a new bull market, historically this is where tops are made when
the put call is this low. currently taking short positions
and dont mind holding them until sp895-905 if need be...
we may get a weak bounce on mon-tue to give us a good wave 2
before we really break the triangles and start the decline.
on the other hand we could break the triangles with strength and
the wave 2 bounce would be coming back up to test the trendline
from underneath. either way I think tbt will make a decent
correction. I thought I sold all of mine on Wed, but my
biggest position in my 401k didnt trade for some reason. I
sold almost all of it today and will sell the rest when we hit
49.50 or we break below the triangles. you have to imagine the dow
going down to 6200 is going to scare some people back into bonds
even if it is only temporarily.
someone posted this excellent djr chart earlier so I copied it
to my stockcharts account, remember though, triangles always break
in the direction of their previous trend especially since these are
wave 4 triangles. The wave 5 down is fast and furious, its
when everyone thinks the market is going to 0 and they don't care
how much they loose or how ridiculous they are for selling, they
just want the pain to go away. Just think of all those people
who got their yearly 401K statements and realized their account
went down even after they put in 12-16K last year. Now when
they hear the market is making new lows they will throw in the
towel. Or think of anyone who has bought during the last two months
of this triangle thinking they bought near the bottom, they will
all be loosers when the strength of 5 starts and get scared selling
at any cost. That is why elliott waves work so well, they
describe the psyche of the masses. personally I am short big from
wed (see my toggle post) and will be backing up the truck on the
retest of the djr trendline from below and the retest of the
spx/dow trendlines from below. I plan on playing this with
options for the May-June timeframe. Opportunities like this
do not come around too often. good luck guys and have a good
weekend.
very careful with the treasuries here. we are about to
start a big wave down after a small bounce. that is going to
cause people to rush back into treasuries. you should
consider taking profits in tbt if you have it. I sold my last
batch this morning..now have 0 shares.
Posted by junkmaylbox on 31st of Jan 2009 at 10:33 am
He misidentified the beginning of the pattern. It started at
around 950, which would give a measured target of about 200 points
down. It's would be around 540, in accord with cwa82675's
prediction for 6200 on the Dow. IMO.
Looks like he took his start point at the current base of the
triangle, which is about 810. However, don't think one can predict
where it will go with any certainty; need to take it one day at a
time, as Steve says. But the trend doesn't look too good at
present. Another thing to think about is that one of the
control points for the upper part of the triangle
is the Obama election day high anomaly. If one were
able to normalize this, the formation might be more akin
to a true Bear Flag rather than a triangle.
This is a hard market to trade. Investors are gone. Many traders
are loitering, trying to take stabs at going long so as to not miss
that "first 20%", but are afraid to be too adventurous trying
to catch the falling knife, and get caught by another downdraft.
The Bears, on the other hand, are afraid of getting
caught short by some newly announced wrinkle in trading
rules, or legislated change or political initiative, which may
instantly fire up the market. Think this is the reason for
the "chop and slop" trading action that rp mentioned.
Just look back to July 15 of this year to see how the
non-shorting rule reversed the downtrend, and kept the market
afloat for 2 months.
I agree with your opinion about the long term trend. Too
many are still thinking that the government is going to
rebirth the misery we are faced with. No one wants
to look at the in depth analysis to determine the future. We are
facing an implosion of historic proportions. The eternal optimists
are delusional. The pain is just beginng to
be felt....
I agree with you that this market is hard to trade. No money is
earned easily, if one is independent. Traders are a stern
substratum of the investor crowd, they can manage their risks so
that they could sleep at night. Good luck!
Posted by junkmaylbox on 28th of Jan 2009 at 03:37 pm
I side with you here. SKF below 130 and SRS in low 50s are
terrific buys. I bought those and am going to wait. In the past
four months, a big up day was followed by a down day.
Posted by dallassteve on 28th of Jan 2009 at 03:00 pm
I guess the operative word is "lightly scaling in," as far as
shorting at this moment goes. You've got more guts than
me. I'm waiting to see if the SPX loses 866 before I
short. Don't you think the SPX may may another run at 900
today?
just make sure you have a stop in place if you are short.
That 50% Fib might have been the top, however there was also no
divergence, so watch to see if previous resistance becomes
support. The H&S pattern measures to 900 and the 61.8%
Fib is 890
Posted by junkmaylbox on 28th of Jan 2009 at 03:50 pm
matt, you are right. I have little luck with choosing stop sizes
for those issues, so I'm going to position trade them. I will sell
if 877 is lost or we rest the breakout line. I cannot find anything
more intelligent in this situation. If you have any suggestions, I
am all ears.
Posted by dallassteve on 28th of Jan 2009 at 03:43 pm
Thanks Matt. Beautiful charts. Yes, very tricky
market, as cspirit says. It is good to see the market start
to do something. I've got tight stops, and will be looking forward
to your commentary later tonight.
One way to play this is to use smaller share sizes and larger
stops. It appears to me market makers know right where stops
should be placed and are running them both ways (Short/Long)
Remember they only make money doing trades not like us.
There goal is to do as many buy/sell orders as they can.
I've done better past month trading smaller amounts and wider
stops.
I place it based on where support is if going long. I then
figure out how much money I want to use and then figure out how
much to risk. I try not to risk more than 5%-8%
capital.
Example UNG
I did 500 shares today at $18.10. Support was like
$18.20. I placed my market limit sell stop at $17.35
GTC. It's far enough down that sell stops won't hit it only
to head higher.
So 9K cashed used risking $375 dollars on 9K investment or
little bit over 4% of the 9K. Once I get couple dollar gain I
will move stop up .50cents.
Only way would be if we get a short covering rally . They
hit all the buy stops near SPX 860 and all the short cover stops
once 855-860 area cleared. This could be why were kinda just
holding stready at 871 currently
Posted by dallassteve on 28th of Jan 2009 at 03:21 pm
Good call concerning shorting. SPX hit 866. I'm
late, but I might jump in soon. If anyone else is thinking
about shorting SSO at this point, I sure would be interested in
your idea of a stop. Thanks.
unless you believe we started
Posted by cwa82675 on 28th of Jan 2009 at 02:24 pm
a new bull market, historically this is where tops are made when the put call is this low. currently taking short positions and dont mind holding them until sp895-905 if need be...
market djr and tbt
Posted by cwa82675 on 30th of Jan 2009 at 04:13 pm
IMHO,
we may get a weak bounce on mon-tue to give us a good wave 2 before we really break the triangles and start the decline. on the other hand we could break the triangles with strength and the wave 2 bounce would be coming back up to test the trendline from underneath. either way I think tbt will make a decent correction. I thought I sold all of mine on Wed, but my biggest position in my 401k didnt trade for some reason. I sold almost all of it today and will sell the rest when we hit 49.50 or we break below the triangles. you have to imagine the dow going down to 6200 is going to scare some people back into bonds even if it is only temporarily.
someone posted this excellent djr chart earlier so I copied it to my stockcharts account, remember though, triangles always break in the direction of their previous trend especially since these are wave 4 triangles. The wave 5 down is fast and furious, its when everyone thinks the market is going to 0 and they don't care how much they loose or how ridiculous they are for selling, they just want the pain to go away. Just think of all those people who got their yearly 401K statements and realized their account went down even after they put in 12-16K last year. Now when they hear the market is making new lows they will throw in the towel. Or think of anyone who has bought during the last two months of this triangle thinking they bought near the bottom, they will all be loosers when the strength of 5 starts and get scared selling at any cost. That is why elliott waves work so well, they describe the psyche of the masses. personally I am short big from wed (see my toggle post) and will be backing up the truck on the retest of the djr trendline from below and the retest of the spx/dow trendlines from below. I plan on playing this with options for the May-June timeframe. Opportunities like this do not come around too often. good luck guys and have a good weekend.
treasuries.PNG very careful with the treasuries
Posted by cwa82675 on 2nd of Feb 2009 at 11:15 am
very careful with the treasuries here. we are about to start a big wave down after a small bounce. that is going to cause people to rush back into treasuries. you should consider taking profits in tbt if you have it. I sold my last batch this morning..now have 0 shares.
S&P500 ------> 210 ??
Posted by x100 on 30th of Jan 2009 at 04:38 pm
http://market-ticker.denninger.net/archives/756-On-The-Edge-of-The-Abyss.html
Not 210, around 540 on the $SPX.
Posted by junkmaylbox on 31st of Jan 2009 at 10:33 am
He misidentified the beginning of the pattern. It started at around 950, which would give a measured target of about 200 points down. It's would be around 540, in accord with cwa82675's prediction for 6200 on the Dow. IMO.
Looks like he took his
Posted by x100 on 31st of Jan 2009 at 04:40 pm
Looks like he took his start point at the current base of the triangle, which is about 810. However, don't think one can predict where it will go with any certainty; need to take it one day at a time, as Steve says. But the trend doesn't look too good at present. Another thing to think about is that one of the control points for the upper part of the triangle is the Obama election day high anomaly. If one were able to normalize this, the formation might be more akin to a true Bear Flag rather than a triangle.
This is a hard market to trade. Investors are gone. Many traders are loitering, trying to take stabs at going long so as to not miss that "first 20%", but are afraid to be too adventurous trying to catch the falling knife, and get caught by another downdraft. The Bears, on the other hand, are afraid of getting caught short by some newly announced wrinkle in trading rules, or legislated change or political initiative, which may instantly fire up the market. Think this is the reason for the "chop and slop" trading action that rp mentioned.
Just look back to July 15 of this year to see how the non-shorting rule reversed the downtrend, and kept the market afloat for 2 months.
Scalping
Posted by geotex on 31st of Jan 2009 at 08:55 pm
I agree with your opinion about the long term trend. Too many are still thinking that the government is going to rebirth the misery we are faced with. No one wants to look at the in depth analysis to determine the future. We are facing an implosion of historic proportions. The eternal optimists are delusional. The pain is just beginng to be felt....
Steve also drew the triangle
Posted by junkmaylbox on 31st of Jan 2009 at 06:40 pm
Steve also drew the triangle in a similar fashion: http://stockcharts.com/h-sc/ui?s=$INDU&p=D&yr=0&mn=6&dy=0&id=p84620209002&a=157306645&listNum=11. 6200 on the $DJIA and low 600 on $SPX are conservative estimates.
I agree with you that this market is hard to trade. No money is earned easily, if one is independent. Traders are a stern substratum of the investor crowd, they can manage their risks so that they could sleep at night. Good luck!
thanks for the info
Posted by lg on 31st of Jan 2009 at 12:35 pm
thanks for the info
Good Post. I bailed yesterday in
Posted by cspirit on 30th of Jan 2009 at 04:24 pm
Good Post.
I bailed yesterday in 401K trying to play this Wave 4. Only lost 1-2% but will make it back once Wave 5 completes.
Just waiting for market to decide.
A clear and well-reasoned plan
Posted by junkmaylbox on 30th of Jan 2009 at 04:19 pm
cwa82675, Thanks for the update. You made an excellent call in Wednesday. good luck with your trades!
cwa
Posted by canadianguy on 28th of Jan 2009 at 02:35 pm
which shorts are you buying/putting on? SKF? SRS? QID? thanks
Im not sure if the
Posted by cwa82675 on 28th of Jan 2009 at 02:51 pm
Im not sure if the rally is going to stick or not so I am lightly buying into skf/sds/srs and trading sp futures heavily with tight stops.
I side with you here.
Posted by junkmaylbox on 28th of Jan 2009 at 03:37 pm
I side with you here. SKF below 130 and SRS in low 50s are terrific buys. I bought those and am going to wait. In the past four months, a big up day was followed by a down day.
I am also heavily into
Posted by lsherrer on 28th of Jan 2009 at 03:41 pm
I am also heavily into SRS at these prices (maybe too much so), but am willing to hold it as long as I need to.
I guess the operative word
Posted by dallassteve on 28th of Jan 2009 at 03:00 pm
I guess the operative word is "lightly scaling in," as far as shorting at this moment goes. You've got more guts than me. I'm waiting to see if the SPX loses 866 before I short. Don't you think the SPX may may another run at 900 today?
losing 866
Posted by junkmaylbox on 28th of Jan 2009 at 03:25 pm
It's almost there. By your request :-)
SPX 30 min chart.png SPX 60
Posted by matt on 28th of Jan 2009 at 03:36 pm
just make sure you have a stop in place if you are short. That 50% Fib might have been the top, however there was also no divergence, so watch to see if previous resistance becomes support. The H&S pattern measures to 900 and the 61.8% Fib is 890
matt, you are right. I
Posted by junkmaylbox on 28th of Jan 2009 at 03:50 pm
matt, you are right. I have little luck with choosing stop sizes for those issues, so I'm going to position trade them. I will sell if 877 is lost or we rest the breakout line. I cannot find anything more intelligent in this situation. If you have any suggestions, I am all ears.
Darn! filled and order for
Posted by Jim on 28th of Jan 2009 at 03:43 pm
Darn! filled and order for SRS at 50.25, right after I read this and was trying to cancel...LOL
Thanks Matt. Beautiful charts. Yes,
Posted by dallassteve on 28th of Jan 2009 at 03:43 pm
Thanks Matt. Beautiful charts. Yes, very tricky market, as cspirit says. It is good to see the market start to do something. I've got tight stops, and will be looking forward to your commentary later tonight.
IDEA?
Posted by cspirit on 28th of Jan 2009 at 03:51 pm
One way to play this is to use smaller share sizes and larger stops. It appears to me market makers know right where stops should be placed and are running them both ways (Short/Long)
Remember they only make money doing trades not like us. There goal is to do as many buy/sell orders as they can.
I've done better past month trading smaller amounts and wider stops.
Just passing this along as an IDEA only.
Chris, what is a wide
Posted by junkmaylbox on 28th of Jan 2009 at 03:59 pm
Chris, what is a wide stop in your definition? 15, 20%?
I place it based on
Posted by cspirit on 28th of Jan 2009 at 04:06 pm
I place it based on where support is if going long. I then figure out how much money I want to use and then figure out how much to risk. I try not to risk more than 5%-8% capital.
Example UNG
I did 500 shares today at $18.10. Support was like $18.20. I placed my market limit sell stop at $17.35 GTC. It's far enough down that sell stops won't hit it only to head higher.
So 9K cashed used risking $375 dollars on 9K investment or little bit over 4% of the 9K. Once I get couple dollar gain I will move stop up .50cents.
This is how I do it. Money Management
Thanks, Chris. So you use
Posted by junkmaylbox on 28th of Jan 2009 at 04:24 pm
Thanks, Chris. So you use regular size stops (4 to 6% is what books would recommend). A wide stop would mean at least 10% to me.
Only way would be if
Posted by cspirit on 28th of Jan 2009 at 03:07 pm
Only way would be if we get a short covering rally . They hit all the buy stops near SPX 860 and all the short cover stops once 855-860 area cleared. This could be why were kinda just holding stready at 871 currently
Good call concerning shorting. SPX
Posted by dallassteve on 28th of Jan 2009 at 03:21 pm
Good call concerning shorting. SPX hit 866. I'm late, but I might jump in soon. If anyone else is thinking about shorting SSO at this point, I sure would be interested in your idea of a stop. Thanks.
If we close above SPX
Posted by cspirit on 28th of Jan 2009 at 03:30 pm
If we close above SPX 861 we have retaken support. Tricky for sure which way to trade this sucker.
Short covering is not a
Posted by junkmaylbox on 28th of Jan 2009 at 03:21 pm
Short covering is not a rally: it's only a one-day bounce. I would be surprised if tomorrow we will get a continuation.
I don't know . Last
Posted by cspirit on 28th of Jan 2009 at 02:58 pm
I don't know . Last hour will tell. I have SPX870 as a support area with not much overhead ress. to SPX 886. We do have support at SPX 860 below.
Will see in the last hour.