1:49pm
Hey guys, i’m on a business trip so i’m having a hard time update things as we move on. But my thoughts as far as today’s action, is that as long as we end the day below 103.20, it will be very bearish. We gapped up in the futures only to sell of right at the open back down. Last time we had that happen, the market fell 3% (2 weeks ago). In the past, we have had the market futures start lower and reverse higher, today was one of the first times in a while that we’ve seen the opposite happen. I’d like to see more weakness from financials, but JPM AGAIN, being weak.
Intraday Commentary ~ 08/28/2009
– August 28, 2009Posted in: Intraday Commentary, Stock and ETF Models
$INDU 1 minute even more beautiful Inverse H&S. Bears need to push thios below 9530 fast.
Stopped out of EDZ at 9.09 bught at 9.05. Will wait EOD to place a bet again.
If Inverse H&S does not play the sell off will be furious because it so obvious that I imagine a lot of people are buying right now.
Is it just me, or do these patterns fail more than not. It seems that people talk about head and shoulders and inverse head and shoulders, and they dont play out, or never reach their target. Maybe its just an easy pattern to identify but I’m not impressed with the record of this pattern. In the last 4-5 months we’ve had a ton of these on the SPX but not one has played out significantly. They are always “forming” or “potential” but you dont really hear much about them after that.
In other words, if a pattern only plays out 5-10% of the time, then it’s a worthless pattern. Candlestick patterns seem to be the same way. Bearish hanging harami shooting doji star – fiddlesticks. If it doesn’t work it doesn’t work. The channel, fibbonacci, and VWAP analysis seem to work much better in this market. Just my opinion.
There are several problems. These patterns were not really meant to be used for 1 min charts like a lot of people call out all the time. Also, most don’t look at the technical definitions, such as volume patterns or the fact that IH&S do NOT develop at or near the tops of an uptrend as it is a reversal pattern ,not a continuation (sp) pattern. So people call these out because they “look” like them in form but they don’t meet the technical definitions.
what a nasty place to sit in the market lol.
On a TA basis – we are consolidating under the 20/50/200 MA from 1027 – 1028.5 … hence may need to form a bull flag to break this level …. 10 min chart
thanks for that information. i’ve been trying to focus on my long term charts, and have turned away from 10 minute and lower for a short time to have clearer long term outlooks.
great to know!
Glad to contribute something
I think this should be bull flag complete … otherwise we have a problem .
Broke above .
Last resistance @ 103.23 – 50 MA .. then 103.60 (minor) and then the high ..
yeah the 1030 will be a bit of resistance first, then the numbers you listed.
still a lot of fighting left for the bulls to take full hold.
If there were to be a 5th wave,, where would be a good place for it to end?
at this point maybe 1019…
I believe he meant wave 5 to the upside, which would probably complete P2. The target for that is 1044.31
i actually think it might be 1046?
well it’s somewhere around there. thanks for the clarification “rec.”
Also, the other question is that if wave 5 happens .. .then what is expected after that ? A move up / down ?
hard to say.
one thing we have to clear up is that we’re looking at intraday waves currently which aren’t the most reliable. there are occasional moments in time when they line up beautiful and paint a clear picture, but not always.
look at the rise from 666-832 (no major retraces)
look at the rise of this 5 wave up to this area (no major retraces)
if the major movements aren’t retracing in a pretty fashion, we can’t expect the smaller intraday to give us the clearest direction either.
after 1045, we could fall a lot or a little, we could go down to 1004 if it wants and still be able to head higher. or it could wedge, it could do anything.
i won’t consider serious large position calls until after 1045 breaks (if we get there).
currently, the market seems to be grabbed by the bears a bit.
still could rise. mini 3 wave down complete (possible 4 of 5).
i won’t consider getting out of calls til 1025 breaks to the south.
until then i’ll hold and enjoy.
Thanks for thi.. but was asking more short term #88
Well, I am looking for the start of P3 after we top. The top may not be 1044, we may make it to 1122(50% fib). But from my wave count, 1044 seems like a good top.
After that, (1) of [3]. That should take us down nicely, maybe ~900.
Thanks Woo.. I did mean it to the downside.. the fifth wave down (if it were to be a 5) before the leg up to 1046.. By the way is there a gap in the 1093..? could that be a target close to your 1080′s target?
i think i tried 1088-1090 which looked pretty nice. i haven’t tried 1093. i’ll check it later.
we have to get to 1030 first, then 1033 before we can even hope for anything higher.
Since Richard is away, I’ll point out how SRS is not moving despite market down and empty store fronts and Malls across America. Parts of this market really do smell like rotten fish.
I have SRS and noticed this. Probably should’ve done my research first, but what does SRS represent anyways?
“ProShares UltraShort Real Estate (the Fund) seeks daily investment results that correspond to twice the inverse daily performance of the Dow Jones U.S. Real Estate Index (the Index). The Index measures the performance of the real estate sector of the United States equity market. Component companies include those that invest directly or indirectly through development, management or ownership of shopping malls, apartment buildings and housing developments, and real estate investment trusts (REITs) that invest in apartments, office and retail properties. The Fund takes positions in securities and/or financial instruments that, in combination, should have similar daily return characteristics as –200% of the daily return of the Index. The Index is a price return index. The Fund’s investment advisor is ProShare Advisors LLC.”
Anyone got in on XOM? I had very small XOM 70 put (September and October) filled when XOM went above $71.80 (near triangle resistance on the daily). Minimum target is $67 in two weeks, and more if the triangle breaks down. My September put profit is to cover the cost for October put purchase.
Woo – if we do see a wave 5 down – you expet it to end at 1019 …what are you seeing after that ?
maybe 3 wave up, then 5 wave down.
but i still say 1045 will hit minimum. 1036 and 1039 are UGLY tops.
UGLY I SAY. the math lover in me cannot accept it. 1045 MINIMUM for an acceptable top. 1088 is more beautiful-er though. =P
The reason I’m saying 1044.31 is that because that is the 4th wave extreme of 3 of (3) of [1]. That is the expected target for P2.
i have no problems with 1044 at all.
I just pointed at 1046 because of the intraday wave minimum is at around 1046.
on the 6 month it looks nice around 1044-1045. it can go to 1046 and still hold 1044 on the 60 minute avg.
thanks =P
if we don’t go to 1045 minimum, i apologize in advance. good luck. my money is where my mouth is though.
Bought into UUP at $23.20 for longer term hold.
Another indecisive day.
Can someone confirm Robert Prechter said it’s time to go full on short?
i just heard it on this forum from that one poster. haven’t seen any articles or other mention.
http://www.elliottwave.com/
EWI intraday service said that the top MAY be in. Short term update from Wed said that 1037-1044 was a good target. Special report this morning from Prechter said that we are just a few points away but did not say about anything about going 100 percent short.
thanks paul.
Thanks from me too. I guess we’re in that same state.. where the longer term bears already went short and the rest of us that want every dollar is waiting for a move higher before the fall (blow off top?)
All this action over the last few days seems to me that the market is buying time for the trendlines to be higher for the top. But the major bear trendline (See Daneric’s charts) are descending, so the market is running out of time. I expect a throwover of the bear trendline to trap a lot of bulls before we start P3. It would only be suitable for P2 to break this line and start the recession is over party.
During the tech bubble, market overshot bear trendline by 3%.
DXY at HOD. Not good news for equities.
thanks Woo…it helps knowing that! Nice to have conviction!
It seems like the HFT machines are being turned off. Absolutely no volume on the SPY. The dollar meanwhile rallies. This is bullish manipulation. When the dollar turns down the HFT machines will get turned on.
arent those machines great.
Can you explain why this is a bullish manipulation?
See you guys next week. 100% cash into the weekend. No relevant event today.
So, if we can break above this 1031-1032 range, then we should setup for a rally next week. This week opened at 1026.59. So that is also a level to watch. Dropping below 1016 would definitely end the week more bearish.
this doesn’t look like wave 3 up, more like wave 2 . Monday should be a big wave 3 down
What a market! We are in a new era without corrections!
The key in this market is to go with stocks that have corrected, or in a “comfortable” level at which you can buy. At the same time, have an exit strategy in place should the market either correct or pull off the move the bears have been dreaming abou for the past month.
BREAKING NEWS: Cerberus’s hedge-fund investors ask for the return of $5.5 billion.
http://online.wsj.com/article/SB125148681701267563.html
Woo -couple of basic q for you on the way you chart these ..
1. How do you determine where to start the wave counts from ?
2. You mentioned that wave 4 met the minimum retrace criteria … can you share the min / max retrace tgts for the waves
Thanks a lot in advance ..:)
BTW we broke 1030 …next stop 1033 ..
i’ll post answers in a bit.
1030 wasn’t broken on the 60 minute…
Yes -i see tht …. what r u thinking ?
rise into close…
maybe fiddle above all the 20-50-200ma’s you were talking about ont he 10 minute.
or maybe close around 1030 to make it really interesting.
set up for monday is perfect. be ready.
Straddle – works going into Monday as a move either way will be really strong.
or go cash
That works, too.
I was contemplating straddle, but decided to wait for 3:55 PM September 4. I think Bailout 3.0 may cause a 35% decline (or perhaps even crash).
Im half in cash with 4 shorts and 4 longs remaining in equal dollar proportions (aka, Delta neutral)
Let’s see if the bulls defend this 1026 level to close the week positive.
idmcq just went over 5 cents
i’ll gamble a bit and hold over the weekend.
good luck everyone =)
cash is probably the safest move. i couldn’t get out at 1039 because i was sleeping lol.
With ya on holding Woo…..thanks
Have a good weekend,
Ox
I am holding too
could bite all three of us in the ass haha.
good luck =P
Will be hard to hurt, I had a lotto ticket in DELL
So although I am a bear most times, I will let ‘em have this chance. Everything I held overnight Thursday paid very very well this morning, after that I thought it was time to buy the dips.
Out of SPY puts becasuse of weekend gains from today & yesterday+38% puts.
Bearish going into the new month.
I was bearish going into this month. After fighting the trend and getting whipsawed half to death (well maybe only 10% to death) i’ve decided to go back to the good ole days where the trend is my friend. Now where is my teddy bear when i need it, i need something to hug while i cry myself to sleep, lol.
If this is going to be a shooting star reversal, then there should be a gap down on Monday that will not be filled for a long time. I’m not holding my breath, though. I’m not taking any positions (except XOM puts) until near closing on September 4.
On the weekly chart, forgot to mention that.
Weekly candle is still green though. Shooting star pattern still can be valid?
Sorry, I was thinking evening star. My bad.
You’re right in looking at the weekly candle. Green or red doesn’t really matter. It will confirm if we gap down and close the next week in the red.
Been listening to both Bears and Bulls today.
Bulls are happy that the S&P ended above 1027. They think it’s going higher next week.
Quick question Fritz- I’ve seen you mention September 4tg an the healthcare bill many times. Is there a vote on the bill around then? Trying to figure out what is significant about labor day…thanks!
Whether it gets the week of Labor Day or after, it won’t matter. As soon as it starts to be debated on, you’ll see fireworks in the market. Wall Street loves Bailouts one day and then hates it the next day. Wall Street loves socialism one day and hates it the next day. I can say for 100% confidence that the day it gets passed, which it will, markets will drop hard (>5%).
Ocotober 3 2008, market was in the green before Bailout 1.0 was passed. By October 10 the market had already declined by more than 25% from the Ocotober 3 high. On February 10 2009 when Bailout 2.0 was passed, markets declined 22% to the lows on March 6. Market cap wiped out during the Bailout 1.0 crash was more than 4 trillion dollars if I remember correctly, and market cap wiped out during Bailout 2.0 crash was more than 1 trillion. Bailout 3.0 has a price tag higher than the previous two bailouts. (BTW, September 15-17 2008 decline is associated with another smaller bailout: AIG.)
(This will be my last post on this bailout subject.)
When the bill gets passed, I don’t know, but I am adding long term puts so I am just looking for 100% certainty in my trades. Direction from September 8 onwards should point down.
I’ve also mentioned capitulation resistance at DOW 9400 and SPX 1010, and although DOW & SPX are above that line now, it’s not a clean breach. I’m looking for a shoot-up and shoot-down day for the final confirmation. This setup must occur on the SAME day and there should be no EOD rally after the shoot-down. It’ll be a more beautiful setup if the shoot-down shoves the market right below the capitulation resistance.
We closed right above all the averages now … @ 103.31 … so next level would be 103.6 if we can stay above this leve in the open on monday
I closed all of my long positions mid-month and have been playing on the red team ever since. I’ve initiated 6 trades so far with the following results:
SCO: 500 shares closed on the 14th for a profit of 680.00
QID: 500 shares closed on the 17th for a profit of 950.00
SDS: 500 shares closed on the 18th for a profit of 550.00
SCO: 3000 shares closed on the 27th for a profit of 4650.00
TZA: 4000 shares still open (average of 14.25 so I am down 560.00 right now)
SCO: 4000 shares still open (average of 16.00 so I am up 80.00 right now)
total profit so far = 6350.00 (neglecting trading fees)
Not bad for about 2 weeks of trading. I’m holding the TZA and SCO over the weekend. Have a good one!
Wow… thats a good pull down morris!
You are the man! Full disclosure…great thank you.
Now this is credibility…..
Milk money.
Lets see your trade 3min…
Congratulations!!
And thanks for the update Morris!