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Tuesday, February 7, 2012

SPX Update: Indecision 2012

No material change in the counts since yesterday.  The S&P 500 (SPX) daily chart shows another indecision candlestick: in this case a dragonfly doji. This candlestick foretells of a reversal roughly half the time -- in other words, it's pretty random.  However, it does indicate an undecided market.

On the daily chart below, I've annotated some of the nearby support and resistance zones, both long and short term.  There is significant resistance directly overhead right now, so a consolidation or reversal may be in order.  Conversely, a breakout through this zone would target 1370-1380 next.

The market is also at something of a crossroads between the pink channel and the green channel.  A breakout through the top line of the pink channel could indicate there's still a fair amount of momentum left in this move. 


The 10 minute chart is unchanged from yesterday.  If a top is going to form here, it may take a few sessions.  As I've said before, tops are usually a process; whereas bottoms are usually an event.

Again, until the trend channels are broken, there is no objective indication of a trend change.


The chart below shows the Nasdaq (COMPQ) daily and notes that the rally has again reached the underside of the old upsloping trendline off the March '09 lows.  It also notes how overbought the market has become (in technical terms: "just a tad").  If the Nasdaq breaks though this level, the next meaningful resistance doesn't come in until around 3040 or so.


There is simply not much to add after yesterday's action, which was essentially just a sideways/up grind.  The market has a lot of options for its next move, so until it either breaks out or breaks down, there's no real way to project what happens next.  The market's as overbought as it gets, and has been for some time -- but an overbought market can always get more overbought.  If the Minor (2) count is still valid, then now's the time for the rally to end -- but the market did nothing yesterday to add or subtract confidence from that count.  So at this point, we'll simply have to watch overhead resistance and the lower support zones for clues to the market's next move.  Trade safe.

The original article, and many more, can be found at http://PretzelCharts.blogspot.com
Posted by PretzelLogic at 12:59 AM

382 comments:

  1. Pretzel LogicFebruary 7, 2012 at 1:00 AM

    Morning, everyone.  :)

    ReplyDelete
  2. Phoenix58February 7, 2012 at 1:16 AM

    Thanks PL - waiting and watching.

    ReplyDelete
  3. katzo7February 7, 2012 at 1:46 AM

    We are now sitting right at the bottom of this megaphone line, a make or break time. It measures to 1335.50 ES. WWWCI fired off last nite calling for 1360.

    http://www.screencast.com/users/katzo7/folders/Jing/media/bebfb0b4-924f-4d13-9930-f0962ad4f045

    ReplyDelete
  4. Lena_W3February 7, 2012 at 1:49 AM

    Indecision or not, the bulls are already celebrating. 

    http://www.spiegel.de/fotostrecke/fotostrecke-77755.html

    :)

    PL, in real life you are Jon? :D

    ReplyDelete
  5. DanielJ73February 7, 2012 at 2:05 AM

    timeframe in chart ES 120?

    ReplyDelete
  6. infidelserfFebruary 7, 2012 at 2:10 AM

    he is John Galt

    ReplyDelete
  7. katzo7February 7, 2012 at 2:11 AM

    Huummm, usually aways (oxymoron) a bounce up off the megaphone TL. Broke straight thru? Setting up for a back test? Or to continue its fall? See how accurate the WWWCI is, sometimes there is a time delay of up to 24 hours but usually it works well within about 3 to 6 hours. A call for 1360 $SPX did the trick. WWWCI call for gold to 5,000$ and oil to 150$ signaled the exact top, cannot do better than that.

    http://www.screencast.com/users/katzo7/folders/Jing/media/07bd90a0-7ef7-4b96-bb26-1f8719a64bea

    ReplyDelete
  8. katzo7February 7, 2012 at 2:21 AM

    whhooooaaa lena. we are looking for mrkt to go down not to rise !

    ReplyDelete
  9. jbg1911February 7, 2012 at 2:28 AM

    Thanks Katzo....For the first time, I actually believe that this rally is being exhausted for too many technical reasons to mention, in addition to the several "events" that are lining up. Now will the rest of the participants agree, or will "they" keep trickle charging the bids?

    ReplyDelete
  10. katzo7February 7, 2012 at 2:31 AM

    FRom AJInsight ""Golden Cross" (50-day trend crosses 200-day) = coin toss. 20x since 1961
    w/positive follow-thru only 35% after 1 wk, 55% 1 mo, 50% 3 mos."

    ReplyDelete
  11. Whoa_NellieFebruary 7, 2012 at 2:31 AM

    Morning everyone.  Looks like we have a giant game of 'chicken' on our hands.  Greek politicians holding threat of country's chaotic bankruptcy over everyone's heads, daring the troika to withhold the bailout funds needed to avert that scenario.  The Greeks will never give in, so just a question of whether the other EU nations have the stones to force them to default or if they will capitulate and throw more money their way even though they don't put through all the asked-for reforms.

    ReplyDelete
  12. jbg1911February 7, 2012 at 2:31 AM

    Thanks PL for your rational and pragmatic approach. It is appreciated.

    ReplyDelete
  13. katzo7February 7, 2012 at 2:32 AM

    keep this out of that megaphone and e have a good chance. megaphone now measures 1335.50 ES at bottom TL.

    ReplyDelete
  14. William LiFebruary 7, 2012 at 2:35 AM

    Good morning yall.

    ReplyDelete
  15. CalDFebruary 7, 2012 at 2:35 AM

    Looks like we have a giant game of 'chicken' on our hands.

    Remind you of anyone?

    ReplyDelete
  16. jbg1911February 7, 2012 at 2:35 AM

    You are absolutely correct that the Greeks will never capitulate.

    ReplyDelete
  17. William LiFebruary 7, 2012 at 2:41 AM

    Long term, I think it makes sense for Greece to want to default.  It's the Euro nations that will not let it default because they want their money back.  If Greece defaults, they will have to struggle for years, but they will get a brand new start with a weaker and more competitive currency.  Greece should want to default.  If they actually default, it may take more than meetings to get money/property from Greece.

    ReplyDelete
  18. jbg1911February 7, 2012 at 2:43 AM

    Don't try to call it...just play it. You know how to do it. I swear to God futures are the only vehicle to play this thing.

    If history repeats itself, we have a week or two (or three) of this before everybody catches on that "uh oh...this is BS".

    ReplyDelete
  19. katzo7February 7, 2012 at 2:53 AM

    I am going out on a limb and saying the high is in. My only concern is that the opening bell tends to be positive and someone erratic to predict, we could hit an EW5 top of 1345 ES during that time, I do not think so tho. On the 60 ES chart, we are gettin' a curl in the 20 MA, a cross of it with the 50 MA would verify my call. Look back at the 20/50 MAs on 2/03 at 6:00 and 2/01 at 3:00 and you will see two kisses of the 20/50 MAs. Three times is the charm. A cross and then I will breathe easier being on the short side. As well as breaking the megaphone TL, we are now sitting on the TL of my triangle on the 60/120 minute.

    Here is what I said yesterday. "on the 120 ES chart put an EW5 at the top at 14:00 Friday, an EW1 at
    the doji at 4:00 today, an EW2 at the doji at noon today so we
    should transition into the 3 down now or soon. . .  spent about 6 hours
    up here filling that damn gap and looking for upside horse power, now
    the real direction will appear, maybe in after hour trading, bad news
    after-the-bell?" 

    On the 60 minute ES now. Since that time twin pipes have developed (some call this tweezers) up at that gap fill. On the 120 the EW5 has slip over to 20:00 with a gravestone doji. Gold continues to fall, not sure I would call it a leading indicator but it is working better IT in that capacity now. Problem with this concept is that if Israel lobs a missile or two at Iran, or if Iran bottom feeds the Suez with ships gold and oil shoot higher and $SPX falls rapidly breaking any leading indicator relationship. One time when the news will precede the mrkt. But now the parallel seems to be working better.

    ReplyDelete
  20. Pretzel LogicFebruary 7, 2012 at 2:57 AM

    Hey, is that TastyKake offer still open?  :D

    ReplyDelete
  21. katzo7February 7, 2012 at 2:57 AM

    no, a tick count, experiment around and see if you can find it.

    ReplyDelete
  22. Whoa_NellieFebruary 7, 2012 at 2:57 AM

    All that's certain is that once it does turn, every pundit will proclaim that they 'saw this coming' due to the market being so overbought...:)  Hopefully we can close below 35.5 today.

    ReplyDelete
  23. Pretzel LogicFebruary 7, 2012 at 3:00 AM

    I'm still completely torn on gold LT.  Undecided if the 1900s top was 3 or 5.  Even if it was 3, gold could still see the 1300's on a correction.

    ReplyDelete
  24. jbg1911February 7, 2012 at 3:01 AM

    Of course it is...For you, anything (I'm keeping my wife though, the third one is a charm.)

    ReplyDelete
  25. katzo7February 7, 2012 at 3:06 AM

    $VIX up 3.86%, plus WWWCI call.

    http://www.screencast.com/users/katzo7/folders/Jing/media/05172031-47fb-4874-8006-8d7778f39eb7

    ReplyDelete
  26. jbg1911February 7, 2012 at 3:06 AM

    If I could actually stand looking at or listening to Cramer, I'd love to see his face...but he will be two weeks late anyway, and probably be calling sell half-way out of the bottom (like he's told to by GS).

    ReplyDelete
  27. katzo7February 7, 2012 at 3:08 AM

    I agree with trying to define the top, now down is the direction tho. . . 

    ReplyDelete
  28. Pretzel LogicFebruary 7, 2012 at 3:15 AM

    My take on gold short term is minimum 1642-1670 on this move.  If it breaks that LT rising trendline, then I would look for the low 1500's... if that doesn't hold, then the low 1300's.  All of this could still take place within the context of an ongoing bull in GC -- even if the peak was only wave 3.

    ReplyDelete
  29. Lena_W3February 7, 2012 at 3:18 AM

    Ok, but the headline reminded me of Indecision 2008 and the Daily Show... :)

    ReplyDelete
  30. Lena_W3February 7, 2012 at 3:18 AM

    Maybe you. I want to see it rise. ;)

    ReplyDelete
  31. katzo7February 7, 2012 at 3:18 AM

    CORRECTION: Said "As well as breaking the megaphone TL, we are now sitting on the TL of my
    triangle on the 60/120 minute." We are not sitting on the ED TL but sitting on a GANN line (35.50 ES). We are 1/2 the way there towards the ED TL tho. 

    ReplyDelete
  32. Pretzel LogicFebruary 7, 2012 at 3:20 AM

    It is sitting right on daily support at the moment, though.  So breaking that would be the first step.  Back above 1761 would potentially negate these projections, obviously.

    ReplyDelete
  33. Pretzel LogicFebruary 7, 2012 at 3:22 AM

    I'd really love to see ES make two marginal new swing lows prior to rising above 1337.25.  That would be a confidence builder in an impulsive move down.

    ReplyDelete
  34. CalDFebruary 7, 2012 at 3:23 AM

    Twenty days out of 50 years is a pretty teeny fraction of the total, but that strikes me as less than a coin toss probability-wise. If markets tend to rise about 2/3 of the time -- as evidenced by the proverbial staircase up, elevator down pattern common  in stock charts -- then one might expect to see at least a slight positive bias in any comparison of a statistically significant set of randomly selected days on a price chart with prices some fixed number of days following each -- particularly between any two days 3 months apart.

    ReplyDelete
  35. Pretzel LogicFebruary 7, 2012 at 3:24 AM

    Yep, that's what I was thinking when I wrote it -- especially since it's an election year. 

    ReplyDelete
  36. jbg1911February 7, 2012 at 3:25 AM

    Israel is going to need a very large missile to get to the underground installations unless they go nuke, so I would be more inclined to see an event occur in Israel or U.S. that would green light a *massive* conventional airstrike with heavy bombers (B-52) capable of carrying a 10,000kg bunkerbuster. Cruise missiles would only be used for prepping SAM sites. Plus, deals have to be made with the Saudis for continued cheap sweet, and Egypt has to be kept out of it. I'd go for the scuttling in the Suez first...I wouldn't be surprised if the ship's name was "Maine".

    ReplyDelete
  37. Lena_W3February 7, 2012 at 3:25 AM

    Still I think the Greek are afraid of the Turks enough to cave. But in the end, who cares. Greece is important to the Greek. For the others just a nuisance. The firewalls are build and in place.

    ReplyDelete
  38. Pretzel LogicFebruary 7, 2012 at 3:25 AM

    Yep, that's why I switched to futures years ago.

    ReplyDelete
  39. dle7319February 7, 2012 at 3:34 AM

    Just seen it and planned to tell everyone that it may go to 1338 ES.

    ReplyDelete
  40. katzo7February 7, 2012 at 3:36 AM

    1337.50-.75 is a must hold otherwise we head for 1345 ES.

    ReplyDelete
  41. dle7319February 7, 2012 at 3:58 AM

    The bear should hold it below 1336.50 ES. Now, it's a tug of war. By the way, today's pivot is 1336.50. It's very interesting, isn't it?

    ReplyDelete
  42. Lena_W3February 7, 2012 at 3:59 AM

    You mean the strait of hormuz, I guess.
    http://upload.wikimedia.org/wikipedia/commons/9/92/Strait_of_Hormuz.jpg

    €/$ leads the way today. Will be more of long for me.

    ReplyDelete
  43. jbg1911February 7, 2012 at 4:09 AM

    I'm going futures after the big down occurs. I should be well-capitalized by then.

    ReplyDelete
  44. katzo7February 7, 2012 at 4:09 AM

    Yes, that is what I meant.

    ReplyDelete
  45. Lena_W3February 7, 2012 at 4:10 AM

    Me thinks No. 37.

    :) 

    http://www.ritholtz.com/blog/wp-content/uploads/2012/02/FRHS.png

    new entries only cautious for me. But short is not too convincing for me right now. But that can change fast...

    ReplyDelete
  46. jbg1911February 7, 2012 at 4:13 AM

    Excellent signal chart...Now I know. LOL

    ReplyDelete
  47. katzo7February 7, 2012 at 4:19 AM

    you are  RIOT !  :-)

    ReplyDelete
  48. dle7319February 7, 2012 at 4:20 AM

    In current situation, there is a very high chance that the market will make a new high again today, imho. The action of ES about 45 min ago has given a dangerous bullish sign for today's market action.

    ReplyDelete
  49. dle7319February 7, 2012 at 4:25 AM

    Just cheched the news and seems that big boys took the action before everyone as usual.

    ReplyDelete
  50. akwfungFebruary 7, 2012 at 4:32 AM

    Just a FYI ....

    Yesterday was the slowest day in ten years. Market tends to drift up in slow market. :)

    ReplyDelete
  51. Pretzel LogicFebruary 7, 2012 at 4:33 AM

    Hence the old expression, "Never short a dull market."  ;)

    ReplyDelete
  52. JimFebruary 7, 2012 at 4:35 AM

    that's funny

    ReplyDelete
  53. JimFebruary 7, 2012 at 4:36 AM

    Cash?

    ReplyDelete
  54. katzo7February 7, 2012 at 4:39 AM

    ES 1338.25 is/was EW4 level on some short term charts, that is the must hold area for bear count to work. . . 

    ReplyDelete
  55. JimFebruary 7, 2012 at 4:40 AM

    lmao

    ReplyDelete
  56. Pretzel LogicFebruary 7, 2012 at 4:46 AM

    Check yer e-mail. 

    As far as the wife thing, it would never fly with mine anyway.  Even if it would, it's never a good idea.  The whole issue is summed up very well by the Chinese character which translates to the English word "trouble" -- the character depicts two women under the same roof.  ;)

    ReplyDelete
  57. katzo7February 7, 2012 at 4:47 AM

    celg march puts.

    ReplyDelete
  58. Pretzel LogicFebruary 7, 2012 at 4:48 AM

    lmao

    ReplyDelete
  59. Pretzel LogicFebruary 7, 2012 at 4:50 AM

    There's no way I'm celging March puts in this environment.  I might consider buyging them, though.  :D

    ReplyDelete
  60. JimFebruary 7, 2012 at 4:52 AM

    puns make me laugh

    ReplyDelete
  61. jbg1911February 7, 2012 at 4:54 AM

    (golf clap) LOL

    ReplyDelete
  62. katzo7February 7, 2012 at 4:55 AM

    level held tight
    add +6.25 for $SPX

    ReplyDelete
  63. jbg1911February 7, 2012 at 4:57 AM

    awe Crap...now I'm certain to get a reminder.

    ReplyDelete
  64. jbg1911February 7, 2012 at 4:59 AM

    double Crap...now I shall have two reminders.

    ReplyDelete
  65. Pretzel LogicFebruary 7, 2012 at 4:59 AM

    Covered at 1333.50 for +6.5

    May jump back in quickly, depending...

    ReplyDelete
  66. Pretzel LogicFebruary 7, 2012 at 5:08 AM

    Imma put my orders on autopilot.  I need to walk away from the computer for a few and eat something.  After staring at it for like 12 hours straight, I start to feel a little stir-crazy sometimes.  Be back in a bit.

    ReplyDelete
  67. CalDFebruary 7, 2012 at 5:09 AM

    Your fellow Minyanviller Chris Vermeulen had a great line this morning. He pointed out that "greed is simply slower to reverse than fear"... well I thought it was a great line.

    ReplyDelete
  68. schFebruary 7, 2012 at 5:10 AM

    Pretzel,
    Any thoughts on what is happening (or more importantly what will be happening) with the U.S. dollar.   It looks like it has fallen way through the bottom of the "blue melt-up channel" suggested in your 01/15 update.   The guy I pay for timing advice said on Monday to switch from long dollar to short dollar funds -- just wondering where you see it.  Thanks. 

    ReplyDelete
  69. brianhutFebruary 7, 2012 at 5:10 AM

    Looks like the adults are back in town today.  Maybe yesterday was just another holiday-type session. 

    ReplyDelete
  70. CalDFebruary 7, 2012 at 5:12 AM

    Where's the Groan button?

    ReplyDelete
  71. Whoa_NellieFebruary 7, 2012 at 5:17 AM

    Hope your autopilot has as a big a smile on its face as the one from Airplane!, when you get back.

    ReplyDelete
  72. jbg1911February 7, 2012 at 5:17 AM

    Will do...The Chinese were right.

    ReplyDelete
  73. BigO PerezFebruary 7, 2012 at 5:46 AM

    Is it me or I get the feeling this thing is getting ready to burst through $INDU 12876?

    ReplyDelete
  74. Authentic1February 7, 2012 at 5:49 AM

    Purchased JPM Feb. 10th 37 puts @ $0.13  Not trading advice.  Please manage risk and trade safe.

    ReplyDelete
  75. Whoa_NellieFebruary 7, 2012 at 5:58 AM

    Eur is exploding higher (1.3240), i am now long from ES 1339.

    ReplyDelete
  76. Dust DevilFebruary 7, 2012 at 6:01 AM

    I went long a few minutes ago also.

    ReplyDelete
  77. Pretzel LogicFebruary 7, 2012 at 6:03 AM

    Back in short at ES 1341.  Glad I covered when I did.  Tight stop on this one.

    ReplyDelete
  78. dle7319February 7, 2012 at 6:04 AM

    It's a powerful wave 3 up and just at its first stage, min target is 1351 SPX, be careful and trade accordingly.

    ReplyDelete
  79. Dust DevilFebruary 7, 2012 at 6:06 AM

    Glad I bailed, too. Any hesitation in this market and you're toast. Be happy to take a loss.

    ReplyDelete
  80. Dust DevilFebruary 7, 2012 at 6:06 AM

    Thank you so much for your target! Appreciated it.

    ReplyDelete
  81. matsteryFebruary 7, 2012 at 6:07 AM

     Just broke it. 

    ReplyDelete
  82. Curiousmind3861February 7, 2012 at 6:08 AM

    DOW passed 12876, does it have to be on closing basis to invalidate the bear count?

    ReplyDelete
  83. Pretzel LogicFebruary 7, 2012 at 6:10 AM

    Dollar is in the process of breaking a support level, so it could drop a little.  Be very careful of it around the trendline connecting the August and October lows.  I would expect it to find support there, if not sooner.

    ReplyDelete
  84. Pretzel LogicFebruary 7, 2012 at 6:11 AM

    Nope, Dow count is busted.

    ReplyDelete
  85. BigO PerezFebruary 7, 2012 at 6:12 AM

    Yeap... Back to the drawing board....12878.88 and getting ready for more...well...this has been fun learning... back to classical monthly average investing with quarterly re-balancing. Cost me the equivalent of an MBA to learn EW is just another way for market to toy with small fish.... (sorry for the venting).

    ReplyDelete
  86. KKS123February 7, 2012 at 6:12 AM

    PL - i am not an expert in EW, but this is what i found the issue in the bearish chart (minor count). The peak you have marked iii is not more than the wave i length. As this is not ending diagnol so wave 'iii' cant be shortest of the waves. So probably this might be subwave in the wave 'iii'.  To me this rally looks like to ends near 1352/56 area. if you add 21points of wave 'i' to todays lows. Sorry i have used different numbering ....

    ReplyDelete
  87. Whoa_NellieFebruary 7, 2012 at 6:12 AM

    I covered 1/3 position for 2pts, have SL at 1339.25 for the rest.  Looks like DJIA briefly tagged 12878, not sure how meaningful that is?  I'm actually hoping today is up big on big volume, that would make me feel better about a top being put in.

    ReplyDelete
  88. davezarlingFebruary 7, 2012 at 6:13 AM

    yes... yes you will. : )

    ReplyDelete
  89. dle7319February 7, 2012 at 6:14 AM

    btw. I'm just trying to help. Don't take it as trading advise and manage your risk carefully.
    Actually, it was a setup around 5:30 PT or 9:30 ET. I felt strongly about it and have told everyone with my post below.

    ReplyDelete
  90. Pretzel LogicFebruary 7, 2012 at 6:14 AM

    I'm happy 'cause I took a profit.  :)   Not a big one, but 6.5 points isn't terrible, either.  

    Wouldn't be as happy if I took a loss.  But a small loss always beats a bigger loss.  Might have to take a small loss on this trade if it heads back up again.

    ReplyDelete
  91. Dust DevilFebruary 7, 2012 at 6:17 AM

    I took profit at present level. Upside profit netted start of day loss on short side, net to zero. Just watching at this point.

    ReplyDelete
  92. Dust DevilFebruary 7, 2012 at 6:18 AM

    NP, I'm all cash at the moment.

    ReplyDelete
  93. Pretzel LogicFebruary 7, 2012 at 6:19 AM

    3 doesn't have to be longer than 1.  It just can't be the shortest of waves 1, 3, and 5. 

    ReplyDelete
  94. Pretzel LogicFebruary 7, 2012 at 6:20 AM

    Also, I have no clue which iii you're talking about.  If you're talking about the final iii, it actually is longer than wave i.

    ReplyDelete
  95. Dust DevilFebruary 7, 2012 at 6:21 AM

    And BTW, I view all market actions nowadays as controlled by bots. I try to observe the bots' tendencies. I am presently not subscribing to theories about waves, but just using linear channels. Seems to fit the bots' modus operandi. So in hindsight, I closed my long position at exactly the right price and time.

    ReplyDelete
  96. dle7319February 7, 2012 at 6:22 AM

    A brief of pullback may be coming, it's a good chance to re-evaluate your trading strategy today.

    ReplyDelete
  97. billabusterFebruary 7, 2012 at 6:23 AM

    1350 to1370 is a magnet.

    rumor: the greek government is drafting an agreement on a bailout deal for approval today

    ReplyDelete
  98. KKS123February 7, 2012 at 6:26 AM

    Sorry PL, counting error myside..

    ReplyDelete
  99. dle7319February 7, 2012 at 6:26 AM

    Yes, everyone has edges to trade. It's not neccesary with EW. You just go with whatever you think it's a good edge after backtest it carefully.

    ReplyDelete
  100. davezarlingFebruary 7, 2012 at 6:27 AM

    I can't believe how the market responds to Ben.  Incredible.  Central Planning.  Not Free Market.

    ReplyDelete
  101. Pretzel LogicFebruary 7, 2012 at 6:28 AM

    Sorry.  But no, it's not 100%.  The market's been pretty hard on most systems lately, 'cept the lucky perma-bull ones.  I wish you'd caught the October bottom w/ me, the 165 point gain would have more than made up the 41 point loss from 1269-1310.  GL

    ReplyDelete
  102. Dust DevilFebruary 7, 2012 at 6:28 AM

    Anyway, I'm back in on the long side. A bot will start up at 11:28 and I'm betting it will push prices up.

    ReplyDelete
  103. Pretzel LogicFebruary 7, 2012 at 6:28 AM

    Yeah, I get that a lot.  :)

    ReplyDelete
  104. jbg1911February 7, 2012 at 6:29 AM

    I thought that was yesterday's, last Thursday's, and two Monday's back's rumor.

    ReplyDelete
  105. Dust DevilFebruary 7, 2012 at 6:31 AM

    dle7319 ... See, one of the bots pumped it at 11:28. Next pump will be at 11:40. Next will be at 11:57.

    ReplyDelete
  106. jbg1911February 7, 2012 at 6:32 AM

    me too...dumped both sides this morning at almost appropriate times. Waiting for settlement so that I can enter and exit at will.

    ReplyDelete
  107. Michael RobertsFebruary 7, 2012 at 6:34 AM

    DD, where are you getting your bot reads?

    ReplyDelete
  108. jbg1911February 7, 2012 at 6:34 AM

    I am sooooo screwed ROFLMAO

    ReplyDelete
  109. Pretzel LogicFebruary 7, 2012 at 6:34 AM

    Yep.  Out for -2.  Time for bed soon. 

    ReplyDelete
  110. dle7319February 7, 2012 at 6:36 AM

    Yes, it may go on and on until the end of the day, it looks like that for today... Someone must feel lucky when it has a brief pullback to get in or cover.

    ReplyDelete
  111. HT00February 7, 2012 at 6:40 AM

    PL - What are the implications of DJIA busting through its minor 2 count on SPX? Higher probability that SPX will bust through 1370s as well?

    ReplyDelete
  112. Dust DevilFebruary 7, 2012 at 6:40 AM

    From a tool called Flux Pro. It's proprietary and I'm not allowed to post charts from it, as per the license agreement. The bot times are from historical data mining over 60 days.

    ReplyDelete
  113. Whoa_NellieFebruary 7, 2012 at 6:41 AM

    Eur giving up some gains here, closed out longs and went short at 1343.25.  But if it doesn't take a breath here in next 5-15 mins, I will close out the short (or if it trades 1344).

    ReplyDelete
  114. Dust DevilFebruary 7, 2012 at 6:44 AM

    I think Awfkung's hypothesis of the slow bear squeeze makes the most sense. Somebody has figured out a way to program a bot to cycle bears. Spend e dollars to do a pump. Extract s dollars from bear squeeze. Profit from s > e.

    ReplyDelete
  115. Pretzel LogicFebruary 7, 2012 at 6:45 AM

    IMO, yes that makes it higher probability.  If SPX breaks out above 1350, it targets that level anyway -- but that's a very aggressive buy trigger w/ the market this overbought...  tough market now for all but quick plays.

    ReplyDelete
  116. Dust DevilFebruary 7, 2012 at 6:52 AM

    When I see slight downdraft like at present, I'm thinking: These are the non-robotic participants selling. In five minutes, a robot will come in and take their money.

    ReplyDelete
  117. Whoa_NellieFebruary 7, 2012 at 6:52 AM

    Closed out short at 1342

    ReplyDelete
  118. m_atFebruary 7, 2012 at 6:52 AM

    Dow jones transportation index down slightly when market up, can sometimes lead to market reversal.

    ReplyDelete
  119. HT00February 7, 2012 at 6:54 AM

    Thanks. Do you have a preliminary upside target range for DJIA after the minor 2 bust?

    ReplyDelete
  120. Pretzel LogicFebruary 7, 2012 at 6:56 AM

    13150 

    ReplyDelete
  121. Whoa_NellieFebruary 7, 2012 at 6:57 AM

    Now I want to see what EUR does from here.  It could retrace back up to 1.3260 area or it could roll over.  Whatever it does, i expect equity market to  roughly follow.

    ReplyDelete
  122. Pretzel LogicFebruary 7, 2012 at 7:00 AM

    Hey Katso, what was that thing you said about blogs eating their young during market transitions?  :(   

    I suppose it's to be expected, since 95% of traders go bust, regardless of what system they follow -- but knowing that fact doesn't make it easier.

    ReplyDelete
  123. HT00February 7, 2012 at 7:00 AM

    Got it. Thank you.

    ReplyDelete
  124. Whoa_NellieFebruary 7, 2012 at 7:02 AM

    My options express was soooo freaking slow I missed the offer at 1342.25 as Eur took off again.  I am not chasing it.

    ReplyDelete
  125. Dust DevilFebruary 7, 2012 at 7:03 AM

    OK, the 11:40 and 11:57 bots did not run. Next up are the 12:09 and 12:36 bots.

    ReplyDelete
  126. BigO PerezFebruary 7, 2012 at 7:04 AM

     How I wish so too Pretz. The problem is that not only did I miss the October bottom but I actually SOLD longs when the print screamed bear market (right at the -20% to the penny) and started trying to catch up with shorts. So I was big-time whipsawed. If I could have only found you in late september....now I'm protecting capital mode (whatever is left of it anyways) and will suffer this rocket rise to B (hopefully) or even worse to GSC 5 on the sidelines afraid to even attempt a Long.

    ReplyDelete
  127. akwfungFebruary 7, 2012 at 7:05 AM

     And Benanke said ....

    "Inflation? What inflation?". Dutifully, the market went nuts. :)

    ReplyDelete
  128. mavrichFebruary 7, 2012 at 7:06 AM

    need to reevaluate my trading strategy. was up 40% to down 20% on my account this year. any suggestions on being nimble with less than the 25k day trader req?

    ReplyDelete
  129. Dust DevilFebruary 7, 2012 at 7:06 AM

    Everything manual is extremely slow. This weekend, I'm going to try to write a trading bot using Ameritrade's programming language. A lot to learn :-(

    ReplyDelete
  130. Pretzel LogicFebruary 7, 2012 at 7:06 AM

    Really?  I've pretty much never missed an entry/exit.  Of course, I don't trade EUR much -- that's a very crowded market, lots of big orders ahead of you.

    ReplyDelete
  131. Michael RobertsFebruary 7, 2012 at 7:06 AM

    Ahhh…the irony. The market creating its own inflation. J

    ReplyDelete
  132. Dust DevilFebruary 7, 2012 at 7:07 AM

    I'm using options as a proxy. Works for me.

    ReplyDelete
  133. davezarlingFebruary 7, 2012 at 7:08 AM

    Good info. Thank you.

    ReplyDelete
  134. GGekkoFebruary 7, 2012 at 7:08 AM

    LOL correct - and after they sign it the Unions will strike and they'll be zero follow through

    ReplyDelete
  135. Dust DevilFebruary 7, 2012 at 7:11 AM

    Not every bot runs on any particular day. What is important to observe is whether bots that run are running to sell - if you have long position. So far, the majority of the bots running today are buying.

    ReplyDelete
  136. Pretzel LogicFebruary 7, 2012 at 7:12 AM

    Mainly you have to super-fine-tune your entry/exit strategy.  Been awhile for me since those days, and honestly, that's a much tougher gig, IMO... especially in a market like this.

    ReplyDelete
  137. Dust DevilFebruary 7, 2012 at 7:14 AM

    Not much of a trend channel today, so I'm now paying attention to the MAs on the 15 minute chart.

    ReplyDelete
  138. Rocketeer911February 7, 2012 at 7:14 AM

    Pretz, greetings from Salzburg (here for work for a couple of days). Now that the DIJA Minor 2 count is busted is this now a 3 up, with 4 down and a 5th wave still to go. Thanks. D

    ReplyDelete
  139. Pretzel LogicFebruary 7, 2012 at 7:14 AM

    But swing traders basically are forced to take bigger losses -- goes with the territory.  Even if you were long in this market, it runs down enough to clear out all but the widest stops, or the really good entries, then heads back up.

    ReplyDelete
  140. mavrichFebruary 7, 2012 at 7:15 AM

    true, not having a round trip cost me 10 percent one day. I printed out that article where you outlined "preserving capital" but I got too busy trying to get to that 25k market though excessive leverage. Rookie mistakes. But at least it was now with my small account rather than when in the future when I have more capital to loose.


    Your website has been invaluable pretz, truely a gem for a noobie trader like myself. Much thanks

    ReplyDelete
  141. HalukFebruary 7, 2012 at 7:16 AM

    Is there any significance of two consective harami crosses? That's the situtation in the daily Russell 2000 chart now (of course assuming that we close around here). Or is this just a rest stop? Thanks.

    ReplyDelete
  142. FredMazFebruary 7, 2012 at 7:17 AM

    A Plausibe explanation of why/how the stock market has been going up in the last couple months despite the headwinds is offered in an article in "oftwominds.com" blog, The argument goes as follows relative to the possible Greek default and its impact on CDS's covering that default:
    ."...........some of these CDS are written against various swaps or stock indices, meaning that the asset to be delivered upon default is ultimately a claim against stock indices, currencies, etc............Prudent institutions aren't waiting around until the dominoes fall--they're buying the underlying assets( including stock indicies) so they can meet their CDS obligations. That's the only way not to topple into insolvency when the default causes CDS to be recognized as due and payable."
    http://www.oftwominds.com/blog.html

    ReplyDelete
  143. jbg1911February 7, 2012 at 7:19 AM

    OT: Salzburg is AWESOME!!!

    ReplyDelete
  144. katzo7February 7, 2012 at 7:21 AM

    while driving to work it broke my 1338 level so 1345 ES was tgt. my puts are on high flier stocks of what I think are broken charts. guess we will see.

    ReplyDelete
  145. akwfungFebruary 7, 2012 at 7:23 AM

     And gold and silver call his bluff .... :)

    ReplyDelete
  146. Pretzel LogicFebruary 7, 2012 at 7:25 AM

    Ah, R911 -- you have no idea how much headache that KO adds to my work.  This is going to be a trendline and trade-trigger market for a little while.  Anything but short-term targets will be a challenge for the very immediate future, until the market rules out some of the myriad options.  In time, there'll be more clarity.

    ReplyDelete
  147. katzo7February 7, 2012 at 7:28 AM

    yeah, transitions are very tough, mrkt is the ultimate Professor and will test your position size and timing. . . 

    ReplyDelete
  148. Authentic1February 7, 2012 at 7:28 AM

    Russell 2000 underperforming S&P 500.  Risk off?

    ReplyDelete
  149. sandyone44February 7, 2012 at 7:31 AM

    driving to work?  i thought you traded 24/7 Katzo  :)

    ReplyDelete
  150. CalDFebruary 7, 2012 at 7:32 AM

     Apparently, e-Mini index futures aren't subject to the $25k pattern day trader requirement.

    ReplyDelete
  151. katzo7February 7, 2012 at 7:32 AM

    is bernanke still testifying? maybe mrkt tanks after he finishes up. just getting the feeling we close red today. . . 

    ReplyDelete
  152. Whip_sawedFebruary 7, 2012 at 7:33 AM

    If I remember right, this was the case yesterday too.

    ReplyDelete
  153. Dust DevilFebruary 7, 2012 at 7:33 AM

    I think 12:36 will see a rally.

    ReplyDelete
  154. Whip_sawedFebruary 7, 2012 at 7:34 AM

    Hello All,

    Closed all short positions once the Dow broke through.

    Market crash of >1,000 DJI points in 5...4...3...2...

    ReplyDelete
  155. infinitiplus1February 7, 2012 at 7:35 AM

    Everytime I go to the grocery store I almost sht myself at the checkout counter. 

    ReplyDelete
  156. Dust DevilFebruary 7, 2012 at 7:35 AM

    I thought all margin accounts are under the $25k requirement for day trading.

    ReplyDelete
  157. baksuFebruary 7, 2012 at 7:35 AM

    Guys, check this out - Markets are rallying likely because of derivatives and de-leveraging (not fundamentals or even technicals):

    http://www.oftwominds.com/blogfeb12/deleveraging-rally02-12.html

    If this is true, expect a nasty liquidation event as Greece nears default.

    ReplyDelete
  158. akwfungFebruary 7, 2012 at 7:35 AM

     Bernanke said, "Interest rate? What interest rate?"

    With that, the market exhaled. And said, "It's 1375 and beyond!" :)

    ReplyDelete
  159. Pretzel LogicFebruary 7, 2012 at 7:37 AM

    Ouch, that stings, selling at the bottom in October.  I know you've probably figured this out by now, but "revenge" trading never works... at least, it never did/does for me.  Too much emotional investment on "getting back at the market" clouds the trade decision process.

    All in good time, my friend.  

    ReplyDelete
  160. Dust DevilFebruary 7, 2012 at 7:38 AM

    Wrong.

    ReplyDelete
  161. mavrichFebruary 7, 2012 at 7:38 AM

     are you sure?

    ReplyDelete
  162. RockyTopGunnerFebruary 7, 2012 at 7:44 AM

    nope...futures...in and out all you like.

    ReplyDelete
  163. dle7319February 7, 2012 at 7:45 AM

    whoa, knowledgeable adults back in town again. Seems that they've made some good trades while other children is playing with dip holes and a lot of headaches at this moment. lmao.

    ReplyDelete
  164. Dust DevilFebruary 7, 2012 at 7:46 AM

    You don't say! I'll have to look into that, then.

    ReplyDelete
  165. Authentic1February 7, 2012 at 7:47 AM

    Yes, it was.

    ReplyDelete
  166. CCAvatarFebruary 7, 2012 at 7:48 AM

    RUT doesn't have AAPL holding it up.

    ReplyDelete
  167. jacostraussFebruary 7, 2012 at 7:53 AM

    Greetings from Ghana! And good luck with this Pamplona moment ;-)

    ReplyDelete
  168. billabusterFebruary 7, 2012 at 7:55 AM

    if market above 200 day lean long. if below 200 day lean short. solved

    ReplyDelete
  169. Dust DevilFebruary 7, 2012 at 7:58 AM

    The market is flat because KatzoBot is having chinese food.

    ReplyDelete
  170. akwfungFebruary 7, 2012 at 8:02 AM

     What's your count so far, dle?

    ReplyDelete
  171. Authentic1February 7, 2012 at 8:03 AM

    Out of JPM puts at $0.11

    ReplyDelete
  172. brianhutFebruary 7, 2012 at 8:04 AM

    No matter what the reason for the perma-bid might be, this remains a dangerous market to short.  That eleven point move upward from 1,336 to 1,347 is the largest intraday move upward of this rally where the move never retraced by even one point.  And it came after a fakeout waterfall open. 

    As we've seen so many times before during this rally, the bid under the market got flipped back on like a switch . . . and wiped sellers out with barely a yawn.

    ReplyDelete
  173. Matteo Del PantaFebruary 7, 2012 at 8:06 AM

    Hey PL,

    Last time I posted a comment was in november.. All I want to say is it may not be the best way to look at the DJI as its composition and thus its performance is skewed. If we look at the S&P500 or the Russell the story is different.. 1350-60 is my target.. even if Greece find an agreement this could be the trigger to rally the S&P to its top ... rallies end on good news rather than bad ones ... July 2011 anyone... after a Greek agreement there is no more positive news that could be priced in...

    Ciao,
    Matteo

    ReplyDelete
  174. sandyone44February 7, 2012 at 8:07 AM

    DAILY VIX OPTION TRADES:  Here is a glimmer of hope for my fellow VIX fans..  Upside potential on a big trade today.  25K VIX calls bought on FEB 35 calls with a week left till expiration. That betting the VIX doubles in 5 trading days..  Big play..

    http://www.youtube.com/watch?v=0oJ41acfwAA&list=UU83RU3yDhHwzG9d9LD1x5yQ&index=1&feature=plcp

    ReplyDelete
  175. Matteo Del PantaFebruary 7, 2012 at 8:08 AM

    Also not trying to be smug, but some PPL threw abuse at me when I called a bottom expecting a rally to 1330... Just food for thought for Katzo7 as he likes to follow his WWWContrarian indicator (i.e Billabuster no?)

    Good luck everyone.. 

    ReplyDelete
  176. dle7319February 7, 2012 at 8:09 AM

    akwfung, it's wave 3 of wave 5 up... but I may be wrong. It seems unreal, doesn't it?

    ReplyDelete
  177. Dust DevilFebruary 7, 2012 at 8:11 AM

    Nope, but the 13:08 bot seems to have a slight effect of riding the up channel. This channel only has a Pearson R value of .73, but still.

    ReplyDelete
  178. t_winnFebruary 7, 2012 at 8:12 AM

    This makes sense.  It may explain why Bernanke made such a strong statement today, insisting to 'protect' the US financial system regardless of what will happen in EU--like he's expecting something bad to happen with EU.

    Also in the McClellan video that someone posted last night, the guy seemed to imply that the market between now and June can be really crazy, and only nimble traders can be in.  Other investors should get out and come back in June!

    ReplyDelete
  179. akwfungFebruary 7, 2012 at 8:13 AM

     TY.

    That's my count also. My fingers are crossed. Hopium and liquidity are powerful stimulants. All bad news are supposedly priced in. That means any good news .... :)

    ReplyDelete
  180. JimFebruary 7, 2012 at 8:16 AM

    For how long?  can't like the market now, but you certainly called it right this morning!   Kudos!

    ReplyDelete
  181. Dust DevilFebruary 7, 2012 at 8:16 AM

    I so hope McClellan is right. Big money in them swings.

    ReplyDelete
  182. matsteryFebruary 7, 2012 at 8:16 AM

    Excellent article; thanks for posting.  This would explain a lot of the nonsensical behavior in the markets lately with the underlying perma-bid as well as the ignoring of resistance levels and grossly overbought conditions.

    The way I read it, this rally could very well continue until Greece defaults.  In fact, the closer we get to default, the steeper the rally may climb.  Very interesting.

    ReplyDelete
  183. jbg1911February 7, 2012 at 8:18 AM

    lmao...I know the feeling

    ReplyDelete
  184. akwfungFebruary 7, 2012 at 8:19 AM

    VXX is trying hard to dive towards its two year low of 20. That's the market's way of saying, "Risk? What risk?", :)

    ReplyDelete
  185. JimFebruary 7, 2012 at 8:20 AM

    what

    ReplyDelete
  186. William LiFebruary 7, 2012 at 8:20 AM

    That is a big play.  I wonder if it's someone that knows something or someone that is making a last desparate attempt at the casino.  We'll see how it pans out.

    ReplyDelete
  187. jbg1911February 7, 2012 at 8:21 AM

    It's gotta be less headaches...I could throw away my calendar.

    ReplyDelete
  188. JimFebruary 7, 2012 at 8:21 AM

    Try that one again....What did Uncle Ben say?

    ReplyDelete
  189. akwfungFebruary 7, 2012 at 8:21 AM

     Wow.

    I forgot about that. Question: does 3 have to be the shortest of all (1,2,4,5) or just the shortest of all impulsive waves. TIA

    ReplyDelete
  190. Pretzel LogicFebruary 7, 2012 at 8:23 AM

    Yeah, I'm quite torn on this.  INDU has an upward bias, I'm well aware of that.  Just have to see if I can reconcile an INDU count with a wave (2) in SPX... 

    ReplyDelete
  191. FredMazFebruary 7, 2012 at 8:23 AM

    Test

    ReplyDelete
  192. sandyone44February 7, 2012 at 8:24 AM

    Sniff sniff.. i smell volatility?

    ReplyDelete
  193. FredMazFebruary 7, 2012 at 8:24 AM

     A Plausibe explanation of why/how the stock market has been going up in the last couple months despite the headwinds is offered in an article in "oftwominds.com" blog, The argument goes as follows relative to the possible Greek default and its impact on CDS's covering that default:
    ."...........some of these CDS are written against various swaps or stock indices, meaning that the asset to be delivered upon default is ultimately a claim against stock indices, currencies, etc............Prudent institutions aren't waiting around until the dominoes fall--they're buying the underlying assets( including stock indicies) so they can meet their CDS obligations. That's the only way not to topple into insolvency when the default causes CDS to be recognized as due and payable."
    http://www.oftwominds.com/blog.html

    ReplyDelete
  194. Pretzel LogicFebruary 7, 2012 at 8:24 AM

    Other way around.  3 *cannot* be the shortest of 1,3, and 5.

    ReplyDelete
  195. Pretzel LogicFebruary 7, 2012 at 8:25 AM

    Doesn't have to be the longest -- just can't be the shortest.

    ReplyDelete
  196. sandyone44February 7, 2012 at 8:27 AM

    or its like that someone betting the $1,000 that the first play in the Super Bowl would be a Safety.  He was right. payoff was $50,000.  lol

    ReplyDelete
  197. akwfungFebruary 7, 2012 at 8:27 AM

     TY for the correction.

    My mind and my fingers are not in synchrony. :)

    ReplyDelete
  198. baksuFebruary 7, 2012 at 8:28 AM

    Yep. My interpretation of his logic is that markets can ramp as underwriters buy the underlying collateral instruments to anticipate having to cover their obligations, but at some point, they will have to liquidate the collateral itself to pay up. Perhaps this is the event that is the nexus between the massive derivatives market and the 'real' market - with one about to take down the other. 

    Anyways, its better to trade the trend and always wait for confirmation - these things can go on for a while! 

    ReplyDelete
  199. Dust DevilFebruary 7, 2012 at 8:36 AM

    Next bot scheduled for 13.41 and price is reaching bottom of trend channel. I expect a rally.

    ReplyDelete
  200. sandyone44February 7, 2012 at 8:36 AM

    Interesting action in VXX and TVIX today..  They are Not tanking when the market turned Green??  call the news channels.

    ReplyDelete

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