red candle down as early as tomorrow.

It's really hard to say about tomorrow.  I could easily see a gap down to fulfill the bear flag, but if it fails, a large up day could also happen.  You can see the bear flag, if you're bearish, and you can see considation if you are bull.  I'm still very bearish, but I'm weary of surpises by the government.

The weekly chart tells me we should go down again, and put in another red candle, but again... the market could go either way right now.  I'm still very bearish of course.  However, some good news could easily spark a rally, so bears be careful.  We are truly in "no mans land" right now...


P.S.  Sorry I wasn't around any, I was on the road driving all day.


The calm before storm...

Friday was basically a flat, as market shuffled companies around to re-balance the Russell index.  Overall though, the market still looks extremely bearish.  The technical pictures looks worst now, as the 60 minute chart has finally worked off the triple bullish divergence, by going positive (above the zero line), but now looks ready to roll back down again.

That's bad news, if you're a bull.  While it could go up a little more on Monday, it's going to be really hard too go very far.  The 15 minute chart is headed south again, and of course the daily, weekly, and monthly are still pointing down.  So while anything is possible, the charts tell me Monday should fall hard... especially when that 60 turns back down.

It could be rolling over already, and we could have a gap down on Monday, or it the 60 could push a little higher before rolling over.  So, while my gut warns me of a possible gap up and rally for several days (or weeks), the charts tell me otherwise.

That's one of the hardest things to do... follow what the charts tell you, and ignore your gut, unless you are Anna, who has an amazing ability to be right, by listening to her "gut instinct".  Of course she uses charts too, but when it's time to pull the trigger, it's her gut that she listens too.

I have to hand it to her, she makes a lot of great calls that way.  But I,on the other hand... I get killed listening to my gut.  So, the chart tell me that we could finally have that "Black Monday" that I've called for too many times (and been wrong each time), while my gut still worries about a gap up on Monday.

That goes to show you how good of a job they do of training us sheep to do the opposite of what they do... so they can take our money of course.  How else can they stay rich and powerful, while we struggle to make ends meat?  The market was designed and created to take money from the unsuspecting sheep (public... aka, the retail traders - as in you and me).

So, should I listen to what all the technical analysis, astro, elliottwave, etc... tell me?  Of course I should, but will I?  Well, I did this time (LOL), but I can't guarantee I'll always listen.  Turning off your emotions is the hardest thing to master... and I haven't master it yet.  I'll make more stupid emotional decisions in the future, I'm sure of that.

But for now, I remained short... based on the charts, not my emotions.  Nothing in any chart or pattern I see can justify a gap up and rally on Monday.  Sure, we feel like the market is oversold now, because we fell hard 4 days in a row, and closed flat today.  But the charts say the market isn't oversold yet, but still has room to go much lower.

It's times like these that test your will power as a trader.  After all, chasing a falling knife isn't a wise thing to do.  But, neither is going long when after a huge run up.  But, if the charts say there is more room to run (up or down), then you just have to do it.  They call it "Buying Overbought and Selling Oversold"... but the great thing now, is that we're NOT oversold yet!  Can you believe that?  After all these days down, the market isn't even in oversold territory yet.

That should make you feel even happier about going short today, as the daily chart is just now at the zero level with the histogram bars and the MACD's are just now ready to roll over and head back down south.  While they could turn back at anytime, I believe we need a capitulation day first... before any big rally can occur.

On the bullish side, the weekly chart is working it's way back up, from oversold conditions.  But, the bearish engulfing candle put in on that chart indicates that we will have another down week.  If this week goes down the first few days, and then rallies back later in the week, then it could end with a doji candle.

That would allow the following week to rally up, and work on putting in a lower (positive... aka, above zero) histogram tower on the daily chart, then the previous tower.  But for this week, I expect the daily to cross below the zero line for at least a few days, putting in a small (negative) tower.  Then again, it would go back up next week and rally the market.

But this week should go down early and rise back later in the week.  Will it?  Who knows, but that's what the daily chart indicates it is likely to do.  It would also match up with the weekly chart, as it is putting higher lows on the negative histogram tower, slowly working it's was up to the zero line and above.  However, on the weekly chart, I think it will just barely make it above the zero line before rolling back down in August.

So, now that you are totally confused, I'm bearish on Monday and maybe Tuesday, then bullish for a week or two.  That's what I see in the charts, but my gut tells me that it's going to rally on Monday and not stop for a couple of weeks.  I choose to ignore my gut, and go with the charts.  So, I'm short into Monday.

If Monday opens up, then I expect it to rally up a little in the morning, to allow the 60 minute chart to put in a few more positive histogram bars.  Then, I expect it to roll over and tank into the afternoon and early Tuesday morning.  While the market is turning bullish on many indicators right now, it still has just as many that are bearish too.  That's why it's so tough to forecast this weeks' move.  A big rally is coming soon, but I think we need  a big down day to have capitulation first.  Whether we get it or not, is anyones' guess?


Sorry for late post gang.  I had internet problem, and was down for awhile.  But, I finally got the video uploaded to Youtube...


    • Oh, yeah, that was bear porn all right. 🙂

      Cracks me up how the kabuki theater is that the US dollar is some sort of bedrock, and not the same kind of toilet paper that they have in the EU. I expect the deflation angle to play out to the hilt, even to the point where people are taking pay cuts to keep up with the mighty dollar's purchasing power.

      Utter shite.

    • Interesting article. When I'm see this kind of porn on CNBC, I can't help but be paranoid as a bear…

      Anyhow, can someone explain:
      “The next shock and awe will be in the form of large scale QME (Quantitative Monetary Easing), but with one massive difference – it will be focused on lowering yields, not expanding money supply,” he said.

      “So do not be surprised if the next QME is about guaranteeing yields at, say, 2 percent on the (10-year US Treasury) or lower,” he wrote.

      How do you do QE to guarantee low yields WITHOUT this increasing money supply?

  1. I certainly don't follow the clown but everyday doomsayer Atilla just closed out all of his short positions. Claims now that he may re-short in October.

  2. TLT : new high for the year. It looks like it's going to go parabolic. Now that's a good tell.

  3. Gang, I was on the road all day today, so I couldn't post any. But, looks like I didn't miss anything. The daily chart has a bear flag on it, and it should play out soon.

    I seen it go 4 days before falling, and we now have 2 days of doji candle's with a big red candle in front of them (last Thursday).

    The 60 minute chart looks overbought now, but I'm sure will could trade sideways one more day. However, I personally think it's going to roll back down tomorrow. If so, with daily also rolling over, I could easily see a 200-300 point down day.

    Should be tomorrow, but anything is possible? Some really good news could spark a rally, but I think it will be short lived… if it does?

    I should be around more tomorrow. Refresh your page, as I added Monday's post to the Weekend post.

      • Yeah, I didn't miss a thing did I? LOL

        You know, I just watched the chart pattern traders video's and his becoming very bearish now, and talking about closing up his long positions tomorrow. I'm glad he's bearish again, as he's been on a roll here lately and quite accurate.

        I think we are going to have at least a 200-300 point down day… either tomorrow or Wednesday, as that daily chart looks really bearish now. The more day's it trades sideways, the more likely it will play out as a bear flag.

        So, I'm looking for tomorrow or Wednesday to drop hard… unless some really good news comes out to rally the market of course. Even still, it's not likely to last with the jobs report forecasted to be bad again this Friday.

        We'll see tomorrow I guess…

  4. Gang, I was on the road all day today, so I couldn't post any. But, looks like I didn't miss anything. The daily chart has a bear flag on it, and it should play out soon.

    I seen it go 4 days before falling, and we now have 2 days of doji candle's with a big red candle in front of them (last Thursday).

    The 60 minute chart looks overbought now, but I'm sure will could trade sideways one more day. However, I personally think it's going to roll back down tomorrow. If so, with daily also rolling over, I could easily see a 200-300 point down day.

    Should be tomorrow, but anything is possible? Some really good news could spark a rally, but I think it will be short lived… if it does?

    I should be around more tomorrow. Refresh your page, as I added Monday's post to the Weekend post.

  5. BIDU, usually is never safe to short sell….It is now…look for a retest of May lows 63-65 going forward. imo…It's controversial because there are so many BIDU bulls out there……Keep this in mind, I know how to kill bulls with my teeth.

  6. Hi Red,
    Between XOM and CVX, CVX is the more likely to make more money, going long. I think I have to make up my mind pretty soon. I don't know how long CVX will be at these low prices.

  7. So far so good gang, as the futures are down nicely this morning. Of course they could run them up in the hour, or run them up all day. But, I think we are going to gap down, and continue down all day today.

    The daily chart is definitely going to roll over on this gap down, and the 60 minute chart with also roll over. Depending on how deep the 60 burys the histogram bars, we could have 2 straight down days before it gets very oversold and and rolls back up.

    Great for the bears of course. But, Thursday and Friday will likely be bullish, especially if today and tomorrow really tank. The jobs report will be factored into todays' sell off (should today continue down, and not bounce at the open?).

    The 1040 area that has been hit so many times now, should break this time. But, no guarantees of course. If 1040 breaks today, then I'm looking for that 100.72 spy fake print on Wednesday.

    Of course if we open and bounce, then we could but in another doji candle today. I don't think it will happen, but it's possibly… especially with light volume. So let's monitor the volume today to see if it increases. If so, then we'll probably trend lower all day.

    Good luck to us all…

  8. rrman on jawizz say helge's says we close on the low today and go lower wed am. then rally.

    jawizz appears to be wrong today.

    do they use astrology? I have a problem with this

  9. Buzz up! 0
    Anne D'Innocenzio, AP Retail Writer, On Tuesday June 29, 2010, 10:08 am
    NEW YORK (AP) — Americans, worried about jobs and the sluggish economic recovery, had another relapse in confidence, causing a widely watched barometer to tumble in June.

    The Conference Board, a private research group based in New York, said Tuesday that its Consumer Confidence Index dropped almost 10 points to 52.9, down from the revised 62.7 in May. Economists surveyed by Thomson Reuters had been expecting the reading to dip slightly to 62.8

  10. rrman said… (interpreting Helge ?sp)
    ben we pop at close up into 9pm central will be a nice pop short it hard! then down hard into 8-830 am Wed..,., cover everything then!
    I will go long hard….
    we will go up hard into July 6 or 7th
    there will be some whipsaws but will hold tna/faz until that high helge shows july 5 market closed…

    10:16 AM

    • Jay uses time cycles I believe, and maybe astrology too? RRman is pretty good too, and I must agree with him on this call. I believe today will be a trend down day, just like February the 4th.

      Then tomorrow should open with a big sell off early, and then rally back add close positive like February the 5th did. Then rally the rest of the week and probably next week too.

    • Nenner Cycles show a drop to 900 after this break.

      I wiyuld not go long. Any bounce will be intra day and short lived.

      • The 900 area is where I would look to go short too Jim. But only for short lived rally. Several days at leasts, a few weeks at most. Depends on what the charts look like after a rally from the 990 area starts.

  11. Ben, if you go long, you should be aware that the vix will drop big time on the rise. For that reason, you should either buy a option that is “in the money” (2-3 points on the spy), or do a spread to neutralize the vix going lower when the market rises.

    If we get down to the low 990's, then I will do a 100/105 call spread. Meaning, I'll buy the 100 (July), and sell the 105. The market should easily get back to 105 before the expiration of the options.

    In fact, I have a fake print of 112 spy, so that might be the target for opx? Don't know of course, but once the rally starts, it will squeeze all the bears out. You know that all too well by now.

    If we get to 105 by this Friday, I'll close out the call spread, and go long with something else. Just remember, with spreads, you can't make any more money once it goes to the strike price of the one you sold (in this case, the 105).

    Hope that helps…

  12. I think you are over analyzing here trying to play perceived swings. This market could only muster an intraday high of 1131 for all the bluster and rebounding and elation at busting through 1105, etc and just as rapidly has come down again, most likely to burst through 1140 this time and then to who knows where. Why all of that gives you some great sense of a two or three week rally to new highs baffles me. I don't know how many more clues are needed from the economy, the administration, what is happening on the streets, what is happening throughout the world to alert you to the fact that times are bad and will soon move to ugly too. You can only prop up and patch a dilapidated house for so long before the obvious happens. There are a MYRIAD of things that can erupt at any point in time to really collapse this thing. Playing around guessing for some rally amidst of all that seems pretty ill advised to me.

    • I only said it “could” rally for several weeks… not that it would. It all depends on the charts at this point. Once the daily chart gets deeply oversold a multi-week rally is possible.

      For now though, the trend is down, with short lived rallies to shake out the weak hands. Remember… I short right now.

  13. I only said it “could” rally for several weeks… not that it would. It all depends on the charts at this point. Once the daily chart gets deeply oversold a multi-week rally is possible.

    For now though, the trend is down, with short lived rallies to shake out the weak hands. Remember… I short right now.

  14. The UUP (the dollar) has fell back to gap window at 25.05 and found support. As soon as it starts rallying again, the market should follow by going lower (remember, they trade the opposite).

  15. good morning all – finally the day we have all been waiting for and I had to be out all morning! Still short.

      • obviously not! It concerns me that AAPL is down so much already. Usually when it gets to it's moving averages (there now), it pops.

          • I hope you are right. Funny, how they decided to shrink yahoo finance today! Same thing happened over the weekend.

          • if you have a scroll wheel on your mouse click on web page hold ctrl key and scroll up or down to make page easier to read…to go back to normal ctrl 0…

          • Because it's been hit now multiple times now (4, if you look at the 60 minute chart, and 3 on the daily). It gets weaker with every hit. I think it will break into the close today.

            I think today will be like Feb. 4th, and tomorrow like Feb. 5th… which had a hard reversal after the early morning sell off. We have that 100.72 spy fake print from earlier this month. I think we are going to hit it tomorrow.

            We also have one at 112 spy, and that could be hit by opx? Hard to say on that one… and we could only bounce a few days and sell off more. But, you know how they like to squeeze the bears on opx week… so we should be going up during that time period.

            If we don't break the 1040 today, into the close, then they should gap it down below it tomorrow morning. But with it being hit now 3-4 times, it could break into the close?

          • No doubt it will break today or tomorrow, but they could just as easily run it up now into the close and then take it back down tomorrow. Anyway, I'm holding cuz that's just the kinda gal I am!

          • ??? It's the market leader and it seems that whenever it reaches it's moving averages, it pops. What do you think?

          • Yeah, it always drops after a new phone release. I can tell you that the antenna issue is big. It would not surprise me if the phones are recalled. Do not believe the hype.

          • I have one for testing purposes and I can say the antenna issue is big, even after I've lost reception sometimes I have to reboot it to get the signal back.

  16. Jimhobson

    “after this break” you mean if 1040 breaks or another wave down in the future after this breaks corrects?

  17. quadruple bottoms are too rare. AND we get 10 pt drop in consumer confidence. a multiday bounce from here does not make sence

      • Yeah, definitely worrisome. But, I'm going with the charts, and they say we continue down. Who knows when that print plays out? I don't see that tomorrow, or today. Too many trapped bulls right now, and they will continue selling on any pop higher, pushing the market back down.

  18. This puppy is weak. It looks like it's going to break to new lows soon.
    Don't listen to the Jaywiz group today. They are wrong. I can see a low early tomorrow morning but it depends how hard we sell off into the close. The June 1930 fractal calls for a drop to the 1040 level but the wave count calls for a bigger drop. Well Armed (Anthony Allyn) has speedline support at 1015. SP might want to head for the Nov 2009 support area (SP 10-29 LOL) and slightly penetrate it before a bounce (which would be a 1 day affair)

    • I don't know how accurate he is either (we all get it wrong a lot), as he kept calling for a 47 point drop, and then a 57 point, during the opx week for June.

      Of course it never happened, as they almost always squeeze out the short during ever opx week, and pin the spy where all the puts expire worthless.

      But, maybe he's right on this call? Who's knows? I've had many bad calls too.

    • funny, atilla mentioned that 1015 number as well. Anyway, I hope to cover in the 990s whenever that may be.

  19. I just saw what I think is a fake print on C. June 29, 13:04. $3.317. A real FP, or a fat finger on the market?

        • Hold down the “shift” key and the “PrtSc” key at the same time. That will copy what's on your screen to the cache memory. You can then open up some program that allows you too paste pictures.

          I use Frontpage, but you can do it in Word. Just “right-click” and choose paste, the blank page. Or, hold down the “ctrl” key and hit the “V” letter to paste it.

          Then save the page, and email it to me and I'll upload it so all can see it. You can also set up a free account with ScreenCast.com and upload it yourself. Then post the link.

    • Nope… mine was for 3.317… DOWN. Saw it on Scottrade, too. Got both screenshots from ST and Goog.

    • I don't think so Jim. I see more selling tomorrow. If we don't break the 1040 area of support today, then it's highly likely it will gap down below it tomorrow morning. I really think we are going to see that 100.72 spy print before any decent rally.

        • I don't think you will be wrong on this call. The daily, 60 and 15 minute charts are all pointing down together. Unless they defy gravity tomorrow, we should continue down further… at least in the morning session.

        • Do not be hard on yourself. No one knows. It amazes me how folks continually prognosticate as tho' they do. This game is like Baseball. If you are a .300 hitter your are a hall of famer. I know their have been others on this site that have tracked the bloggers. The number seems to stick.

          • OK. Maybe I am typing too fast for my own good 🙂

            What I meant to say was at the last picot low Cramer came out with a sell. The market rallied up. I do not want him to issue a sell.

            By sticking, I mean that I have casually observed the other blogs, I do not think it would be fair to mention names but you are savvy enough to know and it appears that about a third of all calls are accurate. By accurate I mean there are no revisions and it plays out as called.

            What I have learned from your blog and one other is that most users of TA do not understand the math behind the indicator and draw conclusions from casual observation.

            Or as my stat teacher said 'correlation does not imply causation'

    • It depends how the lamestream media plays it up. If it makes the headlines you will see the huddled masses following their beloved Cramer to the door. Just hope Cramer says buy!

      • Not sure I follow you on that one? People follow Cramer, (and yes he's wrong a lot… err, he tells the public the opposite of what he's doing), but don't we want him to tell his followers to sell?

        I see more selling in the morning tomorrow, but it's possible that we rally back in the afternoon.

  20. Nenner This am.

    The indices continue on a sell signal
    Today, we again show the Head and Shoulders formation on the S&P
    Based on cycles, we think that it is too early for a breakdown
    However, as mentioned before, such a breakdown could lead the S&P down to around 900
    Therefore, we continue to be careful and standing aside
    Our system that is not based on possible Head and Shoulders formations shows that the S&P could get as low as 1025
    There are enough reasons to continue to be careful
    We were looking for this correction to go long, since short term cycles are bottoming
    If we get some technical indication of a low, we will buy – but only for a bounce into late Aug

  21. Wow Gang… what a great day! Let's see if 100.72 spy gets hit tomorrow or not? Just be prepared for a hard reversal at some point… where I don't know? We could go to the 991-994 spx level, or only the 100.72 spy level. I'll probably NOT go long, but instead just close out my shorts.

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