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Update on my models & analysis


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#1 Entropy3.0

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Posted 25 November 2008 - 12:54 PM

I'm focussing on my trading at the moment so I only have time to comment on swing/IT...so I'll post this over here on swing...

My models say we may have topped here already.....should pull back today and that give more information on the swing...
...but there's a 50/50 odds we need one more move back to 900-920 area...will update if I see more

..then (in December) I'm looking for a massive capitulation decline to end the bear market (for now at least and likely until 2010).
I've got 3 separate patterns with projections to 550,600,650, so between 550-650 for THE low. If they work out,
I will show them AFTER...they predicted a 600pt crash in the summer so until it brakes!

disclosure - position short ( posted initial position to FF beg Oct http://www.traders-t...?...906&hl=poll and many updates since )


best,
Mark.

Edited by entropy, 25 November 2008 - 01:00 PM.

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#2 Tor

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Posted 25 November 2008 - 01:01 PM

Check me out on TT main board. This baby is going to 600 one way or another, that is a given. I dont know when exactly. Q1 next year I imagine.
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#3 mss

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Posted 25 November 2008 - 01:20 PM

:)

:)
TOP = 1005, FIRST BOTTOM = 805, SECOND BOTTOM = 695
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=7&dy=0&i=p58060515545&a=116044349&r=4463.PNG


We hit the 805, then went lower, now back up. I think the 1005 is still in play here but maybe back down first.
In another post, 700-695 was covered as well as 610 still "out there."

I do not claim that my numbers are any more correct than someone else, the point is several of us predict a much lower Low coming down the road. Most of us see 2009 (mar-jun) for the bottom, but it could run to Oct. TWT

I leave timing to the experts. B)
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#4 Entropy3.0

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Posted 25 November 2008 - 10:44 PM

:)

:)
TOP = 1005, FIRST BOTTOM = 805, SECOND BOTTOM = 695
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=7&dy=0&i=p58060515545&a=116044349&r=4463.PNG


We hit the 805, then went lower, now back up. I think the 1005 is still in play here but maybe back down first.
In another post, 700-695 was covered as well as 610 still "out there."

I do not claim that my numbers are any more correct than someone else, the point is several of us predict a much lower Low coming down the road. Most of us see 2009 (mar-jun) for the bottom, but it could run to Oct. TWT

I leave timing to the experts. B)
mss


Hey mss that 'mar-june 2009' bottom could fit with my patterns if it's a retest.
But the 3 patterns I have all say December is crash part II, we will see, its developing exactly as it should
with this rally ( breakdown backtest) max upside should be 900-920'ish, and it should last ideally until mid-next week then capitulation move straight down, no more rallies to 550-650 area. The rally would then be jan-feb back to 950'ish, then a retest in march-jun.

Of course, 'we' could all be wrong but I have a high confidence in my patterns/models/analysis at the moment that the IT low is not in...but Ms Market can make monkeys out of all us, its a game of probabilties. So i'd be concerned by a move above 950spx....but I'll let the market show me from here.

I've got bunches of ST indicators saying the upside if very limited for the next few days, infact I short the close just for a pullback, maybe we can chop higher toward 900-920 with positive thanksgiving seasonality, but any gains I will be shorting...the best chance the bulls have to break above 950 will be after a pullback, lets see where we are by mon next week...I'm going away with my family/friends for the holiday, but will update this thread Sunday if I have time.


best,
Mark.

Edited by entropy, 25 November 2008 - 10:48 PM.

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#5 spratman

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Posted 28 November 2008 - 05:40 PM

Thanks Mark! Please keep us posted! Best, spratman

#6 Entropy3.0

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Posted 01 December 2008 - 10:50 PM

But the 3 patterns I have all say December is crash part II, we will see, its developing exactly as it should
with this rally ( breakdown backtest) max upside should be 900-920'ish, and it should last ideally until mid-next week then capitulation move straight down, no more rallies to 550-650 area. The rally would then be jan-feb back to 950'ish, then a retest in march-jun.

....
I've got bunches of ST indicators saying the upside if very limited for the next few days, infact I short the close just for a pullback, maybe we can chop higher toward 900-920 with positive thanksgiving seasonality, but any gains I will be shorting...the best chance the bulls have to break above 950 will be after a pullback, lets see where we are by mon next week...I'm going away with my family/friends for the holiday, but will update this thread Sunday if I have time.
best,
Mark.


Where are we by Monday? where we ought to be according to my models as above. We couldn't even make 900spx, this is a great start.
As posted above I added shorts on the thanksgiving rally and haven't lightended up yet as I expect us to follow through down at least
to close the open gaps below...though the TRIN 10 close has me concerned as often we see a bounce...but if I'm right it will be minimal
if at all. I am encouraged the OEX traders were very bearish today, and Rydex bear funds actually LOST funds with this crash today,
put/calls stayed low, and general traders and media sentiment is pretty much 'its a pullback/buying oppertunity.' Pretty amazing,
considering the majority of 'bottom buyers' are now underwater ( majority didnt' buy in the last 10min last Friday/mon gap open) but
after...so this gap down/run smells like a bull trap.

So as it stands, the market has done everything as I said I was looking for, but it must confirm now by continuing to collapse the next few days killing off
the consensus 'bottom is in' talk, and ushering in a final 'give up' decline. Ideally ( and market rarely is) it will be continue down tomorrow in another
50+pt down day.

However, I always look at the bullish alternative ( or opposite to my trading position), and the best I can see is something like July 2002 ( see chart for Spec Osc below), with another leg up but only after a few more days sideways/down. So I will be looking very closely at action wed-thur to navigate that potential pitfall....will post if I change my position.


MarketNeutral asked for a Speculation Oscillator Update on FF - here it is. I have broadended the charts to include the 2002 bottoming period, to add some CONTEXT.
Couple of points -
1. It has moved to unequivocal BUY.
2. It is often EARLY because its an IT signal, hence my final washout scenario is perfectly feasable, but it does strongly suggest we are close to an IT rally.

Problem - there was a very large spike on Friday half day trading, and that is not trustworthy. So I need to see another confirming spike.

Two different views of Speculation Oscillator -

http://img386.images...decspec1ao1.gif

http://img110.images...decspec2hg9.gif

FYI - here is a couple of other charts that show storng resistance points i.e. why I picked spx 900-920 above.

http://img370.images...image=b1yj4.gif

comparison to 2002 for context -
http://img370.images...image=b2cp9.gif


best,
Mark.

Edited by entropy, 01 December 2008 - 11:05 PM.

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#7 Entropy3.0

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Posted 03 December 2008 - 11:16 PM

Man o man what a couple of days intraday. The end of day candle's don't show what's been going on. I can't remember such ping-pong random huge moves, absolutely incredible movements with no triggers than I can see. I have many reliable day-trade signals, ALL of them have failed MULTIPLE times the last two days, I have never seen anything like that. This has been as close to 'pure random' as i've ever seen. Having said that, on the hourly/day scale there is a clearer picture. The hourly CLEARLY shows a corrective ABC up off the 750 lows, and now some kind of corrective off the high, and now a sideways mess from hell (likely a 'b' wave).....i.e. when everthing is corrective you get a mess. Add to that we're 'boxed' in by a gap above and below...and this ping-pong makes more sense. I wanted to say alot tonight but I'm fighting off a cold, so will just cut to the chase. 1. I'm as certain as I get that whatever the move off 750 is, its 'corrective', and so isn't the start of a mega-rally, at best I can see it goes back to 1000 area...but that is a long shot according to my models. 2. the recent short I added to long term position is down a bit as of the close, and I sort of feel I'm 'due' , so maybe we take out the gap above, but I have a rule 'only be wrong once' - so I have to stay short based on my system until spx 900 is taken out on a closing basis - if i'm gonna' have a loss, I'll take it for the right reason i.e. no system is perfect but mine is saying SELL SELL SELL here....at least, not BUY BUY BUY...and I reserve the right to change my mind :lol: My best guess ( and that it is because the last 2 days were utterly insane intraday), is we go back down to test the gap below. I hate to say it, but I'm beginning to believe we're going to be stuck in a narrow trading range for weeks.something like 800 to 950...but tomorrow is the key day so lets see how it goes...bulls HAVE to take out the gap above and run and close above 900, or else very high odds we go back to the gap below ( as I'm betting). This tape has been excruciating for shorts.....the rallies are just relentless on the 1minute...straight up...then the missile stalls..we drift down, then a short plunge then BOUNCE another moonshot from knowhere...hour after hour...and my sentiment indicators clearly confirm very few shorts are left - but of course, liquidity could overide that short term...price is ultimately right...and its goin' up...I believe we are seeing what I call SHEARING - basic wave theory ignores liquidity. One of my extensions is to include that in a phenomena calling shearing - like a strong wind that call 'distort patterns'. In this case, I believe in a normal market we would move sideways in a classic 'wave b', but I speculate that a ton of liquidity from I know not where has come to market, and 'sheared' priced up. If I am correct, this will correct when the additional liquidity is removed, and a repeat of monday 80pt down day is possible in that case. Shearing also happens with lack of liquidity, like when you see a very weak left shoulder to a H&S. FYI * the only time a price pattern this 'choppy' end up going up is a 'running correction'...I could be wrong, but all my experience says this isn't one... best, Mark.

Edited by entropy, 03 December 2008 - 11:23 PM.

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#8 Entropy3.0

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Posted 03 December 2008 - 11:32 PM

Chart to show intraday and overnight actions...ping pong is continuing overnight

http://img151.images...pingpongnf3.gif
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#9 beta

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Posted 03 December 2008 - 11:46 PM

I have many reliable day-trade signals, ALL of them have failed MULTIPLE times
the last two days, I have never seen anything like that. This has been as close to 'pure random' as i've ever
seen.

Having said that, on the hourly/day scale there is a clearer picture.
The hourly CLEARLY shows a corrective ABC up off the 750 lows, and now some kind of corrective off the high, and now
a sideways mess from hell (likely a 'b' wave).....i.e. when everthing is corrective you get a mess.



Mark, this is priceless ! Thanks much for sharing these brilliant insights.

For a while, I thought I was the only one seeing "randomness" on the charts (or is it the "Invisible Hand" ?)
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#10 Entropy3.0

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Posted 09 December 2008 - 12:35 PM

Quick update

..and now a sideways mess from hell (likely a 'b' wave).....
My best guess ( and that it is because the last 2 days were utterly insane intraday), is we go back down to test the gap below.


- we did, it was a 'b' wave with the 'c' down completing at the gap below completing wave 'B', surprised as I said I thought we'd close the gap below before this rally we're in now (which is wave C of ABC off the lows)....that we didn't close the gap is evenmore bearish for the longer term sentiment wise.

I hate to say it, but I'm beginning to believe we're going to be stuck in a narrow trading range for weeks.something like 800 to 950...but tomorrow is the
key day so lets see how it goes...bulls HAVE to take out the gap above and run and close above 900, or else very high odds
we go back to the gap below ( as I'm betting).


I don't see anything to change my mind on that, and the euphoric jump in sentiment on us going above 900spx strengthens the odds of this.

I really don't have a good read on timing of when this corrective rally fails ( likely wave IV of 3), but high odds of a swing high on Wednesday,
ideally around spx 920-930...

I lightened up some shorts on the 'c' wave down to gap test, but still hold a significant short position here, and will be adding to it on any rally
toward 920-950 area which as I believe will cap this, I cannot see us getting to 1000area ( the everyone knows target )....will be a bit
painful for me if we do, but the downside is so HUGE here, the risk/reward is too good to ignore .NOTE. I am talking about a position trade,
about 25% of my assets - the rest I daytrade, in this case long to hedge my short risk.

best,
Mark.
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