Monday, December 12, 2011

Tracking the 10/80 Weekly MA Crossover

UPDATED: Mid day trading on Friday, Jan. 20th.  Scroll down to the bottom of the post (not the comments) for weekly updates.

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ORIGINAL POST

Many of you have become interested in BullTart's 10/80 weekly moving averages and his solid assertion that since the 10 week 'had' crossed below the 80, the equities markets were heading for a major downfall.  His assertion was based on past history of that moving average pair and it was as solid a conclusion as one could ask for.  Much to the chagrin of almost everybody though, that pesky 10 week turned back up and by golly, it crossed back above the 80 week again.  How was BullTart to possibly know that was going to happen?  I mean we hadn't seen a "failure" like this in the past 21 years at least.  Probably much longer, but that's as far back as I can look with the charting service I use.  Yup, the conclusion drawn by our friend BullTart was perfectly logical and very solid indeed.
  
                                    Click here for a live and updated version or better yet, click here for a real good close-up.

Fortunately, several years ago I developed a handy little calculator that can figure out what price is required for all kinds of different things to happen.  It can calculate what price it would take for a MACD to turn lower or higher, for a histogram to turn north or south, for any type of moving average pair to cross each other in either direction, etc.  It's at interesting times like this when that calculator is worth its weight in fresh lobster.  For example, as of tonight (Sunday, Dec. 11th, 2011) I can report with 100% certainty that in order for the 10 week MA to cross below the 80 in this coming week, the S&P would have to take a
mighty tumble indeed.  To 1066 no less.  It ain't gonna happen.  Not this week.  No matter what happens with the S&P 500 this week, that 10 week MA is going to continue to point higher and the masses who follow this indicator are going to be 100% convinced that the markets are headed to new all time highs.  That too ain't gonna happen...

...because unbeknownst to all but myself (lol), the odds of that MA pair crossing back to the downside again are much higher than most interested parties would think possible.  In fact, I predict that before the end of December, most investors who watch that chart are going to be shocked to see that the 10 week moving average is heading south.  What are people going to think then?  I know what I'm going to think.  I'll be thinking that people are going to have had an epiphane... a new-found appreciation for BullTart's theory.  It will all have turned out that this little hiccup in that moving average pair was nothing but a cruel joke.  A little trick played on Bulltart by the scumbag orcs at Goldman Sachs.  You see, banksters think that shit is funny.

 
The truth is... the incredible rally of the past two weeks should never have occurred.  It's going to be unwound.  Because it never should have happened.  It wasn't meant to be.  BullTart's theory says so, and by golly the chart pattern combined with the news I'm getting out of my little calculator strongly suggest that the markets are almost assuredly going to be heading lower after all.  The only thing that could mess up 'my' theory, would be if the markets head higher, lol.  I contend that the odds of that are slim.

But like everyone else, I can't say with 100% certainty that the central bankers of the world won't just collapse all the currencies as a unit, drop the entire basket right off the cliff in a final (and all too common) attempt to save their own sorry asses, their country's good reputations, and screw all of us in the process... the process which would also drive the price of oil to $199.50 per barrel, for starters.  Nah... with $200 oil, I can't see any option but for the the markets to head lower whether we end up in an inflationary (currency destruction) environment or a full blown deflationary environment in terms of US dollars.  Deflation for the USA, inflation for the rest.

One little caveat to this entire discussion.  I all due respect to our friend BullTart, I personally would have never used the 80 week MA.  The reason for that is simply that it's overly slow, overkill.  I would have used the smallest one that still maintained the perfect track record of predicting market direction when a crossover occurred.  And that would be the 65 week.  And as fate would have it, that crossover is still in "down" mode.  It "has not" crossed to the upside.  Here's what that chart looks like.  Quite a different story, yes?

In any event, if you're interested in following the saga of the MAs, bookmark this page because I'll update it every weekend and publish the "secret numbers", the price required in the S&P 500 for the 10 week MA to turn lower as well as the price required for the 10 week SMA to cross back beneath the 80.  Over the past two weeks, I'd published the numbers required for it to cross to the upside and that cross happened exactly when I said it would.  Since the cross didn't happen mid week due to the fact that the S&P hadn't climbed far enough, I declared that it would automatically occur at the open of trading on Monday,  Dec. 5th.   And that's the real reason why, if you look real close, the cross is actually located between those two candles.  So stay tuned... I'll let you know when it's going to cross back below again.

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UPDATE: after the close of Friday, Dec. 16th

As promised and just for the fun of it, here's what's going on behind the interesting 10/80 week moving averages that BullTart is fond of.  Not to mention 'very confident in'.

At the end of last week, I reported (above) that in order for the 10 week MA to cross below the 80 this week the S&P would have had to have fallen a massive amount... all the way down to 1066 this past week.  I also opined that "it ain't gonna happen".

However after this week's market action, where more than 35 handles were peeled off the S&P 500, that crossover to the downside is not as far off as most would think.  Looking at the close-up of the chart above, most viewers would take one look at that crossover to the upside and come to the quick conclusion that "holy smokes, this market is going to the moon".   But hold on there Newt... in the spirit of BullTart's theory that "once that crossover had happened to the downside a major sell signal had been issued", we continue to calculate what it would take for the 10 week MA to turn lower and cross beneath the 80.  As predicted, it's much closer to being possible this weekend than it was at the close last Friday, Dec. 9th.

Here it is:  in order for the 10 week to cross below the 80 in the coming week (ending Dec.23rd), the S&P would have to close at 1090.32 or lower, by the end of this week.  I'll say it again... that ain't likely gonna happen. But as I also said last week, I predict that we're actually going to be seeing the 10 week MA roll over and start to head lower before the end of December.

I was right because guess what?  We're going to see it roll over as early as Monday.  If the S&P 500 closes this coming week below 1224.58, the 10 week moving average will have rolled lower and will have put in a new lower high.  The S&P is already below that required price.  Folks... do you realize how bearish this development would be?  The 10 week moving average rolling lower for the second time in only 7 months and putting in a new lower high in the process?  Holy smokes... that's very, very bearish.  And I'm telling you, it's going to happen this coming week before Santa gets here.  Provided the S&P closes below 1224.58.

Stay tuned, because I'll do this very same report next weekend.  Haha, I also predict this topic is going to come to the forefront once again on the site where all of you initially heard BullTart bring it up.  I'm pretty darned sure that before December is done, and possibly as early as next Friday, the question on everybody's mind is going to be "are we going to get that crossover to the downside once more?"  My best guess is "yes we are".  Stay tuned and I'll tell you what price it's going to take.

And one final note:  A very special Merry Christmas to you BullTart.  Thanks for bringing this particular pair to the forefront and I truly hope this damned banker inspired deke out hasn't hurt you too badly.  Damn their oily hides.

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UPDATE: Monday, Dec. 19th

Well what do you know?  As predicted in the update above, that darned little 10 week moving average did turn lower first thing Monday morning (this morning), lol.  But the markets rallied 3% and it just barely flipped higher.  As long as the S&P 500 is below 1224.58 by week's end that 10 week will remain pointing lower.  In any event, I can virtually guarantee it will be pointing lower at the open on Tuesday, Dec. 27th.  It would take a massive rally over the next 4 days to prevent that.  I'm talking 1285.

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UPDATE: after the close of Friday, Dec. 23rd

Well another week has passed and another 46 handles added to the S&P.  I'm not sure anybody saw a rally of that size coming.  And it may not be over.  As I stated in the update of Monday (just above), the 10 week MA had indeed flipped lower at the Monday open.  But it didn't remain pointed down for long.  Had the S&P remained below 1224.58 at the close today, the 10 day MA would be heading lower right now, but as we all know now... that didn't happen.

Believe it or not, the same thing is darned near going to happen at the open on Tuesday.  This week the 10 week MA would once again be pointing lower if the S&P 500 closes next Friday (Dec. 30th) below 1285.08, the 10 week moving average will have rolled lower and be heading toward that almighty 80 week. Can the market tag on another 20 handles next week?  I don't see why not other than the fact that it's already so overbought.  But it can remain overbought for a long, long, long time too. If the S&P were to in fact rise above 1185.08 and close the week up there, then all of a sudden the odds of the 10 week MA turning lower any time soon drop substantially.  And my goofy little exercise here can be chalked up as a waste of time... more or less.

Damn... which is it going to be?  When the 10 week crossed below the 80, history dictated pretty strongly that a market correction of gigantic size was destined to ensue.  Hence, BullTarts's theory and claims... all of which were well founded.  But now that the 10 week has immediately reversed course and crossed back above the 80, does this imply that we're in for another multi-year rally?  Yes, it does.  I'd say this week is the decision week.  By Friday, Dec. 30th, either the 10 week MA will be pointing lower, in which case BullTart's theory is still in tact but slightly bruised - OR - the S&P will have closed above 1185.08 locking in the 10 week as pointing higher, in which case the odds of it turning lower are going to diminish very quickly due to price action of 10 weeks ago.  Such a development would have been the first time in 21 years or more where the 10/80 weekly crossover issued a false signal in 'either' direction.  Simply amazing what a little liquidity can do to mess up every trading system known to man.  As of tonight, it's all very much up in the air... and getting more interesting as time moves forward.  But there's a real chance that it could become very uninteresting for a long, long time to come, should the S&P close above 1185.08 next week

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UPDATE: after the close of Friday, Dec. 30th

Another week has passed and my question of 7 days ago has been answered.  No, the S&P 500 did not tack on another 20 handles this past week.  You know what that means?  I means that at the open on Tuesday the 10 week moving average will be pointing lower.  It will be pointing lower and headed straight for the 80 week which is not far away.  As one commenter noted last week (regarding a different pairing of MAs) a crossover of the smaller moving average below the larger one would be more 'effective' or 'trustworthy' as a bearish signal if the larger one were headed lower.  That is true in all cases.

The fact is though, that by its very nature, the longer MA is almost always late.  Therefore, we don't know for certain whether or not a real trend change has occurred until that larger MA actually does turn lower.  In the case of the 80 week MA, it changes direction to confirm a major trend change on average 8 months late.  In other words, the 80 week MA will not flip lower until 8 months (on average) after what turns out to have been the high, and at bottoms it turns higher on average 13 months late.

By the way, this phenomenon is also true of almost every moving average... they are later at bottoms than at tops.  It's a phenomenon caused by the fact that there are powers that be who try to hold a market 'up there' for as long as possible.  There is a natural tendency for markets to 'rise' due to the fact that there are hedge funds and banks that have a vested interest in making sure that they do.   Conversely, at market bottoms those same players have every reason in the world to stop the bleeding at the earliest possible convenience.  In other words, even in a falling market, any time they sniff a bottom the power brokers will exert their pressures to try to ensure that it truly becomes a bottom, and secondly, to try to catch the bottom as best they can.  They 'want' the market to bottom even though in a market crash scenario they may not always be able to do so.

Nevertheless, once that bottom has truly been attained, the pressure for it to rise becomes enormous and very quickly so.  Therefore, the downward sloping moving averages are so far 'behind the times' that by time they do finally roll higher, the market is so far above them that the best buying opportunity is way in the past.  In the case of the 80 week MA, 13 months in the past.  When it comes to tops though, that same longer moving average has been afforded a whole lot more time to catch up.  So at tops, the longer term moving averages are much closer to the prevailing price and therefore take less time to roll lower.  Therefore, they are also more accurate.

Ok, back to the situation with the 10/80 weekly.  As I have done in each report so far, I will again identify the price on the S&P that it would take for the crossover to actually happen in the coming week.  It's important to keep in mind that the calculator can only ascertain (with 100% accuracy) the price it would take in the coming week only  And the reason for that of course is that it cannot predict at what price the S&P will actually close this coming week.  It needs to be fed data that is known, not data that still lies in the future.  So just for the heck of it, I can report that if the S&P 500 were to close below 1137.6971 next week (ending Jan. 6th), the 10 week MA will have crossed below the 80.  And of course, the odds of that are very slim indeed.  Nonetheless, just for fun... there it is.

So stay tuned because I think the 10 week moving average is going to close next week pointing lower while putting in a lower high in the process.  And that my friends, would be a very, very bearish development indeed.  But if I am wrong and the S&P closes the week above 1285.08, then the 10 week MA won't likely turn lower for weeks, perhaps months into the future.  It's pretty much a 'now or never' sort of deal.

I'll do the same type of report next weekend.

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UPDATE: After the close on Friday, Jan. 6th.

Well officially it has happened.  The 10 week moving average has indeed turned lower and is now falling toward the rising 80 week MA.  True enough, it is barely visible since the MA has 'just' rolled over at the inflection point but it is pointing lower.  As detailed in the Dec. 30th. update (just above), as long as the S&P 500 closed below 1285.08 today and cemented the moving averages in place for the week, the 10 week would be headed lower.  And that's exactly what has happened.

But next week will really be the clincher.  That's when the rubber really has to meet the road.  Because in order for the 10 moving average to continue pointing lower, and not just go sideways from here (if not outright flip back higher), the S&P 500 must get below 1253.23 by the end of trading on Friday, Jan. 13th.  If that happens, the potential for the 10 week to cross back below the 80 would be very real indeed.  However, if the S&P does not close below 1253.23 next week, we'd be looking at a whole different ballgame.

When BullTart brought this particlular moving average pair to our attention, he was dead on correct with his assessment and in his faith that the initial crossing of the 10 week below the 80 was a signal of mega proportions.  In the past 21 years at least, this crossing had never failed as a confirmation of a mega-change in trend.  But naturally, as is the case with any moving average pair of this magnitude, obviously it is very late at both tops and bottoms.  To be more precise, 8 months late at tops and 13 months late at bottoms on average.  [This is typical behavior for moving averages to issue better signals at tops than at bottoms, and I explained why it happens in the Dec. 30th update just above.] But I don't believe BullTart ever declared that this crossover was an "initial" sell signal.  He only said that it was a confirmation... and he was correct.

In any event, once I saw the possibility that the S&P 500 was behaving in a way unseen in the past 21 years at least, and that this weird stock market action might indeed cause the 10 week to turn back above the 80, and in the process trash BullTart's perfectly good assessment, I thought I'd jump into that discussion in his defense... before the trolls got there.  Because I knew that if the 10 week actually did cross back over the 80 (as it subsequently has done), there was every possibility that it would be short lived.  We are now at the crossroads.  Next week is key.  1253.23 to be precise.  That's the level required to keep the 10 week heading south.  If the S&P is any higher than that at the close next week, the odds drop dramatically that the 10 week is actually going to turn lower at all... potentially for a long, long time.  The S&P 500 has exactly one week to git 'er done... 1253.23

So check in next week for another update... it's going to be fun to find out either way.

UPDATE: Late day, on Friday, Jan. 13th.

As noted on the Jan. 6th update (just above), the 10 week MA did indeed turn lower.  How long did it last? About a day... just long enough to cement the little down-flick in place and then the market surged higher this week.  It's been a long, long time since we've seen the 10 week moving average jacking around like this.  I'll save you the trouble of having to scroll up and find the link to the close-up.  Just click this thing.  And as crazy as it sounds, it wouldn't be at all difficult for the 10 week MA to turn back lower again next week.  In fact, if the S&P closes the week (ending Jan. 20th) below 1263.85, that's exactly what is going to happen.

When we look at momentum indicators on a daily chart of the S&P, I can't see any reason why we should necessarily be expecting it to turn lower although there are negative divergences starting to show up.  But a 60 minute chart tells a bit of a different story.  With negative divergences showing up there as well, and with a pattern that clearly looks like a corrective 3-wave sequence higher off the late November low, and that one itself more than likely representing a 'c' leg of a larger 'ABC' off the October low, EWT could certainly make a case for lower prices at any time.  It depends on which Elliott Wave technician is counting the waves.  Nevertheless, it's entirely possible... the 10 week MA will turn lower yet again next week (ending Jan. 20th) if the S&P closes below 1263.85.  And that would put it on a collision course with the rising 80 week.  It gets interestinger and interestinger.  In short... this is one seriously wacky, jittery and frightened market.

Check in next Friday for another update because if the 10 week has indeed turned lower, I'll start adding information about what price it will take for the crossover to actually occur... to 4 decimal places of accuracy if you want.  Have a great weekend :-)

 UPDATE: Late day, on Friday, Jan. 20th.

As I reported in the update of Jan. 13th, (just above),  the 10 week moving average still had a chance to turn lower this week.  It would have taken a move lower in the S&P down to 1263.85.  As of last Friday, such an outcome was entirely possible.  But no more!

If nothing else, today's close will complete one mission with flying colors.  It is going to not only cement the 10 week moving average firmly in place as a solidly rising moving average, but the chances of that MA rolling over in the near future just flew right out the window.  The odds are now very slim that that average will turn lower for perhaps months to come.  I'll save you the trouble of having to scroll up for the close up chart.  Just click this thing.




26 comments:

  1. waz up AR?...seems I can't look at a chart without counting 12345...haha...anyway, close under 1231.47 is a momentum changer. Jack. (don't understand all the "profiles" so I guess I will be "anonymous)

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  2. re: 10/80....there hasn't been an environment in the recent past that offered the statistical basis to develop a filter to fend off chop. I prefer the quite common and widely followed 13/34 ema for a weekly indicator. just my $.02 Jack

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  3. Is that you Jack? Welcome aboard. This blog is a work in progress and I might not even keep it in this format. Might even find a different bloghost because I don't like the fact that we can't reply to one another in the comments section. I also don't like the fact that links provided by commenters aren't dynamic. If we want to look at a chart you provided for example, I'd have to copy and paste your link. That absolutely sucks so I'm open to suggestions from anybody.

    Were you having issues signing in or something? I'm not even sure how somebody joins this blog. Baltimore Greg did it though... not sure how. So did Phil Grimm. I think they have a Blogger (Google) profile and that's all there is too it I think.

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  4. You betcha Jack. Any MA you like and that you get used to is the one to use. There's nothing magic about the 10/80 or the 10/65 other than the fact that they can be worked with. So can the 13/34 or any other one where some reliability can be found. They're great for helping determine the larger trend but once we've decided that we know what they're telling us, right or wrong, for trading purposes we have to use MAs that are much smaller, ranging all the way from daily down to 10 minute, depending on what kind of trader we are. Nice to see you here bud.

    Just as a matter if interest, even though I have a great big honkin' troll gun here, if I see the shit disturbers show up, I might even change this site to a "by invitation only" format and try to keep the number of people at a way low number, maybe 20 or so. Only the best friends and those who consistently have great stuff to offer to the 'family'. The 'family' will not include trolls, lol. We'll see how it goes. I have more than 20 friends on the other site alone, so if they all wanted to join in I might have to increase it. But I'd rather 'not' make it exclusive like that. We'll see what happens.

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  5. no worries....I tend to believe ...."if you're the one talkin', you ain't the one learnin'". and..."the older I get, the less I know". Jack

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  6. Jack, rest assured you fit in as a member of the family, charts or not. "Friends" is the key focus.

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  7. Over a long enough time any MA cross-over indicator is going to register some false positive readings. However, if the cross-over at issue is short-lived (as I think it will be), it's reversal will likely be a strong signal to short the market.

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  8. I actually published this reply on Dec. 13th, but since I've changed up a few things on the blog, I had to reflect those changes in this comment so as not to confuse people. So although the date shows Dec. 19th, please consider this comment as having been published on the 13th.
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    Hi Doc. Now nice to see you stop by.

    Oh man, you're not kidding about that. I really like moving averages but as you know they're only effective in a trending market. During sideways action we have to look at shorter and shorter MAs until we find a 'trend'. IOW, even when markets are swinging up and down sharply like they have been over the past 5 trading days, a moving average system can help an investor pick up some pretty good green. The fact that we never know whether or not the sideways consolidation is finished or not isn't a worry when using the proper MAs. But it's critical to be on the side of the larger trend because one of these days the sideways action is going to end and a huge move will begin. And a correctly placed trade is going to result in a huge gain.

    In the case of this gigantic MA that BullTart likes, all we can assume I guess is that since it hadn't been wrong over the past 21 years at least (probably 50 years or more) it's a signal to take seriously. At this very moment it's saying prices are going higher. But I do believe the initial signal will be proven correct since it's not going to be too difficult to turn it back lower and fool everybody. We'll see. We're certainly in uncharted waters on so many fronts. So I agree with you 120%. If that huge 10/80 turns lower there should be little doubt where the markets are heading (for a long time).

    By the way, check out the 10/65 too (link is above). It hasn't even crossed to the upside yet. Probably won't.

    Don't forget to click the link over in the right sidebar if you'd like to stay informed "up to the minute" regarding the HO. I've been covering that issue for a group of friends over at SA for over 2 years now. The markets are absolutely primed to issue a signal. The last time we saw the conditions we're seeing now was in April and May of 2010. That doesn't necessarily mean the HO is going to issue a signal, but if it is ever going to issue one again... these are the conditions required for it to happen.

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  9. "There's nothing magic about the 10/80 or the 10/65"

    Yes, here are some other
    moving average crossovers
    which identify long term trend direction.

    Others are:
    the 50/200 day SMA ''death cross"

    the 60/260 day EMA cross
    http://seekingalpha.com/article/206789-moving-averages-bull-market-still-strong

    the 100/250 day SMA cross
    http://www.lizak.ca/images/charts/bear/Buy_and_Hold_is_NOT_the_Best.html

    I look at them all,
    and they all help in creating confidence
    in the trnd direction.
    Tho, since they all are curve fittings,
    none is a *guarantee* of long term trnd direction.

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  10. Hi BrightFire. Nice to see you drop in (Greg stops by as well once in a while).

    For sure, any of those longer term moving average pairs can work. But in BullTart's pair for example, If I wanted to use a pair that was spread so far apart, I would have used the 10/65 instead, because the 65 is shorter and therefore faster than the 80, and yet it has performed with the same reliability as the 80. No disrespect to BT of course... I like the guy.

    By the way, there's a link to that 10/65 week pair in the article above. If I supply that link to you here in the comment area, the darned thing won't work. You'd have to copy and paste it, which is one thing I totally detest about this format. The other thing I don't like is that comments aren't properly threaded. Apparently that's a Disqus thing.

    Anyway, good to see you man. Welcome.

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  11. Alberta, I already have the link to your 10/65 pair.

    Also follow your, SPX:TNX, SPX:CU CRX:SPX and Libor chrts. Which I periodically pop open, for a peek into a possible future.

    Grateful for your helpful sharing.
    [And, tks for the warm welcome.]

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  12. My pleasure bud. It's nice to be in a room full of friends and not have arseholes like Wagner following us everywhere, like he has done on SA. Can you believe that guy? I can prove it too and if he pushes me one more inch I'll do just that.

    Thanks for checking out the charts. I think it's not only valuable stuff but very interesting to boot.

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  13. "It's nice to be in a room full of friends"

    Yes, and people
    who are not seeking attention,
    and are free from spite.

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  14. Haha... do you know Zim? He's in the "Signals From Libor3" page right now, lol.

    Maybe I should set up a chat room or something, like a new one each day or something. Just a place where those who want to meet up, can do just that instead of being spread out like this. That wasn't my intention when I started this thing necessarily but it seems a few of the good folk are dropping in with comments now and then.

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  15. Speaking for myself,
    I would be a daily visitor.
    And if,
    there are others in the world like me,
    it would blossom.

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  16. Hi AR!

    First off, I'd like to congratulate you on this great blog you've created. Bravo!

    The weekly 10/80 SMA is definitely an interesting indicator and an important one that I keep in my toolbox.

    What we witnessed, as you correctly described, is something that has not happened in a very very long time.

    It has happened though, if you look back to 1994, but as you will see, it was a very shallow cross over and back and then some. The angles were very low and the MAs were pretty much flat-lined.

    To be completely honest, I was not expecting a cross back, and when it did occur, I had to obey the rules and unload short positions.

    I've been in a wait and see mode, but have recently re-entered shorts once more.

    As you've documented, the 10 is curling downwards now, and most importantly, we simply did not attain the "lift-off" velocity after the cross-back upwards that I was looking for.

    Had we gotten "lift-off", I would have initiated long positions.

    Instead, we've seen a very tired looking meandering market, and it looks like it wants to cross back down now.

    Coupled with the daily cycle analysis of many time-based disciplines, along with the other data such as yet another red NFP day today, signs are pointing to some sort of a top very soon.

    In my opinion, next week. Which just happens to coincide with the "do or die" setup for the 10/80 weekly SMA next week.

    There is a lot riding on the markets next week, and we shall see what hand it will show.

    The most important thing to do is to invest and trade based on what the market shows us, and not what we think it should do.

    If the market shows us that we are indeed heading up up and away, then it will be time to find a good entry point(s) for long positions.

    Cheers, and once again, good job on the blog AR!!!

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  17. Thanks for the update AR!
    Interesting that a 1253 close would pull the SPX back below the 200 dma ... which it has trouble staying above. Managed it for one week out of 10.

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  18. YAY another great article.
    Someone I can't remember who ran a 1-1/2% filter on the 10/80 monthly cross in Daneric's comments. Do you remember this AR? Looks like it held to this criteria. It seems the orc-algo driven price action of recent years likes to bust up even the most reliable patterns so updating with filters is probably needed.

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  19. Love the updates to this thread AR--well written, timely. Guest comments ain't too shabby either!

    Thanks man!

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  20. This is awesome, 4 comments from 4 people I consider as good friends. Sorry for not getting back to you sooner but I had to head out for the rest of the day after the market closed. Just got in and it's already getting late... and I have a ton of catching up to do like looking at the market internals charts to see how they ended up, stuff like that.

    I'd like to respond to all of you tomorrow though. Before I go, a bit of good news. I was chatting with TX today and got some great info from him. It turns out that I have the ability to install the same threading format (Disqus) that we've all become used to and seem to like. The only reason I'm holding off for now is that I'm awaiting a bit more info from TX about how big the troll gun is with the Disqus format. Too bad I don't have installed already because I'd like to respond to each of you individually (more directly).

    In any case, if I install it, then the thread called "Where Friends Gather" might become more or less like a community pub, a general gathering place, or just a place to drop off a message to any friend you want. Grab yourself a cold beer and chat away. The reason I probably should do that is because I sometimes update these posts throughout the day and we all kind of get scattered all over the place that way. We aren't really able to "gather". Once the pub post becomes too long and cumbersome for our computers to handle, the beer mug will appear as empty and you will be linked to the next "Where Friends Gather" post (pub), complete with a picture of the full beer mug so you can easily spot it. We always want to know where the nearest pub is, lol.

    But when we close a pub because it's too full of comments, you'll see a link to the new Pub anyway. So no worries, nobody will be left behind, lol. In the meantime then, we're going to have to put up with this style of non-threading comment stream. I hate it, but I hate trolls even more. So hang in there... all of this is a work in progress.

    And Greggor, before I forget... no, the 1253 level is not where the MAs would cross. 1253 is required *just to keep the 10 week MA heading down*.

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  21. Hey BullTart, thanks for dropping in. I really did want you to see this particular post. And thanks for the kind words about getting this blog off the ground. I really didn't want to start one but you know why I had to do it. On a side note, people have been urging me to do it for two years now. One lady in San Diego, after I admitted to her that I didn't even know how to create a blog, even offered to set one up for me, if I would just write more often. God bless her, she even sent me an awesome Happy New Year video this year.

    You bet, we're on the same wavelength on this topic for sure. I remember when you were not expecting the cross back up. Initially, neither was I. But I saw it coming a bit later. However, I also saw reasons why I didn't think it would hold. My explanations in the most recent update above are making the case very clear. If the S&P doesn't get below the 1253 level this week, then beyond that it's going to become harder and harder for the 10 week to turn lower at all. This coming week is absolutely crucial for the markets. I expect fireworks one way or the other with a slight bias of oh.... say 98%... toward the downside.

    But I'm in agreement with you about the other alternative. If the S&P can burst higher this week... well I'm just sick and tired of trying to find a top when there theoretically won't be one for 9 more years. That's how insane the dark establishment has become. I'd have to go long right along with you.

    Unfortunately, such a scenario of a runaway inflation nightmare would crush us all. Deflation would do the same. In a deflationary scenario, those who stand the most to gain are those without debt, whether they are currently rich or poor... doesn't matter. In fact I'm still waiting for this "the meek shall inherit the earth" deal to kick in, lol.

    "The most important thing to do is to invest and trade based on what the market shows us, and not what we think it should do. If the market shows us that we are indeed heading up up and away, then it will be time to find a good entry point(s) for long positions."

    You just nailed the very problem with EWT. As doctor_jr. so astutely pointed out one time, "EWT constantly has us focused on trying to find highs and lows. No chapter was ever written on how to enjoy a trend." That was paraphrasing, but that's basically how he worded it.

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  22. Greenface, yes I remember that guy. He was about to go public and he promised to let us know when he did that. But I forgot his name, trusting that he would get back to us. Very recently, TrendXplorer contacted me and said "a promise is a promise". So I assumed that was the same gentleman. I'm not sure it is now, and I've forgotten to ask him. Put that on my "to do" list. In either case, TrendXplorer is a real good guy and I like what he's putting up on his blog. He's an asset for all of us for sure.

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