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Thursday, April 5, 2012

SPX and Oil Update: The Market Appears to Have Finally Reached the Tipping Point

Who remembers Sniglets from HBO's series, Not Necessarily the News?  Sniglets are words that should be in the dictionary, but aren't.  One that sticks with me from my youth, and which comes to mind now, is:

Pielibrium - n. The point at which the crust on a wedge of pie outweighs the filling and tips it over.

I believe this historically over-bought market has finally reached the point of pielibrium, and I'll elaborate on some of the reasons for this belief in a moment. 

First, a quick update on silver, sans chart, for anyone who missed the chart yesterday:  I personally closed all silver longs yesterday shortly after the open, with the cross of price back beneath the 30.72 pivot.  (This level was called out on yesterday's premarket chart.)  Silver appears to have new lows on the horizon.  This was also one of the "hints" the market was giving yesterday, warning of further equity weakness.

Those of you who follow along in the intraday comments section know that right at the close yesterday, I called for a gap down open today.  I'm going to share my short term chart, show you what my read of that chart is/was, and why I made that call (below).




Next, a wider view, and the projected target range if this is wave 5 of (i).  The more aggressively bearish view would have this as a nest of 1's and 2's. 

It is important to note that 1386.87 is still the first confirmation level for bears, and it has not been broken yet.  So I'm a bit ahead of the market with this update, since this update is decidedly bearish.  There are still bullish potentials out there, but I am ignoring them at the moment.  I think the time has finally come. 

Perhaps a bit aggressive, since I'm projecting a major trend change is about to unfold.  Oh well... if it blows up, it wouldn't be the first time I've had to eat crow.  ;)

Readers should be aware that projecting trend-changes before confirmation is very high risk.



Next a wider view, showing the key trendlines, which appear ripe to fall on Thursday.  It will be interesting to see if the market closes inside or outside the (ii) (iv) trendline.  The sketched-in portion is simply a rough idea at this point, not a projection.




Next, I want to put up the big picture chart.  A few readers have asked about this lately, and it is still my long-term projection that the 2009 lows will ultimately be broken.  I do wish to stress that there is nothing even approaching confirmation yet; and a lot can happen between now and the bottom to stretch out the B wave even further.  The chart below assumes the most immediately bearish outcome -- and while that outcome is certainly quite possible, I am not yet assuming this to be the case.




I also want to revisit an oil chart I posted back in February.  Oil has now whipsawed back beneath its breakout level and has broken its intermediate uptrend.  The chart appears quite bearish at the moment.  This weakness is being echoed by many other commodities, including gold and silver.



Now for a quick discussion regarding my thinking behind the psychology of all this. 

The pattern had two main options heading into Thanksgiving of 2011.  One option was an immediate bearish resolution (which appeared to be unfolding according to plan), and the other was to turn the 2011 decline into an (x) wave.  Ben and friends stepped up at just the right moment to blow-up the bearish pattern, and the market has been running with it ever since.

We've reached another inflection point.  While it currently appears unlikely, there could still be a bit more upside here -- that would be okay for the bear view.  But one way or another, it does appear that the market is at an inflection point of intermediate proportions.  While it's been a tough turn to nail, one can't help but find it interesting that the waves counted out just about perfectly to line up with the market's recent Fed-motivated Moment of Recognition that no new stimulus appears to be forthcoming.

Elliott Wave is largely based around psychology, and it does appear that psychology is now shifting/about to shift.  The stock market is an unusual mechanism.  I'm going to use Apple as an example here, but really you could use almost any stock.

Why does anyone buy 1 share of Apple stock for $600?  Before you give the quick and easy answer, think about it for a moment.  You don't need it; it's not going to keep you alive.  I can see paying $600 for an apple, if you were completely out of food, starving, and stuck crossing the desert -- but $600 for a piece of paper? 

It isn't the newly-announced dividend, because it would take about 60 years just to break even -- certainly not a wise exchange.  If I asked you to lend me $600, and told you I'd pay you back $10 a year for the next 60 years, would you do it?  Doubtful. 

And yes, if you owned enough of these pieces of paper, you could exchange them for a stake in the company, but you're not going to do that, and neither am I.  (By the way, if you're rich enough to buy a controlling stake in Apple, I expect some serious donations pouring in today!)

No, the only reason you buy Apple for $600 is because you think that, later on, you can sell it to someone else for $700.  Or $1,001.  Or whatever -- but you think you can sell it for more.  There is no other genuine reason to buy stock. 

Want to test this theory?  Try this simple mental exercise.  If you had a crystal ball and knew with certainty that a year from now Apple would be selling for $300, would you still buy it for $600 today?  Of course not.  Conversely, if you knew that the new TV or laptop you desperately wanted to buy today would be worth half what you paid for it in a year (which is probably the actual case), you would still buy it.  Because a TV, or a laptop -- or anything tangible -- has value which is granted through its use.  Stock does not.

Wall Street has convinced people that it's "investing" but it's more speculation than anything.  So you are buying it on the speculation that someone else will pay more for it down the line. 

This is why stocks move as they do, in buying and selling panics. 

"This stock's going up, oh my gosh, I'd better buy it before Andy does, so I can sell mine to Andy for more!" 

"Uh oh, the stock's going down now, I'd better sell it while people are still willing to buy the damn thing!"

Stocks move as they do as a result of the fact that, deep down, every "investor" knows that the value of stocks is largely arbitrary.  When it begins to be perceived that "greater fool" buyers are in shorter supply, the smart money starts dumping.  This starts to drive prices down, but the average "investor" keeps buying these dips, thinking there are still "greater fools" out there... and not realizing that they themselves are the greater fool.  It reminds me of the quote immortalized in the movie Rounders, regarding poker:  "If you can't spot the sucker in your first half hour at the table, then you are the sucker."

Eventually, the average investor realizes that the market is in a down trend, and then they start dumping -- and when that happens, you get a bear market.

We've had an ongoing buying panic because of the perception that, essentially, the Fed would be the ultimate greater fool.  And to a big degree, that has been true.  Stocks don't rise and fall based on the economy, they rise and fall based solely on liquidity.  While it's true that a good economy often means a liquid market and vice-versa -- that liquidity is only a by-product of the economy.  In other words, stocks can be driven indirectly by the economy, but not directly; the economy by itself is not the causation.  Many traders miss this key point.

So what we've had is an ongoing liquidity flood, which has in turn backed the psychology of speculation, which has in turn led to the Rally from Hell.  But now it is suddenly being perceived that this liquidity will go away.  Whether that will actually be the case, or whether Ben will pull another rabbit out of his butt remains to be seen.  Obviously, we can only play the hand we're dealt right now; we can't see the future. 

My contention is that without the Fed, this market will not hold up.  Especially right now, when it's as over-bought as a market can be, at long-term resistance, and loaded with negative divergences.  This means that if there are no more "greater fools," the exit doors should get jammed quickly.  Couple that with the fact that the wave patterns have reached a probable completion point, and you get the potential for a serious decline.  Given the pattern right now, an intermediate decline is the high probability outcome.

It is important to recall that Ben could step in a month from now and change the pattern again.  He could add another (x) wave, or numerous other things.  We'll deal with that if and when we come to it.

It does seem, though, that at some point imbalances ultimately need to be reconciled.  Much like the housing market collapse; bubbles can only stay inflated for so long.  Eventually the forces of nature, or inevitable human error, bring the imbalances back to the mean.  And right now, I think it's likely that this massive rebalancing is on the verge of beginning.  Trade safe.

571 comments:

  1. The two sniglets that stick with me:

    Cinemuck:  The gooey, unknown substance that coats the floor of a movie theater

    Point Blimfark:  The speed reached by a child after he turns out his bedroom light when he thinks there are monsters under his bed.  He can be in bed, under the covers before the lightbulb goes dark.

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  2. A force of reason, you are.

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  3. Cinemuck, lol.  I had forgotten that one!

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  4. Good morning. Good post with pop cross references. Read them poker faces.

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  5. Most excellent. Thanks for putting into words, what I've been thinking (kinda) for a while. I avoided playing the ED (thus avoiding a lot of aggravation), and sold out SLV yesterday at the open...100% cash and staying that way until confirmation. Thanks for sharing your sensibilities and sentiments with us.

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  6. In accordance with my post yesterday (for RUT):
    1) bounce up (most likely)
    2) down then bounce (likely)
    3) splat down (unlikely)

    #2 might be in the running today.

    The alternate counts have been preferred and the preferred have been alternates. Keeps things interesting, I guess.

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  7. Good Morning and happy Easter to you and all readers and their families.

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  8. Have to be clear on my 480 chart posted yesterday. There is a nice h&s on it; there is not a h&s on the DAY tho, one or the other will rule. My 3P&DH h&s concept is not validated. In plain English, there could be one move run to form a shoulder on the DAY, overriding and breaking the h&s on the 480....

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  9. PL, beware of Apple bulls and shareholders (as it seems like everyone's on the bandwagon) who will scorch your disapproval by hinting that they are fools. :)

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  10. Good morning everyone not Jason

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  11. Good morning Jasons who don't go by Pretzel Logic

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  12.  I was sure that Point Blimfarkwhen I read it had something to do with the bearded one. Guess my predictive powers are fading. lol

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  13. I'm not hinting that they specifically are fools.  As long as they can find someone who's willing to pay more, they're brilliant speculators. 

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  14. PL said "This is why stocks move as they do, in buying and selling panics. 

    This stock's going up, oh my gosh, I'd better buy it before Andy does, so I can sell mine to Andy for more!

    Uh oh, the stock's going down now, I'd better sell it while people are still willing to buy the damn thing!
    "
    Trend lines (and )removes the emotion.....

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  15. lol -- it's still weird to me when you call me "Jason."  I don't know if you saw on another thread, but I've gone by Pretzel Logic in the online world for almost 2 decades.  So you're giving me an identity crisis calling me by my real first name online. 

     :)  

      :D

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  16. Your post reminded me why I don't play poker...

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  17. Carrying over my reply to Bob_E about his question on digital options:

    I know what they are.  All I can say is, in general, the fancier / more complex / less liquid a derivative is, the more edge / profit is built into it by the seller / market maker...Not saying you won't make money if you get the call right, just saying it's like betting on the favorite at the track.  The favorite generally has higher probability of winning baked into its odds than it has in real world...

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  18. Agreed.  ES pattern (and implications) quite a bit different from SPY (cash).

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  19. Great article, PL.

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  20. Thank you for clarifying. You know how zealous and sensitive some of those people can be as evidenced on sites like Yahoo, Minyanville, etc.

    How's your Windows Phone? Which one do you use?

    I'm hoping Microsoft can get its act together with Nokia.

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  21. Your good morning is below, right there! I didn't want anyone to feel left out.

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  22. Minyanville knows who you are. You have been exposed! :)

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  23. My guess for EOD target for maximum frustration (from chartists) would be ES = 1394.5, SPY = 139.95, SPX = 1399.5

    Not trading advice.  Just my thoughts.

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  24.  Jason has been outed? Rut row. Just as long as he slays the mrkt.

    http://www.google.com/imgres?imgurl=http://www.ppchero.com/wp-content/uploads/2012/01/jason-mask.jpg&imgrefurl=http://www.ppchero.com/our-greatest-hits-for-december-2011/jason-mask/&h=347&w=520&sz=30&tbnid=KPwf6MeWzSw8rM:&tbnh=93&tbnw=140&zoom=1&docid=Nftzsvfm6pNaPM&sa=X&ei=HZ19T9ONC5T-8ASxy9nyDA&ved=0CGQQ9QEwBQ&dur=1029

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  25. It's an HTC HD7.  Here, I added this paragraph to help illustrate the point, and to hopefully lead Apple owners down the correct mental path:


    Want to test this theory? Try this simple mental exercise. If you had a crystal ball and knew with certainty that a year from now Apple would be selling for $300, would you still buy it for $600 today? Of course not. Conversely, if you knew that the new TV or laptop you desperately wanted to buy today would be worth half what you paid for it in a year (which is probably the actual case), you would still buy it. Because a TV, or a laptop -- or anything tangible -- has value which is granted through its use. Stock does not.

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  26. I used to read only on Minyanville.  Last Winter when Jason was predicting the end of the world, and then the KO level hit Minyanville didn't echo any of his updates for a week... I was thinking "WTF? Miss the call and no updates?!?!" Then I reread and saw the link to here haha

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  27. I just got tired of sending the articles to them.  Eventually, I'll send more -- it's just a bunch more work on top of everything, because they want a certain format which I have to package for them.

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  28. ES 1391 is strong resistance, either a back test of that and it holds or a break and we are headed up, think up is corrective, not impulsive tho

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  29. Zoom in... Look out below.... 1355 is on the way.  Looks like I was wrong about a push up to finish the week.

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  30. Island top is in and retested.  Evening star, even though action failed to make the pattern textbook, looks like the top.  I feel sorry for a guy I know... I tried to hint at him to be very careful, but I didn't want to come outright and say it since I get calls wrong...

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  31. You are truly one in a million PL. Educating us EW newbies not only in wave structure but also in human structure. I can't say it often enough....Top Drawer, one in a million, best of the best. Lucky for us you are out there and lucky for us we found you.
    Muchas gracias, señor presidente 

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  32. PL, good job warning readers that the potential still needs confirmation.  Way easy to get ahead of ourselves.  In the spirit of protecting the inexperienced from themselves, you may want to revisit the importance of the stop loss.

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  33. The race is on for AAPL, PCLN, GOOG ....

    .... to be the first into the thousand dollar club. :)

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  34. and the neighbors report that, "He was always so quiet...just kept to himself, and worked the ES...we never thought he was into PMs."

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  35. SPX did have a complete 5-wave decline -- now we find out if that is wave 1 of 5, or just a very short fifth wave.  Above 1401.39, and we'll probably get a larger bounce.

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  36. Yes, stop losses are muy importante.

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  37. NO brag...just fact!

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  38. Very nice phone. You're probably due for an upgrade. May the next gen WinNokia serve you well.

    Your example is the reason why we are traders. :)

    This is reminiscent of the last tech bubble. Now probably spreading to new victims and old victims who have forgotten what it was like to have eBay and Amazon hyped to the moon and then left holding the bag. People say it's different this time because it's Apple. But it's Apple stock, and stocks are whimsical.

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  39. Like many others here, I needed to know  a little more about who I was reading, Jason.
    You are a remarkable communicator, and I will now have to up my monthly donation to insure that you continue this endeavor.
    You also appear to be wise far beyond your years.  Have you somehow mastered time compression/expansion with your copious spare time?

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  40. CVX....going to start scaling in Put option buys on CVX anytime price is above $106.50. I'm getting ready for the "Trap Door" plunge that I think is around the corner on CVX.  Using EW, I think I figured out the CVX "tell"

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  41. SLV back at 30,72+ up, so confusing...

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  42. I agree from a maximum frustration standpoint, that would be true.  I have no positions currently, am interested to see how today turns out.  If we close green, could be a re-run of the 3/23 + 3/26 mkt action.  Unemployment #'s are trailing, not leading, indicators.  So March could be decent, and market could interpret that bullishly as Euro woes not affecting USA.  But clearly Euro's problems re-accelerating and their recession will ultimately impact USA just as our housing crash impacted Europe...

    OR, the point of recognition may have been finally reached and we close at spx 1365.  But I keep thinking that big tops (cue circus music) are a process, and this one would have just started on 3/26-27 (last week) so it seems too soon for the bottom to  fall out.  Just IMO.  I still think we see spx 1410 in next week or two.  But waiting to see how we look nearer today's close.

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  43. Market never moves in a straight line.  :)

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  44. lol -- no, unfortunately. 

    And thanks... I faced a lot of challenges in my youth -- which I think either pushes you to learn from those experiences, or crushes you.  :)

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  45. There was a question yesterday about the expected rate of decay of TVIX. CBOE lists VIX futures prices going back to 2004 which can be used to estimate the performance of TVIX. I'll post some charts later. First everyone has to guess what a million dollars invested in TVIX in April 2004 would be worth today.

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  46. Here is Zerohedge takes on the secret meeting of beard boy and banksters.....

    http://www.zerohedge.com/news/art-cashin-bernankes-secret-banker-meeting-keep-europe-afloat

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  47. i'm going to guess less than 1 million...

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  48. Speaking of moving in a straight line, I keep forgetting to ask you if you're near Lahaina.

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  49. Used to live in Lahaina, but it was too damn hot.  Moved up to the mountiains last year, in Kula.  Can't beat the weather up here -- mid 70's almost all year round, and gets just chilly enough at night in the winter (50's) that you feel like there's some variation.

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  50.  The comments the individuals leave in response to those articles are detestable.  Opinions are one thing, but how you express them is another!

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  51. yw, the Artist Formerly Known as jbg  :)

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  52. LOL... I've always wondered what that movie theatre sh*t was called.  Thank you very much.

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  53. Agree 100%.  I think higher highs are off the table, but a decent retrace into the ED or middle of the topping pattern of the past 2 weeks is a possibility.  

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  54. Potential small head and shoulders on SPX 1-minute chart.

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  55. Good morning BOB-E. I am with you  on this CVX option. BTW what is your feeling  about positioning puts on FCX?

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  56. Zerohedge shows you how BLS turns a disappointment of initial claims into a hopeful job recovery.....

    http://www.zerohedge.com/news/initial-claims-continue-string-disappointments

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  57. Watch it....I'll start singing...and nooooooobody wants that to happen. :O

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  58. That must be so nice.  I had the extreme pleasure of being in a pub getting tanked with some kind of pretty little bird that came to eat some of my popcorn at an open-air pub on Front Street.  Pure magic it was.  I just loved it.

    But...at Christmas 2010 I was in the "officially" coldest place on the planet that night, Edmonton.  It was -46C or -51F..  With just a light breeze that temp was brought down to -63F.  It was nowhere near a record but was the coldest I've ever felt.  I can't describe how painful it is but I also know an guy who used to be an ice road trucker.  He experienced -90f.  Here's what happens to a glass of hot water when you throw it in the air in those kind of temperatures... instant snow.

    I'm comin' to Hawaii.

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  59. Excellent post. What most people ignore is one important aspect of stocks - ultimately, besides being a 'piece of ownership of a company', they are products! Products traded in public open markets and subject to supply and demand imbalances. Like any other product, stocks can be marketed, advertised (positive or negatively, boosted or hammered), and that will have a psychological influence on supply and demand. Products whose prices can be easily manipulated by the major product holders. The same can be extended to stocks as an asset class, i.e. to the stock market as a whole, and also to other asset classes. Fundamentals become secondary in this context. Understanding such 'product nature' of publicly traded assets, the psychology behind trading and how asset prices (all classes) are influenced by cyclical liquidity (money supply) fluctuations is key.

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  60. Good day RickQC.....quick look at FCX suggests the fifth wave was extended and could rally back up to wave 2 within  5 (which is around $43). I'll look closely today and get back to you.....I'll have to put the aluminum foil back on my head, and get busy!

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  61. Thank you; will wait for the next couple of bus further up the line. Thanks & have a great trading day

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  62. ES tgt 1397 to 1402

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  63. this is how one can interpret my post. the EW4 tgt is no higher than 1402 on the 120 ES chart. I am looking for a turn there if this is an EW4; a breaking higher of that level means that there is a chance that the EW4 is broken and we are done with IT down for a day or two. SO:
    1402 holds and down or sideways, (ABCs)
    1402 breaks and up or sideways, (ABCs)

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  64. Question: If SLV continues to decline to the bottom of it's current channel around $22.....ZSL would be priced around $30. Correct, or should I take my meds?

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  65. I'd wait for the uptown bus...see if it passes by. If so, then wait for it to complete it's route and we'll catch the downtown bus.

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  66. Wouldn't trade above 1399 invalidate the EW4 count, because EW4 would have crossed back above EW1?  Or is 1402 allowing for a margin of error - leading to a whipsaw back in line for more down?

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  67. Take your meds Bob ; ) - it all depends upon the path it took to get there and the time.
    If it did it today, ZSL would be worth about $17.50 EOD
    If it took 6 months ZSL, could be worth less than currently valued

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  68. and just to extend my comment Pl was considering if this was a 3 ot a 5, I said because of the extended oscillator readings (down) that the down was not over yet and thought it was a 3. So after this corrective EW4 move we really should see more down.

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  69. now you've got me confused. which bus goes to airport?

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  70. Take the "smokin bus" if you plan on "flying"

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  71. Thanks KB....I needed that!

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  72. Richard MckenzieApril 5, 2012 at 5:51 AM

    Bob_E.  I agree with you competely. Just curious about the price of $106.50.  Do you anticipate that price today?  I was considering the May 100 or May 95.  Any thoughts?

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  73. You betcha Bob - and thanks for your intraday commentary, much appreciated. Keep you eyes on CVX, I got some home run puts, that I'm looking to retire on ; )

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  74. Bears need to take out 1396.50, otherwise we go higher.

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  75. Wave 2 low 1396.50?

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  76. I wish I was that good, that I could call a day, or even a week. I watch all day (really love it) and I am thinking (don't quote me) that the price $106.50 would come about early next week. IMHO

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  77. Oh man...you can't retire. GDP would take a big hit...Bernie would have to invoke QE2.1. Just buy Greece with the profit!

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  78. Not if bears can break it -- then it's the B-wave low.  But yes, that's the basic idea.  :)

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  79. A chance the up corrective move in ES is done or close to being done, some things are pointing to lower now.

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  80. maybe, I have a ghost spike on the 120 all the way down to 99.50 ES.

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  81. That last wave down *looked* impulsive, and the dollar has done a ramp and camp and looks ready to move higher.

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  82. I agree most part of your post but I wouldn't put fundamentals as secondary.  A bad product won't attract much buying even though shoppers has a lot of money to spend.  I would treat liquidity and fundamentals equally.

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  83. Have you used Binary (Digital) Options in your career?

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  84.  you guys are awesome.. thanks for posts..

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  85. Just checked, yes 99.50.  My question regarding 1402 level... is that your margin for a fakeout move before wave 5 down has to begin?  Or was that taken off a technical level not related to EW?

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  86. I use Trinary Options, priced in base 12. 

    lmao, no.  I use options pretty sparingly these days.  Occasionally, when I feel above-average confidence, I might get risky, like at the close yesterday where I bought some April wk 1 CVX puts and picked up a quick 100% at today's open.  But I mainly consider options for trades where I don't want to manage the trade too actively and I want to limit my exposure -- or for spec trades. 

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  87. CVX right at the low......stochastics low low.....

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  88. *If* 105 +/- goes, could get a mini-crash in CVX.

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  89.  Fiat liquidity eventually leads to Pie in the face.

    Great Post.

    For those who checked "I like pizza", in Chicago you can experience Pielibrium eating your favorite deep dish health food.

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  90. Put my aluminum foil on as soon as I read your opening line. LMAOROTF. Thanks for the reply. I know your busy...so I'll shut up.

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  91. Heading out to Pizzeria Due tomorrow as a matter of fact!

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  92. For this 'General Interest" thread, heres an old Apple post I liked:  . 
    http://www.denversyntax.com/issue11/essays/bitz/mac.html 

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  93. (doing my best B.B. King voice, from Trading Places):

    "I don't care whatchu paid for it, in Philadelphia, your TVIX is worth... fifty bucks."

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  94. Can't even walk away to use the bathroom.

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  95.  dont hold it too long..  hope ya didnt eat tacos

    http://www.youtube.com/watch?v=b7l6jg4Hlog&feature=results_video&playnext=1&list=PL54EA45C9E02C548C

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  96. I get the 93 ES area as area to break for more down

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  97. Lol!  Done that and suffered for it in the past...

    Don't tighten your stops before you walk away or they'll hit them.  They know when you are away... : )

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  98. This has the feel of a typical OPEX day -- slow sideways crawl all afternoon.  Pretty soon, they will offer options contracts with daily expirations and the market will never move again.  B-O-R-I-N-G

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  99. VIX option report

     http://www.youtube.com/watch?v=SImGqqaaUeQ&feature=plcp&context=C4da7932VDvjVQa1PpcFP8gF6YbVbpVw_VEhX6xFVhT6Syqq7K2Ow%3D

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  100. lol, I remember that with your stops.

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  101. Too much coffee.....tying a square knot right now. Let's see that's left over right and then right over left......yeow!

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  102. great post PL, AAPL pie. yummie. You surely dared to to stick your neck out on this one and front run it for a mile, but hey, what's the worst thing that could happen? Just BTFD and go long again. Typical boring day-before 3-day-weekend day today (jee that's 3 days in one day!?). Just sitting back, relaxing, and watching the show unfold. Btw, nice call on the gap down today!

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  103. Mental stops.....and I did a sweep of the place this morning. No bugs! 

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  104. Everything is telling me to go long CVX right here PL. I don't have the courage to do so, cuz I'd just be gamblin. But all the oscillators are low low and there are a couple indicators showing non-confirms. Really teasing me. 

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  105. Don't give the Beard and his wizards any more ideas!  

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  106. Thank you, sandyone.

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  107. is that an extended fifth from $105.41 down PL?

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  108. Yup.  Lesson learned.

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  109. That's what you think...

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  110. you might be fighting the mrkt direction, about 50% of a stock's move can (usually) be attributed to the direction of the mrkt...

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  111. Oh man...wish you hadn't said that. Now I'm getting paranoid!

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  112.  target hit on  INDU?

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  113. Lol.  They can see everyone's order(s), but since you use mental stops, you should be safe.  I think...  ; )

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  114. Don't tighten your stops before you step away.

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  115. Thanks K7....appreciate your wisdom. I have no position in CVX right now. Watchin and learnin......I'd like to see a rally back up to $106.50 to confirm my thinking/wave count. But that might not happen. Too many indicators telling me CVX should go up...so I really can't step in to a short here. 

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  116. I write my stops down on the inside of my eyelids. Don't lose em that way. Hurts, but I always know what I'm doin.

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  117. You are good, Authentic1.

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  118. April 20....date of interest.
    http://finance.yahoo.com/news/greek-banks-face-moment-truth-152805168.html 

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  119. I've heard that they use Elliot Wave Theory to predict what you are thinking...  

    Lol!

    Have you seen "The Minority Report"?  The Beard and his wizards just had an important lunch meeting this week...

    Note: To be clear and before anyone makes the wrong assumption, I have the highest respect and admiration for PL and his EW abilities.  The above comment is just a joke.

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  120.  I wonder if a straddle would be in order?

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  121. Man...shows you where my mind is....started looking for my wife.

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  122.  Speaking of straddles, does anyone here have any experience with Form 6781?  I'm having a difficult time figuring out what gets filled in on Part II and the documentation that is supposed to be attached.

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  123. excellent post and charts ! .....I liked the explanation of how the market works...I am guessing you are not a believer in discounted cash flow analysis  lol ! oh well back to the drawing board !

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  124. I know PL is objective and right. But the indicators I watch are all saying either sideways or up. I'm hoping for the up, but standing aside. A straddle says I don't know....conservative certainly and very appropriate right here. I can't pull that trigger though. You know they say hope, is what you have, when you can't face reality. I hope I'm right!

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  125. Death by a thousand paper cuts......Ouch

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  126. Continuing TVIX post from below ...
    The guesses were interesting ranging from .001 to $75,458,125.23.

    VXX
    is an ETF which consists of first and second month VIX futures. The
    futures are continuously rolled over so that average expiration of the
    futures held is 30 days. Using VIX futures prices from CBOE we can
    estimate the performance of VXX going back to April 2004. The first
    chart shows VXX overlayed on my VXX estimate.

    TVIX and UVXY are 2X daily leveraged versions of VXX. The second chart shows my estimate of TVIX. One share of TVIX would have cost about $1,620,000 8 years ago so a 1 million dollar investment would be worth about $4.75 today. That makes Authentic1 the winner with a guess of $1.

    This means that TVIX has lost on average about 79% a year or 12% a month. From 2004-2007 it lost about 90% a year or 17.5% a month. From March 2009 to March 2011 it lost about 96% a year or 23% a month.

    The last chart shows the gain over previous low. In 2008 TVIX increased by roughly a factor of 17.

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  127. ES was on the edge right there, wanted to caution you about trading opposite what I thought was its next move

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  128. Passed up on my usual fillup at the local Chevron this am and instead went to Citgo - short Chevron or support Chavez, hmmmm, the moral dilemma. Oh well, seems to be working ; )

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  129. if this is the EW5 down move it should be pretty good.

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  130. CVX mini-crash, right on schedule.  Bob, it just broke down from an important support level.  Why not use that as your pivot?

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  131. Greatly appreciated...I wouldn't go against PL's wisdom and experience. Be like steppin in front of a bus.

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  132. Thanks PL......I will do so.

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  133. Look at PL's last comment on CVX mini-crash

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  134. Did Bernanke just announce that he's shaving his beard or something?

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  135. Look at PL's last comment on CVX mini-crash

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  136. Look at PL's last comment on CVX mini-crash

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  137. Wish you had told me earlier.....I'm always the last one to know!

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  138. hmmmm, a recent post of mine miraculous disappeared. PL, can you check if you got it in your inbox? It was about fib-based butterfy pattern. It posted, then when I reloaded 5min it was gone and a bunch of new posts came up. Huh? Anyway, attached the fib-pattern.

    It's from Market Barometer: http://finance.yahoo.com/news/market-barometer-april-5-2012-112946893.html

    They've been posting it since January and the market has tracked it rather nicely. Now the article projects decline into 1340-1370 area, which is in line with PL's estimate. Given the accuracy of the pattern, I do give the article credit.

    Boy, if it closes today below 1394 that be real good for the bear case IMHO

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  139. next down wave may be commencing

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  140. The head of PPT (Plunge Protection Team) is gone.....

    http://www.zerohedge.com/news/brian-sack-out

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  141. Something that is easy to forget sometimes is that no-cost liquidity has to be returned to the lender eventually, and people in temporary possession of it aren't actually trying to be de-possessed of it. :-)

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  142. i told you to not go long CVX. 

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  143. inverse h & S on the 5 min es

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  144. @UKDNY - I noticed that STAN-LON on daily chart is about to complete a complex, multi-month head and shoulder.

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  145. thanks! It was probably because I had too many links in the post?

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  146. SPX possibly forming a triangle or flat... might have to wait 'til Monday for more excitement.  I need to get to sleep anyway, but this market is doing its best to lull me into a coma.  Been trading DX all morning, and I've made a few bucks, but it's been about as exciting as reading a washing machine instruction manual.  I'll catch up w/ everyone later.  GL!

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  147. I'll keep ya in the loop next time. And FYI I eat only Kraft Foods products, Philip Morris chewing tobacco, Jack Daniel's whiskey and drive a Ford Truck.

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  148. As I said...I'd definetely not go against PL's wisdom and experience, but had I gone long, I'd be down $0.07 right now. 

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  149. sweet dreams! monday should be full of drama.

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  150. Right on...I buy only American made products. Had a solicitors call yesterday from some guy in Malaysia. Told him as soon as he moves to the U.S.A. as a citizen, then he can call me. Other than that!...Take a hike!

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  151. now a break of 89.5 es should speed this down up.... this needs to happen pretty soon, no deliberation

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  152. Thanks for taking the time to do this, giarc.  It should serve as a warning for anyone looking to buy and hold any VIX etf - even for a few days.

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  153.  whats the spread difference between ES nad $ Katzo?  thanks  i dont have current ES quotes

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  154. add 5.25 to Es for $SPX

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  155. Just to add: that's now a confirmed 5 waves down, so do be cautious of whipsaws. A solid whipsaw could be a larger 2nd wave rally kicking off. ________________________________

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  156. Hiya DD,
    can you post the chart then... be good to see your take on it, & any projections as to where we end up.
    Isn't today a total bore... zzzz.... should help PL get some sleep :)

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  157. look at AAPL, straight up

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  158. Hiya Bob_E
    Heironymus WHO!?
    It's Feynman dude..spelt F.E.Y.N.M.A.N.
    Mind you it does look very similar  ...  lol
    Glad your CVX is paying the rent, good calls. Respect.
    Have a great WE
    Kind regards

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  159. Right......caution is the watch word of humanity, or something like that. Not being is on the down is OK for me. The last decline was really confusing to figure out....and if I'm not comfortable I can't pull the trigger. But have the utmost respect for your comments and recmnds. Thanks for taking the time to reply to this neophyte.

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  160. headed for 98-9 ES before any down

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  161. in case one didn't know (but of course your did!):  Jobless Claims Keep Getting Revised Up.
    The Labor Department has now revised upward its first estimate of seasonally adjusted claims in 56 of the past 57 weeks http://blogs.wsj.com/economics/2012/04/05/jobless-claims-keep-getting-revised-up/

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  162. Top of the day to you good Doctor. I was referring to Mr. Herman Goldschmidt in Feynman's book. Went to the funeral, was a plaabearer, didn't know the guy? Ifin you read the book, I'm anxious to know who Herman was?

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  163. Just came back from the airport I saw my set up puts didn.t get triggered. The bus is still going towards downtown "I'm loving it". Are you still seeing an up trend before the EOD or going sideways from here?

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  164. Hiya K7,
    looks like AAPlL is in a 4th wv triangle, with (I think)  a pop up to 637 by the close... dull market today, when will those 400 point surges come back... good days those...
    Have a great WE, :)
    Kind regards

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  165. My take? Nothing much to say except it is retesting the gap from January. And if your STAN-LON analogy to $SPX holds, this is interesting. http://screencast.com/t/19J4xfy5KL

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  166. if this can get to 96 to 99 quickly and stall right there, there is a chance we slip into the EW5 (120 min. es.) and fall rapidly at EOD. But it is getting too late.

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  167. Just completed five waves down so we'll have some form of a-b-c correction (whether simple or complex????) PL was suggesting being cautious here because of the potential for a whipsaw in the 2 wave back up. Indicators/oscillators are all low low so I'm of the opinion our "next week" target still applies. I'm leaning towards next week and any rally that gets overbought (high stochastics) will get me to pull the trigger. We didn't miss much on this decline....all though convincing, not much to write home about. See you next week....happy easter and have a good weekend.

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  168. Up from here I believe.....oversold and the markets are holding up.

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  169. Pretzel, I believe this market will decline in the near future but do you really think it'll decline prior to the presidential election? I'm sure obama really wants to win and will do anything in his power to get his approval rating up which means using his powers to prop the market up

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  170. In case you missed pL's comment re: CVX
    Just to add: that's now a confirmed 5 waves down, so do be cautious of whipsaws. A solid whipsaw could be a larger 2nd wave rally kicking off 

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  171. It’s a rocket ship -- when does it run out of fuel?

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  172. Good post, Soulsurferusa.  I would call this jobless claims numbers a politically seasonal adjustment numbers.  Without artificially intervention, consistently up revision of jobless claims for over a year is unrealistic.

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  173. Thank you very much & have a wonderful Easter with your family & friends.

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  174. I am more convinced now that this final leg down was the fifth wave of the first wave down. If you look at the 15 min chart starting at April 2, it's clear the third wave down was complete at $105.05 due to the EW Oscillator registering the lowest reading at that time and then an intervening rally (complex) and the final fiftth wave down without confirmation from the EW Osc. What worries me now....is the possible wave 2 back up.....could correct 50% of the entire down from $112.28. That would be....$108.29, or 38% at $107.44......lots of work to do over the weekend.

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  175. It's a 4th wave triangle. The wave labeled 4 on the 1st chart was actually wave 4 of wave 3. ________________________________

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