I too bought FAZ and SRS at the close, expecting to unload on a retracement of the move up today. I could be totally wrong here, and have the same rational as you do. Good luck!

A half of the way to rebound is covered. It should make it to 116, as its measured move.

Matt, you did better than I did: I shorted SKF at 197 :-) How did you use TRIX to anticipate your entry and what collection of indicators would permit you to enter a trade before exponential moving averages crossed over? thanks for this information.

Jeez, that's been quick!

rp, I see the same thing as you. I concur with your observations. I reckon you are slightly ahead of me in your time. For now everyone wants a bounce, we had five down days in a sequence. Especially the technical analysis oriented crowd. Let them have their bounce and use it to reduce cost of our positions. This market needs a capitulation in order to have a more sustained rally, we haven't had any so far. November lows will just not do it, as long as there are folks who want to break even or cut their losses from a rally. There is too much opposition to buying so far.

I hate persuading you, take it as my opinion. You've done extremely well with your strategy, so keep it in place. Good luck and thanks for sharing your insights! -junkie

rp, I concur with you. However, remember how the November 21 bounce started? We reached the measured target, a 2002 lows, etc. Within a day the trend reversed. I am seeing a huge short covering this morning. 740 is the measured target of the bounce, so profits are being taken. They could break the November lows to scare off the bulls -- and perhaps they will do  that, indeed -- yet I don't expect to break November lows on the  first try. I am positioned slightly bullishly now, and am going to start scaling at 780 in small amounts. Wave 3 of 5 lasted since SPX at 870, and it's a good place to reverse a bit. For what it's worth.

This is mostly a short covering, IMO. I wonder if we ever retest 781 this way :( I am getting impatient as hedgies have outsmarted me once again!

An interesting article, thanks! On a related note, what is "running correction" (a bullish pattern the author mentioned)? I've never heard of that pattern before.

I learnt the same thing. Hold them and do not touch them, for your own gain's sake.

Yeah, it was a good opportunity. The market is kept from making large bounces to prevent folks from adding to their short positions. In wave 3 declines one only sees small bounces, not more than that. I was expecting a larger bounce myself :(

I concur with you, rp. Ultra ETFs work wonders in trending markets, they will out-perform the index and under-perform it, depending on the type (long or short).

The $gold is topping today, it bounced off the $1,000 per ounce. I don't see much upside for $gold here, it must consolidate first to make new highs. I am willing to lose 5% on this trade if I am wrong here.

The two MAs (7 & 21) are equal at the moment. I went short on GDX and AUY.

http://stockcharts.com/h-sc/ui?s=GDX:GLD&p=D&yr=0&mn=9&dy=10&id=p50517984652&a=141880679&listNum=8

I have entered two large "stink bids" for UYG at 1.50 and URE at 2.05 this evening.

I meant MA(20), not MA(50), and calculations are made for XLF, not for UYG.

I would start buying when RSI gets below 30 or we go below 750 on $SPX, whichever occurs earlier. I don't expect indexes to go much lower than the November 21 lows, because this is a retest. We might ever reverse tomorrow if the market gaps down and drops really hard in the morning.

Another criterion that I would use is to compute the difference between the MA(50) and the price. Any time the distance is above 27-30%, a reversal is imminent. Right now the distance is 17%. If XLF is below 6 (currently MA(50)=9.03) , it would be a terrific buying opportunity.

For what it's worth.

$gold does not seem to follow the Elliot wave analysis --nor technical analysis, as a matter of fact -- as well as everything else. One reason for that is covert manipulation of gold prices. As for the television adverts, I would simply use them as a good sentiment indicator without believing all those prepaid theatrics. If gold is wanted by nearly everyone, it's high time to be selling it.

Now is a safe point of shorting $gold, as it's unlikely to break its all-time high at this time and is very close to it. If it does break it's high, it's not going to continue its run, but is bound to reverse immediately. For what it's worth.

here

In 1970s $gold increased 27 times: from its low at $30 to $840. If the upcoming move is at least as big as before, we should see $gold reach $270*27=$7,290 per ounce. In fact, we have seen only a triple from its lows, hence a 9-fold increase is still in the cards.