Amazon

Friday, December 23, 2011

SPX Update: 'Twas the Top Before Christmas?

There's been no material change in the counts since yesterday.  The primary occurrence of note on Thursday was the SPX reached the 1254.50 target. 

If this is a corrective second wave, as the bearish count sees it, then a top is forming.  Currently, the move off the December lows is a three-wave form, meaning it has not yet completed an impulsive pattern and could very well fit the bill.  Regarding the short-term counts shown on the chart below:  the bear count needs to stay below 1267.06 on the S&P 500 (SPX) to remain valid.  The bull count needs to stay above 1229.51.  That pretty much sums up the situation, and the key levels to watch now.



There are two other charts of interest to share.  The first is the NYSE Composite Index (NYA), which is a much larger index than the SPX, and therefore more representative of the broad market.  I mentioned a potential triangle in the NYA on December 18, and suggested that the lower boundary would be tested.  That boundary has been tested, and the NYA has now nearly hit the upper boundary of the triangle.  A breakout/breakdown from the triangle suggests a move of about 20% in the direction of the break.  As the larger Elliott counts suggest that the market has not yet bottomed, I would expect if the market did make an upside breakout, it would ultimately whipsaw.

The red line is another overhead resistance level for the market to contend with, if the upper triangle boundary is broken.


Next is Wilshire 5000 chart I first published on December 4.  It continues to track well, so it's worth updating at this point.  (Thanks to Arnie for reminding me to update it.)  :)



The last trading day before Christmas is generally a light volume holiday session, which typically favors the bulls, since the large funds realize they can't do too much selling into light volume without cracking the market.  The same was true of the Thanksgiving holiday, though, so light volume doesn't automatically guarantee higher prices.

In any case, since it's my favorite time of year, here's a little Christmas poem to close out the holiday week:

'Twas the last trading day before Christmas, and all through the land,
Everyone was still hoping Europe didn’t get out of hand.
The loans had been readied by the old ECB,
and nations lined up to get money for free.

The bulls were all nestled, all smug in their beds,
while visions of QE3 danced in their heads.
With ma in her kerchief and I in my cap,
we’d had about all we could take of this crap.

Then on CNBC there arose such a clatter,
I sprang from the couch to see what was the matter,
Ben Benanke was talking, he was building more bubbles! 
He just didn’t care about any debt troubles.

He said he could print; that the Fed had more tools,
He said, “We’re not breaking, just bending the rules.”
“When there’s crisis,” he said, “The Fed is your man.”
“No it’s not,” I replied, “You’re just kicking the can!”

But he couldn’t hear me, there on the TV,
Even so, I still added, “Ain’t nothing for free.”
When what to my wondering eyes should appear,
But the eight-hundredth bailout we’ve seen in four years,

Ben sprang to his press, to his team gave a whistle,
And the money flew out like the down of a thistle.
Then I heard him exclaim, as oil started to spike,
“Merry Christmas to all! And to all a good night!”


Here's to hoping everyone -- bulls and bears alike -- has a wonderful holiday with their loved ones.  There are much more important things in this world than markets.  Trade safe. 

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

283 comments:

  1. Ty again PL, you inspire a lot. Happy Holidays to you and your family. Get some rest is all the wish I have for you right now.

    ReplyDelete
  2. Great post.  Mele Kalikimaka, Pretz, and thank you!

    ReplyDelete
  3. LOL - Good stuff J - Happy Holidays - the Gekkos ;)

    ReplyDelete
  4. Great post, per usual pretz

    ReplyDelete
  5. That is some good stuff PL, Thanks for the smile in the morning! Mele Kalikimaka to you and your family! Hope you have a nice relaxing holiday!

    ReplyDelete
  6. Clever post, well balanced. We will see next year if the various triangles will be broken upward or downwrad. Statistics still book  downward. Marry Christmas to you and to your family. 

    ReplyDelete
  7. Ah, you guys beat me to being the first post, lol.  Got hung up trying to get the article sent in.

    Merry Christmas, everyone!  Or "Happy Holidays!" if you prefer.  ;)

    ReplyDelete
  8. Merry Christmas,everyone

    ReplyDelete
  9. The Italian 10-year bond is back to 7% again. Everybody is freaking out.

    Marry X'mas to all.

    ReplyDelete
  10. One way to count the wave up says the morning spike high will be the top.  Not completely sold on it, but it's definitely possible.

    ReplyDelete
  11. It would project up to about 1260.

    ReplyDelete
  12. so what? that doesn't mean anything. Relax it's only 7%. The eurocrats can solve it over bong pipes and wine/beer tasting. Haven't you heard that SPX is safe haven. It's only way is up :)

    ReplyDelete
  13. Once 1255 is taken out going down, that *could* be all she wrote for the rally.

    ReplyDelete
  14. Hope so.  Shorted yesterday near the close and averaged in overnight, so short from an average of about 1252 ES.  Just got back to black, but I'm going to let it ride from here and maybe tighten up my stop.

    ReplyDelete
  15. 7 is the new 6, haven't you heard?

    ReplyDelete
  16. re. SPX is safe haven

    I do wonder whether the futures being up overnight might not be movement of money from Europe to the US - done during their day as orders for our market hours. The DAX and CAC would not correlate on a day to day basis because of the delays in moving money across the ocean, so this pattern might not be easily discerned.

    ReplyDelete
  17. Happy holiday everyone and especially to you PL.

    ReplyDelete
  18. Good morning all, and thanks, PL, for the poetry, very nice. Did you write it?

    ReplyDelete
  19. But of course! 

    Also, I'd have given credit if I was reprinting it.

    ReplyDelete
  20. PL,

    I just found your site about 3 days ago and love it.  Thanks for all your work and also to everyone else's insightful thoughts as well.

    Happy Holidays.
    -Bill

    ReplyDelete
  21. Merry X´Mas all, and thanks PL for putting up with us.
    But hey, you live in Maui so I dont feel at all sorry for you. 
    Me myself live in Sweden, in a town where our government yesterday by using some sort of statistics have calculated (theres my tax dollars at work) that Santa lives. Its cold and dark here, so I have no understanding why he would like it here.

    And Im somewhat curious to hear from Anon20 today, should be an interesting post. Maybe something in the spirit of Christmas, what ya say Anon?

    ReplyDelete
  22.  The equity market is saying all is well.
    The bond market is not buying. Literally. :)

    ReplyDelete
  23. Chart and commentary of wilshire 5000 is good, maui kid.
    Tell ME, chart is based on closing prices, and it's linear?

    That why you can trace a PERFECT down trendline
    from ALL the tops downward, from july onward.

    And just like I wrote on the linear closing price spx,
    wilshire also is NOW touching that trendline, again.

    Gap down on Monday.  A slamdunk.  Party is over.
    Cannot wait to wipe smile off all comfy amerikans.

    Fanfuckintastic.  I will bring 'coals' a day late, 26th.
    I'm an atheist, don't give a fuck about moron rituals.

    So NOW post the wilshire chart
    with MY down trendline drawn.

    ReplyDelete
  24. Awesome post today Pretz!  Merry Christmas!  The second donation will be on it's way when I close out my Jan positions.

    ReplyDelete
  25. Good morning, everyone.  Just made quick long scalp from 1,256 to 1,258. 
     
    I don't think the Street really CARES about a big advance from here. Though I do think that a break of 1,260 is a foregone conclusion. 
     
    But a meaningful advance after that will cost too much, and Street pros will not have any belief that it can be defended after everyone gets back from vacation. 

    But I do think longs care about hovering up above 1,250-ish to sell more stocks to those who'll buy them.  And to take positions in preparation for the rundown.

    ReplyDelete
  26. Often talent exhits itself in many dimensions!

    ReplyDelete
  27. I am assuming you don't think the downtrend line that I've drawn in a dozen other charts is now YOUR idea?  lol  It's not my "idea" either.  It just is, whether one draws it or not.

    The reason I don't have the downtrend line in that particular chart is because it makes the fractals harder to see. 

    ReplyDelete
  28. Transports down, Russell flat, and Utilities big outperformer to the upside.  Seems very 'risk-off'.  Also Euro down, though apparently that doesn't matter much any more.  Seems we should be heading lower any minute here.

    ReplyDelete
  29. And it's a 60 minute chart.  If you right click on the charts and bring them up in a new tab or window, they're big enough to read the chart details.

    ReplyDelete
  30. Just curious ....

    Does Santa wear shorts in Maui? :)

    ReplyDelete
  31. Starting to look like a small ending diagonal forming on the one minute charts.  Might barely tag 1260 and call it quits.

    ReplyDelete
  32. Nope, nix the diagonal.  Keep thinking we'll hit 1260... maybe 1259 is close enough?  Either way, still think the bulls need to hold 1255, at least ST.

    ReplyDelete
  33. Even on a holiday light trading day session, longs not showing much conviction like they did the last two days.  It may be that they accomplished what *they* wanted to yesterday with that slow ratchet from 1,248 to 1,255.  And this is now all just gravy and not worth wasting a lot of money on. 

    Considering where we were just four days ago, the opportunity to sell off above 1,250 is a true Christmas gift.

    ReplyDelete
  34. No kidding. The newspaper yesterday saying that the uptake of ECB money was "good new" was 180 degrees off, if you ask me. hehe

    ReplyDelete
  35. LOL just have to add that the US markets are closed on Monday!

    ReplyDelete
  36. 5 min chart the past few days, seems like a bearish rising wedge.

    ReplyDelete
  37. No self-respecting longs would want to be exposed going into the long weekend.
    Just trading bots trying to lure everybody into the psychologically significant 200 dma. The left hand is selling to the right hand. :)

    ReplyDelete
  38. lol, yeah, didn't catch that on the first read. 

    Speaking of, I'm PSYCHED to have a three day weekend!  Woo-hoo!  I really need it right now.

    ReplyDelete
  39. That sounds like the exactly like the same sort of idiotic use of  tax dollars that are routinely wasted in the US.   The SAAB workers in Sweeden  are probably most pleased by that.   

    Not that I'm in favor of gov't bailouts of private enterprise.  

    ReplyDelete
  40. You got that right.  Any Street pro has got to be thinking:  I'm not gonna be the jackass buying in at THESE prices and holding the bag next week . . . but I'll be more than happy to make someone else that guy. Ha, ha.

    ReplyDelete
  41. Tip pointing at 1260. How serendipidous!

    ReplyDelete
  42. I'm happy to see you finally get to recharge!

    ReplyDelete
  43. Euro and gold both look like they're consolidating losses and should head lower over the next week or so.

    ReplyDelete
  44. Merry Christmas to all and all whom you love.

    ReplyDelete
  45. you deserve it! hopefully it'll also allow the USD the consolidation it needs to continue its relentless journey up.

    ReplyDelete
  46. Very short term measures of breadth (5,15 and 60 min McClellan Oscillators) indicating a pause in the upward action shortly.
    However, there is yet no evidence on a daily basis (MCO, Sequential and Volatility) that the rally is over.

    ReplyDelete
  47. I definitely need to recharge.  Been feeling really drained all week.  All work and no play makes Jack a dull boy.

    ReplyDelete
  48. Forgot you socialistic amerikans create a 'holi'day even were there is none, otherwise your minimum wage peons would slaughter you all in your sleep. 
    So I will have to wait until the 27th, for amerikan-crushing crash pleasure.

    ReplyDelete
  49. Can't bear to wait for the last few pennies.
    Just pulled the ripcord and deployed the parachute. :)

    ReplyDelete
  50. Sooooo . . . did someone program '1,258 first hour' into every computer on the Street this morning? 

    At least no one's made or lost any real money . . . but what is the point of all of this then?

    ReplyDelete
  51. Again: happy holidays and/or merry Chirstmas to everyone!

    I *almost* fell asleep about 4 hours ago while working, but willed myself back awake... so I'm going to knock off early this morning and get a bit of rest.

    So far, this market is almost as exciting as Earnest Borgnine's auto-biography, so I'll bbl.  :)

    ReplyDelete
  52. It could hurt those holding options, especially over the weekend.

    ReplyDelete
  53. So sure of a crash, telling everyone that since it didn't happen today (again) it will happen first thing Monday.  The Oh-wise-guru-of-markets then was told that the market wasn't even open on his crash day.  So it must hapen the very next day (repeat ad-infinitum).  I prefer my market wizards to at least know when trading occurs before considering their "forecasts."

    ReplyDelete
  54. Preztzel,

    Obama is coming your way. Merry X'mas and good night. :)

    ReplyDelete
  55. Bots in perfect harmony singing fa la la la la, la la la laaaaaaa to one another. 

    Such a picture of holiday goodwill and cheer has never been witnessed on the Street before . . . ;)

    ReplyDelete
  56. Why do you keep leeching off our host?  Your ideas loose money.  Your trendline would likely be downward sloping and rather limp looking if I were to guess.  And likely only a couple of bars in length.  Can you really even call a 3 bar line a "trendline"?  I guess not everyone is blessed.

    Thanks PL for a great blog.  How you don't ban some folks shows what a big heart you have.

    ReplyDelete
  57. Pro's already rolled over their options and hedged them against time decay.

    ReplyDelete
  58. That's why it's smarter to sell options than to buy them

    ReplyDelete
  59. That's right.
    Just remember: Option is time-limited insurance. Option longs have two enemies - price and time.

    ReplyDelete
  60. SPY in the top five of WSJ Selling on Strength list AGAIN.  I've never seen it there three days in a row.  And I look just about every day, especially when I think the market it near a top. 

    SPY is pretty much never on this list near market lows.  That's when it shows up in the BOW page.

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

    ReplyDelete
  61. So the top was in yesterday, right?  You told us all so.  Today is an Amerikan illusion . . . ;)

    ReplyDelete
  62. The recent ECB move has been giving Financials a lift.  Financials may need to go down first in order for the overall market to decline.  So far, XLF is still going strong...

    ReplyDelete
  63. Went short with minor position at 1,262.  This move is now an hour old with ST indicators peaked.  A retrace to at least 1,260 is 'due' here.

    Will add heavily if we hit 1,265.  Which I do expect once a pause here is completed. 

    ReplyDelete
  64. Merry Christmas, PL!  Happy Holidays to all!  Thank you for the poem, PL!  It is great.

    ReplyDelete
  65. Amazingly good. :-)

    ReplyDelete
  66. hmm, DJIA just knocked out the bearish nested 1,2 count...spx next up?

    Pretzel - thoughts on cross index price action...can SPX still be in a nested 1,2 down if the djia just gave it the KO?

    ReplyDelete
  67. Here is what I'm not completely sold on EW - in the short term.
    Why market is fully participated, bulls/bears are completely engaged, then EW reflects the overall sentiments and the real conditions in the war theater.
    When the market is light, it is difficult to tell the collective sentiment.
    Comments?

    ReplyDelete
  68. Agreed.  The last two days have all of the hallmarks of holiday sessions.  Especially near market peaks. 

    The indexes are taken up with relative ease, because there is no real resistance. But they are not taken up TOO high, because the pros behind it know it costs too much money and they know it cannot be held once the serious participants return. 

    But if you can take higher and hold there to sell to those who'll buy, then why not?

    IMO, these sessions are about one thing and one thing only:  Distribution.  And maybe a second thing: Printing a nice green candle and high water mark to lull bullish sentiment.

    ReplyDelete
  69. Another serious problem is when much power is held in a small group, and they don't *necessarily* oblige to wave dynamics. Thinking of the Fed in particular.

    ReplyDelete
  70. PL,

    Merry Christmas and God Bless you.  Glad to be here.

    Daniel B

    ReplyDelete
  71. When I asked PL about the effects of QE's on EW, he told me that they were felt. I have no reason to doubt that - in the long run, there is no way the elephant can hide.
    My beef is mainly on the short term predictive value of  EV - especially for day traders.
    That's why I am very curious about intraday EW counting.

    ReplyDelete
  72. merry christmas guys!

    ReplyDelete
  73. Agreed, and was what I meant.

    ReplyDelete
  74. Interesting - with the Dow up 100, 1/4 of my short efts are also up - sort of like the smart money is using the bogus run to sneak in and short gold, silver etc

    ReplyDelete
  75. brianhut - where would you place the odds of the market visiting 1290-1310 next week?  seems all the current seasonal factors will still be present - light volume, bot drift, etc

    ReplyDelete
  76. Right or wrong ....

    I just neutralized my holdings with a slight upward bias, until mid-Jan.
    This is not based on EW counting but from the fact that the Euroland will be unleashing their le TARP's, QE's, etc. And a hunch that hopium will rule the market for a while.

    Marry X'mas and happy new year to all.

    ReplyDelete
  77. Good morning Pretzel and Merry X'mas to you.  Sorry I didn't mean to put you on the spot with my odd question yesterday.  I was just thinking it would be very inspiring to know that the average joe (meaning anyone can do it given that they put in enough effort and dedication) can trade for a living successfully against the big funds and professionals. 

    ReplyDelete
  78. Pl and/or Brian; No matter what index/subindex/market I look at on daily or longer term charts, we have triangles converging/coiling, ready to explode one way or another. An upward breakout would only be possible if we get unusually good global economic news together with a meaningful resolution of the EU mess and/or QE3, neither of which, specially the first two are not even remotely likely. I view QE 3 is being reserved for when the reality of the global mess has permeated every household in the US, when coincident economic data is overwhemingly negative, and when the short half-life of the next QE coincides with next year's election...say about early to mid summer. If these triangles are to breakout soon, it has to be down. How do toy guys see this plat out?

    ReplyDelete
  79. I honestly wouldn't pretend to know.  But another full fifty points up from here sounds like quite a stretch, unless there is some kind of Fed type interventionist event.

    Could happen, but I wouldn't 'bet' on it either.  This market is getting pretty stretched already to the upside. 

    And what you are postulating is a LOT different than what we've seen the last two sessions.  The last two sessions DIDN'T COST LONGS A LOT.  The gains are EASY.  The resistance is minimal. And holding up here is EASY.   The cost of getting here is therefor easy for the pros on the Street to pay in order to have the opportunity to distribute from here.

    However, even with a light holiday week next week, the cost of gaining 1,300 is probably pretty exorbitant.  To get to 1,300 from, it means that someone with real money will have to buy a LOT of stocks on the way up AND have the confidence that they can be sold while we're up there. 

    Add to this: the Street's pros who move markets don't go completely on vacation for an entire week.  Meaning sellers will be back pretty soon.  We might get a couple sessions of this sort of thing, but seven days is a lot harder to fathom.

    I remain of the opinion (until proven otherwise) that what we are seeing the last two sessions is just your run of the mill holiday session where the indexes are taken up enough to create the IMPRESSION of a healthy market and more good times forthcoming.

    ReplyDelete
  80. So this move from 1,257 to 1,263 is now two hours old and no retrace of even two points the entire time is rather curious.  Very slow moving.  Ratcheting incrementally higher and never falling back by more than one point the entire way. 

    Similar to yesterday's move from 1,248 to 1,255.  After which time we bounced around in a two piont range the rest of the session.

    ReplyDelete
  81. very interesting brian.  this is the 1st blog i've read where people (you and pretzel) have discussed accumulation/distribution levels in the market.  i think that's so interesting and makes sense. 

    i had another question for you from our discussion yesterday.  you mentioned human behavior and the divergence between what people
    claim to value/respond to and what they actually value/respond to.  can
    you talk more about that and what you mean?

    ReplyDelete
  82. I agreed with you, Fred.  I think right now SPX is in a throw-over of the wave v in the triangle.

    ReplyDelete
  83. Intra-day ....

    I am seeing a 1, a flattish 2, a sizable 3, another flattish 4, then peaked at 5.\
    Now, it is on the a leg.

    Correct me if I'm wrong.

    ReplyDelete
  84. VXX is up 2+%. Normally, that would have tanked the SPY.
    It is not budging. Amazing.

    ReplyDelete
  85. We finally got that two point retrace. So I just sold the small put position that I added to on the way up for a minor gain and am now long at 1,262. 


    No matter what happens today, I will be closing this long position out by day's end, since I have no confidence that the market will continue to be held at these levels into Tuesday.

    In a virtual mirror of yesterday's session only this time we're ten points higher, I *suspect* we'll trade between 1,261 and 1,266 for the rest of the day. 

    Unless there is some kind of push back down from the Street coming that will be aimed at holding everyone who bought up here underwater.  But I think that comes later next week.  In the meantime, I think it's probably more profitable for the Street to sell as much as possible at these levels for as long as they can.

    ReplyDelete
  86. Yes, I am seeing the same thing and it could be the top.

    ReplyDelete
  87. My understanding is that if the low of a does not KO the low of 4, then it is bullish advance. So far, this is the case. No?

    ReplyDelete
  88. I'm seeing the same thing, but I am suspending my EW counting today.  And going with what is the max dastardly and most profitable thing that the Street can accomplish with today's trading.

    In my estimation that's keeping existing shorts trapped, selling overpriced stocks to those who will buy them, printing another nice green candle on the daily chart, positioning to go short from these levels, etc.

    And I'm not truly a capable EW theorist to begin with.  I depend on others for that analysis.

    ReplyDelete
  89. My Vix ticker says it's down -0.18 today.  And just looked at the chart.  It's trading a narrow range. This is not a session that would drive the Vix higher. 

    I didn't look at VXX, which I assume is an ETF (I've never traded it and am not terribly knowledgeable about the Vix in general).  Wondering what you are looking at though. And what are the components of VXX that would give it that kind of jump?

    ReplyDelete
  90. VXX is the ETF for SPY.
    It is supposed to measure the vol. of SPY. But who knows.
    As to VIX,  I was told that the pros are dumping them and rolling over to months  further out. Because of that, it is no longer a good measure for the vol of the whole market.

    ReplyDelete
  91. To my knowledge, I don't think that is true.

    ReplyDelete
  92. You are absolutely right.
    In any case, SPX is now riding another up wave again - tbe "b", perhaps?

    ReplyDelete
  93. It is not clear right now but I am thinking downward impulse wave.

    ReplyDelete
  94. Good to know, thanks. 

    ReplyDelete
  95. I trade UVXY and its been my top stock the last 2 sessions.  Picked it off near the bottom

    ReplyDelete
  96. Talk about hovering.  Pegged at 1,262 for an entire hour.  How often do you ever see the same point traced out for sixty straight minutes? 

    This market is all about distribution at this level.  Couldn't be more obvious.  As has been the case since mid-November, the Street does not feel comfortable nor the need to advance past 1,265.  It's just fun to hang out up here for a day or two to sell to those 200 dma dreamers.

    ReplyDelete
  97. Looks like a new ETF.

    Are you swing trading it? TIA.

    ReplyDelete
  98. It moves - I picked it off near the bottom at 10.20 and its run to over 11.40 - and that is on 2 up days !!   If we get the down leg I'm looking for it'll run to 20 quick

    ReplyDelete
  99. whatever happened to the french credit downgrade?  haven't heard those rumors much this week.

    ReplyDelete
  100. This is such a boring trading day... Would have worked well for options sellers all this week.

    ReplyDelete
  101. cnbc.com had something suggesting it wouldn't happen until next month, probably because of the holidays.  So, rally on!

    ReplyDelete
  102. I read an interview that said S&P would not be analyzing it until January.

    ReplyDelete
  103. "S&P is not expected to release its eagerly awaited verdict until January on debt ratings for the 15 euro zone countries it placed on review, two independent European government sources told Reuters on Friday."   This is from http://www.reuters.com/article/2011/12/23/us-sp-ecb-idUSTRE7BM0RL20111223 .

    ReplyDelete
  104. I'm done for the day. This is a waste of time. 

    Sold my postion taken at 1,262 at even which meant eating the option commissions.  I watched the contracts fluctuate by no more than three cents for an hour and a half.  And they're still there now.

    Problem with a market that moves this little is that if we decline a couple points, I cannot count on buying more on the way down to play any kind of retrace to get back to even.  The retrace may never come at all.

    So now figuring it's better to just call it a wrap.  Was a good week overall.

    ReplyDelete
  105. Not going to happen during the holidays.

    ReplyDelete
  106. the VXX is a short term S&P 500 vix etn.
    basically it moves up on backwardation and down on contango.
    notice the vxx is still elevated relative to the vix since august.

    http://seekingalpha.com/article/296118-hedging-your-investments-using-vxx-s-backwardation

    ReplyDelete
  107. Closing Call?
    The pros are watching for a 1265 close.
    Above or below? :)

    ReplyDelete
  108. And whomever doesn't think this market can be completely controlled and manipulated, I'd give you the last two trading days as Exhibit A and B. 

    As textbook as it gets.  Take higher. Hold here.  Sell here to whomever will buy. Easy as 1 -2 - 3.

    ReplyDelete
  109. Here's the wedge on the 5 min chart one more time.  Broke out of that last wedge trend line sideways, so I've widened it.  I think we might stay here or drift a little higher to keep us in this pattern today and keep people guessing into next week.  I'll be holding shorts into next week from 1253 ES unless something changes in the next hour.

    ReplyDelete
  110. Yeah, this is probably not a bad time to sell really overpriced calls to someone.  I'd feel guilty doing it though. 

    ReplyDelete
  111. fwiw:  Astro update - we're still in the throes of that Jupiter station energy - turning direct on 12/25 - loaded with optimistic attitude.  
    On a bright note for bears, 12/29 offers some negative energy prior to market open - Sun conjunct Pluto approx 2:30 am.  If Jupiter provides an optimistic hangover into Tues. next week, take advantage going into Wed/Thur for a change of market direction.

    ReplyDelete
  112. lol, right at the 200 dma.

    ReplyDelete
  113. Yup, just to mess with everyone.  :)

    ReplyDelete
  114. Which would mean that the Street is going to hold everyone who bought after 11 am today under water. 

    Not exactly a Christmas gesture, but sure is what you'd expect from MM's at any time.  Which would in Wall Street spirit seems appropo.  Self-gifting is more their kind of thing, right . . . ;)

    ReplyDelete
  115. Closing my short from yesterday for trivial loss. This is not a normal market, and all bets are off. Speculating that the machinations recently seen can be applied some more next week for further upside. If it closes above the 200 dma, the bulls get all excited. The bears relish the thought of even better buys.

    ReplyDelete
  116. I suspect there's quite a bit of short covering for US financials.
    Shorting banks was banned in the Euroland a while ago. So the US ones were shorted as proxy instead. Now, with le TARP and das QE's coming, they just want out.
    XLF has been on fire lately.

    ReplyDelete
  117. Interestingly 12/29 is the  Italy €2 billion & €7 billion auctions

    ReplyDelete
  118. Happy Christmas to all and my Santa deliver stockings full of trading luck, skill and insight to all of you for 2012.

    Thanks also Pretz for creating this community. May you have a great (and well deserved) rest with your family!

    ReplyDelete
  119. Now, that's interesting - 'cause when we're dealing with Pluto in financial terms it's very much about debt and taxes. 

    ReplyDelete
  120. Do you have a web site?

    ReplyDelete
  121. btw, ew theory wise, the afternoon may have  been a 4 wave and now you'll get that 5 spike to close.

    ReplyDelete
  122. It's on fire, lol.

    SPX is now on steroid. Someone really wants 1265. :)

    ReplyDelete
  123. PL, an update of the Big Picture SPX would be helpful if you can find the time. Thanks!

    ReplyDelete
  124.  Volatility etn's ,bottomed out yesterday, Tvix,uvxy,cvol,etc. anybody has an explanation?

    ReplyDelete
  125. Wow, holy cow ....

    What a closing. Desperate shorts or eager longs?

    ReplyDelete
  126. You were right yesterday about opex. I had too much faith in the trendline ceiling, 200 dma, 50% wave size, etc. Opex + holidays.

    ReplyDelete
  127. Nice day for VIX related stocks. Expect a reversal in SPX soon. Italian bonds back over 7% is another bad sign for markets.

    ReplyDelete
  128. Lol, funny stuff there at the close.  Got a fill at 1260.25 on ES, think that's the high of the day.  Averaged my short to 1255ish.  Merry Christmas all.

    ReplyDelete
  129. Apologies to PL, not soliciting,  just answering this question.
    I am building a site, but it is primarily focused on my consultation services for personal and business astrology. This is the only place I drop in for financial astro commentary.I really need to talk to PL about what's okay for me to cover here for those who are interested versus those who are not.  

    ReplyDelete
  130. I think it's a total fake out move.  We get 1,265 . . . for like thirty minutes. There's no real buying here. 

    But we get to go into Christmas with everyone who did buy today not sitting underwater.  Thus preserving holiday complacency.

     I can just hear the boys on the Street saying to one another: Let's print it . . . and then get ready to give it hard to all these chumps who bought next week.

    ReplyDelete
  131. This recaptures the Dec 7 close and erases recent bad memories for the bulls. Next week should see more upside.

    ReplyDelete
  132. Yes, that was a dramatic 4:00pm close.  We still have until 4:15 for those that trade the VIX options. I'm debating if I should sell more VIX calls and hold over the weekend.  Three days of Time eats away the VIX call options so extremely that it would take an exreme rally up to raise the VIX call values back up...  

    ReplyDelete
  133. Anon20, wow, again with the money loosing call.  What happened you "your" line in the sand in around 1255?  Blew through there pretty quick.  Of course you didn't have a stop though, just doubled down?  Maybe if you wish a little harder, things will go your way. 

    Money and risk management are the only way to play.  You can make money with random entries with good management.

    ReplyDelete
  134. 1265....what is that, a 99% retrace from the dec 5th high? is 99% a fib ratio? lol!
    gap up tuesday coming?

    ReplyDelete
  135. erratic moves in very low volume..back to severe reality in january 2012
    happy christmas to you all

    ReplyDelete
  136. The Best VIX bottoms approach or exceed -2 SD.
     So perhaps the recent low will be revisited.

    ReplyDelete
  137. I'm "speculating" that maybe on or after wednesday when more traders are back from xmas.  There are still folkers that have extended vacations through the New Years too.  Just a guess.

    ReplyDelete
  138. I usually don't leave unprotected calls/puts overnight, let alone over a long weekend. When all kinds of you know what can happen.

    I usually protected it by bringing in another leg to turn it into a spread. Icing on the cake - the arrangement takes care of the time decay issue.

    This way, you limit your upside, but protects your behind.

    As PL said, it is not about making money. The name of the game is not loosing your shirt so you can fight another day.

    ReplyDelete
  139. With my 9-5, I definitely did not get to focus on selling as much as I should have.  I am new to VIX options trading, about four months, but see that most of December would have been a dream for VIX Options sellers.  The SPX was either sideways or up.  This is due to low protective options activity from most traders being out of the market for the holidays.   You can verify this, as PL mentioned in his back testing of the past December quotes on the VIX.  Not advice here, but I will note this for next December.  :)

    ReplyDelete
  140. When I said, "This is due to low protective options activity from most traders being out of the market for the holidays", I was refering to the VIX being low, not the SPX.

    ReplyDelete
  141. Excellent points AF.  I have a spread of short-front Jan 40s and long back-February 26s.  I hope to sell more Januarys and close out of both front and back months after the anticipated French AAA downgrade in January.  If there are no other major bad news, I will have to roll back the Februarys and let time eat away at the January 40s.  I am new to trading VIX calls, and find trading with spreads a challenge.  The need to manage enough profit from shorting front-month calls while managing long back-month calls from losing their values at the same time is a lot to grasp.

    ReplyDelete
  142. brianhut you silly bear (no pun intended), but the SPY was not even on the list Thurs or Fri.  Yes it was #1 on Wed, but that's all I saw.  What you smokin' man? 

    ReplyDelete
  143. With the Dow's action today, it's pretty hard to cling to the ST bear count anymore.  Prolly time to start calling this a double zigzag.  Interesting, with all the repeated failures of some normally good indicators...  makes me wonder if there'll be a Revenge of the Indicators decline in January.  ;)

    ReplyDelete
  144. Furr, you're more than welcome to cover anything and everything.  :)

    As long as I feel your motives are benign (and I believe you when you say they are) then I have no problem with it.  Depending on the quality, there are pretty good odds I'll put you in my link list once your site is up -- as I did recently with Albertarocks.  Appreciate the respect.  :)

    ReplyDelete
  145. That'll get you an Anon20 reply.  He was quite silent as they day progressed.  I don't want to get too worked up by these no volume days or bond market closure days.  There are only buyers generally

    ReplyDelete
  146. did you get knocked out of your shorts pretzy?  i am still in but now a little fearful where the es will open.

    ReplyDelete
  147. Be that as it may, your work is invaluable.  I certainly learned a lot.  Some lessons more painful than others.  I'm now waiting for the longest 30 minutes in the world to drag out before I call it a day and head out for the holiday weekend.  Wish you and everyone here and your family (even ANON 20) all the best during  the holidays. 

    ReplyDelete
  148. RE: a couple people asking about EWT short vs. long time frames...

    It's a bit like any other type of analysis -- sometimes it works phenomenally well on short and intraday frames (refer to the 10 days prior to the rally where it was hit after hit short term and intraday... other times, it's hard to apply on very short time frames.  A lot of that hinges on whether you have the picture at one higher degree pegged or not.  In other words, if you know you're in a motive wave (even if it's a motive within a corrrective -- i.e. wave A or C), then you have a point of reference for the intraday projections.  When it's something like we've seen this week, where it could be any of several counts, it's much harder.  That's why I tend to trade with larger positions when I feel more confident in the count (as in the prior week).  This week, I've been taking a few stabs here and there, but with very small positions.  This is, btw, another way a trader mitigates risk, as most of you who trade more frequently already know.

    So, bottom line, at times it works amazingly well intraday, and I think most of you got a good look at that during the prior week, when I couldn't *miss* an intraday call.  Other times, there are challenges... just like any type of indicator. 

    I picked a helluva market to start this blog during, that's all I can say.  :D   Literally every form of analysis out there has been incredibly challenged recently.  I keep tabs on a lot of different folks, from Hurst to moving average to classic TA to fundamental -- and speaking comparitively, we've been doing pretty darn well in this market.  :)

    ReplyDelete
  149. Thanks, Juan.  All the best to you and yours as well.  :)

    ReplyDelete
  150. lol

    I don't get too worked up about them either, but they do impact the picture.  It's a bit like the "butterfly effect" as it's called in Chaos Theory.

    ReplyDelete
  151. Does that throw us into the Alt count on the SPX chart in today's blog, or something entirely different?

    ReplyDelete
  152. Still in -- just barely.  I will probably look to cover on any early pullbacks next week.

    ReplyDelete
  153. Alternate in today's article becomes the preferred count now.  To be fair, I haven't yet done my full scan and examination of markets -- but at first glance it looks highly probable that this is the situation.

    ReplyDelete
  154. btw, if this is indeed the alternate, meaning we're still in Minor (2), expect bullish sentiment to keep growing for a while.   "Everything Will Be Coming Up Roses" for the bullz, sentiment-wise, during the next week or few. 

    ReplyDelete
  155. Furrr --

    Speaking of, now you've got me a bit curious, since you anticipated that sentiment (nice call!).  When do things turn back to negative, and how dramatically, in your opinion?

    ReplyDelete
  156. Me too.  Would like a pullback to shuck my ES shorts, then wait for the 1300 range.

    ReplyDelete
  157. The bond market closed at 2PM which left equities the only game in town for the last 2 hours.  Wasn't a bear in site

    ReplyDelete
  158. Also, I noted that last Friday, she (I assume it's a she, apologies if not) correctly called the Monday / Tuesday reversal.

    ReplyDelete
  159. The French public got pretty worked up when they heard the rumors of a downgrade.  There were riots at one point, and a few builidngs were burned... the hysteria was finally overcome when the Prime Minister held an emergency press conference and announced that the downgrade had ABSOLUTELY NOTHING to do with French restaurants. 

    ReplyDelete
  160. Would that also mean that a maximum pullback under that count would be 1229.51?

    ReplyDelete
  161. Yeah, that's the call I'm talking 'bout.

    ReplyDelete
  162. The short answer is: essentially, yes.

    ReplyDelete
  163. A few of the charts I'm looking at are suggesting an immediate pullback on Tuesday.

    ReplyDelete
  164. I think your question put to one Mr. Furr is quite apt. It's not a question of IF we get big heaps and gobs if happy the works is fine bull pabulum over the ST. The question is when it stops. The answer to that question makes the trade to make an easy call. Right now it's just: go long or play safe . . . until reality returns.

    Right now the market is screaming that the coast is clear and the waters are warm and shark free. We all know how long the market delivers on that 'promise': just long enough to deliver the goods enough to make you believe it might be true. And then it screws you for believing it.

    ReplyDelete
  165. Interesting divergence at play -- while the SPX and Dow are back to their December highs, the NDX has only retraced a little more than 50% back to its highs.  I talked about it before, but I may go back to using NQ as my primary short vehicle.  I switch off from time to time between ES and NQ, depending on which looks weaker.

    ReplyDelete
  166. lol- yep.  A lot like the bears who jump in and short near the bottom, when it seems "safe" to do so.  You'll have a lot going long here soon, 'cause hey it's "safe" again!

    ReplyDelete
  167. PL, what about continued the continued EUR weakness we saw this past week. It seems as though EUR could be consolidating here before breaking down further. While SPX could very well lurch even higher towards 1300, the past two weeks moves in gold and weak moves in FX seem to show that SPX is more/less trying to defy gravity as the USD gathers steam to lurch higher. Merry Xmas to you as well and everyone here!

    ReplyDelete
  168. Yeah, these are preliminary observations, btw.  I'm going to spend part of this long weekend really shaking the tree here.  Maybe there's an explanation for the Dow/SPX divergence that I haven't seen yet.  Like I said a couple days ago:  lots of cross-currents right now. 

    ReplyDelete
  169. Yea definitely a lot is going on in the markets right now, that and I say give your Wilshire chart a day or two to play out and perhaps it will still lead the way for us. Would be nice to have a trend either way without all this whipsaw.

    ReplyDelete
  170. PL:

    If you take a look at the components of SPY (I assume it's a good proxy for SPX), you'll see that all the 200
    dma's are pointing northwards.  With only one exception - XLK (tech). Even the financials (XLF) are pointing northwards.

    I think the ORCL debacle may have something to do with it. It rally rattled the tech bulls. But then again, it may be just that tech had been the high flyer (relatively), and is where the money is for profit taking.

    That is my fundamental take on the divergence. Whether it makes sense technically, I really am clueless.

    Marry X'mas.

    ReplyDelete
  171. Agreed.  May be it just a throw-over at wave v of the triangle.

    ReplyDelete
  172. What I want you to look at is oil. Wtf is up with its continued strength. Is it sniffing out under the radar printing and liquidity? With Asia and Europe both in less than stellar shape oil should be falling. Makes no sense to me.

    ReplyDelete
  173. anyone know if the futures trade again before 6pm et on 12-26?  holiday hours mess with me

    ReplyDelete
  174. I am really wondering if anybody was actually buying stocks to hold over the weekend? EU in  BIG troubles, Chinese bubble about to burst, US still 8.6% unemployment -touted by the press as a big drop from the previous 9%... lmao-, less than stellar income growth and spending growth, etc etc. Sure doesn't look to me that if you're having a billion dollar plus portfolio (or a few thousand for that matter) to go long and hold would be the safest bet... or????. But, what do I -little nemo in the sea full of big sharks- know, right???? I jumped ship at 1250, so I must be stupid... This looks like short-squeeze after squeeze. Buying back of shorts over and over again. As if this market is becoming a pump 'N dump. I thought that was the arena for penny stocks, but not anymore.... 

    The biggest I played was LEXG (just type that ticker in your trading platform and go back to spring this year).  One of the biggest promo-pennystock-EVERRRR. Went from $1 to $10 in 1 month. I jumped ship way before, as the last week or so was just short-squeeze after squeeze. Never more than a 3-5point dip, just like the last 2 days we've seen now. But boy, did she go down in the end. To less than $4 in 1 day... ; and I am really thinking the market will too in a similar fashion. The higher she goes, the more shorts are being squeezed the deeper she'll fall.Maybe it won't be exactly like the July 19-20 top Pretz showed us again and which I reminded him off. Maybe we'll overshoot (we're overbought already anyway), and go all the way to 1300+. So what? Just go long and take the profits. Don't fight the current, she'll eat you up and spit you out. Setting your teeth in 1300+ will be even more profitable than a bite of 1260... Because this rubber band is about to snap or bounce back. It's stretched almost to the max. Maybe it's more like the April-May 2007 time frame (TI's now and then are surely behaving similarly); and we all know what happened starting June 2007.... So maybe we're in a 1-2 month bull market and that's all she writes? Maybe not. Since everybody is becoming more and more bullish we all know what that means too.

    Happy holidays!!
    Arnie

    ReplyDelete
  175. Spectacular market! This must be purchased and wait for a profit, one day or an other the profit will come

    ReplyDelete
  176. My beloved ORCL is just a signing a global economic cooling and northeard of Italy we have the Noth pole wich is very cool place

    ReplyDelete
  177. LEXG great stosk! Yesterday well 69.000 shares were excanged at 0,65 with whom it may be I will buy two skipass

    ReplyDelete
  178.  Pretzel--  Happy Holidays BTW-- I always use Chrome browser but your site keeps changing.  Now I see no way to reply to a message, so I am just typing in a comment which I assume will come up as the last comment, at the top. 

    Here is what Furr last sai--, since you asked about that person's prediction for when sentinment would reverse.  Of course Astro projections,  like all kinds, are sometimes right and sometimes wrong.  So who knows what will happen but here is what Furr said in a post below.  This site is no longer giving me times that the posts appeared, so I have no idea when Furr posted this.  

    FurrrCollapsefwiw:  Astro update - we're still in the throes of that
    Jupiter station energy - turning direct on 12/25 - loaded with optimistic
    attitude.  On a bright note for bears, 12/29 offers some negative energy
    prior to market open - Sun conjunct Pluto approx 2:30 am.  If Jupiter provides
    an optimistic hangover into Tues. next week, take advantage going into Wed/Thur
    for a change of market direction.

    ---------------
    BTW, Folks, what is the best browser to use to get onto this site?  I am in Chrome now, which works best for most sites I visit.  But I can't Reply to a previous post.   And I don't see the times and dates other posts were made.  Both of which I'd like to do.

    Happy Holidays to Pretz and Everyone.

    Josh  

    ReplyDelete
  179. Josh,

    Internet Explorer seems to provide the best compatibility with the Disqus comments section overall.  There are still some strange occurances with uploading images, but I haven't heard anyone say they've found a browser that uploads images flawlessly yet.

    ReplyDelete
  180. IE9 works best for Disqus. IE8 will work very poorly. There is a reply button even in other browsers but you have to just move the mouse to where you know it is and watch for the arrow pointer change to a hand icon that you can click. You can also select the entire page content with control-A on the keyboard. This semi-inverts the colors and lets you see the button.
    Easiest way is to subscribe to the discussion by email. There is a button for that at the bottom of the page just under the last comment, towards the left. When a comment comes into your email inbox, you can reply to that person just by replying to that email.

    ReplyDelete
  181. Pretzel, since you curious what the stars might portend for the markets. Here is a link to Ray Merriman's website. He is suppose to be good, afterall he charges over $300 a month for his subscription service. http://www.mmacycles.com/weekly-preview/mma-comments-for-the-week/mma-comments-for-the-week-beginning-december-26,-2011/

    ReplyDelete
  182. I would take these 200 dmas with a grain of salt. Agnostic or data driven decision may be a mistake at times of market distortions. As I'm thinking out loud here, I'm also wondering if the particular path to this point, slow grind over a few days, was designed to maximize the impact on the dmas. A strategy of patiently waiting out the dma declines, to meet them easier?

    ReplyDelete
  183. Check this link out for Ray Merriman astrological insights into market cycles.
    http://www.mmacycles.com/weekly-preview/mma-comments-for-the-week/mma-comments-for-the-week-beginning-december-26,-2011/

    ReplyDelete
  184. Cool! Thanks for the link. They seem be saying that wed or thurs might see a reversal.

    ReplyDelete
  185. Hi, my statistics need a market change next week otherwise I have to torough away the statistic approach a find someting else. Marry Christmas to you and to the team

    ReplyDelete
  186. Hi PL, I'm rather new to you Blog and I reconise and appeciate the teamwork which is inside your work. My be that somebody has more technicality than you but your teamwork ovecome the rest. Marry  Christmas 

    ReplyDelete
  187. I think this is the longest time I've gone in one stretch w/out posting something on the blaaaaaaaaaawg.  :0

    Gotta couple hours to do some work -- wife wants to go last minute shopping, allegedly for something for me, so I can't go along. 

    ReplyDelete