Friday, March 6, 2009

Covered SP and ES below 670

We are putting some sort of bottom here. We will have more clues going forward.

I have covered all banks

covered all financials around ES 671 level,
the index is likely putting an important bottom.

covered GS @ 75

covered BK @ 16

sold FAZ @ 110.2

I am holding the rest as seen on http://xpositions.blogspot.com/

covered ES @ 675

Aproaching the base...looking good.

After my first MS degree, I landed a job at Airforce as an avionics engineer. I used to watch landing warplanes and listen to the wireless communication between pilots in my spare times. One thing I noticed was the fact that landing was a much harder process than everything else they do.

On December 9, 2008 I said Dow Jones Industrial index would likely test 5000-5500 range in two months. Obviously this call seems to be at least one month early but I think, if the landing system doesn't malfunction or they don't hit the eject button somewhere between 5500-6000, we will get there in late March or early April.

Thursday, March 5, 2009

The last 100-150 SP points of the bear market

As we enter the intense part of the selling climax of this cyclical bear market, it is important to keep the bigger picture in mind when the emotions intensify.

Staying fully short SP / ES and banks.

Wednesday, March 4, 2009

Roundy roundy it goes...

Yesterday I was asking how the market could do the most obvious in the most unobvious way. Did you like the trick?

shorted NQ @ 1111

The day of reckoning

We all know that another example would be made soon. We all know that there will be some sort of crash-like broad plunge in two weeks. What we don't know is how the market can do the most obvious in the most unobvious way - again.

In my opinion, today's gap-up together with underlying sentiment increases the odds for the final episode.

Until then, you know where I stand.

Tuesday, March 3, 2009

Trader Tax

One important issue we all may have to deal soon. I completely agree with Gail.
--------------

Hi,
Just found your site last week and am very impressed - keep up the good work!
I wanted to make you aware of something that you might want to post to your community and other fellow traders.
A Congressman from Oregon has introduced a bill that would impose a transaction tax of 0.25% on sales/purchases of stocks/options/futures. I am enclosing a link to a petition that has been started against this tax, a link to the Congressman's contact info, and a link to info on the bill and other sponsors. The Congressman wants Wall Street fat cats to pay for what they are doing by implementing this tax to help reimburse TARP. He amazingly doesn't realize (or doesn't care) what this would do to the average person who is starting to take control of their portfolio or trying to recoup losses by trading (since this would impact transactions even losses would be taxed not just profits).
Hope you find this info helpful and please pass it along.

No trader tax

Contact

Bill

Best,
Gail
Baton Rouge

Catching the bottom again?

This goes to the sword catchers, please quit trying for God's sake! Have some fear for the goodness of the country.

Why most of the retail crowd can not quit picking bottoms in the face of an epic plunge?


Markets closed below the last support

From this point there is nothing to hold S&P500 technically. The selling I was expecting late in the day will probably be resolved with a gigantic gap down or a quick crash tomorrow.
Staying fully short SP / ES and banks.

The intense part of the selling climax is beginning

SPX may be down 20-30 or even 50 points in the next hour or two and I suggest everyone to use extra caution. It is hard to spot a climax bottom before it happens so we will likely know after it is printed or during the event at best.

Monday, March 2, 2009

Some thoughts

Dear all,

JB3 here.

Some thoughts for you... 

....but first, please note: Speaking from experience, these times in the markets is where Atilla's skills stand apart from anything I've seen before. He was made for times like these. So pay even less attention to me than you normally do, OK? I'm serious. 

I haven't done a complete analysis of all my data points yet, but this immediately caught my eye so I thought I'd share it:






In short, that volume doesn't support the idea that we posted 'the' bottom.

Now, onto what I think is the most valuable 'bigger picture' piece of information that Elliott Wave Theory can offer at this juncture. In short it is this: we need at least one more sizeable bounce before we can entertain the notion that a bottom can form.

Why? Because one of the cardinal rules of EW is that impulsive waves must subdivide into five (5) sub-waves (or sometimes nine, and even rarer, thirteen) . At the moment, quite clearly, we only have three (3) sub-waves. Three wave impulses are not possible in EW theory. Three wave moves can only be part of a corrective pattern, and there are very few (if any) plausible corrective patterns that could develop on that wave degree presently. Here's a quick sketch of what EW theory says has a very high probability of developing:





So the bigger picture, from an EW perspective, is quite clear: a bounce should develop soon and last for at least a few days, then one more impulsive drop (at least).

Also, according to EW theory, sub-waves 2 and 4 should never overlap (except for an ending diagonal, which quite unlikely according to the current wave shape). So the bounce should stop well short of 800. 

A finer EW point (not drawn), this bounce has a good chance of taking on the shape of an EW 'flat' or 'contracting triangle'. Something to keep an eye out for. But if it is another zig-zag, like wave 2, then we are likely headed waaaaaayyyy lower.

Finally, in capitulation moves EWaves can often get 'compressed' as the impulse comes to an end, making them tricky to count in times like these. Even more reason to keep an eagle eye on Atilla's calls from here on. 

That's about as detailed as I'll get. As I've already said, Atilla plays these stages with the finesse of a world-class concert pianist, and too much EWaving at this point will just get in the way.

Cheers

JB3


Not happenning

So far market didn't act like it did when it was first breaking below 950 back in October. However, it is extremely likely that there will be lower prices tomorrow.

Still fully short

There could be a sudden drop below 700

I am getting early signals for a 4-sigma move. If the market suddenly slides below 700 , it may drop additional 10 or more points by 4:15 to open below 670 tomorrow. This is somewhat similar situation to October crash. If this is the case, then there will be additional 10% or more percent drop in the morning and we may put a significant bottom right below 600 tomorrow morning.

Test 1 2

Did site collapse? Cant read the blog.

SP500 is about to slide below 700

No 4-sigma move but an orderly breakdown is in order, there may be an attempted rally right below 700 but I doubt it lasts. Selling climax will not stop until no unturned stone left.

A bullish looking chart

for all time frames....

Saturday, February 28, 2009

Berkshire reports a 96 percent drop in 4Q profit

On October 26 2008, I wrote the following about Market Fundamentalism that sounded quite offending to many type-two suckers who manage multi-billion funds based on valuations and market fundamentalism.

Collapse of Market Fundamentalism

Did you read the 5th paragraph?

This morning, Berkshire Hathaway Inc. reported a 96 percent drop in its fourth quarter profit because of largely unrealized losses of $3.25 billion on investments and derivative contracts. In the report, Mr Buffet confesses that it is all his mistake. This alone makes me rethink about his ability to learn despite his age and honestly I might have been underestimating his adaptive skills.

However there is still an army of thick headed fund managers in the business that will not understand what has really changed and why it is different this time, until the grand day of reckoning. Until then the wealth transfer from this army of suckers to the minority at the top of the pyramid will continue like a fight between dinosaurs and their predators... lengthy and bloody.

Friday, February 27, 2009

S&P may open below 700 on Monday

Markets may accelerate to the downside into the close before the announcements by several European banks this weekend, I wish all xTrenders best of luck.

shorted BBY @ 29.46

shorted JNPR @ 14.4

Shorted GS @ 93.1 and AMZN @ 64.4

You don't really believe we can break down here, do you?



xVix shows some complacency.

Thursday, February 26, 2009

Wednesday, February 25, 2009

Major world markets may crash alltogether in two weeks.



I have readings similar to those I got in August / September 2008. As you know, I have been talking about this terminal sell off since SPX 900-950 level but instead we got a slow motion sell off (only 200 SP points so far). In the last few weeks, several significant developments took place in major world markets including US. We have been consolidating under the important trends that will likely push prices lower over the intermediate term.
However, from here on, markets will likely accelerate to the downside at very fast fashion. It will have to be somehow faster than October 08 event by nature... unfortunately.
This may all take, unlike October 2008 sell off, one or two days, or it may be something like October 1987 event.

There is an intermediate term trend line passing through 750-755 on SPX and obviously it can not be taken out intra-week. What is most likely to happen is that , we will probably close around 750 on one of Fridays to open below that trend line with a sizable gap, probably on the following Monday. It may trigger the event or it may not. Hard to fine tune the timing at this moment. BUT dont forget that it gets darker before the dawn. For a healthier market, perhaps for another bull market, this has to happen.

Since this will likely be a terminal move, since it will be harder to predict the exact moment, I insistently stay short SP from 757 and higher. Plus several domestic and European banks.

Don't say you weren't warned

Dear all,

JB3 here. Two things:

1. Don't say you weren't warned

...not that we have any kind of obligation to warn you, but here I go anyway. 

These kinds of events that are coming very soon get wild. In the past wave down and bottoming process we saw a number of xtrenders blow their accounts up. Following in the same vein as Atilla's last post:

Margin  x  Volatility  x  Emotion  x  Inexperience   =   KABOOM

or 

Margin  x  Volatility  x  Emotion  x  Inexperience  x  Greed  =  MUSHROOM_CLOUD

Recall the last wave down, as shown in the chart below. Pay particular attention to the shaded areas:
 





2. Elliott Waves update

Trying to make a case that the price patterns in the recent bounce are impulsive (ie. bullish) is a difficult one indeed. I see quite a bit of overlap and general untidiness indicative of impulses. 

EDIT: Sorry about the typo: That should read: I see quite a bit of overlap and general untidiness which is NOT indicative of impulses.





Right now I am 90% convinced the Elliott Waves are corrective. I will be 100% convinced when the SPX prints below 758.

That's not to say the bounce won't go higher. I would be surprised if 818ish was tested, and I would be proven wrong about this short term analysis if 876 was taken out.

"What????" I hear you say? "Geez man 876 is a long way from here!.... I'm going short anyway even though I'll get margined out at 820 'cos I'm not gonna miss this one!".... If that's your view, save yourself the heartache and the brokerage fees and transfer the funds in your account directly to me, 'cos you're on a slippery slope to Trading Account Armageddon and rather than give your money to some silver-suited shark why not give it to a fellow xtrender instead ;-)

Seriously, now.... manage your risk prudently or suffer the consequences.

Take care out there,

JB3

F=M*G

That is Newton's second law. You know what I mean.

Tuesday, February 24, 2009

No double bottom I see

What I see is a cause building on short squeeze, not a double bottom.

The cause for the inevitable selling climax into the oblivion.

Staying short SP from 757 and higher, also shorted banks and brokers, expecting SPX to take out 700 this week.

Short BK@23.60, long FAZ @ 65

Shorted ES @ 757

sold ES @ 757, FAS @ 4.74

long FAS @ 4.45

stop 4.35

xVix

Site traffic was huge yesterday. This indicator usually acted like a vix index in the past. I call it xVix. This kind of spikes almost always occurred at the important swing tops or bottoms.

Monday, February 23, 2009

Update

Still long from 750. ES closed at 745, I expect it to open above 754 , tho I would appreciate little heavy lifting by Atilla tonight.

Also stopped out of SKF short at 199.

All shown at http://xpositions.blogspot.com

reinitiated long ES @ 750

with no advertised stop. I will post when I get out - realtime.

added 25% ES @ 756

fully long now

stop 754

Edit: shifted stop to 752

added 25% ES @ 758

stop for all ES 755

added 25% more ES @ 759

stop for ES 755

long ES @ 760, 25% position

shorted SKF @ 194

stop 199

covered WFC @ 11.3

shorted WFC @ 12.6

stop 13.2

Sunday, February 22, 2009

Saturday, February 21, 2009

What I think is most likely over the coming days

Hey everyone,

JB3 here. Sorry I can't post more often but it's physically impossible for me at the moment (he says as he peers, albeit lovingly, through the cracks of his red bloodshot eyes across the room to his lovely little 5 month old girl).

Well... back to business. I'll focus more on Elliott Wave based ideas, because Atilla and Sol do such a fantastic job at everything else that there's not much more value I can add.

First, an update. Earlier this week I shifted my ES/SPX shorts over to NQ/NDX shorts because, all going according to plan, NDX should outperform SPX and the DJI to the downside. Yong Pan (aka Cobra) sums the situation up well with his QQQQ/SPY ratio chart here.

But since Thursday I began to reduce my NQ shorts, and eventually closed them all on Friday, because to me the Elliott Waves (which have been serving me extremely well since the top at 944) and various nearby support/resistance levels (and gaps) indicate that there is high probability that taking profits now and reloading shorts at higher levels.

Now, for some prognostications:

From an EW point of view, these are the top 3 scenarios I see unfolding from here, and I'm treating them all as equally likely:

1. Tiny bounce stopping at about 785ish and then the impulse extending down in an accelerated fashion, probably leaving more gaps. I haven't got a sketch for this one.

2. Small bounce, followed by new lows (possibly around 740) and then a bigger bounce before the next wave of the capitulation. See chart below (the dark blue box is my ideal targets, the lighter blue is my next most preferred targets):


3. The bounce that began on friday continues immediately to the targets as drawn below:


For the record, there is another more bullish scenario that I think is highly unlikely but I'm keeping it on my radar - a C wave of a flat pushing up towards 920.

Also, I hope most EWavers would agree that a triangle should not be considered as being in play any more because the DJI and OEX have broken the Nov 08 lows.

Well, that's about all I've got time for at the moment.

FYI: Although I have closed my NQ shorts, I am still short a bunch of stocks and indexes:
Short CFX (Australian RE Stock) at 1.71 and 1.795
Short AZO from 139.36, and looking to add if it goes higher - but I think upside is limited
Short BBBY at 24.39 and 25.10 (small position) and will add if it goes higher
Short FPL from 52.22
Short MA from 163.77
Short RIMM from 58.99 and have been adding as it falls
Short V from 55.46
Short XOM at 77.66 and added at 80.88
Short ASX S&P 200 futures from 3480
Short Nikkei futures from 7802, adding on the way down.
Also short a CFD version of XLE, riding the exit from the triangle

This week I also took profits on QCOM, and German DAX futures shorts and will look to re-enter at appropriate levels.

On friday I also closed my long term Natural Gas longs at a loss as there has been a key break below critical support levels at 4.03, which broke my trading plan. The new plan is to re-enter for the long term below 3.62-ish, with the understanding that it may go as low at 2.0-ish so I'll keep plenty of powder dry to add. I would like to see these lows in Natural Gas coincide (roughly) with the impending IT bottom in the SPX.

This state of affairs with Nat Gas, Oil, TAIEX and other charts I watch further confirm a longer term deflation scenario and reduce the probability that we'll see inflation any time soon. In the long term, recent action convinces me even more that the USA and many other major markets (esp European mkts) are entering depressions (some are already in them, albeit not officially recognised) and these depressions are bigger (possibly much bigger) than the Great Depression. That said, I'm no sell-out to any thesis... if future action dictates a change in stance, I'll change.

All the best,

JB3

Don't get me wrong again.

We have not seen the bottom. We have not even approached the bottom. In my opinion, we are 100s of S&P points away from the bottom that may lead to a cyclical bull market. You know my target for S&P500: 400-450: Almost 50% from here.

But in trading, you have to capitalize on the moves that are highly probable, that is why I got out of the shorts at 755. I will continue to trade this market on the bear side.

Monday, February 16, 2009

Another example will be made soon

If you believed Mr Nassim Nicholas Taleb's Black Swan Theory, then in late summer 2008, you were thinking I was an insane person when I repeatedly said 10s of thousands that the market would crash in early October, in fact, 4-sigma portion of it 2 hours before it took place on October 9, 2008.

For centuries, humans tend to call unexplainable events unpredictable, illogical or chaotic because it is the human psychology that forces man to cheat. Less uncertainty gives man more confidence and inner peace, sometimes at the expense of truth.

I think the market will make another example out of it in near future. Whether you call it Black Swan or not, it is once again all over the charts !








Update on cyclical target for SP500

During the last few weeks, the markets showed that 600 level on S&P500 could no longer be an important support for this bear market. I expect the benchmark to stabilize between 400-450 before the next possible cyclical bull market. Not only several major indices but many heavily weighted components are somehow giving similar implications on long term charts.

Wednesday, February 11, 2009

Possibility for a sizable gap down tomorrow

that should be the start of the terminal move I talked about before

Shoerted ES @832 %25 Position

Sunday, February 8, 2009

Did you panic during the crash of 2008?

Somehow I tend to think that this crash never set a panic/crash tone in sentimental way although price action clearly demonstrated the greatest panic of the last two decades.

I don't know, maybe I am missing something. Because of the fact that xTrends called the crash at the precise time and price and 10s of thousands here were enjoying the move, this could mislead me in reading sentiment overall, perhaps.

However when I think about the stuff coming down the pipe these days, I think I may be right about it. Seriously, is there anyone out there buying BAC for an investment? Do you really think its end will be different than AIG, WM, LEH, BSC, MER, CFC, WA, FNM, FRE, C ...
When was the last time you check xTrend's archives to see what I was telling about all these tarts including BAC. Don't you suspect that most of the banks could end up like them since they all now are showing similar setups on lifetime charts?

Since November, the market has been chopping without a trend. AND without a spine because something has been broken on Dec 1 2008, with monthly gap. The market is consolidating , compacting energy for the next sell off. So far, the median range since Nov 2008 has been 800-950. This will soon change. When it does, hopefully I will be there again and hopefully I will see some crash sentiment to feel more confident about SPX 600 level.

Friday, February 6, 2009

Holding shorts into the next week

Obviously traders are expecting more upside after the release on Monday. I believe the trends I am following will have the last word.

If you need a "WHY"

IF you will need a "why" to explain the coming shock wave, perhaps the final one to terminate this cyclical bear market, I am going to try my best now.

It is now about the economy. Regardless where the rates are, how big the stimulus joke gets and how high they raise your taxes! If this was only a bank problem, the market wouldn't even let Lemon Bros go. Credit and mortgage was the triggering events. The cancer now went through the system and somethings gotta give. It is no longer a credit and mortgage story, it is about the whole system. The market knows this, benchmarks can not even break through immediate resistance in the face of a massive multinational effort to elevate financial markets.

Me, I do not need to think about the whys and wherefores, I had seen this past crash coming in 2007, perhaps little early and I am seeing more to come now. Couple of months ago, the markets broke through century-old trends that defined the economic and social structure of this country. Based on my trend theories, It will never be the same for many western economies and the markets will eventually do the inevitable. I had defined the basic analogy behind the current situation in one of my articles before. This bear is something you and your ancestors have never seen before. In my opinion this is the beginning of the end of market fundamentalism, this will feed on itself for years. Another chapter of history is in writing, and you have been watching it realtime !

Thursday, February 5, 2009

I am proud of Sol

I can not express how I felt when I reviewed the most recent trade record of Sol. It is a unique priceless sensation when you see your methods and teachings successfully used in different time frames on different instruments. I believe Sol will be making the best use of his crash check and is my biggest candidate to to be in the next revision of Market Wizards.

Forming a broad top across the markets.

This is a very important day in my calender because I received significant number of setup alerts from stocks and indices. This happens when the market is at apex or important pivot. The type of setups implies the market formed an important top today.

I tried to enter ES short positions with tight stops three times, didn't work so far. I will not let the train leave without me. I am building swing trade positions on those with chart setups. ES is one of them.

Shorted JNPR @ 15.89

I think we are forming another important top as many stocks and indices test breakdown levels.

long SKF @ 148

This could be an important pivot for the market. I may hold these positions into the next week. Hopefully I get more confirmation by the end of the day.

shorted GS @ 93.5

shorted @ 836

stop 839

I am insisting because lows should be tested today.

short ES @ 829.5

stop 834

Short ES @ 825.5

stop 828

covered ES @ 818

sold SKF @ 160

Wednesday, February 4, 2009

shorted the other half @ 848

Not a day trade. We will close the week below 780 according to Atilla before a possible crash in option expiration week.

shorted ES @ 846

50% position

Shorted BK @ 27.7 and BAC @ 5.15

Tuesday, February 3, 2009

The second wave of crash is well underway

I call it terminal move which should take SPX below 600 soon. I suggest everyone to be careful in the second half of this week. A few month ago, I said C and BAC will be near $2. BAC will crater below $5 on gigantic volume tomorrow. But more important ones are the coming FUBARs. I expect JPM WFC and BK to share the same destiny. This will continue until there is almost no bank left in USA. Perhaps one or two private banks together with a government controlled bank.
Also time has come for a 4-sigma move in FTSE due to the reasons I explained couple of months ago. And believe or not, the coming blood bath in commercial real estate here will make the collapse of investment banks look like a minor event.

long SKF @ 147.8

fixing my early mistake

shorted FPL @ 51.90

short RIMM 55.8

short ES 832.25

stop 837

Covered MS @ 20.9 , BK @ 26.4

Sold SKF @ 147.5

Covered QCOM @ 34.05

covered ES @ 822.5

for 15 points profit

Monday, February 2, 2009

covered BAC @ 6.19

for 6.2% profit.

I am overloaded, can't carry too many positions. Otherwise BAC is going to $2 in a week or two (possibly , not surely)

Shorted BAC @ 6.6

EOM

Thursday, January 29, 2009

Going after the big fish this time.

As some of you know, before the crash in Oct 2008, I was trading short term swings until I had to take a break due to the accident. I will not do it this time because I believe I entered the market at the apex of this cycle.

Today I added to the positions I opened yesterday and I intend to hold until SPX 600 minimum. I expect SKF to trade around $420 and most of the financials to disappear before we put a firm bottom. I will micromanage the positions on the way, such as, covering this, shorting that, other than this, there wouldn't be too much action on my side except a few day trades, perhaps.

You can see my holdings at http://xpositions.blogspot.com/

All trades are posted on this blog realtime before I update the table, usually every night.

As far as I know, Atilla shorted big time yesterday and the day before, probably including the stocks that I shorted since he recommended them. He has been increasingly busy in the last few months but I hope he will drop by from time to time.

Added QCOM short @ 35



Also planning to add to the other positions later today. I believe we put a massive top yesterday. Aside from major trend backtests, it appears to be lots of bullishness if yesterdays rebel attempt against Atilla is any indication LOL ! Trust me I have seen this many times, they mock him right at the top if he is short little early, in this case he was one day early.

Wednesday, January 28, 2009

Bill passes plus Fed releases some gas ...

I think everything will be fine from now on. Goldilocks could be back. We rallied almost 30 handles. More importantly I stayed missively short ES and SP with newly added bags... I just cant help!!!




Added SKF long @ 129.1

short VRTX @ 32.48

short QCOM @ 36.93

All these trades are triggered based on intermediate term setups. Therefore I expect them to work for a few weeks or fail immediately.

long QID @ 54.1

shorted MS @ 21.4

shorted BK @ 26.4

The path of the most predictable...

This came to my mind a few days ago, why the most predictable has been working the best since late November. I can only come up with one thing. Institutions are out of the market. I know GS and JPM didn't break $10 yet but when they do, all rules of the game will turn upside down completely. You buy low volume rallies, extreme bullish retail sentiment trade news with straight Aristo logic etc... Sounds like a biblical justice for suckers.

Lets gap up and sell off, rinse and repeat, make retail addict to the oscillator trading until the next day of unpredictable.

Tuesday, January 27, 2009

long SKF at 153.4

The other half. You can see my holdings on xPositions.

Long SKF @154.6 50% position

--- Charts to be posted here ---

Trade summary

Due to my intesified work schedule, I will be posting less from now on. Below is a trade summary as future referance. SP position is the largest and intended for intermediate term trade:

Short SP@ 844
Short YM@ 8100 (average)
Short NQ@ 1182
Long SKF@ 159.5

Mental Stop @ 847 (Exit will be posted regardless)

Target for all is btw 550-630 on SPX

PS: Blog will still be as active as it was as Sol and other authors (there will be a new member this week) keep it updated often. I will also drop by if/when there is an impending major event.


xTrends forever !!!

Lets get over with it...

Without getting into details, there is a possibility , there are signs in place, that S&P may finally test sub-600 level to put a multiyear bottom in a few weeks. This will be the best stimulus package this country as well as any other nation on the earth can get.

Shorted SPH9 above 840

long SKF @ 159.5

Added YM short @ 8125

Sold ES @ 842

This leaves me with NQ and YM shorts

short YM @ 8080

sold BGU @ 29.1

Sold TF @ 452

Sunday, January 25, 2009

Long term Gold

I had posted this chart in September 2008 and told you Gold should bottom between 650-700

I guess it bottomed out right below 700 in November 08.


Setup




Friday, January 23, 2009

Thursday, January 22, 2009

What the following chart means?

Sol posted a very important chart that has implications for all equities and economy going forward.

Before I start, take a look at the following chart of TLT. (TLT is an ETF tracking 20yr treasury bonds).



You can see the breakaway gap from the other corner of your room can't you? That breakaway gap on TLT corresponds to the massive breakdown on $TNX. For those who dont know how these instruments move, they usually move in the opposite directions. $TNX is 10 year bond yield, TLT is a bond ETF. Although TLT is more related to the longer term maturity debt (20 year), it does move in the opposite direction of $TNX most of the time.

Technically what the above chart simply implies that the bonds will soon rise as they test a longterm channel breakout that accompanied with a longterm breakdown on $TNX. This is a direct indication of deflation and implies that the current situation is nothing like you or your grandpa has seen before (Because of the importance of the breakouts/breakdowns on very long term scales). Such situation seen in Japan in 90s. If you want to know what happened to them, do a little research.

One of the reasons I have been shifting away from my bullish stand for a bear market rally was this.

More than words....

Are you ready?



Markets may be going into a selling climax

Noticed the first signs yesterday before I put the hedges on. Unfortunately I observed more of the same today that forced me to put second hedge although intraday timing was little off again.

Now you have to listen carefully. The short covering rallies which are quite deceptive can be a cause-building because unfortunately market can not move away from what I consider a very important pivot around 800. I did not want to carry big contracts with such a market that closes near this important level consecutively. So I am only left with ES and ETF longs that are fully hedged via YMH9 and I am waiting for the market to tell me what to do next. I do not have a very clear read on the market at the moment. I am waiting for the certain occurrences to take place in order to move ahead decisively.

I will post another update after the close as we are at an important juncture.

shorted YM @ 8040 against ES longs

shorted Esh9 @818

stop 824

target soon to be refined

Wednesday, January 21, 2009

Have we put the bottom?

Thanks for your votes...

Past poll result is:

Key reversal day on volume

We got the key reversal day on volume, I closed YM hedge staying net long ES and other given ETFs. Expecting a significant gap up tomorrow.

shorted YM @7985 against ES

I closed SP around 815 in the morning, hedging ES with YM for the day.

sold UYG @ 3.01

will reenter later today

Today will be a reversal day

Based on yesterday's EOD, today will be a key reversal day. What this means is, after a morning spike which we are seeing currently, there will be lower prices. This could be 780 or 790 or higher on ES but this level will produce a severe reversal that will push the indices above today's opening prices by the close. Before the noon, I will be closing SP big contract positions that I opened below 820 last week. I will reenter later today.

Tuesday, January 20, 2009

Why sell off can not last

and the low will produce new swing highs on many indices. Internal charachteristic is not showing similar signs as the previous sell offs. VIX is broken.