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Tuesday, April 3, 2012

SPX and NDX Updates: So Far, So Good...

Yesterday performed perfectly in accordance with the expectations of the preferred count, which needed the market to show some upwards momentum.  That's exactly what we got, and it's always tempting to be lulled into a sense of complacency when the market performs as anticipated.  The good thing about the complacency approach is that it saves a ton of time -- the problem with that approach is that the market usually eats complacent traders. 

So I constantly re-evaluate the market and my expectations, and I never assume that the move will continue to perform as expected simply because it's done so up to this point.

Along those lines: the market rallied convincingly yesterday, but has so far only produced three waves in the upward direction.  The preferred count does expect it to go on to form a fourth and fifth wave, but we can never assume the market to be completely "deterministic" -- so I've spent tonight actively looking for reasons why it might not perform as expected, and I'll present some of those counter-arguments, along with some levels to watch, in this article.

In examining the charts, let's start with the highest probability outcome.  It appears that the market closed Monday within a small fourth wave correction (red iv, chart below), and it would not be unusual for this correction to last a bit longer into Tuesday, or even into Wednesday's session. 

The chart below roughly depicts what to expect if the standard impulse plays out.  Please note that my charts are almost never intended to be time accurate -- I simply work within the available space. 

The two levels to watch which would provide warning that the impulse was going astray are noted on the chart: 1409 and 1401.



Next we'll take a look at the "still impossible to predict" potential diagonal.  Even here, and even if the market is only in one of the c-waves up for the diagonal, it would be unusual for the upwards movement to be complete yet.  Barring a break of the 1409 level, the waves seem to point to 1427-1431 at the minimum.


In looking for alternate possiblilities, the NDX caught my eye.  It's failed to make a new high, and spent a good portion of yesterday bouncing along the underside of its most recent uptrend line.  This behavior does leave open the possiblility of weakness in the near future.  Levels to watch are noted on the chart.



Since SPX has only formed three-waves up, let's consider how it could play out if this is not part of an impulse up, but is instead still part of an ongoing corrective wave.  That option is shown below in more detail.



It's important to note that both the impulse (first chart) and the correction shown above ultimately suggest that there should still be new highs -- the question is more which path the market will take to get there. 

I'd like to use that thought as a segue to discuss one of the challenges in this business.  Regular readers know that for roughly a week, I've been predicting that the SPX would make new highs, which it finally did yesterday.

You really have no idea how difficult these calls can be sometimes. Especially now -- with the market massively over-extended, sentiment at ridiculous extremes, and most markets flirting with long-term resistance.  Additionally, I'm well-aware of the underlying fundamental weaknesses in the whole system.

As a result, sometimes it's actually painful for me to "have to" make calls like that, because deep down I know that if everything fell apart immediately, we'd all look back and say, "Well, duh.  Obviously.  What were you thinking suggesting higher prices?"  At times it feels like I'm going against every ounce of common sense in my body, so it's a big relief when these types of calls play out as predicted.  

It's one thing to be an oblivious perma-bull whose knee-jerk reaction is always "buy!" -- but I believe it's difficult for any thinking man to be bullish at this juncture.  For some of the reasons I feel that way, please review the long-term resistance levels covered in yesterday's article

The point being, I will continue to do my best to give an honest and objective read of the waves -- and if they seem to be pointing higher, then that's what I'll present.  In that context, please do bear with me if it all suddenly falls apart five minutes from now... because while my best read of the short-term waves doesn't suggest that will happen -- and even suggests some out-and-out bullish potentials -- at the same time, because of the massive over-extention of this rally on so many levels, it wouldn't surprise me either.  Trade safe.

276 comments:

  1. Morning PL - great post as usual. Thanks for all the hard work - can't quite find the right point to start trading but its close largely due to the confidence I'm building off yours and some of the others bloggers insight.

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  2. Great post, PL.  Thank you.

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  3. Morning...  Another great post PL.    With the new highs call coming in as you laid out it seems you are successfully  channeling your inner beard!

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  4. ty Phoenix, glad to hear it.  Sounds like you're taking the right approach in general.  I've said it before, but a big key is to keep the emotion out of it once there's money on the line.  The market will panic you into doing the wrong things if you don't stick to your plan.  As an example, how many traders dumped their long positions with the little "orchestrated" crashes at the open yesterday or on the 30th?   A fair number, I'm sure -- and then they missed the big move up.

    The market has a way of shaking out a lot of traders at exactly the wrong time, because they trade based on the emotion of the moment.  Just FWIW.  :)

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  5. lol -- inner beard sounds painful!

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  6. Pretzel,

    Haven't read through it yet but your so darn consistent that by the time I do, I'll just be hitting the 'good post' check box anyways.  Yesterday's was a tour-de-force...fantastic job that is mind-boggling in the shear amount of work that it represents.  Glad to hear that you're taking family time.

    You didn't like the musical post from yesterday??!!  "...make me slit my throat"  LOL.  It was actually supposed to be a sarcastic commentary on the market.  Huge, long running rally built on nothing but debt no one will ever pay back!?  Don't worry...  buy until you don't have any money then buy some more with OPM!!

    I was reading in F&P that Elliott described ending diagonals typically occuring when a market has gone too far too fast.  It seems like this market would fit the bill.

    Thanks for all your hard work and for the guidance (not tradin' advice!  Of course!).  Regarding the difficulty of making calls...no worries there!  My own trading success or lack thereor gives me quite a bit of appreciation for not only your hard work but "the calls". 

    Well, that's my 2cents for the day.  Off to work. 

    Good luck everyone.

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  7. DRG,

    Your response to my musical post made me snort my OJ.  Never heard that one before.

    Good luck tradin' today.

    whip

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  8. Very Well Written - enjoyed the part related to what a Thinking Man would have to say about this versus what a Perma - Bull would do.....  I would like to add this - a Thinking Man would say this entire rally is liquidity driven hogwash, but a trader would buy the dips and hedge the hell out of the long position.  That is not to say that trader's aren't thinking men, but that traders make money going with the larger market direction.  I still am of the position that the diagonal is playing out and the end of that diagonal is closer than you think.  IMHO I think you have it nailed, I think we have seeen Frustration Point A and are now going to zig zag to Frustration Point B with a down open followed by decent data reversing the market towards "B" from which we will zig and zag down to Frustration Point C.......  somewhere in all of this is a Maximum Frustration Point that will provide a trend changing move.  A to B to C to MFP - another Suessian rhyme in the making....  LOL  Once again well written - gotta go to work see you guys later - see what you can do to keep Bob E off the roof........

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  9. Careful there bubba - the O2 in OJ is pretty low......Good luck to you as well.  Be watching for an exit point on RUT.

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  10. Good mornign PL,
    the ending diagonal? Dead yet?

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  11. I wish I had said that "inner beard".....

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  12. Apple is looking to gap up - maybe short the fill?

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  13. wonder where liquidity has gone? and why the markets behave how they do?

    Update April 2, 2012:  HFT Killed the Emini
     http://www.nanex.net/Research/EMini2/EMini2.html

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  14. Thanks for yet another excellent article...you are officially "the reasonable man". Just hanging out in cash and SLV until this diagonal plays out. I worked TF yesterday with my fake OX account...that was totally a blast and did well with 3:1 stops. Missed missed half of the ridiculous gap fill PLUS on steroids. Quite well-orchestrated by "dem guyz". Thanks for that OX link.

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  15. lol @ AAPL.  Fill the gap? No, ride the momentum!  I opened a SPY put on open thinking aapl would fill and bring the market with it.  Well I got the SPY movement without AAPL's help.  Now if AAPL starts to chip in...

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  16. Many thanks to DBR for the donation this morning.  :)

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  17. It doesn't need to converge from the bottom of b of (i)... if my labeling's correct.  It needs to converge between ii-iv and i-iii.  :)

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  18. ty DRG -- Bob's fine, if he makes it *to* the roof... it's getting there that's hazardous.

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  19. That's why I keep coming back! 

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  20. ED is da man!  Market just bounced right off the blue support line above the red iv from yesterday's ST spx chart.  Looks like we're on track for 1427-31 in coming days.  Great work PL!

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  21. Fascinating, yeah.

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  22. Good article...TY

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  23. Quote of the day: "AAPL will reach 1,001 shortly." said an analyst on Bloomberg.

    Note:
    That, will propelled the Wall Street darling to a jaw-dropping, eye-popping, to the very, very exclusive trillion dollar club. Where no publicly traded company with market cap under a trillion is allowed. :)

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  24. That gap fill PLUS shows the bull still  has legs. I think it might run up to just before earning season.

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  25. Yes, but it hasn't happened yet.  Just ask RIM.

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  26. Whip, AMZN hit ST tgt at 200 SMA. Closing weekly long option trade

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  27. That would make complete sense...It's probably the path of least resistance.

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  28. Hmm.  Tricky market.  Careful if that trendline goes...

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  29. FYI....5 min chart on CVX suggests completed five wave down (1) an a wave up and b wave down. Option idea based on current price and expected wave 3 down coming up = June 100 Put $1.40 to $1.45. Projected low of third wave down based on first wave times 1.618 multiple is right around $100. Will attempt to "fine tune" as we stair step down.

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  30. $RUT is looking like it had too much coffee on the 5's and 10's. Sumpums going on.

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  31.  Well, 628 down 373 to go .... :)

    At this rate, by summer?

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  32. Many thanks for the donation! 

    Really appreciate your ongoing support.  :)

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  33. Apple going to $1,001, though, haven't you heard?  You can actually trade Apple stock for extra lives now, that's why it's so valuable.  So if you fall off Bob's ladder and break your neck, you can just trade in some Apple stock and get a "do-over."  Hard to put a price on that!

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  34. Fed minutes coming ....

    QE3 or no QE3? That is the question for traders. :)

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  35. LOL-- best trade I've made in the last month was buying those stupid VIX July 15 puts for .10.  Bid/ask .35/.50 now.  If only I had put my whole account into those...

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  36. They're skipping QE3 and going right to QE9000.  During QE9000, Ben will change his name to Hal -- however, his schtick will be, "I'm sorry, Dave, but I CAN do that!"  He's already bought the suit, and filmed several dozen late-night-TV infomercials.  Word is, they'll buy almost anything -- with the one qualifier being that whatever they buy can't have any real value. 

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  37. Glad you didn't put your 'whole account' into cheap downside puts though, otherwise we wouldn't be able to trust your judgment...:)

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  38. SLV just  broken a rising triagle. Long, looks like confirmed retest.

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  39. By November elections?

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  40. NDX ending diagonal within an ending diagonal. COMP looks similar.
    (spx chart too)

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  41. He just wants to see if there really is a P3.

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  42. truerangeballisticApril 3, 2012 at 5:26 AM

    DRG lookin at AMZN daily chart you could have a nice bull flag settin up. I may do a VCS on it. Just lookin for the road mix in this before I get the 3/4 down for the path up.

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  43. UKDNY, your red iii looks shorter than red i (visually, I may be wrong). I am not an EW specialist, on the contrary, but I believe this makes your red count a bit innacurate. Maybe your red v is actually red iii...

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  44. Don't knock it, QE9000 could be nirvana - everything will be free, there will be no need for anyone to work, money will grow on trees (and the beard will be giving away seeds for these trees for free).

    The only slightly small downside is, although everything will be free, since no one is working, there won't be anything to buy...Except AAPL stock, which will also be at 9000.  Every other company on the planet will have been accquired by AAPL and PL's job will be much easier as the 'market' will consist entirely of AAPL.  The fact that no one works at AAPL and it isn't producing anything won't stop analysts telling everyone AAPL is cheap at 9000.

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  45. lol -- for some reason, none of ths really sounds that far-fetched...

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  46. PL, what is expected if the TL you highlighted below ('tricky market' comment) around 1413-14 is broken? We are right there now... Would 1409 and 1401 be the ultimate invalidation levels for the preferred count?

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  47. Another quote of the day: "At 1000, AAPL is still cheap." a MSNBC commentator.

    Note:
    To paraphrase Crammer, AAPL is a "buy buy buy". :)

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  48. Bulls need to right the ship pretty quick here, or there'll be trouble in bullyville.  Trade below 1409.61 would KO the 4th wave.  It does still leave open the potential of a nested 1-2 until 1401... but it's hard to see that here.  Not impossible, but that would imply a *really* strong leg up, and it's just hard to envision that coming here, with the market in this position.

    On that note, I need rest.  GL.  :)

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  49. My charts show the first positive divergences of the day appearing... Maybe turning around just about now... to move higher.

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  50.  At $1000, AAPL is merely equal to main market valuations.

    Whether you think the current market is 'fair value' is irrevelent, AAPL is currently massively under-valued relative to main market, and on any basis, it deserves a rating ABOVE main market.

    Yeah, all else being equal. AAPL should be around $1200/1500.  -  under 'current market valuation standards'.
    -

    Regardless, it remains amusing to see the doomer chat everywhere again. So now '1422' is the top huh? .

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  51. Thanks UKDNY.....I like your count. Let me know if your Itchy coo eyes see anything important regarding CVX please.

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  52. truerangeballisticApril 3, 2012 at 6:00 AM

    Have you been watching TF and the RUT? Something is going on? Not sure what though. Got any clues in what you see? Always appreciate another viewpoint.

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  53. So far AAPL repeats the pattern seen in previous weeks - moving up on Monday and Tuesday after a quiet weekly opex Friday. Buying weekly calls on these Fridays to drop them one or two days after has proven to be a recurring winning strategy.

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  54. what I expected to happen yesterday is happening today. PL was right about that triangle, it had one more shot to a high.

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  55. Looks like we'll find out momentarily of 1409.61 will hold.

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  56. a break of es 04 breaks up pointing EW on the 120, a major time frame
    then 80 to 120 to 80 to 140 rule may be in place

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  57. Hello All,

    Not the charging out of the gate I was hoping for (pulling for the Long case here).  According to FreeStockCharts IWM is only at -0.3%ish but S&P is ~ -1%  is that right?  If so, it seems that the risk-on trade is still there.  Dunno.

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  58. DRG, thanks for the heads up.  Right now, I'm only following broad based indexes.  Oh and thanks for the warning about O2 levels in OJ...makes one wonder why one would know that...  :)

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  59. on SPX 1410.5 1411 area is strong support.
    1410.5 is apprx 62 retrace from 1404 to 1422 area
    old highs 1410.86 was break out to new highs.  We are retesting.
    look for rally from here.
    I do think bears want to be causious coming into FMOC min release at 2pm

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  60. I guess the "personality of this leg down in CVX will determine whether it's wave five of 1, or the beginning of wave 3 down. My hands  are sweating.

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  61. on upside 1410 has to hold ES for more down, break that and we go up, a ST call, will or will not happen within 1 hour

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  62. It looked like some serious hyperactivity/HFT action...I was actually pondering the idea of a flash crash...it looked like an intramural firefight gone wrong...I think it was algo driven...it wiped up every carbon-based life form for sure. I went short TFM12 @ 825.5 (practice account) yesterday after the rocket up. Just sitting on it and watching. I think "dem guyz" are cleaning house for a standard "RUT-style Where TF did that come from move". I'm hanging short for now. I just realized why they named it TF...where TF, what TF, etc. Now it's all crystal clear.

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  63. possible bear flag, 15 min. ES

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  64. truerangeballisticApril 3, 2012 at 6:40 AM

    I agree why the named TF. Been saying that all morining. Here is a setup I doubt will happen but a nice dream anyway.

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  65. I must have missed that chart before...I was just gonna say, go back to 3/20 play connect the dots with the gaps and let me know if I'm crazy or not about an H&S.

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  66. truerangeballisticApril 3, 2012 at 6:52 AM

    This a very good setup. LS higher than RS, time between shoulders is about right and the neckline is sloping the right way. But you know what happens with good setups, lol. Poof TF or PTF. Back to reloading.

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  67. fwiw, flip side of same coin, I was long, got stopped out when we broke es 1407.75, got long again at 1405.5 with sl and reverse short at 1404.5 (with limit order still open to buy more at es 1405).  These correspond roughly to PL's first chart and support lines there and warning around the spx 1409.61 area.  If we reclaim es 1308 convincingly, I will likely get longer at 1408.75 w sl at 1407.75 for anticipated move up to next support / resistance around spx 1415 / es 1410.5. I'm happy to just watch in the es 06-08 area.

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  68. PL...is that enough of a break of the trendline? CVX is tracking the SPX and if the SPX goes down then CVX is headed there also.

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  69. Daily, weekly and hourly stochastics on UUP low low....

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  70. Cup and handle formation points to possible 1411 target.

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  71. LOL...yesterday's moves were mostly like clockwork without much interruption. It hit most of the fibs right from the beginning of the day then boom...too fast though...too contrived. But then again maybe more learned and experienced eyes might say, "meh, it vuz nuttin".

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  72. AAPL is allegedly the dumbest stock I'm told...there are folks who know how it works and make a killing on the options. It is probably the most opex-oriented issue.

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  73. actually, 629$ sounds about right for an extra life.

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  74. VIX option report..

    http://www.youtube.com/watch?v=KU_g2TXUMZc&feature=plcp&context=C4558477VDvjVQa1PpcFP8gF6YbVbpVy4YB9mvfz9U3bbEUuLtU7s%3D

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  75. Pretzel (et al)... I've really got my eye on that Aussie:Yen pair and the potential H&S it's developing.  Because when that pair rolls over, so do equities, every time.  (Ok, 99.46% of the time).  You can watch the game live, right here, lol.  There are 2 other charts that go with this one on my latest post if anybody wants to see them.  But this chart is good enough to show what's transpiring.

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  76. I'm confused... aren't we where we want to be for (IV) of the diagonal?

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  77. On Feb 15 SPX closed at about -0.5% and pushed higher on subsequent days shrugging off anything that might be taken as negative in the Fed's minutes (CNBC called that shy decline a 'sell-off'...). By then, ES lost about 17 points from the previous high and resumed the move up. I do not see the potential for something different (i.e. a meaningful downside) happening today. We may have some weakness through the EOD, but critical support levels will probably hold, reinforcing the upcrawling, ending diagonal scenario discussed here. AAPL ES 1398 is my ST breakdown level. If held, up we go, and I will get a ST long indication. If broken, I would look for a lower low (below 1386.65) and a successful retest of 1398-1402 as a ST short indication.

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  78. Thank you, sandyone44.

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  79. anyone see that candle?  what was that?

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  80. Anthony SwiderskiApril 3, 2012 at 8:02 AM

    Fed minutes

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  81. Looks like CVX broke.....

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  82. Gooo VIX  Gooooo!!

    http://www.youtube.com/watch?v=9QS0q3mGPGg

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  83. FOMC minutes released @ 1pm - possible culprit

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  84. Just felt  a CVX wheeeeeeee! Didn't see that coming so quickly.

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  85. Comex closed, and a minute later SLV and Gold just fell if there is no tomorrow... any explaination? 

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  86. Remarkable, but just for interest sake... if AAPL were performing at this very moment the same as the other 99 stocks in the NDX, the NDX would be down exactly double what it currently is.

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  87. Bus schedule has been moved up!

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  88. Would be nice if they'd let us in on the news sometime soon.

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  89.  nice my UVXY is blasting 9%. pooor shorts..

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  90. Probably some discussion on raising interest rates half a point in the next decade

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  91. FED minute takeaways ....

    The cavalry is all suited up, but not ready to charge. Market will have to wait for another day.

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  92. ghost spike on aapl 10 minute? pointing the way?

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  93. There it is... the reason behind the mini-sell off: sticking to the plan.

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  94. Probably work sideways now for the rest of the day and then another wave down tomorrow. Check your bus schedule.

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  95. Already bought 6 tickets for this bus ride, like the tour so far!

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  96. Jamie Tyrell says players are betting on a big implosion between now and september.

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  97. goin lower, 80 to 120 to 80 to 140???

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  98. Anyone familiar with a usable algorithm for calculating option premium. I could do it by hand but wondering if anyone uses or is familiar with one?

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  99. Big Euro drop.

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  100. lol I love the market's reaction to the fed minutes.  I want to get a loan from the mafia, load up on puts, and promise Big Beard Ben Bernanke halvsies if he mutters the words "half point increase by the end of the year" near an open microphone.

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  101. Now that wouldn't be fair - would it?

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  102. heard some numbers yesterday (Carter Lewis) regarding this most recent rally extending into 15 weeks. Longest one recorded from the March 09 bottom without at least a 4-6% correction. 

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  103.  saw that. possible target 1275 SPX

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  104.  Thanks for the update Bob.  I was away yesterday and feeling out of sync with the market action today so I've just been sitting on the sidelines.  So do you think CVX is going to continue down before it goes back up to 107.17?  Are you saying this is wave 3 of the first wave down?  I thought we were already in wave 2.

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  105. Exactly....1300 minimum, but figured 1275 likely. He was right on top of things back in October 08 and again in March 09. Very good technician.

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  106. last one to leave (the big board floor) plz turn out the lights

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  107. MACD is showing some, but not convincing, divergence on the 133t chart SPX over the past hour.  LOD is probably printed, methinks

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  108. I closed all my longs; protecting profits. Red flag -according to PL's analyses- has been raised: trade below 1409.61. Risk/reward is IMHO not worth it anymore in going long, even if it does go a little higher from here on. 

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  109. I've got my aluminum foil on now...so here's my thinking. If the decline to $104.92 was in fact a completed fist wave down....then the intervening correction to $107.89 may have been wave 2 and we are in the early stages of wave 3 down with a target below $100. If the $104.92 low was a fourth wave correction within the first wave down...then a new low below $104.92 will stall and then wave 2 will commence. I'm not good enough to call it....watch PL's updates on CVX so you can sleep at night.

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  110. Geez...UUP looks like a roman candle!

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  111. No worries...controlled by motion detectors. Marvelous thing...technology!

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  112. I guess no QE3 means a stronger dollar. Oops. There goes the export strategy. Actually, I'm glad we're helping our European friends.

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  113. The 1 min chart shows a more compelling divergence.

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  114. I think we all recognize a good trend line when we see one.

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  115. Family planning......

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  116. Thanks for the heads up.... I hadn't even seen that.  Focusing too much on the Aussie.

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  117. Wouldn't that involve the Black-Scholes calculation? http://www.tradingtoday.com/black-scholes

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  118. "A bird in-hand is better than two in the bush"

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  119. Inverse H/S complete and retest on SPX 1 min more support for rally on close scenario I am favoring, or at least no exciting drops to new lows today.

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  120. break of 04 es and bottom could fall out

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  121. Hi Bob_E, if we are talking about the same person, his name is Carter Worth, from Oppenheimer. Here is his interview: video.cnbc.com/gallery/?video=3000080741

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  122. Superb....thank you for the link and noticing my query. Good hunting!

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  123. Nice pic AR - my favorite Yogi:

    "You've got to be very careful if you don't know where you're goin, cause you might not get there."

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  124. CVX.....wave 1 of this first leg down from $107.89 does not appear to be extended, nor does the current third wave down...so I guess we should look for the fifth wave to extend. Wave 1 down was $1.39, so if we halt the correction up at or near $107.17 and subtract the $1.39 from it...we arrive at $105.78 not even below the recent low of $104.92. I'd say we close out the ops at $105.50 or lower. Any thoughts?

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  125. My fave Yogi was "Nobody ever goes to that restaurant anymore.  It's always too packed."

    Love that guy.

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  126. You are right.....not sure where I got the lewis from? Maybe Lewis and Clark...cuz I feel like I'm lookin over my shoulders for indians and arrows in this market. Tough being a pioneer.

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  127. Did "uncle Ben" say no more QE stimulus?  Trying to figure out the selloff today.

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  128. I was wondering why she 'ever' got pregnant.  Did you see her face, lol.

    Alternatively, it's possible she might be getting pregnant in that picture.  You never know.

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  129. 15 week rally....longest since the 09 bottom. Nenner suggesting weakness into first week of April...then important high on April 19. 

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  130. If there is a fork in the road take it.

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  131. must have strong bones.....probably comes from good stock.

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  132. Never heard that one and I'm laughin hard.

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  133. IMO ED still in play (PL's 2nd chart), today's dip still within tolerance of b of iii.  Might see a little weakness tomorrow a.m. but then likely c of iii will start fairly soon.  If it doesn't, ED might be in trouble.  Mkt closed strong though, think we go higher (and holding 1/2 position long o/n).  Will keep open limit orders lower o/n in case they run stop grabber.  sl at es 1400.5 / spx 1405.  Not trading advice.

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  134. I'm favoring Jason's diagonal, which should top this week.  I got the dip today at 1408.  I'm going to ride it to 1420ish and bail.

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  135. You think today's bottom is b of (III)? I have it as c of (IV) lol.

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  136. Kind of tough trying to trade with baseball size hail and tornados!  Never seen weather like this in Dallas at least for this long of time.

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  137. Pretty much. At least, he's having a harder time getting enough voting members to go along with his schemes. 

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  138. Yeah, that's the magic cookie. Not making any plans for a big date that night.

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  139. On second thought, I owe that lovely woman an apology.  I only said that to get a laugh out of somebody... anybody.  I'm sure she was a wonderful person and mother.

    One of my mother's grandmothers died in the mid 1800's at the age of 93 or 96 after having raised 12 children.  Imagine that... back in the days 'before' Wyatt Earp.  Kind of puts things into perspective doesn't it.

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  140. Kind along the lines of "Insanity is hereditary.  You get it from your children."

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  141. Scenario that works well with wave V completing this week.  Market is weak on open after the action today.  Closes strong maybe to 1425.  Thursday retests 1422 peak and meanders up.  Strong rally on close in anticipation of good job numbers Friday.  Good report Friday, market rallies and peaks.  Enters corrective phase needing just a small push to challenge long term trend lines.

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  142. Good fortune....(rather than good luck), more towards a beneificial or favorable outcome.

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  143. One wonders if that is the actual "DAY", then I'm gonna start prep'ing for the Matrix

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  144. Friday is Good Friday
    I heard markets are closed?
    Can anyone confirm?

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  145. Yogi was burning leaves in his backyard in New Jersey and the fire got a little bigger than he liked so he called the Fire Department.  "Hi, this is Yogi Berra.  I think you guys should come over to my house right away, I'm burning leaves and it's getting too big."  "Sure Yogi, how do we get there?"  "Don't you guys have those red trucks anymore?"

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  146. Does anybody know what caused TLT to tank like this in the final two hours?
     

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  147. Confirmed.
    http://corporate.nyx.com/holidays-and-hours/nyse

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  148. Looks like a C wave correcting the entire first wave up from March 19. Low was 109.69 on 3/19. Nenner said yesterday there could be some short term weakness in bonds.

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  149. Wow!  I love exciting weather.  But thankfully we don't usually get it as dangerous as some of you folks down there.  But we still get some incredible thunderstorms around here as well as the odd killer tornado.  Check this thunder storm.  Turn your volume up real loud, ok?

    This vid was taken from about a block from where I live.  I was in a high rise watching this from the balcony.  I'm not exaggerating when I tell you that the 'big shot' that you're going to hear were going off at times about twice per minute.  This storm raged full blown like this for 5 hours.  By far the best one I've ever seen.  Lightening In Calgary

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  150. Good catch.  So the market will have all weekend to digest numbers before knee-jerk reaction.  Remind me to be all cash be close thursday.

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  151.  Hows SPX and your TVIX chart looking technically? i sold most of my UVXY during day. will reload after i look at big picture. VIX is awakening nicely. thanks for all  your updates

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  152. Anyone else notice AAPL posted textbook evening star on daily?  15ish point red stick tomorrow would complete the pattern.

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  153. Bob_E pointed out that UUP looks like a Roman candle.  Same thing happened with TNX.  Rates exploded higher but this time around it's probably for all the wrong reasons and therefore bearish:

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  154. AR you might like this since you seem to be as cynical as I am: 
    http://www.sporcle.com/games/MaxMallanite/mitt-or-barry

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  155. PL sold his vix puts just before today's selloff and vix rally. -- masterclass performance.

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  156. You know you're tired when you read that second sentence as "Rats exploded higher...".

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  157. The issue with that calculation is that it is a static calculation. That is that the calc does not run real time. Premium is based on market and Implied Volatility of the underlying at the time of trade. Best you are gonna do is an estimate and then........ Drumroll please..... You have to determine what the bid/ ask is going to be at the time of the trade...... You will get better results trying to tie up some smoke and put it in a bag....... Lol. I use a really simple estimation method based on delta and anticipated moves

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  158. Yes. But the feds will dish out employment numbers anyway.

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  159. Awesome! If you've ever been really, really close to a single strike, the sound is so loud that it will defy description, and actually make you think your hearing is gone.

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  160. Thank you DRG62....I understand the "fuzzy logic" associated with option premiums. What I'm trying to determine is within a specific asset, such as CVX, what option strike and date have the least premium and then attempt to calculate an expected price for the option given an expected price for the underlying stock. The Black/Scholes model is way to "quantum" for me...but getting close to a number, by using the website algo mentioned below, is better than guessing. The Black/Scholes model suits my purpose. Thanks for your info and opinion.

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  161. Lol.  Get a quick nap and hurry back.

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  162. You got that right.  Oh for sure, I have had a strike as close to me as that big one in the video.  It really does defy description.    You can almost feel or hear a bit of buzzing or crackling for about 2 milliseconds before it hits.  Nothing quite like it.  In fact, I heard it and then saw the power line that it dropped into the back alley about 100 feet away.

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  163. I wasn't there, but have read that it is!
    Do you know how many Yogi jokes there are?
    Only one, the rest are true stories!

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  164. Lol... what a loveable character he is.

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  165. Good evening GPitt,
    thnak you for your observations, I shall call you 'hawkeye'  hence-forth :)
    You noticed that the waves were not correctly labeled, quite right, but not exactly as noted, (rush rush rush, but no excuse.)
    Here is a 'proper' chart with more accurate labels, it shows (I think) a blue Ending Diagonal (ED)
    with an extended 5th ( red ), and that has an extended 5th too (black dots). No doubt about the top!
    And none of the (measured this time) 3rds is the shortest.
    Thing is, is that the Top of a wave 3 or a wave 5. or even -  THE top?
    Just a oouple of days more to find out..
    Kind regards,
     

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  166. Saw 18 wheelers being tossed in the air like straws.

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  167. If the Fed is not preparing to ease, then conversely it must be preparing to tighten. Yields up, price down in bond market. Thus TLT tanked

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  168. One hit the road about 30 feet away from me and I thought I had gone deaf.  It stuns you.

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  169. It was scary.  I love wild weather but this was beyond likeable.  Two hours under a tornado warning is unheard of.  Not to mention the hail, baseball size.  Luckily no lives lost, I believe.
    Thoughts on where we go tonight and in morning for the market.  I think down but end the day up.  Next week we might start to see a shake up begin.

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  170. Cool breezes Mano, was going to take a few and explain how I get pricing on options and spreads that I trade with a few easy rule of thumb things that can be done on the fly.  Let me know if you are interested.  If not that's cool too.

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  171. No hawkeye, UKDNY, just trying to learn from PL and our EW expert friends in this blog - and I have a lot to learn... Do not take my comments seriously, as they may be completely wrong. Take care...

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  172. Wow!  They're particularly scary on a sunny day when you least expect 'em, lol.

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  173. I hadn't yet heard that the Bernank kind of delivered the bad news.  I was wondering why bonds tanked and equities tanked at the same time because normally money that flees the bond markets ends up in equities.  This time around though I don't that that rule of thumb is going to work anymore.  Rates are rising for all the wrong reasons this time around.

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  174. "Do not take my comments seriously, as they may be completely wrong."

    For some reason that comment resonates with me.  I've been known to eat a little crow myself ;-)

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  175. Beard Ben's zero rate policy is under pressure.....

    http://www.financialsense.com/contributors/jim-rickards/problem-with-feds-zero-rate-policy

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  176. Many thanks to Dave for his donation and continued support!  :)

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  177. Man, this market's trickier than a one-armed rattlesnake right now. 

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  178. Dyin to know....anytime, anywhere, well anytime. Thanks for thinking of me and I'm anxious to hear about your process. 

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  179. Yes, we dipped below 1409, but we closed back above it. BTFD's barged in. So I guess we are still in the ending upward diagonal. If so, think we're in it for about 7 more trading days? Bueller?

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  180. Ditto.  Eating crow comes with the territory.

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  181. The range of "tip tops" that I see is 1420-1449. Not a huge difference, certainly.

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  182. Rates have been artificially repressed due to Fed's actions.  Equities have been inflated due to liquidity.  As it unwinds the two normally opposing forces are going to move together.  I do not think this ends well.

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  183. This mixed metaphor calls for a brief interlude into The Worst Joke in the World

    Who's head the one about Nate the Snake?  So Nate the Snake lived out in the desert across the street from a lever he watched over -- this level, if pulled, would destroy the world.  Nate the Snake took hit job seriously, and performed his duty admirably for many years -- until one day Bob and Max were driving through the desert (I chose Bob 'cause of the ladder thing, Max I threw in for fun... incidentallly, Bob's driving).  Bob is trying to find a CD and he looks up at the road just in time to see he's headed right for Nate the Snake!

    Max yells, "Lookout, Bob, you're gonna hit Nate the Snake!"

    But Bob realizes that if he swerves off the road, he will destroy the world -- so he hits the brakes, but still plows over poor Nate the Snake. 

    As they come to a stop, Max gives him a glare and says, "Why'd ya do that?" 

    And Bob says, "Oh well... better Nate than lever."

    (now you have to go to this site and press the button)  http://instantrimshot.com/


    Sorry... this particular joke was inficted on me perhaps 25 years ago, and I've carried it around like a scar ever since.  Whenever someone says, "Better late than never!" I think of this joke.  And whenever I meet someone named Nate, before I can stop myself, I blurt out, "Nate the Snake!"  Usually they edge away from me at this point.

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  184.  "friends don't let friends Drink and Write"  ..  lol.. i'm calling you a cab PL...  drink lots of water

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  185. lmao -- I haven't been drinking!  I'm not quite a teetotaller, but I have a drink socially maybe once every 6 months.  Bottom line: I have no excuse for sharing this joke, other than I thought perhaps someone *might* get the smallest kick out of it.  :)

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