Going Down?

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After such a huge rally, who's left bearish?

Well that would be me of course.  Today closed at 106.30 spy, and filled the fake print I posted with 10 cents to spare... What will tomorrow bring?  I see two options here: One, a run up to 1070.50 spx, to fill that fake print... or Two, we just open flat or down, and start selling off.

If we pop to 1070 first, then the day should likely back off down to the closing price of today... about 1060 spx.  That would give us a doji for the day, and allow Friday to be a big down day... that could wipe out all of today's gains?

OK, here's a third option... we can all take the Blue Pill, and rally on up taking out the Aprils highs and going to the DIA 118.16 print over the next few months.  Yes, it's possibly... but not likely.  Every time Cobra posts a chart showing the liquidity, it's being sucked out faster then the money in your wallet is (by the government of course).

I find option One or Two the most likely, and give very little odds to option Three.  So, should it go up to 1070, that would be a ideal shorting spot, before a huge sell off over the next coming few days.  I expect next week too be really ugly, as I believe we are now in a wave 3 down on the weekly chart.

While everyone is expecting a rally up to where ever, to make a larger wave 2 up, with the move from 1220 to 1010 being wave 1, I think 1070 is as far as she going.  This ship just popped the nose up into air, before a plunge to the bottom happens.

So, for you bears, the best you can hope for is a move to the 1070 level to fill that gap.  For you bulls, you want a small down day to consolidate before another move higher.  I also have a print of 112.41 spy, which could be the wave 2 target high... after wave 1 down is complete.

If wave 1 down is complete at 1010, then the larger wave 2 up should go to that 112.41 print before starting larger wave 3 down... which should take us to the Wilshire print level of about 725-730 spx.  But that's awhile off yet, so let's just focus on this week for now.

My forecast is simple:  Thursday should go up to 1070 and then reverse back down to close slightly negative or a doji, or it should simply sell off from the open and close lower for the day.  Friday should be a large down day, closing this week out negative.

Red

712 COMMENTS

  1. Slightly off-topic… but…

    Anyone feel like shorting a bank? I'm tempted… NASDAQ:CSNT (Crescent Bank and Trust Company). It has a Texas ratio of 4.11. Above 0.90 is in FDIC takeover territory.

    “The Texas ratio is determined by dividing the bank's non-performing assets by its tangible common equity and loan-loss reserves. Tangible common is equity capital less goodwill and intangibles. As the ratio approaches 1.0, the bank's risk of failure rises.

    Every bank that has failed in the second quarter has had a Texas ratio of greater than 0.90. In fact the average was about 5.0.”

    CSNT is one of the few banks on the list that is on NASDAQ and might actually be able to borrow shares…
    Nifty source of doomed banks: http://investinganswers.com/a/your-bank-one-433

    Does someone want to talk me out of this one?

      • Hi Monica.

        Everyone is expecting a rally and dump. Which leads me to believe something else will happen. I do not think we will get soon, August should start the decline. But that is a guess.

        The breadth indicators are all in negative but they will bounce this high enough to get the bears to cover unless we have a news event.

          • Yeah, that would be murder for us. I still think we chop around today, going back up and back down between 1060-1070, and close with a doji.

            With no news out there to move the market in either direction, it could close out this week about here too? But, I still think there will be some selling tomorrow… how much is unknown?

            It would have too get below 1010 to close negative on the week, and unless some big news event happens tomorrow, I just don't see that big of a drop… but I got my fingers crossed. LOL

  2. I think the markets will rally for the next few days. i am now looking at breaking 1085 and maybe approach 1100.

    this is just a prelude to earnings and nothing more. This week has little news to bite on except todays spin on jobless numbers.

    Still holding 1/2 of sso and TNA but not buying into shorts until moving averages indicate.

    Summation got a small tick upwards so iam watching close.

  3. There is every need to fear, for Sir Woody Hackswell is here! (Have we made millions of FRN$ yet?)

  4. Man… long boring grind down. Where's the action? Where's the FLASH? C'mon! Up or down! Pick one! GAH! =frets=

  5. Poopies. CSNT: No shares available for shorting. 🙁 (And ST says I can't short stocks below $5. 🙁 )

    • No much action today, and tomorrow should be even lighter volume. As all the bulls pill on long, and the bears go back into hibernation, everyone is expecting a big move up next week, especially since it's opx… which is generally bullish. But, I disagree. I see a lot of people being sucked in long, and that just might be a bull trap?

  6. This is going to be a nothing day after yesterday.

    Vixes are no where so a little volume will move the markets easily one way or the other

      • I came close to getting stopped out of my remaining longs twice this am. depending on what happens after 3PM I may bail. the indecision is not good for long trades IMO.

        But I still will hold off adding shorts.

        • Well Jim,

          The next FP to the upside that I have is for 112.41 spy, and I got it a week or two ago. If you feel brave enough to say long until then you've got a bigger pair then me. LOL.

          I have one to the downside that I got last weekend, but I'm not posting it yet (I will when the time is right). It will blow your mind.

          You see that we hit the FP from yesterday at 106.20, and again at 1070.50 (from a few weeks back), so do you want to wait for the 112.41 print, or bail and sit in cash?

          If we put in another doji tomorrow, then that could be bullish consolidation forming before another move higher next week… but I think the downside print will play out first… and it's scary!

          Cash is position my friend. Be safe first.

          • Red, normally I just lurk on your site to see what everyone has to say, but teasing us with a scary fake print? That's just mean…Spill the beans already!!! Pretty please with sugar on top?

          • LOL… I'll post it when we start to head down. That way you will know when to get out. For know, let's just say that all those short will be happily rewarded.

          • I am substantially in cash and will probably not wait for a 112 level.

            this is a technical bounce only and who knows when it finally fails.

            It did hit 1070 and came off quick. Is another attempt in the cards????

            Vixes are not supporting that move at present.

          • I think the 112.41 print is the top for major wave 2 up. But, are we done with major wave 1 down now? If so, the the 1220 high to 1010 low is major wave 1, and major wave 2 should end at 112.41… but what if wave 1 down isn't done yet?

            If it's not, then the 1070 print has now be fulfilled and the next move is down to put in another lower low. If tomorrow closes flat like today, then that will leave everyone guessing over the weekend.

            Some emailed me, or I seen it somewhere (can't remember?) that 97% of all the traders with an account size of 1 million or more, are now net long. Either they will all be richly rewarded next week, or robbed blind… you tell me?

            I'd like to see the sell off start tomorrow, but they will probably wait until Monday to tank it (should this be the high?). They like to release bad news over the weekend and trap everyone.

            It's been a long time since we had a really be down day on Friday, so we might have to wait until next week.

          • I'm not following the sub waves Anna, but I could see a pop back up into the close today, as the 15 minute chart is oversold and should go back positive within an hour or so.

            On top of that, it's putting in a bull flag. So a move up into the close is likely (shake out the last bear)

  7. Ha Ha!!!! Look at the volume on TZA!!! Big boys are loading up. Maybe some of the trolls can enlighten me. With the reverse split, there are fewer shares yet the volume is explding. Do they adjust the volume backwards also. I need to lock at that

    • TPTB engineered this. They bought their calls BEFORE the split, knowing most trading platforms would be screwed up today. 😉

    • Well, that was too be expected. The 15 minute chart was in oversold territory most of the day, so now it's going back positive and rallying the market. Just one big bull flag playing out the the chart.

  8. The 60 minute chart has a bull flag too, so it “could” push on up higher tomorrow morning, but should roll over into the close.

    If it doesn't take out the current high by much, then that's pretty bearish in my opinion. Tomorrow is hard too call, as it could trade sideways all day without and news to rally or sell it off.

    Some good news could push it to 1085 area or some bad news could tank it. But no news leans toward another sideways day. 🙁

  9. Nasdaq messed with us all day now look at it after lagging the entire session.

    Crazy last hour is the only action of the day.

  10. Completely un warranted rally. Pretty sure it's being manipulated to make it seem like a bullish day, when it was anything but. I guess the close is what counts though.

  11. The next barrier is the June 28 low of 1,071, followed by the 20-day moving average at 1,074, and then the 50-day moving average at 1,101.

  12. For this to be real (for the bullish breakout I mean), the bull flags need to push this up to the 1085 area tomorrow. If not, then the market could fall back down quickly.

  13. I see good resistances at 1071, 1074 if we cross them with some big good news 1101 but as red indicated I don't think before testing lows at 1010 we will not go to 1101 or his fake print 112.6.

      • Red, next week will be major earnings drive and only way I could see 112.41 happening is AA, GOOG, BAC and JPM to beat the earnings estimates provide a nice forward guidance, which I highly doubt – many analysts have already slashed their earning estimates and I feel that is a good indication these companies will deliver low estimates. Also, past few quarters earnings for these companies were not that stellar…. even if they deliver I see sell the news more than a run.. with DOW, COMP, SPX posting a good 6% profit this week.

        • I see it as bearish too, but in the end… if the crooks don't sell, then it could trade sideways until opx is over with. If the crooks got themselves positioned short today (with the reverse split on many 3x etf's), then they could start dumping as early as tomorrow?

          While I don't think they will sell off tomorrow, as it's Friday (which usually has light volume, and rarely sells off hard), they could surprise us all with another false flag event, catching everyone long, and no shorts in the market but them.

        • Earnings do not matter now. It is ALL about guidance. There were only a few pre-announcements. Therefore everyone will be close or beat.

          GUIDANCE is KING!!!!

      • My GUESS is that we fill the gap tomorrow or Monday on the NAZ then either consolidate or drop. The 15 min chart is still strong and reliable for the NAZ.

        CPT nailed this one. I have to give it to him. He blew the right shoulder call but he has made a ton of Robert Dinero lately.

      • I was long spy and apple yesterday and reversed positions, it was painful, I shorted off the open and had to cover again. Just should have stayed put.

        • It's not looking good for us bears Newbear. If it doesn't fall hard tomorrow, I do believe we will go to 112.41 by next Friday. A flat or slightly down day would be considered bullish. We need a big sell off or the bears are dead for now.

          • Here is Atilla's take on the market and so far he's been dead on:

            2- If there will be a pullback to test the lows, it will come right here not higher.

            If this market goes higher from here, it will not come back.

  14. Well, it's not looking good for the bears right now. At this point, I'm inclined to believe that tomorrow will like bring about the same as today… sideways trading resulting in slightly up or down close (most likely slightly lower tomorrow).

    • I think you might be right Anna… but let's see what tomorrow first. A flat day, and yes you are probably right. But a big sell off will change everything. I just don't see that happening now. 🙁

    • I think you are good into the gap. Probably a head fake above that. If we go down it will be from there. Everyone is looking at the gap. It is the fib 50 and consolidation pt as well. Thats why I expect a headfake.

      But you cannot predict only respond.

  15. How's this? Local top of 1132 to local bottom of 1013 puts 1070 almost perfectly at 50% fib level. TPTB aren't very imaginative, are they?

    • That's fine, you can post it here. I don't care if someone promotes their site, or a their services, as long as they drop by from time to time to chat with others on this site… which you do. So you're good to go.

  16. I'm hearing some noise on various blogs that the intra-day VIX low at 24.22 was a fake print. Anyone got a 15 minute vix chart from today that they can post?

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