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Tuesday, March 6, 2012

SPX and NYA Update: New Discovery Changes Everything

Okay, I really have to rush now.  I literally had the entire update done, and at the last minute had a "eureka!" moment.  Despite the association with the popular vacuum cleaner, Eureka moments don't suck (rimshot).  But now I'm having to re-do everything, so it won't have as many charts as originally intended. 

Bears are going to love this.

Anyway, I have to really boogie to get this posted because, basically, I had to do two updates tonight.  I'm going to lead with the chart that led to the epiphany.  I've been wrestling with the first leg of this rally since it started.  It doesn't count well as much of anything for an impulse wave, and I have looked at it every which way I could, without anything jumping out at me as being "right." 

All of that changes right now, though.  With this new count, suddenly everything fits.  The chart below is the NYA -- the NYSE Composite Index.  I often like the NYA as a better reality check, because it's a much broader market representation. 

And here's the key realization:  the first part of the rally doesn't fit properly as an impulse because it's not technically part of the same wave.  Start with the big picture NYA count below, and it will all suddenly make sense.


Zooming in to the smaller waves, it looks possible that there could be another wave up left, if this is part of a 4th wave expanded flat unfolding now.  It is also possible that the market has topped, though it doesn't seem to fit the one-minute charts as well, since the wave labeled "alt. 5" looks like a 3-wave move.

In either case, a major top is either in place, or should be very close at hand.  This completely changes my expectation of another major leg up.  There may be one more leg up, but I don't think it will be the big leg I was expecting.  I'll have to revisit all that later today when I have more time.


As shown on the chart above, it does appear likely that there's still one more slightly higher high due, but I simply don't have time in light of this new count to go back and revisit everything right now in the detail I'd like to.  So, for the SPX, I'm going to suggest that bears watch the 1350 zone, and below that, the 1337-1340 zone for clues.  If this is a 4th wave unfoldiing, then both of those areas have the potential to mark the bottom. 

Below is a very short-term SPX chart which shows near-term support and resistance.  If the market doesn't hold 1350ish, then a drop to 1337-1340 looks promising since there appears to be an air pocket in between the two zones.


Yesterday saw the first material break of the 2-month trendline, which could mean the early stages of a trend change; however, this isn't uncommon to see during 4th waves.  I'm not going to put up the 10-minute SPX chart, because it doesn't really convey any new info, other than the trendline break, and I need to rework the count there.

However, I am going to show the RUT chart again, because this one seems to jive with the idea that this is a fourth wave correction at a smaller degree than previously anticipated for SPX.  I really like the way this all fits together now; I've literally been wrestling with it for about two weeks.  SPX is likely still in a fourth wave, but it's one degree lower -- and the next top should be a major one, if the NYA count is correct. 

Again, the top could be in place, but I view that as somewhat less likely at the moment.  Closer examination when I have more time could change that opinion.

In either case, what gives credence that the next top will be major, and that this whole move is an a-b-c (assuming the triangle is correct in NYA), is the fact that triangles are almost always b-waves or 4th waves -- and it's clearly not a fourth wave.  Triangles are almost never 2nd waves.


In conclusion, this is something of a game changer.  The short-term hasn't changed much -- it still appears most likely to me that the market will make another new high.  However, that new high should mark a major top, and the next trip will be a test or break of the October lows.

It is also possible that the turn is in already -- but based on RUT and NYA, the pattern still looks incomplete. 

I have to re-work a lot of charts later, but these are my preliminary conclusions based on what I've been able to examine -- and based on what my gut has been telling me for a while.  Until tonight, though, I couldn't figure out exactly how to fit all the puzzle pieces together.  Now they fit.  Trade safe.

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

216 comments:

  1. Good morning.  DD, the ST chart was what you were asking for last night, yes?

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  2. awesome PL.. thanks for all your efforts..

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  3. glad i held TVIX..    when XIV reverses a little, (its falling like a
    rock) i may take Tvix profits  (approaching up 10% from yesterdays close) and watch for gap fill.. There   "MAY" be a
    waterfall after profit taking that could overshoot and get this thing
    moving in wider swings.  Bollingerband is kinked like my 5$ garden
    hose.. 

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  4. there is gunna be a morning opening rally, tgt 62-5 es

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  5. I'm going to have to reread this a few times. The pieces haven't fit for me because I'm an EW reader, not an expert. :)

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  6. Looks like I had the 1-2 nested part correct.  That gap down looks like a 3rd wave, not a fifth wave.

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  7. I'll try to connect the dots better in tomorrow's update, when I have more time.  This count solved a number of questions I'd been wrestling with.

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  8. Sure seems that way, then down to the mid-low 40's, right?

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  9. Thank you for putting the pieces together....You're a good dude. :)

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  10. This fits well with seasonal trading patterns of corrections in early March, new highs with flood of tax return money around 4/15 then sell-off after that.

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  11. If that was (3), then (4) shouldn't get above 1359 cash.  So a morning sideways move, then a new low -- then maybe the rally would be my read, assuming my ST count is correct.

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  12. agree, think 62 set too high but that is pure EW retrace level, big question is where does it start from? dropping lower, at 47 now, lowers my tgt accordingly

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  13. Thanks.  Man, I was getting seriously burned-out wrestling with these counts for the past couple weeks.  You have no idea. 

    I feel somewhat re-invigorated now, though.  :D

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  14. think you got it right

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  15. me too...I actually feel like a new man today. It's amazing what a head-game this can be.

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  16. Hope so.  Kept coming back to two things: the first leg of the rally, which didn't fit properly, has been bugging me for a looooooong time -- and then more recently, the idea that there was a 4th wave in progress.  RUT and NYA and some others just weren't jiving with SPX.  Now they're all in alignment.  :)

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  17. RUT 4 points from its target now. 

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  18. any rally pushed off

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  19. It really should read 788/789, though.  :)

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  20. lol....I'm not fast enough on the trigger for one point to make a difference.

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  21. pl,

    if its not too late, you may want to fix "in conlusion"......not to be confused with collusion.   :)    Great work and I look forward to tomorrow's update.

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  22. I think like a lot of traders this morning, I am sitting this one out until I see a clearer picture form.  

    My 30 minute stochastics have yet to really bottom btw.  The move is too soon for it to catch up.  Charts on every other ST and IT time frame are flatlined though.And we may see the Stoch, Williams and RSI come off their max upper ranges on the Daily chart for the FIRST TIME this year.   Which should tell you how hyperinflated this rally was with CB money.  Against this economic backdrop, there is no way that happens without Fed and ECB manipulation / interventions.

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  23. lol -- thanks.  Some confusion over my conclusion in Conlusion, which I believe is on the outskirts of Beijing.

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  24. I take that back.  30 minute chart was flatlined by the time I finished writing this.

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  25. PL- love the site.  I've been a lurker for about 2 months and wanted to let you know you have another happy follower.  I've got a daily indicator that should turn long at the close today or tomorrow.  Seems like that could line up with your wave IV ending before the final push higher.  Thanks for all your hard work and I'm happy to know your eureka moment has you feeling better about your charts!

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  26. Good morning PL. I haven't read today's article yet (yes, I actually do read them, even when I say I just skim). Been busy creating a reply to you. :-)

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  27. Thanks, tuzocat, and welcome.  :)

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  28. To you both -- I think you are both right.   Nothing I've seen from any waver I've consulted has lined up with my own work at all well, until this post.   Epiphany is the definitely the word.    On the primary vs alt ... I do see another modest leg up, but its not even clear if we will get new highs.   It could be top is in with retrace for 2.   Or the 4-5, 1-2.    I like the next top (higher high or lower high) in early April.

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  29. I think morning bottom is in.  Caught 1 Long ES at 45.25 (with limit order).  Stop set at 43.5

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  30. I'm still confused - nice work PL

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  31. 5th waves can sometime "fail" -- meaning they do not exceed the old price high.

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  32. Sounds like PL stepped away from the table and there it was.....the last piece of the puzzle layin on the floor. Congrats on the "Eureka" moment PL....boat drinks!

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  33. remember when the contrarian indicator showed up trying to blame the blog for what was prolly paper losses? that was timely and very telling. . . .

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  34. PL, 1,377.5378????  I think you could been more accurate, by maybe a decimal place maybe.   haha.   You should frame that post from last week with a chart next to it.

    IBM's down 2%, 3% for CAT and BacteriaOfAmerica is turning in its usual stellar performance and we can barely squeeze -1.3% out of the headline DOW, what's it gonna take to put a fork in this thing once and for all?

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  35. more down to come, again strength oscillator are going crazy, no where near over, the selling that is

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  36. jbg1911 I did what I suggested you do, and had my TVIX sell set at 16.80, where one doji line was. Retrospectively, I should have set half my position at 16.80 and the other half at 17.30 where another doji line was. Retrospectively, LOL. But the point is to make some money instead of making nothing by missing quick moves entirely. It could have gone up to 17, then head right back down to 16 again. :-)

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  37. RUT target reached.  Don't be afraid to share the joy with the "Donate" button if you took that trade.  :)

    Looks like it could run further though, so taking partial profits and lowering stop losses way down might be the way to play it.

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  38. Stopped out. 

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  39. Gotta run for a few.  I am being urgently employed by my wife to go on a milk run fer da toddler.  The joys of parenthood.  :)

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  40. Astro $.02 - updated chart that I've been posting for a while - the light purple background.
    Other chart is courtesy of a Ray Merriman subscriber that arrived in my email this morning.

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  41. sold  Tvix 17.49  bought XIV 8.50..     i'm gonna play the gap..  will see if it works..

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  42. truerangeballisticMarch 6, 2012 at 5:35 AM

    I plan to but I want to see my debit spreads run just a bit more. I did do ok with some call credit spreads on the way down. Thanks again for your work. If we get the afternoon melt up I will close my debit spreads. I know don't get greedy.

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  43. Katzo, we seem to be starting to retrace now. What do you see the T1 to be for this retracement?

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  44. stop was too tight, entry too soon. what are you using to time entries if you do not mind me asking?

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  45. You are pressing the easy button again. But aren't you glad you bought TVIX yesterday? I sold some UVXY at 5.92 today, may pick them up again later at cheaper price.

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  46. es 50-53 but I would like to see it not get that high. 

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  47. Thanks DD...I actually just sold 50% @ 17.32 (basis 16.41) so it is a good day...Thanks for your suggestion. :)

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  48.  nice move!.. yours had way more push than tvix..  :)  i'm still on fence on which to play with all the behind the scenes going on..  i need luck along with charts , just me lol

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  49. Traders' whisper number for non-farm payroll on Friday is 300K. That would send the market skywards. :)

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  50. in these world of manipulated markets, where the paint hold the wreck, this kind of chart could be helpful for positioning
    very interesting 
    Thks

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  51. remember this channel chart posted pre-bell? got chart?

    http://www.screencast.com/users/katzo7/folders/Jing/media/745bc056-8e7c-4364-a44c-ffefc6b9bfb9

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  52. It is frustrating to watch it hit your stop and then bounce.  My stop was too tight and my entry too soon as you said.

    I watch the 1 minute charts on various stocks, indexes, and VXX.  I mainly use trend lines, Fib. levels, and chart patterns to time entries.

    On March 2nd around 11:35 AM you foresaw a high probability of a sharp down move - which materialized about 5 minutes later.  What were you watching that gave you that possible signal?

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  53. Long 1 ES at 44.75  Stop at 42.75

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  54. Furrr, you've been suggesting March 7 for quite a long time now (Jupiter leaves Taurus 7degrees). Congratulations on your fortune telling!

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  55. So we're going to witness the first loss > 1%  of the year.  That should be at least a minor shock to the system.  Another first is that we will be closing below the 10 day MA.  If European markets are an indication, we'll have a selloff into the afternoon.  DAX & CAC are down over 2% (nearly 3%). 

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  56. so far the bounce has been weak, hope it stays that way, but AAPL is coming back from down 2+% to only down 0.5%. volatility has gone down a bit, maybe another ramp after Europe closes...

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  57. Is today going to be the first day where the dip buyers get burned? We shall see after Europe closes at 11:30am. 

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  58. S&P may be waiting for EU markets to close before ramping higher...  Just a thought.

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  59.  try switching to a 3 minute too much noise on the 1 min. there was a very clear entry on the 3 min.

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  60. The clear entry on the 3 min. was based on Stochastics? MACD? or something else?

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  61. That would work.  I thought we would have seen a higher bounce from that drop by now.  Keep stopping at 1347 or so. 

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  62.  sold XIV 8.61 Bought Tvix  17.21.   concerned  about   gap but will cross that road later

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  63. Slog view on Greek default:

    “It is a near-certainty that CACs (collective action clauses) will be activated after the offer
    closes on Thursday night,” [Unnamed Greek source].

    http://hat4uk.wordpress.com/

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  64. Good move, how much XIV do you usually buy for daytrade? I found out (the hard way) this guy has a lot of decaying power too...Somehow I have a feeling that volatility may be waking up, hopefully it is not my wishful thinking, I am still holding lots TVIX and some UVXY after selling some today...spx just made lower low as I type, your TVIX is looking good. Maybe we can have a 30% up day for TVIX finally :-)

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  65. Yeah, I'm flat waiting to see how that unfolds and whether we have another up move to finish the overall move

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  66. Yes, this chart (
    http://3.bp.blogspot.com/-twr_D-NL98E/T1Ya-_fgAqI/AAAAAAAABZM/CVShhKpJv0U/s1600/spx+very+st.png ) has the right time/price scale and level of detail to help a day trader reason about the day as it unfolds. It's turning out to fit your hypothetical future labels (present index at 1345, located at your blue (iii) label).

    And if it had turned out differently, say, it gapped up to 1370? Well, that's maybe a day to  not trade. Or, could you have provided a hypothetical scenario for that with counts? Maybe that's just too impossible to think about. Maybe does not matter, just skip trading such a weird day.

    Congratulations on your discovery of the late December rally, instead of the mid December rally. It is obvious how difficult it was to break free of one previouly conceived pattern! You are a genius. Don't let my ignorance and frustrations get you down.

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  67. Well then, thanks in advance.  :)

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  68. down DJIA to minus 180 usually goes to 220, then
    back to 170 to 190, EOD down 240

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  69. Stopped out again.

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  70. all of those and more
    W%R

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  71.  Volatility is waking up for sure..  pick your favorite ETN, ETF, Vix option..  i just play what i'm used to watching.  i need to check more out as tvix didnt do its magic like i had hoped but its moving  now & will see how it plays out.   my trades very but last one was 2000 shares.  i'm liking the volume.  Back month  vix contango is lowering helping front month VIX.  should see some bigger swings now.  disclosure, im not a pro :)  i post info to compare notes

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  72. DJIA just went minus 180, now we see
    i load these comments hours before and fire them off when things are about to happen, in that way i hope to avoid wracking ppl

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  73. Pretzel, what can I say? I love eureka moments! I don't want to sound "told ya so", since I didn't tell anything really, but yesterday evening I wrote in response to your "where are all the bears?" comment (since there were so few comments on yesterday's post) that maybe even the bears were lulled to complacency as yesterday may as well have been another bread-n-butter less than 0.5% pullback as we've seen time and again over the last 2+ months: then to be followed by more immediate upside. But, that big fat down day thus finally came, hammering both complacent bulls and bears. Isn't that exactly how the market works!? Makes so much sense. 

    I must say I am surprised by the size of this down day too; we're looking at 1.5-2% across many markets! Especially since I had a down side target of SPX ~1350 in mind. LOL, but who cares.

    The scenario I have in mind for this week is a slowly drifting lower or somewhat sideways from here on into thursday. Then on Friday the Jobs report will be better than expected and boom wave 5 starts!? Sound too logical?

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  74. es 42 is key, either break or bounce....

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  75. plz, avoid long today imo

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  76. go baby, to down 220 DJIA

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  77. go, put a stake in it

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  78. RUT low of day at 787.27. Frikish close to its previous wave iv bottom that Pretzel showed! Right on dude!!!

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  79. Many thanks to a certain donor who wishes to remain anonymous.  Much appreciated.  :)

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  80. Alright, I think I need to hit the hay -- doing "two" full updates in a day is way too much work.  :) 

    GL all.

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  81. Yeah, I'm beginning to *really* like rectangles.

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  82. sold Tvix 17.40  bought XIV 8.44..

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  83. well deserved rest dude! RUT went to 787.21, flirting with 50d-SMA. If RUT is front running, then it be logical to conclude other markets will follow to their 50d-SMA's. Friday will be big important day with Greece and Jobs. 

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  84. Right. Leave that collusion stuff to the CB's and their trading desks.

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  85. they are running equally

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  86. Agreed.  Should have waited for a move closer to PL's 1340 target zone before making any long attempts.

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  87. Thanks.  I need to set up some charts with all those parameters.

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  88. Sold my TVIX too Sandy for small profit - never fooled with the VIX in my life, but the peer pressure of the group made me do it - I was feeling left out

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  89. Attached the little Bollinger Band study I mentioned yesterday, as a tool to predict the next possible move, since the SPX closed below it's 1-stdev upper Bollinger Band yesterday for the first time in a while and since most TIs were in nosebleed over-bought (which they weren't during the other 2 prior occasions that happened; this also shows it's key to use several TIs for interpretation and to not rely on 1  TI only). 

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  90. All your friends are doing it... :)

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  91. I like TVIX. I mean, I made 3%. S&P is currently off 1.6%. It works, right? But then also, TVIX has the much greater spike potential.

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  92. yup...When "it" happens, you're looking at a 3 or 4 banger.

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  93. Just relax and inhale. Your friends like it! LoL

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  94. hey PL,thanks for answering my question yesterday related to my problem that  I have a hard time placing smaller counts in to the bigger picture. I just back-tracked the comments from yesterday (kind off a bitch of a thing to do; any other simpler way one can back-track posts then scrolling down???) and read your reply. As usual: lots of work. I am not sure if I wanna go as deep as you do, since what's the point, I'd be the 3rd wheel on the wagon yah!? Hopefully my more conservative TA's aid to your EWTs, with an occasional EW count by me thrown in -like those of many others on this blog, who do a far better job than me!- while you do your beauty sleep and we hold the fortress ;-) 

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  95. How 'bout me roll one for the road

    http://www.youtube.com/watch?v=64zcZ6UdKAU&feature=results_video&playnext=1&list=PL1EA466BA65C5524C 

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  96. Sometimes, one can get a bit lucky. :-)

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  97. katzo- what do you make of this quiet market since midday?  Is there another drop in store or do we bounce first?

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  98. Look at DJIA money flow, which is positive. http://online.wsj.com/mdc/public/page/2_3022-mfsctrscan-moneyflow.html
    Doesn't it look like rotation is still in effect?

    The "most believed in" stocks are all down though: ABT, AAPL, CVX, JNJ, PEP, VZ, DIS, WMT.

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  99. Not yet. But will be soon and TVIX can really fly!!

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  100. Spooof...man that was a dip in the hot tub time machine., LOL

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  101. I haven't seen the market this heavy for what feels like infinity!! Hopefully it is not another bear trap. I think I have been conditioned by the past action of short squeezes 

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  102. has DJIA bben down 220 points yet? was away

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  103. From time to time : )

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  104. I think very short term, this is a bear trap. Confer PL's chart. http://3.bp.blogspot.com/-twr_D-NL98E/T1Ya-_fgAqI/AAAAAAAABZM/CVShhKpJv0U/s1600/spx+very+st.png
    Will it be a weak wave 4 up or a bigger one? Potentially, the wave 4 can retrace quite far up. There is a scheduled bot move upward at 14:37 so I'm expecting a half decent move up to kill the late bears who jumped around now.

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  105. hope you guys weren't messing with this on the long side

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  106. No, I don't think so, but it seemed to have traced your projected pattern, only it's a slight bit shorter in vertical distance.

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  107. I'm expecting a reasonable upmove in 10 minutes, but to play that would not be worth it, IMO. However, if it did play out, I would buy TVIX again at EOD.

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  108. Good evening PL,
    sure looks and feels like a 4th wave everywhere.
    BUT, the problem I have with running with that at the moment is:
    1293.55-1074.15 = 219.4 and 1378.55 - 1158.67= 219.88, A=C proportions to 1/2 a point.
    So for the moment the jury is out until I see some confirmation of the various views expressed.
    As ever, time will tell.
    Kind regards,

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  109. Me thinks we touched the 220 - still expecting the 220/190/170/240 relay?

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  110. PL, if the $RUT lower target ~787 is taken out today, then is it safe to say that we're not going to have another bounce and that we're heading straight down?

    thanks 

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  111. Or Forest looks like he may just keep on running past 220 - Run Forest, Run!!

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  112. yes, there will prolly be a rally to DJIA down 170 to 190, then we will head back down, breakin the minus 220 and stall at minus 240

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  113. Forest looks like it but we don't trust Forest lol

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  114. I think the SPX ES has extended third wave down and next traget will be 1334 with the following target 1328.
    It is not a trading advise

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  115.  That's why I'm flat at this point....I took my profits early (it's been awhile)...Thanks again for your suggestion.

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  116. That would make sense, because of the DJIA stocks being better known to retail investors.

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  117. I think the low 1340.11 spx was the end of the fourth wave, which was perfectly hit on PL,s blue target box and we are now starting the fifth wave of  C

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  118. You know, one reason I like TVIX is that it rewards taking profit quickly, due to the uncertainty spike and then the fall-off in uncertainty, even as the underlying index continues to move downwards. Those who short the underlying ($SPX or ES H2) will continue to have to hold their position for the downward move to maximize their profit. So they have to suffer the anxiety of waiting while you and I are out and sitting happy, possibly in a hot tub. HA HA HA!

    I wouldn't get back into TVIX until the definitive EW4 up appears. Fortunately, eSignal is good at helping with that (timing the transition from EW4 to EW5).

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  119. Huh? The low would be end of (iii), followed by (iv) up, which has not yet happened (15:17 Tuesday). http://3.bp.blogspot.com/-twr_D-NL98E/T1Ya-_fgAqI/AAAAAAAABZM/CVShhKpJv0U/s1600/spx+very+st.png

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  120.  Or smart money short covering. :)

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  121. final plunge comin' up, my 180/220/170-90 was off, i think because it plunged well past minus 220, but was workin and did not watch it, anyone, what was exact DJIA low, minus what? if it goes beynd 220, reset levels move down, 180 to 200

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  122. 12734.86 was absolute low today for $INDU. From RTH open of 12958.65. Delta was -223.79.

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  123. so only down minus 223?

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  124. Approx 224, yes, only! LoL

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  125. Back down there still. Bingo!

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  126. what happens next will scare the chit out of the dumb money

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  127. low of day for DJI is 12735.16

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  128. final plunge, will cover at bottom
    direction is down tho, IT/LT shorts still good imo

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  129. I have heard two conclusions on those CAC activations. One - no CDS's will be triggered. Two - CDS's will be triggered.
    What the hey! Anybody know what the real story is if those CAC's are launched?

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  130. Where did you wind up going short today (not an accusation, just curious)?  Saw you were looking for a morning bounce to 1358 after covering your short at T3 overnight.  I stayed out today, didn't want to get greedy after capturing some of the move yesterday and today was a gap down.  Will see what kind of follow-through we get tomorrow/rest of week.  I agree with PL this may be first head-fake move, with a move higher, then serious move down after tax season buying done.  I am still holding short Eur contracts though, more confidence that that goose is cooked.  GL, hope you made good coin today.

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  131. went short after I got out of long, read my description of mrkt, there are hints in those

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  132. 6 hours ago ~ any rally pushed off, this is serious, oscillators on many time frames continue pushing down$VIX up 14%

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  133. Assuming irregular flat wave 4 correction: Target is 1338.92 SPX. Previous 4th wave of one less degree is 1337.45 on 2/10/12.
    The Math:
    Top of A (2/29,  11AM) 1378.04 - 1363.81 =14 .23 length of A.
    14.23 x 2.618 = 37.25
    Top of B; 1376.17 - 37.25 = 1338.92

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  134. Out GDX puts - best one day trade in awhile

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  135. rut row, far from over....

    http://www.screencast.com/users/katzo7/folders/Jing/media/b7144234-9554-4a9e-828f-b66c208210b6

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  136. Awesome, glad you were able to capture the move.  I had a lot of other stuff going on today and couldn't watch closely and was afraid of getting whip-sawed chasing.  If it bounces overnight, I may short again, thinking there will be some follow-through in the a.m.  GL

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  137. Scotty_Doesnt_KnowMarch 6, 2012 at 11:03 AM

    Astro?

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  138. http://content.screencast.com/users/chartwiz/folders/Jing/media/314353a4-6c91-4c82-9e53-e63b8b6d8d88/2012-03-06_1602.png

    Wild @Gann360 chart

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  139. http://online.wsj.com/mdc/public/page/2_3022-mfgppl-moneyflow.html
    Strong Buying on Weakness number for the SPY.  Which could just be short covering.  

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  140. Wow, where do you get stuff like this?

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  141. @Gann360 on Twitter 

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  142. TY. So are these Gann360 guy(s) getting rich yet? In other words, how good are his/their calls?

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  143. I like it for the very same reason, and I enjoy volatility in general. Definitely less anxiety, but then again that might be because we are still in the basement price-wise waiting for the elevator to be built. But I might go with UVXY next time. Either way they do seem to behave accordingly during SHTF periods, but today there was a super distinct difference in yield.

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  144. BTW, I put in buy order for TVIX at 16.91 which is at one of those Doji lines and about 50% retrace of current range. We'll see if this order gets filled.

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  145. This is right.  Very nice.  Merci.

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  146. Cool...It may get filled AH's. I've had some good scalps done entirely AH or PM when I'm too lazy or occupied to work RTH.

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  147. I count the October rally as a double zigzag, A-B-C (on almost all the major indices).  That would mean a W-X-Y and another double zigzag or double three of another sort (another impulse wave higher to complete an a-b-c Y could still allow for another substantial move higher.

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  148. imo one of the best economic indicators.  showing weakness not seen in over six months.

    http://www.aar.org/NewsAndEvents/Freight-Rail-Traffic/2012/03/01-railtraffic.aspx

    just got back from the islands (maui, kauai, big island) pretzy.  maui was awesome but we didn't spend enough time there.  we crammed all we could into two days.  the people are so friendly and the weather was ideal.  you live in a very special place :)

    per your suggestion pretzy i also read psycho cybernetics while i was gone.  there is so much valuable insight about living a self fulfilling, prosperous life, i took so much away from the book.  it really drove home the point to me about setting very specific, concrete goals and then visualizing yourself accomplishing those goals.  it made me rethink a lot of things. i feel like i should re-read it two or three more times and take detailed notes this time :)  thanks so much for the suggestion, hope you're doing well.  mahalo!

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  149. Many thanks for the RUT setup!

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  150. Bastiat, Do you chart this data?

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  151. that's a really interesting idea, but i have not put any charts together with this data. 

    i think it's useful to be familiar with this report because the information covers such a wide swath of economic activity and updates every week.  i also like the numbers because they represent the truest picture of what is happening on the ground.  it isn't a small sample survey and the various measures aren't statistically manipulated. 

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  152. It would absolutely not be safe to say that, no.  :)

    There is a dashed line on the RUT chart that shows "final confirmation of trend change" -- even trade below that level wouldn't make it "safe to say" -- it would merely make a decline much more probable.  :)

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  153. Whip_Sawed, thank you for the donation today.  :)

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  154. yw, and welcome to the blog, btw.  :)

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  155. Looking at everything in light of the new count (with a slight alteration, now that I've had a bit more time to study), there's a fair to middlin' chance that the 1378 print high was all she wrote.  I'll try to come up with some key levels to watch for the rest of the week.

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  156. Pretzel - we bounced at your targets today right? I covered my TZA at RUT 785...still think another leg higher is possible or did you see something today that convinced you the top is in?

    If we break today's low tomorrow, i'll probably chase this sucker. I do know its going to be hard for me to stay short if we get to the 1292-1307 range. I'm going to need a lot of convincing down there :)

    Keep up the great work.

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  157. Um, by any chance is that newly confirmed 4th wave ($NYA) a down wave? 
    Somewhat confused.

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  158. nice, you can disregard my post above...composed it as you were posting this it seems. Looks like I'll be chasing tomorrow. Thanks.

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  159. nice, you can disregard my post above...composed it as you were posting this it seems. Looks like I'll be chasing tomorrow. Thanks

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  160. Juan, thank you very much for the *4th* donation!  Greatly appreciated.  :)

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  161. disqus is messing with me...this was in response to Pretzel's latest comment.

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  162. RTG, I wouldn't necessarily recommend chasing right here. 

    btw, as I was falling asleep, I was wondering, "What happened to Rocky, I haven't seen him around in a while..."  Glad to see you're still out there.  :)

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  163. It's still on the table -- but there is a reasonable chance it's not the 4th wave, but a 1st wave down.   I really didn't have time last night to re-examine the whole big picture in light of my "epiphany."  As I said, I'll publish some key levels so we can figure out what's what going forward. 

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  164. btw, HighRev, welcome to the blog.  :)

    I have a lot more work to do tonight, but after looking more closely, if this is w-x-y off the October lows, then c of y could actually count as complete.  As I said -- more work to do, but I'll publish the count which shows the math behind this conclusion in tomorrow's update.

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  165. Hi bastiat, wb! 

    Yeah, I first read that book about 12 years ago, and I've re-read it about 3-4 times since.  It sounds like you got as much out of it as I did -- amazing book, definitely one of the best I've read in that department.  Glad you found it useful.  :) 

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  166.  Just change your name to RockyWhereverIdangWellWantGunner.  That should fix it. :)

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  167. yeah, out of touch for a couple weeks, I was in Shanghai...and the great firewall of china won't allow access to blogs.

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  168. Thanks, bastiat31.  Good data.  Do you understand the distinction between "carloads" and "trailers and containers"?  Are carloads used for bulk commodities such as grains, liquids, and chemicals whereas trailers and containers are similar to those transported in ships?  Is this the distinction?

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  169. Thanks. I will stay tuned.
    Not that anyone on this blog would know, but Tiffany's now has a new jewelry design. It's a pendant/earrings that consists of 5 stationary individual "strands" that puff out from a single point into a real Fibo/Phi spiral, and then fold back into a single point. Just like the Fibo/Phi flower of Brugmansia Culebra. I nearly popped when I saw it today and started babbling at the sales woman about Fibo and Phi and EWT. To her credit she remained calm, and then mentioned that her grandmother had, in fact, been friends with - and - a teacher with Gurdjieff and Ouspensky. Yup. The Tiffany sales woman has a big stash of those guys' original books. Who knew?

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  170. Hey PL....I just wanted to sincerely thank you for your help in making today one of the most successful trading days I've had in a while...the pucker factor was reduced to a reasonable level and everything went smoothly. When this bull finally takes the big swan dive, your gonna get a sweet donation, cuz I'll be ready for it. You have created a great place to learn and have fun all at the same time.

    Katzo...you got class brutha...you put it all out there for everyone else to share...truly uncommon.

    ....and all you other good people who contribute your experience, knowledge, and variety of views...you totally rock.

    ...and noooooooo...I am not crying in my beer. I only have one grotesquely large Guinness a month (and it wasn't tonight). :P

    I'm just saying "Thank You".

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  171. Guess $2.6 trillion does buy something after all.

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  172. Thanks for the info.  I'm not sure how much to read into it though, the ratio was only 1.06.  And i'd bet some of those buyers are boatloads of retail people conditioned to 'buy the dip' and got run over when it declined further and just held on for the long term, 'it will go up eventually' rather than take a quick loss...CVX/JCP were impressive, but I have no opinion on them beyond what i saw in the link.

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  173. Very Cool,  Taken me a while to get to be able to make this post.  Had to reload IE8 to resolve the Disqus login problem.... Technology is great when it works....lol  Drilled into the news and saw the same things I have seen in my shipping news I follow - that being that autos, equipment, manufactured goods are moving up on a YOY basis but bulk, coal and non-metallic minerals are down YOY.  That ties to downturn in materials, construction, and coal..... as well as fertilizer so watch related stocks like CF, POT, CLF, for short entry points.  Also construction related providers of cement.

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  174. Authentic1 - trailers and containers are for manufactured goods electronics and other things made overseas containerized and shipped port to port for transport by truck or rail to distribution.  Carloads are for bulk goods like coal, sand, gravel, fertilizer, ash coke and things that will be used as feedstocks to manufacturing of various sorts

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  175.  carloads pertain to trains, Trailers to overthe road trucking and containers is shipping.

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  176. Thanks, windyb.

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  177. Thanks, DRG62.

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  178. Thanks, jbg, much obliged.  And I know from first hand experience that you're as good as your word.  :)

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  179. Got smacked today's trading. Yesterday I mentioned I drank the koolaid ate the cookies and went long the dip in RUT and SPX.  I was thinking we would get a frontrun on tomorrow's ADP numbers.  I was wrong.  We got Katzo's missing gap down open instead.  So was stopped out at the open for a loss on both positions.  I kept them small in accordance with waning confidence based on trading into the bottom of the channel but trend trading the way I do it requires trading the setup with conviction.  I will be looking for a place to get short here in the near future.  I am a little frustrated in that I had SPX puts on at 1377 as a hedge against the long position.  I closed those when I closed the longs and did not get/take the opportunity to reload.  Took some profits in other hedges VIX call options, and TLT Calls.  I still think we are due a bounce towards the highs followed by a longer deeper correction.  Good trades and thanks for all the great input.

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  180. Sorry to hear that, Katz has been right on lately.  I had my second biggest day ever on the futures today and missed the big gap down.  I did go against him near the close and played the rebound.  I play the TF and not the ES, which is much more volatile.  I believe top is in and think that a big fall is in the cards just what will trigger it.  I have been thinking of keeping a short position open so I don't miss anything major.  VIX calls had a nice day as did TZA.  Happy to see a group of TVIX players on board.
    Worried about employment numbers on Friday but consensus is for them to be good so might be a chamce for disappointment.
    Today helped my faith the bear is just hibernating and not dead.

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  181. no prob.  keep em coming

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  182. Reading through some of the comments lead to some observations:
    1) PL seems to get more donation on a big down day :)
    2) there seem to be more bears than bulls on this board
    3)but the bears have been badly burned in the past that we are all conditioned to expect bounces (like Pavlov's dog) after a big down day
    4) bears dip toes into going long, hoping the past will happen again which will help to recuperate some losses due to shorting  in the past (who can blame them?)
    5) I noticed that quite a few people didn't want to hold short position over night, thus missing the majority of gain in the big move down...
    Now the $1,000,000 question is what kind of move can the market take to leave most people behind??

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  183. Hillwalker, thanks for the donation.  :)

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  184. Yeah, nobody took the NDX 50 point upside trade from last week, apparently.  If they did, it didn't result in any donations.  :)

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  185. PL, would it be possible to move the comments section to an independent, potentially searchable, url?  This would make tasks such as refreshing and finding threads much easier to accomplish.   TIA

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  186. Hi Randall, I know you asked this previously, and I didn't have time to answer.  I'm working on building a new website, and potentially a new forum as well.  But this stuff is far from easy, and it ain't exactly free either.  :) 

    So, to be determined. 

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  187. btw, nice blog. :-)

    Here's a chart with my RUT count incorporating a similar triangular interpretation of the Nov.-Dec. correction.

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  188. PL, it sounds very promising, thanks. Everything you have accomplished to date is excellent and much apprciated.

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  189. Thanks for the donation, Randall.  :)

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  190. another mrkt blog I was a moderator on, perhaps the most popular but the least involved with any productive TA has auto load. Any new comment is loaded immediately to the top with a link back if it is a response to another's comment

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