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Sunday, February 27, 2011

Now tomorrow is the day..

This is SPX on top and RUT in the bottom 15 min chart for the week.  SPX is down for the week. It was down on Tue.,WED.,Thu. and was up on Fri.  On a closing basis it as down 36.91 and on Fri it was up 13.78 that is 37.33% or 38 a Fib. number.  On a intra day Hi to low basis SPX is at the 50% point.  On a closing basis RUT is down and the counter rally is 63% or the golden ratio of 5/8.  All this is within the expected counter rallies.  I would be disappointed if the rally gets too far.  The biggest concern is RUT is so close (27 points) to all time high of 856.  If  RUT make a new high then  I will be bullish and not bearish.  


The chart on the right is TNA daily.  Pretty good fork at work.  The recent decline brought TNA to exactly to the median line. When a long candle comes exactly to one of these line and bounces IMO it means a lot of people are watching that line.  Technically such rallies don't hold and new decline goes below the line.  If  on the other hand the line is touched after a few days of small declines and TNA bounces from one of these lines then rally holds.  That is just my observation.  I have also marked the 285 days of first rally and the exact copy extension from the first top.  The second 285 day ends on June 9th.  My scale on the chart is in error.  The top value is at 110.  Should we get a severe drop the bottom is at 58 on the same date.  IMVHO we will have a pull back to 66 in the next 10 days and we will march towards 110.  That is my current view.
The chart on right is FAS daily.  It backed off after hitting the 75% point.  It made a low at the 55.9% point which is 
(100 - 44.1). and 44.1 is 1/2 of 88.2 Sylvanus' number. The 44 ; 56 ; 88 ; and 12 are proving out to be very important numbers.  The counter rally is in the small box extension. Here too 32.23 which is the 44.1%  number is important to watch.   The bottom line way I read these numbers    is we are having good counter but are not out of the woods by any count.  This rally will end and the decline should continue.  The obstacles are tomorrow is last ay of window dressing usually positive and Tuesday is first of the month a pension fund buying day.  I will watch little keenly. Any of these 2 fail and I will get a good confirmation of the down trend.  I am bearish and sweating it.
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Friday, February 25, 2011

3 red candles so far..

SPX did LH and LL and closed in the red that is negative for tomorrow and RUT did a LH and HL and closed in the positive. Yep it was an inside day with a plus closing that is bullish for tomorrow.  BY studying the chart from the decline it appears to me we did a 1 2 3 4 yesterday and did a 5 and start of an a of an abc of 2.  Sometime during the day tomorrow SPX should give us a b wave decline and it should come very close to the lows say 1297 or something and  that would be my signal to buy the bull side or TNA.  However I will not take any bullish trades home for the weekend for the market is in a down trend and unless we pass 1325 (approx. 1294.xx + 30)  I would short very surgically.  SPX did put on a good show today the range was 17 points It declined till 11.00 and then rallied almost 94% of the day's range and finally settled at 75% from the low.  
This is my daily SPX since July 1st low at 1010.  It got turned back at the 3x1 line.   A good decline will take it to 2x1 line at 1240 near 1227 which is previous high and is a good support.  A great decline would take it to the 1x1 line at 1130 which is also a previous high.  Anything less would be personally disappointing to me.  I have Gann emblem insert. Today is 180 degrees from Aug. 25th low at 1039 but it was not a phenomenal day.  Overall I am still bearish on SPX.  It will give a counter rally but as of now that wouldn't change the down trend. 
This is TNA daily.  The upward channel from March 09' low is very symmetrical.  In Sep.09' it got hit at the top median line of the top half of the red upward channel and found support at the lower line.  This time it got hit at the same median line but hasn't reached the support line yet.  Heck it has only been 3 days.  Also the fast upward blue channel  also provided support from the bottom line of the channel.  This support should give enough time for distribution to the end of the month window dressers.  After mid day or end of day Monday the abc of 2 should be complete and it should start next hit which would be a 3rd wave hit.  I expect that to take TNA down to 62 level.  Needless to say I am bearish but will trade the long side for the c of 2.  Not carrying any longs over the weekend though.
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Wednesday, February 23, 2011

Follow thru!

Today SPX had a nice follow thru to the decline we had yesterday.  SPX was +3 by 6.45 and that was the high of the day.  A steady decline took it to  low of the day at  1299.5 around 10.20.  SPX almost captured 75% of day's range by 12.30 but went on to close at 44% from the bottom.  RUT did worse it only got up to 50% on the counter rally and closed at 25% from the bottom.  Not a healthy sign.  Several long and mid term trend lines were broken today.   I am a little worried about the severity of the decline.  SPX has lost 44 points in two days.  The most in a while.   It seems rallies are just an excuse for the floor to sell than a genuine buy from others.  Because the pounding has been continuous RSI indicator is all hosed.  RS is essentially average of positive gain in 14 periods divided by average loss in 14 periods.  To make it into an indicator and create an RSI indicator use the formula  100 - 100/(1+RS).  If the declines are consecutive then the RSI is extremely low like now.  The theory is nothing lasts for ever so too many periods of decline should be followed by a rubber band rally.  But I remember the worst declines come when conditions are extreme already.  


This is my hourly SPX.  The top half of the channel in grey is where SPX has been trading.  Today it hit the bottom of the top channel and bounced back..  If SPX doesn't get a rally going from here and I don't think it will there is very good probability that it will go to the bottom of the bottom yellow channel and that is at 1180.   I have also included 2 tables.  The first  one if average points per hour in waves 1,3 and 5.  I only noticed it now and it has been steadily declining from 0.63 to 0.55 to 0.38 points per hour.  That also confirms too many candles and too few a points rally always cause huge red candles.  The bottom table is for wave 2 and 4 and they are 0.96 points per hour in both cases.  That was quite odd.
I believe the first phase of the decline is about to end and we should get a small rally after this decline is over near today's lows.  May be slightly lower.  I count that we have only done 1 2 3 and 4 and started 5.  At the end of 5 the rally we get would be an abc rally for big 2 followed by a big 3 drop.  
I am still bearish but will play the abc 2. They can be very deep and rewarding.  
and then I will short.  This may not be the mother of all drops but surely doesn't look like any small correction to me. 
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Now what?

I have been waiting for this for a while now and boy am I glad it came today.  Markets got whacked and whacked hard today.  SPX gapped open 4 points lower and never filled the gap.  It was a steady decline  all day. The worst point was at 12.40 and SPX stood at 1312 roughly 32 points lower from yesterday's high.  It passed some major milestones today.  Doma 77 on the hourly was taken out.  30 min 200 point mvg. avg. was breached.  It took out all the gains after 4th of Feb.  MACD and STO rolled over. 10/20 mvg avg cross on the hourly.  It was a DKOD.  Many channels and trend lines were cut.  All in all worst day in quite a while.  RUT did even worse. 
One can pick any indicator and it was negative.  like everyone ran for the door at the same time. 
I have 2 charts.  The first one is TNA hourly.  It has crossed the DOMA 77.  It is in a solid channel and the lower line support is at 75.5. It has found support there previous 3 times.  I believe it will find support there again albeit short term.  I have marked some very important levels of support.  This could and sure looks like it would get very nasty.  The thing that bothers me the most is the RSI and it fell to 17 a very low number.  That might give TNA a small bounce.  
This is my daily TNA.  The top median line of the channel was resistance on Sep 23rd 2009 and the decline from there lasted 28 days.  TNA went from 44 to 31  a 30% decline.  The bottom of the long term channel is around 75 should that be taken out next stop would be around 61.  I plan to watch the daily closely.
We are in a decline.  There will be no rush to buy or to cover yet except for trading.  The rules there are slightly different.  Short and cover and reshort at a higher price.  But for medium and long term I will unload primarily because 30 point SPX drop ; DOMA 77 hourly cross ;  30 min. 200 point mvg avg breach.  
If the signal comes for going long I will follow with a 1/3 lot otherwise I am looking to short.  I do expect tomorrow to be a narrow range day may be even an inside day.
Thanks for reading my blog.

Wednesday, February 16, 2011

Today is the day!

RUT made  a LH and LL and closed in the negative and the range was pathetic 6 points.  SPX also made a LH and LL and closed in the negative and a even more pathetic range of 6 points on 1325 points.  Since the start of this year only twice has the RUT been able to put on more than one day declines.  Once it was 2 days and the other time it was four days.  Other times the declines have been limited to just one day.  That makes it difficult to trade.  The better strategy may be to buy and hold.  
This OPEX week.  In this week there will be one day when the markets will come down strong may have happened today but I am not convinced;  and another day when it will be up strongly.  That I know hasn't happened yet.  The floor covers its calls and writes some expensive puts on a down day and covers the puts on an up day.   This tells me we should have a good to very good up day very shortly either Wed. or Thurs.  Generally on Fri. every one is in their best behavior.  Markets on that day are flat as a pancake so as not to attract any attention.
From my last blog I am expecting tomorrow to be a topping day and hence a good size rally has high probability. 
This is a daily chart of RUT.  It is not very far off from all time high at 856.39.  It is on the median line of the top half of the channel usually not a strong resistance.  The top line of the channel is at 890 or so.  Now once we blow thru the old high RUT should decline a bit (In the words of my guru Adi its called saluting an old high) and then really. It then wont be a declining market at all.  So things are getting little interesting and I plan on watching.

This is also RUT daily.  It has Gann angles on it.  I have marked lots of lows and highs on it.  First thing I noticed was Lows and Higher Lows followed by Highs and Higher Highs.  During last years decline I did see LH and LL.  IMO it is important to keep a chart with numbers on it.  It helps me identify the trend very clearly instead of getting lost in trend lines looking for tops.  The 3x2 is quite good in offering resistance it is at 836.  
This is by far the most important display I follow.  I found charts with lots of lines can inundate me with too much information.  A carefully constructed matrix helps me a lot.  I start with Column D as low  then C as high. Col B = Prev. row D - C  and Col E = C - D. For  decline as a % of  rally Col. F = E/B and Rally as a percent of last decline Col. A = B/ Prev. E.   When the percentage get very high orange cells I know trouble is brewing and RUT is ripe for a turn.  

I am bullish for tomorrow and will act as soon as I get a signal.
Thanks for reading my blog.

Sunday, February 13, 2011

Intersection..!

This is Gann Emblem.  Basically I get important dates to watch for from it.  The current rally started on Nov 16th.  The low on that day was 1173 in the very last hour of trading.  Gann circle is making the 365 days in the year into 360 degrees and marking the 1/4 or 90 degrees at roughly 90 days. In this instance it falls on the Feb 16th. The 90; 180; 270 are important turn dates.  Personally 90 and 270 work better than 180.   
This is my hourly SPX.  It is still within the plus minus 1% of the top of trend line.  The thing that caught my attention today was the first move was 187 hours and the second move or EW wave 3 was 343 hours approx = 187*187 = 349 hours and current move three or EW wave 5 is 419 hours that 2.24 times 187.  This number 224 is an often seen ratio number.  
This is my TNA daily.  I marked the Feb 16th on this chart and found it falls exactly on the intersection of the red median line of the upward channel and the newly constructed downward channel.  That is a tell and is pointing to a pull back point IMO.
Lastly this is my hourly TNA.  The fast and slow channels are set to intersect in 17 hours or 3 days.  That will bring it to March 16th which is in line with Gann 90.  These 4 charts point to Wed. high for a pull back to set in.  Its all charts and construction and conclusion.  These are highly likely events.  Should a top occur on this day and I get a signal after I would be more confidant shorting.  
I am now bullish and will stay that way until I get distinct go for the other side.. Follow me on twitter to see my trades as they happen.
Thanks for reading my blog.

Wednesday, February 9, 2011

Grinding..

SPX made a LH and a LL and closed in the negative That is negative for the markets.  Benny's quizzing was without any fanfare and boring.  The range was about 10 point and spx closed 62% of the range from the low.   Dow was up for the 8th day in a row.  My Dow daily data from yahoo starts only from 10/1/1928.  It has been up 8 straight days only 54 times and out of that it made it to the 9th straight day only for 25 times or 46% of the time.  The highest number of straight up days is 13 and that happened only once.  Now here is my thinking too many green candles to get very few points means one huge red candle to take away all those points. 
Today is the first day of red after 4 days of green in SPX  that is a negative for  the markets for when the red trend takes over ( when ever that is) it has to start with a red day.  


This is my hourly SPX.  Not much has changed since SPX first hit the top line of the channel.  This is grinding slower and slower until we come to an halt and turn back.  The more I look at it the more I am convinced we will come down.  Well we haven't gone up in the last three days.  Its like a rocket (sputnik may be) that spurts up keeps going higher and higher until it runs out of gas and gravity takes over. My eyes are on it.
This is my TNA hourly.  Here we can set some specific goals.  First the median line then the DOMA and finally the 25% and bottom line combo.  Should we go below 73.2 it will be good sell signal.  In TNA tops, what I noticed is the second high does not have to be lower than the first high to be a top.  As long as they are close its good.  In bottom the second low is almost always ( more than 85% probability)  higher than the first to be a bottom.  This is the one I am 1/4 short and watching a little more keenly.  RUT had an inside day closinfg in the negative and that is negative.
Couple of things large conglomerates like COKE, IBM  etc. make substantial amount of money in foreign countries.  As dollar is weak; they bring back larger number of dollars.  This doesn't mean they are selling a lot more units it is just that they bring in cheap dollar paper.  Second because of cheap dollar it may appear to foreign buyers that our securities doesn't cost them that much.   That is a twin edged sword.  For when the dollar gets stronger and the markets fall and they cash in and take their marks and euros back they will find it isn't that much second it has very little buying power.  Well good luck Chinamen.
Another thing I found if I hang out in places where majority are bears I become a bear  myself. I have made a point to get as much bullish info as I can to be more objective.

I am still bearish 
Thanks for reading my blog.

Monday, February 7, 2011

The end came today...or did it?

SPX made a HH and HL and closed in the positive.  It was not a cloud walk day but close.  It sprinted to 1322.85 by 8.45 and then it was slow churning decline to 50%.  RUT rallied to 812.68 by 8.00 and also had a slow 50% decline.  A small counter move ended both close to high of the day and at the highest close since 666.  I was very impressed with the rally.   
This is my hourly chart of  SPX.  The end came to day.  Wave 1 took 2  half sections and moved from 1011 to 1129; wave 3 moved 3  half sections and went from 1039 to 1227; Finally wave 5 has moved the 2 sections and gone from 1173 to 1322 at the exact top of the channel.  It also backed off precisely at the top.  I have been calling this for a while and was glad it happened today.  Now all I need is a little follow thru and I can look forward to a good size decline of 60 some points on SPX at the minimum.  However should we jump higher then I will quit looking for a top.  This is the one I was looking for;  I saw it  and If it doesn't work out it will be abandon ship time for me.
This SPX daily.  It has channel and Gann angles from July 1st low.  SPX today hit the top of the channel and the 3x1 line.  I wrote some time ago this would b the spot where the top makes most sense to me.  This will prove to be a very good resistance.  If 1260 doesn't hold next stop is 1130 something a very few are talking about.
Today is also the anniversary from Feb 5th low.  I believe all these things have topped the markets today.  
I will stay bearish one more day. 
Thanks for reading my blog.

Signal isn't there!

SPX made a low of 1275 on Fri. 28th at 12.45  and that was the last time we saw that.  It rallied on Mon. and Tue. to 1308 at the closing.  Wed. was a flat day and Thursday morning after a quick drop to 1295 it has rallied into Fri. to close at 1310.  There really wasn't a hint of a pull back.  Yep! It ONLY did 35 points this week.  Like everyone else I have been calling and waiting for a top for a few weeks but it just isn't happening.  Egypt did not do any damage to the markets.  Now with some gimmick the unemployment is at 9.0%.  How we went from 9.4 to 9% with only 30K jobs is something I would never know.  One thing I know in California the foreclosures are being snapped up by Banks either the lending ones or other banks.  They are not going thru lengthy auction process.  Something positive is in the air in the segment.  With so many real estate agents not making money a super sales job may start this summer to get the housing market going.  I would keep an eye on it.  



This is TNA hourly.  The previous top is at 79.30.  The last three lows have been higher lows.  68.57; 69.20; and 72.47.  They all have relevance to previous highs.  This IMO is very positive.  Should we get a high high above the 79.30 TNA would be off to the races again.  The pull back in TNA was 10.73 or 39.28% close to Fib. 38.8% number.  If I understand peaks and troughs correctly TNA has put in a bottom at 68.57 and the next would a peak whenever  that is.
The chart is TNA daily.  It is on the median line and getting resistance but I am not convinced that it is strong enough to hold the rally.  The best way to see this chart is to magnify it and stand back and look at it. TNA is camouflaging a bigger size advance by nickles and dimes.  I remember what "they" said.  Oh! these ETFs are not holding but trading.  I can't see how applying a standard simple rule of 15% pull back  to sell and 15% rally to buy can hurt.  This chart is also bullish IMO.
I have read a lot of blogs this weekend.  May be I only read bear blogs or there just isn't that many bull blogs  the majority of what read were of the view that either a top has been formed or is about to form very shortly.  The usual stuff MACD, RSI, low volume and many ratios that are out of whack.  I can't say I disagree with the analysis but for me I have to see change in TNA price and I am not seeing it.


I am bearish for just tomorrow after that I am out of that camp and into the bullish camp until things change significantly.  say 30 points or more lower in SPX and a lower low in TNA.
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Thursday, February 3, 2011

Ultimatum to th markets?

 SPX made a HH and LL and closed in the positive.  That is another intra day reversal.  That is positive for the markets.   
Last FRi. was an intra day reversal to the down side followed by an inside day to the upside followed by huge up day follwed by another inside day to the down side.
If the opposite of the pattern were to continue we would see inside down day and a huge down day on Monday.  After making a quick and nice size low at 7.15 (about 9 points lower from yesterday's close)  SPX took off and never looked back. RUT did the same.  They both closed very near the highs of the day.  Very positive day for the markets indeed.
This is SPX hourly.  Just waiting for the paint to dry.  I looked at some previous high since 666 low and found 930; 1037 ; 1143; 1220 ; 1129 ; 1227 all to be highs.  The last two are after July low at 1011.  I was surprised SPX likes to top around 20 or 30 points over century.  Now there is a calculation out there of 666*2 = 1332 for a top.  It will have to be one massive distribution for two days for that to happen.  Time to watch a little closely.  If SPX does not turn around here ( low probability at this point ) I will be bullish rest of the way unless I see a 2.25% or about 30 points pull back then may be very may be I will look for a decline.  Honestly I do not want to be chasing the top by 5 and 10 points all the way to who knows where.  
This is TNA hourly that caught my eye.  Today's decline was exactly on the 77 DOMA and and at precisely  12.5% decline point.  TNA has not broken its channel of ascend.  It barely touched the lower line and took off.  Its moves are very exaggerated for it is 3x er. None the less it is looking very bullish and another assault on the top line very likely.  And that is around 87.  Now where have we seen that 87?  
The markets are very stubborn and do not want to come down.  It is time in my books either the decline starts now or I am forgetting it.
I bearish for 1 more day or couple thats about it.
Thanks for reading my blog.

Wednesday, February 2, 2011

One huge Red candle?

 SPX made a LH and HL and closed in the negative.  It was an inside day.  As I have  learned from recent past on an Inside day the closing is more important than previous day therefore it is negative for tomorrow.  Dow SPX RUT none of them got any traction at all today.  There was Egypt enough to put a damper but ADP was positive that didn't move the market.  Unemployment and ISM come out tomorrow and Benny speaks.  There is room for action some big action.
This a daily chart of TNA.  My sense is it came down on (1) from 79.3 to 68.57.  Rallied to 75.9 as (a) down to 69.2 as (b) and up to 77 today finishing (c) and completing (2).  The channels and the gaps support that. Tomorrow if  TNA gets a follow thru and slides hard that would confirm a start of 3. When compared to last Jan. there is only 8 more days of decline left. 

This is SPX daily.  On a flat day like today there isn't much change in many of the charts.  It looks to me like SPX gave a GANN 4 hit on the 4x3 line.  This a daily chart and reversal when they happen would be substantial.  The market looks exhausted meaning the average gain per day on 10 day average is now lower than what it was in Dec.  and Dec. was a slow month.  Too many candles very few point gain in my book books meas  one huge red candle in the making.  
I am still bearish
Thanks for reading my blog.

Tuesday, February 1, 2011

Anniversary ?

SPX made a HH and HL and closed in the positive.  That is positive for the markets.  It was a cloud walk day.  SPX only corrected 12.5% towards the end of the day.  Bulls had a fantastic day, but if I remember correctly I could not find even one of them yesterday.  Bears got crushed and SPX went on to make the highest high since 666 low.  
The chart above is SPX hourly.  I cleaned it up a little bit.  Wave 1 from 1010 to 1129 crossed 2 halves of a channel.  If I expect the same 2 halves for wave 5 I see 1320 as a top.  Incidentally the wave 3 from 1039 to 1227 took 3 halves.  I have been focusing on the vertical movement and not on channel movement.  Future will show how this works. Wave one took 186 hours I believe wave 5 should take 372 hours.  SPX is 11 hours shy of that. 

The emblem above is Gann.  Feb. 5th last year was a low.  It is very probable (rule of opposite )  this Feb. 5th should be a high.  With 11 more hours to go and 360 degrees so close I am thinking this could be a true Gann moment at 1320.  
I am still bearish 
Thanks for reading my blog.