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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 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.


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