Day trading predictions... no matter how often you get them right, they get you once in a while. My gap down prediction was one of them.
I posted many long term charts from DJI to OEX to SPX to COMPQ. Nothing has changed. ES is currently up 10, near yesterday's high. Larger time frames always dominate shorter time frames, therefore market will not be able to sustain these levels in regular hours as most of the indices pushing through multi-decade trendlines. Their reliability is quite proportional with their lifespan.
Thursday, April 30, 2009
Wednesday, April 29, 2009
Fed Pattern
Like I predicted in my previous post, SPX spiked after the FED announcement and rinsed 04/17/09 high then reversed to the downside. There will be follow through tomorrow.
Also since SPY was unable to close below the trend line at 86.9 (which was tested and held near the close), SPY will gap below 86.9 tomorrow and gap should not get filled.
As stated before, this was the best ST scenario for the bears as it fits in bearish intermediate term picture quite well.
Also since SPY was unable to close below the trend line at 86.9 (which was tested and held near the close), SPY will gap below 86.9 tomorrow and gap should not get filled.
As stated before, this was the best ST scenario for the bears as it fits in bearish intermediate term picture quite well.
Best scenario for bears playing out
Fed rally I predicted in my previous post came before the announcement so expect a reversal very soon. This will mark an important swing top going forward.
Watch those stops above 875, they may momentarily be run after the announcement.
Based on the following chart , SPY needs to pull back below the green trend line again. For this to happen today, we should sell off into the close. So my guess is watch the stops above 875, once they are hit, look out below.
Edit at 2:00EST :
SPX marginally broke above 04/17/09 OPEX top. We may not get a FED spike after the announcement. Be careful.
Watch those stops above 875, they may momentarily be run after the announcement.
Based on the following chart , SPY needs to pull back below the green trend line again. For this to happen today, we should sell off into the close. So my guess is watch the stops above 875, once they are hit, look out below.
Edit at 2:00EST :
SPX marginally broke above 04/17/09 OPEX top. We may not get a FED spike after the announcement. Be careful.
Tuesday, April 28, 2009
Ready... Get set...
Hey - JB3 here,
In my last post ("The Magnet") the situation has changed, in my view..... but only slightly.
Here's what has changed as I see it:
- I'm now seeing the possibility of a slightly different pattern playing out, a complex 'triple-three' structure, where the ending diagonal I discussed last time is still possibly valid, but just part of a larger structure. There's also the chance it may have instead been the internals of a triangle. In either case, it doesn't matter quite so much any more, for reasons that I hope will become clear.
- Upside is very limited, but may exceed the previous ending diagonal high of 875 (SPX) marginally. I haven't got specific targets (no time to check the charts in detail yet) but sticking my thumb at the chart says the levels Atilla mentioned in is last post 880 or slightly higher might be the max point. But if it goes there I'll be more concerned about how it's travelling (e.g. whether it's on fumes or strength.. I bet it's fumes) rather than projecting an end point. If it tries a run like that then I'll pull an all-nighter (Aussie time) to watch that sucker 'cos I think we've either just had (last week) or will have (this week) one mighty important turning point that is not to be missed.
- Following on from my previous comments about the longer term - the price/volume action since then only convinces me more that 666 is going to be seen again and likely left for dust. This bounce is a house built on quicksand.
Sorry no time to post a chart, just thought I'd give a heads up on what I'm thinking/seeing in case anyone was interested.
Given all this, I've been taking profits and covering some (not all - about half actually) short positions over the last day or so and will reload soon... hopefully at higher levels but at also if strong support levels I'm watching get taken out.
All the usual caveats. Remember that I don't only use EW in my research, but because neither Atilla or Sol use it I stick to mostly to commentary on EW (and occasionally musing about the bigger picture) because they do such a great job with everything else.
Take care out there and I wish you all the best.
JB3
Another distribution day ...
Tomorrow is Fed day... It is gonna be boring till 2:15
Considering the big picture that suggests a multi-day sell off as a start for the impending intermediate term downtrend, my best guess is we gonna rally after the Fed to reverse next day. Because Fed pattern suggests a reversal after the Fed day or the day after.
If we sell off, it wouldn't fit quite well in the big picture as the sell off should lead to a multi-day rally that will distort the intermediate term structure.
But in case we sell off, it will have to be a severe and sharp, like we test 810 or something because this sell off on Fed day will likely be followed by a reversal that will start a multi-day rally. Again, considering the big picture, this rally must stop around 875-880. Therefore any sell off on the Fed day must be deep to make enough room for the next possible rally that should die around 875.
Staying massively short from 865...
Considering the big picture that suggests a multi-day sell off as a start for the impending intermediate term downtrend, my best guess is we gonna rally after the Fed to reverse next day. Because Fed pattern suggests a reversal after the Fed day or the day after.
If we sell off, it wouldn't fit quite well in the big picture as the sell off should lead to a multi-day rally that will distort the intermediate term structure.
But in case we sell off, it will have to be a severe and sharp, like we test 810 or something because this sell off on Fed day will likely be followed by a reversal that will start a multi-day rally. Again, considering the big picture, this rally must stop around 875-880. Therefore any sell off on the Fed day must be deep to make enough room for the next possible rally that should die around 875.
Staying massively short from 865...
Fish got cornered ...
SPY didn't open below 84.55 and naturally the gap got filled. But it is now compressed between green and black TLs. All looking well within the grand schema of the topping process.
A daily close near 84.6 will confirm a downside acceleration for coming days...
On the upside its very limited... As multi-decade trends are pressing on many major and sectoral indices....implying an average of 40% drop in a year or so ...
These are precious days, shorting the pops to built an IT position before they ran out of money (only 110B left) will soon be proven another epic xTrends trade
A daily close near 84.6 will confirm a downside acceleration for coming days...
On the upside its very limited... As multi-decade trends are pressing on many major and sectoral indices....implying an average of 40% drop in a year or so ...
These are precious days, shorting the pops to built an IT position before they ran out of money (only 110B left) will soon be proven another epic xTrends trade
Monday, April 27, 2009
Fish in the barrel - part 2
We got the shooting star which was foretold by green TL intraday.
In this episode, you should watch the next level defined by the black xT which passes through approximately 84.55 - 84.45 area.
IF SPY opens below this area, it should trigger a serious sell off from the get go.
In this episode, you should watch the next level defined by the black xT which passes through approximately 84.55 - 84.45 area.
IF SPY opens below this area, it should trigger a serious sell off from the get go.
When the trained crowd gets this greedy
When the trained crowd gets this greedy, tops take longer but firmer...
Regarding today, it wouldn't look so pretty when this turn into a shooting star , would it?
This is the most likely scenario since it opened below the TL, it should close below the TL today.
Surprise me bulls.
Regarding today, it wouldn't look so pretty when this turn into a shooting star , would it?
This is the most likely scenario since it opened below the TL, it should close below the TL today.
Surprise me bulls.
Back to the fish in barrel...
Two days ago, I wanted to highlight the discipline I have been following and why I do it. I think there is going to be a real life example to explain it better today.
Take a look at the following chart again.
If the market opens at where futures are now, SPY will gap below that green trend line and trap a bunch of traders who thought we were breaking out on Friday.
Big picture, larger time frames, micromanaging, sticking with the strong possibilities while taking advantage of small moves... These eventually let you capitalize on the large moves.
Some people confuses micromanaging with day trading, some doesn't understand it at all. Micromanaging is a way to optimize your average price. If your system predicts a range bound market which will soon lead to a directional trending market, you take advantage of this congestion within the range to optimize your entry prices of your portfolio which you built for the next big trend. You do this by closing a portion of your position when the market goes in the opposite direction in small time frames then reopen the same position at better prices.
Why I was trading on the short side around this area? Why Sol shorted a bunch despite he knew they looked like breakouts. Why I said big surprise will soon be on the downside? Because larger time frames always dominate smaller time frames. Longer xTrends always dominate shorter xTrends. When the market pushes through some steal wall like this one under some certain conditions, it gets rejected like a ball bouncing off a stiff surface.
World Bank: Economic crisis turning into calamity
I wish best of luck to those who bought Friday's fakeout.
Take a look at the following chart again.
If the market opens at where futures are now, SPY will gap below that green trend line and trap a bunch of traders who thought we were breaking out on Friday.
Big picture, larger time frames, micromanaging, sticking with the strong possibilities while taking advantage of small moves... These eventually let you capitalize on the large moves.
Some people confuses micromanaging with day trading, some doesn't understand it at all. Micromanaging is a way to optimize your average price. If your system predicts a range bound market which will soon lead to a directional trending market, you take advantage of this congestion within the range to optimize your entry prices of your portfolio which you built for the next big trend. You do this by closing a portion of your position when the market goes in the opposite direction in small time frames then reopen the same position at better prices.
Why I was trading on the short side around this area? Why Sol shorted a bunch despite he knew they looked like breakouts. Why I said big surprise will soon be on the downside? Because larger time frames always dominate smaller time frames. Longer xTrends always dominate shorter xTrends. When the market pushes through some steal wall like this one under some certain conditions, it gets rejected like a ball bouncing off a stiff surface.
World Bank: Economic crisis turning into calamity
I wish best of luck to those who bought Friday's fakeout.
Saturday, April 25, 2009
Modified "P-Index"
Do you remember this custom index I created back in August 2008 which helped me to capture the crash.
The following chart belongs to the new version of that index. This modified P-Index contains an additional sector and all of its coefficients are adjusted accordingly.
I have been following this new index for the last few weeks and it was another reason I called 850 area intermediate top. It doesn't matter whether SP overshoots 10 or 20 points above 850, we are forming an important intermediate term top here...
The last two weeks were gift for me, I was able to optimize my positions for the next leg down that will likely end 40% below where SP is today. of course this will be obvious to the masses in coming months once SPX takes out 720.
The following chart belongs to the new version of that index. This modified P-Index contains an additional sector and all of its coefficients are adjusted accordingly.
I have been following this new index for the last few weeks and it was another reason I called 850 area intermediate top. It doesn't matter whether SP overshoots 10 or 20 points above 850, we are forming an important intermediate term top here...
The last two weeks were gift for me, I was able to optimize my positions for the next leg down that will likely end 40% below where SP is today. of course this will be obvious to the masses in coming months once SPX takes out 720.
Friday, April 24, 2009
Forcing the issue may eventually lead to FUBAR
PPT is death but there is CPT now. After the crash of 2008, Crash Prevention Team was established. Unlike PPT, CPT consists of mostly ex-con low-intelligence highly-brave redneck-like people.
But when their stupidity gets arrogantly loud and when you see positive VIX in the face of 2% rally on well orchestrated pump and when it is still a bear market, you must think what the heck?
Another upward push to break SPX 850 / DJI 8000 layer. Unfortunately this has been going on for months and SPX is still near the October 2008 crash low, moving up and down around 850 by 15 points... unable to overcome the crash prints.
In terms of short term, one had to cover shorts at ES 853-854 level early in the morning because of the following chart which I had posted yesterday as well. As you remember I said SPY needed to open below 84.7 for a full force sell-off from the get go. But instead SPY gaped above the middle green trend line seen on the following chart. This implied further upside for the day, I stress the words "for the day"
Why I talk about this short term situation? Because I want all xTrenders to understand one thing:
I use xTrends to trade intermediate term moves, that is my time frame and I explained several times before that I expect 850 area to be the intermediate term top. I am hopping it is all clear that this doesn't contain any day trading information.
Furthermore you should all know by now that I don't buy all the dips and sell all the peaks on intraday charts except for micromanaging purposes. So when I micromanage like today, you will likely not know whether I am covering or selling BUT WHEN I SEE THE INTERMEDIATE TERM PICTURE CHANGING, I WILL LET YOU KNOW. I tried to post my micromanages a while ago but it turned out too time consuming in the middle of the trade executions, costly indeed.
Another point I want to make is about the trend I am trading. For me, bear market has the definition of trend. When it is a bear market, I happen to find it safe to short the tops instead of buying dips although I sometimes go long when I see low risk/reward. It has been over 1200 intermediate term S&P points I accumulated since SPX 1550+ and 800+ points since last August. This last 800 points was all published on the blog realtime publicly. The last time I closed all my shorts was at SPX=670 which happened to be an intermediate term bottom. All these can be confirmed from the archives date by date.
xTrends is not a bear cave or bull barn. It is a place to trade trends. And it is definitely not a place for some pinhead low lifes to get egoistic satisfaction at the expense of others' honesty.
This is just another intermediate term trade which I have extremely high confidence. Market will have the final word as usual and I will respect it as always. Until then I will continue executing my strategy to full extend.
But when their stupidity gets arrogantly loud and when you see positive VIX in the face of 2% rally on well orchestrated pump and when it is still a bear market, you must think what the heck?
Another upward push to break SPX 850 / DJI 8000 layer. Unfortunately this has been going on for months and SPX is still near the October 2008 crash low, moving up and down around 850 by 15 points... unable to overcome the crash prints.
In terms of short term, one had to cover shorts at ES 853-854 level early in the morning because of the following chart which I had posted yesterday as well. As you remember I said SPY needed to open below 84.7 for a full force sell-off from the get go. But instead SPY gaped above the middle green trend line seen on the following chart. This implied further upside for the day, I stress the words "for the day"
Why I talk about this short term situation? Because I want all xTrenders to understand one thing:
I use xTrends to trade intermediate term moves, that is my time frame and I explained several times before that I expect 850 area to be the intermediate term top. I am hopping it is all clear that this doesn't contain any day trading information.
Furthermore you should all know by now that I don't buy all the dips and sell all the peaks on intraday charts except for micromanaging purposes. So when I micromanage like today, you will likely not know whether I am covering or selling BUT WHEN I SEE THE INTERMEDIATE TERM PICTURE CHANGING, I WILL LET YOU KNOW. I tried to post my micromanages a while ago but it turned out too time consuming in the middle of the trade executions, costly indeed.
Another point I want to make is about the trend I am trading. For me, bear market has the definition of trend. When it is a bear market, I happen to find it safe to short the tops instead of buying dips although I sometimes go long when I see low risk/reward. It has been over 1200 intermediate term S&P points I accumulated since SPX 1550+ and 800+ points since last August. This last 800 points was all published on the blog realtime publicly. The last time I closed all my shorts was at SPX=670 which happened to be an intermediate term bottom. All these can be confirmed from the archives date by date.
xTrends is not a bear cave or bull barn. It is a place to trade trends. And it is definitely not a place for some pinhead low lifes to get egoistic satisfaction at the expense of others' honesty.
This is just another intermediate term trade which I have extremely high confidence. Market will have the final word as usual and I will respect it as always. Until then I will continue executing my strategy to full extend.
Thursday, April 23, 2009
Topping process...
As part of the topping process, the market continues to oscillate between 830-850 before diving towards sub-800...
SPY needs to open below 84.7 for a nice intraday sell off tomorrow. ES is currently down 4, I guess we need 2 or 3 more (842 or 841 should correspond to SPY 84.7) to trigger a sell off from the get go.
Meanwhile, most of the long term charts are perfectly in sync. Like OEX below, they all imply minimum 40% drop in the next 3-9 months. So I stay massively short till SPX is cut in half.
SPY needs to open below 84.7 for a nice intraday sell off tomorrow. ES is currently down 4, I guess we need 2 or 3 more (842 or 841 should correspond to SPY 84.7) to trigger a sell off from the get go.
Meanwhile, most of the long term charts are perfectly in sync. Like OEX below, they all imply minimum 40% drop in the next 3-9 months. So I stay massively short till SPX is cut in half.
Wednesday, April 22, 2009
In addition to 720 ...
I think we will break out of this trading range soon, in other words we break below 800 in a week. This will open door to test 720 which is an important juncture defined by multiple xTrends.
That list Sol gave you earlier are the best shorts today's pop created. The list is actually huge, I will continue to mention individual opportunities going forward.
Also I think Sol hesitated to mention that I am short AAPL from 125 and AMZN from 82 areas into their earnings.
That list Sol gave you earlier are the best shorts today's pop created. The list is actually huge, I will continue to mention individual opportunities going forward.
Also I think Sol hesitated to mention that I am short AAPL from 125 and AMZN from 82 areas into their earnings.
ES to test 720 as next swing low
That is what Atilla is expecting. I see other possibilities like 780 and 750 but who cares at the moment. I will be fully short until we take out 800.
List of the stocks Atilla recommended me to short today
He asked me to post the list today because of the importance of the day which he believes offering extremely good short opportunities for the intermediate term.
All trades are for intermediate term.
CHRW (I shorted at 54)
EXPD (I shorted at 34.7)
IBM (recommended to short at 103)
JPM (recommended to short at 34)
QCOM (recommended to short at 41)
AMZN (recommended to short at 82 before earnings)
BBY (I shorted at 42)
XLF (instead I went long FAZ at 8.65)
SMH (recommended to short around 20.40)
All trades are for intermediate term.
CHRW (I shorted at 54)
EXPD (I shorted at 34.7)
IBM (recommended to short at 103)
JPM (recommended to short at 34)
QCOM (recommended to short at 41)
AMZN (recommended to short at 82 before earnings)
BBY (I shorted at 42)
XLF (instead I went long FAZ at 8.65)
SMH (recommended to short around 20.40)
Monday, April 20, 2009
The Magnet
Heya. JB3 here:
So busy... so busy... so busy! No time.. no time... no time!!
Just a quick recap on the smaller timeframe view of this crazy bear market bounce which, with high likelihood, at the very least ended its first stage on Friday.
I haven't been able to post much recently, but my last specific call was on Friday evening, AU time (early Friday morning US time), which was as follows:
Hey y'all, I still haven't had time to do any full postings, but I just wanted to say that I'm seeing a fairly major junction approaching. It's either an ending diagonal which should top in the next day or so (I like the notion of a top during Fridays session followed by a sizable gap down on Monday, similar to what others have suggested... but we'll see) or else this SOB will literally take off into orbit on strong volume. I strongly favour the former scenario, but am keeping these other options in the back of my mind. I am short, and plan to add... if the tape appears to be keeping to the script. I agree with others that the 880 area should contain prices, but ending diagonals are real bastards for shaking out nervous shorts before the drop with some crazy whips.
Good luck all.
URL: http://xtrends.blogspot.com/2009/04/regarding-sentiment.html#comment-8291289
A number of other traders picked up on the ending diagonal/ending wedge idea as well. Kudos, and 'so far, so good'. The volume profile certainly was classic for an ending diagonal. I'd like to see some more convincing volume as it drops, but that's about my only concern with this projection so far.
Checkout a quick chart here:
Trying not to over-think this, the main fact about ED's is that the starting point of the ending diagonal acts as a strong magnet for prices. So with that in mind I'm expecting price to drop to 778 at a minimum.
Obviously if the tape indicates something else is going on in the meantime, then things will need to change... but so far this is a really 'textbook' ED.
As for what I'm thinking over the longer term - I don't really care so much at this stage. My entry was good, and the minimum targets are clear and hopefully Mrs Market will drop some clues about the bigger picture as more time passes.
But if prices are going to make a another bear market bounce run for higher prices, history dictates that price needs to retrace further than 778 if it is to get enough of a springboard in place for higher prices. So I'm fairly confident we'll go quite a ways below 778 on this leg, and as mentioned, will be watching for clues along the way.
I haven't been able to read many comments these days, but the poor (low) volumes on this bear market bounce are really quite interesting. There's talk of a liquidity crisis in some circles. I dunno, but that kind of thing would certainly help drive a capitulation which, as Atilla correctly states, is a precondition for a lasting bottom.
One thing is for certain, this bounce is almost certainly a bear market bounce. It is very hard indeed to find a way to label the bounce as some kind of impulsive bull market kickoff wave. So... there will be lower prices (lower than 666) at some point in the future.
Cheers
JB3
So busy... so busy... so busy! No time.. no time... no time!!
Just a quick recap on the smaller timeframe view of this crazy bear market bounce which, with high likelihood, at the very least ended its first stage on Friday.
I haven't been able to post much recently, but my last specific call was on Friday evening, AU time (early Friday morning US time), which was as follows:
Hey y'all, I still haven't had time to do any full postings, but I just wanted to say that I'm seeing a fairly major junction approaching. It's either an ending diagonal which should top in the next day or so (I like the notion of a top during Fridays session followed by a sizable gap down on Monday, similar to what others have suggested... but we'll see) or else this SOB will literally take off into orbit on strong volume. I strongly favour the former scenario, but am keeping these other options in the back of my mind. I am short, and plan to add... if the tape appears to be keeping to the script. I agree with others that the 880 area should contain prices, but ending diagonals are real bastards for shaking out nervous shorts before the drop with some crazy whips.
Good luck all.
URL: http://xtrends.blogspot.com/2009/04/regarding-sentiment.html#comment-8291289
A number of other traders picked up on the ending diagonal/ending wedge idea as well. Kudos, and 'so far, so good'. The volume profile certainly was classic for an ending diagonal. I'd like to see some more convincing volume as it drops, but that's about my only concern with this projection so far.
Checkout a quick chart here:
Trying not to over-think this, the main fact about ED's is that the starting point of the ending diagonal acts as a strong magnet for prices. So with that in mind I'm expecting price to drop to 778 at a minimum.
Obviously if the tape indicates something else is going on in the meantime, then things will need to change... but so far this is a really 'textbook' ED.
As for what I'm thinking over the longer term - I don't really care so much at this stage. My entry was good, and the minimum targets are clear and hopefully Mrs Market will drop some clues about the bigger picture as more time passes.
But if prices are going to make a another bear market bounce run for higher prices, history dictates that price needs to retrace further than 778 if it is to get enough of a springboard in place for higher prices. So I'm fairly confident we'll go quite a ways below 778 on this leg, and as mentioned, will be watching for clues along the way.
I haven't been able to read many comments these days, but the poor (low) volumes on this bear market bounce are really quite interesting. There's talk of a liquidity crisis in some circles. I dunno, but that kind of thing would certainly help drive a capitulation which, as Atilla correctly states, is a precondition for a lasting bottom.
One thing is for certain, this bounce is almost certainly a bear market bounce. It is very hard indeed to find a way to label the bounce as some kind of impulsive bull market kickoff wave. So... there will be lower prices (lower than 666) at some point in the future.
Cheers
JB3
Sunday, April 19, 2009
It is not me, it is the market
I am receiving increasing number of emails threatening myself and my family just because I talk bearish about the intermediate and long term future of the market.
Despite S&P overshoot almost 20 points above my trading range on option expiration day, last Friday, I stand still with modified positions for the next intermediate term plunge to sub-600 and I will stay the course as long as my charts say so.
I am going to make a few things very clear at this point.
First of all, some pinhead rednecks need to understand the fact that I am not the one responsible for all this mess... If S&P500 dropped to 666 from 1576 in less than two years, it is the policies, system and macro-economics not a trader or a group of traders. I am a trader, there are 100s of other known people called it, traded it, made fortunes on it.
Secondly, it is not my responsibility to spoon-feed some daytraders constantly. Even the pay-sites that you pay tons of money to get daytrade signals do not take a slightest responsibility on any kind of losses.
This a social, financial blog to share ideas and information. While the situation is like that Sol and I have still been doing our best to share our view on short term situations frequently. Except two intermediate term trades that Sol didn't micromanaged at all (FAZ and NQ), this xPositions table clearly shows how we traded short term moves for the last year or so.
I am an intermediate term trader, those who followed me for years know the fact that I have been bearish since the day one of this top and I covered my long term shorts at 670 publicly real-time at the bottom on March 6, 2009 and consider and trade the current range as the next intermediate term top. I stand still with modified core positions, with average 865, I will keep pounding on the table that this bear will end only after we make new lows on all major indices.
Despite the fact that I have been calling the end of bear market below 600 due to the long term technicals, this market has no bottom until the very basic fundamentals of the global economics are stabilized in terms of demand-supply balance that can be translated to credits, consumer spending, production, unemployment, deflation, liquidity and all other factors...this may take decades. But regardless I will be closing my positions below or near the 600 because I always traded charts not economics.
Despite S&P overshoot almost 20 points above my trading range on option expiration day, last Friday, I stand still with modified positions for the next intermediate term plunge to sub-600 and I will stay the course as long as my charts say so.
I am going to make a few things very clear at this point.
First of all, some pinhead rednecks need to understand the fact that I am not the one responsible for all this mess... If S&P500 dropped to 666 from 1576 in less than two years, it is the policies, system and macro-economics not a trader or a group of traders. I am a trader, there are 100s of other known people called it, traded it, made fortunes on it.
Secondly, it is not my responsibility to spoon-feed some daytraders constantly. Even the pay-sites that you pay tons of money to get daytrade signals do not take a slightest responsibility on any kind of losses.
This a social, financial blog to share ideas and information. While the situation is like that Sol and I have still been doing our best to share our view on short term situations frequently. Except two intermediate term trades that Sol didn't micromanaged at all (FAZ and NQ), this xPositions table clearly shows how we traded short term moves for the last year or so.
I am an intermediate term trader, those who followed me for years know the fact that I have been bearish since the day one of this top and I covered my long term shorts at 670 publicly real-time at the bottom on March 6, 2009 and consider and trade the current range as the next intermediate term top. I stand still with modified core positions, with average 865, I will keep pounding on the table that this bear will end only after we make new lows on all major indices.
Despite the fact that I have been calling the end of bear market below 600 due to the long term technicals, this market has no bottom until the very basic fundamentals of the global economics are stabilized in terms of demand-supply balance that can be translated to credits, consumer spending, production, unemployment, deflation, liquidity and all other factors...this may take decades. But regardless I will be closing my positions below or near the 600 because I always traded charts not economics.
Friday, April 17, 2009
Thursday, April 16, 2009
Regarding sentiment...
It came to my attention that a few readers who has been bullish for the last few days getting nasty to the others even tho the market didn't budge in the direction of their delusion.
I said this countless times before, and the most of my readers know that I am an intermediate term trader.
After I covered at 780, I said that I am expecting a range bound market till earnings are out. And this is exactly what has been happening so far.
I shorted at 840, covered at 810, went long at 803, and now I am short at 850 ... trading exactly what I said for weeks.
I expect the start of the sub-600 scenario after we break below this range which I believe will happen after the earnings.
Now, I want xTrends to be a place where everyone can share ideas and trades respectfully.
This is my final warning to those who intentionally distract the community with false and wrong information constantly. Some of these people were repeatedly banned after violating terms of use in the past. They still come back.
If this continues like this, there will be further action to moderate the board to protect the decency and freedom.
I said this countless times before, and the most of my readers know that I am an intermediate term trader.
After I covered at 780, I said that I am expecting a range bound market till earnings are out. And this is exactly what has been happening so far.
I shorted at 840, covered at 810, went long at 803, and now I am short at 850 ... trading exactly what I said for weeks.
I expect the start of the sub-600 scenario after we break below this range which I believe will happen after the earnings.
Now, I want xTrends to be a place where everyone can share ideas and trades respectfully.
This is my final warning to those who intentionally distract the community with false and wrong information constantly. Some of these people were repeatedly banned after violating terms of use in the past. They still come back.
If this continues like this, there will be further action to moderate the board to protect the decency and freedom.
Range trading continues with increasing deception
Market will not be ready to visit the lower boundary of the range (800 on SPX) until most of the type-1 suckers are lured into the bull buss.
Remember before the GS earnings market sharply moved towards 850 into the close as if it was about to shoot towards 900 next day. But the next day, market cratered as GS got severely decimated about 20 dollars per share in a few hours.
We have seen the similar market action before JPM earnings. Only difference is JPM is slightly higher in pre-market action while futures are down.
Market will do the most obvious in the most unobvious way. So my advice, trade what you see, not what you feel or believe.
Remember before the GS earnings market sharply moved towards 850 into the close as if it was about to shoot towards 900 next day. But the next day, market cratered as GS got severely decimated about 20 dollars per share in a few hours.
We have seen the similar market action before JPM earnings. Only difference is JPM is slightly higher in pre-market action while futures are down.
Market will do the most obvious in the most unobvious way. So my advice, trade what you see, not what you feel or believe.
Wednesday, April 15, 2009
Tuesday, April 14, 2009
Stress Test...
Bank stress test results are coming at the end of the month and whales are selling while selling is good...considering the sector is already bloated on fake numbers.
Meanwhile, after the shocking numbers from invincible WMT, today INTC and LLTC gave another meaning to what xTrends were telling you .... test of sub-600.
Like I said months ago, this will no longer be a credit problem after the epidemic spreads through the system. From small businesses to large international companies like INTC, IBM etc , they are all on the same bus down to El Paso.
Regarding S&P trading, like I said earlier today, we continue to congest between 800-850 until the bulk of the earnings are out. We tested the upper boundary with brief penetration towards 860 which cleaned out the stops. This occurred during the fake bank earnings, and it also helped to clean more shorts from the system. Now we shall test the lower boundary of the range on tech earnings which are overly estimated.
Staying short ES / SP from 850 area, roundly roundly it goes...
Meanwhile, after the shocking numbers from invincible WMT, today INTC and LLTC gave another meaning to what xTrends were telling you .... test of sub-600.
Like I said months ago, this will no longer be a credit problem after the epidemic spreads through the system. From small businesses to large international companies like INTC, IBM etc , they are all on the same bus down to El Paso.
Regarding S&P trading, like I said earlier today, we continue to congest between 800-850 until the bulk of the earnings are out. We tested the upper boundary with brief penetration towards 860 which cleaned out the stops. This occurred during the fake bank earnings, and it also helped to clean more shorts from the system. Now we shall test the lower boundary of the range on tech earnings which are overly estimated.
Staying short ES / SP from 850 area, roundly roundly it goes...
Congestion between 800 / 850 continues
Like I said, the market will trade within this range during the earning season with brief intraday penetrations (upto 860 and down to 790) of upper and lower boundaries to trap and lock and run the stops.
It is no surprise that we have visited the upper boundary during the fake bank earnings. I strongly believe we will visit the lower boundary during the coming tech earnings which are overly estimated.
It is no surprise that we have visited the upper boundary during the fake bank earnings. I strongly believe we will visit the lower boundary during the coming tech earnings which are overly estimated.
Monday, April 13, 2009
Long at 9.40
I reentered at 9.40,
As I predicted earlier, FAZ tested the morning low with a marginal breakdown which did not produce volume.
I am expecting a huge tradable bottom for FAZ here so I insist , considering the reward.
Stop for this one is 9.20
I hope this is the last try.
As I predicted earlier, FAZ tested the morning low with a marginal breakdown which did not produce volume.
I am expecting a huge tradable bottom for FAZ here so I insist , considering the reward.
Stop for this one is 9.20
I hope this is the last try.
Saturday, April 11, 2009
The end will be astonishing !
That is the end of this bear market, the final leg of this bear market, which we are 100s of SPX points away. American public is unfortunately once again lured into the belief that things have turned for the better and a new bull market has began. The same game, different players. From Bernanke to Greenspan to Bush to Paulson... These people cost some of the average Americans more than their total life savings.
Acceptance did not come until SPX dropped below 1000 where we saw some geniuses like Buffet and Hussman calling for the end of the bear market and attractive valuations. For a moment It confused me but like all other human beings, my thought process is adaptive. Just like how the market is an adaptive dynamic entity. In March SPX plunged to 670 where I covered all my short positions but I knew it was not over.
Up until now, once again, the same old tricks has been played by a modified team masterfully. But this time, they used not only what they have in treasury, but everything they can get from public. This is where the death of market fundamentalism becomes obvious because we shall observe the fact that current valuations and numbers has been adaptively changed in time. That is why the coming sell off will be astonishing, nothing to hang on, no hope to hold on.
At this point anything that implies otherwise will not make any sense to me because almost everything I looked at confirms what I said. That is, trend studies... Trends are the only tool that show you the faith with high accuracy. Because these lines create your sentiment, market internals, shape your oscillators... Because trends are created by the economic realities.
I watch almost all sectors and indices along with 100s of major components. When we have this many stocks and indices back-testing xTrends, the market always formed a massive top that lasted months to say the least. Even Shanghai Stock Exchange showing a 50% sell off from here on by 2010.
The current trading range on SPX (800-850) will be the last deception on your charts. That is, the market will likely move within this range in a way that it will give the impression of invincible strength. Several upside and downside penetrations will occur during the process to trap and lock. This will eventually unclog the system for the next downtrend.
The last thing, which is not related with the topic but some readers. At the beginning of April, I recognized that there will be a lengthily topping process. Therefore I covered my premature short positions at 780 then shorted at 840 to cover around 810. I went long around 800. Now I am short right below 850. All of these moves were timely and profitable unlike what some trolls try to advertise in media.
I will not talk about why these people do it because the psychological part of the market is complicated but there is always a causal connection in human behavior. Only reason I can think of is the punishment of the market. Position and risk management is where we say devil is in details. I don't know how many people wants to see xTrends as a trading service rather than a financial blog?
Acceptance did not come until SPX dropped below 1000 where we saw some geniuses like Buffet and Hussman calling for the end of the bear market and attractive valuations. For a moment It confused me but like all other human beings, my thought process is adaptive. Just like how the market is an adaptive dynamic entity. In March SPX plunged to 670 where I covered all my short positions but I knew it was not over.
Up until now, once again, the same old tricks has been played by a modified team masterfully. But this time, they used not only what they have in treasury, but everything they can get from public. This is where the death of market fundamentalism becomes obvious because we shall observe the fact that current valuations and numbers has been adaptively changed in time. That is why the coming sell off will be astonishing, nothing to hang on, no hope to hold on.
At this point anything that implies otherwise will not make any sense to me because almost everything I looked at confirms what I said. That is, trend studies... Trends are the only tool that show you the faith with high accuracy. Because these lines create your sentiment, market internals, shape your oscillators... Because trends are created by the economic realities.
I watch almost all sectors and indices along with 100s of major components. When we have this many stocks and indices back-testing xTrends, the market always formed a massive top that lasted months to say the least. Even Shanghai Stock Exchange showing a 50% sell off from here on by 2010.
The current trading range on SPX (800-850) will be the last deception on your charts. That is, the market will likely move within this range in a way that it will give the impression of invincible strength. Several upside and downside penetrations will occur during the process to trap and lock. This will eventually unclog the system for the next downtrend.
The last thing, which is not related with the topic but some readers. At the beginning of April, I recognized that there will be a lengthily topping process. Therefore I covered my premature short positions at 780 then shorted at 840 to cover around 810. I went long around 800. Now I am short right below 850. All of these moves were timely and profitable unlike what some trolls try to advertise in media.
I will not talk about why these people do it because the psychological part of the market is complicated but there is always a causal connection in human behavior. Only reason I can think of is the punishment of the market. Position and risk management is where we say devil is in details. I don't know how many people wants to see xTrends as a trading service rather than a financial blog?
Thursday, April 9, 2009
tested 850
S&P tested the upper boundary of my trading range after visiting 800 two days ago.
No matter what the news and rant could be, the market is doing what it wants to do.
I expect the market to gap down on Monday. Some indices will fill the gap but some will not. Those indices with climactic action into the close will likely not fill their gaps on Monday.
Like I said in my earlier post, Wells Fargo, like many other banks today I believe topped out.
I am trading according to this S&P range.
I am fully short SP /ES from 845 just like I was fully long at 803 two days ago.
No matter what the news and rant could be, the market is doing what it wants to do.
I expect the market to gap down on Monday. Some indices will fill the gap but some will not. Those indices with climactic action into the close will likely not fill their gaps on Monday.
Like I said in my earlier post, Wells Fargo, like many other banks today I believe topped out.
I am trading according to this S&P range.
I am fully short SP /ES from 845 just like I was fully long at 803 two days ago.
The joke will fade faster than you can say goodbye !
It is a well engineered, government supported manipulation that Well Fargo , unfortunately, reported 0.55, a fake number, still 10 cents below expectation.
But the FASB rule change allows them to report it like this. They can state a false net income number, as long as they disclose the writeoffs in brackets down below.
The stock is under tremendous distribution since the open, despite the fact that this is a pre-holiday trading day.
WFC, considering a PE ratio of 16 which is over the top given the current conditions, is worth only $8 today. However the market doesn't only price today's conditions but 6+ months future.
So WFC today is worth $2-$3 like all other major banks you know of.
Here is the thing you should be careful. Conventional wisdom today changed. Masses now think that they will get the same reaction after all other bank earnings. There is no free lunch in this business. If the market unloads WFC after the news, which is the current case, this mind-set will be a trap to the broke-house. Because these banks may not see these prices for the rest of their business lifes.
So within the grand schema I gave yesterday, S&P500 continues its congestion within 800-850 range until earnings season is over. Therefore I am shorting the upper boundary and buying the lower boundary of the range during this time frame.
But the FASB rule change allows them to report it like this. They can state a false net income number, as long as they disclose the writeoffs in brackets down below.
The stock is under tremendous distribution since the open, despite the fact that this is a pre-holiday trading day.
WFC, considering a PE ratio of 16 which is over the top given the current conditions, is worth only $8 today. However the market doesn't only price today's conditions but 6+ months future.
So WFC today is worth $2-$3 like all other major banks you know of.
Here is the thing you should be careful. Conventional wisdom today changed. Masses now think that they will get the same reaction after all other bank earnings. There is no free lunch in this business. If the market unloads WFC after the news, which is the current case, this mind-set will be a trap to the broke-house. Because these banks may not see these prices for the rest of their business lifes.
So within the grand schema I gave yesterday, S&P500 continues its congestion within 800-850 range until earnings season is over. Therefore I am shorting the upper boundary and buying the lower boundary of the range during this time frame.
Wednesday, April 8, 2009
Sold ES @ 823.5
I have other important things to do for the rest of the day. Market is slow, it is not worth for additional 2 points. See you later.
Short term uptrend within the topping zone
Like I said yesterday, I think SPX is congesting between 850-800 area during the earnings.
We have tested the lower boundary of the range last night. I have 2 hours sleep as I stayed awake all nite to help bulls. I think immediate target for ES is around 828.
We have tested the lower boundary of the range last night. I have 2 hours sleep as I stayed awake all nite to help bulls. I think immediate target for ES is around 828.
Tuesday, April 7, 2009
Long ES @ 803
upto 811... my little contribution
Edit:
I was a freshman in high school when this movie was released. I am a huge leg man, she has awesome legs. I wished Teri wasn't wearing the tights in this scene :)
Edit:
I was a freshman in high school when this movie was released. I am a huge leg man, she has awesome legs. I wished Teri wasn't wearing the tights in this scene :)
Expecting a gap up tomorrow.
Not a big one but I do not know if the gap fills on SP. It may or may not.
One thing I keep in mind that the market is topping out. Tops are process, we will see some congestion between some range before the bottom falls out. My best guess for the range is 850-800 on SPX.
Another thing as a part of the big setup I keep in mind is we will print the top this month if we didn't already. This is important because at one point, it will help me to stick with the trend once breakdown happens.
But for now, in my opinion there is a short term setup in place suggesting some upside test.
As usual, I will not go long any rally as they are all subject to be fake-outs.
One thing I keep in mind that the market is topping out. Tops are process, we will see some congestion between some range before the bottom falls out. My best guess for the range is 850-800 on SPX.
Another thing as a part of the big setup I keep in mind is we will print the top this month if we didn't already. This is important because at one point, it will help me to stick with the trend once breakdown happens.
But for now, in my opinion there is a short term setup in place suggesting some upside test.
As usual, I will not go long any rally as they are all subject to be fake-outs.
Downtrend
As expected , 840 level was the top, at least short term.
Of course we do not know for sure that this will turn into an important top yet but like I said and showed several times before, there are too many xTrends evidences that 840 area was the top that can possibly lead us to sub 600 level over the intermediate term. However, there are interim target levels before we get there. For example 750 area could be a decent ST support.
I am 80% short SP and ES from 840, I will be fully short on the first opportunity I get. (Watching 825 area on ES)
PS: This is a holiday-shortened week. Volume will likely decrease towards the weekend. Expect the market to extend intraday moves in the direction of the underlying trend.
Of course we do not know for sure that this will turn into an important top yet but like I said and showed several times before, there are too many xTrends evidences that 840 area was the top that can possibly lead us to sub 600 level over the intermediate term. However, there are interim target levels before we get there. For example 750 area could be a decent ST support.
I am 80% short SP and ES from 840, I will be fully short on the first opportunity I get. (Watching 825 area on ES)
PS: This is a holiday-shortened week. Volume will likely decrease towards the weekend. Expect the market to extend intraday moves in the direction of the underlying trend.
Monday, April 6, 2009
Saturday, April 4, 2009
The final round begins in April
I expect a sizable gap down on Monday and the gap shouldn't get filled completely.
Here is the video I gave a link to yesterday. A nice way to end this intermediate term move.
History doesn't repeat but resembles...
Here is the video I gave a link to yesterday. A nice way to end this intermediate term move.
Visit msnbc.com for Breaking News, World News, and News about the Economy
History doesn't repeat but resembles...
Friday, April 3, 2009
Precious times
These are important and educational days that you can learn about how tops are built. Yesterday the market was up on flat VIX. Put/Call ratios have been indicating that Joe is more confident about the bull market than he was at SPX 1570... but in fact today SPX closed right about where the first leg of the crash ended: 840
Remember those sweet days... xTrends had been short from various points around 1200. When the market crashed and finally hit sub 900 in the morning, I became a bull and kept promising about a rally to SPX 1070 which didnt started until 3:30PM NY time. In the last 30 mins, SPX rallied about 100 points and pulled back little to close right below 900 to open with a gigantic gap up on Monday. We got my target that day and the next down leg started.
Why I remind this? Because I am a technical trader who believes that the market is controlled by its own demand-supply balance rather than news. xTrends is just a tool to measure it. Trends are constructed by fundamental facts that create demand supply equation.
I will post a few important charts this weekend. These charts along with a few conditional indicators give me this confidence that the demand supply balance will significantly change soon around 840.
Edit:
Please remember this video. I will post it before September 2009 again.
Remember those sweet days... xTrends had been short from various points around 1200. When the market crashed and finally hit sub 900 in the morning, I became a bull and kept promising about a rally to SPX 1070 which didnt started until 3:30PM NY time. In the last 30 mins, SPX rallied about 100 points and pulled back little to close right below 900 to open with a gigantic gap up on Monday. We got my target that day and the next down leg started.
Why I remind this? Because I am a technical trader who believes that the market is controlled by its own demand-supply balance rather than news. xTrends is just a tool to measure it. Trends are constructed by fundamental facts that create demand supply equation.
I will post a few important charts this weekend. These charts along with a few conditional indicators give me this confidence that the demand supply balance will significantly change soon around 840.
Edit:
Please remember this video. I will post it before September 2009 again.
Shorted AMZN @77.75 , stop 78.6
shorted QCOM @ 41.3, Stop @ 42.4
AZO @ 161.5, Stop @ 163.6
BBY @ 40.03, Stop @ 41.1
AZO @ 161.5, Stop @ 163.6
BBY @ 40.03, Stop @ 41.1
Orchestrated bottom picking
No bear market ever ended with such retail sentiment...
Like I said yesterday, many sectors, indices and large index components achieved their monthly and quarterly targets. This will blossom into another intermediate term leg down.
Like I said yesterday, many sectors, indices and large index components achieved their monthly and quarterly targets. This will blossom into another intermediate term leg down.
Thursday, April 2, 2009
Fully short SP and ES from 840
This is an intermediate term position with a target below SPX 600.
As you know I have mentioned importance of 850 level when I covered SP and ES shorts at 780 yesterday, SPX rallied 60+ points from the point I covered. Considering too many sectors and index components completed their monthly and quarterly targets today, I believe this is a good place to begin shorting.
However, since the market will likely make short term moves around 840 before downside acceleration, I will micromanage this position accordingly as usual and for the benefit for all xTrenders, I will try to let you know when I make any changes.
I am doing this because, unfortunately , there are too many short term and day traders expecting my intermediate term index positions to work immediately although sometimes they do.
I will post a few important charts later today or tomorrow morning before the opening.
Good luck everybody.
As you know I have mentioned importance of 850 level when I covered SP and ES shorts at 780 yesterday, SPX rallied 60+ points from the point I covered. Considering too many sectors and index components completed their monthly and quarterly targets today, I believe this is a good place to begin shorting.
However, since the market will likely make short term moves around 840 before downside acceleration, I will micromanage this position accordingly as usual and for the benefit for all xTrenders, I will try to let you know when I make any changes.
I am doing this because, unfortunately , there are too many short term and day traders expecting my intermediate term index positions to work immediately although sometimes they do.
I will post a few important charts later today or tomorrow morning before the opening.
Good luck everybody.
Wednesday, April 1, 2009
Dangerously close
There are sets of rules used to interpret price action around trend lines.
This one is called, "Too good to be true" rule.
If price moves towards the trend line after a multiple test, be careful if you fade it.
I knew this was coming this morning when SPX made a consequtive test of that xTrend at 780 .... made me got out of SPX shorts quick.
However whatever upside we get will likely be a fake out on weekly charts so don't fall in love with it.
I am waiting to short ES / SP at the right time and price. I stay short financials and real estate.
This one is called, "Too good to be true" rule.
If price moves towards the trend line after a multiple test, be careful if you fade it.
I knew this was coming this morning when SPX made a consequtive test of that xTrend at 780 .... made me got out of SPX shorts quick.
However whatever upside we get will likely be a fake out on weekly charts so don't fall in love with it.
I am waiting to short ES / SP at the right time and price. I stay short financials and real estate.
Covered ES @ 806
I don't want to force the issue. I think I will let Atilla frontrun again (kidding) :)
Covered ES and SP @ 780
Closed all SP and ES shorts (from 740-750 and 830), for near break even.
Still short financials and real estate.
I will enter SP shorts later in April.
Still short financials and real estate.
I will enter SP shorts later in April.
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