Saturday, October 31, 2009

Ok...nothing to do but be long for a week...

The two dotted green lines are from intermediate term trend lines. The top green trendline is the upper resistance trendline for the bear market since early last year. The bottom dotted green trendline is the bull market support line since the March low this year. There is an idea that when lines cross like this and form a triangle, the market will try to move to that point on the triangle (after all they are both trendlines). So basically I am looking for a choppy next week, with the market retracing back up 50-62% (106.88-107.69...around the green dot I marked. After that we should start [iii] down.
VIX pierced the upper BB sharply, we definitely need to pull back into the envelope. This corresponds to a market rally.

Hey look! BPSPX:CPC moving down sharply...
CPCI:CPCE still has not crossed over to indicate a downtrend. I don't expect it to happen until after [iii] starts.

Thursday, October 29, 2009 chart...

Pay attention to the BPSPX...the graph at the top. When the BPSPX is over 70 it is considered overbought a 6 point drop is considered a sell signal...we have dropped more than that from the recent peak.

Hit the target...

Well what more can you ask hit the target zone...No charts tonight as yesterdays chart still holds. Watch out if the rise violates wave i tomorrow.

Wednesday, October 28, 2009

Here you go...

Ok, I really expected this 5th wave of iii to much shorter than it actually was. It looks extended. No idea what the GDP or Unemployment numbers tomorrow are, but it should spike the market up if the count is right.
The large green circle is where I expect the bounce to retrace back to, then we will have a wave V.The chart above is what I see happening longer term after this first wave is finished we will have a wave 2 up that will trace out the right shoulder of a large head and shoulders pattern.

Ok the BPSPX:CPC closed sharply lower. The MA's will start accelerating down in the next few weeks.

Tuesday, October 27, 2009


A bit under the weather tonight. I expect the market to be finishing up a wave 3 soon. Looking for wave 4 up.

So in other words...potentially down in the morning but bounce back positive before the close.

Call me a blind squirrel!

Wow, the market was reading my blog yesterday:) So again today I am looking for a retrace to the 107.65 area before a final plunge to around 105.5...heck while I am on a roll, the retrace back up after that should be to around 108.24.
The BPSPX:CPC gave an early sell indication. I don't actually believe it...well not yet.
The vix should retreat back to the midline intraday before again spiking up.

Sunday, October 25, 2009

More predicting!

So how about a complex head and shoulder pattern shown above. With the market first heading to 109 before the plunge down through the neckline. That goes with the EW count above if you think we have had the top and the 10/22 high was the start of a wave 3 down.

Anything beyond 109.77 means we are headed to a new high.

Wow, BPSPX said to get out of shorts and buy...
VIX has gone crazy the last 3 sessions.

I expect the market to be up tomorrow, looking at 109 for the 62% retrace then down. Beyond that level it gets tricky, beyond 109.77 time to get out of shorts.

Thursday, October 22, 2009

Ok...went short...

There is my count...We did not get a confirmation day on the candle patterns. The vix looks pretty messed up with today's candle engulfing yesterday's which engulfed the day before's...

Wednesday, October 21, 2009

Did I just see P2 end?

Above is a count...don't really like it...really expected a move up to 112. But that drop at the end of the day looked impulsive. We are going to have to wait and see if that was the top. For the time being, today was a key reversal day. We made a new high today, but before the end of the day we finished below yesterday's lows. And of course a bearish engulfing candle pattern formed.

Also note that any unfilled GAP DOWN tomorrow will leave an ISLAND TOP.

The BPSPX:CPC crossed indicating an intermediate downtrend is coming. Doesn't necessarily mean that P3 has started. I won't be posting this chart again for awhile until the crossover indicating buy.
Wow that was a heck of a reversal candle on the vix. A bullish engulfing candle formation has occurred. Tomorrow will be in getting confirmation.

Monday, October 19, 2009

It crossed!

The count is murky, but the BPSPX:CPC finally had its MA's cross signaling a SELL for the intermediate term. This does not rule out new highs for the next week or so, but it does say we are going to start moving down soon.

VIX has traveled to its lower BB...time for a rebound.

At this point I will start building large short positions.

Sunday, October 18, 2009

Just an update...

Here is my count...could it be a 1-2 already? I am torn. The market is between fib levels, but is also showing signs of topping. Objectively I am leaning towards a run up to 112 as we punctured the 108 level far enough .
But then you have this nice H&S pattern that has formed on the ES.
The BPSPX:CPC has been a good indicator so still has not said to go short yet. The MA's are so close but still have not crossed over to confirm the market direction.
How much further can the VIX go down? Are we going to the teens in a massive blow off top in the market?

In conclusion, the top is near...whether behind us or just ahead of us...its near :)

Thursday, October 15, 2009

Move a little here and there...

The new and improved count...
Of course the BPSPX:CPC says not to buy yet...
The vix has traveled down to about the lower BB...time to rebound!

Wednesday, October 14, 2009

Bonus post!

Here is my current count.

The big picture...

My big picture...Basically we will close below the upper trendline on the weekly this week. Spiking above it on the daily this week as we make a blow off top. With all these squeezes in the futures market causing gap ups in the morning, I suspect when we gap down we will form an island top.
Less than pixels from crossing...

Well I had said to someone that if we break the support line we will be making a trip to the lower BB...I just didn't expect us to make that trip in 1 day...and make the trip back up on the same day!

Still predicting down by Friday...

Tuesday, October 13, 2009

This week is it.

It stopped at an upper trendline for the bear market. The above chart is a weekly chart, and I can see the market closing above the upper trend on a daily basis but it will pull back under for the week. The market will collapse and the weekly stochs will break their trendline from the March lows. We should also see a volume spike.
Wow, still no cross when we zoom in on the BPSPX:CPC.
The MA's technically have not crossed on the CPCI:CPCE...they are exactly equal right now!

Wow, we opened on support...shot up during the morning...then traced below in the afternoon...and closed right on it.

Monday, October 12, 2009

Things that make you say hmm...

I am going to go counter to everyone and say we will have a significant pullback. The problem is that we made a very marginal new high today. I expected this, but many are thinking this opens the door to a new highs in the 112 area. It does, but I don't think thats where its going and there is time to figure it out. Ignore the (ii) as it is a remnant...The question is did P2 end today or are we in a complex correction with P2 ending in the near future around 112?

Btw...did you see the Bear flag form at the end of the day? Volume was not declining during the formation so that is a little worrisome if you are short.
So close...
Yet another that is so close...But with the bullishness today the ma's actually got further apart.
Ok...back to the reason why I think we will not immediately head to new highs. We closed right on the VIX support.

Now the essence of the problem is that we either bounce off the VIX support hard...or we pierce it and head to the lower BB.

Friday, October 9, 2009

Everyone expects it to make new highs...

There is room in the green rising wedge for another run up to the top wedge line maybe to about 108 or so. Also note that this formation has declining volume which increases the likelihood of a break down out of the wedge. A smaller pink wedge has formed in the last two days with declining volume also. The volume is key to identifying the probability that the rising wedge will break down.
Still pixels away from crossing on the BPSPX:CPC.
Now this VIX chart is the reason I think we will reverse hard on Monday. The VIX closed on support today.
Finally this one is interesting, I got this over at Traders-Talk. Note how bonds have been in a slow controlled rise from the March lows. Then all of a sudden last week they broke down. This is foreshadowing what is going to happen in the equities. Generally it assumed that the bond traders are a bit more skilled than equities traders.

The VIX and the bonds lead me to believe that if the top is not in, it will be soon and it will not be at much higher levels than we are at now.

On a side note: Obama winning the Nobel Prize for promises he made during the election gives you some idea of the world we live in now. Promises and rhetoric are valued more than substance and results. If the economy goes where many of us think its going, history has shown that the U.S. will become more isolationist and protectionist. If prizes are given on promises, ok...big promises, then I promise peace on earth and good will to men...Now can I have my Nobel Prize?

Thursday, October 8, 2009

One way or the other?

Ignore the (iv) right now its a remnant. But right now we are at the cusp of a major move. The problem is that major move can be either up or down in the short term. Longer term its clearly down. Kenny posted a count like the one above, basically with wave (ii) being a 3-3-5 correction. Of course, the other more popular count is that we are in wave 5 up to new highs.
BPSPX:CPC ma's are just pixels apart from crossing. The top is near, either behind us or in front of us. At the same time we are about to break down out of the wedge that we have been in for a year now.
The VIX:SPX formed a bullish hammer today. While this is a low reliability formation, we will get confirmation tomorrow. But there is still a little room for it to travel to the .022 area for support.

Based on this chart I DO NOT expect a new high or at most a marginal new high. In fact tomorrow would look like an excellent day to short. A bull flag/pennant formed today so I expect a pop in the morning and then a sell off though the day.

Wednesday, October 7, 2009

Still waiting...

Ok, waiting to see if ii is actually a wave 2. Right now its looking like a bull flag, so I am expecting a jump in the morning.
BPSPX:CPC is so close to crossing. So we know the top is near if it hasn't happened already. Remember this chart essentially magnifies the Bullishness of a normal BPSPX.

I don't like that we broke below the 20 on the VIX:SPX. This could essentially send us to the 0.022 area before a rebound.