tradesmart
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Also see Day-Trading CBOT mini-sized Dow Futures
One of the best nuggets of info.....
Good, now we're getting there.......
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One of the best nuggets of info.....
Good, now we're getting there.......
peterpr
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Don't misunderstand this post. I'm not a bull convert BUT, let me play devils advocate for a moment.
IF, we are in process of making a multi-year top here (and I believe we are), then my guess is it will not be as simple as it looks right now. The H&S on the 90 and 60 minute charts are just toooo obvious. The world and his dog has them in their sights. It's broken well below the 9 weeks trend, but then the DOW does have something of a reputation for serious false breaks.
The bearish wedge on the weekly chart is the key to it. We're testing its lower boundary right now - + the lower one of that 9 week ascending regression channel.
It could just plummet through both of course, but more likely the bears will be wrong-footed (yet again ) and we'll see a bounce - even a spike above the upper wedge boundary - before the downside begins in earnest.
IF, we are in process of making a multi-year top here (and I believe we are), then my guess is it will not be as simple as it looks right now. The H&S on the 90 and 60 minute charts are just toooo obvious. The world and his dog has them in their sights. It's broken well below the 9 weeks trend, but then the DOW does have something of a reputation for serious false breaks.
The bearish wedge on the weekly chart is the key to it. We're testing its lower boundary right now - + the lower one of that 9 week ascending regression channel.
It could just plummet through both of course, but more likely the bears will be wrong-footed (yet again
) and we'll see a bounce - even a spike above the upper wedge boundary - before the downside begins in earnest.Attachments
tradesmart
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Very likely that you're right Peter......
I don't really feel that the higher ground north of 900 has had sufficient test yet.....
And the fact that it didn't quite reach 11k must have left some bigtime bulls itching for another try......
The best rallies on the Dow come off of really bearish days......
All speculation of course - but that's the name of the game........ :cheesy:
edit - We’re looking at a nice gap down today that will surely be filled…….
Excellent advice here on how to trade them with an example similar to the current situation……..
I don't really feel that the higher ground north of 900 has had sufficient test yet.....
And the fact that it didn't quite reach 11k must have left some bigtime bulls itching for another try......
The best rallies on the Dow come off of really bearish days......
All speculation of course - but that's the name of the game........ :cheesy:
edit - We’re looking at a nice gap down today that will surely be filled…….
Excellent advice here on how to trade them with an example similar to the current situation……..
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tradesemart... are you long then? i notice what you say after the last 170 point decline we had 3 good up days but do you not think that crude at 57 and GM and its implications will be enough to keep bulls from particpating right away. I would want confirmation that the selling is over and might want to wait until a lower test i.e 10-500 before having a stab at a long.
counter_violent
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I think the point here is ....".where the gap occurs" on the face of it this gap has little chance of being filled short term , but most gaps do get filled as TS rightly states
tradesmart
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I’m holding a short from the futs top at 800 this morning which was taken in anticipation of a gap down fill, but very lucky that the GM news intervened..
I’m also trading both ways on my second day trade account and have been short/long/short so far…….
When I see a solid bottom appear on the longer timeframe charts,I’ll enter a long looking to hold for several hundred points…
Hope springs eternal……
I suspect that this is just a pullback within the ongoing bull market......the Dow has a very big range which can be confusing.....
roguetrader
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tradesmart said:
Interesting thought TS,would you not be starting to get the view that too many technical levels are being taken out with relative ease to maintain a bullish view on the market.
tradesmart
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Well, the bull market has been running for two years since the rally from the 7300 ish lows in March03, and despite the recent falls, we're still very close to the top of the market, and all the recent data and earnings support the view that the US economy and corporate earnings are very strong...
I suspect that as long as the earnings hold up the market will do so as well, but there is bound to be the occasional downdraught from short term issues - ie oil, dollar, current account etc..
But will short term issues become long term issues....?
Maybe..........
roguetrader
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I can seeyour point mate from the perspective of where we are in relation to the run up from the 03 lows, however from what I can see sector after sector is starting to rollover now, and in the face of rising commodity prices right across the board, not just oil, inflation has to bite soon.
Add to that the steady Fed tightening and the increase that inflation will bring about and you don't really have a good backdrop for earnings to continue. As for oil I don't see that as a short term issue, it's here to stay imho, and go higher.
I would have expected one more push higher to put in a top, but as each day goes by I wonder have we already seen it, I'd be surprised if we had. But even assuming there was another push higher I think a top is imminent.
Add to that the steady Fed tightening and the increase that inflation will bring about and you don't really have a good backdrop for earnings to continue. As for oil I don't see that as a short term issue, it's here to stay imho, and go higher.
I would have expected one more push higher to put in a top, but as each day goes by I wonder have we already seen it, I'd be surprised if we had. But even assuming there was another push higher I think a top is imminent.
counter_violent
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Welcome aboard
tradesmart
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Yes, some correspondents were saying that when the Dow hit 10K - it all seemed so totally unjustified.....
But it all depends on whether punters, large and small think that they can make a buck or two out of stocks and at the moment they seem to......
In the big picture, we're still seeing the pattern of higher highs and higher lows - when that reverses watch out.......
Wall Street's default mode is optimism.......for now....
Just covered my day short for a few.......
Tradesmart-I totaly agree with you in every aspect.This is not a dig at anyone really but I feel I have seen this time and time again.Markets make a large pullback within the 2 and a half year bull phase and thats it,everyones bearish,were going to october lows and were short short short.I would love to see the crystal ball that picks that one up folks.
The fact is that yes,there is some pretty dire news coming out at the moment and crude is very high but hasnt there been dire news coming out for the last year or so and yet the markets have gone up while our heads shake in wonderment.Why now? News has been bad for quite a while,oils been going up for quite a while,yet the stock market has been going up and up and up with the shouts of why why why?
January 2004 charts looked pretty damn bad with lower lows and yet we broke up.We have also had some quite extravagant moves up after some very brutal down moves.3 weeks ago I believe was one in particular.
I honestly cannot see that a 300 point pullback from the dow highs can tell anyone that we are going to pull back 3000 points.
Yes we may hit lows but we would need a much further pullback than this to be honest,all in my very own honest opinion.
The fact is that yes,there is some pretty dire news coming out at the moment and crude is very high but hasnt there been dire news coming out for the last year or so and yet the markets have gone up while our heads shake in wonderment.Why now? News has been bad for quite a while,oils been going up for quite a while,yet the stock market has been going up and up and up with the shouts of why why why?
January 2004 charts looked pretty damn bad with lower lows and yet we broke up.We have also had some quite extravagant moves up after some very brutal down moves.3 weeks ago I believe was one in particular.
I honestly cannot see that a 300 point pullback from the dow highs can tell anyone that we are going to pull back 3000 points.
Yes we may hit lows but we would need a much further pullback than this to be honest,all in my very own honest opinion.
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roguetrader
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Fair comment TS, and of course you are quite right, as long as the pattern of higher highs and higher lows continues we the bulls hold the day. Of course the NAZ may have already put in a lower high.
But I'm sure the loss of the long awaited breakout, the failure of the Naz to hold her 50 day sma, and now the broad market loss of the 50 day sma's in the space of a fortnight will give thempause for thought
As for market optimism, aint it great the more the better I say, makes the descent so much more profitable so much quicker.
But I'm sure the loss of the long awaited breakout, the failure of the Naz to hold her 50 day sma, and now the broad market loss of the 50 day sma's in the space of a fortnight will give thempause for thought
As for market optimism, aint it great the more the better I say, makes the descent so much more profitable so much quicker.
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peterpr
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I base my medium-term view mainly on various paid-for and free EW analyses which are pretty consistent. That together with all the usual commentary - Main-stream and not so MS - which we are all free to interpret as we see fit. After all - no market if we don't disagree sometimes is there?
I think we are close to a top and a multi-year decline - maybe even one that will make 1987 look tame (and I was managing retail funds though that debacle so I know what it fels like!). But that's not to say I expect it to happen overnight. Multi-year highs are by definition complex affairs and, as you say, 300 points down from a 2 year high in a couple of weeks doesn't constitute a medium-term trend change. It is unsettling for the perma-bulls though - after all we're two years into this so-called bull market and it does feel like its struggling just a teeny bit, what with the NASDAQ still 60% from its all time high + a constant stream of stats on record bubbles, deficits, dollar-weakness etc.
The question is where will the DOW go next intra-day and short term. The answer of course is that nobody knows and that price action or your 'system' should dictate trades anyway. BUT, a little crystal-ball gazing can't hurt if kept in its place can it?
On that score I personally expect a bounce from not much further - if at all - down from today's close. Volume says there was no real panic today and I just have this feeling that the bears have not been hurt enough by the topping action so far. OTOH Some important support/MA's/trend lines have been breached so - its quite capable of just continuing straight down.
I think we are close to a top and a multi-year decline - maybe even one that will make 1987 look tame (and I was managing retail funds though that debacle so I know what it fels like!). But that's not to say I expect it to happen overnight. Multi-year highs are by definition complex affairs and, as you say, 300 points down from a 2 year high in a couple of weeks doesn't constitute a medium-term trend change. It is unsettling for the perma-bulls though - after all we're two years into this so-called bull market and it does feel like its struggling just a teeny bit, what with the NASDAQ still 60% from its all time high + a constant stream of stats on record bubbles, deficits, dollar-weakness etc.
The question is where will the DOW go next intra-day and short term. The answer of course is that nobody knows and that price action or your 'system' should dictate trades anyway. BUT, a little crystal-ball gazing can't hurt if kept in its place can it?
On that score I personally expect a bounce from not much further - if at all - down from today's close. Volume says there was no real panic today and I just have this feeling that the bears have not been hurt enough by the topping action so far. OTOH Some important support/MA's/trend lines have been breached so - its quite capable of just continuing straight down.
counter_violent
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Totally balanced thread so far, and given that it has taken on a bearish tone in the last month or so is beginning to be borne out by the facts !! Or did we all just get lucky ?
Anyhow if I see something worth pointing out for everyones benefit, then i will continue to do so, in the belief that I may also be enlightened by others observations.
counter
Anyhow if I see something worth pointing out for everyones benefit, then i will continue to do so, in the belief that I may also be enlightened by others observations.
counter
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This post is not for TS it is for members in general but I have just taken TS's quotes as the general feeling of alot of members that read this thread.
TS you make some very good posts on this thread so thanks as I'm sure members appreciate your contribution. However let me justify what you have just said in relation to how I percieve it.
When we hit 10K if you look at the chart of short positions held at that time in relation to the commercial hedgers then you can see that they had the lowest number of shorts in the last five years.
You can argue that when we were approaching 10,000 people said 'this that and the other' and now we approach 11,000 and its all the same stuff?
Well no.
Look at the shorts held by commercial hedgers this time its more then what was held at the time of the dotcom bubble. That should show all members something of major significance even if investors don't like it. The VIX which many lost faith in as it hit new lows shows how extremely complacement the market is even at the current VIX levels.
Its not your average 'punter' that controls the market its a large powerfull flow of money that controls it and that is the commercial hedgers.
So fine we've had a great run for the last two years but please don't start to believe that the skys the limit.
Alot of traders saw the bad news at the lofty highs in dotcom boom.
Same stuff is occuring now. We've rallied a long way and now the bad news is pricking this market and we can all see it as a advanced warning. We got strong earnings however traders are still skeptical too some degree. We keep on pricking this bubble but its not popping:
Oil
Inflation
Trade Deficit
Dollar
Earnings
Terrorist attacks
War
It will be just a matter of time before the pricking will finally succeed and this bubble will pop. Because under todays news and the market conditions of the future I would regard this market as a bubble; as it has no justification of being where it is and thats when they usually collapse. All the election rallying is out. I still feel we will have one last short squeeze but I don't think 11,000 will be tested.
See the chart attached. There was a fair bit of confusion regarding this chart but look at it simply in relation to 2000 commercial holdings and 2005.
The values on the left are short positions of all market participants (Large Speculators, Commercial Hedgers, Small Traders) on a percentage basis (all short positions = 100%).
TS you make some very good posts on this thread so thanks as I'm sure members appreciate your contribution. However let me justify what you have just said in relation to how I percieve it.
When we hit 10K if you look at the chart of short positions held at that time in relation to the commercial hedgers then you can see that they had the lowest number of shorts in the last five years.
You can argue that when we were approaching 10,000 people said 'this that and the other' and now we approach 11,000 and its all the same stuff?
Well no.
Look at the shorts held by commercial hedgers this time its more then what was held at the time of the dotcom bubble. That should show all members something of major significance even if investors don't like it. The VIX which many lost faith in as it hit new lows shows how extremely complacement the market is even at the current VIX levels.
Its not your average 'punter' that controls the market its a large powerfull flow of money that controls it and that is the commercial hedgers.
So fine we've had a great run for the last two years but please don't start to believe that the skys the limit.
Alot of traders saw the bad news at the lofty highs in dotcom boom.
Same stuff is occuring now. We've rallied a long way and now the bad news is pricking this market and we can all see it as a advanced warning. We got strong earnings however traders are still skeptical too some degree. We keep on pricking this bubble but its not popping:
Oil
Inflation
Trade Deficit
Dollar
Earnings
Terrorist attacks
War
It will be just a matter of time before the pricking will finally succeed and this bubble will pop. Because under todays news and the market conditions of the future I would regard this market as a bubble; as it has no justification of being where it is and thats when they usually collapse. All the election rallying is out. I still feel we will have one last short squeeze but I don't think 11,000 will be tested.
See the chart attached. There was a fair bit of confusion regarding this chart but look at it simply in relation to 2000 commercial holdings and 2005.
The values on the left are short positions of all market participants (Large Speculators, Commercial Hedgers, Small Traders) on a percentage basis (all short positions = 100%).
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