Monday, March 28, 2011

I Caught the Knife, Now I Just Keep Stabbing

  Sort of changing the count from when I took a stab at it a few days ago.  The pivots stayed the same, the labels just rotated.  Speaking of rotation, I wouldn't worry too much if your horse takes a hit, or has taken a hit.  The fear seems to have left the building.  For this count to remain valid, that i level at 1296.5 can't be violated.  I'd look for 1300 to hold.  There is horizontal resistance at 1300, and it's a round number that's sure to bring out some buyers. 
  In all honesty, I'm not sure what levels to expect for this fifth wave, I'm sure someone else would be willing to throw out a number, but I don't see the point.  I feel like it will show itself as we get closer, so there's no point sticking my neck out.  Another thing to consider, which I hope people understand, is that I don't label in the traditional way that Daneric and EWI label.  I still recognize degrees and they are extremely important, I just choose not to because my charts are usually short-term and there is no need to worry about correct degrees.  I'm more concerned with readability than conforming to the degree structure.  So for instance, in the chart above, when yellow 5 ends, some may think I imply that's the end of the fifth wave, but my view is actually that yellow 5 would be 1 of minor 5.  I guess I could obsess over the degrees and have them all look so pretty, but what would be the fun in that?
  We've been moving in 20's on the futures, so if 1300 holds, 1320 is the next spot to look for resistance.

Friday, March 25, 2011

Kwestion of the Week

Where did the Libyan rebels get all this hardware?  They're running around with 50 caliber heavy machine guns mounted to trucks, RPG's in trunks, AK's AK's AK's, and what is this?  Is that a mounted anti-aircraft gun?  What the hell?  Nobody seems to think anything of it either.  I guess some of them are defected military, but they've got an arsenal the NRA would be jealous of.  I guess this was building over time and the people made preparations to bring in weapons, but it's not like they have a weapon superstore down the street where they can pick these things up.  Somebody supplied this war is the obvious answer. 

The market?  It's going up, duh!  Remember... winning?

Thursday, March 24, 2011

It's Still Rock N' Roll To Me





All the short term downward trend-lines are broken, and the upward trend-lines are accelerating.  Until we see a change of character, prices will continue to advance.  I think we're starting to see the more dogmatic of the bears covering.  Imagine going short near the 1250 lows and then imagine what you would be thinking holding rotting puts.  The bulls continue to herd the masses into equities.  Look at NFLX and friends... the energizer bunnies have got gas.  You can't afford to fight the tape here with the prospect of a fifth wave.  Possibly a trend ending fifth wave, so a blow off move is not out of the kwestion.  Maybe holding a few unleveraged shorts pay off in a few years, but let's push it to the limit.

Make Me Breakout

Wednesday, March 23, 2011

Taking A Stab


Everything's up in the air, but this is kind of what I'm looking at.  The other indexes look a little different, but if this really is a fifth wave from the July lows, then it should be fairly large and the wave structure really shouldn't be clear at this point.  We'll see what happens going forward.

Tuesday, March 22, 2011

Caution is Warranted

The bounce off the lows is looking reticent at the moment.  The many red daily bars are what worries me the most, but prices are advancing despite the intra-day selling.  This character could indicate a correction within a down trend, or it could be characteristic of a fifth wave.  We should be cautious as we finish out the week.  If the bears will make a move, they will do it from these levels.  I'm pretty comfortable saying the action today and yesterday is corrective.  We seem to be in a pattern of holding levels and then taking the ramp overnight.  I'm not going to recommend action at this time, other than to pay attention and prepare stops.

I think this caution is what we're seeing in the market.  Maybe a case of the tail wagging the dog.  If we can break 1300 and hold, I think you'll see a lot of scared money coming in and shorts covering.  That same logic goes the other way though, if we break down and break the 1250 lows we would likely see long-term bullish positions being liquidated.

Friday, March 18, 2011

The Weekend is Coming! The Weekend is Coming!


Have a good weekend guys!

Thursday, March 17, 2011

Wednesday, March 16, 2011

Tuesday, March 15, 2011

"We're Goin To War Boys!"

When the gates open up in the morning and you're staring death in the face, the machine guns are blasting over your head, they're telling you the world is ending today when japan melts into the center of the earth causing a black hole to swing out of equilibrium, remember the words of our great president FDR, "There is nothing to fear but fear itself."

Say it with me, "I AM NOT AFRAID!"

They're making plans now for the assault...


Japan might end up being a great buy out of this mess. Obviously the damages in Japan equate to a reduction in the value of the underlying companies, but the stock action will likely overshoot to the downside, after which they will sharply recover in a similar fashion to what happened with US markets during the flash crash.

There's no reason these levels can't hold and rally on into these fifth wave mega retard highs.  Not saying they make sense or will persist, but it's not chasing if you win.  The chasers just got creamed last month, and if it turns they'll probably be buyers at 1300.

So we're buying... what to buy?  I don't usually bump a stock, but I have to go with the home town hero, Synovus, ticker SNV.  It has been sitting on its 200 day moving average for a little while, off the bottom of the daily bands.  There is a strong resistance band from $2.36-$2.5, and I would be a buyer within that range on the day, assuming we don't plummet through 1250 /ES.  I see the stock at $3.00 by the end of next month assuming that this rally takes place.  This is a trade that could turn into an investment, but I would just cash it out and move along.  We can always come back.


Don't mistake my bias for being blind to the bearish count.  I made a point to highlight a possible contracting wave from the lows last year, but it was my belief then, and (hanging by a thread) I still believe we can hold these levels.  Should we collapse, OK, I was holding short, and I'd look to 1180-1220 to hold... but we've got to detach from the media barrage and look for value.  Japan got nuked in WWII, and they came back from that... we've seen meltdowns before, and though they are not pretty, they are manageable.  This will take time for all parties involved, especially the Japanese people, but from the fire of the crucible will emerge the strongest elements.  All my prayers go out to the people of Japan, this is a terrible ordeal that I would wish on no one.

Monday, March 14, 2011

Are we there yet? Are we there yet?


Cash made a new low, but futures might have a date with that 1278.5 level.








Possibly channeling down for a fifth wave.  Expect overthrow from this type of formation, which would serve as a trap for new shorts and a shakeout for weak longs.


Proposed 4th of 5 alternates with the 4th of larger degree in that the previous ABCDE was contracting, where this formation is expanding.

Risk reward is beginning to skew to the upside players in my mind.  Wouldn't initiate shorts here, unless that's your style.  Possibly a lower open but that's likely quickly bought.

Friday, March 11, 2011

Steal This Count

In line with the previous minis count, here's how I make today corrective.  I think a lot of people cried uncle when everyone else covered before the weekend.  I think people are preparing for another run-up, but one more low could be in the cards.

Thursday, March 10, 2011

WooHoo!

Ok, enough celebrating, don't want a penalty in the end-zone.  Assuming that this is just a hiccup in an uptrend, we need to start looking for a bottom.  Nothing saying bottom to me here.  VIX has a magnet that will suck it into the top of the daily bands.  Watch the $cpce for an extreme reading. 

I made a little /ES count, but it's more of a guideline than a rule.  I think the gap represents a third wave and we're likely going to see some 4's and 5's that should be bought.  The Pomo schedule seems like a hint, and we might well decline into the resumption on the 15th of March, but it might get front-run.  The key here is that until proven otherwise, this is still corrective.


I'd like to think I've learned a few lessons in the market, and one would be to not be so attached to your counts, so I merely speculate at the current structure, while I am much more confident in the A-B notation.  We could see these counts expand into any number of possibilities.

Can you smell it?

Confirming the weakness we've been feeling.  This is third wave, so if this confirms, don't expect big retraces.  Maybe we chop after the open and drop after we run out of buyers.

Wednesday, March 9, 2011

Still Waiting


Don't worry Mr. Petty, one way or another, I have a feeling we won't be waiting for too much longer.  For all the up, downs, back and forth, nothing really has changed.  You could just feel the emotion today when the S&P caught a bid and were pushing 1323 around noon.  It felt like the breakout, was it the fake-out?  Waiting...

Monday, March 7, 2011

Something to Consider

I think the last time we saw a level similar besides April '10 was in March of '04.  Take your pick. 

Thursday, March 3, 2011

Dry analysis

Hopefully my rants don't scare whoever reads me away, but everybody loves a little drama and conflict right?

Anyway, some simple charts...

 BPSPX is plateauing after the quick drop.  At this point the BPSPX is losing its predictive value because it has already topped.  If you think BPSPX is going to rally up to beat the recent highs soon, then make me a side bet!  I'm sure I can cover any potential losses there.  I really want to see the RSI dip below that 30 line before I'm convinced the correction is over.  I mean it's already there, just finish it.

  

 Put call is trending up.  We've seen it before, when the bottom right green line hits the cpce wall that'll be confirmation that it's rally time and I say confirmation, because the price will probably scare you into the trade before the EOD CPCE print has a chance to make a difference with your execution.


The OEX here just to show the general 'character' of the market.  My big gripe is that it's below the middle of the bands, whenever the market moves lower, it almost always exhibits this characteristic of chopping below the middle of the band and then breaking the recent low.  There is that one spot in December of 2009 where we broke the middle of the band and didn't chop and descend, but it also didn't have the big bars up and down and it was obviously correcting above the middle of the band before it got there.  There is also that November of 2010 area where we chopped under the middle of the band and then just barely broke the low.  That is definitely a possibility.  It's very possible we blow straight up to the moon from here, but I doubt it.  You can see I acknowledge that with the trend-line from the Sept. Low to the Dec. Low.

There has been A LOT of back and forth with everybody who is supposed to be "calling" this market.  That is the psychological character of a B wave or a 2 wave.  I'm not saying I've got it locked in, just noticing the indecision from everyone.  I think the buyers here are still energized from the run-up, but aren't taking into account things like the BPSPX falling from highs.  I will agree that there will likely be some divergence between the BPSPX and the market.  I do see more room to run, but I don't want to buy here.

All in all, yeah you know, I'm shooting my mouth off and we are right here near the highs, it's do or die time for both sides of the trade, it's just a matter of seeing it through.  If it runs against me into key levels, I'll switch.  But it just looks too sweet for me to let go.  Anyway, I'm sure I have said too much today!

Grow some Algae!

I think I have done enough dry market analysis to warrant some almost baseless rhetoric.  Which brings me to the point to end all points.  The point the TV just can't let go because the pointers want it looked at, but only temporarily.  What's the point?  I ask myself the same kwestion, but no, it's OIL!

I hear Warren Buffet talking about this "system" that America created which is driving our growth and economic power, and he says the emerging markets are now unleashing their potential.  I say the "system" is nothing more than a code for OIL and cheap labor that oil provides.  Our entire economy is based on it, which is why higher oil prices are seen as a market negative.

Who is to blame for the blinders on our eyes?  A lot of people is the short answer, the real answer is probably hard to imagine and impossible to prove.  I think that it has a lot to do with generations and the fact that people live and die.  I remember talking with an engineer in Pennsylvania about the oil problem, at the time oil was hitting $150.  And his response was that he didn't care because he would die before the problem blew up.  I think that statement and mentality is a microcosm for the whole problem.  My grandparents parents started oil and it was good, then generation after generation they laid down their prayer rugs in homage to the oil gods.  The oil put food on the table, and that's all there is to it.  This mentality breeds among the people like a virus, but the virus could end up killing the host.

I'm not saying we run out of oil tomorrow, or even in the next 10 years, but oil's availability is undoubtedly heading lower.  The real kwestion here is what will we do after oil and what are we doing now to get there.  I think the short answer is no one cares.  The long answer so far is that, there will be a giant disaster due to oil suddenly "vanishing".  Corporate structure and political structure is unforgiving to dissenting views and the old players are at the top.  They've been told since the 70's that this ride would ultimately be unsustainable and their arrogance has showed. 

My hope is that in some secret government lab, they have a new age of energy sources waiting to be unveiled like a new TV, 1/2 an inch thinner than the last.

My worry is that there is a plan for the end of oil, but it has nothing to do with a replacement.  I worry that oil is to become a Pearl Harbor and a rallying cry for the same idiots who thought moving into Iraq for WMD's that weren't there was a good idea.

Wednesday, March 2, 2011

Eh Taters!?

I would post a count, but someone would just come on over here and steal it... either that or it'd just jinx the trade.  At least when I talk like this, you have to be an intelligent Elliott Wave practitioner to use it.

I think there are two scenarios for a down move; grinding lower, and plummeting lower.  Grinding would suggest the 1260-75 range, and plummeting would suggest 1200.  The plummeting could start off grinding, so...

see ya tomorrow!

Tuesday, March 1, 2011

Dear amphetamine bloggers

The waiting is the hardest part.  I see these counts changing daily as if all waves complete in 2 day time frames.  I believe fairly firmly, reaffirmed after today that this correction is still ongoing and while 1260 is at the bottom of the first target range, I still like that zone as a target.  If we're going to repeat the April fractal word for word then we bounce tomorrow, but I have my doubts of that period repeating.  Down week this week.  Friday at the lows.