Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Hey Hand where have you been? How can I contact you??
Added 5,000 of what?
Where is the new spot?
Finally the market has come down. I hope the market drops to 7,033 where it belongs. How have things been guys?
Is that so old friend?
Dow 6,500 on the Horizon
Get the bottom over with???????????? Don't think so!!!!!!!!!!
http://dshort.com/charts/bears/four-bears-extended-large.gif
Yo!!!!!!!!!!
We need to pay attention to what the Financial Sector is doing on its charts because it has a tendency to lead the broader market, and many eyes are focused on news from this sector. Let’s take a quick look at the Daily and Weekly charts of the XLF.
A quick overview tells us we don’t want our portfolios anywhere near the Financial sector, at least from a trend perspective. Price continues to make lower lows and lower highs while the moving averages are in the most bearish orientation possible.
Rather than making a positive divergence like the broader indexes did in November, the XLF weekly momentum actually made new lows, hinting that new price lows are yet to come. The momentum oscillator is ‘rolling over’ and cracking through the red ‘trend’ line at the moment.
From a cursory glance, it would appear that we’re in the down-swing now that will break the November lows, which bodes negatively for the broader market. Let’s drop down to the daily chart for more insights.
Again, we see a similar picture in that the trend is clearly confirmed as down, the moving averages are in the most bearish orientation possible, and price appears to be in a downswing that will take us to new lows in 2009.
We did have a positive momentum divergence in November, but that was quickly worked out and now no longer has much influence on the price action as sellers are claiming the momentum again and could push us to a new momentum low as price falls to test support at the November lows.
Also, you can draw various trendline interpretations, but what I’ve down is shown a rising blue trendline has been broken to the downside and confirmed as resistance to the upside (just shy of the falling 50 day EMA).
Also, I have us breaking down out of a descending triangle which is classically a bearish pattern with a measuring objective that takes us down to the November lows.
There is absolutely no further support to stop us from hitting the sub-$9 per share level and odds are that momentum (sellers) will continue, forcing a new price low in 2009 which most likely would precede a new price low in the S&P 500 and other US Equity Indexes.
Continue to study the XLF charts and apply your own analysis and be aware of what it might mean for the broader market.
From a technical analysis standpoint, we’re officially on course today to test or break beneath the November 2008 lows in the US Equity Indexes - it’s now the highest probability play. Let’s see that development on the Weekly and Daily charts:
First, is it a certainty? No, but I’ll make the case that it’s the most likely outcome of today’s early morning downside break.
On the weekly chart, we see a significant new momentum low in October which tends to precede price lows - we did get the price lows in November, but one cannot discount the strength of that momentum low to lead to continuation.
We got two retracements since October, and it would appear the current retracement up that fell just shy of resistance via the falling 20 week EMA at 975 and now it ‘looks like’ we’re entering the next down-swing expansion move.
If you look at the retracement from November, it looks like a rising trend channel or more specifically some sort of bear flag pattern (perhaps a wedge). There are bearish implications for such patterns.
The larger structure is clearly in a downtrend, price continues to make lower lows and lower highs, and the orientation of the moving averages is as bearish as it gets.
Let’s focus our attention now on the daily chart. Again, as in last night’s post on the S&P 500, the analysis still stands. In sum, moving averages in the most bearish orientation, trend still confirmed as down, price forming a consolidation pattern.
What could make this move quicker and more painful for the bulls is the Bull Trap that lured them in once price broke above EMA resistance for the first time in months and formed a ‘confluence buy’ trade… before reversing. The move down is likely to be even swifter as their stops are taken out one by one on the way down.
Also, we’ve now officially broken downwards out of either a rectangle pattern or an ascending triangle (also which trapped the bulls - we did have a breakout of an ascending triangle which lured more bulls in - they will be stopped out on the way down). Patterns with false breaks tend to have stronger moves in the *opposite* direction.
This is something I haven’t heard anyone else mention, but that we’re in the midst of a “Bollinger Band Squeeze” where the volatility bands have compressed into a narrow range - often we get powerful moves that come out of such patterns which are based on the principle “Markets Alternate Between Range Contraction and Expansion.” I’ve been warning to expect a price expansion move - one just can’t be certain in which direction the move will expand. That direction seems clearer now.
Finally, there just isn’t any logical technical support, like a Fibonacci retracement (they’re all *above* price) or key Moving Average. There’s not even a meaningful swing high or low to halt price until it touches the November lows, which is the whole point behind the notion of a “test” in the market.
Without going into detail here, if you employ Elliott Wave Theory, then you’ll know we’re in some sort of Wave 4 corrective phase and have now most likely opened up into either the large-scale Wave 5 down or the smaller fractal Wave 5 of the larger Wave 3 - either interpretation would have us testing or more-than-likely breaking the prior lows as most Wave 5’s do (see my post “Two Competing Elliott Wave Counts” to see these possibilities).
In sum, nothing is guaranteed in the market, but it appears to me at least that the odds have now shifted solidly in favor of price making an expansion move that takes us down to ‘test’ the November lows of 750, and I would further assume that buyers would fail and that price would be taken out - but we’ll cross that bridge once we get there.
Yeah you lazy ass!!!!!!!!!!!
$DIA 8364 next DJ support
January 12, 2009
To Go Long DAILY Setup and Commentary:
[setup values unchanged from the last trading session]
The SPX last Friday closed down @ 890.35.
In terms of Frequency, the most frequent long reversal cluster remains between 890 and 860.
Please notice how the reversal Frequency drops dramatically below the 860.54 level, it goes from 20% frequency to 4% frequency... this means that if you stay short below 860 you are taking a big gamble here.
Can we go lower than 860? Sure we can! But we have to try to stick to the odds to get some grip on the SPX's average behavior during "this type" of retracement down.
879.33 is the most frequent reversal level. It spikes out quite a lot, so it's important to take this into consideration in your trading plan. Also, it converges with the Weekly 879.29, another good reason to consider it good support.
We opened already a few longs @ 890 and we are going to add @ 879 and at each level below.
Our 100% adjusted odds target (below) is set @ 780.96. Should be conservative enough since we are not anymore in crazy-swings-crash-mode since a while.
Please remember that the 850-860 area has offered quite a lot of support as of lately, as explained 2 Weeks ago in our Weekly report , so 860.54 is definitely a good support. If broken, it may open the door to a big plunge, but as you have seen on the Frequency Table above, the most part of reversals are happening above 860.54.
879.33 (below, highlighted in purple) has >70% odds to see a long reversal, with our settings. Quite good if coupled with the fact that 879.33 is also the most frequent long reversal level (see Frequency Table above) and converges with an important Weekly support, as explained before.
Let's check again also the Reversal Risk Meter (below), to see graphically how the long reversal odds will be rising if we fall towards 780.96. The prices you see are marked by a green, yellow and red dots. The red dots are ideally flashing this message: "WARNING - IMPENDING LONG REVERSAL". The risk of a long reversal, on the prices marked with a red dots, are>75%. If you activate this tool on the RL Calculators, you can hover with the mouse over the dots and see the reversal odds. This tool helps the trader visualize the risk of reversal at certain levels, to avoid going short right before a long reversal begins (sounds familiar?). This tool also helps the trader decide where to take profit: once the SPX reaches the yellow or the red dots levels/prices, it's definitely time to take profit.
anuary 12, 2009
To Go Short DAILY Setup and Commentary:
The most frequent short reversal cluster is between 896.94 and 918.26.
896.94 is the most frequent short reversal level. 907.60 as well is very frequent.
From the shape of the graph below we can acquire a very important information: most short reversals are happening quite soon, all the graph's Frequency peaks are in the lower levels. This means that, on average, "this type" of retracement up tends to have a very short life. This doesn't quite match with the Weekly vision, where we have the most frequent short reversal @ 1046. So, you may ask: which one of the 2 is right?
The answer is: both. On a shorter time period (Daily), we may see a little bounce up and then down again. On a longer time period (Weekly) we may see a rise towards 1046 (it can happen in a few weeks, does not have to happen in one week). This will confirm both visions were right.
Or, we may just see a plunge and we'll never go to 1046.
Or we may just see a rise and do not have a reverse soon.
Anything is possible. The logic here is to try to wait for situations, setups, with good odds. Once the good odds are in, take the trade. There's not much more that you can do. A mistake is always possible. But if the odds are stacked in your favor, a mistake is much less probable.
In the Scaling Table below, we have set the 100% odds level at 1008.57.
907.60 has >67% odds to be the reversal level with this setting, and it's also one of the most frequent reversal level, on average (see Table above).
Other good shorting levels are probably in the 930-area, since that was the last resistance encountered. The odds @ 935.51 are >88%, very good.
The 896.94 level is the most frequent reversal level (see Frequency Table above) but does not have great odds, so be careful shorting there, it may work or not, but for sure is a bit of a gamble.
if $len is in fact guilty of an enron like book cook, it could be one of the best shorts of09
Today's markets are likely to move based on the higher-than-expected unemployment rate. At 8:30 a.m., the Labor Department announced a mixed employment picture: lower-than-expected job loss, yet higher-than-expected unemployment rate. But the more important questions for the economy are how many jobs were lost in 2008 and how many more will perish in the next few years.
Despite being better than expected, the numbers of jobs lost in December are still awful at 524,000. Not to mention, that the unemployment rate rose from 6.7% to 7.2%. Economists had forecast 550,000 lost jobs in December and an unemployment rate of 7%. The actual 7.2% unemployment rate is the highest in 26 years. Also, the 2.6 million jobs lost in 2008 marks the worst level since 1945. If things keep going along those lines, the unemployment rate could top 10%.
In terms of pure Frequency, the most frequent long reversal cluster is between 890 and 860.
Please notice how the reversal Frequency drops dramatically below the 860.54 level, it goes from 20% frequency to 4% frequency... this means that if you stay short below 860 you are taking a big gamble here.
Can we go lower than 860? Sure we can! But we stick to the odds here, to get some grip on the SPX's average behavior during "this type" of retracement down. So we are going to be long from 860 and we will add longs at each level below that price.
879.33 is the most frequent reversal level. It spikes out quite a lot, so it's important to take this into consideration in your trading plan.
Our 100% adjusted odds target (below) is set @ 780.96, it would take a 14.16% sell-off from yesterday's close to get us there. Should be conservative enough since we are not anymore in crazy-swings-crash-mode since a while.
As a general rule, when setting this level, it's important to follow a bit the amplitude of the market swings. Of course we cannot forecast tomorrow's swings but usually when the market has a certain rhythm, it lasts for a while, so it's important to tune yourself onto this rhythm to set this value correctly.
What we are trying to say is that 701.37 seems a bit out of rhythm (=too far for the current type of SPX swings/waves).
Please remember that the 850-860 area has offered quite a lot of support as of lately, as explained in the last Weekly report , so 860.54 is definitely a good support. If broken, it may open the door to a big plunge, but as you have seen on the Frequency Table above, the most part of reversals are happening above 860.54.
879.33 (below, highlighted in purple) has >70% odds to see a long reversal, with our settings. Quite good if coupled with the fact that 879.33 is also the most frequent long reversal level (see Frequency Table above).
Our 100% adjusted odds target (below) is set @ 780.96, it would take a 14.16% sell-off from yesterday's close to get us there. Should be conservative enough since we are not anymore in crazy-swings-crash-mode since a while.
As a general rule, when setting this level, it's important to follow a bit the amplitude of the market swings. Of course we cannot forecast tomorrow's swings but usually when the market has a certain rhythm, it lasts for a while, so it's important to tune yourself onto this rhythm to set this value correctly.
What we are trying to say is that 701.37 seems a bit out of rhythm (=too far for the current type of SPX swings/waves).
PWAV looking like a really good buy here!!!
Cosi looking like it's about to break! Insider buying chart setting up nice.
I am back from the Holidays..... Booyah!!!!!!!! See you in the morning Hand!
Hello from Mexico!!!! Good luck this week... I will be on the beach! (But that just means the Market will go up and I will miss it)
Hey TheInvisibleHand told me to ask you why this signature does not work correctly
[*chart]ih.fotothing.com/62739.gif[*/chart]
Thanks
$FAS looks halfway decent on 60 minute charts. Bouncing off 80ma which corresponds with 20 day ma.
http://www.retracementlevels.com/
Someone figure out how to use this.
http://2.bp.blogspot.com/_FiNhXIv5StE/ST0kabud0SI/AAAAAAAADhg/dLFJinpXfv4/s1600-h/SPX60.png
http://2.bp.blogspot.com/_FiNhXIv5StE/ST0kXKueblI/AAAAAAAADhY/tQ5wtkM-C1A/s1600-h/NYAAccum.png
http://3.bp.blogspot.com/_FiNhXIv5StE/ST0m7SUuEXI/AAAAAAAADhw/OLdrPKR946c/s1600-h/SP_from_1825.jpg
The S&P 500 is poised to pierce important resistance around the 895 area. On the daily chart this is a significant swing high. Note the slope of the declining 20 day EMA has flattened substantially and is now acting as support around the 875 area. The 825 and 850 areas have repeatedly and successfully acted as support last week.
On the 60 minute intraday chart the significance of the 895 area becomes even more obvious as this is also where the 200 period EMA is. Note the slope has flattened. A successful upward penetration of the 200 period EMA is now more probable.
The S&P is likely to rally to the 975 – 1000 area before the year is out. The panic months of October and November consisted of forced liquidation. The ‘rinsing’ of weak hands is plainly visible in the number of Major Distribution days (where down volume exceeds up volume by a factor of 9:1). Mutual funds and the hedgies all positioned into year end early and aggressively fearing massive redemptions (and rightly so). This means that selling has now dried up, especially as prices move off the lows. Hedges will now get triggered as this market gets hijacked by the ‘momo’ funds looking to squeeze the shorts in a low liquidity environment. Expect near parabolic moves in the really beaten up names.
A word of caution is warranted. This ‘rally’ is nothing but a ‘bounce’ until proven otherwise. The Monday after the Thanksgiving Weekend resulted in the single largest Major Distribution Day since the crisis started. Down volume exceeded up volume by a factor of 80:1. That is massive. HUGE. Until that distribution day gets answered by a massive Major Accumulation Day (or a series of lesser ones) be wary of a post holiday, early 2009 collapse in risky assets.
http://4.bp.blogspot.com/_FiNhXIv5StE/ST0kdvJCFPI/AAAAAAAADho/UUwvYm6L5vY/s1600-h/SPX.png
Watch out for the ceiling!!!!!!!
Welcome to the board. The Invisible Hand knows his stuff!
Read this article it is very good!!!!!!!!!!!!!!!!!!!!
http://www.portfolio.com/news-markets/national-news/portfolio/2008/11/11/The-End-of-Wall-Streets-Boom?tid=true
hehe :)
I did not get any emails today HAND you slacker. You better fix the situation because you are making me lose money!!!!!!!!!!!!!!
o o
. .
. .
. .
I want to opt in......
Looking to trade FAS if we get a close to a retest...
I wonder what happened the day after that day in 1929.
You might want to get some guns and land and grow some food.... If you really think about it, gold is only metal!!!
They work for me and for Pipul.... can your computer read a PNG file?
I tried to tell you guys a couple weeks ago.........
http://1.bp.blogspot.com/_r_4bas-lh0U/SPi1IgM4TdI/AAAAAAAAC9c/U76VPCDRZOA/s1600-h/whatif.png
http://1.bp.blogspot.com/_r_4bas-lh0U/SPdQ8E5XkSI/AAAAAAAAC8U/CSe94QNjj3I/s1600-h/1929CrashChart.png
http://4.bp.blogspot.com/_r_4bas-lh0U/SPi1GB2xJuI/AAAAAAAAC9U/gnsGMdUuiTA/s1600-h/complacent.PNG
The end of the world is here!!!!!!!!!!!!!!!