2 replies to this topic

[arbman]

I updated the Hurst cascade setup toward the major cycle low. The market is again at a very critical juncture.

Fed has stopped several declines at very critical levels so far since the Christmas rally that started on Dec 18th from 1090s, the new year rally from 1115 and now they have to accelerate the market even higher before it penetrates below 1131 or so during any pull back. So, the downside risk appears very steep at this juncture.

Here I illustrated how the market can still trigger rapidly to the downside from here according to Hurst setup;

The market is now more stretched than ever in every measure!!! Investors beware...

I already showed how the internal setup is also similar to the Feb 2007 decline...

Best of luck.

Edited by arbman, 09 January 2010 - 02:49 AM.

[redfoliage2]

I heard that next week the Fed is going to have a huge auction, more than $150 billions for the week. Anyone can confirm?

[arbman]

I kept the calendar put spreads on Friday at the close. I will decide to return to neutral again with ES futures on Sunday night to see whether Fed will do yet another pump. I have some additional credit spreads from much lower levels that will expire this weekend, these helped me offset the losses from the put spreads so far... I remain bearish despite the upside action. This rally reminds me of the September-October period. As we came out of a sell off in September, the market continued to rally over and over while it looked like struggling internally back then and finally sold off. I will generally remain neutral until I see the proper FLD breaks to the downside and I continue to roll the put spreads to higher strikes in the mean time. When the break comes, I will rush to close the premium plays and hedges at that time... I don't have much plans than remaining delta neutral, even if the trend accelerates to the upside, it is a real possibility...