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Tuesday, February 28, 2012

SPX Update: Studying the Divergences in the Trannies and MACD

SPX finally broke the 2011 highs, which is a huge monkey off my back, since I've been insisting that it would ever since the Dow broke its 2011 highs back on Feb. 7.  Now we'll see if SPX has any interest in the double Fib zone of 1376-1378, and in making a turn soon.

As I've discussed previously, the Dow Transportation Average has been diverging from the Industrials since then -- and now, with the Monday's action, the SPX is diverging as well.  I took a look at the two most recent times the Trannies have made a solid turn ahead of SPX, and both instances eventually led to a correction in SPX.  Averaging these two recent instances, the SPX target for a turn is roughly 1375 -- which lines up nicely with the wave counts.  Chart below.


The SPX chart is next, though there's not much to add over the past few weeks.  Yesterday's decline bounced right at the trendline and rocketed up over the 2011 high.  If my count's correct, this is the zone where a turn becomes likely.  

Of anecdotal note, the bears seem to have given up all hope of a turn ever happening, and the bulls are amazingly complacent now in their "buy the dips" thinking.  This psychology is perfectly in line with the end of a fifth wave. 



The next chart takes a look at the massive MACD divergence currently present, and should give pause to those bulls who believe we've kicked off a never-ending rally to the moon.  The MACD and other market internals are giving fair warning that this rally isn't as strong as it looks.  Note how differently MACD behaved coming off the 2009 and 2010 bottoms.


I also want to whip out the Bullish Percent Index INDU chart one more time ("Scuse me while I whip this out..." -- sorry, a little Blazing Saddles humor there), to show that the market hasn't been able to get away with these readings for long in the past.  It usually rallies a bit after hitting this level, and that's now happened.  Could go for a little bit longer, but it can't go on "forever," which seems to be what everyone's expecting at this point.


In conclusion, the charts are again aligned for a potential turn.  But if you're a bear, please don't front-run -- as I've been warning for a long time now.  Hopefully, if you've heeded these warnings, you haven't lost a cent on the short side since the 5 points lost when I suggested shorting at 1328 with stops at 1333. 

Not sure if you've wagered anything on the long side, but since SPX 1347, I've been pretty strong on the idea that SPX would break the 2011 highs -- however, it certainly hasn't been the easiest market since then, and I can't say I'd blame you if you didn't hold longs through all the up and down whipsaw action.

I would also say if you're a bear who's survived or made a profit in this market, then pat yourself on the back.  This has been a very rough run for bears, with a lot of false signals being generated across the board in most every form of analysis.  This has been one of the toughest markets I can remember, because the signals have been at complete cross-currents with the price action.  The signals have not confirmed strength, yet the rally has continued. 

This is the type of move that can bankrupt an overly-eager bear, and I do hope that my consistent warnings of watching and waiting on the trend lines have, if nothing else, at least saved swing-trading bears from jumping in too soon.  Nimble bears have been able to make a few bucks -- but in this market it hasn't been easy, or even advisable, to hold a position for long.

The big ECB LTRO announcement comes this Wednesday, and it's difficult to predict how that will impact this market without knowing the details behind it.  This is not a "news" event as much as a liquidity event -- and liquidity drives the market. 

It seems safe to assume that a fair amount of front-running by the bulls has occurred in advance of this announcement.  It also seems safe to assume that the looming threat of this pending liquidity flood has kept the sellers very subdued -- as a result, the announcement has the potential to be a game changer.  The preferred wave count is strongly suggesting a turn soon -- so the ECB announcement may turn into a "sell the news" event.  Based on all the technicals, I feel (as confidently as one can in this bizarro market) that it will.  Trade safe.

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

232 comments:

  1. Good morning PL,
    trust you are now fully recovered.
    I earlier posted a ? expanding flat as a solution for SPX but quite forgot there is an overlap as earlier discussed when you were looking at it. So- back to the drawing board! It looks a doozy of a problem .. far too complex for me so .. waiting for you to call it.
    Surely it can't be far away before the other shoe drops?
    Kind regards,
    UKDNY 

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  2. It sure seems like it won't be too far away.  :)

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  3. My upper es tgt has come down to 1373.25, it just hit that. 

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  4. G'mornin'....I've got those 5th wave blues....even broke out the harmonica and my Ray Bans.

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  5. you are welcome jb, if I can help in any way, just ask

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  6. Durable Goods orders at -4.0% vs -0.7% expectations.

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  7.  In my ST trading I constantly scan various time frames looking for indicator candles. Believe me, it is a real pain in the a$$. In this case they were on the 240 and the 8, nothing of consequence was on the popular time frame of the 15. I sometimes apply non-traditional time frames to 'skunk' the crowd, I see things minutes before they do. Also these time frames are fib. numbers, 3, 5, 8, 13, 21, 34, etc. These indicator candles have to be in the correct place, not every dlji signifies a change in direction. TA does not occur in a vacuum, use of the oscillation mode comes into play as well as EWT and a few other things.

    IMO direction had switched to down in keeping with my oscillation TA.
    P.S. There is a nice doji right at the TL on the 15, things slow down now until and if we break thru.

    http://www.screencast.com/users/katzo7/folders/Jing/media/5b4a8f39-5fc8-4012-b6b0-4092bedcdfac

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  8. T3 changed to 66.25 es, break that and next fall occurs.

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  9. These are the days that if I were an accurate daytrader, I'd be a good dipster. This grinding up seems like some gravity-altered version of Jenga. I am puzzled by the EUR -- shouldn't it be a lot lower?

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  10. Expected. Tax credit for capital goods expired EOY.

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  11. Thanks A1
    But...but....the economy is the best ever...Maria lied.
    3.3 pts is quite a miss.

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  12. Yup...Q1 is likely to be quite a disappointment.
    My cousin-in-law used rotate out half his fleet of trucks every year to max out that $500K S179 depreciation rule....not anymore.

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  13. Good point.  That implies that the 2012 rally is a fake out... 

    The puzzling thing is that ISM and PMI figures have been off the charts since the beginning of the year.

    Which data point is more timely?

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  14. Watching SLV closely this am - looks poised to test that upper trendline that PL showed on Friday around $35.50 or so for completion of 1 up with 2 down to come. Silver should stayed coupled with equities, so a correction in both is in order, but further upside seems to be in the cards for both afterwards. My belief is that silver will outperform,  IMRO (that's R for Redneck) ;)

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  15. Keep in mind that in the very short term (today through tomorrow), the market has its heart and mind focused on the upcoming LTRO #2 sweetener, regardless of the economic data.

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  16. Companies are still putting their cash horde into CapX. Hence the good ISM and PMI numbers. Consumers are still hurting and will take a while to repair their balance sheets. Latest figure is showing student loans reaching a record number.

    This country is neither kind nor gentle to its students.

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  17. BBY is having a clearance on APPL's iPAD. Sign that the much talked about iPAD 3 is on the way.

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  18.  Greek sovereign IOU's as collateral are not welcome - says the ECB. With no access to liquidity, Greek banks are tanking.

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  19.  ES tgts
    T4 1356.50
    T5 1349.50 {may not reach here]

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  20. found it thanks.  Seems only temporary and banks can still borrow from their national central banks who can borrow from the ecb in the LTRO...

    http://www.bloomberg.com/news/2012-02-28/ecb-suspends-greek-debt-as-collateral-after-s-p-credit-rating-downgrade.html

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  21. EUR/$$ headed down, fast

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  22. my thinking is that any ST/IT short will work if held til EOD or when we bottom, entry levels were 68-70 es. . .

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  23. Floor traders are positioning for LTRO disappointment tomorrow ....

    Too little, market will want more. Too much, it will freak out on worse than expected bank problems. :)

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  24. Look at aapl go.  NDX may hit pretzel's 2650 target tomorrow...

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  25. Thanks.

    "The ECB isn’t going to make an exception to its rule on not accepting defaulted collateral..."

    ...but CDS are not going to triggered?!!! 

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  26. Take a gander @ PCLN - up over 7%

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  27. Is this the end of NAS100?

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  28.  at this point potential for sudden drop, DJIA dropping to minus 20 to 30 points. . . .

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  29. Didn"t there earnings come out yesterday? I don't follow this one much. How were there numbers? Like that matters in this market, lol.

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  30. They beat nicely. Take a look at their chart back to 1999 - what a huge "El Grande" cup! 

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  31. Aapl up 31% since end of 2011.  New 52 wk high today, but vol is avg, doesn't seem like a blow-off yet.

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  32. Don't know TRB - I don't follow it either other than it's in my "WTF " watch list.

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  33. Hey CalD, could you bring us up-to-date on your 100 share trade of SPXU? How'd that work out for you BDWB?

    SPXU is threatening my stop at $10.12 again. Guess I could move it back down to $10.02 but my entire risk including commissions* is about $40 at this price and anyway, fretting over it is half the fun. 

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  34. This may be turning into a 'run it up and hold it there' day...

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  35. JBG, Think 830.16 is the high for the RUT today? That 833 has been pretty strong resistance so far.

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  36. fretting puts the "F" in fun

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  37. cuz Ireland mentioned "Referendum" near the words "EU Fiscal Compact"...Bless their souls :)

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  38. Question: I'm curious - what is the significance of the 1911?

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  39. Ireland will hold a referendum to decide the Shakespearean question regarding its membership in the Euroland:

    To be or not to be .... :)

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  40. 1911A1...my usual carry

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  41. I was an armorer in the Marine Corp. Worked on everything from 1911A1 45's all the way up to 106 recoilless rifle. Kinda heavy piece to be carryin a 45....you must be a big guy.

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  42. The rich can subordinate the politicians, who then subordinate capitalism to benefit the rich, but eventually in a democracy, the politicians have to answer to the voters.  Everyone knows Greece is going to default, the vote in Ireland could be an unwelcome surprise if they don't approve the new fiscal union.

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  43. I'm "bigger" than I used be, as I've gotten into shape in my mid-life (round is a shape)...Katzo will tell you it's all the Twinkies I eat. (I can neither confirm nor deny that.) But I was weaned on steel, and we always got to select our own gear. 1911's just work and work. I have at least 60k rounds through this one--new springs, and pre-fitted sear/hammer sets always on stand-by...it has a good rattle to it... I gotta say that I saw a couple of 106RR demos using flechette rounds at a few hundred yards on balloon platoons in formation...no balloons left. (They are still inventoried by the way.)

    Thanks for your service...One of my best friend's is a bird Col. USMC (prior enlisted, so he's alright.) SF to you my friend.

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  44. What the Plunge Protection Team has been doing to the Bears.

     http://www.nobodyhere.com/toren.hier

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  45. Ascendng triangle on the ES 60 min. chart?

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  46.  lol, I thought weight in proportion to height?

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  47.  another timing band coming up for a down move, the first one did not work out, but imo this just pushes it out. If something happens before 1:30 mrkt should be down ROD.

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  48. Speaking with an fiery Irish lass (with a German husband) about the austerity situation...Nobody is particularly happy with the fact that pensioners are being cut off while recent immigrants are receiving full public assistance. That was her take. And her husband's response... I think the words "Teutonically pissed" would capture his sentiments appropriately.

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  49. PM's on the cusp of breakin' thru or breakin' down

    http://www.youtube.com/watch?v=X-HQJXI4nVw 

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  50. Yes, thank you for your service. My neighbor across the street is a Retd. Brig. General (JAG) in the USMC. He is absolutely the nicest guy/husband in the neighborhood. Always ready to help.

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  51. Growing out is the same as growing up in my book. I can't help it if they keep lowering the damn numbers for Body Mass Index...It's all the bean counters at Met Life's fault. If I actually weighed 180 (like I'm supposed to at 5-11) people would ask me if I had seen a doctor about my anorexia problem. Currently...I can wear my "I Beat Anorexia" t-shirt proudly and stretchedly (that's a word I think). :O

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  52. Two cheap stocks: AAPL and PCLN ....

    Short or long? :)

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  53. I am short up in the 70 & 71 area, SL logically above the high. . .  I am looking at the EW5 on the 120 min. es at the top, the plunge I called early this morning the EW1, the retrace up to 71 the EW2, waiting on the 3 if that is what is in store next. . . who knows. . .

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  54. it's all about BMI man.....wow, you bring back some dusty memories when you mention "flechette rounds" Fifty cal mounted on the 106 was used to target. 50 cal tracer round told you it was ok to fire (no wasted rounds). Back in WW2 they mounted six of the 106"s on a tank. Unfortunately the ammo guy was often picked off trying to reload. They called it the "Ontos" Where were you when you saw the live fire?

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  55. The latest analyst top call on AAPL is now 700. :)

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  56.  The barbarians are running amuck. Where are the Romans when we need them? :)

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  57. Ft. Indiantown Gap...As old as they are...the US is still handing them off to various groups.

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  58. Glad to frannybrd. I enjoyed my time in and wouldn't change a thing. Please tell you neighbor  "Semper Fi" from a jar head up in Michigan.

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  59. Good afternoon PL,
    May I have your opinion please; is this legal?
    Many thanks,
    Kind regards,
    UKDNY

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  60. katzo7: You mentioned that bar chart pattern recognition is one of the tools in your impressive tool-box.  Do you have a source of reliable (not perfect obviously) patterns that you can share?

    Thanks.

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  61. LMAO....I wonder who came up with those BMI #'s. I'm 5'-8' and 185 today. When I exited boot camp in 1969 I was 5'-8' and 175. BMI today is 28.1 and they say 30 is "obese"....who came up with the numbers???  Twiggy??

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  62. Hmmm.... That SLV....

    Such powerful breakthrough 35.5 resistance, could it be that 1 ended at 33.5 area, hit 2 at 31.85 and this is in fact EW3??

    Katzo, PL do you see that possible in the counts?

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  63. I'm more of an Eastman Kodak guy ;) 

    But seriously AKW, got no real opinion one way or the other, although Apple long long term is certainly the better play, at least for the next decade - destined to probably go to $1,000, pay dividend and travel the path of the techies before it.

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  64. Daily VIX option trades..   Contango is still high.  No news..  Low VIX..  i take cash, check, or American Express,,   thank you

    http://www.youtube.com/watch?v=pJiH3YnQiCc&feature=plcp&context=C33df8f9UDOEgsToPDskI34taj0Z9dAhnClITeAwyO

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  65. I've been at a number of competition shoot outs between 106 squads. One gunner, a brit, didn't even use the 50 cal....he was that good. He had a big ole polish kid as his loader. Stuck the rounds point down in sand...picked em up with one hand and in one motion slid it into the breech. They won every year I was in. Talk about fast & furious

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  66. AAPL to announce new iPAD, next Wednesday, in San Francisco.

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  67. That line in the sand is holding pretty well, but it still looks like the bulliest of bull flags. I bought a 300 TZA at 18.21, stop loss at 18.05 with a limit sell at 18.95. If we get the usual waterfall, I'm golden, otherwise I'm out a tank of gas. The $RUT TL puts it below 830. I'll be out EOD either way.

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  68. DOW up, TRAN down, hummm ....

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  69. I like Sid's idea here:

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  70. Yeah...me and one of the other smart ass nurse's I worked with were going to start a not for profit (yeah right) Bariatric Sensitivity Consultation and Certification Agency (BS-CACA, like the name) so we could extract consulting fees from our illustrious medical establishment that seems to love getting certification plaques hung on the walls. The going price for a plaque on the wall of your local hospital is 50-100K, just in case you ever wondered why healthcare is more expensive than it should be. oh...now I'm fired up. LOL

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  71. That's slick....smooth is fast.

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  72. JBG, I think that is a good play.

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  73. I couldn't stop laughing after reading the BS-CACA. You have to run with that.

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  74. I always root for the barbarians, and the bulls of Pamplona
    The Roman's on the other hand...are not what they used to be....I'm blamin' it on the Chianti.

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  75. No I haven't...But I ought too....There should be a rule about 3x ETFs...Never have a really awesome +30% on your first go around with them...It's like a crack dealer giving you your first rock for free...Damn Direxion. :)

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  76. IMO the ipad 3 will not be many new surprises. From looking at people around me, Apple is losing their market shares to Samsung big time. A lot of people I see are slowly switching to android tablet and phone. Most people switch, not only because the samsung looks great, but you don't have to deal with that stupid itunes.

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  77. well, on the bright side, at least it is not collapsing, how long can the vix go really?? opps hope I am not jinxing it again...

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  78. silver is unbelievable, but it feels a lot like short covering than real buying, up almost $2 from the low this morning. According to Turd's blog, the MM tends t o cover short and let silver rise on Tuesday because of the COT report,  I guess we should see tomorrow...

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  79. Nice call, got a quick move down in TFs.
    Thanks

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  80. It's totally true...All you have to do to soak the medical industry in this country is come up with a BS, feel-good, touchy-feely, we're more sensitive than you Certification Program and they will totally pay you for that plaque.

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  81. Interesting article on LTRO effects, by Paulo Santos:

    http://seekingalpha.com/article/394271-what-to-expect-with-the-ending-of-ltro-2

    Key concept:

    ".. there's something that should be predictable about the
    LTRO 2, namely what will happen after February 28. Some might think that
    this operation will create amazing gobs of liquidity that will splash
    across markets. This, though, ignores something important: the impact of
    the LTRO, as seen in the chart, happens before the date the
    financing is awarded, not after it because the assets to be delivered as
    collateral to the ECB are bought before the LTRO date, not after it."

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  82. i agree..  holding about here is fine till we get some bad news/a stop loss triggering  'kaplunker'.. 

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  83. you're on the inside man....go for it. life is like a box of chocolates

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  84. You are preaching to the choir, I'm an Android guy. :) And I'm in the process of designing some apps for the platform. For trade/investment, however, I'm long AAPL and short GOOG. The reason is that AAPL is designed for idiots (technically) which is the vast majority of America and the world. Android devices are for tech savvy guys/gals.

    My experience with Linux vs Windows taught me that much. :)

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  85. Good thinking UKDNY, I think it is an ending diagonal with throw-over.

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  86. Come on XOM......wave 3 down is your destiny.

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  87. Great call, it just started to move down...down...down... ( I am just hoping it goes a lot lower :), at least the DOW is red for now...

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  88. The fly in the ointment seems to be the 1366 support line.

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  89. If this is true, then based on asset values, they have done a lot of buying! 

    Therefore, does that imply that the LTRO #2 will be above expectations tomorrow?

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  90. Quick check in from da lunch break, and to add a few words on PL's "
    Not sure if you've wagered anything on the long side, but since SPX 1347, I've been pretty strong on the idea that SPX would break the 2011 highs -- however, it certainly hasn't been the easiest market since then, and I can't say I'd blame you if you didn't hold longs through all the up and down whipsaw action." 

    Personally I didn't long that much this rally. I got burned hard on some shorts and puts in late December, then and therefore wait for the October highs to be tested and broken. went long from 1295 to 1315. I let wave 4 pass, and went long from 1305 to 1325, then from 1325 to 1350. So that's been a total gain of 70 points of a total of ~170: 40% of the run. Not shabby, and I made up my losses (hence my small donation to PL last week ;-) ). Now 40% of the total run may not sound like much, but I don't think many, if any are in for the full 100%. If you can catch 70% you are doing G R E A T. My mantra is: I made money because I sold early. I stick to that. It avoids losses, but guarantees gains, ALWAYS! ;-)

    I've been cash ever since SPX hit 1350. (trading mostly other individual stocks for the moment; no not AAPL ;-) -that require a $55K portfolio to get 100 stocks these days... pffff....). I was tempted to go long when it broke the 1355-1360 area, but glad I didn't. Too much whipsaws IMHO especially since it's hard for me these days to trade intra-day, the green-red-green-red  daily candles on an almost daily basis for the last 2 weeks, except for the last 3 days, kept me therefore from entering a long or short position as I couldn't pinpoint a good entry. Now I am just "watch and learn", trying to count the waves and improving my EWT skills, without the pressure of having any money associated with this market. Plenty of plays on the individual stock side though :-)

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  91. That't the truth.  The large win is the hook, and as they say: "The rest is history."  If not careful, you'll give back the win and much more trying to catch the next wave.

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  92. This is great information.  Thank you for sharing, SJ.

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  93. Ain't that the truth - my uncle used to sneak me out to the track as a tweener, and one night I hit a 30-1 bomber and I've been fighting with the ponies for 25 years - wouldn't trade it for the world though, I think I finally got back to even last year (at least that's what I tell myself)!

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  94.  So far perfect, here is a chart describing visually what I said about the waves. Wish it had a bit more punch tho. Was talking to a friend about this alignment of the bodies of the candles RIGHT along the 61.8% retrace, A M A Z I N G how this happens, never trust a candle until IT IS CLOSED....

    http://www.screencast.com/users/katzo7/folders/Jing/media/64c8eac1-dd28-4bd1-8e58-b585e8e5c4bd

    Here is who I use for candle and pattern recognition.

    http://thepatternsite.com/

    Good luck, if I can help in any way, please ask. I do not do silver, only gold, never have understood silver, nothing to easily cross reference it with as ES vs. eur/$$ vs. VIX.

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  95. Hi Katzo7!

    Given your amazing (at least most of the times) track record, I'd like to ask what's your take regarding tomorrow's open? Especially in light of the LTRO announcement, which will take place before the open tomorrow...Would you buy TVIX or FAZ before today's close and hold overnight or would you rather wait for pre-market tomorrow?Thanks a lot in advance for any useful words of wisdom or informal advice that you would like to share!

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  96.  katzo
    A previous post mentioned time bands. Which software or calculation do you utilize ? Fibonacci?, Gann ?, other ?.
    Thanks for sharing your experiences. I've combined candles, volatility and EW...so adding the time element should further enhance the win ratio.

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  97. I do not watch the news, only look at charts. I would have to see where we end in RTH today and what the overnight move is before I could predict that.  Sorry, a bit too far out for me in this kind of mrkt.

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  98. http://www.businessinsider.com/freaky-the-sp-is-right-where-it-was-on-leap-day-eve-in-2008-2012-2

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  99.  es 66 is now the break through point, because the TL slopes down it moved from 66.25 to 66

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  100. these are my own devices and based on experience in reading the mrkt, nothing i could even put down in writing. . . 

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  101. Many thanks for your reply!

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  102. AAPL a monster at 533

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  103. timing bands say 3 to 3:30 pm could be active for es, EW3 on the 120 chart move, i usually do not hold past 3:30

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  104.  look at the slightly lower low in the last candle of es/120, that is the entire reason i am holding my short trade. . .

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  105. On the topic of tomorrow's LTRO. It really is anyone's guess as to how that will play out.  Despite the fact that this round is believed to  be much larger than the 489B in Dec.  I don't get the sense that as much those funds will find their way into equities in the form of liquidity this time around.  There is a bit more risk this time around, both in the form of higher equity prices as well as higher oil prices. So it's my guess that the institutions participating have about as much equity risk as they can stand or should take on for the time being.   

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  106.  nope, gunna finish higher, out

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  107. I believe you did well on that one. I did not remember your entry point. Looking at the 5min chart it looks like we are in the same downward move as the 21st to the 23rd. Maybe a low in the 814's, just a guess but the setup looks similar. Nice work.

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  108.  I took a look at SLV, in a parabolic on the 120, T1 36 [there now], T2 42. gravestone doji on the 120, but it could blow past that, parabolics are very hard to determine the top

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  109. do you think today's action has anything to do with the end of month window dressing? or it will be tomorrow? Today dow ends at a weaker note than spx, at least they did not melt all the way up at the close, like before. everyone is jittery about Europe tomorrow and maybe Mar 1(ISDA hold 1st Greece default determination hearing)

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  110. This is a pattern that I love and trade often. What I think it is is a double top on the 120, can be very effective in trading. It tried to break to the upside (the EW5 on my chart), then when into what I thought was an EW1, 2, & 3 down move. They broke that and brought it back up to the top. Usually these fail, will be watching in o/n action and tomorrow for more signs.

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  111. Thanks much. 18.21 entry $115 after taxes/comm.  Flipped into TNA at 60.85 x 100 with a and it got choppy and stopped out at 60.77. Dontcha know BAM up to 61.20 within less than a minute after my exit (61.76 AH ... 61.85 was my limit sell)...I swear they were waiting for me...I really, really do.

    Anyhews, ES looks like the smartest move out there. Less aggravation, (more) logical system, no need for sleep apparently (I'm lookin at you Katzo and Pretz), no wash sale crap, no waking up to a gap/up down. Now I need to hear about the bad parts of ES from youz guys.

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  112. It's all good...Hakuna Matata

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  113. Hi Pretz,

    First, thank you for all of your hard work; you put together some of the best analysis I've seen.  Also, really appreciate the recent post on the snapshots of SPX, Oil, Gold Silver, US Dollar, and NDX.  It's always nice to see EW analysis on the other markets.  

    In regard to SLV, does today's move alter your count at all, or do you still think we'll see wave iv down soon?  This would align with an expected downturn in the indexes.  However, today's move in SLV seemed pretty strong.  I feel that unless we see an engulfing candle tomorrow, then odds are we'll see a measured move up to the $42 to $43 range.    

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  114. I know the week just started and tomorrow is key, but so far the price action of this week has been confined to "the new trend channel" that I showed last week. Let's see what the next few days bring....

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  115. Thanks Katzo.  Appreciate it.

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  116. http://platinumplus.thetradingbook.com/wp-content/uploads/2012/02/Screen-Shot-2012-02-28-at-5.13.37-PM.png

    interesting pattern

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  117. On the 120 min of ES, previous bar was a hammer.

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  118. who knows, could go 1425 spx is what chart is saying. aapl still leads hmmmm. wont short. trend is too strong . no crack. we still have longs but not as heavy. added some spy at the close . shorting  momentum like this  is a B!t$%. market cant get below 20 day. if it does i will take some off the table. closing basis tho. as said, bears need a big up day then sell off reversal or whateva the pros call it. just an amateur here with simple methods.  
    http://stockcharts.com/h-sc/ui?s=$SPX&p=D&yr=0&mn=2&dy=20&id=p95069126553
     gluck

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  119. http://content.screencast.com/users/doctor_jr/folders/Jing/media/945aa224-4fb6-48fd-b90a-6317fe693435/2012-02-28_1737.png

    another

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  120. wow, great chart!!! Notice the perfect butterfly wing pattern connecting the july 2011 high  with the early october low and the end of october high to form the left wing and the right wing by connecting the end of october high with the late november low and the rally until now/your target. Attached my EWT count (PL, please approve!!) suggesting a tiny little more upside still to come -if I've counted correctly, 'cause the last days have been a B$%^H as PL put it so nicely recently ;-) - which coincides with your plot also suggesting a little more.

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  121. Thanks to Richard L.  for his donation!
    and thanks to Ed N. for his donation!

    Very much appreciated -- thank you both.  :)

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  122. Hi Bamboozled, thanks and welcome.  :)

    At first glance, silver looks like it's still in wave 5 of 1 -- but katzo said it best just below: parabolics are hard to call, and PM's are known for extended fifth waves.  It just broke out through two important trendlines, so that's a buy trigger... one would expect a back-test of those lines at some point -- but that pattern is very bullish overall. 

    As far as silver vs. indices -- those correlations aren't set in stone and while I give some consideration to them, I still look at each independently -- so it doesn't change the SPX count.  For example, most recently, silver bottomed 2 1/2 months after SPX did.

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  123. Could you explain what the circles and ovals are referencing?   It looks like a good fit.  What is this type of analysis called?

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  124. Again nice work. I hear ya on the wash sales and all. The mini futuress do seem like the way to trade. THEY are always waiting for you and me! lol. Is TF the futures for the RUT? Good luck Let me know if you find any decent reading material on futures trading. I appreciate it.

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  125. I have never seen anything like that before.  Interesting and I hope correct.

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  126. PL (and others),

    Do you have recommended reading for the novice EW theorist?

    Thx

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  127. Very cool looking, BS. How do I interpret it?

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  128. Love the charts and the site ! Here is something I am looking at with the BKX where there are some simple Gann cycles lined up and  3 tops on the daily chart    http://chartramblings.blogspot.com/2012/02/bkx.html

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  129.  Katzo: are you going to try and be flat before the 5:15 am announcement on LTRO?   I'm expecting this announcement to turn the markets lower, although a pop first wouldn't surprise me.

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  130. dont know, just have to watch the charts

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  131. fib. arcs. or fib. circles

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  132. I'm gonna be picking PL's and Katzo's brains for the correct path to follow. I believe EZ is the Mini R2K. Thanks.

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  133. i just put an Ad on Craigslist..  "VOLATILITY WANTED"  MUST SELL, thanks..

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  134. T-Shirts for sale   "GOT VOLATILITY ??"   sizes avail:  S,M,L,XXL

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  135. Briefly, how does one calculate Gann cycles?

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  136. TOY  DINOSAURS 4 SALE :  TVIX, VIX, VXX,    Sold out of T-REX  and  PENTACERATOPS

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  137. Are you expecting this to be the end of an ES EW 2 zig zag followed by EW 3 down?

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  138. Chartrambler I have an interest in the BKX in that I think it's in a down trend headed for $30. Here is why. True head & shoulders patterns are "reversing patterns" They are either at bottoms or tops and are very reliable. However, one must see not only the right price configuration, but also the right volume configuration. BKX has both. Draw a "neckline" thru the bottoms at Nov 3,2009 again at Dec 21, 2009 and thru Aug 30,2010. Continue that neckline out to price today and you will see that BKX broke thru the neckline on Aug 5,2011 and dropped to $32.50 before rallying all the way back up to the neckline at $46 today. The head measurement (the distance from the neckline to the top of the head) suggests a decline to just under $30. Keep in mind the entire head & shoulders pattern took 2 years to develop, so the decline will likely take that long to finish, using Aug 5,2011 as the start for the next two years.

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  139. Thank you, katzo7.

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  140. PL, do you have a downside target for wave 2? Could today's move to 37+ in spot be the end of wave 5 of 1? I recall from one of your silver chart, wave 3 up will take silver past $50, its alll time high? Am I correct?

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  141. Let's speculate for a moment here, tonorrow's announcement has been hyped for awhile, a lot of people are expecting diff scenarios to play out, most people seem to expect a larger LTRO, which will take the market to strathosphere, however, I do believe PL is right in saying that alot of bulls have been front running this news
    2) quite a lot of people are also saying we will have a pop and drop
    3) few people said it will be sell the news, without even the pop, big sellers probably have been waiting for this news to be over before they bring out their big guns...as what people always say, the market will always do the most improbable and unexpected, in order to leave most people out......
    Which scenario will leave the most people gnashing their teeth? Or is there a 4th scenario?

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  142. Which scenario would leave the most people gnashing their teeth?

    4) A large pop and continuing higher with little to no gap fill for the next 2 to 3 days that takes us up to SPY = 140 or 141.  Then, a sharp downside correction that lasts about 2 weeks and takes us down to SPY = 128 to 130.

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  143. I am not voting for this scenario, but it could happen.

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  144. Thanks Pretz. Appreciate it. Not sure why I was thinking wave 4 was next; kind of faded on that one. So still expecting wave 2 down following this parabolic move up, which could end up being an extended 5th of 1. Groovy.

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  145. Hi Chartrambler, thanks, and welcome!  :)

    I've been toying with a BKX count.  In fact, I had one ready to go yesterday, but didn't publish it.  Here it is for giggles (note this is yesterday's chart, not updated with today's action.  BKX did move a bit higher though, as expected under the expanded flat scenario annotated).

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  146. Never read it.  Is his name really "Poser"?  Might be questionable if he lives up to his name.  :D

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  147. All depends on where 1 ends, of course.  Wave 2 typically retraces 40-60% of wave 1.

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  148. I have a similar count for FDX.  FDX is one I watch regularly, since it often acts as a leading indicator.

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  149. Hope it's throated and polished.  Load that puppy w/ Speer 200 grain hollowpoints (nickname: "the flying ashtray") and it's ready to stop a mule.  :o

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  150. bmi is so flawed it's silly.  I'm 6'4 and have a large frame.  At my "ideal" bmi weight, I'd look like a refugee.

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  151. With the appropriate image no doubt?

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  152. Pretzel, Chartrambler is one of those Englishmen.  Best not to get to know him too well.

    In truth though, he's one of the few out there who I call a true friend.  An outstanding gentleman... his commentary would be a blessing to this site.  Especially since he's not too long-winded like yours truly.  Glad to see you show up here Chartrambler.  This site is outstanding already, but your presence here just makes it even better my friend.  Perhaps we'll chat here a bit and be free from you know who.  He's been here by the way, but Pretzel read him the riot act on day one.  I think that had something to do with his short-lived attempt to clean up his act.  But as you know, a leopard can't change its spots.  One thing is certain, he'll never post on my site and he won't post for long here, lol.

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  153. I should also add that just the b wave is viewed as an expanded flat, to avoid confusion.  It's not fully annotated.

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  154. Thanks, AR.  Yeah, I don't see the point of allowing people to bash other posters.  As I've said before, it's hard enough just fighting the market -- we don't need the added stress of fighting each other, too. 

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  155. Maybe because wave (iv) in SPX is expected next?

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  156. Shouldn't "Got Volatility?" shirts be one size fits all?  That would add to the irony.  :)

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  157. LMAO.  That reminds me of a restaurant that used to be located right in downtown Calgary decades ago.  I'll bet the building was built in the 1920s.  Anyway, the name of the restaurant was "Fit To Eat Foods".  Well I should hope so!

    Sometimes a name change is something that should be taken into serious consideration.

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  158. Completely off-topic from anything:  Recently, my reward to myself to relax after finishing an update has been to watch one or two episodes of "Heroes" on Netflix (never watched it when it was on TV; I don't watch regular TV at all).  Anyway, last night, I finished watching the last episode of "Heroes" season 4 on Netflix... and then realized there IS NO season 5 because they cancelled the show!  I'm completely heartbroken -- now I'll never know how it ends. 

    The show was a serial, and quite addictive.  If you haven't watched it -- cancelling it after season 4 would be akin to the network having cancelled "Lost" after season 3.  I have nothing to look forward to after completing tonight's update!  :D

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  159. This is actually basically my new preferred ST count.  I'll publish my version in the update later. 

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  160. My point exactly.  We're in a life and death struggle here.  We have no time for added stress.  None whatsoever.

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  161. That reminds me of another total ripoff that happened about 8 years ago.  It was a reality show called "The Mole" which ran for about a half a season.  It was really quite good, a show that kept the viewers guessing as much as it did the contestants on the show.  It was hosted by Anderson Cooper.  Anyway, one Thursday night it just didn't show up.  No reason... nothing.  It just vanished.  Have you seen the movie "Margin Call"?  I haven't either but I was reminded of it just tonight.  It's downloading now.  Maybe you could do that?

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  162.  aww that sucks. yeah heroes was a great shows, seasons 1 and 2 in particular were my favorites.

    alphas is suppose to be like a heroes knock off but I haven't heard anything good/bad abut that.

    off topic, but if youre looking for a good comedy scrubs is an all time favorite. action/drama i've heard good things about suits, white color and the walking dead. also breaking bad is great too

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  163. I have seen Margin Call.  It was good, but not as good as I'd hoped.  Still worth watching.

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  164. Yeah, Breaking Bad was awesome.  Watched that one before Heroes -- at least they finished the series on that one.  I thought they did a great job wrapping it up, too -- unlike, say, Lost.

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  165. After a while, I say hello again. :)

    My favorite for the sp is the nov 2010 solution. Or call it the soybean scenario ;)
    A little bit accelerated up, then a RT 4, then finishing, making every bear just insane.

    The scaredy cat rally was pretty impressive so far. Good hunting everyone. Thanks to pretzel for your worthwhile readings.

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  166. Anyone remember carnivale? Like heroes normally only a one season arc, but would have been worth some more ideas...
    Pretty awesome is also games of thrones. Or shameless, the us version...

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  167. Hi, Lena, welcome back!  I was sad when you ran off.  :(

    Please don't run off again, we value your input and humor.  :)

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  168. lately I had nothing new to add... 
    Still No. 37 ruled, even when the (little) short moves got more agitated, resistance was futile. The borg ehr, the bulls did it. Today fresh money from the ECB (tons of) and tomorrow first of the month. If the Israeli do not strike, that should be enough for some jumping the charts. But as always, you win, when you can loose. 

    here the soybeans scenario: http://img818.imageshack.us/img818/37/lenasoybeansscenario.jpg 

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  169. http://img163.imageshack.us/img163/4854/lenasoybeansscenario1.jpg

    thats the right label. SP not DJ. :)

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