Wednesday, October 8, 2008

Suckers are delaying the inevitable

I was expecting the washout today but suckers are too impatient and there are millions of them out there. Some of them are in S&P pit, some are on the floor, millions are on their computers....
They are delaying the inevitable. It is like an elephant trying to walk in a pool filled with trillions of ants. But we will get there, one way or another.

Staying short ES from 1041
and big contract from 1025

35 comments by xTrenders :

JC said...

Hi Atilla,

Thanks again for the insight.

Wondering a couple things if your so inclined to comment . . . though it may be too early to say.

How deep is the abyss (950 . . . or even lower)?

How big do you see the bounce? . . . above today's high?

Which scenario has the greater liklihood in your opinion . . . gap down to 950, then just take off? or open around the 965-970 level drop precipitously, get a volume spike and then move higher?

Thx again

johnboy said...

Atilla,


Bravo on your calls.

Does this slight deviation in behaviour of the markets from what you previously expected alter your expected downside target when the washout does actually happen?

And (I hope you haven't already answered this question already, but I couldn't find it), where are your stops sitting at the moment?

PCP said...

"But we will get there, one way or another."

But I don't think it will be tomorrow b/c most of the Street is going to be taking a day off :-)

johnboy said...

Sorry, looks like jc and I posted more or less the same q's at the same time!

Lawrence Chiu said...

I've familiar with SPY and ES futures, but what is the "SPZ" that Atilla shorted at 1023-25?

My broker is Interactive Brokers and I can't find this symbol.

Thank you.

angus said...

It's the big contract

angus said...

Pros tarde these, it requires much higher margin, it moves in perfect correlation with ES, so for us home-gamers ES is the way to go

angus said...

oh and on interactive brokers type SPX -> futures -> 2008 -> DEC

and it will show up on your screen

dougs charts said...

They are advertising the "rip roaring rally" coming in the next couple days on the funny channel.....

PCP said...

"My broker is Interactive Brokers and I can't find this symbol."

This is one of those things where if you don't know what it is, you don't want to go anywhere near it ;-)

zigzag said...

Atilla, could we be seeing a seismic shift here. One in which the whole world market is being reset at a much lower level before normal trading resumes. So low that the cash players (companies with lots of cash and no debt) are literally the last one's standing. That's a stretch I know. Your oppinion matters to me. You're light years ahead of me and a whole lot smarter. Am I out to lunch with an idea like this?

sahmtrader said...

Is the shorting ban on financials off tomorrow?

angus said...

EWI STU says if we violate today's lows tomorrow, wave iii is not over, so tomorrow's open is critical.

But, if you go with STU's forecast, even if we gap down tomorrow and then a rally develops, it would be a corrective bounce (iv) that will lead to another leg lower (v) before we have a rally that will last for several weeks or months.

So, again, if you go by the STU forecast, any rally from a gap down tomorrow will not last long (maybe a few days). However, if you consider the resistance levels that they give (e.g. previous iv at 10729 in the Dow), we could be talking for a 1000+ point rip.

To sum it up, their forecast is: if we gap down tomorrow and we capitulate, then look for a sharp rally, which will not last very long. Then look for another leg down, and then a more sustainable bounce.

Vin said...

Shorting of financials is allowed starting Thurs. I wonder if they'll toss in the uptick rule to ruin the technicals.

Tony said...

Attila: To reiterate the question from the previous entry, no ES (just in case) stops overnight?

WagTheDog said...

Interesting speculation (from another blog, The Market Ticker):

Start:

There is chatter circulating, apparently, that "global equity markets will be closed after the emergency G7 meeting this weekend." That ought to induce confidence - just ask the Russians or Indonesians, both of whom have tried this and it has resulted in an instantaneous crash when they reopened (the Indonesian market was just closed AGAIN this evening, after literally imploding - down by more than 10% - within an hour of starting to trade.)

End:

And to Atilla, Thank you. I have stayed out of trades that I would have otherwise taken based upon my own analysis when your views strongly differed - and you've been right, I've been wrong. I'm learning - an addict actually - and it's nice at this point to have your postings as a litmus test to my analysis. And, also want you to know, as with another poster, the money made from your advice will be used to benefit others. Keep Well.

Eurobear said...

Hey Attila, is Sol missing all the action, is his mum shielding him from the market :o) ? I hope he hasn't been holding anything long......since the accident

ajay said...

Atilla,

If tomorrow's action is similar to Monday's, then would it require a big gap up and rally on Friday to confirm the bottom?

Thanks

Action Points said...

Does anyone know the email address for Atilla? Thanks for any help.

ko said...

Wish i would have found this blog BEFORE i loaded with calls today. Here's to hoping you are as wrong on this as a twice Bush voter and 1 time McCain voter.

Vin said...

IBM beat bottom-line expectations and affirmed their earnings outlook. Looks like we'll get a chance to witness the power of trends...

James said...

Thanks Atilla

illiac64 said...

If coordinated rates cuts did not get the job done, then IBM earnings are not likely to help either.

As Atilla has repeatedly said, the bottom will only be in when everyone is bearish.

Vin said...

I don't doubt Atilla's logic at all. We need panic selling on volume in order to confirm the end of this spell.

The ES only had heavy downward volume during pre-market and a little bit near the close. Bah.

Andrew said...

Another thank you post...i know i know....but i was sluaghtered last week and could have been again today if i didnt adhere to your advice...so again a sincere thank you for your shared wisdom

FanOfAtilla said...

Ditto plus kisses.

ARAK said...

Atilla,

If the ES were to break 950 in the night (Eastern Standard Time) and recover, would you consider your target having been met, or would you wait until 950 is breached during the day time where volume provides the confirmation you are looking for?

doc4bax said...

wheres my kisses,, I told everybody to hang on to their shorts,, hee hee, maybe we are close to a bottom,, after seeing fanofattias, I was actually willing to get rid of my shorts..hee hee. just kiddin,,

Wiseowl from Texas said...

I guess that Attlia's position implies that there are a lot of people who are buying keeping the market up. The volume was up, bit not high enough for a capitulation.

Does above makes sense...

doc4bax said...

so when is the ban on shorts going to be lifted? tonight right? good thing, cuz its getting cooler up here in WA st. seriously,, Atilla,you mentioned the demise of Citibank is near,,me thinks theres plenty of down left,, and if trhat happens,, were talkin big down..

doc4bax said...

Art Cashin is in the same boat,, hes frustrated that the capitulation hasnt happened, been close but no cigar

Mike Truong said...

what do you guys think? Should I buy some of these for a long shot?

.SUCKS
.SUCKY

I am partial to .SUCKM but I might be persuaded to .SUCKU

Fergie said...

Atilla,
I'm new to futures trading, but am trying to follow your comments with what my trading platform shows. So you've been short the
ES8 since 1041? The rally has brought that up to 1108 as I write.

I share your lack of confidence that this "rally" will hold. So if I buy puts now, I'd be able to take advantage of any downward slide to come. Thank you!

johnboy said...

fergie,

You must be looking at the wrong ticker symbol. ES is the shortened form of the name everyone recognises as the 'e-mini' version of the futures contract for the S&P 500 index. 'e-mini' refers to the fact that the 'ES' futures contract series is for smaller parcels than the standard futures contract for the S&P 500, which is so large that all but very wealthy private traders can afford to trade in.

Clear as mud.

I hope this link doesn't get munged by the comments system, but here's a link to the current 'front month' contract for ES, which is due for settlement in December 2008.

http://futuresource.quote.com/charts/charts.jsp?s=ES%20Z8&o=&a=V%3A5&z=800x550&d=HIGH&b=bar&st=MACD(12%2C26%2C9)%3BRSI(14)%3B

To make things even more confusing, different brokers use slightly different notation for fully specifying the exact futures contract series. For example, in above link Futuresource calls it ES Z8. The Z refers to December, and the 8 refers to 2008.

You'll see from that chart (which is slightly delayed) that the current price of the 'front month' ES futures are trading at around 997.

This site is probably not the best place to be asking about futures contracts, because (it seems to me at least, Atilla and Sol may correct me) that this site is more concerned with actually trading than teaching people the basics.

There's plenty of other places that provide good intros to futures trading.

Hope this helps.

Fergie said...

Thanks Johnboy. My original message left out the z. So I'm looking at the ESZ08 and confirming that was what Atilla was referring to.