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Wednesday, December 7, 2011

SPX and US Dollar Update: Clues in the Dollar?

This week, we've looked at about a dozen indicators which seem to be suggesting that the market is forming a top.  We've looked at divergence indicators, candlesticks, past market history, Elliott patterns, sentiment, and numerous other things.  I'm just about out of arguments at this point; the market either makes a top here, or it doesn't. 

Yesterday the market formed yet another potential reversal candlestick, this time in the form of a spinning top (long upper and lower wicks, small real body).  This was a white spinning top on SPX, which is not a terribly reliable reversal pattern, unlike several other patterns it formed this week which were "more" reliable, yet failed to work.  Maybe the less reliable pattern will emerge as a winner. 

The action Tuesday also formed an inside compression bar (all trading took place within the prior day's range).  This suggests that buyers will show up above Monday's prices, and sellers will show up below Monday's prices.

One short term pattern I feel I've finally potentially unlocked is that of the short-term dollar.  The long-term dollar count I believe I nailed some time ago, but I had been wrestling with the short-term count for about a week, and I feel I've finally got it pinned.  I believe the dollar recently completed wave (i) up of wave iii up (see long term projections).  The question in my mind is whether the wave (ii) correction in the dollar is over yet or not.  The pattern has fulfilled its minimum corrective requirement, and as such, could launch into a solid rally above the recent highs.  If this is wave (iii) up now unfolding in the dollar, we would expect to see a strong rally develop over the next week.  Obviously, any trade below the recent lows would indicate that wave (ii) is still unfolding.

Note that the dollar is sitting on potential channel support, and could start rallying as early as today:



The SPX is more of a mixed bag.  There are now at least five different ways to label the current structure, and all of them have different expected results.  We're simply going to have to wait for the market to clarify before any level of accurate short term projection will become possible.  I continue to believe the next move is down, the question is really "how far?"

One possibility to be aware of is that the market could be forming a smaller scale redux of the last rally, shown below:


While I continue to favor a bearish resolution over the medium and long term, the short term picture is quite hazy.  However, due to the large number of top indications, I continue to favor lower prices over the short term, as well. 

But as a result of the limited market movement of the prior five sessions, the bearish and bullish immediate potential resolutions are both still standing.

The bear count is shown below, and would have us in the process of a significant top:


The count above would probably need some fairly strong downside action sometime over the next few sessions to remain in contention.

The bullish short-term count is shown below.  Please note that B and C paths are simply hypothetical at this point.


With a little luck, maybe the dollar will give early indication of the market's near term intentions.  I'm seriously hoping that the market will do something today other than trade within the recent 25 point range, and will thus grant some clarity -- beyond "I think the next move is down" -- in the form of projections tomorrow.  Trade safe.

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

195 comments:

  1. These hours be killin' me.  :o

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  2. Thanks PL!  There's a lot of us out there who appreciate it.

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  3. Wait, no NDX chart?  Someone's going to be disappointed.....

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  4. yw, Bob.  I'm going to need to do better than 3-4 hours of sleep each night.  Two nights in a row I couldn't stay awake long enough to write the update.  That's the first time that's happened.  :(

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  5. Thanks to btb for his third donation to help support the community!  :)

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  6. Morning Pretz, apparently you didn't get enough rest.  Again.  Hmmmm.

    This is looking like a good day for sellers to trade intraday.  Very predictable and nice movement down so far.  Pauses at predictable junctures.  Let's hope this continues.  :)

    I suspect that 1,250 is now sellers to defend rather than fight for.  Apparently announcements / developments / whispers out of Europe were rather underwhelming and have not delivered on bull dreams of a money printing bonanza.  

    Europe may actually be taking the sane way out:  Cut spending, let prices fall, no magic pills.  One can only hope.

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  7. Dude... dying over here.  I need about 50 people working under me to do all this research each night.  Half the time, you guys don't even see it because it doesn't go anywhere -- for example, tonight I researched the history of the pattern of the last few days, which took forever, but uncovered nothing.  :(

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  8. Good stuff Pretz

    Prechter makes the headlines on Yahoo this AM - that's gotta boost the odds of the Bullish count ; )

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  9. Okay, I promised everyone the hidden message I found in the dollar chart.  Kinda funny really -- this is about as well formed as you can make these letters given what's possible with a linear price chart.  Secret message regarding the state of things, from those who know?

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  10. Lol.  Get some rest PL! 

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  11. That boosts odds of your mother having dropped you out from her rear end, and not usual front one.

    The significant part of your name, is LIL---for small turd, you were.  You still dark brown, perchance?

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  12. “Great minds discuss ideas; average
    minds discuss events; small minds discuss people.”
    Eleanor Roosevelt

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  13. It's all your fault Pretzel, I got cursed by EW... now I am fallen into this curse of counting waves forever more....  introducing a  new technique (a rather sophisticated one) into this juncture of the market is mental masturbation :-)  WTF :P

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  14. Good night dude!  You need to get a little shut eye :-)

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  15. Not going back to sleep for a bit now, lol.

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  16. Well, that wave was an impulse down.  Question is whether it was "c" of B of the bull count.  Bears don't want to see the price back above yesterday's high.

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  17. You could have over 50 people working for you, if you subscribed for 6 months, to EWI.
    You are so stupid, you are beyond stupid.  Prechter has created a machinery, for 36 years,
    that you, as a total rube in the woods, dismiss, as utterly inconsequential, in deep ignorance.
    Look, turd pretzelbrain, I do not work for rp, I shhtt on eveybody, including him.




    yet, you WASTE your ability, in NOT using him---even dismissing him.
    you act like a little fish, constantly in envy awe, of the big master killer fish.
    you remind me of the film 'Amadeus', where Mozart was so envied, he was hated.
    Prechter is a genius.  You are NOT, nor ever will be.   Grow balls, be a man, and accept it.

    Yet---you have enough talent, and work hard enough, to go STEAL from him, by subscribing.
    Trust me, little sad maui wannabe-genius BOY, you are not even remotely in the league, of EWI.

    Only reason I try to make you better, is because you are free, as I would never pay you, a penny.
    YOU ARE BLIND to so many DATA truths, 35%BULL, thus you bear-puhsee out easy, constantly.

    ---------

    So, if these hours be killin' you, then die, fraidy boobie maui, die.
    Your own BUBBLED 1250 bear target above, has already been taken out---downward.
    So get on express train down NOW, fraidy maui, or you'll miss BIG move once again, as usual---
     
     The Dax is already down 1.4%, they know better than any fraidy dummy amerikan, what's really up in the Eu.
    So---you know what's acoming  now, noncommitting, knee-knocking, you 35% BULL, fraidy boobie maui? 
    Slowly growing----acceleration.   AC-CE-LE-RA-TION.    Downnnnn n  n    n     n......   into human hell.
     
    As the saying goes: you can force a dumb, stupid mule to oasis water---yet you can't make the idiotic beast drink.
     
     

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  18. Anon20 seems to be unusually nice today!  What a pleasant change.

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  19. The Grinch's heart grows three sizes today thank to the growth hormones injected by PL.  Merry Christmas Everyone.

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  20. With the trend model BUY signal in effect, a long entry point for potential continuation of the rally will be when the RSI (14) goes below 30 on the 30-minute S&P500 chart.  Safer entry is when this dip occurs and then the RSI trades back above 30.  I do not use this in the model but as entry points for additional cash on hand or when I was too hesitant to have traded the initial signal.  Of course, this works on all such dips until the last one prior to a SELL signal.  See end of the week of 14-Nov as an example.

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  21. Okay, a moderator needs to get ahold of every one of Anon's posts from now on.  This made me laugh. Good stuff.  ;)

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  22. Bulls making a surge to play keepaway from 1,250.  Sellers sure haven't defended it well.  Or maybe they don't mind taking things back down from 1,255 again.  Some sort of retrace from the morning's rundown was to be expected, I suppose.

    I closed out my modest short position taken on the open on the push back across 1,250.  Will look to get back in when the buying surge seems a done deal.

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  23. And there you go. The bulls are back, buying the 'undervalued' equities. I think EOD we will see a big green candle. AGAIN.

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  24. This is pretty much the moment of truth for the counts here, I think.  Closed out my shorts too, for a decent profit.  Now it's watch and wait.

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  25. PL, do you think there may be some "big" announcement coming from Europe by the end of this week that could blow the bearish short term count off the board despite the great signs that a large correction is coming?  It seems like every time we are ready for the preferred count to come to fruition, some announcement comes from Europe saying the deficit has been taken care of, and that prosperity will rule for the next 100 years, thus messing up the preferred count.

    I know today Germany is at some disagreement with the European Union regarding the latest bailout proposals, but we all know that could turn on a dime.  You think there is any sign of another bailout announcement this week?

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  26. Yup.  Almost in the green already.  People who wouldn't purchase this morning at 1247 are just tripping over themselves to purchase at 1253.  Somebody must have pumped the futures again.

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  27. I think the price action over today/tomorrow will probably tell us if the bear count is off the board.  Gawd, I hope so anyway.  Tired of this no-man's land for the counts.

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  28. fwiw -- if this is the bear count unfolding, a retrace to 1255-1260 would be pretty normal here.

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  29. Does the structure of the retrace matter?  This looks kind of 'impulsive' to me (not sure the technical EW definition of that word).  We took back 1% in about an hour virtually straight up.  Didn't really look like a slow, meandering kind of retrace to my untrained eye.

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  30. As PL said earlier out of 100+ points upmove on the SPX since the last bottom, only 20 came from cash. So a lot of 'cash' is still 'in hand' to jack up anything to skynet.

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  31. It does -- but A and C waves in a correction are both impulsive waves.  That's why, when the larger count is this hazy, you can't really tell right away.  When the larger count clarifies, you have a better idea of what to expect at a given turn.  Right now, it's pretty much just waiting on the market to reveal its hand.

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  32. Cash "in hand" is a myth.  Let me dig up a prior post, brb.

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  33. That took forever to find.  Prolly woulda been easier to just re-type it:

    Regarding "cash on the sidelines" (since I've heard several readers mention it recently): This topic will become increasingly popular for under-educated analysts to talk and write about as the decline wears on. There is no such thing as "cash on the sidelines." Here's why:Let's imagine some fund manager is sitting on $200 million "cash on the sidelines." He decides to buy stocks with *every single cent* of that money. So is that money now "invested in the market"? Nope. Obviously, it went to the people he bought the stock *from* -- and now THEY have $200 million in "cash on the sidelines." There is always cash on the sidelines, and there always will be. It's a zero sum game.I heard this argument parrotted time and again by people *the whole way down* in 2008. It's a myth, and if you hear some analyst start talking about it, change the channel, 'cause they don't know enough to keep their jobs. You'd think they'd have figured it out after '08.You'll also hear about corporate cash "on the sidelines." However, if you look at corporate balance sheets, their total cash after liabilites is a *negative* number. Mish, (who is apparently a blog reader, btw, since he posted one of my charts and an article blurb yesterday at his site... which I thought was cool since I've been reading him for years), put together a great tool to understand this graphically:http://globaleconomicanalysis....

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  34. Fixed the link.

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  35. Wow, super slow today.  Must be a top.  ;)

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  36. For what it is worth: "
    S&P 500 May Bottom in 2012, Bartels Says: Technical Analysis"
    http://www.businessweek.com/news/2011-12-07/s-p-500-may-bottom-in-2012-bartels-says-technical-analysis.html

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  37. Remember Mish cash on the sideline comments but I believe that there has also been some investigation done on Minyanville as well.

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  38. Prolly.  It's an ongoing debate.  I'm always open to hearing other sides of pretty much any argument, if you have a link.

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  39. I doubt we'll end 2012 in the 1300-1350 range, unless my LT count is WAY off.  Gotta remember that the job of these people is to *sell* stocks.  You can't sell stocks by saying the market is likely to bottom in 2012 around 500, lol.

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  40. My point is that I also believe that 'cash on the sidelines' in general is a myth.  Maybe on the retail side to some extent but in the grand scheme of things no.

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  41. Oh, gotcha.  The "but" made me think you were taking the other side of the debate.  :)

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  42. Now I'm no Bull these days - but that chart of the S & P sure as hell looks like a cup and handle formation - not to spook the bears, of which I'm one - the more that handle keeps extending the more of a pop there may be - imho

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  43. I'm flat, so a rally here wouldn't bother me. 

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  44. feeling very bear-trapped this morning...

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  45. thanks PL, but still someone is still buying here or the sell orders are being removed. The market is apparently in not thinking of ANY correction at this level imho.

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  46. change 'this' to 'forever' ;|

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  47. Impressive run up by longs. Dow in green.  S&P just one point away now.

    Momentum is clearly on longs' side at this point in the session. I'm now assuming that there will be a test of 1,260 while we hover here at 1,258.  Certainly not willing to trade this market at the moment.

    A close above 1,260 today would  be a rather impressive comeback victory for bulls.  

    Though with the Europe news being underwhelming (so far), I cannot help but think that bulls still don't have a lot of confidence.  Unless there is some sort of announcement coming that makes the market believe that problems are solved.

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  48. About 67 pips up for the EUR/USD since the US exchanges opened.  From the looks of it though, it should turn back down very soon.  So I'm looking for the markets to drop some into the later hours, or at least flatten. 

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  49. Took a small short postion here.  Worth the risk of about 6 pts. :)

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  50. Dollar going down, down, down......Did Ben get ANOTHER helicopter?

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  51. UK: cameron- "will safeguard uk interests at eu treaty talks"--dj news wires.

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  52. Well that looks like the top of the Euro's rally for today's session. I'll dare say that the SPX topped at 1258 as well :  - ) 

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  53. also took a small position as well. this support line  keeps getting tested

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  54. Pretzel, general question: Can a corrective wave just be "one" 5-way move against the motive waves and be done?  As long as it doesn't violate the other EW rules? 

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  55. Pretty much all about yesterday's high and today's low right at this point. 

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  56. So corrective waves always A-B-C kind of patterns right?

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  57. Nope.  I used to know a link that described all the patterns... lemme see if I can find it for ya...

    Here, just glanced at it, but I think this covers most of 'em.

    http://www.thepatternsite.com/Elliott.html

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  58. I should write a thing, huh.  About the basics of Elliott Wave.  All I need to do is find a way to stretch time... 

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  59. LILJUDGE, I can't get my head around the fact that you're KB3.  I keep wondering, "What happened to KB3?"  Happened to stumble on a post where you mentioned it when I was digging up my "cash on the sidelines" myth argument.

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  60. Yes, I would pay for that type of info if that helps.  I have Prechter's book but I'm still lost in EW.  You can stretch time... time dilates as you near the speed of light.  You just need to find a way to move around near the speed of light and you'll have all the time in the world.

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  61. PL, if the DX breaks out here and into next week, are you targeting 84-85 per your previous posts?

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  62. It would help.

    But, yeah, regarding time -- I was thinking about ordering one of the Personal Home Singularities and having it installed in my backyard.  That should do the trick -- a little bending of the ol' space-time continuum.  Only problem is, after you order one, I hear they take forever to get here... (rimshot)

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  63. IF (ii) finished and it launches into (iii) from the 78 level, then 86 is fairly likely.  If (ii) is still unfolding, that would change.

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  64. Boy if DX jumped to 86 in the next week, that would imply a serious slide in SPX...

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  65. Covered at 1254 for 4 points.  Watching and waiting again.

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  66. Yeah you should write a page to cover the basics :-) for dummies like me

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  67. Short again @ 1254, lol... tight stop. ;)

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  68. And me. Great site, thanks

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  69. Many of us rookies would truely appreciate it....time beyond 24 -hr days permitting!

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  70. scalping to riches...

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  71. Just curious, what is you target for end of the current down move from ~ 1254, I'm gussing about 1248?

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  72. Stopped already for half a point loss. 

    Fred, was mainly just testing the water here, seeing if the market could get anything going on the downside.

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  73. Proof that the market is about to rally hard: http://finance.yahoo.com/blogs/breakout/negative-mood-driving-market-prechter-140200467.html

    This guy is only allowed on TV to get everybody bearish just before a huge move up. He is the prototypical contrarian indicator.

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  74. Congrats on being a 700 lb gorilla!

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  75. So, Rydex mutual funds allow you to trade at the close, but also at 10:45am.  I started watching for the "10:45 effect" to see if there was some advantage I could gain with Rydex rebalancing at 10:45, and often there is a reversal that starts at that time.  Could be selective perception, but there is some logic behind it.

    Similarly, I have often noticed a "3:15 effect" as well but I have no rationale.  Big moves or reversals often start around 3:15, much moreso than 10:45.  For this one, I don't have any insight, I have just noticed the time correlation.  Today was a prime example of a big "3:15 effect" movement.

    Anyone else ever notice the "3:15 effect" or have any rationale for it?

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  76. WTF!!!!!!!!!!!!!!!!!!!!!!!!

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  77. What's going on now?  Market up sharply the last ten minutes!  SPX blowing through 1260 with no resistence at all.

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  78. There it is.  We just broke yesterday's high and Monday'sfor that matter.

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  79. Looks like the "3:15 effect" kicking some a today.  We also got the 10:45 as well, banner day!  Except that I am 200% short.  :-(

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  80. Might be getting that October redux... though I put on some shorts at 1266, just in case it's an ABC off the low.  Stops were too close to pass it up.

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  81. Short too, @1265.6, with v tight stop.

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  82. ES HOD yesterday was 1268.

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  83. it's time to rally. the alt-bullish count is at play now imho.

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  84. Wow! Minutes after I posted the Prechter link the market shoots for the moon! I didn't think it would hit THAT fast! :)

    Glad I got out of shorts for a tiny profit this morning.

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  85. Germany pours cold water on EU summit hopes

    http://www.reuters.com/article/2011/12/07/us-eurozone-idUSTRE7B30AO20111207

    what am i missing??

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  86. G-20 is rumored to fund IMF to pay the Eropean bills!

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  87. Probably would take longer than a week or two.  But that's only assuming the correction has bottomed.

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  88. So most of the commodities are down, treasuries are up and the market shoots up. Strange me thinks.

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  89. Dollar's forming a triangle which implies a move up to @ 79.2

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  90. that was some super spike that fizzled at the end- 'don't fight the fed' seems to be ringing in my ears

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  91. Startin' to look like it was a short covering panic on the rumor.

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  92. Every time the EU pharts in "our general direction" we have to change our shorts.  Where's Monty Python when you need them?

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  93. Covered at 1261 for a quick 5 points.  May short again if ES takes out the 1258 swing high.

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  94. Great. My trading platform has gone screwy. It's showing me trades are open which I've closed, and phantom stops which are refusing to be cancelled. I don't actually know what my current position is! :(

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  95. Satisfied w/ my 23+ total points of ES profit today (counting the trades I closed this morning).  :) 

    Got some sell stop orders in, just in case... don't wanna miss it if it goes while I'm sleeping. 

    bbl

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  96. Oh, that sucks.

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  97. lol

    3:45 rumor comes out kills shorts, 3:58 romred denied after too late to take action

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  98. I got burned on that end of day run up. Went short at 1,255 thinking sellers would hold there no problem. And we were at the top of the channel that had formed, so I was expecting a downturn.

    To make matters worse I doubled down again at 1,260 thinking that would hold as well.  So it was also the biggest position I held all day.  

    I chose to jettison at the close rather than worry about what the overnight market might do.

    Turned a nice up day a modest down day.  My first in awhile.  And I was probably due for it. 

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  99. a little worried here that this market seems to be all about targeting shorts, rather than just moving like a normal market...

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  100. negotiation tactic....Germany did the same thing before the October summit and then at the last minute....bang, we had a deal and the market rallied to the moon. I get a strange feeling the same script is playing out again. I may have to just go to cash and watch all this bullshit playout from the sidelines.

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  101. Nice trading.  I didn't trade the end of the day well at all myself.  Will live to fight another day.  Which will  be tomorrow.

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  102. So it was an IMF rumor, huh?  That run up made no sense based on what the charts were showing me at the time. 

    Makes sense now.  And just forty minutes before the close.  Market manipulation at it's finest.  Very nice.

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  103. Can't say I blame you for not holding overnight, as that is often  my preference, but it appears we'll revisit 1255 and below tomorrow.  The Bear defense looks to be well established at the 200 dma - 1264 and even though we've  briefly traded above it the past 3 days, it has held the same way 1244 seems to be holding at the bottom.   

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  104. PL, help me understand.  You said that you made 23+ pts vs the ES, which I believe equates to
    about a 2% gain, right?  Is that what you are claiming for today's
    profits, 2% of your total position?  That is awesome, I just want to
    understand so I can play along with you at home.  Vicarious!



    Disclosure:  I am leveraged 2x, with half in RUT and half in SPX, so I broke even for the day.

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  105. Look at the outflows today, absolutely massive, perhaps confirming the top...

    http://online.wsj.com/mdc/public/page/2_3022-mfsctrscan-moneyflow.html

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  106. It was possibly a rash decision to sell, but didn't mind taking the loss if it means I'll sleep well tonight and not have to worry. 


    The net loss really wasn't that large and the combined gains of the last several days more than offsets it.

    Now that I know that the IMF rumor is completely bogus I wish I would have held though.  What a fucking joke.  Who reports an unsubstantiated rumor like that just 40 minutes before the fucking close???   I'm sure it was an accident, right?

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  107. A lot of bears capitulated today.  This has a lot of signs of a top psychologically.  I am betting on a top today, for at least a while.  Hope I do not regret this tomorrow morning.

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  108. PL  I noticed today that the DOW traded at a high today of 12267.06.  As I recall several weeks ago you said that range was capable of breaking the bear market and indicates a bull run up.  Is that still the case or am I thinking of charts that are now out of date.

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  109. I hope you're right. 

    Makes sense that the IMF rumor would be placed 40 minutes before the bell to clear out stops and produce a short covering panic.  And no one is given enough time to find out that it's a fake for the indexes to recover and run back down.  Total manipulation job that was.  And well played by whomever did it.

    And now that that's out of the way, the indexes can be run back down tomorrow.

    I have SPY puts and a position in a reverse 3X Bear ETF that's quite separate from my day trading activities.  Those are still firmly in place.   

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  110. The DOW (NDU) chart was November 6th and shows a KO of approximately 12280.

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  111. Would not be surprised to see even further upside and capitulation Thursday. Friday ... may be a super-compressed day. Watch out Monday. But... hehe ... it's anybody's guess. I noticed that we're in this tight horizontal band now. Anything in this band is just quantum fluctuation. I'm staying with my 100% triple leveraged short.

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  112. Personally, I am hoping for upside through the OpEx week, and then complete meltdown starting on Dec. 19th.  Just wondering what our friend Anon20 would think about such a scenario.....

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  113. Re market manipulation and the rumor.  Without knowing for certain I'll point the finger at the Guardian or one of those Brit rags.  There was a string of such rumors (usu abt Greece) that would break a few months ago, usually late in the day and would alter the market wildly for a short period.   
    I don't believe the have a market manipulation angle in this as the FTSE has since closed when they float their rumors.  They're just out for a lead. 

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  114. From what I've seen that joker post, the capacity to think was completely void. 

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  115. Not a money flow guy but the divergence is interesting

    http://stockcharts.com/freecharts/gallery.html?$SPX

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  116. the euro/usd is down .002 points and the stock market closed up?

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  117. I missed the afternoon session but it must have been pretty interesting.  Anyway, ES was bid up 16 points on the rumor/lie while most other asset classes (forex included) barely moved.  After the lie was denied, stocks barely sold off.  ZH has a good explanation of the day and equities vs. the CONTEXT global risk model:  http://www.zerohedge.com/news/equity-market-goes-winehouse

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  118. Thanks for posting that. Always good to read exactly how and why you got screwed. Still smarting from it, though it's good to have confirmed that it was something extremely abnormal. I haven't burned like that in weeks. Where we were at in the course of traveling down that channel at the time, that takeoff doesn't just happen. And 'normally' a double down trade on the a release from the BB's and a turn up in the Williams will get you back to even. No such luck this time.

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  119. PL, Do you think it is the downward force of the third wave that is blocking Santa from giving SPX new highs vis a vis the double zig zag? In your experience/research, are double zig zags more common in 2nd waves or 4th waves?

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  120. btb- re: my 23 pts of profit today.

    I don't always post all my trades in real-time, but this particular batch of trades I did -- so you can find all of them in the comments.  Here they are, going back to Sunday:

    (the first one was in reply to william saying he went short)

    PretzelLogic:

    Just joined you at 1263.12/05/2011 05:16 AM
    in reply to william

    PretzelLogic:

    0 Like Added ES shorts at 1266. 

    12/05/2011 08:02 AM So here, I was short from an average price of 1264.50I *had* been accumulating shorts, looking for a larger move, but it became apparent to me after last night that there were just too many possibilities now, as I wrote in the article.  Also in the article, I called attention to the red support line as being important (first chart).I don't like "short and hope" positions, so when the market moved down toward the red support line, I closed out those trades shown above, in two blocks.  I front-ran a little and closed half at 1246.50  (I almost never close *right on* support, too much chance of missing by a point or two and having to cover into a rising market) for an average profit of 18 points.  The other half I closed out when we moved back up through 1250 (at 1251.25) for an average profit of 13.25 points.  So those trades netted me an average of  15.63 points today.  I didn't specify those two exits here in real-time, but I did reply to Brian when he mentioned closing at 1250.  Sometimes when the market's moving fast, I'm too focussed -- or I don't have time -- to jump back and forth between screens.  I love you guys, but my income comes first.  :)The other three trades, I posted in real-time today, so I'm not going to cut and paste them (since they're listed on this same page), but here's the math:Shorted at 1258, covered at 1254 for 4 points.Shorted at 1254, covered at 1254.50 for (negative) a half point.Shorted at 1266, covered at 1261 for 5 points.So that added another 8 1/2 points to today's profit, for a total profit of 24.13 points ES today.  I guess it was actually 24+ points, but I did the math super quick right before going to sleep (plus you gotta deduct a few bucks for commissions) -- all there in black and white in my posts over the past couple days.  :)
    0 Like
    This is what I mean when I refer to being a "nimble" trader.  You have to know when it no longer looks likely that the market will do what you were hoping for when you took the position -- and find a way to capitalize anyway.  Those first two shorts were intended as more of a swing trade, but the situation seemed to be changing.  If you get good entries (i.e.- short near resistance), then you can take advantage of the situation as appropriate (i.e.- cover near support).  I did the same thing with the other trades today -- shorted near resistance, covered near suppport (except for my one loser, where I decided to try chasing a momentum trade). 

    Anyway, that's where the profit came from.  Also, w/ the leverage in ES, it works out to more than 2% -- had I been fully committed (which I wasn't) it would have been about 19%.  I was about one-third committed, so earned a little more than 6% today.  Beats workin' (like this isn't work, lol!).  Beats working for someone else, I should say.  Wait, I kinda work for you guys now... hmm.  Well, you know what I mean.  :D

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  121. Whenever I cut and paste w/ Disqus, it screws up the formatting.  There, I fixed it.

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  122. The bear KO resistance for DOW was12187 per PL a few days ago.

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  123. Double/triple zigzags serve the function of adding more price and time to a move, when the first correction wasn't "enough" for the market.  I've honestly never tried to break down whether doubles are more common in 2nd or 4th waves.  Off the top of my head, I would say 2nd waves.

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  124. I find that not holding overnight, over weekend, etc, does me no good as I just fret that I'm gonna miss a huge move. But now I have peace of mind. ... Zen.

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  125. It's the panicked shorts that cause ES to move so fast.  Shorts are their own worst enemy.

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  126. No, not capable of breaking the bear market -- KO lines just knockout a particular count, not the whole bear market.  Just one interpretation of it.  :)

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  127. btw, I had some orders fill while I slept and I'm short again, this time from 1265.5.  It's all about trading support/resistance in range bound markets -- at least until it's not.  :D

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  128. btb, You can only be nimble though if youve been classified as a pattern day trader though. Im sure that not all of your readers have more than 25k which makes this approach not feasible

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  129. Well, the other problem is (even with a margin account), how do you reuse your money if you have to wait for the transaction settlements? You do a few cycles in one day, and bingo, you're out of cash.

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  130. PL, found this on investorshub with the question: is this really a bear market?

    http://investorshub.advfn.com/boards/read_msg.aspx?message_id=67711339

    I am not advanced enough to answer that question based on the chart. 

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  131. Hmm, I guess that's a good point.

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  132. Dunno about this -- not an issue w/ my broker or account.  I can access the money for the next trade immediately. 

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  133. It's more of a rhetorical question he's asking.  Obviously, it's up to the individual to decide his or her own opinion.

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  134. The thing about all this, too, is you often see these stop runs/rumor mill crap when the market's about to make a solid move down.  That's more anecdotal than concrete, but I've seen it many times.  Clear out the shorts first, then let it drop.

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  135. Another old adage among traders:  "Think like a criminal."

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  136. When people ask me whether their discount broker is "ok" from a price perspective I ask them "how much is a trade that never executes"  .....I use BX/OX btw

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  137. Pretz, who do you trade through?

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  138. Primarily OptionsXpress.

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  139. These charts are a b*tch to decipher right now.  57 channels and there's nothin' on.

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  140. Just so you know our firm has a somewhat similar view in terms of recesion next year and we have moved our equity exposure to the lowest in the last ten years. Your technical analysis is impressive, would you ever want to work for a major firm?

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  141. I would probably consider it, depending on the details, of course.  :)

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  142. http://www.youtube.com/watch?v=YAlDbP4tdqc&ob=av2e

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  143. thanks, that's what I thought too!

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  144. I'll yell you what bothers me, out of all my clients none have disagreed with a potential implosion of the markets. As a contrarian this is concerning.

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  145. no doubt, the devil is in the details. How did you get so good at ew theory?

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  146. Yeah, I've had that thought too.  It seems like people are still quick on the trigger to sell -- as they were in 2010.  But then, if this is a continuation of the 2008 bear, as I believe it is, then maybe that's not so odd.  Think of the late 90's when everyone was bullish -- and all the contrarians kept saying, sheesh, this market can't keep going up.  But it did -- and for a lot longer than anyone expected.

    Who knows.  We're in uncharted generational waters here...

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  147. Don't really know how to answer that, I guess --  since I discovered it, I've always had a natural affinity for it.  Something about it resonates/"clicks" with me.  Beyond that, it's just been a lot of hard work more than anything.  I don't like using it in a vacuum, so I do a lot of cross-studies to determine what makes the most sense at the moment.

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  148. I've been waiting, because i do think that 2000 and 2007 were a ginormous double top, although technical analysis is not my expertise. Wine is;>

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  149. The market is still not showing its hand. But saw some interesting stuff today:

    (1) Divergence in VIX/SPX 
    (2) Money outflow was insane
    (3) 200 DMA intact
    (4) This one is far fetched as it is related to time and not prices but just throwing it out there: If wave 1 of 3 down was 20 trading days long (Oct 28 - Nov 25), then using Fibonacci numbers, 20 x 0.382 = 8 days. This implies that today was the end of wave 2 of 3 (Nov 28 - Dec 7 = 8 Trading days) and the top is in.

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  150. Couldn't tell you much about wine.  My extensive knowledge of wine can pretty much be summed up as such: there's different colors, and usually older is better.  :D

    "What do you take me for, an idiot?  I don't want this old wine!  Bring me some good NEW wine!"

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  151. Not like girls, in wine the older the better.

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  152. PL, could the Nov decline be a 3 wave down? I continue having a hard time seeing wave #4 of the supposedly 5. If it is 3 waves down, then that may mean we are in a bull-leg up?!

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  153. I used to have Interactive Brokers as brokers, and it's pretty much real-time with the settlements, but they screwed me over in other ways, so I'm stuck with another one with long settlements.  Maybe I should switch again.

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  154. Arnie, do you even read these updates?  :D

    That would be the alternate count I've been talking about forever.  :) 

    There are a lot of options right here -- there are even ways for the bull count to finish with a double-top at 1292.  Just a lot up in the air at the moment -- and no help from the range bound market for a week now.  :(

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  155. What gives????   MerKozy have not met yet and the futures are up????   Somebody jumped the gun.....they're gonna be in trouble....

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  156. Good observations HT.

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  157. dude, expat, tell me about it.
    I'm a very frustrated bear at the moment...

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  158. Maybe... maybe got this thing figured out ST.  Still working, but bears could get at least some ST relief here.

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  159. Again - Futures are ALWAYS UP - ALWAYS.  THere would need to be the threat of a giant asteroid falling to earth or another world war to get the futures down.  Since Bernake opened his Etrade account - he has been in there every night buying futures contracts to provide the illusion all is well.  

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  160. I could use a smidge of relief

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  161. Worth noting that bear frustration is at a high, but not at capitulation yet... Scalpers market with an upward bias for now, a big whoosh up would devastate bears...

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  162. I think the primary motive of EFSF is to buy EUR/USD and SPX futures as much as possible. I suspect aunt merkel and Sarcozy even to have an etrade account to buy dax/cac and stoxx50 futures. BUY! BUY! BUY! make a stampede. Why stop? when u can take the SPX to 1700. 

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  163. Also December triple witching starts today.. Any thoughts mighty pretzel?

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  164. What the hell was that?  There was a 26  +11 -15 point swing in the past 35 or so mins.  Dropping fast though

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  165. Unemployment claims were improved, but not as much as expected.

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  166. Cold water just got thrown on the ECB printing hopes that drove the entire rally. Watching the discussion on
    CNBC right now. Bears getting relief today.

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  167. Hmm?  I think its something else.  The market has become a bit more agnostic toward unemployment numbers of late. 

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  168. Yeah, had to be something EZ related.  Of course it didn't really do much except to move the ES from resistance to support.   Might be a day to long intraday. 

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  169. I don't know, but I'm pretty sure that this rally was very much driven by ECB / Fed printing and bond buying hopes.  That prospect going out the window should see many bulls getting out of Dodge. 

    Sellers will need to put max pressure on though.  I suspect they will today.  Best opportunity they have gotten since the big Fed / Central Bank announcement. 

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  170. Buyers pushing back strongly and trying to fill that gap.  Guess bulls won't be folding up and heading home today.

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  171. let's see. 'They' have 2 sessions before the D-day. Can 'they' score?

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  172. Beep, Beeep, Beeep, Beeep, Beep, Beeep, Beeep, Beeep

    Just in PL fell asleep at his puter again!  

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  173. LOL, that's SOP these days.  When the wife finds him she might just smack him awake.

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  174. watch the bear trap, this could be a pause that refreshes the rally...

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  175. Too many options right now--too easy to get whipsawed here.  Sitting and watching.

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  176. taking a little long 1248ish... we'll see if the bulls are setting up a rally or just messing with shorts all week...

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  177. Tough to tell what to do which is why I won't try and front run.  From a news standpoint, the Bulls haven't gotten anything they were hoping for, yet the market hasn't budged.  As soon as the ECB said no bond buying (which Germany has been saying all week) - the S & P should have dropped 100 points - really now they are looking at a recession, bank problems and a slow slog

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  178. Spiker:  That she did.  Good lord, I can't believe I didn't wake up again.  I think I might post the charts I drew real quick and we can continue there.

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  179. VIX was briefly over 30

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  180. Okay, posted the charts and a short update.  This morning's action looks like the interpretation I charted last night may be correct.  Let's continue discussion over there.

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  181. As mentioned on Tuesday, the oils (a late sequence group)  as represented USO, had some lift into Wednesday.
    Wednesday's TD sequential sell on USO is being felt throughout the market today.
    Breadth data suggests that today is simply a sign of weakness, leaving one more rally to go.....twt.

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  182. Hi, you should join us on the new thread.  :)

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  183. I've decided to reveal my identity - replacing Vulture711 - Bulls Beware because money never sleeps

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  184. haha .. very cool :-)

    And may the Force be with you.

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