Amazon

Wednesday, February 1, 2012

SPX Update: Market Now Historically Overbought

No material change in the counts since yesterday.  The SPX hit yesterday's targets, and actually exceeded my exact 1328 target by a couple points before reversing.  A small moment of truth for the short term preferred count is now upon us.  Trade above 1333 would eliminate it, while trade below 1321 would add confidence to it.

Below is the very short term chart, which highlights the key levels.


If this decline is to continue as a leading diagonal, it will be very difficult predicting targets until the smaller sub-waves start to unfold.  There are few Fibonacci relationships within leading diagonals, so I'll have to see the form taken by the next wave before being able to take a stab at a target -- much as I did yesterday.  The only concrete rule at this stage is that the next wave (presumed to be a small third wave) must exceed the low of wave 1 (1300.49).  Wherever the next wave bottoms, it is currently expected that after it bottoms, it will then retrace back above 1300.49.  Cautious traders please take note.

Again, if this is indeed a leading diagonal, then the market is expected to have a choppy downward bias over the coming sessions.  "Choppy" is a key word here.

Below is the hypothetical example of how the leading diagonal could unfold, as shown previously.  Please note this is not intended to be an exact price projection at this stage -- as I said, there are few Fib wave relationships in this type of move.  It's merely intended to illustrate the concept; price projections will have to come later.


Yet another signal that a top is likely to be much closer than the bottom now is the Bullish Percent Index for the Dow Jones Industrials (and others).  The Bullish Percent Index (BPI) is a breadth indicator based on the number of stocks on Point & Figure buy signals within an index; readings over 70% are considered overbought, while readings under 30% are considered oversold.  The current reading is 96.67%, a virtual tie with the highest readings ever recorded.

All 3 readings at this level have occurred post-2006.  The chart below lines up the readings with the SPX price chart in the bottom panel.


And finally, the bullish alternate count.  Again, the count below is not my preferred count, and is presented in the event that the market exceeds the 1333 highs, so readers will have one idea of what may be unfolding.  I feel that in the event that my previous call that Thursday was the top proves to be a tad early, then the top is still very nearby.  However, that's only my opinion, based on the supporting evidence -- so conservative bears may want to trade accordingly and keep tight stops on their trades until the trend actually changes.  Until proven otherwise, the trend is still up.


In conclusion, several days ago, I put forth my preferred view regarding what's unfolding -- and now it's up to the market to either disprove my theory or add confidence to it.  The key levels for the short term are both nearby, so the first question should be answered soon.  For the intermediate term, I continue to believe the market is very close to a meaningful trend change, but there is still no confirmation of that view.   Trade safe.

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

237 comments:

  1. Many thanks for the second donation!  Much appreciated.  :)

    ReplyDelete
  2. Nice job pretz. Hope this turns out how it goes. 

    ReplyDelete
  3. Tom DeMark is expecting SPX close at 1338-1342 for the top which works well with alternative count.
    http://www.youtube.com/watch?v=pErflC2snoM

    ReplyDelete
  4. anyone notice the triangle forming in the es one hour chart?

    ReplyDelete
  5. WD Gann would say, more than one triangle. Look at this chart. Both triangles are being breached on the bottom edges.

    ReplyDelete
  6. Nice post PL. Anther ST drop setting up. How many times will thy be able to buy this thing back up?

    ReplyDelete
  7. I'd like to see it get there, that would add some confidence for the more bearish count.

    In a perfect world, I'd like to see a nice gap down open.  Futures flat right now.

    ReplyDelete
  8. looks like even before the bell. In a perfect world this would be at 900-1000 with lack of buyer participation, fairly valued.

    ReplyDelete
  9. I would almost prefer to see the alternate count play out with a slight new high - then straight to the business of a decline with fewer retractions.
    PL is it possible to have a gap down under which the preferred count still holds, but under which much of the choppy wave acion has to be assumed to have occured within the gap down -  rather than it being explicitly played out? 

    ReplyDelete
  10. Not really.  :)

    Even within leading diagonals, third waves are often impulsive.  So if the preferred count plays out, the next wave down could be a fairly straightforward decline.  But it will still retrace back up into the territory of wave 1 when it completes.  So... choppy in that sense.

    ReplyDelete
  11. Covered at 1319 ES for an average of 4 points on a full postion.  Ready to get short again if the triple bottom breaks, but I'm still cautious of the bullish alt. count here. 

    ReplyDelete
  12. how does one differentiate  a wedge from a triangle? Thanks in advance!

    ReplyDelete
  13. PL, awesome work, 

    ReplyDelete
  14. that is what i am doing, little stabs, not even worth recording here for entries/exits.

    ReplyDelete
  15. Where is the Greek deal that was just "Hours Away" ???  No wonder the response was so tepid.  

    ReplyDelete
  16. Beautiful analysis PL.  On your last SPX chart, is forming a triangle for the blue wave 4 possible?

    ReplyDelete
  17. ty Ray.  Interesting idea.  Sure, could be.

    ReplyDelete
  18. Yeah, I'm kinda feeling that same way -- hardly worth mentioning half the time. 

    ReplyDelete
  19. Paolo Giacobbe PiolFebruary 2, 2012 at 2:48 AM

    QE3 now should be a damage as QE3 would accelarate inflation and slow down economy further. And looking at teasury yield the market is now betting on QE3, if the market will lose the bet the market will reverse downward 

    ReplyDelete
  20. The weekly jobs numbers @ 8:30 could be the catalyst for beginning of the gap down opening (?)

    ReplyDelete
  21. Non farm payroll is tomorrow, that's probably the bigger deal -- it's amazing how many times those dates mark the virtual top of a move, too.

    ReplyDelete
  22. It's a while til the next Fed meeting.

    ReplyDelete
  23. I'm not going to be around much this morning -- got a Dr.'s appointment in the a.m., so I need to try and get a few hours sleep.  Today should be reasonably straightforward though, and I think I outlined everything pretty clearly.  If you're one of the newer traders who took shorts near the 1328 target yesterday, remember to protect those profits!  :)

    I've got a few orders on autopilot, so we'll see what happens.

    bbl, GL

    ReplyDelete
  24. Hope all goes well  this a.m.  Hope you're not coming down with a case of chartitis :)

    ReplyDelete
  25. Early sign of Dotcom bust?

    Friends, relatives and even doorman are now asking about how to buy shares of FB. :)

    ReplyDelete
  26. PL, do you see any potential continuation of the rally beyond C/5 of the bullish alternate count if/once the blue target zone (1335-1355) is reached? From an EWT perspective is a reversal from that level certain / very likely? Retracing down by how much?

    ReplyDelete
  27. Triangle: 
    http://www.investopedia.com/articles/technical/03/091003.asp#axzz1lEc3CWuq - and Wedge: 
    http://www.investopedia.com/terms/w/wedge.asp#axzz1lEc3CWuq ,,,,, A few hours ago, triangle looked like it was breaking to the downside, and it did, a bit. But now it's almost repair. I look at this as a backtest of the breakdown, so without any other consideration, suggests a path lower after this backtest. My 2cents.

    ReplyDelete
  28. In jest, right? Or really?

    ReplyDelete
  29. busy writing a repot, watching from sidelines, still see potential for 1312-15 today.

    ReplyDelete
  30. potential for another mini crash like the one I called the other day, time period 9:45 am?

    ReplyDelete
  31. Maybe 10:00, more likely. Watch out for rally from 11:00.

    ReplyDelete
  32. all short again, tight stop, we shall see- job claims didnt seem to inspire much upside action

    ReplyDelete
  33. Merkel: [knock, knock, knock!]
    Jiabao: Who is it?
    Merkel: Euro.
    Jiabao: Euro who?
    Merkel: Euro gonna wanna help us.
    Jiabao/Merkel:  Hahahahahahahah
    Merkel: So can...
    Jiabao: Hahahahahahahah
    Merkel: Hahaha... Can we...
    Jiabao: Hahahahahahahah
    Merkel: Yes, very funn...
    Jiabao: Hahahahahahahah

    Cartoon credit: Global Times, Beijing

    ReplyDelete
  34. can we split the difference, 9:525? YOU AMERIKAN . . . [don't get me started] lol

    ReplyDelete
  35. Great point!  Co-worker asked me two days ago about that.

    ReplyDelete
  36. i also have seen a lot of streel level people thiknig fb will save their retirement- maybe thats the jubilation that'll kill the mkt- or it might actually save peoples retiremen accnts....

    ReplyDelete
  37. What makes you bots think I'm Amerikan?

    ReplyDelete
  38. TOP is in . for now anyways. took profits.selling  rip. shorting is the PLAY

    ReplyDelete
  39. wow banks just exploded green

    ReplyDelete
  40. What gives? You have the GOLDEN CROSS now. Just noticed how ES has started rally the moment you posted. You're doing the wrong thing! Stick to your GOLDEN CROSS! lolz

    ReplyDelete
  41. OK, the Bot#1 decided to push UP instead of DN. This bot action probably ends in 10 minutes though.

    ReplyDelete
  42. Ohhh god, would have changed my call for mini crash if I saw what is below. Popped higher immediately. . . 

    ReplyDelete
  43. Probably should have known. All bot actions these days point upward.

    ReplyDelete
  44. I am switching my stance, possible basing action of pop to 1370, the spike that DeMark talked about below. Candle action this morn support that and other indicators of sentiment.

    ReplyDelete
  45. demark said low 1330's was the top last week, not sure where youre getting 1370?

    ReplyDelete
  46. may be basing for final (s) moves higher. 

    http://www.screencast.com/users/katzo7/folders/Jing/media/5677e6ec-2cb6-4d3e-80aa-046584a9f500

    ReplyDelete
  47. wow is this 'the view' of economics?  all fluff an zero content... AND FASHION!!!

    ReplyDelete
  48. see video SM posted below. . . 

    ReplyDelete
  49. Sentiment: "
    Global Strategists Abandoning Bearish Views"

    http://www.bloomberg.com/news/2012-02-01/global-strategists-abandoning-bearish-views-after-missing-rally.html 

    ReplyDelete
  50. Yeah, all the bots seem to be heading UP, but I'm waiting to see what the 10:22 bot will do. If Bot#2 does not sell, then it's game over for the DN case for now.

    ReplyDelete
  51. watched that video- ill stick  to what i hear from the man himself, too much glossy makeup on that show to take it seriously

    ReplyDelete
  52. i guess we will see, wont we

    ReplyDelete
  53. there goes GLD, getting ready to sell longs around tgt of 175

    ReplyDelete
  54. EW3 tgt 1330 ES, add 4 point differential for $SPX

    ReplyDelete
  55. this is where in the cycle that
    indicators do not work anymore
    they are of no value at this kind of top, a 'V' top yes, but a rounded top no

    ReplyDelete
  56. Bot#3 kicked in 2 minutes ago at 10:40. It is pushing UP.

    ReplyDelete
  57. bernake is pretty much lying but the bulls are loving it- free money forever, no inflation, everything is turning around.... maybe big ben is right?

    ReplyDelete
  58. Somebody was asking about the "Golden Cross" yesterday. Here's Robert Colby, author of The Encyclopedia of Technical Market Indicators weighing in on the topic today:

    "The
    SPX 50-day SMA crossed above its 200-day SMA on 1/31/12, thanks to
    lower numbers dropping out of the moving 50-day window. This "Golden
    Cross" is widely believed to offer a bullish trend confirmation. Most
    people don't seem to realize that there are a majority of unprofitable
    whipsaws using the "Golden Cross". This may prove to one. "The
    latest sentiment data indicates bullish complacency. When the majority
    of investors is bullish, and therefore already invested in the market,
    stocks are vulnerable to a downside shakeout. The pendulum of emotion
    tends to swing too far in one direction, but market mood always reverts
    to the mean."
    http://www.traderplanet.com/newsletter_articles/view/6791/distribution:7

    ReplyDelete
  59. thats it- tryna done with the tough questions, the parade of planted econimic quesitons begin- today we break to new highs.... cant fight the fed!!

    ReplyDelete
  60. What's going on with the NASDAQ?  Are we in a bull market or is this buyer capitulation at the top?

    ReplyDelete
  61. Fed owns 1 trillion in mortgage backed securities Bernanke agreed

    ReplyDelete
  62. look at the Ending diagonal evident on the 15 min. ES. a ST call, this lag may have just broken. . . 

    ReplyDelete
  63. If there was a Chinese restaurant nearby I would go...

    ReplyDelete
  64. Shorted at ES 1321.25.

    ReplyDelete
  65. Mr. Colby looks suspiciously like Vladimir Putin.  Do you think we can trust him?

    Thanks for that post. 
    http://stockcharts.com/h-sc/ui?s=$NYA&p=D&st=1998-01-01&en=2002-07-01&id=p09717928640&a=235948553

    ReplyDelete
  66. It's just completed a break down on H&S pattern (1 or 5min chart) - a nice break... It seems that there is a good chance that it may back up from this point...

    ReplyDelete
  67. "JPMorgan Chase & Co. (JPM) and Citigroup Inc. (C), which predicted the rally in
    stocks, say it will continue as the U.S. housing market rebounds
    and China eases lending restrictions to bolster economic growth."

    As the U.S. housing market rebounds?  Kind of make you wonder why they get paid a salary at all, let alone a bonus.

    ReplyDelete
  68. The Naz buyers may be the ones moving out of the DJIA and chasing more last-minute goodies over on the Naz and RUT. They made good numbers in Jan on the DJIA, so now they're onto the next pasture.

    ReplyDelete
  69. Bailed on that, flat. No momentum.

    ReplyDelete
  70. take 1296 ES [EW5], subtract it from 1317.50 [EW1], multiple that times 1.618 and add to EW2 low of 1302.25, that will provide a potential tgt for this EW3. then a down, then one more run up to above 1340 for EW5 unless it is truncated, see my chart posted. in this kind of action again, indicators fail to provide any help, very hard to trade, most lose money.

    ReplyDelete
  71. this could be the low for th day, anyone going long?  im not, but just cutious

    ReplyDelete
  72. twice rejected es 1326ish in 24 hours. 

    overbought in every format.

    copper and oil getting dinged

    xlb (materials etf) getting sold for what seems like the 1st time since december. 

    i'm short from 1322.5 and looking for the 1300 area by tomorrow

    ReplyDelete
  73. Pretzel Logic's 2nd chart, blue projection, is looking better now, isn't it? Sure wish we see 1321spx before the close. That would be a case for shorting overnight. Lunar cycle looks like today has bullish influence. Tomorrow should have sharp move, direction unknown, unfortunately.

    ReplyDelete
  74. And SPX just rejected 1321 as well.  It looks like we will be trading between 1321.50 and 1332.50 from now until forever!

    ReplyDelete
  75. I tried to go long at 1318 for a trade based on ST MACD and stochastics, but missed it.  I only did that because today is slow at the moment, no catalyst for a big sell-off that I see (again today).  When people were starting to panic a little on Tuesday I would see that just as the stochastics started to turn, a big seller would come in and take out the bid, knowing that lots of little guys would be there (in addition to the MM) to absorb their order flow.  I agree with bastia that we are likely to test 1300 tomorrow, unless jobs number knocks it out of the park and we get even more overbought.  I've covered my shorts and will get in again if/when we take out PL's 1321.41 SPX cash KO level.

    ReplyDelete
  76. Hello All,

    Here's my one post for lunch time. 

    According to FreeStockCharts.com, the S&P hit 1321.27 at 12:41PM on a 1 minute chart.  Pretzel has an annotation in his first chart that says trade below 1321.41 invalidates the Alternate count and provides confidence to the preferred count.  This would seem to indicate we're heading lower in a "choppy" fashion.

    ReplyDelete
  77. RE "trade below" .... Way too marginal to take comfort in that. There is such a thing as noise.

    ReplyDelete
  78. Nevermind...it seems that was estimated data I was looking at.  Oh well.

    ReplyDelete
  79. the problem is we need BEARS to PUSH the market down, FORCE it down, not this trickling of selling and buying...

    ReplyDelete
  80. I see LOD as 1321.57, missed it by THAT MUCH, LOL.

    ReplyDelete
  81. It may take a big event like a big bank collapse.

    ReplyDelete
  82. I see 1321.57 as the low....not to split hairs.....looks messy to me...no conviction...one way or the other....waiting to see some buying before I go long.

    ReplyDelete
  83. TPTB detest PL and as soon as PL writes it, they will use his numbers to torment him. lol

    ReplyDelete
  84. Market needs a catalyst to take it down.  Markets can remain overbought/oversold for extended periods of time. 

    ReplyDelete
  85. big boys should be getting back from lunch soon, then we'll see what happens.....speaking of lunch....hey K, are you back from you chinese food lunch?

    ReplyDelete
  86. i agree, but thats all in the past- the time to bet on a collapse was august 2011, all those issue have been absorbed by the market- so whats left to take it down now?

    ReplyDelete
  87. daily dip buy the rest of the afternoon it seems....

    ReplyDelete
  88. Tell me about it.  It's like a slow-drip coffee maker - 1 teenie point at a time down 

    ReplyDelete
  89. THIS LIL' GUY IS ON IT!

    ReplyDelete
  90. I think one more revist of the lows first....a test of the overnight low at 1317.00...then bounce to flat after 3:00est

    ReplyDelete
  91. GMCR ...

    Weekly IV was 2+x over next week's. Added 65 Call time spread for 1.5. Waiting for the Time Value of the weekly to collapse. Will cash out at 3.2 +/- today or tomorrow (expiration).

    ReplyDelete
  92. side note, this is the most ridiculous market I've ever traded since 2007, when every day it was down down down with no bounce, this market is up up up with no down... i believe we will tank hard at some point, just wondering if it will be at 1333 or 1533

    ReplyDelete
  93. Here's a link to one of the best presentations that I've ever seen about what the 8 largest central banks in the world are doing.  It's laid out in such a simple style and presented so clearly, that even a doofus could understand it.  That's why I understood it.  I just felt that the type of people who attend this blog deserve to see a presentation as good as this one.  Don't get me wrong, I didn't say that because any of you are members of the doofi, but because you're good people who aren't trolls, lol.

    Special thanks to Iriquois for sending me this link:
    http://www.ritholtz.com/blog/2012/01/living-in-a-qe-world/

    ReplyDelete
  94. Oh boy... another one of my comments vanished.  I was just trying to pass on a link to a great article.  When is this Disqus nonsense ever going to end?

    ReplyDelete
  95. http://www.ritholtz.com/blog/2012/01/living-in-a-qe-world/

    ReplyDelete
  96. Anyone else see this inverse HS on SPX.  Its very clear on a $2 range chart.  It also shows up on a 1hr chart.  The break of the neckline, upward, seems to indicate a move to ~1338-1340 area over the next several days.

    ReplyDelete
  97. yes, you are correct. 

    ReplyDelete
  98. nflx up alomst 100% from the low a few months back....

    ReplyDelete
  99. Yes, I definitely see it.  I asked the same question at yesterday's open, and I received ZERO replies.

    ReplyDelete
  100. No kidding.  Went short overnight with a healthy stop used and they took the market right to my stop then reversed it.
    Could have made a nice gain by early morning.  The R2K is definitely the star saying risk is in.

    ReplyDelete
  101. Missed your post yesterday AM.  Usually I'm up and at it with the market open but yesterday my day job got in the way.  Thanks for the response.

    ReplyDelete
  102. long at 22, tgt 28-38 (big range), SL 20.25

    ReplyDelete
  103. regardless of bias, something needs to happen at some point, can't make millions as a wall street hedgie in a 20 point range....

    ReplyDelete
  104. Yes, but we have been this ridiculous before around March, April 2010 and Nov. 2010 to Feb. 2011.  So the question is "when", as you said.

    ReplyDelete
  105. Potentially good shorts or put option plays:  JPM and HD.  No guarantees.  Please do your own research.  Not trading advice.

    ReplyDelete
  106. also whatever happened to anon20? banned or defeated?

    ReplyDelete
  107. Market has to drop for these to work. 

    ReplyDelete
  108. everything is a good short idea if the market is going to drop

    ReplyDelete
  109. Great Article

    ReplyDelete
  110. I've got a AAPL short position. It may play out even of market goes up. Will FB ipo suck money away from AAPL? We'll see.

    ReplyDelete
  111. truerangeballisticFebruary 2, 2012 at 9:49 AM

    I see it as well but I have a HS on the NDX 1 minute chart. It might drop to 2484 at the EOD. I could be wrong with this market. This might help slow the SPX advance down somewhat. Just kicking things around

    ReplyDelete
  112. truerangeballisticFebruary 2, 2012 at 9:51 AM

    I know I will be wrong on direction now.

    ReplyDelete
  113. Anon20 defeated?  You @#$!-er I WILL NEVER BE DEFEATED.  Tell your #$%^ head @#$% burglar @#$%! MAUI !@#$ inf @#$! PUNK-!@#$ to #@! it in his !@#%.  (posted as requested by ANON20 separately).  

    ReplyDelete
  114. I thought so too.  Very simple and easy to understand.  Glad you liked it.  Special shout out to Iriquois for sending it to me.

    ReplyDelete
  115. tell us which way then

    ReplyDelete
  116. lol - Does he have his own blog now?

    ReplyDelete
  117. dont know how many more time i can roll my eyes at this tape- seriously not willing to give up ANY points?

    ReplyDelete
  118. I SAID USE ALL CAPS!!
    (posted by me, but this is what ANNON20 would really have wanted).

    ReplyDelete
  119. That's a good point (regarding FB's effect on AAPL), DD.

    ReplyDelete
  120. I see that one also. 

    The reverse H&S in SPY and SPX is secondary to the main multi-day H&S forming in the SPY and SPX .  It is just something to keep an eye on that could help with projecting a top if the SPY shoots up.

    ReplyDelete
  121. reversed short at 22.5

    ReplyDelete
  122. yeah, it's STUPIDAMERIKANSAREWORTHLESSANDWEAKANDYOUARETOO.BLOGSPOT.COM and it's sister site MAUIPUNKTHISISALLMYIDEA.BLOGSPOT.COM

    ReplyDelete
  123. 1 point range for 90 minutes...

    ReplyDelete
  124. What does reversed short mean?

    ReplyDelete
  125. means i covered my long and am now short ES

    ReplyDelete
  126. It was in response to my NDX chart posted below to NWDR. I said down so up it is.

    ReplyDelete
  127. Seems like the bots - not including you - want this day to be a spinning top day.

    ReplyDelete
  128. That's what they want you to think.  You may still be right.  If the NDX doesn't close above HOD, I'd take it as a positive sign that the H&S is in play

    ReplyDelete
  129.  Too funny. My mom always told a story about me doing the same thing. Except it was an Angus bull and I had a stick for protection and a diaper on. True story.

    ReplyDelete
  130. 5 minute ES seems to be starting a BB curl up trick.

    ReplyDelete
  131. The distance between the two shoulders are very similiar in price and time. Got that going for me. lol

    ReplyDelete
  132. You guys are hilarious :)

    ReplyDelete
  133. vix absolutely disappearing. soon going to zero

    ReplyDelete
  134. clear sailing down imo, only
    prob. is only 15 min. of RTH trading left ~ ST call

    ReplyDelete
  135. down from higher up = flat

    ReplyDelete
  136. holding 1/2 position overnight again on the change the numbers come in low tomorrow...

    ReplyDelete
  137. GLD up

    yes, crash you mother lol ST call

    ReplyDelete
  138. never mind- all cash.  no point front running, if this is a real top there'll be plenty of downside to come.... sick and tired of holding risk with zero reward!!

    ReplyDelete
  139. hurry, this patient need a defibrillator, flatlining..resuscitate 1,2,3, patient's name: SPX....beepppppppppppp

    ReplyDelete
  140. Another day that at the close the R2k jumps as Dow falls. 

    ReplyDelete
  141. Ditto but will probably get stopped out again tonight before turning lower.

    ReplyDelete
  142. VIX is hanging tough ....

    It should have been at its historic low of 15+/-. Pro's are of the opinion that it is not willing to let go until a resolution from Greece. Only then, they said, it will finally exhale.

    And then RIP. :)

    ReplyDelete
  143. Day ended with a potential trend change down. Could gap down on open.

    ReplyDelete
  144. This has been the most excruciating two months I can remember.  For a trend trader like me, watching this sideways grind is making me want to gouge my eyes out.  Especially when I've been anticipating a turn at any minute for the past 10 weeks.  AAAARRGGHHHH!!!

    ReplyDelete
  145. Matstery, what instrument(s) do you trade?

    ReplyDelete
  146. Ditto here.  I'm a novice looking to get into trading eventually, but I follow this when it comes to my 401K accounts.  It  makes it VERY diffcult to trade long when the market is acting like this!

    ReplyDelete
  147. I guess it all depends on those job numbers!

    ReplyDelete
  148. If you trade futures, take a look at SI. It's been making very nice swings lately.

    ReplyDelete
  149. not much to post about today so few charts. still a possibility. GLD should have a final spike up to the 175 area, then settle back.

    http://www.screencast.com/users/katzo7/folders/Jing/media/3193dc3a-41fc-4425-9bf3-e8349e29449f

    ReplyDelete
  150. Leveraged ETFs primarily, which makes it tough to hold for a prolonged period of time and makes this creeping grind all the more aggravating.  I generally trade the 2-hr SPX chart based on MACDs, trend-lines and moving averages which has worked quite well when there has been a trend.  I hold regular business hours at my full-time job, so I can't watch the
    ticker, and sometimes can't even check the charts for an entire day.

    In retrospect, I shoulda, coulda, woulda made a nice return since mid-December, but I was playing defense all along and was never presented with any real entry points to jump on the band-wagon.  Of course, I allowed my emotions to keep me out of the market instead of trusting my system and what the charts were telling me.  On the bright side, I have learned a TON from PL and you other contributors here and will be ready with guns loaded when the turn finally comes.

    My Commandments:
      Protect your trading capital
      Don't fight the MACD
      Trust your system
      Don't hold on Hope
      Lord loves a working man
      Don't trust whitey
      See a doctor and get rid of it

    (a prize goes to the one who knows the origin of the last 3)

    ReplyDelete
  151. Well, the news outlets are reporting a possible attack on Iran's nuclear facilities by Israel sometime in the spring, with possible help by the US.  That might trigger a nice stock market decline eventually!

    ReplyDelete
  152. what time zone is being used for these posts?   Thanks

    ReplyDelete
  153. Pretz lives in Maui

    ReplyDelete
  154. Jason, I like your work. Thanks for posting. One question on your leading diagonal idea for a 1st wave down from the January 26th high. I know that 5th wave ending diagonals have all 3-wave moves for the each of the 4 waves but my understanding is that a leading 1st wave must have impulsive 1st, 3rd and 5th waves but allow overlap between the 4th and 1st waves. I can squeeze an ugly 5-wave count onto the January 26-30 decline but we both know what happens when you try to force a wave count. Personally, I'd love to see a new high tomorrow (Friday) to finish a 5-waver up from the 30th and finish off this thing once and for all. Shoot it, stick a fork in it and call it done if that happens. February 3rd is an excellent turn date (especially with another test of 1333) on the Gann Square of Nine chart.  Keene

    ReplyDelete
  155. Astro $.02
    Promised this days ago but got "hit" with roadkill flu...The purpose is to illustrate that we are entering a timeband with multiple astro signatures for trend reversals.

    (Disclaimer - not to be interpreted as trading advice, for astro transit illustration only.)

    ReplyDelete
  156. Thanks. ETFs seem to not be effective in low(er) volatility environment because they tie up a lot of capital and so discourages you from being nimble and encourages you to hold overnight. They're great in times of super big moves though.

    ReplyDelete
  157. Anyone,

    I am thinking about buying TVIX.  This could be a dumb question but here goes. I know other leveraged ETF's have had reverse splits. However, because this one tracks the VIX, can it reverse split??  Any help would be appreciated.

    ReplyDelete
  158. I think by blog conventions, times are in Eastern Time and price levels are for the S&P 500 index when referring to pivot levels, knockout levels, and so on. Trades are usually quoted in ES futures front month contract prices, sometimes with the first two digits dropped, like "shorted at 12.5" - but this depends on the individual.

    ReplyDelete
  159. Hi Keene. Do you know of a blogger who posts Square of nine charts?

    ReplyDelete
  160. could be a slow turn down happening here

    ReplyDelete
  161. im in danger of super bullititis

    ReplyDelete
  162.  Sure is a pretty chart.

    ReplyDelete
  163. A lot of money flew out the market today despite an up close. Sure signals a top or that a top is near.

    http://online.wsj.com/mdc/public/page/2_3022-mfsctrscan-moneyflow.html?mod=topnav_2_3022

    ReplyDelete
  164. The Jerk Staring Steve Martin (thx Google)

    ReplyDelete
  165. HT, do you know if these numbers are cumulative for the day?

    ReplyDelete
  166. it is leveraged, those usually bleed. It's the bleeding that forces the reverse split.
    VXX isn't leveraged so it's probably safer but obviously won't move as much. Also note that TVIX and VXX are based on short term vix futures so they don't track the vix exactly.

    ReplyDelete
  167. yes. they define it here.

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

    ReplyDelete
  168. Is that a contracting triangle on the 2 hr ES chart? Does that give any clues as to the next direction?

    ReplyDelete
  169. OK, so yesterday on the NYSE the ration of Advancing:Declining shares was right around 5:1, and 7:1 for the NASDAQ. Today it was 1.5:1 for the NYSE and 2:1 for the Nasdaq and WSJ says the markets are hemorrhaging money. And yet, a healthy 120 stocks made new highs on the NYSE and 160 on the NASDAQ, new lows were in single digits on both exchanges, the sky-high percentages of stocks trading above their 20- and 50-day barely budged and the indexes all ended up a tick for the day.

    What the hell is holding this thing up?

    ReplyDelete
  170. after 25 % up and you are now bullish.

    ReplyDelete
  171. agreed . watch uranus and venus is the key.

    ReplyDelete
  172. The key?? You gotta put all the indicators together. How many times do I have to repeat this, you can't rely on any one thing! To paraphrase he who must not be named, I need to whack you on the side of the head like my baby sister.

    ReplyDelete
  173. bulltards everywhere. when bears turn bull its time to leave bull position. bull bus loaded . could go a lil higher to load up the shorts. a gift. good post on bullish percent P head. could go a couple more weeks tho to my 1350 area postulated or god forbid the 1370 bin laden bullet in the head top

    ReplyDelete
  174. The 52 week low was 15. It did not reverse spilt then. Went to over 100 in October.  Any idea at what price it would reverse split?? Any way to determine that price?  Thanks for your answer.

    ReplyDelete
  175. broke lower but no great conviction and currencies aren't confirming yet...I expect it to remain relatively flat until the report....take your positions then IMO

    ReplyDelete
  176. Now wouldn't it be interesting if we get a little head fake pop to ~1340ish which breaks the TL from the 2007 market top, meander for a couple of days and then finally roll over.  I wonder how many more people a head fake like this would pull in.  Although maybe we just do a slow roll over from this level.  Either way I'm astounded by how prices are just pulled to the TL.

    I know you guys are already looking at these longer term pictures but attached is a five year, daily SPX and a closer view of where the prices are at relative to the long term downtrend like from the 2007 top.  We are right at the TL.  Almost like someone planned it this way.

    ReplyDelete
  177. Retail investors chasing the rally. And they are going to continue to do it till they exhaust themselves.

    ReplyDelete
  178. Lol.... "Keep it together, man."

    ReplyDelete
  179. the recent volatility hides the bleeding....look back at january 2011, vix was in the teens but tvix was in the 60s, relatively stable vix from january until august and tvix dropped to 15...that is the bleeding....I would expect, if vix stayed at 17 for 3 months straight, you would see tvix continue to drop, maybe not with vxx....I have no idea when they would do a reverse split though.

    ReplyDelete