I hate when we get neutral like this. I'd be better if I was in some cleaner positions. honestly I'm kind of whining. It just starts making me sick. Starting to get more psyched about either day trading or just waiting out the trend.
Of course the last time I felt this way was a short covering rally... but the violent action is bearish, as it pummles people right and left.
bla bla bla.....
it's all good.
Thursday, February 7, 2008
Neutral
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2 comments:
Doood,
Great posts, especially the cogent one about Klimt and how most bears can't grow the stones to stay with their convictions.
Today's rally, as pathetic as it was, gave me some room to get a little bit of MZZ. I've still got FXP and any rally in China tomorrow would allow me to add to the Ultrashort FXP. (Looking now the Hang Seng is down. Damn. I was working til 4:30 today and couldn't get tot he computer to add any FXP before the close; I should have done it after hours but was too lazy.)
This Elliot wave stuff is interesting. Correct me if I'm wrong: SPY looks like it's at the start of a Wave 5 with Wave 1 starting way back at the double top in October. If this is true, then we should see some major downward capitulation over the next 2-5 weeks. No?
Longs in this market are scary. I lightened my longs in my retirement account last fall and I may clean out the rest now. I have been hedging all my longs with short and Ultrashort ETF's as well as a small short position in TSM that I took profits on last week.
My thoughts on the Elliot wave analysis (remember I just started reading about it): Would a Fibonacci retracement bring us up from SPY 130 to 139 as happened on Feb 1 (a 0.6 retracement)? If so, then we have already begun a Wave 5-- and how far will it drop? Do we use Fibonacci # to figure the drop in wave 5?
I think you're right-- Monday will be blue for longs. But also, I just don't see many traders wanting to go into the weekend holding long positions, do you? I'm interested to see what happens tomorrow-- maybe SPY starts up but peters out in the afternoon and maybe washes out at the close...
You have it, Roughly... But Remember... It's all Chart-Astrology.... As they say TA is more art than science.
Throwing Elliot waves at this entire move since October.... we get ONE MORE LOW.... And Wave 5 of that MACRO move Started on Feb 4th.
As a Thesis, Wave One of that "Macro wave 5" COULD have ended Yesterday Morning. Yesterdays Correction Being Wave 2 of the Macro Move.... Now we Should be starting Micro Wave 3 of the "Macro Wave 5"... This should be longer than "Micro Wave 1" Which was 8 Pts on the SPY... So Wave 3 should be greater than 8Pts bringing us lower than 126.31(8 minus Thursdays high)(roughly the jan 22 level or LOWER)... Then we catch a bounce... Wave 4 Then a Final move down.
Fibonacci: I try and run as many possibilities as possible, and see how many match up. But roughly using the Nov 26, or Jan 9th, feb 1 levels at the 50% mark... and numerous variations the Target hits 124 to 116 on the SPY....
In Reference to your Fibonacci, The Feb1-feb7(8pts on the spy) move.. As a Wave1 Should be a minimum of 50% of the Entire move. Which takes us to 124 SPY. There are some less bearish models, With the 370 pt Down day, Being Wave 3.. Yesterdays correction being wave 4... and a now developing wave 5.. Building a Double Bottom or even a 76.4% retrace of the Jan22 move... That is what has me shaking in my shoes a little. But Losing in a trade.. wouldn't be a first time.
Remember it's all Chart Astrology, but because people do follow it can make it real. That level 124-116 is the july 06 range... and it makes plenty of sense for us to be there.
When this is over We should get a Hella correction... A nice Wash out here, then a Rally till Q1 and Q2 Earnings... Feels right Lot's of people saying 6 month recession... it's all over Fed fixes everything, stimulus package.. all great reasons for a Solid Denial Rally.
But Remember Of This Bear Cycle... This COMPLEATED MOVE could be Wave 1 of a 5 wave Bear SUPER CYCLE... Which is where I get my Thesis of a WAVE 3 Correction/Crash in October. Maybe Wave 5 Crash Ending October 2009.. Or it could drag out 2011 .. hard to model out that far. and alot depends on things that happen over the coming years.
Basically a Crescendo finish Wave 5, of us Realizing that Supply Side Economics is the Achilles heal of Capitalism. And the Destruction of American Style Capitalism.
Not to get to Bearish... Then the Phoenix rising from the Ashes. Eco-Friendly, Techno/ Eastern Philosophy Hybrid Social-Capitalism(milton Freedman/robert Reich...Esque) Taking it's place... Till we hit a Global WAVE 5.... Then we have to Start Wave 1 of Planetary economics...
Which I liken to the beginnings of the "Kardashev scale" in Physics.
I'll run some charts.... LOL
I will draw some up showing bullish bearish scenarios Fibinachi of this wave of the stock market.
It is all Chart Astrology. and all it does is shows the Bell curve of trend Adoption, which does represent itself in numerical charts.....
And Elliot waves Can Fail.
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