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Thursday, February 23, 2012

SPX Update: A Tough Call

It all seemed so simple when I started writing tonight, but after studying the charts in more detail, it's not as clear-cut as I'd hoped.  I believe the wave down from the 1367 high counts best as a 5-wave impulse, which initially had me leaning in one direction -- however, this impulse could fit into the picture in one of two ways. 

1.  It was wave c of an expanded flat fourth wave correction, with a new high to come (preferred view).
2.  It was wave i of a much larger five-wave decline (alternate view).

I am leaning toward the first option, though it's a very tough call. 

Since February 8, I've been anticipating that the rally would reach this price zone -- but I now firmly believe that this leg of the rally is indeed nearing completion (possibly complete) and that a larger correction is due very, very soon.

My preferred view is that there will be one last high for this leg of the rally, in the 1371-1380 zone.  That count is shown in blue on the chart below.  The alternate possibility is shown in black and gray.

The 5-minute chart below depicts a possible topping formation underway, however that's the alternate count.   Breaks of the black channel lines and the red trend line will be the keys to watch on the downside -- a break of the recent highs would be key on the upside.


I want to expand on the alternate count briefly, and show how I arrive at labeling the decline as a five-wave move.  If the alternate count is playing out, the recent 1367.76 print high should remain intact.  Below is the alternate count shown in more detail.

Next is the 10 minute chart, which shows the larger, more important trend channel and various support zones.


And the final chart is another one of my proprietary indicators, which recently generated a sell signal. This particular indicator has a 78% win rate, though it doesn't predict the magnitude of a decline.



In conclusion, while both counts favor more upside on Thursday, the preferred count favors a slightly higher high still to come. I am now firmly convinced that, one way or another, this leg of the rally is wrapping up inside this anticipated target zone.  A moderate-sized correction should be on deck. 

Trade above the recent highs would indicate that the preferred count was correct and wave 5 is still unfolding, with a target in the 1371-1380 range.  Conversely, solid breaks of the lower trend lines would favor the alternate count.  I would remind everyone that while the counts strongly anticipate that the market is very close to a trend change, the upward trend is, as of this moment, still very much intact.  Trade safe.

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

192 comments:

  1. Morning PL - great work.

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  2. The alternate count target already hit on the futures, right?

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  3. still lookin' for 50-2 ES altho there is a big Price Cluster at 49. Lower highs and lower lows, good enough for me.

    http://www.screencast.com/users/katzo7/folders/Jing/media/c2ab4e4b-9c5f-49e7-b249-228020af05ba

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  4. Think AAPL is about to pop, overlaid a pitchfork on a diamond pattern, It is following the 70 MA.

    http://www.screencast.com/users/katzo7/folders/Jing/media/8b50a7ca-36ce-48a9-80be-07e64dbca24b

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  5. Hi PL,
     
    I may be wrong but the attach chart is my view of your alternate wave count on your first SPX chart. I marked this wave count in black color.  Thanks for your comments of my last post.

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  6. Sorry, I forgot to marked wave iv and v and here it is.

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  7. Timing right on the nose

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  8. Kinda slow today.  Maybe a crash is imminent.  :D

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  9. In my dreams....LOL

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  10. that is what she said. . . 

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  11.  touche'....ROFLMAO

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  12. Rise or fall ....

    The elephant (AAPL investor conference today) will decide. :)

     

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  13. it may be going lower, it threw off some dojis at my 54, I do not want to mess around with it, especially at the opening which tends to be bullish lately. my thinkin' is it will draw bulls in and hang them out to dry. but i would best with real time eval.

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  14. goin' lower, look at ES 120, lower lows

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  15. Hi PL, as always, thanks for your diligent work.  Quick question: Is S&P (cash) 1321.41 still the line in the sand for a change in trend?  If so and that level breaks, would it mean a continuation of a bear market and a five wave structure down?  I apologize if these questions are rudimentary, but I would like to understand the big picture from an EW perspective.

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  16. Huh.  Well, after that open, the alternate count looks more promising.  I hate days like this -- I flip-flopped the two counts at the last minute.

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  17. The BOC and the Chinese courts are giving the Big Boy a real for for his money (literally) over the iPad copyright usage. 

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  18. Hi dave --

    No, it wouldn't necessarily mean a resumption of the bear at that stage.  It would be the first step in confirming a change of trend.  Final confirmation wouldn't come unless 1267 is broken.

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  19. i know, at points like this i trade on intuition more, and VST charts, longer charts are a bit unclear. yesterday should have been a major down, this IMO will move over to today. no sure thing tho and ES is doin' its best to rob both sides.

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  20. if you look at my chart there is a blue arrow, that represents the possible mornin' 9:30 bounce, I got out there and am completely happy about it. 

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  21. Do you know the start time or is it an all day event?

    Thanks in advance.

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  22. It starts at 1:00 PM ET... I just read it in an article.

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  23. bounce to either 60 or 54.50 ES

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  24. Will the market rally in anticipation (right or wrong) of a special dividend?  Hmmm?

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  25. Awesome analogy...even my fingertips hurt.

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  26. Buy this sucker!! Multiyear uptrend coming. Shorting is for chumps.

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  27. looking at Apple.  If we can get a solid Double Top from last high candle and fail, it may be another  confirmation of reversal??  Looking at Gold as the rich mans VIX, it confirms fear is right on target, UP.  The $VIX is delayed (for whatever reason, it is extremely complacent with this huge rally and only a few new 52 week highs left). It may retest the 16.00's unfortunately before the 20's..   any 'guesses'.. ?

     I believe we are in for some daily swings soon (wishful thinking) of at least a Starbucks 'Grande'   2% milk, machiatto, no foam, splenda, extra hot, in a double cup with a straw.  hold the scone for now...

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  28. any nice chart overlays to post of apple, starbucks, gold, vix, DJIA etc would be a bonus for all to look at.   i dont have that technology :)

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  29. Good morning PL,
    both suggestions I made this AM have been busted (W4 overlaps W1) so back to the drawing board!
    ?Diagonal still in play and what would exclude this?
    With little left in the way of options, as Sherlock Holmes observed; once you have eliminated the possible the remainder however improbable must be the truth. Or something like that. :) 
    Europe not impressed by the huge burst from INDU, just yawned, and FWIW the DAX has dropped through the lower RAFF trend line it has observed for the past 10 weeks.
    Looks good for the bears.
    Kind regards,
    UKDNY

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  30. It aint the same without the scone....the scone just went into my gas tank :(

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  31. The other elephant is dragging the indexes up, kicking and screaming - IBM. :)

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  32. Hi Pretzel,

    Since SPX made a lower low today than the placement of wave i blue in your alternate count on the 1 min chart, would you call that lower low a b wave expanded flat of ii? If so then c of ii may top not far above a of ii around 1360. Thanks!

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  33. Even now, I'm having a tough time making this call, in advance of the action.
    My hourlies are certainly seeing the ALT count as quite viable ... I'm watching the volatilities for early signs of a mid session turn.   XIV looks stretched up here.    
    But my main index dailies held support and point to more upside.   Bucky isn't down to the 200 yet either, which is where I think it holds up.    The RUT should be a good tell if the hourly MACD can manage the crossover.   If so, its got lots of ground to recover after leading down.

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  34. INFN...long now at $8.20, sell target above $10.50. Wave structure suggests 1,2,3 & 4 complete, with possible fifth wave extension due to normal 3rd wave length.

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  35. appears AAPL is about to break out to new high, so much for a magnet to 200 DAY moving average. WWWCI ++.

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  36. Gas, SBUX, VXN. Weird how the VXN tracks AAPL's volume.

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  37. Theory: Thru end of European market, your alt count is on target in line with your very detailed math. Why not be a contrarian to your preferred count--devoid of any analytical investment on your part? 

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  38.  That's wave 2 retrace after the drop. For AAPL, the 200 DMA will most likely rise to meet the price. :)

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  39. my point is, is hasnt dropped, dont count your chickens. . . 

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  40. Those are indeed impressive pipes...a lot of pts there.

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  41. Good afternoon spudthorpe,
    My thoughts too.
    The retrace C wave hit the 61.8% marker dead on at 1,362.5
    Looks good!
    Kind regards,
    UKDNY
    (but we could be wrong. :(
    Gotta wait for confirmation and if you are correct it won't be long coming)

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  42. lots of short stops 60.5 to .75 es, if a break of that a quick blast to 61.5 or higher

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  43. what do you mean by 'twin pipes'?

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  44. AAPL showing very first signs of weakness today.

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  45. someone tell ms. winn, have to go

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  46. seems like the preferred count is back in?

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  47. close enough....100% short S&P, stop at 1367.77

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  48. What a surprise.  After yet another short waterfall open to create a better starting point for those who were doing the buying, we get another short destroying run up of 10 uninterruped points with a miniscule retrace of 1 1/2 points. 

    Whoever has been supplying the 'perma-bid' under this market can still dicate direction and price any time 'they' damn well please. 

    And they way they are running things, they are producing one wave after another that only market pros with their massive buying power can hold through it all and would have the resources to be able to average down and get to the eventual retrace wave.  Which always shows up and after the retail sellers have bailed.

    So for now we just traced out a one and a half to two point range and then higher we go.  That's buyers holding anyone who was on the wrong side of the big move underwater. Which convinces retail shorts to bail and sell. 

    It's also not an accident that we are heading another ten points up from here just now either.  Though the perma-bid crowd could make it happen with no difficulty at all.  It sure isn't sellers holding this range. 

    That's the market makers creating an environment where there are few tradable movements one way or another while everyone wonders what's going to happen next.

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  49. PL, great post. Given that the markets appear to follow your alternate counts more often than not, for some reason ;-) (no offense, hehehe). I'd say looks like ii was/is hit!?

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  50. are you related to Oliver Stone?

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  51. Two side-by-side large candles. In this case the the 9am 7pt red candle next to the 10am 7pt green candle on the hourly ES chart.

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  52. Funny you mention perma-bid.  I was reading something that said 70% of the trading going on right now is computer generated which explains why the move up has been so linear without so much as a correction or pullback.  I whined quite a bit in the fall that futures were up EVERY night - regardless of what was going on in other markets.  My best guess that it is actually the FED as part of their asset purchases that were buying futures contracts and now are in the open market purchasing equities.  It's a zero lose game - they can buy what they want, create a market environment that only goes up, then sell at a profit and repay taxpayers for borrowing money to trade.  It's part of the master scheme to then make everyone eventually jump in and they can stop.....the Buyer of equities of last resort as they were the lender of last resort.  Reading through Bernake's speeches - I am making all non-equities valueless so you have no choice but to buy stocks.  But fear not grandmothers and other scary cats - we won't let the market go down for 2 straight days until I say that's it. So you can buy with impunity and be guaranteed to make money.  It is the undercover wealth effect.  We will keep doing it until everyone gets off the sidelines and joins in.  Thank you, Uncle Ben

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  53. Thanks BH...I was wondering WTF...I guess we'll be back to true price discovery when we're back to bartering for food. Damn shame it is. What do you think, if anything, is going to break this mechanism?

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  54. BR, though I respect your views and knowledge, I must say that  I am not getting too excited about all the liquidity stuff or who-runs-what-and-how anymore these days (though it's very interesting speculation for sure), but I have gone back to simple technical analysis. Why? because the beauty of TA is that everything known is built into the price action. No matter what. Liquidity pumps are thus priced into markets already. The LTRO will be a docu-soap for the next week or two. We all also know that tops are 9 out of 10 times rolling-over patterns with decreasing volume for each new (lower) high (less buyers), which is what're experiencing now.  I for one for now let the indexes run along until they make a decision.Any body who thinks that markets will go up for ever (due to LTRO, ECB, FED, etc pumping in money -not saying you do, as I) or will go down for ever is complecent IMHO, nothing goes up or down for ever. 

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  55.  Don't kid yourself. Market manipulation probably predates agriculture. It's not the exception to the rule, it is the nature of the beast.

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  56. GG...They aren't paying taxpayer's back...The purchases are by the Primary Dealers with low interest taxpayer funding via POMO. So it's the Primary Dealers at JPM, BAC, GS, etc who are making out. Please correct me if I'm wrong on any of what I stated,

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  57. I know...it's just much more efficient now.

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  58. Arnie,

    This wasn't so much about who is behind it as the nature of these moves, though they clearly are controlled.  An unfettered market simply does not move this way. 

    These moves are so violent with only a minor retrace waves for a reason. Thing are also holding in a narrow range shortly after the completion of these moves for a reason as well. 

    I agree it doesn't matter who is behind it all, but the way the market is currently trading matters an awful lot to anyone trading it.

    Also, no amount of TA can help you if you are on the wrong side of one of those moves.  Where is the TA that says there is now a predictable playbook:  after any couple downs days of trading, let's push the market down a few points and then violently shoot higher and destroy anyone who shorted and held on the way down?

    This remains an extremely dangerous market to hold anything short.  Especially after any recent move down.  That's when the bots kick in and yank everything higher.  And usually so quickly that there is little time for the retail investor to respond.

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  59. you are gunna be surprised, headed for 1349 now, bottom of channel, one of these times it is going to keep on going and f-ck the perma bidders. . . it will be their turn

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  60. Since Credit Suiesse stop issuing new shares on TVIX, the percentage relationship has really been altered. TVIX being a 2 X Etn, used to be almost exactly twice the relation of VXX.  if VXX was down ( 4.25% as of right now)  TVIX would be down 8.5%..  instead its only down 1.40%..  they wrote about the premium would change but werent sure if would be higher or lower..  My concern would be during a VIX spike, the opposite will be the case..  it may be a shallower TVIX spike?

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  61. AAPL throwing off ghost spikes to 509

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  62. BR, I absolute agree that this market has been very hard to trade on an intra-day basis. Never seen the likes of it, and this 0.1-0.5% range over the last 2 weeks is just nothing for the retail investor to play with unless one has a $50K+ budget (which I am sure many retail investors don't or they won't be retail investors anymore... hihi), and one therefore has to be super quick in pressing the "buy"/"sell" button to not get caught on the wrong side.

    I've been cash ever since the market hit 1350. Reason? I rather get out too early then too late (famous quote: I made money because I got out too early! ;-) ) and every since then, the markets have been sloppy like hell. Topping in other words IMHO. Also, I prefer not to trade intra-wave 4 and 5 waves (in this case wave (iv) and (v) of wave iii is what we've experienced IMHO). By then I wasn't sure of course we were going into those waves, but the price action back then suggested to me that there wasn't much upside left (I mean; since SPX hit 1350 till today, there's a 10 point gain over 9-10 trading days... can't call that very profitable, neither very bullish anymore. Or in other terms, 40 out of the ~50 point gain in February were made in the first 5-6 trading days).

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  63. VIX daily update.. found the answers i was looking for...
    http://www.youtube.com/watch?v=i1N-NOngjuI&feature=plcp&context=C320ea0cUDOEgsToPDskJ5N41U4D0i_zo85AWy0h1a

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  64. AAPL consolidating near its lows, and lost the 515 area (which was important at least in my mind!).  The 15 minute chart looks like a failed attempt to regain 526, and AAPL could waterfall lower fairly soon if 515-520 isn't retaken quickly.

    Thoughts from others?

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  65. This is my point of view about the mrkt, this has been a strong mrkt and it is not going down so easily. have to find the last sucker to buy the top. here is thew chart I have been working off, UPMOST it is about lower lows and lower highs. First and foremost. We are saw toothing our way down the channel. My levels have been spot on, said 49 to 52 this morning, then 54.5 OR 60. We hit 60. If you hear hoof beats dont think zebras, but horses. unless i see otherwise i go with the channel play

    http://www.screencast.com/users/katzo7/folders/Jing/media/4b2ffcb6-531d-48fc-b0e9-046d59f71904

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  66. Great chart, katzo.  Thanks for sharing!

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  67. short ES 59, short AAPL

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  68. A friend of mine who trades forex refers to these as dragon tongues.  He believes the MMs use them to clear out shorts/longs.  Do you agree with that analysis?

    I can see what your talking about with AAPL.  I've also attached a chart of the dragon tongues / ghost spikes from ES on 2/10 to 2/13.

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  69. Not an EW expert, but I'm reading it the same way - i.e.  move to S&P 1362 the was maybe the c wave of some type of expanding flat of a wave 2 abc correction.
    On other hand,  as noted by other comments to the post the market up moves do seem gravity defying with scarcely a pullback once the begin.    

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  70.  Oh, I dunno. Remember that all the same people trying to take our money are also trying to screw each other. The nice thing about greed is that any conspiracy based solely naked self-interest is eventually undone by it.

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  71. This is also how I understand it.  GGekko is mostly on point, but with one alteration... the Fed is not buying directly.

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  72. yes, they could be stop grabbers. sometimes that are huge tho and do not stop ppl out. anyone get stopped out on AAPL around 509 area?

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  73. INFN.....prepare to launch. 9.6 million shares short (11 days average volume)

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  74. We'd be screwed for awhile...but things have a way of returning to the middle.

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  75. Great analysis considers the most probable outcomes (plural).  Your work fits that definition.

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  76. A shallower TVIX spike during another VIX spike?   Maybe that's what they want to achieve with this move to stop issuing new shares?  It can save them a lot of money with a shallower TVIX spike when things go crazy next month???

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  77. Agreed.  It needs to close up for the day in order to at least stay where it is.  If it closes down for the day, then I think it is headed down to at least 506.46, then 496, and finally a retest of 487 (the low after the parabolic peak). Those are the levels to watch.

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  78. ES tgt 55-6

    oil shooting up, threatens to tank any recovery

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  79. I am seeing that ES could be forming a reverse H&S (to be completed afterhours) with a right shoulder low of around 1353.   Just a possibility. What are your thoughts on this?

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  80. I agree with you on that Katzo. This morning's bounce came right off the bottom channel of the primary trendline, but the bounce as then contained by the new channel's upper trendline. Could be a bull flag or a possible trend reversal.

    http://dl.dropbox.com/u/59021800/ES4H2012-02-23-TOS_CHARTS.png

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  81. It could be headed to right around 1362 first, in order to complete the neckline.

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  82. Good afternoon PL,
    this market is not going to die unless put to the sword is it?
    So- How about an ending diagonal to finish it off with a flourish ( three 5s end here) and nail your 1,370?
    INDU also looks possible, same count I think but pending?
    Does it fly?
    Kind regards,
    UKDNY

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  83. Guys, BRCM may be about to trigger a H&S top

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  84. My understanding is that it is currently not trading below NAV which is what the fair value of the assets backing it. My understanding is that most ETFs do, (i.e. TZA/TNA). It is currently trading at, or above its NAV. Which is a good thing...it's at a premium. PLEASE let me know if I have misunderstood what's happening. It likely would not effect the price during a run-up as it would likely still be trading at NAV or a premium.

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  85. exactly.. im waiting for a solid short squeeze when things turn (if they ever will in 2012)..   since there arent any options on TVIX like VIX and VXX.  its an even sum game when all said n done..  we just need some solid old school FEAR VIX action to bring $VIX up to futures VIX price instead of futures coming down to cash..  BOOOOOOO!!!  did i scare anyone?? someone?? Please?  :)   

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  86. INDU ending diagonal?

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  87. the past 2 days it has been trading at a premium when it rose.  Yet this down day has been interesting..  mayby its more premium and im just confused..  by the house rules it has to stay at least at or above NAV i believe

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  88. Scared like Ricky Bobby...

    http://www.youtube.com/watch?v=74Obm6bEH80

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  89. I'm always confused...thank Gawd the Mrs. keeps me in line. :)

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  90. 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.

    (*Barring finding myself square in the path of an onrushing freight train when the market gaps up on open, that is.)

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  91. I wanna be a Primary Dealer when I grow up....

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  92. got a meeting, will not be able to post exit, if we fall will drag stop down til I am out, trade based in inability of ES to get over 50 MA on the 120 chart, if it does not hold I am out, 3 doji on the 60
    good luck all. . . 

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  93. I think you're absolutely right. I don't know much about zebras but hard fought declines and spirited rebounds seem have been the order of the day for months. This sucker is not going gently into that good night.

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  94. Thank you for posting.

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  95. CHeaper than going out to the movies....YEE HAAA

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  96. Whatever the count is I just can't ignore this.  I just can't bring myself to believe the market can continue higher with that bizarre dislocation going on.   I'm starting to think The Matrix was a documentary not a great fictional story.  Clearly the FED is buying both treasuries and equities.  Nothing else could be causing this.  Besides, they've admitted as much.  So I guess it could go on for as long as that unelected, private bank wants.   Until the end of the dollar.  Until the end, period.

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  97. Alernate count target hit.  If and when the market rolls over, this puppy's (BRCM) going down.

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  98. how do you want your market? with or without AAPL: 
    http://etfdailynews.com/2012/02/23/apple-inc-s-gigantic-impact-apples-nasdaqaapl-meteoric-rise-is-distorting-everything/

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  99. adjust 1 to be Jan 3 high at/near 1286....see what you think then.

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  100. Half of DOW's points gain today was due to IBM. :)

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  101. Someone/firm just bought 1,000,000 shares of TVIX after hours at 16.21..  i give up trying to figure volatility..  i wont bug the board anymore about.. 

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  102. It's an odd thing.  TVIX was down 5% today on about 60% regular volume.  UVXY which is supposed to be the same 2x VIX play was down 12.5% on 2.5x average volume.  It seems institutions are bailing from UVXY and I think putting that into TVIX which is what I did.  I also added VXZ which actually was up .70 from where I bought it

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  103. Sans AAPL please. This is just frustrating my frustrations. I'm returning my Iphones immediately.

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  104. Good afternoon Bob_E,
    Kind of you to post. I didn't read what you said, it seems to have vanished, but I'm trying to make sense of this market which has almost zero volume (the lowest daily for a dozen years some say) but is soaring ever higher.
    I have to agree with PL that 1370 (and 13025 INDU) seem do-able but I don't know why!! 
    Do you have a view?
    Kind regards,
    UKDNY 

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  105. LOL! Who doesn't? Of course, that might be like saying, I want to sell my soul when I grow up! : )

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  106. It's at ramming speed....sheer madness, true to life insanity.

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  107. I honest to God don't think they'll give a special dividend until it's in their best interest...They're putting cash under the mattress until this thing of a market breaks, and they're gonna buy everything they want at a discount. Cash is king when you make your own products. It gives them the leverage they want everywhere they want it... and that includes politics.

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  108. We all learn together...that's why this is "The Nice Blog" :)

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  109. UVXY's price decline is accurate, TVIX's is not.  TVIX is trading above NAV, so I would stay away from it.  Volume is switching over from TVIX to UVXY since the TVIX etn has stopped creating new shares. 

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  110. Don't give up.  Here are some general rules that I learned the hard way:

    1) VIX and all of its related etf's and etn's become profitable (rise consistently) only when a serious decline gets underway.  AT ALL OTHER TIMES, THEY LOSE MONEY- LOTS OF IT!!!!!!!!  I cannot stress this enough (sorry for the caps).

    2) If a meaningful decline is about to start, VIX and its related etf's/etn's should be flat (minimum) or rising even as the market creeps higher.  If it is declining, exit the trade.

    3) Don't average down.  If it is going against you, exit the trade.  There will be a more profitable entry (price or conditions or both) at some later date / time.

    4) Don't hold any VIX related etf / etn overnight unless it is closing up on increasing volume AND there are lots of indicators confirming a continued decline in the stock market.  Even then, it may be more prudent to take profits and evaluate the situation the next day. 

    5) If the VIX related etf / etn you are holding closes down for the day, exit the trade.

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  111. oil lookin good after breakout as mentioned.  need about 1380 or so and vix should hit under 16 to 15.5 area.   moving averages all say up till cracked. market cant even get below the 20 day. good to see mr p has played some long lately.

    http://stockcharts.com/h-sc/ui?s=$WTIC&p=D&yr=2&mn=0&dy=0&id=p07905131947

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  112. I feel the pain, brother. Maybe this is preisely how it should feel when the real turn is just around the corner. I appreiate your sharing about the Vix alot. 1 M shares is no joke, considering tvix is trading at about $2 premium now. I am still holding my tvix but i added some uvxy at the close just in case the premium gets compressed. Did you see the volume on uvxy today? Obviously I was not the only one who thinks that? Did tvix trade to 16.21 after the close? I thought it was only about 16.05. Sonething is brewing alright. Keep the spirit up!

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  113. Wave characteristics are at play here, I believe, when one considers volume, or the lack thereof. This is suppose to be a B Wave having less over-all volume. Add to that the many ETF's and volume should be contracting. Therefore I believe this note applies:
    Wave B: Prices reverse higher, which many see as a resumption of the now long-gone bull market. Those familiar with classical technical analysis may see the peak as the right shoulder of a head and shoulders reversal pattern. The volume during wave B should be lower than in wave A. By this point, fundamentals are probably no longer improving, but they most likely have not yet turned negative. 

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  114. ES is breaking thru 1364 after hours,what is next level? 1370?

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  115. Interesting (and very brief) ZH post about the plausible effects of a Tweet they sent out today...
    http://www.zerohedge.com/news/curious-what-just-took-down-gold

    Also at least one interesting comment made
    "all ZHers should coordinate a tweet assault on the market to prove how ******* broken this piece of  **** sknyet market is.  lets all plan on
    tweeting "GREECE DEFAULTS" tomorrow at 10:03am EST"

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    Replies
    1. I might participate just for fun to see if the bots do screen twitter feeds

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  116. Opps didnt read your post until after the close. I did exactly # 6 today....

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  117. looks like an ED on the 5 min ES chart supporting the alternate count

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  118. hmm, I am confused. I am now inclined to say that PL's preferred count is in play, see my -not completed and thus not entirely correct- EWT county attached. I am confident though about wave 3 and wave 4 and how wave 5 is been labeled so far. Please comment on my count. Note, not complete but I gotta run to get my son to baseball practice. 

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  119. XOM, a Dow component has a very clear price high at $87.94 on 1/23, from there a clear five wave decline (1) into Feb 2, from there a clear three waves up into Feb 7&8 (A), from there a clear three wave down into Feb 10 (B), and we have completed a five wave up from there (C)...or (2). Time to go down. 

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  120. Would TVIX not spike more relative to NAV due to limited supply? So the theory is that the benefits of holding TVIX are both in lesser drawdowns and increased upside?

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  121. Yep, stopped me out again. Rotten bastards. Second time in a week. The first one cost me right around $35 too though, so I'm not complaining too loud. I very much prefer getting stopped out during the day to waking up to a
    nasty surprise at the opening bell. That can ruin your whole day and
    this is supposed to be fun.

    The upside of trying to pick tops and bottoms -- yes I know that's generally not considered a best practice -- is that you can set your stops super tight and if you're wrong, you're wrong. No big deal. I've been wrong before and the fact that I got hit means the market isn't doing what I thought it was doing. That being the case the right thing to wherever you got in is to beat a hasty retreat with as much of your money still in hand as possible, which buying near support or shorting near resistance does allow one to do. More sensible entries are by no means immune to nasty surprises and higher probability entries often come with looser stop levels attached.

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  122. Thanks for distilling your wisdom. You are an old soul.

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  123. Cal, do you warch all day or set your stop and go about your day?
    I found that if I can watch then I use a mental stop only but you must be disciplined.  I have been stopped out much less when I don't show my hand.  More than a coincidence how many times the market goes against me and stops me out but then turns and moves right back up.  I use 2 point stops or so so it isn't like they can grab me quickly.  Much of the time the game is more about surviving a bad entry point and being able to wait for the momentum to swing the other way.  Unless you just time an entry horribly and the market moves big then you can survive.  THe key though is using your mental stop and not continually moving it in hopes of not getting stopped.  Others might disagree with my method and I would like to hear their opinions. 

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  124. Interesting. 

    If the market tanks as a result of a coordinated tweet, the FED will quickly call the F.B.I. and all those who tweeted will probably be arrested on "market manipulation" charges.

    If instead, they tweet something false that kicks the market up another 20 or 50 points, then its no problem at all.  : )

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  125. I guess the alternate count is off the table.

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  126. God forbid...market manipulation...only the Fed is permitted to do that...they couldn't have competition.

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  127. A most excellent and thorough set of rules for VIX. #2 is an awesome observation (and it makes complete sense). Thank you for posting them.

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  128. What?! The Federal Reserve only seeks to facilitate economic recovery by creating a capital environment favorable to productive investments.

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  129. 10 min. ES bearish continuation wedge. 

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  130. Seems so true, doesn't it? The buck or two that you lose by waiting for the uptick is worth the peace of mind over the weeks and months, yes months!, leading to that uptick.

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  131. My 4-year old must feel like a Primary Dealer, he gets money whenever he needs a bailout, all his expenses are paid, gets a driver and company car for all trips, never gets punished for wrongdoings, is always playing with Monopoly money....hmmm

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  132. Many thanks to HLO for his donation earlier!  I appreciate it very much.  :)

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  133. Good stuff A1

    7) If you have a confirmed "roof jumper" on the Street, throw out all the above rules and go all in on anything associated with the VIX

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  134.  It just seems like months LOL....Your life flashes by you

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  135. Definitely don't give up, sandyone.  :)

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  136. Yes, I'd considered a diagonal as well at one point a few days ago -- but it doesn't "look" right, as you said.

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  137. Agree, brian.  Buyers still have a chokehold on this market, and it does appear that it will take an "event" to bring sellers out en masse.

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  138. PL,  do you think the current rally in the futures will hit your target at 1380 tonight?  This thing doesn't seem to want to look back. ;)

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  139. I think cash will trade up into that target zone.  I continue to hold to my belief that SPX "wants" to break the 2011 highs.  There's a big psychological factor at play for that target in the bull camp.   

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  140. So the alternate count is off the table?  I wonder what the afterhours futures market will do.  I've come to the conclusion that I should not trade at all during cash market hours.  So far, in the last few months, I've made most of my gains after hours only to lose them during the cash market hours, only to make it back after hours, etc.

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  141. Stick with what you do best.  I have had similar success in after market.

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  142. I wouldn't say it's completely off the table, but it sure looks much less likely after today's strong reversal.  Agree that after hours is less headache to trade.

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  143. Looking at the charts and how many times this market has whipsawed shorts with false break downs, it sure does appear that buyers are just f&*king with short sellers.

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  144. That's it you've done it now...I'm changing my name to Jamie LLoyd Bernanke-Geithner in all of their honor...the wife is gonna have to learn to live with it.

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  145. So your thesis is that it will serve as a psychological release for the bulls...They can proclaim, "Mission Accomplished" and then let it all go to hell?

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  146. To some degree, yes.  It's a bit like when gold hit $1000 for the first time, back in '08.  Everybody "knew" it was going there and goldbugs wanted it to -- so it finally did... then reversed almost immediately, and corrected almost 35%.

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  147.  One of AR's posters "ZIM" has a really interesting/freaky overlay chart. Is it cool to post it...It ain't my chart and I don't know blogger protocol very well.  It's the third post from the top, middle chart...take a look...it kind of gave me the chills.

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  148. I think it's fine to post other people's public charts, as long as credit is given.

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  149.  Okey Dokey....Here's Zim's chart posted on AR's blog...Freaky fractal alert...

    http://rationalinsolvency.com/2012/02/spxanalog022212.png

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  150. The correlation to the 1-minute/60 minute completely fell apart with today's action, though -- so while the chart looked cool, it wasn't very predictive.  :)

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  151.  I'll save it for the other newbs. It'll impress them  lol...I'm having flashbacks to when I was 16..."But Daaaad...ya gotta check out this cool car...Its got like headlights that kinda work, and an engine, and everything.

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  152. That would be a riot, J.B-G!

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  153. lol -- that's why they pay me the big bucks.  Or They should, anyway.  Anybody have Their number?    :D

    I do wish, though, that I could figure out how to get Stockcharts to overlay two different time frames like that.  There's times I've wanted to do that.

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  154. NDX ST chart sure looks like an ass-ending triangle.  Usually bullish.

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  155. Hey Pretz, quick question: will Stockcharts.com give me intraday historical charts going back the past couple years? Specifically the five minute charts for each trading day? I'd like to be able to look at the intraday price action of previous market run ups as well
    as the big waterfall decline days.

    Thanks in advance.

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  156.  I was doing that at first for two reasons. One is that I'm a serial obsessive and I learn through immersion. The other is that I had only the vaguest idea how to plan a trade -- still do for that matter, but I dare hope I'm beginning to see some faint outlines emerging through the fog.

    There are three problems with that approach as I see it though. One is that unless you're trading from a 100k+ account, the
    amount of money you can hope to make from a single trade doesn't pay you
    very well for that kind of investment in time. Doing inverse or leveraged long ETFs you're looking at staying in a trade anywhere from a couple of days to a couple of weeks. They're much too blunt an instrument for day trading and that's a long time to spend watching the ticker for a few hundred bucks if you're lucky.

    Another is, let's face it, that's addictive behavior and one wants to be vigilant about that. But most importantly I think, the people I've been studying who've been successful in this business -- and it is a business and should be treated as such -- are pretty universally in saying that managing risk is more important than being right. You gotta play the odds and the odds say you're going to be wrong some of the time, maybe a lot of the time.

    So to me the first and most important decision you make when entering a trade is how much money you're willing to lose on it. I back out a position size from there and set my stop the minute I enter an order, then I walk away. From there I'll trail the market and move it tighter if things go my way, but never looser. I check the price action a couple of times a day but I do have a day job, so I can't possibly watch the charts closely enough not to have a stop order set and I've finally gotten over obsessing about it to the point that I think I have to anyway. If I don't win a trade, there will be another along soon enough. The trick is to stay in the game long enough to win a few.

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  157. Everyone keeps talking about the final top of wave five being right around the corner. Ending diagonals, the conclusion of wave 5, a correction is due, etc.

    I'm not arguing against it, but we are in an era of unprecedented artificial liquidity injections. Which would blow up
    what the 'normal' cycle might otherwise be. With another unlimited LRTO coming in just a few days, it just doesn't seem particularly likely that the liquidity part of the equation for this run up has reached exhaustion.

    Today we just saw what an effortless 10 point instant run up AGAIN. Buyers seem to just blow through any resistance when they feel like it. Then very tellingly hold a three point range for the rest of the day. At no point were sellers allowed an even
    three point move for the last six hours of trading.

    I just don't see any evidence that those on the bid side of this market aren't in complete control of where we are going.

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  158. I think since this bull run has been illogical for the most part, no correction to speak of, the ending might be the same.  I expect some crazy news event but that is too easy.  As you say the bulls are doing as they please so I don't see a slow gradual drop.  SOmething crazy will happen but when???????  Maybe something along the lines of what happened to gold today.
    After hours market tonight, BORING!!!!!

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  159. I asked Zim about that as well.  StockCharts can't do it.  Zimmer did that himself somehow.  He's got some pretty darned good skills with his own "display" tools but I don't know how he does it.  As far as I know he's still learning... experimenting might be a better word. 

    As far as I know Zim doesn't really try to predict so much as just post a chart (like many of like to do from time to time), where a nice trend line or two might point to one potential target... that type of thing.  jbg1911 asked about posting Zimmer's "animated" chart here.  I don't know what you think of that either Pretzel, so I didn't post the link either.  It's very cool though.  But I know Zim fairly well and he's a real easy going dude, so if 'you' wanted to grab it and post it just to let your viewers see a real interesting animated chart, I'd say go right ahead.

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  160. Sorry, brian, I was afk.  Stockcharts will only give 60 minute data (for intraday) going back past the last few months.  No 5-minute data -- I wish they did.

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  161. I'm taking a crach at some shorts here at ES 1366.50.  Stop's are pretty straightforward, and the alternate count isn't dead -- so WTF.  Good risk/reward equation.

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  162. Well, I agree it's certainly hard to believe this market will correct ever again -- but even these types of moves eventually require some degree of mean revision.  I don't know if it will happen here; this market hasn't behaved right at all, so who TF knows.  But this is a good spot for it to do so... so *if* it's going to happen, now's a good time.  Otherwise, bears will be beaten back again and have to wait for the next reasonable defense level.

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  163. AAPL powers up in o/n action. Needs to break the TL before is is a viable short, my short yesterday was too early. Shoulda followed my own advise on AAPL, but have a small loss on it did not let it get too far. Those ghose spikes to 509 are now gone, vanished.

    http://www.screencast.com/users/katzo7/folders/Jing/media/0c612266-e9e8-4bcd-a963-1bb9d0d672e9

    The mrkt jumped my upper TL of my channel set at 136o ES at the beginning of Globex and kept on going, but the candle structure looks very weak at this top. When mrkt does stuff I don't understand I go looking for a megaphone and found it on the 6o. Also on the 6o, this is an EW4 at the twin pipes and now we are forming the EW5. I will short soon but want to watch it a bit more.

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  164. ES 1369 is my tgt for shorting.

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  165. Oil should be at a top now, at least a IT top. VIX and Dollar should have bottomed.

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  166. Funny you mention Earl -- I did an IT chart tonight for tomorrow's article, which suggests a correction is due.

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  167. yup, and a timely post below

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  168. katzo, do you have a target for expected decline? Thanks!

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  169. I saw that indicator firing off.

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  170. the gap line, 60 to 62, i am not enjoying the timing element here, should have started by now, careful, 67.75 should limit any up move, above than and dunno

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  171. Okay, update's posted, let's continue discussion over there.  :)

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