TRADERS ANONYMOUS: Morning Audibles - DOUBLE Head & Shoulders?

Morning Audibles - DOUBLE Head & Shoulders?

You asked with your eyes... You asked with your eyes...

I'm running out of ways to justify (in explanation) why the SPX remains buoyant. The latest (last, perhaps), after yesterdays deat defying aerial show was that it's perhaps was trying to settle what looks to be a DOUBLE HEAD & SHOULDERS pattern.

The left shoulder was 7 days before the HEAD... We have completed 6 days since... So this should be set to resolve itself quickly...

For reference, I drew the "neckline" from the .021 FIBO extension level (1194.18)... It fits very nicely with the wave troughs and otherwise seems to point the next trough in the direction of the next FIBO extension of 1178.33...

It is possible to assume that if 1,178.33 is taken out to the downside, both the neckline AND fibo levels would fall together... This has the potential to trigger some major exits from the market...

291 comments:

«Oldest ‹Older 201 – 291 of 291 Newer› Newest»

McFearless said...: we've been bouncing sideways for hours now, all the waves overlap, so i couldn't get long here, what is the set up when the pattern doesnt' look complete?; May 4, 2010 at 2:51 PM
DL said...: I'd love to see crude get down to $76 (or so).

I'd buy, buy, buy.; May 4, 2010 at 2:52 PM
McFearless said...: test?; May 4, 2010 at 2:52 PM
karen said...: DL, i hope you know never to take me seriously..; May 4, 2010 at 2:52 PM
mcHAPPY said...: Kare, this public service announcement brought to you by mcHAPPY:

Just say no to oil!; May 4, 2010 at 2:52 PM
Nic said...: Anon 2:38
AUD is way more exposed to China than CAD I think. Even NZD will outperform AUD when China's bubble bursts.; May 4, 2010 at 2:54 PM
karen said...: GS violated SHO? No way! (from Bloomberg)

May 4 (Bloomberg) -- Goldman Sachs Group Inc.’s execution and clearing unit agreed to pay NYSE Euronext and the Securities and Exchange Commission $450,000 to settle allegations it broke rules governing short sales on U.S. stocks because of a bookkeeping error.

Goldman Sachs was censured for violating the SEC’s Regulation SHO, which sets rules for handling bearish trades in equities.; May 4, 2010 at 2:54 PM
mcHAPPY said...: CV

You like pictures with lines. What do you think of this one?

X marks the spot; May 4, 2010 at 2:55 PM
Nic said...: Am I the only one who thinks this spill is really bearish for crude?; May 4, 2010 at 2:55 PM
DL said...: Karen,

NEVER?; May 4, 2010 at 2:55 PM
DL said...: Nic @ 2:55

What's the reasoning?; May 4, 2010 at 2:56 PM
72bat said...: left good ol' u.s. of a. on 4/22. return flight from cork was canceled this a.m. due to ash cloud intrusion over irish airspace. before leaving i volunteered to be manny's replacement as the goes-away-market-goes-down indicator. how's that working so far?; May 4, 2010 at 2:57 PM
bob said...: 1.29, got both in one day. What's your pick for the belmont?; May 4, 2010 at 2:57 PM
Nic said...: Heeeeeeeeeeeere comes 1.29 handle; May 4, 2010 at 2:58 PM
Leftback said...: Crude will head down after July 4th, but if BUCKY goes on a tear before then it could be sooner, as traders will suddenly notice the oil slick. The one in CUSHING, OKLAHOMA and wherever else it is all stashed.; May 4, 2010 at 2:59 PM
CV said...: @McHappy (2:55)

I'd love it...

That way we'd get down to the 972 I called in january :-); May 4, 2010 at 2:59 PM
mcHAPPY said...: Ben a picture for you too. Any thoughts? Seems to be a gap or two to fill.

It would seem a bounce is due whenever this v ends, n'est pas?; May 4, 2010 at 3:00 PM
karen said...: Nic, long term perhaps, as I am HOPEFUL it will encourage newer-cleaner energy sources.. (effing auto industry and oil titans). And NIX off-shore drilling... but i'm not in the peak oil camp, anyway..; May 4, 2010 at 3:00 PM
McFearless said...: Nic,

pardon DL, he's into that whole oil/inflation thing.

C,

Here's one, who is going to win American Idol.

Very important.; May 4, 2010 at 3:00 PM
CV said...: @bob (2:57)

Belmont?

Whoever Nick Zito enters...; May 4, 2010 at 3:00 PM
Nic said...: DL
because if it turns into a really nasty mess then longer term it can only be good for Obama's alternative energy programs.
And stuff like this:
http://www.huffingtonpost.com/2010/05/03/breaking-large-air-spill_n_560762.html?ref=fb&src=sp; May 4, 2010 at 3:01 PM
mcHAPPY said...: @Nic

No. I think RP is bearish on it too. I believe he had a freebie post about oil after Exxon in '89. See what happened to oil after 1989.; May 4, 2010 at 3:02 PM
CV said...: @McF

CV has never, EVER, not even once, watched "American Idol"...

Not even a minute of it...EVER...

I doubt I've even 'passed that channel by' when it was on and I was flipping around...; May 4, 2010 at 3:02 PM
McFearless said...: RP is beyond bearish on oil, I'm not even going to mention his price target....DL will pass out.; May 4, 2010 at 3:03 PM
McFearless said...: C,

As a music guy I'd figured you'd at least watched one episode of it.; May 4, 2010 at 3:03 PM
DL said...: Karen @ 3:00

"And NIX off-shore drilling"

Well, if you guys in CA were willing to allow drilling off Santa Barbara, that would bring in some much-needed revenue for the state.; May 4, 2010 at 3:03 PM
DL said...: McFearless,

I'm getting the sense that someone is trying to make fun of me.; May 4, 2010 at 3:04 PM
I-Man said...: Nic, I think its bullish for Natty...; May 4, 2010 at 3:05 PM
AmenRa said...: GS is green?!?; May 4, 2010 at 3:05 PM
Anonymous said...: I had to take a little more off the table here at 1166.75 on the sp mini futures....

-AT; May 4, 2010 at 3:05 PM
DL said...: CV @ 3:02

Ditto, ditto, and more ditto.; May 4, 2010 at 3:05 PM
Nic said...: If you are a big long term dollar bull and think we have a flat jobless recovery I don't know how you can be really bullish crude.
I too struggle with the peak oil thing. They don't tell the truth for opec quota's, why would they for this with so much $$ at stake.; May 4, 2010 at 3:06 PM
McFearless said...: McHappy,

yeah, I like the ny chart there for the most part, as for the gaps, the idea that they get filled will keep the bulls buying, but those don't look like exhaustion gaps.....and those are the one's most likely to be closed out of the four types of gaps.; May 4, 2010 at 3:07 PM
Nic said...: Dl
I'm not making fun, but I don't watch American Idol; May 4, 2010 at 3:07 PM
McFearless said...: DL,

just having fun; May 4, 2010 at 3:08 PM
DL said...: Anon @ 3:05

I think there would be merit to buying some SPY calls right here for sale tomorrow.

(I'm not going to do it, however).; May 4, 2010 at 3:08 PM
McFearless said...: oh, and I really do watch AI if that's what you were talking about....; May 4, 2010 at 3:08 PM
karen said...: CV and DL, me three.; May 4, 2010 at 3:09 PM
I-Man said...: Kick ass, AT!; May 4, 2010 at 3:10 PM
DL said...: Nic @ 3:06

Over the next few years, I'm bearish on USD relative to commodity currencies (e.g., CAD, AUD, BRL) and bullish on gold and oil. Mostly it's about the Fed.; May 4, 2010 at 3:12 PM
McFearless said...: That was a great trade Andy. You either caught almost all the B wave down , or all of 1 and 3. In any case.....winner.; May 4, 2010 at 3:12 PM
karen said...: a good post and chart of xlf

http://www.fundmymutualfund.com/2010/05/financial-select-spdr-xlf-at-key.html; May 4, 2010 at 3:13 PM
Nic said...: Doug Kass thinks the quants might be blowing up again.
http://www.thestreet.com/story/10744909/1/kass-quants-causing-trouble.html
Also some juicy stories about hedge funds naked long Greek Government bonds getting margin called.
And alledgedly the Spain rumour which started the rout in EUR today started by RBS who are big Sov CDS traders.; May 4, 2010 at 3:14 PM
Leftback said...: "I'm bearish on USD relative to commodity currencies (e.g., CAD, AUD, BRL) and bullish on gold and oil."

That is another phase. 2012, pre-election QE. 2011 is going to be a meat-grinder of a year.; May 4, 2010 at 3:15 PM
McFearless said...: I'm so sick and tired of hearing about quants and how smart they all think they are. The market does not move according to physics...but they math away at it anyway.

anyone that ever spent any time with the Fusion program could figure out that one day it will be whipsawed very badly.; May 4, 2010 at 3:16 PM
DL said...: "2011 is going to be a meat-grinder of a year"

Could well be.; May 4, 2010 at 3:18 PM
McFearless said...: Is it just me or has Doug Kass been very absent the last several months, you never hear anything from him lately, or it seems that way.; May 4, 2010 at 3:18 PM
I-Man said...: Quants are by definition destined to implode...
You cant bullshit a bullshitter and the market is the ultimate humbler.; May 4, 2010 at 3:19 PM
karen said...: I think i mentioned the nice rounded top in $copper the other day..; May 4, 2010 at 3:20 PM
DL said...: McF @ 3:18

I think he writes a regular column for thestreet.com. Haven't seen him in any media appearances lately.; May 4, 2010 at 3:21 PM
bob said...: Look at the puke of TBT shares over the last hour.; May 4, 2010 at 3:23 PM
McFearless said...: DL,

yeah you are right, I wont' go to that site anymore though, I'm in a Kramer free zone.; May 4, 2010 at 3:23 PM
CV said...: If anyone was curious about that last little move UP in SPX...

It basically hit a 61,8% fibo retrace from todays low bacj to the .034 FIBO level of 1178,33...

FWIW; May 4, 2010 at 3:24 PM
mcHAPPY said...: @Ben 3:07

What kind of gap would you label it? I'm going to do a little reading later tonight on the type's of gaps for EW. 4 gaps, right?; May 4, 2010 at 3:24 PM
karen said...: From NYMag's Party Lines: How would you punish Goldman Sachs?
“Well, I think by continuing to show what they’re really like. Unless, of course, they’re utterly innocent and all this is a communist plot [sarcastic tone] … Jon Voight, he’s doing a comedy act around the country, or else I didn’t read about his brain damage, saying that the president is being bated in communist influence.” —DICK CAVETT; May 4, 2010 at 3:27 PM
Mel said...: Idol winners? The newly formed Mc-mel-man percussion trio...we'll win on bongos, good looks, and some Treme inspired grooves.; May 4, 2010 at 3:28 PM
Nic said...: McF
This is GREAT documentary next time you are bored or waiting for a trade:
http://www.youtube.com/watch?v=ed2FWNWwE3I; May 4, 2010 at 3:28 PM
mcHAPPY said...: @DL

I am Canadian, not sure if you know. I can remember very clearly what happens during a time of strong USD. I worked in teh states during the summer of 2000 and 2001. My $2500USD turned in to $3800 pretty darn quick at the local CIBC.

I suggest you have a look at Lara at forexinfo.us. Her recent count is off as she was not expecting anything above 82.68. However, she is correct more often than not. With that said, look at her latest video.

If you don't want to watch the full 8 mins look at 1:25 with her targets for the possible end of this C wave in 5-7 years.; May 4, 2010 at 3:29 PM
I-Man said...: @ Mel

I wish you guys could hear the power of my Ivory Coast Djembe when I hit it in the sweet spot...

It is the dawn of bass.; May 4, 2010 at 3:32 PM
McFearless said...: @McHappy, for starters, and I think you'll get an idea of what those look like, from my notes:

According to traditional technical analysis, there are four types of price gaps: Common, Breakaway, Continuation and Exhaustion. The Common gap provides little, if any, analytical value and occurs primarily within a range-bound market. The Breakaway gap indicates that a new trend is beginning. The Continuation gap typically marks the midpoint of a developing trend. Finally, Exhaustion gaps signal that a trend is coming to an end, and they are typically the third gap within a series of price gaps. Moreover, it is the price gap most likely to be closed.

Now look where the biggest gap happened on that chart you linked up....; May 4, 2010 at 3:34 PM
McFearless said...: Nic,

thanks, I will check this out.; May 4, 2010 at 3:34 PM
mcHAPPY said...: CV

Congrats, man! I did not expect to see 1.29 tagged today. Nice work! By the way, given your current streak, the national lottery up here is called 6/49 (pronounced 6-4-9) where you pick six numbers out of 1-49 and you get a bonus number. Would you mind hooking me up with 6 #'s and a bonus? Thanks!; May 4, 2010 at 3:36 PM
DL said...: McHappy @ 3:29

Yes, I know that you're Canadian.

Can't watch the video right now.

(Pretty picture of the beach, I would say).; May 4, 2010 at 3:36 PM
mcHAPPY said...: Thanks for the reply, Ben.; May 4, 2010 at 3:37 PM
McFearless said...: Nic,

I did the first 3 minutes and I'm already hooked....the guy on the boat at the start was speaking some serious truth wasn't he.; May 4, 2010 at 3:38 PM
karen said...: i am watching it too.. a bit melodramatic at points but good so far.. and yes the beginning truths were just that.; May 4, 2010 at 3:40 PM
mcHAPPY said...: FAZ has caught up to its 3X short peers as the day has progressed. It was the laggard starting off. FXP is finishing the day strong as well.; May 4, 2010 at 3:41 PM
AmenRa said...: The real reason behind the selloff {snark}: Voting begins in Senate on Wall Street reform; May 4, 2010 at 3:50 PM
McFearless said...: from the video:

"you hear...stories, about quants basing models on 4 or 5 years worth of data"

they are all so smart yes.....; May 4, 2010 at 3:54 PM
I-Man said...: Put shoppers may want to take a peek at this one today...

CAB; May 4, 2010 at 3:54 PM
mcHAPPY said...: My 3:41 certainly came back to bite me in the @ss... sh*tty.; May 4, 2010 at 3:57 PM
Nic said...: Good point Ra.

Hey McHappy, those were the days, eh? I still earn in USD and live in CAD so I am looking forward to this dollar rally.; May 4, 2010 at 3:57 PM
I-Man said...: GDX making some new friends this afternoon... I like that.; May 4, 2010 at 3:57 PM
karen said...: well, i'm completely disappointed with a close above 1170, but that's just me..; May 4, 2010 at 4:00 PM
DL said...: Nic @ 3:57

You're the "anti-Gisele"

(Regarding your views on currencies, anyway).; May 4, 2010 at 4:01 PM
mcHAPPY said...: @Nic

I get paid in CDN but would be willing to do a currency swap with DL for the next 3 years! (joking). I have quit trading the Horizon Beta Pro ETF's and focus on US now. Hoping to add a couple of percent on each trade as the CAD weakens over time relative to USD. That and you can set stop limits with a range US exchanges versus exact stops in Canada. I lost a chunk of money a couple months back on this. Actually it was when everything reversed in mid-Feb.... still a painful memory.; May 4, 2010 at 4:01 PM
spoonman said...: Sold my puts into the close again. Maybe I'll be lucky again. Gotta think there'll be a bounce tomorrow. If there isn't...well, you can't go broke making money. I'll just keep repeating that to myself over and over.; May 4, 2010 at 4:03 PM
spoonman said...: K - I was thinking maybe there'd be a flush into the close after no bounce all day...no dice.; May 4, 2010 at 4:04 PM
DL said...: McHappy,

Yeah, we need to do a 3-year currency swap.; May 4, 2010 at 4:05 PM
Nic said...: DL
Sadly I am an anti-Giselle in a few ways but
I am sure Giselle is loving her euro paycheck today ha ;); May 4, 2010 at 4:06 PM
McFearless said...: crucial part of the video is at the 29 minute mark through about 29:35.; May 4, 2010 at 4:06 PM
DL said...: Nic,

Surely you'd have no trouble competing with this:

http://gisele-caroline-bundchen.blogspot.com/; May 4, 2010 at 4:08 PM
Leftback said...: "well, i'm completely disappointed with a close above 1170, but that's just me.."

Karen, were you hoping for THE BIG ONE?
Well, perhaps you will be lucky soon.; May 4, 2010 at 4:11 PM
I-Man said...: Well K, you know what they say...

Rome wasnt burned in a day.; May 4, 2010 at 4:14 PM
Leftback said...: DL wants bikini icons from now on. But he has to go first.
Iconless...; May 4, 2010 at 4:17 PM
DL said...: LB,

No, I want to hear more from Karen about "well-rounded tops".

(Like the one in copper, for example).; May 4, 2010 at 4:21 PM
Nic said...: Great call on copper Karen!; May 4, 2010 at 4:24 PM
Leftback said...: DL. YELLOW card.; May 4, 2010 at 4:30 PM
McFearless said...: LB,

thoughts on JNK, it failed at the .618 retrace from the big move down, the trendline from the lows is also broken now...; May 4, 2010 at 4:34 PM
Leftback said...: The Bond Report 5.4.10

A good old-fashioned FTQ as we headed into TURNAROUND TUESDAY and Greek 2-years once again went orbital. A strong sell-off in equities and an unwind of USD and JPY carry created a bid for Treasuries, especially at the long end of the curve. IG outperformed HY substantially, and dividend stocks also had a good day (MRK, BMY).

Corpies: LQD 0.12%; AGG 0.40%; JNK -1.35%; HYG –1.03%;
Govies: TLT 1.80%; IEI 0.41%; TIP 0.15%

For once we were not hedged and so had a very good portfolio day indeed. We added hedges into the close (TBT) and took a punt on ERX as well.; May 4, 2010 at 4:37 PM
Leftback said...: Our hedging is based on expectations of a modest bounce in risk assets after tomorrow's ADP number, which will presumably foreshadow a strong number on Friday. There are a few bearish indicators out there, and we are feeling more inclined to play on the short side in equities soon.; May 4, 2010 at 4:39 PM

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Morning Audibles - DOUBLE Head & Shoulders?

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