Yellen, "The Fed has more work to do!"

Yea, I mean we're still using dollars instead of SDR's.  The Fed needs to hurry up and flush everything down the toilet so we can be 'rescued' by one world government.

New Beginings

We seem to move forward through life looking forward to things in the distant future and then immediately looking forward to the distant future for the next event of importance.  Meanwhile we waste away the gift of life.  Where are we now?  What are we looking forward to?  Have you looked at where /NQ is sitting in respect to the monthly Boilinger Bands?  Can you see the stars?  How many fingers am I holding up?

Will November be bad?  Will it be good?  It depends on what you're looking forward to?  It's much easier to be pleased when you aren't expecting anything in particular.

Not a Paper Trader

I'm a Paper Chaser!

 

Dot Dot Dot

Everybody is too bearish...

Bot

Rally on nothing

Feels like a wave 2 to me.  A lot of the internal indicators I follow are saying to me we are in selling mode.  Still not sure how I feel about /YM... but tomorrow would seem to be breaking point for the bearish case if it intends to break.

Let it Ride!

In case anyone was wondering or couldn't figure it out, the last count I posted has been COMPLETELY RIPPED APART.

So instead of waiting on a fifth, it was complete as a 1 or an A.  2 completed this morning and we have a 3 of 3 on the board.  1488 hit, but it's no longer the target. 

"How do you deal with the /YM high this morning?"  Basically, like this... It lagged, the others did not truncate, and thankfully im not positioned in DOW.

Big Head and Shoulders on the Nasdaq.

The way to play this move is to look for extremes in your indicators matched with "reversal".  I really dont think this is the big one, at the same time it's not an average correction, but anything is possible.

I watched a video the other night on some traders because, let's face it.. I'm moderately obsessed.  One thing stuck out was this guy sitting in a plush house drinking wine like it's water and in a full reclining position talking about how easy making his money was.  It's obviously not that easy, but his advice came in two blocks of hard truth.

1) Win every day.
2) Let it ride.  If you're winning, bet more, let your winners ride.

While #2 can get you in trouble quick, if you abide by rule #1 it's not a problem is it??

1488 = 1505 - (.618 * 28)

 

 

1488 = 1505 - (.618 * 28)

Bartolomeu Dias (Portuguese pronunciation: [baɾtuluˈmew ˈdi.ɐʃ]; Anglicized: Bartholomew Diaz; c. 1451 – 29 May 1500 ^[1]), a nobleman of the Portuguese royal household, was a Portuguese explorer. He sailed around the southernmost tip of Africa in 1488, the first European known to have done so.

A Good Day to Die

Some time in the early spring of 1876, Sitting Bull climbed to a hilltop, seeking a vision. In his dream, a great dust storm swirled down upon a small white cloud that resembled a Lakota village. Through the whirlwind, Sitting Bull could see soldiers marching. The little cloud was swallowed up for a time, but the storm eventually dissipated and the village emerged unharmed.
On June 21st, Custer met on the Yellowstone River with Colonel John Gibbon and their superior, Brigadier General Alfred Terry.

Terry ordered Gibbon to march to the mouth of the Little Bighorn, while Custer and the Seventh Cavalry would try to locate the Indians and drive them down the valley toward Gibbon and annihilation.

As Custer rode off, Gibbon called out to him, "Now Custer, don't be greedy. . . . wait for us."

"No," he said, "I will not."

"This country is my country now, and I intend to stay here and raise my people to fill it. We did not give our country to you; you stole it. You come here to tell lies; when you go home, take them with you."
-Sitting Bull

wow

I'll admit the past few days have been a surprise, but this extreme move is hard to trust.  I'm not able to check charts now but I believe we gapped into the upper daily band and moved above it to close.  It's hard to imagine this move doesn't retrace significantly, perhaps the middle of the band.

Gap.. to crap?

Crazy gap, does it crap?  At least closes on the day I say... no way?  OK.

Bullish Count

 

Any deal is market positive in my opinion.  I tend to agree with republicans that in order to reduce the debt, spending cuts are the only solution.  It would seem that the path we are on involves a default or an attempt to inflate away the debt.  After all, do we really have the balls to fire government employees and terminate government contracts?  We already have a weak economy, imagine one without cushy government jobs.  Just imagine...

Should we get a deal tomorrow, the above count is how I see it.  There's some fancy dancy math to guestimate a region for a top which is somewhere between 1467 and 1546.  The top limit is based on the rule that the "third wave" can't bee the shortest in an impulse.  I have this counted correctively as a-b-c-d-e, but it's the same form as ending diagonal.  The bottom limit of 1467 is taken from the observation that the ratio of 206/351 is close to the fib .618 so multiplying 206 by .618 and adding to the local low at 1340 gives us the limit 1467.  I would say we hit this "e" target in the first quarter, maybe January or February. 

Don't Bottom Pick

I'd be willing to give 80% odds that this little lift in the futures is quickly sold off at the market open.  A lot of people seem to want to be optimistic here, but there is little technical reason for a bottom.  Everything has room to run further IMO.  Some people say that acceleration won't occur unless a downgrade is announced, but I would disagree.  In 2011, the official downgrade announcement came only a two trading days before the short term bottom was in.

4-4.5?? That blue pill won't be much help.

4-4.5 has been a level where the $BPSPX:$VIX (BPSPX divided by the VIX) has fallen in a big way in the past.  It would be very easy to draw an analogue to the debt downgrade in 2011.  There have been threats of a new downgrade and I believe any confirmation of that type would accelerate selling into a sharp point suited for big gains in short-term buying.

I am getting ahead of myself speculating the degree of this potential round of selling.  Any word of a positive deal could easily launch the market higher overnight.  My sense of the motivations leans toward no deal before the new year and no deal before market declines.

All that being said.  If the market is tired of the upside, this relatively subdued selling could in fact be the calm before the storm.

Adult Swim!

These are good levels to sell.  End year down from here.

Kwestion of the Week

Are we grinding higher or gearing up for another move to the downside? 
It seems like we're just spinning our wheels here.  If we've got a date with the bottom of the channel we've been running up, that's somewhere around 1340.  If we're grinding higher, we want to see a close above this upper trend line of the channel.  If this move up has been a B wave in a correction then there's a considerable drop ahead.

They say things like bad things happen in threes.  Maybe that's like an impulse to the downside for markets...  I just feel like everything goes great for a while and then BAM!  Everything falls apart all at once.

The Fed and EU didn't make me feel any better about being long.  It made me feel like the markets were going to force them to take action.

Challenge accepted.

Dear BearPig,
  This is how I count the move.  Double zig-zag.  Spy looks worse because of the gaps.  Watch the futures.

Hard to hold from where I recommended going long, but in the green.

Trying to stay on the sunny side

A while back I made a conscious decision not to be as vociferous with my opinions on market direction.  I still feel that decision makes sense, but I'm back today whether it be due to pride or boredom.

I think a lot of the negative outlooks on the market are a bit dogmatic while they are definitely based in reality and a somewhat compelling elliott wave count.  Speaking about market signals, the size of the leg down in SPX points was not as severe as what we have seen in previous summer selloffs and the VIX was significantly more subdued.  In short, the fear just wasn't there.  There is a case to say that that leaves plenty of room to the downside, but I lean to the other side of that premise.

I think there is a significant chance of retaking the highs in April, and I think today is a decent spot to trade against a move in that direction.  I could be a bit premature in thinking that we have a bottom here, if I'm early but still correct I could see the bottom in a matter of days.  Anything further than that or significantly deeper would raise doubt to my trade.

We recently had a 20 day/50 day cross in the SPX daily and we fell back into the 50 day as they crossed.  I find that this is typical and this point provides decent support in an uptrend.  Hanging near the 20 week moving average (though under) gives some support.  There are also some significant horizontal resistance zones across the indexes at this level.  The VIX has sold off from its extremes and is bumping up into the 20 day and 20 week moving averages.  The NYMO has worked off a significant amount of its extreme readings.  IYT and IYR are still hanging high having not been affected much during the summer selloff. 

I'm not as concerned with a count here because if we have put in local lows on June 4th, then you could expect a murky start higher.  If there is further correction from April or the start of a larger downtrend, we know the levels where that trade becomes apparent.

There are compelling arguments to both sides of the trade, but having just endured a 4 day move down into significant support I am compelled to go long.

As always, manage your trade.  Know your levels and good luck.

Whoa Whoa

It's a little too bearish out there for me... I'd take a stab at the long side from here.

The EU Summit Leaked...

Triangle? What Triangle?

Dear God, it has driven me to madness... this drivel about triangles... WHO STILL SEES A TRIANGLE!?!? 

You can see that the S&P futures broke below the 1208.5 low, which proves that the corrective move is done.  You can see it was actually a simple ABC correction that just happened to be constrained by support and resistance that led to the belief that it might be a triangle, which of course could be extrapolated into all kinds of bullish formations.  BUT IT WASN'T!

When you look at other indices it is even more obvious.  The Dow futures never really looked like a triangle, but that never stopped the madness.

In my opinion, it was all a flat.  Maybe if "C" truncated you could say 1-2 1-2...
STOP THE MADNESS!  You look dumb.