Today we look at the gap lower in the markets, breaking the ascending support that we’ve been talking about for days, and finally yielding a strong move lower. The volume today wasn’t strong, but it also means that the bulls could have been trapped, and that it was just bears getting in without a fight. We had 25% of our portfolio short before today, and we took 20% of it off when the SPY hit 78.00. Finally we can say that we’re in subwave 5, and that we believe we’re going lower in the 2 weeks to come. In this video we look at XLF, GS, VIX, Dow, and Gold. We do believe there is a potential for a one day upward consolidation on low volume, but that should be a gift to the bears as more bears can pile in short. I will add more shorts on as we move towards retracements on todays move. In addition we talk about potential targets for this sell off, and where the bull market can finally begin.
Excellent video and in line with what I was looking for. My thought was a gap down in the morning to chase some bulls only to run up higher (making it hurt) for the window dressing many of the end of quarter “masters” see setting up. The levels you set make sense, which is why I will be both bullish and bearish tomorrow for scalps intraday. My guess is a choppy type of day with a close at or near the same levels as today in order to keep everybody guessing. Excellent work by everybody here! I cannot tell you how much the analysis helps my own thoughts and theories.
Wish all of you more great trading,
OT
Idan,
Great videos!! I see Oscar’s energy has crept into you also.
On a different topic, I am shocked to learn that Bennet Sedecca, a great contributor to Minyanville, just recently passed away due to brain injury sustained from a slip on the stairs. I learned a lot from his writings. A truly outstanding analyst and a gerat free resource on the internet. I will certainly miss him.
http://www.minyanville.com/articles/bennet-sedacca/index/a/21689
Nice video, Idan. I am not a EW trader, but feel the retest of the lows seems like the most likely scenario. There is not much confidence in this market, as you could tell by the change in sentiment after one big down day by the talking heads. It took a lot of restraint to not sell at the close on my shorts, but I have not reached my price targets and have a longer horizon than your dayish trades.
BTW, i can tell you did well today, as you sounded kinda hypomanic on the video. Keep up the good work!
Idan:
Do you still maintain FAZ potential for $50+?
Yes… just took profits for a potential consolidation down a little.
Up and down moves are very bad for FAZ. RIFIN dropped about 8% today so faz rose $4.60. If RIFIN goes up 8% tomorrow, FAZ will drop about $6.00.
Thank you for the FAZ reports. I’m stuck needed $68.59 to BE. I know Idan can’t yet see past $50 right now and I’ve come to depend on his TA and communication of such here. I’m BLESSED to have found this site while looking to understand what I got myself into with FAZ. Thanks for being here. I’ve learned so VERY much! and, I’ll continue to follow as long as you’re all here! Thanks for helpin’ a girl out!
Thanks.
Love the enthusiasm! Always fun making $$$$. My bracket trades at the open on VIX and GLD calls payed off handsomely. Luckily, I have consulting work this week which kept me away from here and away from some bad trades I might have made subsequently.
Once the end of month bs is over, I believe the true direction will be defined. ES ended up AH so turnaround-Tuesday looks valid. Bears will have plenty of new ammo to dump this market Wed-Fri. Will they “pile in?”
No
The bears can even start taking this market down around mid tuesday, so keep in mind that days don’t necessarily define movements, it’s the retracement levels that do.
I’ve been a lurker here for a while but am a first time poster. Really love the TA and the discussions here. Quick question:
A lot of traders covered their short positions around 778 on ES today. I’m wondering how could they tell that there was no further downside? The market internals seemed to be getting worse at that point, and TICK wasn staying below 0 for the most part.
Secondly, right around the same time (when ES was around 778) people starting talking about re-visiting 800 tomorrow. Again, how could you tell?
Your insights are appreciated, thanks in advance.
the market is efficient.. it always retraces.market fell 9% already , and so it needs consolidation .
if were in p2, then 2moro is sub-wave 2 and later this week is down for a bigger wave 3. possibly hitting 769?! (38% retracement)
I like to think of it as the market having BP (not blood pressure) Bounces, and Pullbacks. After charting long enough, you will find one thing. Support and resistance stay the same, the only thing that changes is the price. The process we are in now, regardless of your wave count, can be charted pretty easily on a Weekly Chart of the SPY. The SPY and SPX are what are being monitored the most in these discussions. For those in the inverse, the XLF is the mainstream.
Here is what I am watching:
http://i399.photobucket.com/albums/pp80/cnest/March30SPW.gif
http://i399.photobucket.com/albums/pp80/cnest/March30SP.gif
First time I have tried to post a link, hope they work.
Thanks. To even a newbie like me, the monthly chart, with what I guess is a “double top,” sure looks ominous. Scary.
Idan
Do you see any effect on the mark to market decision coming up I believe tommorrow or April 2? Your scenerio callls for a sell the news reaction in my view.
PS
Great analysis. I also appreciate how you include your money management ( ie when your adding to your short positions, and stop levels). You’re quite unique in that regard and I appreciate that aspect greatly, don’t know of any other technician I follow who does that so thouroughly. Thanks
I actually don’t care too much about the m2m, it could be that the futures are up in preparation, I will short the market at the levels intended, as I believe the market has decided where to go.
I just can’t see how the financial will go down much this week with the FASB decision on Thursday. I didn’t know that bears had bigger b$lls than bulls. I think it is crazy to be short financials right now unless you are mentally prepared to ride it out.
This is a scary week for all so maybe will just go sideways.
Actually I consider it a scary week to be long. G20 , I subscribe to Soro’s view that if nothing decisive comes out of G20 with a whole lotta unity talk behind it the market will be heading for brand new lows.This rosey picture thats been painted in the US the past few weeks completely ignores the world wide disaster that is just starting.
At the end of the day nothing has changed , the problem has not been solved. Gov is still completely unwilling to let capitalism fix what capitalism broke. The wounderful thing about capitalism is it’s self correcting , but right now no one is willing to let the financial companies fall apart.
G20 will disappoint many I think and as the news focus shifts from the next latest and greatest US bailout to the worldwide problems reality is going to set in.
Besides , Crysler being doomed to BK , that alone will cause the markets to go lower think of all those business’s that are going to go under that support those cars when it’s left to die of it’s wounds in a month.
Yes, with news like this, which I believe Alex also shared with us yesterday, it would be dangerous to be long (of course coupled with the charts and wave counts, that is):
Russia, China- Gold Standard return… G20 showdown:
http://newsusa.myfeedportal.com/viewarticle.php?articleid=282
The threats via this sort of talk to the USD’s reserve status is huge and we currently depend on that flow of dollars outside our country for the loans we are surviving off of.
I believe that the FASB talk only adds fuel to the fire: the global financial community has been losing trust in the US in general but throw in further obfuscation (financial statements based not on reality but mark-to-fantasy) and any remaining confidence goes out the window. We are seeing the market correct itself: other countries see, and are telling us, that the emperor truly has no clothes.
Great post Idan. Agree with almost everything.
I’m still bullish on gold and think we are due for a move higher.
One of the reasons im still bullish on gold is that:
Today HGU ( 2x all of canadian goldmines on TSX) was up even tho the market & gold was down.)
Gold today didn’t lose any REAL value.
In terms of canadian dollars. The USD gained 1.98% & gold lost 0.78%. hence Gold had a net gain of 1.1 % in CAN$ percepective.
I’m sure this holds true to other currencies around the world but haven’t checked.
Gold didn’t pass the resistance channel It’s the gain in USD that pushed that channel lower.
P.S. It’s nice to see you are back in a good mood in your videos. The last few ones you seemed almost depressed.
haha, i’m a college student, we get depressed even if one of our teachers decides to give us extra homework haha.
He also has two profs on the team with him who give him hell if his H&S calls and other TA pronouncements don’t meet all the specs. But at least one of them agrees with him that the bears will roar.