Saturday, April 20, 2024

Bearish Stock Market Ahead But Some Bullishness Left

Tuesday Update...

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

Red

_____________________________________________________

While we didn't crash on Friday, the sell off was still nice... for the bears of course!

(to watch on youtube: http://www.youtube.com/watch?v=I8_sE5EVuU8)

What's next?  Will we resume the uptrend or break the current support and put in another RED week?  That's a tough one to answer of course, so I'll just cover both cases and see which on plays out.

On the Bullish Side:

The move up from the 1250 spx area back in March of 2010 could be viewed as a 5 wave pattern move... meaning one more move up is possible.  The last 2 weeks could be a wave 4 pattern, that is also making a "continuation triangle" as well.  If so, then it could breakout to the upside next week and turn the daily and weekly charts back up.  This would then be the move toward the FP on the SPY of 138.86 that still isn't hit yet.  That's about 1388 SPX.

This triangle that has been forming is similar to the one formed back around mid-February to the first week of March.  That triangle pattern finally broke down and put in our 1250 low a week later.  However, most triangle patterns are continuation patterns.  Since the market has been going up since that low, you would expect this triangle to break up... not down like the previous one.  Also, the market rarely does the same move twice.

On the Bearish Side:

The current triangle has almost the same bearish MACD, Histogram Bars, Full and Slow Stochastics, and RSI reading.  Plus, the Dollar has broken out of it's falling wedge and is very bullish right now.  Since it goes opposite the market, if it rallies, the market will continue to sell off.  While the daily chart on the dollar is getting a little over bought, the weekly is pointing straight up.

There are other factors as well to consider.  The recent crash in the commodities market... especially Silver.  This was all planned by the Illuminati Gangsters, as JP Morgan was about to get called to deliver physical Silver it doesn't have.  The key level was $50.00 per ounce, and since these thugs are part of the government, they orchestrated the whole thing so the wouldn't be called out to deliver Silver they didn't have.

This was all told to Lindsey Williams by the elite gangsters as he reveals it in this interview below.  Silver did bounce off the long term support line from the last several years (on the daily chart, and weekly), but I'm not sure if these gangsters need to take it lower or if they were able to exit all their positions now?  If they still have a ton of shorts left, then Silver could break that support level and head lower.

(to watch on youtube: http://www.youtube.com/watch?v=6ddK2HOGb1g)

In fact, the low on Thursday last week did break the trendline, but they rallied it back up on Friday to close just one it I believe.  I suspect that JP Morgan still has a lot more Silver shorts to unload, so I believe it will continue down next week.  This means the dollar will likely continue to rally and the stock market will continue to sell off.

There is also the fact that the market did turn down after the recent Legatus meeting concluded on May 2nd a few weeks ago.  Everything tells me that this market will go down next week, not up.  While I don't want to bury my head in the sand and not look at both sides, the bearish side out weighs the bullish side right now.

Thinking like a gangster here... I believe they want the market lower this month, so they can announce QE3 in June and rally it back up with more of our taxpayer money (stolen from us, as we don't have any say so in the matter it seems).  The evil thugs want to get in at a better price level then the current one I suspect.  Silver could go to the 200 ma around $28 right now, or even to the $26 level from January of this year.  Below that there is a gap that needs filled from mid-November of 2010... so yeah, the odds favor more downside in the overall stock market.

Short term, what do I expect?

Monday should be the most bullish day of the week, but could sell of a little in the morning first... then rally back the rest of the day.  However, I really expect a flat open and a slow grind up.  The 1353 spx area is going to be some tough resistance, as it's where the downward sloping trendline intersects at in the triangle pattern that the market is currently still in.

They could trade it in a tight range all day and leave everyone guessing on Tuesday?  Will it breakout to the upside then, or gap down out of the triangle?  If this market wasn't so manipulated and controlled, the answer would be simple... Gap Down!  But you can never underestimate the minds of gangsters!  They could turn this charts back up with POMO money and have them all reset by the end of the week.  Total Bullsh@t... yeah, I know it!  But don't overlook it just because 90% of the charts are bearish.

While I don't know how they could continue to sell off silver, let the dollar rally continue, stop the bleeding in the financial's, and then stage a rally in the stock market at the same time... we've all seen stranger things happen!  And that is the very reason that I'm in cash right now... because I just don't know what the gangsters got planned for Monday?

I'll be looking to get short sometime next week, but I need to see the charts get overbought again first.  It could happen on Monday or later in the week... I just don't know yet?  But if all goes a planned (meaning the charts work as expected), we should see a much bigger RED candle on the weekly chart this Friday.  Also, keep in mind that we have another FOMC meeting this Wednesday... meaning that we could just get a lot of chop until after "The Bearded One" speaks at 2:00-2:30 pm.

Red

Red
Author: Red

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Robert
12 years ago

Nice HS formed on 30min for S&P. We break 1335 and we get some heavy selling imo. Banks are in big trouble….:)

Red Dragon Leo
12 years ago
Reply to  Robert

Yes, I think the XLF has already broken the long term trendline.  Things are looking ugly for the bulls right now.  🙂

Red Dragon Leo
12 years ago

Good morning gang…

Looks like we got some early morning weakness.  I’m not sure how this will play out, but I’m still thinking that the best shorting opportunity will be Wednesday after Bernanke speaks (or at the end of the day?)

SAN
SAN
12 years ago

 ES Descending Triangle: http://niftychartsandpatterns.blogspot.com/2011/05/es-descending-triangle-formation.htmlhttp://niftychartsandpatterns.blogspot.com/2011/05/es-descending-triangle-formation.html

Red Dragon Leo
12 years ago
Reply to  SAN

San, what are your thoughts on which way it will breakout?

SAN
SAN
12 years ago
Reply to  Red Dragon Leo

I think this time the support may be held. But the up move will be stopped by the resistance line and then a big breakdown. 

Red Dragon Leo
12 years ago
Reply to  SAN

Yes, my thoughts too San.  I think it could chop around all day today and maybe tomorrow too?  After the FOMC minutes this Wednesday I expect a big move.

Red Dragon Leo
12 years ago

So far gang, all is going as planned.. just chopping around going no where.  Remember, I can see 1353 spx on the upside… if they attempt to rally today (or tomorrow).

The dollar needs a day or two to reset the overbought conditions.  Then we can expect another move higher, which would cause the market to sell off.  I still think Wednesday is the key day.  It could be as simple as shorting at the close on Wednesday?

Red Dragon Leo
12 years ago

Where is everyone?  Are you all sleeping?  Lots of wild swings today… meaning we might not make it to Wednesday before a serious breakdown.

Diablos
Diablos
12 years ago

Hey Red,

This is what i expect  http://screencast.com/t/duErpR6P

Red Dragon Leo
12 years ago
Reply to  Diablos

Nice chart Diablos, but I’m not confident that it will go up first.  Just based on the technical’s, it looks more likely to go down first, and then rally up in July and August to new highs.

It makes more sense that way, because I think the traders are selling ahead of the assumed end of POMO this June 30th.  When Bernanke comes out with an announcement that there will be QE3, then they will rally the market back.  This is all guessing on my part, but it seems to fit.

SAN
SAN
12 years ago

 SLV Analysis: http://niftychartsandpatterns.blogspot.com/2011/05/slv-analysis.htmlhttp://niftychartsandpatterns.blogspot.com/2011/05/slv-analysis.html

Red Dragon Leo
12 years ago

Well, this kind of sucks.  I really expected an UP move first, and then a sell off midweek to the end of the week.  This could imply just the opposite?  Maybe we gap down quickly tomorrow, and then reverse hard the rest of the week?  Remember, it’s OPX week… which is usually bullish.

Kevin
12 years ago
Reply to  Red Dragon Leo

 Yeah,…I agree. This anemic volume supports your thesis. Wednesday will be relief from Berspanke day IMO.

Red Dragon Leo
12 years ago
Reply to  Kevin

Yeah, the support technically still held… with only a slight pierce of it.  That could be a head fake to trap some bears?  We need a bounce badly to squeeze out some bears and trap some bulls.  But when?  I think tomorrow and Wednesday is likely.

Kevin
12 years ago
Reply to  Red Dragon Leo

 I agree… Longer term, it seems as the fall in oil is happening at just the right time with QE2 ending. The consumer should have a little more income to spend and maybe that scenerio makes for a soft landing end to QE2. Boy, that would catch a lot of bears off guard. That is the name of the stock market casino game…

zstock7
12 years ago

i’m thinking CSCO goes to 16.10…
 http://zstock7.com/wp-content/uploads/2011/05/CSCO-5-16AA.jpg

SAN
SAN
12 years ago

 Dow Jones Analysis: http://niftychartsandpatterns.blogspot.com/2011/05/dow-jones-analysis-after-closing-bell.htmlhttp://niftychartsandpatterns.blogspot.com/2011/05/dow-jones-analysis-after-closing-bell.html

Robert
12 years ago

Lets see if we can get some real downside tomorrow…..:) 

Red Dragon Leo
12 years ago
Reply to  Robert

What levels do you have in mind for the downside target Robert?

Gold_Gerb
12 years ago

Colgate, JnJ, Hershey, PG – defensive stocks doing good.
(bad sign)

Red Dragon Leo
12 years ago
Reply to  Gold_Gerb

Yeah, this sell off today wasn’t market wide… which has me worried that they might pull a fast one and squeeze some bears.  Volume wasn’t very much either.

Gold_Gerb
12 years ago
Reply to  Red Dragon Leo

 Absolutely.
it’s the only way left to make money.
how many managers were forced to play safe, and insure for a move below 1330?  and have to cover tomorrow.

Red Dragon Leo
12 years ago

No video tonight gang… sorry.  However, the breakdown has started.  Now if we could get one more rally back up to the downward sloping trendline in this triangle, I think the next move down will blow through support levels like a hot knife cutting butter.

While we could just go straight down from here, I think we’ll see that last rally attempt tomorrow.  Call it a gut feeling (based on looking closely at the charts).  The upside limit is around 1352 spx.  Anything higher and the bulls are back in charge.  But as long as the rally up stays below it, the bears still have the ball.

Anonymous
Anonymous
12 years ago
Reply to  Red Dragon Leo

 What about a cold knife cutting through hot butter?

Gold_Gerb
12 years ago

watch the ES.
I find the patterns over a 24hr period, work mucho better than SPX.
http://oi51.tinypic.com/wall53.jpg

we hit some kind of temp bottom (early) tonight.

essentially starting May 10th, hell has broken loose between the fan lines.
wider and wider, descending.

Anonymous
Anonymous
12 years ago
Reply to  SAN

SAN:  Chart not found 

SAN
SAN
12 years ago
Reply to  Anonymous

The links are working now. Thanks  JDdeBoer

Kevin
12 years ago

 Bernake relief rally tomorrow and rest of the week… With the 60 minute and daily SPX in oversold territory (Stochs), it makes sense to me + Obama isn’t gonna let this market fall. Not before re-election time, then he doesn’t care and it will be armageddon. He’ll work on “sharing more of the wealth” from the people who worked hard and have something to those who he thinks should have it…

Red Dragon Leo
12 years ago
Reply to  Kevin

Yes Kevin, I agree.  It looks likely that we’ll rally for a couple of days, probably starting tomorrow.  It is opx week after all, and you know they want these new put buyers to lose there money.

I also think Silver will move up with this rally, as it’s resting on long time support from a year ago.  It hasn’t broken it yet, and I don’t think it will.  I think a strong bounce on it is coming first.  Then if the overall market rolls back down and doesn’t make a run for the SPY FP, then Silver will likely roll over too, and go test that 29 area I believe.

SAN
SAN
12 years ago

 Dow Jones near previous resistance: http://niftychartsandpatterns.blogspot.com/2011/05/dow-jones-previous-resistance-may.htmlhttp://niftychartsandpatterns.blogspot.com/2011/05/dow-jones-previous-resistance-may.html

Red Dragon Leo
12 years ago

I was really expecting a little better of rally then this.  It seems weak, as not all sectors are rallying.  The metals and the banks still look weak.  I think this rally doesn’t have any legs and will fail.

It is also burning off the oversold conditions on the short term charts, and the most I could see is a quick pop in the morning.  After that, the charts should roll over again.  It could happen today, but I expect it to happen tomorrow.

Anonymous
Anonymous
12 years ago
Reply to  Red Dragon Leo

This is so weird. With the big retracements on the rallies the last 2 months, I expected to see bigger down days either yesterday or today, which didn’t happen. Either tomorrow or Thurs is a “actual” down day or this is all we get. Doesn’t make any sense though. A lot of big stocks are topping out, but the over markets are too buoyant.

Red Dragon Leo
12 years ago
Reply to  Anonymous

Yes, it’s like it’s setting up for a crash… or one hell of a short squeeze!  But which?  I’m not sure what to think?  The daily chart is getting oversold, but could go down more.  The short term charts are working off their oversold conditions and will be overbought early tomorrow.  I’m not sure what the gangsters got planned?

Kevin
12 years ago
Reply to  Red Dragon Leo

Don’t forget a Bernake relief move tomorrow. This is a trading market right now and the 50 DMA has held on the S&P so far. I expect a move back up to the falling trendline at least by the end of the week regardless of if the short term charts work off the oversold conditions. They can stay overbought again for longer than we think.

Red Dragon Leo
12 years ago
Reply to  Kevin

Yes, that is true.  I’m not sure though as I don’t think Bernanke is speaking?  They appear to be simply releasing the minutes of the meeting…

http://mrtopstep.com/economic-calendar/

Kevin
12 years ago
Reply to  Red Dragon Leo

 Yeah, you are right, I don’t believe Bernake is speaking. It’s the Fed minutes that will be out. The weaker the economic numbers are, the more “dovish” the FED may be. That is generally bullish for the market. That 1388 FP IS REAL, dammit…. LOL! This has to be a shakedown, right?

Anonymous
Anonymous
12 years ago
Reply to  Kevin

Yeah, none of this makes sense. I’m been booking profits same-day for weeks now. Stuff is all over the place. I’m just going to wait until the last rally before making any truly big moves.

Anonymous
Anonymous
12 years ago
Reply to  Red Dragon Leo

This happened to me in OPX week in March. I was expecting Tues to be the bottom and then the “real” drop & reversal was Wed. I was the standard one day ahead on that one. Odd stuff.

Red Dragon Leo
12 years ago
Reply to  Anonymous

Listening to Mr. Topstep, they seem to think that the gap will get filled before a nice reversal.  The one from April 19th-20th, around 1310 spx is what I think he’s talking about.  That will also be a hit of the 100 day moving average.

Anonymous
Anonymous
12 years ago
Reply to  Red Dragon Leo

Yeah, but the same gap was passed over both on the way down and on the way up two days later. I guess we’ll find out tomorrow, but we’re near a small bounce, or possibly a struggle up for the next several weeks?

Red Dragon Leo
12 years ago

Refresh page for update…

Red Dragon Leo
12 years ago

Silver is up, which tells me that we are getting close to a bottom in the overall market.  I still think we’ll sell off on Thursday, and probably put in a short term bottom.

Red Dragon Leo
12 years ago

The market is almost hitting the upper trendline on the SPY, QQQ, and IWM.  I think it’s about topped for the day.  It should roll over into the afternoon (assuming the gangsters don’t manipulate it, and actually let the charts work?)

Kevin
12 years ago
Reply to  Red Dragon Leo

 Yes,…it looks tired. Recycle later with the Fed minutes.

Red Dragon Leo
12 years ago
Reply to  Kevin

We are all used too the FOMC meeting causing the market to go up and close positive… then sell off the next day.  What if the market sells off today after the minutes are released?  It’s something we aren’t expecting, so maybe it’s time for a change?

Kevin
12 years ago
Reply to  Red Dragon Leo

LOL! Guess I was wrong,…it wasn’t too tired. Closed at the highs. If initial claims are back under 400K, I bet they’ll gap ‘er up over that falling trendline. It’s the gangsta way… 

SAN
SAN
12 years ago

 SPY Resistance line: http://niftychartsandpatterns.blogspot.com/2011/05/spy-resistance-line.html

Red Dragon Leo
12 years ago

Mr. TopStep…

http://www.youtube.com/watch?v=rrW6XsFSuHc

Just waiting on the FOMC meetings around 2pm 9est)

zstock7
12 years ago

TGT is a really easy trade. the news goes hot to cold, and yet no matter what, the price stays in this channel.
http://zstock7.com/wp-content/uploads/2011/05/tgt-5-18.jpg

zstock7
12 years ago

i have short the IWM, signals at approx 83.4 for an overnight trade. didn’t quite make it there today. maybe next couple of days it will get there.

Red Dragon Leo
12 years ago
Reply to  zstock7

I got the same target on IWM Z… and about 135.10 SPY.

stockdude
stockdude
12 years ago

Swat down from the blue line on EUR/USD?   Just not sure, hard to
predict more downside after a near vertical 6% down already occurred.

Cable, the “old” PRS seems to have come back into play, just like Euro,
Cable seems pretty beaten down, hard to predict more down, I just don’t
see any clarity here.

Fear Factor, nothing astounding here, just more of the Tight Snout.   But odd that Fear as measured by the FF, went down as the SPX whipsawed up and down but mainly down.
http://oahutrading.blogspot.com/

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