5 replies to this topic

[NAV]

Seems like this board and elsewhere on the internet, it's fear fear and fear. Too much of emotional blabbering and too little TA. Now i don't understand why the market has to be so black and white. Either it's melt-up or crash. Why can't we have a big decline a la 2002 spring. That was not a crash, but a hypervolatile move to the downside. Crashes are one day events, rare and unpredictable.. Period !

Do we have a setup for a crash now ? - Yes. But what we have is a just a necessary condition. That's all. I have been observing the SPX P/C for the last few weeks. There has been huge put buying by these folks right from near the top and it still continues. SPX puts are not bought by the retail speculators, but mostly the intituitional crowd. Judging by the SPX P/C ratio, the institutional investors are fairly well hedged at this point. If the average joe on the street knows about the market risk here, i bet the veterans who manage big funds surely do. These are the strong hands and are not the folks who start capitulating until the monthly trend turns down. With so much hedging in the background, the possibility of a market crash is highly diminished here.

But there's a difference between 2002 and now - the huge proliferation of hedge funds. We did not have 10,000 hedge funds in 2002. I bet there aren't 10,000 hedge managers that are qualified. These hedgies and the retailers are the ones panicking here and throwing in the towel. That could create a washout kind of a situation. But crash, i highly doubt it.


Enough of the rant. From a e-wave perspective, as i wrote last week on my blog, i expected a bounce and we got it.

http://nav-ta.blogsp...t-thoughts.html

I said after the bounce we should head to a price climax. The million dollar question here is "Is this the climactic move ?". One has to operate under the assumption that it is. But if we fail to break the ES 1532 lows and the hourly gives a buy signal, we may have another shot at the upside.

Based on my long term count, we are in a X-wave and this market is showing the typical charateristics of an X-Wave. If we break the ES 1532 lows, then we are in the final wave C of X. If we are in the wave C of X then RUT will start underperforming on the downside. The peak of the negative breadth plurality comes during the wave A. Wave C will start diverging both in terms of breadth momentum and price momentum relative to wave A. RUT relative strenght will be the first sign that we are in a wave C. As i said in my blog, this wave C has a wide range for downside target 1410-1360 SPX cash. LarryT mentioned that we could in the wave 3 here. I disagree. For that to be true, we need to make a lower low on the NYSE MCO and a lower low on the weekly CCI. The breadth plurality required to make that kind of lows is literally mind blowing. You do the math !

1998, 1998, 1998, Crash, Crash, Crash, Wolf, Wolf, Wolf - Now i feel better

Edited by NAV, 10 August 2007 - 01:21 AM.

[n83]

The overall move so far has just accomplished 7-8% and not even a decent 10%..only lots of drama (huge futures moves) with huge swings. Simply put..NO.

Edited by n83, 10 August 2007 - 02:24 AM.

[libs]

I dont know. The stuff below about the Chinese Yuan/Dollar and Bush and Paulson responses just reminds me of the currency threat against the Germans just prior to 87 crash. But who knows.
Slow motion train wreck?
===========

Two officials at leading Communist Party bodies have given interviews in recent days warning - for the first time - that Beijing may use its $1.33 trillion (£658bn) of foreign reserves as a political weapon to counter pressure from the US Congress.

Shifts in Chinese policy are often announced through key think tanks and academies.

Described as China's "nuclear option" in the state media, such action could trigger a dollar crash at a time when the US currency is already breaking down through historic support levels.
http://www.telegraph...cnchina107a.xml


=======================
China dollar attack would be 'foolhardy' : Bush
Aug 8 11:56 PM US/Eastern

President George W. Bush on Wednesday said China would be "foolhardy" to attempt to push down the dollar in retaliation for US pressure over Beijing's alleged currency manipulation.

Bush said he had not seen the report that Beijing was hinting at such a move, in Britain's Daily Telegraph newspaper, but warned against any attempt by China to hit back at Washington using vast foreign currency reserves.

"That would be foolhardy of them to do that," Bush said in an interview with Fox News, adding he doubted the report was based on sources from the office of Chinese President Hu Jintao.

"If that's the ... position of the government, it would be foolhardy for them to do this."

=========================

and Paulson , on national television - said that the reported Chinese "nuclear option" is "absurd".

===============================

So much for diplomacy. Have they NEVER delt with Chinese before.

[NAV]

But if we fail to break the ES 1532 lows and the hourly gives a buy signal, we may have another shot at the upside.

I maean't a retest of the recent swing high at ES 1510 and not new recovery highs. Just to be clear.

[humble1]

no and yes. on the daily and weekly charts: no. on the monthly chart: yes. and that is BAD NEWS. as those who read my blab know: i doubt very much that anything significant CAN be done about this historic meltdown. but a crash on the daily would surely help to some degree as a fillip to inspire some bit of relief. and i don't see that as happening in the 1929 or 1987 style.

[LarryT]

Seems like this board and elsewhere on the internet, it's fear fear and fear. Too much of emotional blabbering and too little TA. Now i don't understand why the market has to be so black and white. Either it's melt-up or crash. Why can't we have a big decline a la 2002 spring. That was not a crash, but a hypervolatile move to the downside. Crashes are one day events, rare and unpredictable.. Period !

Do we have a setup for a crash now ? - Yes. But what we have is a just a necessary condition. That's all. I have been observing the SPX P/C for the last few weeks. There has been huge put buying by these folks right from near the top and it still continues. SPX puts are not bought by the retail speculators, but mostly the intituitional crowd. Judging by the SPX P/C ratio, the institutional investors are fairly well hedged at this point. If the average joe on the street knows about the market risk here, i bet the veterans who manage big funds surely do. These are the strong hands and are not the folks who start capitulating until the monthly trend turns down. With so much hedging in the background, the possibility of a market crash is highly diminished here.

But there's a difference between 2002 and now - the huge proliferation of hedge funds. We did not have 10,000 hedge funds in 2002. I bet there aren't 10,000 hedge managers that are qualified. These hedgies and the retailers are the ones panicking here and throwing in the towel. That could create a washout kind of a situation. But crash, i highly doubt it.


Enough of the rant. From a e-wave perspective, as i wrote last week on my blog, i expected a bounce and we got it.

http://nav-ta.blogsp...t-thoughts.html

I said after the bounce we should head to a price climax. The million dollar question here is "Is this the climactic move ?". One has to operate under the assumption that it is. But if we fail to break the ES 1532 lows and the hourly gives a buy signal, we may have another shot at the upside.

Based on my long term count, we are in a X-wave and this market is showing the typical charateristics of an X-Wave. If we break the ES 1532 lows, then we are in the final wave C of X. If we are in the wave C of X then RUT will start underperforming on the downside. The peak of the negative breadth plurality comes during the wave A. Wave C will start diverging both in terms of breadth momentum and price momentum relative to wave A. RUT relative strenght will be the first sign that we are in a wave C. As i said in my blog, this wave C has a wide range for downside target 1410-1360 SPX cash. LarryT mentioned that we could in the wave 3 here. I disagree. For that to be true, we need to make a lower low on the NYSE MCO and a lower low on the weekly CCI. The breadth plurality required to make that kind of lows is literally mind blowing. You do the math !

1998, 1998, 1998, Crash, Crash, Crash, Wolf, Wolf, Wolf - Now i feel better

Until the market proves me wrong my analysis has been and continues to be July 19, 2007 was the super cycle top and we are in a crash of super cycle degree. My fear is I missed the wave two high at 1500 area, it was "supposed" to happen next Fridays options exp. That was to be my short entry for this super cycle decline. Now I have to sweat it out.

You may recall my 235 new moon cycle analysis was the logic behind calling this super cycle top. So, until I see something to negate my analysis I am going with it.

Good Luck out there,

Larry