一个笨蛋的股指交易记录-------地狱级炒手

hefeiddd

Life is short and I don’t think you’re happy enough! That’s right - I teach you to be happy!
UPDATE 3:09pm EST: Okay, last hour - moment of truth. Observe my notorious index grid:

Pretty oversold - aren’t we - I also see a nice divergence happening.
UPDATE 3:22pm EST: Attention EVL-Mart shoppers - disqus seems to be broken again. Not only are they labeling people’s comments as spam, now they switched their servers into 1st gear - it’s f…ing crawling. Sorry, but this is out of my control.
UPDATE 3:48pm EST: Boy, that’s a nice EOD rally - we haven’t seen that in a long time. I actually grabbed a bunch of SPY puts around 744 but then decided to cover them at 745 when the Zero was pointing up - phheeewww - not a moment too soon. Might uncover them at the bell - let’s see how far this takes us.
Where Is Everybody?March 12th, 2009 10:58 am Market Forecasts 252 Comments

UPDATE 11:55am EST: Okay, the comment count is in the toilet - yes, I admit I’m spoiled but I fear that a mass arrest of my evil minions has taken place. See you in a a few years, rats! Whatever you do, don’t pick up that soap!

Okay, I’m hunting for future victims. Here’s one I might like once we reach the top of Minor 4 - CCJ. As you can see we dropped back to a longer term diagonal. There’s a chance we bounce back but I think the entries here are clear. You could even go long here to scalp a few points, but would set a tight stop.
Anyway, I’ll hunt for more and check back in.

CF - don’t grab it right now. Wait for (hopefully) another touch of the diagonal resistance line.
UPDATE 12:37pm EST: Here’s another one that might be ripe soon:

Again, don’t grab GRMN now - wait for this line to be touched.
Okay rats - this is a code red activation! I want to see symbols symbols symbols! What we are looking for are short candidates which are one of the following or even better a combination of:

• Ready to be entered in a day or two
• Are overbought on a short or long term basis
• Are liquid - 2 Million minimum
• Are optionable (meaning bid/ask spreads are not insane)
• Diversified - I want to see symbols from all sectors

Get to work rats - this is not the time to sit back and relax. This is when you plan your next move.
P.S.: Please let’s not debate the wave count to death. We are moving in the pattern right now - if we start seeing discrepancies to the current high probability count then that’s the time to break our heads about this. It seems to me that you guys are fishing for justifications to back up your current trades/conviction.
UPDATE 1:41am EST: Oh, I LOVE the stochastic divergence on DLTR:

Grab it now. Bitch has horrible bid/ask spreads.
UPDATE 1:57pm EST: I was thinking about waiting but might grab GLD puts right now. Look at this:

Might pop higher but I do like this diagonal.
UPDATE 2:20pm EST: We reached the target zone for Minor 4 of (5). I’m however a bit torn - it’s possible that we but even higher into the 760 region. I’ll scale out of some of longs, among which MA produced just nicely

Gold Fever!March 12th, 2009 8:50 am Intraday Update 161 Comments

UPDATE 9:38am EST: Good morning, ladies and leeches! We got ourselves a mild drop in equities this morning, just as I expected. Question now is - will it continue and develop into a full scale slide (meaning Minor 4 is done) or is this only the {b} wave of this consolidation?

Frankly, the chart could not be any clearer, IMHO. If we drop through 710 or even 700 and leave the channel, then I would concede that we only had a min-4 and that the consolidation party is over. But as long as we remain int his channel all this is just mental masturbation.
There are others who bring up the question of whether or not we are already in Primary {2}. Valid question indeed, and yes - it is a possibility. And again, the chart provides us with clues to that effect. If we bust through the yellow Separation Zone (sorry, no cutsy names today) then probabilities start to clearly point that way. However, in addition to price movement I would like to see momentum indicators swing a bit harder - what I’ve seen yesterday and even the day before is not the type of snap back rally I envisioned for the onset of 1 of (A) of {2}.

Gold is pushing up strongly, and I get the impression that we might perhaps see an expanded flat (psalm 47:1-33 in our bible). I have circled the areas where I would dip into short positions. Feels a bit early right now to jump in - that’s just me - I could be wrong of course, so if you are long term trader you should care and this is good entry.

Wednesday Wrap UpMarch 11th, 2009 3:30 pm EOD Wrap Up 183 Comments

Boring day today but the Zero gave us good signals in the morning:

We didn’t get an exit signal on the 1-hour chart, however the ‘Chinese snake wiggle’ around the 0 line on the Zero Lite strongly indicated that this was a consolidation day - participation was very thin (judging by the Mole bubble). I think we’re completing Minuette (c) of Minute {b} of Minor 4. Thus I expect a bit more downside tomorrow morning followed by a push into Minute {c} of Minor 4.
I might chime in later this afternoon - now I’ll kick back for a few hours.

Consolidation DayMarch 11th, 2009 2:25 pm Intraday Update, Market Forecasts 75 Comments

UPDATE 3:23pm EST: Today feels like a consolidation day. Here’s what I see:

We’re pushing up a little - possibility we drop a bit more after this and then channel to the upside, touching 740. The pattern is not super clean - mind you. Again, I usually don’t count Minute degree waves, but I’m trying to throw something out before you rats go suicidal on me. Sucky day - whatcha gonna do. It’ll be worth the pain once we reach our target range.

BTW -  those bitches running the FXY options - I knew this would happen. Have been trying to get a decent fill for three days now and then it starts running off without me. FXY - you can join the club with SLV - you’re on notice!!!
Pardon my french, rats - but those ETF options are getting the better of me lately - LOL
UPDATE 3:31pm EST: Oooops - I actually did get filled on FXY. I guess my threat of casting a Curse of Mole did the trick

SLV - Never AgainMarch 11th, 2009 11:40 am Intraday Update 118 Comments

UPDATE 12:16pm EST: Okay, this ETF is dead to me. Observe:

I was holding July puts, and although we dropped quite a bit yesterday my puts gained exactly zero, ziltch, nada, niente, gar nichts, nothing. Today we bounced back a little less than we gained but my puts lost 40% of their value. Now, some of it was admittedly due to a falling VIX, but this still excessive as we didn’t drop 10% in the VIX. On top of this the bid/ask spreads are almost immutable on SLV, so if you are trading OTM options you are getting a haircut selling them. I tried for three days - today I finally gave up and took the bid.
Thus, Evil Speculator is putting SLV on ‘notice’ - Stephen Colbert style. I will not trade options on this piece of crap ever again and will stick to GLD, which I’m not extremely fond of either, but it’s a lot better than this turd. I guess trading the SLV ETF directly is fine, but that’s not my cup of tea.
The option market is still tough for us traders and remains dysfunctional as long as Mr. VIX remains above 40. Perhaps once we push into Primary {2} we’ll see a drop below 35 or even 30, which is when options become a viable alternative again. In the meantime I remain extremely picky when it comes to choosing my options - I have a stable of about 30 instruments which do have sufficient volume (2 Million/day +) and thus offer acceptable bid/ask spreads.
Unfortunately this is keeping me out of a lot of option trades recently (e.g. FXY), which is why I increasingly am looking at trading futures, which are a heaven sent, frankly. I am particularly growing fond of the ZB contract, which according to my back testing, would have produced steady and consistent returns over the last year. If any of you guys are familar with trading the ZB or ZN contract, please feel free to share your experiences.
Finally, please note the new poll on the right side. I expected a bit more participation as I have exciting plans in the works. You guys kept asking for this, so I’m a bit surprised to see such a lousy poll count.

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hefeiddd

Channel MagicMarch 11th, 2009 9:23 am Intraday Update 158 Comments

UPDATE 10:19am EST: I swear I did not move those channel boundaries this morning:

As you might have noticed, I’m really getting excited about channels lately. It is actually an integral part of EWT, and I should draw them a lot more often - which I’m obviously doing now. The SPY banged its head against the upper boundary at the open and then recovered somewhat. However, I do think this would be a good spot for {b} of 4, so let’s see what happens this morning. If we push higher then we migh have to revise our target range for Minor 4.
UPDATE 10:32am EST: I just grabbed some April calls on MA - hat tip to Jen:

My mental stop is at 140 - which is roughly one ATR away.
UPDATE 11:28am EST: Zero subscriber ‘michealr’ (a.k.a. Mike) - your emails keep bouncing back - tried several times now.

Tuesday Zero Wrap UpMarch 10th, 2009 3:26 pm EOD Wrap Up, zero 216 Comments

This was almost a perfect day for the Zero:

Had it not been for that damn TOS problem this morning - grrrr.. But once we were up and running again it gave us the mental fortitude to remain in long positions into the close. However, do note the divergence on the Zero Lite - we remained in positive territory but it’s shrinking. This may be a precursor to Minute {b} of Minor 4 - although it’s a bit early in the game. I frankly don’t expect Intermediate (4) to be done and over in 2 days. But we remain open minded as there has been much pent up buying momentum which may release quickly as the bears are taking a step to the sidelines. Also note the nice short VTA yesterday - it more than made up for a whipsaw early in the morning.

This is a possible scenario for the remainder of the week. I would like to see a nice clean {b} wave followed by a push into 740. You rats know the drill from here. One last chance to grab some puts and ride this Primary wave to the bottom.
I would however like to issue a little warning: It is possible that we will not see a very long and extended Minor 5 wave - it’s even possible we’ll see some kind of truncation as I think that 3 of (5) has consumed a lot of the momentum. So, I don’t expect us to necessarily drop into the 630 range - it’s a possibility but not a necessity. At this stage of the game we should not be too concerned about the downside anymore - we should start thinking about the long side.
Here’s an exercise for you rats: Take a look ‘around’ and note the symbols which participated strongly in today’s push up. These are our candidates for the onset of Primary wave {2} of c - those will be the ones which will print much dinero. I’m heading to the gym now for some much needed stress relief - by the time I come back I would like to see some charts and symbols - paleeeezzze!!
Cheers,
Mole
P.S.: I do welcome our new advertisers

QuickyMarch 10th, 2009 2:53 pm Intraday Update 53 Comments

UPDATE 3:53pm EST:

BMC: I like it as a long right here.

Back In BusinessMarch 10th, 2009 11:50 am Intraday Update 201 Comments

UPDATE 12:37pm EST: Well, my TOS account problem has been resolved - still not sure what caused it. But I’m back in business, that’s all I care about. My sincere appreciation goes out to all Zero subscribers - you guys were great throughout the entire outage. I didn’t receive one single hostile email - on the contrary - everyone was very supportive. I am very humbled, to say the least - seems like I’ve got a loyal and very supportive subscriber base, which is a big reward in itself.
Of course I myself would have not been so patient and would have seized the opportunity to unleash a hateful email shit storm about the lousy service. Looks like you rats missed out on a great opportunity to complain. Mwuuuhaahaahaaaaa!!!

Alright, back to business: It seems we finally got the launch codes for Minor 4 this morning and are now bouncing against that diagonal resistance line I mentioned on Sunday. I expect us to hem and haw around here for a little while but this should not be the end of it. Although a 23.6% retracement is acceptable in EWT I expect us to continue our trajectory upward into the 750 region, more specifically I would want to see 746. At which point I intend to load up on puts one last time. Remember guys - this will be the last leg down for a while, so let’s do this one right.
UPDATE 12:58pm EST: Here is a possible scenario of how Minor 4 might play out:

We drop into {b} and retest this outer channel boundary and then proceed into {c} to complete Minor 4. Of course there is the possibility that this was it - but it is highly unlikely to see a one-day Minor wave. In this case I might have to relabel 3 of (5) as it might extend even further.
UPDATE 1:30pm EST: Gold and Silver dropped nicely this morning:

I concur with T.K. about taking profits here and waiting for an opportunity to load up on more puts if you are holding front month or short term options. If you look at my chart - we’ve got a major diagonal support line here plus we are touching a large degree 61.8% fib line. So I expect there to be a bounce soon - or at minimum we’ll see some sideways consolidation that’ll burn your theta.
Also, if you are sitting on puts consider that we’ll probably see the VIX dropping along with equity averages completing their Minor 4 consolidation. This will hurt your puts as they are losing vega - for instance my June SLV puts didn’t make any profit today despite a nice drop in the Silver futures. I decided to hang on to them, but again - if you are sitting on options that expire in a month or less I suggest taking profits and waiting for a bounce to load up again.
UPDATE 1:54pm EST: Remember the Goldman Sucks trade I suggested yesterday?

Many of you rats disagreed with me but this round goes to the evil grandmaster - mmwwuuhuuuhhaaaaaa!!
UPDATE 2:17pm EST: Okay, here’s an updated SPY vs. SPY channel:

I have highlighted possible support zones - looks like we are pushing into {c} now.
UPDATE 2:38pm EST: I just looked a the ISEE and it’s mildly bullish:

TRIN has been below 1.0 all morning - so buyers are present.
In other news - I have been trying to get a decent fill in FXY for two days now - about to tear my hair out. I still have not seen any good optionable Yen alternatives. Anyone???

Breach & BreakdownMarch 10th, 2009 11:03 am Intraday Update, zero 63 Comments

UPDATE 12;00pm EST: My apologies for my unusual silence this morning but I am battling a major issue with my TOS account. For some reason I am unable to re-launch ThinkOrSwim, which is also happens to be what the Zero indicator is running on. I have already spent over two hours with TOS customer support trying to resolve the issue. It seems that my IP is somehow being blocked from connecting to their TOS server. They are working to resolve the situation but have not given me an ETA of when this will be fixed. In the meantime my poor Zero subscribers are stranded, much to my chagrin. Fortunately however I kept my main trading system up and running overnight and it still appears to be ticking. So, I will start emailing the Zero chart manually every 10 minutes to my subscribers until this is resolved.

Quick glance at the market: Looks like we’re having ourselves a nice clean breakout here, courtesy of Citibank which reported announced a profitable first two months in 2009 (those cats got all the Fed assistance in the world - they should be so proud at their ‘achievement’ - LOL). Tape looks strong and buyers seem to be prsent, so this could be the Intermediate (4) consolidation we all have been waiting for.
Anyway, I got to run - need to start emailing those charts. I will be pretty silent until my TOS problem has been resolved.
Cheers,
Mole

Goldman SucksMarch 9th, 2009 2:01 pm Intraday Update 344 Comments

UPDATE 2:58pm EST: Since you leeches are completely useless today I’ll have to squeeze my sleep deprived evil brain for good trades. Let’s start with Goldman Sucks:

Lovely Keirsten is doing some MA voodoo on this thing but I just look at the price action and think that this might be a good place to go long. I know… I know - I feel dirty just writing this but this trend line looks strong. Of course if it breaches I would turn the ship around and short the heck out of it.
UPDATE 3:24pm EST: Looks like the majority is going short GS. Again, my line in the sand is drawn above in blue. If we breach that I’m going short - not sure why everyone thinks I’m married to the long side.

Somebody mentioned the ISEE - boo-yaaaa!!! Them are some bullish readings! Would be nice if price would reflect that sentiment. I don’t know about you guys but I’m losing my taste for the ISEE. It’s been confusing at best lately and I rather stick with the good ole’ P/C ratio.

hefeiddd

Channels 4.0March 9th, 2009 9:51 am Intraday Update 225 Comments

UPDATE 10:48am EST: That’s right - it’s evil Mole and his channels again:

So, here we are firing on all cylinders and yet again we bounce off that channel boundary. Nice try bulls - but you really have to do better than this. As I’ve stated before - we won’t see Minor 4 untill we breach this channel with confidence - obviously.
UPDATE 12:22pm EST: Boy, it is quiet in here today. I personally don’t have too much to say until we see a change of trend. This channel is going to direct our actions until we get a change in weather - i.e. a sustained break out. After one month of channel surfing nobody buys those rallies anymore - on the contrary - it seems the bears are just using them to load up on more short positions. Just ask Eric
Tape is feeling a bit erratic today. Almost like the bulls are all waiting for each other to make a move and most of the bears are so fat and happy after a month of sheer bliss they don’t care either way. I’d feel more comfortable if we could just touch 650 and get this wave over with. I don’t like the risk/reward ratio down here - channel or not. As I said - when we get that pop, it’ll be fast and brutal.

Gold continued its path to the downside - as hoped/expected. I’m actually a bit miffed as I forgot to grab those GLD puts on Friday and now we already dropped so much in early trading. Not sure I want to buy them here. On the upside - my SLV puts are doing well.
As a sidenote: I really didn’t sleep that well - this damn time change completely messed up my circadian rhythm. Not feeling 100% today.
UPDATE 2:00pm EST: Okay, the silence here today is deafening. Did everyone just fall out of bed or what is going on? I have to admit though: Equities = boring today. But you guys might know what they say about shorting a boring market
Okay, let’s move on to something else:

Yen seems to be bottoming - there have been several attempts to rally but it keeps getting swatted down. This puppy is extremely oversold at this point and I’m thinking of dipping into FXY options - shitty bid/ask spreads or not. I don’t feel comfortable playing the futures (yet) as I don’t know them well. Any pertinent trade ideas welcome. Also, if you FX traders could chime in here that would be nice.

Spring ForwardMarch 8th, 2009 5:44 pm Market Forecasts 139 Comments

I had to look no further than the Slope to find my muse for today’s title - Spring Forward (Tim’s was ‘Fall Back‘). Just in case you are a ‘furreigner’ and live abroad - over here a handy rule for remembering how to set your clock for Daylight Saving Time (no, there is no ’s’ at the end of Saving) and then back again is the expression:

Spring foward - fall back!

So, in spring you set your clock one hour forward, and in fall you set it one hour back - simple. A handy little mental reminder for memory impaired knuckledgraggers like myself. But there is another change in the air, one that is also guided by seasonality and repeating cycles: Urania, one of the nine muses, will soon bestow us with a new economic cycle in our financial markets - according to our current EWT count this will be Primary wave {2} of Cycle wave c.
Tim was just taking a stroll down memory lane, reminiscing about his experiences playing Cassandra (yes, I’m full of mythology today) over at the Slope and calling for a major bear market way before it was en vogue. I can only imagine how he must have felt taking flak back in 2005. I myself got kicked off a popular trading blog (which shall remain nameless) not even so long ago - back in July 2008 - for warning anyone who wanted to listen that the Dow Jones would trade below 10,000 by the end of the year.
Well, now I’m telling you guys that we will see the Dow trading at 9,000 again by the end of the summer, and maybe - just maybe - we might even revisit the 10,000 mark. Yes, you heard it here first (and maybe on the Slope - damn you T.K.). Markets never move in one direction for very long - even though the last few months might have felt that way.

Minor 3 of Intermediate (5) started like clockwork at the beginning of January. It’s been downhill since then and the first nine weeks of 2009 gave us eight downers and only one week closing in positive territory. That’s further confirmation that this is a third wave - there was little opportunity to jump in if you didn’t catch it at the top. Remember 944, when we bought those June puts? That feels like ages ago now.

The circle is where we are right now - actually we’re a bit further down in that we are close to completing Intermediate (5) of Primary wave {1} of Cycle c. It might be worthwhile to refresh your minds with the time intervals at each degree of the wave cycle:

• Grand Supercycle: Centuries
• SuperCycle: Decades
• Cycle: Decades/Years
• Primary: Years/Months
• Intermediate: Months/Weeks
• Minor: Weeks/Days
• Minute: Days/Hours
• Minuette: Hours/Minutes

The the last trading day of Cycle wave b was October 11th, 2007 with a peak at 14,198.10. Since then Primary wave {1} of Cycle wave c has lasted 515 days and shaved 7,571.16 points off the Dow Jones index. That’s 53.3% - a massive loss in accumulated wealth indeed. Many long rooted pillars of our financial system like Bear Stearns, Lehmann Bros, Citibank, or AIG have either tumbled and disappeared since then or are financially insolvent and on the brink of extinction - requiring recurring infusions of tax payer bailouts to the tune of hundreds of billions to artificially maintain a shadow of their former self.

Of course we Elliotticians saw this catastrophe coming years ago - back when nobody wanted to listen. I personally attempted to save several of my friends from losing their shirts in the market and told them to pull out repeatedly. Of course, none of them listened. Like many others they had been seduced by a Supercycle bull market that had lasted decades and bestowed us with a seemingly never ending cycle of growth and prosperity. It actually ended back in 2000, but due to the devaluation of the Dollar we seemingly eclipsed that mark in October 2007. Go here for an inflation adjusted chart or see shadowstats.com.
So, besides bringing the noobs up to speed, why am I telling you rats all that? Do we really care about those ‘galactic cycles’ when trading on a daily, weekly, or monthly basis? Yes we do - because in a few weeks the nature of the market will begin to change. Initial cautious bullishness will quickly lead to euphoria and calls declaring the bear market as done and dead. I doubt that Primary wave {2} will last 500 days - after all this is a consolidation wave as part of a larger degree motive wave (see graphic above or in the sidebar on your right). But at minimum it will be measured in months and the characteristics of our daily trading reality will shift back to a climate resembling 2007. The pundits and politicians will exploit a market recovery as a sign that ‘the stimulus plan is working’ and that we are on the road to recovery. Do not be seduced and plan your trades accordingly, no matter at which degree of the wave cycle. The old buy and hold paradigm will only serve you well if your investment window is measured in months or weeks - not in years.
For us traders this presents us with an opportunity to play the long side, nothing else. As an added benefit we might actually see the options market become …. well … an option again. Volatility will eventually breach below 30 again, and that will change how options are priced and also decrease some of those nasty bid/ask spreads. A few months down the line, as we reach the peak of Intermediate (A) of Primary wave {2} we’ll be able to load up very cheaply at the top and ride Intermediate (B) down for a few hundred Dow points. As usual, it’ll be all about the right timing and I’ll be here to steer you rats along with my wave counts.

Let’s now divert our attention to the present - here’s what I see in store for us for the next two weeks:
Blue: We completed {v} of 3 and are pushing towards the 750 region. There is some resistance in between around 720 based on a prior diagonal, which was touched three times. We peak at the 38.2% fib line and then descend into 5 of (5) - completing Primary {1}.
Orange: That is my preferred count as the fib relations and the wave patterns would be almost perfect in this scenario. We drop a bit more and bottom in the 650 zone. Then we push into 4 of (5) which completes roughly around 730 but we could push a bit higher and test 750, as in the blue scenario. There’s also a similar bump in the road around the 700 line as we touch that prior diagonal mentioned in the blue scenario. After that we drop into 5 of (5) and complete Primary {1} around 610.

Here’s a larger perspective which shows you where I draw some of those support/resistance lines from. Also note the green channel, which at this point is highly speculative, but I wanted to throw it out. Let me quote from our EWT Bible, psalm 87:1:

Wave 5 often ends when meeting or slightly exceeding a line drawn from the end of wave 3 that is parallel to the line connecting the ends of waves 2 and 4.

Now, obviously we have not even completed wave 4 of (5) just yet, but we have a good idea of where it’ll take us. This, in combination with prior intermediate wave relationships gives us an idea of where the bottom of Primary {1} will be. What I also like about those two targets is that in both, the orange and blue scenarios, 5 of (5) would measure about 61.8% of Intermediate 3 of (5). This would be a very fitting end to what has been an almost perfect Primary degree motive wave.

hefeiddd

Channels 4.0March 9th, 2009 9:51 am Intraday Update 225 Comments

UPDATE 10:48am EST: That’s right - it’s evil Mole and his channels again:

So, here we are firing on all cylinders and yet again we bounce off that channel boundary. Nice try bulls - but you really have to do better than this. As I’ve stated before - we won’t see Minor 4 untill we breach this channel with confidence - obviously.
UPDATE 12:22pm EST: Boy, it is quiet in here today. I personally don’t have too much to say until we see a change of trend. This channel is going to direct our actions until we get a change in weather - i.e. a sustained break out. After one month of channel surfing nobody buys those rallies anymore - on the contrary - it seems the bears are just using them to load up on more short positions. Just ask Eric
Tape is feeling a bit erratic today. Almost like the bulls are all waiting for each other to make a move and most of the bears are so fat and happy after a month of sheer bliss they don’t care either way. I’d feel more comfortable if we could just touch 650 and get this wave over with. I don’t like the risk/reward ratio down here - channel or not. As I said - when we get that pop, it’ll be fast and brutal.

Gold continued its path to the downside - as hoped/expected. I’m actually a bit miffed as I forgot to grab those GLD puts on Friday and now we already dropped so much in early trading. Not sure I want to buy them here. On the upside - my SLV puts are doing well.
As a sidenote: I really didn’t sleep that well - this damn time change completely messed up my circadian rhythm. Not feeling 100% today.
UPDATE 2:00pm EST: Okay, the silence here today is deafening. Did everyone just fall out of bed or what is going on? I have to admit though: Equities = boring today. But you guys might know what they say about shorting a boring market
Okay, let’s move on to something else:

Yen seems to be bottoming - there have been several attempts to rally but it keeps getting swatted down. This puppy is extremely oversold at this point and I’m thinking of dipping into FXY options - shitty bid/ask spreads or not. I don’t feel comfortable playing the futures (yet) as I don’t know them well. Any pertinent trade ideas welcome. Also, if you FX traders could chime in here that would be nice.

Spring ForwardMarch 8th, 2009 5:44 pm Market Forecasts 139 Comments

I had to look no further than the Slope to find my muse for today’s title - Spring Forward (Tim’s was ‘Just in case you are a ‘furreigner’ and live abroad - over here a handy rule for remembering how to set your clock for Daylight Saving Time (no, there is no ’s’ at the end of Saving) and then back again is the expression:

Spring foward - fall back!

So, in spring you set your clock one hour forward, and in fall you set it one hour back - simple. A handy little mental reminder for memory impaired knuckledgraggers like myself. But there is another change in the air, one that is also guided by seasonality and repeating cycles: Urania, one of the nine muses, will soon bestow us with a new economic cycle in our financial markets - according to our current EWT count this will be Primary wave {2} of Cycle wave c.
Tim was just taking a stroll down memory lane, reminiscing about his experiences yes, I’m full of mythology today) over at the Slope and calling for a major bear market way before it was en vogue. I can only imagine how he must have felt taking flak back in 2005. I myself got kicked off a popular trading blog (which shall remain nameless) not even so long ago - back in July 2008 - for warning anyone who wanted to listen that the Dow Jones would trade below 10,000 by the end of the year.
Well, now I’m telling you guys that we will see the Dow trading at 9,000 again by the end of the summer, and maybe - just maybe - we might even revisit the 10,000 mark. Yes, you heard it here first (and maybe on the Slope - damn you T.K.). Markets never move in one direction for very long - even though the last few months might have felt that way.

Minor 3 of Intermediate (5) started like clockwork at the beginning of January. It’s been downhill since then and the first nine weeks of 2009 gave us eight downers and only one week closing in positive territory. That’s further confirmation that this is a third wave - there was little opportunity to jump in if you didn’t catch it at the top. Remember 944, when we bought those June puts? That feels like ages ago now.

The circle is where we are right now - actually we’re a bit further down in that we are close to completing Intermediate (5) of Primary wave {1} of Cycle c. It might be worthwhile to refresh your minds with the time intervals at each degree of the wave cycle:

• Grand Supercycle: Centuries
• SuperCycle: Decades
• Cycle: Decades/Years
• Primary: Years/Months
• Intermediate: Months/Weeks
• Minor: Weeks/Days
• Minute: Days/Hours
• Minuette: Hours/Minutes

The the last trading day of Cycle wave b was October 11th, 2007 with a peak at 14,198.10. Since then Primary wave {1} of Cycle wave c has lasted 515 days and shaved 7,571.16 points off the Dow Jones index. That’s 53.3% - a massive loss in accumulated wealth indeed. Many long rooted pillars of our financial system like Bear Stearns, Lehmann Bros, Citibank, or AIG have either tumbled and disappeared since then or are financially insolvent and on the brink of extinction - requiring recurring infusions of tax payer bailouts to the tune of hundreds of billions to artificially maintain a shadow of their former self.

Of course we Elliotticians saw this catastrophe coming years ago - back when nobody wanted to listen. I personally attempted to save several of my friends from losing their shirts in the market and told them to pull out repeatedly. Of course, none of them listened. Like many others they had been seduced by a Supercycle bull market that had lasted decades and bestowed us with a seemingly never ending cycle of growth and prosperity. It actually ended back in 2000, but due to the devaluation of the Dollar we seemingly eclipsed that mark in October an inflation adjusted chart or see shadowstats.com.
So, besides bringing the noobs up to speed, why am I telling you rats all that? Do we really care about those ‘galactic cycles’ when trading on a daily, weekly, or monthly basis? Yes we do - because in a few weeks the nature of the market will begin to change. Initial cautious bullishness will quickly lead to euphoria and calls declaring the bear market as done and dead. I doubt that Primary wave {2} will last 500 days - after all this is a consolidation wave as part of a larger degree motive wave (see graphic above or in the sidebar on your right). But at minimum it will be measured in months and the characteristics of our daily trading reality will shift back to a climate resembling 2007. The pundits and politicians will exploit a market recovery as a sign that ‘the stimulus plan is working’ and that we are on the road to recovery. Do not be seduced and plan your trades accordingly, no matter at which degree of the wave cycle. The old buy and hold paradigm will only serve you well if your investment window is measured in months or weeks - not in years.
For us traders this presents us with an opportunity to play the long side, nothing else. As an added benefit we might actually see the options market become …. well … an option again. Volatility will eventually breach below 30 again, and that will change how options are priced and also decrease some of those nasty bid/ask spreads. A few months down the line, as we reach the peak of Intermediate (A) of Primary wave {2} we’ll be able to load up very cheaply at the top and ride Intermediate (B) down for a few hundred Dow points. As usual, it’ll be all about the right timing and I’ll be here to steer you rats along with my wave counts.

Let’s now divert our attention to the present - here’s what I see in store for us for the next two weeks:
Blue: We completed {v} of 3 and are pushing towards the 750 region. There is some resistance in between around 720 based on a prior diagonal, which was touched three times. We peak at the 38.2% fib line and then descend into 5 of (5) - completing Primary {1}.
Orange: That is my preferred count as the fib relations and the wave patterns would be almost perfect in this scenario. We drop a bit more and bottom in the 650 zone. Then we push into 4 of (5) which completes roughly around 730 but we could push a bit higher and test 750, as in the blue scenario. There’s also a similar bump in the road around the 700 line as we touch that prior diagonal mentioned in the blue scenario. After that we drop into 5 of (5) and complete Primary {1} around 610.

Here’s a larger perspective which shows you where I draw some of those support/resistance lines from. Also note the green channel, which at this point is highly speculative, but I wanted to throw it out. Let me quote , psalm 87:1:

Wave 5 often ends when meeting or slightly exceeding a line drawn from the end of wave 3 that is parallel to the line connecting the ends of waves 2 and 4.

Now, obviously we have not even completed wave 4 of (5) just yet, but we have a good idea of where it’ll take us. This, in combination with prior intermediate wave relationships gives us an idea of where the bottom of Primary {1} will be. What I also like about those two targets is that in both, the orange and blue scenarios, 5 of (5) would measure about 61.8% of Intermediate 3 of (5). This would be a very fitting end to what has been an almost perfect Primary degree motive wave.

hefeiddd

Finally, there’s the psychologically sensitive 600 mark - if we get close to that I strongly believe that the bulls will make a stand there.

The NYSE McClellan Oscillator also supports the notion that a bounce is in the works, even if it’s just for a few days.

The longer term NYSE Bullish Percent Index is clearly in oversold territory, but there’s sufficient space left to afford a completion of 5 of (5).
Finally, the spread between the 30-year T-Bond yield ($TYX) and the Moody’s BAA Corporate Bond yield was roughly around -4.5 on February 15 and has actually increased to -4.85. This also supports my current wave count as it has been a fairly reliable long term indicator throughout 2008. Once we see this spread decreasing it will be an early warning sign that we are nearing the end of the current Primary wave cycle.

I saved this chart on Friday so that I wouldn’t forget to talk about it today. This is a chart of the crack spread, which is the spread between the U.S. Oil and Gasoline funds. In other words - it’s the profit margin for refiners. What you see is a clumsy attempt to put some EWT labels on the last few quarter of price action. I wouldn’t bet big money on this, but it seems to me that we are completing an a-b-c consolidation and that we might push to the upside here very soon. Either that, or we drop a lot further as part of a large b-wave to the downside. I’m not sure where the cut off point would be but take note and maybe correlate this with your own count in the crude market. I personally do not trade crude and do not want to suggest a pertinent count.
I think the way to play this is to watch for a two day rally to the upside and then go long refiners. This would give us at least some confidence that the c-wave is complete and that we might enjoy a long motive to the upside. Of course it’s also possible that we are embarking on a 5th wave as part of the current push up - but in terms of picking trades that would not matter as 5th waves in commodities often extend quite a bit.

Gold seems to be at a great spot for a reload in puts or short positions. As I stated on Thursday - if we breach 960 I might get nervous as I don’t expect a strong retracement at this point. I will keep you rats abreast of any changes in my precious metal trades - but at this point I expect further downside in both Gold and Silver very soon.
That’s all I got for tonight - see you on the other side, ladies and leeches!
Cheers,
Mole

hefeiddd

Friday Wrap UpMarch 6th, 2009 4:13 pm Intraday Update, zero 220 Comments

UPDATE Closing Bell: LOL - we actually closed 1 point and 8 cents positive on the SPX - that was hilarious! Told ya there would be a snap back rally! What I however did not count on was that there would be so little participation. So, I don’t trust this further than I can throw the average market maker.

The hourly Zero got faked out early in the morning when the tape turned on a dime but we got rewarded with a short VTA that took us all the way to 666 (if you took profits at that level). Intra-day the Zero Lite warned us about a divergence in momentum as shown on the right side of the chart. I immediately sent an alert to subscribers at 675 to go long and we took profits quickly at 682. Then we got a short VTA at the bottom but I think most subscribers ignored that one as I kept warning them about the flatline in the Zero Lite. I’d give the Zero Senior a C- today because of the whipsaw alerts (but it did give us a sustained drop to the bottom) and the Zero Lite a B+. Those divergence plays are something we didn’t get with the hourly version and I’m having a lot of fun picking those out.
I’ll be chiming in on Sunday, as usual. In the interim - enjoy your well deserved weekend. I leave you with this:
FYI - this was produced in 1979 - WAY ahead of its time.
Cheers!

Bearish SentimentMarch 6th, 2009 2:14 pm Intraday Update 251 Comments

UPDATE 2:11pm EST: I just checked my ISEE chart and for the first time in the past few days there’s little discrepancy:

Negative sentiment across the board - in securities as a whole and equities/ETFs. Frankly, this is starting to look like bottom numbers to me. If we could just make it to 650 - nobody’s buying those little MM engendered whipsaws anyway.
Sitting and watching at this point. Oh, and I’m planning to grab some GLD puts by the close probably - especially if we keep dropping in equities (please!!!).
UPDATE 3:13pm EST: Boy, that is some evil tape:

Seriously though - we are nearing the 660 area and the momentum has gone completely flat. This is one of the stranger tapes I’ve seen lately. On top of that weird rumors are now circulating in the pits - I think this might be fear driven but you might want to lighten your exposure during the weekend. Not much else to say until we make those lows I want to see, which remains 660 at minimum - 650 would make me happy.
UPDATE 3:35pm EST: Right at 3:30 the buyers showed up - LOL - I told you guys the market was being walked down. Now let’s see if this one sticks.
UPDATE 3:39pm EST: Meh - still no meat in this move. I got seduced by those long candles but so far no follow through. I’m mentally checked out at this point - wake me up when the ES touches its VWAP.
UPDATE 3:46pm EST: Okay, now they’ve got my attention. We just touched VWAP on the ES and breached it on the NQ.

First breach of the channel center line for today. We are now pulling back hard - could be just a stop sweep or it all falls apart right here. If this one fails I think we’re going to drop hard into the close. Make or break time for the bulls.

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hefeiddd

Strange TapeMarch 6th, 2009 12:36 pm Intraday Update, zero 167 Comments

UPDATE 12:30pm EST: I just played the ES futures a little bit and got in at 675 the bottom and out at 682. BTW, had you been a Zero subscriber you’d been riding along

The tape is really strange today. Take that big spike in the morning for instance - followed up by a drop and then another rally attempt which seems to be falling apart right now. Frankly, I’m not sure yet how to interpret that - either we keep sub-dividing on a Minuette wave degree level or we might be bottoming here. I don’t think I’m selling out my Zero subscribers by mentioning that there is no participation at this point and the signal has gone flat. There was a beautiful divergence we played an hour ago which I’ll post as part of the wrap up later.
I still would prefer to see 650 before we bust higher but we’re spending an awfully long time down here. Above my SPX chart once more - I think the trigger point for Minor 4 remains a breach of that SPY channel I keep rubbing in your faces.
Again - I don’t see enough long ideas - keep working on that, my evil rat minions!
UPDATE 2:00pm EST: FYI - this is the kind of stuff Keirsten keeps seeing on her SPY Level II screen for the past two days now:

I don’t know about you rats, but I have very little confidence down here - throw in a flat Zero signal and you’ve got the recipe for a monster slingshot rally. The sooner we touch 650 and get this over with the better. I myself will probably go long at that level - I will keep you apprised.
For you rats who haven’t seen a Level II order history screen before: These are large block orders by institutionals - the reason why they are white is that they are hiding those blocks, so you don’t know if those are sell or buy orders. I do have a inkling what’s going on and it involves buying massive amount of calls (or selling large chunks of puts) ahead of a buying frenzy in the commons. I could be wrong - so please do not take my word on this - it’s just a theory. I’m sure many here will disagree - interpret this at your own risk. Or, if you can’t make heads or tails out of it it’s probably best to stay out and watch.

One Last Time?March 6th, 2009 9:47 am Intraday Update 216 Comments

UPDATE 9:44am EST: Up we go - nice to see some green candles for a change

Okay, you know the drill - if we make it to the boundary go short. The red area is roughly where I would set a stop - of course you need to gauge the market’s momentum as we might overshoot. Of course if we snap right through it then the long side might be on the menu for today.
UPDATE 10:02am EST: Ugh - we can’t get a f…ing rally in this market. I’m ready to check out - seriously.
UPDATE 10:12am EST: I’d love to play the FXY right here:

However, the options are priced by highway robbers - insane bid/ask spreads. Anyone have any pertinent optionable ideas?

Fib-O-MaticMarch 5th, 2009 9:21 pm Market Forecasts 148 Comments

Drip drip drip - another down day with Ueber-bearish sentiment in the 90 percentile. I know what you’re thinking: How long can this keep going on? What happened to that Minor wave 4 you promised us, Herr Mole?

Well - love or hate this tape - it’s a third wave and it can drop till it… well…. drops! Since February 10th (the end of Minor 2) it’s been one down day after the next. I am counting 13 downers and 4 uppers - a ratio of 3.25. This, my dear ladies and leeches, is most likely a third of a third - if not then the bulls might want to head for the hills when that one hits.

However, that said, there is some strong support lurking below and I wouldn’t be surprised if our intrepid institutional friends weren’t sitting somewhere down there with some massive buy orders. There has been some very suspicious Level II activity today, so something is brewing  I have drawn the current fibs in blue and a second one based on my preliminary target in orange. To make it easier for your teeny weeny rat brains the two main scenarios correlate with those colors.
Orange: This would actually be my favorite count and also the cleanest overall. We drop towards 650 and then reverse into Minor 4 of (5) - target 735.
Blue: We completed {v} of 3 of (5) today and are pushing into Minor 4. Our target here is the 750 region.
Of course there is nothing preventing the SPX from dropping below 650 during a capitulation triggered by a news based catalyst. GE is obviously teetering on the edge of extinction and who knows how deep the rabbit hole really goes. If you’re not already exposed to the short side this is however probably not where you want to jump in - the cards are stacked against you in the risk department.

Swing traders on the other hand can keep playing the game I talked about today because that channel has been pretty solid and right now we’re skating down the center line. Whether or not you are playing the swings - observe this channel because a break out into Minor 4 would clearly breach the upper boundary and probably not even reverse for a re-test. Sentiment is registering record extremes right now and the rubber band is stretched to the max. You don’t want to be running 20 positions in this situation. I think DeNiro said it best:
Don’t get attached to anything you can’t walk out on in 30 seconds if you feel the heat around the corner.

Great spot to load up on Gold puts or sell IMO - I’ve drawn some fibs for your convenience. The 940 to 953 region looks good. If we push past 966 I might get nervous.
BTW, I’d love to see more long candidates - you guys have been less than forthcoming in that department.
That’s it for tonight. Happy hunting tomorrow.
Cheers!

hefeiddd

Closing TimeMarch 5th, 2009 4:09 pm EOD Wrap Up, zero 182 Comments

UPDATE Closing Bell: I do see some intrepid buyers step in the last 10 minutes but there was no meat in it.

Based on my current count it doesn’t make much sense for the market to suddenly start racing upward. Besides, buyers are MIA at these levels and it’ll take some volume as a catalyst for the rest of the herd to join in and kick us into 4 of (5). Although I wouldn’t bet my first born on that count (too late - he’s already laboring in a South African goldmine) it would look a lot cleaner if we drop all the way into the 660 zone.
However, as I’m typing this the futures are racing up, so maybe a reversal is brewing and institutionals were waiting for the bell to show their cards. According to EWT rules we only need to breach the low of wave {iii} to complete {iv}. I personally don’t feel like holding anything overnight at these levels - doesn’t make sense unless you have a gambling addiction and have been banned from all Vegas casinos.

Beautiful Zero signals all day - couldn’t ask for more - it really killed it today. Got us into the game early in the morning and never kicked us out. Added bonus was the Zero Lite divergence which I outlined on the right side of the chart. This thing is really growing on me - and based on the emails I am receiving most subscribers seem to enjoy it as well.
Shop smart - shop Zero-Mart
Cheers!

Confessions Of A Swing TraderMarch 5th, 2009 12:53 pm Intraday Update 239 Comments

UPDATE 12:48pm EST: So, you want to be a swing trader, ey? All ready to go with you fancy TOS account and your Prophet charts. Well, let’s get to it:

• Step 1: Turn off CNBC.
• Step 2: Pull up the chart above.
• Step 3: Draw a channel, and set the center line.
• Step 4: Go long at the lower boundary, go short at the upper boundary. If you want to get really down and dirty you can even play the 50% line as highlighted.
• Step 5: Profit!

Seriously - this channel is almost magical. Let’s say the center line gets breached - just set a tight stop and then get back in at the top boundary.
Yeah yeah - I know - at some point we’ll breach it and rally up hard. But until that happens swing traders should take notice. Mabye also watch the Zero for momentum changes.
Bummer I’m not a swing trader - not my cup of tea. But that doesn’t mean you swinging rats shouldn’t bank coin.
UPDATE 1:08pm EST: I am looking at the Yen and am surprised at its continued slide to the downside.

Based on what I see there is another possibility to count the tape of the last year. Any [intelligent] input would be welcome - I remember someone here is actually doing an EWT count on the Yen but I never had a chance to check it out.
We could put in at least an interim bottom here soon however - the Yen is massively oversold at this point. Even if we continue our drop we should see a day or two of consolidation to sweep some of the stops.
UPDATE 2:19pm EST: ES is re-testing S1 right now - I don’t sense much strength. Perhaps we’ll get some PPT buying around 3:30pm  - otherwise I expect to see further drip drip drip. The road to hell is long and painful - and paved with good intentions.

hefeiddd

March 5th, 2009 10:41 am Intraday Update 196 Comments

UPDATE 10:24am EST: Taking a step back from the intra-day gyrations this chart nicely describes the current state of affairs:

Every time the market is attempting a rally it gets swatted down near the upper boundary of this channel. At this point it’s pretty simple, ladies and leeches - and as I said yesterday - the easy money is to short at the upper boundary line and set a stop a few points up. Probability is you enjoy a rapid descend back inside the channel, and in the worst case scenario you get stopped out and lose a few points.
Rinse, lather, repeat. There is no strength in this market and Minor wave 4 is MIA - not sure when we’ll get it but if we are inside it the wave count is starting to look pretty ugly.
I’m actually in a crappy mood this morning. Seriously - unless you positioned yourself at 880 or 940 and held all the way there have been very few opportunities to jump back in. Now, I did load up on puts around those levels but have been mostly watching ever since as I never ever sell the dips. It’s getting really boring - player needs a rip.
Comment stream also has gone into the toilet. I see a rapid increase in platitudes, annoying arguments, rumor sling fests, dumb questions, lazy questions (as if it’s 1994 and Google does not exist yet), idiotic postings, empty chatter, etc.
Listen rats - I’m not going for this crap. I rather just delete everyone’s comments and have a one-on-one chat with zigzag, Keirsten, BalaB, and the handful of real contributors. It’s not a problem if you are a noob - but I keep getting questions like ‘what’s a VWAP’ - I mean, have you ever tried to type that into your Google search? Then there are others who have asked me the same EWT questions for months now but obviously never bothered to buy a book on the subject matter. What am I - your human trading encyclopedia? For the last time: If you have been here more than a month then get yourself ‘Elliott Wave Principle’ and shut the heck up until you read the whole thing back to back. And once you studid up on the basics you can come back and ask me questions.
I’m not amused.
UPDATE 11:16am EST: And I forgot to mention Erik - he has been a great contribution to this blog. Well, we are below the Tuesday lows now, so this was most definitely not Minor 4 and most likely just {iv} of 3 of (5). I expect more downside to complete {iv} and thus 3 of (5). Possible target is the 660 range.
Wednesday TelegramMarch 4th, 2009 9:32 pm Market Forecasts 196 Comments

This is going to be in telegram style as I have very little time tonight - sorry rats:

Orange: There’s a very good chance that we are already in Minor 4 of Intermediate (5). Expect some bumps in the 723 zone as we’ll touch a diagonal resistance line. Next stop is the 23.6% fib line at 736 but in the course of the next few days we may push all the way to 761 - the 38.2% mark.
Blue: This was just a Minute degree correction as part of an extension of {iii} of 3 of (5). Do not breach Wednesday’s highs,  do not pass ‘go’, do not collect 724.
Silver and Gold retraced a tiny bit today - as I’ve mentioned before, any retracement is an opportunity to add to existing puts or short positions.
That’s it for tonight - see you on the other side.
Cheers!

Zero Wrap UpMarch 4th, 2009 4:13 pm Intraday Update, zero 233 Comments

Today was a pretty good day for the Zero despite the intra-day whipsaw:

We got a solid long VTA which remained active even through the drop down to 705. I think the addition of the Zero Lite probably helped a lot of folks take profits at the top. If you look carefully you can see another divergence in that the price pushes up once more but the Zero signal is already pointing down. Of course at that point you have to get in right away - and you don’t know if it busts higher. That’s why RLs, fibs, and good old TA (not tits & ass - technical analysis) are helpful in identifying resistance/support zones. And that’s why you step in - the Zero just confirms your position as the signal degrades.
I’ll chime in later today once I pour over my charts a bit more. I think it looks bad for the bulls right now, but this might not have been it just yet.

Here We Are!March 4th, 2009 3:18 pm Intraday Update, zero 114 Comments

UPDATE 3:14pm EST: Well - whadayaknow - here we are at the 165% fib line:

If I see some weakness or divergence in the force (i.e. the Zero) I might actually grab a put or two. But I am not in the habit of stepping in front of trains. So, let’s see what happens here. If the zigzag started at 69.40 then we could bust to 73.75 easily. Waiting for instructions.
UPDATE 3:56pm EST: Boy, everyone is running for the exits now:

The last 30 minutes have been ugly for the bulls - mmwwuuuhaaahaaaa!!! Well, if you shorted this one at the peak - kudos to you. I’m still waiting for Godot (minor 4) - this spikes was merely a small degree correction. Maybe that’s the best we’ll get.

hefeiddd

Mexed MissagesMarch 4th, 2009 1:44 pm Intraday Update, zero 139 Comments

UPDATE 1:39pm EST: Nice little divergence in trajectory happening:

My book of evil market curses tells me that there is something iffy on Wall Street. Our intrepid XLF continues its trajectory down while the Spiders pretend to rally up. My line in the sand stands (highlighted in yellow).
BTW, attention Zero-Mart shoppers. The Zero stream now includes the Zero Lite on the right side of the chart - in isle 19.
Shop smart - shop Zero-Mart

Best ing B-movie EVER!
Klatu Verata Ne^%$@(*!
UPDATE 2:17pm EST: Okay, let’s get serious. We might have ourselves a running flat at hand here:

As I’m typing this we are breaching that line in the sand. The maximum retracement allowed for a flat is 165% of wave A, which would get us to roughly 72.60 on the SPY. The SPX looks a bit different - more like a regular flat.
Of course there’s another way of counting this in that the spike down was the bottom of 3 of (5) and that we’re now starting 4 of (5). Well, we’ll know pretty soon if we breach that 2nd line I marked on the chart.
I’m still not very excited - don’t feel like trying my luck on those little gyrations. But maybe that’s what we’ll get for Minor 4 - just some slow grinding up. Which reminds me to schedule an afternoon with Candy down at the Korean massage parlor.

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W-X-YMarch 4th, 2009 12:12 pm Intraday Update 127 Comments

UPDATE 12:08am EST: I was just having breakfast and checked the Zero chart with my iPhone. Had to jump up and run over here to share this:

I usually don’t count small degree waves but this looks like a w-x-y count to me - the w and y are both a-b-c zigzags. This is known as a combination or a double in EWT and is nothing but a more complex consolidation pattern. We are outside the channel I drew and this is an inflection point IMO. There’s a possibility this was just another small degree consolidation and we continue our slide downward. FYI - this is too small to be Minor 4 of (5).
UPDATE 12:43pm EST: Someone mentioned that a lot of action seems to happen when I walk out to have breakfast. True, but I’m sick of snarfing down my first meal in front of a monitor - LOL

Anyway, right after I so proudly announced that shiny EWT consolidation pattern the tape started to revert a little. So, here’s a good line in the sand that might help us gauge the direction this will take. If we breach this little resistance line we most likely pop a lot higher. We are now officially outside that channel I drew, so your guess is as good as mine. Frankly, I’m still waiting for a large pop to dip into puts again. This is way too quiet for me.

XLF ChannelMarch 4th, 2009 10:57 am Intraday Update 104 Comments

UPDATE 10:53am EST: I find this XLF channel very interesting:

The early morning spike was an obvious stop sweep courtesy by the MMs. Back in the channel we go. The way I see it - as long as we stay inside these boundaries sell the rips and buy the dips. Just put your stop 10 cents above/below - very easy to manage. Don’t grab it right now as it’s smack in the middle of this thing.

Breach Attempt 2.0March 4th, 2009 9:44 am Intraday Update 99 Comments

UPDATE 9:41am EST: 250 comments over night - you guys are animals!

That’s a nice channel breach on the Spiders. Could be for real - I expect a little re-test maybe and then we’ll either go gang busters or it falls apart like my wife’s soufflé. I for one would appreciate some upside for a chnage - player needs a rip.
UPDATE 10:32am EST: Well, that didn’t last very long - we are below VWAP on the ES and the YM. NQ seems to be leading today again - keep an eye on that. The Yen tried to make a run for it and got swatted down again. Don’t write the bulls off just yet however - we have been in the 890 - 710 region for 12 trading hours now and unless we breach this level soon this might be accepted as a temporary market bottom.
New poll for Zero subscribers - please vote.

Zero Wrap UpMarch 3rd, 2009 4:36 pm zero 268 Comments

Well, today was an ‘interesting’ day - unfortunately we really didn’t make much progress in the price department:

Zero continued to point down as we were making the daily lows. Then it started pointing up on the 4th hourly candle - again indicating to us that bearish momentum was waning. Eventually we started seeing a 2.0 positive signal as well as a long ETA. Unfortunately right at the beginning of the next candle the tape turned on a dime, something the hourly version of the Zero has a hard time handling. It did throw a short ETA relatively quickly however, getting me out around break/even and back into a short contract.

Today’s action is a good example of how to leverage the Zero Lite running on a 5 minute chart. As you can see it gave us excellent signals all day, including a juicy divergence that announced the impending whipsaw (marked on the chart). For the rats among you who voted that they didn’t understand the Zero Lite - this is what I’m talking about. You can basically watch the momentum diverge which a few minutes later is reflected in price action. We closed in neutral territory, but below 700 - a moral strike against the bulls.
Hope these little reviews help you guys understand this indicator better. Momentum does not lie and I think a combo of the Zero + Zero Lite might be a way to better evaluate entries/exits. I’ll post another poll later today.
Quote of the day: “Even the Evil ones have their cross to bear. — Steve”

hefeiddd

Idiots GaloreMarch 3rd, 2009 2:37 pm Intraday Update 178 Comments

UPDATE 2:31pm EST: Some guy (anonymous coward) called me an idiot because of my short squeeze picks:

what an idiot! The shortsqueeze website gives you data from 15 days or more than that. Usually NASDAQ releases that data every 15 days. It is not current.

Of course lovely Keirsten had it right, as usual:

Read again on their web site
“Members receive short data 1 - 3 days before NASDAQ’s publication release date”

Guess what, pal - I’m a member and those screen grabs I posted are as up to date as it gets.
What a self-entitled asshat… comes here to freeload, never contributes and then calls the host names.
FYI - abusive comments like that not only get your user id blocked but also your IP address - ooopss…
UPDATE 2:42pm EST: Nice rally we got ourselves here. Here’s what I see:

Either this is the beginning of 4 of (5) or it’s a lower degree consolidation before we drop further. Really tough to say right here. I’d play it cautiously either way. Only time I will dip into puts with any fervor will be around 760.
UPDATE 3:16pm EST: Does anyone know a good hosting company?

Short SqueeziesMarch 3rd, 2009 12:55 pm Intraday Update, zero 187 Comments

UPDATE 12:48pm EST: I’ve looked around and came up with two charts I like:

Mmmmh - juicy…


VRTX - that one is stretched to the max. Could be a good long entry.


COCO - my 2nd favorite - not as squeezed.
There are a lot more but I have certain requirements in regards to volume and minimum price of the underlying. Then I’ve sifted out anything that has highway robbers price their options.
Thoughts appreciated.
UPDATE 1:01pm EST: Standard_and_poor posted a few good longs (not short squeezed but still look good to me). I like the following: RIMM, AAPL, DRYS.
UPDATE 1:16pm EST: Our lovely Keirsten posted a few symbols which I would categorize under ‘completely shot to hell’. My favorites: CEG, D, ED, GID, RTN.
Looking at the latest poll I see a mixed response - better to keep the Lite off the Zero chart for now. I don’t want to confuse you guys.
UPDATE 1:32pm EST: Someone mentioned their fervent wish for PALM to turn over and die:

That looks like some solid support here.

Check out how many days it would take to cover all the shorts. I think once this gets going it’ll be nasty.
BTW, for all you verbose rats - I’m not saying that we’ll rally right now. But when the market drops like this I’m in the habit of shopping for long candidates. Just picking my future victims- what I’m posting here is mostly for 4 of (5) of {1} and eventually 1 of (1) of {2}.

hefeiddd

Ominous ThoughtMarch 3rd, 2009 10:32 am Intraday Update, Market News, Trading 249 Comments

UPDATE 10:21am EST: I am looking at the tape and am frankly surprised by the continued lack of buying - all we get to see are token swings to sweep stops and engender trading. We did see some traces of bullishness overnight, but that was quickly remedied in the first thiry minutes of trading. If we don’t see buyers step in soon we might actually embark on a wave count similar to what I labeled in blue below:

As you can imagine, this would basically be tantamount to a impending capitulation and I would then have to revise the target for the bottom of (5) a lot further down (in the 500s possibly).
Again, I’m not saying that this will happen - but if we drop below 700 on the SPX today there is a distinct change that something like this may play out. The cards thus far remain to be stacked against the bulls.
I have nothing much to add at this point. In order for me to jump back in I need to see a major rally first as I never ever sell the tape on the way down. Actually, I’m going to start looking for short squeezed candidates - when the time comes I want to have at least five good ones to go.
UPDATE 10:37am EST: Remember a few months back when I offered a visualization how much $1 Trillion is? Well, let’s review that math real quick:

A 1-Dollar bill is .0043 inches thick. 1 million stacked dollar bills is .067 miles, less than a tenth of a mile. 1 trillion dollar bills would be the equivalent of eight and a half planet earths stacked on top of each other.
For our math challenged rats, let’s do this another way:
One thousand times one million = one billion (millard in Europe, but I don’t want to confuse you).
One thousand times one billion = one trillion
In other words. One million times one million = one trillion.
A one trillion dollar stack of 1-Dollar bills would be one million times higher than the million dollar stack -or- picture it this way: It would take one million stacks of one million dollar bills to equal one trillion dollars.
If the million dollar stack is indeed .067 miles high, then the trillion dollar stack would be 67,000 miles high, which is fairly near to one third the distance from the Earth to the moon.

Some of you might know that the total amount of CDS written amounts to roughly $600 trillion - yes, you read that correctly. Now, if a $1 trillion stack of 1-Dollar bills is 67,000 miles high, then a stack of $600 trillion 1-Dollar bills would reach a height of  40,2 million miles.
BTW, at its closest point in its orbit around the sun, Mars is only 35 million miles away from earth. So think about this for a second - if this was real money (which it isn’t), you basically you could stack 1-Dollar bills from your house all the way to Mars and would still have a load of cash left over. I think it’s safe to say that there is not enough paper and ink on the planet to even print the equivalent of $600 trillion in 100-Dollar bills.
So you tell me:

• How on earth (literally) could something like this be allowed to happen?
• Where were our regulatory agencies?
• Are they going to succeed in ‘fixing the problem’ by bailing out those companies with tax payer funds?
• Are we going to see 4000 on the Dow or less?
• Are you angry yet?

I rest my case.
UPDATE 11:06am EST: As you are probably aware - we are now below 700 on the SPX.
UPDATE 12:09pm EST: New poll - please vote!

Don’t Panic!March 2nd, 2009 9:48 pm Market Forecasts, Trade, zero 170 Comments

Boy, you guys are spanking your mental masturbation gland like a mad monkeys tonight. Will we go up tomorrow…. will we crash… T.K. is short…. but futures are up… I should have scaled out… if we rally - how far are are we going to go…. jeezzz…
Seriously - if you are stressing tonight then you are far too overextended at this late stage of the wave cycle. That is why I scaled out and didn’t hold overnight. Am I going to miss out on a huge drop tomorrow? Maybe. But I’m also not going to get hit by a monster snap back rally - whenever it occurs.
I am NOT saying that you should have not taken those short trades. What I am saying is that if you are sweating tonight then you let greed dictate your actions this afternoon and you are are outside your risk tolerance and are most likely violating your trading system. In which case don’t come crying to Mole - I don’t want to see a single complaint - and I mean that.

I’ll be super quick tonight as Mrs. Evil is waiting with dinner and I might incur the wrath of her pin roller if I let it get cold. As you can see from the chart above I am leaving room for a snap back at this point. But although we are massively oversold it doesn’t mean we cannot keep dropping from here. As a matter of fact - capitulations most often occur in heavily oversold conditions. If we continue downward the wave count changes a tiny bit. I would target either 680 or more likely 660, as that is a strong prior diagonal support line.
If we bounce up tomorrow you guys know the drill - I’m shooting for the 760 territory.

Here’s a zoomed out chart that shows my diagonal support line. It’s been touched seven times before, so i expect it to be observed, at least temporarily.

Here’s something I was working on during the afternoon. I call it Zero Lite and it runs on a 5min chart. It’s a bit wiggly but I want you guys to just look at it and let me know what you think. It appears to me that it depicts intra-day trend changes quite nicely, although there is some increased noise of course. I’ve smoothed it by a factor of 3 for starters - maybe it needs more or maybe it could do with less. Any input/thoughts are welcome.
Got to run - see you guys tomorrow morning bright eyed and rat tailed

hefeiddd

March 2nd, 2009 4:24 pm Update, zero 69 Comments

Here’s today’s Zero wrap up chart:

What can I say - beautiful Zero signals today. Despite me bitching and being conservative it pointed straight down all day. And although the signal line touched the zero mark a few times it never managed to breach it. Great day for subscribers and also a good example of how this trend indicator/barometer can support your wave count (or other technical analysis). As soon as I saw the signal expand in early trading I knew we’d touch 704 today. Also note that it closed pointing down, which supports Erik’s call for further downside.
I might pop in tonight for a quick update.
Cheers!
Mole
Not For A Lack Of TryingMarch 2nd, 2009 3:14 pm Intraday Update 179 Comments

UPDATE 3:11pm EST: It’s getting close to the bell and the bulls have been trying to push the tape above 704 but thus far their efforts have failed miserably. The force is strong with the bears today:

I find this chart fascinating. Note how the inverse correlation was holding up nicely and then suddenly the ES started to drop along with the Yen. Interesting to say the least.
Erik just got his breach of 7.17 in the XLF - so, we could be looking at a late afternoon capitulation.
BTW, I find today’s ad banners very appropriate, don’t you guys? Ahem…
UPDATE 3:35pm EST: The last half hour mark passed and the PPT appears to be MIA.

Let’s take a quick look at the NDX - it always was/is Berk’s favorite. I’m looking at last month’s tape and if you squint and step back to the line of scrimmage then you can almost see that channel I painted above. It seems we bounced off of the lower boundary today. We might keep skating that one downhill but once we see a rally attempt I would play it conservative until we breach that upper boundary, which is a bit soft, I admit but might be a level where institutional buyers step in.

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hefeiddd

For ErikMarch 2nd, 2009 12:53 pm Intraday Update 253 Comments

UPDATE 12:41pm EST: I promised Erik to put up a chart about the 650 level I mentioned in one of my comments. This one is for you buddy:

I never cease to marvel at how Fibonacci levels are key to projecting possible targets in the wave count. Here’s what I uncovered yesterday afternoon during my weekend charting session: As you can see the Friday close brought 3 of (5) to the length of 1 of (5). My reasoning was that we would either bounce here and see a truncation or continue down and meet at least the 702-704 level.
Why 702 - 704?
Because it happens to represent a 123.6% multiple of 1 of (5). The next fib is 680 and the one after than is 650. What is interesting about that is that this is Erik’s range and at this stage I see two possibilities:

• We bounce right here and touch 760 - 770 and then descend into 650.

• We continue down and that of course would also either mean two things:
  We are completing 3 of (5) at either 680 or 650ish. Then we rally and we’ll see a bottom of (5) around the 600 area. Unless of course this move was too rapid and 5 of (5) will be a truncation.
  We are actually already in 5 of (5) and this is the end of Primary wave {1} of Cycle wave c. Meaning we rally hard and that soon.

This is why I’m a bit cautious and took profits earlier this morning. But if you’re aggressive and are only exposed with play money there is a possibility for further downside.
UPDATE 1:05pm EST: BTW, this happens to be my 400th post! Due to the ongoing recession I can only afford one single confetti and a digital audio recording of a cork popping out of a bottle of Cristal.

Paxoramus asked what I think about the ISEE readings right now. Well, they are very bearish on the Indices & EFT column, indicating that we’ll either get a complete capitulation here or that a temporary low is in. I am still trying to make sense out of the bullish readings in equities. Perhaps that also confirms the current Zero reading.

Ding Ding Ding Dinnggg!March 2nd, 2009 12:01 pm Intraday Update 72 Comments

UPDATE 12:00pm EST: I return from breakfast and we are close to the 704 target - nice

This is what I’m going to do: As we are touching 704 or perhaps hover above it I’m going to wait for the market to accept these levels and hold. Maybe let things settle down for an hour or so. Erik asked me if 650 is a possibility and I think we’ll get there, yes. However, we might not get there in this Minor wave and would have to wait for Minor 5 of (5). If we whipsaw around this level I might actually sell some OTM puts or get into a bull put spread, a more conservative trade.
UPDATE 12:20pm EST: Looks like the market is accepting this price level. I think we might still see 704 on the SPX but it’s not a must. I’m going to watch this for a bit longer though - not just ready to go long here.

704 Or BustMarch 2nd, 2009 10:21 am Intraday Update 136 Comments

UPDATE 10:16am EST: Wasn’t that a nice open? At this point it seems we are heading towards 704 to complete 3 of (5).

However, I decided to take profits at the open as I see 703 as a possibility but not necessity. The risk/benefit ratio favored taking profits now and waiting for new instructions. If this was the end of {v} of 3 then we might get a rally into 4, which might be violent and fast - best not to overstay our welcome down here.
UPDATE 10:34am EST: Here’s a pretty exciting chart:

Gold has been retesting its prior resistance line (now support) but as of this writing remains in the red for the day. Remember that GC - the big pit traded contract - closes at 1:30pm EST, so this is the middle of the day for our favorite precious metal. The fact that Gold appears to be unable to exploit a major drop in equities again confirms my position (mental and actual) that there is a good probability 1007.5 was the peak for this B wave.
Well, my SLV puts are loving it - hope you guys got a piece of that action. If you’re still out I suggest you use rips to start accumulating pertinent July put/short positions. I do see a short term bounce in the cards for both metals, so do use the rips and don’t chase.

hefeiddd

March 1st, 2009 7:47 pm Market Forecasts 186 Comments

The bad news just kept rolling in over the weekend. One of the more salient reports was that Warren Buffett’s Berkshire Hathaway posted a 96% drop in fourth quarter net income.

Berkshire shares have fallen 44 percent in the past year as the value of the firm’s top equity holdings dropped and losses increased on the derivatives. Nineteen of the top 20 stocks in Berkshire’s U.S. portfolio declined last year.

However, the real kicker for me was Tom Russo’s response to the news:

“You can call it the worst year ever if you want, but the fact is, the results compared to the 30 to 50 percent declines in the world stock markets show just how defensive Berkshire is,” said Tom Russo, a partner at Gardner Russo & Gardner, whose largest holding is Berkshire shares. “In the face of the maelstrom, he did alright.”

Pay attention investors - we now got ourselves a new Gold standard! Seems like losing money on 19 out of 20 positions is considered ‘doing alright’ these days. Boy, I can’t wait putting my money into one of those funds. Seriously now, I can guarantee you that I can do a better job throwing darts at a finviz stock map….. blindfolded…..with my teeth and two arms tied behind my back.
Congratulation rats - we just beat Oracle of Omaha at his game. If you traded along during the past quarter you have been on the opposite sides of Buffett’s trades - and thus have profited while many of our famous ‘market wizards’ lost a substantial portion of their assets.

I think this picture illustrates how easy it’s been for us bears in the past year. Like swarms of juicy pink salmon investors kept swimming upriver - valiantly defying the raging currents of financial markets and macro economics. All we bears really had to do was to catch them during their little leaps, at whichever degree of the wave cycle we preferred to play. Some very smart bears simply positioned themselves right around the 2007 peak and rode this thing all the way to the bottom. They ignored all the lamenting, all the misleading news, all the bailout attempts, and all those bottom calls by our mouth breathing friends over on CNBC (excluding Mr. Santelli of course). Those bears are now resting comfortably in their winter lairs - fat and happy, waiting for the next salmon season to arrive.
Anyway, if I was trading the news I would be shorting the index futures right now. Fortunately I never trade the news (actually that is not completely true - I often fade them) and the growing amount of negative sentiment is actually a clear warning sign that this year’s salmon season is drawing to an end. We shouldn’t complain - it’s been profitable and (often) fun, but we don’t want to overstay our welcome.

Before we get to the forecast for next week I would like to take a step back and review where we are in the larger degree wave count. The circle on the image above marks our current position in this secular bear market: We are in Intermediate (5) of Primary {1} of Cycle wave c. More precisely we are in Minor 3 of Intermediate (5), thus there are only two more Minor waves separating us from the conclusion of the larger degree Primary wave {1}.
Minor waves are traditionally measured in days to weeks, so we should take note and mentally prepare for what’s next, which is a multi-month consolidation that will give our bullish colleagues ample ammunition to declare this bear market dead. Of course nothing could be further from the truth - this cycle of the bear market is just getting warmed up. As a matter of fact what comes after the looming Primary wave {2} is of course Primary wave {3}, and if you have learned anything here in the past few months, then it is that bear market third waves are the nastiest of them all. If you think that 3 of (3) of {1} was bad, then prepare yourself for 3 of (3) of {3} - it’ll be a beauty. But that’s probably a year or so away, so back to the present.

On a more short term basis we are now facing two scenarios:
Orange: We are completing Minute {v} of Minor 3 of Intermediate (5). A good target for the bottom of {v} is the 703 region, as this would bring Minor 3 to a 123.6% Fibonacci multiple of Minor 1. 700 is also a psychological level that I expect to be defended. The target for Minor 4 for this scenario would be the 765 area.
Blue: We reached near completion of Minute {v} of Minor 3 of Intermediate (5) on Friday and are now dropping a few more points and then ascend into Minor 4. The target for the Minor 4 in this scenario is the 790 level.
Now take a quick note of the green vertical lines I’ve drawn. It just so happens that at the Friday close Minor 3 was almost precisely the length of Minor 1 of (5). There are important implications here in that a third in a motive wave can never be the shortest. Actually in equities it happens to be most often the longest wave, but that is not always the case. The big EWT rule is that a third wave is never the shortest among 1, 3, or 5 - meaning that if 1 is longer than or equal to 3, then 5 must be shorter than 3.
So, knowing that we also know what to expect should we embark on the blue scenario over the coming week. If Minor 3 of (5) ended on Friday then we should expect a rather short 5 of (5). it is even possible that we might see some sort of truncation and that 5 of (5) may not even reach its 680 target and complete near or slightly below the Friday low.
We won’t have to wait long for clarification however - if we drop further then we’ll probably see the 700 teens - otherwise we’ll push towards 790.

The CBOE Put/Call Ratio seems to be supporting the orange scenario as there is plenty of upside potential (downside potential for equities) remaining.

The NYSE McClellan oscillator, a medium term measure, has snapped back after last week’s extreme lows but managed to actually hold up a bit on Thursday and Friday, despite the fact that the SPX broke the November 21 low. There are two ways at looking at this - either we’ve got ourselves a bullish divergence, leading into the blue scenario. Or there is a bit more bottom potential left, thus leading into the orange scenario. Pick your poison

The NYSE Bullish Percent index also seems to have faded the new lows in all indices, and remains above the 20 mark, which by traditional measures is bearish and considered oversold territory. But in the context of what we’ve seen in the past six months I believe that there is ample more downside potential supporting a final drop into 5 of (5) of {1}.

The U.S. Dollar has remained on course and is getting close to breaching its November highs, just as promised. My count indicates that we are in a 3 of (3) wave, thus I expect us to reach 90 and higher.

The Yen on the other hand has been a glutton for punishment while skating down its 2.0 BB like Tony Hawk. We are again pushing up in early Sunday night trading (relative to the U.S. West Coast) but it did that last weekend and then got killed again all week. Thus, I do not have any estimation as to when it will truly bounce back and retrace some of the lost territory. What I do know however is that when it does it’ll be massive - that’s a trade I’d love to be in. It might be worthwhile to take out a small speculative position in FXY as I frankly don’t know how much further this thing can stretch. However, as a trend trader I also know that once a trend is in progress it can last a lot longer than anyone expects, which trend traders happily can attest to. So, be cautious and don’t ‘go all in’ here.

Last but not least - Gold is making a tiny bit of a come back which I see as a good opportunity to reload on puts or pertinent short positions. I’m actually sitting on Silver, which has been treating me nicely last week. If we get a final drop into 5 of (5) in equities it’s not unreasonable to assume that Gold might retrace some. Again, the line in the sand for me is the prior high of 1007.5 in ZG - should we breach that I’d probably cover and wait for further instructions.
However, judging by last week’s tape it’s possible that any further weakness in equities will only partially be exploited by Gold, in that it might merely halt its decline or go sideways. The probabilities in my mind are now clearly on the bearish side. But, as always, when it comes to precious metal futures, I am prepared to expect to unexpected.
That’s it folks - I see you tomorrow morning on the side. Next week should be interesting - that much I can promise.
Cheers,
Mole

hefeiddd

UPDATE 8:28pm EST: I almost forgot today’s Zero chart:

Nice clean signals today - Zero kept us from going long even through those nasty long counter whips (as expressed by those long wicks in the first six candles). Gave us clean signal to the downside once the slide continued. I also liked the Mole’s divergence during this bear flag - as you can see each candle was accompanied by a degrading white center line (the dotted one). The bubble expanded into the close - a expected, but it was clearly pointing down. Good day again for Zero subscribers.

Mole
Battle Of The TitansFebruary 27th, 2009 2:22 pm Intraday Update 300 Comments

UPDATE 2:20am EST: Well, we’ve been seeing higher highs and higher lows since the open - we filled the gap and have bounced back since then. This chart looks interesting:

While the Spiders are painting what could be interpreted as a bear flag the XLF’s channel is pointing down. Which side will win? I think we’ll know soon.
BTW, yes - this is a chapter of my rare edition book of evil market sorcery.
UPDATE 2:55 pm EST: LOL - we’re really not going anywhere today - feels like I’m spending the day at Six Flags. I’m going to break early for lunch and then kick back - don’t feel like watching this whipsaw much longer.
If you don’t hear from me for the rest of today don’t file an APB - I’m done for the week and feel like breaking early for the weekend. And yeah, I’m holding my puts into the weekend. As I said - it’s play money and there’s a good chance they’ll be worthless by Monday. But I had a good morning open and thus I permit myself a [small] roll of the dice - we’re not talking big money.
Good show again this week, rats! I’ll be in touch on Sunday with my notorious weekend forecast.
P.S.: As I’m tying this we’re actually in the plus on the NDX and the RUT. I told you guys today would be interesting.

Daily FibsFebruary 27th, 2009 10:42 am Intraday Update, Trade 223 Comments

UPDATE 10:40am EST: We busted a little higher and retested the prior support 741.02 line, just as promised.

As you know I reloaded around 742 and am prepared to hold those suckers even if we close that gap, which also happens to be the 38.2% fib line. Coincidence? I think not.
UPDATE 12:09pm EST: Nice little zigzag you’ve got there!

At this point there’s a good chance the gap will be filled.
UPDATE 12:48pm EST: It seems the NQ is leading the pack again today folks - keep an eye on it if you want to get a feel for where the tape is heading.
UPDATE 1:18pm EST: Bulls are fighting like mad to hold the old 740 line after this morning’s breach:

Check out our new channel - I think those are good inflection points. If scrape the upper boundary again the bulls are going to make a run to fill the gap. Pretty good chance of that happening actually - I won’t get nervious unless we bust above it with force.
UPDATE 1:33pm EST: WOW - did you guys just see that counter candle on the ES and NQ? PPT is definitely attempting to hold this level.
UPDATE 1:36pm EST: NICE - we’ve got ourselves a huge battle here Yen just breached R1 pivot - on retest now. If it holds and busts higher it’ll get ugly for equities. This is make or break for the bulls - I hope it’s break.
UPDATE 2:00pm EST: I guess they can do this all day - we’re not going anywhere fast. I think we’ll fill the gap, which will make the mouth breathers happy. If you haven’t reloaded yet I’d probably wait until we do. Buyers are stepping in hard and thus far I think they’ve got the upper hand.

650 Or BustFebruary 27th, 2009 9:21 am Intraday Update 125 Comments

UPDATE 9:19am EST: I just got up and checked my ES futures chart, which at the time of me writing this is trading at 734. Even if you factor in the PREM I expect the SPX to open beneath its November 21 low of 741.02.
UPDATE 9:36pm EST: November lows have been breached. Get ready to take partial profits as I expect us to push into Minor 4 of (5) in the near future - could be today, could be tomorrow but it’s good to take some of it off the table.

The gates of hell are open for business. Hey, mouth breathers - remember how I promised you on September 18 that my revenge would be cruel and merciless? I was NOT kidding.
YOU LOSE!
UPDATE 9:45am EST: Okay, you guys knew this one was coming:

It’s going to get extra evil in the lair today. Now seriously - time to post a chart to keep you rats happy:

This officially takes out that damn triangle scenario - RIP. Yes yes - we knew that much but in EWT this is the official confirmation. I expect us to retest the 741 level once more before we complete {v} of 3 of (5).
UPDATE 10:00am EST: What really excited me this morning actually is that Silver is staying put:

Gold has retraced a tiny bit but is also not running to breach 1000. This confirms to me that precious metals have topped. I have not lost a dime on those Silver puts this morning - sweet.
UPDATE 10:08am EST: I just reloaded a little bit on the 741 retest. Puts were cheap and after this morning’s boost to my portfolio this is just play money

hefeiddd

Trade Your SystemFebruary 26th, 2009 3:34 pm Intraday Update, Trade 273 Comments

UPDATE 3:29pm EST: This morning I pulled up OptionMonster.com and saw the following posts:

Folks, this is why most traders lose in the market - they rely on news or analysis by people who either don’t have a clue or have their own agenda. Had I been going long today after reading this I’d be really feeling it - luckily I stuck to my charts
This is something I need you to drill into your little skulls, rats - next time you see a slew of headlines like this - as yourself - what the hell do these guys know? Exactly - nothing - which is why they keep finding themselves on the losing end of the trading stick.
UPDATE 5:00pm EST: I still owe you guys the Zero wrap up:

Zero liked the early morning rally and if you wanted to go long you would have gotten in right at the green square since it’s a VTA. After we turned on a dime the first exit dot I saw was on the 5th candle - getting us out at break/even or at a small loss. After that signal went very flat again - this is something that happened during the last week and first I was not sure what to make of it. But I think I have a theory.
When the Zero sees a lack of participation (see the mole bubble) it errs on the safe side when it comes to entry signals. On top of that it also attempts to keep you out of whipsaw moves, so the threshold for trade alerts goes up. This is has served us well in the past but sometimes it seems we miss out on drops that feed from lack of participation - today was such a day.
Beyond just today’s tape this however might give us a hint as to the state of the market. We are nearing the final stages of this Primary {1} wave and it seems that many of the bulls have stepped to the sidelines. Who can blame them? How often would you come back for another helping of ass whopping? You need sellers to feed a strong negative Zero signal (i.e. participation) and what we’re seeing lately is pretty weak. The strongest signal above is actually on the buying side. That in itself is a warning sign - I do expect the November 21 lows to be broken on the SPX but I also am going to play it very light until we see the end of this Primary wave. For once institutional buyers embark on their Primary 2 shopping spree I expect to see some nasty candles to the upside.
Cheers,
Mole

Down And DownFebruary 26th, 2009 3:20 pm Intraday Update 24 Comments

UPDATE 3:14pm EST: Wow, the bulls seem to have capitulated after their early morning exuberance:

It seems that we have completed (iv) and are now inside of (v) unless this is already Minor 4 in which case this could be the b wave, which would be followed by a push to the upside. Again, this is only theoretical and I just wanted to throw it out for you rats.

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hefeiddd

Channels & LinesFebruary 26th, 2009 1:37 pm Intraday Update 133 Comments

UPDATE 1:32pm EST: I just got back and was a bit surprised to find such a violent retracement. Would have expected to see 790 before I see  760 on the ES futures.

Maybe this chart will tickle your fancy - it seems that we are in a reasonable up channel and a breach of the highlighted area (760) will probably indicate that we push downward. If start pushing back up from here and buyers step up their game once more I wouldn’t be surprised to see 790. One of those days where it’s tough to make predictions - you have to draw your lines in the sand and position yourself in spots where your pain threshold is limited. Because if you are exposed you will be tested on it - you can take to the bank
Also note the upper diagonal which seemed to stop the bulls in their tracks this morning. I think this also provides us with an upper inflection point so to speak.

Equality 3.0February 26th, 2009 11:00 am Intraday Update 182 Comments

UPDATE 11:00am EST: I’m going to be in and out today as I have personal business to attend to. Market gave us bears a nasty open and it’s been up up and away since then.

We seem to run into a wall around 778 but there is a real chance we’ll make a push for 790 today which would represent equality for a c-wave. At which point I will load up on puts again - would you expect any less?
In all seriousness though - the bulls are gaining confidence and if we breach 800 and push towards 810 or above I would probably run for the hills as the wave count would become soft at best. That’s pretty much the plan for now - there’s a battle going on to keep the tape below 778 but buyers are stepping in and I keep seeing higher highs and higher lows.

The XLF is making a hard push upwards and 8.75/8.8 might be the spot where it would correlate with the SPX at 790ish. I think that could be as good as any to dip into some puts - if this line is breached we might see more upside in averages as well.

Your Tax Dollars At WorkFebruary 25th, 2009 6:45 pm Market News 291 Comments

Here’s a public service announcement. This is how much you personally are donating to rich banksters:

Makes me feel all warm and fuzzy inside - I just couldn’t stand the thought of wealthy CEOs and Wall Street millionaires flying coach. Have got to do my part. Give me a second while I find that extra large bottle of lubricant I bought just for the occasion.
Now seriously, if those guys think that I’ll be paying my tax Dollars to bail out those corrupt bastards they’ve got another thing coming. Give it two years max and I’m going to be operating out of a country that commits their citizen’s tax contributions to more worthy causes - like for example: education, health care, science, infrastructure, retirement, social services, you get my drift. Something that actually supports and maybe even raises the living standard of all paying participants in the years to come. Not to pay for the slip ups and outright fraud committed by sleazy con artists in expensive suits posing as financial experts.
This country is broken and the pirates are running off with the loot. For some reason we are running after them begging to take our last pennies and then to throw us off a cliff.
I think I’m going to be sick.
UPDATE 12:04am EST: Read and weep: 4th quarter 2009 – Beginning of Phase 5 of the global systemic crisis: phase of global geopolitical dislocation.

EqualityFebruary 25th, 2009 3:19 pm Intraday Update, zero 212 Comments

UPDATE 3:19pm EST: I guess it’s the blue pill after all:

Equality will be reached around 786-787 - not too far away from 795. I’m already taking it up the ass now, so might as well sweat it out.
UPDATE 3:34pm EST: Disclosure: I just added some March SPY puts - I like the air up here. Yeah, we probably bust a bit higher into the close but you never know.
UPDATE 3:53pm EST: This is such an excellent post by Karl - you should read it. In other news - whatever Obama is doing it seems to be working fine on my new March puts. T minus 5 to NYSE bell - players are going to show their cards now.
UPDATE Closing Bell: I have to say I’m really proud of myself today. Those March puts I added at the top plus Silver actually lifted me over the top and I ended positive. Good day today.

Bit of a tough day for the Zero but it showed us the momentum swinging - I hope it was as helpful to you rats as it was to me.
I might post later tonight with a super quick update. Until my rat minions!

hefeiddd

Channels & LinesFebruary 26th, 2009 1:37 pm Intraday Update 133 Comments

UPDATE 1:32pm EST: I just got back and was a bit surprised to find such a violent retracement. Would have expected to see 790 before I see  760 on the ES futures.

Maybe this chart will tickle your fancy - it seems that we are in a reasonable up channel and a breach of the highlighted area (760) will probably indicate that we push downward. If start pushing back up from here and buyers step up their game once more I wouldn’t be surprised to see 790. One of those days where it’s tough to make predictions - you have to draw your lines in the sand and position yourself in spots where your pain threshold is limited. Because if you are exposed you will be tested on it - you can take to the bank
Also note the upper diagonal which seemed to stop the bulls in their tracks this morning. I think this also provides us with an upper inflection point so to speak.

Equality 3.0February 26th, 2009 11:00 am Intraday Update 182 Comments

UPDATE 11:00am EST: I’m going to be in and out today as I have personal business to attend to. Market gave us bears a nasty open and it’s been up up and away since then.

We seem to run into a wall around 778 but there is a real chance we’ll make a push for 790 today which would represent equality for a c-wave. At which point I will load up on puts again - would you expect any less?
In all seriousness though - the bulls are gaining confidence and if we breach 800 and push towards 810 or above I would probably run for the hills as the wave count would become soft at best. That’s pretty much the plan for now - there’s a battle going on to keep the tape below 778 but buyers are stepping in and I keep seeing higher highs and higher lows.

The XLF is making a hard push upwards and 8.75/8.8 might be the spot where it would correlate with the SPX at 790ish. I think that could be as good as any to dip into some puts - if this line is breached we might see more upside in averages as well.

Your Tax Dollars At WorkFebruary 25th, 2009 6:45 pm Market News 291 Comments

Here’s a public service announcement. This is how much you personally are donating to rich banksters:

Makes me feel all warm and fuzzy inside - I just couldn’t stand the thought of wealthy CEOs and Wall Street millionaires flying coach. Have got to do my part. Give me a second while I find that extra large bottle of lubricant I bought just for the occasion.
Now seriously, if those guys think that I’ll be paying my tax Dollars to bail out those corrupt bastards they’ve got another thing coming. Give it two years max and I’m going to be operating out of a country that commits their citizen’s tax contributions to more worthy causes - like for example: education, health care, science, infrastructure, retirement, social services, you get my drift. Something that actually supports and maybe even raises the living standard of all paying participants in the years to come. Not to pay for the slip ups and outright fraud committed by sleazy con artists in expensive suits posing as financial experts.
This country is broken and the pirates are running off with the loot. For some reason we are running after them begging to take our last pennies and then to throw us off a cliff.
I think I’m going to be sick.
UPDATE 12:04am EST: Read and weep: Equality

February 25th, 2009 3:19 pm Intraday Update, zero 212 Comments

UPDATE 3:19pm EST: I guess it’s the blue pill after all:

Equality will be reached around 786-787 - not too far away from 795. I’m already taking it up the ass now, so might as well sweat it out.
UPDATE 3:34pm EST: Disclosure: I just added some March SPY puts - I like the air up here. Yeah, we probably bust a bit higher into the close but you never know.
UPDATE 3:53pm by Karl - you should read it. In other news - whatever Obama is doing it seems to be working fine on my new March puts. T minus 5 to NYSE bell - players are going to show their cards now.
UPDATE Closing Bell: I have to say I’m really proud of myself today. Those March puts I added at the top plus Silver actually lifted me over the top and I ended positive. Good day today.

Bit of a tough day for the Zero but it showed us the momentum swinging - I hope it was as helpful to you rats as it was to me.
I might post later tonight with a super quick update. Until my rat minions!