Saturday, October 24, 2009

$DWC Whole Market

Similar Analysis method as to my prior QQQQ.
This says more upside can be expected.

QQQQ Heretics View of EW

Probably some strict Elliotician's will have umbrage with this view of QQQQ. Appreciate all comments. I think EW can be useful at all time spans, but I also think that sometimes the rules need to be bent, especially at the topping process of a major Mania. I don't know for sure that my alternate is truly even bending the rules.

This says either the top is in, or we were $.16 from the top, assuming C=A

Friday, October 23, 2009

Control of the Media

I have expressed my opinion on this before.

The wool is being pulled over the average American's eyes. 

It all started with reporters being "embedded" with troups during the invasion of Iraq.

The Governement wants certain news reported, and certain other news --not reported, or spun.

And if you don't play the game, you don't get invited to the game. 

In this age of decreasing advertising revenues, I doubt that mass media will make too much of this "revolt" against censorship by exclusion.

Translation to Other Languages of This Web Page

This blog can be translated automatically into many different languages.

All you have to do is scroll all of the way down to the far bottom of the page, and then select the language you want.

Feedback from several native foreigners (??!!?) is that the translation is "understandable" but weird.   As to be expected. 

About 27% of our readership is non-US, maybe 6% of that is Canada.

Crestmont Research

I ran across this site, and have just skimmed it, but it was referenced by some top analysts, including Matt of Breakpoint Trades.  

Some awesome long term perspectives.

I will let this one stew for a few weeks and then maybe add them to the list of permanent links.

3 Outside Day Down

I have been doing very little trading or even blogging participation for around 2 weeks.  My theory---this market will keep going up until it decides not to keep going up.   But being long has extreme risk, no need to play that game except for some calender spreads I did selling puts near month, and buying puts June 2010. 

Wednesday, I took a position in SSG, giving credit to Tim Knight for the original idea, and further confirmed by my own charts that confirmed the position strongly.   This is a double short on Semi-Conductors.

Also took puts on MS today.  Paid 1.90 and it immediately moved to 2.10 which is nice.   Now I can set a contingent stop on it....if MS equity price rises to X.XX, the ask 1.95 for the puts.   This should lock in a profit.

I rarely buy front month puts, you should always get at least 60 days to stay out of Theta Burn.  If you don't know what Theta Burn (TB) is, you should not be playing options.

Everytime I do an update or upgrade to the Chart of Charts, it take several hours of fairly intense number crunching.  I missed last weekend, but an inspection of the data told me enough without plotting definitive up or down trend. 

I will try to update Chart of Charts this weekend.  It shows an annual return in the low to high 50% range.  It keeps you out of trouble, minimizing losses and getting most of the upside.

The SPY put in a CONFIRMED 3 Outside Down Day (I noticed this possibility on Wednesday, and published here).

Today confirmed it.  However, this is kind of stretching the data since I am using a 3 day aggregation period for my candles.  Quite unorthodox. 

And for more info on these candles, check out these sites.

3 Outside Down Day -- See Below, one of the Strongest Patterns

Finally, Bulkowski torturing the data relentlessly (but no water boarding).

3 day candle, 3 Outside Down, 3 Doors Down.....and bulls may be looking to get their  "Nickelback"--If you understand the sequence of logic in that sentence, you are either quite hip and smart, or maybe just need some counseling.

And since we are on that subject, the band Nickelback owns one of the siblings  of my cherished little puppy dog.  Mine is the small one in the picture,  the big one is her older brother from a different litter (also my dog).

Swine Flu

DarkWave (TM) on Polanski

Does anyone see a certain "DarkWave" (TM) type Wave 3 Darkness to exptradition and prosecution of Roman Polanski?  This guy is 76 YO.  I thought the statue of limitations, was, well, limited.

Is this about getting revenge for excesses of the past?  Do we all feel a little guilty about our excesses of the past?   Society seeks some "payback".

Failed Bank List

 UK still in recession -

Failed banks top 100

MS had good earnings and a huge pop, now a drop?

SMH could outperform

I was not able to short this on TOS, but SSG is the ultrashort for semi-conductors.

The long term resistance (green box) which the price struggled with, only to pop out of, upward, for minutes to perfectly kiss the 50% Fib and then get swatted down...well, thats a beautiful thing if you are a chartist.  The Chart at bottom is from 2 days ago.

Thursday, October 22, 2009

What do Mercury and Computer Backups have in Common

Mercury retrograde no longer in play, petered out in mid Oct.

Indeed per the above backup procedures, I actually followed my own advice, and Mercury hit in Early September, and no gave me blue screen of death.  Did an image restore and turned a nightmare into an inconvenience.

The next big Mercury is Dec 22, one day after the winter solstice, the shortest day of the year.  Equinoxes and Solstices are big turning points, they do affect mass human pysche, and thus market activity.

Above link has link to Mercury Retrograde calendar.

With year end festivities, tax closeout actitivities, and end of trading year....highly recommend you practice now on good backup procedures. 

I can now verify the Acronis True Image Home 2009 is easy to use, but still feature rich.   It hasn't been "dumbed down" to the point of non-functionality like so unbelievable many computer software intended for mass sales.

We will be buying a Laptop with Windows 7 on it, in the next handful of days.  Will advise findings in a few weeks.

Wednesday, October 21, 2009

Recent market action -- Bearish Engulfing on 3 Day

SPY price action shows a Bearish Engulfing (BE) pattern…one of the strongest, but by itself does not mean a big move….but a likely good size move.   I am using a 3 day chart to remove jumpy price movements.

Some analysts have prematurely called this an outside down day (or 3 day if you use my charts). On a classic candlestick approach, it does not show the BE on the daily.

Certainly the 3 day duration candle has just formed the Bearish Engulfing, but has yet to signal an even better Outside Down. For that we need another close below today's close, and ideally on the 3 Day candle The daily did not have the open higher than the previous body top, and the close higher than the body bottom. Thus this is not a daily bearish engulfing, much less an outside down day.

"Non-candle" readers may read this differently, But the open and close mean so much, and forgetting them and just looking at high and low of day, I think are erroneous. Candles aren't everything, but they sum up human emotion in a quick easy to read package, and dumbing them down is highly questioned in my book.

As my recent charts have stated...this could possibly be the top, but no assurance.  Some Bears have been so slobbering over themselves for any sign of a top that they have set themselves up as sitting ducks (bears).

But if it (the current 3D B.E.) gives the indices enough of a kick to break that lower trend channel, then a real drop could ensue.   And if this current 3D BE confirms with an outside down CANDLE, then expect about a 70% chance of a 7% drop.

Stats are primarily from Bulkowski who has a few great books, a website, and blog. Check out his work, and buy some of his books.

I just have to wonder how many retail investors will be buying the dips….they July dip was pretty good size.

But let’s keep it real…last year we had dozens of days that had 5% to 10% DAILY moves on the indices, and now all the sudden a 0.6% drop indicates the start of Armageddon.    Just saying….keep things in perspective, by reviewing history.

Recency bias affects all of us, we are human, we can’t avoid it. However we can swat back the recency bias by a good review.

>I did "your review" of prior price swings for you. The first chart shows a nice symmetric triangle, ready for a move. The second chart looks more like some kind of Polynesian War Club or something, but useful for stock trading historical perspective, check it out.


CAR - idea from some other blog --TK maybe?

I saw CAR recently, but never charted it myself.   It may have been Tim Knight or one of the other quality blogger shown in the poll on the right.

The recent downward wedge indicates upside to come (although small).

The potential move down is enormous.

And some minor enforcement action on market manipulation--

In 1932, after being beaten for years by the Great Depression, Amercians wanted heads to roll, and finally a prosecutor with the guts and ability stepped up to the plate. 

In January 2009, The NYT asked "Where is our Ferdinand Pecora"

Some Old Friends, Index Charts Dow 5000 and Russell 2000

Being a Bear is kind of like being this cat in front of a pack of Pomo Pumped Banksta's trying to reach critical mass and get retail to pour back into this thing we call a market.

This may not be "the top" but it certainly could be. 

The Fib and Horizontal Resistances are some of the strongest yet presented to this advance. 

The reverse holds these lines are broken then retail may very well rush in to stage the final debacle.

Tuesday, October 20, 2009

Monday, October 19, 2009

Fed Funds Rate

Now I have it, that is actually a huge head and shoulders pattern with a measured move of 20 points, which mean pretty soon the Gov will be paying you 20% annual to borrow their money.

Fib Fan from 1932 Lows

It is hard to pick points on charts exactly when looking at 80 years of data.  So I took a few shots at pegging the 2007 top closer with my Fib Fan from 1932.   This worked much better than my previous charts.  This is for the $SPX.

I also took a look a the Dow 5000 (similar to Wilshire).  Nearly a perfect 50% retrace.  The QQQQ is at 61.8% retrace.

Puts will get very expensive when this market tanks.

It takes some serious cajones to take leveraged short positions at this time.   What if retail piles in after being afraid (greed) that they missed so much of the rally. 

Fib Fan from When!!!!!!

It seems like all the lines we have drawn for months on end and just decimated by this raging bull.

But this line has historical significance.  And we are right there, right now.

Black Monday -- October 19 1987

 Check out the first link.  There are alot of interesting "Black Mondays" throughout history.