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Monday, December 12, 2011

SPX Update: All Targets Hit -- Now What?

Yesterday was about as good a day as one can have in the "market projection" business.  Not only did my prediction for a new low below 1231 come to fruition, but the S&P 500 (SPX) even tagged the upper end of my target zone at 1227.  Additionally, the Euro hit the 1.309-1.322 target I published over a week ago, reaching a low of 1.316.  Now it gets a bit tricky again.

Those of you who've been following along know that there are two main counts still on the table.  The first is the immediately bearish count which maintains that the S&P 500's high of 1292 was a major top which will not be bested for a long time.  The second is a count with some short-term bullish potential, which believes that there is one more marginal new high still waiting out there in the not-too-distant future.  Yesterday did nothing to eliminate either count -- and, even worse (at least, for those of us who have to come up with something interesting to share with everybody each day), it made the short term outlook a bit hazy as well.  This is one of those times that another day or two of market action would be very helpful for clearing up the picture. 

So today's article is going to depart a bit from "the beaten market path" and instead focus on something completely different.  Instead of talking about trading, today we'll be discussing the virtues of using bright paint colors to liven up your living spaces!  Of course I'm kidding! 

Actually, let's take a minute and talk about QE3-- since once again all eyes are on the Fed meeting, and everyone (including Martha Stewart) is talking about QE3 again.

The last two times this came up, I opined that there would be no QE3.  I remain of this view for several reasons, most of which I've outlined previously, including this one:  In 2010, when the Fed announced QE2, they demonstrated that they have a pain threshold relative to the stock market -- and they showed us right where that level is. The Fed's pain threshold equates to the SPX 1000 mark, give or take fifty cents.

Additionally, due to political reasons, the Fed is not really able to be proactive; so it is reactionary instead -- and there simply is no clearly-defined crisis to react to at the present moment, at least not in the mind of the average American.  Beyond that, they've been able to accomplish their agenda by employing Virtual QE3, which is where the Fed governors run around talking about how QE3 is ready and waiting and, by golly, the greatest thing to happen in America since Ben Franklin invented fire.  (What do you mean, America didn't invent fire? Whatever.)  So far, this QE3 "dirty talk" has been enough to keep the bulls excited about the market.  So again, I would be shocked if they decided to launch it now.

Alright, on to the charts.  The first chart I'm presenting shows the bullish alternate count.  I'm showing this one first because it portrays a bigger picture look at the market and highlights some support/resistance zones.  Plus it's been a series of dead-on hits since November 20... so it continues to bear watching.


Even though the target zone (for both counts, actually) was hit on Monday, I am favoring some further new lows over the coming sessions.  But it's another challenging call here.  I'm using the wave structure which seems to be present in the E-mini futures (Symbol: ES) to make this call, since Monday was another big gap down and reveals nothing.  I dislike applying Elliott Wave to the futures markets, because the extreme leverage in futures tends to distort the charts.  

Let's zoom in to the one-minute chart, below.  It's possible that Monday's low was simply the third wave of a five wave structure, which would target 1220-1223 for the next bounce.  There are two other possibilities, though:

1)  Monday's low was the end of another first wave down and the rally into the end of day is part of a second wave.  This would target the 1190 area next.  If the move starts to accelerate after a break of Monday's low, look for this possibility to be unfolding.

2)  Monday's low was the bottom of the B wave of the alternate count (I give this low odds; I don't think Monday's low holds).

Too deep a retracement rally (above 1246 or so) would rule out the fourth wave, and narrow it down to the two options above.


It does appear that some more upside is needed to complete the current retracement rally.  The two areas to watch for clues that new lows are unlikely would be the down-sloping trendline on the first chart (in red) and the recent high of 1258.21.  If the trendline is broken, that would be the first clue of underlying strength, and if the 1258.21 high is broken, that would tend to favor the bullish alternate count and new highs.

Another reason I favor more downside in the coming sessions is that the Volatility Index (VIX), which generally trades inversely to the SPX, also traded down on Monday.  Over the past four years, this type of action has led to new lows (not necessarily immediately, but at some point in the coming few sessions) more than 70% of the time.  It also tends to presage a big move down, typically in the range of 2-3%.  This might argue for option 1 listed above: the 1-2 count.

Something else that bears mention is the fact that the market is still trading in a large range, the bottom of which is 1115.  The market has now run through practically every penny of this range at least ten times since August, and that type of trading tends to weaken support and resistance zones, which can lead to a phenomenon known as "range racing."

In conclusion, I remain very bearish over the long and medium term, and at present, I am still short-term bearish as well.  Fed meeting days can be quite volatile (as opposed to the mild volatility we've seen in the recent past -- ha ha), so expect some possible whipsaws.  Also, I would strongly suggest you consider repainting your living room.  Trade safe.

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

206 comments:

  1. Morning, everyone.  :)

    I'm very tired.  Got up yesterday after 3 hours of sleep because I made the mistake of checking my e-mail, and it woke me up completely.  :(

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  2. If anyone really wants to look at the intra-day chart of SSEC, here is the link
    http://finance.sina.com.cn/realstock/company/sh000001/nc.shtml

    It is in Chinese though (Simplified Chinese).  You can find 5 minutes, 15 minutes, 30 minutes, 60 minutes, daily, weekly and monthly options.  If you kick the menu options of the chart that end with K, it will give you candlesticks instead of the line chart.  So, it is always good to learn more than one language.

    Hope it helps.

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  3. Very cool, thanks for the link. 

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  4. Good morning Pretzel. Nice call yday. Quick question, your preferred count has minor 2 completing at 1292? If so, then we are currently experiencing nested 1,2 of 1 of 3 of minor 3? I've lost count a little. Symmetry would have a S&P downgrade of France start the waterfall since it was the downgrade of US that started it in summer.

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  5. Hi PL, I have statistical counts based on oscillators instread of indexes. These counts are decreasing since may 2010 and each time they stopo decreasing somthing wrong  happens. The market goes down ald the counts rrestart to decrease

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  6. If you base the counts on indexes you have to deal with a lot of volatility. When you base the counts on oscillatros you have a varince between 0 and 100, then you cab work with statistical counts. You get also the mirrors where the market bounce, for instant

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  7. My counts are aligned to the second chart

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  8. Is it me or is the China stock market down EVERY single day ?  Much like futures are up every day in the US ???

    Bizarro

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  9. Best Buy misses earnings - and futures are up !!!  There has been a warning from all the major food groups - retail, Intel in tech, Dupont and futures are up !!  Hold on - retail sales lower than expected - and futures are up !!   Does this constant theme amaze anyone but me ??

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  10. Re: previous thread - I was trading Dec contract at the time (late last night EST).  Earlier in the day I mentioned esh12, but my order didn't fill on that one.

    I had a buy stop just under under my sell-in price and a profit-taking buy-limit set around 1227.  Needless to say, we only got down to 1234-ish before reversing hard and getting stopped out.

    Reassessing now.  Might try to short 1245 with a stop at 1250, but will probably wait for the first 10-15 minutes of the cash market.  Don't want to step in front of a freight train headed for 1292.

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  11. I'm with you.  Just about every 'up' day since mid-to-late October has amazed me.  And yes, China has been trading miserably for a long time, and the past couple months while we've been rallying, the difference has been quite stark.

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  12. The VIX did indeed trade down Monday, on a negative market day...which is not generally the case.
    However,  I'd like to see it exceed its Bollinger Band before giving it more import.

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  13. PL  Great analysis yesterday.  My trading is much better since finding your site, you are doing great work for all of your fans out here.

    Just want to say your advise is solid.  Decided to cash out my leveraged ETF's yesterday and wait for a new high to reenter the market.  As was said on the blog yesterday, you never go poor taking a profit. Keep up the good work.

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  14. looking toppy here?

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  15. It does not amaze ME at all. 
     
    For I have already said it repeatedly, and will say it again--- middle class 21st century amerikans believe in irish fairies and gremlins, that come out of the sky, and take care of them, because they arrr theee 'speciall' peeeple.   Modernday amerikans are the most gullible people now on earth, even more gullible than the 30's hitler youth, believe it or not. 
     
     Once market crashes for real and bankruns take over, I predict occupywallstreet movement will be the new french guillotine 'kill the rich' revolution, ala bastille 1789, and whomever ends up heading ows worldwide, will be the mythical 'antichrist' (I am an rockhard atheist since birth, but I like interesting futurist predictions, and the concept of the 'antichrist' has come up, in more than the utterly fictional bible,  in nostradamus, rosicrucians, etc).
     
    And today's typical amerikans will take it up the azz, as g. carlin said in his youtube video I provided yesterday, all the way to the end, because of the idiotic 'amerikan dream'---believing themselves more important than others, even though comparative test scores, for DECADES, have proven than the typical amerikan child mind has been turned into MUSH, and they could NOT compete worlwide with most other modern nation, if it wasn't for 2 things---they shoved the dollar as reserve currency to the entire world, instead of gold, since 1944. 

    And the other is that amerikan ubermen (not you all, you are just the upper middle class amerikan bleeding heart punks), the 10% amerikans that truly run the system ruthlessly, are the very best liars in the world.  And until those 2 myths are imploded completely, by the soon forthcoming world debt massive crash, every village idiot middle class amerikan will continue to buy buy buy, believin in some mythical 'recovery', that's just reserved for good 'amerikans', because you all are all so 'special.'  

    As such, you'll get EXACTLY what you deserve, as a nation.  Of this, I have zero doubt.  And I can't wait.

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  16. RockyToppy - there isn't anywhere for the market to go pre-fed announcement.  It's either going to crap out at 2:15 or rush up....until then traders are trying to suck in the guppies

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  17. Found an interesting tidbit and am going to link to it, hope this is okay Pretzel.  I'm not affiliated with this in any way nor am I receiving compensation.  :)  Anyway, the gist of it is, when we have days like yesterday where the s&p is down a bunch while the vix is also, the next two days almost always see losses, then the subsequent days always (100% of small sample size) see gains.  Past performance......etc etc etc.

    http://sentimentrader.com/blog/archives/82 

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  18. Yes, American children are getting dumber by the decades because the pussy liberals started that crap with even if you lose - you're a winner !! and stopped giving grades and giving ice cream for last place to preserve self esteem.  I bitched out my money manager and his hedge fund for reporting a loss but saying it was less of a loss than the S & P ?  Really - a loss is a loss.  It's not a win to be less of a loser - you're still a loser - Moron

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  19. 1022am et

    Pretzel Head (Eraser Head?), I strongly opine this stockmarket babyrally right now, is about to turn down fast.

    Why. 

    One MAJOR indicator has broken down completely.  The price of Gold.  Gold has taken out MAJOR support in the 1670's area, and is now struggling to get above $1685 area, as to remain with some validity.

    I opine strongly it will NOT achieve it.  Gold will continue it's slide down sometime today, pulling with in the spx down hard, and weaker silver too, obviously.

    I predict gold will be at least in low $1600's by the end of of this week.  And the spx MINIMUM at the bottom of your range, around 1200.

    Spx and gold have been riding together, more or less, for about 10 years, as both are solely a product of easy credit and liquidity.

    And gold now has spoken, for the 3 (spx and silver also)---in the very shortterm (this week) the way is down, for all 3.

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  20. VIX hasn't been this low since early August

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  21. PL ... One thing you do very right is the simple conclusions, e.g. "I remain IT & LT bearish; still ST as well". I often can't get to your blog till after the market open and without time to read the details and study at the charts.

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  22. Short positions taken this morning are looking great.  I shorted a little around 1246, was going to short more at 1250 ish but never reached it.

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  23. Good Morning all, checking in.

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  24. hmm...B wave? start of 5 wave?...oh market, you tricky bitch.

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  25. Good morning Pretzel,  what's been happening to the Euro?  My God it's getting toasted.

    Can I still bet with Euro chips in Monte Carlo next year?

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  26. Lifted from Telegraph:
    "If anyone thinks things are getting better then they simply don't understand how severe the problems are. I think a major bank could fail within weeks," said one London-based executive at a major global bank.
    Many banks, including some French, Italian and Spanish lenders, have already run out of many of the acceptable forms of collateral such as US Treasuries and other liquid securities used to finance short-term loans and have been forced to resort to lending out their gold reserves to maintain access to dollar funding.
    http://www.telegraph.co.uk/finance/financialcrisis/8947470/Eurozone-banking-system-on-the-edge-of-collapse.html"
     Current gold price is well above its 200dma and If the last sentence above is true, gold should decouple from SPX and be breaking upside soon imo.

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  27. What you mean bank doesn't have any intellectual properties thay can collateralize?  Like HFT algorithms?

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  28. Any opinions/thoughts as to why the VIX is so low given the Euro is crashing?  Calm before the storm (waterfall)?  Just seems so odd?  Also, once agqain MAJOR KUDOS to PL for really just nailing his analysis!

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  29. looked impulsive to me so that would be a wave 5 down and not a B, right?

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  30. In NDX driving ??the collapse! Noy just now as we will have Christmas Rally and in January Montecarlo rally

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  31. Was just about to say that.  Nasdaq rolled over ahead of the Dow and S&P, also isn't buying this latest minor move up.  Very weak indeed.

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  32. The NDX is rolling down to 2276 today. I don't see Santa propping this up above 2343 in the beginning of a wave 3 impulse down. Maybe the VXN elves say something different.

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  33. Morning all.  Just waking up and checking into today's action.   Went to the Monday night game last night (I live in Seattle) and was out with the boys past my bedtime.

    Looks like we have another fakeout move up (again).  Would have loved to have shorted at 1,250 had I been up. 

    I'd expect that we'll spend the rest of the day riding this range.  Bulls have done what they needed to with running it up to 1,250 and thus thwarting the start of a major decline.  Bears did what they needed to do by stopping the advance and taking us back to 1,240.  Very impressive push back by sellers at that.

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  34. Cue the Village Idiot Chaz in 3......2......1.....!
    Although I regret having to take up precious blawg space to respond to your psychobabble, and I apologize to the rest of you here in advance for my own rant here, but I feel inclined, in some demented way, to repost my response to your post yesterday regarding the 90% American sheeple - so here it is again:
    Kbiii says...
    And yet again ANON20, the poster child for the detrimental effects of an interventionist U.S. foreign policy survives another day on this alien, petri dish planet to regurgitate more BLAH from the depths of Dante’s Inferno.Actually, your 90% figure is way off, it’s more like 99.5% (that’s 995 out of 1,000 in case the decimal place throws you off). And if you haven’t noticed by now, many of those 5 out of 1,000 contribute here regularly. So while I thoroughly enjoy your "stating the obvious, we also get it fool" rants, look in the mirror, because you too are a suckling, little pig on the tit of the same system you rail against. So while you A20, continue to suckle on every downward move of the market, in the hopes of one day having enough money to leave Mommy’s basement, in the ruins of a former US airstrip, and move to a developed country- I will roam like a wild boar in the great South of the U.S. loaded with my army of cloned children, gold, guns, ammo, property, oil, John Deere tractors and hell maybe even some USD (although Confederate $ is my fiat currency of choice). And when you A20 have sold the last piece of your grandmother’s costume jewelry, and when the government of your country can no longer afford to provide free-internet for you to post here from your pin-up, KY infested bathroom, because the US cut-off foreign aid - that’s when I shall emerge from the swamps of the depths of Redneckdom to feast on suckling pig and thank God for all the wonderful blessings of a bountiful harvest!So from henceforth this day, you shall no longer be A20, but Chaz!"Hey MA - the meatloaf - NOW!!!!"
    http://www.youtube.com/watch?v...http://www.youtube.com/watch?v...

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  35. If EU banks have to use gold as collateral, should that be bearish for gold instead, because this is almost like 'selling' their gold?

    Also, I just read somewhere that, even though it's unusual, the demand for gold in India has been slowing down.

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  36. Pretty slow around here... I assume there are a lot of living rooms getting painted while waiting for Ben... Hopefull PL didn't fall asleep on his paint brush! That stuff can be hard to get out of your hair... although the kids will get a good giggle from dad  when they get home!

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  37. no joke, painting the living room. took the 1250 short an covered, waiting for honest uncle ben to make his play before getting back in.

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  38. Slow day.  Anybody want to share plans for positioning ahead of the Fed?  I'm short IT holdings as well as the ES from 1246 for a trade.  Will keep a tight stop on that in case we jump 20 points at 2:15.

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  39. Agreed that there will be no meaningful moves until Ben tells us what he's thinking. 

    I would think that neither buyers nor sellers will be willing to waste major resources on a move right now if the Fed moves against them and it's all just going to be reversed anyway.

    I think it's going to be more of the same:  we see softness (thus preserving the possibility / hope / argument that he can break out the printing press again).  But there will be no meaningful change in policy, thus trying to project that overall things are fine.

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  40. Yes in the shrt term. But at the same time it is saying gold and $ are the only acceptable currencies, we $ is only perceived so relative to Euro, and it is a matter of time when everyone would realize that the $ is strong/weak as our printing machines, and gold become the implicit  reserve.

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  41. You have serious psych problems, kb worm 3, do you twitch at night, rambling in your stinking swamp bed?.  Tell ME, gumless spastic, did a mexican migrant worker fuck you up your ass as a child, repeatedly, with all his spic buddies, back in a luuuiiisiana swamp?

    but do keep up your reposts, they are fun to read, what a 3-tooth bible-thumping luuuuiisiana ignorant grass-eating cracker 'thunks', for it's better than most of the mealy-mouth entitled pampered punks herein gently write, every sucking pretzelheads ass.  But yes, I do live in an old usa abandoned airstrip, where indian folk still wear loincloth, to cover their unwashed privates.... with MY mama, o course, dishin out to ME, MY pig bittles, that is, when I aint porking her hard....hahahahha.   I kill MYSELF.  laughing.  redneck mental retard azzhole, do keep on sharin, you hear, dickless redface boy?  You see, bastard squealing bucktooth ignorant stepchild, YOU REPRESENT AMERIKA, AT IT'S FINEST.  YOU ARE AMERIKA'S BEST.  What does that say, bumpkus stinking luuuuiisiana jackass?

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  42. went long vix today - was down 9% at the open - makes no sense.. if anything is for sure - volatility will be higher 1-2 months from now. MUCH HIGHER

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  43. Clean up in aisle A20........

    Ridiculous insults  and other mean-spirited drivel with no subtle reasoning behind them - yup, you're like Don Rickles, sans the humor.  George Carlin?  Not even close.

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  44. yes, you are a great winner.  you are such a winner, that you use the alias of a fictional character.  And the stolen pic, too.  You remind of that character in a deniro film, that kidnaps jerry lewis.  You even attempt to mimic gekko speech.  I wonder if you do it in the mirror also, like deniro in taxi driver. 

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  45. smart, you'll probably kill with it.

    terrible name though---toiddy pots  r us.

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  46. fuck the fed. the fed is dead.  just like zed.
    dont you read even your messiah leader pretzelhead?
    1000 spx points, give or take 50 cents, is the fed's goose point.
    so come on, be a good little follower, and trust your self-proclaimed leader.

    btw, did any of you notice, your self-deluded messiahnic ew leader, now calling himself above:
    'Minyanville's most popular author/analyst' ?  Hahahaha.  This maui dude cracks ME up more, each day.

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  47. Do not put money on a spx gold decouple, or you will lose your shirt.

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  48. This market is fascinating.  It goes beyond any complacency.  It goes into utter madness, how anyone, can buy here.  This is why it is the end of GSC 5, 300 years of amerikan hisss-tory. 

    Because you need this kind of aggressive assuredness, that all is well and forever will be well, to buy buy buy, as your fellow amerikan brethren do.

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  49. you are wising up, rickles clone.  I already said, spx zed is dead.  Gold breakdown has assured it.

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  50. linear thinking---you'll be crushed by it.
    printing machine theory, is a hoax for sucker fools. 
    Zero chance printing will ever catch up to the debt.  Zero.

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  51. Wising up?  I've been short for months on end now, shorting rips and covering dips, and I've been laying out trades on this forum for a while, unlike yourself, so keep your smug, self-satisfied BS to yourself.  If anybody followed your crap advice they'd be broke.  Sadly, in reality you likely don't even have your weekly allowance from your parents invested in this market, Don.

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  52. Bernanke beats his wifeDecember 13, 2011 at 8:37 AM

    Dude apparently there ALWAYS is some "pending" news that market is "waiting" for. If its not a EU tready meeting, then its yet another Fed meeting...or perhaps "at the end of earnings season"...or maybe when the Euro breaks 1.30...or maybe the market is merely "waiting" for me to finish my model airplane....then maybe it will actually represent reality.

    yea right...this market is being manipulated upwards/sideways. This "trend" will continue until "the powers that be" run out of money or desire to continue the charade. The Fed meeting is just the newest shiny distraction.

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  53. new to board been following couple months trying to ejumicate oneself, learning alot from everyone especially PL, went in on sds dec 21 puts figured spx 1215 is in the money, do you guys think we'll get there by friday, looking forward to sharing good fortune with PL by way of donation :)

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  54. We've now blown through the Nov lows in Eur and SPX is 90 points higher...I am adding to IT shorts here.  I believe the disconnect is in US equities, not EUR.  When Fed announces 'we remain vigilant' and nothing else, I think this market may sell off and I'm travelling all day tomorrow.

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  55. In 15 minutes we may have the answer.  In case we jump 20 points after the fed decision is released, I have tight stops on shorts.  I will be looking to short from higher levels if we do rally.  PL has some good levels - the 1250ish trendline, 1257, and the 200 day sma at 1263ish now.  If we blow past that then most are looking at the 1277, 1285, and 1292 next I would think.

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  56. LOL - Today is Uncle Ben's Birthday....

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  57. Eur just got rejected at stab at 1.31, I shorted more ESH at 1238.75.

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  58. Eur just dropped 30 pips in 10 mins and we're still up.  I think we go down on Fed announcement unless Ben commits to 1.2 trillion in new QE right now (2x QE2).  All other 'good news' in the announcement is already priced in and reason we are not down hard right now along with EUR, IMO.

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  59. Thanks Potus, I'm learning around here and this looks very attractive.  What would the VIX price do if the S&P goes up following todays announce?   Any volitile changes up or down equal increased price?

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  60. No QE.  Evans dissented again.  Selling off, but very tepid.  I'm watching to see if we turn around and rally just to screw everyone.

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  61. Bernanke is playing his cards well...the 'threat' of QE is what is supporting this market.

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  62. euro at 30?? how is the market not imploding here...

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  63. atleast i'm short the right stocks now....market is up, but I'm short and up big today.
    AMZN, CRM, WYNN, LULU, BIDU, BTU, FCX, DB...good day so far. Just added some PCLN, OXY, VXX, TZA, SQQQ
    diversified short baby!

    Now observe as I get my face ripped off.

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  64. VIX is still down...

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  65. all sds at this point, scaled in and holding tight for the nonsense moves that are coming

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  66. also, the r2k is still up

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  67. There goes 1.3050 decisively, wave 3 could be starting in eur, should be playing soon at a theatre near you...

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  68. LMAO! eur/usd-1.30303, wait there may be another coordinated CB action tomorrow, why sell spx now! everthing's just fine 

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  69. come on, take out yesterday's low! I want 1200!!!!!

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  70. here comes plunge protection...

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  71. that felt a little too panicky....maybe the end of a C leg...now the rally past the 200dma?

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  72. Patience young suckling, patience - if you gorge too soon before the February feast, you will be devoured before Christmas - slow and steady, slow and steady.

    "You fly back to school now, little Starling. Fly, fly, fly. Fly, fly, fly" - the lambs have only just begun to whimper.

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  73. Maybe.  These moves notoriously reverse.  I covered my ES short for a small profit (11 pts).  Letting my tna short ride though just in case, with mostly cash.

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  74. any price move higher by SPX will push vix lower... however, i think the downside to vix is 3-4 points from here and the upside is 20 pts - so I like the 5 or 6:1 i'm getting.

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  75. You are a bigger fucking idiot every day, and a lying piece of garbage, on top of it all.
    Yesterday, birdbrain, you were going to long at 1225, or dont you recall, turdhead.
    I steered you away, told you it was suicide, subhuman ungrateful amerikan trash;
    but this is exactly the way all you skum are, a total shithole nation of parasites.

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  76. What is most incredible of all, is that the DJI is still above 12,000, despite all world events.
    Believe ME, turds, I know more than you all, put together, and that includes your messiah pl.

    There will be a one-day 'haircut', very soon.  And it will not be greek.  It will be wholly amerikan.

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  77. nah.  summit and fed are behind us...

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  78. Ah Ben, you didn't give the finger to do Bears on your birthday today, which is one of your fave things to do with a shitty economy and dollar that you are trying to wrech.  What gives, man.  You must be saving up for a delayed birthday present to be announced soon.  Ha, ha.

    Actually today's announcement was exactly as expected.  No changes, keeping QE options open.  And the market's reaction was completely predictable as well:  all the props of Euro 'solutions' and Ben QE saving the day are now blown out. 

    Other than the Santa / year end hopium, this market really has nothing left holding it up. 

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  79. covered 70%, left a runner for the overnight, average down if im wrong

    IM BACK BABY!

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  80. concur...and because everyone is convinced of santa rally, they are already positioned for it. I think it doesn't happen this year. I think we are in 3 now.

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  81. btu has been taken to the woodshed lately....glad to see that bitch burning, it and Jim Cramer's bull call on the coal market after april screwed me out of a lot of money.

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  82. Time for a moratorium on A320 replies.

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  83. about to tag pretzel's wave 5 target zone....decision time

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  84. 1200 at least, though overnight or tomorrow

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  85. Yeah, wished I had waited on my ES trade.  Thinking about covering some tna shorts as well here and reassessing.

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  86. I'm coming for you next.

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  87. all out- looking for a short buster end of day rally!

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  88. this thing looks impulsive as hell though
    did a small amount of covering with you though
    letting the vast majority ride

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  89. kicking in now- that last wave down was a little holiday gift

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  90. nice channel surfing : http://4.bp.blogspot.com/-xb5ijwx2P9M/Tud4bZ2FfmI/AAAAAAAABF0/IDDXkYfM2O8/s1600/channel.PNG

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  91. EUR sure looks impulsive, I'm looking for 1190 next.

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  92. IMHO, PL's "1)  Monday's low was the end of another first wave down and the rally into the end of day is part of a second wave.  This would target the 1190 area next.  If the move starts to accelerate after a break of Monday's low, look for this possibility to be unfolding." 

    This seems to be correct IMHO. Why? wave 2 on his chart hit exactly 1250, where PL placed his "or 2?" mark. (which is also the upper channel band for today in the graph shown in the link I posted just before)

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  93. You actually still traded on Jim Cramer advice in 2011???????? Where have you been since 1999? lol

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  94. anon, sometimes u r funny, but stop calling everybody else here names. I don't see what the point of that is. Nobody cares. OK!

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  95. today the market's real face was shown: week to it's core. No money printing and it looses 25-30

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  96. Thanks for posting that, ss.  I was just about to look at how the channel scenario is playing out.  Rather perfectly it seems. 

    Last time we had a clear downward channel it was much narrower in range and we hit 1,158 before the coordinated move pulled us back from the brink. 

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  97. I had a good day on the downday on the JSE. Got screwed a bit by the strong NYSE opening, but still did very well on my mostlt short portfolio. My one long stock ros nicely and only my short - gold stock (AU) - ended higher. Anyway went out with the wife tonight, markets up etc.

    Came back and boy oh bow what a turnaround... thought I might still have gotten a chance to short the S&P, but too late for now... And I noticesometing else on Bloomberg: "BREAKING

    Gold down 2% in electronic trading, at
    $1,629.70"

    So that's it for AU being up in SA, I see it is down 3.3% in the US tonight, so I expect a gap down tomorrow morning. Bring it on Bully!

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  98. Not sure if any of you follow the chart pattern trader...but I believe we just initiated the extreme point rule which signals more selling ahead. Bearish ADX crossover with a confirming close below that day's low. And the MACD momentum shift lower was also confirmed with the close below 1227. Ron is going to be screaming sell tonight I believe.

    I wonder what odds Pretzel places on the santa rally after this close. Probably doesn't alter his view significantly.
    Honestly, I'm still short, positioned as though we are in wave 3 lower. Hopefully I don't get kicked in the face and this turn out to be the end of corrective wave C down setting up for the final C push higher on the santa rally. I wonder if Pretzel will identify any new KO levels after this move.

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  99. Which (if I am looking at it right) would mean that we are now in three of three down?? 

    This is more of a question for the experts than a statement of opinion.

    My quick amateur lookover being:  The move from 1,250 to 1,238 being wave one (of three).  From 1,238 to 1,245 being wave two.  And from 1,245 to where the market closed being somehere at the top of three.

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  100. Yep.  A fakeout and sucker's rally the whole way.  And predicated the entire time on outside help and intervention.  Hence no real buying other than to hold ranges or keep sellers at bay.

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  101. IMHO yes, this should be wave 3 down, if i am interpretting PL's 2nd chart correct and since he wrote "Too deep a retracement rally (above 1246 or so) would rule out the fourth wave, and narrow it down to the two options above." we got to 1250, exactly where he placed his "or 2?" remark. 

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  102. And suddenly the Daily Chart looks like it has one hell of a lot of air under it, right?  We are still a relative high point compared to the August through October range. 

    I wasn't shorting the market at the time, but I was going long at 1,150 and selling as soon as we crossed 1,200 like clockwork.  It was too easy. 

    And it made buying in big on the October 4th low a no brainer and easy call (though it would have been nice to have Pretz counts available; I just hadn't discovered him yet).

    The reason I bring it up: I would have seen where we sit today at 1,225 as extremely overbought and equities have no place to go but down.  Which is exactly what I think now.   

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  103. PL, Is the current downward trend running out of time based on similarity? Any thoughts from the board?

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  104. Exactly what I am seeing as well.  Thanks for bringing it to everyone's specific attention.  :)

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  105. you know what's "scarry"/interesting the 1250 top -which marks exactly the upper band of this channel- coincides exactly when Merkel made her statement and the market dropped. Coincidence or meant to be?

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  106. yep, the indicators pretty much all of them show the top was in a few days ago and that down is the way it will go. how low? can't tell you, but 1190 surely is very likely.

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  107. NDX's 2276 finally broke today. I believe we'll retrace a bit (corrective a-b-c) then continue towards 1190 target before starting wave 4/C.

    PL, awesome job... I will hit second donation today.

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  108. Lol, funny stuff, Don.  But seriously, how stupid are you?  Learn to read.  Here's the link to yesterday's article in case you can't find it.  All my trades and what happened.  Not perfect, but made quite a good amount the past few days.

    BTW, had I gone long at 1225, and then covered at 1246 (where I shorted this morning) I would have made even MORE.  You really aren't too bright, huh?  Keep trying joker - you amuse me.

    http://pretzelcharts.blogspot.com/2011/12/spx-and-ndx-update-next-week-lower-but.html

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  109. however....daneric notes - bullish falling wedge complete and setup for a BIG rally tomorrow as well as a bullish divergence on the SPX. I took a little bit of my TZA off AH, counter rallys really bleed that bastard dry. All my other shorts are in place, I also own some VXX which makes me nervous as hell. This may be the last time I sit on any VXX overnight.

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  110. I see Prechter and co has free access to his US stock report until noon on Friday. See http://www.elliottwave.com/ezine/free_reports/traders-free-pass-to-us-stocks-forecasts.aspx

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  111. I have this weird feeling that selling might continue as:

    (1) The big funds realize losses for the close of the year for tax write-off
    (2) Laggard hedge funds sell their positions to meet year end redemption calls
    (3) If the gap below gets filled, there is no real catalyst to stop the selling momentum. Maybe Santa? Last I checked, Santa didn't exist and it made me cry.

    However, the USD EW counts that I have are implying that 2nd of 3rd wave up is not yet complete. There is still wave C to come in the correction, which could imply a rally in SPX. But the rally is going to be characterized by heavy outflows from points (1) and (2) listed above exhausting all the buyers for 2012. And thats when the market crashes as the last buyer would have bought. 

    Waiting for the market to show its hand next...

    Felicitations at PL for nailing the counts!

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  112. That chart is cool.  What are the red and black up and down waves in the main body of the chart.  It looks like an oscillator of some sort overlaid on the candlesticks.

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  113. I agree, it looks like we finished 3 of 5 of, and the last 30 minutes moved up into 4, within 3-5 pts of ending 4 at about 1228, and ultimately reaching around 1216(end of 5), which would be end of a higer level wave (3).....imho, easy for me to say since I don't day trade! That is if Im reading PL's second chart correctly

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  114. Bernanke beats his wifeDecember 13, 2011 at 12:20 PM

    This whole board is a lagging indicator (i.e. market reactionary). Thanks to all  for confirming my short position from last week.

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  115. I'm with you on the VXX - I've been trying different versions of this and it really isn't acting for squat as a short.  That and oil have been lagging for various reasons

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  116. Lagging - how so?  Can you provide examples?  Its pretty clear that most here were short, and that PL was advocating the bear case.  In fact, I stated exactly what I was short and some levels during this morning's rally.

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  117. Did I miss anything?  I mean, outside of the market again performing exactly according to my blueprint, that is. 

    Looks like somebody posted right below me is acting like he had it right, and the board had it wrong... LMAO.  I can't call this market any more perfectly than I have over this past week... pretty sure nobody can.  But if you did, feel free to redirect me to your "more perfect" public record.  :D

    And, you're welcome for confirming your short positions by suggesting the market would head lower immediately off the last three rallies.  Not exactly "market reactionary" -- when I'm looking for an immediate solid reversal to new lows, in the exact opposite direction of the market's last move.

    I dunno, maybe he's talking about you guys as "the board"... but a good chunk of the board posters were short too, so you can't say "this whole board" even if you're excluding me.  ;)   

    ;)

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  118. Many thanks, BigO!  Much appreciated.  :)

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  119. It's the stochastics.

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  120. should 3 be a lot stronger than this? Or is it the beginning of 3 and going to "waterfall"

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  121. Your after-it's-already-happened self-congratulation is curious.  And of course is utterly lacking any specifics about how and when you arrived at whatever your conclusion formed last week might have been.

    If you were so sure of yourself as of last week, why didn't you come on here and say so.  Or were you just saving up for when you *knew* you'd have it confirmed and right.  Hmmmmm.  

    And if you were helped by anyone here, which I have no doubt you WERE, I'm sure that most here are happy to have helped.

    Thanks for letting us all know that you'll be checking in regularly to make sure you are double-checking your well-formed and prescient presumptions.  One wonders what you'd do without it . . . ;)

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  122. PL, quit defending yourself and everyone else here.  He just let you know he needs to check in here to confirm and get a second opinion.  And who can blame him . . .

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  123. A quick shout out to Michael R. for his second donation.  Thanks very much, Michael! 

    Regarding the message that came with it:  I'm sure the rest of this community appreciates your donation too.  With Adsense down, I now earn exactly $0 on the site each day -- so the donations are it... and very, very much appreciated.   I have a feeling we'll be able to figure out something to keep it working.  :)

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  124. Thanks again PL.  I wish I had listened fully and waiting to cover ES down at 1220, but I had a good day nonetheless.  Sorry about the ingrates and other hecklers - the dregs of the internet seem to be out today.

    ES is up 8 points from the intraday low.  A lot of people are calling this a bullish falling wedge c-wave of b and that tomorrow will see a violent snap back rally.  Also, the Wednesday before opex is usually bullish.  Looking forward to your thoughts on whether we're just correcting here or whether wave c is commencing once you've studied the charts.

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  125. PL, brilliant piece of work; once this little peanuts trader -me- with a minimum account has minimized his losses from his puts placed nov 29 (which i thought then was wave 4 up of a 5 wave down until BEURnankEU jumped in on the 30th), then a donation is on the order of the day; as promised!!! 

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  126. Pretz, very curious to hear your thoughts on the 'bullish wedge' and snapback rally possibility that is getting a fair amount of chatter.  Apparently the central question is:  Are we gonna get C or 3?

    I don't pretend to have any idea myself.  But a rally to new highs, especially beyond 1,270 sounds so far fetched to me now that Ben has let the air out of the party balloons (for the moment).

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  127. I can't help it, Brian.  I dislike bullies of all forms.  I'm the type of guy who'll shred someone verbally if they unfairly attack my friends/family/or me in real life... so it's a hard habit to break.  :)

    Conversely, if the attack is justified and done somewhat constructively, I might actually agree -- but then it's not someone just being a bully; bullies are virtually never constructive...

    Either way, debate is part of who I am, and it's hard to get away from my real-life response mechanisms.

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  128. Dunno who you're referring to, but I assume these are the same folks who were calling Thursday the bottom a few days ago... ;)

    Nah, just teasing.  I haven't studied the charts yet, so I'm not ruling anything out blind here.

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  129. also very interested in this as well

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  130. I haven't studied the charts enough to have a reasoned opinion, but the formation is certainly there... just have to do my usual studies to find out if it has validity or not.

    Also, regarding a rally, keep in mind that there's a lot more than Europe and the Fed to this market -- sometimes it's just a matter of too many shorts, not enough longs.

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  131. yeah, the wedge has me scared right now...prime scenario for leveraged futures to gap the market up tomorrow morning.

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  132. Many thanks to a certain donor who prefers to remain anonymous (you know who you are) for his *3rd* donation!  Thanks, man, it's really appreciated.  :)

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  133. Debate and 'shredding someone verbally' are different than defending.  And I completely get defending your friends and family, which is not what I was referring to.

    He deserved amused mockery and returned condescension.  Which implies that you really don't care what he has to say.  And that he is easily and summarily dispensed with.

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  134. Lol.  Daneric was looking for it, and still is, but he is also cautioning against the ugly 1-2 1-2 1-2 potential.

    ES creeping higher, now 10 points above intra-day low.  At this rate I may have to start looking for a buy-stop to get long (with a tight stop).  Waiting for the South American Don Rickles to come yell at me for even entertaining the thought of making money on the long side of the market.

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  135. yo pretz great work today please dont let a really great site turn into a bitchfest with anonymous crazies!  keep it up

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  136. If I recall correctly, on Friday, he thought Thursday was the bottom of an expanding triangle and the Santa rally had started.

    Definitely not to take anything away from the guy, though -- I very much respect his work overall, and this is a very tough market right now.

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  137. Hmm... I guess those three all get lumped together in my mind, to a degree anyway.  But yes, I thought I was doing the second type ("mockery etc.") on your above post.  :)

    Anyway, I have a few things to learn regarding dealing with the unruly internet types.  Much better at dealing w/ them in person -- of course, they're usually not as bold in person. 

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  138. I think I just figured out how to force Disqus to require verified e-mail registration.  All in favor?

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  139. No problem with that.

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  140. Yeah this whole adsense issue is baffling me, is it sometype of lifetime ban? was it something you did or one of the blog visitors? undisclosed policy violation would infuriate me, how can you correct the issue if you don't know what it is...I actually clicked some of the previous ads (never in excess or for reasons other than genuine interest) because they were relevant and i was interested...doubt i'll be clicking the "juicy coture stipped shorts" advertisements, lol.

    Maybe its just talking about the ads at all...if so, feel free to delete this post :)

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  141. All they said was "invalid click activity."  I suspect, based on what I was seeing in my numbers, that someone was coming in the wee hours of the morning and clicking the same ad over and over.  How I'm supposed to do anything about that -- especially when it's a violation to address it directly -- is beyond me.

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  142. VXX is such a hard vehicle to day trade. The only time I've ever made money from it is when the freaking thing spikes huge in either direction. Even little spikes are hard to time on this thing, for me at least. Plus the rodeo riding of VXX with options can throw anyone off mentally. I am currently scaling into a small long term VXX call position that I am going to hold and forget about.

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  143. Bernanke beats his wifeDecember 13, 2011 at 3:34 PM

    In regards to my recent, apparently offensive, post...

    1) Firstly and most importantly, no offensive was intended to anyone. Actually, quite the opposite. I was expressing my thanks to the board for valuable data. I've never been called an attacker before. This post was NOT an attack on "PL"; the dude works too hard.  PL, I apologize for my inarticulate post.

    2) Lagging indicator....whats the problem? Is there anyone here who doesn't use lagging indicators for profit? PL isn't the lagging indicator; its the "post-ers". You guys provide very valuble "sentiment" info regarding the bear-crowd. Watching your posts allowed me to gauge last weeks "pain". I used it as a conta-indicator, in conjunction with objective techincals,  for today's profit. Thank you. 

    I consider many of the opinions expressed on this board to be lagging indicators simply because so many people fixate on "news".   At any given moment all that is knowable about a market is instaneously reflected in the price (most of the time). If you are trading on the news, you are my lagging indicator (offense NOT intended , really). Once again, I would like to express my thanks to the board and PL.

    Regards, "Bernanke beats his wife" (the boards newest bully internet heckler jerk).

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  144. Hopefully it doesn't drive me crazy and turn me into ANON. :)

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  145. you were using adwords right?

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  146. I had a feeling your intentions were benign there, but it was a bit ambiguous.
    And I acknowledge your use of sentiment as an indicator...you just noted it in a somewhat agressive fashion.

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  147. lmao!  Sorry for misreading.  I had just woken up after a much-overdue long winter's nap (8 hours, woo hoo!), so my brain was a little foggy. 

    Thanks for clarifying -- that took courage.  :)

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  148. maybe its sabotage?

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  149. http://support.google.com/adwords/bin/answer.py?hl=en&answer=164786&ctx=cb&src=cb&cbid=-rqugsnjudb19&cbrank=0

    I'm sure you've already done this research but here they talk a bit about how accounts get suspended...traditionally they will inform you in advance. With egregious violations they will suspend without warning. but that is for stuff like counterfeit goods and clickbots, which you obviously aren't doing. I wonder if the rapid growth of your site and viewership has raised suspicions. If you feel it was in error, they have a place to contact them. I tried to find a place where I could comment as a blog/site visitor and vouch for the legitimacy of your blog, ad clicks and the fact that you do not promote clicking within the blog anywhere...couldn't find any forum to do that. If you know of one let me know and I'll send them a message. From what I read though the suspension looks permanent, seems harsh under the circumstances. I don't see any fraud occuring here. 

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  150. PL,

    As to RT's suggestion, I would certainly be willing to provide the written word as to the authencity and value of this site and I am sure I am not out of line suggesting to you that there are MANY others who would be willing to do the same.  If you think it might help, say the word!

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  151. Yeah, I'm wondering if the rapid growth of the site triggered some algo.  I already submitted an "appeal" and hopefully when a human examines everything, they'll realize it's a genuine site run by an author who's affiliated with a lot of very large and credible organizations -- which is why it's grown so fast.

    Thanks for the willingness to vouch for the site -- but, good Lord, all they need to do is examine it and check out my affiliations to understand why it's taken off so quickly.  Minyanville gets more than one million unique visits each month, and I'm their number one most-read author... not to hard to do the math there.  :/

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  152. Well I hope they come to their senses in reviewing your appeal. You work to hard to get screwed for some BS misinterpretation of click activity. Good luck!

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  153. Yeah I think you're right, but I did see it somewhere on Friday - maybe it was one of the people who post on his board (I don't but have taken to reading it recently).

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  154. Many thanks to TJ for the donation! 

    TJ where ya been? (I'm assuming this is the same TJ, apologies if not.)  You haven't posted in some time, thought you vanished. I appreciated your fundamental observations and contributions.  Is it some technical problem w/ the Disqus format?  That was about the time you stopped posting.

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  155. Overnight ES strategy - sell-stop just under 1220, buy-stop just above 1232 (we're up to 1228.50 now).  Thoughts anyone?

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  156. At first glance, I'm not crazy about the ending diagonal interpretation.  I've only been studying charts for a little more than an hour, though, so this is just a preliminary observation, but so many were asking... so there ya go.  If I was going to label it as a diagonal, I would be more inclined (at present) to call it a LEADING diagonal.  

    But I'll have a better idea after another 3-4 hours or so. 

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  157. Hmm, so 1267.06 on the 8th would be the high and the leading diagonal would begin there?  If so, my untrained eyeballs see 5 waves to complete 1 and then a bounce from here for 2 (staying under 1267.06).  Is that plausible or is my wave counting off base?

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  158. It's plausible, but (again, at first glance here) it looks to me like today's low isn't "it."  This is all preliminary, though.

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  159. Do what ya gotta do Chief, it's not like this is a participatory democracy - your house, your rules!

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  160. Hey PL -

    A few things on the ad front.

    (1) just did a "view source" on your site and saw that you still have google syndication stuff active.  So I went to a sterile browser and hit your site and then an unrelated site that hosts google ads afterward.  They hit me with stock buying / trader ads. Until goog gets your revenue back, I'd stop sending them business.

    (2) If I were you I'd get my brand free and clear from goog while I am at it.  Get a domain and put up wordpress.  If you need help doing this, email me - I'll do it for you for what will soon be the cost of a BAC share (nuttin).

    (3) Get an Amazon advertiser account right away.  Place an Amazon button on the site and an Amazon ad panel.  readers who buy their crap for xmas through your site will help you get paid.  Plus you can put up books on trading that you have read and those of us who buy them will help you get paid.

    Point is - diversify.  Goog ain't the only game in town.  I know bloggers who sell their top ad space directly on a weekly charge basis - your traffic and demographic can get you buyers from time to time for that space too.  

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  161. no problem.  i held my leveraged short etfs since last week, after reading your lastest post, decided to triple down at 1250 yesterday, and managed to break even on a pretty nasty loss by closing out everything at 1220 yesterday.

    i was having problems with Disqus, and in general was tied up with work, hence couldn't monitor my positions (which was a bad mistake with leveraged ETFs)

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  162. Hey, thanks, Lugnut. 

    I think I removed Adsense from the code... not sure I got all of it, though.  I'll give the other stuff some consideration -- actually have an Amazon panel under "recommended reading" but it's not doing much.  I rally appreciate the help offer, and I may take you up on that. 

    Eating dinner right now, but I'll bbl. 

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  163. A quick shout-out to Adam S. for his donation!  Many thanks, Adam, your support is appreciated.  :)

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  164. you are also having a lot of comments these days, so for the sake of everyone, i will comment only when I have something useful to say.  and really, the fundamental picture has not changed much since my last post.

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  165. Glad to have ya back!  :)

    And also glad my "not trading advice" helped you recover from an ugly loss.  ;)

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  166. Granted, lots of comments -- but I always felt your comments were "something useful" pretty much everytime.  :)

    Anyway, gotta get back to dinner now, before wife gets annoyed.  :o

    bbl

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  167. Italian parliament to vote on (vote through) Monti's austerity package today - could prove a positive switch for current negative sentiment.

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  168. So much for "The Full Monti."

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  169. The more I look at this stuff, the less I like the ending diagonal interpretation.  I'll post a chart that shows why in the update.  Leading diagonal, maybe.  Ending diagonal?  Hard to see it.

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  170. It's a wrestling move: "the strict monti grip".

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  171. Any good links for that?  I'm terrible about keeping up w/ the news.  A friggin' meteor could deep impact the Baltic Sea, and I would learn about it from you guys.  I literally haven't even watched TV a single time in the past 2 months.

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  172. It's fully expected to pass, so no surpises in store IMO:-
    http://www.google.com/hostednews/afp/article/ALeqM5iJMeJvxAQCwuLNIFym73qE93_Rmg?docId=CNG.249cb628071b3a25f19cf14352a8df81.3d1

    I just sense that the big sense of let down after the Euro Summit has perhaps gone far enough for the moment. It probably wasn't as bad as people think - just the lack of visible "giant bazooka" spooked the pavlovians in the immediate term. So I'm consciously looking for things, whether those things are "surprises" or not, to help sentiment switch back a little. Just looking for something contrarian in the face of rising market nerves, I guess.

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  173. ty. 

    Yeah, not a bad thought.  I'm very curious to see the new AAII numbers when they're released.  Last week, there was still a high number of bears, though it had come down from the week prior.

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  174. TBH, I'm just kicking ideas around. There's clearly a lot of negative stuff out there - look at the Shanghai Composite, which is looking very stretched to the downside now. At such times I can't help but look for a contrarian angle. I recognise though that US markets don't currently reflect much of that very negative sentiment, so that cautions me somewhat.

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  175. lol- just saw the meteor comment.  :D

    What does TBH stand for?  Thought I'd heard 'em all, but I guess not.

    Shanghai Composite actually looks to be in the throes of a third wave down, which means it could run for a while.  Trade below 2220 would confirm it, as that would rule out the decline being the B-wave to an expanding flat.

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  176. btw, I think this futures bounce is another selling op.

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  177. could it be a leading diagonal for now? so up to the 0,76er - 1260 and then down awesome! for german dax it would be 6000 and after that-->down ...greeting from germany, rivertrade

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  178. Hi Rivertrade.  :)

    I'm actually not favoring the leading diagonal either, but it's possible.  Based on my work so far tonight, I think there's more selling right around the corner.

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  179. Futures woo hoo - an all time first - every major world markets is down and Italy bonds hit an all-time high - yet US futures have been up !!!!  It is an amazing feat of levitation

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  180. NQ has been weak all night.  Down 7 right now.  Like I said about 2 hours ago: I think any futures bounces are selling ops. 

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  181. For the Love of Anon20 - can I ever wake up with shorts in place to a 40 point S & P gap down.  It's at the top of my Christmas list

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  182. PL,
     
    Please correct me if I am wrong.  We have two possible counts on the table now - wave 3 or wave B.  If currently it is wave B, then the minor (2) wave has the double zigzag pattern as you shown in the first SPX chart, which requires wave (w) to be a 3 wave zigzag.  I tried to label 3 wave zigzag of wave (w) as shown in attached chart but there is an overlap between wave 1 and wave 4 as shown in the blue rectangle box.  Does that eliminate the wave B possiblity or you have other way to count wave (w) as a 3 wave zigzag or something else?  Thanks.

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  183. lol!  Soon.  And many thanks for the donation.  :)

    Working on the article, getting close to done here...

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  184. C of (w) would be labeled as an expanding ending diagonal -- that allows for the overlap.

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  185. You are right.  Thanks.

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  186. futures flat?  am i seeing that right?

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