Tuesday, September 30, 2008

My theory about bill-day and afterward

Here is what I think will happen on bill-day and afterward.

Senate will pass the bill on Wed night.

As soon as the news hit the wire, futures will take off. We will rally till the morning to gap up and rally more during the regular trading hours to finish near the highs. Kind of a panic buying day.

Next day, we will gap down big, like 30-50 ES points OR we will reverse early in the morning. I prefer the gap down because it will trap maximum number of suckers that can provide fuel for the selling climax. I observed it, always works better.

This will be the true beginning of the terminal move which will end with that long-waited scary selling climax.

Before mid October, we will print an important bottom around SPX 1000 - 1050.

This is just a scenario based on a few analytical data I have on Fed days and similar panic buying days. Will see how it plays out.

ES is currently down about 8, I believe it will stabilize around 1150 tomorrow and wait for the bill to pass there.

still short ES

50% from 1150
50% from 1217

I had taken 100 points profit on 50% position yesterday, which gives me a better flexibility on this intermediate term trade.

1190 is the maximum the current move can advance but I do not think it will

Hope is getting tick

Panic will get thicker.

Unless SPY opens above 114.4, S&P will be deeply in negative territory by afternoon. In other words, I expect a continuation to yesterdays selling climax as long as SPY opens below 114.4

Also based on the past studies, today's range should be minimum 70 points on SPX.


So I expect market to sell off from the opening, into the negative territory, by minimum 70 points from the day's top tick. UNLESS SPY opens above 114.4

Selling climax will intensify tomorrow before a possible intraday reversal

This is somehow similar situation to that we had on September 18. The only difference is, this will be more violent, volatile, luring and deceptive. Very dangerous day ahead of us. I wish you best of luck, you will need it.

Tomorrow's range (day's high - day's low) should be min 70 SPX points. I carry a full line of ES short into this cyclone. Half position is from 1217, the other half from 1150. I do not know where the exact bottom of this pit is. However there are certain indications that appear before every reversal. I will be looking for them.

Monday, September 29, 2008

TOL Bros.

A proxy stock in $HGX looked like this before today's decimation.
This simple chart implies a target around $7.

I am hearing that Fed should cut the rates tonite?

A few buffoons on bubble TV have been giving from their guts tonight.

Fed should cut.
Fed should pump.
Mommy should take care of us.
We need fries and burgers, we missed happy hours.
Politicians save Wall Street otherwise we hurt Main Street.

Here is my answer for all of the above: NO.

They have a bill who knows how many fingers in the jar. Why they can not take a natural market correction, why they need steroids all the time.
Why they should cut the rates? Rate cut can do nothing to the current situation except a few hours of pop in the market. Dont they know this themselves? Are they all trapped in somehow , wanna get out?

They are going to congress on Thursday again. Why Fed should cut before? Why they should probe the market before voting?

Today reminded me those hectic days from 2001. Bottom bottom bottom, capitulation capitulation capitulation, climax climax climax. But all I see is their climactic appetite for calling bottom. At one point, a clown on B. TV used the word "bottom" 7 times in a minute.

Another thing about today was the coalition of suckers. Army of suckers consisting of fund managers and analysts was all in agreement on one thing: It is all fault of Congress. Everybody blamed Congress. Do you remember who they used to point their finger at after Fed announcements? Poor Benny. He now seems safe for a while, with the army begging for mercy.

I expect S&P500 to gap down huge tomorrow as millions of suckers tried hard to prevent the inevitable before the close. Market should have closed at the low tick, it didnt. Reason? Hope. Dont worry market knows how to fix it. You wanna scare the suckers? Open down and sell off. That should do it.

My take is, we gap down 15-20 ES points and sell off more before reversing intraday.

Edit:

Now you wanna see a scary thing? Check this out. Joe blow is trying to catch the sword with his mouth.

If today's drop didn't scare them, imagine what will have to happen tomorrow. Market will not reverse until that ratio spikes over 1. Watch it !

Placed a hard stop at 1156

and closed ETFs from Friday to short more ES... stop 1156 on entire position.
Asia overnight could be interesting.

reshorted ES @ 1150

put that 50% back in work....

I think it will happen towards the close.

This action was necessary for the goodness of United States of America, there will be better times after this event. A new bull market and new era, just little bit patience.

Covered 50% ES at 1120

about 100 points profit

Sunday, September 28, 2008

Heavily short ES from 1214 - 1217 range plus ETF shorts

I am short ES from 1214-1217 range plus ETF shorts and I am done.

I keep a mental stop at 1224 at the moment.

I expect ES to open around 1190 tomorrow

I expect ES to test 1160 tomorrow where I will shift the stop to 1187

I expect ES to take out 1100 this week.

I expect ES to put a bottom around 1035 in the first or second week of October.

Until then, Aloha everyone.


Meanwhile some material for your review:
Bearish
The most intensive selling climax of the decade is about to commence
Will open below 1190

Closed remaining ES long between 1215-1220

I sold remaining 50% ES long beween 1215-1220 and this leaves me with SPY shorts and ultrashort ETFs which I had opened on Friday in AH.

I will be shorting ESZ8 and SPZ8 on any strength overnight with a stop around 1230.

I gave my reasons early this weekend, they are not as important as the intermediate term technicals I talked about during the last few weeks.

I expect S&P500 to take out 1100 this week and I expect a tradable bottom (intermediate term) around 1035. This was the number I refined as a target in October 2007, as some of you will remember. I believe the target will be achieved before Mid-October, 2008.

These are my current thoughts which I am executing my trades based on. They are all subject to change according to new technical / fundamental developments.

Until Sol is back, I am outta here. Good luck everyone.

Lets all make money...

September 23, 2008 was an unusual trading day because we had an equity ISEE reading which usually corresponded to ST market tops in the past. But it didn't work that time.
Why? Because of the bail-out expectations. I think, on Monday, we open below the level the market closed on Sep 23. (SPX 1190)



Saturday, September 27, 2008

That feeling...

I can not explain this feeling. It started Friday afternoon during the ramp up. It is like a recursive whisper: "something is wrong". This is exactly what I felt last year in December, one night in a restaurant in Manhattan. Some of you may remember, I had talked it that time.

The feeling is giving me an urge to sell. It is like if I dont do it, I will regret badly, I will get hurt. It makes me act like a fire man who just got a call from his own home. Whenever I ignored this, I regretted. This was one of the reasons I acted quickly on Friday.

I know some of you got very surprised with my 180 degree turn that night. This was it. One day I hope I will find a logical explanation to this.

Here you go

15 hours after my call on fail-out (reason #1):


The compromise legislation that seemed to be emerging Saturday "is not the proposal that we got from Secretary Paulson," Reid said.


Financial Meltdown


Now the most hard-to-believe part of the call, reason#3 in the list:
Bank of New York, State Street and Northern Trust.

I suggest you all to watch these banks very closely next week as I do not expect a news item on them until their stock prices are significantly decimated into the single digits shortly.

Bailout failure 'will cause US crash’




.

Here you go

12 hours after my call on Wachovia (reason#2) :


WaMu's takeover has proven that there's an easy way, if the FDIC is involved,'' said Sean Egan, president of Egan-Jones in Haverford, Pennsylvania. ``You kick the hell out of the equity holders and bondholders. That may be the new model for bank takeovers.''

Wachovia Suitors May Delay Bidding After Dimon's Deal for WaMu


Doesn't this explain why short selling on banks was banned?

The most intensive selling climax of the decade is about to commence

After so called fail-out tomorrow.


I will post my detailed outlook for S&P and also explain the situation in more details on Sunday.

The items I listed in my previous post are the immediate events in horizon.

Briefly, I expect S&P500 to take out 1100 next week. I expect a significant tradable bottom around 1020-1035 which I was talking about since October 2007.


God damn sunnofa bitchaaa runnin hot...

I think this can not be classified as a crash or anything similar. In my opinion this will be the terminal of this cyclical move and mark a significant bottom that should last till February 2009

Friday, September 26, 2008

I have no bullish exposure

For the record, I fully hedged my remaining ES position in AH using ETFs and their derivatives plus went short S&P via SPY. I will likely close ES long and short RUT and MID on Monday at the opening bell.



Reasons;

1- Bail-out will not probably be what Wall Street is expecting.

2- Wachovia will likely collapse early next week. They are trying to save the bank with Citi but unlike Merill who dumped a lot of toxic before bought by Bank of America, I believe Citi can not digest Wachovia as it is.

3- More importantly, Bank of New York, State Street and Northern Trust: one or more of these banks may disappear next week. Importance of the situation with these banks is much greater than past examples as they have wide spread exposure to public and institutional finances.




We will likely experience historical moments next week, surprisingly right after so-called bail-out.

This is not the first financial crisis United States of America is facing.
Investment banks have been going down for centuries and it is part of the normal economic cycle. I believe our financial system is capable to overcome these difficulties sooner than later.


I will be away this weekend. Good weekend everyone.


PS: I received emails today saying that they want to be added to my Face Book profile. I do not have a profile on Face Book. That kid is either impersonating me or he has the same name and last name. I don't know him.

bot some SKF around 101.5

for hedging purposes.

closed 50% ES around 1210

unloading some above ES 1210+

This is still 20+ points gain on average


I will be accumulating on dips...

Be patient

There is an army of shorts that wanna get out before the weekend which may end up with a 50 points gap up.

Conditions today is no different, in fact more bullish than yesterday as the list got lighter with WAMU takeover.

This market will cross positive before any meaningful intraday selling

Let the shorts pay it, be patient.

Gap down at the current level is a breakdown on several indices.

Well, I was long due so today breaks my long streak of accuracy.

IF ES doesnt open above 1210, this gap down will take out several trend lines I was following. I will be getting out today despite the fact that we may gap up 50+ ES points on Monday.

I will update intraday.

Thursday, September 25, 2008

Why I don't see crash calls anymore

That is bothering me. If I don't see a crash call on the obvious places tonight, I am gonna get itchy in the morning.

One of the major FUBARs (FUBAR=Fxxx up beyond all recognition) on the list is gone tonight. Wamu was seized by FDIC which was quite obvious from the action on the stock today.

This was inevitable and fully priced in. After the initial reaction, this should push the futures higher towards the morning. Since JPM swallowed this bank too, and JPM is one of the largest components of BKX, XLF and other financial index and ETFs, this should give 10+ ES in addition to my expectation which was 1230. Remember the Indybank, it had caused 20 points gap up.

What is concerning me is equity P/C ratio which closed at 0.61. The market may be little heavier than I thought. Or maybe site traffic of xTrends exceeded Yahoo.com, I may be on the same crowded bus.

Aside from conspiracies, I believe the market will close near the best level tomorrow. There may be some early jitters. I still think we will gap up tomorrow. (on ES)

Market will gap up tomorrow again

8 to 15 ES points

This one will not fill

This is a trend day

Folks, program trading will likely take this to 1235-40 range today. I want you to use extreme caution on the bearish side. I will see you tonight. Good luck.

11:31 NY time

ES hit 1218

ES will spike 10+ more points in the next hour

it is 11:03 ny time
ES is currently at 1208.75

Wednesday, September 24, 2008

Gigantic gap up possible tomorrow

Otherwise, the market will skyrocket from the get go. Conditions are quite suitable based on my EOD system.

PS: Sol was hospitalized in a car accident yesterday. He will be back soon.

Tuesday, September 23, 2008

Gold

Gold is likely headed to 650-700 over intermediate term but if the bill passes, I expect USD to crash so that may destroy the trends and patterns on Gold.

Meanwhile, commercials increased their short position on Gold last week.


GLD 5y weelky testing mid channel


GC continuous contract weekly


GC continuous contract monthly, showing intermediate term target between 650-700


GC adjusted contract weekly


GC adjusted contract monthly

S&P cash index should take out 1250 tomorrow

Masses will be forced to go long over 1300 in a few days



Bottom is in

We tested my target on SPX, I think we are headed higher from here on

Monday, September 22, 2008

Analyze that.....

Analyze this .....

Site traffic spiked last Thursday. I think this works better than VIX lolll




Below is USO weekly, testing the mid channel. It should die right around here.

Are you shook up, are you nervous?

Do I make you nervous?

Don't be because we have little left to go on the downside. After that, it is all blue skies for a while.

Post expiration adjustment followed by a rally

closed UYG @ 20.5

time is out, it should have taken off by now

added UYG @ 20.50

added UYG @ 20.35

stop 20.1

long UYG @ 20.55

What on earth?

SKF and XLF both are down about 3%

They are giving dividend today or this is another side effect of short sale ban?

Sunday, September 21, 2008

Post-expiration adjustment followed by a rally

I expect a sell-off early next week, kind of a shake out for those who will say "oooohhh here we go again" but it shouldn't retrace more than 50% of the recent rally.
Most likely 1200-1195 area will support it.

Last few weeks' action has significant implications in terms of sectoral relative strength sequence and trend structures. These are the early signs that this bear market is terminating here.

However, this doesn't mean we will trend straight up. There will be a test of the lows sometime between next week and xmas. We need to collect more information to time it. The test of the lows should appear differently on different indices. I expect Nasdaq and Nasdaq 100 to take out the lows significantly. Dow Jones should show the best relative strength.

I do not expect a bull market after the test. It will be a trading range for a long time. Higher end of the range is around 1400, lower end is around 1100.

Anyway, to sum it up, we sell off early next week, then rally that should take out 1300. I don't know how far it may go but it shouldn't exceed 1350 from where the test of the lows should commence.

Saturday, September 20, 2008

Head and Shoulders on S&P100 was fulfilled

On September 4 2008, I posted my thoughts on that Head and Shoulders pattern on $OEX

Thursday, September 4, 2008 Time to remember that OEX pattern

This Thursday, S&P100 printed 523 intraday. I think the pattern achieved its target and we put an intermediate term bottom.

Fulfillment of the pattern is not the only reason for an IT bottom, but there are a lot of new developments on the long term charts.

Also please remember that the system I use to spot selling climax bottoms expected a low to be put on Thursday which came true.

I believe this actions has nothing to do with Fed and other news we got along the way. This was obvious on the charts.

Majority of xTrends readers was right

Back in early August, we started the following poll that was open for a week.



On Thursday September 18, 2008, S&P500 printed 1133.5.

I posted a new poll, please vote.----->>

Thursday, September 18, 2008

long SPY 125 September calls @ 0.5

not a big position, just gambling... i do this every opex day instead of going to vegas

also XLF daily showing a breakout

I saw IWM trading up more than 100% in the first 5 minutes

They were all valid trades, blocks. This thing is insane, people should use extreme caution.

Could be different this time

As ES took out yesterdays high at 1240.50 where I got stopped, the market proved that the entire move will not get faded completely. However, it is likely that openning gap will get filled, at least large portion of it.

Shorting ES around 1235 again

We are in unprecedented times:


Friday, August 15, 2008 : Something awfully wrong with Goldman S.

Goldman Sucks plunged 50% in 5 days


Tuesday, July 29, 2008 : Next Lehman

Similarly Merril dropped like a stone









These are the biggest investment banks of this country, these are the founder of American capitalism, they are dying, disappearing one after another.


We know that Plunge Protection Team (PPT) tried unimaginable interventions during the last month or so, they did not work.

McCain Says Cox Should Be Fired As SEC Chief
http://online.wsj.com/article/SB122175692668652881.html

This came out tonight right before Cox rumored to ban the entire short selling. Anyone with a little market knowledge knows that banning short selling is not possible in united states. It is possible to ban short selling on a sector or group of stocks but not entire markets. And I am not even talking about futures, I am talking about plain regular stocks. Short selling ban is not possible because it is part of the system in United States.
Anyway, futures popped on Cox news that came right after McCain's threat. Futures will likely open around 1235, right at the max point for S&P tomorrow. What a coincidence.

PPT is also going to congress to ask for permission to buy toxic junk from those banks with tax payer's money again. It will destroy McCain's last chance. So it won't happen either.

This feels like the final breath before the true disaster. And interestingly, S&P is testing the breakdown on these news. So I start shorting right here at 1235 with a proper stop.

This one, unpredictably, if it is what I suspect it is, can blossom into a true crash... After all, the fundamental characteristic of the market is all about doing the most obvious in the most unobvious way.

Huge range on S&P

High to low on S&P is 75 points. Amazing day, I could have made much more.

Closed ESZ8 and puts at 1171.5

They are talking about a plan by Bazooka, better watch

Bot SPY puts in size

Convinced by Atilla in the chat, once again, this market will take out the lows today.

It will be very interesting day, for those who were not in the chat, he added a large short position around 1176

Lows will not hold folks

Atilla is hammering again

short ESZ8 @ 1176.5

stop 1178.75, its a 100 contract position


i will update xpositions at the end of the day... its a fast market i am trading with a diaper here

Dear God

Dow rallied 160 points in 5 minutes after they touched my stop.Sometimes you just need some luck !!!

long ES 1141

stop 1139

Ok problem fixed

I was saying that I think Atilla's prediction is coming true... market will be down huge to reverse later

we may continue the selling climax that began late yesterday

closed Remaining ESZ8 @ 1185

closed 50% ESZ8 @ 1183

long ESZ8 @ 1170.75

closed remaining SKF @ 137.2

Global intervention took place tonight

Federal Reserve Bank of United States after being unable to do anything at home, central banks around the world joined the forces to stop global financial collapse tonight !

Some Asian indices reversed from the abyss. Hang Seng was down 8% at one point, reversed after the intervention to close the day slightly negative.

Will this help to save the US markets today? Well I have doubts but there is one thing I am sure about. If this doesnt work here today, there will be nothing else left except God's mercy. Let's all start praying now.
------------------------------------------


ECB, Fed, others pump dollars into money markets
Thursday September 18, 6:51 am ET
By Matt Moore, AP Business Writer
ECB, Fed, British, Japanese central banks to pump more dollars into money markets

FRANKFURT, Germany (AP) -- The world's major central banks banded together on Thursday to inject as much as $180 billion into money markets in a bid to stave off the growing global financial crisis.

The European Central Bank said that it had joined with the Federal Reserve, the Bank of Canada, the Bank of England, the Bank of Japan and the Swiss National Bank to pump more short-term dollar liquidity into the financial system.

Credit markets have tightened since Monday after the weekend collapse of investment house Lehman Brothers Holdings Inc., and central banks already provided billions Monday and Tuesday in hopes of turning the tide and to keep fearful banks from hoarding cash.

In a statement, the Fed said it had authorized a $180 billion expansion of swap lines, or reciprocal currency arrangements, with the other central banks, including amounts up to $110 billion by the ECB and up to $27 million by the Swiss National Bank.

The Fed also said new swap facilities had been authorized with the Bank of Japan for as much as $60 billion; $40 billion for the Bank of England and $10 billion for the Bank of Canada.

"These measures, together with other actions taken in the last few days by individual central banks, are designed to improve the liquidity conditions in global financial markets. The central banks continue to work together closely and will take appropriate steps to address the ongoing pressures," the Fed said in a statement on its Web site.

Michael Schubert, analyst with Commerzbank AG, said the move was done in part to help banks that may not have direct access to the Fed.

"Firstly, some euro-area banks have no direct access to the Fed. Secondly, euro-area auctions for (U.S. dollars) provide better timing for euro-area banks," he said.

The ECB, which oversees the 15-nation euro zone, plans to provide as much as $40 billion to cash-starved banks, money that is being provided to it by the Federal Reserve swap line. The one-day operation opened for bids Thursday morning. The bank is also going to increase a 28-day tender operation the to $25 billion and an 84-day tender to $15 billion.

"Overall, the dollar funding operations conducted by the Eurosystem could reach an outstanding amount of $110 billion," the ECB said in a statement.

The Bank of England said it would inject $40 billion as part of the coordinated effort. So far, the London-based bank has provided a total of 25 billion pounds ($44.8 billion) to markets since Monday.

In Tokyo, the Bank of Japan said Thursday it has also concluded a U.S. dollar swap agreement worth $60 billion with the Federal Reserve to supply U.S. dollar funds to market participants in Japan. "The bank will continue to strive to maintain market stability through money market operations," it said in a statement.

In Washington, the Fed has pumped $70 billion into the nation's financial system to help ease credit stresses. In emergency sessions over the weekend, the Fed expanded its loan programs to Wall Street firms, part of an ongoing effort to get credit flowing more freely. On Wednesday, the U.S. Treasury Department said that in an effort to help the Fed deal with unprecedented borrowing needs resulting from the current credit crisis, it will begin auctioning debt for the central bank.

Wednesday, September 17, 2008

Selling climax will intesify from here, bottom will be printed tomorrow.

The climactic selling I expected into the close came timely today. Around 3:15 New York time, Dow Jones Industrial was around 10900. From that point into the close, the market headed for the lows of the session, broke below the lows and closed at the session low. Dow Jones dropped 300 points in 45 minutes. The formation of the selling was not linear, it formed a selling climax pattern on expanding volume. This will continue early tomorrow and we will put a tradable bottom somewhere along the way.

Now it is very important to understand one thing. Started 3:15PM today, this market will fall like a hot stone until the selling climax exhausts. I am giving you a time span for the bottom, I can not tell you what price level it will be because I do not know.

This means, the bottom may be 50 points or 100 points or 200 points lower from todays close.... all depends on the intensity of the selling. If you trade futures or options use extreme caution.

It will be a very interesting session. You will witness abnormal moves during the selling, for example S&P may bounce 15 points in a few minutes to drop 30 points in the next few minutes. There will be a washout, it will leave no unturned stone.

Also I was on a crash alert today, I will continue to be tomorrow.

Great day !

This was my second best day of the year. If I didnt chickened out, it might just have been the best of my life. Thanks to Atilla for great guidance and analysis. Following is one of my accounts I trade options and futures with. It is more than doubled, most came in the last hour selling.

sold 50% SKF @ 139.7

long SKF @ 131.5

Unthinkable can happen into the close

I am not writing this for those who are short the market or out of the market. In the middle of my schedule, I felt obligated for those who are still stuck in this market.

I am sorry to say this but the market may crash towards the end of the day today. Please have stops if you are long or hedge your positions immediately.

I wish every one of you best of luck. I believe there will be much better times soon.

Sold SKF at 133.25

For Atilla

This goes to our A-HA.

Out of woods?

Not even close... I must say sell off didn't even start yet.

Forget about Fed pattern and other small things. The real message is written on the charts. News that are coming out tomorrow is on the charts.

There are a lot of talk about reversal today, especially after AIG news. As you know Fed bought AIG for 85 Billion tonight. That was a minor price compared to FNM/FRE duo which cost 5 Trillion for American people. Poor Lehman couldn't benefit from this wholesale auction fair just because it wasn't politically right to save a Wall Street firm with your money, I am sorry, let me rephrase it; It wouldn't be a populist decision to save a Wall Street firm at the expense of tax payers considering we are in a critical election season. But it is ok to buy an insurer who only insures the derivatives by the same Wall Street firms...

But hey, the list is big. You know it has almost every big bank and institutions along with hundreds of mid and small ones. I mean it even has General Motors. You better grab a nice red Corvette before the company bought by Bazooka, I heard that he might even forgive your car loans after all.

Listen, I hate to waste time on polemics. Aside from the daily bullshit we get on news front, the real story is on the charts. It is not important what you and I think, it is what the market thinks.

As you might have noticed we are seeing increasing daily volume in the last few days, today being the heaviest of all. Why? Here is why. The market, the major indices in the market began sliding through major long term trend lines. In other words, we are breaking down on a large scale, that will have serious consequences over the intermediate term, this is why we are seeing volume expansion on the downside, day after day.



I will start with NazDog. As you know, this is a lagging sector in this bear market and like I said before, we should expect this index to break down the last.
Well it happened on Monday. From a technical stand point, Monday's gap down was quite meaningful because it didn't only mark a breakaway gap on daily charts, but it marked a breakaway gap on weekly charts as the length of the channel implied an intermediate term breakdown.

10 year weekly


Weekly close-up showing weekly breakaway gap


Daily version of breakaway gap, Monday's massive volume is another proof.



Do you remember what I said last week, when we seemed to be headed higher?

Thursday, September 11, 2008
This is how I expect it.


Wasn't the action on Monday exactly how I said would happen ?




If there won't be an extraordinary intervention, TLT will test that channel top line which will correspond to a market top tomorrow. That time, as the formation suggests TLT will head to new all time highs, and S&P will sell off in tandem.



[More charts to be posted here]

Tuesday, September 16, 2008

Fed pattern again?

I usually don't trade after Fed decisions so I was out this afternoon.

Atilla has more inside on this however as far as I remember, the day followed by a Fed day tends to be a reversal day.

Also the market was broken, there can not be any upside over the ST. The way today looks on the chats, tells me Fed move was a fake. We should gap down below TL tomorrow.

My only position is SKF from 124.5 That was the breakout test I showed earlier. I believe SKF will open above 125 tomorrow.

Fear of getting squeezed

Fear of getting squeezed is in the air. I think we will test pre-market lows on ES after the Fed.

shorted at 1188

stop 1192.5

I will short at 1191.5 again

if it gets there

Ohh God

Watch out folks, I covered, now it may really crash

covered ESZ8 @ 1188.5

long SKF @ 124.5

short ESZ8 @ 1203.5

this one should produce 10 or more

short ESZ8 @ 1190

stop 1193

closed ESZ8 @ 1176.5

I am scared too now. I think futures will test or slightly undercut premarket lows. I will try there.

added long ESZ8 @ 1170

added long ESZ8 @ 1172

long ESZ8 @ 1174.5

closed all ESZ7 @ 1186.75

I wanna sleep good

Answering some e-mails

I got a lot of emails today asking for access to the blog. I don't think anyone with a regular internet access should have any difficulty seeing this blog. It doesn't require you to log in or anything, it is a regular web site everybody can see.

If you were concerned about that brief interruption yesterday, that was my mistake. I accidentally disabled entire blog instead of only comments.

So the blog is open to everybody. However , in order to post your comments, I believe you must have a google account which is also free. Open a google account and post your comments.

Also, got some emails about RSS feed.

RSS feed is available for both posts and comments. It is on the side bar as shown below.



Direct link to RSS for posts is:

http://xtrends.blogspot.com/feeds/posts/default


Direct link to RSS for comments :

http://xtrends.blogspot.com/feeds/comments/default

You can also create yahoo alerts using the link at the top of this page. That is, "Create an alert" link.
In this case, you will receive posts and comments in your yahoo email or messenger, whichever you select from yahoo setup.
To use this feature, you must have a yahoo account. Once you log in to your yahoo account, come to this page and click on "Create an alert" link. It will direct you to your yahoo alerts page. You will be required to enter the RSS address shown above.

Monday, September 15, 2008

doubled ESZ8 long @ 1176.5

Atilla thinks FED will probably cut the rates tomorrow

My best day of the year

This goes to xTrends members and all readers:

I turned on the comments

Sorry, I had to turn off the comments this afternoon.
I couldnt keep up with you while trading, it was a very chaotic session. Chatting here while being very busy caused misunderstandings and extra work load.

Comment function is back.

added long ESZ8 @ 1198

long ESZ8 @ 1200

covered the rest of ES at 1202

sold SKF @ 131.3

Covered 50% ES position at 1204

sold SPY 120 puts btw 2 - 2.1

added short ESZ8 @ 1212

added ESZ8 short @ 1215

added ESZ8 short @ 1222

added short ESZ8 @ 1218

Selling climax will start towards the close

Massive blocks are coming thru the tape... People should understand one thing.

1- There will not be a bottom while everybody expects Fed to help the stock market.
2- There will not be a bottom while everybody thinks how they are right by taking contrary position based on Equity put call ratio

There is an increasing bullishness among amateurs , under such circumstances that century-old financial titans of the nation being destroyed by the credit and mortgage one after another.

This is the final leg. It has just started yet. This will end with a massive selling climax on extreme bearishness that people including YOU will not be able to DARE to take positions based on how many suckers you think hold puts and such.

My advice for every one of you: BE CAREFUL.

I had to disable comment function

Please be advised that commenting function was disabled. I believe you will understand the stress and work load I have during the day.

Thank you.

added SPY 120 puts @ 0.83

Added ESZ8 short @ 1232

Sunday, September 14, 2008

Time has come?

Today September 14, 2008, Sunday. It is 4:11 PM, New York time.

Paul Tudor Jones was 33 when he caught the crash of 87, I am 32 and positioned for the event with more capital as of Friday's close. I have been waiting for this moment for over a year.

My timing was based on patterns, trend lines and order of events. Like I said in my previous posts, the long term breakdown of Dow Industrial would eventually blossom into a massive sell off that will be triggered by the right event at the right time. That setup was giving me a time span for the event, not the time of the event.
Therefore, in order to fine-tune the timing, you should consider possible triggers along with shorter term patterns.


Dow life-time monthly


close-up


Banks monthly


Oex daily


Nasdaq composite daily




Thursday, September 11, 2008

This is how I expect it.

First chart , TLT 1 year daily shows that it is bumping against the top line. You know the motto: "There is a reason we are here again"

One morning , TLT will gap above the trend line (market will gap down), this can happen tomorrow as the conditions dont get any better than this. This gap will be a breakaway gap since it jumps over an important top line. This means the gap will not fill on TLT. (Market will not probably fill its gap too)




Second chart shows a simple flag resolution. If you dont know what this means , ask Sol tomorrow since these charts belong to him.

Another gap down tomorrow?

I posted the following in somewhere else. This is what I think about today's.

Late day action was bearish. In my opinion, these are discrete buying climaxes building for a cause to sell off harder ... Stick with the overall waterfall pattern on dailies. Remember one had happened yesterday afternoon too. These are emotional and deceiving. Sucks in an army of bulls in it to bury them later. I know it is very hard to stay short in these especially if your entry point is near or below the market but that is why it is happening at this juncture, where it is eating through July lows. Tomorrow will be Bear's turn and it may come stronger. (for Lower lows)

I think many though there wont be any bad news in near term, at least worse than LEH, just like Bear Stearns bottom.
Well, this time is different imo. I think it will not take more than a few hours tonight to realize that the list is not so small to get rid of anymore. The market will not repeat the same pattern. Recognition of the others should take hours this time.

Here is the other soon-to-disappear candidates from XBD and BKX...

Merill
Morgan S
Washington M
Fifth Third Bancorp
Keycorp
Marshal and IIsley
Regions Financial
Wachovia

These are the index components, there are 10s of other large banks and financials not included in BKX and XBD that are in the same or worse situation.

Tomorrows gap down will not fill in my opinion. Folks should get ready for the bumpier ride ahead.

I think we will finally fill that gap at 1035 by opex. I have been calling this for 2 years

long XLF 20 puts @ btw 0.5 - 0.52

bot IWM 70 puts btw 0.79-0.81

bot SPY 120 puts @ 0.83

added short ESU8 @ 1235

added short ESU8 @ 1231

time to take out morning lows into the close

Covered half ESU8 @ 1215

Sold XLF 20 puts btw 0.75-0.80

Delta-hedge meltdown under SPX=1200?

This is a short term possibility that the market may slide big during this quad-expiration.

SPX=1200 level has historically been very important in the last decade. There are currently large put blocks around that level...

If we break below 1200, it may trigger a delta-hedge meltdown, in other words, those who sold the puts to the buyers will start hedging their portfolios by shorting the underlying security which puts extra pressure on the market and usually this continues till the end of the option expiration. After the expiration, since the extra pressure is not there, the market attempts to rally, this forces those who shorted the market for hedging to cover. We get a post-expiration reversal.

Various sentiment readings are very bearish (bullish for the market) and sentiment always works BUT you must be extremely careful in this stage. Considering the current volatility, the market may drop 100-150 points in 2 days instead of 20 usual points before the system is clogged up due to sentiment.

On the following chart, it is clear that SPX has just broke down. After such a breakdown, it usually takes more selling before any sort of rally materializes.


Wednesday, September 10, 2008

Dow 9K in 6 months?

I will translate the following chart's speech to English for you;

1- For the last 3 months, the market has been correcting its oversold condition by consolidating near the lows.

2- This consolidation is caped by the mid line of the channel created by the crash 1987 implying that the move may want to resemble the originating event.

3- Since the move is now defined within the lower half of the channel, the next important bottom should be around 9000 level (rising channel bottom line)

4- During the last 3 months, by fixing oversold condition below the mid channel, the market built a cause to move further down. This move will commence by a triggering event. This can be a quad-expiration, coming warnings (earnings) season or a Fed announcement. Any market moving event can do it easily. The more we consolidate, the more we will compact energy for the next downleg.

I will talk about Shanghai index tomorrow. I have a strong feeling that the triggering event will come from China.
It is somewhat obvious to me that SSEC will go through a severe selling climax or a true crash. A strong selling in China may trigger a global panic which may get quite nasty given the current long term oversold conditions on major indices (DJI and SPX monthly RSI is at 25)

The biggest drops in a bear market usually occur under oversold conditions. Sizable drops in a bull market come from overbought levels.



Market will likely take out last week's low tomorrow

I will post a few charts and my comments tonight.

And of course the impending greatest investment opportunity of this age. China.

I think Shanghai index is entering in a massive selling climax. I stress the adjective "massive" because there is no shorting in China. Selling should easily feed on itself without any resistance until it dries.

Sun rises from East. Japs love this line but it is not the Japan this time.

We may get sizable cascade gap downs due to Asian markets going forward. China opportunity will create new investment titans in this decade.

What market thinks about Lehman

Three words:

INTO THE ABYSS


added XLF 20 puts @ 0.44 / 45

added XLF 20 puts @ 0.45 / 46

added short ESU8 @ 1234

closed YIZ8 @ 10.98

added XLF 20 puts @ 0.47 - 48

bought XLF 20 puts btw 0.51 - 0.54

short ES @ 1229.5

added FXB @ 175.8

long mini silver /YIZ8 @ 11.05

added long FXB @ 176.35

Sold longs except british pound

FCX at 68.9

DIG at 66.5

This is the weirdest market I have ever seen ...

I look over the things tonight, I have to tell you I will not rule out a bottom here. A lot of conflicting signals in place however, trend structures and sectoral characteristics still look bullish.

Now I think the course to follow from now on is to follow the momentum with considerations. What I mean by considerations are the price structure, trend lines, breath, internals , volatility and stuff we use to trade.

In other words, one should pick a point to short the market. That point should be some sort of a pivot with invalidating factors like trend lines or patterns. When the factors are invalidated, trade must be exited, otherwise the position is maintained with a trailing stop. This method can save you from whipsaws like we saw this week.

The opposite can be done for the bull case but I assume it wont work for too long. Bull setups didn't last too long so far.


Anyway remember these head and shoulder patterns? One is on normalized SPX , the other is on raw OEX. I think these may turn out to be powerful setups after all.






Good news for Bulls is that retail traders began to lean hard towards the bearish side finally. However this can only give a short term relief if any.


Bad news for Bulls is that 10 DMA of Equity PC and CBOE PC are turning down from approximately where previous intermediate term tops occurred.

Tuesday, September 9, 2008

This market reminds me 2001

It is taking everything with it because I had to sell everything I bought yesterday. Is this the deception I was expecting? Maybe but you must play the game as you see it not how you think it. Looks like, once again, the market seems headed to new lows. Every time it did this, we had a rally , I started believing that one of these attempts will finally be successful with many caught on the wrong side.

I am confused and doubtful. I will have to see a follow through tomorrow to be convinced. What I mean is not a gap down but a gap up that should not hold despite all the reasons we see so far. Sentiment, divergences and other stuff.....

I was death wrong about Gold and commodity strength. I was wrong about the market. I will reposition myself tomorrow accordingly, perhaps do nothing. All depends.

Added FCX and DIG at 66.5 and 65.3

I am thinking that LEH and FNM/FRE couple created some sort of fear that triggered this sell off. These were the most widely-known problematic issues, once their pain is calmed (by death) I think the market will begin next leg up.

Monday, September 8, 2008

Gold / Silver will be up big next few days

I am bullish on British Pound, Australian Dollar, Gold and Silver. Also Crude Oil and Nat Gas should have a ST rally from here.

I am neither bullish nor bearish on Financials and Real Estate. Today's volume will kill any rally or sell off attempt over the ST. It should be digested first.

Likewise SPX and NDX will probably stay range bound. Dips should be bought .... After this consolidation, the market is going higher. As a proof, you will see an increasing bearishness while the market is in a range.

Determine the range and trade it for a few days. I think today's low on SPX will not be seen but there will be higher low test attempts. NDX may undercut but marginally.

Meanwhile, ST money will be made on commodities.

covered ESU8 @ 1267

We are going higher as the boss says.

Retail investors fighting the trend...

I see that xTrends went long right at the bottom again... where I covered and went long as well.

You will not see that number in coming weeks again.

EPC is higher at the close, retails are fighting the trend as we go higher... just like I said this weekend.

Do not short the market now, there will be time to do it again but the game plan has changed for now. We will have time and opportunity to short this market, bear market is not over but timing is very important. Do not fight it now.

Trends do not turn on a dime.

You witnessed it today, S&P filled the entire gap let us get out of the shorts and go long near Friday's close. When we see a change in trend, odds extremely high that we will recognize it again. We will have plenty of time to short this when shorting works. Don't waste your dimes now.

shorted ESU8 @ 1267.25

Will be holding this into tomorrow afternoon as a sort of hedge against my current long positions.

sold XLF calls at 0.52 and 0.51

selling other half at 1266

selling 50% ESU8 at 1265

Daily stop for all is ESU8=1248.25

For those who followed my trades, I placed a stop at ES 1248.25. If hit, I am automatically out of all long positions.

long DIG @ 71.25

added long ESU8 @ 1255.5

added XLF 23 calls @ .31 / .32

long ESU8 @ 1248.75

long XLF 23 calls @ .43 / .44

closed ESU8 @ 1270

long FXB btw 176.4 - 176.50

long FCX btw 72.5 - 73

long ESU8 @ 1266.25

covered ESU8 @ 1268

will cover at 1269.5 - 1270

placed the orders... sleepy

Friday, September 5, 2008

Market knew this was coming...

News came in after hours, Fed finally decided to waste FNM and FRE common.

Remember I was puzzled with the weird strength in financials, banks, brokers, real estate, home builders and retails. These are the leading sectors of this bear market and they did not lead this sell off.

These sectors have one thing in common. They are the most affected sectors from this credit / mortgage mess. All downlegs of this bear market should be led by these sectors but this wasn't. Matter of fact, the most lagging sectors of this bear market led this sell off. That is, Nasdaq and commodity related sectors.

Now I know why "Plungers" held strong. Someone knew this was coming.




There will be a rally, fast and strong. We will see how it will end but it will eventually end in a few weeks. I am no longer bearish over ST and IT. I stay LT bearish. I am mostly short from 1290-1300 area, I will close them early next week.

Selling ESU8 at 1245 and 1246

have a nice weekend

added ESU8 long @ 1224

doubled the position

Quick quiz for the readers.

Is the following monthly chart of TLT bullish or bearish for US stocks?

Thursday, September 4, 2008

Time to remember that OEX pattern

This is not a basic stuff but I had explained it in the past. We will at least see OEX 525 in 2-3 weeks. Today's move was a downside trust that came on unadulterated institutional selling. Sellers are not uncle Bob and cousin Suzie. Since the end of the holiday, institutional selling has been picking up gradually. Their prints are all over the tape.

This is a start to a move that shall only end with a selling climax.... meaning selling will bring more selling until demand-supply equilibrium is achieved. You will see consecutive gap downs on major indices proving that the move has just been initiated and the market is running away fast , trapping all the bag holders that will capitulate at the end. It is a nonsense to fight it but short the rallies. I have been telling this to you since 1300+ and I will repeat it until I see a change. Market will tell us when things change, there will be enough time to convert. There is absolutely nothing in horizon to suggest that this will stop soon. This is the time to be protective.





The same pattern is more visible on normalized OEX chart




long ESU8 @ 1253

day trade

Wednesday, September 3, 2008

Back to the basics...

I have two simple daily charts...
One is Wilshire 5K which is considered as a broad market index and S&P400 Midcap index which I have been talking about in xSetups.

Any trained eye will come to the same conclusion as I did. They are about to breakdown big time.

Over the years, it has been my experience that some of the chart patterns like these help you to stay in the right course despite all the daily noise. There may be a short term bounce again, but it will too fade in the big picture.

I am short, as large as these patterns want me. I am patient. I will be there when the day arrives.