Go Bears!

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Steak... It's what's for dinner!

Well gang, the bears regained the ball the last hour of the day, after an early fumble at the open.  It was a tough one, as may bears were sacked as the bulls ran the ball back up the field.  But in the end, the bears took the ball back and regained all that lost yardard.  It's about time!

Ok, so what's going to happen tomorrow?  My best quess is a flat day, as no major news data is scheduled to be released. The housing starts at 10am could maybe cause more selling, but they would have too be really bad.  I'm not expecting that to happen, but if it does... then all bets are off!  This market will tank!

What we are looking for now is for the oversold 5, 15, 30, and 60 minute charts to go back up and work off those conditions.  We want them to get overbought so we can get short again at a great spot.  This could take a couple of days... especially for the 60 minute chart.

So, assuming there's no major bad data or news released tomorrow, I'd expect the market to try to get back up to the 1130-1135 area.  Not making it up there will be very bearish, and will likely eliminate any chance the bulls have at the 1160-1170 spx area.  Personally, I think the top is in, and there won't be any move to that level... but anything is possible.

I'm not sure what count this is, according to the elliottwave people, but it looks like our wave 3 down has started now.  This could have been some sort of smaller wave 1 inside of it, and it might not be finished going down yet?  This smaller wave 1 will of course be broken down into even smaller waves.  The sell off into the close was likely a wave 3 inside it, and a wave 4 up tomorrow could be next?

Again, I'm no expert in EW patterns, but I do believe that we have some very ugly moves down coming over the next few weeks.  So, getting short for a multiple week down move could be done after these short term oversold conditions are reset.  Maybe tomorrow, or Monday?  We'll just have to wait until we see what the tape does tomorrow.

For tomorrow, TrekTrader caught another FP of 113.40 spy in the afterhours session on quotetracker.  I use Think Or Swim by Ameritrade, and I only see 113.18 print in the afterhours?  So, we will just assume that we should see some upside tomorrow to at minimum... the lower print.

Then look at the charts to see if they are becoming overbought or still oversold to make any decisions on going short again.  That might be the closing price level for tomorrow?  And since it's not likely to work off all the oversold conditions on the 60 (and maybe the 30) minute charts until Monday, you might not want to get heavy short over the weekend?

I'd stay light just in case they try to screw the bears Monday morning.  But, I'd want too have a few shorts... just in case they decide to stage some false flag event, or release some really bad news over the weekend... causing a gap down Monday.

I'm not expecting that to happen at this point, but I don't know what's going to happen tomorrow yet either.  So, let's leave that for the weekend post.  Ok, that's about it gang.  Just keep your eyes out for more FP's and post them or email them to me if you get one.

Thanks,

Red

70 COMMENTS

  1. I think we get a bloodbath tomorrow. Most bears seem to be calling for a nonevent day tomorrow but tomorrow will provide an easy bear flip and when those flips occur they usually are massive bars. SP and Nya had bear flips barely but Dow and Nasdaq didn’t. And it’s hard for me to see this downtrend suddenly reverse with these daily bars; it would take some sort of hammer bottom tomorrow. Transports have already broken away from their topping level. I expect the other indices to follow similarly ie the red bars should get bigger and bigger. McOscillator should also continue to press farther down below the oline.

  2. Could be Geccko? It’s going to depend on how quick the 5 and 15 minute charts reset their oversold conditions and roll back down. The 30 and 60 could take awhile to reset, as in days… not hours.

    It would surprise me if we really tanked hard, but that’s what they do best… surprise people!

    The Financial’s have just about crossed on the moving averages of the daily charts, but the overall market isn’t there yet. So I’m not sure what will happen tomorrow? The charts say it’s going either going to be a flat doji type day (assuming no really bad news released), or another large move down… but NO big rally.

    The best the bulls could hope for is a barely positive close, and I only think it’s possible because tomorrow is option expiration on the weekly’s… and you know how they love to pin the spy at a certain level on opx days.

    All in all, tomorrow is a tough read. Oversold can get more oversold, or move up/sideways slightly until overbought. Some bad news or event could certain trigger another wave of selling tomorrow. I think the morning we’ll see the push up… if any? And the close is still unknown?

  3. You always provide great detail and advice. I am a novice and it is over my head but I do enjoy steak. LOL

    I am getting very preliminary bear signals and jumped into SKF and UDN today, will buy DUG and SRS tomorrow. I hope I am dodging a bull stampede. Because of the bearish soft signals I sold my QLD hedge today, used for my bonds, at a small profit.

    I would not want to go with any new longs here. I am 60% long and 40% short with 50% cash.

    MK

  4. What do think about the dollar at (what I think is) a support on the dollar index and do you think a lot of folks will be taking profits for EOQ?

  5. Praying for a smack down back under that 50% fib level! 🙂

    Oh… and thank you sooo much anoopsan for your before, during, and after day charts! They’re always informative!

  6. I’m a novice too Mr. King… but I’m learning. Hang in there, as next week could be a really big down week. Save some cash for it, as I expect the later part of the week to be when the crap hits the fan.

  7. ACP,

    I think the dollar will eventually collapse, but for now we should expect that support level to hold. If it consolidates for a few days, and then runs higher, the market will fall hard from it. And that’s exactly what I’m expecting it to do…

  8. Well gang,

    We certainly blew past that 113.40 FP this morning. I expected a rally, but not one this strong. Maybe they will take it up to the 1160-1170 level after all? Anything is possible.

  9. This looks like one last hurray from the bulls, as instead of slowly rising over today and early next week, they are expending all their energy today. By late today, (or Monday), all of the smaller time frame charts (the 5, 10, 15, 30, and 60 minute) will be in over bought territory.

    If it happens today, then Monday could be a huge down day? So scratch what I said earlier about only taking a small short position over the weekend, as we could have the makings of a Black Monday should all these charts get overbought by the end of the day.

    But let’s wait to see what happens before going gangbusters, all in short! Patience is the name of the game.

  10. Bears will get killed if that print plays out. But, it could match up with the DIA 118.16 print? Hard too calculate them together, but matching it up with the SPX would put it somewhere between 1260 and 1280… would be my best guess.

  11. Remember gang, today is opx for the weekly’s. So it’s likely that it will remain up here at this current level the rest of the day, as you know they already have a price target set for the close today.

    While it could sell off some, they have the bears trapped here now and they aren’t likely to let them off the hook. Monday will be a different story though… especially if all these charts become overbought by the end of the day.

  12. One more thing (for those of you who also follow Atilla)… he closed out his longs at 519 OEX yesterday, and is no longer bullish. Remember he made that call when the market was around 1040 spx, and it rallied up over a 100 points from there.

    Pretty good call… congrats to him on that one. His target was 520-525 on the OEX, and I’d say 519.64 is close enough to say you met your target.

    And, who’s to say we don’t still rise up and hit it? The market is trying to get to the 1160-1170 spx level, and that would match up with about 525 on the oex. So, it’s still possible.

    I would love to see it spike up there at the end of the day, and set Monday up for a big down day. It could happen? Talk about trapping a bunch of bulls, and squeezing out the all the bears today… that would surprise everyone! LOL

  13. If this market rallies into the close, and prints a 1160-1170 spx level, then Monday could be a Black Swan Day. Just release some bad news on JPM over the weekend and then overbought charts will have their reason to sell off hard.

  14. Leo, isn’t there some issue with JPM selling too much silver paper? thought I read that or saw it in one of your vids

  15. Yes Jigsaw…

    According to ZeroHedge, JPM has been manipulating the price of silver for quite some time now. They have been shorting it hard, keeping the price down. I suspect they also borrowed shares of stocks that don’t exist… just like Goldman did when they put Lehman out of business.

    If a short squeeze happens in silver, I’d bet you that JPM will end up going bankrupt from it.

  16. For those of you with guts, the smaller time frame charts (the 5, 10, 15, 30, and 60 minute) will be (most are already) overbought by the end of the day.

    I’m not going to call a Black Monday, but some selling should happen as all those charts together being overbought should force the market down on Monday. Some short positions might be wise (don’t bet the farm on it of course).

  17. He’s definitely wrong a lot on the short term. And since I only play the short term, I don’t follow him. He could be right on the Dow 38,000-42,000 call… but only if hyper-inflation kicks in.

    If the dollar is replaced with the Amero, then that call will be wrong. If the dollar isn’t replaced, then the value of it will be 1/10th of what it is today… in as little as 5 years from now.

    As for gold, I still have a FP of it at 935.60… which it should hit that level when the stock market crashes and all the big institutions have to liquidate their gold to cover the margin calls they’ll be getting.

    When will that happen? I don’t know? But the market looks topped now, and if it does start down next week in a bunch of wave 3’s… then it will happen soon then we might think.

  18. Tried posting this on your site, wouldn’t let me?
     
    Check out Yahoo board!  Maybe they do run it up like the vulcan report ?  Get the public wannabe millionaires sucked in to the equities markets after watching the new Wall Street movie and learning how to trade like LeBeouf!  All by himself, he turned 20k in to 650k.  What a trader!
    “LaBeouf tells Tech Ticker he was trading every day and everywhere, even on his cell phone.
    “Went to George Soros’ house for dinners. Hung out with Donald Trump and talked about real estate,” he says. “I’d hang out with Jim Chanos. Nouriel Roubini was like my closest friend through all of this.”
    If you think that is impressive, LaBeouf has substantially grown his $20,000 original investment.
    “I started at 20, I am at $650 today,” he says.
    No, not $650. He means $650,000!
    Unlike LaBeouf, Brolin had a reputation as a savvy trader.
    Before his acting career took off, a need for money spurred him to learn about the markets. “I took profit from a ranch I had sold and I started trading personally,” says Brolin, who has called his addiction to trading “an evil little friend.”

  19. double top with bear flag on 15 min spx chart as of now, first top tuesday, second today, max pain for bears,what give?Be brave could be nice short now with 1151 stop…

  20. Thanks… I got it.

    The only problem is… it matches up with where yesterdays’ closing price was. Meaning… it’s mostly likely just a late fill, and not a FP (but keep sending them to me, when you spot one).

  21. Where do you see a bear flag at Mike? I see a bull flag on the most of the time frames right now. Monday (or the last 30 minutes of today) should go up to fulfill the flag pattern, and then collapse back down.

  22. Today is the ritual day high with the release of Wall Street:MNS. Just like on April 23 and May 12/13. It’s 67 trading days from summer solstice high. There was a 67 td peak to peak cycle earlier in the year Jan to April. A certain indicator implies that the rally doesn’t last beyond today (of course it could restart later on). Better RSI divergences on 60min charts also with these new highs (Rut,transports,nya are not making new highs—SP barely did—Dow and Nasdaq are flying solo. Many other divergences on other indicators. I accounted for the fact that it could rally into today. They’re blowing out all the stops and going to drop it when few are short. Also had a premonition last night; but right now it doesn’t seem to be the place.

  23. I see a bear flag today after this morning spike, it is lightly ascending, my intrepretation is we could see a breakdown at around 1145

  24. All the action on most of the indices could be construed as Wave 2 flats. Dow and Nasdaq going to new highs sort of hinders that theory. But transports continued to fly solo until May 3 while other indices were putting in box formation tops.

  25. Well, did anyone take any short positions? It’s not for the weak, that’s for sure. The charts are toppy, but Monday morning could go up for a head fake above the 1150 resistance level, and then sell off the rest of the week.

  26. huge volume at the close on IWM,DIA,XLF.Big boys selling with short covering? Action today could be a final exhaustion gap. Answer on Monday, usually Mondays are bullish, we’ll see…

  27. Bought deep in the money (Theta > .8) FAZ and SDS calls pretty near the top, 4 of each. Ended the day in the red $50 total, but I like the position. Not too afraid of a huge gap up on Monday. If anything, something small but have a feeling it will be sold. Way overbought now with negative divergences all over.

  28. Today is 33 trading days from 08/09/10 high which was 34 tds from summer solstice high which makes 8-9-10 the midpoint high which helps to corroborate the 67 trading day cycle. Very interesting. Plus I heard that rock station promo just before the Catalyst played last week where the reverend calls for the congregation to turn to page 1067 to hear the sermon of LP lead singer. Now on that radio station I keep hearing promos that THE EVENT IS HAPPENING NOW (for the show THE EVENT—they then tell the listener to go to the broadcast company’s website)—-I had another Catalyst inspired premonition last night —look to 9-26 to 9-31 (the time the song broadcast—I know 9-31 doesn’t exist). I know this sounds nuts but I revisited the Cramer Code and I watched where Cramer pointed his hands rather than the numbers that were displayed. And he points to 9.30 on the ticker screen. I’ll do a more indepth analysis later. Maybe Monday particularly if the market gaps down at open which would validate that 67td cycle.

  29. There is more to this. I just want to point out that they threw clues like this out in 1987 before the crash where they hide the clues in plain site.
    As I already mentioned, the squares of 33 (1089) and 34 (1156) are 67 numbers apart with 1122 the magic number the midpoint between the two and sitting in the top left corner of the Gann Square for that level. Sorry I am not an adept like Gann so I don’t know how to interpret that.

  30. Isn’t that cutting it kind of close Z? What if they take awhile to make another counter offer? Your only giving yourself a day before Nov Ops exspire

  31. A nice gap up to get the ideal short position on Monday would be sweet… and then start crashing the rest of the day. That would be perfect!

    I do think that they will do a stop sweep above 1150 before they tank it… so that makes perfect sense too me. The old “Gap and Crap” move. The bulls will be fully loaded the long, and the bears won’t be positioned short at all, as most of them were wiped out today.

    I expected a move up today, but not the kind of move we got. I was expecting about 1130-1135, not a double top. But hopefully, not too many of my bear friends were hurt on the move. Most probably closed out their shorts at the EOD on Thursday… I hope they did.

    I suspect that after Mondays’ high, the rest of the week will be down hill. I hope it doesn’t gap down instead, as I’d rather see it gap up then fall off a cliff. We shall see…

  32. It will be interesting how the Credit Union Bailout posted on Zero Hedge will play out for financials Monday. Lets see if that double top plays off………..

  33. It’s a series of numbers possibly predicting a crash date that appeared on Jim Cramer’s show. I might provide a link on Monday. I am too busy on the weekend with football and other things. Or you can search for it yourself. It’s on Wednesday May 25th’s episode in the Ripped From the Headlines section. Start around 1:20 min mark to the 1:40min mark and watch the numbers that appear on the screen above the ticker tape. And then watch the ticker numbers Cramer points to particulary the last one at the 1:40min mark.. Its the segment where he talks about salesforce.com. I haven’t really paid attention to what he says. It appears to be some sort of code directed to adepts or fellow initiates.

  34. Is Gold the Catalyst to tank the equities markets? Link to an Interesting audio from Bob Chapman about this coming Mondays Gold and Silver Comex option expiration day, September 27th. The 1300 level for Gold is a titanic level for the commercial banks (GS, JPM HBSC, Detuch bank, Citi Group), who have been net short ,and if the 1300 level is breached it will mean big losses for them. Gold to 1500, silver 30.00? http://www.youtube.com/watch?v=esPFkIxlyXg&feature=player_embedded#!

  35. Quick Note
    Are we at the edge of a P3 event?

    Who knows, but this is clear–

    Wallstreet is completely detached from mainstreet.
    “They” ramp things in the opposite direction to catch as many people off guard as possible. This is clear when correlations suddenly break down, which they have.

    It is amazing that “stock value” is actually computed into what is presented as cumulative “wealth”.

    Think about that word, Wealth. Stock prices are just an electronic blip, a fleeting data point with less mass than a thought. But now that prices are up, suddenly the lie that wealth has increased is being pimped out by the Gov/Financial/Media complex.

    Just over a decade ago, I thought this way– That the stock market price reflected the wealth and strength of our nation. This is how we are trained by the media and our financial “leaders / advisors”. It is false.

    So in the last 2 weeks especially, that market is being ramped in the face of every other indicator showing the opposite. How long can the insanity last? Well look at 1999, it can last a long time. Elections coming up could really be Dabama saying to his G-team….whatever, take $100B and ramp the futures and market indices….make sure people are happy by election day.

    Here are some charts by darell, lots of ratio charts.

    http://oahutrading.blogspot.com/

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