20 replies to this topic

[PorkLoin]

Looking darn good for the simple ABC down. QQQQ hasn't done much to the upside, though. Hourly MACD looks decently strong, but the DJIA is near some sort of top, I would think, and if the QQQQ stays relatively weak then I'd look for the move up this week to be "X" followed by another ABC down.

Doug

[eminimee]

Too bearish...........or too obvious?

[EntropyModel]

Full comment at my blog yesterday afternoon -

http://entropyhome.wordpress.com/
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"I’m observing one of my DER right now( see log..)….so a pullback is imminent very high odds, or a blow off move that will quickly reverse.

I’m not trading the indexes at the moment, because they are so range bound and choppy..plenty of other stuff that is better….but all my stuff points to a swing down starting anytime here…possibly another 1-2days chopping at the highs…but my TA says no breakout coming…building a swing top for a sizeble down move…to previous targets on Q’s, and SPX should join in this time on the downside.


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I'll try to find some time to do some updated charts at the weekend most likely...things are shaping up for some nice trading.

Mark.

Edited by entropy, 28 February 2006 - 02:22 PM.

[PorkLoin]

Thanks Mark. If we're now going down in an equal move to that from the Jan. high to Feb. low, QQQQ ought to go below 39. Doug

[EntropyModel]

Just testing posting live charts from my public stockcharts list ..hopefully it works..want to see if it keeps updated with changes i.e is live.

http://stockcharts.com/def/servlet/SharpChartv05.ServletDriver?chart=$SPX,uu[f,a]waclynay[d20040101,20060317][p][i][J71455236,Y]&r=78.png

Mark

[PorkLoin]

This thing is still tracing out nice patterns. For the NDX to make a lower high (as point 2 above) while the S&P and Dow make new highs in the short-term would be no surprise. I think the structure this year counts well as an overall three-wave move, with us just getting into a possible wave C.

I gave wave C a generalized five-wave look, and that's about it. Not predicting the time it will take nor a certain price level, though of course the common ratios between C and A would be good to pay attention to.

The decline into early February can be counted as five waves, though I don't think it matters much now. If we get a decent decline, some sort of third wave down below the Feb. and March bottoms, then it'd be time for wondering if it's 1-2-3 overall, rather than ABC.

As of now I more expect continued rally to new highs on the year (could be something like May?) after another move down. Not at all saying the rally from the lows of 2002, 2003, 2004 or 2005 is done, (yet I feel such bears thinking about).

Best,

Doug

[eminimee]

Perhaps we can get some clues on the count with these.
http://www.tradingth...oxndx_daily.png

http://www.tradingth...d/ndx_150_r.png

http://www.tradingth...oad/nasi_aa.png

[EntropyModel]

There's alot of 'fuel' for a rally, but 4 key indicators I have are all suprisingly saying the downside is not done yet....even if its just 'bottoming'...so I'm guessing of a break of the 200ma on spx to 1245-1255 for a low...where I will finally look to get long for a bounce IF these indicatos turn bullish the Intermediate.



Also note the Volume pattern chart I showed has played out as well.



I have pretty much stopped posting my work at TT for varying reasons, if I do post analysis in the future it will be on this swing board....so this is a 'tieing up lose ends' post, and so below are some key post I made to explain my 'perma bear' position. I've heard alot about how 'sentiment' didn't support this decline, I outlined my sentiment argument BEFORE the decline for why it DID support it.


April 4 - Important Sentiment Poll

http://www.traders-t...0906&hl=entropy

"is why the first move will surely be fake unless everyone fades it" -[ yep fake move on couple of indexes, but Q and SPX never budged.]

Why?
If the market really wanted to breakout up, why hasn't it?
Folks were much more beared up a few weeks back, and now if anything are becoming pretty bullish on most measures - see Gary's link to Hulberts sentiment link....most measure's I followed have alot less bears..and smart money remains bearish.....so its hard to imagine the market is 'trying to build up shorts' ready to fake them out. The change from bearish to bullish is very obvious to me right now.

The markets also had favourable seasonability from Jan -March, it had end of quarter markup, and now beginning month inflows - yet still here we are....range bound..with some indexes constantly 'flirting' with breakouts in rotation...one has a go, others lose strength in turn...just to keep grinding the bears into the dust and emboldening bulls.

When has the market ever broken out with the SOX and Q's lagging this badly.

There's also the old saying - whats the harder trade here?
Trying to short this market for 2 months has been torturous...tiny declines which disappear in minutes, with plenty of 'fake upside breakouts' to frighten bears to death. On the other hand, bulls haven't had anything to scare them for weeks, well months - so are confident that 'there's no risk' in this market on the downside.


Basically there's absolutely no reason to be short here...what's there to worry about? 4 year top is obvisouly nonsense now, markets are at new highs.the 'trend' ( try not to laugh is up......all over the financial press, economy is super strong I read everywhere....not a black cloud to be seen, and so clearly the logical thing is to be long, therefore were going down

But I'd like to see a upside minor break first to 1320Spx'ish...accompanied by breakout fever....this is going to continue to be tricky as hell to trade I think...best to stick to 5 minute trends for trading....until Miss Whiplash sings.
----------------------------------------------------------------------------------------------

That's EXACTLY what happened, breakout fever on minor move around 1320'ish...it took a while to build the fever up, and once it was setup..
the market did its business.



March 21 -

http://www.traders-t...=50132&hl=rydex

FWIW I just read that what happened today has NOT happened for 16+years....new yearly highs on comp, rut, indu, spx and then taking out the prior days low...quite a statement by price today...today was the day to show the bull cards, and mojo was lost again...a fumble in the end zone...pick your metaphor.

I believe we see 1250 before we see 1340....



March 24 - Regarding Dangers of relying on Rydex Sentiment



http://www.traders-t...0a9e87dd7d1adb0

&search_in=posts&result_type=topics&highlite=rydex

"Currently my smart sentiment measures are the most heavily SHORT of the entire bull market, the smart money clearly believes a significant top is very close.

On the other hand, dumb ( or contrarian..of whatever you want to call it)...overall is neither long nor short, just kind of sitting transfixed for months. Now the trouble is, that within the dumb there are some measures now showing extreme bullishness( which is bearish)...whilst others are very bearish( hence bullish).

The biggest bulish setup sentiment wise are the Rydex numbers. However, we have to be careful not to give one measure too much weight. The Rydexers represent a certain group in the market, not all. For example, for bull market tops I think mutual fund inflows are more important, and we've seen some large peaks in than....and 'the public' in terms of mutual funds has remained largely bullish since 2004. Also there is a problem that use of Rydex indicators has become increasingly widespread.....and also that it appears hedge funds and other non-retails groups are using the funds now.....so its hard to compare historically.

As I said the other day, I simply don't believe the Rydexers are going to get bullish enough for sell signals in the timeframe for a typical 4 year top....unless like 1998 or 1987...we get a very late top and some sort of crash.


My best guess is...we aren't going to get a major top...but an IT top....and like I said perhaps a 10%'ish pullback this year...then a major top next year.


Whatever...I'm going to learn alot about the interplay of sentiment with Technicals and fundamentals...unfortunately the data simply doesn't exist compare to say the 1970's which is what I'd like to compare. Technically the market is weak, and fundamentals are getting ugly....most importantly liquidity is historically at an extreme that has caused bear markets.

This is boring to trade, but fascinating to see how it plays out. If pushed, here are my two top scenaro's for this year and next.
1. We top out in next few weeks maybe 1320-1360...then decline to 1000-1100 area by Autumn....then rally to test highs by spring 2007....then decline for 3 years into the final secular low around 650-800.

2. We go alot higher..perhaps 1400..into July.Aug...then crash ala 1998 and 1987....


One thing I'm sure of, this is a very dangerous market right now..a big trending move up or down could come anytime...and I don't wanna' get 'bull or bear religion' here...having a system and trading the signals is the way to go in this environment.
"

Edited by entropy, 19 May 2006 - 12:39 AM.

[mss]

Good morning.

I have pretty much stopped posting my work at TT for varying reasons, if I do post analysis in the future it will be on this swing board.

Not saying what this is , because I will nolonger share my work....

Above are some selected quotes from your post.
Please keep posting your work, at least on this board. I do not do "1,2,3, or A,B,C" type work but always find it very interesting and helpful. Your overall work is great and I enjoy it very much.
Thanks for all you do and share with us.
mss

[Rogerdodger]

Ditto Mark:

...but always find it very interesting and helpful. Your overall work is great and I enjoy it very much.
Thanks for all you do and share with us.