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16
Oct
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4:01pm
GOOG reports Q3 $4.92 v $4.75e, Revenue $4.04B v $4.05Be. Stock is trading significantly higher after hours.
4:00pm
What a rally! Didn’t quite make it up to my target. I’m holding overnight. Google just reported…
Also, the TED Spread is down to 407 bps. Nothing to brag about but improvement.
3:16pm
My target for this rally is $955.
3:06pm
ES 10m testing its 200MA (921.30).
3:00pm
ES getting held up at some resistance levels but I’m sticking with it until it violates my stop.
2:51pm
ES 5m: Rally time. Set stops under the neckline.
2:28pm
ES 1-m: Sellers trying to break the pattern. Sell if the shoulder breaks. Not seeing much sign of volume buying, at least not yet. Remember, from failed moves come fast moves. This market will selloff quickly if the pattern breaks.
2:15pm
Trade Alert from Mohan:
Guys/Gals,
There is an intraday H/S on SHLD. The right shoulder is higher than the left with lesser accompanying volume. Therefore, it is not a classic H/S, but still a H/S. Neck at 60. A 1 min close below 59 – the stock could lose 5 pts in a hurry.
Yesterday and today SHLD set a 52 week lows on lower than normal volume. I am expecting higher volume sell-off soon. I am not expecting it to race up 5 points in a hurry. Good risk to reward.
2:08pm
The stakes are high right now. If the inverse H&S pattern works, we should see a 50 point rally in the S&P. If the pattern fails, we should see a sharp selloff. Notice a possible WV pattern that has formed on the 1-minute.
1:56pm
TED spread has improved to 410 bps.
1:36pm
ES 1m: Inverse H&S pattern still looks good. Approaching 2pm…
Experimenting with a magic pen. Not part of TOS. Let me know what you think.
1:00pm
This inverse head and shoulders pattern is something to keep an eye on. It may or may not pan out. Ideally, we would see a break above the neckline near the 2pm time when volume generally comes back into the market. A break above the neckline could yield a rally of a about 50 S&P points.
12:24pm
This right shoulder could move as low as 888 (roughly, if it equals the height of the left shoulder) so keep that in mind for entries and stop points.
12:29pm
ES 1-m: Larger Inverse Head and Shoulders Pattern forming? (Martin, you the man!)
12:23pm
ES 10m: Descending 200MA will serve as resistance. Roughly coincides with double top level
12:20pm
This breakout looks legit. Volume picked up on the breakout.
VIX 60m: Double top?
12:14pm
ES 1m: Breakouts from inverse H&S patterns require volume. So does a break above the VWAP. If it holds, the price target is the double top level near $930.
12:07pm
ES 1-min: Just throwing darts at a wall here. Could this still be an inverse H&S forming with a ascending neckline coinciding with the VWAP?
12:03pm
UNG 10m: Up 2.5% while oil is down 6%. I’ve noticed some bullish divergences for what its worth.
11:56am
ES 10-minute: Moving into 20MA resistance (coincides with VWAP). Volume decreasing.
11:53am
ES 1m: We are breaking the neckline, but we never really formed the right shoulder. And the volume is light on this move higher. I don’t have much confidence in the rally but we’ll see what happens at the VWAP.
11:49am
ES 1-minute: Might we form an inverse head and shoulders pattern? (good call out Martin)
11:38am
Crude oil now trading under $69.
11:29am
Gold making new lows under $790.
11:26am
QQQQ 30m: Made a new 52-wk low, no bullish divergences…
11:22am
ES 10m: Potential bottoming candle not reliable – lighter volume than preceding candle
11:13am
ES 15m: Next stop 839?
11:10am
VIX 60m: At least this is beginning to look like a topping pattern. Maybe a double top or a head and shoulders pattern. VIX is above 81.
11:09am
Crude oil trading under $70.
11:02am
The ES has fallen to fresh session lows under 880. Crude oil is falling lower initially after the larger than expected build.
11:00am
Oil Inventory Data: Crude +5.61M v +2.5Me | Gasoline +7M v +3Me | Distillates -453K v +500Ke | Utilization 82.2% v 83.7%e
10:54am
No reason to believe a bounce is coming until buyers show up, which is yet to happen. The volume on the buy side is very low, and the trend remains lower. Using the VIX as an indicator or bullish divergences on the MACD, RSI, Stochastic, or other indicators should only be used as a reversal alert system, but price action and volume are most important.
10:49am
In the past 10 minutes, the VIX made a new high above Friday’s peak. But the market did not make a new low. Doesn’t make much sense to speculate, but perhaps the VIX gets ahead of the market because there are some traders getting long equities and hedging using puts, which raises the VIX while traders are positioning themselves net long. Just a thought…
10:43am
ES 15m: Holding session lows at 880 for now. Next support level is last week’s low at 837.
10:37am
VIX 60m: Moving into double top territory
10:35am
Natural Gas Inventory Data: +79 bcf v expectation of +75 to +85 bcf
Oil Inventory data due out at 11am
10:17am
ES 10m: Fighting, still above session lows, but not seeing much volume on the buy side
10:13am
ES 10m: Breaking down
10:06am
Crude oil is trading under $73
The TED Spread is moving higher again, to 426 bps
VIX 60m: Climbing above 70
10:05am
ES 10-minute testing the 50MA.
10:03am
Gold 60m: Not difficult to see why the stops were triggered
9:58am
October Philadelphia Fed Index: -37.5 v -10.0e
~ Not good data, worst since 1990. Sellers coming into the ES on the number.
9:53am
TED spread has improved to 416 bps. Moving in the right direction… but hardly good.
9:44am
Gold now down more than $40, trading under $800. Looks a a string of stop orders was triggered.
ES 10-minute: Notice the 50MA serving as support. Watch for resistance at the 200MA.
9:36am
Gold has fallen sharply in the past few minutes, down $20 to $918.
9:34am
OK, the gap has been filled. Can we rally from here? Looks like there was some volume buying at the gap fill.
9:33am
Watch for a gap fill to $899 on the SPX.
8:30am
Initial Jobless Claims: 461K v 478Ke.
~ Better than expected… have not seen that in a while.
Good morning.
Sleeping in this AM? Got the gap fill. Now let’s see where we go. I have not closed shorts yet.
My thought on gold – it does not mean the same thing to this generation. We barely remembeer that it backed currencies. It has lost its luster with today’s crowd and the elders as well. Why? there is no YIELD in gold. the money that used to flow to gold for safety is now flowing into CD’s for yield. People need income and growth, not safety. That’s my thought.
October 16th, 2008 at 9:49 am
or that there are way too man gold bugs at this point in time.
Looks like I will dominate the board today. Where the heck is everyone? Even you were late Craig.
dipped. Closed the gap. Now holding trendline. Out of shorts and into longs – ROM and RXL
On the ES8 I see us breaking out of an acending triangle. Could be good. See if we can take out 930. If so we may run huge today. I’m not screaming from the mountain top though. Just not feeling a big move today. Possibly tomorrow. GOOG earnings tonight may hang over the market and keep it from running.
October 16th, 2008 at 9:51 am
actually I am holding dzz until gold is 730 or so.
October 16th, 2008 at 9:54 am
Morning Shanky! Good monologue. I’m becoming a believer in the charts…watched the gap fill and the market turn around. You guys are turning me into a &* chart believer. Never thought I’d say it…grumble…grumble.
October 16th, 2008 at 9:56 am
Hey Valerie. The charts are real. Learn how to use them and you will be able to make much more diciplined purchases and sells both short and long term. Craig and this site are a gift.
October 16th, 2008 at 10:14 am
Agreed.
Thank you Craig for the options max pain calculator.
Here is my target for GLD. It should go up eventually.
http://social.stocktock.com/photo/photo/show?id=2348194%3APhoto%3A1594
October 16th, 2008 at 9:58 am
dude, that top chart looks like some ocean current study or a worm ate some toxic gree stuff. I like it. Looks rational. $68 it is. I’ll be watching
Does anyone know where to look for advancers/decliners info. other than Yahoo finance ?
Thanks.
October 16th, 2008 at 10:24 am
http://online.wsj.com/mdc/public/page/marketsdata.html
October 16th, 2008 at 10:35 am
http://www.nasdaq.com
Go into “Market Activity”
All,
Yesterday and this morning, several reports out indicating continued deleveraging and hedge fund liquidation. One of the reasons given for liquidation is to meet the settlement of Lehman CDS which is to the tune of 200-400 bil. I don’t think they are raising all this money during the week.
And then there is the settlement of Washington Mutual CDS waiting in the wings. To the best of my knowledge WAMU CDS auction hasn’t yet taken place.
Be very vigilant if you are long. Looks like the selling will go on into next week.
I am only long VLO and hold calls in TSO. I will sell them in a heart beat.
Also looks like the reports of Euro demise are greatly exaggerated. I am considering going long EUR/USD via call options on FXE
October 16th, 2008 at 10:02 am
good stuff. still plenty of bad news to come. first hedge fund falls this AM. More dividend cuts etc… I like the levels I am long at for clients. Still in the money on 90% of the plays. Still waiting on more downside.
Interesting play on the EUR/USD. If that is the case gold should plummit.
October 16th, 2008 at 10:16 am
You should like EUR/USD higher if you think ES has bottomed. EUR/JPY tracks ES everyday. At least that’s been the pattern recently.
Earlier when futures were +20 EUR/JPY was as high as 137.15
Since the market turned negative, were now at 134.85
It’s that simple.
Pete
October 16th, 2008 at 10:55 am
Pete,
Good input. Thanks.
Craig – do you think someone knows something about GOOG earnings that we don’t? Hmmmmm? Interesting.
October 16th, 2008 at 10:25 am
I try to believe that earnings results are not leaked, but traders are clearly anticipating weak results. This is where call options get attractive to me because expectations are so low.
Craig, et al
Do you or anyone know the maximum pain for options on the QQQQ and SPY?
Last month, the close on Wed before options Friday, the QQQQ closed down at $39.8. By cob Friday, it had rallied to $42.90, a 6 % rise. At the time, the qqqq had dropped from in 8 days from $46 to $39 before it reversed, two days before options Friday. I had thought at the time, no way the market could get the qqqq back to max pain area, but they did.
Can it happen again today and tommorrow? Thanks all
October 16th, 2008 at 10:34 am
As of right now, max pain on SPY is 110, QQQQ is 40
you can calculate it your self here
http://www.optionpain.com/MaxPain/Max-Pain.php
October 16th, 2008 at 10:43 am
Thanks all. Small bet we get near the SPY figure.
October 16th, 2008 at 10:35 am
Check out optionpain.com.
MACD divergence bt 12 and 24 is expanding. I’m thinking recersal soon. It can’t support the divergence.
I’m pissed. closed my longs. Should not have sold the shorts, but made great $$. I told you I was always a day early on my calls. Damn it man! Trading lesson – I lost my commitment to my position. I was right and I lost it. F*^#. I was right thru the night. I knew it and lost it.
Craig
On the 30 min, the VIX doesn’t appear to show any divergences at the double top, at least that I can see. Still going with Elliot wave rally action later though.
OK now – double top on the VIX. Time to get in???????
October 16th, 2008 at 11:02 am
Nope – took out low with style.
October 16th, 2008 at 11:08 am
it’s either a double top, or last friday’s peak was the left shoulder.
October 16th, 2008 at 11:10 am
Right
vix might hit a 100
VIX – This is the 9th consecutive day over 50. We have peaked over 75 twice on two of those days intraday. In 1987, the VXO was over 75 for 9 consecutive days, and over 50 for an additional 8 more. The crash reached a peak of 172.
October 16th, 2008 at 11:12 am
Now, did we REALLY need that information right now? just kidding. i was not wanting to mention the 172 number, but….
October 16th, 2008 at 11:16 am
LOL. This served as point of reference. Craig put up an excellent chart a few weeks ago in one of his videos and then reposted it, showing the VIX/VXO trailing back to 1987. It was a perfectly symmetrical W. I went and counted the days to measure the duration of the high stress period, and it surprised me when it was 17 days. I thought it would be less.
Volume on the SPY is huge today. Over 250M shares already! Maybe this volume will support a capitulation day if we continue down to under 8000??
October 16th, 2008 at 11:16 am
Finally.
My Moment –
Trading psycology –
I HOPED the market would turn. Don’t play on HOPE. HOPE is bad. HOPE is not real. HOPE is a Fing guess. HOPE means NOTHING. I was dead Fing nuts right yesterday. I lost my conviction and HOPED the market would turn. I wanted to scream from the mountain tops yesterday. HOPE sucks. HOPE is BS. HOPE should be eliminated form the english language. I am an idiot and I hope (oops – scratch that), wish (not a good alternative) better learn from this.
There is a subliminal message in my note above. As Mr.Mackey would say, “Hope is bad”.
October 16th, 2008 at 11:29 am
Or, as the Architect said in the Matrix Reloaded.
“Hope, it is the quintessential human delusion, simultaneously the source of your (humans) greatest strength, and your greatest weakness.”
October 16th, 2008 at 11:29 am
Hope. It is the quintessential human delusion, simultaneously the source of your greatest strength and your greatest weakness.
October 16th, 2008 at 11:32 am
lol jinx.
Craig,
Considering all the factors, do you think we will hold the 837 on ES ? or do you think it will make a fake out and undercut the lows and then go up ? or it will make new lows and go to 767 ? Thanks.
Forestry giant (and potential future REIT) Weyerhauser (WY) selling at a 15 year low.
The ways of the market are amazing. When wave 3 started, gold was soaring, almost 100 points in a day and now gold is taking a spanking. Gold to 680$
October 16th, 2008 at 11:41 am
Anyone else bowing to the power of waves? ung up 1.5% while oil is down 6%
IWM put sellers also are going to get crushed if IWM does not go up substantially by opex. Huge volume of puts are now in the money at curret level.
October 16th, 2008 at 11:31 am
The talking heads have been discussing how purchases or sells will be made by the institutions controlling/writing the options. This could cause a flurry of the stocks furthese away from strike to get purchased. Remember, they are like a bookie. They want the juice. they want either side of their book to be as even as possible. Manipulation will occur going into tomorrow.
October 16th, 2008 at 11:36 am
If I read optionpain right $65 would be the optimum price for the market maker of the options. Is that correct? IWM at $48. That’s a massive spread. Who’s gonna buy it back up?
October 16th, 2008 at 11:49 am
Note sure who will buy it up, but the option put sellers on SPY, AAPL and IWM better come up with something to stoke the fire, or Monday, we could really see a crash of Daneric proportions due to put sellers liquidating SPY and IWM.
What I have been doing is not going by max pain, but a more conervative “cut losses” approach. For example, I am using AAPL 105 target and would use something around 56 for IWM
Should we be buying longs now or are we still expecting a new low?…
October 16th, 2008 at 11:35 am
Nobody here can tell you what to do with your money. What do the charts tell you?
Personally, I don’t think this looks like a bottom yet. But I could be wrong.
October 16th, 2008 at 11:42 am
Sorry to bother Craig. The charts are confusing me, they made sense last night but doesn’t seem to be playing the lows that I expected. and my gut is telling me to wait till mid day.
October 16th, 2008 at 11:42 am
Let me paint the picture for you. The Long term trend is up. The 5Y trend is sideways. The yearly trend is lower. The weekly trend is higher. The daily trend is lower. The intraday is lower. We know we are going lower, but eventually higher.
Does this tell you anything? NO. stay cash.
October 16th, 2008 at 11:48 am
Ahhh, Picasso!
Thanks Mike.
The 2.0 Volatility Band for today is at 83.70 in the SPY, the 3.0 VB is at 80.54. If things really get out of hand the 3.5 VB is at 78.96. Also I saw the FTSE took out last Friday’s lows and made a new 52 week low today. The VIX looks like it maybe exhibiting it’s final 5th upward wave so it appears this could be its last significant move upward however it could rise back to 100 before it peaks. My guess would be we see a significant bottom occur sometime next week as there is a significant turn date around October 23rd.
maybe a inverted head and shoulders
Check out the rally in steel today. STLD for one.
MaxPain for options – People will have different experiences using this. I tracked several stocks with this over the past few years, and my experience has been that this serves as a fair indicator when there are no ‘externalities’ or volatile outside events, and best for months in which options have not been available for that month for extended periods of time. If an option has been available for many months or over a year, keep in mind a lot of people bought and sold those options a long time back, when it was ‘inconceivable’ that prices are where they are today. This will weight the number in one direction. The chance for us to see 1100 on the SP500 tomorrow would take a historical size upward move at this point.
Hey Craig,
Inverse H&S on the minute SPY?
Just touching that neckline.. if it holds as support, this might become a move higher to retest that intraday top.
Am I right on this?
This consoidation pull back as we hit the 20 SMAs looks very promising for the bulls…
From yesterdays high of 945 on the SPX yesterday afternoon, it looks like one big ending diagonal forming with this push down being the last wave 5 push downward.
Which would mean the whole move is running out of energy.
Just a possibility.
Hey craig how is this for a play on AUY?
Check the weekly 3 year chart and you’ll notice a huge H&S pattern.
I’ve calculated the highs and neckline length and made an entry point for me..
What’s actually rather interesting is that it comes close to the next support line on the chart which goes back to Sept. 05 at 4.40.
So this is my calculation:
High: 19.93
Neckline under the set hight: 12.04
19.93-12.04= 7.89
12.24 (lowest peak before the RS move higher) – 7.89= 4.35
The lowest we went this week was 4.40, which was also set today and which is the Sept 2005 highs and nearest support target (so that’s not very surprising at all).
What is pretty surprising is that the H&S retracement also point to that level..
Now when I check the 60 minute chart I see we set a bottoming candle when hitting that low.. We’re in confirmation mode right now and should we close above that level with decent or strong volume, this can result in a strong bottom for AUY.
Please let me know what you think guys..
Daneric. Check this SPY chart and let me know, please, if it goes with Elliot theory?
http://social.stocktock.com/photo/photo/show?id=2348194%3APhoto%3A1605
October 16th, 2008 at 1:10 pm
I meant Daneric40.
craig,
are you going long for a bounce?
October 16th, 2008 at 12:26 pm
Sure am.
October 16th, 2008 at 12:30 pm
what are you buying
October 16th, 2008 at 12:31 pm
SSO for leverage.
October 16th, 2008 at 12:38 pm
what is your target for sso?
October 16th, 2008 at 12:40 pm
Have not calculated it yet. Let’s see if this inverse H&S plays out. If it does, take the distance from the neckline to the bottom of the head. Than add that distance to the neckline for an upside target.
October 16th, 2008 at 12:48 pm
is it on 2 day 15 min chart?
Well I think this was it boys. The fake out and the shake out. Look at the market moving straight up! I think we rally from here. The volume is good, the VIX looks right, Options Ex tomorrow.. etc
looks like right shoulder is about to form
October 16th, 2008 at 12:28 pm
Oh I see, you are looking at a larger inverse H&S pattern. Interesting.
MACD narrowing again at the top after divergence. This turn is a result. I was right on the bottom call above via MACD divergence and RSI turn. I just don’t know where we are going from here. I’m down. No conviction today.
LIBOR spreads narrowing. This may be the turn I was looking for. Commercial paper is getting better. This may be the good news we were looking for. Guess I’m getting long here.
I’ll keep tight stops.
October 16th, 2008 at 12:31 pm
Again.
Bull flag on the ES?
October 16th, 2008 at 12:42 pm
Volume drying up on the rally.
October 16th, 2008 at 12:44 pm
ES needs to hold this trendline
October 16th, 2008 at 12:45 pm
Great calls on the H&S formations. Very well done.
October 16th, 2008 at 1:10 pm
POT; BUCY new 52 wk lows.
Shanky – You’re my contrarian indicator today. Each time you say you’re buying cause we’re breaking hgher…I’ve sold. I may have to offer dinner for the board if you don’t get quiet!
Craig – look at 15 min chart on the ES. H&S pattern. Friday was left shoulder and today is the right shoulder. Yes/No? Thoughts? I think its a bad sign.
October 16th, 2008 at 1:41 pm
I like to see larger shoulders relative to the head. But its something to watch.
Guys – is my charting working poorly today, or all SPY/SSO/SDS (others?) have very strange and large OHLC withinn last 45 minutes?
October 16th, 2008 at 1:02 pm
I see the same thing. Does anyone know if that indicates anything?
Testing the daily VWAP on 1min chart. Run up on higher volume pull back on lower volume good technical bull flag. See if it can hold the VWAP or not
October 16th, 2008 at 1:08 pm
Hope so for my sanity.
Take a look at my pic on social and see if my H&S call is correct. Thanks,
Can someone please explain why the data spikes on charts occur (SSO & SPY)? Is it just because Ameritrade sucks or does it have something to do with large orders being processed?
October 16th, 2008 at 1:25 pm
As I said before I see it too. But my charting always sucks, so I desbelieved it first, until you confirmed.
For me it looks as some targeted trades; I had open buy order easily within limits of those spikes, that did not get filled for about 30 minutes, why my limit price was hit by those spikes dozens of times (on 1-min chart). So I think those trades are/were not for regular guys, but some more special guys.
This is one of those things that have been a great mystery to me, I would love it if someone could answer this.
OPEC emergency meeting announced earlier today and oil continues to fall. I expect it to flatten here going into meeting. You got to thnk they’ll try to keep prices high. could be an opportunity. Brtter fill up this week just in case.
Mutual Fund business will be comming in. FY end 10/31. they will be loading up at these levels.
I’m getting that feeling again…..Mr. Long may be BACK!
The level II data seems just as weird….
Looks like the head and shoulders worked..
Craig and all
Today’s 2 PM reversal (if there is one) could be a fake.
MS CEO said in an interview with CNBC – deleveraging is continuing.
Oct 21 – Lehman CDS settle
Oct 23 – WAMU CDS auction. (Crash scheduled??)
We are not out of this
October 16th, 2008 at 1:41 pm
The 21st event could be the major capitulation day?
October 16th, 2008 at 1:45 pm
I don’t think so. WAMU CDS auction is on 23rd. It is not as bad as Lehman but it could be the last straw.
October 16th, 2008 at 1:42 pm
Mohan, I’m not calling a bottom to 3(3), but we could see an options expiration rally.
October 16th, 2008 at 1:42 pm
Who is not to say that there are buyers stepping in to take advantage of the de-leveraging? As with the de-coupling theory early this year regarding emerging markets – I am sure this one will turn out to be just as silly…
October 16th, 2008 at 2:02 pm
There are a lot of “market retested the lows so it is the bottom” callers on CNBC. It is true that there are buyers taking advantage of the situation. However, it is simply supply and demand situation being out of whack. Too much supply and still limited buying interest. Furthermore, houses are rising money for CDS settlement.
VIX broke out today to new high (80+) and per CNBC Nov month implied volatility (VIX) is over 140. Either this high Nov volatility is:
a) defensive put buying, or
b) they are expecting something big
My guess is (b). Downside risk is higher for at least a week. I am urging caution.
Then again, I am just speculating. I could be totally wrong.
Can someone explain the data spikes or admit that no one really knows why this happens or what it may indicate?
i like it but only time will tell. i think i like goog after the bell taking a small call opt.
October 16th, 2008 at 1:58 pm
Just saw a feature on the GOOG phone and I am not as excited about AAPL as i used to be.
I am actually getting a bit dizzy watching this market!
Also looking for a bounce into options day, with a SSO hedsge at $27.65 from this am. Have traded the SDS core I have a few times for some quick trades.