The last month has been like this for me...
Best Posts in Thread: Anybody taking advantage of Coronavirus?
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Going all caps, because I know this will be HARD to do this week: IGNORE THE ELECTION! IGNORE ALL TALK THIS WEEK. Focus ONLY on the market moves and ignore the noise, it is VERY important. We will like have a LOT of volatility this week and you will want to attribute it to the election. DON'T. The election has been "priced in" for months. So, that said, and focusing ONLY ON THE MARKET MOVES, here's my update:
- Bears are absolutely still firmly in control, period.
- There are no indicators to the contrary. In fact, all indicators are that we have a lot more to give right now.
- We are highly likely still moving DOWN toward the 3050-3000 level on the SP that I've been talking about.
- 3236 is next level of resistance on way down. 3236 is important because a close below that is a Dow Theory Sell Signal.
- We will likely get another good bounce, possibly even filling the "gap down" last week between 3350-3400, but this would HIGHLY likely be a "false breakout" and we'll roll over on our way down to 3050-3000.
- For the millionth time, this is where you will want to establish your truly long, buy and hold, positions.
- In the "big picture", using a trend channel back to the bottom in 2009, we are still in the upper half of that channel and a move to 3050-3000 would ONLY be to the center of that channel. I still expect us to go up, WAY up, over the next few years.
- Again, this doesn't have schit to do with who gets elected on Tuesday.
- If you are on the sidelines right now, STAY THE FUK THERE! You ain't going to miss ANYTHING this week either way.
- Have fun!
Update (off the SP500 as usual):
- Prior to Friday's market action, I was giving a higher probability to the "skinny/shallow" scenario where we had bottomed and were starting higher.
- Given Friday's market action, I now think it's "50/50" on shallow vs moderate. I think this week will decide it for us.
- If this week, the SP500 rallies and closes above 3515, we are likely going higher to as high as 3600+, then small pullback, then run to 3740.
- If this week, the SP500 falls and closes below 3430 and the 21 daily moving average , especially if to 3400, we're going lower, possibly to 3050-3000.
- Indicators are all mixed and could be used to argue either scenario.
- I'd wait to see which way we break.
- In full disclosure, the positions i have right now are "long," but i don't feel comfortable with them.
- Remember, I use all this for short term, swing/momentum trading for income, NOT for retirement savings (but you can do this in a retirement account if you have control of the account). For a true retirement account, I'd still just be buying, holding, and adding to those positions.
- This will be short as I was moving kids back to UF all last week and have to get caught up on work...
- Again, this is all SP500 related.
- Nothing has changed, bulls still in control... FOR NOW.
- 10 yr is weak and dollar gaining mo, both are "bearish" for the markets, which matches with nearing a top.
- Projected top of Wave 5 is now 3453-3500. That will complete that 5 wave move (and Wave 1 up of larger 5 wave cycle). I will get very
- We then get the Wave 2 drop, likely to the 2800-2970 level (could be lower, but in that box as of now for 38.2% retracement). But it may not go lower than 3000... can't time/predict the bottom, obviously. This is the "second bite at the apple" to get in long at low prices. You'll want cash at this bottom to buy in again.
- We then get Wave 3 up to 4000 range.
- This is the short to medium range outlook (like through the end of 2020).
- Long term, I think market will at least double from the Wave 2 low. Current Rule of 7 3rd Projection is 3612 (we hit 1st and 2nd Projections already), but this will likely come AFTER the Wave 2 down move, and as part of the Wave 3 up move (then Wave 4 is a pullback, final Wave 5 up move is the long, strong one that takes us wayyyyy higher than current all time highs).
- If you are looking for a historical example of what our current market looks like, look at the market in 1970-71. That said, I think there are two worlds, "before 2008" and "after 2008." The world has never seen markets where due to QE and everything else the Fed has done, there is only ONE place to put your money for a return, the markets.
- Now, here's my big caveat! Given the bullet above regarding 2008, we are in REALLY unpredictable times. So far, all my updates since the crash have been spot on, and I think they will continue to be so, however, this market could shoot WAY higher BEFORE we get the Wave 2 pullback. If that happens, Wave 2 pullback will be even stronger (i.e. lower).
- Be careful over then next weeks and few months.
First, when I talk about "waves" in this thread, I'm referring to Elliott Waves. There are "waves within waves" in Elliott Wave Theory. For everything I talk about in this thread, we are currently in the Wave 5 (of 5) up wave (and Wave 5's are long, strong, up waves). This Wave 5 is the finish of a series of 5 waves that make up Wave 1 of a much, much, larger series of 5 waves. So, you'll see me talking about making highs below, and these will be the end of both that Wave 5, the smaller series of Wave 1-5 that it is a part of, but it will also be the end of the much larger up Wave 1 in the bigger series of waves. So that is why you see me talking about "Wave 2"... Wave 2's are sharp, deep, corrective waves in the 5 wave pattern. So the big drop that I refer to as the opportunity to get in cheap again is this Wave 2.... hope that helps! Now, before anyone hammers me on Elliott Waves, I think if you've read anything I've posted, it is but one of MANY "theories"/tools I use, and it is very useful. On their own, we can make fun of/poke holes in ALL of these theories (see Rule of 7's Dow Theory), but if you use say 3 to 5 of these things as tools/guides, and most of them all indicate the same damn thing, I think yer on ta somethin' you can act on. So far, my updates have been pretty damn accurate, but I am very curious, and very nervous, to see how it all holds up as we approach SP500 at the 3400 and above level. This is where I have to really steel myself to trade what's in front of me and not what i THINK and FEEL, and that's hard for everyone. Here's a primer on Elliott Waves if you want to at least get the gist of what I'm talking about with "Waves": Introduction to Elliott Wave Theory
- Dow Transports: still holding, small corrective pattern, strong close friday. Bulls still well in charge.
- R2000: same, still above June highs, small corrective pattern. Bulls still well in charge.
- 10 yr still at .71 holding it's big rise. Bullish for stock markets.
- Dollar still has not broken upward to break resistance and is still bearish. Needs to get above 94 to break bear trend. Bullish for stock markets.
- "Smart money" (commercial hedging) still betting long. Bullish for stock markets.
- All indicate continued bullishness, but as I've said, I'm very wary during this next push up.
- Still on track to get up to 3400-3453 on SP500 by September/October.
- Will probably see a small pullback when we hit near 3400 level (all time high) because it's natural resistance, then move back up. 3453 is going to be a tough level of resistance to break above, but could shoot as high as 3500 before rolling over.
- 3320 is still key support. If we break that, could test 3235 (June high) level, then run up to all time high.
- I still see all time high being taken out before we get the big pull back (big) Wave 2. We'd need to see the leading indicators (first 5 bullets above) break down to get more bearish.
- Gold/Silver - some sideways consolidation, then retest highs ($2076), then we'll see whether it's 2011 redux (breakdown/failure to around $1800-$1850, first two Rule of 7's targets), or they go higher. If it breaks down now to 1800 instead of retesting highs, then we likely get bounce we would indicate next bull leg up. Gotta watch, remember, gold and especially silver, can be volatile as fuk and is susceptible to manipulation (the big silver drop last week was ONE trader, JP Morgan, doing a HUGE dump with a MARKET order. I suspect they will be the same ones buying in big if we get gold down around $1800.
- Bitcoin. Had a big breakout. Still in its Wave 5 up move. Will likely follow what gold does, likely up to near $14000 levels before its big Wave 2 pull back. $11500 is key support right now. If that breaks, Wave 5 still holds after the ABC correction, and the remainder of the Wave 5 up move continues. Bulls are still strongly in control. I know people are skeptical of bitcoin, but it should not be ignored. I think it was around $7200 when I started talking about it in this thread and I'm still very bullish on it. It smashed higher through its upside resistance line from it's previous two highs.
- Hit the SP500 highs mentioned above (3453).
- Using Fibonacci retracements, here are the levels we are looking to drop to:
- 38.2% = 2975 (most likely)
- 50% = 2825
- 61.8% = 2676
- If we shoot higher than 3453, the likelihood of pushing down to 50% or even 61.8% increases.
- Bad news is is that timing wise, this drop is likely going into the November elections, and the next big run up will just be starting (that will be the start of the bigger Wave 3 to newer all time highs).
- Dow Transports still rallying STRONGLY... back to mid-channel.
- R2000 also rallying strongly... also back to mid-channel. 1530 is support for bulls to remain in charge.
- SP500 February down gap at 3337 that I kept talking about was filled last week.
- SP500 still on track to run to 3400-3453. 3320 is support for continued run up.
- "Equal Weighted" SP500 (reduces "power" of big tech stocks) also showing big strength.
- Advance/Decline line indicates SP500 will make new all-time high. It has shown NO weakness since June high. This is a "healthy" sign for the MARKETS (remember, the MARKET is NOT the ECONOMY!). As a "rule," new high should be around August 27th... this is based on new high being reached 80 days after previous high (80 days is a MEDIAN number).
- Then I'll be in "shorting land." I see testing 3400, pulling back to averages, then one more push higher to 3453 area, maybe even 3500+ blow off top, then look out below!
- For the Dow, 27830 is the next Dow Theory target.
- Dollar still oversold on all levels of RSI, holding at 100 day average.
- Gold hit it's 3rd probable target of 2076 (Dow Theory, hit it exactly, and has fallen from there), we'll see if it pauses/tops, but I seriously doubt top. "Smart money" (commercial hedgers) continues to bet against gold, history shows be cautious at this level. This pairs with the dollar. Wouldn't be surprised by stronger dollar, pullback in gold to the 21 DMA. Watching for a drop below 2000 for that to happen.
- Silver hit (but did not close above) it's 2nd probably target at 29, next is 36 unless it drops below 26.90.
Nike stock is down 10%. Seems like a quick way to make a few bucks when it returns.
Anybody remember the Bhopal disaster 35 years ago. Dow Chemical dropped like a rock. Of course it came back once the hysteria subsided. I learned then that these events are an opportunity to buy.
- OK, we've crushed through the 3414 (was 3410 yesterday) support level.
- "Moderate" scenario is now highly likely.
- Let's see if it closes below that 3410 level today and really remains below it this week.
- We will likely see a bounce (even a big one) after today before it rolls over again.
- If we stay under 3410, first target down is currently 3236, bottom is 3055-3000 level I've been talking about.
- I said 3443 was the critical support to watch to help determine if we were in "skinny/shallow" or "moderate" pull back. A close above it would be an indication of "skinny" scenario running higher to the 3700 level, a close below would indicate further dropping to as low as 3050-3000 level.
- We JUST pierced the 3443 level (3442.94) this morning at the open, but so far, we have bounced from there. It's where we close that's important.
- Dow Transports still strong, they have not taken the hit.
- Adv/Decline chart same thing.
- RSP (equal weighted SP500) same thing.
- Depending on the close today/tomorrow, we might have bottomed this morning and are making the next big run up.
- We really want to see this bounce get back to the 3500 level to confirm.
- If you're a gambler, you could start going long tomorrow depending on what happens today at the close and at the open tomorrow.
- If you're not a gambler, sit tight for confirmation one way or the other!
"You walk away from stalled talks, get in your car and drive off, leaving the other side stunned and, hopefully, softened up for compromise. Then you restart negotiations with each side a little more flexible, and — in this case the crucial second part of the strategy — the deal broken up into bite-sized, and thus more easily doable, parts."Let's review:
- Nancy started at $3.4T with HEROES Act. Trump wanted $1.0T targeted deal. No deal.
- She just passed a "compromise" bill for $2.2T. No deal, Trump walks away, then dangles carrot of $1.8T.
- End deal likely somewhere between $1.8-$2.0T.
- Both sides claim disappointment and victory.
- Nancy will try to slow Trump getting $1200 checks out before the election.
- Stock markets win.
- America loses, again.
I meant to post my update last night, but here is now (again, based on SP500):
- dollar down, crude way up, 10 yr way up = market bullish.
- Dow Transports still in upward trend channel. Support is still 11080. No sign of bearishness yet.
- R2000 on the weekly chart has a bullish pattern looking like it put in a bottom.
- NASDAQ is not showing a bottom, but that's the only down note right now.
- We are still in a bit of a gray area on my "skinny/shallow" vs. "moderate" retracement scenarios.
- It is increasingly looking like we got the "shallow" retracement (not what I was hoping for) to the 3236 level.
- That 3236 is now key support for SP500. It is a "Dow Theory Sell Signal" and another key support metric.
- As long as we remain above 3236, we are still bullish and will likely slowly push up to 35-3600 and new highs.
- If we close below 3236, we likely get the "moderate" scenario. I think the "deep" scenario is irrelevant unless we do get the "moderate" first.
- We're still in an uncertain phase... with either the "shallow" or "moderate" scenarios, I see us pushing up to 3500 range, then pulling back a bit... that is where we will get confirmation on "skinny" vs "moderate," because that pullback will either then bounce back up and keep climbing (skinny) or fall further to around 3050 level (moderate).
- I'm still wary, and yes, feel like I'm "missing out" a bit, but I haven't lost any money in this either.. trade at your own risk!
Update: Again, all off the SP500 term...
- I still say we topped and are in correction. Question is: how big is the correction?
- R2000 officially broken down and in a down trend but holding major support.
- Dow Transports has now hit all three of my indicators for SP500 going bearish, it did get the "negative divergence" I was looking for. As a leading indicator, it's a signal of weakness.
- Dow Transpiration Index, watching for whether or not it closes below 10940 (support). If it does, and breaks below that and it's upward regression channel, very bearish.
- Dollar still gaining strength. On the monthly chart, it does look like it bottomed. Support for $ is $93.50 to remain bullish.
- So, Wave 1 up is over, question is, what does Wave 2 down look like? Shallow (where we are now or down to 3200-3145 area), moderate (down to 3055-3000), or deep (down to 2890-2725)?
- Futures are up a bunch, but I said we'd likely get a good bounce before more down, so we'll see whether this bounce signals the end of the "shallow" retracement, or is just the bounce before going down to "moderate" (most likely) or "deep" (least likely) drop before big, long, Wave 3 up.
- In my "Elliott Waveland," I think this Wave 2 down move is an "A-B-C" correction where we already had the "A" move down to around 3200, then the "B" wave is a bounce up, then we get the bigger "C" wave down thus completing the "ABC" that makes up the "Wave 2." To be clear, that would mean we already had the A down from the high of almost 3600 to around 3200, we are starting the B up bounce (could be up into the 3400-3500 range), then we get the C wave to the bottom of Wave 2 (I think to the 3055-3000 range). Still following what happened in 1971. We also had an ABC like this in 2009-2010 before the long Wave 3 up move. Bother were 38.2% retracements (my "moderate" scenario). FYI, 38.2% is not of the market level, but of the run up from March bottom to the high.
- Bottom line: we don't know where we are right now. Was last week the bottom and now we start just going up again, or will this be a bounce followed by a sharper drop lower.
- On the weekly chart, it looks like this will just be a bounce, followed bigger move lower. That said, in these situations, there can be a lot of "false signals," it's why I try to look at a lot of things in totality and go from there.
- We are still in wait and see mode. It's too easy to get whipsawed on a daily/weekly basis right now.
- I'm sitting tight to see what the bounce does.
- I had three conditions for evidence of a "top":
- Overbought conditions (we had that).
- Break down outside of upward trend regression channel (has now happened multiple times in the last week without getting anywhere near back into the channel). We also closed, again on Friday, below major support levels.
- What I call "negative divergence." We haven't had this yet, and I don't think we will because this top was a "blow off" top. Conversely, at the bottom of the March low, I did not get a "positive divergence" signaling the beginning of the up move, and that happens when you have full capitulation (which we did).
- So, I now think we definitely topped (for now) when we hit 3580 and completed the up Wave 5 (that completed the 5 waves of the larger Wave 1) and we are now in the Wave 2 pullback/correction.
- Trying to profit on this Wave 2 down is probably VERY dumb, because historically, they are VERY messy with lots of sharp "ups and downs" while slowly moving lower to its bottom.
- What we are really waiting for is that bottom, because that will be a HUGE "buy long" opportunity and the start of a long, large Wave 3 up to new all time highs of 3600+ (potentially much higher, as much as up to 5000 levels).
- So, what do I expect now:
- Using this first leg down from the highs to calculate the 3 probable bearish targets for the Rule of 7's, we get: Target 1 = 3232 (June highs), Target 2 = 3145, Target 3 = 3000. These are probable targets, it does not mean we will hit all three. For the 3 bullish targets before, we hit Targets 1 and 2, and came just short of Target 3. We could also go much lower than 3000.
- The Target 3 of 3000 also nearly coincides with a 38.2% Fibonacci retracement (it's 3055). If we are on this path, we likely keep dropping to around the 3232 level, get a bounce up, then fall again toward 3000. Then start the big Wave 3 up.
- There is still a "risk" (I say "risk" because I'm personally hoping for a much bigger pullback, like at least 3000) of a "shallow retracement" where we only pull back to around the 3232 (June high and Daily100/Weekly 21 EMA) level, find a bottom, then start the Wave 3 up. I think this is the lower probability scenario given all the crap going on.
- Please note, the farther we fall, the stronger the Wave 3 up will be. So I'm hoping for as big a pullback as possible.
- New resistance in 3429. As long as we stay below that, bears are in charge.
- If we close solidly above 3429 for some reason, will reassess. But I would only see a rise to this level as a bounce before breaking down again, not as another big leg up.
- Another signal that we've probably topped: on a weekly chart of the SP500, the MACD is looking like it's setting up for a "death cross" soon.
- A note on the Dow Transports (a leading indicator for markets) looking at its WEEKLY chart:
- It seems that any time the Dow Transports break their previous intraday all time high (ATH) on the weekly chart, it signals a "false breakout" upward, and has resulted in crashing.
- It just broke it's ATH (from back in 2018) on the Weekly chart.
- The last two times it did this (in 2018 and 2012), it then failed and crashed HARD (total reversal in multi-month price action).
- It also happened after hitting ATH's in 1999 (after breaking ATH of 1998) and 2011 (after breaking ATH of 2008.
- Finally, if you are a "candlestick" reader, the recent piercing of the ATH was a "shooting star/doji" which is a signal of weakness.
- 11000 is support for the Dow Transports. If we get a WEEKLY close below 11000, major bearish.
- Dollar still not showing any sign of life.
- I had three conditions for evidence of a "top":
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