Bravo..the shorts will crash and burn from here on..

To recap, completion of daily and weekly H&S all on targets and initial confirmation of bottom on Jan25 and now, today, the big confirmation of volatility index. The trend has finally turned and casted in stone. All shorts will be burnt. Buy on dip time. OEX 660 is in sight and depending it may even go further. Some videos from some gurus were still preaching doom on the DOW and they are charging an arm and a leg for subscribers. Oh boy, in any case, if any guru is still preaching down slide...get rid of them. Mind you, pullbacks are not downturns. Anyways pivots rock, today support at 626 and rocked all the way to 642 r1,just lovely. What a buying opportunity as indicated yesterday. Ok tomorrow, 652, 637 and 628.
GOOG news pulls itself down but I am sure it will rebound and rock with the market soon.

2c

Let's take a closer look

Fed cut rate by 50 bps and market rallied above r1 but fell back to s1 by the close. A volatile market indeed and obviously 644 or Dow 12500 is the first major resistance for the bulls to overcome. If you look at the weekly chart, the trend has turned up and there should be more upside according to the daily chart. The futures tonight do not look too promising. On the other hand if tomorrow's numbers (642, 636, and 626) are not violated. It may be a buying opportunity.

2c

Range narrowing again...

Yesterday's range was 15 points and tomorrow's is 7 and the numbers are 638, 634 and 631. This is an NR7 and breakout is imminent. If the Fed cut rate by 50 bps then a continual rally to about 644. If only a 25 bps is realised then a sell off. In either case, a pullback is anticipated in the very near future. It is better to stand aside and ride the trend as it develops and is not wise to front run it.

2c

Bulls are back in business...

Trading is definitely an art. We talked about pattern violation yesterday but the big picture is still up. The tricky part is when do you sell and when do you hold long when pattern or pivot is violated. Practice, practice and more practice and believe it or not traders can be trained. Ok, to recap, we have the completion of daily and weekly H&S and 5 waves. Make a note, this is wave A of corrective ABC and using Fib ratio, it should theorectically reach 660 as an intermediate term target. The word intermediate is mentioned because as of today, intermediate up trend has started. Today it closed beautifully above 627 and tomorrow's numbers are 637, 627 and 622. A chart is posted again today to illustrate. Pivot numbers are important but one has to look at the forest too. Longer term hold will produce bigger results rather than crumb change.

2c

Weekend Update

Channelling OEX...

2c

Hmmm....

Forgot to mention yesterday that the buying sentiment reached peak and today's gap up to above r1 triggered off a wave of selling which kind of exaggerated to the close. Many are now calling for lower low targets. The bulls are not dead yet. Technically the pullback today is 38% retracement of the rise from the low a few days ago. Though it looks bad because it closed today at 622ish below 630 pivot. However, other indicators points to the trend about to turn especially in view of the FOMC meeting next week. Tuesday's numbers are 634, 627 and 614 and if it can close above 627we are back in business. Hang in there bulls.

2c

ok this is it....

All on board to go green. This a short term up trend within a larger down trend. Technically, it should be up till FOMC next week. Definitely don't short and just buy on pullbacks. Tomorrow's numbers are 636, 630 and 627. Conservatively, a near term target of 650 can be accomplished.

2c

Oh well, what do you know?

Thought AAPL was going to destroy the confirmation day. It was not because of the 75 bps Fed rate cut, which actually sent a bad message to the consumer in a sense. It was the banks and the regulators that got together to bail out the bond insurers. The Fed rate cut frankly will do very little to help the situation. Further, how do you size the risks of the fancy securities and derivatives that those big boys committed to but with very little understanding. In any case, with 250 billion in deficit a recession is almost certain in 2008.

Technically, today's low was a bit below s1 of 599 and because of the bond insurers late news which triggered off a huge short covering. Mind you, buyers were small by comparison. It closed at 627 well past r1 622. If you have a drop to s1-s2, you will get a rebound. The same thing can be said here. A rise to r1-r2 will almost always get a pull back. This is also in light of the fact the the DOW has traversed 500 points in one day. Now are we there yet? The weekly H&S was completed. Therefore we expect a rebound of approx 38% to 630ish and tomorrow's numbers are 631, 616 and 605. 631 is the forecasted number, only if it takes out 631 and closed above 637, the down trend is terminated. Volatility ratio has not indicated a turn yet and other inidcators are saying potentially but not confirming. The next few days are important but the feeling is that it is not finished yet. Expect more volatility to come.

2c

Fed panicky....

What a day. Actually, MLK day saved the market. Had to close out all remaining puts in the morning and also played a small long position during the day but left no open positions overnight. Technical, it has all the signs of a turn. The Fed's 3/4 bps made it a wide ranging day which typically signals exhaustion of a trend which in this case is down trend. But it needs confirmation. With a 15% haircut after hours on AAPL we may not get that confirmation tomorrow. VXO at 30ish, yes bottomish but no confirmation of a turn yet from volatility ratio. In this market it is better to wait than to be sorry, or day trade it. Tomorrow's numbers are 622, 609 and 599. See those numbers widening and today's close was at 613 and you notice where it sits in the range.

Have fun, folks

2c

Pivoting the way to profits...

This is old fashion trading and there is no need for fancy charts and graphs. As anticipated, selling into strength, short from pivot 631 and closed out at S1 617ish. One Feb 630 OEX put contract would have net you at least 700 dollars in one day. Imagine you have 10, 100....contracts? Anyways, Tuesday's numbers are 630, 623 and 613. Today's consolidation at the low of the day means more selling to come. Some forecasted the diamond formation of the DOW with target of 11,100 and that will bring OEX to below 600 when this is done and over with.

Good luck

2c

The power of pivots...

Once again, it works. As soon as pivot 644 became resistance, short, short, short...did not matter what B2 Bomber Ben said, it was going down. The tripping point was that he mentioned "theorectically reducing rates may work". The market took it as academic and not working. There was no return after that. Bernanke is no Greenspan. This market is a day trader's market. IBM after hours up 5 points. However, tomorrow's numbers are 639, 631 and 617. If it cannot break above 631, you know what to do. Looking at the technicals tonight, Ben screwed up big time for a rally today and it is not going to turn any time soon. If it gaps up tomorrow because of IBM, there will be another wave of selling into strength just like a few days ago.

2c

Signs of turning...but

Turtlesoup+1 buy signal, but this signal is not very accurate. Other signs are, very high selling sentiment, almost completion of wave5 at 637. The next few days are important. Lessen on your shorts and prepare to go long. The next wave should be an ABC up. Tomorrow's numbers are 650, 644 and 637. It has to take out 650 if it is going to turn.

2c

Trading is definitely an art....

practice, practice and more practice. The NR4 was fullfilled to the downside. This was a no brainer in light of the retail sales and Citigroup earnings. The tame PPI was pushed aside, since the Fed is no longer concerned although they are not admitting it. Recession and this is the bigger evil. The ability to do pattern recognition is important. If you look at Nov15/16, you will see the pattern. The weekend ewave update was the guide. Wave5 started in earnest. DOW 12,000 is doable. Tomorrow's number are 657, 652 and 642. Another 4 to 5 days of onslaught for the bulls is in the card. Will see if Jan 22 is the turn date, give and take some. If it cannot surpass 652 tomorrow, short it.

2c

Not convinced yet...

Impressive close right at R1 663. The buying and selling sentiment were just about equal. Today seemed to be more like Nov15/16. Technically, it is an NR4. The numbers are narrowing, 666, 662 and 659. A break out is anticipated one way or the other. Volatility does not yet reflect a trend change. The bias is still to the downside. There is a flurry of data coming tomorrow such as retail sales, ppi and bank earnings. Particularly for C, a 24 mil draw down, 24k job cut and 50% reduction in dividend are in the card.

2c

Weekend update

A bit of ewave...the numbers in circles represent trading days

A comparison of Oct to Dec 5 wave patterns

2c

The market is really sick

Today is like Nov15 retracement back to the neckline of H&S was only approx. 38%. As soon as the gap down was below 663, buying was out of the question. It tried once to surpass 663 but was turned down immediately. Looks like the weekly H&S is in control now and a target of March low of last year of about 620ish. In addition, it is earning season next week. It is easier to short than to go long. Monday's numbers are 663, 658 and 651. A 5-min chart shows a H&S which says we will revisit 648 in the very near term.





2c

All clear to buy....

Pivot 657 tested and held. He is still Helicopter Ben, not B1 Bomber Ben. As planned, all clear to hit the daily H&S neckline which is 676, 679ish. From 665 to 676, a good 10 points or approx. 5 bucks for Jan 660, or 665 calls. Tomorrow's numbers are 672, 663 and 657. Watch that pivot, for the rally to sustain, it has to close above it every day. If close below pivot on any day...run for life.

Have fun.

2cents

Not entirely convinced yet

It closed at 661 above pivot 657 due to a late day rally. However, all other signs point to no buying yet. Although AA earnings may help a bit tomorrow, but today could be a one-day wonder. Selling sentiment did not come down much and buying sentiment is zilch in comparison. A big short squeeze and we need more buying sentiment if the rally is to be sustained. Perhaps a few more days of volatility. Tomorrow's numbers are 666, 657 and 652.

2c

Just heart breaking...

to see a perfect opportunity for the bulls to take charge and was wrecked by heresay. It was so close. Since it closed today at 651 which is very near s2 of 649, there is a very high probability for a rebound tomorrow. The numbers are 664, 657 and 644. If it closes above 657, the bulls still have hope, espcially Helicopter Ben will be talking on Thursday. Bears be careful here, since it is the eighth day without a bounce, longer than the November down draft. The daily H&S is finally complete and EW wave4 should begin and should be a quick one to 679 max. After that probably EW wave5 down to fullfil the weekly H&S to March low.

2c

Signs of turning

A technical signal, firstly volatility is decreasing and secondly every time there is a 20 point gap from the forecasted value, it will move back towards that point. Especially when the daily H&S is more than likely completed. Conservatively, from 657 to 676 and since it closed at around 662, a 15 point rise from here will net approx. 5-6 dollars, time value discounting including. Tomorrow's numbers are 667, 662 and 658.

2c

Another good day...

for the bears of course. Make no mistakes, this is to be expected. You can basically be a bear until the weekly turns, but then you need a bigger pocket book and a longer horizon. It broke out as expected from the narrowing of pivot numbers and to the downside because of the pitiful job creation numbers. The selling sentiment is very high, but since this is orderly exit, more selling is to be expected. Monday's numbers are 670, 665, and 655. Since the uptrend is broken to the downside, short on rallies until otherwise.

Daily H&S will complete at around 654
Weekly H&S will complete at 624 March low

2c

Pissing in the wind

A waste of time to trade day. It wanted to turn but couldn't. It will depend on employment number tomorrow. It got turn off at the pivot 680 today. Tomorrow's numbers are narrowing, 680, 677 and 674. It will break out one way or the other. Looking at the technicals tonight, the weekly is down trend, that means the upside is limited. ADP reported higher job creation, I am not optimistic for the bulls. We shall see, follow the trend...

2c

Very Happy New Year to the Bears

If you bought puts on Dec26, your money has already doubled in 5 days. This is the beauty of OEX options. OK, where do we go from here? Fundamentally, we have political turmoil in Pakistan that sparked crude oil to $100 per barrel. ISM reading below 50 confirms a recession. FOMC minutes did not save the day. The best the market can hope for now is another rate cut but that would not do any good to inflation. Technically, the selling sentiment has almost reached the turning point but not yet. Conservatively, one to two more days, and would depend on the Friday's unemployment data. Tomorrow's numbers are 685, 679 and 670. This is a wide ranging day prediction but it has to have a strong close for a trend change. Dec11 and Dec26 highs mark the two tops and they are lower highs. There is no change of trend signal since Dec11. So go figure. It seems like an inverted Bradley for 2008 at this point.

http://www.amanita.at/i/bradley/bradley2008.GIF

Good luck

2c

2008 New Year

Hope everyone had a good rest. To recap, buy on Dec18 and sell on Dec26 and remain short. Review of last FOMC minutes this week should reinforce the fact that the Fed was concerned about inflation. Monday's housing number did not excite the market. Near term target for OEX is 680 or lower. Watch 689, 687 and 684.

2c