this last uptrend isn't the worst distribution pattern... infact it's kind of nice.

wedge pattern(reversal)

so...... besides my theory of a bear capitualtion rally...... there is a possiblity that this will break down from here.

this also would continue the trend of me thinking the top is one day before it happens.

Not sure how well I communicated this

.... With the Materials, and now maybe the financials(maybe it's a false rally in financials) Leading this, and the lower volitility...

When you look at some of the past "large recessions" you can get that counter trend rally which builds into a sort of low volitility "Top" .... instead of a jagged mountain on the charts it's more like a small flat hill...... This is sort of what I was expecting... Only I was thinking about a drop down 30 pts in the SPX.... This should dump a ton of volitility out of the market, then as the volitility comes back in, we will get a falling market... the market won't tolerate going "nowhere" for long..... it also should become aparent that earnings arn't growing.... and most the growth is either "inflation" or gets wiped out with higher input costs...

Seriously this is putting me to sleep... I'm laying in bed

Interesting

The umn... this is putting me to sleep..... The volitility continues to bleed off. I kind of suspect we will "Melt Up" for a few days.... may even stagnate for the rest of the week.

It's good to see that The IWM is NOT leading this... and that it's healthy things like materials and Financials, and QQQQ

the strength is in the NASDAQ

gap fade

curious how this will work itself out..... umn....see if we can generate any buying interest.

the XLF looked strong, then gave it up... See how far we get into this gap fade.

My overall Thesis is that we need 1350-1340 to generate any more buying interest.

could be wrong

Plain to see

So, I did some chart Starting this weekend. The market is testing the Theory of an 8 month recession. Everyone knows that it won't be this short, but mother market is testing to see who is willing to put their money to risk.

We could trade to 1420 or so, I just don't see enough momentum to get us there, without pulling back here.....

somehow WAMU raising 5 billion trades us up 80pts on the dow.... and yet Wamu needing 5 billion didn't trade us back 80pts.

As a famous trader said a few months ago..... "I don't think this sub-prime thing is over yet"

Morning

.... someone tell me how the market, on it's own goes nowhere on Friday. +/- 10pts on the SPX

and yet in the futures they want to move that far... based on Alcoa earnings... and Washington mutual needing 8 billion in cash....... "yippee!"

I try not to throw good money after bad. my belief is that we won't hold the futures.

If i had held onto my WM I'd be up 15% this morning.

Bottoms, recessions.

I know that I've said that, I'd be super suprised if we didn't confirm the Bear, with a 20% decline in the SPX... we were only 20 points off, and only 300 pts off it in the Dow.

Problem is .... That down trend ended. now we are finishing the uptrend "Relief rally", as I was pointing to we may still have a Macro Move down for the next 2 days... or so, then another bounce back up... which should top this move out.......

The bottom of most recessions are 4 months before the recession ends.... so if your thesis is that the bottom is then... that means the bottom is October-Jan.... if you believe in a year long recession.

Basicly from now till then we will trade around from this 10% haircut in the Dow, where we are now. to a 40% for a Deep Serious, Recession.

Let me just plant some alternative ideas, I don't believe in "Decoupling" but what I do believe is that the rest of the world, and the stregth created by Inflation, and by materials.... These things should keep a bid in the market for a while..

what I'm sugjesting.... as just an idea or something to watch for, is that from here to october, we could just have some nice 1 week sell offs of 5%, then 4% buy ups... and slowly decline over the next 7 months.

It's the decrease in volitility that puts this idea in my head.... maybe we sell off bank earnings week... then get a bounce.... but I realy think that the decrease in volitility is an indicator of things to come.

all of this goes out the window if we keep having Credit crunches.

There is a bear raid on Washington mutual..... you would think they would keep me in the loop as I buy a terrible stock to catch a bounce in the market.... since it is a big short seller bear conspiracy.

Another Cruddy chart.... This is what I get when I use paint insted of opening up photoshop... Photoshop is just a bitch to open up. then takes forever to do the simplest things(like make larger letters)

So.... this is 15 days of the SPY those small little letters(sorry) show the ABC correction. I'm a little Scared that the Futures on monday will make a new high(and a slightly higher C wave)... but in that case it's going to be too late to do anything, but wait it out. and it's best to start with a smaller position. I start with about 3 grand Meaning if this goes bad, my downside is $100 Upside, on the starting trade $300. Then I start getting more agressive.

Besides Pauson showing up and giving every citizen in the country a hand job, I don't see 20 pts of upside in the SPX... Futures have been very muted latley... and the volitility is easing up.

These are the financials..... If you notice the financials lead the SPX up to the A point... then the materials Lead us the rest of the way to the C point.....

This is my outlook for next week... This move on the XLF will accelerate to the downside on monday/tuesday and it will move to the 25.5 level... then it catches a bounce... it will take the market with it. That will be a bounce in the SPX.

I think this down move on the indexes will be an inside move.(meaning no lower low) we will catch a bounce back to the 1400 level....... where we will top out

20 days in the SPY.... this wedge pattern I'm pointing out... seems like it has 2 more legs in it.

This one to the downside.... Maybe monday through Wed... Then a Quick bounce to the 1400 level thursday friday... Where we top out and then we get Financial earnings. Which will Create a move back tward the 130 level on the SPY, and how bad the write downs are, will determin how low we go.

The reduced volitility points to this kind of action where we continue to have muted volitility into next week... If the Write downs are write ups... then we will go up....

It's possible that we increase volitility into this move down.... and instead of waiting at 1400 at the end of the week we wait at 1330...

But an "inside move" that is a move between here and 1330 seems reasonable.

I sort of like to say "I can see the Truck Turn, but I don't know where or how far it's going to go"

of course, I could be wrong.

the interesting thing about this "Stagflation trade" is that materials and transport stocks, should keep a bid in the market....

This 'W' bottom.. is kind of consistant with that. With the non money center financials bottoming in here and each of them then becoming it's own individual story.

For this pull back to have more segnificant meaning we need a massive sell off, a real increase in volitility...

We shall see.

Nice healthy 3rd wave.........

This is the past 5 days on the spy.....

you can see it's a 5 wave move..... also, we ran out of short interest so the bulls ran out of buyers.... now we correct..... it does show that ABC form......

there are indicators of bullishness... and the lows are probably in. this is probably just a short correction.

Plonk

Well Lets see it roll..... I have a stop set.........Lets get Er Done.

137.40

I think we will sell off into the close I set an entry right there.

I'd like to see this flatten out as a wave 5 of the micro move.....

maybe an entry there... maybe see the downtrend defended.... then think about an entry.. enter when we volate the green line.
????

Macro wave C

wave 5 of that wave... Starts to fade... maybe this is in wave 3..... We are working on wave 4

I'm ready to take a small short position.

continued bearishness in wave C

Here it is.....

So... the green wave has now turned sideways... and is turning into more of an ABC correction...

We are still in wave 4... and we want to see wave 5 before we enter..... We don't want to chase the move... We want to see the correction....... Maybe it will be an inside move into the close.... Maybe from now till 3 eastern we will get wave 5 and it will the sell off into the close.

A Tale of 2 waves

WE have 2 waves here.... the green one is the wave I've been calling wave C...

the red one is Wave B. As I've been calling it

Bearish indicators:

.... the red down wave is longer in time than the green wave... showing more conviction.

The Green wave is very steep to the upside, showing short covering.. Especialy the first wave which is almost longer than wave 3.

In the green wave ....Wave 2 is fairly deep.

The red wave isn't as healthy as one would hope.... But we are in an uptrend and it should be Sickly... But still

Here is the follow through.... Wave 4 has broken the trend... it has yet to show us a wave 5.. and I don't think it will.... I think that is probably the "Top Tick"

So now I want to start looking for that "Failed Rally."

Accumulation/Distribution... you can see that we are getting mor MMMMMM patterns and less WWWW patterns This isn't Clean Distribution in a nice upside down 'U' format. You can also see the possibility of inverted head and shoulders patterns....... developing......

Now this could still have another high in it..... but we are starting to see a weakening pattern.

Tired

We are starting to look tired here..... no more short covering to provide upside... the bulls have to work for it now....... Maybe we are working on the top tick......

• Seems most likly that we would buy up into the close....


• we havn't broken the uptrend yet..


• we usually have a 5 wave move in an uptrend... and we have only had 3.....


• one possibility is that we just keep slowing down to the upside, till there is almost no volitility.... and then we drift back down for weeks


• different possiblility is the buy up to earnings.... then as earnings dissapoint we trade down.

The XLF has broken another downtrend and should threaten the highs.

here is the C wave in Green...... I'd love to see some great distribution........ This is a new high, and only slightly higher.... I keep swearing against top ticking..... I'm not going to do it... We could run through monday.... like to see a lower low... then a failed rally to get involved on the short side.

that feels like a wave 5... it seems like we could have a good entry to try a short position... may want to let it break down a little more

that green line continues to be a high risk entry for a short.... I'd rather see a great distribution at the 1380 level... we could start setting off some short covering here.

Starting to see distribution, and continued distribution....... The short entry... if you believe in it.....

is that green line.... ususally we break it on the fourth wave move... then move up again.

that is set up for a correction of the uptrend.... umnnn. my trade is going nowhere. I set a stop

umn... I'm looking for a setup that this is some distribution... there was only slight acumulation this morning.......

No segnificant Wave 2 yet.... umnnn. financials are still trading fairly flat.

broke the downtrend in the XLF.... In fact... I'm going to bet a financial to the upside

my entry was 10.98 on WM.

5th wave over.... We are now in Wave 1. we are going to wait for wave 2 to get the good trend lines

Well... the trend went against my opinion.

So.... the white arrow shows where the Tick value maxed out. which is a 3rd wave move. so I expect this is a 4th wave move... possible we just move to the upside....

I expect one more low...... then an upside correction... then we see if we get a "Failed Rally to a new high" to short.

I'm trying to be ahead of the curve... and then I can make predictions....

How about this........

What I'm looking for is a good uptrend.... then that can be shorted for a "Short Term Trade" with enough money. or with enough derivitive leverage.

Think in terms of Trends, and not resistance levels in a Liniar form.... think linier, but in trends.

it's possible our C wave will end, on monday.

how about that...... see what I do is try and make adjustmetns.... But I want to be sure about the trend before I see the setup for the trade.

So.... there is a setup for a possible uptrend... shown in green..... I'll chart it as it developes.... or not.

Trends to watch.... sellers have jumped in at the bell.... financials seem weak....

I still suspect a bounce....

To... not fight the previous war.

My thing about how you have to know that everyone is fighting the previous war... and you have to watch for it, and prepare for it to be a little different....... So... This first upwave was weird.. it didn't have a deep pull back.... IE no wave B.... it makes me think that maybe this is still the A wave.. and that we need to look for the B wave still. of the macro move.

that red line shows maybe we get a great run today, then a pull back.. then one more high...

*shrug*.... I'm just saying "Top Ticking" is a bad idea... this could happen anywhere from here to 1420

*shrug*

15 days of the SPX

here is the Chart-Astrology I've been talking... Today is wave C day.....

The market has been waiting for the NFP day to assualt 1400 on the spx.... and it will depend on the number..... I'm not here to lose money... we should get a MACD divergence here. You can see the setup. just like before. If the NFP is positive, we may hit 1400. over 70K maybe a small rise. Under negative 50 k, and we have an intraday run.

Point is.... this could be the place to start being attentive and looking for Rallies to start short positions. We could see a Rally, in a 5 wave move.... we have had wave's 1 and 2 of a small rally which have been in an AB form.... we are ready for (Wave C) AKA (Waves 3-5).

Maybe the talking points will be.... Well without job loss no more cuts, and we get the punchbowl taken away.

Danger: the Macro wave I have drawn as 'C' from the past 4 days. Could be just larger, and we could still be in the Micro wave 'A' from that move..... I do suspect that we have had micro wave B....

nfp day

well... I say we rally, and the number depends on the amount. if it's positive 400+ points

if the payroll is better than negative 30K, then 300pts.
better than negative 70k, 200 some odd points.

So... my charts say after this we are due for a pull back.....

I'm not sure how to trade it.

I'm very tempted to just stick with my financials and ride them out.. maybe trade around a little.

I keep whining about how tired I am.....

I wonder if we rally and it ends either on friday or Monday.... maybe we drift up for a while..

maybe we drift down for a week and we are disappointed by earnings and start trading back down....

I'm a little stumped.

that is a nice little bearish move that ruined my symmetry.... I was looking at some charts... it's possible we get my one more leg higher.. and that will be it.... I'm looking for a move to 1400 which is 30 pts on the spx... maybe then some distribution.

NFP expectation

.... So... expectations were for negative 50K

we saw the moving average was -15K... Which gave us the ......

Basically I think it shows an overall increase of 10K so

expectations would be for negative 60K maybe 70K?????

I don't' know. it's the first time I've looked at the number in depth... if you can call it that

the little guy

So, I have yet to look it up, but it sounds like Legislative(Federal house and senate) branch is finally bailing out their home builders and developer buddies.

also.. as we constantly debate how there may have been a 'rumor' about Bear Stearns... after Bear Stearns tried to dump the CDO's off on their hedge funds. and how unfair a rumor was.

Also how there was blatant predatory lending, and continues to be some real predators in the mortgage industry, against consumers.

Fuck Bear and a Rumor....... It just continues to show how stacked the deck is in favor of the top echelons, against the real people who government is supposed to advocate for.

our system is absolutely "One Dollar, one Vote"..... and the Crying about this unfair "rumor" ...

this is the Moral Hazard, when you ask what the problem is in the financial industry. it is that we Bail these idiots out like they are little kids, and therefore they behave like them.

I don't think people should be bailed out, We need a financial system that no-one is "too big to fail" or too interconnected to fail. Certainly there is systemic risk. it has to be protected. But it's the depositors that have to be protected.

piss on the School teacher who purchased a million dollar home with the idea that it was an investment.

I keep wondering if the Federal government, in a real way should create a buffet like investment firm to pick up the morgages at 20-30 cents on the dollar. which is a broad bail out of the problem, with big upside for the state. Government has longer time frame than most investors, and can pull off these kinds of bailouts.... which put the banks and investors over the fencepost.

My overall frustration, is that as a trader. I know the risk. and I know I'm not going to be bailed out... I don't get why everyone gets bailed out ... Except the little guys... and you know that they will be the last ones delt with in this crisis.

Wallstreet.
Financials
Developers
builders
owners.

that is the pecking order....

sigh

so..... The weather has been crappy here. and it has me with a tragic case of spring fever.

I wonder if most of this rally is spring fever, trader fatigue by traders.... they just want an upside rest... before we get back to beating the hell out of the market.....

certainly that is me....

2 day spy.... LOOK AT THAT SEMITRY.....ok.....umn The right wave which isn't finish.. is slightly healthier that the left.... overall.. we are neutral in here.... as I see it, but have yet to see the wave finish...... But when I talk about 'w' patterns.......you can see it on a Macro level here.. but you can also see it on micro levels... and the inverse becomes the distribution patterns. Like I pointed out.. we saw a little distribution yesterday. and alot of accumulation. Now we are seeing more distribution.. but more accumulation.... But without the short covering the bulls will have a hard time at the next levels..... higher.

signs

there are some beginning signs of distribution.... usualy we see some slight signs, then one more big push. up... then some real distribution.....

In our wave counts.... this is now Wave C... Wave B ended this morning. This is a nice healthy slow sidways wave... It's dangerous but I expect a nice move to 1400 on the SPX.. then we should get a nice Macro B wave.... Right?

This is the C wave of the A wave of a Macro ABC.... correction.

financials

I keep buying financials.... I havn't been this long since last may....

I need to unload some stuff so I can... have cash.

initial jobless claims

+38K to 407,000

(post in progress)

I was having a nice premarket nap before this number came out.

My Voodoo says.. this market will rally as long as the NFP is not lower than -100k.

ADP, which is always wrong... except when it's not. said +8k???? or near that, I figured that put us in the clear. even a -50k won't freak out the market... it will be seen as a positive because they are reducing... asuming the revision isn't 100k for febuary.

so, I'm going to work on this post... see what I can find out.... feedback apreciated.... unless you are an asshole.

Morning everyone.

.... Wierd I have to apologise for my bullish outlook...

it was in the cards, and I've been talking about a strong denial rally since January. Historically, as I've seen. We just catch a bounce, thinking that the earnings will be fine... earnings won't be fine. *shrug*....

Maybe we will wait for NFP tomorrow, sort of muddle in this Wave 4/Wave B correction. We get initial claims today..

fore those keeping track of my garden..... I had an incredible day yesterday... in fact I kept track of the market in the morning, I was waiting for a chance to buy some more financials. But after the market closed, I caught up on most the spring planting that I was behind on... Greenhouse is rocking!!! sat around getting things ready for the summer!!! whoooohooo!!

I woke up for the first time at 2am... things are best when I get things going at this time, I get my reading done, breakfast done... and I can just mellow out until the market opens...

Gold again

... I'm getting more bullish on gold..... I know.... commodidies are dead..

There is a seasonal march stregnth... august pull back in gold... I think. I think there is another pull back in the carts... maybe $850

this isn't april fools.

Several analysts, who use technical analysis, have released bullish reports on the U.S. equity market this morning. Most notable was Dennis Gartman. He has classified recent strength in U.S. equity markets as a “watershed”. Weakness is to be bought rather than strength sold. About 30% of S&P 500 stocks are trading just below key resistance levels. Modest strength will trigger significant technical buying.

Bearish

..... I know I'm forecasting some extremely bullish movement in the market.... I just want to say that I'm still very bearish on the economy. I just think the stars have aligned for a move up. Short interest is being pushed out.

With the ideas of a new Mark to myth accounting, the fed bailing out anyone who needs it assuming you aren't a citizen of the United states, or the USDollar. Inflation does take stocks higher. The rest of the world is weakening, The Bulls being on their asses for 6 months. A good denial rally seems in the cards.

It will take some time for the 120 IQ, Investors and traders to realize that though the "Recession is Shallow" (yes, I said that) but it is part of the "Stagflation model", a good pop till earnings start...

maybe as earnings start, and F P/E is revised downward, we will See some downward momentum.

or we go down from here.

Stagflation is worse than recession. it is going to take some time to settle in.

Aparently Dr. Greenspan's PHD Thesis is an embarasment.

There is a hit piece on greenspan... maybe deservingly so..

From Barrons

by Robert Auerbach entitled Deception and Abuse at the Fed: Henry B. Gonzalez Battles Alan Greenspan's Bank.

Auerbach strongly implies that Greenspan's 1977 Ph.D. from New York University was obtained in a few months with little more rigor than a matchbook-cover art degree and that Greenspan has kept his Ph.D. thesis secret in order to protect his vaunted academic reputation.

ABC

.... I know I'm not comunicating it all that well.

The way these corrections go off normaly.

We get the A leg of the Correction..... and it is make up of a 5 wave ABC correction... Then we get a pure 1-5 impulse wave down.... Then we get another ABC correction to the upside.

This time we have had a 5 wave impulse.. not an ABC correction to the upside. as the A wave.

Then this B wave was more like an ABC correction.

I know I'm talking my book but This looks like it has another 800 pts to the upside... or so.....

Not that I havn't been wrong before.... but after a pull back at the 1390 level.... we could have another 50 pts to run on the SPX.

I am talking my book though....

But this pullback wasn't quite as bearish as it could have been, but......

I guess we are going to see

Turky trade

That is just off to the races isn't it.......

*rolles eyes*

So..... This correction says we arn't going into the mid 1400 on the SPX.

This is a 6 month daily SPX..... this current move has 139 writen all over it IMHO... maybe we sell off tomorrow and I'll be more convinced. that we are getting to the top...

I expect this to trade...

ABC upside correction(we are now in B, and maybe it will keep going down tomorrow). Then we should get the C leg up...

After that we should get a solid full day... multi day pull back.... Followed by one more solid leg up.

So....... Problem is that would be a 7 leg move since the Bear stearns low... and this is the 5th leg of that move..... so .... Maybe after our next leg up... that will be it...

We are still seeing more Acumulation than distribution......So, I'm saying we still have upside....

This is getting to be a bitch to trade....

But regardless... if we get one more leg higher and we see some nice distribution, I'd say it's time to get a little short.....

I took a short term trade in the financials..... This is a Sort of Impulse wave... and almost an ABC correction... We arn't quite Bearish... And not quite Bullish...

I may get stopped out...... I'm not feeling this trade...

Well There is a Wave B........... No Mas on holding the uptrend

I still expect a wave c... and it should get higher than this wave.

Wave Counts

It's been a good day to nap and listen to Uncle Ben.

here is my theory....

We have a Macro ABC correction.

We are on Wave A of that Correction.

in Wave A We just finished Wave 3, Which started after the close on Monday. We are about to hit wave 4.... which could very well be a Wave B correction of of the Macro Wave A.

We should at a minimum correct over to the green line 136.50

gold broke my down trend.... I think it may have another little leg down..... I may be being a sissy.

UNCLE BEN SPEAKS!!!

it's a classic trade for the past while... sell the fed chairman.... This should give us a small B wave correction.... lets see if it's a B wave correction or a Wave 4 or this uptrend.

I love gold

If you believe in the elliot waves and the gold story.....I would wait for it to start breaking the downtrends.. because Wave C of this correction here could go down for a while... the trend line sugjests 83 on the GLD... if you can draw that

you are looking to execute a very defensive trade when it cracks these downtrends.... The steaper one, I'm not all that confident in.... since the second point doesnt seem natural..

But the second leg of this should shake out the weak holders....

.....

My Regional bank screen

this is my bank screen, I ran months ago. And have shared a few times.

it's ripping in this order
(I'll mark with a star the ones that arn't particularly regional)

I believe that the big winners will be the Potters banks of the world.

WM + 8.16% *
RF + 7.59% (I own this)
WB + +7.15%
BBT + 5.43%(own it)
FHN + 5.21%
CNB 5.1%
PBCT 5.08%
Hban 4.8%

I have a further list, but these are the ones I think are ok....
BBT is a small bank that wants to be a money center... I think that is bad.. but may be good as a trade..

2 day spy

So.... this is the trend.

I'm scared of the retracement........

I still think this rally will fail..... I'd like to call this the 120 IQ Rally.... This is the slow money getting their dicks out..... Will it bring in the sideline money?

This is so straight up.... again it feels like a short covering Bear market correction... if this wasn't so vertical, i'd give some credit to the bull rally...

it's possible this will slow down and we will get a good clean bull run.....

I guess we are going to see..... in a bull correction, we should expect a 'B' Wave. for a day trade it should be playable. Then a new vertical C wave....

There is still a lot of short interest.... hard for the market to go down when everyone is Bearish.

If you ask why this didn't surprise me.. as bearish as I am.... I should show you a 20 day chart..

I'm trying to ignore the market today... cause... Me Tired...

To be honest, I'm getting long Biased... For the most part, the money has been made short.... there will be some opportunities... but it's going to be better to wait things out and buy the pullbacks.... I'm not saying Dips.... they should be Pull backs.

We could see a 2 day pull back... C wave correction.... then that other run...

This market will be flat unless we start getting big negative NFP.

Yep....

The garden is going to take me today...... that and a nap....

today does kind of feel third wave like.

we had a 30% retrace... notice it wasn't even an honest 38.2....

Oh look my senator the dumbest man on the financial committee is on CNBC

Well

I'm actually just riding some stuff out.....

I've had trader fatigue for a while... So... I'm suspecting we could be in the Range bound trade I've been talking about.

We may never hit my 11300..... I'm sad about that.. Truth is we need more job losses.

I have an idea that in a Jobless economy, we could see a minimal loss of jobs... but that will take months to sink in.

or we are topping out and my Psudo optimisum is a great contrarian sign.

I want to take a nap and work in the garden today

continue to forgive...

I'm completely behind the curve this morning.....

But I've woken up to a +9% portfolio.

Would you believe

I watched Squawk from bed for most of the morning, the futures were high. Then I fell asleep, suddenly we were up 200 PTS.... I have no idea how to trade this right now... Except to ride out my longs.

I'm Compleatly Bearish..... but it's good to be on the happy side of this trade.... I feel sad for my breathrend who are getting their teeth kicked in today..