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Feb
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Market ended fairly ambiguous today, right in the middle of a number of significant points. On the monthly chart it ended between the 50ma and the 200ma, in between a descending channel from highs (1050s), in between the 38% and 50% retrace of the last major fall, below a 3 day ascending trend line, but below a 1 day trend line. It is also sitting in between the 38% and 50% retrace of the rise from the 1057 area. How is THAT for fun?
Now many of you may notice that my counts above are different from daneric, craig, and kenny (who are great TA’s and EW guys). I just thought I would explain the reasoning towards my madness. Currently with my count above the wave 1 and the wave 3 are almost the same length, with wave 3 being slightly longer. In the other party’s count, the wave 3 is currently shorter than the wave 1. That is pretty much the only difference in count between my chart and theirs. At the moment I am leaning more and more towards the wave 4 having ended. I drew two fibs for you in light blue (similar to the observation that craig used). the first fib is A of wave 4, followed by an expanded flat correction, and then the other light blue fib which is C. In this scenario my wave A and wave C are also of similar length with wave C being slightly longer. the expanded flat correction here goes past the 38% of wave A of 4 and the C of 4 does the same, and I am leaning towards it dropping further from here. There is a chance that we could rise further, but I believe I would have to see another ABC correction happen prior to that move upward, but because the wave 2 was so drawn out, I don’t think it allows for enough time for the wave 4/wave 1 to form a 3-3-5 correction to change paths. So what I think I’m saying is that I am leaning towards wave 5 down having started.
That being said, wave 1 and wave 3 down in my count, were very quick, this probably will mean that wave 5 will be drawn out, this will work in favor of the market manipulators going into opex week as any big moves will be sudden, but most likely followed by corrections, double bottoms/tops, and drawn out consolidation and wedging. This will mean decay for those that hold, and frustration even if you call the overall direction of the market correctly. However, I wouldn’t be surprised if this wave 5 (if it happens) extends even as far as the 1.6x of wave 1. This means wave 5 will end at least below the 1119 level. Based on fib projections I would lean towards 1113 or even a 998 as a possible end point for the wave 5, but I won’t be able to confirm until I get more market confirmation. 1122 is a major fib retracement of the overall P1, so it will probably create some resistance adding to the drawn out movement of the wave 5. Wave 1 and 3 took about 3-4 trading days, so wave 5 will take longer than this, maybe close to two weeks.
However, the market is currently nearly flat in futures, so we won’t really know what the market is going to do until tomorrow begins. If we rise above 1081, I will probably throw away everything I said here and rework charts based on a 1 wave northward and the possibility of new highs. I entered a very small put position into closing on march SPY, and if we rise, I will probably consider adding to this position, or stop out and wait for the next significant point to the north until we get a confirmed break that shows bullishness. may be a lot of stopping out and frustration.
Just some things going on through my head in case anyone is curious. Good luck!
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From Unersaettlich:
===============
MACD vs PPO:
PPO is percentage version of MACD which does not get as distorted as MACD if the chart moves thru a big range of prices, as with 3x ETFs. Here is a free chart that shows them side by side:
http://stockcharts.com/h-sc/ui?c=FAZ,uu[d,a]daclynay[pd20,2!b50!f][ile12,26,9!la12,26,9][dd]a
Most of the MACD is unreadable on that chart, while the PPO is useful over the full range of dates and prices in spite of the extreme range of values.
In general, you can google a topic related to charts, or especially look it up directly on stockcharts.com, as in:
http://stockcharts.com/support/search.html#ppo
Why the rises on Monday and the dips on Thursday?
The Fib levels and wave action construct a channel in which the even-numbered waves push prices up and across to the upper boundary of the channel. The 2nd and 4th waves have been starting Monday or late Friday (gold boxes on the chart below). Similarly, those waves have been ending just in time for big 1st, 3rd, and 5th waves to drop (turquoise boxes), often rather precipitately from the upper channel boundary much of the way toward the bottom. That is just how the geometry happens to be working out in many charts lately as a result of the interplay of the Fibs and the resulting waves and channels that form when prices bounce off of them. Fibs have mathematical properties that cause them to generate other sets of fibs so that Fibs from different sets coincide with each other. 61.8% / 38.2% = 100% + 61.8%; 61.8% x 38.2% = 23.6% = 100% – 76.4%; etc., etc. This propagates the same S/R zones and trend channels up, down, and across a chart. So whatthehell, my bear buddies and I are loaded for bear with FAZ nice and cheap this afternoon, and lusting after the hoped-for action tomorrow. If it doesnt work out, maybe the pop will happen on Monday. Or whenever. These things dont go on forever. At some point, I could wind up giving people buggies at Wally World, but for now, maybe its worth a shot.
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How to do Fib levels at the office or just about anywhere there is a computer with spreadsheet software
The instructions below will give you a spreadsheet that does Fib levels in either direction, as in the following screens:
1. Open Notepad or MS-Word or just about anything that can edit AND SAVE plain text.
2. Copy the next 18 lines and paste them into a new document:
Level,$SPX,
=1+A10,=B$18-$A2*(B$18-B$10),
=1+A11,=B$18-$A3*(B$18-B$10),
=1+A12,=B$18-$A4*(B$18-B$10),
=1+A13,=B$18-$A5*(B$18-B$10),
=1+A14,=B$18-$A6*(B$18-B$10),
=1+A15,=B$18-$A7*(B$18-B$10),
=1+A16,=B$18-$A8*(B$18-B$10),
=1+A17,=B$18-$A9*(B$18-B$10),
1,667,<== Put Hi or Lo Here
=A10-A17,=B$18-$A11*(B$18-B$10),
=A10-A16,=B$18-$A12*(B$18-B$10),
=(SQRT(5)-1)/2,=B$18-$A13*(B$18-B$10),
0.5,=B$18-$A14*(B$18-B$10),
=1-A13,=B$18-$A15*(B$18-B$10),
=A17*2,=B$18-$A16*(B$18-B$10),
=A13-A14,=B$18-$A17*(B$18-B$10),
0,1576,<== Put Lo or Hi Here
3. Save the document AS A TEXT FILE (not a Word doc or some such) with the name FibLevels.csv to make a comma-separated values file that can be opened by just about any spreadsheet program.
4. Open FibLevels.csv with your spreadsheet program. It will do fib levels as is, but you will have fewer weird messages if you save and use a new version formatted for your spreadsheet program. Remember the proper suffix, such as FibLevels.xlsx or whatever MS-Excel is using this week.
I went long TBT according to Rick Santelli the 25 year treasury was a not very good he rated it a D on a scale of A-F ..So im short long term treasuries..
February 10th, 2010 at 1:46 pm
I think that’s a smart play. I may be joining you.
February 10th, 2010 at 2:00 pm
Thank you..Come join the short bond fund party….:-)
——— IBOC ———– up 3% from its low
———- ONB ———- up 3% from its low
———- RF ——— up 3% from its low
are all these banks exactly the same? all up 3% from the low? ive never seen
this type of symmetrical moves in stocks that are all in a different position.
February 10th, 2010 at 1:47 pm
SOMEONE JUST COVERED A MONSTER SHORT POSITION….. NO?
————- S ————- SPRINT missed and is off 10%
they distribute PALM product. PALM rallies 3% off its oversold condition. if you have no position in PALM, it may just back test that $10 – $10.50 level.
—————- RF —————– not sure what is up here. but the daily is starting to shape up alot more bullish although the volume and candle pattern is ugly. took more short term puts in this spot @ $6.45 ………………. however im now more 50-50 on this holding. this has to pull back before the close today or its looking short term bullish.
RF MARCH 7 PUT $0.78
————– CERN ————- money in the bank so far. bought my puts at $81.70 or so.
at this time the market rallies and CERN goes into the DOO DOO tank.
this really looks like it can make a big move soon.
now trading under the 20 / 40 / 80 SMAs on the daily.
Here we go, I think we`re heading lower the rest of today and the big one coming tomorrow.
I`m short SPY and AMZN, long GIGM.
February 10th, 2010 at 2:28 pm
…yepp…probably I will load more SPY PUTs by EOD….
———– ANJALI ———— re: CERN … earnings were out yesterday. look at VPRT the day of earnings. it was strong and then flopped days later. this one cant even put in a decent candle today. the volume in the PUTS is JAMAZING. im in and smiling. up $$ already.
February 10th, 2010 at 2:22 pm
Hye Richard – yes
I expected this could goto 82 at the most – it went to 82.5 
February 10th, 2010 at 2:29 pm
the stars align in the chart . moving average at the 50% fib. swing points lining up with the another key average. im really feeling good about this trade.
————— V —————- sure looks like a BEAR FLAG on the daily
temptation is such a bad thing
February 10th, 2010 at 2:22 pm
took just 4 contracts here. day trade. believe we at least pull back to the 1065 area. something is not sitting right with me. this move is too early imo.
February 10th, 2010 at 2:24 pm
looks like a flag pointing up on the weekly and a flag pointing down on the daily. longer run 40 and 80 pointing up and the 20sma pointing lower.
$85 FEB puts $2.08
February 10th, 2010 at 2:26 pm
any print above $84 and im OUT
looking for a print of $83
February 10th, 2010 at 2:39 pm
the lower line in the DAY CHART FLAG is the LOD in VISA. so it tested it today and held nicely. if it heads to $83 i’ll hold for a bit. and watch for around $83.25ish . maybe just maybe it breaks lower today.
…looks like my post….#45….is still in force…
..bettter to sleep…what a boring day…..
February 10th, 2010 at 2:35 pm
..set orders to load more SPY PUTS if it goes below 106.5
February 10th, 2010 at 2:36 pm
Don`t go to sleep yet, it`s just starting
In order for tomorrow to be a bearish Thursday, the bears need to put in at least 30 minutes of solid action to screw the bulls before market closes. Otherwise, the upside momentum continuation will likely carry through to Asian markets and then European markets.
Germany, please just announce your decision to bailout Greece due to fear of “systemic risk” to the Euro Zone. Get it over with and let’s crash the market so that it won’t become stagnant for the rest of 2010. Do it for your own good…
—- WHERE IS THE “BIG BOYS” POSTER WHEN YOU NEED HIM ? —
sure would like to know what the next move is … before it happens
these posts of “i told you so” after the market moves dont help my $$
February 10th, 2010 at 2:43 pm
….agree on every letter….there are 02 main truths with stocks:
- why I did not sell..
- why I did not buy…
I don織t believe in any miracle….I use my logic….but I know the limits to get out…
Strategy is whats keep you playing in this shark game
February 10th, 2010 at 2:48 pm
I would rather be out of a trade wishing I were in, than to be in a trade wishing I were out.
February 10th, 2010 at 3:05 pm
I guess right now the big boys are doing nothing, or is it that they are covering their shorts slowly?
I was expecting a down day today by around 0.5%, looks like a dead market. If it doesn`t move down tomorrow I`ll be selling my puts.
February 10th, 2010 at 3:09 pm
I’m selling my puts tomorrow no matter what.
The VIX forecast shows a possibility of further deterioration in volatility (in other words, slow melt-up or slow bleed-down). The only positions I will hold on to are my short shares and VIX calls. Put options suck in this environment.
———– HSU.TO ———- is the CAD$ ETF tracking the SPX. i look at it quite often to see where we are at on the daily. the HOD $9.26 is right at the GAP we filled 8 trading days ago. the first move off the GAP was boing. now we are under it and it seems that this instrument is having a tough time running above this spot again. GAP support is so obvious. many will go long at that spot… if they held it through this … a lower low printed would most def shake those GAP luvvas out.
——— CERN PUTS = +37% ———- so far.
February 10th, 2010 at 2:46 pm
———- RF ———- took 30 contracts in total so im thinking i’ll
take profits on some of them today. this is a heavy position
for me. dont like carrying too much overnight.
———— TAKING PROFITS ON SOME TRADES ——— @ 1066.50
this is where we see a two bar break and pull back on the SPX 15min
—————– V ————- action around $83.40 will be important
—————- RF ———– action around now @ $6.35 will be important.
both are 50% retraces from the move off the LOD
February 10th, 2010 at 3:10 pm
both tagged the areas and bounced.
GOT OUT of the riskier (imo) Visa Position for a negligible gain.
February 10th, 2010 at 3:15 pm
———– RF ———– dont like what im seeing here. trimming it back. sure it is light volume fluffery but it is price action first. you dont know if the sell price ask is too high or the buy price bid is too low. light volume can mean a number of things. the sell side will crack or the buy side cracks. this chart has become much tooo neutral for me.
February 10th, 2010 at 3:22 pm
keeping a few. but this DAILY 40SMA haunts the bears @$6.00
February 10th, 2010 at 3:30 pm
IMPORTANT NOTE ————— 50,000 $6 FEB CALLS on this one.
SUPER busy day at work today. haven’t had a chance to look at stock at all, except bits and pieces. market really not doing anything significant…
drawing itself out into opex week. dirty dirty dirty.
———- OIL ———— does this look like its going to MONSTER LAUNCH higher ? this 10 MIN CHART looks rather bullish.
February 10th, 2010 at 3:25 pm
but resistance in only 1.5% higher
February 10th, 2010 at 4:04 pm
HOD.TO … short oil … pulled back to the 20SMA on the daily and held. im out of the trade as of yesterday at $10.26. im going to see if it holds this average before being a grease bear again.
———– CERN ——— after all the madness is done… puts in a red candle.
Woo, are you bullish or bearish?
February 10th, 2010 at 3:39 pm
currently a bit bearish.
market just broke below the 50ma and 200ma on the 5 minute chart. below two overlapping fibs at 1067.5
here you go:
http://stockcharts.com/h-sc/ui?s=$SPX&p=5&yr=0&mn=1&dy=10&id=p62613677102&a=181738042
February 10th, 2010 at 3:42 pm
Woo,
Yes, sp drop .4% after your bearish analysis
February 10th, 2010 at 3:43 pm
lol. i wield so much power haha. i need to keep posting to make the market drop .4% at a time.
February 10th, 2010 at 3:48 pm
Why limit yourself to .4%? I just loaded up on some TZA…shoot for the moon, I say! hehe…
February 10th, 2010 at 3:50 pm
well the intraday commentary i wrote into today caused a 10 point drop. i dunno if i want to write that much to create another drop.
i’ll just be patient. i sold some puts earlier in the day, and loaded up again with more puts. let’s see how much fun they are.
Any thoughts on BIDU?
February 10th, 2010 at 3:40 pm
I haven`t seen their numbers but just looking at the chart, it shouldn`t go more than $500.
If I wasn`t so short right I might have taken a small position on a red day like tomorrow.
It`s risky though, I`d have to look at fib levels to be sure.
Maybe Bearned Bear can take a look for you?
February 10th, 2010 at 4:07 pm
“A red day like tomorrow”… ?
If you have the ability to predict tomorrow then why are you were you already short today ? btw: $500 is still $18 from where it closed today.
February 10th, 2010 at 3:44 pm
MAR 440 PUT
February 10th, 2010 at 3:51 pm
You`re ahead of us Fritz
I can`t do Fibs here at work, what`s your downside target on that?
February 10th, 2010 at 4:01 pm
$380. I’ve already set a limit order to sell the puts at $60
February 10th, 2010 at 4:36 pm
Thanks Fritz.
February 10th, 2010 at 8:02 pm
Fritz – can you share what the 380 is based on ?
February 10th, 2010 at 4:53 pm
Now you can do Fibs at work (see above).
———- AIG ———– market leader rallied to the 40SMA DAILY
February 10th, 2010 at 3:33 pm
oversold bounce off the double bottom.
February 10th, 2010 at 3:36 pm
we all missed the boat on this TOO BIG TOO FAIL … FAILING BEAST
if anyone here has some calls on this … CONGRATS!
———– MTD ———- after failing to rally with the market . threatening $94.00. very few buyers lined up to pay $95 in this revenue dropping non-dividend paying beast.
TRY TO UNLOAD MY FRONT MONTH $100 PUTS HERE
February 10th, 2010 at 3:46 pm
trading…. ULTRA LIGHT VOLUME TODAY
February 10th, 2010 at 4:02 pm
THE BID FOR MY PUTS …. $0.20 TOO LIGHT. maybe this has filled that itty bitty gap in the chart. find out tomorrow if my GREED BURNS me.
if i take $6.00 bid there … id have a double. only have 2 contracts.
already counted this as profits back at $96 where i took a larger
position further out. its oversold now. ill add to that longer term
position on any significant bounce.
looks like this sucker is just wedging sideways…still below the 50 and 200ma.
still leaning slightly bearish.
February 10th, 2010 at 3:54 pm
Could this be a triple ZZ from 1044.5?
February 10th, 2010 at 4:07 pm
to me it looks like a 3 wave up from there, and now a possible 5 wave down is beginning with the 1 having started with a flat correction sideways.
being below 1069 is fairly significant, but not enough for bears to jump for joy.
February 10th, 2010 at 4:19 pm
THE OLD 10 DAY CONSOLIDATION into OPEX to make every trader nuts as their puts dissolve under ZERO price movement.
bidu just get big push, it may go up a little one or two more days than fill the gap
Hi Guys,
I am still holding my short positions mainly because PPO is still bearish. I expect to increase my profits tomorrow.
However I don織t expect any sell-off. Mainly because everything (mid-term and sentiment indicators) is bullish.
I do expect a drop to reach 161.8% retracement…that織s it…and it will complete the Fibonacci structure
China and the US stocks they hold. Interesting, no Google on that list:
http://newsusa.myfeedportal.com/viewarticle.php?articleid=516
i set a limit order for put russel now
Well we closed in the red as I mentioned before the bell, but sure didn’t erase yesterday’s gains, or even come close to that, as I predicted
Oh well. I will however predict that by the closing bell tomorrow we will have erased yesterday’s gains between today and tomorrow’s action.
So I remain 100% short, looking forward to a 1% or greater drop tomorrow.
Hope you all made some money today, and good luck to you tomorrow!
February 10th, 2010 at 4:20 pm
US GREEDY BEARS must hope for a double bottom to the Friday action
February 10th, 2010 at 6:42 pm
Very true Richard, lets hope we see just that!
Today’s volume is next to dead. I really hope Greece gets bailed out tomorrow so we can crash the market real hard. I hate to be trading 2009-type of market.
February 10th, 2010 at 5:07 pm
Lets just chalk it up to a blizzard conditions on the East Coast for the market no-action today….tomorrow with job claims should turn the market one way or another as well…
February 10th, 2010 at 5:17 pm
I hope you’re right. Today was a total waste of time.
———- RF ———– sitting right where i got out. i made very little in this trade. but i did nail the entry at the top. was looking for a strong move below thie $6.36 and the market knows that everyone like me is looking for that. no volume fluffery. see if it gaps under this support tomorrow. more fun tomorrow. … GOOD LUCK TRADING!!
I MADE A VERY TINY PROFIT TODAY… AND A BIG HEADACHE
uner posted some great updates above. Make sure to check them out when you get the chance.
February 10th, 2010 at 5:40 pm
thx Master Woo and Uner
I’ll be waking up early tomorrow to watch two levels on the FTSE 100: 5181.21 and 5105.3
Breaking below 5105.3 with volume will probably send the FTSE down to 5033 and maybe even lower. Greece bailout please.
All that FTSE did today was back testing the uptrend line (2009 rally) broken on February 4. It backed off considerably and closed below 38.2% of today’s trading range. If FTSE is down more than 2% before markets open here, what would that do to US markets?
February 10th, 2010 at 6:05 pm
thanks for the update and critical points to watch Fritz =P
Hi Guys,
CSCO (Cisco) is showing a very nice bearish formation. Also it retraced 61.8% and looks like that it topped.
Current levels is a major resistence. Looks like a nice one to short
Enjoy
http://www.freestockcharts.com?emailChartID=e8c5679d-bbdb-4f7b-a49a-dd0b69401b90
February 10th, 2010 at 6:21 pm
Beyond this PPO hourly topped and it is showing a bearish cross
February 10th, 2010 at 6:28 pm
…for oil traders only:
USO is showing a very nice bearish formation. Also it retraced 61.8%. PPO hourly topped and it is showing a bearish cross
trigger – right now
stop – get out if it goes beyond 37.15 (76.4% retracement and open gap)
target – 31.6
http://www.freestockcharts.com?emailChartID=aac506b1-6387-4323-9921-7e7d2b86b4ba
February 10th, 2010 at 6:37 pm
Thanks, Burned! Like those oil etf’s.
February 10th, 2010 at 6:48 pm
Enjoy!!!…I will buy some PUTs tomorrow morning as well…
February 10th, 2010 at 6:34 pm
for gold traders only
GLD is also a bearish formation. Also it retraced 50%. PPO hourly topped and it is showing a bearish cross
trigger right now. It looks very weak for me
stop get out if it goes beyond 106.8 (61.8% retracement and open gap)
target 99.50
http://www.freestockcharts.com?emailChartID=093983b3-ffe7-4e3e-89f3-b3f73338ab89
woo and craig,
i could not understand your ew analysis, any good book or website you can recommend?
February 10th, 2010 at 6:46 pm
…from my own painfull experience…
…if you try to study EW using specific books they will only make you more confused. Do you know why? Because they try to explain EVERY move in the market…try for example to follow some blogs…those guys are quite confusing….
…my take is…study Fibonacci analysis..it will explain some basics of EW theory..only enough to use EW on daily basis…..
February 10th, 2010 at 6:52 pm
http://stockcharts.com/help/doku.php?id=chart_school:market_analysis:elliott_wave_theory
is a pretty lucid introduction.
I have aquestion guys. I am looking at optionhouse rates and I see thier rates are way less than other brokers. Is there any problem with them? I am looking to close out my accont with scottrae and go with optionhouse.
February 10th, 2010 at 7:11 pm
http://www.finviz.com/store/stock-brokers.ashx
IB is good
February 10th, 2010 at 8:16 pm
I use Tradeking. Their rates are very cheap and their services are pretty reliable
BB and Craig, thanks!
BB, you did a lot of Fibonacci analysis in your blos,
what is the best article or website to learn Fibonacci analysis?
February 10th, 2010 at 8:13 pm
Hi Pete,
Use the link below to download the PDF book (password is “fibonacci”). It mix Fibonacci analysis with some EW theory. Take a look at the 1st 100 pages. This book will make you a much better trader
http://depositfiles.com/files/2ns1ocyp6
hrm, took a quick look at aftermarket…inverse ETFs down slightly. wonder what’s in store tomorrow…hoping for a down day.
THIS MARKET IS CRAP but shorting seem to be wrong side… every dip it’s worth going long
February 12th, 2010 at 11:29 am
I must say they made this law for day trading margin call crap to let our money sink for sure….
100k account my account created 1500 day trading margin call which i have no clue how it was and even TOS is not able to tell me… yet i can’t trade until they receive $1500! 100k cash but would not let me trade what a FKJKLK:JHOILOU
market is down almost 85 points yet 70% of my watch list is in green.