Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Gold Amid Epidemiological and Economical Update - 15th Jul 20
Is it Time To Dump Gold Stocks? - 15th Jul 20
Retail Stock Market Traders & Investors Squeezed to Buy High-Risk Assets Again - 15th Jul 20
SPX about to Challenge 8/08 High - 15th Jul 20
How to Grow Huge Fruiting Magical Indoor Grape Vines at Home UK - 15th Jul 20
Stock Market Dow 30k before End of 2020? - 13th Jul 20
Credit Market Investments Turned Into End-User Risk Again - 13th Jul 20
Investors Are Going All-In on This Coronavirus Proof Industry - 13th Jul 20
5 Vital Insights That You Can Gain From Instagram Trackers - 13th Jul 20
Stop Believing The 'Economy' Is The Same As The Stock Market - 12th Jul 20
Spotify Recealed as The “Next Netflix” - 12th Jul 20
Getting Ahead of the Game: What Determines the Prices of Oil? - 12th Jul 20
The Big Short 2020 – World Pushes Credit/Investments Into Risk Again - 11th Jul 20
The Bearish Combination of Soaring Silver and Lagging GDX Miners - 11th Jul 20
Stock Market: "Relevant Waves Vs. Irrelevant News" - 10th Jul 20
Prepare for the global impact of US COVID-19 resurgence - 10th Jul 20
Golds quick price move increases the odds of a correction - 10th Jul 20
Declaring Your Independence from Currency Debasement - 10th Jul 20
Tech Stocks Trending Towards the Quantum AI EXPLOSION! - 9th Jul 20
Gold and Silver Seasonal Trend Analysis - 9th Jul 20
Facebook and IBM Tech Stocks for Machine Learning Mega-Trend Investing 2020 - 9th Jul 20
LandRover Discovery Sport Service Blues, How Long Before Oil Change is Actually Due? - 9th Jul 20
Following the Gold Stock Leaders as the Fed Prints - 9th Jul 20
Gold RESET Breakout on 10 Reasons - 9th Jul 20
Fintech facilitating huge growth in online gambling - 9th Jul 20
Online Creative Software Development Service Conceptual Approach - 9th Jul 20
Coronavirus Pandemic UK and US Second Waves, and the Influenza Doomsday Scenario - 8th Jul 20
States “On the Cusp of Losing Control” and the Impact on the Economy - 8th Jul 20
Gold During Covid-19 Pandemic and Beyond - 8th Jul 20
UK Holidays 2020 - Driving on Cornwall's Narrow Roads to Bude Caravan Holiday Resort - 8th Jul 20
Five Reasons Covid Will Change SEO - 8th Jul 20
What Makes Internet Packages Different? - 8th Jul 20
Saudi Arabia Eyes Total Dominance In Oil And Gas Markets - 7th Jul 20
These Are the Times That Call for Gold - 7th Jul 20
A Reason to be "Extra-Attentive" to Stock Market Sentiment Measures - 7th Jul 20
The Beatings Will Continue Until the Economy Improves - 6th Jul 20
The Corona Economic Depression Is Here - 6th Jul 20
Stock Market Short-term Peaking - 6th Jul 20
Gold’s Major Reversal to Create the “Handle” - 5th July 20
Gold Market Manipulation And The Federal Reserve - 5th July 20
Overclockers UK Custom Build PC Review - 1. Ordering / Stock Issues - 5th July 20
How to Bond With Your Budgie / Parakeet With Morning Song and Dance - 5th July 20
Silver Price Trend Forecast Summer 2020 - 3rd Jul 20
Silver Market Is at a Critical Juncture - 3rd Jul 20
Gold Stocks Breakout Not Confirmed Yet - 3rd Jul 20
Coronavirus Strikes Back. But Force Is Strong With Gold - 3rd Jul 20
Stock Market Russell 2000 Gaps Present Real Targets - 3rd Jul 20
Johnson & Johnson (JNJ) Big Pharma Stock for Machine Learning Life Extension Investing - 2nd Jul 20
All Eyes on Markets to Get a Refreshed Outlook - 2nd Jul 20
The Darkening Clouds on the Stock Market S&P 500 Horizon - 2nd Jul 20
US Fourth Turning Reaches Boiling Point as America Bends its Knee - 2nd Jul 20
After 2nd Quarter Economic Carnage, the Quest for Philippine Recovery - 2nd Jul 20
Gold Completes Another Washout Rotation – Here We Go - 2nd Jul 20
Roosevelt 2.0 and ‘here, hold my beer' - 2nd Jul 20
U.S. Dollar: When Almost Everyone Is Bearish... - 1st Jul 20
Politicians Prepare New Money Drops as US Dollar Weakens - 1st Jul 20
Gold Stocks Still Undervalued - 1st Jul 20
High Premiums in Physical Gold Market: Scam or Supply Crisis? - 1st Jul 20
US Stock Markets Enter Parabolic Price Move - 1st Jul 20
In The Year 2025 If Fiat Currency Can Survive - 30th Jun 20
Gold Likes the IMF Predicting a Deeper Recession - 30th Jun 20
Silver Is Still Cheap For Now - 30th Jun 20
More Stock Market Selling Ahead - 30th Jun 20
Trending Ecommerce Sites in 2020 - 30th Jun 20
Stock Market S&P 500 Approaching the Precipice - 29th Jun 20
APPLE Tech Stock for Investing to Profit from the Machine Learning Mega trend - 29th Jun 20
Student / Gamer Custom System Build June 2020 Proving Impossible - Overclockers UK - 29th Jun 20
US Dollar with Ney and Gann Angles - 29th Jun 20
Europe's Banking Sector: When (and Why) the Rout Really Began - 29th Jun 20
Will People Accept Rampant Inflation? Hell, No! - 29th Jun 20
Gold & Silver Begin The Move To New All-Time Highs - 29th Jun 20
US Stock Market Enters Parabolic Price Move – Be Prepared - 29th Jun 20
Meet BlackRock, the New Great Vampire Squid - 28th Jun 20
Stock Market S&P 500 Approaching a Defining Moment - 28th Jun 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Stock Market Update: It's A Trader's World

Stock-Markets / Futures Trading Sep 21, 2008 - 08:39 AM GMT

By: Dominick

Stock-Markets IBest Financial Markets Analysis Articlet's incredible to be living and trading in these historic times which people will be reading and talking about for decades to come. But making some money while we're at it is even better, especially since so many are in the red for this year. Now that we've gotten this huge move of over 120 points off of Thursday's low, we have to respect the rally and expect some follow-through in the short term, even while the choppy, volatile action continues. Looking at some of the internals on this move, shown below, you have to figure there's a good chance that a feel good rally into the election has just begun, an idea we'll be exploring in greater depth this weekend for members only. The charts below show us the extremes that we saw this week in up volume, total volume, and the Vix.


So, the market closed up a few points for the week, but boy does that not even begin to tell the story! Of course the government is going to take all the credit for sparking that huge move on Friday, and others will blame it on the PPT and whatnot, but if that was the whole story, how could I have been looking for a low all week and have a wave count and other evidence that predicted it perfectly? Isn't it more likely the government waited until the bears were too fat and happy, until the rubberband was stretched too far so they could get the most bang for their regulatory buck?

Just like the bull in Jeff Moores graphic at the top of this article, TTC came into last week knowing the crowd was shifted too far to one side. Staying unbiased, we were ready, willing and able to buy that bottom on Thursday and make some good money. Some members made six figures this week as TTC performed exactly as it was meant to, with members working collectively on multiple markets to understand what the market was saying and how best to capitalize.

Yes, we knew the ratings agencies were all of a sudden waking up and doling out long overdue downgrades that triggered cascades of capital-raising exactly as confidence in the financials had deteriorated virtually into nonexistence. We used 1256 on the S&P e-mini futures as a trigger to short a market that was clearly getting panicked, and a confirmation number reserved for members that would get us even more long term bearish.

But we also knew it was options expiry week and, if they wanted to, the feds could really stick it to the bears. So it was no time to be pressing your luck on the downside. Wall Street's become more of a casino these days, where the only way to keep your money is to take profits whenever you have them. In fact, as the week progressed, we had a growing pile of evidence suggesting a good bottom was imminent. The first was sentiment, which, as you know, reached epic proportions in its bearishness. The put/call ratio was well into oversold territory. We also had this visual representation of sentiment care of Jake Bernstein's Daily Sentiment Index.

Here's a study in Bollinger bands that worked for us before in the past and worked again last week. The VIX violated the top band as the S&P fell through the bottom, a situation

that usually doesn't last for long without correcting itself. Another clue to a bottom.

And it certainly didn't hurt to have the correct Elliott wave count! While everyone seemed to be trading the middle third down, expecting a huge crash, we were that one lonely bull watching the chart below, looking for a bottom where Y=W that would have everyone else shorting the hole and then scrambling to cover. If the Fed and the news agencies don't know Elliott wave, they sure have some interesting timing! If you didn't have the chart below for at least an alternate pattern, you have to ask yourself why?

And here below is a chart that was posted as the market was dropping to its lows, again suggesting a bottom with a quick recovery instead of Armageddon and the 1, 2, 1, 2, 1, 2, count the bears kept massaging to fit their bias.

As you know, the market came off those lows like oil on a hot skillet, exactly as it should after an ending diagonal!

There must be some real ugly stories out there this weekend, of longs on margin getting taken out at the lows, of bears shorting the bottom and waking up to a busted account. But TTC rose to the occasion with some members having their best week ever trading a market that gave huge moves in both directions. And our whole purpose for existing is to cultivate traders. Our real time chat is populated with consummate professionals who, instead of panicking at the lows, were discussing trading vehicles for later in the day, double long S&P ETFs, Rydex Funds, and options. We bought the 1180 October calls that ramped from $31 on Thursday to $100 on Friday's open. And we discussed getting long the Japanese market for overnight, which had also been painting a bottom and would most likely rally off the S&P recovery.

And on Friday morning, we had our proprietary tend cycle charts to navigate the huge volume and momentum that had finally arrived. The chart on the left shows resistance in our 60-minute oscillator, getting us to look for a top to TMAR (take the money and run) against. On the left is the 6-minute chart coming into support later in the day that had us ready to get long for one last ramp job in the final hour.

The other big story of the week, of course, was that huge move in precious metals early in the week, which is a perfect example of the alternative markets I'm constantly suggesting members trade since they usually behave much more predictably than the S&P. First, here's an older chart showing two possible targets based on Fibonacci extensions of the previous decline.

And then here's the after picture with gold launching a record-smashing intraday move of over $100 perfectly off our low target.

So, you can see this is a trader's world, and only the unbiased that move in either direction based on the charts, not the news, are making serious money in this “crisis” environment. But, as I said, you have to respect this rally and how psychology has shifted, even as we continue to get some choppy action in the short term. Having only closed slightly above the previous week, there's still a long way to go before a real recovery is at hand and the bottom confirmed. TTC members still have our critical confirmation level that we wouldn't want to retest if looking for more upside. Break it, and new lows are very likely. But other than that, having been that lonely bull that got in at the bottom, we're happy to have taken profits and not be married to a position, or a bias, going forward.

Have a profitable and safe week trading, and remember:
"Unbiased Elliott Wave works!"

By Dominick , a.k.a. Spwaver
www.tradingthecharts.com

This update is provided as general information and is not an investment recommendation. TTC accepts no liability whatsoever for any losses resulting from action taken based on the contents of its charts, commentaries, or price data. Securities and commodities markets involve inherent risk and not all positions are suitable for each individual. Check with your licensed financial advisor or broker prior to taking any action.

Dominick Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules