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Friday, February 17, 2012

SPX and BKX Updates: Finally, the Fifth Wave

In honor of the fact that today is National George Stephanopoulos Day, I'm going to keep this update a bit on the short side. (Actually it's because I spent a good part of yesterday dealing with personal health issues, and have only had about 5 hours to work tonight.  But how much fun is it to say that?  No fun, that's how much.)

Yesterday, the market launched upward, finally beginning the fifth wave up we've been looking for since Monday.  There is still no indication as to whether the fifth wave will extend or not, so I went digging into a lot of other indices, and maybe found an answer in the Philadelphia ("The City of Brotherly Shove") Bank Index (BKX).  ( I was born in Allentown, PA, so I'm allowed to poke fun at Philly.  At least I didn't call it "Filthydelphia," like my father used to!)

The pattern in the SPX is a typical fourth wave blob.  Fourth waves are usually choppy sideways affairs and difficult to pin down -- basically they often act schizophrenic, much like the market acted this week.  On the one minute charts, the fifth wave looks to me like it needs a few more points of upside (at the minimum) to be complete.  The preferred target zone, assuming no extensions, is 1363-1368.

 
Since there's no real way to know ahead of time if this wave will extend and make Bob from those commercials even happier ("Why is Bob the Bull smiling?  Because he found out about Fifth Wave ExtenZe!"), I looked at all 56,000 other indices to try and figure it out.  The best argument I found against a fifth wave extension (sorry, Bob) is the BKX chart, below:


The BKX chart suggests a bit more upside, same as SPX, but then suggests a solid correction.  This is, of course, assuming I'm interpreting it right.  Obviously, there's no guarantee of that.  The argument that bothers me about the SPX stopping at 1368 or lower, for example, is that I'd really like to see it knock out its 2011 highs, which the Dow, Nasdaq Composite, and NDX have already done.  The vast majority of the time when the Dow makes a new high, the SPX follows.  And I'm still inclined to think 1376-1378 should act as a magnet for this leg of the rally -- so we'll see. 

In any case, the BKX chart would line up pretty well with the bigger picture count, as shown below:


Even if the fifth wave does extend, based on the one-minute counts, the odds are very good for an intra-day reversal today or Tuesday (depending on how long "The They" stretch out the micro fourth wave of this larger fifth wave).  Whether this expected reversal will prove to be only a very short term correction will have to be determined as the structure unfolds -- if it unfolds as a three wave move, it means higher prices on deck for this wave.  If it unfolds as a five-wave move and trades below 1340.80, then the odds become very good that the market is finally embarking on a meaningful correction.  Trade safe.

347 comments:

  1. Morning all.

    Many thanks to KS for his donation this morning!  :)

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  2. morning pretz. hope you get better soon <3

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  3. Take care of yourself, think 'big' picture :)

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  4. stopped out
    be out of touch, next 2 to 3 hours

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  5. One minor point of clarification - cash markets in US are closed Monday.

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  6. Ah yes, ty.  I knew this, but temporarily forgot while writing.  Fixed.

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  7. Thanks.  I do tend to forget at times that I have a physical body which requires some level of care...

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  8. morning, Pretz,hope you get well soon,health first

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  9.  Not everyone can be a bot...get better...my wife is forcing me to get out of the house this weekend...she says I'm starting to look like this guy...

    http://www.youtube.com/watch?v=VObFc64OnEk

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  10. Doesn't a print by SPX above its 2011 high invalidate the Big Picture bear market scenario?

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  11. It invalidates the Minor Wave (2) count, which I killed a week and a half ago when the Dow KO's its Minor (2) count.

    http://pretzelcharts.blogspot.com/2012/02/spx-update-pre-eating-some-crow-in.html

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  12. I think its over...   Not trading advice.  Could be wrong.

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  13. hey PL  wishing the best for you and family...

    ...italian police seize 6 trill in fake u s treas bonds in switzerland in hidden compartment under safety deposit box

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  14. VIX rising, AAPL back below 50% retrace...

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  15. TECH sector (NDX, NDX100etc) not leading, except AAPL of course... lol; meaning broader indexes up, riskier indexes off... telling a tale!?. 

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  16. Not sure yet. MSFT had a  big run yesterday as did the NDX. This index has been getting wild bids up after weakness and still remains within TL's, imo. Of all the indexes this one is due for a sizeable retreat, imo. One thing I have looked at is when the 8 sma moves below the 21 sma on the 60 min chart at tops it usually indicates a move down. I will try and post a chart. AAPL is still the glue holding this fantasy together.

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  17. ST decision time here.  A new low would confirm our first 5-wave structure off the highs.

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  18. Long TVIX @ 17.45

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  19. Here is the daily chart. Note when the 8 sma crosses the 21 sma at the tops.

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  20. Covered at 57.5 -- can always short again if we get another wave down.

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  21. Daily NDX

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  22. PL - emailed you with some astro perspective.

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  23. Damn,  that was supposed to be QE4.5.  Now what?

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  24. Short again at 58.50.  Stop at 60.25

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  25. Now i see what's been driving this market - "Italian police seize $6 trillion of fake U.S. T-bonds:

    http://news.yahoo.com/italy-police-seize-6-trillion-fake-u-t-144806353.html 

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  26. Sent what little I could.  Hope your health issues resolve to the plus side.  katwitch

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  27. LMAO . This is unbelievable!

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  28. Would like pretz to send my email address to furrrr.  Have been looking for an astrologer.  Thanks katwitch

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  29. I wonder who got sucked into that scam.

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  30. Yeah, and can you hear John Belushi's twin at the dinner table? "The plutonium. How much for the plutonium?" 
    Ah, Nigeria, the Mos Eisley Spaceport of Africa.

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  31. Out at 57.25.  Picking up the pennies today.  :)

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  32. Done.  And thank you for the donation, katwitch.  Your ongoing support is appreciated.  :)

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  33. The State Department used to have a guidebook for doing Nigerian transactions...We retitled it to "So You Haven't Been Screwed by the Nigerians Yet?"

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  34. Back short at ES 57.25.  Hopefully, I won't give all my pennies back right here...

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  35. Herc17, thank you for the donation!  I appreciate your continued support.  :)

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  36. health is everything, please take some time off

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  37. From the article:

    The eight alleged fraudsters are accused of counterfeiting bonds, credit card forgery, and usary.  Initially facing sentences of up to 30 years in prison, public outrage ensued on the news they have already been bailed out and hired by the U.S. Federal Reserve.

    I bet Bernanke is jealous...

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  38. Looks like I won't have a choice this weekend.  :)

    Sometimes it seems like stuff like this happens to *force* you to slow down a bit...

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  39. take care of yourself, we need you get well.  

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  40. Covered at 55.25  Still not sure what the market's planning here...

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  41. "Filthydelphia" ... Hey PL, I went through Philly briefly once. Right away, noticed how grimey it was. Yuck. Compared to Seattle. Boston was pretty.

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  42. Dave, thank you for the *5th* donation (btw, PayPal's tracking system is still not functioning right -- I had to scan through everything by hand, so my apologies if it was #6  -- I checked twice, but sometimes I don't catch something). Your consistent support is deeply appreciated.  :)



    Alright, in the spirit of attempting to not drive myself into an early grave, I'm going to go get some rest.  Orders on auto-pilot the rest of the day.  GL all, and thanks for all the kindnesses.  :)

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  43. enjoy your rest and the 3 day weekend. no update until Tuesday morning 9:29am ET. K!

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  44. Yo DD...I was born and partially raised in Sowphilly...It was a cool place to live until Nicky Scarfo whacked Angelo Bruno...The mob kept it nice back then (at least our section)...safe to walk the streets back then...Neighbors looked out for each other...and kept all of the kids in line (beatings optional). Now...not so much...All-in-all, Boston is a better deal right now...except for the damned snow. :)

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  45. Seattle house prices have been falling and falling. A good deal there now from that standpoint. The air is clean there. A bit damp though oftentimes. A lot depends on your lifestyle.

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  46. You’re going to have to give your secretarial
    staff a day off to to get a fresh look at things!



    I have to admit that I'm flat for the year,
    but that's (as is ALWAYS the case) my doing, and not due to the insight offered
    here. I've made the mistake of listening to the news and trying to front run a
    drop that seems somewhat elusive! But due to the targets offered in your
    column, I've been able to bring myself back to flat.



    I've been trading in the markets since '98.
    This is one of the most befuddling times I've seen. Early '07 was just as
    frustrating, but this time it seems more compressed.



    My new goals.... more discipline and patience
    to for tradable levels rather than front running.



     
    Hope you feel better!

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  47. possibility of a mini flash crash, two to three hours out

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    Replies
    1. I love your mini flash crash warnings. Things are boring now. A crash will certainly spice it up

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  48. dollar may be waking up

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  49.  I'm in the 'burbs of Reading, PA right now. Wudda sad city this is. Fortunately the home prices were so low to begin with, we didn't really get hit, even though we bought at the top. We have all the bad parts of city life with none of the good. All I need are some good restaurants and I'm happy. :)

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  50. Fwiw, AAPL pretty much failed its 50% retracement this morning from recent highs to lows.  This probably doesn't bode well for the broader market (eventually at least).

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  51. Crude oil is on the verge of breaking out. If that happens, it would be a pall over the bull market.

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  52. Yaaaaaaaawwnnn.....

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  53. It would be great if we could close below SPY = 135.60 (last 2 weeks' closing price)...

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  54. 5 min bbands on my es chart very narrow!!  winding up for the pitch?  

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  55. FWIW - Doug Kass just tweeted this -  "Alert! Alert! George Lindsay's Three Peaks and a Domed House pattern has now been completed!"

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  56. 54 es or cash? I love your mini flash crash warning. It will sure spice up this boring day

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  57. lol . Maybe he's trying to do a Joe Granville.

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  58. And oh yeah, it's completed, so anything can happen from here! ;-)

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  59. Careful, I posted his original chart with link to Minyanville article a while back and some on here said he had the count wrong.  Also given that today ES tagged 1361.25 which is higher than any other price in the last 6 months, not sure how he can see it has completed?  The dome has to have a rounded top, so far it is still going up unless he's referring to a very short timescale...

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  60. within 1.5 hrs or less

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  61. are you serious.?........this pattern has conditioned me for closes at highs.  thanks for your posts

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  62. What are we talking about? 

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  63.  What indicator, pattern or concept are you focusing on which leads you to the mini-crash hypothesis ?
    Thanks.

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  64. Hope you recoup fast PL. Btw I opened a Tradeking account today, will open Zecco later on. I opened the account by clicking from your page, is that enough for you to get referral or do I need to do something else?

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  65. katzo, no offense or disrespect and I REALLY appreciate your charts, insights, etc etc But, please!!! be very careful with claims like these, unless you can give some very solid TA that argues in favor of such bold statements. People might enter trades based on this and get burned. Now you might be right, who knows, but so far you haven't provided any insights beyond "a break of 54" (whatever that means...). 

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  66. those tight bbands made her break to upside again......oh where, oh where will she stop.......

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  67. There's nothing specific in his post that should cause anyone to take any specific action. 

    Everyone needs to do their own research... take their own risks... etc...

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  68. no offense but wouldn't that be their issue if i said there was a possibility of a mini flash crash within a certain time frame and they decided to go short? don't quite know how i would be responsible if i am not short yet, but watching for possible entry. look up the word 'possible'

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  69. Looks like an almost failed 5th to me. Doesn't look like breaking to the upside. Actually, this morning, pre-market, after the finished of the 4th down, there was almost nothing left for it to go upside. The action looked over extended. I also think this morning's pre-market up 1 and down 4, refer to Katzo's hypothetical chart from this morning, were forced attempts to create those waves, to trigger the next wave. But the 5th didn't really take off.

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  70. Possible H&S pattern on S&P (we are on the right shoulder right now).

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  71.  He has to look at the Hulkmania pattern that just completed.  I posted it yesterday.  Still have to determine if it ends in a sleeper hold or a pile driver.  It could  also be an atomic leg drop.

    http://img.ly/e1W7


    It is making it rounds and more people are recognizing it.

    Joe

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  72. If it "works" it projects to a possible closing low of around SPY = 135.2  but if we trade above SPY = 136.40 it is probably not going to happen.

    Not trading advice.  Just a possibility.

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  73. short ES 58.25, SL 61.50
    h&s 5 min.

    follow you own charting, do you own trades, do not hold me responsible for any losses, they will be your trades therefore your losses, not mine

    so if i posted that i felt that the mrkt was going to 1500 SPX and it crashed I would be responsible for those losses too? i just don't get it

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  74. Anyone have an  EWT chart of TVIX? The volume on this puppy has exploded in the last 4 weeks. We kind of "look like" we're at the bottom of a 5th (but I am a total newcomer to EWT, so that's more of a guess). I know it's an index, but I am trying to decide if the risk is reasonable between now and mid-March. Other sites say that it'll tank in March.
    Thanks.

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  75. See posted chart on channel control.

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  76. Didn't PL say that EWT can't work on leveraged derivatives? It's like charting options. They jump alll over the place.

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  77.  Please continue to make your calls and devote your time. It is helping this new trader learn. I like how you explain your thought process.

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  78.  Maybe it's a bauhaus dome.... (I have no idea where that obscure reference came from) :)

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  79. Good post. Thanks DD.

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  80. Thanks Katzo.  I truly appreciate the efforts and candor, of course all the knowledge

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  81. Have a great weekend everybody, I don't expect much to happen the rest of the way.  Maybe we get back down to 1357 es, maybe we get up to 1359, I'm not sticking around to find out.  Volume will be thin the rest of the way, be careful.  Junior traders will be manning the desks, they love to see if they can f with people by running stops.

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  82. Here's the daily VIX Option trade update..  Record open interest volume in VIX options yesterday..  People aren't selling the calls they are buying also in March n April.. interesting.  check video if u play VIX options, VXX, or TVIX, etc. 

    http://www.youtube.com/watch?v=mHQHhq4ijvE&feature=plcp&context=C3491479UDOEgsToPDskJ5N41U4D0i_zo85AWy0h1a

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  83.  Have a great weekend :)

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  84. Katz, please continue what you do.  I trade the TF but I aprreciate your entry points and SL.  It reaffirms my decisions.
    Blaming others for losses is nuts.

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  85. Boss prob said to junior, you let it run out of the channel, +/- 2, and you're fired. ;-)

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  86. hi Pretz
    best wishes for your health
    keep it up with the good work

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  87. Did ya see ZH's take on it...maybe they weren't fake...Geez, like I need another conspiracy in my life.

    http://www.zerohedge.com/news/why-were-trillions-fake-bonds-held-chicago-fed-crates

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  88. bythe way Pretz
    if may ask, considering the last misfortunes of my trading, i would like also to consult with an astrological expert
    thanks

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  89. I'm sure you know, but in case others don't - vix is implied vol on equity index.  vix options implied vols are the volatility of the vix volatility (so trading the volatility of the index volatility).  That the Apr 29 straddle sold for 9.85 tells you that vols of vix are pumped up.  The breakeven on that straddle is vix anywhere between 19.15 and 38.85.  And unless vix moves outside that, decay will cause that straddle to get cheaper the longer vix stays inside it.  So, if you think vix is going up, you would be better off trading vix futures as the vix options are getting seriously juiced up with all the demand lately.  If the vix moves up, the implied vols in vix options will come down (just like when index goes up, vix comes down usually).

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  90. Thank you for this. This helps so much. I do have a question. What is a "call stupid"? 

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  91. it is a head scratcher for sure. not easy to explain, let alone play it.  If i ever have kids, i will name the first ones 'Contago' ,  'Straddle', and 'Call Stupid'. 

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  92. here's is a great explanation. 

    http://finance.yahoo.com/news/When-stupid-trades-exactly-optmonster-878917345.html

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  93. Trading VIX futures. As what? Direct contracts or is there an ETF?

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  94. Greek one year bond yield at 629%. Let's just buy Greek bonds it will never "default" right? :)

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  95. a 'stupid' spread is where both contracts are bought or sold.  So 22/29 call stupid spread means buyer bought both 22 and 29 calls, or whatever it was, i don't remember the strikes from the video.

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  96. Thanks. Very clear.

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  97. can buy/sell options VIX and VXX but only trade TVIX, no options.

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  98. Might start heading downhill in about 5 minutes, from SP 1361.

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  99. See, those upper BB touches didn't set off any run. The "stimulus" isn't working anymore. Oscillators need to unwind first.

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  100. maybe we should ask Katzo to turn on the selling bots?

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  101. The selling bots are not running. That's ok. It would be bad for me if they had the "buy" setting on.

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  102. Thanks. Feel like I'm getting ready for spelling bee, memorizing all the acronyms, symbols and their meanings. Where are my cue cards?

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  103. VXH12 is the current front month vix future.  There is a futures curve that goes out farther though.

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  104. Greek 1 year bond yield at 629%, what a deal, as long as they dont default in one year, you get 6.29x your money. Lets all go buy some Greek bonds now. They will never default....right? :)

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  105. always enjoy reading your post. your call helps me a lot. much appreciated.

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  106. in short at 60, you wil remember this was my tgt

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  107. TVIX lookin like i want to buy it again.......do i do it before todays close or wait for tuesday morning.........oh the many decisions one must make......

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  108. just 10 minutes and closed for a nice 3 day weekend..........i hope you all enjoy it.....gonna be nice weather out here on the high plains...take care

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  109. wouldnt it just freak traders out if there was a flash crash here in the last minutes......that would be cool.......it would dominate weekend discussions.......

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  110. And the channel controllers have kept it within, what, a few points for the last 3 hours? That's a fine-tuned algorithm for you.

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  111. Have a great long weekend everyone.

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  112. I hope everyone has a great weekend. 

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  113. Katz, curious why you don't trade the TF?  Much more movement than ES and on days like today it is needed.
    More volatility but more bang for the buck on margin.

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  114. That's not the only kind of 'stupid' spread.  I've put on a few other types in the past :-)

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  115. morning chart posted (price not updated)

    http://content.screencast.com/users/katzo7/folders/Jing/media/7b695101-8802-48f1-84c0-e6c0a78d454c/2012-02-17_0750.png

    what I predicted would happen at 8:30 am did not happen today. all levels correct tho. pushes what I see out time wise, OPEX may have messed it up. have a good weekend

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  116. lmao (was't all that funny at the time tho)

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  117. Rest up PL and hope all of you have a great weekend - it's Mardi Gras time here in the sticks of Louisiana which means feed the chickens, saddle the horses, put on ridiculous clothing, ice down the beer, break out the gumbo pots and Laissez Les Bon Temps Rouler:

    http://www.youtube.com/watch?v=MLwInPwmv7E 

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  118. That's all that needs to be done.  Thanks, BigO.  :)

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  119. Alright, I'm off to see the wizard...  I'm sure I'll be back on later tonight or tomorrow.  :)

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  120. You're in our thoughts PL.  Be well.

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  121. death cross looms on gld. needs to get below 200 day tho.  nice 3 year ride of goldie cross.  may get my 1370 spx level monday. all signs up for now moving averages show no cracks

    http://stockcharts.com/h-sc/ui?s=GLD&p=D&yr=3&mn=0&dy=0&id=p04420183045

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  122. Best of luck and be well ..

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  123. I'm so glad you think so (your 1370) because I have a sizable position in TVIX.

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  124. are you long or short TVIX? if you are long TVIX, 1370 spx should be bad for TVIX??

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  125. I am long Tvix, but you know what, if it gets up to1370, folks might get even more nervous. But anyway, I was just joking. :)

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  126. GLD is basing for the next move higher. 

    http://www.screencast.com/users/katzo7/folders/Jing/media/37b2b8fd-3a54-482d-bf73-dedf7fa130c1

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  127. TRAN/day
    Final days of this 3P&DH I identified on this site may be upon us. Watching for a validation of this final h&s by a considerable drop locking in the h&s indicator effectiveness; its potential conclusion should lead us down in a similar manner to the wall from the second floor. The pattern is laid out perfectly. Strength is waning and divergence is apparent on numerous indexes. The mini-flash crash set up is still there, will it happen (?), it may be just pushed out time wise. I can attribute this to OPEX affecting yesterday's price action. The GANN lines go way back, measuring recent action against previous peaks. The red XTrends line is telling, a support that is in need of being broken to make the 3P&DH pattern and the h&s work.

    http://www.screencast.com/users/katzo7/folders/Jing/media/6fd01d77-519c-4ba3-a69a-50d33384016b

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  128. EW peaks on multiple time frames

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  129. Thank you Katzo... Damn us Nor'easters don't sleep. I had been wondering if the OPEX was the culprit of the flat futures action during Thursday/Friday overnight.

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  130. More and more I come to the conclusion that the top in the SPX will turn out to be a megaphone pattern. This fits well with a bullish wave count and ensures a large collapse following a large bullish five wave count pattern higher. It fits well with the money printing liquidity drive and then massive collapse. I am convinced that now (I was wrong and many others to expect wave 3 down at this time). I believe we will see a shallow correction (wave 4) followed by wave 5 to top of pattern. 

    If this is the case, then a massive opportunity exists at the top of the megaphone pattern to short at little cost and reap a massive poayback. I will park in cash either hoping the megaphone occurs or the bullish wave count evaporates, and then opportunity exists sooner for wave3 decline. 

    I think the market is too dangerous at the minute. Everyone calling tops, but I think the megaphone will fool the lot. I'm not brave enough to bet bullish from here - would rather be in cash until I can see the red in the eyes of the bulls at the top of the megaphone pattern. 

    Just my thoughts not meant as trading advice.

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  131. sorry, chart below goes with comments below...

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  132. Sleep? Overrated, one only needs 4 to 5 hours per nite. I am also giving up eating, drinking, and the fairer sex. But bots don't need these anyway. Algos like music tho and been running this, some soothing music.

    http://www.youtube.com/watch?v=QcfqBKVH0pU&feature=related

    Three years ago I did a study of OPEX last two days action, the percentage of change on OPEX Thursdays and Fridays. I went back two years, that was 24 OPEX weeks. This study was comprehensive and very enlightening. A high percentage of OPEX Fridays went very flat from Friday at 2 pm on, basically sideways action. I think it was like 85 to 90%. Most of the set up work for Friday was done by Thursday noon, most of the time that is, there was always that pesky exception to the rule. Here is a chart of what I would call a typical OPEX week on top (a 15 minute or the past Thursday & Friday action) vs. a longer term chart on the bottom with my 6 month analysis, disregard the directions during OPEX Thursday & Friday, it is the action or volatility I am spotlighting on those two days.http://www.screencast.com/users/katzo7/folders/Jing/media/c350dbea-bc89-4fa2-b611-7b6120d24f5fIn this short six-month period we have three what I would deem major reversals of direction relative to how it came into OPEX, two continuations of direction and one flat (purple). In my charting blue always represents up; red down. I define a major movement as happening within two days after OPEX (on Monday or Tuesday) that led to a more than 50 $SPX point move. In my two-year study there was a much greater preponderance of post-OPEX action that was a good and substantial reversal of the direction coming into OPEX. I played every one. We have just had a contrarian indicator fire off too. I would not be surprised to see either Monday or Tuesday down substantially. This ties in with my end of 3P&DH analysis, my posted $TRAN chart, and my analysis stated on Friday for a mini-flash crash. But timing is everything and that can be elusive. This provides a premise of what to use as a basis to watch for in real-time mrkt action, we parallel the premise or react against it if action differs. For two years I would load up expecting the opposite of the entry OPEX trend based on statistics, it is obvious very early on if this will work or not. Two days to work is the key. Once again, this is pure EWT and mrkt research, I do not push the button on your trades, therefore I should not be held responsible. If I share in the losses then I must share in the profits too. Address will be provided for the checks to be sent. LOL Do your own homework. I will position long or short in accordance to real-time mrkt action and reserve the right to switch direction in a NY minute. I am a ST trader and am after a profit and to limit any loss.http://www.youtube.com/watch?v=V1Gn0e7kvTA

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  133.  Same view with weekly line chart and trendlines (from extreme data points)

    http://screencast.com/t/h8wW5p2tQa

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  134.  Very interesting chart pattern.  Thank you for sharing.  I am a neophyte trying to learn this stuff and you contribute so much.  You even explain your positions. 

    I understand your lawyerly talk at the end.  I am glad it is not the normal "This is not trading advice..."

    Joe

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  135. if we hit 1370 i will sell my single beta shorts and load up on more double and triple beta shorts and of course.....i will buy TVIX again........ive never traded such small capital in one ETF and had such great returns as TVIX........risk goes both ways though.......1370 should get TVIX to the 15 to 16 area.....what a buy....not trading advice

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  136.  PL I hope everything went OK.  I am very glad you are taking care of things quickly.  I once got a call from my doctor with the statement being "it is not life threatening".  Two weeks later when I went to the hospital for my test I ended up in the emergency room with a priest giving me my last rites.  It was no fun and recovery took forever. 

    Everyone get your thyroid levels checked.  Most physicals do not cover that and thyroid problems are endemic.

    Joe

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  137.  Many thanks for the OPEX characterization...It describes what I thought I have seen on a regular basis on the various OPEX days on the $AAPL Index (since it is in a world unto its own). Have no fear about me interpreting your posts as telekinetic trading...my brain does its own thing (sadly), and my trades are my own. If I learned nothing else in my 5 years of military school...I am responsible for my own actions and their outcomes...hence my bot-like tendency to exclaim, "No excuse, Sir" and move on... lol. Life is frustrating as hell otherwise.

    This guy was my CO at VFMA...  http://en.wikipedia.org/wiki/H._R._McMaster  Definitely a good influence, who taught me the above lesson. He was also the only one smart enough to ever figure out my evil plots...LOL

    Here's some more slow jams that soothe, me when I'm machining away...

    http://www.youtube.com/watch?v=X3cuaQPY2Rw&feature=related
    http://www.youtube.com/watch?v=Mk0UDGSWwmw (Gawd I miss Boston, clean and nobody tries to run ya over when ya cross the street. Ya know that's a recognized sport in Philly.)

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  138. Great stuff Katzo!  I'll add that I think AAPL's break from its parabolic run is going to break down much harder very soon, and serve as a wake-up call to the market.  This coincides with your work. 

    I also see you pointing out how weak the Transports have been lately in comparison to the broader market.  I have noticed this also, and they were especially weak on Friday as well.

    Keep up the great work!

    John

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  139. Agree, when TVIX moves in your favor, it can be the best money maker. Sometimes the wait is worth it...

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  140. I'm not very well versed in TVIX. Would you say that, at this level, even if the underlying index advances, the TVIX does not fall commensurately? In fact, that it is possible for both to go up at the same time? Fear does not decrease as prices grind higher, no?

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  141. China lowered its RRR by 50 points. Will it cause the market to melt up when it opens on Tuesday?? Somehow, it is always easy to melt up than to melt down. Consider China's inflation is still way up there, this move spells desperation from the Chinese govt to support the collapsing housing market. Sometimes the more you try to control something the more out of control it becomes, e.g. Greece, China....

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  142. I'll check out your bear porn.  BTW you posted the wrong article link.  We can get to your site w/o it, but thought you would want to know.

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  143.  Thanks AR...thanks for the additional info...very enlightening link, and a great article.

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  144. Hi Michael. Is the megaphone on your chart from 2003 onward? A very large megaphone?

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  145. You seem to be right, considering the action in TVIX in the past few days. Volume has been exploding, on mildly green days for spx, it was also up, on huge up days, it's not down 20%. The fact that it has been making higher lows as the spx made new high maybe telling us something....just hope I am not only seeing this because I want to see it.. however, I am LONG and STRONG TVIX at this level. God Bless us bagholders!!

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  146. oil  breakout?

    http://screencast.com/t/KeiokmhvTMUz

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  147. There's probably cosmic justice somewhere, but we still have to be very careful.

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  148. good points.. i agree 15 would be a great buy.. i'm just curious how your trades have worked..  are you speaking of the uptrend to 100? or the recent moves higher in TVIX. Exiting the trade is half the battle.. 

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  149. Wishing you a speedy recovery, PL.

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  150. please mention on the blog if you check it out you found the link on Pretzels site.  and post it  http://pretzelcharts.blogspot.com/ 
    only fair to both writers who spend hours for us :)

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  151.  true. I would clear it with the blog owners when you're posting a link to another site. I know that some owners do not like it when readers post links to other blogs w/o asking

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  152. yeah, i agree. im new to the blog sites and kinda feel its not something they like to share links.   feel free to delete the link PL.   i just felt i personally was posting too much VIX posts on PLs site..  I have other stock also that PL's analysis is soo helpful.

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  153. The article suggests that Geithner was either an idiot or tanked the economy deliberately for the democrats in exchange for the treasury secretary position. If it's the latter, it seems unlikely that "they" will tank the market before the 2012 election. Rather, they will probably pump it up for Obama's re-election. I guess we'll know for sure if they institute QE3 despite the recent rally.

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  154.  I'd go with answer C) Both A and B.

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  155. Check out the COT indicator on the McClellan site.  Seems to have a solid track record for market prediction.  Yet another sign of a top currently, and a predicted low in June.

    http://www.mcoscillator.com/learning_center/weekly_chart/eurodollar_cot_indication_calls_for_big_stock_market_top_now/

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  156. You're welcome SpikerJ and thanks to you as well.  I hadn't seen that report that you linked.  I'm interested in their projected low occurring somewhere around early June.  I've noticed that equities put in a huge low in the week of July 6th, 2009 and then again on June 28th, 2010.  I'm just looking at a weekly chart so don't quote me on the 'exact' date, but basically it's very close to Independence Day... July 1 for Canada and July 4 for USA.  It's all about a big party man, lol.  In any case, they were mega-important lows.  So going into the Independence Day weekend of 2011 I was looking for the same thing to happen.  But the markets were already rising.  And lo and behold, a huge top was put in instead.  So the conclusion I came to was that July 1-4 seems to be a turning point one way or another... for reasons that escape me.  Maybe it'll pan out that Tom McClellan is right, we get a rally on June 4rd and it ends on July 4nd (that's the way my brother used to write dates just to humor me).  Either way, let's try to remind each other as those days approach.

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  157. Normally we sure wouldn't expect to see the markets tank just before an election, so your assertion certainly makes sense to me as well.  I have no argument with the logic behind that.  The problem I have is that the day Obama was elected, I immediately got a hunch that he was going to be a one term president... the guy they were setting up as the fall guy.  There is one fellow I know, and quite like, on another site who absolutely insists that "they" don't exist.  I guess he's never heard of the Rothschilds.  We'd better believe "they" exist, and that "they" pull the strings.  They certainly have plans that we are unaware of but suffice it to say there are most likely much, much more sinister than most people could possible conceive of.  The message on the Georgia Guidestones is scary enough and yet nobody even knows exactly who built it or paid for it.  Rumor has it that it was Ted Turner who actually arranged for it and paid for it.  But who knows.

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  158. Oh man Spiker... I hadn't even noticed that (obviously).  Thanks for the heads up, I've corrected it.  That's a bit embarrassing but I was just headed out for the rest of the day and had a deadline.  Normally I check all links I provide to make sure they work.  And as luck would have it... on the 'one' I didn't check, I had messed it up.  Thanks for the heads up.  It's fixed.

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  159. http://www.marketwatch.com/story/riding-the-elliott-wave-to-amp-up-gains-2012-02-17?pagenumber=1

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  160.  Thanks Katzo...I found the article encouraging.

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  161. Good background info, Katzo. The fact that pros, who are at least so-so Elliotticians, get sucked in - that's worth noting. But people here will attest, it's hard to fight the tape.

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  162. Katzo, sorry but this is not a correct 3PDH pattern.  The first story's three peaks come after a sharp rise up, yours are shown after  a move down.

    "Look for three peaks rising from the base at point 1 and 2 in a sharp price uptrend to peak 3."

    http://thepatternsite.com/3peaksdome.html

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  163. what is your take on TVIX after reading that VIX  site? trying to find out what his time frame is when he says dont buy n hold..  is he talking 2 days, 2 weeks, months etc  ?

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  164.  It's been like slamming it with a car door. :O

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  165. Great article, though the text of the article wasn't nearly as bearish as the title of the chart - "The next 3 months show a sideways to downward structure in the eurodollar COT data, and the implication is that the steep price advance that we have been seeing should transition to a more sideways market. "

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  166. I know, I know. Play small at tops and bottoms, unless a V form and wait til a good channel is formed, then ppl can go in bigger with a bit more confidence. That is why I day trade now. I, as well as PL, think that a turn is almost here, no sense dumping short positions and then watching them grow, that is the intent of that article I posted. But who knows. The $TRAN chart I posted was enlightening to me with the 3P&DH start of a h&s to finish it off (????). The $RUT chart is a mess, nothing there I can see yet. $SPX and $INDU are less advanced than the $TRAN but showing decent signs I think.

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  167. If one looks at the BKX index going back to 8/7/09, we see an up sloping head and shoulders top (a reversing pattern). I am often amazed at how many times Head & Shoulders patterns are referred to (in the past) but do not have the corresponding/corroborating volume configuration. The BKX has the proper volume characteristics. The neckline was broken/violated on 8/4/11 and has implications of a 16 point decline from the current neckline (which price has retraced to test) of  $29.  Given the fact that the head & shoulders TOPPING pattern took 24 months to form, and price has returned to test the neckline, I'd look for a long drrawn out decline, kind of like a tombstone....down to $29.

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  168. ES open from 6 pm Sunday nite EST til 11:30 am Monday morning. Opens again at 6 pm Monday nite.

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  169. Needless to say, I have survived modern medical care (so far, anyway). 

    Thanks to Jon S. for the donation yesterday.  :)

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  170. nice to see you back!

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  171. Welcome back.  What happened?  Groin stick?

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  172. Good to have you back Pretz.

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  173. Good, we were concerned PL.

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  174. Thanks Joe.  Much to everyone's disappointment, no doubt, I did not have my last rites read to me.  I *did* have my first through ninth rites read to me, but then I had to get going, so they never got all the way through to the last ones.  Lucky for me, apparently there's a lot of rites. 

    Some of them I didn't even know about.  I learned a bit about the whole "rites" system.  The ones I remember:

    * The first rite is the "first rite of refusal."

    * The Third Rite was defeated in World War II, and is no longer spoken.

    * The fifth rite is, quote, "the unalienable or inalienable, whichever is correct, rite that all men are created equal -- except for your mother-in-law, who's hopefully not a man anyway, although we at the Bureau of Rites have our doubts about that, if you catch our drift"

    * The seventh rite is that a complete list of all Rites can be purchased at the Rite Aid Pharmacy.

    * The ninth rite is "your rite to paaaaaartay"  Apparently, a brave group of outspoken boys in the '80s had to fight for this rite.

      

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  175. Yay!! Welcome back Captain!

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  176. Groin stick?  lol -- I don't even *want* to know what that is.

    Actually, it turns out it was just the market -- which had been causing a debilitating pain in the ass.  "The silent killer."  :D

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  177. Well, if you don't know what a groin stick is, then your heart must be OK because you didn't get a heart cath.  Hopefully whatever the issue is/was, it's being taken care of and all is well.  

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  178.  Wilkommen...glad to see you survived and got some rest.

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  179. short ES 68, tgt 61-2 gap fill

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  180. No, nothing *that* serious.  I'm generally in pretty good health.

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  181. Beautiful.  Same here at 68.125.  Almost too good to be true.

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  182. Good Lord, is ES going to gap up after every single weekend?  Glad I went into the weekend flat.  I took a small short at 68 too.

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  183. Good to know.  I thought about it based on the story about your mom that you wrote.  That would put you at an increased risk of the same thing.  I thought it was heart related.  Anyway, get screened, and take care.

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  184. Yeah, my mom's heart problems were actually caused by the chemotherapy.  The irony was that the same medical treatment which put her leukemia in remission ended up killing her. 

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