Index chatter...

[Simonyadig]

Originally Posted by MC

Hrmmm. Can history repeat itself?

Here's what I see in that chart. The two peaks made a potential double top with confirmation being a convincing break below the lowest valley between those two peaks. The lowest point of the recent market crash traded well below that valley from 02, but now it's at least temporarily gotten back above it. I believe that was actually a convincing confirmation of the double top and a sign of things to come, and this recent rally is one last gasp by the bulls trying to save themselves. I still wouldn't be surprised to see this rally push us higher, maybe even upper 120s, but I am strongly convinced that the bears have a massive wave coming from them. To me I see that move down from 155 -> 70 as being the first attack from the bears but definitely not the last. It went far enough to really break that 02/03 low and truly reveal the extent of the power of that bearish move, but after such an extended move in one direction a correction was virtually guaranteed. Now the bulls are overextended, the bears well rested, investors are complacent and overconfident, the dominant trend from the last 3 years is down, and the table is set for bloodshed once again.

[MC]

Originally Posted by Simonyadig

Here's what I see in that chart. The two peaks made a potential double top with confirmation being a convincing break below the lowest valley between those two peaks. The lowest point of the recent market crash traded well below that valley from 02, but now it's at least temporarily gotten back above it. I believe that was actually a convincing confirmation of the double top and a sign of things to come, and this recent rally is one last gasp by the bulls trying to save themselves. I still wouldn't be surprised to see this rally push us higher, maybe even upper 120s, but I am strongly convinced that the bears have a massive wave coming from them. To me I see that move down from 155 -> 70 as being the first attack from the bears but definitely not the last. It went far enough to really break that 02/03 low and truly reveal the extent of the power of that bearish move, but after such an extended move in one direction a correction was virtually guaranteed. Now the bulls are overextended, the bears well rested, investors are complacent and overconfident, the dominant trend from the last 3 years is down, and the table is set for bloodshed once again.

IMO it went lower this time because of the velocity of the drop. Y2K's drop was nothing to compare on that front, it was much more gradual. Panic was bound to drive the auction lower this go round, given the speed of decline. So while there was a lower low and even a close beyond the support line I drew I don't agree with your stance.

IMO the bears are very scared and some of the continued momentum is bears covering. I don't think it will be easy for the bears to get another massive drop like we had prior.

JMHO. Time will tell which of our opinions is right.

[Simonyadig]

Originally Posted by MC

IMO it went lower this time because of the velocity of the drop. Y2K's drop was nothing to compare on that front, it was much more gradual. Panic was bound to drive the auction lower this go round, given the speed of decline. So while there was a lower low and even a close beyond the support line I drew I don't agree with your stance.

IMO the bears are very scared and some of the continued momentum is bears covering. I don't think it will be easy for the bears to get another massive drop like we had prior.

JMHO. Time will tell which of our opinions is right.

Yep, we'll see one way or the other. I've been loading up on Dec 10 and 11 way OTM puts, and I'll continue to add to them with a percentage of my future profits as long as we continue to rally. I've probably thrown around $25k into this trade so far and I'm down at least 50% on that , but it was all money that I was willing to go all or none on, and like I said I'll even continue to add to it with a portion of future profits on my shorter term trading (premiums are too cheap not to).

[MC]

I will be pretty amazed if you don't at least get a pullback soon. The market is in zzzzzz mode...almost HAS to do something. The market will have to auction one way or the other at some point...it moves because it has to. They can't get any volume or emotion going with narrow price action.

My longer market bias is bull. But with no bullish power to push higher and with technicals seeming to need a break, the correction seems overdue.

GL bro.

[MC]

My perspective. Obviously green drawings = bullish and red = bearish. There are many support levels below. The failed break on the head n' shoulders showed quite bullish sentiment. Bear wise, there is some nice resistance overhead. Both the channel and bigger triangle/spring have broke down. The channel even tested and was rejected at $110ish so that's a KEY level the bulls will have to fight.

Personally I'd like to see quite a bit of consolidation, which would build even more support up here for the bulls to spring off of. I don't see how jobless recovery is possible, but I'll trade what I see and not what I think.

[Simonyadig]

I wish we were on the same page here, it would make me feel better about my crash insurance I bought. Which by the way I'm only down 20% on now.

Ah well, I still say we're in for some scary downward action, but I'm not doubting some more bullishness first.

[cire2222]

just a note on the head and shoulders pattern. studies have shown for it to be the least reliable of the common patterns.

[Simonyadig]

Originally Posted by MC

My perspective. Obviously green drawings = bullish and red = bearish. There are many support levels below. The failed break on the head n' shoulders showed quite bullish sentiment. Bear wise, there is some nice resistance overhead. Both the channel and bigger triangle/spring have broke down. The channel even tested and was rejected at $110ish so that's a KEY level the bulls will have to fight.

Personally I'd like to see quite a bit of consolidation, which would build even more support up here for the bulls to spring off of. I don't see how jobless recovery is possible, but I'll trade what I see and not what I think.

Some of the best trade signals are busted setups. Going long on that failed H&S would have been too perfect.

[cire2222]

Originally Posted by Simonyadig

Some of the best trade signals are busted setups. Going long on that failed H&S would have been too perfect.

i agree with that, a failed signal is the strongest signal. I think Jesse Livermore was a big fan of failed signals. I know Thomas Demark said he used to trade the failed signals

[cire2222]

Think of technicals this way. Use technical analysis NOT to determine how you will trade but to determine how others will trade. You will profit on thier mistakes.