Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Monday, March 31, 2008

no chart yet

so... EWT says we should look for one more low.... We are still in the trade channel for the ENTIRE downtrend.... But the up move today was very wave 4, for the entire downtrend..

there is always a chance we just stay in the trade channel.

scary notion is that the wave forms are starting to look more bullish than bearish.....

so, we sort of had wave 5 and 4 of the smaller move, and we are now tying to correct wave 5... which may happen in the futures.

A failure of the wave 5 is possible. and I believe we have seen some accumulation.

you know what I'm thinking, about the reduced Volume, is that it could be because of the de-leveraging process....

trying to blog

I had about 3 hours of sleep lastnight....

I sort of have......My chart deal is sucking it up right now.....

but... We have yet to break the downtrend... the resistance we found today was the downtrend line...

and it feels like we get one more low..... Now... there is what feels like a turn happening.....

but with quarter end and the low volume...


I'm very nervous.... I'd like to see us break the downtrend line for the entire move.... that woudl make me feel better...


there is some reason to look for the possibility that this correction is over.


we continue with our nice WWWW patterns. This still has more downside...131.50????
but acumulation patterns, as I see it..

So... it's possible we will correct into the close... and bleed off all the gains., it would be bullish if we set a higher low, into the close.

Now the Volume still sucks.


Time for that correction...


more acumulation...... this isn't as bullish as the last set.... It may give me my wave 5 on the XLF.


Feeling some wave 5 action here...... I'm curious what it will do to the spy

damn you cant see it but, this didn't want to wait for the red line and turned on the green.... I can make a case for a 5th wave on this.

Posibly.... This is the XLF we will come down to the red line... in an A wave... have an upmove on the redline...up to the blue line... then back down below the red line....

Then.... This is interesting... I bet we have another upmove and another downmove.......

and that will mark the Turn.... In theory...


ok.... so.... we are onto wave 5... and Maybe.... maybe after this wave 5 should lead into a multi day rally. Failed move.. then 11300 here we come

That blue line is segnifcant resistance.. it's lame that as fast as I post it it happens... But I was going to say that though this little downmove on the SPY looked like it was a failed move, I thought it was more likly a wave 4... which is happening right now. wave 5 is happening.


the XLF is almost in a completely bullish trend.. a slight correction(which was fun to trade this morning) as have been the other 2 big up moves.. as the inverted Triangles set up.
Umnnnn I would not be surprised to finally get a correction here abouts... this feels unsustainable... but if we break that blue resistance on the spy Good things could keep happening... for my long positions.
this still doesn't mean I don't think we will hit 11300... Just have to make some more people lose money.

see the nice W patterns.... I still suspect another low not sure when... and we may take a new leg up and then have a failure move.... Cramer was uber Bearish this morning... makes me think we are going up. just till he changes his mind... then we come back down.... Not that I don't like cramer....

As the rally happened last monday-tuesday... he was throwing out alot of "buy" before the market gets away from you..... Not that he can't be wrong, cause I know I'm wrong alot.

Wave counts.



What just hit a wave 4 is the 10am move... from friday. That little 9:35 move is the 5th wave of the Noon move.
The financials are trying to be bullish... and may just make us turn.
This could be the wave 4 from the monday through friday move.

financials turn... and the spy



spy in first wave 4

this is the XLF.... which has a chance to turn.....

Magic in boxing....

If there's magic in boxing, it's the magic of fighting battles beyond
endurance, beyond cracked ribs, ruptured kidneys and detached retinas.

It's the magic of risking everything for a dream that nobody sees
but you.

Link

Sunday, March 30, 2008

Elliot and trade channels


What I see here... is a fairly healthy Elliot wave..... What has happened with this 5 day chart is that The initial elliot wave Broke into a larger wave... Into a larger trade pattern.... It is possible that this last move is just wave 5. I have seen wave 5's overextend themselves out of the trade Channel.






The blue shows the trade channel/Elliot wave, which then breaks into the larger Elliot wave





But, most likely what was the original Trade Channel, accelerated into a larger trend. This was what I was hinting at, when I was trying to figure out if we were Accelerating or decelerating





The big hint on Friday was, that blue marked descending Triangle... Downside target is 1300-1310






In red I've marketed what do look like Accumulation moves... or Hint at it....

I'm pointing out that there are HEALTHY UPSIDE IMPULSE WAVES. much healthier than the sell offs. Which look like Bear Corrections in a Bull market.... I'm not saying that it's true. What I think is that in the Low Volume, there were many people convinced into a bull market... Certainly not enough of them... but they are there none the less.... This was what I've been pointing out by saying it's not that the market was getting Sold... it's that there aren't enough buyers.... Even the sell off at the end of the day felt like There were buyers, just at lower tick levels. I was watching The Individual trades in one stock, and there were blocks of 100 shares being traded every 3 minutes, Seemed like Short sellers selling into buyers hands at lower levels.... Those are sucker Trades. I know when I've made those trades, I've paid every time.


Further interesting patterns... I've marked the Impulse waves(with counts of 1-5) in blue. and the corrective waves(ABC) in red Green and dark green. The Green waves show a more Neutral wave, which is almost an impulse wave with a failed 5th wave.. into a failed correction.

So, here are the wave counts. What this tells us is that the Blue wave is Owed:


a wave 4 then a wave 5.


Then the Red wave is owed a Wave 4 and wave 5.


so a minimum of 2 more new lows.... or 3 since we wern't done on friday.


From that accumulation I was looking at, and the attempts at blue impulse waves. The bulls are going to put up one hell of a fight at one point. But this is also just the kind of buying that could create enough panic to get us to 11300. Saying we are in a trading range is like bouncing off a new low and saying "We are glad (insert new low) Held and find it bullish for the market... it's just Yesterdays news... and it's interesting but not forward looking.... more properly said "we have been in a trading range"

Lookie here, this is 5 days of the XLF..... That looks Ripe for a Turn. Still in it's trade channel, but could be played out. Looking for a bounce.

Not that I'm perfect or anything but "just barely know what I'm talking about ", but there are some interesting signs in the market. ... and about reading the waves.... The only thing you actually know is wave 3... and as you suspect wave 4 and 5... truth is it can always accelerate to the downside... into a larger trend.

Saturday, March 29, 2008

It's 2am and I'm still up!!! Damn. This is a Super post from my Crystal Ball

Grodge and I were commenting about Peter Schiff, and the DOW in 2006 when it was at 11300.. and Peter was talking about the Recession. I figured I'd share this with the Class.

He said:
The amazing thing to me has not been the decline since Oct, but rather the prolonged market rise from Aug06 to Oct07. Amazing. What was it based on?

Not to be Patronizing(I'm just providing background, incase somone needs it)... but the market is based on PEG (P/E and Growth) The Growth in earnings in a stock, give us our upward momentum in the market. If a stock is Showing steady 2% growth in earnings every quarter. The P/E ratio gets larger and the Price of the stock steadily... Linearly Grows every quarter. And a miss will take it back to it's last quarter level...

So, if the stock is growing at 2% one quarter and 3% the next quarter and 4% the next... this is where the stock gets Parabolic.. because as the earnings are parabolic so will the stock price..... The danger with these stocks is that if they miss Expectations in any way... That parabola Suddenly gets flat, and a 20-30% haircut is in order... Immediately, This is what happened to the Nasdaq in 2000.

So..... As a stock trades, so as the market..

Kudlow did a great thing about earnings tonight. He pointed out that "Domestic Earnings Growth" has been flat since late 2006. But international earnings were supporting the market, till August 2007.... this is accounted for in the Dip we took in late 2006. And the continuation in a slower up move through august.

Now the banks were hiding their losses, up till then. This was what shook the market in august.... But UnTalked about by CNBC, primarily was that earnings were Flat in August... and Roughly this means we have to come back to the March levels.... Primarily, and trade flat.

The Bull thesis between August and October was that; the Weak Dollar, and the fed was going to save us.(BTW I actually looked it up, and it's very normal for the market to have a denial rally when the fed starts cutting, happens almost every time. The Thesis almost every time is weak dollar and the fed will save us, it was Creapy, I looked it up) And almost every time After the fed cuts We trade to "NEW ALL TIME HIGHS" then within 1-6 months we trade back to where we were when the fed started cutting.... Catch another Bounce... and that is where the "Recession Trade" starts.

Interesting, this cycle was that We traded this crisis like we had a problem Like the Mexican debt, LTC, or Asian Debt. Some External threat to our market like a Hang Nail or thorn in our side.
This was very strange, and from my research it should not have happened... BUT this can be accounted for buy the fact we have had such a strong bull market, and so many "Generals Fight the last War", and the only substancial financial Crisis we have seen in 30 years was the Nasdaq Bubble. If you notice... Every thing is a bubble now... you hear it everywhere.... and it's nonsense... most "over heated markets don't trade like bubbles".... a bubble is that parabolic move in things... and when it pops we get that 30-40% haircut... That is a bubble. And housing was a bubble, and that doubling in price in 2 years was parabolic (quick tangent, When Gold goes from 2k-3K in a parabolic move in the next 5-7 years... that will be the "Bubble"... this $1030 level was no bubble. That will tell us that the Secular Commodities bull is over.)

More on how this should trade.....

Assuming I'm correct and this is a SECULAR BEAR..... and that what comes with your secular bear BTW is a Crash... a Charming 40% Dump in the market from the highs. BUT... since I've only looked at a few of them... and this is the way this should trade... We will trade down to 20-25% from the Highs..... We will Trade Range bound +/- 15% for some period of time.... 6 months-2years.... then we pull back to that 40% mark... After that WTF knows.. We usually recover, but could trade +/- 20% after that for 5-20 years. This has been Baby bear who in a few months has grown to adolescent bear.... Mama Bear is coming.... And then Daddy.

There has been some remark about this last rally and how "Bullish" it was... Which Makes me feel better about my Thesis on this being a Range Bound Secular Bear... It should be Different than a standard Recession trade. A standard Recession is just a large 10-17% dip in the market For 3-5 months. But But But... here is the thing... I talk about the "Inflation Trade".... This is what should keep the market up, and Range bound..... We will Keep waiting for commodities price to come down... and it's just never going to happen, it will keep the materials and industrials ripping... But Like in the 70's "higher input costs" will keep things from growing. And will keep the market from Daddy bear Market for the time Being. Also... there are Too many Bear Generals Trading the Last War. The 2000 Nazdaq bubble... Which is where they are getting confused(or I'm wrong and full of shit) But... I believe we will never see 12700 ever again.. till 2015 . or Hyperinflation... which ever comes first.

Interesting thing I was trying to point out last week as all the "Crisis Trade" Bottom pickers were out in force was that, they thought this was a Crisis Trade... Problem is this is a Recession trade on a Lack of Growth in Earnings... this is the Second in a series of "Credit Crunches"... and like the Fed cuts only help after 9 months... Credit Crunches hit us in 6.... So expect us to feel the effects of this one in September...

What is SUPER SCARY!!! Is that in a normal Recession trade the fed still cuts for 3-5 months after the market has recovered.... Problem is... the Fed is out of Bullets.

THE BIG QUESTION IS... when will traders figure all of this out.... and we are a discounting mechanism.. but only 6 months out. They do tend to be smarter than I think... and we could see some..... unexpected moves.

My expectation is a Temporary bottom to be put in between now and April 15. in the 11000-11300 level... We will pop back to 12500. Then be Range bound.. maybe back to 11300-11500 Bounce to the 1200 Flatline +/-200 pts for 1 month or 2.

There is many a slip between cup and a lip... The real Bomb to the Shorts, will be if they do as Steve Forbs says, and toss the "Mark to Market" and go back to "Mark to Enron".. that could give us a 2K pt pop in the market... till Unemployment starts Creaming us. I suspect, that the bad jobs numbers won't come till fall.

I heard someone joke about the Non-jobloss Recession, just like the Jobless recovery. I have called it the Jobless Economy, as huge numbers of people have moved to "contracting" which is more like being a second class employee form companies these days. Most the job losses will be felt by Contractors, and by undocumented workers... that is this leg of the slowdown... But I think it will hit normal workers later in the year.... I also think that the Fed will have to take the tough road and Hike Rates... but the market is going to have to Scream at them to do it.... In fact I bet Cramer will have to do it....

A Bullish Case For a Bearish Quarterly Print

I'm having a hard time sleeping.

Thesis:
A Bullish Case for a Bearish Print in some good stock
for Hedgfunds in Q1
So, Pretend you run a hedgefund You are starting a new position in a Stock. For your investors you want to show that first position in a stock. and you want your balance sheet to show
200,000 shares X bank, March 1 $10
then next quarter you can show.
400,000 shares X bank, june 1 $20 -last Quarter $10... Gain 100%.
Point is Push it down as far as you can for that first print on the balance sheet......
Also... Not everything Trades with the indexes... When the Third wave of a down move is at its most bearish... that is when the good stuff gets Cheep.... not always on the 5th wave.
Also some Hedgies show open march 31, or close mar31, or open april 1, or close april 1.
this is all just theory, I know nothing.

Friday, March 28, 2008

Ugh

lol... Brian was making fun... I'm having a hard time turning it all off..

my biggest mistake as always is my willingness to try and top tick... I only do it about 20% of the time... but 80% of my losses, and unrealized gains come from doing it.

*shrug*...

Looking at the charts... we should catch some kind of bounce....maybe Tuesday, Wed.... With the slow sell off. Assuming it doesn't just slowly accelerate...

I want to work up a chart about how to detect the acceleration...... Hopefully as a day trade this will work out.... and the only problem I'll have is if we make it to 11300 in the next 3 days.... but I know how to take a loss.

as much as I'm complaining...... I don't mean to toot my own horn, but I'm well above 50% on good trades vs bad ones.

Though I've declared that we are in the third wave.... there were some values I couldn't pass up..... Problem is... third waves can go on for a few days...

here is my list of Industrials

In the green today
X
AA
AAUK
DE
MON
BHP
POT
BBL
CAT

I hate being long... at all

Every time I take a significant long position... I just have nightmares in this market that we will crash imminently.... Just straight down.... It's an irrational fear.... and new to this market, but I'm starting to feel like I should start thinking 50% long 50% short, instead of net short.

I always make mistakes on Fridays... I should just not trade.... We will see, I like the stock I purchased, the value was great.... 7% dividend at this level.... maybe I can keep it.


so..... I was working up some charts... but I'm tired... and I'm driving myself crazy with wave counts.....

this is an interesting chart.... that is one nice Impulse wave to the downside....

The question about acumulation is does the chart look like MMMM or WWWW

we are getting more WWW action... we should have broken down and have only moved down slightly by relative terms.... I cleared my shorts and took a small position in a bank.. Seems logical that we would sell off into the close though...

I'm not positive... but I'm thinking we have a high probability of acumulation.... and may have one more low... or a series of lows... and we may get another bounce.

no chart

Total Volume on the SPX 10:50

Today 10:50-1,164,303

Yesterday(we had a low volume open, high volume late morning, higher volume close) 1,438,775

Day before(wed) 1,339,301

Morning ... the open

There was some opening volume to the sell side, that was met with some buying... Which was met with some selling.


IWM is weak... naz is stronger of the indexes.

This is a nice little Elliot Wave.... Not that in the context I would trust that it is a top.... and as I'm typing that is happening.... But

More on futures

The Futures are actually neutral....

I like this action....

It's much more rational for the futures to be half way between the last low and the last high...

which is where they are... It shows neutral action...... which says 3rd wave of this move.... we are in the middle... not right in the middle but traders are indecisive.


Opening bell:

damn Sell volume right off the bell



we should see a bounce at the 10day MA which is 132.30

China

So.... I was psyched for china to "Delink" from U.S. Trading the other day(not just do what we did the session before)... and sell off aggressively.......

it's a good sign that if we retest.... China Is super nervous..... maybe time for a short position.

I don't know if I'm at any way accountable for that statement or position.... but I won't be.... I'm more aggressive against our markets.....

If you cant get a return in bonds, stocks, savings, business.... It's time to make money short the market....

Free market capitalism is the best path to prosperity.... even if you profit from it's destruction...

Peter Schiff

I suggested to Grodge that he listen to Peter Schiff just to get the "FULL BEAR" perspective on the market.... if you listen to the bulls you have to listen to the bears...

Unfortunately, I'm concerned he has Cashed out of Equities, Purchased some firearms, Some Wheat, and some Gold, and is now Quivering under his covers for a few days......

As I like to say...... You have to keep your "dick out".... sorry Melissa... I mean it more figuratively.

Lets heat them up and see what happens.

Nice to see the futures get a little more sane.

Price Descovery, and the market as a truck

Nominal thinking... I guess that is a new phrase for me... is that we will get some window dressing.
I've drawn some lines.... as the market was working on a close and was finding No support yesterday. The question I had.... Since One could see this as Wave 5.... Problem is... this is showing Acceleration Especially on the top side, where we are seeing.... Larger lower highs, than lower lows.

When I look at the broad chart of the market, I see that we are doing price discovery... 12500 was too Hot.... and last time we checked 11700 was too cool.... No reason we won't keep looking for a Floor.....

Weird thing is the futures are more volatile than the market right in here +/- 20-30 points every day....

economics mode

I'm trying to do some economics reading at the moment... I breazed through the WSJ this morning, and breakfast and the rest of my reading....

I want to find something to do this weekend besides Gardening...

just a little inside baseball...

Still WTF with the futures...

Futures

Can't get through a day without me complaining about futures. Who the hell would give you +60 on the Dow Futures. Every positive future for the past 3 days, has been a LOSER. There has been more volatility in the Futures than there has been in the market.

I may have to start trading futures.

We are trending down.... WTF happened to the trend is your friend.... Damn asian and Euro Traders... No wonder they are such financial losers. you have to be a Communist or a Capitalist to understand this shit.... Stupid Euro dorks.....

let the Anglos come in sort it out....My bet was down 50... or flat for hell's sake.

Thursday, March 27, 2008

Ugh.... I quit

...

Umn

for all this "Good Data" acroding To
CNBC we do seem to be responding poorly..... I mean.... Didn't We Bottom..... and isnt' the world Rosy and shit!!!!!

Mortgages are Free to the Rich.... Only the Poor want homes... things are good...

for all the good data... why do we keep selling off.... I think that is Bearish!!!

think

I just think that no body wants to own stock!!


ifwe can make it to 32.20 that would maintain some bearishness... since the noonish high weare in the third wave of this sell off..
the volume here though has been strong.....
Sellers have been coming in agressivly.

Lower Low

sigh


this is a bearish descending triangle pattern currently... but needs to break through... BUT... this is starting to look like possible acumulation.

what I think


that was a compleated elliot wave... showed a MACD divergence.... broke the uptrednd...
I think the market was waiting for the Taft auction to make a difference.... it didn't... market muddled.. no buyers no sellers... so we defaulted back to the mean.

did I just hear

that the fed gave away 75 billion....


what a fool I may be.... but.... hmmm I'm not convinced... that wave is a compleated wave...

daily spx

this is the SPX...... What about this... We trade down to 1320 20 handles lower... then we get one of those little lame rallies... for window dressing.



this third wave is exceding my expectation... I'm tempted to toy with the idea of an end of the day sell off.......


umn... not.... sure I can keep blogging

looks like we should at least Retest...... Umn.....

Tom MacKity... or however you spell his name... I remember in October.... and he got on power lunch. and he said "I guess I'm the only one who things this market is crazy... and am super Bearish".... and Immediately the market sold of like 100 pts.


Wave 1....
Wave 2....
Now wave 3
red arrow is the possible target.

So... there is still that posibility of some better downside action...

Not heard on CNBC... JPMorgan says we will probably scrape along the march lows for the rest of the year.

Not like I listen to them... more likly to lead you astray...

possible

that that was wave 4... and we are now on wave 5.....

Quite probable we will get a correction out of this..... Most probable to a lower low... Possible one more high......

It's exit time on this hopefull correction....


Well risk management says hope for a correction and set some stops....
Now that we are at the day high... the longs have to earn it... and the shorts are on D-fence.

Well.. Playing with some trend lines... nice little trend here.... market gets down there at the bottom.. some guy buys it for a coule minues.... it's losing me money....

So... If every day the market makes a new low... and CNBC... hauls out somone "seems like the market comes out... and bounces off (insert new low of the day)... yesterday is was 1335, today it's 1330. Day before it was 1340.......

Nice.. well we are trying to make a new high for the day.... Sweet.

lets look at the broader trend



Thes volume spikes are rediculous... Also of note... the volume overall has picked up from yesterday... but it is all in 1 minute spikes......
As much as I hate it it doesn't mean I'm not losing money....
if this is window dressing...... umn.... what can I do about it... but lose money......
maybe cry a little... or something...... that morning low could be wave 5..... It usually pays to see that nice healty Acumulation pattern.....
My thesis.. is that whoever this is, or They are... I don't think they can maintain.... I think they are just trying to keep us up at reasonable levels. I just think that if the market dipps they will be running and cause more damage than they were solving..... I hear markets are efficient that way..
or I'll lose money....

I've been getting cold calls from Realtors and mortgage brokers lately...must be getting desperate... Huge staffs with nothing to do, but to start cold calling...

we continue to go up....... this doesn't show good healthy buying..... and if this does break down, it should take this market down another leg... They are trying to fight this tape too much... I also wonder if as they buy it up, they are rolling out of the positions as best as they can......

I don't know.. still the safe entry is that blue line..... We are coming to the 1340 level in the spx... should see some resistance there... with enough money you can fight this.. Also the financials did show some strength after that low.

lookie there

Well... Possible you got stopped out That blue line shows a new better entry... if you believe the market is going down.... That uptick was super sudden... doesn't show healthy buying.... Probably also shows people doing exactly what I'm talking about.... but there is still some selling pressure coming right back in....

we are getting to the lunch hour... and usually somewhere between now and then there is a change in trend... will we maintain the upside to the last 2 hours... or will we do some selling off then have some buying into the close.

3 minute chart of the spy from this morning.

this is the wave we have been talking about.. So.. as I've been talking about, the sell volume is lighter than the buy volume... Problem is the buy volume is sudden..... it's Hedgies trying to fight the tape... but it's not setting off short covering because the shorts have conviction.. and it's possible that there isn't short interest, just Sell interest.

So.... There it is.... The order should have been triggered.... 20 cent risk..... another thing is that it's probable that we would just retest that low from 40 minutes ago.... and if your playing with enough money... you can just play that as a swing...















this is this mornings trade.... we have a retrace of 23%... maybe a little more...





Lets look at the wave..... Nice little wave 1... Wave 2 correction, the bulls jumped on... brought it it........ Now..... The third wave kind of moves up... but then falters... moves sideways..... it's starts looking more like an ABC wave..... you can maybe make a wave 4 there... Maybe wave 4 is developing.... This is nothing to jump on...... Yet...



Ok.... So the wave Developed a nice little wave 4 then bounced back.....




I draw a trend line...... Then we wait till it breaks that trend line.... Usually when it breaks the trend line it will follow it to the upside for a bit..... This is wher you put in a stop limit... or order to sell if it gets to a certain level... Say that 133.00

So this is it topping out.. I drew teh arrow to show where I thought it was going to top out.... Again we made an higher low... ... But what we do is look for it to break that higher low... and that is our entry point.
ok that yellow arrow is where if it breaks below you enter... and if it does that then breaks above that high... that is your low risk entry..... Risk 20 cents.... and hopefully the trend maintains to the downside... as a shorting opertunity....

we maintain being conservative on our entry... and it keeps saving us... But we have more that MMMMMMmmmmm pattern and not the WWWW pattern... slightly higher highs... if you are aggressive you can make an entry at this point and just stop out with a 20 cent loss... or Wait till you see a confirmed lower low....

This shows more Distribution than acumulation, with sellers more agressive than buyers.

The open volume was strong... then we muddled, and couldn't get any buyers interested... Volume IMHO was neutral... yesterday it was down biased but no aggressive selling... this last move did see some buying, followed by some aggressive selling...

Maybe the sellers are getting more aggressive.

we seem a little stuck and prone to a breakout to the downside... not sure how far..

Financials looking weak... we traded this way yesterday.

No Body Knows!!!

the pain of the $20 up and down swing in my acount all morning..... no body know my sorrow.....

we should break out, and are curently.... finaly showing some motion!!!!

poet Knowit.

Nice head scratcher today..... Abosolutly worried about a weak little sell off.......

May even call the other action the A wave... this the B. Wave... then we get to 1440... or not

New Economic Indicators and Releases

What does Blue Horse shoe love?- Blog search of "BHL"