9 replies to this topic

[A-ha]

likely tomorrow... todays selling was so orderly that even my dog could trade it with eyes close... spx silently broke below a 4 year trend line yesterday. what is so important about this breakdown is that it confirmed the fake out of the century. (ndx may still be holding that breakout or about to be broken but it will likely fail.) after yesterday's breakdown, SPX tried two attempted rally today and tested the trend line two times , both failed miserably... what was more interesting was all this happened on extreme bullishness / bottom picking and all other favorable conditions for bears... I will make it very short now. There is nothing underneath except daily and hoult S&Rs and TLs... IMO The way this selling will stop is its self destruction. It is feeding on itself and the time it dries we will get a chance for rebound. We need a selling climax which I think could happen tomorrow

Edited by A-ha, 15 August 2007 - 03:35 PM.

[rkd80]

In order for this selling climax to not be a breakdown of monumental proportion, does the reversal have to happen that same day?

In other words if we finish tomorrow at the lows like today, would that still be considered a climax in your eyes?

Conversely, I assume that any rally will be greeted with skepticism...


Here is a chart I use to spot out bottoms. We are now at the lowest levels on spxa50, spx200, bpspx since '03. The bottom is coming real soon, but how many points the spx can shave off is a guessing game.

http://stockcharts.com/h-sc/ui?s=$SPX...0&listNum=6

Edited by rkd80, 15 August 2007 - 03:39 PM.

[A-ha]

In order for this selling climax to not be a breakdown of monumental proportion, does the reversal have to happen that same day?

In other words if we finish tomorrow at the lows like today, would that still be considered a climax in your eyes?

Conversely, I assume that any rally will be greeted with skepticism...

Selling climaxes have their own unique charachteristics. Todays selling, like I said above, was very orderly. It had nothing to do with selling climax.

Selling climaxes occur on gigantic volume and waterfall price action.

Some of the climaxes extend to the next day. This happened a few times during the bear market of 01/02


Volume and price formation are key elements to identify these events.

Nasdaq composite should print something like 3.5-4 billion volume and price formation should reflect the emotion

[rkd80]

...but with out getting into a semantic battle, we are not in a bear market yet...seems unreasonable to expect bear market-like days in a bull market.

[A-ha]

Honestly we do not know whether we are in a bear market or bull market. This could be a wide trading range as suggested by VIX however most of the fundamental stuff I follow suggested / called for a bear market, this spring 2007 as you may know from xtrends I dont care what it is tho, giving names doesnt give me extra advantage... but i think i do know how to handle this market. most of the people still trying to use last 4-5 years indicators/ systems to trade this. They will not work because this is a different market. I said this a few times before this market has changed. You have to adapt yourself.

Edited by A-ha, 15 August 2007 - 03:57 PM.

[DraggdOut]

One thing that has become very clear to me from P/C & odd lot data is that all of a sudden all the fades are selling this market. That does not bode bearish for OpEx...

[Trend-Signals]

re: Selling Climax

OK I admit that we are in different trading environment.

Since we don't have uptick rule, the volatility is unpredictable.

It is all depending on "Fast money" net work blue horse shoe.

You could have seen my post.
http://investorshub....age_id=22099517

Edited by Trend-Signals, 15 August 2007 - 04:21 PM.

[rkd80]

Honestly we do not know whether we are in a bear market or bull market.

This could be a wide trading range as suggested by VIX

however most of the fundamental stuff I follow suggested / called for a bear market, this spring 2007 as you may know from xtrends

I dont care what it is tho, giving names doesnt give me extra advantage... but i think i do know how to handle this market.

most of the people still trying to use last 4-5 years indicators/ systems to trade this. They will not work because this is a different market.

I said this a few times before this market has changed. You have to adapt yourself.

Like we discussed earlier, something definitely changed as can be seen by the failure of certain indicators. Some however go back as far as 95 and they are failing too! You are right, the market has changed.

Btw, I was using 80,85 EMA + being above March low to determine what market we are in. Maybe its a crude methodology and worth revising.

Ultimately, who cares how you call it - if you can trade it, more power to you. Clearly at this point, I cannot. But if its a bear market and we are going to get a massive relief rally, technically it should stall out before reaching the highs and start a multi-year downtrend. I am still open to the idea of a '87 type run up, mind you in '87 they had a 10% correction in the summer before they went parabolic.

[Trend-Signals]

This could be a wide trading range as suggested by VIX


I said this a few times before this market has changed. You have to adapt yourself.

As noted on my earlier post, I made my comment on the issue - getting rid of up tick rule.


http://investorshub....age_id=22099517

I haven't seen your comment on this before.


This change of the rule is promoting high trading volumes and favoring hedge funds.


This changes ENTIRE TRADING STRATEGIES....

Edited by Trend-Signals, 15 August 2007 - 04:48 PM.

[Trend-Signals]

We have pros and cons for "No up tick rule:


Worst Side (con) like subprime fiasco

This rule change is like a paradise of big hedge funds, especially when they are networked together, they are going to move just about any stocks, wipe out clean!

With the nonsense which we have seen on "subprime" loan, the hedge fund activities are uncharted territory. No control, no policy, no audit trail, no accountability for any group activities to move stocks, etc.


When we are robed out clean, it is too late for "SEC" just like "Subprime" fiasco.:


~~~

This could be a wide trading range as suggested by VIX


I said this a few times before this market has changed. You have to adapt yourself.

As noted on my earlier post, I made my comment on the issue - getting rid of up tick rule.


http://investorshub....age_id=22099517

I haven't seen your comment on this before.


This change of the rule is promoting high trading volumes and favoring hedge funds.


This changes ENTIRE TRADING STRATEGIES....