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!

===================

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 doesn’t work out, maybe the pop will happen on Monday. Or whenever. These things don’t go on forever. At some point, I could wind up giving people buggies at Wally World, but for now, maybe it’s worth a shot.

===============

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.

when p3 is confirmed this is the thank you speech:

first of all i would like to thank Obama for helping to make all this possible. dare to dream, that all things are possible if you reach for it. if it weren’t for you, i could not short/put the market so confidently. way to put bush behind you and take things into your own hands.  there were so many chances to help the economy, but it was you who lead the way without looking back, to making mistakes and bigger mistakes. from giving bailout money only to large companies that never spent it to help any average consumer/worker, to focusing on spending even more money on redoing the healthcare system while the rest of the economy was failing, there was never a doubt in my mind that P3 wasn’t around the corner. Thanks to your great policies, unemployment is near lows, give or take 10%, and all banks and real estate companies have fixed their practices by changing nothing at all, which will help protect us in the future. luckily our tax money will help buy nice things for bank executives, whose bonuses will be taxed for only a small portion in the future starting from…some time in the future.

the FED, oh where would we, bears, be without your initiative to not learn anything from the Japanese economy and bring the rate down to 0. They may be having a horribly slow recovery, but I think we can beat them and make our recovery even slower. let’s at least beat them in this since we couldn’t make a better, more affordable car for the last 20 years.

this reminds me, thank you to the american car companies that made crappy cars for decades before finally deciding to make more dependable cars after people have lost the desire to purchase anything american. way to stick to your guns and make cars that break down and have frequent maintenance problems for so long. you know your company is doing well, when your commercials state that your car is now like a toyota camry. good thing the american GDP and jobs market is highly dependent on the auto industry! This also wouldn’t have been made possible if you weren’t overpaying your union workers and giving them lifetime pensions after 15-20 years of work, while letting people retire in their 30s so that you can pay salary to a non-working person for 40+ more years.

Thank you to the banks and insurance giants who paid record bonuses to your executives. For all the people you fired so that more money could be put into manipulating the market at ridiculous leverages that got us into this mess in the first place. 666 is stamped on the spx in your honor. I think the world was angry at first, but everything is fine now that you have apologized in front of congress. a few million dollars in bonus is only a couple thousand jobs. a smart man takes what he can before it’s gone. you go boy.

Who could forget the housing sector. the bread and butter of the collapse. it is YOU that help those with the american dream! have a history of not paying off credit cards, a bad credit score, no money for a down payment? IT’S OKAY! american real estate companies and banks have your back. this spirit of hope, of trusting in everybody and anybody whether or not they are reliable or not, is what all americans should embrace. let’s not even lock our doors anymore, everyone’s houses are foreclosing anyway. and now that some bailout money has come to help companies in housing, to approve barely any percentage of loans for small businesses and housing for those with even a good credit score is really helping make the world a better place.

and how could i forget, thank you to the american people who buy everything on credit – houses, cars, tuition, food, and clothes. we know it’s everyone else’s fault but our own because the 12 trillion dollar debt is such a huge amount in reference to the 50-300+ trillion dollars of credit going around within the United States. buy now and pay later is only something crooked politicians do with tax refunds and tax dollars. tax refund IOU’s in california?! the nerve! we would never dare to spend money from the future like that! for shame!

together we can and have made a difference. God bless america.

wait…what do you mean when you say the things we do in the US affect the global economy?

Woo:

Market is up a good amount in futures. That takes us above that pink trend line. The pink trend line was never really that strong. I’m expecting the 50ma and 200ma to cross soon on this 5 minute chart. We could just see a rise up to the 1115 area on Wednesday, but we might see a slight rise, and then a dip to meet the 50/200ma.

That trend line above the pink trend line is high enough that we really could see that 1122 number by tomorrow, or even the day after. If you are bear you have to be willing to hold through a rise to 1122 over the course of the next 5 trading days or so. We’ll see if we dip once more before hitting 1122.

Let’s try and watch the comments on the board. Try and keep it stock related and try not to poke at individuals if you can help it. We don’t want this to become a yahoo board. Thanks everyone!

Woo:

Futures are up a good amount. We’re above the fib of 1098 in the futures, but we’ll see if we stay that way into open

1 month chart:

So this blue line has been around for a while, but I forgot to extend is all the way through. That bottom was a good call position and I didn’t even realize it because I forgot to extend that line. Either way, I’ll be able to buy stocks again starting this week, so I’m looking forward to getting my foot back in the market. As I’ve been saying over and over and over again for a few weeks like a dead record – 1122 on the 5 minute chart. There has been no movement in the market to make me think otherwise. Who knows if we’ll get there this week or not, or if it’s the complete top for sure, but I know that it’s a top that is the current projection. I’ll try and post some individual stock charts throughout the day if I can find time at work. Sorry, very busy weekend. Good luck everyone!

My Target for GLD remains around  155.6-116 in the short term, I believe we could see a nice correction once we hit around those levels… That’s where my fib projections take me.

Dow Jones Daily: I said i would play the megaphone formation… well here we go… I bought DXD at 30.32 today.

Woo:

1 month chart update of SPX:

So after hitting the 1088 fib, we bounced and stayed above the 1090 cluster of fibs as expected. The 1090 area was a good area to buy calls. The 1096 area was the initial top to look for and it hit on the dot as the first area of resistance. There are two fibs in this area, and there’s still a chance we could drop. I wouldn’t be surprised if the 1080 area were to hit, so it was wise to get out of at least half the position of SPY calls going into EOD at the 1096 level. This way you lock in profits and if the market heads higher you have a good position on those calls, and if the market heads lower, your losses are hedged by the profits made, and the profit position going into closing. It is always dangerous to hold options overnight during opex week because decay will hit options even if they are next month, much more than they would at other times of the month.

Ideally for a call position you want to see a rise into open to the 1105 level where you’ll hit the first trend line resistance, but the market may go horizontal for another day to decay options. This can hurt both bear and bull and leave the market in limbo for another day into the weekend. On the longer term charts the market can still drop a good amount more without losing the bullish bias. We’ve had a 3 wave movement down so far to the 1088 lows with the 2 of 3 being a flat correction. The big question is whether this 3 wave will finish, or it will go down and complete a 5th wave south. I have a feeling if we do head south, we’ll stop at 1085, and that is an area where I would consider grabbing a nice experimental call position for a potential 5 of 5 wave finish and then a rise up. This would create some problems though and mean there could be more dropping after the bounce there, so I’m leaning more towards heading higher into tomorrow or going horizontal. If you have a call position going into tomorrow the 1090 area is the key place to watch. A drop below 1093 technically will be the first short term bear sign, and you may actually want to have stops below 1092.9 (maybe 1092 or so if you want to lock in profits). If 1090 breaks, 1088 break would be further confirmation of a bigger fall to come, once that fib breaks that could mean that even though we may bounce one day or so, most likely a bit more downside is to come.

So we stopped at the next bit of fibs at EOD. the reason why i recommended pulling out half profits at 1096 is because there is still a chance that we could drop. this way you lock in profits, and if it falls, you can buy back in, but if it rises, you still have a good position on a decent number of shares. On an opex week friday, there’s too much risk, and decay will affect even december options strongly.

Original post:

Looks like the market is going to open lower. Will have to see exactly where it opens to see if we’ve had any real significant places broken or not. Top action is always a little more difficult to make short term scalps off of unless you’re really careful.

trend line at 1102 needs to break.

Futures are pretty flat. So far market is still bullish. need a lot of breakdown for the bears to really gain any ground.

1 month:

trend line is holding and it looks like 1115 is the short term top to watch prior to the 1122 top on the 5 minute. the only drop i would be looking for (if any happens at all), is one to 1096, but it isn’t necessary.

here’s how things look on the 60 minute:

ALMOST there…i need to take some time to draft potential other tops and calculate the max extension we can head to in case we pass this 1118 area on the 60 minute. i’ll try and do it this week.

here’s the longer term chart that i’ve had up for a while. Updated from the chart i posted a month back (http://www.stocktock.com/2009/10/23/ew-and-fib-update/)

it will feel so good if this plays out. hope i’m right. if not, hopefully someone else on stocktock gets it right. good luck everyone!

Is it just me or does 1115 look like a good place for the SPX to head to short term? trend line is holding. we’ll see how the last 30 minutes of the market acts.

Original Post:

So looks like the market is back within the channel. I’m thinking that we could possibly drop back south towards the light blue line on the monthly, and maybe even the 61.8% fib projection around 1098 on SPX. Futures are down a bit as expected after not rising enough above the intraday trend line that is pretty easy to see (I haven’t drawn it in). I would still consider grabbing a call position if the 1098 area hits. I would be careful if we drop below 1098 and place stops there on any call or long positions entered around there. the 200ma is also sitting there.

Also recently we’ve had some calls for additional moderation within the forum. Sorry about that guys. I’ll try my best to moderate a bit more. I didn’t expect the conversation to get so off topic. Joking is completely fine (and I know most agree), but some of the comments did get a little out of line. They weren’t necessarily offensive, but when I read them, it did raise some minor flags for me, which I think we should be careful about. Remember that we aren’t the only readers on this site, and though a few of us may get very comfortable, any racial or gender jokes can be taken out of context and can be offensive to some. I would say it’s better to NOT test the line, then to test the line and end up with negative results. Not saying don’t joke or that we don’t appreciate humor, but to be careful.

Remember the main focus is stocks and T/A. I’ll delete some posts here and there to keep the peace and order. Hope nobody is offended for what is posted, for what is left posted, and for what is deleted. Thanks for everyone’s understanding! Let’s all make some money and have a good time while doing it.

1:50pm
Idan: I am looking for another potential move up here to go short… the Dow Jones has hit it’s 50% retracement of the bear market, and I believe if i can go short at 112-113 on the SPY i’ll be rewarded with another 5-20% move to the downside.

——————————-

Original post by Woo:

So the market is back north of a the November monthly trend line, and futures are up a good amount. I’m still leaning towards this going up into new highs as I’ve been saying for a while now.

Here’s the SPX 1 month:

The futures move puts us above the 50ma and 200ma on the 5 minute monthly chart. it also has the 50ma crossing north of the 200ma, which is pretty bullish. We also cross north of the 61.8% retrace of the drop. We’ll have to see how the market opens though. There’s a chance we could retest that line, or consolidate more, but there’s also a chance we could skyrocket north into new highs. The trend lines north of here are WAY up there, and we’re running out of fib forecasts towards the 1122 area on the 5 minute 1 month. Same with the 6 month log chart.

6 month 60 minutes SPX:

This market won’t give in so easily, so don’t be surprised if you get a drop. However, I would buy drops, and sell rises, as opposed to vice versa, till that 1120s area hits on the 1 minute chart. From there I would start taking strong put/short positions.

So I may not be posting as actively in the intraday for some time, depending on how things pan through. Perhaps this is too much personal information for a stock site, but since I have interacted regularly with many of you for a couple months (maybe even over a year for some), I thought I would update a bit. I was very recently approved for a loan towards a condo, and escrow will be closing very soon (maybe even this week). I am pulling out all my stock earnings to pay for the down payment towards the condo (so that I don’t have ridiculous mortgage payments). I’ll also be getting married in March. So I won’t have any money in the market till possibly February of 2010. This means that even though I want to take the opportunity to make tons of profit on the drop down, the condo and wedding and honeymoon costs come first. So since I won’t have any personal money in the market, there is less incentive for me to wake up at 6:00 AM PST when my work starts at 9:30 AM PST. I’ll still post updates, and try to update during the intraday (so that at least others can make money), but it will definitely be less. This is not goodbye, and I have too much pride to try and not figure out market action short and long term, even if I don’t gain anything from it. Wishing everyone the best. I will still make sure to post the intraday everyday till Idan is back from his business trip, and after that, I’ll at least try and have a weekend update for everybody outside of the intraday comments I’ll try and post while at work. Good luck to all! – Woo