The market made its first lunge downward last week on Wednesday afternoon. The talking heads on CNBC said it was a “mistake” – as if some trader at an i-bank pushed the red button on his trade-bot by accident. When the market bounced back on Wednesday, they claimed vindication. Not once did I hear the word “triangle” on CNBC.
Now these same traders have declared that they all got short on Monday. Imagine getting bearish after the McClellan Oscillator plunges below -200, and the VIX spring has already sprung. Ridiculous! The market may continue to fall, of course, but the odds are with the bulls for an oversold bounce.
The market pushed the lower line of George’s triangle downward so that it is now parallel with the top line. However, the market needs to rally very soon to hold onto this potential pattern. It still hasn’t hit the triangle target, and since this was such a large, powerful pattern, I would be shocked if the target wasn’t hit by the end of this week. The bulls would be lucky to get off with just a downtrend channel.
George’s triangle was a dramatic pattern. We probably won’t see another triangle of that magnitude for a while, but they are worth watching out for, right?
The IWM bounced at its October 6th gap on Monday. The bottom of that gap is at 59.09, and that is an important level for the market. Small caps and banks have been getting a beating, so if they can find support, the overall market has a better chance.
Matt,
BAC took out the 10/2/09 low and is on the wrong side of both the 20 & 50 EMA.
The SPY has lower lows and lower highs since the 1100 SPX on Wednesday.
Testing 107.5 on the SPY (SPX 1075 that you notes several times as previous support) tomorrow morning may be very telling.
I found it quite disturbing to hear Cramer saying he would be shorting all stocks right now. What a flip flopper. I tend to think Joe Terranova’s shirts are brighter than he is, but I think he’s the only one on the Fast Money crew that was willing to admit there was real weakness in the mkt last wk.
And that is why the market is going to go higher on Tuesday…Thank you Jim Cramer!
Hi hank…
Hi 2thfixr,
Great trade today in SDS!
Thanks for the link, you have a nice website. I live in Scottsdale and work in Chandler so I have to stay on the east side. BTW, I grew up around 39th Ave and Thunderbird, not far from your office.
Matt, George,
That was a very nice call on the triangle!
ok i got out with $1 on my bull bet. doesnt look so good out there anymore
BIDU down 73 bucks. Scotty you must have hit the goldmine.
S&P 500 currently has a rounded arc formation.
Thanks Hank for the compliment. That neighborhood isn’t the greatest anymore, but hard working American folks that appreciate a good dentist still live there! How fast did the website load for you? We’ve been going ’round and ’round with the developer about that, and they claim everything is fine. We think it takes too long (more than most people hold their breath, for example). The lose interest and move along without ever seeing the website.
My SDS trade is going to pale in comparison to the BIDU puts from Scotty. He didn’t have the balls to do the SDS, but I didn’t have the balls to buy the BIDU puts on Friday or Monday thinking it was going to run up to $450 or $470 before plummeting. Some great trading going on right now.
My trades are lunch money to you guys
Bidu -82 holy macro!!!
that is why you need to be the advisor….get paid for advice.
Good trading all. Off to work.
Holy crap bidu down $82!! I will dump at the open.
My Internet is off and on so far today. Some kind of IP conflict.
Scotty, WTG, hope you had at least a handfull of shares.
Just a handful
Crazy Internet connection today. Only got two trades in so far and I’m not sure my charts are accurate.
Looks like SPY wants to go up to its 15min 36MA for a test.
The way SPY is moving sideways, it may wait until the 36MA comes to it!
SRS on the edge of dropping back.
1060 spx is 50% retrace of wave from oct 2
DIA is close to making a 9/36/15 cross-up.
THIS is what i think is going on http://3.bp.blogspot.com/_goypolxEFd4/SuaQgttstvI/AAAAAAAACfw/u-BQszBvFzU/s1600-h/SPX+1+min.png
ERGO….we should start moving up now or maybe one more ZIGZAG
SPY holding on the daily 36MA, spike down and narrow body right now.
SKF over its daily 36MA. The last time it did that was in Early October.
BBT looking bad. If it doesn’t recover here, it will go to at least the $22 range from its current $25 area.
BBT has been up almost all morning and I missed out ’cause of Internet problems. It’s making a nice move so if it clears this intraday resistance I’ll hop in.
I know why am getting education. So many fine ladies
anyone going long SPY at 1061?
The market is attempting to make a double-bottom with the 10am plunge low.
SCOTTY…..no can do…my chart shows we ticked below todays early low….start counting again
dax ah did a double bottom, too (first one was during reg trading)
MATT ….we did tick below early low on spx ….correct?
LOOKS like SPY did not make a new low…
We moved slightly below but it was within the 3-4% range of the previous low so I think it can be considered a double-bottom. But volume is supposed to immediately increase on the upswing from the 2nd low. That didn’t happen. I think the market is looking to retest.
BTW, I am a new trader and have been reading this blog for months, but never posted before. So, hi all!
Phil,
Yes, we did. SPX, NDX, and futures.
Matt
Phil,
I have SPY making a lower low by two cents.
Matt
SCOTTY….no sense going long here… 1050 is .618 retrace of oct 2 wave….if that goes there is BIG trouble
thanks Phil
MATT ..thanks…..my schwab charts show those pennies
Hi, Matt S.
Glad you like the blog.
I don’t know what I was looking at, but the futures did not make a lower low at 1:30. It was a higher low by a quarter point compared to the 10am low.
DIA is clinging to its 9/36/15 cross-up, but that is because the green sectors today are all energy and defensive. For this bounce to stick, the risky sectors will need to join. So, keep an eye on the QQQQ and IWM.
SPY working on a Three Amigos on its 15-minute chart. Film at 2:30pm.
SPY is trying to print a bullish hammer candle on its daily chart. Volume is a bit less than yesterday so far though, so it is still suspect and this may only be a 2 o’clock retracement.
http://lh5.ggpht.com/_APmrYvpA45s/Subm0Urx_FI/AAAAAAAAFLg/FFeucdIMF30/s1600-h/3%5B2%5D.png
SCOTTY http://blog.afraidtotrade.com/weekly-view-and-elliott-count-of-bidu-oct-27/
Thanks Phil but sold at the open
Well good trading all. I will have to do basic technicals on sds srs and smn to see wether I should double up the winners.
.
I love that SuperK works on SMN still
I finally gave the heads up before it popped and didn’t confuse with SMH
I know you might have seen me post about NXTH going up 24 straight days but check today for something hilarious!!
Well, no hammer for SPY. Nice call back here, Phil:
http://www.trivisonno.com/tuesdays-trading-102709/comment-page-1#comment-49508
http://www.businessinsider.com/the-shorts-are-piling-into-citi-and-cit-2009-10
The Russian government has cancelled a massive gold sale due to the timing of the sale being leaked beforehand.
The sale was previously planned as a method for Russia to fill holes in the country’s budget deficit.
http://www.businessinsider.com/russia-cancels-giant-gold-sale-2009-10
ok starting tomorrow I will put all the news on my site.
Analyst Dennis Gartman touched on an important, yet brief point in his Gartman Letter this morning. He believes Apple (AAPL) has emerged as a new market leader, along with Amazon (AMZN) and Goldman Sachs (GS). He fears if Apple’s stock dips below the magical 200 mark, all hell will break loose.
Gartman was dumping long positions yesterday too, as he stated on Fast Money last night. He didn’t see the turn coming.
i am tired of watching cnbc so thanks for the info Matt.
Nielsen reported a 50% plunge in CNBC vierwership in October year over year
there we go! am one of them
I think it was Larry that showed me some comparisons of blackberry vs Iphone and nokia.
here’s a new chart Larry!
http://digitaldaily.allthingsd.com/files/2009/10/rim_apple_palm_current.jpg
K, where did you get those Nielsen #’s ?
thx
after,
http://www.businessinsider.com/cnbc-viewership-plunges-50-in-october-2009-10
I meant this but both will do
http://www.zerohedge.com/article/cnbc-viewership-plunges-50-october
The WSJ is reporting GMAC is in “advanced” talks with Treasury for another bailout: “The U.S. government is likely to inject $2.8 billion to $5.6 billion of capital into [GMAC], on top of the $12.5 billion that GMAC has received since December 2008 .
Great another piss poor reason for a rally
Injecting money into Government Motor’s finance arm? I wonder how well this “government bailing out itself” project will work…
How is it possible that CNBC is losing ratings when they have Charlie Gasparino pitching his book every 5 minutes? Surely, that’s a ratings magnet, no?
more on GMAC
http://www.nakedcapitalism.com/2009/10/gmac-joins-the-black-hole-club.html
K, I’ve got like $3.00 in my two GMAC Demand Note accounts with them. haha I wonder if I’ll finally qualify for a government bailout if I lose the $3?
No volatility today…what’s up with that? I like it since I wasn’t here to trade it, but not much chance for the rest of you to take home some bacon today! Hope you all made some $$$$.
congrats again Scotty. Enjoy the profits.
Phil, TBT or TLT? I haven’t checked the chart yet, but I see that TBT lost a buck+ today.
K, be wary of the pitfalls of using percentages: CNBC had record viewership last October when everyone thought the sky was falling. It would be silly to think that they would match that viewership given the performance of the market over the last year.
Funny how that ZeroHedge post only shows the data from 2008 and 2009. For a real comparison, they would need to compare to 2007 or 2006 (or say the last decade in a monthly plot). This cherry-picking of data is something I have noticed all too often from them.
Excellent point, towelie. This October has been much list exciting, so far…
My Latest Blog Post
$TED Spread caught in an Ascending Channel Pattern http://bit.ly/3j4w0i