Thursday, July 30, 2009

The run for 4 digits

Looks like we have a good chance for a stepping day today. Easy to detect what will happen. Open should be the low within 2 points and by 9:45 trend higher all day via our famous stepping day mechanism. If this is to occur we should have another 10 points on the upside from the open with very small retracements until 2:50 PM.

Other scenario of course is sell off - we will know the answer to this as well around 9:50AM this morning. If we are to see ourselves lower by at least 5 pts by that time frame we could continue to trend lower all day.

My assumption of course is a move higher from here out of our consolidation zone. We have now had 5 days of removing any short and mid term overbought conditions and are ready to take the market higher. Yes we are quite overbought on the daily but this is due to the crazed short covering - so ignore the daily overbought condition on the short term, it will resolve itself as time passes.

26 comments:

  1. looks like we already got out confirmation within 6 minutes. The low of the day should be in - at least the low until 2:50PM.

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  2. market played a little trick on me there - trying to make me believe I was wrong by setting a marginal lower point (less then a point) off the previous open low.

    tsk tsk tsk .... still same applies and we have the confirmation now. After this run up here until 10:10 we should stay very narrow with minor new highs throughout the day.

    Until 2:50PM ... will post updates before 2:50PM to let you know what we should expect.

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  3. yeap lol, look at the chart from yesterday - yellow circle on the right - ironic hah.

    Lots of short covering here (I covered 2 days ago so I am not the reason this stuff goes higher here)

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  4. looks like we finally paused here at ... 10:10 lol

    I guess I am much better at forecasts if I am not in any position lol

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  5. from a bigger picture perspective - it is very possible that we continue towards the 998-1004 today.

    Everything is on GDP tomorrow - if they are inline or not bad we have a chance to break my key range of 1014 which could put us above 980 for the remainder of august. While this may be very hard to believe to stay above this range without any pull backs it is very possible.

    I do not want to come off sounding like a bull here - I am not. And no this is not one of those "the second I go bullish the market will turn" - I am as bearish still as I was last year, last quarter, last month and last week =)

    But I have to respect the market - something I should have done 200 points ago.

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  6. Yea, I think regardless of the actual GDP figure, the market will somehow find a way to interpret it positively, especially after the sentiment today.

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  7. ok looks like we have a failed stepping day - a bit odd. It could be that we just ran up too much and need to distribute more, however not seeing enough buying here around the VWAP.

    Would be ironic to leave every short waiting for 1K and turn them into dip buyers for our "much needed retracement towards 930", then slightly lower to 900 another chance to go long and finally our key support at 880. By that time you should be fully invested on the long side for the final end of the bear market and the run towards new highs.

    .... wait .... 850 .. 800, 780 .... what just happened?

    I love to dream. Still 100% cash and staying cash for a while =)

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  8. you need to get a hobby chaugsy. : )

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  9. what do you think will happen when we hit 1000?

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  10. I am confident that it will not happen today - it should not. If it does it will only occur during a last 20 min crazyed buying rally into GDP data tomorrow. High for the day should not exceed 998.

    Other scenario is another GAP up through GDP data tomorrow. If that does not occur I would say that we will probably hold at 1004 first and then go for the 1014 range.

    Once we get closer I will be able to figure out what exactly will happen - not quite as easy here since we had 2 crazy weeks ahead of us.

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  11. Update:

    ok as we are nearing my 2:50PM time point I wanted to give a quick update. Technically we should remain above 988 - and have a max of 998 for a last hour buying event.

    However, I do believe that we will see hesitation going into GDP tomorrow so its very probable to sell off for a close around the 983.75-984.60 range here.

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  12. another important piece if info.

    This gap CANNOT fill today - if it does we will have an extremely strong bearish reversal pattern. So keep that in mind. The GAP will be filled eventually but not before resolving unfinished business on the upside.

    Failure now ... bad bad

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  13. nah...if they fill the gap today I will ban myself from my account haha...

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  14. lol ... the chances of a GAP fill are probably less then 5%, heck, I would dare to say less then 1% statistically.

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  15. is this a joke...?

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  16. this is either a perfectly engineered bear trap OR the end lol

    Take a look at the daily charts ... NASDAQ, SPY, etc ... not looking pretty here.

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  17. Well Chris you said it above yourself, "However, I do believe that we will see hesitation going into GDP tomorrow so its very probable to sell off for a close around the 983.75-984.60 range here."

    Give yourself props

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  18. ok. Can someone please trade with my money. It seems whenever I am 100% cash I can make great calls. I am gloating quite a bit as you can see. Called the morning action on price and time ... and now we are selling off.

    Whats really interesting to see is the huge price drop we have on little volume - very unusual. Lets see if we can nail my close price lol

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  19. this price drop on low volume shows the real problem of liquidity that I have been so obsessed with the past few months.

    Everyone running for one door and no HFT and liquidity provider available that wants to carry the burden and push in money that is doomed to show losses.

    I mean if I were a broker - why would I want to have to buy up shares here so suckers can sell, knowing that I will not be able to unload those shares at higher prices.

    Maybe there is a reason why the SPY 80 PUT open interest is so high for august.

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  20. "Whats really interesting to see is the huge price drop we have on little volume - very unusual. Lets see if we can nail my close price lol"

    - Probably computer error hahaa..

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  21. When does the GDP number come out tomorrow?

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  22. 984.60 was my anticipated close ... darn off by 2 points. Should have been more accurate lol

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  23. Don't be too hard on yourself, all in all great insight with the numbers.

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