12 replies to this topic

[U.F.O.]

This is shaping up to be a barn-burner. redfoliage2 has tapped onto something that I've been looking at (not talking about) for the past 4 weeks. Are we putting in a complex head with multiple shoulders top on the NASDAQ? (3 charts)

http://www.traders-t...mp;#entry271426

The reason I've avoided mentioning this pattern is because we, as chartists, are like communist hunters from the 1950's sometimes.....we see a head and shoulders pattern behind every bush. Many times we're wrong. If we're wrong here, it could be a biggie. There's a solid downtrend line off the recent top and overhead resistance off the shoulders that will give a clue if this is a fake-out and we rally further here. This chart also shows the potential head w/multiple shoulders pattern. (chart #1)



The Bollinger squeeze is alive and well on the dailies and weeklies. A perfect storm is brewing. (chart #2)



Lastly, the DE/AD's and Binary Waves. DE/AD's contracting towards a buy and Binaries on the verge of a bullish cross. Batten down the hatches and watch out for the smell of chicken. Whoever clucks shortly is gonna get reamed! We're in for a wild ride.....soon! (chart #3)

U.F.O.

[U.F.O.]

I don't have a margin borrowings chart to post here because I found it on my pay Bloomberg at work and they don't take kindly to copyright infringement. However, margin account borrowings are currently back to March, 2000 highs, for the most part as a result of the growth of Hedge Funds. I find this troubling. My gut here is this bull will die a "spike rally" death, not a MT head w/shoulders collapse. Too much leverage in play. Watch for it.....I think we trade higher. U.F.O.

Edited by U.F.O., 13 February 2007 - 10:51 PM.

[hiker]

hi UFO convergence of many moving averages for QQQQ is of interest right now, I am noticing the first convergence of the 21 sma and 63 sma since May and August. happy times, bro...

Edited by hiker, 13 February 2007 - 10:55 PM.

[U.F.O.]

Obviously you saw what happened to QQQQ in August. (1 chart)

Best to you hiker.

U.F.O.

Edited by U.F.O., 13 February 2007 - 11:32 PM.

[Rightfield]

However, margin account borrowings are currently back to March, 2000 highs, for the most part as a result of the growth of Hedge Funds.

U.F.O.

couldn't these Hedge funds be equally shorting the market on those same margin account borrowings? seems like a plausible proposition just going by the persistent record short interest in the Naz ( more than triple the March 2000 levels)

http://www.sentiment..._INT_NASDAQ.htm


RF

[U.F.O.]

Right, absolutely. But the story on the street is many of the hedge funds are getting creamed on bad energy plays. (Which made them a fortune until recently.) They're trying to "double down" and catch an equity puke. Who's waiting in the wings to help them lose some more money? GS, MS, JPM? Remember, there's a counterparty to every trade that exists on the books. Hedge funds could lose a stack if the stock market has one more major push higher. That's the "spike" I was talking about earlier in the post. U.F.O.

[dcengr]

Right, absolutely. But the story on the street is many of the hedge funds are getting creamed on bad energy plays. (Which made them a fortune until recently.) They're trying to "double down" and catch an equity puke. Who's waiting in the wings to help them lose some more money? GS, MS, JPM? Remember, there's a counterparty to every trade that exists on the books. Hedge funds could lose a stack if the stock market has one more major push higher. That's the "spike" I was talking about earlier in the post.

U.F.O.

Except futures positions are rather high right now amongst large traders... and rather short amongst commercials.

[slatedrake]

Excellent information, thanks for sharing U.F.O.

[pdx5]

I will second that UFO, thanks.

[bobalou]

are you looking at my posts ?
up is down ,down is up
and I have been a day trading chicken..
http://forums.techni...post?id=1605164

Edited by bobalou, 14 February 2007 - 05:06 AM.