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"

Wednesday, December 31, 2008

Happy New year

http://seriss.com/people/erco/gifs/HappyNewYear-2000.jpg
I Woke up from my nap...

I think maybe my calling to to be an Atheist minister... Or an Athiest Non-minister.

but Happy New Year!!!!!

50dma descending trend line

the 50dma is here, and that descending trend line is about 10 above here on the spx. I told tony that the next time we messed with the 50dma I'd be bullish.... I can't go back on my word...

Seasonality says be bullish through Monday.

Another Jan Effect

Yet another "jan Effect", Traders talk about finding small cap stocks that have underperformed into the last day of the year, and that those specific stocks have been un naturally killed for tax reasons, and regardless should get a nice pop into the first few days of the year.

I've seen some stocks that have been "Underperforming" yesterday and the day before I'm toying with playing them

Insomnia/ Operation filmmaker

there is an episode of independent lens called "Operation Filmmaker" It was interesting, I'm not saying it was Clear in Theme or Story. Overall it was interesting, sort of inside Hollywood, inside documentaries, inside the method and madness of all these people.

It was worth a look.

but... besides that I've found myself with a bit of insomnia, It's odd It's usually in part because of a poorly timed nap I took, but Unfortunately I only took a couple 10 minute naps today... but for my body to keep it's usual timing, it's decided to skip sleep all together, and I'll manage to do the exact opposite of what I had intended, I'll extend one of my naps tomorrow, which will become full on sleep..... throwing my sleep schedule off even more.

So here I sit... you know it's bad when I blog about it.

Tuesday, December 30, 2008

the screen

So, Today was a good day to "Ponder" leadership for a "New" market for 2009.

Screen pulls up

Airlines.

Biotech/pharma

and Gold

some technology

bmc
CA
UTX
Oracle
qlogic.

Roughly followed by

Industrials.

Into Alternative power

OH Sweet, I forgot about the indexes....

OK
Airlines
Gold
Drugs
Pharma
Gold and silver
Naz biotech
Utilities
defense
oil
consumer

Then the dogs...
Tbills
cyclicals
broker dealers
sports
kbw

Some Elliot talk

I find EWT as more of an instructive way to talk about waves within a trend, since I can throw enough BS EWT at you to take the market any direction my own Rorschach wants it to go. But for Tony This is what I'm talking about.... But What I am saying is that you normally have a momentum high, followed by a secondary high.... We should see this trend Turn like an 18 wheel semi, it should take a good half day or full day of slowness before this Up trend will end.

Here is another look.... In many corrections the A and B leg are the same length. So if after Jan 2, there is a correction. this is what it should look like... but the move is no lower than 81.5. as a correction...

As a matter of sentiment, I'm embolden by the bearishness on fastmoney tonight, they brought out the worst Technicians, and the guys who weren't bearish at the tops of this move, are of course, now bearish again, and they were bearish yesterday, and the market went up today.... so, the scepticism is good.

I also bring out carter worth who said in mid december that things were good till Jan 1.... well he is now bearish, and wants despair stage... I'd hint that maybe despair stage will be next fall or summer.

Let me also suggest that we need leadership, As of now, I can only identify semiconductors, and maybe industrials as leadership.... I've never been a fan of "Tech will save us" since it needs to be something besides "social networking" and "Cellphones" for economic growth. But I will say that besides Pharma, Semiconductors look good..... When I'm talking about leadership I'm talking about some part of the economy that there will be a ton of jobs and a new bubble...

today we did see healthcare..

If you listen to some people in the market, it does take a good sector like tech materials or financials for leadership.... and materials as part of hyperinflation doesn't count.

So... Maybe healthcare, maybe semi's, Pharma.. industrials because of the Obama stimulus plan.. could be developing leadership

So

overall I can't draw a chart that is convincing either way.

One can say that we successfully retested the low again, and it's time to check out the top.

One can also say that in the costanza world follow through is foolishness.

I did like how bearish everyone was on fastmoney lastnight, they were equily bearish today...

mackie's sugjestion was buy the open sell the close.

New years is an inflection point...

The trend of today should follow through tomorrow... after that I don't know. that is the inflection point.

Like I talked about the "Jan effect" could take us into jan...

I don't have a problem Faiding the fast money crowd, cause they have never anticipated anything.... OK, there was a point where everyone was correctly bullish on biotech pharma..... But 1000 typing monkeys...

I think it's worth testing Being long into either new highs, or into Jan 2 or 3rd....

In EWT we are in wave 3... so we need to see some weakness before becoming bearish...

Year end effect, Christmas rally... Bla Bla Bla

......

I was interested to "clearly Define" what a Year end Rally, January Effect was/is.

I found this site.

With, Vernacular definitions, and with the Willy and hap hazard use of these words by CNBC and it's Minions. It's interesting to find it's "many definitions"

All to give one a base of what it meant.

Apparently in the late 80's, a trend was noticed. Roughly Losses, being taken in small cap stocks(and others), at the end of December then that cash being put to use in the first days of the year.

In anticipation of that(to talk about how it's now gamed) there is traditionally a rally in the last few days of Dec (The Christmas rally, which is a Rally AFTER CHRISTMAS), in anticipation of selling stock to the January buyers.

Interesting to think that the downward pressure of "HomeGamers" who sell and apply pressure into the low volume of the last weeks to the downside, Then to Buy into the first of the year.

Other definitions are for a "Jan Rally" that moves through the entire month, it being one of the best months of the year to invest historically.
Also a rally through the first few days, first week... Etc...

I just commented to tony... and I think I said this yesterday, that I'm torn between a retest of November, and a rally(with some bumps) through May... or even September.

Morning

Leadership opened with the financials, moved to semi's...

then seems to be industrials, stregnth in health care... and what we don't want to see, some other defensivs like utilities and non-cyclicals.
So we can see a huge(relatively) gap up, with a nice Gap fade.

We havn't seen a healthy upday in sooooooo long... one that doesn't involve a heck of a lot of short covering....

Goodness

higher lows, what a bitch...

I hate to say it, but I'm stumped.

Just vacillating between a mid jan retest, and a move to a higher high.

I would say that my bias is down.

and yet like all the other lemmings, I feel a compulsion for a "year end effect", the idea that some cash will come into play in the new tax year...

Then just dismissing today's move as day traders ... and fear of this Israel conflict.

Monday, December 29, 2008

Umn....

Look at this nonsense...
And the spx.... You have to say that the trend is down, I like that we rejected the 860 level on the spx... though I can't read if it was a convincing rejection... doesn't seem like it...

It also feels like we are in the costanza trading again... Or I am in the costanza trading....

the vix was up, as last week "all was good because we traded some losses with a reduction of Vix." then today we had a marginal move in the index open to close and an increase in the Vix.

regionals were worse than the financials, biotech sucked it up, the semi's were good today, even with tech taking a beating.

All this seasonal bullshit makes my ass hurt, Always seems like we are grasping for hope "Year end Rally" "Year end effect".... Just a bunch of market Voodo...

Seems like the trend is down...

When I've looked through the year end trading.... seems like there is the pre christmas trend, Post christmas trend through the new year, and the after new years trend....

this suggests that If today is not outlayer the post Christmas trend is down.

But... I'm saying neutral..... I just don't have a good read.

Melissa Lee

Ok, so this is part of how she Pains me.....

this is what she just said. "The biggest winner out of the indexes, is the nazdaq down 1.7%."

Ok Melissa the word is 'loser' not winner..... the problem is she reads the teleprompter wrong all the time... I imagine there is some dyslexia involved. But it pains me when I hear something she said and I have to "Rethink what she just said, to make the words actually mean something."

One time she was talking about the 1970's, then she talked about John Macenroe and wimbledon and Highs in Gold. It took me a bit to realize that she was talking about the 80's...

Why is it

that the market is always trying to give me a tumor, over low volume holiday periods.

Trying to find leadership

Doesn't look like it's in the small caps


going to need to be in the naz or the xlf

hmmm

the move overnight in oil was much stronger... one would wonder if it's the market is down, pushing oil down.

This also feels like.... we are just trading around like a bunch of Dopes.

day traders

Day traders for the most part don't hold overnight. On friday, the traders sold the market till 1300, then it ended flat...

I wonder if what we have is that the day traders are just throwing their weight around...

Unfortunately the tendency for "mean reversion" works against them

Tough read


Besides to say the obvious... one can imagine just a spike lower, but it seems to have gone beyond a "Baseing" pattern...

I honestly don't know what to say... and the grim look of the nazdaq...

not the most optimistic move

Morning

Nice to wake up to a Mideast war, a much weaker dollar and... some other crap....

I like that the futures are mellowing out... to see the futures move more than the market was just silly....

In europe it was all the hyperinflation trades... maybe some banks...

basically the world going in the wrong direction as far as I'm concerned...

Time off

Damn.... Don't get a day off till thursday...

It's starting to seem like I need some time off again..

Sunday, December 28, 2008

GIS


So, tony wanted to look at this... the long term chart hmmmm may not reflect panic yet... I imagine if it gets below that spike low from october, we should see some panic. To look at the shorter term trend, seeing it break the uptrend from the past week or so, would be a good signal. With so many people in a flight to safety, assuming there is more appetite for risk over the next few weeks, seems like the "Safe" plays should go lower.

Now if the market downtrend continues... There should be some new positive momentum in the safety names.

Friday, December 26, 2008

Unbelievable

... It's friday night and I'm not exhausted...

of course the fact that I fell asleep at my desk today helped.

Now that we may have a new trend

.... So... There are some important "Pivot" points for the next week... First.. there may be some attempts to sell on the first day of the new year.

also the NFP is next friday I believe...

There may be some dips in these points..

but.. the idea that some of that sideline cash will come into the market in the new tax year.

ascending triangles


So... the red triangle takes us into the yellow one. which takes us into another bigger one....

the pattern seems clear here.....

gold

Seems like gold is trying to make a decisive move... and

it looks impressive, to the upside....

I'm not in that move yet.... I just hate gold.....

stuff


thsi is the spy, we are breaking out of the pennant... still time to be cautious.... but the red shows the ascending triangle and the pennant, now the pennant has the same bias as the daily trend. which is down.
But the ascening triangle... well that should get us moving to the upside, makes another ascening triangle up at the 88 level.... etc etc...

chart look


So, you have to wonder now how many shorts are stuck in here.
this does show Pennant, but I can sort of draw in an ascending triangle at the 87.25 level.

iwm is trying to lead



we would like to see the smh confirm the move..

waking up?

we could be waking up here

Torn

Is everyone else as torn about the Madoff thing as I am..

To start off, couldn't have happened to more deserving people, as the country club/Royalty crowd... It sucks the Non Profits that took hits, but ... I don't cry for many non profits, since many of them only exist for their own benefit, but that is kind of cold.

I can imagine the idea of being "set for life" then suddenly realizing "somehow your going to have to work."

but I guarantee that their hearts don't bleed for the working class...

now that is a move


something to wake me up from my nap

christmas

So, it's just a nightmare to think about economics right now....

every once in a while I think about getting a real job... I would just like to go in and do some work, get paid... and have that be my life.

China is Awesome

Note: i didn't say good or bad:

BEIJING (AFP) — The former head of the Chinese firm at the centre of the tainted milk scandal, who will stand trial next week, could face the death penalty if convicted, a lawyer said Friday.

We didn't even put maddof in prison, this guy is in charge of the company with the tainted milk... they are going to whack him. I'll bet this guy is killed before maddof even sees a courtroom.

I intended to comment, how much I liked how Pissed off Kudlow was that maddof wasn't in prison.

Revelations

Did you know revelations refers to the overthrow of the roman empire...

yada yada yada....

when am I going to get regular sleep, I'm starting to think that just about all traders take a nap after the close...

So, I took about 8 naps from the close on wed, and about an hour ago.. so now I'm up Super early.. It would be nice to get in one more nap...

Not like you give a crap... but I'm doing bills... Yep things are that exciting...

wow I used 27 minutes on my cell phone one month, last month I used 4

there is a foot of snow outside, that just fell.

Wednesday, December 24, 2008

Well.

Happy Holidays
http://deco-00.slide.com/r/1/33/dl/YqkfzDEe5D9DIAruwTkuYOUGtU5V5Dl8/watermark

some charts

we failed agiain to make a new low, and the attempt on christmas eve was not convincing. My Rig trade seems like a dog.... We shall see, what I get for not trading it off a chart. This is what a nice Basing move with a breakout could look like. over the next few days.
None of this eliminates potential bearishness, but we do have the potential for a move up leading to Jan1.... after that... Who the hell knows.

ZzzzzzzzZZZZZ

http://ecko4inc.files.wordpress.com/2007/05/sleep-of-reason_goya.jpg
If I have no coffee, for 48 hours will I fall into a comma? or just get a headache.

the charts make me say....hmmmm

not sure how much we can take away from today.

your not suposed to go down when I buy it


stupid commodites trades, and your stupid "energy numbers", that make things get cheeper or more expensive, based on some kind of Build/draw number.

money where mouth is

rig 42.73....

I know it looks like a pennant in a downtrend......

But I'm long

remember market closes at 1pm

so the daytraders will get out somewhere from 11:30-12:30 or 1.

Boats and holdays

I know when I write this stuff, and of course I've spend a week convincing people to go short...

But now that it seems aparent that that was the right call....

Being the contrarian that I am, it starts making me think that there is a chance that everyone has moved to the other side of the boat now...

Just a chance....

early look

I have banks/regionals pharma semiconductors technology leading this morning...

materials are the laggard.

Sentiment

we had some real negative mojo going on the regionals, and we have a nice early morning pop.

Also, for the past few days we have had lots of calls for $20 oil....

There is this smart person I know who suggests that when people are calling for a 50% decline in the price of something... regardless of the long term bearishness... it's probably worth a pop.

Exhausted

I fell asleep right after the bell, and just crashed...

For all my "Sense" for reading the market, I want to throw out a caviot.

I'm beat, it's been a long year, and I need some time off... read a fiction book or something, unfortunately I have this pile of trading books, I can't stop reading.

But this morning I had that feeling of impending "Yips", Almost went long at the top this morning. Regardless of how obvious it was that the uptrend was fading...

So... I figure with the holidays ... etc.. I figure it's time to get "Small" and take it easy.

It still seems clear that the trend is down. I was checking the futures, one of these days I'm going to find a good site for futures. I keep looking at the cnbc site. Wow that thing is such a piece of crap, every person who "Works for them" technically, must hate their job. Maybe it has to do with working for a bunch of Wanabe elitist windbags. But... point is... most the time the fair value calculation is wrong, and so is the futures calculation. One would think simple math would not be impossible. but every time I'm suddenly running through all my data, getting the futures value off the Nymex, then I have to find the closing value, and the closing futures value...

and do my own math... But it's all crap anyways, I've decided. Only cnbc finds the "Fair Value" a compelling stat.

All I'm getting at is that EXPECT MY MOJO TO BE OFF, even I'm nervous about it.

I'm sure I'll run some charts in the morning.

Tuesday, December 23, 2008

some indicators


For those of you who don't read the comments between Tony and I..... It's all the debate if this was a "Higher Low" or if we are just grinding against Monday's low..... in a developing descending triangle on that resistance

Stay tuned to the market tomorrow, for the answers. Though, I'm not certain, my" spidey sense" is that this is a Higher low.... Too bad I'm more Wolverine, than spiderman.

So.... Regardless of My "Mojo", the technicals have yet to pan out.

no chart

but in a micro sense, yesterday's bounce into today... may have been a wave 4, now we have a wave 5...

after this we should get a wave B upmove....

according to idiot wave...

and this wave 5 may not make a new low.

Have I yet mentioned

My hate for the holidays...

Spent most my weekend dealing with family melt downs, and since I swear I'm the most competent, and less apt to the "Holiday Melt down", Everyone brings their problems to me. Since I don't have kids, and all that crap, in the family, I'm like the employee who has to work every thanksgiving and Christmas, because I don't have one, even though all these people shouldn't breed... And they all take it for granted.

3 days ago I swore I would do something good for somebody... maybe not randomly but hopefully somebody who might appreciate it, only to be inundated by the old family nonsense...

and now I just say "Bah Humbug"

But If I don't say it again... I do hope everybody has a happy holiday.

Monday, December 22, 2008

we know how this goes

There is every chance the melancholy mood could just be aversion.

we also could just be a a broader buy the dip mode.

or some nice despair...

how is that for lack of clarity

I'd say

those arn't buyers, those are day traders getting out.

seems clear to the cnbc cretw

That this sell off is nothing to worry about, it's low volume, and it's the holidays..... Everything is fine, there is nothing to worry about.

That almost sounds like a subtable warning to me, Though with the naz and spx down 3%, I'd say it's overt.

Art Cashin

Who I both love and loath,

Said, "Traders are saying there should be a buying opertunity about the second week of jan".

Then I said.... "I said the same thing to tony!"..... Maybe Tony is Art........

decisive?

well that seems decisive.....

Ho Ho Ho, I mock, hoping that my emotions aren't to be faded

still cautious


but this smells of downtrend... But I see some upmovement in some banks.

Sunday, December 21, 2008

Hey look!!!

Dr. Brett,

has a great quant view of gold.

Just in case you missed it, His last interests in gold has marked Euphoria(the top), in the gold market.

Of course if gold breaks 870 all bets are off.

Saturday, December 20, 2008

Christmas Rally!

I'm going to do a fast study of the week around christmas.

2007:
Christmas was on a Tuesday, The week Before Christmas was a Rally, The week of christmas was a decline, then a long decline into socgen weekend.

2006:
Christmas was on a Monday, Before christmas week there was a Decline, The week of Christmas ended up, but Rallied 2 days, declined for the remaining 2 days, then declined for another week.

2005:
Christmas was on a saturday, The week before was a Slight rally, the week after was a decline.

2004:
Christmas was on a Friday, We rallied right into it, and all the way to the first of the year, then jumped off a cliff.

2003:
Christmas was on a thursday, Rally right into it, and right out of it.
(2003 and 2004) were strong bullish legs, where the market had rallied for over a month just about every day.
2002:
December of that year was just about a decline every day of the month. Christmas was on a wed, and we rallied monday and tuesday, declined the rest of the month.

Well, I say this is inconclusive.....

Can I hedge? I say there is a bias toward a rally the week of, leading into christmas day, for a day or 2, Now that I've said that, there seems to be a down bias in bear markets, and an up bias in bull.

All Your base are Belong to us!!!!

I'm Fried, I always say my biggest mistakes happen on Fridays, worst part is that I know that, and then compensate, but is that the mistake?...

If Ya'll don't realize, I spend my life asking questions of myself like that.... And what do I resolve... that it's probably not all that healthy...

I could throw another chart at you and show that there is a chance we are Base-ing.

Friday, December 19, 2008

Chart for Tony

Here is the ascending triangle tony was looking at, Trying to look at it impartially. What I see is that the trend line on top has only been tested twice. The other trend line is the uptrend, This is where I get a Bias... The more times a trend is tested the more likely it is to break. The first trendline tested is usually where the bias is to be broken.

6 times is amazing for that test. And there are some things that get me "Cautious here"... But I'd rather play it on the other side of this "decision point".

This is common behavior before a breakdown, for the market to "Toy with" the trend it just broke.... It's also how bear and bull traps get set...

There is sort of an upside bias for Christmas week. Last year and the year before, the top of the market was about the 14th of December.

Some hedging

I was looking at the charts and saw what tony sees...

I'd draw some charts but it's friday, and I'm so sick of this...

The market has set up for a decisive move.

also some of the moves at the end made me more neutral...

What a pummeling market, almost every move has had a "Mean reversion to it".

Let me say this is just like I felt neutral before the market broke down yesterday...

I figured if we hit that trend-line we would break down to that 850 level. Only it set up like a bear trap... but also like it should do where the market plays with the trend line...

I'm going to maintain my Bearish bias, But I just have to say that there at the close, I saw some things that make me more neutral... or say that things could very well go both ways.

Let me also add that Friday expiration day is also one of my, pivot days. So regardless of the downtrend over the week, it can easily be a pivot day either way.....

and that end of the day action could easily be a nice little bear trap.

interesting move

that was wierd.... I'd explain why but.....

Now that Is amusing

we are testing the trend line as the new labor secretary says "we are going to strengthen unions"

on the way

to that last retest......

Triangle or wedge?

color me wrong on that one

but we are hitting the 38.2

Bear flag

only cause I'm crazy

this is where I excel, and I can't give out rules...

but I look at that, can see a trade channel, and it looks like it's setup for a 50% or 38.2% retrace, most likely a 38.2

This move in context

we are back to the uptrend resistance

More adjustments

and a new possible trend line

Volitility

The vix has a corelation to the range of motion during the day.

The vix was 40 yeasterday and closed at 50, The vix would have a hard time getting over about 60 today, so for every point on the vix, the market can move 1 point on the SPX. The maximum the spx can move today is about 60 pts.

we opened at 890, moved to 900, That is 10 pts of motion.

From 900 we are now at 890 that is 10 more points. Meaning the motion left is no more than roughly 850 on the spx or so....

No compression


See how we arn't compressing, this is very bearish, says we are headed to the other pin......

PROBABLY!

trend lines


So... I drew these three lines, but the white one isn't valid so I delete it
It looks like we are finding resistance there, So I adjust the green line.

todays trend

This is today, I guess the trend lines I have drawn arn't all that large.. I don't Know what this trend is saying yet, and all I do all day are draw and adjust trendlines, till I see some patterns. Above, is todays chart Below is a close up of the current downtrend. Another thing I do is instead of reading the 1 minutes, I like to look at the tick charts. I like to look at the trends tick by tick, there was a point where I used to read 5 ticks per bar.

New Economic Indicators and Releases

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