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TF thread (Russell 2000) ... anything goes

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 kbit 
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This is a kase bar chart from today
You can see an entry right after the pinbar that was a retest....remember I pointed out this was an area to watch.....
I didn't see anything on my tick charts but got it on this one....

Simple stuff

I'm just wondering if I should even bother to post this stuff anymore....seems like I'm talking to myself all the time....I hope someone out there gets something out of this stuff.

Edit: by the way the target for this is 796.8
I'm out already but that is where it should end up....some other time I will explain targets and so forth...If your reading this now don't try to jump on it....I'm out for a reason....I will explain later

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This is a kase bar chart from today
You can see an entry right after the pinbar that was a retest....remember I pointed out this was an area to watch.....
I didn't see anything on my tick charts but got it on this one....

Simple stuff

I'm just wondering if I should even bother to post this stuff anymore....seems like I'm talking to myself all the time....I hope someone out there gets something out of this stuff.

i quietly lurk....

dont believe anything you hear and only half of what you see

¯\_(ツ)_/¯

(╯°□°)╯︵ ┻━┻
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 trendisyourfriend 
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Me too ...

I find it interesting to track the reaction of price to the RTH open on the ES and at the same time evaluating how the TF and NQ react to this level. The ES RTH open was 1308.25 (Red line) See what occured on the TF when the ES pulledback to the open.


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 kbit 
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Well, they didn’t really say that, but they could have, and perhaps should have, and the bond market wholeheartedly agrees with them. That is my takeaway from the Fed minutes released yesterday indicating that the Federal Reserve intends to extend its hyper accommodative policies for at least another 6-9 months to “late 2012.”

It also lowered its long term economic growth forecast from 2.5%-2.9% down to 2.2%-2.7%, a major downshift from the 3% plus it was predicting a year ago. That also brings them nicely to my own estimate of 2%, which I nailed on the mast over a year ago.

The reasons offered were many. Business fixed investment is slow, inflation is stable, unemployment is declining only slowly, and international risks are substantial. It was enough to create one of those odd trading days where everything went up. The Dow flipped a 100 point loss to a near 100 point gain. Bonds rocketed, with ten year Treasuries dropping 10 basis points in yield, and five year paper utterly collapsing from 0.89% to 0.77%.

The risk markets rallied like this was a new quantitative easing, which it isn’t. Bernanke is just “thinking” about QE3, which is nothing new. If the economy worsens again, he’ll pull the trigger. If it continues to poke along as it has done, he’ll do nothing.

I have said this countless times before, but I’ll say it again. When the stock and bond markets deliver a contradictory message, you always believe the bond market. It is right 90% of the time. Right now, the stock market is saying that the economy is growing a 4%, while bonds say it is expanding by 2% or less. I’ll go with the later and wait for a great entry point to short more stocks.

Looking forward, I see a coming drought in upside surprises. Tomorrow, we see Q4 US GDP, which should be over a healthy 3%. Next week promises another sizzling nonfarm payroll on Friday. After that, there is nothing on the horizon until we get the final word on Greece, or the next Fed meetings in March and April.

All of this encourages me to hang on to my tiny short positions in the (SPY) and the Euro, even though we are trading close to my stops. Bernanke’s easing yesterday could be the “buy the rumor, sell the news” event that the market has been rallying on for the last three weeks. If it is, then the downside could be just around the corner.


Fed Says Market Rally is BS

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 kbit 
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Lately we've been getting a lot of concerned emails about this chart.


Bloomberg

That chart is a 1-year look at the Baltic Dry Index, which measures the spot cost of shipping good by ship around the world.

As you can see, it's plunged nearly 66% since its recent highs, and understandably, people are wondering whether this remarkable deflation means the global economy is falling straight off the cliff, or at a minimum indicative of a rapid hard landing in China.

To answer this question, let's first put the latest move in the index in context.


Bloomberg


Instantly you can see a couple things.
The first is that the current decline is nothing like the declines we saw the last time the global economy went into recession in 2008. You should also see, hopefully, that this index is VOLATILE.

It might be hard to figure out some of the moves due to the scale of the chart, but from May 21, 2010 to July 14, 2010 it fell from 4078 to 1708, a decline of 58%.
Conversely, from September 24, 2009 to November 16, 2009, the index jumped nearly 200%.

Again, these kinds of big swings are par for the course with the Baltic Dry.
But to really understand what's going on, you need to understand that the Baltic Dry Index is not merely a reflection of shipping demand, but also ship supply.

Back in May 2009, former BI writer Vincent Fernando published a pretty fantastic Baltic Dry explainer of the index.
To start he noted:

Why do shipping rates seem to jump all over the place? Due to near term supply of ships versus demand for commodities. Its just a matter of bottleneck problems. If rates go up it can come from either of two things, not enough ships at the time or too much commodities demand at the time. In a situation where ship owners match demand, which over the long run they will, then rates won't sky rocket and will just track their costs plus some margin for their effort.

He then offered up this very obvious example to explain the volatility...

Imagine you have 10 loads of iron ore and 9 ships, and that every load of iron ore must be sent no matter what while every ship must be filled no matter what. Imagine the bidding war between those 10 iron ore consumers fighting over just 9 ships.

Shipping cost would skyrocket since they all need to ship regardless of cost. Now imagine if a week later two more ships enter the market. Now imagine the bidding process. Suddenly the tables have completely changed. You have 11 ships, that all need to be filled no matter what, and only 10 loads of ore. Shipping rates would plunge, despite a period of just a week passing by. This is, in a simplified nutshell why the BDI is so volatile.
And he concluded...

Now, add to this the fact that predicting ship supply and commodities demand has a pretty high margin of error, at the same time remembering how sensitive the BDI is to small mismatches due to the inelastic nature of its underlying supply and demand, and you quickly realize that predicting the BDI is a fool's game and also that it is not a reliable forward indicator given that it is a spot rate index in a market where both sides are basically forced to close a deal due to high fixed costs.

The BDI is measure of supply/demand mismatch at the moment, and can change drastically on a dime. It's little else beyond this. It hit its peak not when the global economy was in its healthiest state, but in early 2008 when things were already starting to come apart, but Chinese commodities demand growth still had some steam and just kept outstripping stagnant vessel supply growth. For a moment. And then it all collapsed.

The bottom line is that because it has so many moving parts it's just not that good of an economic indicator, though unfortunately a lot of stories have been written about how great it is, and how people should pay attention to it. Also, because it's so volatile, you can tell a heck of a story using it.

So for all the people emailing us about the plunge, we'd just like to say: Chill.



Read more: The TRUTH About The Massive Plunge In The Baltic Dry Index

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 kbit 
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Lately we've been getting a lot of concerned emails about this chart.




That chart is a 1-year look at the Baltic Dry Index, which measures the spot cost of shipping good by ship around the world.


As you can see, it's plunged nearly 66% since its recent highs, and understandably, people are wondering whether this remarkable deflation means the global economy is falling straight off the cliff, or at a minimum indicative of a rapid hard landing in China.

To answer this question, let's first put the latest move in the index in context.



Instantly you can see a couple things.
The first is that the current decline is nothing like the declines we saw the last time the global economy went into recession in 2008. You should also see, hopefully, that this index is VOLATILE.

It might be hard to figure out some of the moves due to the scale of the chart, but from May 21, 2010 to July 14, 2010 it fell from 4078 to 1708, a decline of 58%.
Conversely, from September 24, 2009 to November 16, 2009, the index jumped nearly 200%.

Again, these kinds of big swings are par for the course with the Baltic Dry.
But to really understand what's going on, you need to understand that the Baltic Dry Index is not merely a reflection of shipping demand, but also ship supply.

Back in May 2009, former BI writer Vincent Fernando published a pretty fantastic Baltic Dry explainer of the index.
To start he noted:

Why do shipping rates seem to jump all over the place? Due to near term supply of ships versus demand for commodities. Its just a matter of bottleneck problems. If rates go up it can come from either of two things, not enough ships at the time or too much commodities demand at the time. In a situation where ship owners match demand, which over the long run they will, then rates won't sky rocket and will just track their costs plus some margin for their effort.

He then offered up this very obvious example to explain the volatility...

Imagine you have 10 loads of iron ore and 9 ships, and that every load of iron ore must be sent no matter what while every ship must be filled no matter what. Imagine the bidding war between those 10 iron ore consumers fighting over just 9 ships.

Shipping cost would skyrocket since they all need to ship regardless of cost. Now imagine if a week later two more ships enter the market. Now imagine the bidding process. Suddenly the tables have completely changed. You have 11 ships, that all need to be filled no matter what, and only 10 loads of ore. Shipping rates would plunge, despite a period of just a week passing by. This is, in a simplified nutshell why the BDI is so volatile.
And he concluded...

Now, add to this the fact that predicting ship supply and commodities demand has a pretty high margin of error, at the same time remembering how sensitive the BDI is to small mismatches due to the inelastic nature of its underlying supply and demand, and you quickly realize that predicting the BDI is a fool's game and also that it is not a reliable forward indicator given that it is a spot rate index in a market where both sides are basically forced to close a deal due to high fixed costs.

The BDI is measure of supply/demand mismatch at the moment, and can change drastically on a dime. It's little else beyond this. It hit its peak not when the global economy was in its healthiest state, but in early 2008 when things were already starting to come apart, but Chinese commodities demand growth still had some steam and just kept outstripping stagnant vessel supply growth. For a moment. And then it all collapsed.

The bottom line is that because it has so many moving parts it's just not that good of an economic indicator, though unfortunately a lot of stories have been written about how great it is, and how people should pay attention to it. Also, because it's so volatile, you can tell a heck of a story using it.

So for all the people emailing us about the plunge, we'd just like to say: Chill.






I probably shouldn't have even posted this...I didn't see thier original article but as with so many of these clowns they like to sensationalize everything. This article from them "corrects the record" .... it seems like they went from "holy shit" in the original article to "whatever" in this one.

That being said I believe that index does have some significance and should be considered for a big picture view.

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 kbit 
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Just a heads up on some spots to watch.
I still have 801.5 as a spot on the upside here, down below is 792.5 and around 788

It's getting messy around here so I'm just taking it as I see it meaning we could just yo-yo around for a while and then get some kind of breakout....it could go through those downside spots and it almost needs to so I can get a better picture but in the mean time I'm more interested in that 801.5 if it gets hit

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 kbit 
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Baltic Dry Index Signals Renewed Market Collapse


Much has been said about the Baltic Dry Index over the course of the last four years, especially in light of the credit crisis and the effects it has had on the frequency of global shipping.

Importing and exporting has never been quite the same since 2008, and this change is made most obvious through one of the few statistical measures left in the world that is not subject to direct manipulation by international corporate interests; the BDI. Today, the BDI is on the verge of making headlines once again, being that is plummeting like a wingless 747 into the swampy mire of what I believe will soon be historical lows.

The problem with the BDI is that it is little understood and often dismissed by less thoughtful economic analysts as a “volatile index” that is too “sensitive” to be used as a realistic indicator of future trends. What these analysts consistently seem to ignore is that regardless of their narrow opinion, the BDI has been proven to lead economic derision in the market movements of the past.

That is to say, the BDI has been volatile exactly BECAUSE markets have been volatile and unstable, and is a far more accurate thermometer than those that most mainstream economists currently rely on. If only they would look back at the numbers further than one year ago, they might see their own folly more clearly.

Introduced in 1985, the Baltic Dry Index first and foremost is a measure of the global shipping rates of dry bulk goods, mostly consisting of vital raw materials used in the creation of other products. However, it is also a measure of demand for said materials in comparison to previous months and years. This is where we get into the predictive nature of the BDI…

In late 1986, for instance, the BDI fell to its lowest level on record, then, began a slow crawl towards moderate recovery, just before the Black Monday crash of 1987.



Coincidence? Not a chance. From 2001 to 2002, a similar sharp collapse in the BDI preceded a progressive drop in the Dow of around 4000 points, ending in a highly suspect (Fed engineered) illegitimate recovery.

In 2008, the index fell to near record lows once again just before the derivatives and credit crisis hit stocks full force. To imply that the BDI is not a useful measure of future economic trends seems like an astonishingly ignorant proposition when one examines its very predictable behavior just before major financial downturns.

This is not to suggest that the BDI can be used as a way to play the stock market from day to day, or often even month to month. MSM analysts rarely look further than the next quarter when considering any financial issue, and that is why they don’t understand the BDI. If an index cannot be used by daytraders to make a quick buck in a short afternoon, then why bother with it at all, right? The BDI is not an accurate measure of the daily market gamble.

It is, though, an accurate measure of where markets are headed in the long run and under extreme circumstances.
Over the course of the past month, the BDI has fallen around 65% from above 1600 to 726. Mainstream economists argue that the BDI’s fall in 2008 was a much higher percentage, and thus, a 65% drop is nothing to worry about.

They fail to mention that shipping rates never recovered from the 2008 collapse, and have hovered in a sickly manner near lows reached during the initial credit bubble burst. By their logic, if the BDI was at 2, and fell to 1, this 50% drop should be shrugged off as inconsequential because it is not a substantial percentage of decline when compared to that which occurred in 2008, even though the index is standing at rock bottom.

Yes, the useful idiots strike again…
Looking at the rate and the speed of decline this past month, it’s hard to argue that the current 65% drop is meaningless:



Another subversive argument against the BDI is the suggestion that it is not the demand for raw materials that is in decline, but the number of shipping vessels out of use that is growing. A smart person might suggest that these two problems are mutually connected. An MSM pundit would not.

In 2008, many ships were left to wallow in port without cargo, but this was due in large part to two circumstances. First, demand had fallen so much that too many ships were left to carry too little raw materials. Second, credit markets had sunk so intensely that many ships could not find trade financing necessary to take on cargo.

In either case, the BDI still falls, and in either case, it still signals economic danger. The only way that the BDI could signal a major decline in shipping demand artificially or inaccurately is if a considerable number of ships under construction were suddenly released onto the market while there is no demand for them.

There have been no mass increases or extreme changes in cargo fleets this past month, or at all since 2008, which means, the BDI’s decline has NOTHING to do with the number of ships in operation, and everything to do with decline in global demand.

What is the bottom line? The stark decline in the BDI today should be taken very seriously. Most similar declines have occurred right before or in tandem with economic instability and stock market upheaval. All the average person need do is look around themselves, and they will find a European Union in the midst of detrimental credit downgrades and on the verge of dissolving.

They will find the U.S. on the brink of yet another national debt battle and hostage to a private Federal Reserve which has announced the possibility of a third QE stimulus package which will likely be the last before foreign creditors begin dumping our treasuries and our currency in protest. They will find BRIC and ASEAN nations moving quietly into multiple bilateral trade agreements which cut out the use of the dollar as a world reserve completely. Is it any wonder that the Baltic Dry Index is in such steep deterioration?

Along with this decline in global demand is tied another trend which many traditional deflationists and Keynesians find bewildering; inflation in commodities.

Ultimately, the BDI is valuable because it shows an extreme faltering in the demand for typical industrial materials and bulk items, which allows us to contrast the increase in the prices of necessities. Global demand is waning, yet prices are holding at considerably high levels or are rising (a blatant sign of monetary devaluation).

Indeed, the most practical conclusion would be that the monster of stagflation has been brought to life through the dark alchemy of criminal debt creation and uncontrolled fiat stimulus. Without the BDI, such disaster would be much more difficult to foresee, and far more shocking when its full weight finally falls upon us. It must be watched with care and vigilance...

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 kbit 
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I should have seen that bottom at 784 and change....I was looking for a long this morning but got no decent PA so sat here twiddling my thumbs....
Actually I did have an order parked at 1295 ES but it front ran me....saw another trade on ES at 1303 long but didn't jump on it....

Anyway I suppose that was close enogh to 95 to stick so we might make it to the 801.5 on the TF....I'm not to sure about the spots to watch yet ...maybe around 786 would be a good spot...I'll edit this post a little later with some better spots.

I've noticed some guys are looking to short the ES here around 1309 ish...but I'm not jumping on that train....I really want to see something better

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 kbit 
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My impulse is to write off these headline-type technical events at this point and this impulse, at least in the case of the Golden Cross, is wrong considering how reliably positive it has been since 1932.



As can be seen above in a statistical chart created by Ron Greiss of The Chart Store, it seems that the Golden Cross has cast the S&P in a golden light more often than not and this is particularly true of the more recent past as in the last 13 years or so. Looking back further, though, apparently there were only 4 times in the last nearly 80 years when the S&P turned down significantly and consistently in the year after the Golden Cross was made and this stacks the odds against this current Golden Cross turning into a bearish event.

Of course the Golden Cross has to actually happen for us to consider its more likely bullish message with the index’s 50 DMA below its 200 DMA by less than a point and something that makes it seem as though it will happen as can be seen in the chart on the following page, but it shows something else and perhaps one reason to believe that this crossing of the averages may not be as bullish as the statistics shown above.

Specifically, the S&P’s 200 DMA is not really rising right now, it is flat-lining as the S&P potentially creeps up to move through it and thus this may not count for the strongest Golden Cross should it occur as seems very likely unless this week is comprised of big declines.

Interestingly, though, the chart below may mean decent declines are ahead with the most recent portion of its Rising Wedge, and a Rising Wedge unto itself, confirmed to take the S&P down to its target of 1204.




For us to take that Rising Wedge seriously, though, the S&P needs to close below support around 1279 and a level that’s proven to be important support/resistance in the past and one that would probably prevent its larger Rising Wedge shown below from trying to put in an even higher apex and probably push it down toward confirmation at very roughly 1250 and more precisely 1247.



There is, of course, the potential for a beautiful Head and Shoulders pattern above to support the large Rising Wedge and its bearish implications, but the main thing that the chart above shows is a long-term sideways trend between about 1120 and 1350. Interestingly the entire sideways range, though, can be divided into two portions or about 1120 and 1220, and still my near-term target range with a near-term target of 1120 with both under real attack right now, and 1220 and 1350 and what makes these divided ranges very interesting is the somewhat equal time spent in both even though in a very volatile and whipsawed way.

Right now, it is pretty clear that the S&P is trying to take on the top side of this range but was stopped out by important multi-year resistance at 1335 last week and a level pointed out here back in December 2010, when these notes were very bullish, as a level that could give the S&P trouble in the months ahead.

Whether it was 1335, 1347 or 1371 itself that did give the S&P trouble last year is unclear, but what is clear is that the S&P struggled with that entire range of resistance last spring and summer and something that caused it to fall all the way back into the bottom, and even below, the sideways trend.

It seems likely that if the S&P makes other attempts on that range in the days ahead under the possible glow of the flat-lined 200 DMA Golden Cross, it may struggle in a similar manner and something that will perhaps put its potential Golden Cross in the minority of Golden Crosses in the past that brought on downtrends and, in two cases, bear markets.

As interesting would be if the S&P’s smaller Rising Wedge remains confirmed to tug the S&P clearly back down into the sideways trend and something that could turn the possible Golden Cross into a dud or something even worse.

Something worse, and a cross of another sort as mathematically challenged as it must be, would probably translate into just bearish rather than the gruesomely bullish Inverse Head and Shoulders pattern that the S&P has struggled to confirm recently while what might be starting to show itself right now is simply sideways with the next swipe down.

After all, it still seems fair to consider all three scenarios even after a look at the Golden Cross and this may be a good reason to treat the S&P with care.

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 kbit 
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 kbit 
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The monthly vwap is at 784.3 and based on what's going on it looks like 82.5 at worst should at least get a bounce.

It's currently at the 86 area...watch for something

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 kbit 
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790 should be next target.....

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 kbit 
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I should say if you are in at 86 ish move your stop now to break even at worst

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 kbit 
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If we get over 88.8 we should be ok...just keep your stop somewhere you don't lose anything....if it comes back it's over

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 kbit 
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One last note....it probably should have popped by now so I'm not really excited ...if it gets taken out just wait till it gets to the lower areas I posted earlier and watch again.....

Edit: 791.5 and then 792.7 are next in line after 90...if it goes up ...just move your stop under previous levels as/if they get hit

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 kbit 
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That's what I'm looking at.....

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 kbit 
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worst case you case you got just got stopped just under 90.....not the best but not bad...it may not be over but I don't want to get anyone in trouble here so I'm done posting trades today

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I'm going to stick my neck out here and give a prediction on what will happen.
As I see it now it should get up to about 96 and bumble around for a short time and then launch up to my 801.5....might happen tonight.

The only thing that concerns me is that the ES is dragging its rear end.

I think the guys who are short are feeling somewhat comfy and this would be a good time to shake them out.

Just remember on this post anyway I'm throwing out a wild guess on this one ....don't trade anything you don't like

Let's see what happens around 790-791 this time

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I'm going to stick my neck out here and give a prediction on what will happen.
As I see it now it should get up to about 96 and bumble around for a short time and then launch up to my 801.5....might happen tonight.

The only thing that concerns me is that the ES is dragging its rear end.

I think the guys who are short are feeling somewhat comfy and this would be a good time to shake them out.

Just remember on this post anyway I'm throwing out a wild guess on this one ....don't trade anything you don't like

Let's see what happens around 790-791 this time


So much for that...I couldn't predict my way out of a paper bag.....I think I'll just stick to watching areas

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Predictions never go my way either

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 kbit 
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Presented with little comment except to say that the total lack of volume (and massive concentration of what volume there is at the close) is hardly reflective of a market that is anything other than broken and dying. Last January (2011) the average number of stocks traded on the NYSE per day was 891mm shares vs 661mm for this January (a 26% drop YoY!) and this is down an incredible 59% from January 2008.





Just a note from me on this one and as with anything else someone might look at what I am saying and say I'm full of it....but they are full of crap or ignorant of both if they dispute this

I've been trading long enough to know the markets are getting worse and worse..., though I get trades this is probably the crappiest looking January I have seen....and it's not just Jan...it's been the last few years.
I feel sorry for the guys starting out in this profession, it just sucks really compared to the way it was.

I just wonder if it will get better or not. I think all the economic stuff has scared everyone away from stocks and as for index futures traders, I suspect a lot of them got wiped out...(It's just me vs Goldman at this point)

If you guys don't believe me just look back a few years and see how the markets used to work.

If your a new guy just take it slow...money can still be made but it's not as easy as it was

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If your a new guy just take it slow...money can still be made but it's not as easy as it was

Well forex is continuing to gain volume, and futures lose volume. CME needs to look at its practices and probably make some changes.

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Created a thread to discuss:



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 kbit 
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I'm not to sure about any particular spots tomorrow...maybe that crackpot prediction I made earlier might work out....though 790 didn't hold ...it might have been just a flush out....will post some ideas tomorrow if things become clearer.

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Well maybe my wild guess prediction wasn't to far off after all...anyway, the way this has played out we have to not be to cocky when/if shorting 801.5 ......this thing could launch up to the 815 area considering the range we have been chopping around in.

Really, this is doing what I thought it would (look Back a few posts) up to this point. The question is if we actually hit 801.5 soon or continue to chop around in this range some more.....

Looks like 786ish is the bottom...if it for some reason gets below 782 I will be nervous about this 801.5 idea but not really until/unless that happens

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I got a couple spots to keep an eye on....809-810 this might be a top...if it goes past this I will be looking at 815

If it in fact makes it to 815 it might only drop to 810 and go up again. 810 should bring us back to 800 or more(maybe around the 93 area)....guessing a little here on how it may play out but not the spots to watch.... but should be pretty close to what might happen

There are a couple other spots but those are more significant.....you can look for PA along the way but the way it's going now I don't see any real drop happening today anyway...

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Just looking at things and have determined that if/when it comes back down 802.5 is a spot to be reckoned with

Edit: I'm seeing a footprint here at 805.5...in other words if say we turn around at 809 ish that might be a good first target

As I'm writing this I see another happening at 806.8......

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This isn't the cleanest but looking like 805.5 will be the spot....when it turns around (you see a lower low or whatever)just measure the distance from the very top ( HOD ) to 805.5 and deduct that amount from 805.5 and that would be the next target on the downside.

The only bad part here is that like I said it's not the most ideal layout here but....

Edit: just realized it's perfectly posistioned right now with a high at 808.5 to go down to 802.5....lets see what happens

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 kbit 
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Last note here wait for a double top or something with a failure....don't get trapped !

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 kbit 
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Haven't seen anything to jump on ....Like I said earlier,not likely to get a drop today though there was a chance that I pointed out but nothing has materialized so.....

It could happen I suppose but with no PA I like ...I'll come back tomorrow,which should be a good day.

Not that it matters now and I know everyone hates hearing about stuff after the fact but did any of you notice the flag this morning....I did but it took off before I could post anything...sorry...if it makes you feel better I didn't trade it....oops

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 kbit 
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Interesting end of the day...the ES sold off and the TF is ending up at the highs...confusing

Just keep those areas I pointed out in mind tomorrow( 809-810 and 815)...I'm really focusing on seeing some good PA somewhere...with these things this far out of whack we have to be careful. I don't know if the ES will catch up or the TF will crash and level off...to soon to guess. Just have to tread lightly I'm thinking.

I do have some other thoughts but I'm going to wait a little bit.

once we get a top here some place I can more easily determine where it will go

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 kbit 
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If any of you guys are night traders keep an eye on 1325.75 ES

I'd also like to see the DX bounce off 78.800

I stay away from the TF at night generally but it is at the level I pointed out earlier

Don't marry anything if you see something....just ask yourself a question:
.

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 kbit 
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they still want to go up....next up is 815...watch for something there....

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 kbit 
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Basically we have to wait to see where we go next....815 fulfilled the swing target to make a long story short.

It came down to 808.4 so those are the numbers we need to keep in mind (don't initiate trades off them though..they are reference points, not spots to watch)...

Back later

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 kbit 
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.



Head & shoulders

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 kbit 
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Good thing the weeks almost over...getting a little silly.
Couple spots to watch 822 on the topside and 808 below and probably 802.5 below that.

back later

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 kbit 
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This one is the Euro/Usd daily



This is the TF daily



Look at the patterns here.....look at your own charts and maybe you can see it better

(disregard the dots.....just playing around with a RSI thing)

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 kbit 
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Didn't expect that blast off....I had about 1333 on ES as a target that I kind of forgot about when the TF hit 815.

Anyway, 833.5 is a spot that should hold this if they get real crazy....there are some others but I need more time.

Big picture wise I'm not to far off....if you look back I was thinking that if we hit 815 it might only go down to 810 and go back up.

little concerned about what the DX is doing......

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 kbit 
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Just wanted to write this here so I can look back and see how far off I was but...On ES anyway I'm seeing a high of 1346.75 and a low around 1334.50 on monday.

I have to spend some more time on the TF....

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 kbit 
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Slim chance of getting new high on ES today (though the range was about right)and my thought of a low at 34 and change fizzled but anyway...

I think we might need to get a new high before we get some kind of pullback....though if we continue to grind around in a tight range it might not pullback and just jump higher again.

At present course and speed which could change of course but it looks like we could visit that 802.5 spot I picked out a few days ago maybe by wednesday....
I kind of expect it to chop around some more tomorrow and break on Wed...just a guess.

We need to see what happens when it breaks todays high or low...I'm laying low until then

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 kbit 
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Just a random thought since I am qiute bored today.

Is it just me or was the whole freaking world going to fall apart and the ES was going to 800 or something and then for some reason...out of nowhere really the market decides to rally up to where we are now starting Jan 1st......

Where was there any news or ecnomic justification for this ?

It's interesting ...it really started the day after BAC closed under $5.00.....literally....

I think there is/was an orchestrated effort by the PPT or whomever to bullsht everyone and point us in a different direction.

I know this is a very tired argument and a bit conspirisistic(is that a word?) but you really have to wonder....
How many guys around here and everywhere else for that matter just keep/kept looking to short.

Spare me the cliches and so forth, I know to do what the chart says...it just seems odd.....

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 kbit 
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It could be considering how bad its possible Inverse Head and Shoulders pattern looks with a bearish Rising Wedge riding right on its back.



Interestingly, its Rising Wedge is trading toward a perfect apex area right about now with there being some room for a move to about 13200 and a note worthy level considering it nearly matches the level provided by the 3% rule around both the Dow’s attempt on the top of that Sideways Trend Channel and its potential Double Top. Relative to that 3% rule, it is an imperfect way of marking whether a breakout attempt, up or down and from any defined technical aspect, is real or not and it is calculated by adding or subtracting 3% of the level being watched to or from that level.

Practically speaking around the Dow at this moment, it translates to a level that is a bit above 13200 and should the Dow close above that level in a convincing manner, there is a good chance the Dow will climb higher toward the 14000 target of its possibly improbable IHS pattern. However, should the Dow fail to take out 13200 or so on a closing basis, its IHS will be proven improbable as that Rising Wedge will try to confirm at about 12250 for a target of 10400 and something that would be most consistent with the history of that Sideways Trend Channel that marks a sideways trend that’s been quite vicious at times.

The reason the Dow’s nearly two-year sideways trend is so vicious is because the minute it seems that it’s about to be broken to the up or the downside, the sideways trend whipsaws it in the other direction and one reason to think this could occur again is shown by that Rising Wedge and that possible Double Top pattern that shows more majestically in weekly form not to mention a multi-year Rising Wedge pattern.

It seems this confluence of bearish aspects could overturn that seemingly weak Inverse Head and Shoulders pattern and one that was made weak by the late October Europe Is Saved – Again – rally.

As notable as that possible Double Top in the weekly chart is the Falling Wedge and Rising Wedge combo that the Dow has been trading in over the last year or so in a pattern duo that seems to mimic the pattern duo of 2007 and 2008 even if the composition of the two patterns is not precisely the same in both pairs.

Returning to that Double Top alone, it remains valid so long as the Dow is below 13250 while it confirms at 10405 for a target of 7935.




As can be seen by the first top of sorts, there is a strong chance that the Dow could trade sideways for a bit but below that 13250 before its Rising Wedge in red eventually tries to tug it down toward confirmation and then its target with the latter level serving to confirm the Double Top for its well-sub-10000 target and something that won’t bring out hats but handkerchiefs.

One reason to think this could be true, though, is shown by the larger Rising Wedge marked in lightly that had been confirmed until just recently and a pattern that will reconfirm if the Dow should drop below about 10405 for its outrageous and bucket-requiring target of 6470. Whether or not the Dow would fulfill that pattern entirely if at all is to be seen, but there is no question that it puts bearish background pressures on its charts and something that favors the failure of its IHS pattern for the sake of the smaller Rising Wedge and the Double Top.

Timing, of course, is tough to determine, but it seems likely that the Dow could trade sideways between about 11900 and 12900 for a few weeks to months with the possibility that a peak or two near 13200 is put in before the Dow starts to head down at some point in 2012 and probably in the first half of the year.

Unless the Dow rises well above those higher levels, there is a good chance that there’s a Double Top in the Dow that will take it down relatively soon.

(just remember I post this for your consideration but if you really want to know what's going on listen to me)

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 kbit 
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It had been flashing just yellow the last few times the VIX has been detailed in these notes, but it’s closer to red now that it appears near to finding some sort of apex to its current and bullish Falling Wedge.



In looking at the six-month daily chart above, it appears to have put in some sort of Double Spike Bottom that will support a rise to about 20.00 and a level that would bring the VIX closer to safe confirmation of its Falling Wedge at about 22.50. Such a potential bottom even appears supportive of a fast spike up to about 30.00 or so, but the VIX’s three-year weekly chart is really calling for a true bottom to that Falling Wedge at about 15.00 or so and this seems to suggest that any sort of near-term move up to 30.00 would occur within a month only to be followed by an equally fast fall back down.



Relative to a possible move up to about 30.00 and one that could start in days but probably would not last longer than a few weeks, it is supported by the small kickback rallies involved in the true apexes around 15.00 to those other fulfilled Falling Wedges with the VIX’s current Falling Wedge carrying the same target of about 48.00.

Put most simply, it seems that the VIX may or may not climb to about 30.00 in the weeks ahead with it seeming very likely that irrespective of that possible move up, the VIX will bottom out in the first half of this year at about 15.00 before climbing significantly higher toward 48.00.

In turn, this suggests that the equity indexes will fail to take out the long-term levels of resistance that are being approached right now as some volatile sideways trading in the months ahead ultimately resolves itself at the bottom of the matching long-term Sideways Trend Channels if not significantly below.



As shown by the chart of the Dow Jones Industrial Average above, possible sideways trading in the months ahead would probably take place between about 12000 and 13000 before its bearish Rising Wedge, and the inverse pattern to the VIX’s Falling Wedge, might try to fulfill in full sincerity toward its target of 10400 and closer to the bottom of that Sideways Trend Channel that gains better definition with longer charts.

It is the chart of the VIX with its close-to-fulfilling Falling Wedge, as in 3 to 6 months, that most strongly suggests that the Dow will fail to climb 3% above last year’s intraday peak and that the sideways trend at a minimum will claim it while the potential Double Top born of last year’s top and this year’s potential top-to-be will try to take the Dow well below the bottom of that Channel and into a new old sideways trend entirely.

In turn, it seems worth paying attention to the fact that the VIX is flashing yellowish red.

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 kbit 
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Looks like the ES will maybe work up to 1346.75 on vapor volume overnight when nobody is looking....

Which brings me more to the point...that is a lot of guys are saying that just over 50 should hold for sure ( I have it at 51.5) but I am expecting something to happen at 46.75....

If your awake when it's around these spots keep your eyes open....

The TF has seemed to run out of gas and I'm having a hard time figuring out any particular spots other than maybe Fridays high so......

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 kbit 
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It looks like now we are posistioned to go either down to 802 or 850 on the upside ..
Actually it would have been nicer to dip a little lower today but it's probably close enough.

If you think about it with this just churning around here it's going to set up a scenario where those targets will get hit when it breaks out one way or the other.

The longer it churns the greater the likelihood that this will occur.

We will have to watch that 51.50 on the ES and probably 834 on the TF (not 100% sure on TF number, might be lower because it's out of gas)

Probably if 819 gets hit we should work our way down...the TF is struggling here and it seems like the ES is the one holding it up so we need that to turn and then we drop.....just keep an eye on the spots I mentioned, really the one's everyone else mentioning too.

I don't know if that makes sense so to put it simply I'm looking to short around 834ish TF and really 51.50 ES ( though I 'm watching 46.5 as well)

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 kbit 
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Monthly vwap at 818.5 TF ....might get a bounce here though it looks like it might bounce off 819 ......

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 kbit 
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I'll post something later but at the moment anyway if your not short already right here at 823 is a spot to watch ...

Above that is 826ish...on the downside we have to watch what happens at 814-815.....if that area holds that would be a good spot to go long up to 850 (just a possibility, I'm really looking for the 802.5 thing to play out).

So to make a long story short watch what happens at 815.

Always remember if you look for PA...you will be ok

back later

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 kbit 
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I hope someone other than me can make sense of my ramlings and made some money today....

As far as spots to watch just refer to my earlier post but change 826 to 827.....we are sitting on it now so it's probably not real significant but....

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 kbit 
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Just got this....though it seems like these guys are usually wrong, I'm inclined to somewhat agree this time since it's in line with what I'm seeing(though I don't look at all thier funky patterns)....but if I were you I would ultimately listen to me and not them
>
>
It could be in looking at the intraday chart below with there being a possibility that the original Diamond Top outlined the other day is growing into a bigger Diamond Top along with its cousin patterns shown or a Broadening Top and a potential Complex Head and Shoulders pattern.



Maybe this bearish pattern combo breaks to the upside and something that requires confirmation with a rise above 1349 for a target of about 1370 while the downside scenario confirms at 1336 for a target of 1316 with confirmation unlikely to come until Friday or Monday if the combo remains good.

In turn, this suggests the S&P might trade down to about 1339 today before bouncing up to about 1345 on Thursday before tapering out between those two levels ahead of confirming up or down.

Should that sideways trading take place, it will probably mean that the S&P’s Diamond is getting bigger.

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 kbit 
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Based on the charts of the Nasdaq Composite and the equity index trading above its long-term sideways trend for days now, it does seem to be a possibility and one that may manifest in the relatively near future.



Starting out with the intraday chart of the Nasdaq Composite, it is showing a Broadening Formation and a quasi-Diamond Top and Head and Shoulders combo similar to the one shown in the S&P and something that should be bearish for the Nasdaq Composite, but what appears truly bearish for the Nasdaq Composite is that unclosed gap at 2868.

It is unclear when this gap might try to close with the intraday chart pointing to a possible Island Reversal taking place soon and something that would close that gap while its daily chart shows that its unclosed gaps to the downside have remained unclosed for days, if not weeks, before the Nasdaq Composite has dropped to close those gaps.

Looking at just the last year, it is all but certain that the Nasdaq Composite will drop back to 2868 and something that will reinforce its long-term sideways trend even though it does not make certain that such a reinforcement might last.




Rather than showing that long-term sideways trend as a Sideways Trend Channel, let’s look at it in the form of a large Symmetrical Triangle as shown in the monthly chart below.



It is showing an upside breakout from that multi-year pattern with the top trendline representing its all-important third Bull Fan Line to mark the beginning of a reversal of the sideways trend to the upside and it is useful because it provides a level by which to identify the Nasdaq Composite’s positioning in relation to its sideways trend even when drawn as a horizontal Channel.

Specifically, if the Nasdaq Composite remains above about 2627, then it is probably pretty safe to believe that its long-term sideways trend is being defied to the upside, but below 2627 and its long-term sideways trend will be very much in control and something that means the Nasdaq Composite will be spit back down to the bottom of that Symmetrical Triangle at about 1500 within 12 months or so.

What makes this so interesting is the fact that the Nasdaq Composite broke above this long-term Symmetrical Triangle just this year, but it did so on, yes, a gap that had been pointed here several weeks ago several times at 2617 and a level right above that 2627 level that marks the demarcation around the Symmetrical Triangle’s top trendline.

And this brings up the precise point raised a few weeks ago when that originating gap was first highlighted and that is to question whether a 20%+ move up can happen on top of an unclosed gap.

Interestingly, it has happened in the past as a part of the whole QE2 rally on a gap at 2252 and a gap that has yet to close, but maybe the three unclosed gaps highlighted here provide a reason to think that sideways will resurface.

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 kbit 
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Looking like I MIGHT be wrong on the drop happening now.....was thinking we'd be on the way down by now.

At this point we have to see what happens at 51-52 on the ES.....and watch where we are on TF .....

I need to do some homework to figure out some other areas above here becuase it might happen soon if these tops we have now get taken out....technically we have enough to get up to 850 and change if it breaks the highs....

As I'm writing this ES just hit 52 and TF is below it's high ....we'll see

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 kbit 
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I should explain why I'm a liitle concerned....about my downside /pullback idea.....to put it simply it won't go down....

The TF went down yesterday and hit 819 but wouldn't go through it .....we really need to get through that area to do anything....the ES as you know just keeps grinding higher...last nights low wasn't very low at all....

I probably have everyone totally confused ...just watch the high on ES and see if it holds.....

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 kbit 
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Monthly vwap and S1 at 819.4 today

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@kbit, can you post a new chart showing your S/R?

Mike

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 kbit 
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I don't really have lines showing S/R areas...the areas are in my twisted head...this is what I'm looking at now.

I will post something with lines later on

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 SeeTrader 
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For all you TF traders out there, since the TF isn't as liquid as some of the other markets what is the max amount of contracts that can be traded without any problems getting filled?

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 kbit 
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For all you TF traders out there, since the TF isn't as liquid as some of the other markets what is the max amount of contracts that can be traded without any problems getting filled?

Depends on conditions....and where your looking to get filled...that's tough to answer.....

If your trading RTH you won't have a problem unless your trading 50 lots or something.....I have problems occasionally but not to often. After hours forget it...stick with the ES

Like I said if you are good enough to pick your spots right to the tick (say you went long at 818.1 today) it might be tough to get everything filled but other than that you'll be alright.

Just try it and see.

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kbit View Post
Depends on conditions....and where your looking to get filled...that's tough to answer.....

If your trading RTH you won't have a problem unless your trading 50 lots or something.....I have problems occasionally but not to often. After hours forget it...stick with the ES

Like I said if you are good enough to pick your spots right to the tick (say you went long at 818.1 today) it might be tough to get everything filled but other than that you'll be alright.

Just try it and see.


Ok, thanks. I will be trading from 10-12est. and I was wondering if I am able to develop a system for the TF that's consistent enough if I would be able to work up to trade 10 contracts without problem.

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 kbit 
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Ok, thanks. I will be trading from 10-12est. and I was wondering if I am able to develop a system for the TF that's consistent enough if I would be able to work up to trade 10 contracts without problem.

Yep, you should have no problem with those hours ...I think you might like it better than some of the others anyway...it's not as choppy as the ES for example

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Yep, you should have no problem with those hours ...I think you might like it better than some of the others anyway...it's not as choppy as the ES for example


That's one of the reason I'm looking at it, less chop. Lately, until today it seems like light volume though.

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 kbit 
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Same sht different day....

The TF just gets about a inch lower everyday and the ES gets about an inch higher.
You can trade this stuff on either side of the ranges...just be careful when she finally blows out one way or the other.

Based on whats been happening I guess we might see 815 tomorrow....the highs around 832 is a spot to watch as well.

Anyway, keep in mind that scenario I laid out a day or two ago about the 815 area...

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 kbit 
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Haven't posted a daily Ichimoku in a while....it's played out very nicely...only now the KS has leveled off and gone flat which portends I suppose of a reversion to the mean or stated differently might drop down to that green line....(based on my limited experience It might be about a week before/if it happens...just looking at it from an Ichimoku perspective)

The one down here is an hourly and will make you nauseous if you look at it to long

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 kbit 
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I'm going to wait until sometime on Monday to zone in on some spots but in the mean time keep an eye on 815 as I mentioned before.

The way things played out Friday it seems like we will be visiting 802.5 soon...815 seems to be resistance at this point so bear that in mind...

Keep in mind that 802.5 number is a target but could go well beyond that really...what I'm saying is to use that as a target on the downside and not necessarily look to go long there.

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 kbit 
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Looks like 802 ain't going to happen....news on Greece pushed us up.

I do have a couple spots but I am unsure about them.....I just want to wait and see what's going on especially with the ES which is back at the high and seems to not want to give up.

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 kbit 
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This may be one of those times that the ES acts like a retard and has to hit 1352 like 4 times before it figures out that it's time to drop.

Our job is to be patient and wait for the ES to figure it out.

I just hope we can get in at a decent spot....don't want to see those whores drop these things overnight and we sit here with our thumbs up our butts waiting for a pull back that never comes.....

Yeah, I feel better now that I vented a little.

I still can't really nail down any particular spots here...it's just to goofy right now....if I figure something out I'll post it....in the mean time just stick with the areas around the highs and lows....

You guys I hope are getting trades...I am but, just hoping to narrow down an entry for the mother of all shorts
(which might not happen but...)

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This may be one of those times that the ES acts like a retard and has to hit 1352 like 4 times before it figures out that it's time to drop.

Our job is to be patient and wait for the ES to figure it out.

I just hope we can get in at a decent spot....don't want to see those whores drop these things overnight and we sit here with our thumbs up our butts waiting for a pull back that never comes.....

Yeah, I feel better now that I vented a little.

I still can't really nail down any particular spots here...it's just to goofy right now....if I figure something out I'll post it....in the mean time just stick with the areas around the highs and lows....

You guys I hope are getting trades...I am but, just hoping to narrow down an entry for the mother of all shorts
(which might not happen but...)

just out of curiosity, why is it time to drop?

of course "profit taking" can happen any time after that nice move we had. but the mother of all shorts?

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just out of curiosity, why is it time to drop?

of course "profit taking" can happen any time after that nice move we had. but the mother of all shorts?

Yes I exaggerated, it wouldn't be the mother of all shorts.... I would be looking for somewhere in the 790 area really.

We've kind of stalled out here at the highs(more so on TF than ES) and either they are absorbing whatever supply there is and will run up to 850 and beyond as you think(guessing) or it will pullback and then take a run for new highs.

I'm in the we need a pullback camp, and I know you've been around long enough to see the stuff I'm looking at that would support my thoughts on this...I don't want to go through the list...just go back through the thread and you'll see what I've been looking at.

All that being said, I do have a post a few weeks back that said to go long in the low 750s and you would still be long at this point ....

Thanks for posting it's been getting kind of boring around here....look at the kind of stuff I have to post to get a response

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 kbit 
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The Russell 2000 is worth watching considering that its trading of the last several sessions appears to be forming into an intraday Descending Trend Channel as opposed to the other indices that look to be a bit more sideways even if lopsided to the topside and in a way that makes it appear the downside could be found soon.



Should this intraday Descending Trend Channel prove to be reliable as it has been during its brief life, it will try to take the Russell 2000 down below critical support around 810 and something that could cause the Descending Trend Channel to be breached to the downside to close that gap.

Is there a rescuing intraday Bull Pennant in there somewhere? Maybe and that has been the trend this year for certain, but it is not showing itself very well unless the Russell 2000 climbs above about 825.

Otherwise it seems that the Russell 2000 could become increasingly sideways in its daily charts as was detailed as a possibility on Friday evening and the reason why the Russell 2000 is worth watching.

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This may be one of those times that the ES acts like a retard and has to hit 1352 like 4 times before it figures out that it's time to drop.

Our job is to be patient and wait for the ES to figure it out.

I just hope we can get in at a decent spot....don't want to see those whores drop these things overnight and we sit here with our thumbs up our butts waiting for a pull back that never comes.....

Yeah, I feel better now that I vented a little.

I still can't really nail down any particular spots here...it's just to goofy right now....if I figure something out I'll post it....in the mean time just stick with the areas around the highs and lows....

You guys I hope are getting trades...I am but, just hoping to narrow down an entry for the mother of all shorts
(which might not happen but...)


We've hit 1352 three times by my count as of this writing...

Edit: actually would be 4 times if you count the time it got up to 51.5...

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Yes I exaggerated, it wouldn't be the mother of all shorts.... I would be looking for somewhere in the 790 area really.

We've kind of stalled out here at the highs(more so on TF than ES) and either they are absorbing whatever supply there is and will run up to 850 and beyond as you think(guessing) or it will pullback and then take a run for new highs.

I'm in the we need a pullback camp, and I know you've been around long enough to see the stuff I'm looking at that would support my thoughts on this...I don't want to go through the list...just go back through the thread and you'll see what I've been looking at.

All that being said, I do have a post a few weeks back that said to go long in the low 750s and you would still be long at this point ....

Thanks for posting it's been getting kind of boring around here....look at the kind of stuff I have to post to get a response

there's something we have in common. I like to exaggerate too.

actually for the market it would be healthier to have some pullbacks on the way. I wouldn't like to see a move straight up to 850 and beyond.

good job on your postings.

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 kbit 
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Wondering why the market just viagra'ed up to green on absolutely nothing? Here is the news from Reuters, with key words underlined:




Greek conservative party leader Antonis Samaras is expected to deliver a letter of commitment to the country's international lenders on Wednesday, a government source said on Tuesday.

"Samaras' letter of commitment is expected to be handed in tomorrow morning," the government official told Reuters on condition of anonymity.

A senior official at the conservative New Democracy party confirmed that Samaras intended to sign the letter. There was no official comment from the party.
So... let's get this straight: Samaras, the guy who has promised will he reneg on the European deal as soon as he becomes PM, is "expected" to agree to the deal he voted for on Sunday..."according to a Grek government source." And who will he supposedly delivery this letter to?

The cancelled European meeting? Or to Juncker who said Greece needs to comply with the terms of the first bailout, forget the second one. The same Juncker who said he is uncomfortable with Samaras lack of commitment?
And the end result is a 25 pip move in the EURUSD which undoes a 75 drop in the DJIA?




Market Spike Driven By Latest Bout Of Idiocy Out Of Greece | ZeroHedge

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 kbit 
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Just watching the ES pop the top...still won't give up....
Notice where the TF is however....826 ish, which is below 832 for those that can't see to good...in other words still below it's high.

My point is that there is a possibility that they still may come down and the ES just wanted to get the stops first, though I have to acknowledge the ever increasing possiblity that these scumbags will just keep going up.

At this point, being that they have no apparent desire to retrace I will continue to just trade back and forth on the TF unless it breaks it's high.....know what I mean ....
.

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 kbit 
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I was just thinking I maybe should have posted this one...almost seems more appropriate....
.

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 kbit 
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It's a little to soon to say what will happen here exactly but I wiil say we are currently posistioned to finally make it to 802.5 (baring any more Greek news)

The question is will the ES finally relent and let everything drop...(yeah, I know the NQ is a trouble maker too but...)

The ES only dropped 10 points from the high that was taken out last night so we have to see if they try to run it up again from here.

Anyway we have to get past the 810 area first...
I'll post some spots later today...need more time to examine things.

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kbit View Post
It's a little to soon to say what will happen here exactly but I wiil say we are currently posistioned to finally make it to 802.5 (baring any more Greek news)

The question is will the ES finally relent and let everything drop...(yeah, I know the NQ is a trouble maker too but...)

The ES only dropped 10 points from the high that was taken out last night so we have to see if they try to run it up again from here.

Anyway we have to get past the 810 area first...
I'll post some spots later today...need more time to examine things.

I don't have the NQ up but the dow dropped out of its long channel already, I am pretty sure nasdaq did too, really all that is left is the ES.

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 kbit 
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Just last night in reviewing a few motley looking equity index and sector ETF charts along with the VIX, there was one chart that stood out as more motley than the rest and that was none other than the Nasdaq Composite.


One to keep a real eye on is shown in the Nasdaq Composite below and a pattern that is unidentifiable as a topping pattern of a particular sort but is identifiable as an Island that may reverse down to close that gap at 868 and something that will qualify it as an Island Reversal to the downside and one that may come as AAPL’s own Mountain Island collapses down at some point in the possibly not-so-distant future.


What makes this possibly worth thinking about now is the fact that AAPL is showing a Church Spire Top after the recent parabolic move higher and something that was seen in silver last spring along with today’s later day decline.



This Church Spire Top confirms at $496.89 for a target of about $467 and a level above a small unclosed gap at $477 that will close soon while the real gap to be reversed – that possible Mountain Island Reversal – is at about $431 for a possible decline of about 13% and one that could come quickly as in within weeks.

One reason to think AAPL’s Mountain Island Reversal will occur would be provided if the Church Spire Top does fulfill down to its $467 target and something that could happen very quickly as in within days because its potential fulfillment would serve to create a Rounding Top pattern of sorts with a minimum target of about $408.

In short, AAPL may finally be ripe enough to fall from its tree and something that will pressure the S&P but even more so the Nasdaq Composite with its own ugly and unclosed gap showing and something that has been detailed here a good bit in recent days as a reason to believe that the Nasdaq Composite will be unsuccessful in taking out its long-term resistance on this particular pass up but rather will fall back into its sideways trend.

Should this prove true, it will be a matter of degree around that fall into the sideways trend with 2750 looking like a strong possibility with there being some chance that the Nasdaq Composite could try to close a gap at 2617 even on this particular sideways swipe down that will be proven if this index does an Island Reversal to close its gap at 868.



Such a potential Island Reversal seems likely in just looking at the chart above with a faster fulfillment increasing the odds that the Nasdaq Composite will find sideways again as happened for the Russell 2000 already with the possibility of an especially fast reversal of that gap making it seem that this tech heavy index could find its way well into the top half of that Sideways Trend Channel rather soon.

And it would be such a potential move by the Nasdaq Composite back into its vicious sideways trend that could come on a Church Spire Top in AAPL.

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 Silvester17 
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there's something we have in common. I like to exaggerate too.

actually for the market it would be healthier to have some pullbacks on the way. I wouldn't like to see a move straight up to 850 and beyond.

good job on your postings.

that's what I call a healthy pullback. now we can resume course to 1600


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 kbit 
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that's what I call a healthy pullback. now we can resume course to 1600


I was/am hoping for a better pullback than this but might not get it.....

Since about noon time the ES was floating up on fumes according to my CD but as we all know that doesn't mean it won't keep going.
About the only thing left is that the TF stays under 832 and the ES doesn't make it much higher (maybe even a double top).

It really doesn't matter to much anyway....I've been trading the range anyway as you probably have too.

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I wish I had something interesting to post but don't have anything really except that it seems like we are getting comfortable here.....I don't have market profile but just the fact that we keep rotating around up here kind of tells me(obviously I suppose) that we have some level of acceptance and could be building a base here for a launch to new highs or just will go back and forth until we get some kind of news that breaks us out one way or the other.

In the mean time just have to keep playing back and forth until it really pops one way or the other.

I haven't been sure enough of any particular spots to post so I've been quiet lately and still remained focused on around 832 and 815 and 810 but the in between stuff is unclear....

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If George Lindsay's technical observation proves correct, the S&P 500 should embark on a sharp move higher. As I noted on June 24, 2011, in "Crazy and Fast Times With 'Fast Money,'"

At the same time the stock market enters this uncertain, murky period of less monetary and fiscal support in a somewhat broken, or at least wounded, state technically. While I don't rely on technicalanalysis, I recognize many do. While a lot of the "Fast" gang looks at technical levels in determining market direction, resistance and support, if I go technical I prefer looking at patterns rather than levels. And I highlighted my view that a George Lindsay Three Peaks and a Domed House pattern could be indicating an April 2011 top in the markets. The gang laughed!

By means of background, technical analyst Lindsay coined his 23-step "Three Peaks and a Domed House" technical pattern and gained celebrity because it pointed to a market peak in late 1968 -- and the largest stockmarket correction since World War II followed in the years after.

( Here are some historic examples of such a technical setup.)
Earlier this year I raised the issue that an unusually negative technical formation (in Stages 1 to 7) of Three Peaks and a Domed House might have indicated that an important market top was being made in the spring of 2011.

My observation caught the Fast Money team and a number of technically inclined analysts by surprise, as I tend to side with fundamentals.

The sharp downturn in stock prices in July (matching Stages 9 to 10) that followed provided an almost perfect fit to Lindsay's observed technical configuration.

But now (after possibly moving from Stage 1 to Stage 19) a positive setup and phase (from Stages 20 to 23) might be in order.

If the pattern of Three Peaks and a Domed House continues, a sharp upside move in the stock indices appears possible.

The chart below indicates that the technical pattern (though there was recently a slight undercut, just as there was a slight overcut in previous stages) is almost exactly synchronized. If history follows, we are about to move toward the domed house (and much higher stockprices) in the months ahead, as opposed to the doomed house mentioned yesterday by Dr. Bobby Marcin.

Below is a chart of S&P 500 cash year-to-date superimposed by Three Peaks and A Domed House. Please note the similarity between the S&P and Lindsay's technical configuration throughout this year.

S&P 500 and Lindsay's Pattern


Click to enlarge


Read more: Three Peaks And A Domed House: What The Classic Chart Pattern Is Indicating | Stocks And Markets | Minyanville.com

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If George Lindsay's technical observation proves correct, the S&P 500 should embark on a sharp move higher. As I noted on June 24, 2011, in "Crazy and Fast Times With 'Fast Money,'"

Is this the way you see it? Thanks.


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Is this the way you see it? Thanks.


I guess this guy(George) is thinking that we will just go up from here and at this point I would acknowledge that possibility.

I'm thinking there is definitely more topside....my problem is (and I'm not alone) that I want a real pullback to 1300 or something.

This might not happen though the way it's been going....so I can try and guess all day long on what, where ,when ,why and how but at the end of the day we have to trade what we see...(yeah that's a tired old saying).

I have been trying to figure spots this might turn around at and have been pretty close but the problem is that when it hits support it doesn't break through and hold. so that's why I have been promoting the idea of just trading the range....when it breaks through support and gets rejected on a retest we will be good to go.

I don't know if I answered your question or not.....I don't want to ramble on to much and confuse everyone (including myself)

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Just a couple spots to keep an eye on....825 and 828.5 and 831.5

On the downside 813 ish (might be weak so...) then 806 then my 802.5(from qiute a while ago but..)

Where it goes nobody knows....but those spots should do something

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Looking like 815 might hold (day ain't over yet though)...I was thinking we might see 813 but .....

821 seems to be a spot to keep an eye on based on the activity around there but I don't necessarily like it that much...rather see around 825.

I don't see a decent bottom around here so in other words I want to short it again somewhere for a retest at least...the only thing is all that chop that could be considered I suppose to be accumulation but I don't really see it that way.

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It would seem there is a chance of it, but as was stressed earlier, confirmation is key considering how long it is taking everything to trade out on today’s narrow trading in DXY and EURUSD.



There’s the VIX’s intraday Double Bottom gone triple and this intraday Triple Bottom confirms at the same 18.94 for the same target of 20.34 but fails at 17.54.

The Russell 2000’s intraday, or daily, Double Top remains valid and still confirms at 812 for a target of 791 and just below a gap at 795 that is likely to close at some point sooner rather than later.



Should the RUT turn down below 817, there’s a good chance this pattern will confirm while a move above 824 will make it less likely.

But it is for these intraday charts that make it seem that the VIX appears to be going triple as the RUT stays double.

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Well looks like 813 was better than I thought it would be...I did take a long of that area but foolishly didn't ride it to the top...oh well
If you guys recall 825 was a spot to watch as well...turns out they wanted to go even higher.

At this point I'm thinking the 822 area is a spot to keep an eye on.
The topside I'm not sure but will post some thoughts later

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Well looks like 813 was better than I thought it would be...I did take a long of that area but foolishly didn't ride it to the top...oh well

Are we headed to position 23!?!

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Are we headed to position 23!?!

I'm beginning to think so.....if we can get above 833ish and stay there it looks likely.

Take a look at the next post (# 291) from PT....I usually think they are wrong but I'm pretty much on the same page with them on this one.

I stll haven't written off the downside idea yet though until like I say we stay above 833...For now anyway I want to first see what happens overnight and secondly see what happens around 822.(maybe just a hair under 821 really)...actually it might bounce off 824.

If they are really bullish it should not drop further than about 817.5 worst case

If it doesn't bother to pullback at all that's fine too...we'll just look for a retest around 833 after it makes a new high.

I know I have a bunch of spots but it's a bit confusing for all of us at this point..

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The fundamental “something” that is coming started to show up in DXY and EURUSD today but in reverse form than what the intraday and daily charts were suggesting with DXY nearing the bottom of its multi-week sideways trend and EURUSD breaching the top of its range.



EURUSD’s breakout above its last high should be taken as a serious sign that it may try to stage a significant move higher even though DXY’s chart still suggests that it is trying to move higher and so until the two charts align fully, it remains my inclination to believe that DXY will break above 80 soon and EURUSD below 1.300.

That being said, today’s trading in DXY and EURUSD would suggest otherwise and so let’s bring in some of the equity charts that are showing a fundamental “something” to come as well and one that will be significant enough so as to break the congested sideways trading of recent days/weeks and the very hallmark of a shift-to-come in the fundamentals whether to the positive or the negative. Put otherwise, whatever the fundamental something is that investors have been waiting for clarification around for about a month as told by DXY and EURUSD and for about two weeks as told by some of the equity charts will produce a very clear breakout to the upside or to the downside.

Interestingly, this sideways trading is showing only in select equity-related charts including the Russell 2000 and most of the sector ETFs with the XLF showing something that almost looks like a Double Top in the apex area of a decent Rising Wedge and one built of declining volume that accompanies the slowing buying momentum of that pattern.




In turn, the XLF’s chart set-up looks bearish on the Double Top that confirms at $14.39 for a target of $13.92 and the Rising Wedge that confirms below $14.39 for a target of $11.73, but maybe that Double Top pattern turns out to be congestion that takes the XLF higher and this means confirmation at $14.86 for a target of $15.33. Overall, though, XLF’s chart presents in a more bearish light than not and risk-to-reward profile that is skewed toward risk.

Taking a look at the Russell 2000, this sideways congestion shows very well in a relatively well-established Sideways Trend Channel within the bigger Sideways Trend Channel.



Clearly, resistance around the top of the Sideways Trend Channel is proving formidable as the Russell 2000 trades in what looks like a small Double Top, too, and one that confirms at 812 for a target of 791. But even though the Russell 2000 has been balking below the official neckline of its Inverse Head and Shoulders pattern, maybe this seemingly bearish congestion turns out to be bullish by breaking above 833 to confirm that congestion for an upside target of 854.

Returning to the sector ETFs, the XLB continues to look vulnerable to the downside on congested trading that matches that of DXY and EURUSD in duration.




The Rounding Top pattern in the XLB confirms at $36.10 for a target of $34.20 and one that is supported by the unclosed gap at $35 along with a gap at about $34.

Worth noting is the fact that the second half of this Rounding Top is built on declining volume and maybe this supports this pattern breaking to the downside as it “should” rather than to an upside target of $39.90 on confirmation at $38.

Speaking of “shoulds”, though, there are a lot of bearish aspects failing and/or being stretched in the bullish direction before a possible bearish snap and so confirmation is required relative to having any confidence in any of these aspects having a shot of succeeding let alone succeeding.

Interestingly, it is the chart of the VIX that suggests these bearish topping patterns comprised of sideways congestion will break correctly to the downside for declines of 5-7% at least.



It continues to trade in an unconfirmed Inverse Head and Shoulders pattern with the Bull Pennant marked in providing one good reason to think the VIX may spike higher soon. Specifically, the Bull Pennant confirms around 18 for a target of about 22 while the IHS confirms around 23 for a target of 30.

Maybe this pattern set-up fails and something that will probably come on the EURUSD moving higher and the dollar index lower as equities continue to climb into the stratosphere, but there are a greater number of technicals supporting that the fundamental “something” to come will push risk down and probably as the dollar index rises.

Until either such scenario plays out, though, the congestion trades on.

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The last six months' market behavior is somewhat breath-takingly similar to the same period a year ago. With global central banks pumping (RoW replacing Fed for now), energy prices soaring, and since the market is the economy - hope is rising that we are doing better; the drivers of the asset price reflation are similar too.

While Treasury yields appear to be bucking this sentiment-euphoria, perhaps it is the because the US is the hottest market and all the world's money comes here that we are 'decoupling'. It seems the stakes are higher and scale of known unknowns even larger this time as the can that we are kicking is gathering a lot of trash as it rolls down the road.



Perhaps the 'events' and collateral needs around CDS roll dates and IMM dates (highlighted in the chart) - which just happens to coincide with the March Greek bond maturity next month - will prove once again that this time its no different.
And from Goldman on the 'similarities':




What’s similar?

A sharp increase in oil and gasoline prices with political volatility mounting in the Middle-East. The most obvious similarity to last year is the fact that crude oil prices have been rising sharply since the turn of the year. Between December and the last week of February 2011, Brent crude prices rose by about 20%. Over a similar period – from December till now – crude prices have risen by about 13%.

While the extent of price rise over this three month period is a bit less this time around, crude prices have started at a higher level. So Brent crude increased from about $89/bbl to about $106/bbl from Dec till late-Feb last year, whereas the move this year has been from $109/bbl to $122.9/bbl. Gasoline prices have also increased sharply both this year and last year.

Since December, the increase in gasoline prices has actually outpaced the one from last year – rising by about 18% this year versus about 10% last year. Last year gasoline prices went on to rise by almost 50% between Dec and end-April, and this was an important part of the explanation of the subsequent US economic slowdown in 2011.


Another disconcerting similarity to last year is the concerns around political volatility in the Middle-East with the potential for supply disruptions coming on top of a tight market. After earlier political unrest in Tunisia and Egypt, Libya was in the throes of a political revolution by mid-February, which rapidly deteriorated into civil war by March.

The ensuing prospect of disruptions from a significant global oil producer caused oil prices to spike further, so that they exceeded $125/bbl by early April. This time around, concerns have been centred on Iran, and the possibility of supply shortfalls from there either because of embargos or disruptions in key shipping lanes.


A backdrop of improving cyclical momentum across the world. The increases in crude oil prices both last year and this year have come against the backdrop of improving cyclical data. From December through Feb last year, our aggregated global PMI measure increased from 55.1 to 56.5. And this year too, global PMIs have increased from 49.6 in November to 51.8 in January.

The difference in levels is worth noting: the oil price increases this year have occurred with PMI levels much lower on average than last year. That said, the increase in PMIs this time around is more even – with increases both in EM and DM, whereas the last year the increase was primarily focussed on DMs. EM PMIs were more or less flat as most EMs were tightening policy to restrain high rates of inflation.

February brought the first signs that the higher commodity prices were beginning to weigh on growth. As oil prices moved higher through February last year, we saw the first signs that growth-sensitive assets started to falter. Our WF US Growth basket peaked in February last year (even as the index itself continued to move higher) after increasing by 12% since December 2010, and this year too, our growth basket has struggled to advance in recent weeks despite the tailwind of better macro data. Other growth-sensitive assets like copper also exhibited a similar pattern.

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I don't know when or how long it might take ...might(should) be soon but according to what I'm seeing we should be targeting 798.
It would take to long to explain but if we get under 815 again it's pretty darn likely as I see it.
Probably more immediately we need to get under about 821 to begin to make that happen.

This should be interesting......

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That 798 scenario is still in play but hanging on by the thinest of hairs....the bulls don't want to give up.....
Basically what's going on is they keep trying to bait the bears here but unless they can hold it over 833ish the bears still have a chance the way I see it.

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Officially, per the 3% rule, the Nasdaq Composite’s breakout above the top of a more than decade-long sideways range has proven itself to be the real deal by closing 3% above the very top of that range today.




This suggests that the Nasdaq Composite will try for the upside target of that Symmetrical Triangle at 3255 rather than the downside target of 1940 despite its 30% post-Bearish Band-Aid Rip rally occurring on declining volume with the last month resting on an ugly and unclosed gap at 2868.

Technically, it is the Nasdaq’s close at boring old 2986 that is far more important than the Dow’s headline-trumping close above 13000 and something that means very little relative to the Dow proving it is making a sustained breakout above its more recent sideways trend between about 10000 and 12900.




What will prove a sustained breakout by the Dow Jones Industrial Average above that defined sideways trend is a close above 13260 and the level that would equate roughly to the Nasdaq’s close right below 3000.

Interestingly, though, the Dow’s previous breakouts that were 3%+ above its truly long-term sideways trend in dashes and that more recent sideways trend ultimately failed as is well-demonstrated by 2008 and 2009 along with 2011 with 2012 perhaps setting up a Double Top that remains good so long as the Dow is below 13260.

Worth noting as well is the S&P’s close above last year’s intraday high at 1371 with 1412 standing as the 3% rule test around the S&P.




However, the S&P may find itself challenged to hold that positioning considering that it is 5% above its 50 DMA and has been for many weeks now and something that has proven approximately unsustainable in the past as circled.

So far, then, per the charts reviewed, it was a good day for the equity markets and despite the Case-Shiller report that fed its long-term chart that suggests housing prices will drop by another 15-25% as discussed most recently in January 7’s Housing to Take A Triple Tumble?

What, though, is going on with the Russell 2000? Yes, it is up a whopping 11% year-to-date, but it is worth noting its recent pause.

As shown in the daily chart on the following page, the Russell 2000 continues to balk below the official neckline that would confirm its Inverse Head and Shoulders pattern to the upside as it remains stuck in the top part of its sideways range in consolidation that still exhibits lower highs after today along with higher lows to form a Symmetrical Triangle.

Should that pattern follow the other indices up, it confirms at 833 for a target of 854 while it confirms to the downside at 812 for a target of 791.


At this point, it seems more likely that the Russell 2000 will follow the other indices up to 854, but its hesitation may support its bearish Rising Wedge and a potential Double Top that would take it back down to the bottom of the range if not well below it.

Such a potential move by the Russell 2000 and more truly the S&P is showing in the chart of the VIX with its Sideways Trend Channel comprised of bullish Falling Wedges with the possible apex of the VIX’s current FW showing as a Double Bottom and/or Inverse Head and Shoulders pattern in its daily form.



Should those bottoming patterns prove successful, the VIX will shoot up toward 30 while its Falling Wedge carries a target of 48.

It will be interesting to see, then, what comes ultimately of a breakout in the Nasdaq, the sort of holdbacks in the Dow and the S&P along with the RUT’s sideways stall.

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I don't know when or how long it might take ...might(should) be soon but according to what I'm seeing we should be targeting 798.
It would take to long to explain but if we get under 815 again it's pretty darn likely as I see it.
Probably more immediately we need to get under about 821 to begin to make that happen.

This should be interesting......

Well at least this time it got under 821 and it was rejected after a retest......

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If this rally runs out of steam, history suggests the next move down could plumb depths not seen in years.

If the market rolls over here, the next bottom might be a lot lower than most players think possible. After all, the "news" is all positive: Europe's debt crisis is now resolved; employment in the U.S. is trending up, GDP is growing nicely, etc. etc. etc.
As food for thought, here are two charts, courtesy of frequent contributor B.C., that suggest the good news might not only be priced in, but it might abruptly cease flowing.
The first chart is of the S&P 500 from 1973 to the present. The current rally has stalled right at a multi-year line of resistance, and a potential A-B-C pattern in a long-term channel suggests a return visit to the March '08 lows around 666, or perhaps even lower.

Here are B.C.'s observations:
If a C wave is imminent, a typical pattern is 2 (or 2.382-2.764) x A or a target of the '02-'03 and fall '08 lows, or even as low as the 500s-600s eventually. C = A would imply an idealized target in the 460s and nominal SPX 600s (US$ constant at the current level).
Such a decline in a period of "growth" seems impossible, but we should keep in mind the possibility that four conditions could cause growth to roll over and corporate profits to compress:
1. Rising energy input costs
2. Rising U.S. dollar decimates overseas earnings of U.S. corporations
3. Tapped-out consumers run out of gas (literally)
4. Federal government stops borrowing and blowing 10% of GDP every year
Next up, an analog chart of the Nikkei and the S&P 500 (SPX). To align apples to apples, this chart tracks the dollar-adjusted Nikkei from its top in 1989 and the dollar-adjusted SPX from its top in 2000. (For reference, the yen-adjusted Nikkei is also plotted.)
Interestingly, the SPX has tracked the Nikkei rather closely--at least until the extraordinary monetary interventions by the Federal Reserve known as QE2 and Operation Twist put booster rockets on the market (with some recent aid from the ECB's LTRO injection of about $1.5 trillion into the banking sector since December).
If the SPX were to continue tracking the Nikkei, the next bottom won't occur until late 2013 or early 2014--two years hence.

Here are B.C.'s notes on this chart:
Note how relatively closely the SPX was tracking the currency-adj. corollary with the Nikkei until QE2 and "Operation Twist". Coincidence . . .? I suspect not. Had the SPX tracked the corollary as in '01 and '08, the SPX would be in the 800s-900s by now. Can the Fed and shadow banksters prevent for the next 18-24 months the historical tendency for the SPX to follow the self-similar cyclical and secular patterns? I suspect we are going to witness their ongoing desperate attempts to do so.
The problem for the Fed is that interest rates are already zero, and playing around with bonds and buying more mortgages (the Fed already owns $1 trillion) is ultimately pushing on a string: the Fed can't force all the free money into productive investments, nor can it force banks to lend or consumers to spend.
The cliche is "don't fight the Fed;" there is no need to "fight the Fed" because they're busy self-destructing, and all we have to do is watch.
Maybe the market will follow Apple in a trajectory to the moon here. If it doesn't, a variety of other models suggests the wheels may fall off the "growth and rising profits forever" story and the market will decline to test recent lows or even hit new lows. That's not what the Fed or the politicos want, but events on stage may be slipping beyond their off-stage control.


charles hugh smith-Weblog and Essays

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Kinda liking the short idea here at 822 down to about 814.7 ......top has to hold here

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If any of you guys are short from 822 your stop should go to break even...shouldn't come back the way it's going

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Have a nice day....

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