254 replies to this topic

[kaiser soze]

Think the same about Bots parking the market - possibly an inside day.  NDX first downside objective (Feb lows) has been met and breached. 

[kaiser soze]

New lows. Inside day scenario went out of the window.

[EntropyModel]

Kaiser - yeah it low odds on my system the lows hold - i'm looking for 2400-2420 today - BUT, if we start to bounce again ,then

I just see it ranging into xmas  from here.

 

I see literally nothing bullish here ST at all -i.e. not for swing up, IT low - weak bounces at best.

Edited by Entropy3.0, 21 December 2018 - 12:58 PM.

[kaiser soze]

You were so right about the bots getting flushed out (at least temporarily).  Since this last Fed day, the market is calmer and gently trending downwards with measured bounces more akin to the markets before 2008.  I figure the day Powell caused a market up-spike to 2730 with dovish comments was when the algorithmic traders began to get hit with massive losses with the process culminating when Powell spoke again at the Interest Rate decision. 

 

But they might be back.  They can use the discount window to get ST loans on the pretext of holding up the market/providing liquidity.

[EntropyModel]

You were so right about the bots getting flushed out (at least temporarily).  Since this last Fed day, the market is calmer and gently trending downwards with measured bounces more akin to the markets before 2008.  I figure the day Powell caused a market up-spike to 2730 with dovish comments was when the algorithmic traders began to get hit with massive losses with the process culminating when Powell spoke again at the Interest Rate decision. 

 

But they might be back.  They can use the discount window to get ST loans on the pretext of holding up the market/providing liquidity.

 

Some very good points Kaiser, I can't do them justice right now - but yes, the 'support bot programs' CAN come back, but I do NOT believe they will

for  reasons I need to explain - those on my blog know I was looking for this bear market to start here, and more importantly WHY..and has mostly to do

with FED - liquidity and 'bots ... and reasoning outside that which most people will NOT have heard and probably I can't discuss here tbh ..lets

put it this way, those 'powers that be' never lose, and love a crises they create to get what they want.

 

If they DO come back I will see it on my LQ signals, that is their sole purpose to monitor those bots LQ supply. Right now, they are cut off completely,

except for occasional spurts to flush the shorts (back sweeps as I call them).

Edited by Entropy3.0, 21 December 2018 - 02:37 PM.

[EntropyModel]

FWIW VST - I see setup for a big flush down here into the close toward 2400..

if  'xmas fairy magic' occurs :-)  and we dont' take out say 2430 by 3.10pm then the 'park it' setup is more likely, 

* or take out 2450 above again.

Edited by Entropy3.0, 21 December 2018 - 02:51 PM.

[EntropyModel]

FWIW VST - I see setup for a big flush down here into the close toward 2400..

if  'xmas fairy magic' occurs :-)  and we dont' take out say 2430 by 3.10pm then the 'park it' setup is more likely, 

* or take out 2450 above again.

 

Just like that :-)

 

One of these moves is eventually going to 'let go' and flush down in a really big way  - then we'll be close to a Swing low at least.

[EntropyModel]

 

You were so right about the bots getting flushed out (at least temporarily).  Since this last Fed day, the market is calmer and gently trending downwards with measured bounces more akin to the markets before 2008.  I figure the day Powell caused a market up-spike to 2730 with dovish comments was when the algorithmic traders began to get hit with massive losses with the process culminating when Powell spoke again at the Interest Rate decision. 

 

But they might be back.  They can use the discount window to get ST loans on the pretext of holding up the market/providing liquidity.

 

Some very good points Kaiser, I can't do them justice right now - but yes, the 'support bot programs' CAN come back, but I do NOT believe they will

for  reasons I need to explain - those on my blog know I was looking for this bear market to start here, and more importantly WHY..and has mostly to do

with FED - liquidity and 'bots ... and reasoning outside that which most people will NOT have heard and probably I can't discuss here tbh ..lets

put it this way, those 'powers that be' never lose, and love a crises they create to get what they want.

 

If they DO come back I will see it on my LQ signals, that is their sole purpose to monitor those bots LQ supply. Right now, they are cut off completely,

except for occasional spurts to flush the shorts (back sweeps as I call them).

 

 

I wanted to give a better answer on some important issues here - since my view of how markets work, is very different to most people.

Here is what I posted in my blog Nov 14 about 10 reasons we will get a bear market - I had to remove the first because it about politics,

I essentially predicted a constitutional crises but I don't want to get drawn into 'who's to blame', because my view is politics is just a distraction

used by the 'powers that be' and of no real importance  beyond understand their real agenda. 

 

Here's the ten reasons - obviously each requires alot more depth, and if there's one thing to know about me, its I go 'down the rabbit hole ' as far as it goes, but

can't write a book here. 

 

https://www.screenca...om/t/Z48l1II4Ke

 

Now, on liquidity -

I am not just talking about the Bond-stock allocation models, OR the FED Spigot via QE, and their various black arts. Their is another form of 'dark art bad ju ju'

I discovered around end of 2017, and built a set of signals and have works on short term to long term better than any other form of TA i've ever used. This

has shown me, that the most important drive of prices is this - I call it the GSB ..its the most important active 'bot program with patterns i was able to identify,

and its source of LQ which is independent. These signals correctly called both big drops in 2018 - and alot more - so i'm very confident on this.

and those in my blog know I've used it countless times intrday to predict exact moment of large drops.

 

One of the key concept of the GSB I call LEDGING and REPRICING. Essentially it works like this:

 - the 'bot tries to absorb 'natural selling' in the market ...at certain pivots(key bifurcations), which match my Key Pivot system 

 - If natural selling is too great, and a key pivot is lost, we drop to a 2nd support pivot fast and support kicks in again

 - If 2nd one is lost we DROP VERY FAST - or almost instantly to 'a 3rd pivot I call the cascade pivot' ..

 - if the Cascade pivot is lost - we get a 'flash' move down like in Jan/Feb and again recently ...I call that REPRICING ( for reasons I'll explain)

 

Why does this pattern occur ? 

 - because the market is always trying to find a price level - and the GSB's action in a bull market is to  'artificial mark up pricing' above 'natural price discovery'.

 - Essentially it forced price discovery to 'maximum extreme' or 'extreme extreme' as I call it - it *may* have got their naturally, but, the path to it is forced into

a 'unnatural pattern'( bot based patterns, not human patterns that i've been able to identify, more complex than simple TA patterns as they are fractal based

not just on price, but signals as well) ...also natural price discovery wd high odds terminate before 'max extreme' and never reach it.

 

This is a form of 'virtuous cycle' - if u guys want to research that. The market moves since around 1998 post LTCM have been virtuous cycle driven. 

Now the flip side of that is called the 'vicious cycle' - which comes as sure as night follows day - nothing can stop it once the virtuous cycle reached 'max extreme'.

The two bear markets since LTCM are examples. 

 

My model predicts that each vicious cycle will occur FASTER and higher volatility event - i.e. compare 2007-2008 to 2000-2002,  because of the REPRICE effect. So its quite possible this time, it occurs without 'normal' early bear market patterns that those bear markets had  - which wd predict we are close to 1st leg completion here - my model puts 2300 SPX as the dividing line, and breach of that will put us on a  CASCADE FAILURE for the bear market, something like

1987 or 1929 but unique - essentially like compressing the 2007-2008 bear market into a few months.

 

 Now, if 2300 holds here - then, its possible the GSB can re-establish and recovery and that is end of decline IF the LQ supply comes back. So

the question is WHY is LQ for the 'bot been removed?  and therefore why would it come back?  The answers to that are 'red pills' and most wouldn't believe

me if I explained it. But I'll put it this way - some people will win very big from another bear market here, understanding their agenda is key - and they

would have no reason I can see to allow the GSB to re-establish itself.

 

So I keep a very close eye on the LQ signals, and expect they will give me head up if the pattern changes. Will can get bounces, some big/fast/exciting ones 

as shorts are back swept out of market - but without the LQ, the 'natural price' for this market is probably around 1600-2000, and we could get there very fast

if 2300 fails.

 

btm line of it -  the GSB bot program big enough short term ( minutes ) to override all other buys/selling, certainly human ones - hence 'sentiment/internals' don't matter as much,

and that programs runs of liquidity from market sources that can be tracked and predict ability of the program to hold key pivots, and where cascade failures will occur.

 

* how can support market for 'minutes' change the pattern? that's complicated but it does - u have to understand the dynamics of intraday markets...but here's a simple example.

Most are familiar with concept of support level - like fri- the market drops to test a support . Without 'support' the market drops through and buyers become sellers  - if support holds, momentum players jump on the up move, then shorts have to cover ..and the move becomes parabolic -   in that 'test of support' moment ( a bifurcation instability point) its possible to influence price momentarily at the balance point to direction u want ( that's the LEDGE I referred to)...and I can see it on various indicators ( its an edge, not going to say how, but its really simple when u know what to look for).  so there is no need to 'constantly' support market -

 - it just require a momentary shift of the buy/sell order book at points where supply/demand are fairly balanced 

 - it obviously takes a large amount of $ ..hence that LQ signature shows up on signals I can track.

 

When I talk about LQ, I'm mostly referring to signal on daily, and hourly that effect this program - I do also track bond/stock assets signal but they are less important on the short term - but the bond ones are very important on the longer term, and have already given bear market signals here.

 

 

 

[EntropyModel]

FYI - I shd add, a 'crash' is low odds, for obvious reasons *  so where I mentioned 1929, and 1987 ..i'm just just using them as examples

of  what a 'cascade event' sort of looks like, as this is a new phenomena in market ..well, evolving since LTCM ..and matured into the 2008

decline in Oct-Nov 2008 which was the bulk of in in compressed time - that is better example of a 'reprice' cascade event.  

Again, this current down move is likely to time compress more than 2007-2009, but its not clear yet if the 'full reprice' is now ( like that period in Oct/Nov 2008)

or later. For complex price modelling reasons we ARE most similar to 1929 here, though, its not exact match the dynamics are very similar, including

the form of the fractal top off an extended V wave and length/size of preceeding primary and cycle moves.  

 

I don't need to guess, because I just follow the pivots and LQ and risk on/off signals ...but, if I had to guess, i'd said I expect it cd be a single compressd

event over 3-6 months, but we'd still get some massive shorts destroying rallies - look at the one in 2008 just before the Ot/Nov drop ...it was breathtaking.

So, trading wise, a 'short and hold' is OK but has already, and would certainly miss huge tradable bounces.

 

I do feel we are likely approaching one of those - but not quite there, usually they occur at 5 S.D. on various signals I use, we haven't reached that, and

usually we get a 5% type down move intraday 'no bid' event to get there that reverses.

 

* no crash - if by crash we mean 1987 'no bid' event - too much control over markets now to prevent no bid - unless a literal meteor strikes Wall Street.

1929 was not a 'crash' in those terms, but  2 waterfalls, and initial one off the V extension - which is where we are now ...then a large 'bounce', into 

the perlonger waterfall cascade event over 2 years 1930-1932.    If you study the price dynamics and conditions of this, and all other similar events, you

will find they are all similar, and YEs, we DO have that signature here ... so risk is high as i've said, below 2300 being the demarcation. Whilst we are

above 2300 i'm treating this as 'normal WATERFALL market', but If I don't get Buy/reversal signal before 2300 breaks, then I'll swap to 'cascade failure' event

which requires multiple 5 sigma  - in 2008 for example, there were at least 3...one of them just at beginning -- which wd be a 'buy' in all history except such events.

 

so knowing all this isn't 'academic' its absolutely critical to know what kind of market CONTEXT u are trading in. I have very specific signals to tell me.

Right now we are normal waterfall, not quite extreme enough - but getting close for usual V reverse area. Some waterfalls have a puase around here, which

is actually extended the decline further - so if we want 2300 to hold, we'd be better off collapsing to it wed-fri ...a 100-150 pt bounce here wd very high odds

setup a break of 2300 on my system.

Edited by Entropy3.0, 22 December 2018 - 05:37 PM.

[Waver]

Interesting info
Thank you for your insights
Much appreciated