Saturday, January 14, 2012

Ok, So Here's The Plan

All those who know me from various blogs are aware that I'm the first to admit that I'm not a very good Elliott Wave practitioner.  Thankfully I've got a pretty darned good background in pretty much all other forms of technical analysis by now, considering that I started studying it at age 11.  But it's been a long time since I read any of Prechter's books and to tell you the truth I don't even know where they are right now.  Probably in a box somewhere in a friend's garage or something.  I've literally got a library full of great TA books and thankfully most of what I read there got stuck in the old noggin.  That's a good thing because I don't know where those books are either.

But in any case, EWT all sounded simple enough at first.  But when I tried to put it into practice I soon discovered that very seldom was I getting the results I was expecting.  I don't particularly like surprises like the kind I was being confronted with.  I don't like disappointment... I want results that I can rely on a little better than that.  For example, when I stick my tongue in a light socket, I know what's going to happen.  The light bulb that I screwed into my arse is going to light up!  Those are the results I want... something dependable.  So it didn't take me long to realize that although some people have a great ability to come up with some remarkable visions, I personally just had to swallow my pride and admit that I'm just not a good wave counter.  I don't have the proper aptitude for it.  I don't have the patience for it.  I don't have the vision required to come up with alternate counts.  The only letters I'm familiar with in EWT are A, B and C.  When it came to Ws and Xs and Zs, my eyes kind of glazed over and I discovered that WTF was more appropriate most of the time.  Nope,. I'm just not a very good waver.  As some of you already know, the last time I did any seriously good waving was when the bus carrying the South Okanagan Bikini Team drove through town.

But by golly, I'm feeling kinda cocky tonight.  So I've decided to really stick my neck out here and show all of you what is going to happen. Yup, this is what's going to happen... I've made up my mind.

Click here for a larger version

I know what you're thinking.  You're thinking "What in hell is that?"  That my friends, is the S&P 500, invisiblized.  What you're looking at is the 6 day simple moving average of the S&P with the S&P itself made invisible.  Nothing like clearing away the
noise in order to get a nice clean picture of the skeleton.

And just to put it all in context, let me flip the switch and turn the lights back on.  No, I'm not talking about the tongue and the light bulb trick... I only do that at parties.  Here's the exact same chart with the S&P now visible.

Click here for a larger version

For all practical purposes, I don't particularly care whether or not the actual price action overlaps yellow wave ((i)), as long as the moving average doesn't penetrate that level.  In fact, I'd fully expect one more deke out bear trap.  An overlap would do the trick nicely.  However, if the moving average does drop beneath the yellow wave ((i)), then my count is wrong, we're on our way, and I'll post another wave count sometime in 2013.  Maybe.




62 comments:

  1. Albert, first time post. Now forgive me for saying so but I think you are wrong.
    US bonds and USD are saying you are wrong.
    It has largely gone unnoticedvthat the US 5 and 10 year bonds broke above 5 month consoldations on Friday and the shorter terms are about to go higher as well. Couple that with a very strong move in the USD and that says ONE thing to me.
    Cheers

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  2. Haha, there's nothing to forgive beetlejuice. Everybody is entitled to their opinion without criticism. I'm not sure which aspect you think is wrong... the little move higher or my ultimate conclusion that we'll be headed lower soon.

    Cheers to you as well. I wish you all the best in 2012.

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  3. All the best for 2012 to you as welll and just to clarify. Friday has some pretty conclusive indicators that we go straight down from here and no higher highs into February. Greece are in real trouble NOW and I think if you look at the comments of the Greek leaders yesterday it's fairly obvious what is coming just around the corner. The bond market is sent a very clear message Friday.
    Cheers matey

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    1. Thanks for clarifying. As it turns out, at first I totally misunderstood what you meant when you said I was wrong. I was under the impression you were thinking that the markets were about to head off to new highs and that you weren't aware of the implications of stronger bond prices and a rising dollar. I wrote you a respectful reply based on that misinterpretation. Then I re-read your reply and went "Doh... he knows what a stronger dollar means. He thinks we're headed straight down from here." So I had to re-write my reply to you in a hurry, lol.

      You could be absolutely right. I wouldn't argue with you about that for a second, not even considering the fact that if you're right, then my wave count blows up. I don't even care if my wave count blows up... I'm positioned short already. Mostly in cash though. Like I mentioned, I'm not very good at counting waves. So if I totally ignore the news (which I always do anyway since by time we hear it, it's already in the market), and if I completely ignore signals I'm seeing on the 60 min. charts, and ignore bearish signals like the ones $NYMO and $NAMO issued on Friday, and just focus on a wave count, then I can envision the pattern developing as I've drawn it.

      There are three reasons why I can entertain it for now. The first is that not all the market internals data is negative yet. For example, the Summation Indexes still aren't issuing a bearish signal although they did show signs of losing momentum on Friday. The MacClellan Oscillators ($NYMO and $NAMO) did turn lower as did the bullish percentage on the S&P, and especially in the financials. Also, the percentage of stocks above their 50 day moving average fell across the board on Friday, from very lofty levels. So there are definitely some bearish signs out there right now, that would support your opinion.

      And the second reason I can still entertain a pattern developing like one I drew is that from a purely EW stance, the pattern I drew is what I think we should be expecting. The third reason is that we've seen the Orcs of New York pull a giant green rabbit out of their arse so many times that I've just become conditioned to expecting another one, and another one, and another one. One of these days they're going to tug on those rabbit ears and haul out a great big brownie. That would kinda stink and would send the markets crashing. I wouldn't be surprised if the ultimate effect of QE3 is far more negative than their bargaining for.

      In any case, I'm not sticking hard core with my vision. It was more or less an exercise where I could display to the world why I don't present my wave counts very often, lol.

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    2. "we've seen the Orcs of New York pull a giant green rabbit out of their arse so many times that I've just become conditioned to expecting another one, and another one, and another one. One of these days they're going to tug on those rabbit ears and haul out a great big brownie. "

      Brilliant AR ! next week should be interesting.Hope you're well.

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    3. Haha. I'm glad you liked that one CR, I've got a million of 'em, lol. Yes sir, I think next week will have ended with a big move one way or the other. I'd say the odds are that it's lower and that the level of 1267 or so will come into play. It'll be interesting to see if the S&P can find support there. There was a lot of volume right around that level recently so I'm guessing that if the market does head lower, it should find support in that range, which in turn could make my count look reasonably good. If so, that would be the first time ever, lol.

      I hope you're doing well too, as always. Nice to see you pop in here. It might even be a little more fun if I ever get around to installing the Disqus thing. Mind you, I sure don't like the lack of dependability I'm seeing with it on other sites.

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  4. AR,
    First time poster, but have been reading your work. I was first aware of the HO back in Aug 2010. We all knew what happened then. The market melted up and away....it was painful for me. But I do believe strongly the validity of the signal. But the dark forces/ PPT was at work overtime. Anyhow, I understand what you are trying to say. People are conditioned now to expect the FED or TBTF to pull something out each time the market tank a little bit, they are buying the dips. People on the street seem to be all EXPECTING 1300. Do you think they will get it when so many wants it? I certainly don't know. I just looked back in Aug and knew that a lot of those dip buyers were burned badly, crushed by the elevator down. Will it happen again? I think so, but the timeline is unclear. It may be next week (which I hope) like beetle said, it may be Feb like you said. It may even drag on till Mar when all the PIIGS have huge amount of bonds maturing.
    Like Beetle said, the US bond has been rally quietly with the stock market. The bonds are almost at the level when the stocks crashed to 1075. US dollar is definitely stronger than the last time the index was at 1290 in end of Oct. Something 's got to give, right?

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    1. AR:

      What I am most interested in finding out is do all of your other TA's validate your EW analysis? I have reservations about EW, but I'm willing to give it a try - if it works. The only way to find out is to see if it is painting the same picture as other TA's. No?

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    2. Curious, yeah for sure, that HO signal that happened in August, 2010 was quite late. In fact it was near the tail end of that summer decline... and that doesn't do investors a whole lot of good. Normally when the HO goes off, a bigger decline than that is what happens. It's signal is 100% valid at all times insofar as that it's saying "ok folks, the market has now reached a rarely seen point where there are darned near as many horses pulling this big stock wagon downhill as there are trying to pull it uphill". It's simply a matter of arithmetic... the HO is always right. But what the market does after a signal is issued is the part that is not guaranteed. In fact, the HO doesn't even offer a way to measure how big a move that might be. All we can go by is what has happened throughout the entire history of HO events and go with the odds. By it's very nature, the HO will be late, just as the 50 day moving average doesn't turn lower at the very top either. It's always late too.

      And yes, you'd better believe it was one of those giant green rabbits that the FED pulled out of its arse that saved the day back then. Needless to say, if the FED hadn't saved the world once again with another round of QE, it would have been a much different story and the HO would have looked like a genius.

      Geez, I wish I could answer your question about whether or not we're going to see 1300+. I could be dead wrong about this, but as of this moment, yes I think 1305ish is a real possibility. The market just loves to reach the big round numbers so that Steve Leisman and the other muppets on the propaganda network can have their little fake orgasms. But I also doubt that if 1305 or so is attained that it would stay above that level for any more than a day or two. I think the market drops below 1300 pretty quickly and lets all the wind out of that sail in a hurry. The disappointment would be huge... as in "GASP!"

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    3. AF, EWT almost always goes hand in hand with the basic TA. For example, when the RSI gets into overbought territory and gives hints that it wants to roll lower, usually there is a wave count that would more or less be calling for that drop in prices too. The problem is that if that RSI forms a neg. divergence, and yet the market doesn't drop, then the market is more than likely just consolidating and building up steam for another push higher. We never know. So if the market then pushes higher, the technician who was using the RSI as an indicator will probably be disappointed as his shorts start to lose money, and so will the practitioners of EWT. They'll have to come up with a revised count and the guy using TA 101 will have to wait for another signal from the RSI... somewhere down the road a bit further. And he'll probably have to find it on the next bigger sized chart.

      This is why we have to pay so much attention to support and resistance levels and trend lines (especially trend lines). As aggravating as EWT and other forms of old school TA can be for issuing false signals, the vast majority of that noise can be eliminated by just watching moving averages and using some form of MA system that you tweak to suit your style. Here's a link to a pretty good, relatively short article, on how to implement a moving average system.

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  5. Replies
    1. Yay! Don't ya just love it when that happens?

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  6. Hey AR ... I love your chart with the 6 day moving average ... a nice additional tool to EW ... and cleans up all that annoying static for a reasonableness check. I think your count looks valid, and it's close to Daneric's ... which is looking for one final push up with ((iv)) already in. I'm still sorta stuck on the AUD/USD which has a count which looks complete and may have already started down (if it doesn't get a new high). But who knows ... I would no longer be surprised by anything. I do have a hunch that Jan. 23rd date could be a key turn date, the day after OPEX during earnings -- a great day for the beginning of the next wave down. I also agree with you -- this wave counting is difficult -- I finally ordered the EW Principal book for my b-day, and am reading about those pesky WXY's, we'll see if that helps. Anyway, nice creative enhancement to EWT ... good work as always. You rock!
    Hope you're out having fun till midnight!
    Greg

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    1. Hey Greg! Yeah, I find that the noise in the markets is really where the bots are playing tag with each other. Either we become a day trader and try to snipe a few pennies here and there, or we step back and just ignore their games in favour of a larger picture. On the largest of scales, the best way to do that is to pay more attention to trend lines and moving averages. Of course, once we get into a sideways market like we saw between August and Oct. of last year, trend lines pretty much don't exist anymore, and moving averages can either whip a person to death, or be the biggest money maker he's used so far that year.

      As you probably know, a moving average system works awesomely well in a trending market but not in a sideways market. In a sideways market the momentum indicators and oscillators work best. But take another look at that time frame between Aug. and Oct... if a trader had simply been trading swings using moving averages as seen on a 15 or 30 min. chart, he would have done very well. There were plenty of smaller but steady trends to find on the smaller time scales. Strangely enough, I did fairly well in that Aug.-Nov. time period doing just that. But the intraday stuff... that's for the birds. Or for doing a bit of sniping with a very, very small portion of one's account.

      Naturally we'd all prefer to get on the right side of a big juicy trend and ride that sucker right into nirvanaland, but big steady trends don't really happen all that often. Really, markets are usually more or less just chopping around a great deal of the time and I think that's what drives most bearish investors nuts. Not to mention the fact that the bias applied to the markets by the power brokers is always to the upside. So bullish investors on the other hand are quite comfortable in that very same choppy market because they are fully comfortable, and totally complacent, about the notion that Benny and the Jets will always have their back. You wanna know the truth? Bullish investors have been spoon fed babies their entire lives and don't even know it. They have absolutely no idea how "lucky" they have been over the years. Nor do they have any idea about how big the next downdraft is likely to be. And worst of all, they don't even have any idea "why" a mega crash is even possible.

      I'm glad you liked this slightly different angle of looking at the market. There's nothing wrong with masking out the noise and just taking a nice calm look at things. The market activity intraday is just too darned wild and furious, filled with nonsense, deception, manipulation and theft to be of much value to one's soul, let alone his trading account. But stepping back a bit, to get outside that world of unnecessary and plastic insanity, can be really, really helpful. That's all I've done here.

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  7. I just noticed that your ((iii)) looks good where it is, if it was on the earlier peak, your ((i)) would be longer than the ((iii)). So, that seems appropriate also. Although, I'll go look at Daneric's count, maybe he only has a 3-waver in c? Hmmm. And argh.

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  8. Good Morning AR: Warning - I have never posted a chart before in my life. I am not and EW student, but like to follow people who use common sense, write well and make me think. That is why I am here. What I try to do is figure out a long term trend and then never bet against it. So if all the short term tech analysis methods say that the index is going up, but I don't think the long term trend is up, I don't bite. That way, I don't get caught with longs in a downtrend after a head fake. Here is a chart that possibly indicates future direction. For wave traders, this VERY long term, but for 401K's (which use mutual funds and do not allow market timing) it is pretty good.
    Seems to catch the major part of long term trends.
    https://plus.google.com/photos/116451239633884775918/albums/5697838910989777041?authkey=CIGQttOIkqSesAE

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    1. Hey there Joela. No worries about how your link turned out. All readers have to do is to highlight it and then right click it. I'm not sure if you know about how to use html tags but on some sites they can be used to make your link turn out like this.

      "So if all the short term tech analysis methods say that the index is going up, but I don't think the long term trend is up, I don't bite. That way, I don't get caught with longs in a downtrend after a head fake."

      That philosophy is going to keep you out of a hell of a lot of trouble Joela. (Can I just call you Joe? lol). It's so important to recognize when a long term trend is about to change, but I'm not sure what your opinion is right now about the long term trend. By the tone of your voice it sounds to me that you believe the trend is currently "down". That's certainly my opinion. But hey, who the hell am I to know? I'm not privy to the plans that the dark lords have. My name isn't Danny Bernanke and to tell you the truth, if I had the opportunity to be Ben Bernanke's brother and get all the inside scoop, I'd refuse it and keep the name I already have. I liked my dad a whole hell of a lot more than I like Bernanke, that's for sure. Besides, I'd rather be Irish than an orc, lol.

      And don't worry about your link... it's just fine. Most of them will turn out like yours did (unless the commenter knows how to use html tags). No worries.

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    2. AR: Feel free to call me Joe. I believe that we have now entered a downward trend in the markets that will be the norm for a while. I know that you and many others are predicting that the markets are about to come apart at the seams. I don't have enough analysis experience to make that kind of call. I also believe that the guys who run the world have more white rabbits in the queue before they get to the brown one (very entertaining by the way). These white rabbits will not have the effect of QE1 or QE2, but they will keep the S&P from plunging to 600 or 400 or the other numbers I have read recently. Not that these bandaids will be good for us in the long term. They won't. Everything they do will either immediately or gradually erode your and my assets.

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    3. Thanks "Joe". The reason so many of us are predicting the worst case scenario, one which at the present time, you aren't buying into just yet, is because of the grand cycle studies. The Kondratiev wave (approximately a 60 year cycle) is very real. The amount of debt the world has run up has reached a limit and believe it or not, there is currently almost 1 quadrillion dollars worth of debt and exposure to ultra-dangerous derivative out there. The unwinding of the past 3 decades of mad debt creation is about to arrive, so we think. It's all about to come unglued. It ALL has to be dealt with and either the central bankers are going to have to be prepared to make the next QE 10 times the size of the last one or they won't even be able to put a dent in it. A drop in the bucket compared to the debt unwind that seems to be right on the horizon. And if they were to make the next QE 10 times (or larger) that the previous ones, then currencies are destroyed and so are the economies of the world. We can't have a healthy economy with $550 oil, which is what would happen if they printed like what would be necessary to avoid the deflationary collapse.

      I'm not saying it "has to" unfold in the worst case scenario because none of us know for sure. But one thing we suspect very seriously is that it's perfectly logical to be expecting something really, really big... of epic proportions. If you haven't seen Chris Martenson's The Crash Course, or the movie available on the internet called The Secret of OZ, I highly recommend you watch them. It's so important to have a good understanding about how we got here in the first place. Only then can one envision 'why' it's entirely possible that the worst case scenario is what lies before us.

      Don't get me wrong, I don't know for sure, and I'm certainly not trying to twist your arm. But my biggest fear is that the vast majority of investors out there (at least 97%) have absolutely no idea about what we're really facing here. In the meantime, let's just hitch our horses to the wagon headed south and hang on for the ride. There would be big bounces to be sure, but it sure won't be ending on the first one, lol.

      All the best :-)

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  9. I guess that is not the way to publish a chart?? Anyway, I tried,

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  10. Just checkin' in, AR.

    I'm still paying attention out here, but haven't had the time to keep up with the details. (I've been re-landscaping my front garden.)

    I think Monday will tell us where the markets are headed next. We should see the start of the next trend from there.

    Be nimble, folks. I have a feeling that the second quarter of 2012 will show us some quick and nasty moves.

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    1. I've been working on my front yard as well. What kind of snow shovel are you using?

      Yeah, I don't have much doubt that 2012 is going to be even more exciting in the markets (not to mention world events) than 2011 was.

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  11. Signing in AR. Looking forward to the banter in here.

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    1. Well whadaya know? Hi there stranger... haven't seen you in a long time. Nice to hear your voice. When I finally get my act together, I'm planning on installing Disqus for the comments handling aspect of this site. Our friend JW at TrendXplorer gave me a link that should help me get the job done, but for some reason I've got a mental block going on right now. Can't seem to get at it. I've got a couple of free days on Tues. and Wed. so I'll really try to get that task finished by then (if not sooner). Don't forget there's a nice little pub on this site. And I know Englishmen like their pubs.

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    2. Thanks mate. I occasionally pop my head around the door at Daneric's but I'm usually put off by the shouting and unseemly brawls at Happy Hour. Seems this place is more civilised - I'll pass on the bucket of lager, mine's a cheeky glass of Cabernet thanks. In Tenerife enjoying some sun at the moment, hope all is well with you.

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    3. Oh you dog. Rub it in why don't ya? I take it you're aware then, that the temperature here in Calgary dropped to -30C tonight? Every October for the past 20 years at least I have promised myself "this will be my last winter in this freakin' cold. I'm moving out of Calgary". And 5 years from now on some January evening you'll probably send me a message saying you're in Tenerife of Las Palmas or St. Tropez and I'll still be in Calgary wondering if my car will start in the morning, lol.

      Enjoy your visit my friend... and have another Cabernet on me :-)

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  12. yo ar,happy new year,congrats on the new blog, cr is linking it in, i have to say i love that chart.....at the end of the day , ralph nelsons waves were based on closing prices, so that chart counts perfectly , with the 5th wave {thats yet to happen} possibly giving divergance ,keep up the good work ......see you at dino's sometime,pogeen

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    1. Happy New Year to you as well pogeen. I'm glad you took the time to see what I'm doing here and tanks for the kind words. It's just a place where I can post a few thoughts and not be bothered by these bastards, lol

      So how are tings over on the Emerald Isle? I tink I told you already, but my daddy's family was from the Cork area (Millstreet and Macroom) and me momma's name was Kathy Murphy. Her family was from.... from... all over Ireland I tink.

      To tell you truth though pogeen, I didn't really feel like I fit in at the CILs. I felt like an outsider... and probably still would. I don't know what it is exactly, but it just felt awkward for me, kind of like trying to break into the "old boys club" when you didn't even have an invite. You know what I mean? But I will say that the one guy who made me feel welcome was CR. And he's still a great buddy of mine today. Funny how that works sometimes, eh? lol

      2012 should be a barn burner of an interesting year and I've got a hunch... pretty damned profitable for some of us. Wishing you the very best.
      Danny

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  13. AR, I laughed out loud at your light socket/light bulb analogy. I've told you since I first began reading you on another blog which went to a fee model, your writing is astoundingly clear. You've taught me to look at the market from unexpected angles. Thank you for your insights and -- most of all -- for your civility that marks you as an authentic gentleman.

    Sean

    P.S. You're bookmarked!

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  14. Great AR, Disqus is up and running.
    Congratulations!
    JW

    http://www.youtube.com/watch?v=q1yLRK2M8YQ

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  15. Thanks JW, but hang on a minute.  I don't think I'm happy with it yet.  None of the previous comments are threaded properly and I specifically demanded that.  So I'll likely uninstall Disqus and try again some other time.  I have an exceedingly short fuse when it comes to stuff like this.

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  16. Haha... glad you liked the lightbulb trick senrex.  And thanks for your overly generous words.  I certainly remember your name but I hadn't even had time to think of where I'd seen it when you told me, lol.

    I also don't recall that you'd said that my writing was fairly clear to understand, but I really, really appreciate you saying that, since that is one of the aspects that I really focus on.  I want it to be very easy to understand and hopefully somewhat entertaining if I can squeeze anything in.  But 'clarity' is definitely my first focus.

    Some would argue with you whether or not I'm civil but if they'll be fair for a minute, they'll admit that anytime they've ever seen me go off my rocker at somebody, it has always been in reaction to an insult or name calling or something like that.  Other than that, I've never been a trouble maker.  Not on a website that is ;-)

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  17. AR, with today's S&P hitting 1303, do you think that is the final thrust of wave v, or not there yet? what is your target for this wave before it turns down? My short pants are kind of on fire with today's move haha :)

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  18. Sorry Curious, when I saw the European markets going on another rocket ride last night I switched my alarm clock off for this morning.  Woke up at 11:00 Eastern.  That gave me 6 hours of much needed sleep, which is more than I usually get, lol.

    The blast-off we're looking at off Friday's low sure looks like it could form a beautiful clear fiver.  In order for that to complete though, we're going to have to see wave 4 (which I think we're currently in) complete.  My guess is that there's going to be another surge to maybe 1305ish to finish it off.  There are neg. divergences now showing up on the 15, 30 and 50 min. charts so I'd say it's just about time for at least some sort of top.  But I won't be surprised to see that 1305 first.

    But before I can be confident that something big is going to happen on the downside, it's gotten to the point where I've gotta see the 6 day moving average roll over.  That thing is pretty dependable, as long as we use it in the direction of the larger trend.  So the first early signal I'll be looking for is the 3 day rolling lower and crossing beneath the 6 day.  A 'very aggressive' trader could enter at that point.  But when that 6 rolls over as well, then I'd consider that as a reasonably safe confirmation to add to shorts.  Except for this:  according to the 200 day MA, we're in a downtrend.  According to the 50 day we've in an uptrend and according to the 100 day, we've just entered an uptrend.  So what does a guy do... which direction is this stinkin' market really headed?  So it would be kind of a gutsy call to short it when the 6 day rolls lower under these conditions.  And then there's EWT.  What does it say?  Is it right?  I don't freakin' know to be honest.  This is where our biases can kill us.

    In any case, you can monitor the 3 day and 6 day averages on a 30 minute chart by putting on a 39 and a 78 moving average.  Here's what it looks like:

    http://stockcharts.com/h-sc/ui?s=$SPX&p=30&b=2&g=0&id=p27240794204&a=246027623



    I wish I could give you a better answer than that curious, but that' the most honest thing I can come up with.  I'm short with a relatively small amount of the account and the rest is in cash.  I'm just as spooked as a bear as anybody else, lol.

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  19. Well this is our first day with Disqus and I don't mind telling you, it's performing like a pig.  First of all, it causes the time required to load 'this page' for example to darned near double.  On top of that, Disqus is dead slow to accept a comment, even going so far as to tell me that my own comment, on my own site, must be approved by a moderator.  At present time, I AM the moderator.  So I'm convinced now that so many of the problems all of us have seen with Disqus on other sites are within the Disqus software itself, not with our hosts.  If there was a better alternative, I'd say Disqus would already be on thin ice with me.  But for now... let's give it a whirl.

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  20. I made it in!

    It was nice to read through a page of comments and not see a useless insult.

    Any thoughts on closing action yet? I find it hard to believe we can muster enough energy to challenge that 1306 tomorrow. I still think there is enough pent up selling to take us to 1280 tomorrow. But I closed out my position on SPY 128 puts. Everytime I have left a gain on a short term derivative go overnight, it has been wiped out. I will be much happier with the bird in the bush.

    Any thoughts on the flyin' burrito (aka CMG)? It looked Friday like it was breakin' out and then today it trades no volume, and reverses into the red.

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  21. Yeah, it works. and i hear you on the slowness.
    Sometimes it loads, sometimes it doesn't.

    It is really the only thing out there. Moderation and forums in general are impossible.

    As a web site developer, I steer far clear of anything social in nature.

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  22. Like I said on another site, if it was raining palaces I'd get hit with a dunny door at the moment.
    So I'm not offering any views technically as I am probably the worst TA in history and it would be as welcome as a fart in a phone box, but I know enough to know that this market is expensive, very expensive.
    And if one more moron tells me that on a discount earning basis the market is cheap I'll thump 'em!

    Sooner or later this market will revert back to value, but be buggered if I know when.

    Cheers

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  23. I'm glad you made it in.  Welcome.  You bet... isn't that refreshing?  To answer your question... at first, earlier today, I was quite suspicious and even confident that we would see the S&P hit 1305ish before it headed lower.  I actually expected to see it today.  But that possibility still exists I think.  But this market has me and probably everybody else so convinced it doesn't want to drop that I want to see the 1279 area taken out before I myself would be more convinced.

    Here's something else that I think is so important.  The 6 day moving average rolling lower is what I consider as a very important signal that a top is in.  For the conservative investor, until that happens a person who's expecting the market to drop shouldn't even consider shorting until he sees that happen.  In fact, that's even a bit aggressive considering that the 50 day and the 100 day are both pointing higher and the 50 has crossed above the 100.  That's a bullish situation.  But the 200 is still headed lower.  So which is it right now, bearish or bullish?  That's always the key isn't it.  And it's really hard to know right now.  So I'd want to see that 6 day MA heading lower as the very minimum and relatively safe signal.  And guess what?  That happens tomorrow if the S&P closes below 1292.  We're darned near there already.

    One other thing... when these key moving averages that I consider kind of like 'decision makers' get broken, so of ten it's with a gigantic gap.  We'll see what the futures do, but I wouldn't be one bit surprised to see a mega gap down tomorrow.  On the other hand, that 1306-06 level is still doable tomorrow.  In either case I think a top is very near.

    CMG?  Haha, I haven't even looked at it. Hang on... 

    ... oh yeah, that thing is looking so toppy.  But to tell you the truth, again the trend lines are key I'd say.  I'd want to see these get broken before I'd even dare short it.  If it's really 'the' top, then a person isn't missing much by waiting:
    http://stockcharts.com/h-sc/ui?s=CMG&p=60&yr=0&mn=2&dy=10&id=p31749365805&a=254097814

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  24. Is that our old buddie DK, or a new 'addictive Aussie'?  No, DK is good with TA so you're a new one.  Welcome.  What's a "dunny" door, lol?  To be honest I don't even pay attention to whether or not a market is considered "cheap" or "expensive" because there seem to be about as many ways to measure that as there are economists.  Just like wave counting.  The odds are that you're not going to find too many "morons" here although it's possible.  But you aren't going to find any trolls here who's sole objective is to destroy a blog.  I have a gun for dealing with those people and I've already used it ONCE.  And ever single person on here knows who it was that got shot in the face.  And they know why.  So we're going to see if we can run a fairly respectable community here and see what happens.

    I don't know "when" either.  But we sure know how to recognize the signs.  IMO, we need to see some moving averages roll over and some damned trend lines being broken.  Something like in the chart of CMG that I posted just below.

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  25. If any of you are having troubles with Disqus on this site, just know that so am I.  It's properly installed and the problem seems to be with Disqus.  If you see a message that says that your comment has to be approved by a moderator, I assure you that is not the case.  You're free to fire away.  It's just a Disqus thing and I'm not impressed.

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  26. I'm not quite following you.  These are social sites aren't they?  Or do you mean sites that are configured differently?

    ReplyDelete
    Replies
    1. If that was me you were replying to I meant I never "develop" social websites because of the headaches, that doesn't mean I don't frequent them ;)

      this seems not to let me select my disqus id

      Delete
  27. No mate not DK. Oh and a "dunny" is slang for the door of a outside stand alone toilet.

    They were once found in every backyard of Aussie houses but began to disappear after the 50's. Usually they were overgrown with vines and very delapidated and quite formidable places to sit and do you know what.
    http://en.wikipedia.org/wiki/Dunny

    Cheers mate great blog

    PS Just a bit peeved at the moment as I couldn't pull the skin off a custard let alone pull money out of the market

    ReplyDelete
  28. AR, you are the best in responding to your reader with such detailed replies. You have no idea how frequent I got ignored when I posted comments :( haha Anyway, share with you an imagery that came to me today with the market actions the past few days and today. It is the imagery of a man fallen into water, at first he was fine, treading water waiting to be rescued. But as he gets tired and realized he might be sinking (Friday's action), he mustered all his energy for a final kick higher out of the water (today's action), just to fall back down to the water and continue to tread water with the last bit of his energy, and finally yet slowly, he's sinking, however he refused to believe he might die drowning, he lived on the hopium that someone will rescue him.....Will someone (FED) throw a floatie to this man, we shall see in the coming sessions.

    ReplyDelete
  29. AR, you are the best in responding to your reader with such detailed replies. You have no idea how frequent I got ignored when I posted comments :( haha Anyway, share with you an imagery that came to me today with the market actions the past few days and today. It is the imagery of a man fallen into water, at first he was fine, treading water waiting to be rescued. But as he gets tired and realized he might be sinking (Friday's action), he mustered all his energy for a final kick higher out of the water (today's action), just to fall back down to the water and continue to tread water with the last bit of his energy, and finally yet slowly, he's sinking, however he refused to believe he might die drowning, he lived on the hopium that someone will rescue him.....Will someone (FED) throw a floatie to this man, we shall see in the coming sessions.

    ReplyDelete
  30. Disqus won't let me reply to our thread, the "reply" link doesn't work, so I am going to go out of sequence here.

    Thanks for the "all important" sensible warning. I think that, as a trader, one of the things I personally struggle with the most is waiting for that trendline to get broken and then having the balls to jump on the short side. It makes perfect logic to sell short the things that are going lower, but it always feels like you are going to be selling the low and buying back the high. 

    And like you said with the big down gap. So what would happen in the past: That big downward gap comes that changes the trend, I rush in and short at the low, only to see the move faded in the other direction and then be forced to cover higher. Then the trend down continues and I am sitting on the sidelines holding my pud when I was right all along.

    The market always seems to give you multiple opportunities to make a profit if you have the general direction right. It's just a matter of believing you are still on the right side of the trade when the short term moves against you that is challenging.

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  31. ugh, now its posting it twice :((

    sorry for duping. it gave me "system error" twice.

    ReplyDelete
  32. It's not your fault inursha. Disqus is acting up all over the internet today. Plain and simple, it's a bloated pig. But unfortunately it seems to be the best option right now if we want to see our comments threaded this way. Pretzel is having all kinds of trouble with it as well.No worries, I just deleted one of those duplications.

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  33. For sure, the most difficult time is right after we've entered a trade... usually.  Because very seldom do any of us absolutely nail the top or bottom.

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  34. Dear LY,

    I just tossed the bastard a boulder to cling on to.

    Love,
    AR
    :-)

    ======

    Thanks for the kind words Lisa, but I certainly won't be able to do this all the time.  I have another job as well, one which I do in the evenings and weekends just so that I can get back into society and regain my sanity for a short period each day.  But yes, I find it very rude to just shuck people off with a short, trite answer.  I'd feel a bit like an arse if I did that.  But really, I don't have anywhere near the time that it would require to respond to everybody.  I really only created this space for my friends (and that includes you of course) to exchange ideas and comments about the markets without trolls.  Eventually they will start chatting amongst each other since they all know each other.  Once Disqus starts acting better I'm pretty sure that's how it will evolve.  I shouldn't have to be here in order for it to thrive, if people want to use it that way.  Actually, the real general meeting area is here.

    And no worries, I see that Disqus double and triple posted on you.  I cleared 'em up including the one that showed your real name.  I assume that's what you would want.  Sorry about all the Disqus troubles, but they're happening all over the interweb or whatever it's called, lol.

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  35. Oh, an outhouse?  Awesome!  We're hoping to get indoor plumbing in Canada soon too.

    By the way, that Aussie I referred to as DK!  He goes by DarkestKnight.  A great guy.

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  36. AR, do you think there are more upside to come? or is it a bull trap with gap down tomorrow? (a guy can wish!) Somehow the market just seems will never drop, it can only go UP. Maybe that is how the retails will be lured to join the party before being slaughtered? This opex week will be interesting..

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  37. God, I wish I could help you out with something half-assed intelligent to say, but really... I just don't know what these monsters are going to do next.  The market is melting up on the worst news in the history of the world so none of it makes any sense to me.  Like I've said so many times, in a world where logic has been outlawed, I'm not going to do well mentally, lol.

    Nonetheless, we're definitely watching a leg higher off the Dec. 20th low that's losing steam and leaning to the right.  If it were a serious impulse rather than this phoney ramp job (no doubt related to OPEX) then it would be screaming higher with trend lines that are steepening as opposed to what we're seeing here. It looks like a limp dick.  Mind you, volume is stead as far as I can tell.  I just don't know what the Orcs of New York are doing because it's sure not Joe Public who's driving this thing.

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  38. AR..........
    Natural Gas Buy  ?In depth article herewww.markethighsandlows.wordpress.com/

    ReplyDelete
  39. Hi Scotty.  Geez man, that's one dagger I wouldn't be interested in trying to catch with this kind of velocity to the downside.  True, it's very oversold.  But I wouldn't even think of touching it until it showed some sign, any sign, of a bottom.  For me, that would take, at the very minimum, at least a moving average rolling higher.  A person could get lucky and get in right at the bottom but for me, that's just too risky.  Been there, tried that.

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  40. Very nice technique, charting with a 6 day moving average

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  41. Glad you can see some merit in it DD.  As doctor_jr. suggested, a method like that where I make the S&P itself invisible, probably eliminates some valuable information.  From the EW purist point of view, he's correct.  He still appreciated the unorthodox approach though.  But for the simple purpose of removing the noise and trying to get a real honest and simple picture of what exactly it is that the market is doing, I find it helpful... and harmless enough.

    ReplyDelete
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    ReplyDelete
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    ReplyDelete