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Sunday, April 29, 2012

SPX, INDU, and Employment Updates: Looks Like the Shoe is on the Other Hand Now!


No one can deny that many indicators look bullish right now.  The bears are rapidly running out of real estate, and the Dow in particular is within a stone's throw of making new highs.

However, the burden of proof is now on the bulls.  Anybody can run the market back and forth in a trading range, but until it breaks out, it's just range racing.

It's worth remembering that things looked fairly bearish a week ago, but bears failed to get it done when they needed to, as discussed on April 22:

I think one of the key trendlines right now is visible on a longer-term chart, and it's not too far below the current market. If that red trendline breaks, the market could start the next big leg down. If it doesn't break, the market should continue to bounce higher.

Bears were unable to break the red trendline, as shown below, which did indeed lead the market to bounce higher. 





Now the market has reversed roles, and the onus is on the bulls. Things look fairly bullish (as they looked bearish recently), but the bulls now need to "prove it" by making new highs. Until they do, the danger of a bearish reversal can't be ignored.

The Dow chart illustrates the levels a little more clearly.

There are a few different ways to view the rally on this chart.  The bearish view basically needs a top immediately.  The bullish view suggests another new high, which would also invalidate the bear count.  It seems reasonable to assume that if the bulls get a new high, then that will probably mark wave (1) of the larger (v) and at least a couple weeks of new highs would be forthcoming.  It's also possible it would mark ALL of (v), but that seems less likely at the moment. 





The SPX looks like it either has formed, or is very close to forming, at least a short-term top.  It's completing either its C-wave or first wave up.




Zooming out a bit, the SPX counts look like this:




The advantage the bulls have, of course, is that they are continually backstopped by the Fed, whose goals of making the dollar worthless have, thus far, largely been successful.  A worthless dollar makes everything else worth "more" in dollars: from stocks to precious metals, to oil/gas and food.  So it seems like things are going up in value, when in actuality the dollar is simply going down in value.

In reality, it's a zero-sum game that only damages the American public with higher prices.  The upside is that we all "feel better" about things while they're doing it. 

However, I propose that the Fed should at least buy us all a nice dinner.  And I'm talking about a good restaurant, no greasy spoon joints.  I think this is only common courtesy, as the majority of us Americans appreciate being taken to a nice dinner before getting royally screwed.

Of note, the Fed recently announced a new motto, which I think is a sad, but excellent, example of Truth in Advertising:

The Federal Reserve:  Saving the World Daily by Destroying America

I'll stop ranting about the Fed now (until next time!), but it's hard not to get depressed about this stuff from time to time.

Segueing back to the market:  There is an interesting psychology that's developed among bulls and bears alike regarding the Fed.  The bulls have been backstopped for so long, that if/when that safety net ever goes away -- or fails to work -- I wonder: how far will the market fall before the masses realize it's not working anymore? 

And what will happen then, when they do realize it no longer works?  I doubt it will be pretty.  It will probably resemble a first grade fire drill, with everyone rushing about chaotically, failing to take their "place" in line, and most making a mad dash for the exits completely out of order. 

It's hard to say with any certainty how far away that day is... it might be next week, it might be next year.  But it does seem that, at some point, this fiat fiasco must end.

Along those lines, another interesting chart I want to call attention to the euro/dollar.  Euro/dollar has some pretty serious intermediate and long-term resistance not too far overhead.  Again, the onus here is on the bulls to break out.




I'd like to end this article with a couple charts and comments from my friend Lee Adler at the Wall Street Examiner.  Lee's comments in italics below:

Improvement in first time unemployment claims is slowing. Actual, not seasonally manipulated data, including an adjustment for the usual weekly upward revision, shows that the year to year rate of change is on the cusp of a possible upside breakout, which would be good news for stock market bears if it happens.




Here's why it's mind blowing. I've plotted it below on an inverse scale with the S&P 500 overlaid.




That speaks for itself. As the improvement in claims has slowed, so have the gains in stock prices.

I found this data quite interesting, since it fits with both counts quite well.  Sometimes we get so focussed on the short-term that it's easy to lose the big picture; the counts are really just nit-picking in the grand scheme of things.  Assuming the SPX drops back below 1000 at some point in the future, what's the practical difference if the top was at 1422 or 1452?  Trade safe.

224 comments:

  1. Good evening PL.

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  2. Good evening all. 

    I'm reading, "The Disciplined Trader: Developing Winning Attituds" by Mark Douglas.  This is an excellent book!  It doesn't provide a trading system or TA or EWT or anything like that.  Instead he explains is very painful and chillingly accurate detail the behaviours and emotions that cause a trader to harpoon himself.  I'm less than 70 pages in.  It feels like I recognized myself on every page and I know I've made every one of the mistakes he talks about.

    I wish I could remember who recommended this book here on the blog.  I'd like to give credit where it's due.

    If you decide to buy it, remeber to use PL's link on the right.  That way you'll help to support the blog in a painless way!

    Good luck everyone.

    -whip

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  3. PL,
    In the first chart, you noted that Bears would need to break trendline of 1296.   That was a typo, right?   I thought you meant 1396?

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  4. hey PL, good stuff. sorry but I haven't been around much: AWOL for sure! Had a death in the family back in Holland 2 weeks ago that I needed to attend to and now traveling all over the country for work :-( not much time to follow the markets. besides noticing pretty much sideways slop shit... always reading your updates though, religiously. good stuff. keeps me sane. just checked in for my next flight.... gotta go! 

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  5. in light of PL's excellent jobs' comments: 
    http://www.cnbc.com/id/47226507
    scary. especially with the utter bull complacency and 1-stock focused market of these days.. (AAPL's earnings weren't stellar across the board, which  it usually is, and Samsung beats AAPL in phone sales....)

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  6. Well, it's a rising trendline, so it will vary as time goes by.  Right now, it crosses roughly 1367.

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  7. Hi, Arnie, sorry to hear that.  Seems to be going around lately. 

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  8. Nice write, PL. The real difference between 1422 and 452 = 30.  ;-)

    But thanks for asking that question. :-)  -DD

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  9. any one saw that huge ghost spike on silver and USD on the kitco chart? Is it just kitco error? or is it for real?

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  10. PL, I'm in the Eurozone at the moment and cheaper EUR and GBP wouldn't hurt. :)  Still keeping tabs on your blog... Unemployment seems tough everywhere. One of these days someone will be able to paint the full picture with the different unemployment reports, combining inital claims, continuing claims, and percentage unemployment, and then point out what missing. The reports can be taken at relative value from one report to another and its usefulness for Wall Street seems to end there. But the real numbers of % unemployment is a bit more useful (or perhaps, useless) for Main Street.

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  11. Hi PretzJasMan.  I really enjoyed that read.

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  12.  headed for tgt of 1390 ES

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  13. INDU 11:30 GMT. Flat ?

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  14.  DD, you beat me to it.  That's one question even I could answer.

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  15. lmao -- How did I end up with such a group of smart asses?  ;)

    I mean, I keep it ALL BUSINESS, and here you guys are making wise cracks.  Imma change the sentence! 

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  16. Now it says, "what's the practical difference."  Take THAT!

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  17. Are US stocks trading tomorrow?

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  18. Great charts and very funny .Thanks.

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  19. ES/15

    http://www.screencast.com/users/katzo7/folders/Jing/media/e4f25816-475f-41e7-b241-6992b1388865

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  20. had my first ES trade yesterday, went short and went my way a point before I had to leave.  I have to admit futures may be a little more intimidating yet also liberating... cheaper trades, no pattern day trader nonsense.  I'm liking what I'm seeing.

    went short ES  at 96.25 (not the best timed entry) with SL 98.5

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  21.  watch the tgts I post, when mrkt is orderly there usually something happening around them

    good trading. . .

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  22. Nice article.  Liked the comparison chart of SPX vs Unemployment.  Note that over the last month unemployment numbers have been trending an increase.  Survey week was last week I believe and the weeklys were 380,000.  So it will be interesting to see what Friday brings.  Wed is ADP, Friday is BLS, so the question is......if the BLS number is bad will the market go down or will it price in QEx....

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  23.  should get an EW4 to 5 quick drop now, 5 min. ES

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  24. Off to work we go.....have a great day all y'all.

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  25. I THOROUGHLY ENJOYED THAT ARTICLE. Really fine work all the way around....every word of it. Ya know it was good cuz the smart asses went and mooned ya. That's the PL I remember...A melange of objectivity and subjectivity complimented by a just a hint of nuttiness :)

    Your reference to the imminent fiat decline reminds me of how an uncle described his extremely expensive divorce, "It's the F'n ya get, for the F'n ya got."

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  26. ST ES tgt raised to 95, I will get out there. 7 point range, 1402 minus 1395.

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  27. Dang it!  I can finally provide an answer and you change the question.

    I give up....

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  28.  now who gave DRGuy a like for going off to work? LOL I want a name !

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  29. ty Nostra, it's pronounced "doo-ma"!

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  30. Great post SS....Complacency often evolves into delusion.

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  31. out at 95 even

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  32. Katzo, do you think we started down in wv3 from the fri high. Or this dip in Es just a corrective wave in the continued uptrend- likely the 5th wave to the top. Thanks for your input as always

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  33.  out at tgt, I respect my TA.

    http://screencast.com/t/nK9zjtTTEUWm

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  34.  said 41 minutes ago should get an EW4 to 5 quick drop now, 5 min. ES

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  35.  I dunno, we are in an oscillating mrkt and may just be entering a down move, 'the seed change' I mentioned last week, very tough to read. This is an IT call tho

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  36. PL - Did you happen to have a chance to look at AMZN?

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  37. LOL...I say let the cabal run it up...it'll bite'em in the ass eventually, cuz the game is getting "Too Big To Win" now that the U.S. is just a pawn instead of the queen. The fly in the ointment is that reversion to the mean will be quite painful for those who grew up with their largest mental expenditure of energy being figuring out which new app to download.

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  38. Clayton, see the ES 5 min. chart I posted above, that is for you. See how I was watching for the EW iii, iv, & v. Those are my counts [not eSignal auto counts] based on perceived EW action in the larger five. One can count them out as they are happening.

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  39. not much of a profit (can buy my family dinner) but hey it's a hell of a lot better than losing money (which I have gotten skilled at)

    I'm fairly risk adverse at the moment and trying to pick my entries better...  thanks for the help Katzo and I think we all appreciate you pros contributing your pearls of wisdom to this forum...

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  40. wow silver (/SI) just had a huge red candle 

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  41. And can you look at BP, WFC, and WMT while you at it? kthxbye

    *sarcasm here*

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  42. LOL..I wasn't glad he was goin to work :P
    I liked his his have a great day....Geez I knew that was going to happen. Double  :P to you K7

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  43.  EW5 tgt (120 min.) raised from 90 to 91 ES
    I expect a morning opening bounce [slight to 97??]

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  44. Good morning PL, getting very 'boxy' now, everyone boxed in with little indication of the next move... here's 2 charts (dow global & djat 50$), they look like a 2nd wv is about to finish .. might indicate INDU's next move? kind regards

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  45. From hussman, http://hussmanfunds.com/wmc/wmc120430.htm  :

    "Over the past 13 years, and including the recent market advance, the S&P 500 has underperformed even the minuscule return on risk-free Treasury bills, while experiencing two market plunges in excess of 50%. I am concerned that we are about to continue this journey. At present, we estimate that the S&P 500 will likely underperform Treasury bills (essentially achieving zero total returns) over the coming 5 year period, with a probable intervening loss in the range of 30-40% peak-to-trough.
    "

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  46. Excellent....Like my father told my mother, "This 'til death do us part' thing is alright, but this home for lunch everyday crap has got to stop."

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  47. Yet another newbie question...
    sounds like you are not going long in anticipation of the bounce, but waiting until ~97 area to enter a short if your other indicators (doji etc) are met?

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  48. My wiife has stopped asking me to attend family (her side) functions...every since I started sporting the aluminum foil beret. Wish I would have thought of it earlier.
    Have a good day Nostra...any predictions?

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  49.  unclear here how high we go and if there will be a shift from up to down

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  50. Have a good day Nostra...any predictions?
    yes, your wife's family will again accept you if you take the hat off...

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  51. One more nugget from the article:

    "Once upon a time, the stability of European government debt, the solvency of the European banking system, the prospects for the euro, and the speculative elements of the financial markets were all fairly distinct aspects of the financial landscape. Unfortunately, as the result of bailouts, monetary interventions, accounting changes, watered-down capital standards, and other kick-the-can strategies, all of these issues have become glued together, as the whole world has gulped down the elixir sold from the wagon of Ben Bernanke's Traveling Medicine Show. In response to strains in the European banking system due to risky sovereign debt holdings, the ECB made loans to those banks in return for "collateral" in the form of newly issued, unregistered bank debt, and the banks used much of the proceeds to take even larger positions in sovereign debt, against which no capital needs to be held. So rather than "fixing" the problem, the ECB simply bound the problems of the European banking system more tightly to its own balance sheet, and to the fiscal strains of European governments. Nobody cares right now - I get it. But understand that this is likely to end badly, particularly given that government debt typically grows sharply during recessions."

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  52. Hmmm...predictions.....hmmm.....Let's see, WWCI showed up recently so I say down. But I swear $RUT will fill that RTH gap first...but that would screw up the count would it not? I still have dreams of a big ol' H&S so that "everyone" understands what's happening and gets with the program... and gets their Katzo's.
     

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  53.  yeah, I was gunna mention the Wrong Way Wanda Contrarian Index's appearance.

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  54. jeeeez, my 97 ES held exactly [so far], think we are headed down ROD but will be watching, this mrkt has changed her dress numerous times before the date.

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  55. All of this could be characterized as the result of financial incest...The lock is off the basement door, and the kid is loose. Now they're trying desperately to get him back before the tourists see him. (I live near the Lancaster County "Plain Folks"...this happens on occasion.)

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  56. quite a long red candle just now, almost hit your 91 target

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  57. And he was barking LOUD.

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  58. Weekend $INDU chart brought forward, not updated. If we break 13900 or 80 [to be safe] then we might be on path B.

    http://screencast.com/t/CuXnEpXYnu

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  59. 13900?? path B is??

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  60. Maybe it's the negative vibe of the one year anniversary date of the silver crash when it lost 13% in about 10 minutes - also the day Bin Laden was killed.

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  61.  fixed, view again

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  62. Thanks, now that makes a lot more sense

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  63. I agree, though the thing is, the Beard and the ECB so far haven't seen much, if any, negative consequences from their currency devaluations.  So they will continue on that path until it doesn't work.  

    "It's gettin' so a businessman can't expect no return from a fixed fight. Now, if you can't trust a fix, what can you trust? For a good return, you gotta go bettin' on chance - and then you're back with anarchy, right back in the jungle. "

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  64.  note the green arrow and the doji. . .

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  65. It is toying with breakin support, if so a good drop coming. . .

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  66. Thanks for posting the pivot and the two paths. -DD

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  67. I'm not sure if we already got 5 down (orange) or not...

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  68. Bears should watch out if the market finds a bottom here.  We're at the upper trendline from the old trading range, and we're right near the target generated if this is an expanded flat fourth wave.  See chart. 

    Gotta run, GL.  :)

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  69. Excellent and tragic point about the Beard...he believes his own press, and may even sleep well at night. It's the rogue wave that will sink the ship. Going long lifeboats and paddles.

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  70.  think more down to come, 15 min. strength oscillators expanding to the downside, usually very telling. . .

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  71. should be a break right here of 91.5 support

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  72. short ES at 91.5 SL 93.75  fingers crossed :)

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  73. Lol, thx for the humor on a Monday. Looks like SPX support on 60 min is around 1391.55, RUT is 815.97. Which is junction on 60 min of downtrend line from 3/27 through 4/3 highs and the 4/23 and 4/24 lows. Good a place as any for the 3 to 4 wave to make a bounce.

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  74. my wife said 'til death do us part' but if I catch you fooling around death will come sooner than later. . .

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  75.  tough period to trade, between 11 am and 1:30 pm
    if no directional strength is evident, sideways. . .

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  76. AAPL bull/ bear targets..
     http://www.peaktheories.com/download.php?id=1383

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  77. Short-term count

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  78. I don't know about all this talk about bulls' onuses. Pretty soon this place could be crawling with philatelists, thespians, and matriculators. 

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  79. I thought I was the only one that needed aluminum foil.

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  80. I once dated a thespian who was totally into philatelic symbols as a professional domatriculator....I think that's what she called herself.

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  81. My unorthodox "traditional" TA is strongly supporting the case that today puts us in the penultimate 4th wave.
    My weeklies are poised to roll over next week.   And my dailies should be finished after one more high.
    This is wrong if we really start galloping north, vs. say a grind that struggles to approach and test the most recent highs.

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  82. Our wives must have taken a class together...Mine always makes me watch whenever she chops up zuchini.

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  83. PL,  responding from 36K ft up in the air. I read about ur death in the family too, last week. I am very sorry to hear that. For me it was one of my uncles. Attended his funeral in Holland, etc. Never expected him to pass away. ugh. Anyway, back to the markets. I noticed your "bears watch out" plot. Given the sideways action of late I am hesitant to go long. Maybe do both a small position long and short? Not seeking any trading advice, but just trying to figure this puppy out. Man markets have been so frustratingly unclear lately it's not funny anymore.

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  84. where's the beef?

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  85. ouch... 25 Horrible Statistics About The U.S. Economy : 

    http://etfdailynews.com/2012/04/29/25-horrible-statistics-about-the-u-s-economy-tna-tza-slv-gld-sds-fas-indexsp-inx/

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  86. VIX option report

     http://www.youtube.com/watch?v=nOlgX7wx6Hg&feature=plcp

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  87. Where did I put that super glue???

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  88. Hey man wanted to give a the news.... I made 96 bucks on that IWM put trade that I put on based only on the EW wave count and oscillator. Worked great. However, it does raise the question of what is the most appropriate timeframe to trade off of for a position trader because I rarely have the time available to do day trades so much prefer trades that run over longer time span. Couldn't have gotten where I am without you and PL and everyone's contribution. Thanks all.

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  89. More confused now than when I asked.....never mind, I'll roll the chicken bones again. See what they say.

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  90. She use a "veg-o-matic, or meat cleaver"? 

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  91. Fantastic response!

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  92. stopped out at 93.75...  rookie mistake of entering too early

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  93. One thing to keep in mind is that the AAPL:NDX ratio just continues to get crushed.  With AAPL lower by 2.65% at the moment, the net result is that the ratio is also lower by 2.16%.  And as you might have seen, that was the topic of my previous post.  Remember how that ratio crashed in 3 waves and everybody thought the correction was over?  From the perspective of 'duration of that correction' I don't think there's any way it's over.  Today's action is going a long way to confirming that view... that there's a lot more downside coming in that ratio.  And if you've read the analysis on that topic, it's been proven that when that big horse starts pulling the NDX wagon downhill, that wagon is gonna go downhill.  At least the NDX has never been able to overcome that force in the past.  Why should we expect anything different this time?  So I think it's just a matter of putting the odds in our favor as best we can, and the AAPL:NDX ratio is saying there's probably more downside coming.  At least for the NASDAQ.

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  94. Lol crrraaaccks the whip and out the door we run..... Actually she beats me to work by about 2 hours each day so she can pick up the plumbing plugging rascal from school..... I have great respect for her, up at 4:30 am and gone by 5:30, while I get to sleep in until about 6 at which time I try to beat the rascal to the kitchen for a quiet cup of coffee.....

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  95. Scott me up beamie......

    MANCHESTER, N.H. — Police say a former Miss New Hampshire USA faces a simple assault charge stemming from a confrontation with her boyfriend.Police say Sunday that 26-year-old Nicole Houde (hud) was arrested Wednesday. Authorities say the Manchester beauty queen punched, kicked, scratched and bit 33-year-old Scott Nickerson, also of Manchester.Police say the two were arguing and Nickerson took Houde's cellphone, prompting the physical confrontation.

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  96. I just left a comment here but apparently it's in the spam bin.  It was a heads up about the AAPL:NDX ratio getting crushed yet again.  I guess it's the links that don't pass scrutiny with Disqus sucks.

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  97. That's quite a woman you have there DRG. Only an hour to prepare herself to meet the world? Must be an engineer or nurse.

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  98. $96 divided by 347, let's see.......gonna share right?

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  99. Here's what I was trying to point out:  At present NDX is lower by 0.49%.  If AAPL was lower by the same amount as the other 99 stocks in that index, then the entire index would only be lower by 0.15%.  In other words, of the .49% loss in the NDX 100 today, 70% of it is due to AAPL alone.

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  100. She would alternate, depending on her mood.

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  101. A win is a win. Congrats :)

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  102. Here's a strange thing. COMP NDX and SPX are down trending as their Linear Regression lines have reversed, but INDU is in an up trend.

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  103. doji on the ES/5

    breaking down?

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  104. Played a lot of baseball, short stop, and often employed the FFPD (future family protection device)...you play baseball?

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  105. think drop coming, CLayton's doji call correct. Chop period of day may be ending. Lookin for break of 91 ES

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  106. I'll try another comment with a link and see if it sticks.  Just a quick chart that I haven't put any effort into, but it shows what a nasty candle is going to be produced today in that insane retail sector.  Why it's 69% higher than it was at the peak of 2007 is just beyond my comprehension.  Some day that's XRT is going to be the short of the century.  I any case, here's a 60 min. chart showing today's negative action:
     http://stockcharts.com/h-sc/ui?s=XRT&p=60&b=3&g=0&id=p21251772927

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  107. I think it's these guys who are behind it all. We still love ya AR.

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  108. Haha... yeah you love me like you love a toothache. lol

    I can't read that... what do their tee-shirts say?

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  109. A Katzo "Whooosh" move as the flat breaks down

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  110. Nah...was Captain of the Debate Team...I know (I'm a nerd -- says so on my ID).

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  111. Gonna need Webster to decipher this and maybe a few other books not available at the local library.... Lol

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  112. Ya shoulda seen her matriculate with her thespian friends. They'd perform for hours as they stood in line.

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  113. Ok...good, debating can give you time, but you need protection. Want me to send ya my old one? 

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  114. INDU: can it gi higher?

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  115. It looks like it's doing the same thing $RUT is doing...I know this is a sloppy observation but it looks like it's been doing that "crabby thing" since mid-March.

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  116. Eeeewwwwwwwwww.

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  117. You're right, bad idea. Have any aluminum foil?

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  118.  I (heart) Foxconn....Can't ya tell by the look on their faces.

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  119. Are you seeing a crab pattern?  On second thought you probably mean the 'sideways' thing?

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  120. 1 min spx triangle...  will this thing ever break down....
     

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  121. ES tgs on break of 91
    T1 89
    T2 81-2
    T3 77 (prolly not today)

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  122. Good doctor.....you amaze me everyday with your analysis. 

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  123. great read...He's one of the good guys :)

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  124.  PL and anyone else who has looked into these things- 
    I'm wondering about the fractal nature of the markets and whether you have seen smaller fractals within larger fractals that actually forecast what the larger fractal is going to do?  Since I've started looking, I'm seeing patterns on the 1-minute and 5-minute charts that look a lot like what the hourly chart looks like.  My question is:  Do these have any predictive power or am I just using my innate human pattern recognition skills to see stuff that is not there?  Can we take what the wave 5 of these smaller fractals does and expect a wave 5 down in the hourly chart (from Friday's highs) that resembles the one I see in the 1-minute chart?  I will keep watching this, but thought I'd ask what other think...

    Thanks!

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  125. You're one solid dude AR for helping PW out like that - his work is excellent and deserves recognition, and for you to go out of your way like that says alot about you as a person.

    +1 to you AR

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  126. Oh I get it.  Yeah I think that's what happy Chinese look like when they have a gun to their heads.  Just like the North Koreans who were forced to put on that crying act when the great leader passed on.  The propaganda on this planet is just pathetic isn't it?

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  127.  out at tgt 89.75

    too many dojis piling up for me

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  128.  that could be it for the down move today, might go into a sloppy period with slight up bias

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  129. Fascinating. I don't know the answer, but it's a great question. 

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  130.  yes to predictive power but trust them less at tops and bottoms

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  131.  possible down swoosh right at EOD

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  132.  ES/1

    http://screencast.com/t/XLNzgJJoOa

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  133. Just so nobody misses it....
    Krugman debates Paul live on Doomberg at 4pm ET.  Nobody break their big screen please.

    http://www.zerohedge.com/news/watch-paul-krugman-dispense-keynesian-brilliance-debate-ron-paul-live

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  134. just out of curiosity, what was your trigger?  was it the the doji on the ES/3?

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  135.  I do not use only one factor but yes, that was one. Not 100% sure of this trade....

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  136. lol I'm still in it...  short at 91.5...  

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  137. I take it, the strength and velocity of the move up to 92.5 was the incentive to get out?  I'm just curious what caused you to cut out sooner than your SL.

    Am I being an idiot for holding onto it still?  I still have a SL at 193.75.  

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  138. Thanks KB03.  But in all honesty I'm kind of surprised you'd find that to be extraordinary in any way.  I consider many of the other bloggers to be friends of mine and am more than happy to promote their talents.  I promote Pretzel shamelessly and often.  Same with many others.  Even though my own blog is new, there are newer ones and if they have something to offer that I honestly think is valuable I'll direct my own followers over to that site.  I also invite them to post links to their site on mine, as well as their charts.  I don't mind it at all.  Some consider it pimping... I consider it sharing with friends.   In fact Pretzel has given me permission to post any of his charts on my own blog as long as I give proper credit which of course I would do in any case.

    I just like the principle of "team" and I'm just assembling the best team "for me".  I'm selfish, lol.

    But thank you very much for those kind words.  I'm honored by them.

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  139. For sure.  A very likeable guy.

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  140.  I can tell the minute I place the trade whether it will work or not, hard to explain.

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  141. Embarrassing for both...I think!

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  142. of course as soon as I got bounced out it headed back down...  my stop was hunted down and bearded...     overall for the day down 3.5 pts...  learned a lot though so it isn't a total loss...  thanks for the insight katzo

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  143.  Bob, I have not read the EW book yet, but I have read the one I mentioned the other day.  I'll get me a copy of the Frost & Prechter book sometime soon.  What a boring day for CVX.  I wish it had been boring down instead of boring up.  Maybe it will move down tomorrow.

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  144.  I have found it very hard to make any money in the last 1/2 hour and usually do not trade. You may be overtrading if you lost today, how many ES trades did you do? I did three; that was one too many, try to keep it to two unless extenuating circumstances. . .

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  145. I posted a comment earlier today about how long it took CVX to drop from $112.28 to $100.51. Total of 20 days.....7 up days and 13 down days.

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  146. A zigzag.  Probably.

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  147. ok..  yes I did too many (5) 
    other than the one this morning where I got in/out at a good time, the rest were poor moves and got stopped out

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  148. Daily count of SBUX trade I am tracking. Expecting drop tomorrow. My count says drop tomorrow.

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  149. Is this her by chance?  Prolly not eh?
    http://corpserun.files.wordpress.com/2010/01/ugly_fat_women_big_boobs_ugly_woman.jpg

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  150. That's a little unnerving...  I was trying to close out that last (dumb overtrading move) short when 4:15 hit...  I guess I have to hold onto that short for the next 15...   I'm assuming I'm not the only one who has made this oops...

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  151.  High end retail tends to do very poorly during downturns. Check out Saks, Tiffany, Nordstrom, Sotheby, etc during 2000 and 2008. Some of these are currently showing divergences with XRT.

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  152. Bullish percent index.........
    The Bullish Percent Index (BPI) is a breadth indicator based on the number of stocks on Point & Figure buy signals within an index.

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  153.  Thanks, I had missed that post.

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  154.  I know a little bit about BPI.  Here's a chart using Point & Figure.  If the BPI is over 70, it's a good sign that the market is overbought and time for a selloff.  As you can see by the chart, once it makes it over 70, it starts working its way back down again.  This means that the buy signals are starting to turn into sell signals.  Right now the last signal produced by 67% of the stocks on the NYSE were buy signals.  As these signals change from buy signals to sell signals, the percentage drops.

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  155. Thanks for the info 4runner.....very helpful info.

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  156. tuzo, I've seen 2 min fractals that exactly resembled daily fractals, but they end results were much different... see for example the attached, where the 2min scale almost exactly resembled the daily scale, but instead of a decline (as in the 2min scale), we got the current bull-run...

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  157. FWIW C233 I'm told the avg trader makes 3 losing trades per winning trade. So 4:1 is ok in my book.

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  158. Thanks for the pep talk UKDNY although I have no delusions of being anywhere near the level of an average trader just yet  :)  at this point my hit average is worse than only playing 00 on the roulette table.  

    That which does not kill me makes me stronger....

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  159. It sure sat there like a stone, didn't it? On the other hand, a number of the MLPs were up nicely, partly off the action from ETP. 

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  160. i think i'll go with this short-term count

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  161. you have to make decisions very fast in ES and protect your capital.

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  162. Absolutely they can be used.  If you notice, I do a fair number of 1 and 5 minute charts.  In fact, some of my best calls have been based on the 1-minute fractals.  They're "tougher" in a sense because there's less room for error -- a misread on one tiny wave can throw the whole count off.  But they work just as well, IMO.

    I don't know if you recall this chart from about a month ago, but this is the chart that warned everyone that the trend was changing, before the last big decline started -- and it's the 1-minute chart.

    http://4.bp.blogspot.com/-88O3B6J5BPU/T3w1_QkdKgI/AAAAAAAABwo/YoOY6xu3FRQ/s1600/spx+st.png

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  163. lol.  "Thespians!  That's illegal in seven states!"

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  164. Hi LW, I didn't get a chance, no.  Keep watching the comments, and I'll post something when I have time.

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  165. Lapwolf, I don't have a strong opinion on AMZN because I don't follow it closely, but here's what I come up with when I look at the chart.

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  166. Scrivener's error..... you're allowed....... So where do these zig zags go from the end of zag.......

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  167. Clayton - it is easy to get caught up in trying to nail every move especially after hitting one exactly as planned.  A suggestion for this point in your trading, if I may...... try taking an hour or so break from the market after closing a winner....  the market will always be there to participate in, but you will do better by planning more and trading less.

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  168. They do and you can.  However, you have to have a well defined trading timeframe upon which to make trading decisions.  I have been trying to figure this out and for me as a position trader who takes a position and intends to hold it two to three days, those shorter timeframes are dangerous.  As an example, I went short IWM based on the short term timeframes and to put it in context the trade lasted about 2 hours from just before the close of last Thursday into about 10:00 am last Friday.  Had I not been aware that the trade was short time frame based and not been expecting it to last long, I could have easily been trapped and would have had to wait until this afternoon to get out or could have been stopped out on the rise into Friday's high's.  Another thing, shorter timeframes are higher risk/reward trades.  I put on a trade risking 320 and made after commissions just under 100 about a 3 risk to 1 reward trade.  The frequency if where the short timeframe trading money is made, so if you are not a day trader or able to risk sizeable sums across very short moves, then the shorter timeframe may not be the best suited.  Thanks for letting me share that. 

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  169. Interesting chart, shows a triple bottom with a double top with the tops outside the last 2 bottoms, patternwise you would expect a repeat of the last week of march to first week of april pattern creating the false impression of a larger cup and handle bullish pattern, however, those are bottoming patterns not topping, continuation patterns, neither is the inverted H and S interpretation.  So what you are left with is an ABC strong leg up correcting....... Check chart of RL for high end retail sector going forward as well as VFC....

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  170. You might want to read Murphy's Technical Analysis of Financial Market's and research classic double bottom's and top's, according to Murphy and O'Neil these patterns require a minimum of 15 bars between the bottoms and tops and a close above the peak or valley......... Ms. Doolittle does reference it as odd but then says its confirmed, begs the question of how does a pattern that is incomplete confirm?

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  171. Laughter IS, the best medicine.

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  172. The peaking wave 5 looks larger than the wave 3 leading to it. I'm talking about the nested five waves in the peaking wave 5. In addition, the outer wave 5 is way bigger than the wave 3 at that degree. Doesn't look right to my eyes. -DD

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  173. man that's a nightmare, from now on.

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  174. PL,  thanks for taking the time.  Everytime I look at the underlying numbers, I just don't get why AMZN doesn't crash and burn (PE of 170, PEG Ratio of 6.8, razor thin margins, etc).  No "investor" would, or should, get near it.  By comparison, AAPL is a much better place to "invest" (PE of 14, PEG Ratio of 0.65, 34% marings, etc).  At least I feel I somewhat understand the latter.

    I see AMZN as a $100 stock that's blown one helluva bubble, but I don't know what thr point of recognition will be, unless I'm way off base...

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  175. I like your alternate triangle count.  That looks like a good triangle to me. 

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  176. You're not the only one who's done that.  And it prolly won't be your last time.  :D

    Personally, I'm not very good at recognizing objective time.  I lose track of the "actual" time very easily... it's all subjective to me, so I've made that particular mistake a number of times.  I would say the last time has probably been as recent as a few months ago, but in order to quantify it accurately, it would require me to objectively recognize the passage of time...  so it might have been a few months... or it might have been 10 years ago... or last week.  Not really sure, but it "seems" like a few months ago.  :D

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  177. Looks like the EUR is about to suffer from ED.

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  178. I think the ECB has a little blue pill for that  :)

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  179. LMAO... "nightmare" doesn't even scratch the surface. lol

    But she (it) sure looks happy and I guess that's what counts.

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  180. Hey PL,
    Are you looking at AAPL chart tonight?  If AAPL keeps dropping, perhaps your COMPQ chart posted on Friday will come into play?

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