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!
market djr and tbt
unless you believe we started
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!