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Regarding 'corrupt earnings', you really want to get pissed about the manipulation of earnings?
Read this garbage...(of course, CNBC won't ever tell you this stuff)
http://www.marketwatch.com/story/deception-season-on-wall-street-2010-07-13
Uh oh. Remember, tech leads the market and semi's lead tech (because well, duh! everything tech has a semiconductor in it!)
But, what if things actually aren't so rosy as INTC put it last night?
http://www.cnbc.com/id/38248251
Hey Fish, watch this guy's video from tonight....
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Yeah, that's cool. You pretty much got it. The idea here is to scalp for a few points over a few days, not big homers. But you get the picture. I'm telling you it works very well.
Can you program that to scan for stocks that meet that criteria rather than me everyday having to look at my list one by one?
Back to the 'system' I've been using -- here's what you want to do: open 'freestockcharts.com'
Use three indicators.
1 - set a 14 period moving average on the price
2 - set a 14 period CCI below price
3 - set a 'regression line' from the sidebar.
Now, you have to guess a little here with your settings for the regression line. Basically what you want to do is go back to an obvious begining of a leg up or down. But use at least 2 months or so.
The regression line sets the 'mean' price level of where the stock 'should' be over that timeframe.
The 14 MA is another guide for that with the CCI being used as the visual guide to extremes. When the CCI gets over about 150 or -150 (preferable 200/-200), you go the other way using the 14 period price level as your exit target. What this does is gives you a definite profit target and a very high probability of success because EVERYTHING reverts to the mean.
It's like printing money. Just expect to be upside down from time to time, but know you have to hold out.
As of today, BRCM's target would be about $35.15ish
Oh, don't worry. I've been trading a 'system' I've created for short term trading that's been working really well. First off, INTC ALWAYS does this, and then craps out. Now there is this big belief in the market that it's on the verge of a monster selloff. The reason is the chart setup/wave pattern. However, as usual, you must have a catalyst for that to happen. Tonight on Fast Money, a guy pointed out that this financial reg bill that is about to pass this week forces banks to mark to market all their assets including loans. What this will do is basically destroy lending because they won't lend to iffy borrowers. This week it was shown that almost 70% of all Americans have credit scores under 650. (I think I have that right) So, with no lending, banks will get clobered because most of thier money comes from lending. Plus it will kill the economy because obviously biz needs money. Only big biz is getting the loans. But that screws everyone.
Now look at this chart of BRCM:
(use BRCM as a key to the rest of the $SOX stocks)
Is that the most overbought stock you've ever seen? Geez.
Tops happen when everyone gets all giddy. But the reality is that no one is really giddy other than maybe Cramer. Smart money managers and fund managers don't buy up (or chase) the market running the SPX 100 points in 5 trading days. That's only caused by scared shorts. Short squeezes cause these kinds of moves. INTC reported great numbers, sure. But that's not the real story. The real story is that there has been a huge inventory build on the expectation of a resurgance in the consumer. But that's not happening. So being that INTC has 80% market share in gadgets, of course with a new inventory build you'd get this monster earnings release. But that's the past. Now with big inventories, how is INTC going to come through again like that? It's not. What happened after hours is what's called an extension to wipe out the remainng shorts who are nervous. There might be a bit of an extension in the morning, but now I think is the time to start shorting into this. We'll see!
WOW!!! 3 F-18s just roared over my house! Holy crap! Now that was cool! Probabaly the flyover for the All Star game at Angel Stadium.
Huh?
The only problem with that logic is that the wave pattern suggests we have some major downside. I know the fundamental arguement reasons otherwise and is in line with Doug Kass's valuation low-for-the-year call. But don't ignore the technical makeup.
Although there sure is a boat load of large hedge funds and big names out there talking about this as a monster short setup right here, right now.
So, either they're all right, or there's going to be one mother of a short squeeze.
I'm leaning on the selloff arguement, but I'm not convinced either way. I'll make money either way. But no large bets just yet.
The options will adjust to the new price. The $7s are obviously now $35s. Just do the math based on the old prices. So your 15 calls should now be 3 $35 calls.
Just ride out until op-ex.
Now here's where everything right now is getting very interesting and confusing at the same time. Of course, the talk of the day by EVERYONE is - is this a short term pause before a major plunge? Or, is this a bottom of significance that will lead to much higher prices?
First, read this guy's article on DecisionPoint:
http://www.decisionpoint.com/TAC/ORD.html
I actually subscribe to his letter and he's been pretty damn accurate. I'm posting the public article because I don't want anyone tattling on me for posting the paid one.
That said, many are betting on a monster new low to begin to form after this current rally. Will it? I don't know. The case makes sense other than Kass's fundamental reasoning that suggests unlike 2008 where you had a combination of forced liquidation due to the LEH BK which forced hedge funds to liquidate because LEH was their clearing broker and of course the over-valuation of the time, right now things are actually very positive in the fundamental arena for companies. However, the counter to that is that all of that will change and is changing right now. So, current expectations are not accurate to future earnings.
Considering that EVERYONE expects this major decline and are betting on it, the short squeeze could be monsterous catching many WAY off guard. Now Todd above shows that we should have a MONSTEROUS 4th quarter seasonal move here. To me, that should mean any big downside here could be muted as we've already had a 20% decline in the market - at least in the Russell.
So, we'll see. Trade what you see, not what you feel.
So far today, we had a gap, gap fill, and now looks like a bump and run.
It was funny today on CNBC Kass's comments were the talk of the day (probably because the cheerleaders always want good news) and someone pointed out Kass's record was something like 19 bottom calls and only 1 or 2 right. But I'm wondering if that guy realized that Kass actually nailed 14 of those bottoms within 5%, just not 'the' bottoms.
I've given up long ago trying to time exact bottoms or tops. As long as I'm within 5% or even 10%, I can make a good living on the bigger trades. You just need to have patience and know your reasoning is correct as to why you're getting into the trade. SYNA was a perfect example of being right on the trade, a bit wrong on the timing, and dead right on the story/reasoning even though a so-called 'professional' analyst (blaine curtis of Jeffries) trashed it clearly not having done the homework I did. Had he shorted the stock on all of his reasons as to why he gave it a $16 target, he'd of lost his ass and we all made out like bandits.
Hmmm? When this guy says something like this, you have to listen...
http://www.cnbc.com/id/38112449
Now this is where I get confused. Prechter hasn't been that right over time. But he's picked some pretty good tops/bottoms. However, Ralph Alcomporah has been right one over the last ten years I've followed him. He's got a different take...
http://www.cnbc.com/id/38088826
Almost every major moving average cross I've ever seen leads to a big rally back into it to catch all the auto-traders off guard, only later to fall back and resume the trend direction. Considering the oversold conditions along with the fact that quarter end under SPX 1115 meant most money managers needed to raise cash for next quarter most likely added to the extended selling, I'd expect a pretty big bounce over the next few weeks. TNA to at least low $40s. Elliot wave says we have to have a 2nd wave bounce any minute now.
Before any big selloff, the gap around $42.50 needs to be filled.
Very interesting setup. The $RUT(TNA) chart is completely different than the SPX's. Everyone was looking to short the break of SPX 1040. But what happened? It broke slightly, then in the last ten min or so, a monster sell program (says Art Cashin) hit the futures to kill it to 1028. The amplified effect was that many short stops got filled along with stop losses. The best scenario from a trader's point of view was to have the SPX closing around 1037ish. But that selloff most likely created a situation where EVERYONE now is on the same side of the trade. Managers are now all out for quarter and have raised cash for next quarter.
So, here's the PERFECT scenario: TNA opens up tomorrow between $35.50 and $36.20 and then closes above $39 setting up a monster daily outside key reversal. The put to call ratio is almost at a record which has marked the last three monster lows.
Tomorrow's close is very important. Either a key reversal or a hammer. A gap needs to be filled to about $42.
Okay, the trade here I see is the market most likely should bounce in a 'C' wave rally to complete this ABC, THEN collapse into the fall to SPX low 900s?
Remember what I said about end of quarter money managers not having to buy because the SPX is below last year's closing. So, yesterday's selloff was most likely just book clearing to raise money for next quarter/half. The evidence for that is today's anemic action with no follow through. Look for a nice bounce here, and then sometime next month the market falling off the cliff.
Hey Net, and anyone else interested, you will find this site VERY helpful in understanding elliotwave and where you are right now. It presents a very interesting perspective on where we might be going. Very scary. This TNA trade is going to be very short.
\http://www.thechartpatterntrader.com/
Okay, strictly elliotwave speaking, this is how the market looks when you then combine the typical yearly cycles/timing.
You can count a near perfect 1 through 5 wave move down from the April high to this month's low. Perfection. But what does that mean now? Well, that 5 wave move down means it should be an impulse wave, right? If so, then it's a wave 1. So, that leads to the most likely scenario that we're now in a wave 2 correction up. Corrective waves are ABCs. The leg up off the low would be a wave A, then the last leg down a wave B, and now we 'should' be starting the final leg up in this ABC as a wave C that should equal to some extent wave A. (AWE theory). That means TNA could run to $60 to $65. That should time out right around early/mid July. THEN the major leg 3rd wave down into Sep/Oct.
It all looks pretty damn clear to me just strictly looking at the chart. It is what it is.
I personally bought 1000 TNA today at $41.50 just for a small trade. I'm thinking a possible bounce to month/quarter end to $45 or higher.
Now I heard something yesterday on Kudlow's show that made a ton of sense. Basically money managers trade against the benchmark SPX. Last year the SPX closed at 1115. So, if the market keeps trading higher than that, then, and only then, will they all have to pile into the market to keep up to match or beat. If they start to get left behind, they'll have no choice but to buy high beta names like $RUT stocks. If the market stays under 1115, then they have no reason or interest to go long. Remember most don't short the market, just traders and hedge funds.
So don't expect much on the upside until it starts to trade north of that number.
Hey Fish, remember that we took out $1.55 out of our TZA position on that short $7 call for June. So, the basis is now actually $5.98 if you add also the $254 we made on the previous TZA trade. You see the power of shorting calls against long trades?
As I posted a minute ago to Net, look at this chart of this little stock:
Yeah, I don't want to confuse myself here though. Basically, there is a cycle here that has the market going up into month/quarter end of June, then topping out in July sometime that falls into Sep/Oct. SPX 900ish then? That's the play. But until the SPX breaks over 1220 or below 1040, it's stuck. There's an interesting debate going on here about DOW Theory sell signals being generated. Basically it says that unless the DOW breaks the Apr highs of what? 11,200ish? by month end, it will put out a sell signal. All things point that way. But remember the market climbs a wall of worry. But also falls on the slope of hope. Considering all that 'hope and change' garbage out there, who will win?
I am right now looking at a play on a tiny $3.30 stock, IMMU. It looks like a real quick grabber. What I mean is it trades in a tight range between about $4ish and $3ish. It has a very good EPS and PE under 10 with a pretty good ramp potential. Today it looked like it wanted to turn back up toward $4 again in a week or two?
Maybe we'll play it for a couple thousand shares to grab .30 or so.
The $RUT - which we trade as the TNA or TZA - is making a daily small hammer, but a weekly monster outside week key reversal to the downside. Not looking good to be long. Hopefully, we get a great shot down into the high $20s or low $30s to buy TNA or even the calls. A big move = big profit coming shortly. Just wait..
I don't see any trades right now out there. Too much confusion with the current patterns. I think it's all about the banks. When the banks start lending again, the economy will resume. Watch the bank index and the broker/dealer index. If the market is going to start going up again, brokers will start to do well in anticipation of higher trading revs. That's usually your signal. There shouldn't be a reccession (double dip) because the yeild curve isn't inverted. (the 3 month paying out more than the 3 year).
I remember in 2007 the curve inverted and everyone on CNBC kept saying, "oh, that doesn't matter anymore. It's different this time"
Hell, even Larry Kudlow was saying that. Then guess what? 2008 came along. So, right now we don't have that, which suggests to me at least that the market could be staging a bull market leg higher later in the year. Of course I can't imagine a fundamental reason for it, but the market does climb the 'wall of worry'. "They" are going to defend SPX 1040 at all costs. We'll see!
Personally, I'd love to see the Russell run again to 740.
Fish, there is something I think going on that's not being discussed because so many are part of it. Remember how much money the fed/congress put into the 'system' - which basically means the markets. Money went to the banks to prop them up which they in turn put into stocks as an indirect runaround by the government to stabalize the markets. Strong markets = potentially strong economy due to the wealth effect. Okay, fine and dandy. Seems to have worked somewhat. The problem now is that they - that is, the government/fed - have blown their wad and have no more ammo left. But right at the time the economy is looking to roll over again. All that money that was printed/pissed away is now looking to have not done much.
So, yes, all those headlines are designed to prop the markets, clearly. But look at what happened today- the market opened up big, then sold off. Why? Because the pros know better. Most are actually starting to get it. And I'd say most are actually not buying for the expectation that there is going to be this follow-through selloff. I personally don't know what is going to happen. But I do know that not much is being done from where it needs to be done - DC.
In other words, don't buy into the headlines. Just go with your gut and what you know to be true. All the cheerleading won't change the outcome. It will only delay it.
Okay, for market timing purposes, I am basically in this guy's camp:
http://www.decisionpoint.com/TAC/ORD.html
The bottom line to put it all simply is that I believe the market in this June/July summer rally will take the SPX to 1150 to 1190. Then, turn south to a low in Oct-ish of about 900 to 940. SPX 1140 is the magic number to watch. A break of that should be shorted big.
So, we sit and wait for the clear setups. No need to be a hero. Something big will happen soon and we'll be all over it and the profit should be substantial. I'm really only looking at triple ETFs for this - along with shorting calls along the way.
TQQQ - triple Q's
SQQQ - triple neg Q's
TNA - triple russell 2000
TZA - triple neg russell 2000
UDOW - triple DOW
SDOW - triple neg DOW
Hey Pooruser, I think I understand your predicament. Your frustration actually puts you in very common company. That is, it sounds like you've made some bad trades that have left you with little money left and you need to get it back. Believe me, you have much company in this regard.
Now looking back a few months, I remember when Fish posted how freaked out he was when TZA was going bad. Of course indirectly blaming me for making the trade. If you guys paid attention to the trade and specifically the amount of money as a percentage of the account I'm using above along with the options trades around that position and the justification for each, you'd understand that from the beginning it was an almost sure bet. Now surely, when I got into it at $7.70, I could have timed the entry better just looking at the wave counts. It then fell to under $6 when a few freaked out, which told me that that went 'all in' on the trade. But what did I say? Just sit it out because you will most likely never get in at the bottom or out at the top. The times that you do are pure luck.
As long as you're correct in the end is all that matters. And be sure to have a reasonable and justified basis for you assessment as to why you're making the trade. SYNA had that and paid off. REGN was a small trade made twice that was more of a gamble along with seasonality that went wrong and that's why I made both small trades. But now look, TZA is actually a good trade because of the power of shorting calls (you must have a broker that allows it) and we can now wait for a better setup for a new trade. The $10k account is up almost 80% in a year and every trade was made the day before and emailed ahead of time.
So, as to your question about the market moving on its own or not, technically you can say yes, you're right. But that is exactly what elliotwave is - it's NOT a technical analysis study of market direction timing. That's what most think and are dead wrong. Elliotwave theory is simply a proven fact of the five emotions of human behavior. When you start to study it, even just the simplicities of it, it's truly fascinating because it makes so much sense. So, when you look at the chart of an index, not so much individual stocks unless they are heavily traded by millions of traders daily, you can typically count 5 or 3 waves at any cyclical leg up or down. The simplicity of the theory is basically this:
Wave 1 - the initial wave let's say of a downtrend. This is the first down move against a previous long term uptrend that catches traders off-guard. It will fall to a point, and then reverse. This upside reversal against this first leg down makes investors/traders feel like it's a dip buying opp and makes them wipe their face as if to say, 'whew, that was scary. I don't know where that came from. Probably some large investor having to sell. No big deal, buy more!"
Wave 2 correction - again, this reversal off the wave 1 decline 'suckers' in new buyers or new money from existing holders. Or, those that short the previous bull run thinking the market was extended and didn't cover on the wave 1 decline are typically squeezed out on this for fear of it actually being a simple pullback. The problem for both is that these waves typically are fast, but weak in volume and breadth. They only will retrace between 50% of the wave 1 move and 72%. It's the extension to that 72% that scares the shorts and emboldens the dip buyers.
Wave 3 - By Elliotwave rules, this can NEVER be the shortest wave and is typically the biggest. Why? Because when the market reverses off the wave 2 high back down, it scares the hell out of the dip buyers. As it gets going, the emotion is to stare at your stocks dropping in disbelief 'riding it out'. But it just keeps going.
Wave 4 - ugly correction of wave 3. Typically is a rising wedge
Wave 5 final leg down - A weak final leg down to end it all and where the news is typically the worst. Time to buy!
Don't worry, just follow the trades in the account and you'll be fine. I think the market is setting up pretty well and predictable. I think I can get the now $17,600 account to well over $25k by year end. But I'm playing it carefully and you must be able to short calls and puts. If you already don't, get an account at IB!
Account worth $17,689 as of 6/17
No, the market doesn't do what it wants. It trades these days strictly on technicals and specifically within elliotwave/fibo levels. Listen to Cramer bitch about it everynight.
My only problem with the move here is that it's too fast. The rise and time it takes to get there should match somewhat the previous leg's length and time. So, I'm leaning toward more choppy action for the next few weeks as it slowly climbs toward that level, not just here and now. But be ready!
I find this very enlightening --
http://www.thestreet.com/story/10783826/1/the-second-housing-crisis-is-here.html
July's earning's reports are going to be VERY important because when timed with the elliotwave setup, it appears that there is the very real possiblility that they stage the next monster leg down going into next year.
If you watched Obama's speech tonight on the oil mess, he said he's commissioning a panel to investigate. Is this clown the biggest dumbass we've ever had as Prez? I mean, seriously. Carter must be doing handstands knowing he's no longer the joke of the Left. When the economy and market tank next year - if that's what ends up happening - I'm sure Obama will commission a panel to investigate it.
Oh, and if you REALLY want to get pissed off, read this...
http://www.humanevents.com/article.php?id=37491&s=rcmp
No, I told you guys days ago this is a 2nd wave rally that most likely will take the DOW to at least 10,750 which is the right shoulder of a large head and shoulders setup with about 9900 or so the neck. This is probably the best elliot setup I've seen in years.
Well, his chart today was violated with the close higher than his swing high top.
Oh, this will be a nice short opp in the semis. The book to bill ratio is starting to roll over. That usually spells doom for the semi-cycle. The down cycle usually lasts 2 to 3 years. The last top was Jan '06. The shift away from laptops/desktops to phones is going to destroy INTC.
No, RXD I sold at $40 (see above). Every one of those trades were setup the night before, leaving absolutely no room for mis-representing the true return.
I sold the TZA calls against the stock rather than just selling the stock because I felt that by June op-ex the $1.55 was going to net me/us more than the $7.75 at the time. I think the high it's made was just a bit over $8, nowhere near $8.55. So, the covered call on TZA is not a hedge against the long TNA. Basically it's a full long position here with the added TNA for a 'kick'.
So, as of tonight, the account stands at (if all positions were closed) $17,646, or about a 2% profit so far for the year. Not much, but the expiring $7 TZA calls will add another $1000+ to that and the added TNA profit. We'll see where it stands next Friday, op-ex.
Like I said, this year has been a tough one because the chart patterns have only now started to show their hand. I see a very real possible head and shoulders setting up around late June/early July. Then from sometime in July we see a rollover into Oct that takes the DOW to below 9000. How low? We'll see.
I know, it's tough. Both scenarios make sense. That's why you don't want to take a big bet in either direction. Surely, considering the way things are out there around the world, the market should probably be trading under SPX 800. But stimulus/printing is a dangerous thing to go against. However, elliotwave is elliotwave and this is a 5th wave we're now in. Looking at the futures right now tonight (after the Laker game),they're getting killed to -10 points. So, I'm still standing by my idea that the Q's trade down to $42ish, then rock until end of month.
We'll see.
Well, regarding immigration, I'm sure some of you have heard this quote from Teddy Roosevelt:
We should insist that if the immigrant who comes here does in good faith become an
American and assimilates himself to us he shall be treated on an exact equality with every one else, for it is an outrage to discriminate against any such man because of creed or birth-place or origin.
But this is predicated upon the man's becoming in very fact an American and nothing but an American. If he tries to keep segregated with men of his own origin and separated from the rest of America, then he isn't doing his part as an American. There can be no divided allegiance here. . . We have room for but one language here, and that is the English language, for we intend to see that the crucible turns our people out as Americans, of American nationality, and not as dwellers in a polyglot boarding-house; and we have room for but one soul loyalty, and that is loyalty to the American people.
The left would be calling him a racist today for saying that. Find anything wrong with it?