xTrends has been exponentially trending

Since I started using Atilla's short term system, the site traffic started growing exponentially as my performance did. xTrends has no links to other blogs and no other blogs are linked to xTrends. The traffic is mostly created by our own readers.

I know some of you will say this can not continue forever. I agree. The site traffic will be saturated at one point but I dont see any reason for the system get affected by the traffic unless xTrends is targeted by some large institution or entity. That is a possibility and I will be closely watching going forward.

My performance since May 1, 2008 until Oct 30, 2009


Number of unique visitors per day:


There are several ideas we have in mind if things go out of control.

Finally...

Finally retail crowd got bearish, but it is not enough tho it may be enough for a snap-back rally to shake them out on Monday.

I will post an update on some of my proprietary indicators this weekend before futures open, they have strong implications for the coming week.

long 50% ES @ 1032.25

I bought back the one I sold. ES should open above 1035 on Monday

Sold 50% ES @ 1037.75

System points to higher prices but I am not taking chances in case if trapped bulls start capitulating into the close

ES hit the target

From Wednesday, October 28, 2009: ES targets 1035 as a swing low
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.
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Expecting a close above ES=1052

This one caught me unprepared before I can adjust my stop but based on the system, we have to close the day above 1052 today.
If we get convinced that the recovery wont happen today, I will close the position

long ES @ 1047.75

Covered ES @ 1053.75

Internal initiation will lead to lower prices ...

The following chart is from yesterday. Nasdaq McO hit the lowest level since the crash of Oct 2008. This internal initiation will lead to lower prices over the next 2 months. We got an oversold bounce today as predicted but somehow it extended little bit than I initially thought. No worries, the bottom shall fall out in a few days...




Meanwhile retail crowd appears to be confident that the rally will continue. We shall see.

added other half @ 1061.75

See you tomorrow

shorted 50% ES @ 1062

Covered @ 1059

I am trying to find the best entry to open a swing short position. If we rally into the close, that is it. I will partially short.

If we don't rally, there may be a test of ES 1070 tomorrow, therefore I will wait.

shorted ES @ 1063.75

I will cover this in 30 min

stop 1064.75

Will be shorting at the close today

Well, this really looks like a bear market rally, very hard to short. I am planning to short at the close today, kind of opposite of what I did yesterday.

However, if we close above ES 1051 today, 1051 will be support for tomorrows session.

System stays short, I am thinking 1067 is the line in the sand as shown by Atilla yesterday.

Reentered ES short @ 1057

Same thoughts

stop @ 1060

Re-entered ES short @ 1054.25

I believe I got whipsawed
the system is massively short, I reentered
Risk/reward is very compelling there is a huge intraday downside potential.

Stop 1055.5

Shorted ES @ 1051.5

full position

stop 1054.75

Sold ES @ 1051.25

When you get to learn the same lesson ...

That is why I am in love with Ms Market. Over a decade ago, when I started trading, I found a true challenge for a life time. It was something I had never come across before. Ms Market was tuff but so sweet even when she is angry at me. Colorful and beautiful...

Last year, she gave me a big present in our 10th anniversary. The Crash. I had been waiting for it since late 2007, it worth the wait. But what makes our relationship so special is not these occasional big gifts. It is the small things we always find excitement. Small surprises, fights and mad love...

Today, she surprised me, actually she reminded me something I had learn almost a decade ago. See these surprises don't have to be necessarily new things, they can essentially be the same type of surprises in different packages:

3 days ago, when S&P500 stealthily broke below an intermediate term xT under extremely weak/oversold internals and bullish sentiment among small traders, I knew it was a recipe for a selling climax because conditions were now different, the price would eventually get as oversold as internals unlike past bullish setups.

On the second day, as the market started slowly building the early stages of the pattern, I got more confident and got more bearish because it was obvious from the broadening formation that the market accumulated more selling power by consuming a lot of price-time between 1060-1070, some call this building a cause, the same thing.

Finally last night when futures tried to break down overnight, I was 100% sure the market was moving into a waterfall / selling climax.

I had shorted more ES overnight and was very tired as I slept 5 or less hours. This afternoon, I made a very old and usual mistake and closed out my gigantic short positions in Real-Estate and Financials, covered some ES and other indices. This was despite the fact that I knew 100% the market was going into a deeper selling climax.

Anyway, now I am left with my core short positions and little ES shorts and begging for the market to go higher tomorrow so I can re-short around 1050.

I love you so much Ms Market.



PS: There is a high probability pattern for tomorrow. Flux capacitor gave a signal at the end of the day today. I will explain the setup in details early in the morning tomorrow. But for now, briefly 2 scenarios based on tomorrows open: If we gap up, expect a attempted rally that will fail then we will shaply sell off , drop like 20-50 points from the morning high to reverse later in noon or afternoon. If we gap down, there will be some attempted sell off that will fail then we will rally into positive territory.

Added the other half @ 1038.25

long 50% ES @ 1039

Thinking about going long at the close.

It turned out to be a larger degree selling climax pattern which Atilla warned about yesterday. Neither he nor his system is short but I believe there will be a tradable bounce around this level. I will wait till close to see how it goes. We will probably close at the lows today which may be a good setup for a gap up and run tomorrow.

long ES @ 1048.75

full position

stop @ 1046.75

Covered @ 1051.5

ES targets 1035 as a swing low

This was the selling climax pattern I noticed yesterday.



Now it is more visible isnt it?

After a stealth break below that rising TL, SPX stayed under distribution over the last two days. It now appears to be finding its way through the least resistance once again.

We may not test 1035 today but odds favor we will visit sub 1050 early in the morning.

Watch sentiment, some Hogs who were calling for a rally yesterday are now calling for a crash on Traders-Talk, telling people how price should follow internals in downtrends and so on... (Sounds familiar?) More importantly, some excellent fades like isaac and IYB over there covered yesterday with proud. This means there will be some sort of puke by the remaining hogies in the morning followed by a possible rebound, probably near mid-1040s. I suggest you to watch EPC and Equity-only ISEE numbers real-time.

Sentiment gains more importance in such days because when price finally waterfalls, all you gotta do is to watch if there is more selling coming from Hs. The best way to find out this to watch their sentiment through Equity Put/Call ratios. When they turn bearish and lean hard, the system clogs up, you get a sharp intraday rally which may be strong enough to print a daily reversal.

They may be mowing the yard tomorrow...

There was a heavy put buying on S&P500 index while Equity P/C fall even lower which indicates retail traders are getting bullish in the face of a falling market. That is a recipe for a big intraday sell off.

Meanwhile our beloved GIGA appears to be on its way to our projected target.

Intraday update

This turned out to be more serious situation than I thought, I now think it will take longer and deeper. 1045 may not stop it at all

I am now 100% sure that this will end with some sort of selling-climax which may be more powerful than I initially thought yesterday. Because the market seems to be sliding in a slower pace, accumulating more selling power, broadening overall pattern in price-time continuum. Seen this picture 100s of times before.

I added to shorts during the bounce. I am now short, not only real estate and financials but across the markets.

Second day of the intermediate term sell off

Well this is where it gets exciting. Because upto this moment, you had large number of company in trading the downside. It was easy and logical for many to short overbought market. From here on, it is gonna be a lonely trip for pros.

You know there are three types of people in the market. Bulls, bears and hogs. Hogs can not be bull or bear although they pretend to be like them from time to time.
Bulls and bears always make money as long as they protect themselves during the opposing domination. Hogs are in the market to be bacon all the time.

After 6+ months of restless rally, just the time we started getting intermediate term weakness across the market, third group of traders now appears to be in knife catching mode. Most of them think internals are oversold but they can not interpret the differences between the current conditions and the previous ones. In uptrends, such oversold conditions create upside reversal, that is what this crowd is trained for. But it is not the case in downtrends which is not clearly visible to them yet.

In downtrends, such oversold readings in internals are simply indication of future price action. In other words, price will likely get as oversold as internals before any upside reversal happens. We are in the second day of the sell off yet, would you mind please? LOL!

Equity P/C showing no fear at all while the boys got extremely bearish as OEX P/C closed over 2.



Meanwhile both Nasdaq and NYSE McOs are getting oversold, indicating what will soon happen to the price. In other words, a mini selling climax.





Like I said earlier, the next ST level to watch is ES 1045 area, we will likely test it this week.

Added other 50% short @ 1067.25

stop 1071.5

System has been blatantly pyramiding up all day, I think we are moving towards some sort of a short-term selling climax

shorted 50% ES @ 1069

Covered the rest @ 1063

Covered 50% @ 1065

That sudden push

I am trying to find out where the push came from. I dont see a leading sector. Banks are weak, there are bankruptcy declarations all over the place and futures pushed higher.
I read the article on ZeroHedge this weekend but it has nothing new to offer. We all knew it for months that Fed and Treasury have been running trading desks through primary dealers but what we still dont know is the organizator. There is always a mastermind behind every manipulation, like William Crapo "Billy" Durant, who singlehandedly organized and supervised the biggest market manipulation in the history of financial markets.

There is a broken multimonth trend line on S&P500 which means we should pull below 1080 by the close today. In fact, we should test 1067 on ES minimum. The system is still short, so am I but it doesn't feel good, the system has no feelings I do... especially when I think about Mr Rampalot!

Update on Big Picture ...

Updated versions of the long term setups posted before and archived in Big Picture was compiled as a slide show.



The charts shown in the video can be seen on Big Picture.

added other 50% short @ 1077

shorted 50% ES @ 1076

If this works I will hold over the weekend. I believe the market will no longer recover. This sell off was for real.

Out @ 1075

I think we will sell off into the close

added the other half @ 1076

stop 1073.5

Long 50% ES @ 1076.5

Covered ES @ 1077.5

later

shorted ES @ 1084

full position

stop 1085.5

Covered @ 1083

later

shorted 30% @ 1086.25

Covered ES @ 1083.75

will reshort later

GIGA closed the day above TL

Tomorrow is the last day of the week. What this means is, GIGA will sell off tomorrow to close the day near the TL, so the weekly will stay contained.
The market probably knew what was coming from AMZN, they bought the rumor. They will sell the news tomorrow like most of the other tech earnings.

GIGA weekly


GIGA daily


GIGA daily close-up

Shorted other 50% @ 1090

I have decided not to reveal my stop for this trade due to the importance of the situation. Instead, I will post my exit realtime (stop loss or profit)

Re-entered 50% ES short @ 1081

PS: Disqus is down. It doesn't show the number of comments under the post but you can still comment I guess.

Covered ES @ 1076.5 and 1076.75

will re-enter later.

The market is broken but yesterday's impulsive sell off might have drained a lot of ST selling power out of the system. We will likely consolidate in a tight range today, which will be a great shorting opportunity.

Take your time and let the bulls give you the best entries.

Added the bach @ 1075.75

Added short ES @ 1074.5

Bull is done first time in a long time and this is the time to use all the ammo I got from da bulls since August.

Leaning hard right here !

shorted ES @ 1079.5

stop 1082.75
same target

When it rains, it pours...

Please click on the corresponding keywords in the labels section underneath the post to get more information about what these custom indices are and how we use them. So I can skip the "101" part and talk about "the butter and bread".

S&P500:
My projection for S&P500 appears to be playing out very well so far.... with small extension to the upside. Timewise my expectation for a top in late October , I believe already happened. Price-wise, instead of 1075, SPX extended little bit to test 1100 where X3, the final line in the sand was.

GIGA:
Generals are dying. When their momentum is completely gone, engines will stop. The market will fall faster than you can say "good bye". Today GIGA was rejected at the controlling trend line once again. This index has a clear intermediate term target as indicated on the chart.
I expect the index to fall into the new year then rally till mid-Spring 2010 to put a generational top.

GIGA weekly


GIGA daily



Modified P (MP):
Aside from the massive divergence this index exhibited over the last few weeks, the index has never made a new high while SPX and most of the other major indices made significant highs. MP is a leading index. It shows tendency to go in the future direction of the stock market. Therefore the weakness in this index has to be interpreted as a possible development of an intermediate term downtrend for the stock market.

I had given my projection for this index approximately 5 months ago. It has been working like a clock so far. Following are the current charts.

MP weekly


MP daily


Money Watch Index (MWI):
This is perhaps the only evidence for my decoupling theory. This index broke out of the declining top line and also recently jumped above the crash gap indicating future upside for this index.
At this point, remember how this index is constructed. MWI=a*SPX+b*EUR/USD , a,b real numbers. What this means is, if the first component a*SPX drops, the second term b*EUR/USD has to drop less than the first component so that MWI can stay above the crash gap or rise further. What this means is, SPX will likely drop with the USD, defying the most fundamental dynamic between currency and equities. In other words, this move will be the first confirming sign for my theory about liquidation of all US assets, currency, bonds and equities, simultaneously.

MWI weekly


Composite Index (CI):
This index represents a larger spectrum of US assets as it contains bonds, stocks and volatility. Volatility component is important because it is the end product for rotation between bonds and stocks.

This index shows where the possible short term support for the current swoon is. But longer term pattern confirms my long term projection for SPX.





Following is a hourly chart of S&P500 emini indicating a possible VST support around 1060





Conclusion is that I believe it is dangerous to play small swings from here on because as these charts suggest, the intermediate term topping process is about to be over and the coming downside will likely be swift. Rules of the game is about to change and range trading will no longer work. One has to be very carefull with catching intraday bounces. Keeping a core short position and trading around this position should play out very well going forward.

Going to be a lean and mean into the next year

Are you listening?

I will post a ST update tonight. As the market started breaking down, looks like it will leave most bears behind. There are important dynamic pivots you have to watch and act upon. I will talk about them.

Covered ES @ 1086.75

will reshort later

Re-entered ES short @ 1094.25

stop @ 1097
same weekly target

Shorted the other half @ 1089.75

Stop @ 1093 (regular hours)
target 1064

There you go. This is from "Radium". We like this one much better.

shorted 50% ES @ 1089

covered @ 1087

Looks like I am gonna get stopped out anyway. System is short with larger stops. I gotta be nimble. I'll try later.

Shorted ES @ 1087.5

stop 1088.75
expected trg 1064 this week

Covered ES @ 1084

Re-entered ES short @ 1095

stop @ 1097
still expecting 1072 as a swing low this week

Shorted ES between 1088-1089

stop 1092.25
expecting 1072

x-Ray Vision

To discover high probability trends and patterns that are not visible on the financial markets, we created several custom indices that contain more important information and less noise compared to the regular indices and we introduced some of them here on xTrends.

------O------

Composite Index (CI), for example, contains information on equities, volatility and bonds. Therefore this index covers large spectrum of the financial markets.

------O------

Modified P (MP) is composed of leadership sectors which diverges from the major benchmarks ahead of the market reversals.

Back in July 2009, my projection for "Modified P" index was as follows:



MP today:


A significant divergence between SPX and MP took place over the last few weeks, just like the one in June 2009 which led to a multi-week sell off. This one however should be deeper and longer.

------O------

Money Watch Index (MWI), contains the currency and equities which usually move in opposite direction. Breakouts and breakdowns on this index may signal inflows and outflows.

------O------

GIGA is composed of the generals of the bull army. For the bulls to give up, these stocks must stop. This is what happened this week.




GIGA 10 day - 30 min

Sold ES @ 1088

Have a nice weekend.

GIGA has implications

Just want to update GIGA index which shows a confirming picture of the slow motion termination.

This index, composed of the darling-stocks, represents the generals of the bull army. When the generals are death, the war will soon be over and the entire army of bulls will surrender.

After GS yesterday, IBM cratered wide-open today, pushing the index further lower despite the strength in GOOG shares, which will soon be faded. There is now only one component left in this index, AAPL, which did not release earnings. I dont think it will be any help anymore.

HOWEVER, this doesn't mean that one has to go full-margin short because now the worst kind of stocks and sectors of the bull cycle are gaining strength. Energy and some commodity related stocks... With the help of these lagging sectors receiving inflows, the gradually increasing weakness in leadership sectors like Financials, Tech and Real-Estate may get faded upto some point, which means, instead of sharp sell off, we may fall slowly but surely. This sectoral rotation scenario perfectly fits in my rounding top theory which predicts a top print between Dow 10120-9800 in late October.

GIGA yesterday

GIGA now


GIGA 10 days - 30 min

Re-entered ES long @ 1078.5

stop 1076.25
expecting 1088-1090

Long ES @ 1081

stop 1079.25

At the end of this option expiration...

Check this out: Road Map

I believe the markets will close OPEX week near the rally highs which is about the maximum price target I predicted for Dow Jones (X2) and S&P500 (X3) back in September. High targets for SPX appears to be 1105 or so. For DJI it looks like 10120 +/- 20.

Time-wise, my expectation for the top was late October / early November and such weekly close will also satisfy the time constrain.

By the end of the day tomorrow, based on the market conditions, I will likely close all bullish hedge positions. (for confirmation, check with the performance site at the end of the day)

Following are the two charts I had posted in early September.





I believe after reaching the maximum price targets, the both indices will sharply pull back to close the month below X2 which is 1040 for SPX and 9750 for Dow

Again, ultimate target for SPX appears to be 1105 or so. For DJI it looks like 10120 +/- 20. Can we get there tomorrow? Depends on GE and BAC. Futures are holding pretty well despite IBM and AMD so far. All of my bullish hedges are in energy and commodity area. Not Gold or other front runners but the lagging segments of commodities , the worst kinds are not getting attraction as we approach the apex.

Crude oil is breaking out

Just like predicted, energy complex and related stocks are now getting the bulk of the inflows while hot money leaves leadership names like Goldman S. and IBM... Remember GIGA index at the trend line and components have to adjust themselfs for the index to stay contained. That is why IBM down while GOOG is up.

Commodities and related stocks are always late in any cycle. And Energy is the most lagging segment amog commodities during this bear market. We can say that Gold and precious metals can be a leading group among commodities compared to the rest. So worst of the worst is now getting a lift. Bull is very tired. Remember the vicious rally , 145+ oil while SPX was taking a dump before plunge happened?

I accumulated CL contracts in addition to my existing Nat Gas position. Also went long some related ETFs and stocks. All these are hedges against my existing short positions in financials and real estate.

Crude will likely gap up tomorrow.



Like this tourist who enjoys the art of pottery in Turkey, bulls enjoyed this greatest sucker rally which forced the limits of TA all the way. Enjoy it while it lasts.... But make sure that you leave it before bears take what you created and use it on you.

Slowly slowly....

Covered @ 1089.75

I will wait until the last hour tomorrow

Shorted the other half @ 1093

Shorted 50% @ 1091

screw the overnight, it is already there LOL

Classic OPEX action

Sometimes, I really have to listen myself. The market is moving in a range of 1090-1080. Two days ago, I said I would build a short position in this range but I am still trying to day trade.

I have strong evidences that, we will likely get a post-expiration adjustment if not a sharp sell off after this week. And I think they will try to close the week near the highs. There are bullish option spreads on SPX, they want to expire them as good as it gets.

I will try to short slowly around 1090 as part of my strategy. System is short, and still shorting near 1090 but I have to be more nimble. I will wait for an overnight stop gunning to short.

Tonight, GOOG and IBM earnings will be out, tomorrow morning GE and BAC.

Enjoy the rest of your day.

Shorted ES @ 1087

stop 1089.25

Fakeout on GIGA

GIGA index composed of 4 horsemen , GS, GOOG, IBM and AAPL left a fakeout on dailies.

The index opened above the TL yesterday which turned out to be a fakeout today. The biggest tops are printed this way.

GIGA weekly


GIGA daily


GIGA daily close-up

Goldman S. likely printed an important top yesterday

I shifted 27% of my short positions in financials to GS while it was trading above 193 yesterday.
I believe the stock will test 120 by the xMas this year. Regarding stock market, odds favor that some sort of a top has been printed yesterday. For this to happen, today's opening gap should not be filled, or there should not be an attempt to fill it.

All of the long term charts posted here and archived in BigPicture are fully intact. I may post their updated versions at the end of the week but I don't see any need for it as they are all contained within the same bearish configs.

What is more important for the short and intermediate term are the setups on custom indices, namely MWI, CI and MP. I will post an update on them today.

Stopped out at given levels

Just to let you know that my stops (1088 and 1087.25) are hit and I am out of shorts. I am planning to wait till next week.

It is always easier to push the market in the direction of the overall sentiment during the option expiration weeks, so even we pull back little here and there, I am willing to wait till the end of OPEX.

xPositions has just been updated.

Shorted other 50% ES @ 1083

Money never sleeps, heh heee.

Stops:
1087.25 for 50% and
1088 for the other half

If the trade works, I will close only a portion of the position and leave the rest as a part of my intended intermediate term position.

Building intermediate term short position on ES

I will be building a core intermediate term short position between ES 1078-1090. I got a partial fill above 1079 in after hours, rather unexpectedly, as someone's stop got hit. Over 5000 contracts were bought through the market.

I expect more stop gunning tomorrow if JPM doesn't mess up the party.

My intermediate term position will be 65% of my regular trading size. I will trade the rest of my account around this core position going forward.

Shorted 50% ES @ 1081

Sold ES @ 1071

long ES @ 1064

stop 1063.25

Covered ES @ 1064

Range expansion on increasing volume is next...

We had two consecutive narrow days on NYSE McClellan Oscillator and SPX is moving on vapors. This can be interpreted as if the market is waiting for the earnings but no matter what the reason is, we will soon get a range expantion on increasing volume.
I expect the direction of the range to be down. Not to mention OEX PC is rising rapidly while Commercials are gradually increasing their shorts in SP big contract.

Sold UNG @ 11.91

Will buy later if the ST support can hold the market

GIGA may open at the spot

The index GIGA which is composed of four horsemen of the bull army; Goog, Ibm, Gs and Aapl may open right at the precise intermediate term target this morning suggesting gap and crap.

GIGA along with other evidences suggests we get a sharp sell off here. However, I do not know how long it may last because as I said, MWI brokeout last Friday implying a possible fresh inflows into equities over the next few weeks. If this is a valid breakout, the impending sell off should stop right at the breakout level on MWI.

GIGA weekly


GIGA daily

Money Watch Index has an interesting weekly close

Money Watch Index (MWI) has a weekly close above the crash gap implying there may be further upside after a possible test of the breakout.

Both Composite Index (CI) and Modified P Index (MP) are testing their medium term targets, which means there will likely be a sell off in immediate future but since MWI broke out, which implies a possible push up for a week or more, I would be closely watching these indices when the immediate short term levels are tested this week.

Like a trained puppy

Its comiiiinnnnn

and now...

Shorted the other half @ 1068.25

Shorted 50% ES @ 1067.75

Sold the other half @ 1066.5

Atilla is closing as well

Sold 50% ES @ 1067.5

My balls are relatively softer than of those who are pushing the indices to reverse on suckers

Its comiiiinnnnn

Gonna be fun ...