The trading session is off and stumbling. A dip occurs and traders come in to buy the dip. Tech is not leading lower as discussed previously this morning so that created the move higher for the indexes. The broad markets are probably in waiting mode until the Consumer Sentiment at 9:55 AM which will be a market pivot point, about ten minutes away. Watch the sturdy SPX 1375 support level, and the cliff edge at 1369. Also, the other cliff edge at NYA 8001, now at 8042, only 41 points away from disaster. The 10-year yield is 1.62%. The euro is 1.2710 wrestling with the psychological 1.27 level. Copper is sick. JCP is a debacle. Keystone took profits on SDP exiting the trade. This was the thinly-traded ETF that shorts the utilities sector.
Note Added 11/9/12 at 9:54 AM: SPX testing 1375 support. NYA at 8028. Pivot is a minute away. Here it is folks. Hang on tight......
Note Added 11/9/12 at 9:57 AM: Consumer Sentiment is a blowout 84.9, at least folks are very happy while they jump off the fiscal cliff. Markets are pondering this optimistic attitude of the minions. SPX continues to test 1375.
Note Added 11/9/12 at 10:17 AM: The 10 AM data provided more of a market boost than the sentiment data. The SPX is now at 1380.56 back kissing the 200-day MA failure from yesterday at 1380.98. Price either pokes up thru and the bulls sigh relief into the weekend, or, a collapse occurs. Okay SPX, bounce or die, what will it be? The VIX is at 18 with its 200-day MA at 17.75 so watch this closely today. Bulls want the VIX under 17.75 asap but the bears want the VIX to stay above 17.75 which would continue to indicate continued market selling. The politicians, both President Obama and Speaker Boehner, wipe the powerdered sugar and jelly stains from their neckties as they prepare to discuss the fiscal cliff and likely scare the markets further.
Note Added 11/9/12 at 11:49 AM: Markets are motoring sideways. Speaker Boehner spoke promising a chicken in every pot, next up is the president at 1 PM, about one hour from now. The markets are listless and unispired knowing that overall, everything that was in place politically before the election, remains in place after the election. In the last three days, after the president's re-election, the SPX has fallen from 1435 to 1373, 62 handles, -4.3%. How many points lower will occur after a presidential speech? We find out shortly. SPX S/R is 1399, 1397, 1394, 1391, 1389, 1387.08 (10-month MA), 1385, 1384.67 (150-day MA), 1381.01 (200-day MA), 1378, 1375, 1370,58, 1370.07 (Keystone's 12-month MA indicator), 1370, 1369 and 1366. Bad things happen under 1370.
Note Added 11/9/12 at 12:23PM: The 10-year yield is at 1.64% moving up with the equities moving higher. AAPL is higher so tech leads the push higher and favors the bullish strength. The SPX is testing1389 and 1391 resistance. The 1391 and 1394 levels are very strong resistance so a price move up thru here is given street cred. This would also be the area where price would collapse from and venture lower again if the bears start pushing. Volume is light and below average on a run rate of about 85% of a days average expected volume, far lower than the stronger volume in place the last few days as the markets sold off. Markets are waiting on the president, we find out if he ever actually had a plan, or not. If President Obama says he has a mandate to tax the 250K and higher individuals, well, Goodnight Irene.
Note Added 11/9/12 at 1:57 PM: Sleep tight, Irene. The answer is that a presidential speech is good for about ten negative SPX points. More of the same in Washington, D.C. SPX is testing the 150-day and 200-day MA S/R levels right now and the cliff at 1370 remains only a few points away. DIS is receiving a 6% beating, down three bucks. As a rule of thumb, take any point move for any Dow component and multiply by eight to see its effect on the Dow Industrials (INDU). Three times eight equals 24 so DIS is accounting for 24 negative Dow points so the Dow would be up 24 instead of flat right now if it was not for Disney.
Note Added 11/9/12 at 3:14 PM: Keystone bot HPQ opening a new long position. The bounce a few days ago was a nice gain, so price is now back down with attractive positive divergence so we will see if HPQ can launch again.
Note Added 11/9/12 at 3:45 PM: Keystone bot EGLE opening a new long position. This is the overseas shipping sector. EGLE has attractive positive divergence setting up but it is a thinly-traded stock.
Note Added 11/9/12 at 3:59 PM: Keystone added more USD, the ongoing long semi trade.
Note Added 11/9/12 at 4:20 PM: The SPX moved higher and lower today to close towards the middle of the range with a downward bias into the close, ending at 1379.85. Price moved above the 200-day, 150-day MA and 10-month MA today only to close back under, this can only be considered as a very bearish indication. The LOD at 1373.03 occurred early on, overall, the strong 1375 support held, and price closed using the 1378 as support over the weekend. The VIX closed near the highs at 18.61. Keystone's SPX:VIX Ratio Indicator is at 74.15 so watch the 68 level next week since that would signal a large down day on tap. Utilities are completely collapsing. Remember how we have watched the utes roll over from the top three months ago and lead lower, a very ominous broad market signal. NYA closed at 8054 only 53 points above the cliff edge at 8001. The SPX is ten above the cliff edge at 1370. Bulls and bears have time to think things over before Monday. Troika was to provide a report on greece on Sunday that allows a decision to be made on aid but Europe continually kicks the can so do not hold your breath. Europe remains a mess and Draghi cannot fire the bazooka since Spain will not ask for a bailout. The U.S. is at the same exact place it was before the presidential election, two sides arguing like babies, only now we are all riding on a caravan heading for the fiscal cliff. The presidents statement about taxing the 250K plus folks sent the markets lower, same-o, same-o talk, nothing is new. The earnings releases are disappointing, top line revenues keep falling, companies are starting to lay off employees again, disinflation and deflation are taking firm hold. Taxes will increase. Business and entrepreneur bashing will continue so the prospects for the market are not too rosie, hence the selling pressure. President Obama's re-election results in a three-day sell-off where the SPX drops over 4%.
Your comments are great Keystone: "at least folks are very happy while they jump off the fiscal cliff" was a good laugh.
ReplyDeleteThe mess over the last few days has clarified a bit for me, and the market could move up in a few different ways (one of which is a post diagonal thrust which means a fast (but limited in this case) move up), however, I can not find any satisfactory count that allows a collapse directly from here. I am looking for upside between something like 1400 and 1450, at this point 1410-1420 is my higher probability target area.
Will be looking to gradually re-enter shorts as the count arrives somewhere where it could be interpreted as complete and build as it rises more as the ultimate ~1000 area is still my intermediate expectation.
Sold a small near dated put position (covered by my short shares) while this market figures out what it wants to do. I don't intend to cover much more, if any, depending on the next moves.
Hope everyone just uses RSI, AAPL CRUS..beautiful...rest is noise
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=120&yr=0&mn=4&dy=0&id=p70035709851&a=279991213&listNum=2
ReplyDeleteFor a while, the fiscal cliff appeared as an inevitability. Even if it's just empty gestures, there appears to be more of a willingness from both sides to resolve the F.C. without going over it. Is that just the mood of the moment? Maybe. But if the fiscal cliff is mitigated, then how much downside is left. Anything more than a 10% correction from the high would just be tomfoolery. Don't get me wrong. The markets are more than capable of tomfoolery. The elections behind us now. We can drink heavily through the weekend. Then, Monday. Nothing's really changed. Same President. Same congress. Same fiscal cliff. But now maybe we'll do something about. Maybe.
ReplyDelete*If* we hit the bottom of wave 2 there on the S&P, (and I thought we could go just a touch deeper) wave 3 up could go to 1420ish. Then a bigger short could be applied.
ReplyDeleteDoesn't feel like a time to load the boat either way, since we are oversold and gotta wait to see if we bottomed or wait till we push up.
I hope Key hasn't swapped Jelly Doughnuts for the pie.
that was it - wave iv is in - we move down in wave v of 3 probably ending on the 14th with a good bounce to the 1350/1375 area
Deletedo you mean bounce 'from' 1350-1375? or bounce up to 1450-1475?
DeleteROFL - of course I proclaim iv as in and here we go to 1390 - this really should be it - shouldnt go much more
Deletethink an intraday reversal is in the offing
I mean wave 3 will end at 1340 or a bit lower and the 4 will bounce to 1350/1375 before 5 finishing in December sometime at around 1000
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ReplyDeletesome how my post from yesterday on keystone 150, 200d sma didn't post... but what i echoed was that i would be careful with shorts now, since the market can use the 200d sma as a launch pad, and it might as well just have done that; it has happened the past 2 instances; dec '11 and june '12. from an ewt perspective, spx has made 5 waves down to 1373 and there are now several options:
ReplyDelete1) this was a wave 2 correction on a large scale and we're off to new highs (due to qe3 starting the 14th)
2) a wave 1 down of a larger wave down has ended, and now a wave 2 up has started, which should retrace about 50-62 points of the 100 point drop since the 1474 high; targeting 1430s area (oh so important)
3) today is part of a smaller degree 4th wave with a final 5th down wave to come, and then 1) or 2) will happen.
either way, up it is currently. personally i favor 2) for now, and i am long (sso) since yesterday @ 56.10 (which was sso's 200d sma yesterday). down momentum is loosing steam, as KS pointed out with the SSTO and MACD histo.
An excellent chart to study as a leader and from an e-wave perspective is GOOG. That one it is easy to tell its five-wave structure off the top, today is a pop but the fifth wave may want to finish at the 200-day at 637. When this happens it should be a go for the markets. Probably 637-650 would do it. Perhaps when this happens, the SPX will be coming back down to satisfy the weak and bleak RSI, money flow and MACD line on the daily chart, and place the SPX bottom with a very quick false breakout bottom planting the low print at 1350-1370 very quickly with a fast spike upward and rally back into the 1390's perhaps over 1400 again.
Deletei will have to reevaluate if spx gets back into the zone above 1392ish...until then I think we go down some more
Deletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=3&dy=0&id=p66669020717&a=280214481&listNum=2
KS, thanks for bringing GOOG to our attention. I haven't looked at it lately, and yes that's a beautiful 5 wave down.
Delete1 down: from 774 to 738 ($36)
2 up: from 738 to 759 ($21, with a nice ABC pattern; 2 days for A, 3 days for B, and 2 days for C, with Oct 18s intra-day high as end of C. retrace is about 60% of 1 down, which falls nicely in the 50-62% typical category of a wave 2)
3 down: from 759 to 670 ($89, 2.5x wave 1, and thus extended, but close to "classic 2.62 ratio)
4 up: from 670 to 695 ($25, about 30% retrace of wave 3, also rather classic)
5 down: 695 to 650 assuming 650 is the bottom, that make $45, which is 1,25x wave 1, Not ideal but acceptable.
the 200d SMA at 637 as KS mentioned would make 5 exactly 1.62x wave 1.... hmmmm, very nice target indeed.
Markets are getting abounce but the SPX daily chart wants to see another price low, remember the weak and bleak indicators. Today the histogram and stochatics are bouncing price. But SPX will likely come back down to test the LOD at 1373.03 today or Monday. That may be the true bounce point. A false break thru below 1369-1370 with large intraday spike down to 1350-1365 then wild spike vertical from there and that would be the bottom. But this only a guesstimate, perhaps bordering on palm reading. The idea would be to be ready on the buy button and as the SPX would fail at 1370, start entering longs since the false break down would only give you minutes to snag some great entries. It is good to simply be ready for this possibility which could be later today or Monday or Tuesday. The president speaks, that may send us down to this scenario.
ReplyDeleteKeystone will stick to pie, the big shots eat anything, the first place they run to is the buffet table and the only thing the politicians finish is the dessert on their plates. NYA recovered to 8100 so it is a 100 points away from disaster now.
THANKS FOR THE HEADS UP KS! That's a great play-set up you described.
DeleteHave my finger on the sell button for my longs from yesterday. If Obama says anything about about the wealthy or 1% I am selling. vix confirms the rally.
ReplyDeleteWhat rsi period do people here use? Going to re-enter shorts on the drop.
Easy peasy. Fully short now. Also betting Greece will squable over their budget on Sunday.
Deletehttp://stockcharts.com/h-sc/ui?s=$SPX&p=60&yr=0&mn=2&dy=0&id=p19839238803&listNum=2&a=278901139
ReplyDeleteok - now I'll say it again - iv is done v of 3 on the way! lol and I have the winning lotto numbers in my pocket!
ReplyDeletechart above worked like a charm! I will play lotto today! I will have sun on my face! LOL
DeleteThe congregation speaks a lot of Elliot Wave of late. I gave Elliot a long and serious study and was never able to get anything out of it. You count the waves and then it does the opposite. Then you're all "no, no, no, that was a little wave inside a much bigger wave and that bigger wave is a little wave inside of an even bigger wave." It's like listening to Professor Jennings from "Animal House". There may just be an entire universe under my finger nail. After Elliot Wave, I lost my ass and had to go wandering around the mountainside looking for it.
ReplyDeleteShane, that's why you have to also use "classic" TA, look at MACD, SSTO, trendlines, etc. No technique is perfect and all have their flaws. EWT has helped me to call tops and bottoms more accurately. EWT is NOT the whole grail, just another tool in your tool box!
DeleteShane - my charts are working out just fine...do you need the lotto numbers! lol
DeleteEW can be frustrating sometimes.
Probably my fault for starting the wavespeak.
DeleteI am glad to hear you put some time into it, most seem to give up before really trying. Sorry to hear you had a bad go.
Some notes on making it work from my experience: You must count every single squiggle. It all fits into the larger pattern and ignoring any peaks and valleys will allow you to simply throw any label you want at any spot you want. No surprise that this has no predictive value. The rules of internal form also must be obeyed. If you start calling 3 wave structures 1st or 5th waves, no surprise you won't get the count correct there either.
IMO counting Elliott Waves is an all or nothing proposition. If you are not going to spend hours figuring out a proper count, a "quickie" will do more harm than good and you are better off spending your time on something else. This is what most people do from what I see posted around the internet which is why they have such bad "luck". Proper counts are high maintenance but it really is stunning what they can predict when done right. The startup cost is also extreme. I am not joking when I say: You will have problems figuring out what will happen over the next week if you are not familiar with the count since 1932. This is vastly different from identifying H&S patterns or double tops/bottoms. The waves do not stand alone: You must know what they are composed of and what they make up which necessitates deep counts in both directions and when you start on a fresh market, the "bootstrapping" process to give you something to start with can be very challenging.
Counting waves is probably one of those things that you just have to be the right type of person for to "see" it, just like people who can properly read traditional technicals.
And finally, it should go without saying that there are many ways to make money in the market. If waves aren't your thing, no sweat. No two successful traders use the exact same techniques.
Thanks for the 411. You're right. I'm way too A.D.D. for all of that. Other technicals take some time, but I don't have to start counting from 1963.
DeleteI haven't found anything in my toolbox yet that can accurately account for what I call "sea changes". That's like unforeseen market movers, like Uncle Ben announcing QE3, when virtually every market-minded person sees that as a horrible idea. I think a lot of us got caught on the wrong side of QE3, but gold paid off (sort of).
Great discussion, the part about only using it superficially and getting into trouble makes sense, that is true with anything, it is remindful of the funny quote Keystone will say often, "I now know just enough to be dangerous with it." LOL
Deletehttp://stockcharts.com/h-sc/ui?s=$TYX&p=D&yr=0&mn=11&dy=0&id=p15174689272&a=275123604&listNum=1
ReplyDeletehttp://stockcharts.com/h-sc/ui?s=$TNX&p=D&yr=0&mn=8&dy=0&id=p98585282033&a=275457077&listNum=1
http://stockcharts.com/h-sc/ui?s=$SPX&p=120&yr=0&mn=3&dy=11&id=p55090640848&a=279563378
MACD, RSI, and Bollinger have been better, not great for me. Don't get me wrong. I'm not dissing the great and powerful Oz. I'm just saying it didn't work for me. And Scott, yes, please the winning lotto numbers would be nice. It doesn't even have to be the big jackpot, one of the little ones will do.
ReplyDeleteAs I relook over the charts for the weekend, any bounce next week is hittable short for another barf lower.
ReplyDeleteIMO EWave works best for the REALLY big picture, like 1-5 years. I mean if a wave five gets "truncated" or something, like what happened on my wave count, then your wave count gets hosed.
Anyway if you are watching this excellent blog everyday, you are probably daytrading as I do, and the big picture only helps with the trend to help your daytrades.
The cliff edges held at SPX 1370 and NYA 8000, will they hold on Monday? Even if 1370 ruptures prepare for the possible quickie fake break down move which would be a bottom. It would be like the early June bottom. Or perhaps more so the October 2011 bottom was that quickie spike down to 1075 and run higher. OpEx Monday tends to be up. New moon Tuesday would hint at negative markets into the Tuesday close. Solar eclipse as well. These are wild times. For OpEx there is the period between a Tuesday low and Wednesday high that typically occurs, so watch that for a long play or plays brought on sometime Tuesday.
ReplyDeleteHi Keystone,
ReplyDeleteAlways thank you for info in this blog of you. I find your comments funny that people are at least happy while falling off the cliff w/ high consumer sentiment. Good one :-))
As you realize I am new to the analysis but I noticed todays minutes chart shows Bullish Gartley/butterfly which means breakout is close, perhaps Monday or Tuesday.
I also would like to thank for the comments of Trader Kid & Arnie, it is helpful reading those dialogs.
I am not catching every single wave up or down but so far I ride one once in 10 days or so which I consider a progress.
I was not planning on posting my count for reasons that are noted on the chart (basically complexity and lack of helpfulness in forecasting), however, given the discussion above, I thought I would put some comments on and post it for educational purposes.
ReplyDeleteTake a look, and please note if you found it useful so I know whether my time was well spent putting it up:
http://i.imgur.com/JeIdR.png
Interesting stuff Trader. The RTH and GOOG five wave structures are interesting and to hint that a bonce should occur at anytime. A crash lower, or false breakdown, or immediate move higher on Monday's open would be the three scenario's on the table. The SPX 1370 is the cliff edge, also watch NYA 8000 at the same time. If these hold, its bounce time. If they rupture, it will either be a false breakdown with a mini panic spike lower that will be great place for long entires for a quickie perhaps few day up move, or the SPX 1370 is actually the doorway to a waterfall crash. In an ideal world, markets would remain weak into a low on Tuesday which would allow a few days of upside for markets to get their bearings.
ReplyDeleteThe rupee was at 60.64/67 in early trades as against Thursday’s close Of 60.43/44. Agri Tips
ReplyDelete