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Thursday, April 30, 2009

The Market Is Goin' Down

There I made a commitment. The sideways slash of April and then the burst up to 888 I think is all she got left in her. The NASDAQ has just been relentless. But even that is showing signs of cracking. It was supposed to correct 38% but it didn't. Now it hangs up at this ridiculous level in such a short time. April was a near record gaining month in like the last 60 years or so.

Potential topping candles on all the indexes, shooting stars, etc. Some of the bear ETF's such as QID have been what seems like a bottoming process. Its MACD line is curving upwards. Its rounding. Most indexes' Bollinger Bands were punched into hard today. Its just stupid.

I would say the VIX flashed a buy signal today and it came back and tested the buy signal trendline. The VIX continues to show multi-month positive divergence. It is near to testing a breakout of its long term bear trendline. Also recently its holding positive divergence versus the market. Market keeps making new highs, VIX is stubborn.
Financials are also either lagging or showing the true path of the next move: down.
Little cracks in the armor. I like a big [e] wave down to wherever it must go fulfilling the X wave pullback. Lets fill some of them lower gaps huh? I actually would like to see the market test 800 and then just head on up and keep rallying. I want to see a 38% pullback. The test doesn't have to be a long drawn out affair. A quick selloff and then a turn at some point. I don't want to chase the market without a pullback. I already bought long at sub 700, I wouldn't mind buying more longs at 800 or so. I really think P2 will run through the end of August at least and breech its 200DMA which is dropping everyday.
I don't look forward to P3. The carnage will be horrible.
But for now I think we have an X wave correction come due. I don't like the bullish count because it would mean it just keeps rolling over all the bearish technicals that *should* pan out.
Breakout today...fakeout today. We shall see. Futures are up a little, I hope they shake out the low MACD and stochs on teh e-minis overnight. I think the market is going to go down Friday and then some more Monday and maybe some more next week too.
Monday would be a big gapper down. That way the least amount would profit. It would figure. I should sell futures, I think it would be more profitable and I think I could do it very well at all hours of the night. I see the patterns form every night. They seem easy enough to trade. The e-minis don't always translate very well over to the SPX cash index the next trading day.
I have been fuddling the last 4 weeks hemming and hawing not sure of where the market was going. I was justified. It was 845 on April 2nd and 847 on April 29th. The patterns didn't pan out and kept fooling the bears mostly. Longs probably weren't too sure either lets face it.
So lets get it on: Market goes down 1st and 2nd of May. Take some profits longs, its still a horrible economy out there.
I was ready to roll over as a bear...its a sign....all permabears must be squeezed to the point of capitulation if they try swing trading this P2....so far they have been squeezed relentlessly. Market has not had 3 down days in a row since early March. Today was like a capitulation day for the bears. That's what it seemed like. I didn't capitulate my short term QID holdings for 2 reasons: 1) It wasn't too bad underwater, I mean its not like I held since $50.. 2) Its May 1st tomorrow. Wait and see what the new month brings.
But I'll commit: This market is going down and WILL get its 38% pullback starting with 888 as the top.

11 comments:

  1. you weenee......seriously dano help me..i count (a) sweet 5 impulse waves...but where is (c)could it be as low as green [ii]..that puts it at about860.....what kind of wave move after it touches there........

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  2. Start with A = C so if A is a 20 point move, then take the top of B and subtract 20.

    I dont have the figures in front of me...

    But if this is impulsing down (like I suspect) then its going down more than A = C obviously. It'll be a wave 3 and they are almost always longer than wave 1

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  3. Yikes---

    thats one BIG bull flag lol

    poor VIX..stuck in a corner, hes gonna get mad and the market comes tumbling down =)

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  4. 777 would be 50%. I like that better :)

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  5. Is there anyway to measure a target? I mean..typically you would add the longest dimension/post to the breakout point..but that would mean------- back to the crash of october??!?

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  6. Sammy yes there is but the waves have to develop first.

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  7. Just in case anyone plans to act tomorrow on the assumption that Monday will be stress test results day -- it's been postponed. (See Bloomberg:

    "The Federal Reserve will postpone the release of stress tests on the biggest U.S. banks while executives debate preliminary findings with examiners, according to government and industry officials.
    The results, originally scheduled for publication on May 4, now may not be revealed until toward the end of next week, said the people, who declined to be identified. A new release date may be announced as soon as tomorrow, they said."

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  8. Dan, please acq that VIX has some space to stay inside this wedge for 2 more weeks.

    Roxy

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  9. Roxy I seen the market make 2 new highs yet both times the VIX is stubborn. So I don't know. Of course it has room. If the market goes up yet again, this time the VIX will break down some more. So maybe these past few days was just consolidation of the VIX for a further move down

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  10. Hey Dano--It seems to me that you were definitely committed a couple of days ago (4/28), so I started buyin both faz and skf. Then you seem to have gotten blindsided by the EWI/hockalouie count and appear to have been doubting your own count.

    While I understand EW is fluid, your 4/28 chart said it all. Thanks for your continued work and insight. When the SNP is down about 100 pts from here, your efforts will certainly be acknowledged$. flyfar

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  11. atta boy dano! welcome back to the team :p at least if get our arses kicked, we get them kicked together

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