Odds Of A Stock Market Crash Are Increasing…

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Thursday Update....

(to view on youtube: http://www.youtube.com/watch?v=7hZPBMnfL1Y)

Crash alert!  The Non-Farm Payroll Report could crash the market.  If it's viewed positive, then we should rally and everything will be ok until next week.  If it's really bad, then look out below!

Red

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The market isn't bouncing like I thought it would, and the daily chart is turning down hard.  This all increases the odds of a stock market crash happening by the end of this week or even into next week.

(to watch on youtube: http://www.youtube.com/watch?v=pVCW9Zpra5Y)

There is the erie feeling that the release of the death of Tim Osman (aka... Osama Bin Laden) who has been dead since 2002 and put on ice until such time that the release would benefit the gangsters was done at this time period for a reason.  It smells of distraction too me!  Do they plan to pull a fast one and do another "Flash Crash" while the media is focused on something else?  Let's also not forget that the Legatus meeting is over now, and a turn in the market did indeed start this week.  So how far will they take it down is the question?

Will it just be a small pull back and another run higher to the FP on SPY of 138.86, or is that something that won't be hit until later this year... meaning that a top is current in on the market right now.  I'm starting to lean toward a much larger sell off over the next few days, as things just don't feel right.  It seems everyone is looking for another push higher right now, as we did backtest the breakout level from the inverted head and shoulders pattern today.  I also see that the measured move up from a successful breakout on that pattern should push the market up to the 1440 spx area.

But, what if the breakout was a "fakeout"?

Yes, it's looking a lot like we will continue down tomorrow and Friday too I believe.  The angle that the daily chart is rolling over at is very steep, and it's not looking like it's going to stay above the zero line on the MACD and Histogram Bars.  This spells major trouble for the bulls.  I think a lot of bulls are going to get trapped long tomorrow when the short term charts get quickly overbought and roll over into another wave down.

Even the die hard bears might be sleeping and not see this move coming.  I think that the bears are now looking to exit any shorts that they had and are expecting a big bounce from this support area that the market is current in right now.  However, the problem is that the short term charts are moving up fast from oversold territory and will become overbought early tomorrow morning.  Not good for bulls if they want to stage a rally at this level.  I just don't see it going very far right now.

The bottom line... we could have another Flash Crash!

Once the 30 and 60 minute charts peak and get overbought tomorrow, they should roll over with a vengeance and have the daily pushing them down hard and fast too.  This makes for a "Wave 3 or C" in Elliottwave theory.  I just can't see a the market overcoming this chart conditions, as well as the fact that the dollar and vix are now breaking out to the upside as well... which trade inverse the market.

For now, I think the SPY FP is out of the question and the short term top is in.  Maybe later this year the FP will be hit, but right now I think the trend is down.  I don't know how far down they are going to take this, but it should clearly make the inverse head and shoulders pattern breakout a "Failure".  This should happen tomorrow I believe, and most likely the rally will end early in the morning and we should rollover into the afternoon and close.  We might not make it even the first hour?  Hard too say for sure, but the 60 minute chart is moving up very fast.  It will be overbought in the morning session tomorrow.   The 30 minute chart is already above the zero level and could rollover at anytime.

So, the ABC move that I was looking for today should now happen Thursday morning.  I think we already started the A leg and possibly the B leg into the close Wednesday.  That leaves the C leg up tomorrow and then she rolls back down hard into either a wave 3 or C... nasty, either way!  The charts don't lie, and right now they are very bearish.  Yes, the charts can be (and are) manipulated by the wallstreet gangsters, but they don't seem to want the market to rally right now.  Get ready for a surprise gang, as I think a lot of bears will miss this move.

Red

1520 COMMENTS

  1. Vix may do a kiss of death on the daily 50day moving average line. In regards to Elliott Waves and the timing of the correction, im still thinking its early June but hell… if we dont get a rise soon..that may change lol. The 15min /YM chart looks like we are finishing a 5th wave down and may do a strong ABC up for the remainder of the day. Not sure about you guys but it looks like there are three or four fake prints over the last two days to the upside on spy. Silver has pulled back to its daily 50MA and lower BB and crude oil pulled back to its daily 50ma as well. Thinking that we may head up from here in precious metals, oil, and equities. Also, the rising unemployment and poor job numbers means that the feds can justify MORE easing..so i think the worse the report is tomorrow, the more the market might actually go UP and not down…ironically.

    • I think you are right on your thinking Shark. Looks like we did the opposite of what I was expecting. We sold off first at the open to flush everyone out, and now we should do the ABC move up I’ve been expecting. But, it should go much higher then what I stated in the video.

      We should get a Fib. level retracement. I don’t know if it will be 38.2, 50, or 61.8, but a bounce is coming. The question still remains… will this just be a wave 2 up with a wave 3 down to follow, or will it just resume the up trend toward the SPY FP of 138.86? Next week we’ll know I guess?

  2. Big retracement below the breakout, the next rally will most likely be the last……

    • I think we will rally into tomorrow too ACP. Then we will see how the charts look. We could get overbought in the morning session of Friday and sell off into the close? I think I’m a day off now on the rally.

  3. Soros says he is dumping gold, either a headfake or he has insider info on a Greek default. Keep in mind he has a long history of illegal activities in various markets around the world, and as a result has paid millions in fines. Sounds like a dollar rally soon.

  4. That neckline is SUPPORT until we close below it. All these traders going short on a break during market hours are just fuel until we hit the target range of the inverse head and shoulders (circa 1435 SPX). Remember Red, Bullish patterns work out, Bearish patterns fail… Nothing has changed,..YET.

  5. I think we are putting in a temporary low today. We should start the rebound rally tomorrow. It should carry over into early next week too I believe. Today’s late sell off should flush out all the bulls and have plenty of bears on board for a squeeze to happen.

    This will be 4 days in a row down on the market. Odds are high for a rally tomorrow. How far up, or how long is unknown? It could only be a morning rally and then a sell off in the close? If that happens, then it could be another flash crash? I don’t expect it too happen, but it’s possible.

    If we gap up tomorrow then the rally will be strong and odds are high that it will be an “all up day”. If we open flat and rally then it could rollover into the close. We are very oversold on the short term charts here, so a rally is overdue.

    • I think they we just flushing out the bulls. We should see a pop in the morning I believe. I don’t know if it will just roll back over and crash or be an “all up day”, but a rally is overdue now.

      • you are right.. this was to flush out the weak bulls.. and then a push higher so …these weak bulls cant make money…when this market goes up… makes perfect sense.

  6. Rally time gang! I wouldn’t be shorting this, as it looks pretty strong. We can expect this to carry into early next week before finishing I believe… unless it does a 50% retracement today and rolls over into the close. I really doubt that though. I suspect it will be an ABC move up, or even a 5 wave move.

    That leaves next week for a big sell (or crash?) late in the week. Of course there is the possibility that we just resume the uptrend and head toward the 1400 area, but I really doubt that will happen. A wave 2 up is what I’m expecting today and early next week. Then a wave 3 down.

    • Wow, all the short term charts are getting overbought now, except the 60. And, we’ve almost done a 50% retracement today. We could roll over today and surprise everyone. I’m not so confident about a rally the rest of the day now. It might be safe to take a few shorts just in case this thing tanks into the close.

        • For now, I don’t see hit happening. Maybe later this year? The market has hit the 61.8% Fib. level in one day! We could see this rollover into the close and surprise everyone. I really expected this move up to take a couple of days… not a couple of hours! Not good for bulls, as it too straight up I believe.

  7. Gang, I hope you all aren’t asleep now. The daily, 60, 30, and 15 minute chart are all bearish together right now! “If” the gangsters let the charts play out as they should, and not manipulate them, we should tank into the close. I could see the 1320 spx level being hit… if these charts all get some momentum going. I have no longs right now, only shorts!

    • “Special meeting” being called in Europe, most likely about Greece’s debt. Hmm…I wouldn’t feel exactly comfortable holding longs over the weekend…

      • Yeah… how convenient the timing is on that meeting! The charts don’t say for sure that we are going to tank, but all the pieces to the puzzle are there. What time is this “Special Meeting”?

        • This weekend…from ZH:

          GREECE THREATENS TO LEAVE EURO AREA, GERMANY’S DER SPIEGEL SAYSFINANCE MINISTER FROM EUROZONE AND EU COMMISSION HOLDINGS CRISIS MEETING TODAY IN LUXEMBOURGMEETING AGENDA INCLUDES POSSIBLE NEAR-TERM DEBT RESTRUCTURING FOR GREECEEUROGROUP CHAIRMAN JUNCKER “TOTALLY DENIES” MEETING TO BE HELD TODAY TO DISCUSS GREECEAnd cue panic and furious denials: French finance ministry official cannot neither confirm or deny Spiegel report of emergency Eurozone meetingAustrian Finance Minister spokesman says Eurozone breakup “absolutely unthinkable”German government source says theres no plan for Greece to leave the EurozoneSenior Greek government official denies report that Greece raises possibility of leaving EurozoneIMF SAYS IT HAS `NO COMMENT’ ON REPORT OF GREEK EURO EXIT BID

  8. Unbelievable volatility. EUR/USD goes from 1.49 to 1.437 right now in just one day. That’s totally insane.

    • Yeah! … and the Legatus meeting ended this Monday the 2nd! Tell me that’s just a coincidence! This could really start to move down fast into the last hour. It looks like it’s gaining momentum now.

      • It’s just a coincidence. There, I said it, bwahaha! But yeah, looks like a lot of things coming together at the same time. Don’t forget a possible artificial disaster…

        • Well, today is 5-6 or “5 minutes until 6 o’clock”… in the Simpsons clock picture. Also, we have another 11 next week. Maybe we bottom today, rally back on Monday and Tuesday, and then have a big wave 3 down on 5-11-11?

    • All the charts are lined up, and supporting a big drop into the close. I don’t know if the gangsters will let it happen or not, but so far they are… at least for the last 4 days.

      Since the gap up probably squeeze most of the bears out of their shorts, I’d say the market is free to fall now.

  9. I saw that 61.8 FIB get hit on SPX and I didn’t get my sell executed. Darn… I shoulda known, oh well. Not sure this market is ready to roll over just yet. I think this is a huge shake out for a move up to the 1400+ area. “rumors” are always nice to move the markets whichever way they want to. Remember”S&P credit downgrade” rumor? This Greece rumor would be a nice one to shake out traders. We shall see… 🙂

  10. Well, have good weekend everyone. I don’t have a clue about Monday, as we technically had a 61.8% retracement today. That makes you wonder if Monday will go up… or tank? It’s too hard to predict that kind of move.

    • Check out volume on UUP, yes – many are going to cash, it’s hand-in-hand.
      so, educated guess, dollar continues up, market tanks along with commodities.

      Dollar tank?, stick save. sounds so easy eh?

  11. i think,
    NEM is about to retest 50 or lower. energy costs have really hurt their bottom line, this past 90 days.
    FCX has been hurt too.
    here’s why I think FCX is the much better trade.
    FCX has support around its 200 day.
    here’s why.
    http://zstock7.com/?p=4616

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