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Friday, December 16, 2011

SPX, NDX, and Dow Update: Who Wants to Fade Santa?

From a technical standpoint, nothing happened yesterday.  The markets may as well have been closed.  Lots of people are talking about the bullish "inverted hammer" candlestick (so named because it looks like a candlestick) on the daily charts, but Friday's action is needed to confirm the bullish implications of this pattern. 

Next week is the last trading week before Christmas, and traditionally it's a low volume week with a bullish bias.  Of course, the week of Thanksgiving would be described the same way, and this year saw a pretty steep decline through Thanksgiving week (as predicted here). 

Another interesting seasonal fact is that the Volatility Index (VIX) often bottoms in December.  In fact, during many years, the low of the entire year (or very close) in VIX is reached shortly before Christmas (recent examples: 2003, 2004, 2006, 2009, 2010).  So who wants to fade Santa?

Frankly, I'm scared of Santa.  Always have been.  Buried away somewhere, I have a picture of me as a baby, bawling my eyes out, while I'm being held by a mall Santa who -- judging by his facial expression -- clearly felt that this particular situation hadn't been thoroughly discussed during his training at Mall Santa School.  So it's hard to get too bearish about the week before Christmas -- but I'm going to suggest it anyway.

The caveat here is that many markets are reaching levels which could generate a strong bounce soon. Yesterday, I used the analogy of a stretched rubber band:  either it snaps back forcefully (possibly right into your face), or it breaks.  This is the position the market appears to be in, and, as of yet, no key intermediate levels have been violated on the downside -- at least not in the major averages; several minor averages have already broken some key support levels.

The charts are now in a position where it's very difficult to predict which situation will actually play out.  As I said, I favor the bearish resolution, but I have annotated the next chart to illustrate both potentials. 

The preferred count shows the decline as a series of first and second waves, which, if correct, should be the prelude to a big third wave decline.  The pressure is now on this count to perform or be eliminated.  Friday should see some early upside bias under the expectations of this count, but next week the market would need to sell off strongly.  If one were so inclined, Friday could provide some short entries with manageable stops (barring a huge gap up on Monday... now where have we seen that before?) and a lot of profit potential.

The bullish alternate count suggests the market will ultimately break above the October highs (before reversing to new lows).  A sustained upside break of the red trend channel would be first warning to be alert to the bullish alternate count, and trade above the red dashed knockout level would indicate new highs are very likely. 

The chart below uses the Dow Jones Industrial Average for form.


The next chart is the daily chart of the S&P 500 (SPX), and depicts the expectations of the bearish count over the short term.  Note that the market is currently trading just above a theoretically-important support zone.  The chart is annotated with "or (2)?" to show the expectations of where the bullish alternate count could top if it unfolded.


The final chart is the Nasdaq 100 (NDX), and it's the same chart I showed yesterday.  The NDX continues to act like the weaker sister here and is actually below important support.  One of the things I'd like to call attention to regarding this chart is that the count is much less vague than the SPX.  The NDX shows a very clearly defined A-B-C pattern, and I have a really hard time imagining that NDX has not already topped its Minor (2) wave.  In my mind, this lends credence to the argument that SPX and Dow have both topped as well.


In conclusion, I remain long and medium term bearish.  Short term, my current expectation is that the market probably won't grant the much-anticipated Santa rally to new highs, which it seems everyone is waiting for.  But there isn't any real confirmation yet either way, so it's prudent to remain alert to both scenarios... especially since Santa brings huge lumps of coal to investors who don't trade safe.

The original article, and many more, can be found at http://PretzelCharts.blogspot.com

291 comments:

  1. Morning PL, i don't want to fare Santa I don't have the nerve to do it

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  2. Good morning. Glad your system crash was of a minor degree ;-)

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  3. OMG - futures are UP !!!! As they are every day.  Much like the sun rising in the morning.  Must be because the Dax is up 8 cents.  Actually, it's because my hedge fund wants to unload some positions - some for a tidy profit, some to reposition - so we gap the market up to find some chumps to buy the open while we then short what we just sold - like clockwork.  GG

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  4. Pretzel, I remember yesterday you mentioned sustained trades above 1227 would imply something bullish.  Is it still true today?  looking at your SPX charts, we could go all the way up to 1250 without breaking your black trend line

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  5. pretzel - the hyperlink is missing on your reference to thanksgiving week being a down week.

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  6. morning all - nice article PL - clear stops to look at IF we are going higher. I think the count is balls on - especially with opex today - and mondays after opex always seem to be, let's say "interesting".

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  7. In my mind 1227 is still very significant since it's the 50 day MA.

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  8. Yesterday, the count looked like a fourth wave, which was why 1227 was an issue.  It looks like 1-2's now, so no longer an issue.

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  9. Kinda funny re-reading that article now.  First off, my BKX target was a dead-on hit, though I don't know if anyone played it or not.

    Second, the article ends with this:  "My strong belief that we're headed lower in the near future hasn't changed. The key levels to watch are still SPX 1215 and 1190. Barring some type of central bank intervention, or the significant threat of such, a break of those levels should lead the SPX down into the low 1000's."

    How prescient was that, in hindsight? 

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  10. so what do you think the resistance will be today (in other words, where is a good place to do a day trade short)?  I find it hard to see how we can go to 1250...

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  11. hey pl, i've been following you for a few weeks and your observations and analysis are top shelf all the way.  appreciate all the hard work you do, i know with the time difference and what not it's a ton of effort on your part.    i was curious about your own style of trading.. are you purely a day trader, or do you ever let your positions ride?  sunday night you had a brilliant trade when you shorted es @ 1257, i'm pretty sure you got out of it in the 1230's somewhere.   how do you decide when to exit something that's profitable for you?

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  12. Good morning all.

    Looking to replenish tza reserves gradually today and short ES.  Any predictions for where the heck we close today given opex?

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  13. PL, what made you change the 123 projected pattern to 1212? the idea that the powers that be can keep it hanging together for just a bit longer?

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  14. Thanks, bastait.
     
    I trade as a swing trader as well.  It really depends on what the market is doing.  When there's no strongly defined trend, or at inflection points, I day trade to make money while protecting myself.  Speaking of, I took some shorts at (March) ES 1221 a few minutes ago...
     
    I decide to exit when it either hits a target zone, or when it "looks" right.  i.e.- market is approaching support, or indicators look ready, or market's putting in a potential double bottom/double top, or the wave structure looks right or wrong, etc. 

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  15. Huh?  I don't understand the question, sorry.  :)

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  16. Your blog, in 7th paragraph, says "The preferred count shows the decline as a series of first and second waves, which, if correct, should be the prelude to a big third wave decline." I think I don't understand at what degree these 1st and 2nd waves are at. Are these starting from (1) at the close of 12/08/11, with (2) at close of 12/09/11?

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  17. Use the Dow as the equivalent short-term chart, and watch the trendline there for warnings.

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  18. my HSI puts are going to be raped on monday...

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  19. The session's young.  No need to panic YET.  :)  Maybe later, but definitely not yet.

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  20. 1225-1230 is the expected reversal zone for the bear count, so we'll see what happens.

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  21. where is a good place to short today for SPX?

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  22. Uh, I hope this answers that question.  :)

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  23. looks like it reversed?

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  24. yeah you nailed it...that CB intervention was a game changer...at least in the short term.

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  25. A crash next week is a SLAMDUNK.

    So I repeat, FORGET the alternate phantom bullish count---I mean, if there wasn't a highprobability bullish count, plus seasonality, plus q3 hyperinflation threats, plus blah blah 'world cb's in control' NEWS, always taking your propietary indicator up to 1000th of a point before it FAILS to fold, occurring 10 times over last 3 weeks,I mean, then  it would be easy, right, and everybody would be on board the bigbear train unafraid and laughing, right? 

    So you know, I have MY own propietary indicator, and that is based on the amount and degree of 'BALLS FEAR to go short' quotient, of your 'supposed permabear' posters herein.

    1.
    look at the perfect rounded top in your weekly dji chart today (and not just at the perfect trend channel), just like I pointed out a week ago, on the spx chart, right before it dropped over several percentage points over next few days.  Slow forming rounded tops (with lessening volume) are notorious for their signs of buying exhaustion, and quite often lead to unexpected gap drops.  Plus it is interesting that the upsection of the rounded top is tighter, more compressed in control, while the drop part of the rounded top, is looser, slacker, more confused, as though saying: 'hey, we're falling, this wasn't supposed to be happening, hey we're getting tired, where are the big buyers, and where's santaaaa, it was a sure thingggg, wasn't iiitttt?' (place here a sad amerikan soft face, with a questioning hurt look, staring at coal chunks in his babysmooth manicured hand).

    2.
    I continue to REFUSE to believe, that the MAJOR multi-month, linear chart, downward trendline touching FIVE closing price peaks, will EVER be broken (MAJOR trendline that I pointed out to you last week, and you praised, before you got your panties all in a bunch, over with MY other EVIL 'subjective' posts HAHA).

    3.
    I still feel CERTAIN, the 2007/2008 chart is KING, and has not failed YET, not even once, to FORETELL what will happen in 2011/2012, considering it is EXACTLY the same dilemma, except, MAGnified worlwide, by a factor of a 1000, IMO.  The parallel of these 2 spx chart is uncanny, and over nearly a year, already.  There is  HUGE drop straight ahead, over 1000dji intraday, as I have foretold several times, is it UNavoidable---for it is ABsurd, that the dji is still near 12000, when it should be at 10000 at least, in order to have some bearish synchronicity percentagewise, with almost all the other major world bourses, ad most especially, the last european stronghold: the DAX. 

    So, as always, I REPEAT:  The major BAD 'news' this time, next week, will HAVE to come from the usa itself, because gullible complacent amerikans won't sell BIG, until they are hit HARD at home, with their baby happy comfy christmassy dreamy bubbles, being STINKINGLY burst.

    4.
    Gold and Silver have fully confirmed (as I have ASSURED you all, for  MONTH now), that the SHIT is going down worldwide, way down---and it's called DEflation, and NOT fake cb bullshit inflation. 

    (And I enclose a great chart---from your dear buddy, fellow-rocker bobby p., and his ewi band---and it clearly shows the UTTER meaningless, over the fullness of mediem-term time,  of the 'masters of the central bank universe are in control' bullshit NEWS).

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  26. Would opening gaps of small sizes, such as yesterday's and today's, suggest that they stem from end-of-day traders, i.e. retail traders? If so, these upticks seem bearish in implication, to my mind.

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  27. So far... wouldn't be surprised to see it run up once more into that zone.  If it starts building momentum on that run, though, be careful.  Ideally, if it makes another run up, we want to see it losing momentum.

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  28. What a rejection at 1227 LOL - like swatting an attempted dunk

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  29. ES did a lot of work in that area overnight and couldn't breakout, btw.

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  30. Wow I hit the sweet spot on my long trade.  Closed it for 200 % return on LVS, which topped at 42.2 :  -) !!!
    It then immediately dropped.  Timing really IS everything as they say.

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  31. I notice he doesn't have QE marked on there, though.  :)

    But yeah, PM's look like they're toast.

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  32. Yes.  Dow chart: 1-2 then i-ii then (i)-(ii)

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  33. 5. 
    PLUS, December 2007 was a BEAR month----'cause Fat Santa was sick with bad case of herpes that year, or he took the day off since he didn't want to deliver bad news to amerikan kiddies, or, better yet---he ran off with one of his cuter girl elfites, because he got tired of doing rudolph.  HAHA.

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  34. how are you playing the market today?

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  35. Back into the zone... so far so good.

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  36. Ah, gotcha. I should understand that you don't always make $SPX your primary discussion symbol. Thank you.

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  37. Short, from right about here... but if it sustains trade much above 1230, imma cut and run.

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  38. Wel, that was a nice spike - shorted at 1222 (march es), hoping not to get run over.

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  39. boomshakalaka...bears let the bulls get the offensive rebound there.

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  40. Pretzel, ok your zone is on.  what do you make of the momentum

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  41. Dude, you're gonna have to start reading my posts.  This is the 2nd time I've had to repeat myself.  :)

    So far, so good.

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  42. opps, i just saw it.  this reply function is hard to track after some time.

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  43. Had taken a half position, PL seems to be okay with this move even though its underwater a few points so may try to put the other half on at 1224ish, stops at 1228.

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  44. btw, if they can push it through 1232 or so, then 1240 is on the table for next stop.

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  45. Morning guys!
    one thing ive noticed and didnt like is that aapl keeps making new day highs today

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  46. hey pretzel what do you think of the momentum?

    ha!
    I know nothing about message boards, but cobra has a way to highlight his comments so visitors can jump straight to his posts...may be worth investigating since you are so active on the board here. I think he uses twitter somehow.

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  47. btw, did anyone get a kick out of:

    "Lots of people are talking about the bullish "inverted hammer" candlestick (so named because it looks like a candlestick)..."

    I thought that was pretty friggin' funny.

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  48. or maybe a sort option to only display Pretzel's posts

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  49. and if they can't?  would you say 1215 will provide support again or it will go right thru?  just wondering if i should short and hold or day trade

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  50. Yeah, maybe once I move this to a real platform I can add that stuff.  w/ Disqus, I don't think I can do that.

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  51. If the 1-2 bearish count is right, this would probably be a good short and hold.  But, sheesh, I can't run your trades...

    This isn't even trading advice!  :)

    I mean, IF it reverses here and IF it gets down to 1215, I'll be looking at stuff on my own to decide if I want to keep holding it then. 

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  52. TJN, are you asking for trading advice? uh oh ;)

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  53. Let's see if da bulls can get one more push up to 1232 here or not.

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  54. options are limited I'm sure...just tossing ideas for ya to chew on.

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  55. haha i am asking for trading views. 

    if that's the case, please air your views when you cover :)

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  56. Apparently someone got a kick  out of it :p lol

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  57. HAHA - Mean.   When bear panic is in the air hand-holding is wanted.  Shorters are like squirrels - they run into traffic, aren't sure which way to run for safety.  Bulls want to buy and buy more

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  58. Hi PL, as I wrote yesterday today big banks have cashed and reinvested the calls. They got the inversion of a chadlestik

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  59. Sometimes I just write to amuse myself.  ;)

    I was dropped on my head a lot as a child...

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  60. how i feel about that (its a gif, you gotta click on it)

    http://24.media.tumblr.com/tumblr_lw9my5jQHE1qzrlhgo1_400.gif

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  61. looking for honest feedback there?....eh, you've had better.
    Love your humor Pretzel, but this one didn't tickle my funny bone...maybe you wrote it reallllly late at night? just about everything is funny to me when I'm sleep deprived. But then again, I always laugh at the wrong stuff anyway (I liked the rubberband in your face comment) but maybe I'm wrong and it was a smashing success.

    didn't want to leave you handin on this one ;)

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  62. In this candlestick I have put all my knoledge

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  63. that's "hangin" not handin...

    you've probably heard enough from me today, so I'll slip back into the darkness for a while :)

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  64. Actually, I appreciate the reply.  And I don't mind people posting a lot -- why is everyone so sensitive about that?  Furr was doing that the other day, too.  I actually prefer it to people just sitting silently -- feels like the board's more "alive" which I like.

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  65. So what's your take on that, then, Paolo?  You think it sticks, or not?

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  66. :) I liked this one....that dog went bonkers!

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  67. NDX is shining, it's bright. Calls effect

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  68. now, if we can just get Obi-Wan to make the market do that....rollover!

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  69. lol, it made me laugh so i hope others got a kick out of it

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  70. Someone thinks it can stick untill Christmas, let's wait and see

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  71. Alright, I actually have to get some sleep.  Surprised I made it this far, I had to struggle to finish the article without passing out.  Always get a little bit of a second wind when the market opens, though... but fading fast here. 

    Hopefully, the market doesn't get too crazy today.

    bbl.  :)

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  72. I should never mention rp to you, as you only see that.  And you mean rp leave`s out that he has called the end of the bear rally 2 times, prior to now, and was wrong due to q1 and q2.  You are correct, but you are missing the point.  The point is they are NEWS, and government news are ALWAYS meant to MISlead.  And there are just so many times you can lie, about someting which can no longer be hidden, as things are now (finally).  There is NO 'recovery', of any kind, you can be sure of that.
    And MY personal point is the dead certain similarity, that has not yet failed even once, of the 2007/2008 chart to the current one, PLUS MY observation of the linear down trendline hitting 5 multimonth peaks, which is extremely unlikely, will be broken, for a multitude of reasons.

    I assure you again, if you concur pms are toast, then, since I am 100% certain, there is ZERO decoupling now, the spx WILL CERTAINLY follow.  MYSELF, I am once again betting BIG against amerikan new homebuilders, there's where most of the easy gravy lies, they are so over priced, they are ridiculous, even their insiders are SELLING their shares bigtime, at these absurd prices, chartwise.  NO  R-E-C-O-V-E-R-Y.  Once this dawns on the 5th wave idiots that are buying these high priced shares, the stock prices will drop like rocks, just like the pm share prices did this week, and I was able to make back 3 quarters of MY capital, just riding their back.  And ext month, I kick some serious amerikan new homebuilder ass, to get ALL MY capital back, plus a doubleup on profits.  Not trading advice, this is MY stand.

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  73. I think we need a much better UI than email. (a) It's too much work to click to see the update [I use GMail]. (b) It really doesn't show the threads that well [in GMail's interface anyway].

    Is there a better UI?

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  74. I like running in traffic...its thrilling!
    does that make me a squirrel?

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  75. Also with a closing at 2265 NDX long term trend gets a negative count

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  76. my pea sized elliott wave brain says this move from the wednesday lows is corrective

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  77. before you go pretz, do you have any prospective targets on the down/upside for the s&p?

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  78. all these miners and momo shorts I'm holding are looking bad today
    all except BIDU, if it's chinese, its grimm death right now

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  79. Thanks again for everything.  Enjoy your well-deserved rest.

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  80. Ok that's right BIDU is already down

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  81. "NDX has not already topped its Minor (2) wave"
    Problem with your notation...(2) is intermediate wave degree...
    If you are taking liberties with the EWT standard notation, is there an hyperlink where you have a legend or guide to the notation convention you are using besides standard Eliott? Thanks.

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  82. Follow my opinion because after losing 90% of my capital I was able to claw back to only down 25%?  In a month.  Do you know what the annualized return on that is?  You may as well hit the casino, at least you get free drinks.

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  83. Wish I had held onto DECK, could have gotten another $2/share.  :/

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  84. My platform is not getting refreshed with the MAR 2012 S&P data!!

    We have a holiday and I wanted to short this baby at MA 13, but alas, couldn't through Markets.com :-(

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  85. and now the move off today's highs is looking very impulsive....i think we're going to test 1190 on monday.

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  86. Yeah this looks like a complete a-b-c like PL was talking about, though I guess there could be one more thrust to new highs, but it doesn't seem likely to me as you've just stated.  Next stop 1200-1204, I would think, that's where I'm covering and reassessing, but could easily plunge straight through to 1190.

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  87. Got it to work, interface just wasn't all that intuitive to make the new MAR contracts available. Sorry for the false alrm

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  88. Any news out recently that's causing this rapid decline off the HOD right now?

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  89. As ALL modernlinear heads do, you take one comment, and turn into eternity.
    That's why you are linear---you, are a simply an amerikan line.

    But I will take it easy on you, not insult, for I truly want you to do something:
    I want you to invest every penny you, your home, borrow all you can, to do this---
    BET YOUR LIFE ON 1322 SPX.  PLEASE.  DO IT.  JUST FOR ME, ANON20.

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  90. Dow now slightly in the red, though the other indices are still solidly in the green, though each well off the HOD.

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  91. Hi PL, yesterday you wrote NDX has a resistence at 2267 and today at 2267,6 NDX changed the candlestick downward. Both you and me are right

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  92. no news....price action is controlling the markets right now....we just completed ABC from wed lows...on to 1200 and beyond!

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  93. Bulls defending 1220.  How long will it hold?

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  94. I hope you are as accurate on this call as you were on the gold call, well done.

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  95. quick show of hands: who intends to hold their shorts over the weekend :)

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  96. A continuation of the fascinating trend where are the buying occurs in the futures market and all the selling occurs in the cash market - today captures that perfectly

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  97. I am...I'm in short and hold mode...if we make it all the way to 1200 today I might cover something though.

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  98. Actually there was a report out within the last hour from S&P indicating another warning for a possible European recession.  So while price action may be controlling the markets, this apparently was the trigger for more selling.  Dow down 30 points now, though the other indices are still in the green but dropping rapidly.  SPX now down to 1217.

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  99. well, things are crumbling apart.  i wished this were the start of the week, instead of Friday.  would like to hold but worried about the govt bazooka over the weekend and the gap up on Monday 

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  100. I have been holding for two days, was very painful at 10 AM this morning but for the week I am still up.

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  101. I have massive amount of shorts which I will hold. I believe we're right at the precipice of a big drop.

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  102. IBM breaking down thru 50 dma

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  103. Bulls should be worrying about a 2 notch downgrade of France soverign rating, along with several other European countries and TBTF banks.

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  104. did that already happen?

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  105. covered and out for the day at 1217- options can be whacky, and i think we'll close around this support today... next week is up in the air so hopefully pretzel you'll have a charts for our stocking stuffers-

    THANKS AGAIN

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  106. Nope, they were put on watch, but its imminent.  And when the S&P downgraded the US they did it after the bell on a Friday.  I'm looking for that today - we'll see what happens.  Could be next week/weekend.

    Also, my bigger short is ES, so I can try to get out Sunday night if anyt bazookas fire over the weekend.

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  107. Hardcore fighting at 1215. 

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  108. Fitch rating watch negative belgium, spain, italy, cyprus etc.

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  109. Morning all, and PL in particular! I don't wanna take credit -and I am sure y'all noticed it yourself, and as PL pointed out nicely in his post- but yesterday I posted a nice trend-channel graph in yesterday's comments. I've attached it again; and law-frikin-behold, it did exactly what it was supposed to do: top at 1230 and then down we go. 

    What really strikes me is the absolute frikin symmetry of the whole thing; is this some sort of bot-mathematical-joke or some? Sure to me doesn't look random at all. I kinda find that scary; as if it's on big TRON or some....

    Anyway, enjoy the channel surfing.

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  110. Yup, seems to have sparked this mini rally - lol.

    France outlook revised to negative also.

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  111. abc starting now....I bet it unfolds within the next two hours and we get a big wosh down to close the day.

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  112. Bounce at 1215, backtest 1220, now down again?  We'll see.

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  113. Thank you much for showing us the down channel. I appreciated it. Sometimes the most obvious things can't be seen.

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  114. soulsurferusa, in these type of channels is there usually a break up or down to break the trend?

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  115. Nicely done !  Gonna be tough making decent money until we can pierce that bottom

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  116. FWIW:  Astro update - the weekend does not have happy camper energy.  Moon in Libra - "Let's find a diplomatic solution"  is at odds with  Venus square Saturn -"Stop squeezing my cash!!!   or   I'm not feeling the love right now."

    Astro may call for short term trend reversal Mon-Tues.  I'll update over the weekend with Pretzel.

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  117. what are the expiration months on people still holding shorts

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  118. http://feedproxy.google.com/~r/zerohedge/feed/~3/aeU2AEJmI3Q/guest-post-do-we-get-year-end-rally-or-not-santa-dukes-it-out-mr-vix

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  119. I have Jan puts.

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  120. Trading March ES contracts, and short some etfs.

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  121. So does "not happy camper energy" mean we are going lower next week or up?  Can't tell if not happy is bear or bull?

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  122. Dec ES contract expires today and I think most people rolled over to the March contract last Friday.

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  123. I think Furr was referring to the players on the real world stage, not the market cubbyhole.

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  124. Just checking in from my phone quickly when I should be sleeping. How's my latest reversal zone call looking? ;)

    Bulls only hope now is back above today's high. Conversely, if bears can take out recent lows, it should be game over for da bulls -- but this isn't required at this stage. ABC as charted currently appears correct. Refer to preferred count above for my current expectations. Barring something really weird now, everything is playing out perfectly so far.

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  125. still hanging on to Dec sds calls, do you think spx will make the plunge by end of trading day

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  126. You were brilliant! Now go back to sleep.

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  127. RE: mcleod.mf.  not happy camper means bearish energy that could turn by Mon pm or Tues.  However, in line with PL's counts, washing thru down to 1200 or 1190 may set us up for a bounce next week.

    Specifically, by Tues, Sun sextile Neptune (leadership has some illusion for you)  and Venus square Jupiter is more of a "Risk On" energy.  Jupiter is stationing direct on Dec 25 making its energy front and center.  Jupiter is frequently associated with opportunity/growth/hope.  HOWEVER.  Jupiter basically expands what it touches; can act as an accelerant. If a panic starts, it will be fuel on the fire.  Keep in mind that can also be a panic rally.

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  128. Wow.  What a battle going on.  Downward channel still holding, rising trendline since Wed. holding... will we get resolution today... I'm thinking not and the resolution will happen on the futures... when most of us can't trade.

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  129. can't figure out how to reply on blog, no reply button!

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  130. One last thing real quick regarding the "channel" - you'll note the upper trendline which rejected the rally has been on my charts for a couple days... If the preferred count is correct, the lower line of the channel will break next week, and a new crash channel will replace it. K, back to sleep. :)

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  131. Another look... as if we all aren't glued to the screen anyway... except PL who is sleeping and missing the battle royal.  5 min... will the rising trendline since Wed. hold or do we fall into no man's land ~1209-1216

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  132. dunno, I've lately only been seeing brake downs. but past performance is no guarantee of future returns...lol

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  133. Like I said PL is "sleeping" but dreaming of charts and bars and lines and waves and counts.... and who can sleep with all that going on ... 

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  134. PCLN shorts....not real happy with the price action, but as long as it doesn't break 464 I will hold.  Seems to me, if it breaks that, it goes to 500.  Anybody short and see something different?

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  135. anyone holding their shorts till next week? I'm considering holding mine

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  136. DR, yeah, I was just about to update the previous channel I showed with the (new) rising trend line, but that trend line is still within the bigger downward channel, so not until the channel is broken (today's high taken out today or monday) would I put too much weight on  the rising trendline. time will tell

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  137. Regarding holding shorts: odds now favor a gap DOWN on Monday. I'm holding... the risk/reward is very favorable. K, really back to sleep now.

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  138. I'm holding a very small short position on PCLN.  I really don't want to see it trade significantly over 460.  I'm looking for this pop up to turn back between 456 and 460.  I think PCLN will depend on the market movement next week.  If the market turns down I will hold the PCLN short.  If the market moves up I will roll out of the PCLN short and look for a better entry.

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  139. nice chart DR!!

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  140. Yes, I'm holding my shorts until next week.  Unloaded some longs, but I'm still long GLD.

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  141. Could we have a third hollow red candlestick in the last 4 days?  Shooting stars/ gravestone doji's on indices?

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  142. If we can break below 1213 then 1182 is starting to look very realistic.... Perhaps it will hit that on Monday in order to leave some time still for a deflated "Santa Rally" lol

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  143. The Selling Indicator is forecasting that on Monday the market will go down

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  144. Thanks pretz, goodnight cutie. lol

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  145. Looks like WW1 trench warfare... fighting over the same ground with no one making any real headway... very intense battle going on right now...no man's land ~1215-1220..

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  146. dude, I was just about to ask how we're doing in the trenches... uhhh  trend line. It's really dipping in and out that lower line for now. Not sure if that's a sign of strength or weakness...

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  147. PL, how about charging a small fee for access to the site  to cover the cost of upgraded communication. This would improve everyones productivity, specially your's, and will be well worth it?

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  148. How do you read "intensity"? I don't see especially high volume for the Dow Jones Industrial and not for Transportations either.

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  149. If I'm looking for a support line to firmly hold I really would like to see movement away from support line once it has been tagged.  The action to me looks like the market is grinding along the support line and will eventually grind through it... but this could be my bearish sentiment speaking

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  150. Volume is up on the NYSE and Nasdaq composite... but it is options epiry day so the increased volume is expected

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  151. Just chiming in here.  The last two slightly 'up' days have to positively demoralizing for sellers. 

    That push from 1,231 to 1,217 thay lasted TWO AND A HALF HOURS without even a one point retrace the entire time was a complete and thorough ass-kicking.  When you gap up seven on the overnights, sellers lay off to let you take it up another six with little resistance . . . and then THAT happens to you.  Hmmm. 

    In reality, buyers have lost every attempt to advance the ball up the field and have been playing defense of 1,215.  Because once that gives way, we're at 1,200 and then 1,180 in a hurry.

    Last two days were good days to trade the ranges and go short at easy to identify junctures, where you'd expect sellers to mount a defense. Which they have every single time.

    Barring some major news event, there's no question right now who owns this market.  Opex will be behind us on Monday, and then the rundown can commence in earnest.

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  152. You're right. Over the last 30 hours, there's been a mini head and shoulder.

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  153. I think we have no resolution today and everything happens on /ES futures before the US opens on Monday.  My 2 cents

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  154. Are the bears taking control??

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  155. No the bulls fight back... I should really just go get some lunch.. this is turning into a bad habit... But the battle is really entertaining.

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  156. If there is a downgrade of France after the close today, this may trigger a market breakdown next week.  We'll see.

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  157. The bulls are wining here.  PL will not be happy with us for letting them back in.

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  158. still channel surfing and still in PERFECT symmetry. Who are the brilliant mathematicians who write the algorithms for the market bots??? It's too obvious IMHO. This is just not random trading, this is all fixed within set parameters... or???

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  159. adding to my case of perfect symmetry and thus NO randomness at all, see updated figure. I just added a few parallel trend and center lines and it all PERFECTLY matches up... 1220 close today???? hell yep

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  160. Closed right on my target of 1217. Pretz has some competition. Haha just kidding

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  161. Meaning? The powers that be are riding your down channel? Doesn't make sense.

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  162. Meant my reply to your channel chart.

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  163. nice chart. amazing how it lines up like that

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  164. i dunno, but for sure ain't my down channel... I am merely fascinated by the symmetry in it all and find no randomness in it.

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  165. Maybe a set of bear bots are steering the market down this channel, mathematically optimized to do it with the minimum cost?

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  166. Just curious, what does it take to program an EW trading bot?
    Good enough to replace Pretzel, that is. :)

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  167. A million lines of code, 30 years of effort and 20 years of back testing.

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  168. Looks like the bulls tried to break out in the final minutes and the bears held the line at 1220 and change.  It will be very interesting to see how this resolves.  I'm holding a short position over the weekend but I wouldn't be surprised to see another push up to the top of the current downtrend line from the July top.  Just to throw the shorts another head fake and allow the big boys to do some more distribution.  But I have a lousy daily track record.  I'm much better at the intermediate time frames.  Definitely looking for PLs take on today.

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  169. Hmm. A 2.5 hour pushdown that's monotonic suggests bot action. They have no fear.

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  170. Fred, are you referring to a better UI (user interface) that presents new messages dynamically in a contextual fashion? As opposed to thin slices of conversations in email from Disqus?

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  171. Exactly....PL is amazzing in being deligent and getting to everyone who has a burning question. It must be cumbersome and tiring  through Disqus...!

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  172. I'm holding shorted FDX into the weekend, after a huge bull run following earnings yesterday.  At one point today it hit $10 above it's Wed close, give or take a few cents before it started to pull back.

    As for the SPX, using my very own (at my own risk) unproven and barely tested "Green wave"  method I'm calling today's pullback  from 1231.04  the start of a 3rd wave that will drop to about 1165 before the next larger correction occurs. 

    That move if correct would stop just above the Nov 25 lows, which seems very plausible. 

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  173. Can't teach bots intuition

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  174. moody rating cut on belgium aa3->aa1

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  175. DR, if you look at the symmetry in the channels, i.e. see my previous charts; you'll notice no gain or losses between beginning of Dec 7 and end of Dec 13... (low of Dec 7 equals roughly top of Dec 13, right before FED's announcement). The step change came on Tuesday during the "FED sell-off"

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  176. Run for cover !  All they are known for is beer and waffles - aliens could abduct all of Belgium and it would have a scant global impact.  Someone needs to downgrade China !

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  177. dont forget about the chocolate! man if only the market fed off of estrogen

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  178. Yes.  I see the levels.   We seem to be really moving into a wedgee, but I'm still very hesitant to push a lot of chips on the table;
    (1)  I don't know how the wedgee will resolve
    and
    (2)  Bernanke has a lot more chips than I do.

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  179. But it is, in general, very good beer...

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  180. ANON20, for some reason you think investing is like gambling, put it all on red and let it ride.  You see, I have the option to wait and see how things work, to change my mind according to new information, and most importantly taking proper risk management actions.  The above question was a trick question, as the volatility from your all or nothing investments will always result in a 100% loss, mathematically.  You got lucky to get some of your capital back.  You now have to have the return of two perfectly respectable years, just to get back to even.  The risks you take will always lead you to bankruptcy.  You invest with emotion, without risk control.  That is almost always a great fade.

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  181. What really concerns me is the amount of shorts in the Euro. If the Euro rallies next week, we can see the bully come out to play. Especially since the RSI hasn't made a lower low and the MACD is showing a bullish divergence.

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  182. Done.  I'm eating a Belgian waffle and downgrading China as we speak...

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