6 replies to this topic

[thespookyone]

Well, we kinda got the rally I saw continuing today-it just decided not to stay, so I threw my goat baa in the title description. Fortunately, the early dip to rally transition created volatility($$$) again. So-where ARE we runnin? Truth=nobody knows. Best guess-now that's a different story. Many great forecasters here. We have DaChief running to new highs, or at least 1530, it would seem. We see Nav shorting, and seemingly bearish. Then we have Mr. Dev, accelerating the car when he knows he's inside the curve-and speeding out of it with bags of cash-nice work! Selecto sees a lot, seems unbiased directionally, and I respect his patience in waiting for confirmation-old school, and strong. What the Sppok thinks may or mat not matter, but I'll throw it out here, because, if nothing else-I am certainlty fearless. We had another huge distribution day Thursday, which has become quite common. We rallied back up Friday on lower volume than Thurs, and attempted to rally today on even lower volume yet. I had been looking for a three day countertrend rally, of which, so far, we got about 1.7 days. Am I looking for the other 1.3 days of the rally-very simply-NO. Truth is, it looks like upward momentum has left the building to me, plain and simple. Much like bears were too quick to buy puts Thursday off a 500 point Dow decline-bulls are jumping the gun by writing off recent market action. Will we travel a lot OEX week, considering what it allways is, and the milage of puts bought Thursday-or the calls bought Friday and today-I'm not sure. But it is possible. Tor stated he can't see the market dropping hard because of the put buyers last week, and I see his logic, but it is somewhat faulted. Depending on where people bought puts on Thursday, they are allready smoked because of Friday, and even if we drop back to last Thursdays low by this Friday-they will have been scorched by the theft of most, if not all of the premium that was there-and it was PLENTY. Other bulls look to indicators to save the market, but, I believe Mr. Devs unique interpretation of oscilators has not only proven it's worth, but shown that the obvious is not allways so. For my money, things HAVE changed in this bull market-and WILL be reflected in price=to the downside. You ask-what has changed-plenty! The media has turned their yarn spiing campain in the other direction, as if they are trying to push the market down-just as clearly as old headlines were attempts to push it up. The dollar looks as if it bottomed, and the macd has some nice bullish divergence growing to support that case. Make no mistake, a strong dollar will smack this market down-plain and simple. The interest rate fairy tale being told, it seems, since time stood still-has now been debunked. Without doubt it helped push the market up-and, I feel the new reality that rates are frozen, but moreso might even rise(perception on the rise part, remember, people aren't trading truth-they never were). The new, higher return on bonds WILL make them a more competitive investment choice-stocks are no longer the only game in town. Remember, one of the nice features about bonds is they are a safehaven during volatility-UH OH. And what about volatility-in my opinion a clear friend to the bears at this juncture. There was basically none during the better part of the market rise-but it's starting to make an appearance-don't write that off too quickly, either. Huge money sat on the sidelines all through the latest rally, and my theory was they didn't want to take the risk for the reward offered-at these prices. I think that has played out, and doubt they prefer buying at even higher prices. Is that money desired in the market-SURE-how do we get in in?-the market DROPS-I never said they didn't want to buy cheap. Could we go on-you bet! The glossed over mortgage market forclosures, the carry trade, gas is STILL rediculous, poor overall retail sales, poor auto sales, poor home sales and, UH OH=INFLATION. I suppose you could overlook the inflation of rising interest rates on peoples mortgage payments, the higher food prices)bought any milk lately?) and higher gasoline and commodity prices in general-ACROSS THE BOARD. But then, only the govenment gets away with that, right? Real humans,U.S corporations and our economy, FEEL that inflation-plain and simple. Distribution-of which there has been plenty-why should I speculate that this is the base for another run up, when I don't have to second guess the obvious-they want out. I'm a big believer in TA, but any oversold indicators can be rectified quicker than a minute. The above reasons are plenty for this market to correct, now, and I believe it will. Whether it is by Friday or mot matters little to me-the reward to the downside clearly outweighs the reward up, so I will take risk on going down. Good trafing to all. Spooky

[Darris]

Spooky, Thanks for the detailed summary, as I certainly see some things to support your view. However, as always from the Bull side, one question, and one point: 1/ Where is your stop, SPX or NDX or whatever? Thanks 2/ Did you notice after a 2%+ correction on the FTSE, they rallied like a scalded dog today. Sometimes after a major market index sells off after a new all time high greater than 2%, the 3rd day after that sell off is telling. The only reason I mention this, is that the SPX is on the 3rd day tomorrow, Tuesday June 12th. Any weakness in the AM in our markets tomorrow, I am buying, FWIW. Game on Double Bull significance, LOL.....

[selecto]

On the 60 the ema 3 is crossing the ema 8 in the direction (down) of the BB centerline. Not to buy. imho

[rkd80]

On the 60 the ema 3 is crossing the ema 8 in the direction (down) of the BB centerline. Not to buy. imho

Just because the FTSE rallied after selling off last week is hardly a bullish argument. Not saying it is bearish, but they footsy did exactly what we did last Friday. Their ST trend is down as is ours.

[thespookyone]

On the 60 the ema 3 is crossing the ema 8 in the direction (down) of the BB centerline. Not to buy. imho

Selecto-I have been using the 3'8 crossover for a long time now, and love the way it filters out noise-nice to see you using it as well.

Darris- A couple other things to support my view-on the SPX Thursday, there was a negative aroon cross at the 70 level (UH OH,NASTY) Williams% blew through negative 50 like a hot knife through butter, ppo headed straight to zero,and macd began to plunge. I'm only trading Q puts here, and I don't set hard stops. If the Q's broke 44.32 I'd be surprized, and if they made new highs-I'd probably be out. Since I'm trading July puts, there is a fair amount of premium built in-that will act as a small cushion. To be honest, I think if we made new highs, I feel they would be so marginal that in the month and change I have left on my puts-they would still play out. My take is, though, if you were looking at a chart-there were minor highs to the left in the 1523 area, we saw the short term top, minor highs are being made or allready done to the right-and soon, we plunge. About buying any dips-be VERY carefull, Darris-that landscape has clearly changed. And-good to see ya buddy, anyway.

Spooky

Edited by thespookyone, 11 June 2007 - 10:05 PM.

[Darris]

Spooky, Yes, enjoyed your posts the last few days, as you were spot on. Nice trading!! I am just recovering from Thursday's slaughter, so still have some work to do. Anyway, bidding every ES pt down from 1523 to 1520 overnight, with a mental stop of 1515-1516 for the regular session. Will buy the NQs down to 1920 and stop them out at 1912, FWIW. Depending on IF we rally tomorrow and by how much, will probably move to the chort side of things Wed morning. Just the OPEX thingy, LOL.

[espresso]

Thanks for summary Spooky, I agree on two new factors that you mentioned: Volatility is coming out from those lows The Media fanfare is playing down All the rest i see no difference for last several months of wall of worry. Let see how Bradley Thursday plays out first, then maybe we can reassess... jmho