Tuesday, October 27, 2009

Morning Post

I made a terrible, terrible mistake yesterday morning. I freaked out and sold my shorts from last week. (I discuss my trading issues with you from time to time as I feel conveying my mistakes may help some of you that are not as experienced.) Why, after riding them all the way up Friday and then on the first sign of strength today I dump them? 1) I don't trust the markets, 2) I don't trust the markets and 3) I listened to someone else and did not go with what I know is reliable and true.

I thought I was brilliant for about 15 minutes. I should have used liberal stops. I had cautioned about a whipsaw all throughout the morning post yesterday and when the daily indicators started to turn, I hauled ass. I can't explain why in any further detail to avoid being critical of anyone or anything, so I'll just leave it as my mistake and chalk it up to freaking out and not sticking to a plan. If I had simply stuck to my normal routine, I'd be sitting fat and happy and not brewing over a stupid mistake. I preach stops and routines or plans all the time and failed myself. So, get your plan and stick to it!

On to the post. I would love to post my Daily Indicator Chart here, but since Stockcharts has a tendency to blow up larger charts and since Stockchaarts does not work well AT ALL with Vista you can't see it (and I have to take the time to rebuild it). So instead I'll give you just the daily SPX chart.

Below notice 1) price sitting on the black trendline in the red circle 2) Price is just under the BB 20ma and the 38% retracement 3) RSI is sitting on the 50 line (pink) 4) MACD is approaching the lower trendline. All of these are pointed out cause they are potential negatives to the bear cause. Now all that being said, trends are down and my favorite timing indicator S Sto is not thinking about crossing. ADX looks bearish and there is a lot of room to fall. Look at the blue support area. Action with the 50ma at the 61.8% retracement is where I believe the turn will possibly happen around 1051. I am not leaving the lower BB at 1028 out of the question.

I am not going to post a 60m chart. The 60m indicators are bottoming but remember I place little weight on them as they tend to embed (especially at the top).

The most important chart out there IMO is the Weekly SPX. Will someone PLEASE tell me how long I have been begging for a divergence on the weekly RSI and pointing to the lower tendline cross? Heloooo, we got one and a trendline cross to boot. The two key things I have been looking for and that kept me in the long game for so long. ROC trendline breakdown. F Sto bear cross and trendline breakdown and and that beautiful falling MACD histogram all lead me to believe that there is an overly high probabiltiy the top is in and that the fall has begun.

Oops, did I leave that P2 target on the chart? I'm so sorry. Maybe I'll take that down after I print and frame the chart for prosperity. Yeah I had a 10/12 top call, but there was a larger window. If you hit the month and a range of 71 points from months out I'll still call that good (Now if it only sticks).

Now, different indexes are all over the place. The SPX and /ES are nowhere near it's lower P2 trendline support while INDU is sitting one it. I have had to draw three separate trendlines for COMPQ and it is cracking the third trendline now. RUT is way below it's P2 support and so is TRAN.

The dollar has reached my wave 5 target zone (perfectly I may add - see EWT does have its moments of brilliance) and put in a huge bullish candle today. The EUR/USD is breaking down. Oil has lost some steam (but will still go higher IMO) and gold continues it's march higher.

I'm still on the bear train for a little longer looking for the 1051 range here if not worse (1028 - 1012 is a number I like as well). All the other indicators are at their lower P2 trendlines or worse, so why not let SPX join the party? Remember I have discussed the FORM of the fall a lot, and we won't be able to really determine anything till it is finished topping and the first falling wedge is set.

You can not trust the manipulated market, but you have to wonder with all the "exceptional" earnings reports and the mix of bad news that "they" may be losing some grip. Insiders are selling out and MF money redemptions are pumping out. This could be another bear trap. I fully expect the government to come out with some form of last ditch efforts to get the market to rally. There is one more POMO this Thursday, but after that they are OUT OF MONEY. The CRE crash is coming and that will take down the TBTFs. With 70% of volume being HFT they can push it any way they freaking want to, so HAVE DISCIPLINE and a strategy and stick to it. I will be.

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