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Wednesday, March 28, 2012

SPX, RUT, INDU Updates: No Material Change -- but Some New Discussion for Bears

Yesterday performed as expected in regards to a consolidation/correction.  This correction may be over, or it may have a bit more downside left.

Some readers asked about the possibility of a top being in place, so I'll address that in more detail in a bit.

Currently, it is assumed that a standard impulse move is unfolding.  If that is in fact the case, then the next wave up should show some strength and upwards acceleration.  If for some reason the next wave does not demonstate those characteristics, it will call into question the most bullish interpretations.  As I said yesterday, there is currently no reason to believe otherwise, but the market will let us know as the move matures.  I've drawn a few extra charts for you, to help readers understand what to look for.

The first chart is the "traditional" upward impulsive structure.  This is assumed to be the pattern unless the market says otherwise.

  
The next chart depicts a hypothetical ending diagonal and the rough form which could be taken by that type of structure.  Ending diagonals can be account killers, because there's a lot of whipsaw action, and over-aggressive traders on both sides end up getting burned.  Again, there's nothing to suggest this is unfolding, but "forewarned is forearmed" as they say, so it pays to be aware of the potentials.


Several bears wanted to know if it's possible there's a top in place.  It is technically possible, because the key index which caused me to rule out certain potentials is the NYA, and the NYA has not made a new high yet.  Until it makes a new high, then more bearish possibilities remain open.

Below, I've annotated the NYA chart, and explained my reasoning as best I can within the confines of the chart.  I'll run down the bull/bear arguments quickly. 

In favor of the bull count:   
  • The move down counts very nicely as an ABC correction.  The NYA decline is a stretch to count impulsively.
  • The move up counts very nicely as a 5-wave impulse.
  • There's an island reversal bottom in place. 
In favor of the bear count: 
  • The NYA has thus far failed to make a new high.
  • Anytime there's a retest of a previous high (or low), the potential exists for a turn.
Given the above evidence, I have to favor the bull count... but the market will tell us which is correct, with a break of one of the two invalidation levels. 

It is also possible that neither is correct, and that something unforeseeable is happening.  For example, the larger correction could stretch out into a more complex form, adding another abc series of down waves before rocketing upwards in wave (3) of (v).  Or the ending diagonal previously discussed could unfold.

If I had to break it into percentages, leaving out "other" for the moment, I would say: 70% bull count, 30% bear count.
  
  
NYA and INDU have similar forms, but the INDU does offer bears the option of counting the decline as an impulse, albeit an ugly one -- especially in contrast to the beautiful impulsive nature of the subsequent rally.

It would be wholly acceptable and normal for the bullish count to show some additional declines before further rally.  A "normal" 2nd wave retraces 38-62% of the prior wave.  I haven't put target boxes on these charts because the last leg of the rally failed to reach these targets at all, so I'm a bit gun-shy of this market.


Next, a broader view of the INDU, and a bullish trade trigger.



Next, the short-term SPX chart, which does highlight a form that has the appearance of a rising wedge.  This could possibly be the beginning of the ending diagonal previously discussed.  As I said earlier, if there's no upward acceleration if/when the recent swing highs are captured, then we'll start considering this potential in more depth.


And finally, the short-term RUT chart, which is showing the same basic pattern as most everything else.


In conclusion, the charts still appear weighted in the bulls favor.  Short term, there may be some more correction/consolidation in order first, but it does appear that higher highs will be along eventually.  Until the structure looks more complete, or until the bears start reclaiming some key levels (whichever comes first), I feel it's prudent to remain on a bullish footing.  Trade safe.

309 comments:

  1. very nice write up.....clear concise and accurate....great stuff PL !

    this market loves triangles ....we have seen them form and break up and down (mostly up) ....the triangle formations must have something to do with the HFT algos.... my theory of a larger wave4 got blown up so now i like the Ending Diagonal Triangle for a 5th wave then a nice retrace of this entire bloody move up from the march 2009 lows

    here is a chart drawn back when SPY was at 127ish and tgts 144ish


    PL i like ur theory of the fed inflating the market until retail gets back involved....BUT....if they dont get back in then what ????   I see a prolonged chop.....a market that does not go up or down because fed is out of bullets but does not dare to sell and risk a crash so we stay range bound for literally years!!!!!

    who knows ???

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  2. eur/$$

    http://screencast.com/t/z8VmQVpga

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  3. New durable goods orders (ex. trans) came in at 1.6% versus 1.5% expectations.  Orders including trans. came in at 2.2% vs 2.9% but the trans. sector is considered volatile.

    IMO this report supports sideways to up action.  The TA picture could easily overwhelm this data in either direction.

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  4. Durable goods orders just out slightly below expectations.

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  5. Q1 ending could produce a rush to the exits to lock in profits.....who blinks first....lets find out shall we ?????

    got a feeling aapl stays inflated as window dressing for the fund managers who need to show clients they r long aapl.....if only for a  few days ...ha

    PL.... i put a 144 cap on SPY because EWT says w3 cant be shortest wave so w5must be shorter than w3 sine w1 was longer than w3

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  6. Anyone think this might have legs? SPX ichi moku and RAFF channel.
    Projected turn w3 was 1421-1431 ( 1 short yest so maybe one last thrust up?)
    Down to bounce on the cloud then top out say 1447 +- 10 depending on where 4 turns.
    FWIW.
    Kind regards

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  7. R2000 slowing down and settling?

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  8. I just had a big sell signal hit.  All the past indicators have had at least a modest correction within a week, if not a major one - and virtually no upside before the correction starts.

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  9. "virtually no upside" is a little strong - maybe 50 points on the SPX in past instances

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  10. And my trendline is broken.  The market needs to not do anything crazy for my indicator to print on the daily chart, but I just opened the positions.  Deep OTM sep exp puts.  If the market prints new highs after Wednesday next week, I'm in trouble probably

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  11.  Max, would you mind sharing what your sell signal is specifically?  Thanks.

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  12. If ES 1408 breaks, we have a long signal?

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  13.  Quote of the day: "With fire hoses in hand, they are not going to let this market back off a whole lot." :)

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  14. possible drop soon, tgts 1400, then 1397 ES

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  15. truerangeballisticMarch 28, 2012 at 4:15 AM

    Surely that kid with the beard in the playground did not say that. lol.

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  16. It's a comparison of the momentum of the top-16 weighted companies on the SPX with the momentum of the SPX - a hit means most of the stocks are breaking down and it's the top companies supporting the index.  Corrections usually start at the edges and work their way in...

    It's hard to backtest too far since the top 16 change.  It has hit 3 times in the past 5 years.  One at 1500, rallied to 1550, corrected to 1460.  Once at 1375, rallied to 1425, then down to the march '09 lows.  The last time was just before the final 30 point push prior to the October crash.  No false hits.

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  17.  good morning..  $VIX hit low of 15.40 at open and quickly bounced and rising..   The market is not  as comfortable.  yes i know $VIX  still low.  but falling to 10 is not in the cards today.  16 more than likely than not. 

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  18. PMs affected by direction of mrkt and dollar, influencing it and PL said.

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  19. spx pivot hit....fcx gap fill nearly completed.....just exited fcx short, holding cat short for measured move on h&s

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  20. CVX headed down for wave five of 1? Fast Stochastics at 5

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  21.  i was just gonna post CAT is about to break 100 bucks..  (down)  HD just broke 50. 

    $VIX just spiked through 16   (up)

    Watch AAPL fall

    Banks still positive, for now

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  22. truerangeballisticMarch 28, 2012 at 4:47 AM

    Katzo7-ERB do you see a bounce up from those levels once your targets are met? Thanks for all your input here.

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  23. Now that is an excellent piece of work.  It's much like the AAPL:NDX ratio in that it reveals the same sort of thing.  When the heavy horses start to slough off, the old stock wagon has a pretty difficult time climbing a hill.  Great work!

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  24. Scam update :)   lol    I'm still holding UVXY  and TZA.  not trading advise, obviously..  This is in my gambling , i mean, trading account...  As long as the $VIX keeps rising and the SEC lets this thing trade,  i'll play.. 

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  25. I thought this was the beginning of wave 3 down.

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  26. ES and R2K futures reached a potential retest / rebound point at 1402 and 832, respectively. However, NDX futures are holding firm above 2770, which makes me feel that we still have some thrust up. Entering ES and R2K long positions with tight stops at 1396 and 826, respectively. If these stop levels break, I would watch for a break of 2750 on NDX futures as a second confirmation of a more meaningful move down unfolding.

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  27. don't know, have to read this mrkt real time, nothing else seems to work, LT TA is f*cked

    gut says more down tho

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  28. covered cat short also....taging neckline, spx pivot hit....I think a little rebound is in order here

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  29. T1 of 1400 tapped
    -- E'BotBastard

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  30. I don't see a H&S pattern???.....but does look like you've begun the third wave of  C wave down

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  31. If 02-3 holds tight more down
    --ERB

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  32.  Hehe, didnt read that, took profits already, thx for your call Katzo :-)

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  33. $VIX  now  HOD 16.24.  target 16.58 intraday bull penant.   

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  34. Looking at the hourly chart.....Top = 112.28 Wave i=109.46, wave ii = 111.06, wave iii = 104.85, wave iv = 107.97 and a break near or below 104.85 should complete five waves down....an a-b-c up to correct this move down and then the three wave...IMO

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  35. EW5 of wave C of the ABC correction down? Correct? With a more impulsive UP move coming in the afternoon? (counts as per PL's preferred count) Do I get this correctly?

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  36. These damned dip buying algos have not given bears a chance, let's see if today brings something new...

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  37. Look at the Elliot Wave Oscillator on an hourly basis.....the deep move to -3.25 earmarks a three wave at 104.85. Now a low below that level will not be confirmed by the oscillator, suggesting that will be the fifth wave...getting ready then to rally back up for wave 2.

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  38. EUR trying to recapture 1.33

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  39. On Monday, after seeing yet another 2% ramp in the Russell, I'd finally seen enough and wrote an article that for me personally was the most painful thing I've ever written... at least in the business of markets, etc.  I took a sea change in my thinking that went so against my grain that I still have to slap my own face to try to convince myself to "snap out of it".  I haven't even published it.  I'm scared to... at least for now.  But give it a few more days and I might have to do just that, and get it over with.  We'll see. 

    But in the meantime, I'm more than happy to share with Pretzel and you twisted readers (I can say that, I'm one of you) what it was that inspired me to write that piece.  I haven't even shared this on my own site yet, thinking that if I actually publish the article, that's where I should be revealing the following stats.  In my mind, these figures are telling a story that perhaps we should be paying more attention to.  At least maybe I should be:
    ============
     
    Bank of England - annual rate of printing in past 3 months = 67%
    European Central Bank - annual rate of printing in past 3 mths. = 89%

    From Nov. 25th until today (or to the nearest local high), the following markets have behaved thusly:

    Annual rate in increase in the FTSE since Nov. 25th= 72.96%
    Annual rate of increase in the S&P since Nov. 25th = 82.24%
    Annual rate of increase in the RUT since Nov. 25th = 104.21%
    Annual rate in increase in the NDX since Nov. 25th = 116.80%
    Annual rate in increase in the CAC since Nov. 25th = 128.21%
    Annual rate in increase in the DAX since Nov. 25th = 159.25%
    ============

    It's the correlation between the printing and the performance of equities that is just becoming too obvious.  And the bottom line is that the printing is not going to stop.  EVER! In essence, the BOE is producing inflation at the rate of 67% per year and the ECB at 89% per year.  Because after all, the word inflation has everything to do with money creation (devaluation of currencies) and absolutely nothing to do with prices.  What happens to prices is a symptom of inflation.  I think you know where I'm going with this.

    In any case, I wish the best to all of you.  If I eventually do find the courage to say what I "don't want to say because it defies logic from one particular perspective", I'll provide a link to it here (with Mr. Pretzel's blessings).

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  40.  Thanks Bob.  I see that.  I was looking on the daily chart where it's not as well defined, and it looks like we've completed waves 1 and 2 and this is the start of wave 3.

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  41. break of 03 and we do not go down but sideways or up. break of 00 and 97, then maybe 90 ES is tgt. these are ST calls, but if 00 breaks this will turn into a longer term call (IT ~ couple of days)

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  42. Thank you Max for sharing your view.

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  43. Apply the typical fib ratios.....wave i down was 2.82...... 2.82 X 1.618 = 4.56.  Wave ii was at 111.06 so subtract 4.56 we get 106.50 and actual was 104.85. From low of 104.85 we calc 38% retrace of wave iii or 2.37 + wave iii low of 104.85 = 107.22 and actual was 107.97. Peace, order and justice. (It can't be this easy....can it?)

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  44. headed down within an hour???

    it is amazing how something that can only go two ways can be so complicated. yes, it can go sideways too but eventually it goes one way or the other. 

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  45. Thanks a lot for the detailed clarification!

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  46. PL really homed in on this one and picked it off like shooting fish in a barrel ( I use that phrase but really don't know what it means....sounds good though)

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  47. anyone see my humorous chart on AAPL and news-related items that drives the stock price on last thread?

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  48. No....what time did you post oh EW sage?

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  49. $VIX    Blastoff!

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  50. nice catch sandy

    TVIX up 9.5%

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  51.  weeeeeee    lol..   I'm not good so i guess that means i'm Lucky :)

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  52. SLV is driving me a little nutty.  It gapped up Monday but didn't have the volume to be characterized as a breakaway gap, and today the gap has been filled.  

    Please pardon my inexperience, but this raises a couple of questions:

    1. at what point is yesterday's primary count get knocked out in favor of the alternate? 
    2. where would be a reasonable place to put a stop? (not looking for advice, just suggestions and rationale)  I bought at 31.89 and just trying to figure out if I suck it up and take the loss (I have lots of practice at this lately) or be a buy-the-dipper...  

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  53. here it is Bob. Am I your wife? just kidding, like your stuff here. Said that AAPL and $SPX were going separate ways.

    http://screencast.com/t/09P4eeUf

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  54. Mercury is still retrograde....

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  55.  I wouldn't call that blastoff - just a little blood back into the you-know-what. :)

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  56. I know how you feel when beard boy is playing needle on the market but we still have to say and do what is right.
    Thank you for your work and looking forward to seeing more of your articles.

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  57. SVL will follow mrkt.

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  58.  lol...that was a good one.

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  59. Sorry!  This is the reply to Albertarocks.

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  60. Long 1 ES at 1398.5

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  61. should be a big down candle very soon if I am right. look at the 120.

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  62. wow.. Panic has arrived.  AAPL low of day..  $VIX at  HOD 16.81

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  63. do you see a 1405 pull back to go really short?..i mean entering  a big move down...or to go short now...?

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  64. RU watching copper ERB - touchdown on the 200 MA again - whatcha she do from here?

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  65. Thanks.....and you want to be Fed Chair?  Where'd I put my passport?

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  66. DJIA down 110. go back and read my real-time stuff, provided tgts, caution at points that were unclear, all clear signs when EWs became more obvious. We are in an EW3 on thw 15 minute now, very clear to see. Go look at size of red candle on the 120.

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  67. Stopped out at 94.5   

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  68. Luck is important in life. Good luck!

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  69. TrueRange, please don't be offended but I'd prefer that your question be asked here since I haven't yet even published the stats on my own site yet, for the reason I mentioned below.   You asked: "So basically you are saying $5 to $6 gas prices as this
    printing madness reaches it's apex. Things cannot go at those rates for
    much longer without severe consequences. maybe I misinterpreted your
    thread. Thanks again for all your work. Let me know if I misunderstood
    the meaning."

    First, let me say "Yay Idaho!", lol.  No, I'm not necessarily making any claims quite like that because even though one of the consequences of this kind of printing in the past has definitely been an outrageous hike in commodities prices, it remains to be seen if those who are given all this free play money to play with, the spoiled rotten little children of the FED, the Primary Dealers, will continue to throw it into commodities, more insanely risky derivatives, more bonds (apparently they're buying European bonds now) or the equities markets.  Or all of the above.  My focus for this particular study is really zeroed in on equities.  But I also have a different study, my favorite study of all to be honest, surrounding the $CRX as a measure of whether or not money is starting to flow out of the commodities based stocks.  That metric provides and astoundingly good clue.  If you're interested you could read that one here.

    In any event, yes it appears that we're talking about $5 - $6 gas at the pumps.  It already hit $10 per gallon in Paris last week.  But the notion of printing "reaching its apex"... I can't see any apex anywhere on the horizon.  Because regardless of whether or not we see the world evolve in the deflationary scenario or the inflationary scenario, they have reasons to print in both cases.  Suddenly, I can see no end to it... EVER. 

    But you bring up the most important point from Bernanke's perspective... at what point will the people begin to march on Wall Street with pitchforks in hand?  The consequences of this type of inflation will be horrid for the people.  But Bernanke doesn't give a rat's arse about the people.  He only cares about keeping the economy going and making sure his dark owners are pleased.

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  70.  So after the correction, we will start wave 1 of 2?  I'm a little rusty on EWT.  After reading the 2nd edition of "Trading Chaos", I started using Bill William's alligator and have found that it works.  I've also been looking at p&f charts a good bit recently.  This has been a very good trade by PL.  After he said that he hints at potential trades in his updates, I have been paying more attention to those hints.

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  71. Kinda amazing to behold, actually.

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  72. Scotty_Doesnt_KnowMarch 28, 2012 at 5:58 AM

    If 1394 holds then back up to ES target of 1423?

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  73. Links to Nenner's appearances recently
    http://finance.yahoo.com/blogs/breakout/market-rally-peak-next-month-charles-nenner-150005109.htmlhttp://www.forbes.com/sites/johnnavin/2012/03/25/an-interview-with-technical-analyst-charles-nenner/http://video.foxbusiness.com/v/1533142368001/economy-to-weaken-in-2013/?playlist_id=87185http://www.youtube.com/watch?v=dCT9FekAeFA

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  74. truerangeballisticMarch 28, 2012 at 6:02 AM

    Sorry  that my etiquette was bad. I do apologize. I was trying to repect both you and PL.

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  75. Stopped out of ES and R2K, very respectful 5-hour red candles on both, and probably just before dip buying resumes to fade me... NDX coming quickly to the next critical level (2750). AAPL firm green, when that collapses the real fun will begin... 

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  76. No worries.  I knew you were thinking along those lines :-).

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  77. Well there we go again.  Another comment into the spam bin.  That'll be all for me today then.

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  78. Is this a short cover squeeze??  further down?
     

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  79. Ok, I'm outta here TRB.  I can no longer post here today, nor edit a comment.

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  80. Thanks Ray.  Yeah, right now I'm more torn than my girlfriends nylons.  I feel a great deal of anger inside thanks to the incredible degrees of greed and corruption I'm seeing.  And that's not good for one's general health, lol.

    I don't even know if this comment will publish since my comments just seem to be toxic in here.  It's not Pretzel's fault either, it's the fault of the trolls who have been attacking me and flagging me for nearly a year now on "the other" site.  One of them is the arsehole known as Mike Wagner, aka TradeToWin, and more recently, aka P3 Is For Fool.  He posts here.

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  81. stopped at 61.8% retrace of up move from last thursday AM.....if this is 3 of 5 as Pretzel believes, then we probably need to turn up now. Maybe a retest of the low, but can't fail IMO. A move the thursday AM low sets the stage for a double head and shoulders that will confirm with a break of 1340....that would be freakin ugly. Unfortunately, I am out of all shorts. So I'm still banking on Pretzel's long call here. Let's see.

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  82. BP slides deeper into the kimshee. Terminal for FTSE.
    INDU etc will follow. Maybe :)

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  83. Can anyone recommend a free tool to quickly and easily calculate and anticpate fibonacci levels?  I use Tradeking right now, but the charting tools, etc don't offer that & aren't very good imho.  Thanks.

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  84.  Appreciate your efforts to keep us informed on Nenner.

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  85. Freestockcharts.com

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  86.  Pardon my ignorance, but what kind of TA is this considered?  It's totally foreign to me, i.e "I'm clueless".  Anywhere you recommend to read up on it?

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  87. Glad to do it....there are many times Nenner needs a translator even though he's speaking english.

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  88.  Thanks Bob_E.  I'm aware of the site but never really used it.

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  89. Does StockCharts free account offer some of those tools??

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  90. Long Term Investment?  Based on the chart pattern of TLT and some info from PL, along with Nenner's recent comments about the 30 YR Tbonds.....would lead me to believe a worthy long term investment would be TBT once we reach new highs in the 30 Yr. Good for IRA's.....anyone shoot a hole in this?

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  91. I must say that I'm feeling pretty bearish here.  Tom DeMark's turn range of 1419-1426 was hit on Monday, and meanwhile the Dow never made a new high.  Furthermore, news that the EU is boosting the aid ceiling $ hits the tape just now, and the reaction is thus far surprisingly muted.

    If AAPL and the QQQ's were to really break, this market has a potentially long ways to fall.  Look how far down even just the lower Bollinger Bands are for AAPL and the QQQ's!  At some point, even if it's a while from now, those lower bands will be touched.

    Thoughts from others?

    John

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  92. Now that I have listened to him a few times, I can follow him well enough.   I like it when the interviewers stop hogging camera time and let him speak.

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  93. True Range we got the RUT gap covered..... Am thinking about some longs here. Want to see a move off 830 first

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  94. CheatemSteelenRyun is a better site...... Lol

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  95. Careful with the Fib Ret .....check the numbers yourself from time to time. I've found they can be off.

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  96. I truly am amazed at how many talking heads just ramble on....they have an expert in front of them and they waste time with their dribble. Duct tape comes to mind!

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  97. It's called Ichimoku Cloud I believe

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  98. If Crude can break below $105.....I think the selling would intensify in the equity markets. Anyone chart Crude (cash market)?

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  99. Yup, all gaps are closed now.  As far as I'm concerned, and in light of the incessant pumping and determinations shown by the oily skanks who run this world, that's probably a green light.  gaps closed

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  100. My TA analysis for a local top has already been initiated but it should be understood that this is only a requirement and not an absolute.  A local top during an uptrend (not a correction during a downtrend) is always characterized by at least one index (RUT or SML, MID, SPX) closing above its upper bollinger band and then at least two of these indices subsequently closing below their previous 5-day low.  Again, there are many instances in which this would occur but the market then just continues higher.  The area of a local low is always characterized again by at least one index (RUT or SML, MID, SPX) closing below the lower bollinger band and its previous 20-day low.  Depending upon my signal condition, it is possible that this local low condition is again not absolute and the market continues to put in lower lows over a number of subsequent days but the bollinger bands always come into play.

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  101. I'll visit later tonight after I've rifled through the widows and orphans assets. Probably have to grow a handlebar mustache...slick back my hair.

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  102. Nenner:

    Only a close below the following levels will be a short term sell signal:S&P close below 1380;Nasdaq close below 2699;Dow Jones close below 13007

    We saw the expected short term bounce in Gold and SilverHowever, Silver closed exactly at our target of 32.80, but not aboveTherefore, for now, we are not chasing the buy signal, and continue to standasideA close below 1673 for Gold and a close below 32.40 for Silver will be afirst signal that the bounce is overThe daily cycles are still projecting a tradable low by mid-APR

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  103.  Interesting stuff Rich, thanks for sharing.

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  104. Folks, I just want to point out what kind of superb individual is running this site.  As some of you know, I have trouble posting on sites that feature Disqus as the comment handler.  That fact is due to the effects of trolls having in the past (and apparently 'still') flagging my comments.  As long as the blog owner corrects Disqus, slaps it on the wrist, by retrieving those innocent comments that were placed into the spam bin, Disqus will learn to leave those innocent commenters alone.  Pretzel does that.  He did it today and retrieved my deleted comments from the spam bin.  One other prominent blogger does not and therein lies my problem.  The primary troll is active 'over there' today and apparently here as well.

    All I can say is THANK YOU PRETZEL.  You might be my savior yet and more than likely we can get that idiot taken care of for good.

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  105.   $VIX daily and bullish Inverse H&S confirms, 19.50 target, 16.58 confirm, 14.25 fail, supports SPX Bear Penant, 1388 target, 1410 confirms.  Abagail doolittle.. food for thought peeps

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  106. Thank you for sharing this, Max.

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  107. Another quote of the day: "The market is slightly overvalued. So buy, kicking and screaming, on dips." :)

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  108. I just looked at PCLN for the first time in a while.  Wow!  Some way OTM PCLN puts don't seem too bad of an idea as lottery tickets.  (not trading advice!).

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  109. not quite sure why ppl are going long, the down 80 to 120 back to 80 $INDU may be in play, still see strength oscillators pointing to lower, tgt is 90 es.

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  110. See if you like this one from ForexPros:
    http://www.forexpros.com/forex-tools/fibonacci-calculator

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  111. CVX I think completed the iii wave within the fifth wave of 1 down. A 38% retrace moves it back to $106.09 and then the final fifth to either new lows or truncation. 

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  112. Getting slaughtered on my SLV long position / added @30,92 / buying the dip :-)

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  113.  I researched the Elliott Wave Oscillator at lunch time and it appears to be identical to Bill Williams' Awesome Oscillator.

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  114. PRETZ FOR PREZ...he's a good guy.

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  115.    VIX Option Update...   Contango is reducing in back months..     Still in UVXY and TZA.  No XIV rebound play yet.

    http://www.youtube.com/watch?v=C4QOCjSGCZ4&feature=plcp&context=C4558477VDvjVQa1PpcFP8gF6YbVbpVy4YB9mvfz9U3bbEUuLtU7s%3D

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  116. I like the EW Oscillator for three wave ID and then fifth wave Non-Confirmations. Not familiar with BW Awesome O

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  117. Good afternoon PL,
    earlier you said re INDU.... " .... in contrast to the beautiful impulsive .... rally."
    Maybe this is a truncated 5th with all the implications that brings?
    Kind regards,

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  118. SLV in the money April 27 call gets $4....Nenner is looking for Silver to bottom in April.

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  119. Good afternoon BE,
    excellent analysis, fits nicely with the ichi moku.
    kind regards

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  120. According to my analysis we are in the E wave of  4 on crude oil, with a push up soon to start wave 5, reaching $112-$114. This also goes along with Pretzel's bullish view on SPX. 
    Would appreciate any other views on where crude is going.

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  121.  Keep in mind that RUT, CAC, and FTSE are at the same level they were at in early February. The RUT advance decline line has turned down since that point:

    http://www.masterdata.com/Reports/Combined/ADLine/Daily/$RUT.htm

    Tops are a process.

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  122. Thank you for noticing UKDNY, I'm still learning. BTW...bless you!

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  123. truerangeballisticMarch 28, 2012 at 8:05 AM

    I agree. Plus I would look for the 55 day sma to flatten some at the circle. We still have a pretty good down draft going imo. Like always I could be dreaming. Notice the hook on the MACD though. That could be a hint higher. Appreciate any thoughts.

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  124. Good afternoon JBB,
    it was 'invented' by a Japanese guy many years ago. By hand!!!
    The formulae are quite complex but these charts are widely used in Japanese pro trading.
    Ichi Chiku is considered the most important, but they all count.
    Your charts should offer you the chance to draw them (eg Forexpros ).
    I did have a book by an English lady trader but can't find it... but Google or Amazon should provide.
    No use at all for short term trading, sideways trading or less than daily charts, but when they all turn down... it's over.
    kind regards

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  125. Anthony SwiderskiMarch 28, 2012 at 8:09 AM

    Treasuries not confirming equity move (yields are higher), Dollar only marginally stronger,  Dow Utilities down more than industrials or transports, and PL's primary count calls for higher prices

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  126. Anthony SwiderskiMarch 28, 2012 at 8:13 AM

    Going long NQ at 2751.75 and picking some TZA puts 

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  127. Thanks daniEWT.....P&F on crude $105 is the neckline

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  128. $INDU touch minus 120 points yet?
    TVIX up 18.48%
    $VIX up 8.40%
    gotta follow the signs provided

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  129. WOW....dialed up some info on Ichi Moku and I'm sure one needs to be a brain surgeon or rocket scientist to use that. Are you either.....? Performs well for you?

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  130. here's the book I had.

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  131. How are your $INDU changes measured? Just today or from recent high yesterday?

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  132. But even from the high yesterday, it has only been down 194.74 at one point.

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  133. opening, this 'rule' is based on many years of observation, not always perfect to the exact point but more of a movement relationship. Like the $INDU rule as the numbers are easy to remember.

    I think what ppl do not understand is that a mrkt that starts on one path, either up or down, usually continues on that path til eod. that is when we get a day with substantial movement involved. 

    my TVIX tgt is 10 to 12, that will be about a double from where I purchased it.

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  134. there, $INDU down 120

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  135. Yes giarc, tops are usually a process and not an event as bottoms are.  I do keep daily tabs on the A/D Lines and am aware of the divergences they're revealing.  I don't know of anybody who has been as bearish as I am, for as long as I have been, based solely on my understanding about why the deflationary scenario should be what we're facing here.  But the deflationary process even come close to evolving, even in light of the fact that Greece just defaulted.  Instead, the equities markets world wide celebrated the glorious event of  Greece's giving birth to a dead baby by ramping up the markets to the tune of about "double in a year". 

    The A/D Lines definitely suggest a pullback, but that's as far as they can see into the future.  Unfortunately for me (or "fortunately", I'm not sure which) I'm now starting to realize that the world's central banks will stop at nothing.  The effects of their efforts are becoming abundantly clear.  What remains to be seen is how long they can keep it up.  It's starting to look to me that the answer is "for a lot longer than the deflationary theory suggests".  This current pullback will go a long, long way towards answering that question.

    Thanks for that link... I'd never seen that before :-)

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  136. Thanks for the chart. I'll include my chart. Please excuse the sloppy drawing.

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  137. TZA at high of day ...    TNA at low of day.        Call volume on all VIX   UVXY   VXX  pumping.. S&P below 1400..   If DOW breaks 13,000,  will people have stop loss orders set there??  may feed the Fear play some more below?  Watching  DOW..

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  138. Anthony SwiderskiMarch 28, 2012 at 8:35 AM

    For anyone interested, Doug Kass covered half of his SPY shorts at 139.8

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  139. Thanks...very helpful. Now I see why Crude hasn't broken the $105 level.

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  140. Good afternoon again BE,
    well yes I did consider neuro-surgery but settled for family medicine, that way one gets to meet complete real people not just their brains!
    But I have to say point and figure are utterly beyond me, despite trying for ages and and ages.
    Might as well be Hungarian or Maltese, the 2 most difficult languages I believe.
    But the Hungarians and Maltese don't seem to have a problem  :)
    I see you don't with P&F 
    RESPECT.
     lol
    kind regards

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  141. doji on the 15, prolly up til RTH eod

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  142. truerangeballisticMarch 28, 2012 at 8:38 AM

    Next stop -80 then back to -120? Just curious as to how this works. Thanks Katzo7

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  143. just touched down 120 points. do not try to get a job on Wall St. with this on, it is mine, and prolly imperfect :)

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  144. sold   UVXY 17.75   Bought XIV  11.11     will see 

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  145. time running out in RTH day, who knows, up for a while, think down more tomorrow or Globex

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  146. NQ100 futures touched 2750 and rebounding, further down only if this critical level is broken. Trying to read the coffe grounds of weekly options open interests, seems that SPY 140 is the level targeted for the month end. 

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  147. truerangeballisticMarch 28, 2012 at 8:45 AM

    Yes it is and think you for your input.

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  148. NDX 5 down with extended 3rd, good bounce.

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  149. i may be wrong about up ROD, if 96 es breaks a good possibility we fall til eod.  IT direction has switched to down.

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  150. Based on DJIA non-confirmation SPX high - this other scenario ST must be considered and still fits PL's longer bull charts.

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  151. The Opening Price Principle states that the opening price will be very near the high or low of that day 70% of the time.  In other words, the opening price will be within 20% of either the high or the low for the day about 70% of the time.  Larry Pesavento wrote a small book on that topic.

    So another way of looking at it is like this: only 30% of the time will price end up in the middle 60% of the daily range.  I've found it to be quite a helpful little tidbit to be aware of.

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  152. Anthony SwiderskiMarch 28, 2012 at 9:01 AM

    Out of NQ at 2766

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  153. Dow bounces off wedge trendline support again.

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  154. sold    XIV 11.45        Bought   UVXY   16.75

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  155. Jason,

    What do think about the possibility that the S&P 500 topped on 3/19 at 1414, and that price action since then is tracing out a flat (3-3-5) correction (Wave A= 3/19 thru 3/23 decline, Wave B = 3/23/ thru 3/27 rally, Wave C = currently underway off 3/27 high)? This interpretation seems consistent with the new high made on 3/27, as Wave B's tend to retrace 100 to 138% of Wave A's in Flats (per Frost & Prechter, Elliott Wave Principle, p89). Also, this view might explain why NYA & DJIA have not made new highs. To my novice eyes, this view appears viable, but of course you are the pro. I am very interested in your reaction to this idea.

    Thx,

    -Will 

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  156. Good afternoon to you Doctor. P&F definitely not my strong suit....actually, don't think I have a strong suit.FYI...Here is a site with P&F plug and play options. It may amuse you. 
    Ichi Moku...worth my time researching it?    
    http://stockcharts.com/def/servlet/SC.pnf?c=cvx,P

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  157.  Kazo,

    This is Q end rotation time, the market will be down in the morning, up in the afternoon. This morning, people were dumping big cap, AAPL, energy, material, etc. And snapping up GOOG, small cap, high beta stuffs, etc. It will be up and down till Friday, IMHO. :)

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  158. I was at the hospital for most of the trading day but could see AAPL was starting to fail - I thought that would take my sell signal off the daily print but it's still there.  I'm going to hold on to my puts if the sell signal looks like it will print for the day, else I'll close for a very modest gain.
    Just so everyone knows - it's the biggest companies now that are keeping to SPX index treading water.  When they start to break down all bets are off.  I'm not ruling out another push higher (1450ish) but based on a short term trendline being taken out, 1400 being tested, and my sell signal, I think yesterday was at least an intermediate top.  I'm targeting 1380 and 1350 for longer term trendlines as possible close points for my puts.

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  159. TVIX article from optionMonster -- http://www.optionmonster.com/news/article.php?page=tvix_fiasco_shows_why_buyers_must_beware_67503.html&src=msu

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  160. I've been watching HPQ closely and believe it is in a complex correction, fourth wave, with a-b in place. C wave should take on the characteristics of a five wave up. Looks like the low of $22.92 and then the recent high of $23.97 are forming 1 of C and the two wave correction so far has stopped at the 50% retracement. Wave 1 = 1.05 X 1.618% = 1.69. Wave two low so far is $23.45, so the third wave up should carry to $25.14. Mercy...I hope the fifth wave is extended cuz I'm looking for $30 to get out of my long @$24.04. ($30 would be approx 38% retracement of wave 3 down)

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  161. I just re-read Jason's post.  my 1380 target and today's action goes very nicely with Jason's hypothetical topping diagonal.  If that unfolds, I expect my signal will hold throughout the diagonal and finally stop as the market begins it's final descent.

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  162. AAPL just turned around and is heading higher.

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  163. Good afternoon MM,
    I think it likely too that SPX has topped, at least for now.
    And AAPL looks like an ending diagonal to you?
    It all looks very bearish to me.
    kind regards 

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  164. Good afternoon Frrrryone,
    Nice chart. Very possible, but 'proof of the pudding etc etc' .We'll see soon enough.
    kind regards

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  165. agree -  Mercury is still retrograde to 4/4 - TA fakeouts.

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  166. Looks plausible wave 5 of an ending diagonal has just begun.  Please don't confuse me with an EW expert though.  I'm a rank amateur.

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  167. thing is, the 'B' wave is a really nice countable 5 waves up.
    Usually 'B' waves are a mess and obscure, difficult to count.
    Also, there are 5 nice waves down from the top.
    True, could be a 'C' but on balance, we've topped I think.
    'twill all be clear in the mornin'.  :)
    (We have a nice view of Jupiter in the south at the moment, bright bright bright.)

     

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  168. And it printed on the daily.  Nice diverging action on MACD on the SPX hourly since March 13th too... very very bearish signs I think... I think Jason's ending diagonal is in play and would fit nicely with what the action has looked like with past sell signals.  If so, the sell signal hold through the diagonal.

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  169. On another note, be aware of Sun square Pluto waxing exact tomorrow afternoon which should reveal something not accounted for to date - and could be negative.  Saw your count the other day for a complete five - also in my count possibilities.

    Kind regards also.

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  170. hi everyone,
    i'm not a bear nor a bull. i play the VIX by the idea that the market will not die because that is the over all interest of many parties out there.  i do believe in heart attacks in the market but not an absolute death.

    i just want you to be careful when you bet against the market.  it's your decision of course, but just be careful out there.

    if you look at the VIX April 17 strike calls today, it ranged from 1.83 to 3.10.  it was high most of the day and tanked back down to around 2.10 (at the moment).  the people that bought it at 3.10 (betting that the market will tank more) would be hurting big time right now.  

    please please be careful and never jump "all in", and never bet on the death of the market.

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  171. when playing with VIX options contracts, unless there is a potential black swan where VIX will spike up to insane levels, the VIX will always want to decline (because the market will always want to return to "stability").  

    in other words, if you think there will be a lot of fear for a long period, go long on VIX.  if you think there will be fear but only temporary, then you should either short the VIX at the HOD, or go long the VIX at the low of the day early in the day (if you go long towards the end of the day time decay will sink those contracts right back down).  you should also plan to close out all your VIX contracts before the end of day.  this will give you profit and save you your shirt if the trade against you.

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  172. When asked how they would beat the looming recession,
    the world's countries all said 'we're going to increase our exports and reduce our imports'.
    How does THAT work?
    However, your biggest customer, Europe is in deep trouble so take heed.
    Here's Europe's Finest Fifty.
    kind regards

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  173. Beggar thy neighbor, all over again hey?

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  174. Good afternoon WM,
    FRRR posed the same question earlier, he has some replies.
    kind regards

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  175. Good afternoon GPitt,
    have you tried chicken entrails, or Voodoo? Works for rme  :o)
    kind regards

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  176. here is my YM 1hr chart....notice the vpoc below and the dotted horizontal lines.....those lines provide very nice support and resistance....i guess u could think of them as pivots but i dont calculate them in the same way

    the trendlines tell me direction is still up and until 1) 12960 is taken out and a lower low is established and then 2) we take out price at the very important date of 3.6.12

     

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  177. tvix maybe waking up. i'm in at 20, 16, 8 and 6. loaded up most at 6. its cheap i think. should run up to 15 area with a spx correction to 1320 which the charts show supports there.  easy money i hope. nobody mentions it much anymore. they already swindled the money. time to get back in methinks

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  178. Good afternoon klout,
    Nice chart, all your own work I take it?
    Two trend lines from 4 oct and 19 dec crossed beneath INDU today at 13040 and will rise of course.
    Are you saying that a close beneath them would not be relevant to your interpretation of the trend?
    I'm sorry but I don't understand your acronyms so forgive me if I misunderstood.
    kind regards

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  179. AR,

    Continuing the discussion from below...

    Where you see markets on pace to double in a year, I see a trillion dollars of easing required just to bring the markets back to where they were a year ago. 4 of the 6 indexes you mention are still below their 2011 highs.

    I would also say that increases are the result increased willingness to speculate rather than inflation. There will come a time when people are unwilling to speculate as a result of more QE.

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  180. Hi Bob_E,
    had a good look at the P&F site. Made me lose the will to live so... 
    on balance, I'm going to attend Hungarian language classes taught by a Maltese.
    Should be a fun day. lol
    kind regards

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  181. @UKDNY, From my perch (and admittedly I probably lack the extensive EW background that you may have), there appears to be too much overlap to count potential Wave B up (i.e. the rally from 3/23 to 3/27) as impulsive. If on the other hand, it is counted as a three wave pattern instead, then the five down off yesterday's high makes sense, as it would represent the final leg of a 3-3-5 flat off of the 3/19 high. Any feedback (positive or negative) regarding this view is greatly appreciated.

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  182. Katzo, I have a question. From 14:10 to 16:00 in today's UVXY chart, is that a complete 5 wave down? If so, is that s spot at which you would buy it (almost at the close) or would you wait for the next trading day?
    Thanks.

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  183. Oodles of action in UVXY today. Looks like the crowd showed up at the door at closing time and started throwing their shares over the transom.

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  184. Doug has been suffering with his shorts. Has some good longs, though, like IFF and WLT. He sure puts up with a lot of pooh from some of his subscribers.

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  185. broken etn....avoid at all cost IMO....don't expect to make back your money in it. If you do, ya got lucky.

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  186. I'm considering how I want to close out my puts (deep ITM sep expiration on SPY).  I see two possibilities: 
    1) the market deteriorates from here and I strike it rich 
    2) the market does some version of Jason's ascending triangle and then corrects (and I strike it rich)

    So that leaves me with two options on how to play it:
    A) Hold until the correction.  If 2 is in play, alpha should exchange for time value.  A KO stop at a loss of my sell signal or 1460 SPX should limit my losses to 10-20% (hopefully).
    B) Set a trailing stop for this leg and re initiate higher.  Safer than option A, but a zig up can stop me out and miss a whole lot of downward price action.

    Here's what I'm thinking: place a stop at 1460 initially.  Close trade if SPX goes up AND sell signal goes away.  Close trade within 3 weeks regardless of price action, unless market has started precipitous decline and no clear bottom in sight.  If SPX trades below 1400 prior to breaking 1410 again, place stop at 1400.  At 1380 and 1350 long term trendlines, close if SPX meets support and rallies 1 percent off trendline.  Reinitiate near 1450 if sell signal still present, or 5 min SPX print below trendline.

    I hope that makes sense.

    Navy is sending me to Ottawa for a few years to play with the Canadians :-)

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  187.  Bob, I'll be looking for more of your analysis of CVX.  Thanks for the input today.

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  188. agree. it runs -14% per month so unless the world ends, it's an expensive proposition. Also read an article about how the dumb money got burnt on last weeks tvix implosion, so if the dumb money is betting on volatility, then less volatility is probably the best bet. makes sense.

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  189. I know the situations are tough for you when market is against you but hang in there.  I think the ship is turning.

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  190.  yes these are all my charts and my custom studies.  my harmonic pivots start at 12960

    12960 is my key pivot...if market breaks that price lower and closes below 12960 i think the market moves lower short term.....if it continues to move lower and closes below the 3.6.12 price then i will load up short

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