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Tuesday, December 6, 2011

SPX Update: WHAT? No NDX Chart?

In yesterday's article, I laid out the case for the market forming a top.  This case continues to strengthen the longer the market hangs around at this level.  Calling tops or bottoms is essentially the most difficult aspect of technical analysis, and it's always easier to be wrong than right -- because you're trying to anticipate a completely new direction in price movement, based only on circumstantial evidence.  So, despite the prevalence of indicators, I could always be wrong.  Please manage your trades accordingly.

Listed below are some new and continued indications of a top.

The Volatility Index has now traded outside its lower Bollinger band for the fourth straight day.  This is a pretty rare signal, and has only happened nine other times since 2004.  In 6 of those 9 times (67%), this led to prices falling below the price at which the signal occurred -- however, sometimes after one or two days of the market trading higher than the signal price.  In 1 of those 9 times, this signal marked a major peak: in May of 2008, when the S&P 500 was trading at 1440.  The market ultimately went on to decline all the way down to 666; and this peak has still not been bested since.

The market also formed its third reversal candlestick in a row.  This time, a black reversal bar -- which is formed when the market closes below the open, but the close remains above the prior close.  This is the third day in a row that the market has seen an intraday reversal lower; usually, this is a bearish signal. 

It seems like the main thing holding this market up right now are the overnight futures.  In fact, of the 108 points the SPX rallied off the 1158 low, from the standpoint of price advancement, approximately only 20 of those points have come from the cash market.  Even as I write this, the futures are trying to reverse Monday's selling.  I'm dubbing this "The Buyerless Rally."
 
Anyway, in the daily chart below, I've highlighted every occurrence of a black reversal candlestick going back to April, and you can see that Monday's candlestick is almost always found in the vicinity of market reversals:


The next chart is the preferred count, which was updated first thing on Monday's open at my website.  The market followed the projected path perfectly for an expanding ending diagonal.


Now, the challenge remains that this rally could still be labeled impulsively.  I believe it counts better as an ending diagonal, as shown above -- but it's not a clear-cut 100% "oh yeah, that's it fer sure."  Below is the bullish labeling, and for the moment, the haziness remains between counts.

Both counts are expecting downside in the very near future, and the preliminary target for either count is the 1225 area.


Any new highs above Monday's would further favor the bullish alternate count shown above.

Apologies are in order for not completing the NDX chart, which one reader was very insistent on seeing over and over and over.  I'll try to get to it tomorrow.  ;)

In conclusion: it remains a trader's market, as so far every break of important support or resistance has led nowhere.  I continue to favor the bearish short term resolution, as well as the bearish long and medium term views.  Hopefully, we'll gain more clarity on the short term picture soon -- three days of the market doing essentially nothing hasn't helped much, though I do feel the bearish ending diagonal count is quite viable and somewhat superior to the more bullish impulsive labeling.  Trade safe.

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

161 comments:

  1. Here's the irony:  the update was a few minutes late today because I passed out at my computer while STUDYING THE NDX CHART, lmao.  I swear I'm not making that up.

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  2. The NDXCLF gets its revenge!

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  3. Question Pretzel: When you count waves and analyse the market, do you only count the movement of the cash market? Do you consider the movement of ES "part" of or continuity of the cash market while cash market is closed? Or do you treat them separately as "two" different markets?

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  4. Excellent.  You should have included the NDX chart in the update just to blow all of our minds.

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  5. Never got done w/ my study.  :(

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  6. I treat them as related markets, but the wave structures in the futures get warped due to the leverage so impulsive moves often fail to follow through, and vice versa.

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  7. Doc - Your bullish chart lines up beautifully with the recent call by Tom Demark...rally to 1325 by dec 21st then major pullback....love your work Pretzel

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  8. The European markets don't appear to have been bothered by the S&P downgrade talk.

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  9. Pretzel - thoughts on copper and oil given recent developments in the market?

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  10. Thanks, Docsteve, and welcome!  :)

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  11. I really was the stress of the NDXCLF letter that wiped me out. 

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  12. Move up looks corrective so far, should take out yesterday's low before we take out yesterday's high.

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  13. I wonder if 1260 could theoretically be a good place to try and short the S&P...

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  14. Assuming we just made the top of the correction at 1260, next target should be 1243 +/-

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  15. Oil looks like it may have formed a double top at the recent high, and the move up to that point looks corrective.  Copper, on the other hand, may be completing an impulse up.  Haven't had enough time to study either in depth lately, though.

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  16. I would say it was probably the perfect place to, yes.  Theoretically.  May have missed that window, though.

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  17. 1400+ hits right at 9 am EST, a new record... and the one day the update wasn't posted, lol.  :D

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  18. DAX looks very toppy to me here.

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  19. Yeah, wished I had added more there today (added a little yesterday).  Might get another chance though, this market seems bulletproof.

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  20. You're in high demand.

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  21. People obviously want more NDX charting.

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  22. This sure is some anemic trading - can we get a sell off already - geez

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  23. Best I can offer is my dog in front of a Crimbo tree...

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  24. Lovely !!  Now order up a big push into negative territory - maybe if we chant 

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  25. om mani padme hum
    om mani padme hum
    om mani padme hum

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  26. Yeah the European downgrade thread really confused the Talking Heads today. The SA JSE closed down and the downgrade talk was given as the reason. When confronted by the fact that the FTSE was trading higher, the talkin Head had an answer: "You see the talk of a downgrade puts pressure on the Europeans to reach agreement to 'resolve' their problems sooner. So the market is positive about it"

    hahahaha hehehehehe hahahahaha

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  27. Yeah, I was driving home at the time and when I logged on my chart hasn't refreshed properly yet and I thought it was still at 1259..... After I posted I saw we were already a lot lower :-(

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  28. And now we are going out for the evening - so that is that for me for now. (1256 would prob also be a good place now - but I have to run... Enjoy!

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  29. Here's some fun reading if yer bored.  I just dug this up, which took friggin forever, but I thought it worth backing up my claim of calling the exact bottom in March '09.

    http://pretzelcharts.blogspot.com/p/historic-real-time-bottom-call-3-6-2009.html

    btw, this could be b-down of an a-b-c, so we might get a rally back up as high as 1263-1265 if anyone missed their entries yesterday. 

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  30. Huh - the Dow went from 15 to 45 in 3 seconds ????? Bizzzzzaro

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  31. Pretzel, do you think it's better to do lots of short term swing trades and day trades to compound continuously making small gains over time, Or do you think it's more profitable to take a "position" trading approach to ride a intermediate/longer term trend to trading? 

    Sorry I know you are not a hedge fund manager but what's the potential ave annualized return of each approach?

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  32. PL, I don't quite understand you statement about VIX *outside* of the Bollinger band three days in a row. What standard deviation do you use? Do you reckon the close or intraday? See my attached. It's certainly riding near the lower band but yesterday, it barely touched it and closed inside.

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  33. Still have not done an exhaustive search (1 1/2 jobs, home remodel, wife/kids, investment home seem to get in the way) but I like to identify 'significant' tops with the $vix:$tnx CLOSING below the lower Bollinger limit with at least one of the small cap (S&P600 or RUT), mid cap (S&P400), and/or S&P500 closing above its upper Bollinger limit.

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  34. I think they're both profitable if used properly.  I do both, depending on whether the market is trending or not.  The trade I made into the March bottom was a position trade, as was the trade I took out of it.  My initial call off the March bottom was for 780 as the next stop, which got hit rather quickly.

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  35. Oh damn.  You're going to make me post the VIX chart, which means it's going to be on every post I make for the rest of my life...

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  36. When I say "traded outside" I mean it printed a trade outside, not closed outside.  Here's the chart:

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  37. Since greed is the dominant emotion at tops, and greed manifests slowly...tops, even minor ones, take time to develop. Additionally, the oil sector as represented by USO, wants to go up into Wednesday, at minimum.
    Ergo, patience is the watchword of the day.

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  38. Its a new bull market.  We've decoupled from China/Europe/reality/everything.  BTFD.

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  39. To quote Bruce Lee: The art of fighting without fighting ;-)

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  40. Looking forward to studying the VIX chart.  Tomorrow's title: WHAT? No VIX Chart?

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  41. the past few days, paint has been drying quite slowly

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  42. A"greed" -- tops are usually slow.  Much harder to call, as well.

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  43. That's what I thought... for a strongly uptrending market position trading is great.  For a sideways choppy market and a violent bear market it's probably better to do shorter term swing trades

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  44. Well I must say I am rather impressed with the bull's efforts for the morning.  They've held most of the day above 1,255.  

    Not sure if bulls trying to just wear down sellers and waste their firepower. Or if they really think they can take things higher from here.  But they have turned back most downward pushes rather impressively.

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  45. lol- yesterday I felt like a "one-hit wonder" band who always plays their one hit at gigs. 

    "Dude, I won tickets to see Abby and the New Bull!"
    "Who are they?"
    "They did that song 'NDX Chart'!"
    "Oh, sweet!  Can I go?"

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  46. $vix:$tnx closing outside on May 15th.  S&P600/RUT both closing over on May 15th, S&P400 on May 15th and 16th, and S&P500 on May 15th.

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  47. RTT,

    I assume you are talking about the Daily Chart for both the indexes and the vix?  And not shorter interval charts?

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  48. My Tin Foil Hat theory right now is that the reason all the moves have been in futures is because "the They" want to hold it up here to distribute their inventory.  But that's really just pure random speculation.

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  49. Hmm.  My chart shows vix:tnx just inside its BB on May 15.

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  50. I never use dots, maybe that's why.  :)

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  51. I completely agree.  This does not *feel* like a serious effort to drive the indexes higher so much as maximize what can be gotten out of the rally.

     And as far as this entire leg up from 1,158 and the market staring at the abyss from there (which I firmly believe that it WAS):  this is the biggest fakeout sucker's rally I've ever seen.  Have you ever seen 109 SPX points of movement done with SO LITTLE buying before ever???  I don't have the experience and understanding of market history that you have, but I sure as hell don't recall anything like this.With buyers have had to waste no firepower on even getting here though, it does leave them with plenty to waste now that we are here.  They are playing with house money courtesy of Ben and meddling his crowd that loves overpriced everything other than the dollar.

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  52. It costs less money to jack the futures than to jack the cash market !? :-)

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  53. I only use daily.  My objective as a trend trader is to use daily trend and valuation service data to obtain intermediate and long term positive gains that meet or beat the overall market.  Wanted to develop something suitable for 401K accounts with the variations in trade restrictions that exists. Intraday highs and lows are a part of the system as well but do not use any other timeframe.

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  54. Are you kidding?  WAY less.  Leverage, and much lighter volume.

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  55. Hi PL, you are a wise investor and a clever person. I have also tons of analisys but in these situations you never know

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  56. Let's slap it back down :-)

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  57. Let me sell 100 billions of ES contracts tonight :-)

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  58. You have a rigid thing with 'perfect' and 'exact' counts, 'perfect worlds', 'perfect spots', etc.  No wonder you still can't earn a living at this, despite you supposedly "calling the exact bottom in march '09."  Did mommie and daddy regularly reward you for being 'perfect', and hard punish you for being 'imperfect'?  Your 'perfect' superego is bore, kid, and it will lead you further astray, than usual.

    Like for example, last wednesday, when you complacently called spx 1225 'perfect' top of your up range, and then you puked, when it doubled that, and ever since, you have been waking with your tail between your legs, not as perfect and complacent ew 'genius' (HAHA) as before.  I wonder how much money you cost your readers, in that TOTALLY BLOWN wdnesday call.

    So now, in this same erroneous mode, you call for a 'preliminary target for either count', at the same spot that murdered you last week, spx 1225.  And because of that, and because you are slowly becoming my contrarian indicator, and the current gsc primary trend is WAY down, then I say you will BLOW IT AGAIN, and 1225 will be taken out like swiss cheese, and by DOUBLE the amount that wed. took it out by, which was around 25 points, so now I SAY, 1225spx will be taken out on INTRADAY basis, and SOON, by at least 50 points---while you, once again, are left, in a scary IM'perfect' world, that makes you crap your panties once again, and then go into your next day's revisionist rationalizing mode, in which you'll say, you had the primary trend all along.

    You are not just becoming predictable, you are becoming boring, and that's the death of published online entretainment.  The maui rubik's-cube clown that considered himself better than Prechter at ew.  Funny indeed, if it wasn't so pathetic.

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  59. Uh, yep.  If you think about it, it's quite possibly viewed by the 'they' as an a rather low cost sentiment and perception manipulator.  

    If you and your friends are managing collectively a trillion in equities and you can jack the futes for a few million apiece at select moments (and it being EOY is certainly one of those select times), why wouldn't they do it?

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  60. I wrote on Saturday in my Blog that NDX has a positive trend with negative technical indicators and that this is s discrepacy. I' m please to se today the weakness of NDX, we will see   

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  61. this action reminds me of the days leading up to the fed announcements in 2009/2010- nothing happens, then BAM!  right in the kisser!

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  62. lol, I "liked" your post when I was groping in the dark for the reply button.  Great post, GC!  :)

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  63. This is an old trick money managers use. Even Jim Cramer admits to using it when he was running a hedge fund. Here is the video of him explaining and admitting it:

    http://www.youtube.com/watch?v=GOS8QgAQO-k

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  64. lol, just looked at that pic again.  The rubber chicken is a nice touch.

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  65. Can you post a link to your blog Paolo or send the name.

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  66. Wow Frank that sounds like an Anon20 move

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  67. wtf is happening with Gold and Silver?

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  68. Just click on his name.

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  69. That's actually a really interesting video, ty for posting it.

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  70. It would... if instead of 100 billion, it was like 100 pesos.  :D

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  71. please do it in euros. ;)

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  72. Holy cow, I'm wiped out.  Lack of sleep catching up w/ me.  I might have to call it a "night" soon, so the market can tank again.  Maybe in another 45 or so.

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  73. I think you should totally rest for a couple of days. The Brussels meeting is on Thursday/Friday ;-)

    Likewise, I'm just on cruise control. Have to catch up (badly behind) with work at my day job.

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  74. Very interesting.  Fiction on top of fiction to move the market.

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  75. Ok you will see tonight ES tanking 100 points... I am going to use the funds from Central Bank of Mongolia :-)

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  76. Can't like it here, market is waiting for something....and I don't think it's Fridays meeting in Europe.   I'm getting a sneaking suspicion they want to run this thing up towards 1300 before they let it come down.   Let it drop into the close and then a gap open at 1285.  That would clear out some shorts prior to the meeting.

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  77. I agree that this market is starting to look like it is being gamed today, possibly in advance of a bigger announcement from the Fed later in the week.  At 10am and noon EST the eur shot up, followed by equities.  Let's see what happens at 2pm EST

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  78. It is odd that we are up slightly on essentially a 'risk off' day.  Trannies are down while utilities up, so people are taking some risk off but looks like they're rotating into defensive names instead of cash so that they catch some upside when the super great 100% guaranteed Christmas rally kicks off.  R2k is underperforming, but was much worse before the afternoon spike.  CNBC just did a piece touting how mispriced smal caps are.  They are correct, but IMO the polarity is off, they are way over priced considering the economic headwinds currently and the ones coming.

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  79. This choppy "rally" still looks very corrective IMO.  Might get a c-wave thrust higher at some point, but I don't think it will be sustainable for too long.  Ultimately, I think we take out 1250 either today or tomorrow.

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  80. Euro completed the bounce I suggested last night:

    PretzelLogic:
    Your Ho sitting right on the rising trendline from the earlier correction @ 1.337. Looks like it's completed a 5-wave structure down (wave 1 of 3?) prolly see a bounce up to 1.34... maybe as high as 1.345. Bears don't want to see Your Ho above 1.349 now -- that would make the recent decline an a-b-c.

    Edit
    Reply Yesterday 07:51 PM in reply to brianhut 0 Like

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  81. Trading a seven point range for the day so far.  Is that the narrowest we've seen in a long time. I don't recall one under ten anytime recently.

    LOT'S of movement within that range though.  Sellers are able to reject 1,260.  And buyers can hold all day above 1,255.  Not sure what that might mean.  And this feels like a totally false battleground.  But I do know that the market NEVER likes to stay in one place for too long.  I would call today MUCH more of a 'win' (so far) for bulls than for sellers so far though.  And that this is doing more to wear out bears than bulls.Not being able to capitalize on the S&P warning shot delivered yesterday says a lot.  It does make me think that neither 'side' has a lot of confidence right now. And the bulls have more incentive to simply hold up here and sell off as much as they can get away with. It also makes me wonder with the Fed and another European summit around the corner, perhaps everyone is content with sitting tight and waiting to see what happens before making a move from there. 

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  82. The rumormill keeping the markets afloat are related to the Europeans meeting this week. Apparently, markets are expecting:

    (1) Mario Draghi to announce more interest rate cuts, 
    (2) ECB to relax collateral requirements for banks to borrow and 
    (3) ECB to increase its sovereign debt purchases by a whole lot.

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  83. It hit 1.343 around 6am EST, do you surmise that terminated the bounce and we are beginning a leg down now?  What is your first target?  Also, I suppose this scenario would fit into your view that we are going to break below the 1.31 low soon right?

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  84. and there we go, 1.3385 to 1.3405 in under ten minutes starting at 2:30 est.  That's not normal.  Still flying up as i type this.

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  85. Well, the Finantial Times did just report that the powers want to double the size of the firewall around the trouble spots in Europe.

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  86. I've closed out, will re-examine when we get to eur 1.3450, which we have a date with, possibly overnight.

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  87. etrade is down.  great timing, imshort and getting squeezed

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  88. Funny how there was no money to fund the 400 billion euro EFSF, so instead they just say they're going to create some other fund with a different acronym and fund that with 400 billion euro of magic money and the market takes it at face value and loves it.

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  89. Approaching yesterday's high on the 5-minute $SPX but MACD shows very noticeable negative divergence.

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  90. I think the bullish count now has 111% chance. ;) Nothing can make this market fall. NOTHING. SPX is all set for 1600!:o

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  91. The rubber band just keeps getting stretched, which means the snap is gonna be longer and stronger.  Hopefully.  :-)

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  92. Increasing the odds of the bullish count is my purchase of spy puts minutes ago.

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  93. If you say so, so emphatically, it must be so, not. So I'm very relieved. Whew!

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  94. So far yesterday's high of 1266.73 hasn't been taken out.  We hit 1266.03.  Maybe this is corrective (near 100% retrace) and we have a double top from which to fall from.  However, I too am becoming disheartened - maybe that's a sign a downdraft is finally near.

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  95. why not just run it up already?  whats the wait?  We're at resistance, someone is driving this thing up- just go for it already

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  96. Just came back and saw the strong market. Tempted to go short, but  missed the high. If this thing is going higher into the close, I think I'll show some balls ans short it overnight...

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  97. most of the biggest volume bars on the minute chart for SPY have been red in the last 20 mins ~127 seems to have been soundly rejected.  Mutumbo style.

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  98. that is not how a sniper works

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  99. if the bulls press just a little, we're going to run up huge very very fast.  im on sidelines for now....

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  100. Today's session traded entirely between yesterday's LOD & HOD.  Safe to say we should see a bigger swing either way tomorrow.

    Of course based on market's behavior  of late, we should probably look for a gap up to open tomorrows session.

    /rolleyes. 

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  101. well,it didn't rise into close so i didn't short... probably stupid, last bear standing and he misses it ;-)

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  102. Jaco, you've mentioned the JSE quite a bit.  Thats a somewhat obscure market for regular mention, unless you live there.  Do you live in Jo'Berg?  If you've said so before I haven't seen. 

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  103. Another doji candle for the day.  And to follow yesterday's hanging man.  All things you'd expect to see when the market is about to reverse hard.
    This is more and more looking like there must be some kind of belief / rumor running through the markets that a coordinated deal is going to be struck for Europe (how many times have we heard this before??).  Geithner isn't visiting Europe just to shake hands and say hello.  Wtf is he telling them?  Or at least wtf does the market believe he's telling them?And last week's Fed action coordinated with the rest of the world's central banks certainly tips their hand.  Makes me wonder what the Obama Admin, the Fed, the IMF the ECB, Merkel, Sarkozy, Draghi are all saying to one another . . . and what rumors are being floated to the markets out of all of that. 

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  104. PL,

    Does 1266.03 qualify for the bullish count??  Keep up your great work. This is a tough business.

    Daniel B

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  105. Hi Brian.  I was wondering what your outlook for tomorrow would be given another doji today and your grasp of short-term indicators. I was thinking about holding some Dec spy puts overnight, something I don't often do, but thought that second bailout fund news needed to be faded.  I'm up 15% on the positoin already, but don't want to get greedy.

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  106. http://www.bloomberg.com/news/2011-12-06/geithner-backs-merkel-sarkozy-crisis-plan-with-stronger-firewall-on-debt.html
    Ah, well here it is.  And check out the money quote from Timmy:

    “This of course will take time” and “a very substantial commitment and a sustained commitment of political will,” he told reporters. “Financial crises are ultimately resolved when governments and central banks succeed in creating conditions that make it compelling for investors to take the risk involved in lending to governments and to banks.”

    This economic moron and welfare state champion thinks of crises as being 'resolved' when the system convinces everyone that lending gobs of money to the welfare state and the banks the buy their bonds continues to be a great idea. Notice no mention of how this chokes off actual productive creation; destroys a nation's wealth and savings; and drives ALL prices for everything that matters higher.  And especially the prices for assets.

    And 'political will' is about surrendering whatever is necessary to fund the continuing scheme of vote and constituency buying. Which is the only real reason that social programs exist. They have nothing whatsoever to do with anyone's well-being.  They'd cost a fifth of what they do now, if that were the case.

    The entire edifice of the world's current financial arrangement is built solely for the survival and benefit of the welfare state.  Which is the justification for the centralized power and financial structures created for those who run and benefit from the entire system.

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  107. They are probably all passing around some greek giros and italian vino. 

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  108. This looks like a copy of the debt-ceiling / S&P downgrade in July-August. To the question "why didn't the market price in the S&P downgrade?", I seem to recall that one MarketWatch talking head opined that traders were simply too distracted by the debt-ceiling debate to realize the downgrade's implications. Look, it's always possible to make a deal, just not so great a deal. So on Friday, we'll hear the chorus of self-congratulations. Then on Monday, watch out!

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  109. Honestly, for tomorrow I have NO IDEA.  

    There is no question in my mind that the current positive spin cycle will be resolved with lower prices at some point.  And I do believe that this is true sucker's rally time with the news telling everyone that all is well and please buy stocks now. And you don't want to miss out.

    But when the market has all the naive bulls safely in the barn and is ready to lead them to slaughter is anyone's guess. But it is end of year, holiday season, FOMC time, Euro summit time, and the futes keep getting bid up overnight when it makes no f-ing sense for them to be.  And even when the Asian and European markets are down.  

    Some thoughts and clues to where we are at though:  

    The 200 dma keeps getting rejected pretty hard.  Sellers seem pretty serious about defending.  As long as they do that, they can wait this out.

    And as a corrollary:  Buying ALSO is rejecting a push below 1,250 pretty hard.  But the Street's bulls also don't seem all that serious about a push past 1,265, which I think they could have accomplished in the afternoon session if they REALLY wanted to.  They were quite content to let bears run back down to below 1,260 from there.

    The lack of comfort with holding  beyond 1,265 has been true for QUITE some time now.  I doubt that the Street is willing to expend the money and resources (at this point) to try to take and hold there.  

    I wouldn't be surprised by a one or two day, blow-off pinnochio of the 200 dma though.  Which isn't predicting that it'll happen.

    If there is an announcement that either the ECB or the Fed will print (which I think is unlikely), then you could safely bet that there would be a run past 1,300.  Bears would then CERTAINLY abandon ship and wait for a much higher entry point.  

    Any other or different announcement or 'solution' probably gets faded once the euphoria has passed though.

    I still think that buyers are primarily playing keepaway from below 1,250 and holding up here for distribution.  

    And also that they are calculating that they may have time through the Euro summit and FOMC meeting to get away selling overpriced stocks to the gullible.

    I expect to spend the next several sessions simply trading them intraday.  

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  110. Maybe jaco didn't see this, but to try to answer your question: I believe from previous posts he mentioned he lives in South Africa and trades the JSE.  Feel free to correct me if I'm wrong jaco.

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  111. Drive interests rate so low so that those with capital feel "forced" to buy asstes they wouldn't otherwise be interested in, all the while those same low rates are distorting assets prices horribly, thus ensuring that investors are paying prices that condemn them to poor long term returns, and ensuring that long term economic growth and employment is impaired to due the widespread missallocation of capital that those same low rates encouraged.

    Genius.

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  112. Thanks for the thorough response.  Don't mind holding shorts IT obviously but short-dated puts are pretty volatile things.  Looks like I'm taking my chances tonight.  Seems like a high probability trade looking at the charts (candlesticks and both of PL's possible counts) and the weak performance into the close.  Looking for a move to 1245.

    Another way of looking at the past few days is the fact the 1265 keeps getting tested is making it more likely it'll break soon.  Sure hope it doesn't tomorrow though.

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  113. PL, EURUSD beginning to lose some of its "risk-on" characteristics:- 

     http://www.riskelia.com/blog/2011/12/the-euro-devaluation-process-has-started/

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  114. ...........and we're positive again!  Whew, close call.  +1.5 implied open currently.  Rally on.

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  115. I thought we all need a little fun, enjoy.

    http://www.zerohedge.com/contributed/tis-season

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  116. Yep on the bigger swing. The 'writing on the wall' says higher. The PTB are pushing for it. Which means they expect to either serve an agenda or screw you hard after it's all over. My *guess* is that there is an agenda here that is paramount.

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  117. Yeah looks like it.  Futures slowly but steadily drifting higher since right after the close - 6 points or 0.5% since right after the close.  At this rate we'll gap up 2+% tomorrow.

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  118. I think I'm running the worst sleep deficit of my life right now. 
     
    Interesting, the futures are green -- new playbook tonight.   So maybe later they reverse to the red for once this time.

    Spinning top inside compression day on NYA... hmm.  Four reversal candlesticks in a row, you would think eventually one would work.  :\

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  119. I don't know if my count is accurate, but it would seem to me that the AD and Euro still have some upside. :(  Franly I am hoping I am wrong.

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  120. One would think............

    Any initial thoughts upon viewing today's price action?  A third momentary breach of 1265 in two days now (mini triple top?), more negative divergences on rsi, macd, etc.  Any further signs this thing is going to roll over?

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  121. The last 20 mins of the close showed some weakness today, I'm surprised to see green right now

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  122. Well, I was expecting today's action to some degree... not sure if I posted it or not... lemme look... nope I didn't.  Exhaustion.  Anyway, today's action wasn't inconsistent w/ a top.  But I haven't really done much studying yet.

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  123. I can't tell you much about yer count if you don't post a chart.  :)

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  124. Yes, I live near Cape Town, South Africa. The JSE might be somewhat obscure, but moves together with Western markets and can often be used as a leading indicator to the NYSE, often peaking or bottoming a day ot two ahead of the US markets.

    The reason for this might have something to do with 'smart money' moving in and out of our market at such junctions...

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  125. Thanks b.o.b., spot on. I have now opened an US trading account too, although most of my trading will remain on the JSE. At least for now...

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  126. Hey pretz, I noticed something funny. It will be full moon Dec 10 and new moon Dec 24. Given how the market is "churning" the last few days and the fact that yesterday you posted a chart from somebody -anonymous- who predicted a market low ~the 21st.  I thought it was coincidental.

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  127. Is anyone really surprised anymore? Someone (or some group of someones) is scared. And it isn't of lower equity prices. Those behind this are paying for propping up something else. There is a market that holds the key to all of this. And it's bigger ( in stakes) than the S&P 500. Hmmm, I wonder what it might be . . .

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  128. Can you explain the how the prop up by the futures creates a buyer-less rally? Thanks for helping the blind

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  129. I also would like to hear from the more experienced, but may I postulate that one "channel" by which high futures would prop individual stocks is that it would suppress profit protecting algorithms from activating. Such mechanistic computing models might be looking for futures price erosion near market open to make their mindless decisions to sell or hold.

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  130. PL,

    Get some sleep.  Trust me, sleep deprevation does not make for good judgement.

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  131. Just got back to my computer and finished the count. I am still a beginner at this and work with Elliot Masterworks in hand as I mark the charts.

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  132. IMO, this is simply the case of the market just holding it's breath for the news this friday, it's a big enough event that I'm sure it'll throw off charts in the near term. Either the EU will get its act together, and the stocks will take off, or not, and hopefully fall... Either case, things will really just have to wait for friday's news.  As for my Dec puts, I'm hoping for another round of kick the can.

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  133. This is my preferred count, which makes me feel that we may go higher

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  134. HT posted a great video earlier which explains it pretty well:

    http://www.youtube.com/watch?v=GOS8QgAQO-k

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  135. When the market opens and the futures are markedly higher or lower, algos kick in that buy or sell the underlying stocks (and/or futures) to capitalize and profit on the difference in "spread" between futures and the cash market.

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  136. Astro-cycle watchers are very tuned into the full/new moon phases.  Sometimes there seems to be something to it... but who knows.  Cycle "turns" in general are so vague, it's hard to tell what actually works and what's just coincidental.

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  137. No thanks, I already ate.

    Wait... what?  ;)

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  138. Colorado:

    I would recommend commiting the rules of structure to memory as a first step.  You have to really study the rules of structure to apply this theory. 

    There are a lot of rule violations in your count (such as waves 1 and 4 crossing the same price territory), which means it can't be a correct count.  If you apply labels without properly reconciling the count with the rules of structure, you're merely going to confuse yourself.  :) 

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  139. Also, wave 2 cannot retrace more than 100% of wave 1.  :)

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  140. I swear to you, I'm seeing the letters "WTF" in the dollar chart (the F isn't quite perfect).  :D 

    After I'm actually done working, I'll post it if I have time.

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  141. hi PL, 
    it's really getting on my nerves. I can't even classify the feel. It's a mix of frustration, anguish, pain, guilt, loathing (both self and market)..the list goes on. It seems I am the beneficiary of the max payne effect of markets, even my balls are squeezed right now. :o. True to your analysis the irrationality can play longer than the margin calls. The only breather is your take and sarcasm on the markets :)

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  142. Thanks, vin.  :)

    Yeah, I understand your frustration.  Been kinda feeling that way myself -- moreso about the charts than my positions, which are pretty light at the moment.  This is one of those times it's probably just best to wait until the market makes more sense before taking any large positions.

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  143. Dollar at 78.6 right now... thinking it should run up to at least 79.2 next.

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  144. I'll Opine that the end result this week will be disappointment - If you actually look through the clutter to what's been said its this - Merkel - No Eurobonds or ECB over-involvement...whole thing will take time.  Geitner - US will not be loaning any money to the IMF.  Long range solutions to cut debt and curb spending.  I don't think the uber bulls will get the big show quick fix......but really, that probably wouldn't do anything.  The steps they are taking are probably sound, long term structural fixes - but I'm not sure it's what the bulls are looking for - a bailout, China and the US to be involved, QE-Europe.  Germany really calls the shots and they are conservative.  The more socialist nations want bailouts and money spending - sort of sounds like the constant tug of war you see in the US

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  145. Futures are clicking down slowly but hopefully surely and the Euro is headed down too

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  146. Excellent reading. And for Germany, and maybe France, it must feel like "should I throw good money after bad?" Kinda like how we feel now, I gathered ;-)

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  147. Two can play this game. If you ask me, bears are saving their ammo for Monday. Let as many as possible buy this level, all the more to increase the long squeeze to come. It's almost too logical: a big nothing on Friday, then downgrades on the weekend.

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  148. lot's of red now on the futures screen, is this the start of the blue B wave down?

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  149. Fell asleep again, but *maybe* woke up in time to get finished before the open, lol.

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  150. EURUSD back flirting - again -  with the .618 retracement level of last week's "central-bank-pop". ECB surely sure to be cutting rates tomorrow too.

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  151. We at the NDXCLF (NDX Chart Liberation Front) wish to announce that we have Pretzel.  If you want him to post again then follow our demands:

    1) Attach an NDX chart to your next comment
    2) Hit the donate button

    We are serious and desperate.  Don't try anything funny.

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  152. Okay man, just don't hurt him - I need today's update!!!

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  153. Today's update is posted, let's continue the thread over there.

    Lugnut, LMAO.  Thanks for letting me at the computer for a minute to post the update.

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