Sunday, August 25, 2013

The REAL S&P500

There was an old trading story, some may call it a legend:


When new trader was hired by the prominent trading outfit he went into the head trader’s office to be introduced. What he saw surprised him enormously – head trader was standing on the table and looking down on the floor where multitude of the charts were spread out. Newly hired trader could not hide his surprise, but the answer he received was quite simple: “You need to distance yourself from the market, your ideas, influences to be able to see BIG PICTURE” said head trader…


This is what I will try to do today – not just distance from the market, but zoom out as much as I can to try to see Big Picture.


And the main point of my “viewing” would be to imagine were market might be going on the longer timeframe and to be just I will introduce INFLATION into the pricing of the market.


When we look at the monthly D-Wave what we see is that due to new, even inflation adjusted, highs have been made in August 2013, therefore monthly Dwave 5 has to be extended and what we have is a complete mess and guesses and … nothing I really like to base my trading on.


See this chart – nothing to like here, move along…


2013-08-24_1946 really boring indeed…


But now lets introduce inflation into pricing and what will happen is that we are in the very beginning of totally new wave structure because previous 1-5-A-C completed!



S_P_500_Inflation_Adjusted_chart_May_2013 (2)

So, if that holds water, then August 2nd top (if holds) is, in fact an end of wave 1, and, if market doomsayers are correct – then next wave we will indeed retrace almost all the way down to Evil-ish SPX 666 (normally 62-70%+ retrace is not unusual to shake most of longs.


I will add this inflation adjusted chart to “BIG PICTURE” page and we shall see if it holds water.



Now, on the different topic – someone asked me on natural gas forum about my trade – below is the chart, entered based on declining channel, exited based on the same, will be waiting now for the confirmation of the trend change. Profited handsomely – with contract margin's roughly $2,600 realized profit in the pocket is around 100% for 3 weeks trade plus 2 heart attacks and countless ulcers.






And last, but not least – as a reminder of my “TOPS/BOTTOMS” expectations based on DeMark D-Wave coupled with my own ideas:


SELL end wave 5 - August 2nd-5th 2013

BUY end wave A - August 22nd -23rd 2013

SELL B - September 7th-10th 2013

low/buy point C - mid to end of October 2013 (and stay long or out of market till the beginning of 2014)



So far bears were totally gutless and harmless, just making pitiful sounds of own demise, but make no mistake – starting September 10th (around) – they will show first real bite and in the beginning of 2014 – they will be ruling this market for entire year.


Too bad most AmeriKans do not know any other language than English…

well – majority do not know even that language





blog comments OCCASIONALLY powered by Disqus