Merry Christmas and Happy New Year

This blog will be inactive from 21 Dec 2007 Friday till Jan 02 Monday 2008. Time for a trading break. Thanks and good luck to all faithful fans. Up or down, we will all hit it big next year.

2c

Remember those numbers

Contrary to what most people believe, life is all about numbers. The long trade from last night was closed out when OEX 685.5 was reached. Remember last night we had to memorize 686, 679 and 674. Without a doubt the market marvelously traveled in between S1 and R1, give or take a few decimals. This is a trader's market. Short from R1 and long from S1 and just suck the money out of the system. Tomorrow's numbers to memorize are 685, 681 and 676.

Now, longer term, are we up or down or what?? Looking at the numbers (sorry it has to be stressed again) tonight, it appears that the smart money has already left the table leaving the average investors to hold the fort. Selling sentiment has subsided but there were not many buyers. You can see in a 2 minute chart, it gapped up and down like a yoyo. Just thin volume trading in effect and moves will be amplified. The market is due for a bounce and this one may just be the last one for this year and it is with high probability that the market will continue downward after this one. Again OEX 690 is the line in the sand.

Good luck

2c

As anticipated

a bounce. It travelled in between S1(674) and r1(683). Did two good trades today. Shorted as soon as it fell below 680 and closed out at 672 (Fib 61% retrace). Went long as soon as it surpassed 680 and is still in the trade. The decision to leave it overnight is because VXO is falling and this gives the hint that the market will go up at least for the short term. But again 690 is the line in the sand for the bulls. Tomorrow's numbers are 686, 679 and 674.

2c

Target reached....

OEX 680 was reached and gone into lower band of 677ish. The whole day it was not able to rise above 684 which was the S1. It was a kind of orderly selling and has a sickly stigma attched to it. In any case, it has been six days of fall and there should be an OS bounce within one or two days especially when the Fib ratio is reached. The bull's case has completely collapsed and do not let any talking head confuse you. It has merit if and only if the market rallies hard back above 690, else the case is closed. Tomorrow watch 683, 680 and 674. Anywhere below 690 is shorting territory.

good luck

2c

It is about time .....

Finally dawned on the investors that we are in a recession with high real inflation and credit problems. We are as of today officially in a bear market. The all important bull support 690 was broken to the down side. Now will see if the official head and shoulder is realised. OEX 680 is near term target. If this line is broken, everybody should run for cover. Looking back at the last few days, could not help but to think how naive some investors are. Dr. B had alrady said no further rate cuts because of high inflation. Do people not know that this is a hint and that one would imagine Dr B would have advance information ahead of all of us and some of us has to wait for it to come out and still buy??? Whoever, advocates new market high should have his head examined. Of course, the market does not come down in a straight line but short on rallies is the theme now. Monday watch 693, 690 and 684.

2c

It is logical that the market is illogical

It still wants to go up in face of high inflation and credit problems. In any case it is oversold and the 686 area, the confluence of multiple moving averages, is providing tremendous support for two days now. Watch 690, 693 and 699 tomorrow. There is a very high probability that tomorrow is an up day, provided tame CPI of course . Whether, it will continue its down draft, we will just have to wait and see.

2c

This has to be a topping process

A wide ranging day suggests exhaustion of trend. Tomorrow's numbers are 706, 696 and 685. Yesterdays' dream still intact till
it is broken. Neckline is 670ish.

good luck

2c

Market literally pulled back 1 min after FOMC

Kind of expected the day after but that shows how much dislike the market is with the Fed's 25 basis point cut. Now the reverse H&S is broken and come to think of it, the right shoulder was kind of in a hurry. The market was at OB before FOMC and never understood why people would still buy going into the meeting. This is Oct31 all over again, the Fed still worried about inflation and hinting no more rate cut and this will put a damper on the market. The highs of Oct11, 31 and Dec11 form a resistance line which is stopping the advance of the market. The original forecasted 710 was good and it is always important to realise the market will reverse in between 61.8 to 78 Fib retracement. Today is approx 0.38 retraced from the rise from Nov26 and is sitting on forecasted value of 690. If the uptrend is strong it may bounce tomorrow, however, right now with the market sentiment, there is no reason to believe that it will change overnight. A conservative target would be 50% which takes us to 680 and tomorrow's numbers are 705, 698, 684 and therefore, if it continues downward somewhere around 680 to 684 sounds right. But then again the brokers will be coming out with earnings this week and may be they will lead us further down. Was waiting for the infamous FOMC 1,2,3 pattern to realise today before shorting but shorted the market anyways when the pattern failed.

More thoughts tonight....could not help but thinking about the weekly OEX chart which is forming a H&S right shoulder. The left shoulder started from Aug13 this year. Now if this H&S materialised the neckline is 676 and the projected target will be OEX 58 points down from 676 taking the market to OEX 618 which is lower than 624 of March 12 this year and this is what Bradley Model is predicting by Dec 22, only 10 days from now. A drop of 72 OEX points and DOW 1440 points to DOW 12000. Just dream on for now...


2c

FOMC

no pullback yet, so it looks like one of those times that pulls back after FOMC. Tomorrow's numbers are 709, 705 and 703. Played gold stock calls last Friday and sold today.

2c

Not surprised to see a pull back here

Now price and volatility at opposite extremes again. Expect a pull back to 695 the worst case. Monday's numbers are 703, 702 and 700. Still in uptrend pending FOMC of course. Have a good weekend.

2c

Who says market does not go up in a straight line

Well, nothing more to add. Tomorrow employment report and numbers are 707, 699 and 695. Now be watchful of the fact that every time the market goes out from its norm for more than 15-20 points, a pull back is expected soon.

Oh boy! Forgot the inverse H&S. This is huge and 35 points back up to old high 725. Hold all longs.

2c

A confirmed buy signal...yes

How about that! one day is confirmed sell the next is confirmed buy. The worst nightmare came true this morning. Comparing chart pattern, today was like Aug29. It flipped right back. Lucky only 1/3 of puts were reentered last night and was scrambling to get rid of them this morning. As it turned out with doubling on calls, it was a winning day today nevertheless.

Technically, it exploded past 690 and up trend was firmly anchored. Well, the good news today were, higher productivity, non-inflationary unit cost of production, and in addition bigger than expected crude draw down led to the oil rally. The Santa rally is here with FOMC next week and worldwide rate cuts. The only down side may be Friday's job number. The ADP report forecasted a higher than expected increase and basically saying what recession??
In any case, no shorting please if you want to stay alive in the market, and buy on the dip until otherwise. Further, volatility indicator has shown a trend change again today which means up ...Tomorrow's numbers are 697, 690, and 686 and the near term target of course is fib 61% which leads us to 710.

2c

A confirmed sell signal...but

if it were below 680 then no questions need be raised. However, since the market has made its first step into an up trend and comparing August 28, it could flip right back. But the economic condition was different then. The glimmer of hope from FOMC next week probably helps to slow the speed of the decline. Could not help but took profits at the open then reentered Puts later. Tomorrow watch 685, 684 and 681. If it closes below 680 especially 676 we are looking at closing the gap.

2c

Remain short

nothing more to add...except watch out for Fib 0.38 at 680 and 0.5 at 675....watch 690, 688 and 684 tomorrow....

2c