Saturday, March 12, 2011

S&P 500 looks frail


Thursday, March 10, 2011

S&P looks like its got quite a bit more to go...

As a side note, I expect something below 1285 for the inner most wave 3 target to be followed by a modest retrace. And the pattern to iterate down with modest retracements and perhaps something stronger when the red wave 3 completes. These are nice looking numerals and letters and are for amusement primarily though there may be some structural value to them in that they indicate that we have most likey more downside to go. But as another note, the bear flag truncated as I proposed on my "bear flag analysis" chart earlier this week and that should result in a very strong impulse down...so, I would expect surprises to occur on the downside and downside to potentially exceed reasonable targets. One of my weekly systems on the S&P500 is looking to cover its short in the somewhere between 1020 to 1050. As it wins over 90% of the time, I would expect us to get there, perhaps sooner than I would have thought possible.

Anyone else want to monetize their own debt and call it capitalism

Meet Time's "Man of the Year"

...the guy who made all this wonderful stuff happening throughout the financial and sovereign world possible...

Tunisia is still revolving...

Very interesting to see some of the process going on there. Here is a Sami Zaoui who went from being a consultant to Secretary of State in apparently a metter of hours...lets hope they can get a stable government in place for the long run.
Watch live streaming video from facebookguests at livestream.com

The search continues...watch copper

I have to tell you, the persistence of people attempting to map, remap and remap the remap of what are relatively random letters and numbers onto current patterns is downright intriguing. I would guess that the confusion from yesterday has intensified...by the ridiculousness of so many of the EW patterns people are posturing about. I don't really know anyone who can make money based on anything more substantial than following basic market symmetry and reasonable trade management. Precise EW counting is not useful in that objective in my opinion.

What I see going on is likely to, once again, cost the loyal counters dearly with more missed trades and more missed calls. I have discovered, for example, that when I mess up a trade, my impulse is to trade more but the prudent move is to do the opposite and trade less. I think the same applies to analysis aswell. More labels and letters have a greater ability to take you away from a goal than towards it. They, however, feel especially interesting and required when one may have recently gotten the previous ones rather wrong.

It is amazing how consistent it is that more analysis leads to more underperformance especially when coming from foundations based on lack of clarity. The thing about EW counts that can also be distracting is that they are so very interesting that is seems they are more interesting than actually successful trading itself. So, the two activities are easily decoupled and no longer need to support each other in that paradigm. I am sorry to say it, but that's the way I see it.

My advice once again is to keep it simple...

Lets examine the situation:

  1. Nearly everyone is looking up (while simultaneously worrying about down after the up)
  2. Relatively large under performance in certain key commodities
    especially ironically ones in which JP Morgan has had large long positions
  3. Key indexes and names are not performing. Nasdaq 100, AAPL, NFLX, AMZN and many other momo names are not playing ball.
  4. The Dollar has broken out nicely of a bullish falling wedge and held supports as I indicated on my previous charts. I see most elliottwave analysis missing the boat on the dollar levels with the wrong trend lines and interpretations. I think that this particularly miss could be hazardous.
  5. American style Tunisian and Greek social unrest is coming to the US - every day it gets closer because Mr. Bernanke, Obama, Bush, Bankers and congress have done everything in their power to make sure that this would happen.
  6. Then there is the sovereign debt issue that is never far away...
Below is a chart of copper...and its not painting a good picture...

Tuesday, March 8, 2011

Transports backtest...


Plane, train, automobile, triangle, diagonal...what gives?

And the answer is...keep it simple stupid...KISS. I will tell you now...I see more Eliott wave people coming up with the wildest abstractions for this market. This is why most elliottwave traders miss the big moves...making it too complicated is not a good technique to use when analyzing the markets. I think its important to be decisive and to be clear...what I see going on is the people are confused and coming up with wild theories whether they are probablistic or not.

For example, our triangle has very near reached its apex...yet with in that apex, we still need to make an D and E wave...it makes absolutely no sense to put the E wave this far into the actual apex. All I hear about is triangles...and pennants but those patterns do not fit well on any index that I looked at.

ES gets some buy interest

Keep in mind that though this is an interesting and somewhat unexpected spike in buy volume...given the number of shorts being put on at the lows and the other nefarious market influences its not entirely surprising and so far less powerful than it may initially seem. Given that the dollar has shown some traction as I setup in my previous charts and thus far is holding its initial supports and that the EURO has been unable to do so...there seems to be a shift going on in the markets...at least under the surface. Many shorts initiated new shorts on the break of the flag and are getting squeezed - therefore, I do not thing this buy volume is sustainable.

Transports bounce inside bear flag

Oil is down all of $4 and the market is partying with Bernanke's help to squeeze the shorts. However, the transports remain in their bear flag

TNA vs TZA...large discrepancy in volume

Checking up on the demise of the dollar...

My target as posted previously for the dollar has been met so far and a bounce of some substantial merit looks ready to start...looks like most people were too focused on the wrong trendline...

Sunday, March 6, 2011

Given the point that we are with the markets...here's a great commodities report

This is from Mathew Frailey, owner of Breakpoint Trades. Please click on the link to get the market report...

I recommend that you spend some time with this - Matt is a great commodities analyst. Commodities are driving a lot of the de-correlations or correlations in the markets...so I thought I would share this with you. Normally the BPT reports are protected, meaning they need a login. This report has been opened up so anyone can view it. Feel free to forward...

Click on this link the access it: BreakPoint Trades Commodities Analysis...
 
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