28
Oct
StockTock.com discusses today’s rally and what it might mean to the outlook. There is no shortage of opinions on this market and I want to emphasize that the only opinion that matters is the market’s. If you keep an open mind and listen to the charts, you will make money regardless of which way the market goes. We look at the various scenarios that could play out and then simplify the whole thing down to one simple trendline.
Loading ...
October 28th, 2008 at 10:55 pm
I’m in the camp that we had a W fomation on the ES with a breakout confirmation or your H&S works for me as well. Mr. Long was right again, but unfortunately he has left the building. Thanks for all you do Craig and the board.
[Reply]
October 28th, 2008 at 11:02 pm
Craig,
As usual, great job.
After a quick look at the charts right before the close, I came to your Scenario 1 conclusion (I gave a 75% possibility - pulled that % number out of you know what). I thought about something similar to your Scenario 2 has a 25% possibility.
For a moment at the close, I felt like closing my short positions. However, in the final 5 min of trading, I added to my put positions. Next couple of days will tell if I am a weak short or a guy with some dumb luck.
Now the conditions are even more conducive for a market crash than they were four days ago when I felt that a crash is very likely.
Here is my take on the possible psychology…
I read today on a news story today - small investor bullish sentiment as of today is over 50% (sorry, can’t find the link). That number is before the market rallied. This number has been the highest in several months.
In addition to the title of one of your posts today, at least one news headline said this:
MARKETS UP: ‘EXHAUSTED FROM GOING DOWN’ I am not so sure about seller exhaustion. Mutual funds close books on Oct 31, people can redeem from hedge funds till Nov 15. If you are waiting in the wings to sell, a 10% rally into the trendline resistance is one heck of an opportunity to sell.
BTW, fair weather market pundits on CNBC are bit bolder in asserting that the bottom has been reached on Oct 10, market will be higher 6 months from now… I think they are speaking, with their positions, not with objectivity.
I am keeping my bearish bias. But, I am keeping an open mind about your Scenario 2. Of course, this whole rant may be by my positions, not my objectivity.
Thanks.
[Reply]
October 28th, 2008 at 11:57 pm
Hi Craig,
Thank you for the video/chart scenario presentations.
If you take a look at the spx 1 hour chart on TOS, the 200 day MA is at 978.3. This may be a level to watch for either reversal to bearish or breakout. What is your opinion on that?
Best of luck tomorrow,
Bogdan
[Reply]
October 29th, 2008 at 1:51 am
I use the S&P E-mini Futures (ES contract) for my moving averages. I watch the 20, 50, and 200 SMA.
The market would be lucky to make it up that high tomorrow.
[Reply]
October 29th, 2008 at 1:01 am
the vix looks it
might b forming a h&s patern
[Reply]
October 29th, 2008 at 1:47 am
Thanks again for your work.
I am still learning TA. The internal trend line that you now show has some aspects that should be considered.
1) When the internal trend line was broken and the SPX dived deeply down below the internal trend line back on Oct 6 could that be considered capitulation of sorts?
2) The SPX became trapped under this internal trend line for the past few weeks could the horizontal support line provide a base for development of a bottom? This should be considered with respect both the buy and sell volume that has developed during the pendant formation.
I am trying to stay neutral. I was slightly bearish but now looking at the possibility of a profit taking pull back tomorrow with a another move up out of the pendant if the Fed meeting provides the market with good news.
[Reply]