5 Comments

1. momoney

   Posted January 13, 2009 at 9:24 PM

   Craig,
   What is your opinion on where we are in wave counts? I agree with you from earlier post that we were still in wave 4 since it had been a short time.
   http://www.stocktock.com/wp-content/uploads/2009/01/jan2-qqqq-d.png

   • Craig

     Posted January 14, 2009 at 7:02 PM

     So far, this wave 4 looks pretty much how you’d expect: a sideways-to-up grind higher that is choppy and difficult to play. I think this rally has more room to the upside and could make new highs. I’m not bullish, but I’d be patient getting short this market. I think we are still in wave 4 and I doubt it’s over.

     I’m open the possibility that we are still in wave 3, in which case I’d be getting long rather aggressively if the market retests the lows. If this is wave 5 of wave 3, it’s very risky trying squeeze every last bit of profit from the short side given that the tide is about to turn.

2. Unersaettlich

   Posted January 14, 2009 at 8:56 AM

   I object to putting Brian Shannon’s videos on the Main Trading Blog. Social has a section for videos, which is where these belong. Brian makes a number of useful points, but so do others. They want to make a living from their sites, too. Brian’s short-term viewpoint often fails to consider important near-, medium-, and longer-term factors, which, not incidentally, also influence short-term market moves. He talks almost exclusively about major indexes, where levered ETFs are probably more advantageous for short-term traders, as many of us know. Reserving video space on StockTock’s main page ONLY for Brian is analogous to a veterinary college repeatedly inviting the same lecturer about large animals, whose only instruments of examination are microscopes and magnifiers, without including the latest drugs and treatment modalities and special cautions for their use. I propose that we not post ANY videos from professionals here unless all team members agree on them.

   One should not merely object, but also offer supplementary material to balance the appeal to investors who can’t watch every 5-minute bar blossom on the screen, savoring each tick of its brief life before another grows in its place. Here are an S&P chart (and an XLF/FAZ chart because, as Mohan correctly emphasizes, the financials currently lead the markets downward, and FAZ is the highest-percentage mover for shorter-term traders to play, as Brian might notice to his profit):

   S&P 500:
   http://social.stocktock.com/photo/sp-3month-hourly-with-basic-ta
   Link to live chart (requires subscription): http://tinyurl.com/9dlh2a

   XLF and FAZ:
   http://social.stocktock.com/photo/xlf-and-faz-3month-hourly-with
   Link to live chart (requires subscription): http://tinyurl.com/93erb8

   These charts include (on a scale easier and steadier for most eyes) what most regard as TA fundamentals:

   (1) Hourly / daily / weekly price movement over a period of about three months
   (2) 20- and 50-day moving averages (and a 5dMA to help link to Brian’s work)
   (3) Bollinger bands
   (4) Near-term Fibs
   (5) Longer-term support & resistance bands from older Fibs / tops / bottoms (tops & bottoms are 0% and 100% Fibs) and other horizontal influences
   (6) Operational diagonal influences
   (7) References to useful projections from other analysts.

   • Craig

     Posted January 14, 2009 at 7:03 PM

     I agree with your sentiment that Brian’s videos do not really belong on StockTock. He is not a contributor to this site, and videos can be posted by anyone on StockTock Social. When Idan posts his videos, they will be featured in that space. Scott and I are exploring other ideas for that space assuming there will not be a daily video. Ideas?

     • Unersaettlich

       Posted January 15, 2009 at 12:21 AM

       Our members post useful charts, blog posts and videos. We could pick one to put in that space on a frequent but irregular basis, something of lasting interest of a generally instructional nature. They don’t have to be PhotoShop-fancy like mine, just useful, understandable, educational, making an important point beyond the context of daily goings-on. One guy recently did a pretty good bearish ascending wedge, then later showed how it broke down. We could even ask him for one more, showing how the bloodbath progressed. I posted a similar chart, but we could try to pick somebody not part of the team. It would attract members and they would make more effort to do stuff that would be worthy of selection to be featured. We could also learn of consistent good performers who might be considered for team membership.

       The wedge charts were classic TA stuff. They also were a concept that a lot of folks, including some gurus, missed, braying some bullish nonsense about “higher highs & higher lows,” “support from the uptrend line and the rising 20-day MA,” and/or an EW fantasy that was never going to penetrate all the nasty resistance of such as a Bollinger Band blanket draped over the upper end of the flag, screaming that values were getting too extreme and were about to melt down as they had so many times before. The short-to-medium-term uptrend happens to be typical of bear flags / wedges / pennants, bear market rallies, and other signs of coming misery, as shown nicely by the member’s wedge with an apparent nice rise suddenly breaking down and pouring blood out of the hole in the wedge, maybe after a false upside breakout, and / or a backtest of the support line suddenly become resistance. I wouldn’t go so far as to make the area a “wall of shame” for all the videos and charts from pros who ****ed up big time after being mesmerized by the 27% rise out of the November bottom, but we could mention that such mistakes were made. We could speak with pride that one of our fine members was not taken in, but had done his homework and knew a deadly TA pattern when he saw it. That pattern delivered to my (Mohan’s, too) favorite greedy rapacious speculator a 65% rise from 32.75 to 54+ in about a week of betting against it (via FAZ) without a single trade, more if selling the upsquiggles and buying the downsquiggles, perhaps something that could be mentioned in accompaniment to the selected items to highlight how the knowledge communicated could have been translated into nice profits.

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