Monday, May 27, 2024

Weekend Update – Another Bear Squeeze

Monday update...

Another FP showed up that Jim Hobson caught (thanks Jim).  It's of the Russell 1000, (RIFIN) and shows a downside target of 439.63 on the daily chart.  More and more signs are telling us that something wicked is coming this way soon.

Red

______________________________________________________________________________________

Just when you think the bears are going to win... they dropped the ball again!

Well, what can you say... they didn't call them the "Bad News Bears" for nothing.  While they lose most of time, occasionally they'll win one.  I guess I've always liked the "underdog", and so I rout for the bears all of the time.  But, in this game of baseball (which is just like the stock market)... you're going lose a lot more then you win.

So the bears took another beating on Friday, which took me by surprise I must admit.  While I was expecting an UP day, I was only expecting a move to 1130-1135 spx, not a 20 point rally to happen.  But, I wasn't in any short positions on Friday, so I wasn't hurt by the move up.  I only hope my fellow bears weren't hurt either.

As for next week, what do I see?  Certainly the charts are now mixed with both bullish and bearish counts.  What I'd like to see is a gap up on Monday, and then a sell off to follow.  And, it's quite possible that we'll get one as there are overhead stops above 1150 that I'm sure they've love to take out before plunging the market.

There is an opening price of 115.95 on May the 13th that left a gap that they might be trying to fill?  That's only a 10 point move up in the spx, and it would also clear out all the stops above the 1150 level.  After the gap is filled, the market would then be very overbought on all the shorter time frames.  A sell off could then start down and continue the rest of the week.

We need the daily chart to roll over too, (as well as the weekly also), and if that happens then a really large sell off could become a reality.  I don't know "if" that going to happen or not, but certainly one should be looking to get short on a gap up on Monday.  For how long, is unknown?  I'd basically just close out the shorts once the charts on shorter time frames become oversold (probably by the end of the week).

The price level that they will be at won't be known, as if the daily chart doesn't roll over with the other charts, then the move down could be short lived.  We'll just have to cross that road when we get there.  But even if the daily doesn't turn, a day or two sell off should still happen.  If the daily "does" turn down, then it would be a multiple day down move.

I feel like we are ready to fall off a cliff hard, but with the elections just about 6 weeks away... I just don't know if they will let it happen or not?  As long as the big institutions don't hit the "sell" button, this sideways up and down chop could last awhile.

As for the fake print count (FP's) we have many of them to the downside now... which makes me believe they are going to tank it soon... but when?  We have one for JPM and GS... and now one on Google too.  I don't have any new upside FP's, just the old DIA 118.16 print from March 30th of this year.

My gut tells me that this market isn't going to really collapse until that upside print is filled.  Regardless of me wanting to see it fall off a cliff, into wave 3 of 3 of 3, etc... the reality is that's never that easy.  With the elections coming up in November, and Bernanke saying that they'll do "whatever it takes", means that they will probably put in another secret stimulus package into the market to keep it afloat until the elections are over.

But on the flip side, when that's over with, we know our first major downside target of DOW 8300, which coupled with the FP's on the XEU, XSF and XBP (and the JPM, GS and Google from above), all but confirm that the coming debasement is going to be huge!  The downside FP's are trying to tell us something... and we'd better be listening.

So, with only 1 upside FP from March, and 7 downside FP's... which side you favor?  Let's not forget the new Wallstreet movie was released over this weekend (the 24th), and the Legatus Pilgrimage ended on Monday of this past week.  The timing isn't always exact with them, but a significant trend change has happened around every meeting in the past... will this time be different?

Weren't we going up for 3 weeks into the meeting?  While it's possible that they continue to grind higher, with short lived pullbacks along the way, I still think this coming week could should sell off some.  I think Monday will be the high for the week, and the rest of it is down hill.

The short term charts are looking very toppy now, and even though they put in a bull flag on most of them... I don't think it will go too far.  Just a quick pop above the 1150 level to close that gap (at 115.95 spy) and clear some stops... and then it should be finished.

Monday should provide another excellent opportunity for the bears to get short again.  How far they sell it off it unknown of course, but we do still have the 105.39 FP that Anna caught awhile back.  However, forecasting is never that easy.  I only know that the print will eventually be hit.  Will it be this coming week?  Who knows?

I'd just be happy with a nice multi-day sell off after a Monday morning gap up and crap session.  This market still isn't in a "trend mode" yet, and until it is you must swing in and out of this short moves down (and up... if you like to play both sides?).

The bottom is this... look for a possible move up on Monday, and then a sell off the rest of the week, with Friday possibly being another UP day (due to another opx).  That's what I see in the charts, and that's my best guess for what I expect too happen.  Good luck to everyone...

Red

P.S.  Should panic set in, and margin calls happen on the big institutions, they will be dumping their gold.  Will this be the downside target?  I don't see that anytime soon, as gold is on a tear right now and will likely go up past the 1300 level and continue until the end of the year.  But if it ever does get down that low, it's the buying opportunity of a lifetime, as gold is still in a huge bull market.

P.S.S.  The link I talk about in the 2nd Video for the post by HighRev is here.

Red
Author: Red

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Anonymous
Anonymous
13 years ago

I counted two “fall off a cliff” references in the video, so I’m taking two shots (it’s a new red dragon leo drinking game).

Red Dragon Leo
13 years ago

LOL…

I didn’t realize I said that phrase twice in the video’s? Who knows? Maybe that’s what my subconscious is telling me? (of course that doesn’t mean it will happen)

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

My subconscious tells me things, too, Red. But I try not to listen to it. What it tells me is usually not repeatable in public forums! 😉

Red Dragon Leo
13 years ago

LOL…

Well Woody, I left out the naked cheerleaders with rally caps on, and pom-poms!

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

No… mine leaves images like this in my mind:

http://naturalnews.com/Cartoons/Fishing-for-gm-Salmon_600.jpg

Not a good sign for the bears! 😉

(… in Soviet Russia Fish catches YOU!)

Red Dragon Leo
13 years ago

Too Funny!

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

Now, if I could just get a hold of a dwarf, two bottles of cooking oil, and a spatula…….

Anonymous
Anonymous
13 years ago

I got bloodied good Friday. Added to some ultra positions not seeing friday as a strong possibility. Now I see continuation through 1160 and not sure where a break wiil come with this continuing lack of volume.

Red Dragon Leo
13 years ago

Sorry to hear that Jim. I expected an UP day on Friday, but not the rally we had. I was only looking for a move to 1130-1135 or so… more like a “pause” day, closing slightly positive.

It took me by surprise too. Now it looks like a move up a little higher is almost certain at this point. If we don’t get it today, then tomorrow will likely move higher. But I’d rather see the move up happen today, and then a reversal (or at least a doji) on Tuesday. Then more selling on Wednesday and Thursday. Don’t know about Friday yet, as that’s another opx day, so they will likely try and pin it where it benefits them the most.

Red Dragon Leo
13 years ago

I’m surprised that it didn’t gap up to clear the overhead resistance levels? It was much high in the pre-market, but sold off to even at the open. Now it’s going to be extremely tough to go through the resistance, as opposed to gapping over it.

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

Depressing. I calculated how many toz of Au it would have cost me to buy my house in 1998… 266 toz!

At today’s market value… It’s worth: 73 toz… if I’m lucky!

🙁 🙁 🙁

Red Dragon Leo
13 years ago

Wow Woody!

The current price is a 1/3 of the price 10 years ago. It’s not even that bad here in Florida. I’d say now houses that were $400,000 in 2007 are now selling for $250,000… but that’s still more then 1/2 the original price. Your real estate market has really taken a beaten.

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

No. I bought for 80k. I estimated sale price now of 95k! (I finished the basement and replaced many critical devices!)

“Good” investment is real estate, eh? Not compared to Gold at least!

Red Dragon Leo
13 years ago

Oh… I thought you paid 266 for it in 1998, and it’s now only worth 73. But you only paid 80k for it? How did you do that if it cost 266k back then? Did you buy it many years ago, and not in 1998?

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

Sorry.

1998: FRN$80k =~ 266 toz Au
2010: FRN$95k =~ 73 toz Au

FRN$ increase: 18.75%
Au value decrease: 72.5%

Red Dragon Leo
13 years ago

Ah! I got you… I didn’t put 2 and 2 together. The difference in the currencies values between 1998 and today is what you were referring too. Maybe you should have bought gold instead of house? It appreciated against all currencies. (Just paint it gold and maybe that will help). LOL

Sir Woody Hackswell
Sir Woody Hackswell
13 years ago

2 + 2 = 5. Big Brother told me so!!!

Yes… but sadly, homeownership still provides SOME value… as renting with the same amount of money would have left me with 0 toz of Au.

But just sad how far the dollar had fallen against Au… in only 12 years! 72.5%!

Red Dragon Leo
13 years ago

I see it. Thanks.

Trektrader
Trektrader
13 years ago

New FP on GS at 147.38 (approx)….

Anonymous
Anonymous
13 years ago

Look at the $RIFIN Daily. What the heck is that??

Trektrader
Trektrader
13 years ago

Interesting that JPM got a FP of 39.50 at the same time….

Red Dragon Leo
13 years ago

Those prints should be fulfilled by the close of today, or tomorrow morning. And from watching the charts on the overall market, I’d say they will work off the overbought conditions on the all the shorter time frames by the close (or early tomorrow), which will allow another move up to occur.

Red Dragon Leo
13 years ago

Holy cow Jim! Another grand canyon move down… LOL

Anonymous
Anonymous
13 years ago

the print also shows the 439

Red Dragon Leo
13 years ago
Red Dragon Leo
13 years ago

All these FP’s tell me that a major move down is coming soon… when is the question?

Anonymous
Anonymous
13 years ago

Actually Tom N on Chart pattern face-book caught it. You all are more4 in tuned to these issues so I wanted your reactions.

Red Dragon Leo
13 years ago

Yeah, I’m probably known around the financial blogsphere as the “fake print” guy. LOL

It looks to me like they are setting up for one big crash, and letting all their buddies know the various downside targets on each index. Of course timing the exact date is the hardest thing to do.

I’m really leaning more toward mid November because of the elections. Meaning that the market is going to chop around until then. Will it go up to the DIA 118.16 print before then? I don’t know?

But, I’m not expecting a big move down until this election crap is done. Regardless of whether or not the Democrats remain in control, or loss their majority to the Republicans, the crash is still going to happen.

“The Powers That Be” control both parties, and it makes no difference on the out come, and the cards have already been dealt now. We just have too wait for our turn to lay down our bets. (Fortunately, they’ve told us what cards they are holding, and we just need to wait until the deck runs out).

Red Dragon Leo
13 years ago

Thanks…

Trektrader
Trektrader
13 years ago

SPY FP at 114.42

Red Dragon Leo
13 years ago

Looks like they worked off the overbought conditions and are now ready to go higher. It will likely continue into tomorrow from the looks of it.

Jigsaw
Jigsaw
13 years ago

Someone is going to make a boat load on NFLX when it drops
http://screencast.com/t/M2YwZDA0MzM

Red Dragon Leo
13 years ago

I thought you were posting another FP, but you are just pointing out how high it’s ran up… right? That’s not the only stock that’s going to make someone a boat load. If those FP’s on JPM and GS play out, those could make you wealthy too!

Mike
Mike
13 years ago

window dressing effect today? Starting tomorrow trades for fund managers will appear only on October books. I am sure they want to show the best portfolio and performance possible to fund holders for the 3rd quarter so that is why we don’t have any selling as of now.Could signal beginning of a pullback in equities for next few weeks. Flight ot safety continues with bonds surging, vix ready to pop,dollar very oversold and current rally long in the tooth. On the other end fed continues buying with POMO days today,wednesday and friday.Let’s see how it unfolds.

Red Dragon Leo
13 years ago

It might continue for a few more days too Mike, as if no one is selling and they have more free money… the market won’t sell off yet.

Mike
Mike
13 years ago

Some folks must know something,selling is picking up now.

Red Dragon Leo
13 years ago

Just some profit taking in front of the GDP numbers out tomorrow morning at 8:30 am I believe. As long as they have that free money, it’s likely to stick (the selling I mean).

Anonymous
Anonymous
13 years ago

GDP is on thursday

Red Dragon Leo
13 years ago

Right… duh! I forgot what today was. I seen that it was on September the 30th, but for some reason I thought that was tomorrow? Time goes by too quick, and you lose track of the days sometimes I guess…

Geccko23
Geccko23
13 years ago

That was quite a sharp drop/freefall into the close. They got it to 1149 SP, a key number I have been contemplating since it is 27 numbers added to the magic number 1122 /Gann Square corner number and we got there on Sept 27 (999 with an extra 9 thrown in).
Interesting that the futures got to 1149 on the Sunday globex session in the first hour and then has sold off since then and helps to validate my “Catalyst” induced premonition for 9-26 to 9-31 (the time it played on my radio. On Friday, the Dow rallied 197.84 pts, an anagram for 1987(4). Today at its high it hit 10870 or 10-87. There were 111s in all of the SP numbers today. SP had a decimal .67 in the close on Friday, 67tds from the summer solstice high, a td cycle that has been prevalent since March 2009.
——–Today’s breadth was negative and it looks like McOscillator will go slightly negative. Will it bounce again above the 0 line tomorrow? Its doubtful considering the close, 67 td cycle and another esoteric indicator and the similarity to this top to the ones in April and January. Transports put in a doji top.
Another thing going for the bears was it was a Monday that opened with a few meger takeover announcements and the market dropped from the get go including the Nasdaq which generally has been impossible to submerge even on down days for the other indices.
The Cramer Code featured a 4-1929 number almost reverse of Friday’s Dow upnumber. Was the 4 then a reference to 4 months in the future while Friday’s a reference to 4 days in the future? Cramer specifically points to 9.30 in the ticker tape and the number on the otherside of the arrow also translated to 9-30.

Mike
Mike
13 years ago
Red Dragon Leo
13 years ago

I’m surprised that they didn’t gap it up this morning Geccko, as it was at 1150 ES in the pre-market, but fell to flat at the open. They had their chance to break up above the overhead resistance area, and failed.

That’s very bearish, as now the short term charts are rolling over, which doesn’t give them much chance of piercing 1150 tomorrow. In fact, I expect another down day at this point.

Geccko23
Geccko23
13 years ago

One thing I forgot to mention. On Sautrday, I saw Yahoo list stock prices as the number 2 trending item on Yahoo. The stock market was a top trending item on Yahoo back at the August bottom but not at number 2 which gave me pause. Just another sign of overexuberance currently in the markets. It also told me there probably wouldn’t be a scary gapdown on Monday because they would want to levitate the markets enough to get the latecomers into the party.

Geccko23
Geccko23
13 years ago

That news pisses me off since they always ramp the markets when he goes on CNBC but he came on during market hours after the high of the day. I don’t know why they put him on because they generally ignore him until bear market bottoms. Most bears have already been roasted anyway. There might be something ritualistic in there so I think it’s an important video to study. I’ve already noticed a few things after just watching a few minutes.

Mike
Mike
13 years ago

Big banks like GS,JPM,HSBC that are net commercials short in gold did not lose in futures contracts 1300$ expiring today, gold closed under 1300$, now I bet gold will now tank. Big divergence in GLD versus GDX.GDX unable to make new highs like GLD.

Mike
Mike
13 years ago

I agree,look at financials leading again the selloff and even AAPL sliding hard,doesn’t look good at all.

Robert
13 years ago

Bounced nicely off the 1150 resistance level. Think we continue drop tomorrow. 1 good down day which we haven’t seen in awhile would surely shake up the bulls……….

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