Amazon

Thursday, March 8, 2012

SPX Update: Market Not Doing Anyone Any Favors

Yesterday, the preferred count expected a bounce, which we got.  Problem as I'm writing this is that ES futures are up about 9-10 points. 

As I mentioned in the body of the article yesterday, the wave iv target could run all the way up to the gap fill, although in looking back at yesterday's chart, I didn't quite draw the target box to match that statement.  This is another reason it's important to actually read the articles, although the people who just look at the charts will no doubt miss this portion of the article suggesting they read the articles.  Catch 22.

Maybe if I say it really loudly:  HEY YOU FOLKS WHO JUST LOOK AT THE CHARTS, READ THE ABOVE PARAGRAPH.  There.  Certainly made me feel better.

Anyway, if this 9-10 point ES rally sticks, while a big retrace is not outside the realm of possibility for the fourth wave as counted yesterday, it's less likely because it will break the top line of the 1-3 trend channel (not shown).  So today I'm going to lead off with another potential short-term wave count. 

The count below would be yet another head-trip from this market to add yet more confusion to the fire.  Or fuel to the fire, as the case may be -- I guess confusion doesn't burn too well.  "Add more fuel to the confusion fire" sounded dumb though, so I had no choice but to mix metaphors.  Looks like the shoe's on the other hand now!

I really can't blame the people who just look at the charts.

This is an entirely new option shown below.


And here's yesterday's chart, which discusses the short-term invalidation levels, and shows some ST support/resistance zones.


And next, the bigger picture SPX chart, which didn't show the alternate count yesterday, so I've updated it. 

As I talked about at length yesterday, there was nothing in the decline which should lead one to become ultra-bearish.  There are still numerous possibilities on the table, and until the market confirms a larger impulsive structure to the downside, it's entirely possible that there are new highs still coming.


Even with the rally in ES tonight, the odds still favor a new low for this move, for a number of reasons:

1)  It's challenging, though not impossible, to count the decline as a complete wave.
2)  Declines with the level of momentum displayed on Tuesday rarely mark the exact bottom of a move.
3)  Tuesday had very high levels of distribution which, again, rarely marks the exact bottom of a move.

So the odds still favor a new low for the move, and thus a sell-able bounce.  Of course, there are exceptions to every rule -- so these things are merely probabilities, which is all we ever have to work with as traders.  Trade above the 1378 high would negate all downside projections.  Trade safe.

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

266 comments:

  1. Nice post, PL.  I expect the SPX to retest the bottom of the Dec 29 - Jan 30 trend channel which is around 1372 (cash) today and then peel away.  That would leave the gap filled, trendline tested, and 1378 still intact with new lows just around the corner.

    ReplyDelete
  2. I updated the leading diagonal chart (1st chart).

    ReplyDelete
  3. Good morning PL!
    Nice post, I actually had been doing the opposite this week and reading but not looking at charts in depth.
    Already +2.2 TF today on shortside but waiting for jobs report now before a possible re-entry.

    ReplyDelete
  4. Do we have a failed or truncated EW5 in copper? I will be watching the 8.2 level for any sign of failure.

    http://screencast.com/t/RumAb9lk9Y2

    ReplyDelete
  5. Hi PL, I love your writing btw. Always innovative and often hilarious, I don't know how you do it. Anyway, although SPX counts quite well as 5 waves off its high, the Dow is a mess and probably counts better as nested 1,2s. What do you think of the ultra-bearish possibility that yesterday and today are another 1,2. I'm just curious as to why you've not included that as a possible and possibly a better fit than a leading diagonal?

    ReplyDelete
  6. Here's my take on the "lack of 'LIKES'" question from last night.  I have noticed a decrease in the total number of comments over the past two months, but I don't think it's an issue of like vs. dislike on the charts and articles (nobody can dislike your writing style and the labor-intensive precision that you put into your work).   I think it's more the fact that most people here have been bearish since August and this bull run since mid-December has simply dashed their hopes and worn them out to the point that they are apathetic.  My guess is that most of your followers are not day-traders, so this slow grind higher, day after day, after day, after day, after day has left them with virtually no entry points on the long side and short positions have been perpetually crushed (or at least stopped-out).  As someone said yesterday:  "Same shirt, different day". 

    ReplyDelete
  7. I must be one of the few who doesn't look at the all the charts and prefers reading the text. :)

    ReplyDelete
  8. Your 1,2 scenario is included. In particular, it is indicated as the preferred count of the second chart in today's article, if I'm not mistaken...

    ReplyDelete
  9. Thanks.  :) 

    Just personal preference regarding the question:  I'm not crazy about a 1-2 nest where there's a big move, and each 2nd wave retraces too much of each 1st wave.  Usually the big move will be the third wave of part of the nest, as opposed to another first wave.

    ReplyDelete
  10. 1376.17 blue ii was not there yesterday and is today's premise for leading diagonal wave. Some of us read and re-read, and when we repeatedly find 4 contradictions within one sentence, are relegated to study the charts. Lesson: Don't believe anything you read, or half of what you see...particularly from the Master Bator!!
     
     
     
     
     
     
     
     

    ReplyDelete
  11. Yes -- I was reading his question differently, but this is correct.

    ReplyDelete
  12. "The count below would be yet another head-trip from this market to add
    yet more confusion to the fire.  Or fuel to the fire, as the case may be
    -- I guess confusion doesn't burn too well.  "Add more fuel to the
    confusion fire" sounded dumb though, so I had no choice but to mix
    metaphors.  Looks like the shoe's on the other hand now!



    I really can't blame the people who just look at the charts."

    You crack me up PL. You're always good for a laugh. Why anyone would skip the text is beyond me!

    ReplyDelete
  13. btw, for anyone who didn't understand this, the first chart is an entirely different way to count the decline.  It's not the same chart as yesterday, though I assumed that most who aren't trolls probably already understood that.  The second chart is yesterday's chart.

    ReplyDelete
  14. Follow up on that wonderful investment opportunity LOGL, hyped by the quick witted and facile. Turn $10,000 into $30,000, throw away your charts, don't miss this opportunityLOL [go back and see my past post]. Well, seems I missed it could not get in at the bottom and strangely there were no shares available to short at the top ROTF. . . . Wonder if Sleezy MacShame bought the yacht yet.

    http://www.screencast.com/users/katzo7/folders/Jing/media/cc50eab5-d240-43f6-9106-f2191a129b78

    ReplyDelete
  15. Thanks for another great article. Your commentary is way better than Art Cashin, and makes the confusion of the market much more bearable...I mean tolerable. I don't even get frustrated anymore...I just remind myself that the "Bernanke Pusts" are in effect.

    ReplyDelete
  16. It's that magical time of day when I look at the chart and think, "Someone knows what's in the employment reports. What would I be doing right now if I were they?" But since I'm me I'm waiting to find out, even with play money.

    ReplyDelete
  17.  I knew there had to be a reason, thanks. (I was referring to the option of counting yesterday as a 5 wave down but I only switched to preferring this when ES broke above 1359 invalidating a IV wave as an option - not thinking about a leading diagonal).

    ReplyDelete
  18. Jobless claims rose to 362,000, higher than forecast.

    ReplyDelete
  19. Brazil continues easing and Fed floats rumor.  Ben says jump and markets say, "how high?"

    Market reaction to Fed "Sterilized" Bond/MBS purchase rumor courtesy of Ciovacco Capital Management.

    ReplyDelete
  20. Pusts are all the rage these days!  Can't believe you guys hadn't heard of them.  Bernanke has two on his forehead, so when the market needs more liquidity, he just squeezes some out...

    Ewwwww...  sorry.  :(

    ReplyDelete
  21. "Bernanke Pusts" are the worst.  Especially, when summer roles around.

    PS - jbg, I still have 3/22 marked on my calendar! ; )

    ReplyDelete
  22. Whatever happened to that solar flare?  Did it hit already?  Another non-event?

    ReplyDelete
  23. Makes me wanna start a gold mine in my back yard (well my noisy neighbors back yard) and issue shares.
    I'm pretty sure he's singin' "I'm on a Boat"

    ReplyDelete
  24.  this afternoon...when the Greek stuff goes down.

    ReplyDelete
  25. Is that Bernanke Puss? Was it a typo with an addition of a 'T.' OUuuuuhhhh.

    ReplyDelete
  26. And I held off posting the album version of "I'm on a Boat" video to try to keep it clean...LOL :)

    ReplyDelete
  27. A great rant against Fed intervention:

    “We should call this what it is…this is market manipulation”

    “The central banks are printing like mad.”


    “I think it’s all terribly dangerous.”
    “Capitalism is the alternative to what we have now. I highly recommend it.”

    http://ciovaccocapital.com/wordpress/index.php/fed-policy/fed%E2%80%99s-%E2%80%9Cmarket-manipulation%E2%80%9D/

    ReplyDelete
  28. It was a typo from yesterday's article.  I meant to say "puts," but wrote "pusts." 

    ReplyDelete
  29. Thanks...Thanks a lot...LOL... I should have made my offer a little looser.

    ReplyDelete
  30. First headline: ECB sees EU economy stabilizing with downside risks [not significant downside risks]. ES and EUR jumped slightly.
    Second headline: ECB lowers growth outlook compared to December's estimates for the EU to -0.5% - +0.3% for 2012. ES and EUR retreated slightly.

    ReplyDelete
  31. Updated graph of ECB and Fed balance sheets post LTRO 2.  Nothing really new, but sometimes a picture is worth 7 trillion dollars.

    Courtesy of Haver Analytics (as far as I know, not the PL we know) and BMO Economic Research.

    ReplyDelete
  32. Apparently "someone" did not read the article....ROFLMAO....only looked at the charts.

    ReplyDelete
  33. I saw. Not much of a reaction though. I was watching the ES chart a week or so ago for an hour before the numbers came out and saw a fairly significant rise between 8:20 and 8:30, after which it headed for the basement in a hurry before pretty much getting back to what it was doing before. So I've been watching major news events wondering if there might be any pattern there -- basically, employment, housing, Bernake, anything with three bull heads on the economic news calendar at forexpros.com that someone here turned me onto.

    ReplyDelete
  34. just joking, I saw it. now Wall St. is buying Bernanke puss. There is a sucker born every minute. . . .

    ReplyDelete
  35. They're busy putting their gloves on the wrong foot.

    ReplyDelete
  36. A post from Ambrose Evans-Pritchard on the winners and losers of any Greek bond default and subsequent CDS trigger.  

    http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100015444/and-the-losers-from-greek-cds-contracts-are-german/

    ReplyDelete
  37. I'm just bustin'em for ya Katzo...it's a sign of respect :)

    ReplyDelete
  38. Hi PL, very excellently written article. I like the relatively shortness in length and the narrow cohesiveness. Don't know about other folks, but I'm extremely time challenged.

    Yesterday, a friend of mine said he was enjoying some old Bob Dylan songs. So I revisited one, http://www.bobdylan.com/songs/desolation-row. Nothing personal or serious, just funny, when I heard these lines...

    Yes, I received your letter yesterday
    (About the time the doorknob broke)
    When you asked how I was doing
    Was that some kind of joke?
    All these people that you mention
    Yes, I know them, they’re quite lame
    I had to rearrange their faces
    And give them all another name
    Right now I can’t read too good
    Don’t send me no more letters, no
    Not unless you mail them
    From Desolation Row

    ReplyDelete
  39.  Yeah, I included the other quotes mostly to give context to that zinger of a last line.

    ReplyDelete
  40. Good morning folk - excellent, short, sweet and to the point pust PL. 

    ReplyDelete
  41. Alright, it's that time of night when I need to step away from the computer for a little while, before I completely lose the ability to see objects in 3-dimensions.  Be back in a bit.

    ReplyDelete
  42. read what article? lol

    ReplyDelete
  43. your chart are in 3d? God, I am getting old. lol

    ReplyDelete
  44. Rest well! You deserve it!

    ReplyDelete
  45. No, that's what I mean.  All I do is stare at a 2-d screen for 10 hours in a row... gonna lose my depth perception.  :)

    bbl.

    ReplyDelete
  46. WHAT, you like pizza???  You're out of here.  No more blog for you!

    ReplyDelete
  47. just kiddin, get some rest. thnx...

    ReplyDelete
  48. Got some speculating on my mind.  I still believe that Israel will strike Iran and that Obama, though reluctant, will instruct the US military to provide logistical support to the Israeli airforce, and obviously defend the oil supply routes in the Persian Gulf.  I also bet that Israel has been told they must wait until after the Greek default to avoid doubling up the market turmoil.  Gas prices peak in the summer, so that leaves a narrow window this Spring for a strike.  An article here shows that there is some spare capacity on oil supply, making a disruption more acceptable.

    http://seekingalpha.com/article/419081-no-shortage-of-oil-yet

    ReplyDelete
  49. You're a good egg Katzo.

    ReplyDelete
  50. Kazo would you like to share your take so far on today's trading? Many thanks in advance! :-)

    ReplyDelete
  51. EUR/$$ coming down... 

    UVXY   (2x levered VIX)  split 6:1...  I think i have more fear than in the vix itself..  it's finally bouncing off morning lows..   I think i spilled Solar flare creamer in my coffee..   not bad...
     

    ReplyDelete
  52. ty PL.  I'm new to EW and started lurking here back in Feb, after I was on the wrong side of the post Christmas rally (long TZA ouch!) I successfully purchased a healthy slice of humility and as my fellow Marines would say "pain is weakness leaving the body"  :)

    From the recommendations here I have read Frost & Prechter's book once through and getting ready to read it again (excellent recommendation BTW)

    A couple of questions:

    Last week you had a W2 target for silver ~ 32.33 do you consider W2 at this point to be complete?

    on RUT the count was showing more potential upside beyond the current 2012 high (833.02), since the 2011 high of 868.57 was an all time high (above the 2007 high where the other indices did not break those old highs), is there enough info for a SWAG at a W5 RUT target?  I have a hard time seeing this rally as setting a new all time high but I may be suffering from myopia!

    You have a great community here and thanks again.
    -Clayton

    ReplyDelete
  53. Yes, SJ, way to live on the edge!  I thought everyone liked pizza until I started following this blog, LOL.

    ReplyDelete
  54. Did you read my lengthy piece on last thread? Start there.

    ReplyDelete
  55. UVXY did a reverse split...was wondering when that would happen.

    ReplyDelete
  56. Headline algos have to have something to do. Doesn't it just make ya crazy.

    ReplyDelete
  57. Huh, the futures looked so much stronger than the actual cash open

    ReplyDelete
  58. re: UVXY...But for just a gigasecond, it felt good to see that it was up close to 500%....I'll take the little thrills at this point.

    ReplyDelete
  59. possible down move to 56 es

    ReplyDelete
  60. Yep! Did that! Gap covered btw!

    ReplyDelete
  61. Good stuff, thanks for posting/referencing it.  I actually covered my short eur (very small pos) last night after i noticed the spike up, as it looked impulsive.  I just shorted again small at 1.3233, will see where this goes, I don't think the decline is over.

    ReplyDelete
  62. Who among us thought the greek debt deal was a completed?  that is what the media reported weeks ago.
    So now the markets are "cheered" because the greeks say that they have the participation they need and the participation level only has to be 66% http://www.theglobeandmail.com/report-on-business/international-news/greece-inches-toward-huge-debt-overhaul/article2362567/
    Other news outlets say the participation level has to be 75% of bondholders and only 40% have signed up. http://www.bbc.co.uk/news/business-17294865

    Yesterday the DOW was non-plused over the ADP report, later after the WSJ acted as the GO TO mouthpiece for the FED, the market was "cheered" and "rallied" because the ADP report was "encouraging"

    PL told us a while ago to ignore the news, now I know why.

    ReplyDelete
  63. Totally agree.  I don't understand how Greece keeps coming back with "good" news.  What BS.

    ReplyDelete
  64. on the 120 es is what I call a T-horn, twin pipes separated by an upside down hammer or a gravestone doji. this is usually a conclusive sign for a rally. eur/$$ not cooperating yet tho.

    ReplyDelete
  65. My hourlies and dailies support the LD concept here, topping at the close or tomorrow's open.   Nicely done.
    I also have IT and LT sell signals as of this week and this month, but they are pending, esp. the LT (monthly).
    In my book, this is the gameplan until proven otherwise.

    ReplyDelete
  66. es 1359 ST key, bounce or break

    ReplyDelete
  67. Would you please define "LD" concept? Thanks!

    ReplyDelete
  68. I am still using ES H2 to chart and ES M2 to trade, all TA on my H@ so will use it for a while til I can switch it to M2

    ReplyDelete
  69. Eur bouncing around a lot now too.  Lot of stress in this market, going to be a big move in some direction, just need to figure out which way :).  I have 1/4 short on at 1359

    ReplyDelete
  70. IMO eur/$$ goes sideways, then breaks down

    ReplyDelete
  71. PL, on you first chart, the blue target box has top area that is *higher* than 1364. Wouldn't blue (iv) higher than blue (i) invalidate the count?

    ReplyDelete
  72. I am guessing he's referring to the leading diagonal mentioned in PL's article/ 1st chart.

    ReplyDelete
  73. Yep you must be right! Thanks Whoa_Nellie!

    ReplyDelete
  74. $ VIX has unclosed gap down at 17.65..   We reached 17.88 at open.    Almost reached it at open..  so close!..  I don't think 'so close'  is a technical term i can take to the bank so i'm planning on  another spike down on $VIX.    and then as a chartest i respect said, if/when $VIX breaks 22, 

    well, this is what she  (Abagail Doolittle) just said   " VIX's gap below 18 supports Rounding Bottom, sideways trade btwn 18 and
    22 likely for days, 28 to 32 target, 22 confirms, 16.10 fails"  

     (this is just conversation only, please do your own trades as i'm sure that's not a problem on this very experienced site..  :)  thanks for listening and good luck..  :)

    ReplyDelete
  75. forget the news, said on previous thread Bloomy was extremely bullish this morning, pre-bell. we will see how today plays out

    ReplyDelete
  76. Something wicked this way comes....I just wish it would hurry up a bit.

    ReplyDelete
  77. slowly transferring TLs etc. to ES M2, ES H2 at 58.25 equals 52.50 ES M2

    ReplyDelete
  78. Very cool - T horn.

    ReplyDelete
  79. EUR rising... I hope it's forming the right shoulder on the 5-min chart and preparing to d.r.o.p.!

    ReplyDelete
  80. for FURRRR, I was back in Amherst MA where I grew up. A 5-college community. Saw a bumper sticker "Come on, let Pluto be a planet."

    ReplyDelete
  81. Thanks for the info. Regarding the gap fill, I know all gaps get filled,, but timing is the key right? It might be soon, it might be much later (maybe just wishful thinking), anyway. just wondering out loud that if everyone expects gap fill soon, wouldn't it make sense for it not to be filled soon? talk about contrarian thinking..but I am always wrong anyway..

    ReplyDelete
  82. lol -  Whatever they call it, the transits are intense.  That June 24th Uranus in Aries square Pluto in Capricorn at 8 degrees 23 minutes is going to get most everyone's attention. 

    BTW, still love your daily commentary and TA sharing.
    Purrrrr......

    ReplyDelete
  83. With Google's about to announce, the tablet world war will soon be on. AAPL wants to sell razor, AMZN, blades. Google wants to profit from the bits and bytes of its user base.

    It'll not be dull. :)

    ReplyDelete
  84.  Katzo,

    Other than Amherst College, who else is there. TIA.

    ReplyDelete
  85.  My daughter attends UMass Amherst, and I know of Smith College.

    ReplyDelete
  86. Interesting ^VIX chart from Gann360 on twitter.  VIX has about .40 more to go.

    Thanks Katzo7

    http://screencast.com/t/aVPAOO2A

    ReplyDelete
  87. Check out the monster H&S (possibly) forming on EUR/USD 240min.  IF that neckline breaks, 1.264 might be retested.

    ReplyDelete
  88. Amherst College
    Smith College in Northampton, two towns overHampshire College ( a fairly new college in Amherst)
    UMass
    Mt. Holyoke (two towns south) 
    there are free environmental bus system I think too to all

    ReplyDelete
  89.  I read from somewhere that Massachusetts is the most educated state in the union. Romey, its ex-governor, will not have any chance in the god and gun country. :)

    ReplyDelete
  90. Google also wants to be info central for ALL commercial transactions. One of my distributors just informed me that in order to carry my items and have them linkable through Google they must have a GS1 issued GTIN (Global Tracking Identification Number -- formerly UPC). What gets my goat is that it'll run me $760 just to register my company and then a 158/yr (for now) annual subscription.

    ReplyDelete
  91. Just a FYI ....

    Puts are 20+/-% more expensive than their identical strike Calls, as measured by implied volatilities.  A reflection that the market, in general, is expecting a kaboom on the way. :)

    ReplyDelete
  92. Possible bear flag on ES right now.

    http://dl.dropbox.com/u/59021800/2012-03-08-TOS_CHARTS%20ES%20Bull%20Flag.png

    ReplyDelete
  93. some things I look at are saying this rally cannot move forward, timing it is the issue tho. drop may be setting up, in future

    ReplyDelete
  94.  Just in ....

    Household networth is up by 8.2 T from the bottom of the stock market, but 8.2 T down from its all time high. To wit: we're at the half way point. Who said QE(n) doesn't work? :)

    ReplyDelete
  95. lol.
    yeah a democratic state (Kennedys) and we keep on electing Republicans. Well, checks & balances I guess. High taxes and a strong welfare state, many cities in trouble. Neighboring RI is worse.

    ReplyDelete
  96. The RP block will torpedo Romney out of spite as they see no material difference between Mitt and Barry.

    ReplyDelete
  97. keep an eye on this a possible break but I think a bit early time wise

    ReplyDelete
  98. I'm just wondering when municipalities will really take the big hit ala the PIIGS.

    ReplyDelete
  99. The full moon has yet to wear off its effect, IMO. That gap fill yesterday would not have happened if not for the lunacy, IMO.

    ReplyDelete
  100. Hello PL and other Fib afficiondao's,  I've been applying Fib Time (practicing) to hourly and daily charts and wondering if you have had any success with it's application. I've been applying the Fib Time intervals to INFN's  (low 11/25, 1PM @ $6.07 to low 12/30 11AM @ $.6.07). First hit came on 2/3 @ 1PM $8.34-$8.55. Second hit shows today at 3PM. Useful tool...? or just blind squirrel syndrome?

    ReplyDelete
  101.  Did they pig out on PIIGS' dung? :)

    ReplyDelete
  102. I have open limit order to sell more at 65.75 (esh12 o/n high) with stop at 1370 around pl's 'beware a break of the upper blue TL though'

    ReplyDelete
  103. Very good...no...*excellent* question.

    ReplyDelete
  104.  So much for "don't be evil". GOOG is Luke Skywalker turned Empire on the dark side. :)

    ReplyDelete
  105. Suspended animation, neither inhaling nor exhaling, waiting for Greece ....

    ReplyDelete
  106. "Just two-and-a-half hours until the Greek debt swap deadline. Reports of a 75pc take-up so far, the minimum level sought by Athens for the deal to go through. If this is the case, then a much-needed bailout for Greece moves a step closer. "

    ReplyDelete
  107. PL, I was one of those suckas that read your words, looked at the charts and then forgot what you wrote. Today caught me completely of guard as I was of the opinion that IV completed yesterday... I didn't take the long trade from the 1340s low... stupid me... that would have been some real easy and quick money. I kept on looking at your plots "seeing" (that is, thinking, believing) wave IV nicely finished at the mid 1350s level, forgetting completely about the alternate count possibility... I can only blame my self, and that wave V down would happen today (which it didn't of course). Hahaha, it happens, but it's a sour laugh though...

    ReplyDelete
  108. Official swap announcement to be published at 1:00 AM ET Friday... 

    http://money.cnn.com/2012/03/08/markets/greece-debt-creditors/index.htm?iid=HP_LN 

    ReplyDelete
  109. Seems like there's an "open can of tuna" somewhere in this Greek debt swap situation.  I'm particularly amused that the settlement date for the Greek Law Bonds is March 12 - the day Mercury goes retrograde - even now, Mercury is slowing to what is called "stationing" before the turn.
    Some of the dates and caveats are covered in this Reuters article:  http://www.reuters.com/article/2012/03/07/us-greece-swap-factbox-idUSTRE8260K620120307

    ReplyDelete
  110. Here are some related articles that are interesting.

    http://hat4uk.wordpress.com/

    ReplyDelete
  111. short es 65 ES H2 (58 M2)

    ReplyDelete
  112. thanks for the update, i was just wondering when it would be made official. 3pm ET was thus the deadline for bids. Apparently the announcement will be made available on a website.... hmmm do we really think all investors will check there??? 

    ReplyDelete
  113. my property taxes have gone up, foreclosures mean a rise in property taxes and consequently a lowering of property values as the discount prices houses sell for bring down evaluations across the board

    ReplyDelete
  114. Interesting comments about hedge funds continuing to buy Greek bonds in order to create a large enough constituent to have CDS triggered!  

    Somebody is going to lose quite a bit of money here--either the banks who will have to pay for CDS or the hedgies will have a huge Greek bond loss a la MF Global.

    ReplyDelete
  115. UVXY tradable now..    VIX poking head back above 18.00..  'They' say deal is priced in??  interesting...  Is this what trading is gonna feel like for the next 30  years?   I sure picked a wild year to start....

    ReplyDelete
  116. I have often heard the comment "commodities lead"....but the attached chart shows equities pointing the way for Gold. Kinda like the housing stocks peaking in July-August 2005 well before the market peak in October of 2007. I wonder who was selling the housing stocks back in 05 & 06????

    ReplyDelete
  117. tgt 1360 es h2
    57.5

    ReplyDelete
  118. Pinkie toe dipped in some March  GDX and FCX pusts.

    ReplyDelete
  119. Quarter of a million job ads in machine shops went unanswered. America went from making things to making things up. Now, we have a surplus of making-things-up workers. America don't know how to make things anymore. :)

    ReplyDelete
  120. Apears to be a hybrid Put option with a MUST clause!

    ReplyDelete
  121. LOL - they're the new rage of the Street, figured I'd go ahead and try some ; )

    ReplyDelete
  122. My wife often wears her "Come to the Dark Side. We have cookies" t-shirt. GOOG is all about tracking cookies now...I just realized the irony.

    ReplyDelete
  123. time to squeeze out all the bears and grab all their stops.....melt up and up ....i think i might be going crazy

    ReplyDelete
  124. I'm waiting closer to the close to sell more, I have a feeling may close at/near HOD

    ReplyDelete
  125. Take Luck....(as Brian Reagan would say)  March seems pretty close...tick, tock!

    ReplyDelete
  126. PL, needless to say, we broke the upper trendline on the SPX (from your chart), does this mean we're not going to revisit the lows again in the next few days? Markets went bonkers today and toasted the bears.

    thx

    ReplyDelete
  127. What's that for M2?  Target?

    ReplyDelete
  128. My pappy told me back in the 80's that eventually all we would do in this country is sell each other insurance, and wash each others shirts...it's almost true.

    http://www.recombinantrecords.net/docs/2009-05-Amusing-Ourselves-to-Death.html

    ReplyDelete
  129. we haven't broken it yet, 1370 would do the trick.

    ReplyDelete
  130. Just subtract 5.7 from ES H2 values to get ES M2 values.

    ReplyDelete
  131. Could this be May 2011 all over again?

    ReplyDelete
  132. stuck in this trade, lookin' for a profit, I do not usually hold after 3:30 but if we get a sell off eod, doesn't necessarily have to go negative, it might set mrkt up for selling tomorrow.

    ReplyDelete
  133. It's amazing how astral events and the menial machinations of mankind coincide.

    ReplyDelete
  134. thanks.  Let's see where this goes.  Short ES M2 61.5

    ReplyDelete
  135. I share your angst....and I think a lot of other people do too.

    ReplyDelete
  136. 3 Main Headlines that will impact the market tomorrow:

    1) TXN mid-quarter update (released after today's close)
    2) Greek bond swap results (released 1AM ET Friday)
    3) Jobs report (released at 8:30AM Friday)

    ReplyDelete
  137. I believe the answer to your question is...the smartest money.

    ReplyDelete
  138. Ah ok. We're dangerously close - only a point or 2 away. Curious from PL what is expected if we break it.

    ReplyDelete
  139. lookin for a drop down to 64 now

    ReplyDelete
  140. I am going to attempt to find out......see if the 10Q's and annuals list some of the top institutional holders back then. I'll bring this info back to the blog - if successful. However, should you hear of my "untimely death" please investigate.

    ReplyDelete
  141.  Could tomorrow be a sell-the-news type of day? There's a lot on the board.

    ReplyDelete
  142.  Lol. Wall Sstreet couldn't even sell subprime loans and CDS's without blowing the country up. :)

    ReplyDelete
  143. I think futes may spike overnight, will put some limit orders in much higher and then see where we open tomorrow.  I could envision a pop and drop at open.

    ReplyDelete
  144. Pissed at my self for not taking the long trade at 1340 and even letting yday pass by, I hope the attached graphs ease my mood (i've learned to not become emotional and jump in anyway, but wait for a better point of entry), as the plots show that the DJI and the SPX are still nicely channel surfing in a downwards trend channel and today's high they nicely tagged the upper trend line, crossed a little to the outside and then reversed back in. Beautiful. Let's see if the markets will stay in this channel tomorrow??? 

    ReplyDelete
  145. Damn, I swore it was February. No wonder my wife was mad last month and again yesterday when I asked what we were doing on the 14th ; )

    ReplyDelete
  146. Out at 65.5 es h2 scratch trade

    ReplyDelete
  147. got some EOD Ghost Spikes on AAPL down to 535

    ReplyDelete
  148. and here are some perfect channels for the DJI, which has consistent tags of upper, lower and center trend lines of the channel it's currently in. Question now is if this channel will remain valid tomorrow...

    ReplyDelete
  149. To complete the chart orgy: here some trend channels for the COMP and NDX. Note that the NDX trend channel is flat (could that be due to AAPL maybe????), whereas all others (SPX, DJI, COMP) are down.

    PL, looks like the NDX put in an almost 100% correction wave 2, after a wave 1 down??? Or????

    ReplyDelete
  150. Hey SSUSA- Is there a trick to getting the charts you post in full size?  All I see is the thumbnail and clicking on them doesn't help....  They sound very informative from your text, but I'd like to see the charts as well... Thanks!

    ReplyDelete
  151. Taking a shot at a comment from my cell phone.... Today's performance was not unexpected from those of us who drink koolaide and eat cookies. Looks like we are headed for a typical jobs day performance tomorrow. Generally the markets will travel about a point up and down to finish within about 0.2 points of flat. Yes I drank the red koolaid and ate some more cookies yesterday morning and bought the opening hour rectangle and held until lunch today recovering about 0.84% of Tuesday's losses. Am flat and will take new positions post report

    ReplyDelete
  152. last but not least a rising wedge over the last 3 days: a rising wedge is often a bearish reversal pattern if I understand correctly,  in addition, the [rising wedge] pattern can also fit into the continuation category. As a continuation pattern, the rising wedge will still slope up, but the slope will be against the prevailing downtrend. 
    source: http://stockcharts.com/help/doku.php?id=chart_school:chart_analysis:chart_patterns:rising_wedge_reversa 

    ReplyDelete
  153. hey tuzo, sounds like it worked out anyway ya!?

    ReplyDelete
  154. It looks like we touched Pretzel's upper trendline perfectly today on the SPX.  We also came very close to the wave 4 ko point, but backed away.  I'm looking forward to seeing what tomorrow brings us.
     

    ReplyDelete
  155. You beat me to it, Arnie.  We are so overdue for a turn back down from where we sit right now.  Even if we do eventually make new highs.

    With the last two days' trading, it's like the waterfall  never happened.  I wonder how many people lost a ton selling their positions rather than holding through it all?  And I wonder how many Street pros knew the entire time that it was all just one big shakeout move that would fleece anyone who fell for it?   

    I almost never hold anything overnight, so it didn't affect me any either way.  Though I found the last three days challenging to trade, even though it should have been easy with the prevailing trend so strong and obvious each day.
     I suspect that tomorrow and Monday's trading will tell us a lot more about what's really going on.  With pretty much every positive major breakthrough or development concerning Greece, the market has run up into the eventual resolution . . . and then fallen hard once the news is out.  This time should be no different.  

    ReplyDelete
    Replies
    1. Thanks Brian, yeah I am bummed having missed this easy 35point retrace. That be an easy $3-$4 per SPY. Slept at the wheel... Hahaha, happens. If this channel holds, with a possible fake break out, then we can already guess how the market (uhhh bots) will respond to Greece and the jobs report. Tomorrow will be very interesting!

      Delete
  156. It FEELS like the continual run up and printing new highs is over.  But the last three days of trading could not have made it more clear how controlled, methodical and measured the market STILL IS.  

    Today was COMPLETELY controlled the entire way.  As with the last two days, the entire session is just too perfect and coordinated to be a naturally traded market.

    Four point waterfall move open. This is to be expected at this point on days that will print a green candlestick.  I think it's almost obligatory for me to go long on these morning moves once they have traveled more than three and a half points down from the open.  

    Then a uninterrupted eight point move up that takes THREE AND A HALF FUCKING HOURS without a single retrace wave. Wearing out the patience of everyone.  

    As an aside:  These several hour long moves where the candlesticks do not budge from their trajectory or they trace out an extremely compressed range and are VERRRY SLOWWWW are completely UNNATURAL.  There is no fucking way that this is how an unmanipulated market that is as large as the S&P 500 trades. We've seen this sort of thing the last three sessions for hours at a time in each one. 

    Then finally retrace (from 1,266 to 1,264) to let out the Street's pros who were short on the run up who know how properly average down and get out when the release valve is opened for a hot second.  There was about a ten minute trading window for this. 

    This happened to be MY release point as well (I went short at 1,265 and was stuck in it for a couple hours).  I got out with a minor gain of a few hundred dollars but it was an expensive proposition to get there.

    Then another fast four and a half point move up to 1,368 . . . . right after it looks like everything is about to break to the downside at 1,364ish. It would have been crazy to go long at that juncture.

    And FINALLY AT THE VERY END a real move down that is OBLIGATORY.  Because if there isn't one, then too many market participants will get destroyed. Which is where it was finally easy to make money.

    What the above is is an extremely demanding market to trade for anyone but the most patient or who is blindly a committed long who will hold through all evidence to contrary . . . and who will eventually get killed for it. Even if it did pay off on a day like today.

    ReplyDelete
  157. Thanks for your insight, Brian. Always appreciative of your input.

    ReplyDelete
  158. In Jim Grant's interview with Maria B. today, he referred to The Bernank & Co. as "a bunch of mandarins sitting around in Washington, D.C.". My. kind of sarcasm...

    ReplyDelete
  159. It's hard not to feel like a fool with the Market Masters at the controls. And, as long as they keep jacking the indices up (and not down - heaven forbid!) the media applauds the action and no one with a pulpit complains. Except Jim Grant, of course...

    ReplyDelete
  160. http://www.zerohedge.com/news/central-bank-attempt-sucker-retail-investors-back-stocks-has-failed

    ReplyDelete
  161. Thank you for this ZH link, MARS. It makes me feel better. :-)

    ReplyDelete
  162. Lol .. For the record, I prefer that pleasure be inflicted on me.

    ReplyDelete
  163. I'm gonna ride out my Tvix position. It just gotta spike back up at some point. There is an infinity of time in front.

    ReplyDelete
  164. Don't know if you've been to parts of Indiana. Very depressed around where former steel mills were. They're still standing, just not being used.

    ReplyDelete
  165. I'm riding out my pos too. I missed my exit during UVXY lockdown.

    ReplyDelete
  166. The first chart in the article with the preferred count could have tracked better... by like a few cents, maybe.  :P

    Chart shows the first peak at 1363 --  morning high was 1363.
    Then decline to 1359 -- decline was to 1358.
    Then rally up to 1368 -- HOD was 1368.72.

    btw, for new readers, while my charts occupy space and time, they are virtually never intended as time-accurate unless noted.  They're for price movement only.

    Anyway, I got the minutiae right -- hopefully the next higher degree's right too.

    ReplyDelete
  167. Looks like Greece will get their swap deal with more than 75% participation.  Depending what the final number is, they may have to invoke the CAC clause, which means CDS will most likely be triggered.   Also, Blloomberg mentioned that 14% of Greek bonds not governed by Greek laws so CAC is not applicable.  If these bond holders don't participate in the swap, then it's possible that CDS will be triggered in their case.

    Do you think the market will fall even if Greece gets the swap deal to go through?  Even if CDS are not triggered?

    What I don't get is this--It doesn't matter if CDS is triggered or not, some financial institutions will lose money and they will need to sell off their assets.   Should that get reflected in price-action of the financial markets somehow?

    ReplyDelete
  168. I shoulda taken the blue pill instead of the red one (ya think that's why Viagra is blue?)

    http://www.youtube.com/watch?v=uGQF8LAmiaE

    ReplyDelete
  169. there is my 64 with me not on board. think going down tomorrow. . . . 

    ReplyDelete
  170. very good to know that the time accuracy is not something you try to forecast.  I had been paying attention to it, but I will stop and just focus on the price levels going forward.  Thanks for that clarification!

    ReplyDelete
  171. Can't understand your sentence. But anyway, are you talking ES H2 or ES M2?

    ReplyDelete
  172. Yep, I always thought Huxley had a much better grasp on the reality of human nature than Orwell did.  The cartoonist forgot to mention Soma -- a prescient parallel to the modern tendency of many therapists to treat the symptoms, by prescribing drugs that trigger pleasure centers or numb the patient (Prozac, Wellbutrin, etc.) as opposed to treating the underlying psychological disorder that causes the patient pain in the first place.

    ReplyDelete
  173. OK. Seems like you're talking about ES H2. Yes, it is slightly below 1364. http://screencast.com/t/BeUJ7oKRGef

    ReplyDelete
  174. Yeah, sorry I haven't mentioned that in a while.  I sometimes forget that just because I mentioned something 3 months ago doesn't mean I don't need to mention it again.  I simply draw the charts within the available space *most* of the time, and try to draw them so they're as readable as possible, as opposed to cramped and hard to discern.

    ReplyDelete
  175. Wish I would have kept that in mind. I made money today the hard way other than going long on the move down on the open. Which i didnt trust to hold for more than a couple points with the 15, 30 and 60 minute charts pegged to their upper ranges for the previous eight hours. Had to average down two other trades just to get out alive and with something to show for it. I hate those trades. Frustrating and nervewracking to say the least.

    ReplyDelete
  176. Lol ... I'm currently taking a whole bottle of red pills (half way thru) ... penicillin. This explains why I'm feeling so calm.

    ReplyDelete
  177. Biggest problem is that the whole move off the lows appears impulsive now.  That one little extra jog in the price movement seems to resolve it as a 5-wave rally.  But the price doesn't match the expectations of an impulse.  Got my work cut out for me tonight... I hate this market some days. 

    ReplyDelete
  178. Yep, agree from what I've seen so far...

    ReplyDelete
  179. Plus it keeps ya regular....Gawd, I thought I'd be long gone before I would have to worry about being regular.

    ReplyDelete
  180. Great call, Oracle of the Pretzel. I may have bought a few shares of SPXU near the second peak.

    Do you calculate the high and low confines of your target boxes, or are they just estimated? If you have actual numbers and it's not too much of a pain in the ass, could you perhaps list the numbers (I read the actual blog, so it doesn't have to be on the chart) or connect the top and bottom of the target zone to other points. Or maybe I just need to loosen up on my limit orders.

    Thanks man

    ReplyDelete
  181. Dude, you have brass you-know-what with the way you trade.  I don't know that I would have the stomach for it.  :)

    ReplyDelete
  182. I'm so sorry it's so hard. Don't kill yourself writing so much, or posting too many charts.

    ReplyDelete
  183. http://www.youtube.com/watch?v=8WEtxJ4-sh4

    ReplyDelete
  184. The actual blue target boxes are a mix of both calculations and estimations based on experience -- I usually do remember to publish the hard numbers, but I'll try to make sure I always remember. 

    When I draw-in the lines, such as today's, they're estimations based on experience, and usually only meant as a rough guideline of the *most likely* path the market will take based on my read.  They're far from "set in stone" and the market sometimes does something completely unexpected -- but it's amazing how often it actually follows the path I lay out.

    ReplyDelete
  185. Bringing forward from yesterday's blog posting...

    Pretzel if you have time, would really appreciate your feedback...if this analysis is just so off base that it's crazy on the face of it, just say so. :-)  I got in Long yesterday in anticipation of this but decided not to hold overnight due to the potential disruptive shock from EU announcements concerning Greece.



    ================Previous Post=====================
    Using your RUT chart from yesterday and the guidelines website that katzo7 kindly pointed us to, I came up with some targets for wave 5 of C on the RUT. I'd appreciate any feedback you or anyone else might have.

    Price Target:1) Wave 4 retraced 49.5% of wave 3 (Wave 4 = 47.61, Wave 3 = 96.24) therefore the possibility of a truncated fifth is not increased. Of course, it can still happen, especially with the EU situation at 3PM tomorrow.2) Wave 3 was extended (boy was it ever) so W.5 = 38% or 62% of W. 0-3.3) P0 = 705.78; P0 is the beginning of Wave 1, do I have the value right?4) Wave 3 ended at 833.025A) Possible end of 5 => (833.02 - 705.78) * 38% + 785.41 = 833.765B) Possible end of 5 => (833.02 - 705.78) * 62% + 785.41 = 864.30

    Hyperlink to guidelies for those that are interested: http://www.tradingfives.com/ar...

    ReplyDelete