BullBear Trading: Stock and Financial Market Technical Analysis

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Hi Gary.  There was no need for you to move your question to this forum.  My comment was not directed at you.

I think I have been very clearly stating that I have been waiting for a rally (the one we are seeing now) for SPX to trade into a resistance zone and then begin selling short for another big move down.  In the trading room, since you are new, it is probably a good idea to read the analysis and then also read the follow up commentary so that you can get the whole picture.

Like you I am happy to trade on either side of the markets.  My motto is "Keeping You on the Right Side of the Markets".  So my analysis always encompasses both a bullish and a bearish view as well as various bullish and bearish alternative scenarios.  Then I use technical analysis to determine the highest probabilities and set my trade orientation.

Yes it's irritating to miss a good opportunity, but the nice thing about the markets is that there is always a good trade somewhere.

Hope this helps.

 

TYVM...I gather that the resistance is in the 1200 area for the SPX. I am going to open a position to short it when it gets near there. I believe now and have believed for some time that this market has been on borrowed time--no matter what the technical's say. The macro picture is too convincing. I am glad to see that my view is not entirely off base. I am VERY sad that I could not be near my trading desk to capitalize for this monster pull back. I had every intention of shorting the market when I got home...history happened. I guess I go after the next one.

If the Fibonacci retracement tool is accurate, it looks like 9700 ish is not out of the question for a downside bottom in the medium term. Is that the way you see it? Would you be inclined to buy out of the money September puts (or later e.g. October/December)? If so what is a reasonable distance out of the money to go?

 

If you are in cash, you should be happy.  A lot of people lost money big time.  There is only one expert here and that is Mr. Steve Vincent.  All others are simply noises. 
Actually the zone I am looking at is a bit higher, closer to 1220. Check out the ongoing coverage in the BullBear Traders room.

Hello fellow bullbear members,

I'd to share with you some of my wave analysis of the Dow Jones World index. It appears to have a close correlation with the US SPX index. Months ago I thought that it was in a 5-3-5/A-B-C move up from the March 2009 lows. I changed my view to a more complex wave formation when I found it difficult to count 5 waves up (c-wave) from the june 2010 low (b-wave bottom). Also, the c-wave of a zig-zag is normally quite powerful, however the move up from the b-wave was much weaker that the a-wave. From Oct-2009 the index has more or less been travelling sideways with upwards bias - exhaustion?

The 1st chart provides a count that has the index moving up in 3's. The d-wave being a flat 3-3-5 correction. The formation could either be a straight diagonal triangle (wedge) or a double combination complex wave structure.

The count also has the top occuring in early July 2011 (267) and not April. This count also depicts an e-wave failure which could be regarded as an exceptionally bearish signal.

I find that the waves of a diagonal triangle,

1. exhibit the similar Fibonacci relationships with regards to duration and retracement as other triangles.

2. the b-wave retracement of the a-wave tends to be quite shallow.

3. like any other triangle formation, it can appear quite complex when one or more waves of the triangle are composed of a flat or triangle instead of a zig-zag.

4. because of its power and extension, the a-wave is always a zig-zag.

The 2nd chart depicts a failing triangle wedge the DJIA countertrend rally during the 2010 flash-crash.

The 3rd chart depicts some significant DJW index trendlines and also Fib time relationships between the index tops made against the L1 trendline. A short position near or at the L1 trendline in July 2011 would have been a low risk trade, however the e-wave failure eliminated this option.

A reason that may support the top occuring in July, is capitulation. You often hear about capitualion lows in the market, but there's also capitulation highs. I visited the Zero Hedge (bear site) during the explosive market rally into the 4th July weekend to witness a huge out pouring of emotion by market bears/shorts. I'd been a regularly visitor to the site over the past 12 months and had never seen so much dispair by the posters there. Utter desolation. There was alot of blame being dished out to ZH, clueless market bulls, stupid dip buyers, market manipulators, fed-reserve, other shorts for covering,  etc. I saved the commentary for future reference and have included some it below.

++
Thank you ZH for setting up the short squeeze by encouraging the expectation that the ISM would print below 50, and that money markets were freezing up, and printing countless negative things about Greece. Very good work, you have lined the pockets of your enemies.
--
Pretty hard to make predictions in the rigged mafia casino.
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I was too drawn in by ZH's negative outlook. ZH only makes one mistake consistently, their timing is too early, and they do not communicate this in his efforts to destroy the banks. I see many people with what I have come to call a "will for the market" where a person hopes and believes something that may or may not be correct but fumbles the timing due the bias naturally filtering out the counterstory. Time to learn a hard lesson, fortunately lessons this expensive STICK.
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This rally is just fucking bizzarro. Just look at the charts. It is just bizzarro. At least to me. I'm new but still. I avoided some painful losses by sticking with it but it could still go either way. Too many arbitrary and secret whims fighting unpredictable events of reality. Blaming ZH for losses when they scrape up muck no one else wants to talk about points to a lack of personal responsibility.
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I don't blame ZH for the mistakes I made. However even as I have made a mistake ZH also makes the mistake of overwealming bias, that does not always serve well its own intrests. If I am to take responsibility for making choices, so too does ZH take responsibility for giving advice. I do not blame ZH for my losses, however factually speaking by reading ZH is THE reason I went short.
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People like you crack me up. Took a bath today and want someone to blame huh.
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I got anihillated this week. My DXD bloc of options just got blown out of the fucking water. So bad that I'm not going to try to salvage the pennies on the dollar that they're worth. I never in my wildest dreams expected the market to wipe out 2 months worth of losses (or gains for my situation) in a mere 5 days. I'm done. This retail trader is out.
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............ another poster summed it up.
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Sadly, this could be a good contrary indicator. A few more knock out blows like this, and the top (the real one) could be in.....
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............ and out of the 200 odd posts, a solitary die-hard bear proclaimed he was not for quitting.
--

I remain 100% short SPY and will not cover at a near 90% loss. The faster and higher S&P spikes, the more violent the pullback will be. My JUL11 options may expire worthless, but that's moot at this point; I'm already well beyond the point of no return. I dare the markets to keep rallying.

++

Comments appreciated.

Thanks,
Ric

 

Attachments:

I'm sorry, I didn't mean to offend.

I'm new here. It does say at the top of this page.

"Post your thoughts, ideas, commentary and research on the markets here."

 

I have exactly that thought.  If you are the market makers facing these hugh short positions, what will you want to do? You will want to move the market such that these shorts will be neutralize and expire worthless. Option expiration is next Friday.  It is a good reason to argue for a rally to the option expiration and reverse afterward, isn't it?

 

 

10 worst crashes:

http://leatherheadblog.com/2008/09/30/top-10-market-crashes/

Number 4:

4th Worst Stock Market Crash: 1929
Key events: End of the roaring twenties, and kicked off the Great Depression
Date Started: 9/3/1929
Date Ended: 11/13/1929
Total Days: 71
Starting DJIA: 381.17
Ending DJIA: 198.69
Total Loss: -47.9%

Number 1:

Worst Stock Market Crash: 1930-1932
This is the grand daddy of them all. Investors lost 86% of their money over this 813 day beast. This market crash combined with the 1929 crash, makes up the Great Depression. In just two months, September and October, the stock market had lost 40 percent of its value. Black Tuesday usually marks the point where the Roaring 20’s ended and the Great Depression started. The stock market continued to fall until bottoming out in July of 1932
If you had $1000 on 3 September 1929, it would have been worth only $108.14 (89.2% loss) by July 8th, 1932. Full recovery of this loss didn’t occur until 1954, 22 years later!
Date Started: 4/17/1930
Date Ended: 7/8/1932
Total Days: 813
Starting DJIA: 294.07
Ending DJIA: 41.22
Total Loss: -86.0%

What's that saying those who do not remember history are doomed to repeat it???

http://www.plumbreport.com/?page_id=56

 

 67 percent in Gold and Silver

 

830 New Lows ($NYLOW) occurred on 8/8/11, 2 days ago. Today, there is 171 New Lows.  Sorry, folks, crash already happened.  New price low likely, but it is at least 4 months away according to McHugh's chart for 1/2000 thru 1/2003.  I am waiting for new lows to drop below 100 to confirm that the worse is over according to the following Robert McHugh's Article:

 

http://www.safehaven.com/article/3989/stock-market-crash-bottoms-in...

 

Today market drop is very good actually setting up a lot of the indicators for a bullish swing up soon.

 

Correction: Crash #5 and #6 appears to be slight less than 3 month apart.  The rests are over 4 months apart, meaning the next possible down draft most likely occur in celebration of the Black Monday October 1987 giving us possible slightly less than 2 month of breathing room.  No hugh rally, but no lower lows in the meantime.

Very good opposite opinion.  I do find the McHugh Analysis not quite applicable to the 2008 time frame when we had the 100-year event.  Let's hope that we don't have that again.  $VIX will tell us.  In any case, if $VIX drops significantly today, there will be a RSI bearish swing siganl in place and the current swing is up.  Just need to get out when the sell signal shows up.  Keep in mind I have a long baised and do not play in down markets. And again, I just can't help myself making noise and has no intention to insult anyone.

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