The Hallucinogenic Toreador

 

Sometimes we attempt to explain reality by using images and that makes reality even more confusing for some.

I am that unfortunate type, I need to see and when I see I see not what that is and not what I want to see, but really something else. 

Am I making myself abundantly clear?

 

Today’s market action mixed with blog policing sprinkled with annoying headache translated for me into two words:

“Hallucinogenic Toreador”

 

 

So, as a result, everything in this post can be fairly described by at least “Hallucinogenic “ part.

No need to reflect on Dali’s work, but you’d agree that the chart below is “Hallucinogenic “ – is not it?

No matter how Hallucinogenic this chart is – it tells a lot (keep in mind that the last change to that chart was made on July 9th – no changes since, not by my hand)

1. TDSequential Countdown Sell completed 2 weeks ago.

2. long term “blue channel” is in play and price action was not even strong enough to touch upper boundary of this channel

3. “White channel” (in place since Jul9th) – failed to contain he price

4. Fib Fan (not that I am a big fan) provided resistance – when that happens it really signifies weak price action.

5. Failed to stay above “50% D-Wave Down w4 weekly” retracement of w3

6. Failed to stay above 88 weeks MA

Not visible on this chart, but RSI failed, even at the highest price point to cross 60 level (so called “Bull Land”)

First “visual support” is 38.2% Fib 07 top-09 bottom, but I think it’ll go right through to prior TD Risk Level (yellow punctured line ) at 980 area.

 

There was one more failure – it you follow springheel_jack’s charts (and you should) – that diagonal trendline of his that just been retested and failed accidentally is a high level TD Demand Line and it was broken and “qualified” today.

 

If you have not had enough of “Hallucinogenic” yet – here is a rare video of Michael Olson (I have cleaner record and it is called “Hallucinogenic Toreador”

 

 

 

11/05/2009 Futures approx. BO
Daily Range Projection	Low	High
/ES	1044	1061.50
SPX	1037.90	1053.75
/NQ	1680	1706.50
NDX	1667.77	1691.15

The Weakest Links

Benny Boy delivered Christmas a little early to some of us today, so thank you Ben... well done! I have no compunction about taking money from this beast, but what is that money really going to be worth? Don't remind me, I'd rather stay in denial, and just trade the weaklings for all they're worth.

I have not had time to pour over the candle patterns or Fibs just yet, but I will comment in the regular section with all of you fine traders later on. We had gap fills, Fib fan rejections, you name it, so it's time to regroup and plot out the next round of moves for tomorrow, because no matter how well we did today, we won't rest on our laurels of good fortune. Excellent trading group.... I still can't get over the coordination that continues to happen here on TTW. In a word, Wow! See you all later on tonight, and enjoy whatever success you extracted!

And in the meanwhile, I present the weakest links and a chart on UUP, and where it stands... $RUT finished down 1.31% and XLF down 1.39%

Not buying it…

Yesterday a lot of commenters on a lot of financial blogs were outraged by timing of BNI announcement – are not we glad we can keep cool heads and understand that during the war each side tries to get as much strategic advance as possible?  We have multiple tools here, yesterday the one that provided explanation was DeMark (see chart posted yesterday) – lets keep up a team work and productive environment.  A lot of people are constantly on the site – don’t be shy to post or the very least – to  ask questions.

Speaking of comments – we are getting to the point where emotions might be difficult to keep in check (for some people), words “mutual respect” becoming an empty sound for some – I can tolerate a lot of things, more than you can imagine, but please, shall attacks on people having different opinions that one’s repeat – I will not engage in yesterday's conversation again.  (None was banned – I prefer to give people benefits of the doubts – there is always an excuse such as too much vodka)

 

Why I am not buying it?  Is not it obvious? What do I need crap for?

Here are few slimmed down short term charts – they look awfully similar – w4 of down contains entire 1-5 up wave (it is like w4 is not already pain in the neck to trade – no wonder I stayed away) – w4 is clear on /NQ and /ES on lower tick will show the same (it takes eternity to load tick chart with DeMark, cannot post every single one, my bad)

 

 

 

11/04/2009 Futures approx. BO
Daily Range Projection	Low	High
/ES	1034	1051.50
SPX	1039.68	1052.09
/NQ	1663	1688.75
NDX	1669.26	1689.05

When the Music Stops

Tuesday gave us very little in the way of big moves on the tape, but it was an interesting day in oh, so many ways. So far it's been rather easy to navigate the tape via the $USD/$SPX correlation, but today we were left with three major market components all ending the day in the positive. $USD + .14%, $WTIC + 1.68% and $GOLD + 2.38%. So what gives, and who will be left without a chair once the music stops? As we enter into tomorrow's FOMC announcement, the intraday charts are coiled pretty tightly, so trade carefully if you're one of the types that likes the rush post announcement, and perhaps we'll recognize a pattern developing pre-announcement tomorrow that we can trade if so inclined. I wanted to review the chart on oil volatility - $OVX, with you tonight, and also the chart on XLE. The coal sector received quite a boost via the BNI buyout, so it could be a sector play going forward. I'll post some momentum possibles in the comments below with all of you in a few, and you may get sick of my broken record, but thanks for all of the work everyone does around here each day. Our host has a very liberal policy on letting us not only trade our own methods, but he's also very tolerant of many points of view. I consider us blessed to have a place like this every day to work together. ~Keirsten

"A successful team, a winning organization is made up of many individuals, each of whom, in his (or her) own way, has attained a personal greatness" - Billy Cox

$OVX















$XLE













On the economic calendar tomorrow: Challenger Job Report, 7.30 AM, ADP Employment, 8:15 AM. ISM Non-manufacturing, 10:00 AM, and Petroleum Status at 10:30 AM. FOMC Announcement at 2:15 PM All times in EST. (it's so good to have that extra hour back!)

Earnings Link

Has the Train Left the Station?

FOMC Tuesday finds the tape moving like you're walking backwards on an elevator so far, but you know what happens every time I mention I think things are slow, and I promised David I would not press my luck with my "it's boring/slow" calls. ;-) Congrats to Miss Fujisan for her excellent charting on Gold and how this has played out. Well done!

Buffet sure gave the Trannies a bump today with his announcement, but let's take a closer look at the IYT and see where it's sitting as of mid-session. Double resistance right up the train tracks ahead....












I also wanted to share a close-up view of a chart I threw together in case we see the tape start moving up, as we've all speculated might happen. SPX will face Quadruple resistance, and we know what happened the last time if faced the big 'ol Quad brick wall. Will it hold this time? None of us know for sure, but I have a difficult time racking my blonde brain as to what would push it much higher than the levels I've noted on the chart. This would also fit my own pattern thesis on the pattern that won't be mentioned I charted last Wednesday, as well as a good fit time-wise going forward, if, in fact, we do see the tape move up.















Good trading to you all for the remainder of this yawner of a session, (see, I snuck one in there anyway,) and let's keep focused and use the time to plan and watch if nothing else. Here's my favorite Mark Knopfler instrumental as my thank you to David for his music earlier. This is part of the musical score from a movie called, "Local Hero," set in Scotland... a movie cult favorite and at the top of my all time favorites too...

David here

I’ve been keeping low profile today due to many reasons.

First – I bet like a lot of you I keep falling asleep in the chair.  Secondly – I really missed few trading opportunities such as long dollar (was long /DX on Friday(?), closed because did not need that additional fatigue – I am still not quite back).

Gold breakout – not that I trade gold, but that would have been a clean trade.  But it is OK, there always is another trade and I’d rather be out of the trade wishing I was in than in the trade wishing I was out.

 

What I really want to show you here is that the game is rigged, was rigged, will be rigged – so stop complaining and as George said: “If you can't beat them, arrange to have them beaten.”

 

Look when American All You Can Eat Buffett made an announcement (I am not even asking WHY he bought BNI – I guess “new deal” is sealed and Midwestern railroads will benefit most and good ‘ole vulture front running taxpayers yet again – just like when he benefited from cannot lose GS deal on following “banks are too big to let them fail” bailouts)

I don’t like the guy, I despised people like him all my life, not because he’s got money and I don’t – I respect Steve Jobs, Michael Dell – they created something of a value, all B. did was getting in on only him available info – real Scrooge.

Anyhow – look at few railroads charts – timing of announcement lined up precisely with max possible effect on the long side.  I am not surprised that there are a lot of bears who cannot keep emotions out of the game – when I see something like this – it makes me SICK!.

 

 

 

Daily Range Projections Nov 3rd ‘09

 

11/03/2009 Futures approx. BO
Daily Range Projection	Low	High
/ES	1032.25	1056
SPX	1036.13	1058.93
/NQ	1659	1697
NDX	1662.14	1699.54

Here is something you don’t see every day – might just be bad tick, but very well could be stops fireworks extravaganza

Enjoy the rest of your morning

 

Just Another Manic Monday

This is what's left of my computer after last night, so I don't have a lot to offer just yet, but I'm sure David will provide us with some DeMark charts if the music moves him. I was just thinking about what I should title this comment cleaner, and I realized how often traders say things like, "this is really a critical price level," or "it's make it or break it time.." we are a dramatic group sometimes, aren't we? ;-) I'm just now looking under the hood to see where we are on the various indicators and indices, but the Qs do have my interest, and I know they gave David a pause earlier today as well. So.. with that, a look at my daily QQQQ chart and yet another rock and a hard place it seems to find itself in. Maybe we should call it price purgatory for now until it makes up its mind? I'll be back later on with more charting meltdown with the rest of you. Jay made mention of a rate increase coming tonight from RBA, so that is definitely worth a watch. (Thank you Jay!) And a thank you to all for yet another good day of trading rhythm! ~Keirsten

 

  David here.

  I’ve been doing some thinking.

We, the small, but coordinated group of traders here, have done pretty good job last few days (to say the least).

We have caught downside move from Oct 21st, we did not get shaken off on retest of high on 10/26 (kudos to those who did not resist that latest contagious disease commonly known as “Mad Russian”), we foresaw that vicious bounce on 10/29 (some made extra coin that day and reshorted into close) – all overall this is probably as clean as it gets.

But now we are craving for more, more…and the truth is – we have very limited immediate downside, we might have some upside, but unless current situation will not play out by itself – no matter how hard we think of it – odds are not in our favor in terms of R/R to push it as hard as some of us want to push it now.

 

 

 

 

As you see (SPY) and (QQQQ) completed or completing sequence down and either already or about to be in abc magnitude of which is as much a secret for me as for anyone else’s.  (UUP) already completed (and “locked”) entire down sequence with current move up being abc of quite extended proportions.  SO, wherever you look – everywhere there are the signs of “looking for direction” and I don’t want to try to predict what is not yet there.

 

Below are daily/weekly SPY to refresh some levels

 

Nov 3rd 5:10AM EST – here is another slight melt down in the making

 

Balancing Act

Once again we're at a delicate point on the charts, and after that lovely jump on the ISM data (by the way, it started jumping the gun at least 5 minutes pre-announcement.. hmmm) and then the correction. As pointed out several times by Bala, that climb was weak at best, so it's imperative to keep an eye closely on volume for the rest of the afternoon. If you can't run software like Bala does, you might want to play around with volume by price and get a feel for congestion, etc. that way intra-day. It's the poor man's version, but I never leave home without it.

Yet again, IWM and the Qs are lagging and remain the weakest links. I'll post charts or David will later on, as trading is taking up a lot of my attention today, but I did see a chart on SPXA200R earlier on Chartly and recreated it to share with all of you. If this doesn't look like a bubble, I don't know what does at these levels...

Good trading into the afternoon to you all and keep your data coming- we all benefit greatly from it! ~Keirsten

 

 

DDT here.

I’ve been quiet today due to multiple reasons, but mainly due to trying to answer one question: “Is this the beginning of one of those trends looking back at 1 year from today we would wish that we’d just positioned our portfolios in the direction of the trend, turned trading stations off and came back in a year….rich and famous….or dumb and broke…never know until it is over.

Anyhow – here is a chart of /NQ, it does show significant change of personality, it is not just lagging stronger indexes, but it goes from one death red downside sequence straight to another – now in the 3rd one from the top.

 

 

Daily Range Projection Nov 2nd ‘09

11/02/2009 Futures approx. BO
Daily Range Projection	Low	High
/ES	1014.50	1047
SPX	1018.77	1050.80
/NQ	1635.50	1686.50
NDX	1641.40	1689.80

 

 

 

Like most of my stays in medical institutions last one did not last long – after been awarded stylish t-short suitable for participation in “who has the most disgusting bottom” contest and being connected to primitively looking “respiratory machine” I started to demonstrate my natural curiosity and ask questions.

 

Q. I think I saw same kind of “machine” in local CVS?

A. Oh, those machines are not approved by organization we pay huge bribes to.

 

Q. Are you going to be doing any procedures to me at night and if not – why should I stay?

A.  We will be monitoring you (according to the hospital's “unpublished prices – it is about $1,200 – for this money I can book penthouse in Taj Mahal)

 

Health care has become reminiscence of auto repair industry, you never know what needs to be done, you have no idea how much something is going to cost, medical personnel interested more in charging for the same meaningless procedures time and again (like taking body temperature, blood pressure etc – you know – all that safe kind of tests)

So, long story short – I escaped and on the way home bought that “unapproved device” in CVS and on Saturday morning I called my doctor and he did prescription for antibiotic (or whatever it was ) to be added as active agent in that “unapproved machine”

I still feel kind of disoriented (I bet you figured it out reading this post), I might be adding some charts to this post later.

Sunday Night Huddle

Good Sunday Evening to one and all, it’s time again to prep for the trading week ahead. I hope everyone had an excellent weekend and you’re rested both physically and mentally to tackle your trading plans. I’m going to post a few select charts in the main portion tonight, along with a set of links for Momo traders and watch lists in the comment section with all of you. I have also updated my graph on ICI data to show money is still flowing out of U.S. Equities as of the Oct. 21st report, and will do my best to keep that graph up to date in the weeks ahead. Follow the money, as they say, and as of the current data, it seems to be pulling an Elvis. I have not heard from our DDT yet, so I can’t share any updates on that front, but I know we’ll do him proud this week in the interim, and please continue to keep him in your thoughts, as well as Squiddy. It’s never the same around here without either of them. If the comments get a little crazy during the day and my comment cleaners bite, please bear with me, as I plan to trade like Lucy Ricardo on the chocolate dipping conveyor belt. So with that, fellow traders… see you all below with more trading ideas, and let’s roll! ~Keirsten

$TRAN Quick note and speaking of transportation: take a quick look at $BDI when you have a minute, because it does look bullish.

QCOM You may be thinking.. why is she putting QCOM up here… well, QCOM has earnings on Wednesday and currently holds 6.33% of the Qs, so it’s one we need to track right up until those earnings, IMO. QCOM also has a very interesting pattern/price action going on, so even for swing traders, this is worth a watch, earnings or not.

Long-term Mutual Fund Flows into U.S. Equities

Last but not least… a quick look at indicators and the potential failure of using indicators to call something overbought/oversold

On the Economic Calendar for Monday: Motor Vehicle Sales (still checking on a time for that,) 10 AM: ISM Mfg Index, Construction Spending and Pending Home Sales. Don’t forget: FOMC Meeting begins Tuesday and will end Wednesday (Ode to Joy) Link to Earnings Calendar