I don’t have much time to write tonight, but I think that Thursday morning we will find out what the big funds think of the “stress test” news that came out after the bell on Wednesday.
So, I will be watching XLF very closely. On the chart in Wednesday’s game plan, I showed XLF with a 100% extension off of its low. On Wednesday, XLF was able to extend up to the next Fibonacci level (127%) at $8.37. That is also the lower bound of its Gap of Doom, and it immediately fell back.
If XLF can power up into the G.O.D, then we have a hint that the big funds might like what the Obama administration is doing with the banks. And if that’s the case, then SPY may be able to complete its head-and-shoulders bottom.
The futures were rallying a few points after hours, but have fallen back as I write this. So maybe the rallying was just some knee-jerk short covering after the “stress test” news came out.
Also, since we are in the traditional month-end-markup period, you would think that the gremlins would be levitating the futures to drum up some phony bullishness for the open. But they are not, so far anyway. So, maybe that is a hint that the big funds are not enamored of the latest banking rescue.
Dave, I read the Kudlow link. This man was actually bearish in the past? More than once? I am truly surprised!
Hank,
From the article you can see that his personality is not given to moderation. His bearishness is due to his political views not market views independent of his political views. And did you note that when he was young he “joined the left-wing Students for a Democratic Society” hardly a group given to moderation.
And what does Larry do when a guest on CNBC expresses a different view ? Larry just talks louder & louder & longer & longer in hopes of drowning the other person out as if Larry was still 14.
Matt, I know you don’t trade currencies much, but I think the Yen could continue to weaken. I’m considering purchasing a slug of put options on FXY or just selling FXY short. It formed a double top and has dropped over 5 points since last Friday. There’s some more rationale on the trade here: http://www.whipitaround.com/?p=315
JG,
Profuse thanks for reviewing my wave count & questions about 2 & ii.
I only included DJI because it corroborated SPX. One of the very misleading things about our current circumstances is that DJI is so much weaker than SPX & NDX/QQQQ.
“Do you still have your 1>3>5 scenario on radar? I’ll be watching the action at 735.46.” Unfortunately, yes.
“Hopefully we violate it to the downside.” Exactly, otherwise my shoes better be tied because we’ll be making U-turns sooner than we would like.
I also think that this is a valid viewpoint about proportionality (see video) http://www.cnbc.com/id/29331307 and is a partial explanation for loss of downside momentum.
JG, as you know target levels both up & down are often reached just not WHEN we expect them to be reached.
Regards
JG,
I appear to have contradicted myself within the same paragraph above (wouldn’t be the 1st time
)
“I only included DJI because it corroborated SPX.” I meant regarding the bigger picture wave count & consolidation areas.
“One of the very misleading things about our current circumstances is that DJI is so much weaker than …) I meant in terms of leadership implications & downside momentum…very decieving IMO.
BASF up 6% because of stable dividend in spite of this outlook:
“2009 is a year full of challenges, like none we have yet experienced. After the collapse of our global business in the fourth quarter of 2008, the
demand for chemical products since the beginning of 2009 has not revived. A turnaround is currently not in sight. In contrary, the situation in our markets is tightening, the stocks in the value chains are still too high. The chemical industry therefore is continuing to shrink, “said Board Chairman Dr. Jürgen Hambrecht.
They will be among the first to profit from the stimulus of building memorials for politicians. He shouldn’t call this shrinking after collapse. Ts, ts, ts.
One other thing which is painfully missing in this stress (like in don’t stress yourself out) test is reflection upon systemic connections and causes and effects. This about internal dynamics, http://www.oftwominds.com/blogfeb09/middle-class02-09.html; I doubt they’ve made any assumptions about repercussions from ROW.
Very telling Mrs. Clinton visited Asia first. Putting debt service over values shows the direness of the situation.
And after that a truly lame duck Japanese PM was the first to visit The White House. Volcker must have whispered to Obama that ‘we have a slight problem with debt and I’m not 100% sure that TG’s and BB’s solutions are really that smart with regard to your 2nd term.’
Gordon Brown must feel like a winner.
Matt – is the H&S still intact ? At the end of the day yesterday looked to me like not.
On the other hand futures are still up quite nicely.
Talk about an event-driven market, bad bank/no bbank, nationalize/nonat, details/OMG details….if these funds are gonna react they really need to sit down and do their engineering.
Timmy’s principles were pretty clear and now they’ve laid out a solvency audit and functional equivalent to Ch.11. However it works out I judge it good for the financial system but bad for bank equity and stockholders.
So why would XLF go up and take the SPX with it ?
George,
C cut BBT from 24 to 19. I like K’s target better!
C is whack but I still stand by my 11.51 fib where I will sink my claws in and get 100%+ when it hits 22+ lol. not to mention the dividend.
MKB yesterday my skf fib played out while I was schooling. my fib called for a 150.93 skf hit 150.87. I didn’t have a buy order or that would have been great.
Harmonic trader is defenetly a book i’d recommend now. gave me more fib confidence. did I mention that its free pdf? google it as I can’t paste links on mobile.
as much as I don’t mind BBT going up I do want to see it get closer to the 11.51 lol it got within a bit more than 1 dollar when it came to 13.
Yerk,
“Very telling Mrs. Clinton visited Asia first. Putting debt service over values shows the direness of the situation.”
Very good point, Sir Yerk.
dave…………….you only got 5 hours of sleep?????
MKB, Interesting how analysts from other financial institutions give recommendations. Conflict of interest?
They are much like movie critics – I pay them no attention and just follow the charts. Sure, BBT could go to K’s $11, doesn’t bother me at all. In fact, I welcome it.
As K said, the dividend is great and… “BB&T has paid a cash dividend to shareholders every year since 1903. The corporation has increased its quarterly cash dividend payments for 37 consecutive years.” (Source: Market Watch News)
JG,
This morning i looked at a chart for E-MINI S&P 500 (instead of cash) & could see a flawed case for a minute 2.
early January as the beginning of minor 5 of intermediate (3) for SPX
1/21 – minute 1
2/9 – a wave
2/23 – b wave
Presently in c wave ending minute 2 of minor 5 of intermediate (3)
That is a much more bearish wave count. The problem with that is 2/23 seemed very impulsive with SPX down 6 days in a row. We would need to have a consolidation similar to 1/21 thru 2/9 in time to what was the a wave of minute 2.
Regards
Phil,
less
George,
I love it! Interesting times indeed! K “fibonacci libre.”
Sherry – I miss your input.
dave…..i have toothpicks if you need them….lol
Phil,
I’m in a sleep rut. I crash prematurely in the early evening. Wake up after 2 or 3 hours & then can’t get back to sleep.
Can sleep forever later on.
Btw, i’ve used that toothpick analogy before. LOL
silver dsi of 95% bulls for the last week may finally have come home to roost…….slv gapped below 18d ma
dave….im a doctor…but not a psychiatrist…i do know that what you are describing is a hallmark of depression….are you ok??
minute ii of minor 5 versus minute iii of minor 5 of intermediate (3)
This reflects an essential weakness of Elliott Wave. One count is of a mkt’s downside move winding down (maturing) versus one where forces are gathering to make a big downside assult especially considering a multi-week abc wave ii.
Talk about the proverbial train vs light at the end of the tunnel. LOL
Only XLF generated increased volume over yesterday in the first 15 minutes of trading, so I’m not all that impressed with the opening. XLF ate away some of its Gap of Doom, but then fell back. IWM looks very weak.
Phil,
no depression; just never have needed much sleep after 2 1/2 -3 hrs
Until we took a field trip to NYC in junior high, i probably had never been to sleep before 10 or 11 pm.
When i was a 3 & 4 y.o., my parents use to have a night club. I use to either sleep in the hat check room or in the exotic dancer’s dressing room. Have often wondered about going thru hypnosis to recall what i saw. LOL
The market did shrug off horrific economic news this morning, so perhaps there are large dip-buyers lurking.
dave,
I had a look at Prechter and I saw no (ii) just whole numbers and letters. It was a quick glance though when I was looking for zz on 5′s.
XLF taking another shot at it’s Gap of Doom Matt. I wonder if it can get through.
dave…glad to hear you are ok…..yesterday i was over my neighbors house visiting… her husband died less than 2 yrs ago….she told me she didnt want to live any more….guess i am just tuned in more right now to depression symptoms……
PIG SOOEY!!! http://news.yahoo.com/s/ap/20090226/ap_on_re_us/guns_in_church
From Martin Pring…
The one indicator that has never failed to
call the bottom is the 18 month RSI. When
it reaches 30 and turns up, you have the
bottom.
The bank stress test:
If the bank can answer the following two
questions, it has passed the stress test.
1) Do you keep books?
2) Do you have off-balance sheet items?
The Govt. will use the stress test PR to
pump-up the market. True results will
have highest security classification.
Phil,
thanks for your concern, really. Think it’s just my internal clock. When i lived on the east coast & was a nightowl, i just stayed up til i was tired enough to go to sleep.
BBT magic LOL YAY
K, LOL
MKB,
with Elliott wavers, i think that there are two slightly different problems: 1) different counting (interpretation); 2) different labeling. That’s like in New England, if you ask for a milkshake, they look quizzily (sp?) at you. They call it a frappe.
Sometimes correct labeling is just a PITA.
At 9:18 post i should have said minute i & minute ii instead of minute 1 & minute 2.
I have often told new people Elliott Wave is something that you want to know a little about, but not too much about. But restricting one’s use is easier said than done.
Double bottoms coming up on SKF
K,
You’ll have to take the elevator with the rest of us.
I use to work in a bldg here in Reno where the elevator would occasionally stop short of our floor. The one time that it happened to me the floor that i wanted was about three feet above the floor of the elevator so i reached up & climbed out.
The thing that bothered me was there was no certificate of inspection displayed in the elevator car.
K,
If you are not in school, can you tell me where intraday fibs would put BBT retracing to?
19.30 and 20 are resistances on bbt lol
lol
MKB not sure which you want but i drew one before you asked and 19.30 said resistance so let me see
matt………….. think about this scenario……we grind sideways to higher next week in preparation for the final low on the full moon march 10….guess what day of the week march 10 is?????????….you got it….turnaround tuesday !!!
Well, I passed the flag at 18.85 from when I picked up your stop two weeks ago at 16.56.
mkb 18.20 was my magic number in 5 minute chart so it went way higher. hence i expect it to retrace to it at the very least
Like Macke says, “It aint easy being short.” Enjoyed the Kudlow article Dave. I like this Orzag cat. No swagga but O’s got enough of that.
Anyone in here follow the Dollar index? If so, how is it technically?
larry………….the dollar is at a crossroads here up agaist its oct nov highs…..could go either way…probably best to watch from the sidelines till it tips its hand which way it wants to go
MKB,
i always thought that http://www.onelapofamerica.com/about/index.shtml was the ultimate test of whether one could stand someone’s company/personality. Can you imagine being cooped up in a car with Kudlow for One Lap of America ??
There is a potential “Bearish Three Drives” pattern setting up on the XLF (See page 227 in “The Harmonic Trader”). I have the projected reversal area at $8.76, which is the top of the Gap of Doom. That is not only very harmonic, but I’m sure that there are also hordes of gap traders waiting to sell there too.
so bbt hit my 18.20 target
MKB,
i got a kick out of Phillips Exeter; summa cum laude Princeton; LSE & “and enjoys country music” http://en.wikipedia.org/wiki/Peter_R._Orszag
Sounds as if he & George 41 were doing One Lap of America a bag of pork rinds wouldn’t get very far.
K,
There is some “small round” support of BBT at 18.05. I don’t trust it though. I want to see some heavy artillery first.
mkb you wanted intraday but i still stand with my 11.51 target lmfao
skf closed their gap on the 17th so i buy i buy i buy
I wished they’d put Grasso on CNBC today. Eliades is fine but I like my traders hungry.
MKB,
IMO, Eliades & Joe Terranova are examples of not what one says nor the record of such but the authority with which it is said http://en.wikipedia.org/wiki/Bass_(vocal_range). Eliades is lucky that people have selective & short memories.
Imagine if Eliades or Joe T sounded like Woody Allen.
I like BBT here – can I pull the trigger fast enough?
MKB, BBT may be waiting to fill the small opening gap ~17.50.
dave……..that is why most market “experts” that they parade on tv are still around despite their horrendous track records…i happen to have a very good memory and am amazed that many of them still are allowed to come on air despite their terrible calls from years earlier..
phil,
By the same token, most of them & the seminar purveyors make most of their money from “teaching” not doing. When i was a young broker, it always amazed me that the other young brokers in my office were telling businessmen & women what to do with $500k when they couldn’t do it for themselves.
E.g., most brokers & “advisors” income is “earned” not “unearned” meaning from commisions not investing.
Traders are going nuts buying calls:
http://stockcharts.com/charts/gallery.html?%24cpc
Everybody is betting on a breakout. It’s hard to believe, but many indicators show the market being overbought, short-term.
phil,
i should have added as a doctor you know from whence i speak. You’ve probably sat across the desk from many of those advisors earlier in your career.
Phil-
Note…so far SPX has a double top
(yesterday and today). If today ends
that way, will wait to see if it kills the
rally.
Be sure to keep us up-to-date EW
wise.
dave…..exactly….a perfect example is my next door neighbor who is a financial advisor…… he is hiding out ….i guess his clients are not too happy…also we live in a complex where the homes are cookie cutter so only minor differences exist…..i thought the homes were good value in 2000 so i paid 150k…..he came in 2005 and paid 475k….last sale was at 240k….is this the guy you want managing your assets???
MKB, that BBT gap I mentioned isn’t from this morning’s gap up. That would be $16.75.
The one I was talking about is around $17.30, not including wicks. It may chose either one, I’m not sure. I’m waiting on the 5min candle to cross 9MA.
http://stockcharts.com/h-sc/ui?s=$SPX&p=15&yr=0&mn=0&dy=10&id=p36831954506&a=162139857&listNum=4
Hi everyone. I just tuned in. Dave, thanks for all the posts. I’ll have to spend a few minutes catching up on today’s thread.
Jo-
While you were going over your charts, I
hope you didn’t eat any of the hot dogs
that were recalled.
matt……..put call ratio is near the level that marked the last peak feb 9……..this is amazing and not good news for bulls
I put on a trailing stop buy of .22 at 17.69 (bbt). I hope it it will be 17.47 and not 17.90. Did I execute that backwards? I don’t have to mention I’m new?
sherry……i am just about to make some nathans hot dogs….are they recalled??????????
MKB, I’m not sure about trailing stop buys, I don’t have that function unfortunately. If it bought it, don’t worry, it’s getting close to a buy anyway, if the 15min 36MA provides support.
spx just bounced off 4 day uptrend line at 761
Phil-
The recall was in Canada. You’re safe…
enjoy.
sherry…thanks……arrrggggghhhhhhhhhhhh
phil,
“hiding out” – My branch mgr said bad brokers don’t call their clients; because one doesn’t call their clients if they have losses.
financial advisor; registered reps; investment advisors — all attempts by the industry to make things appear more than they are.
Fact: The U.S. Dept of Labor classifies them as salespeople.
I suggested to two of my friends to look into the industry for careers. Neither knew anything about investing; both were hired a yr apart by MS. The 40 something very attractive woman kept referring to them as “Stanley Morgan” even after her 2nd interview. I thought “Dawn, you should at least know the firm’s name.” She had had sales experience selling copy machines.
The 30 something fellow was a pit boss in one of the casinos. I suspect MS thought he knew high earning dealers.
MKB, it may be reversing here off that 15min 36MA. Watch the 5min 9MA to see if it crosses and closes above it.
UK will now insure assets at banks…no
future losses.
Phil, does that hot dog have peanuts in it?
MKB, BBT split the difference between those two gaps.
Hey, it’s not a perfect science.
Sweet – “it” bought at 17.34!! Have a friend that was put into a variable rate annuity – he’s getting hammered. Hasn’t seen the cat that put him into it since.
slv down almost 2 dollars since monday……..beware the high dsi
george…..no….. the hotdogs dont have peanuts…….but i do like peanut butter and relish on my hotdogs…….
phil, thanks for the recipe.
MKB, I scalped it for .20c. Waiting to get in again.
MKB,
When my ex-gf told me that she had an annuity. I told her that most people were sold an annuity; they don’t buy them. I told her how anxious my firm was that we all get our insurance licences.
I told her that when i finished my exam i looked at the man from another firm across the table from me. He was only 1/3 of the way thru the exam. He was probably slowed down because i could see his lips move reading every question.
I asked her what kind it was variable; guaranteed, etc. she said that she didn’t know.
dave, do market makers and specialists make good traders?
dave, can I talk you into an ascending triangle for this subwave 4 instead of a (supposedly rare) zigzag? Wedging nicely. The 3-3-3-3 breakdown within the triangle is easier to see on the 1 min. than on my chart posted above.
I’ve posted this before, so forgive the redundancy, but triangles are common for w4s, and if w5 pushes past the “thrust” (a fast move traveling the distance of the widest part of the triangle), then it is likely to be “protracted”–according to Prechter, p. 51.
George,
Great question. Answer may reflect my prejudice a bit. I think scalping & making a mkt may not if the individual doesn’t look below the surface of what they do as i can tell that you have. Mkt makers & specialists have such an advantage that they don’t have to learn the ways of the mkt. As i began to listen to Art Cashin i was surprised how knowledgable he was.
OTOH, i’ve always believed that one can extrapolate what they learn from intraday one minute charts to longer time frame: 15 minute; hourly; daily & even weekly. However, one cannot go the other direction from monthly to one minute because of the speed factor.
The one great thing about very short term intraday trading is the volume of decisions that one experiences. However, one may not realize the intraday, weekly, & monthly time patterns.
matt……….put call ratio now below level of feb 9 peak…….. .66 again….amazing and not good news for bulls
dave, interesting.
I agree about the speed, that’s what I like about intraday. I need to apply that more to daily and above.
Thanks
Matt, phil, dave, and the whole board: how about we get an E wave in the wedge (ascending triangle) which pops over the resistance line of the H&S, makes everyone believe we are running up, and then we fall hard?
If we do go higher, I look for rejection at 785-788.
JG,
Yes to ascending. Here’s a sports analogy: hopefully what bears have been experiencing the past few days is http://en.wikipedia.org/wiki/Rope-a-dope
We’ve been taking a lot of shots. When we break this uptrend line of the past few days, if the speed & volume doesn’t pick up on the downside i’m going to keep my head on a swivel.
Nothing that is happening short & intermediate term makes me believe in 600; 500 or less SPX one iota. Things get to where they’re going; they just don’t always get there when we want nor expect.
This bear mkt isn’t even as long as the last one (yet) & the fundamentals are a lot worse.
JG,
My perfunctory listening to CNBC today sounds like many have been buying into the idea of a friendlier mkt.
It’s hard to crush that optimistic bullsih spirit when it’s OPM. LOL
George,
Think of it this way. You’re taking the condensed boot camp course. The great hitters in baseball say when they’re in a hot streak the ball seems slower. That’s the way things will seem when you stretch out your time frame.
dave,
I like the actiono intraday. It would be nice to have some “slower” trades. Maybe keep one or two on the side.
Good stuff dave.
A hunch: Bair will up the number on the scary FDIC watch list. If you are a bank in an ETF you’ll get wacked in a few minutes.
Getting into double tops on inverse.
Four more mini-Madoff’s discovered today.
MKB-
Your right. Number of banks on FDIC
trouble list increased by 32%.
Sherry,
Much money involved ?