Thursday, October 9, 2008

4-sigma move is underway

I believe we are about to see the sharpest sell off of the bear market in the next two hours. There is a possibility S&P may undercut 900 intraday.

If it happens, most of you will remember this for the rest of your lifes. I definitely will. I think this is the time span we come across in books and memories of those who capitalized on such moves. Livermore, Tudor, Soros . I am not betting on it, because I placed my bets long ago...

I placed orders to cover under ES 900, every 10 points in case it happens. I may change them based on new developments but if the market starts to move faster than my typing skills allow me to enter orders, you know that I am there covering between 850-900. Otherwise, I will post my exits as usual.

198 comments by xTrenders :

anabolic said...

what's a 4 sigma move?

Ofer said...

a bit confused now.. so support around 940 is now negated because of possible panic exit run ?

Ofer said...

anabolic : a 4-sigma move means the market will make a move that is 4 times that market's average one-day change.

buylo said...

Atila, we are at 975 SPX are you still shorting or have you made all your moves for today? regards john

anabolic said...

thanks ofer.

AJ said...

4 sigma is like a 1 in 99.5% move i believe

once in 10 years I guess is another way

Atilla M. Demiray said...

i stay short from 1040

angus said...

another way to look at it is set the bolinger band in the daily chart at 4 standard deviations about the 20EMA and see how big a possible move he's talking about, it's huge!!!

thedocument said...

sahm: delete enough of the older posts so that the list does not fill the window.

buylo said...

Thanks Atila, I read yesterday you were short since 1040, and I went short with a little bit below that, i guess my question is wwould you have the confidence to go short more at this point? Just found your blog a few days ago, so I did not have time to get comfortable with your methods. thanks

angus said...

that failure at 986 lower high (Atilla cudos again!!!) is key, nothing can save this market

tamas said...

Atilla, you think the market will dive on a light volume, jewish holiday?

sahmtrader said...

Thanks, thedocument.

Odin said...

hey guys look at what C is doing. It seems to be a leader to the downside.

Really Lost said...

Dude, you are scaring me.

If traffic that heavy, maybe I should put in buy orders now between 900 and 950

Atilla M. Demiray said...

next local maxima 977-78

Kenneth said...

I worked for all the usual suspects on the Street and Atila is among a small group of fellows who truly breath the market. Count my $$$$$$ for the fund.

Will you go long immediately after all the shorts are gone. or too early to tell?

Atilla M. Demiray said...

Scale in. That is what I will do to go long

when vix is over 55-60, you can not pinpoint the bottom. I will scale in.

angus said...

Atilla, this looks like a trend down day (duhh:) with the high having being made the first 15min of the session. Do you think it might go down all the way through the last minutes of the session?

Tony said...

Attila: The post mentions the next 2 hours.

Understanding that a lot can happen during this timeframe, what are the contingency scenaria for the time frame?

I.e. Wait for the number (value) target even if it doesn't happen within the timeframe?

Wait for the 2 hours to burn and consider covering at whatever the price may be them?

Cover at the first (second, third) really big [up/down?] volume spike?

Which is the 'main' time chart you're watching for volume spikes? (1, 5 15, 30, 60 min?). Sure all, but what 'starts' and which 'confirms' the 'target'?

Ofer said...

the calm before the storm...

Atilla M. Demiray said...

I think the pattern will reverse today

we will close with a positive hourly momentum

Phillip said...

Huge action in the 45 front month vix puts. This is a tell. If you follow Atilla's advice, you can wait another 1.5 hours and probably catch a great price. Could be a huge gainer. Regards.

Lawrence Chiu said...

What the hell was that spike all about?

TIME = 1:12 PM Eastern

Atilla M. Demiray said...

noise

deebo said...

shake out shorts before drop...

Ofer said...

984 , another great opportunity to load up

PCP said...

Lot of equity and index puts being bought. We might get the flush below 930 but I am doubtful of the 4-sigma event. Everyone can't make money at the same time ;-)

Lawrence Chiu said...

Is it possible that the people buying puts are "long" the stock, as protection against further losses?

As opposed to people who are betting on the downside, I mean.

angus said...

60EMA has kept a lid on ES 5min and the downtrend alive

today again people loaded longs in the beginning of the day, as we approach the last hour, they'll get anxious as we're making lower highs

kacey said...

anyone remember 8/16/07 ? Similar intraday.
Attila, kudos to you

tamas said...

Well, it's almost 2:00. I'm gonna go get some popcorn.

dhw said...

what was that?

massive volume too

Atilla M. Demiray said...

they are gunning the bears, happens right before they pull the plug

Lawrence Chiu said...

Treasury Secretary Paulson just got on the horn and said they will begin buying equity in banks.

johnboy said...

talk about trying to shake out the weak hands!

they are some vicous litte upward spikes!

what a ride!

sahmtrader said...

How timely for them to say that now, and to be in a positon to pick them all up for cheap. What a coincidence!

Atilla M. Demiray said...

motherfu..s cant stay without intervening

dhw said...

time to cover then?

thedocument said...

lawrence: we knew that already. if that's why we popped, it's gonna die fast.

Atilla, you have nerves of steel. I've been poppin' pills all day (jk).

Atilla M. Demiray said...

well it is timely within the grand picture...

that was the last thing they can ever fucking fantasy and they did it ,

NOW if the market sells this one too, it is not gonna be a 4-sigma move but 6-sigma

I want to watch their fucking face when it happens

angus said...

knee jerk reaction, food for the shorts

Lawrence Chiu said...

It takes minutes to go down and seconds to spike up. Is this good or bad?

PCP said...

Paulson is itching to get on a lot of people's shit list :-)

He must have one hell of an exit strategy.

johnboy said...

F*^ck it, I'm cancelling my stop orders.

Balls out!

If I get burned I can just live the rest of my life as a woman. They have better orgasms anyway, right...

Ofer said...

the wicks on the candles of the 15min still show we go down.. another wick as of now. This is one mother of a resistance at 990.

lol Johnny!

thedocument said...

The NY Times broke the story about the Treasury buying equity last night. Don't know why the market would react when King Henry gets his mug on TV and says the same thing.

Lawrence Chiu said...

http://www.cnbc.com/id/27101764

That's the link on the government plan to buy preferred shares.

angus said...

To johboy lol, same here

PCP said...

Lol at Jonhboy.

Guys, the market has had enough interventions already. Look how they responded to the last few. This is the admission from high office that we are in trouble. The more they yap, the worse it appears. Just chill out and put in your stops/order ahead of time.

Lawrence Chiu said...

To: thedocument

Yes, that's true. It is not a new development, but he did say it on TV just now.

Maybe traders don't read NY Times?

apconcen said...

johnboy,

friday is a work day in Australia :)

up from midnight..not missing the last 2 hrs(whatever happens) for the world

Ofer said...

I assume you all see the triangle we're forming..

PCP said...

If government investing in equities was great, they would re-open the Russian markets right away. The ruskies are going to deliver cash to banks any day now :-)

No smart investor wants to be in the same boat as the stupid government investors and be second to them. that's like sharing a lifeboat with an elephant.

ARAK said...

Is 870 on the /ES some sort of circuit breaker level? By broker (TOS) does not allow any entries below 870 saying the order price is outside the limits.

kacey said...

guys, please keep your comments related to the market. No time to joke around. This is a fast market.

thedocument said...

Lawrence: I traded for an IB. Traders there have all kinds of scripts automatically reading the news and executing trades based on it. This morning's pop already discounted that news, IMO.

If Atilla turns out to be right about today, it's not Paulson's face I want to see but rather those of my former co-workers who believe stock movements are normally distributed. They will get fried and served up hibachi style.

Atilla M. Demiray said...

i think the market doesnt give a flying f%^& about henry or his PPT team.... even on a jew holiday....

ppt is broke, short any little pop, we are entering in the sweet spot

tons of suckers bought around SPX 1000
i think that was the important top not bottom.

johnboy said...

Apconcen,

Yes we work on fridays. Even mondays too these days since the government abolished the four day weekend law. ;-)

The boss is away tomorrow, so f*^k it times 2

The boss is my father, so f*^k it times three.

What's a little sleep deprivation...

ofer... I see the triangle too... even on my munted marketmaker CFD charts.

sahmtrader said...

Right now I'm just concentrating on trying to breathe every now and then.

Any pro advice Atilla, on what midset to retain on such days?

Thanks.

apconcen said...

johnboy,

no argument from me :)

Im on the GoldCoast so its 3:39am here.

Goodluck

Odin said...

Is it just me seeing SPX being squeezed between a rising trendline and declining moving averages on the 5min chart? What do you all make of that?

Vineet said...

Hi Atilla,
Im trading SDS, got in at 93. Put a limit sell order at 100. Its currently at 98.3 Do you think it might go higher than that if we go down to 940?

Thanks for all your advise and help

angus said...

I like watching AAPL, it's a tell b/c it attracts lots of susckers who think how can it be so cheap and not buy it .. it now tells we're going down

looking to buy 80-100 call spreads around price $75 if Atilla's wish comes true:)

Greg said...

4-sigma.. wow sounds scary! wouldnt want to be long here!

johnboy said...

To the boffins out there: I roughly calculated at at Dow 8335 the market would be closed down. Is that about right?

KB said...

Opinions please.

Do you view this crisis as worse than everything leading up to AND the 9/11 catastrophe ?

I ask since current market patterns and post 9/11 patterns are virtual twins. Additionally, the FED intevened many times over the next 4 days while the market ignored / sold off hard. Today marks the 4th day after the FED Bailout and numerous interventions (Fiscal and monetary). Day 4 for 9/11 was a down day which stated coincidentally? at todays opening....the market sank to 944 and closed at 865....the next day was a Friday (coincidentally? tommorrow is as well) and the market was up 4%. So, the only question in my mind is NOW a bigger deal than was 9/11 event? It certainly has as much or even greater press and the VIX says its a much more significant event than was 9/11.

angus said...

I think one little pop to complete the triangle and then drop hard

sasgm7@gmail.com said...

Hey, hey H..Why they don't just drop all the market today and move all the money to you. At least they would not blame jews for it since it jew holliday. Right Atilla

KB said...

sorry...the market on day 4 (9/21/01) opened at 985, had lows of 944 and closed at 965 (not 865 as posted).

Atilla M. Demiray said...

SDS goin to 107-108 on the charts

johnboy said...

That triangle that seems to be forming on the 1min chart has me thinking...

Usually triangles are terminal waves.... and usually they are fairly easy to project price targets. So far this one is only projecting down to about 950 by my read.

But the million dollar question is whether or not this market is going to behave normally this time... My guts say no.

Karan said...

any second thoughts that the bottom is in ?

Atilla M. Demiray said...

KB said...

sorry...the market on day 4 (9/21/01) opened at 985, had lows of 944 and closed at 965 (not 865 as posted).

Thursday, October 9, 2008 1:59:00 PM EDT
-----------------

I think this is a complete different situation, I believe Dow will undercut 9K at least intraday

maybe not today but it will

Lawrence Chiu said...

Will we sell off in the last half hour like yesterday?

johnboy said...

I have second thoughts all the time, my man... and thirds and fourths...

If I believed them all I'd be broke years ago...

But I'll be watching the action closely at 950.

But I've got NOTHING on Atilla's skills, so most of my money will be going with his calls.

Atilla M. Demiray said...

That is what puzzles me

apconcen said...

Pisani confirming that folks long the market except financials...he hasnt seen that in a while....hmmmmm

Atilla M. Demiray said...

folks? floor traders?

they are the biggest suckers

we must be in sweet spot on the downside

angus said...

How can the bottom be in? forget even the well defined downtrend, there is no buying interest at the moment, I mean none

The only dude buying is Henry buying the banks:)

PCP said...

Folks long the market?

That must be why we are having record withdrawals from mutual funds and 401K and MMs.

angus said...

The little uptrend line in 5min is about to give in, we should be in good shape after it breaks

Atilla M. Demiray said...

he cant even lift GS, he is broke, bluffing, short any little pop

that is what will save america, short covering

someone oughtta explain this to those imbeciles

johnboy said...

Triangles aren't ALWAYS signalling a terminal move, but history says be careful interpreting it otherwise

Similarly, the usual way to project targets usually indicate the minimum movement.

But it's not necessarily the time to be betting on low probability behaviour... or is it????

Who needs to rent thrillers from the video store??? Shit, this is real life!!! I love the drama!

Greg said...

roll boy, roll over!

johnboy said...

In may not even be a triangle... it may be a series of one-two's...

In that case I'd be expecting one hell of a drop.

johnboy said...

thaaaar she blows!!!

Now, let's see how much grease is on it's shoes...

Ofer said...

breaking now

apconcen said...

Atila,

im sure he meant floor traders

angus said...

You cannot tell a terminal move from the 1min and 5min charts, you got to look at daily and 60mins

these are telling the market is oversold and a sharp move down would lead to a V-shaped bottom, huge move up

Odin said...

Could someone please help me with this. If the government buy pref shares in the banks wouldn't that wipe out the common shares?

johnboy said...

now the parting kiss to the underside of the line, perhaps...

Lawrence Chiu said...

Damn 960

johnboy said...

point taken, angus.

Lawrence Chiu said...

to: odin

Not necessary, just a big dilution. For example, FRE and FNM are still trading. Not wiped out. The government owns 90%, shareholders get 10%.

apconcen said...

were are trying to re=enter the channel on the 1 hour from 1st week of October....we are right at the top of the channel. The bottom of that channel is about 8400 DOW

AJ said...

bulls are holding hope for 970.5 on es

Lawrence Chiu said...

Dear Mr. Market,

Please die already. Atilla needs to get paid so we can all go long.

angus said...

I think if it breaks the lows, it will sell till the last 15 mins

Greg said...

yup! dow 8k and sNp triple digits should provide for some nice conversation around the breakfast tables of the country!

Atilla M. Demiray said...

god, you guys worry too much, this is a waterfall...

have you seen a rafting person escaping from a waterfall after getting caught?

even 1 trillion will not revert this sucker until i cover

ko said...

are you guys setting limit buy orders so they will clip as it tanks???

Or you going to visually call the bottom and try to rush in and buy when it turn back up.

Ideas?

Odin said...

Thanks Lawrence, I meant to say dilution, price decline, not wipe out. Maybe that would explain the hesitance to buy financials then. Maybe that's why the market has a hard time going on that news. SP is 15% financials.

angus said...

I will scale in as Atilla said, for swing trades scaling in is always recommended, for day trades is another story

johnboy said...

apconcen... I agree about the hourly channel...

And it looks like it lost the fight.

apconcen said...

buy limits for me now at DOW 8499 plus a few on the DAX[germany] appropriate levels :) moves like 1.25x the nasdaq so when we roar UP....all should be good

Greg said...

god this is so freaking easy its unbelievable! thanks atilla!

dhw said...

gre,

I think you just jinxed it..

crash canceled.. :-)

anabolic said...

from forum posts, there are many traderssuckers trying to pick a bottom here!! lol

thedocument said...

Greg: take that back. You might jinx us! :-)

Dan said...

Atilla you're a smart trader, but you're missing something. If you don't understand why we're seeing this move let me know.

Posted this last week on your board...

" Dan said...
Hmmm. Going to go back over my charts here. Only saw 30 S&P as a likely possibility and 80 as a max before finding some support.

However, the style in which the market moved up provides a very weak base for ANY support. It's a rocket-sled down but we're going to have a pause and THEN the crash. Could be wrong though.

Regardless, great job Atilla.

Saturday, October 4, 2008 1:29:00 PM EDT
"

I'll be happy to explain, but only to you.

Lawrence Chiu said...

Still need to take out the low today.

Karan said...

bought 2000 QLD .. looks like bottom !!!

angus said...

This is very weak pattern approaching the last hour, longs are now very anxious about being left behind in a sharp down move, I think last hour will be the waterfall Atilla is talking about

Lawrence Chiu said...

QQQQ still positive. Can we bottom without Nasdaq bottoming?

Ofer said...

where's your stop, Karan?

alan b said...

you mind if I borrow those QLD shares from you, Ill gie em back by the end of next week!

GWBush said...

Atilla, is there enough time for a crash and recovery in the next 90 minutes of trading?

Atilla M. Demiray said...

I dont know looks like we may run out of time, if so, then we gap down tomorrow

Greg said...

sorry fellas.. but we all know its inevitable! this is like putting the breaks of a dodge neon on a semi-truck and expecting it to still stop! :D

Atilla M. Demiray said...

Dan said...

Atilla you're a smart trader, but you're missing something. If you don't understand why we're seeing this move let me know.

Posted this last week on your board...

" Dan said...
Hmmm. Going to go back over my charts here. Only saw 30 S&P as a likely possibility and 80 as a max before finding some support.

However, the style in which the market moved up provides a very weak base for ANY support. It's a rocket-sled down but we're going to have a pause and THEN the crash. Could be wrong though.

Regardless, great job Atilla.

Saturday, October 4, 2008 1:29:00 PM EDT
"

I'll be happy to explain, but only to you.

Thursday, October 9, 2008 2:27:00 PM EDT
-----------------

dan great job

angus said...

Atilla what if we sell hard and then pop at the last 15mins would this be enough to indicate a bottom?

apconcen said...

gwbush,

In this market all we need is 30mins max for that to happen :)

AJ said...

9000 dow coming....

Karan said...

33.5 STOP ON QLD !!!

ko said...

Tomorrow we find out who was doing the Trillions of dollars of CDS trading with LEH.

Lawrence Chiu said...

Dan wrote: "Only saw 30 S&P as a likely possibility and 80 as a max before finding some support."

What does this mean? Thank you.

Tony said...

Feels like everyone expecting the bounce back rally.

Some are front running it (hence support).

If it gets any legs (as in break to higher highs) it might trigger the 'sidelines money' into more buying...

Atilla M. Demiray said...

angus said...

Atilla what if we sell hard and then pop at the last 15mins would this be enough to indicate a bottom?

Thursday, October 9, 2008 2:39:00 PM EDT

--------------

i dunno, predicting is a fun part of trading , it is not the business part.

I got my direction from the market long time ago, i am watching it to get new instructions to exit

the rest is mostly BS

jeff said...

support holding very well, expect big eod rally, closing shorts

johnboy said...

Interesting little bounce here. Wonder if it will make it up to the underside of the 1 min trendline for another kiss goodbye.

I chanced it and closed a few pips from the recent bottom. Am drooling for another short entry soon...

ko said...

I wonder if I should hold front month SPY 95 puts overnight, or close for the day around here and try again in the am tomorrow. Thoughts?

Atilla M. Demiray said...

always take some profits from option trades when you make a home run

johnboy said...

Phew... got back in... in the nick of time... only made a few extra pips... that will teach me for playing with my trigger finger when I get bored.

alan b said...

new lows, look out below!

Vineet said...

here we go!!!! crash baby crash!!

angus said...

There goes the low in the S&P and Russell

this is gonna be fun

dhw said...

when is tech going to join to decline. It has held up very well.

qld is still positive even

Lawrence Chiu said...

SPY Broke the lows
Nasdaq is now negative.
QQQQ positive but barely so.

Ofer said...

this thing is selling off but still not panicky, very orderly sell off... The edge of the abyss is still ahead...

Greg said...

die mo fo die!

angus said...

We need NDX to break down to have an all-out slump

Greg said...

lol nobody even discusses upside any longer! so much momentum downhill it's scary!

angus said...

If they sell hard, I'll buy at the last 15mins, but only options (call spreads on techs, etc. as Atilla indicated earlier) have em set up already

Lawrence Chiu said...

You guys are jumping the gun. Remember, we don't cover until Atilla covers.

Or else.

:)

johnboy said...

Holy heck!!!!

I am pleased to inform you that both my testicles are doing well right now.

Ofer said...

CNBC getting bearish.. Bottom is so near.. Smell the fear!

PCP said...

Still looks orderly, but getting there

angus said...

Pisani now says S&P cheap at 800 (based on PEs) lol

Lawrence Chiu said...

ES is in Atilla's target. Remember, he will post when he covers in real time.

Dan said...

DJI 8950 bottom/SPX 950 bottom
Watching for it in a bit here.

dhw said...

wow, more bottom pickers

angus said...

Last 15mins, may be wrong but I'll wait

I was told so by an old trader, don't know why it works, but when the high is made during the first 20-30 mins in a trend down day, the low tends to be made in an equal interval before the close

My guess is because people who load up early get scared and capitulate at the end

Atilla M. Demiray said...

any little pop... it will cut through 950 like a hot knife through cotton candy

angus said...

1296 previous 52-week low in NDX, must take it out

Dan said...

I agree Atilla it's a VERY weak support level, but it's legit.

it's a another one we need to break through. After that we're in deep shit.

alan b said...

vix just hit all time high

angus said...

VIX breaking 60!!!

apconcen said...

shit they look really scared on CNBC...Maria deer in the lights look...Dillion just stuttered for 3 secs

Greg said...

thx again atilla....u make this so easy.

dhw said...

smh still postive.. where's the panic?

PCap said...

always take some profits from option trades when you make a home run
--------------------------------
Very good advice

Ofer said...

starting to scale in!!

Atilla M. Demiray said...

folks 900 will not hold,
ES is still at 940

there has been a great fear of getting squeezed among bears, i dont think there is a short interest left to save the market now

this are the moments you will never forget

apconcen said...

we stop and reverse at the bottom of that hourly chanel i mentioned b4

Odin said...

we seem to have hit the trendline at 940 on the sp. Is this it? Is this the reversal point?

Vineet said...

Atill..YOU ARE GOD!! Thanks for that advise on SDS. I just sold it off at 105. Fastest 14k I ever made, maybe ever will. Thanks, I am your humble follower forever!!!!

angus said...

Atilla kudos to you for your 4-sigma call, great classic man

do you see this happening in the remaining of the session?

PCP said...

"folks 900 will not hold,
ES is still at 940 "

Stop scaring the kids Atilla :-)

It would be great if you had a spot on CNBC and you could say these things.

dhw said...

bottom not in until smh gets crushed too. Its still positive for god shakes.

Too many scared bears covering or too many bottom catchers.

apconcen said...

you can hear the panic in the voices at CNBC...

Atilla M. Demiray said...

Well you guys can write to CNBC to request it

it is a bubble tv, once we are over with the climax, i will talk bullish

Ofer said...

Many stocks close to their Cash levels.. you can buy them for free!!

Amazing!!

angus said...

CNBC says the Chinese should help us I mean the auto co's lol

series of S&P downgrades

Atilla M. Demiray said...

No no no, there is no panic, the voice you hearing is a pain, panic will come when they start seeing 20 points bars on 1 minute chart

ko said...

I just wanted to say thank you to your mental time machine. I was long this am and after reading your blog I liquidated all that Sh!t and went short. Instead of getting creamed I made bank.
The fact that you nailed this to the day and even hour is just amazing!
Any chance I can reenter a short right here at 940? It definitely looks weak.

alan b said...

can we start a new thrad so i dont have to scroll down every 15 seconds to see when Atila covers? ;)

Atilla M. Demiray said...

this means their cash is worthless means they can not develop business with cash

thedocument said...

Gold has started to spike. The panic has begun. We just need acceleration and climax! Oh, and it's a great chance to short gold, too. The air will come out of it when people start rushing to buy stocks.

Dan said...

Looks like 800 a realistic target on the SPX now.

Ofer said...

folks, if we by any chance would stay at these depressed levels or lowers by the end of next week (option expiration) all hell will break loose.. so many short puts in the money will result in even more selling .

Atilla M. Demiray said...

i will post my exit as another topic

Ofer said...

apconen, are you filled on you dow futures order? you said ealier you would buy at these levels..

tamas said...

Atilla, what's your opinion on STT???

Its still positive... UGH

Atilla M. Demiray said...

still positive means we have a lot to go on the downside

Gozen said...

"still positive means we have a lot to go on the downside"

scary for longs.

KC said...

Atilla

What is your expected minimum upside for OPEX week?

KC

apconcen said...

Atilla...when we see those 20point bars on the 1min.....how long do expect that to last for ...say 3mins or so right ?

johnboy said...

Gold and silver are taking hits on speed. It's off the hook! And I think I'm just the person to help with a detox, in due course.

mikehoncho79 said...

I noticed 4 out of the last 5 days we have gapped up at market open, and then headed lower. Just a coincidence, or a pattern? Anyones thoughts.

angus said...

we start havin real panic

PCP said...

Oh man. Now it looks like it will close below 920. Drats :-)

thedocument said...

SPX/Gold parity coming up!

PCP said...

New post

apconcen said...

almost touching that hourly trendline bottom...DOW 8499 should be a bottom

anabolic said...

Atilla,

do u still think gold will crash tmr once the market bottoms out?

thanks.

anabolic said...

Atilla, Your character is just one of a kind. your skills too.

You will be very very blessed your whole life.

Thanks again from the bottom of my heart! =)

anabolic said...

what have Sol hinted may I ask?