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Sunday, March 25, 2012

SPX, RUT, NYA Updates with Bonus! Silver Chart: What Happens Next is Likely to Determine the Trend for Several Weeks

Friday provided a new low, but it wasn't really the "type" of new low I was looking for -- it was too shallow.  So there are still several options open.  As I stated on March 16, when I suggested a turn was coming, the bigger question is what degree that turn would be.  Well, now we've had that turn, but the market still hasn't answered the question. 

I'm still leaning toward the view that there is now a more meaningful top in place... but in continuing to attempt to examine the charts as objectively as possible, I believe the bears absolutely have to keep this market below the prior swing high -- if they can't, then we're almost certainly headed into the mid/high 1400's... or beyond.  In fact, some quick "back of the napkin" calculations suggest the 1500's would be on the table. 

I see very little in the way of middle ground here, so this strikes me as another critical inflection point.  A big reason for that view is the NYA chart.  A fair number of Elliotticians are still looking at this as a larger possible fourth wave correction, but NYA has ruled that out, due to key overlap of the first wave.

So, from what I see, this is either the start of a bigger decline -- or it's only a 2nd wave correction, which means there should be a solid amount of continued upside.  In fact, if this is a 2nd wave correction, then that suggests a strong wave up is on deck. 

On NYA, we can also spot a nice clean red wave (iv) triangle just above the recent lows.

As noted on the chart, trade above 8252 will increase the odds of eventual new highs. Trade above that level doesn't mean the correction can't stretch on further first, but it does greatly increase the odds that this wave is only a correction.


Let's look at some other charts.  As I said: objectively, these all look like small A-B-C's right now.  The only thing still leaning me toward a bigger top is the larger structure.

Short term, the SPX has a small overhead gap that could become a retrace target.


RUT should also provide some good clues.  If the overhead triple-confluence resistance level doesn't contain the market, then bears will probably need to wait a while for another intermediate-term opportunity.


Here's a bigger picture chart of the SPX showing the two potentials.  If the recent highs are taken out, then we can expect the trend will remain pointed up for at least several more weeks.  If they're not, then bears have free reign to run with the ball.


In conclusion, I'm sticking with my call for a larger turn based on the bigger structures -- but the short term structures have added zero confidence to that call, and in fact seem to be suggesting the opposite.  A break of the recent highs will turn me short-term bullish.  As I see it, the trend of at least the next few weeks should be determined by what happens at this juncture.  The good news is: whatever happens here should provide some solid trade opportunities for either shorts or longs.  Trade safe.

Alert!  Alert!  Just added:  BONUS SLV chart, yours absolutely FREE in honor of our
1,074,716th hit! 

(Actually I added this in honor of numerous loyal supporters/readers who follow silver.)

The chart is self-explanatory. 

195 comments:

  1. truerangeballisticMarch 25, 2012 at 7:47 PM

    Good evening. Nice work once again. Thanks for your effort.

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  2. Excellent article PL...a very nice surprise. Thank you...now I can get some rest.

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  3. Dare I suggest that I think the bears are getting hysterically obsessed with what are largely irrevelent micro-cycles. Every down move of 50pts on the dow and the doomers come out, and start calling the top. We've all done it, not least yours truly.

    The bigger picture is clear. Monthly cycles are ALL saying UP. There is no sign of a turn. Not even the most bearish poster has the right to suggest the main trend is not currently UP.  To say otherwise is either an outright lie, or pure delusion. Delusion on the same level that the bulls have of the economy being 'on the mend..and everything is gonna be fine'.

    I'm almost hoping we do get to 1550', not because that just means its a simpler - and safer place to short (with valuations much higher of course), but because I'm actually growing tired of the incessant posters who refuse to acknowledge the broader trends, and instead are fixated on tick by tick moves. Its boring, and if I can see past it, then I'm bemused as to how others can't.
    -

    Pretzel, I really like your smaller cycle work, its superb. Thats why you have a steadily growing legion of followers. However, I'd like to see your analysis if you just post up a few of the monthly cycle charts. Doesn't much matter what indexes you choose, maybe even look at a few of the world indexes?  I'd really like to see how you interpret those, without ANY reference to daily, or weekly counts etc.

    I'm sure you could probably discuss a lot about the underlying economic fundamentals too, but maybe leave that out of what I'm suggesting too. A pure consideration of the market, on a month by month candle basis, thats what I have in mind.

    Its just a suggestion of course, and I'm sure you are busy with other things too.  I think it might be useful though. Coming from a Permabear Doomster, maybe that counts for something.

    Good wishes.

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  4. Hi PD.  I do view this as a bit of a "last chance" for bears for a while here, as stated in the article.  I'm waiting to see how it resolves before putting up more big picture charts. 

    As far as trend: I have continually stated that the trend is still up, going back several months in my articles -- to the point where I've stopped stating it out of being overly repetitive.  You can, however, still see that reflected on the charts, "First warning of trend change will occur..." etc..  Obviously, a trend *change* implies the trend is still up until proven otherwise.  

    Not sure how much of your post is directed toward me personally, but I feel I should also mention that I called this turn before it hit, not after the "down move of 50pts." 

    Not sure if you're a new reader, but I spent the majority of the last couple months looking for higher prices -- not the entire time, mind you, but the majority of that time. 

    Regarding world indices, I put up some DAX charts fairly recently.

    Anyway, thanks for your input, and welcome to the blog.  :)

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  5. SLV/15

    http://www.screencast.com/users/katzo7/folders/Jing/media/2724d604-49fc-4e5c-b4b2-9c2469a9ad10

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  6. No, please don't mis-understand. I have been following you - mostly in the background for a long while now. I'm one the many silent lurkers who has finally come out of the shadows. I myself was long from the October' low too (called it to within 3 hours), rode the November down cycle lower, and went long again on within a day of the low. I watched you, and a few others pretty much call the low, and generally be on the right side since then.

    I always tout you as one of the leaders out there, hey you're in my top'7 on my little page, so no complaining ;)
    --

    I am thinking more in a general sense, that right now we are once again at a point where we had a few minor days lower, and I see many posters out there pretty much getting hysterical about such minor moves. Personally, I've come to regularly suggest now to those I know "unless I see dow -175pts, I ain't taking it as anything other than 'noise' ".

    The one thing keeping me balanced right now...are those monthly charts,and they all broadly agree where we are headed. I find it difficult to even type 'SP'1550', never mind seriously trade it that way, but thats how I see things.
    -

    'If 1550'...then there won't be many of us left of course in the doomster-camp later this summer. Doubtless many that remain will be going max-short around 1435/40 (if we get there)...and if we go much above 1450, then..many of those shorts will still hold all the way up to 1550. It will be nothing less than a Greek Tragedy.

    I for one aim to be here to the bitter end, I know you will be, you're way more balanced than most of the chart-maniacs out there. Hopefully, a significant number of your legion will also be here too.

    PD.

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  7. You just inspired me to add a SLV chart to the article.  For KB03, T_winn and all others who follow silver.  :)

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  8. Thanks for taking the time to clarify, PD. 

    I agree that it's nothing to get excited about yet.  Basically, the larger structure, and the potential of a complete 5-wave form, is keeping me from getting uber-bullish right here.  If we do take out that recent high, then I don't see much hope for the bears for a while -- and I fully agree that the 1500's will come into play at that point.  Unless the market forms an ending diagonal or similar, I suspect I won't be suggesting swing shorts in that 1435/40 area at all.  I think anyone who does so is errantly believing this is a 4th wave correction with only "one more small leg" to come -- and I'm just not seeing that.  As I said, if this ain't the top, then the next wave up should be powerful.   

    I'm just waiting for the market to clarify.  Appreciate the discussion, thanks for sharing your thoughts.  :)

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  9. Great idea. You inspired me to add $RUT, very inconclusive at this point as you suggested. Nice post PL.

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  10. $RUT/120, two ways.

    http://screencast.com/t/w6e0vvmb

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  11. Thanks, katzo.  I know I've thanked you before, but I appreciate all the charts you share here and your willingness to answer the other posters questions -- good stuff!  :)

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  12. Dow futures down a whopping 2 points.  All those longs who bought at the close on Friday are *trapped* now.  Game over!  :D

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  13. Great work PL - its hard to learn this stuff but your explanations are clear and concise. hoping to turn a profit soon :).

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  14. short es 1399, SL 1401

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  15. TVIX muppets were betting on volatility and got smoked, so market probably heads higher.

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  16. Short 1 ES at 1402.5

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  17. 2 pts have become 70. I guess GS is right. Best time to buy stocks is now.

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  18. Chicago FED National Activity Index came in at -0.09 vs +0.22 last month.

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  19. The knife catchers since Thursday morning are a true classic ezample of why its best to avoid getting involved in such hysteria driven things.

    I saw so many posters noting their buys at 13, 12, 11, 10, 9, 8, 7...and here are..a mere 13 trading hours later since $14...and TVIX is $6.50  pre-market.

    Anyone wanna counter my idea that TVIX will be the equvilent of $1 , if sp'1550 and vix <12 by late summer?
     
    *I say 'equivilent', since they'll doubtless do a reverse split by then...same for UVXY.

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  20. The market doesnt seem to think that it is relevant. The inexplicable buying spree continues.

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  21. Anthony SwiderskiMarch 26, 2012 at 2:53 AM

    Not inexplicable - Benny and the Jets Bernanke hinted at QE3.

    http://www.zerohedge.com/news/futures-precious-metals-soar-bernanke-says-more-accommodative-policies-needed-hints-new-qe

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  22. Good morning all. Another nice article, PL, as usual. :-)

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  23. Good morning. ES is currently trading at 1402.75. ES 1395-97 was crossed with conviction overnight, which makes me believe that the major trend remains up. A successful retest of the 1395 level followed with a bounce up would just confirm another leg up, with target around 1415-17. A failed retest could bring ES down to 1380. I favor the former, as NDX is making new highs and RUT is almost there. Hopes for bears rely on the fact that RUT is however reaching its upper channel border, so this could represent some resistance; and AAPL is sitting on the 600 vicinities, without any big gap up expected for open in 20 minutes. Plan for the day will be go long upon retest at 1395. No trading advice.

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  24. truerangeballisticMarch 26, 2012 at 3:22 AM

    I am thinking your first chart will play out. A close above 833 and the RUT will head to the 868 area, imo. Thank you for posting and your analysis. Much appreciated

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  25. that is correct level imo, me too

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  26. I thought we would hit 1403.5 (which we did), but I was more afraid that I would not be able to short at that level (so I settled for 1402.5).

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  27. eur/$$ up, shorts should be held ST in duration

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  28. Pending Home Sales = -0.5%  vs +1.0% expectations.

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  29. I see NYA traded above 8252 by a little (8259), increasing the probability of new highs.  I am looking to get long...

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  30. Did the market make up its mind? Or not yet?

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  31. So I believe that the RUT has knocked out the preferred count and higher highs on in order?

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  32. And so the endless vomiting of FIAT cash from the Fed continues. . . 
    As PL said, it looks like a top is in but other indicators says its not so don't short it just yet.

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  33. Bernanke: "My finger is on the QE3 button." :)

    Market jumps with uncontrollable excitement on the FED hopium .... :)

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  34. And so the vomiting of FED Fiat cash continues . . .
    As PL said, it looks like the top is in but other indicators say don't short the market just yet.

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  35. Yep.  This move could run if this is a 3rd wave up.  This is probably just 1 of 3 right now...

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  36. Bizarre.  I seriously doubt they're considering QE3.  They would have to be insane.  Doesn't matter though, for the market, perception *is* reality.

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  37. Dallas FED Manuf. Survey   +10.8% vs +15.5% expectations

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  38. Not Bob Dole. :)

    1994: Forrest Gump: invest in "some kind of fruit company".  

    http://www.youtube.com/watch?v=SNa4EMUWnAc&feature=youtube_gdata_player

    If we only would have listened to Forrest Gump... 

    2012: A real fruit company. :) DOLE. Check it out. Or keep on your watch list. From a EW perspective could be a longtime long. But just one trade of a lot for me. 

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  39. I am beginning to think that I have to be insane to think that the FED is not insane... :-o

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  40. AAPL is the conundrum today... did not touch 600 (the maximum I see is 599.99!) and is not following the overall market excitement around addiitonal QE, at least for now...

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  41. Quote of the day: "Why? A kardash is a time unit, of course. Which is 72 days."

    Note: Kim K. dumped the love of her live in 72 days. :)

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  42. truerangeballisticMarch 26, 2012 at 4:45 AM

    This does feel like desperation on hopes of more QE. This is not the slow melt up.

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  43. Ben is truly psychotic if he is actually considering it...but he may very well be...anything to save his masters on the taxpayer's dimes --- strike that. I meant dollars (wheelbarrows full)...BTW, I'm really getting sick of his chit eating grin.

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  44. It might as well be its own index...well, I guess it is...duh.

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  45. An analyst said on MSNBC that AAPL is facing carrier revolts. They have to shuffle their hard earned cash to feed AAPL.

    And they can't take this anymore. :)

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  46. It hit 601.21 pre-market.

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  47. VXX is currently supportive of a down move, at least short term.  Note that this could change in an instant.

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  48. VXX is currently supportive of a down move, at least short term.  Note that this could change in an instant.

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  49. Yes...Bob Dole is "another" kind of fruit. I like your sense of humor!

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  50. anybody like tvix here. ev1 liked it at 20 so wouldnt 6.5 be a better buy. hope for volitility. guess vix needs to move back over 20 something for it to move up. bought some more tvix this mornin. doesn't look pretty...

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  51.  Judging by the volume, he scared the day light out of the shorts.

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  52. No great revelation to say that LT, IT, ST and VST trends are all still bullish here.     (The ST was fuzzy as of Friday's close, but no more.)
    Best case for bears is that today's move gets sharply retraced tomorrow and we begin forming an ED.
    However, that expectation looks premature.   My monthlies suggest patience through April and then see if Sell in May plays out.   And my weeklies while extended can stretch further, although we're bumping against the upper bollies.
    Re the PMs (lets say silver), I have this bounce fading by the end of the week ...  so the (IV) and (V) will become AB of IV, and so V down remains.  twt.

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  53. My problem with TVIX has become "unhinged" from the supportive index.  I've never used TVIX or UVXY, but  I do play TNA and TZA so am used to levered ETF's (or ETN's in their case). But todays action is a continuation of proof that the product has a mind of it's own with no relation to the index it's supposed to mirror (yet magnified). the VIX is up .61% as I type this, yet the TVIX is down 9.22%, and the UVXY is downn 11.62%. Trading these at this point is a very dangerous gamble in my book, although every trader has different goals and risk tollerance levels.
    Just saying, read and learn about the products current actions before diving in.

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  54. A few posts back I highlighted EXAR and INFN. Today Seeking Alpha ran a commentary on the EXAR issue. A new 52 week high is in the offing today on what appears to be light volume. I've attached the link to the article FYI.....caveat emptor daily,weekly and monthly stochastics are in nose bleed territory and keep in mind George Soros owns 6.6 million shares at a price between $6 and $7.
    http://seekingalpha.com/article/457511-exar-corporation-buyout-candidate-at-16-plus-with-a-margin-of-safety?source=yahoo 

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  55. I won't touch ETNs as a matter of general principle in our current state of affairs.   Esp. not if the issuer is a Euro bank.
    As for UVXY, I'm NOT CLOSE to a buy setup on my daily.   But if an ED is playing out, it could be rewarding on a 1 day gamble.    My hourlies are hinting at that possibility already.   

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  56. Thanks PL for the chart on silver and for Friday's warning of possible strong upside in the markets.

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  57. Anthony SwiderskiMarch 26, 2012 at 5:25 AM

    For anyone who cares: Doug Kass tweeting about an hour ago that he is highest net short in several weeks.

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  58. Rocky Top Gunner, if you took the AMZN Trade to the long side be advised I am taking profit here at 199.5

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  59. PMs strong, SLV up 2%, both PL and I charted it this morning.

    http://www.screencast.com/users/katzo7/folders/Jing/media/2724d604-49fc-4e5c-b4b2-9c2469a9ad10

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  60. TRB closed longs am waiting to see if we back and fill to reload

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  61. It'll become relevant when more economic bad data showing up.  Right now, the market is feeling good under Fed's morphine - QE3 hint, so it won't feel the pain temporarily.

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  62. truerangeballisticMarch 26, 2012 at 5:38 AM

    I am still hoding my RUT APR 830 calls. I cannot believe how this has flatlined at 844. It almost looks like a bear flag on the 1 minute chart but I doubt it. I do think we see 860 soon. I could be very wrong but facts don't matter anymore. You even hint at QE and the junkie goes crazy. What does your magic 8 ball say? Just trying to be somewhat funny. Thanks for your comments.

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  63. truerangeballisticMarch 26, 2012 at 5:44 AM

    If we get back to 839 or 840 I think I will load up on some 850 calls. We will see.

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  64. Thank you for the information.

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  65. You're welcome, Ray.  

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  66. Going long on TVIX is essentially gambling at this point. It may pop if the world comes to an end but by then the contango and fees will have whittled it down bigtime. Not a buy and hold product. Plus from the sound of things there are going to be lawsuits and investigations into last week's drop. I think you're in for a lot of pain and sleepless nights.

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  67. anyone think we will retrace to 1400, then wave 3 to 1425 followed by wave 5 to 1440? It seems like those are the support levels that are being thrown around. PL mentioned the 1500s as a target though.

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  68. If anyone still cares about Tom DeMark's sell signal (anyone.......Bueller?), it would only be confirmed by a failure to make new highs here (not sure if SPX highs but not Dow counts), and a major down day tomorrow.  Tomorrow doesn't have to take out the lows of last week, but it does have to be a large down day.  Both seem unlikely at this point, but I wanted to update on this, since it received some "likes" last week.

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  69. Very much interested.  Thank you, HappyJohn.

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  70.  TVIX has pretty much done exactly what it was supposed to do today. TVIX doesn't follow the VIX, it follows the first and second month VIX futures weighted to 30 days. The April and May futures are down big today. The April futures dropped to about 16 from 22 a week ago. The short term futures have finally dropped to a level that I would consider reasonable given a VIX of around 15. Contango is still a bit high though with May futures around 19.

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  71.  EW4 settling back to about 1400 then last blast up EOD, my 1411-12 may be set too high but that is what EWT is telling me.

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  72. I shorted a second ES contract at 1405.5   Are you still short or out?

    I am targeting the 1401, then 1398 areas.  If we break those, I think we have a trip to 1395 or 1393 minimum.

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  73. FYI...NennerNIKKEI – cycles are up into 2014Close above 10,200 is a buy signalHang Seng – cycles are downBombay – cycles are downKospi – cycles are downSilver low still expected in late AprilXOM weekly cycles topped, close below $83.50 is a sell signal30 yr bonds cycles bottom 5/4 then up into Oct/NovAUD/USD cycles down into MayAUD/NZD cycles bottom in JuneRIMM cycles down into May, a close above $17.50 is a buy signal

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  74. BTW someone posted this important point last week. Look up TVIX.IV on yahoo finance to get TVIX real value.

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  75. Nenner:

    The markets continue on a buy signal for now

    As long as we do not see a close for the S&P below 1374, a close for the
    Nasdaq below 2695, and a close for the Dow below 12937, the S&P could still
    reach our longer term upside target of around 1449

    While cycles are still down until the end of MAR, the more important top is
    projected around APR 19

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  76. GLD, SLV in strong up trend, being accumulated.

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  77. truerangeballisticMarch 26, 2012 at 6:46 AM

    Looks like the RUt could get to 838 again. Atleast my magic 8 ball trannie indicator points that way. If it crosses above the RUT it will be time to treload, imo. You closed at a very opportune time. Nice work.

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  78. Good description. They should be careful of mixing prescriptions. :)

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  79. bull flag on the 15 & 60 ES may be finishing up, mrkt heading higher as a result

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  80. Out of ES short at 1404.5

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  81. agan, tgt 1411-12 ES but it may finish up earlier, watchin'
    add plus 4 to get $SPX

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  82. I think it's a good LT position. If you are acquiring over several price points and time, I think you'll be rewarded. As you may know...Prechter has targeted the low 1000 range on the Dow Ind's (surely that's extreme). Nenner, when asked for his target said he envisioned 5000 over the next two year time frame. Not sure what TVIX would be worth at 5000 on the Dow....but certainly better than the $6.37 today. IMO

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  83. Short 1 ES at 1406.25

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  84. bull flag on the 15& 60 still not down imo Authentic

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  85. Here's a chart I put together yesterday when the focus was on the 2 gaps that had developed thanks to a couple of little overnight meltdowns.  Today they're just a forgotten memory.  But the chart in the middle is that of the $NDX (blue) and that one is still pretty intriguing for me.  This chart is from the "for what it's worth" files.  And this is a link to the live "print" version so those who are not subscribed to StochCharts can see the annotations.

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  86. AAPL straight up on the 60

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  87. Stopped out of ES short at 1407.25

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  88. Hi PL, I apologize if you already mentioned the specific recent high, but is your analysis indicating that if the recent S&P high is taken out, the next move is probably up?  Is that in relation to intraday or closing prices?  For example, if S&P breaks 1414 (intraday high), are we more likely to have another move up?

    TIA

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  89. 1425 on the SP500 is the next stop. Thought we were going to see it last week but this week should get us there.
    No stopping this train with all the positive economic news and increased liquidity. Party on!

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  90. divergence appearing, 15 minute. it can still run higher tho and divergence increase even more. sideways base on the 8 may be setting up for last spike higher.
    eod???

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  91. Katzo, it's morphing into a stinking inverted H n S pattern. Looking at 1438 to 1440 if it triggers on afternoon high

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  92. I don't see the inverted H&S.  Could you provide details at what date/time you see the head and each shoulder?

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  93. Since my intuition is probably the perfect indicator to fade, I should point out that today really feels like things will never go lower again, the bear case is hopeless, and that much higher prices are 100% inevitable.  Does anyone else seem to feel that way today after seeing this tape?

    Of course, again, my instincts are very often the ultimate fade, but that is really how it feels to me today!

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  94. I feel that we are at the top here.   I also think that the market may just hover at these price levels or maybe crawl very slowly upwards from here as long as possible in order to provide an excellent level for the MM's to short it.  Then, we'll wake up one day with the market down 20 to 30 ES points lower, and it'll be down from there.  When is anyone's guess.

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  95. chart time frame plz?
    tia

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  96. Go to ES 15min. It's trying to reach ES 1410 and SPX 1414 at this moment, the momentum may carry it higher than that due to DJI. However, it may not close at the high of the day.

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  97. New high printed booom.  Closed my bear spread on open with a 10% loss :-( sold bull call apr exp 1400-1380.  Going to close if short term uptrend re-established today is broken.

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  98. Important inflection point nearing. Confluence of previous high at 1414 and rising neckline of inverted H/S

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  99.  Maybe.  It's one of those days where I pretty much make fun of myself for leaning bearish for so long when the longside was so easy.  It just feels like all bearish hope is lost.  Maybe that means a top is finally near.....if anyone knows for sure, it certainly isn't me!

    I do know that markets can't go up 10-15% every quarter indefinitely!

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  100. Can't have an inverted head and shoulders.  Inverted head and shoulders is a reversal pattern from a downtrend - there is no downtrend to reverse.

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  101. Volume seems low for a day printing a new high.

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  102. HOD 1410.25 es, my tgt was 1411-12, can she do it??

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  103. Don't bet on it...

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  104. Thanks, dle7319.  I don't see it or how it could project to 1438 or 1440 in ES, per DRG62.

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  105. No, it seems that it has reached its target but it may go higher due to the DJI as I said above...

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  106. truerangeballisticMarch 26, 2012 at 9:24 AM

    DRG this upper TL is holding tough but a break would need a reload imo. I reloaded earlier at 842 and change with the 845 calls. Comments are appreciated.

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  107. Got something against guys.....lol

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  108. Feels weird today.....can't put my finger on it. But surely a strange day.

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  109. FYI....VIX below 15 is a good sell signal graph. Something we all know...right?

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  110. The activity on the VIX indexes, ETF's, and ETN's signals euphoria to me, or a mad scramble into risk at all cost.  No one needs or wants protection from any unforeseeable events?  No one wants any downside protection in their portfolios?  Interesting.

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  111.  No VIX has been much lower for years before.   When VIX hits 22 you know there is a trend change and the market is going down. 

    http://finance.yahoo.com/q/bc?s=^VIX+Basic+Chart&t=my

    Look at 2005 to 2007 then back to the mid 90's

    Joe

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  112. I'd say, based on Nenner's comments, that we are probably at a peak right now with a modest correction into the end of the month and the beginning of April. Then the last push into mid April. Window dressing certainly is in order for the INST here prior to the end of the first quarter. Lack of buying of course....begets selling. 

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  113.  nice call katzy

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  114. Missed Friday's close long entry at ~ES 1395 - the picture was mixed by then, as ~1395 was presenting itself as a potential short term resistance (central channel line) after few days with mixed behaviors. 1415-17 remains as a target for this leg up, and may be achieved after hours today. Looking forward, until indices keep trading within upper channels, major trend remains up, and occasional retraces back to channel central levels shall provide entry opportunities. Therefore, assuming that the trend up persists, my next trading level is ~1400-1402, where the next long entry opportunity (short term) should come, perhaps within the next couple of days. I know, going long this straight
    climbing line from January is scary, more and more difficult. I still hold few QQQ Apr puts (riding the wildest animal...), but they're few and there is still some time ahead until expiration, so I am holding. Shorting this unstoppable bull in the meantime is very risky, IMO. One can short anything but central bank intervention - and we have been living times of unprecedented monetary easing.

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  115. i didn't think there was such a thing as a good long term position in TVIX...

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  116. 83% premium has given rise to a TVIX discount (based on NAV) Reversion to the mean anyone?

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  117. truerangeballisticMarch 26, 2012 at 10:52 AM

    Today had that feel of something not quite right. Like AAPL just had another blowout qtr report. I can't quite describe it. How quickly the mere hint of QE is bid up seems almost desperate.  I agree with both you on todays action. I am not really a bull or bear but there is nothing remotely rational about this.

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  118. Has to be.....priced at $17 in June 2011, then $109 in Oct 2011, and now $5.88 in March 2012. Variation suggests tradeable long term price points.

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  119. It surely looks like a bear capitulation day...

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  120. where would one look at the VIX futures...appears you are quite knowledgeable with this asset class. What is reasonable with a VIX at 15? ($6 to $7)??

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  121. This is exactly how I feel.  Higher highs are inevitable.  Liquidity trumps fundamentals so the CBs can hint and print all they want.  And I am with you... should I be thinking the opposite of my intuition?  Mind games! : /

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  122. I like to revisit PL's post at the end of each trading day, and the scariest part today is the possibility that today's action may determine the trend for the next few weeks...

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  123. PL, Katzo & other EW experts:


    I wonder if it’s OK to look at the larger waves of the
    market as follows (using SPX daily chart):


    1.      
     We have
    ABC wave structure with Oct High of 1292 as top of A, and Nov Low of 1158 as
    bottom of B.   C has not completed
    yet.  (1158 is the exact 0.618 retracement
    from 1292).


    2.      
    Possible target(s) for market top at top of C:


    a.      
    1426  
    (1.236 of A where A is 217 pts from Oct Low 1075 to Oct High 1292.)


    b.     
    1458  
    (1.382 of A)


    c.      
    1509  
    (1.618 of A)


    Since this market seems to like the 0.618 (or 1.618) fib number,
    my best guess would be a top at 1509.


    So if I only trade the longer term time frame,   I can just buy the market (SPY or SSO) at
    the next little pullback (maybe some time tomorrow) and trail stops through the
    above Fib levels? and hopefully get out at around 1500-ish or get stopped out along
    the way for a profit.


    This somehow sounds too easy to be true…so just want to run
    it by you guys for feedback.

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  124.  I still see a small premium of about 5%. You can trade in blocks of 25000 shares at NAV so I would be surprised to ever see much of a discount.

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  125. well today was a punch in the face. tvix down again. spx up again. rinse repeat

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  126. OK...so you're calculating a 5% (approx) premium at the current value of $5.88. Where do I see/look at the VIX futures ?

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  127. do not expect tvix to start reacting properly. leave it now...it is broken, if you stay in, your gambling. IMHO

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  128.  thats makes as much sense as any other plan i have heard....some folks r calling this a 3of3 with alot more to come

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  129.  when u look at the index all zoomed out like in ur chart u see that nice 5 wave structure....but this  last 5 is a devil to count

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  130. Is Fed's easing getting weaker.....  Is coming economic data consistently getting weaker.....

    http://www.zerohedge.com/news/feds-easing-efforts-having-less-and-less-impact-macro-seasonals-turn-negative

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  131. bernanke came out with his 'policy accommodation' talk which  means more printing aka free money for banks... higher stock prices... lower dollar value and higher commodity prices for all....yippie !

    why did bernanke choose today to start rumors?  i dont know why bernanke needed to crush the USD  but the results were right there in the tape.   attached is a chart done when spy was at 127.3....tgt is 144ish

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  132. Right. No one wants to miss out on the now-eternal gravy train of price increases. Interesting bit on ZeroHedge today about the yen (JGB) and how when/if that bubble bursts, the action will be Warp Factor 5 repercussive. 

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  133.  sometimes i think ZH is a shill setup as a disinformation specialist ..... ZH ala his  gloom and doom posts just excites the markets to the upside

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  134. Appreciate the SLV chart today.  It's nice to have your count validated (even if it's just a possibility).  So would the knockout for a leading diagonal be trade past 36.44?  Trying to figure out when we can be certain that 3 of 5 is underway.

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  135. This type of VIX sell signal only works within the context of a bear market.  Sell signals like this often fail in bull markets.

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  136. I appreciate their articles at times, but other times they're so poorly researched and alarmist I've taken to referring to them as "ZeroCred."

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  137. Yes, prior high is the KO for any bearish counts.

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  138. The problem is the overlap of 1 and 4; that's what's thrown a wrench in the whole thing. 

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  139. Who is telling the truth about employment?  BLS or ZH?  Gallup supports ZH view. The unemployment rate should be
    increased to 9% intead of dropping to 8.3% in February.

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  140. Thanks to Khana for the donation today.  :)

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  141. Volume has been low since December, but it hasn't stopped the market so far...

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  142. These double and triple funds almost always burn the participants at some point, which is why I generally avoid them like the plague.  TVIX appears to be on the same path.  My theory is that these funds exist primarily to fleece small retailer traders who are afraid of futures.

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  143. Sorry I didn't see your question much sooner, but I assume the market has made this a moot point.  :)

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  144. 2011 correction count
    http://2.bp.blogspot.com/-O-OQEhd51Po/T29GHxk0YeI/AAAAAAAAABM/YYkznreM0DM/s1600/2011+correction.jpg

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  145. RTG - AMZN went parabolic today, did you get the message on my exit?  Will have a chart later, working on tomorrow's trade plan right now.

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  146. Katzo - have you seen anything like this on RSI before - I have never seen three successive H/S patterns in a row like this before.  The overall chart reminds me of Bulkowski's inverted scallop pattern a very bullish pattern.... gee I wonder why.......  I have this thing as an A looking for a B with backtest coming of today's H/S pattern breakout line and then higher from there to target of roughly 1433.  Your thoughts?  SP 30 min chart

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  147. Was at work - couldn't get back to you - I generally am looking at 30 min, 60 min timeframes.

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  148. See chart I just posted - I was at work when I saw this and posted - had to get back to doing what I get paid to do ....

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  149. I am looking at that chart right now - will post it with some thoughts. Right now I would suspect some pullback and retest tomorrow and then likely higher. I have to work out the targets and then review the support resistance lines to iron it all out. I exited today at 833 - 834. Left about 0.80 cents on the table in the call spreads. I would like to reload - am thinking we take a run at 850 as well. Be back in a few with chart....

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  150. What is that structure supposed to be, in total?  Asking because I use d's and e's in triangles -- and obviously, it's not a triangle because it violates all the rules.  I think it counts much better as an a-b-c expanded flat -- in fact, it's almost textbook for an expanded flat. 

    I probably have a more detailed chart posted somewhere, but here's one I was able to locate quickly.  I'm sure you can count the 5-waves of c of x down.

    http://1.bp.blogspot.com/-wrCA9K6zcDU/TzJACWEi2WI/AAAAAAAABJg/WzY0WHAsP3M/s1600/spx+short+term.png

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  151. Well I am always open to other's opinion's about things, so let me know what you think about what the SPX 30 minute chart is showing over the last 15 days. I just posted what I think is going on, would like to hear your thoughts. Thanks

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  152. RTG - here is my AMZN chart - not much to add except that I would look for a retest of support in the 197 - 198 area to take a shot a long position.  Will keep you posted as well as I can during the day

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  153. If AMZN holds support at 198-ish, what is your next target?

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  154. yeah, I was out last thursday at 192....but I jumped back in today short at about 200 flat, so underwater again. Setting my stop at the high today, not letting this run anymore...it's too powerful at this point.

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  155. Do you check options volume and OI at the strike prices around the price action? Usually when a strong move occurs you get volume and increasing OI at a higher call strike and lower put strike resulting in settlement at a point midway between the strikes as players take there respective positions. The action today resulted in a price nearly exactly between 200 and 205. Near the end of the day around 3 pm is when the best time to take your position occurs.

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  156. So that's pretty much since the dip earlier this month.  Truth be told, not much.  Three symmetrical triangles that are clearer on the 5 minute chart.  Biggest thing is the trend line formed connecting the bottom of the lowest candles on the 14th and 20th.  The big red candle opening trade on the 22nd violated it, and the big up candle opening today were the bulls retaking the trendline.  The trade in the middle makes kind of an "island bottom reversal" - however I don't like to call it that the same reason I don't like your head and shoulders - can't reverse an uptrend into and uptrend.  If you want, you can call the island bottom a reversal since it is at the bottom of a very short downtrend, but IMO it doesn't count if the reversal pattern is bigger than the downtrend.  


    The trendline (I'm pretty sure Jason identified it last week on one of his 5 min SPX charts) was tested twice since in today's trading, so I think that trend line being taken down will be the first sign of a correction and the bears fighting back.  I'm ready to join their side as soon as they stop dicking around.

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  157. I am not really sure yet. the way I trade in that I suck at wave counts is I look at a variety of things but in this particular stock the options OI and Volume drive the price action quite strongly. So I will know more tomorrow as to near and longer term targets. I am thinking 200 near term and likely 210 longer term.

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  158. Replied to your query down below btw - ah I'll just paste it in here:

    So that's pretty much since the dip earlier this month.  Truth be told, not much.  Three symmetrical triangles that are clearer on the 5 minute chart.  Biggest thing is the trend line formed connecting the bottom of the lowest candles on the 14th and 20th.  The big red candle opening trade on the 22nd violated it, and the big up candle opening today were the bulls retaking the trendline.  The trade in the middle makes kind of an "island bottom reversal" - however I don't like to call it that the same reason I don't like your head and shoulders - can't reverse an uptrend into and uptrend.  If you want, you can call the island bottom a reversal since it is at the bottom of a very short downtrend, but IMO it doesn't count if the reversal pattern is bigger than the downtrend.  The trendline (I'm pretty sure Jason identified it last week on one of his 5 min SPX charts) was tested twice since in today's trading, so I think that trend line being taken down will be the first sign of a correction and the bears fighting back.  I'm ready to join their side as soon as they stop dicking around.

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  159. Hello PL....thanks for taking the time to give me a "heads up" on this graph. I love this stuff.

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  160. Okay, if I understood correctly CVX, was expected to come back up to 108 which it did today which would be the end of wave 2.  Does anybody think that there will be more down from here?

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  161. From the Vault

    Any Sq. of 9 experts here?

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  162. Latest from @Gann360 

     http://screencast.com/t/0ajtWEdmk

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  163. It already went above 202 today.  Maybe it will try to take out the previous high of 220??

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  164. Jason - how do you count the bull market that began in March 09?  Counting it as an impulse wave is problematic - we are still in wave 3 of that impulse, which would imply at least another year for wave 4 and 5 to unfold, depending on which correction you call wave 2.  What really bugs me is that there is a huge correction in either wave 3 or wave 1, depending on how you look - the same size as the wave 2 correction, but on a nested degree - just looks wrong.  The other option is a wave B, but again, which of those corrections would be the nested wave b?  And why is the other one so damn big?

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  165. Hi Max, I don't count the bull market since '09 as a five-wave move.  I count it as a double zigzag -- in other words, two a-b-c's on top of each other.  The first leg (a-b-c) of that zigzag completed in Feb. 2011.  The 2011 crash is part of the X wave that separates the 2 zigzags.  We're now working on the 2nd a-b-c, IMO.  I'm actually working on a chart for tomorrow's article that will help with the visualization.

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  166. Is Bernanke the hero.................................

    http://www.ftense.com/2012/03/bernanke-hero-creates-new-mirage.html

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  167. As a matter of fact: yes.  The square of 9 is 81.

    Thank you -- thank you very much.  I'll be here all week! 

    Actually, no, but here's something of an explanation:

    http://www.gannalyst.com/Gannalyst_Professional/Gannalyst_SquareTools_SO9S.shtml

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  168. Hmmm interesting.  I see what you are saying.  This EWT is voodoo magic to me - but I still read your blog everyday ;-)

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  169. Get the fu*ck out!  LOL. 

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  170. no I cant,
    look at my (blue) c wave, that isnt an impulse, you cant find the 4th wave for my b of c to have an impulse out of a corrective, that wave around 12 jun (?) its way too small, time wise;
    in my count b of d is a corrective, look on30min or 1h tf, you cant label that as an impulse

    tri, abcde, we have all sorts of correctives, if u dont like tri then check Elliott's 7 waves complex corrections, if I remember well.

    btw, jul 7 = jul 21 (?) for dji
    jun 17-jul7, 2 correction, abc and an tri perfect for a 5w

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  171. Looks like this is where we are eventually going.

    http://screencast.com/t/dWTOahju

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  172. SPX right at channel resistance, will most likely gap over this tomorrow, but at an interesting juncture that has contained price for 2 years nonetheless.

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  173. DX at major support, should cap the EUR rally from here...

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  174. Based on correctness of EW form it appears that we may have finished up the EW5 move o/n in Globex and are setting up for a down sometime today. T1 = 1405; T2 = 1400. Wave form is now pretty perfect with the EW5 steep angle to finalize it. The chart in my previous post is $SPX with level of 1416 seeming to hold so far. This chart is ES. Nice gravestone doji up at the 5 plus a few more indicator candles. Remains to be seen whether the usual morning bullishness brings $SPX up to equal the ES top but I think we have a good chance to go down at opening prolly on some news-related item.

    http://screencast.com/t/fjjDF2zh8xS

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  175. Are your targets suggesting a "buy-the-dip" ST correction, or a larger trend change after a complete EW5? TIA!

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  176. t_ should fade back some likely down to 200 or the the support area - depending on market conditions.  Could be a 3 of 3 wave on my count from the ending C shown on my chart - not that I am any kind of EW analyst.

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  177. Prolly a buy-the-dip ST correction. One thing that happens at tops tho is that TA fails, it just falls apart, it just does not work right. The mrkt gets confused. Rounded tops are the worst, have seen this kind of thing happening before, a small decline suddenly turning into a 140 point down move which starts the EWs counting to the downside and begets more selling eventually. As the say, they do not ring a bell. Again the above call is an IT call, extending out a couple of days at this point.

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  178. Thanks, in my world the round number should hold on a backtest if it is to remain a bullish scenario. I am planning to reload on such a successful test and hold and look for 850

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  179. Thanks katz! You're a gem!

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  180. I agree, I think if you draw a line across the big down candle from Friday and the big up candle from Monday you will find support at the red line marking lower price channel and the ds tgt for me today.  That is where I will enter long all other things being normal as can be.....  LOL

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

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  182. How did you like the AMZN action today. Popped up there early in the day held just under 210 the iffy upside we talked about and then plunged to 205 late in the day. Options volume and OI are at three strikes 200, 205 and 210. Looks like we might get a little more retracement below 205 to 202/203 and then take another run at 210. Of course it could retrace all the way to the original scoped out pullback point of 198. have to wait and see

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  183. Not sure I grasp the full form and substance of what you are telling me here. Just because you don't appreciate where the pattern shows up doesn't mean it can't be traded. Call the pattern what you will,it has a measured move that we will have to see whether or not comes true. So long as trade is within or above the low established in the lowest part of the pattern the right shoulder or inverted scallop, if you will, is under formation. A break above and close above the line crossing the down and up sides of the "head" will trigger the pattern. You are of course free to disagree and trade short if you like.

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