Friday, February 13, 2009

Diamonds

Here is my intra-day chart of DIA, the un-leveraged ETF of the Dow Jones Industrial Average:


It's a snapshot of my 30 minute chart that highlights a few key indicators. First, the upward sloping channel up from Thursday's low prices through today's highs has been breached to the downside. Second, the False Bar Stochastic has turned down from Overbought. Finally, my bias trend system (left chart) flipped from Long to Short early this morning.

This chart is targeting 76 for this move, approximately 7600 on the DJIA. I own the February 80 puts, currently at 2.25 and will have intrinsic value of 4.00 if DIA drops to 76 anytime before expiration on February 20th. I'll be out way before then.

A

8 comments:

mlomker said...

The move has began. We had wave 3 of wave 1 of 3 of (5). Man, that's a mouthful. It means that today's high was all she wrote.

On a personal note, I was stopped out overnight at 840.50...the top tick! I should probably stop listening to Neely. I'm growing less impressed as the weeks pass.

Allan said...

It was a work of art. Chop, chop, chop, gone. Three chops just before the close before a three day weekend and with everyone and their brother stopped out and gone for the day, they initiate Wave 3 Down with no one left short, except them of course.

If Tuesday's gap leaves any room to get on board, there should be plenty of downside remaining for those left with mouths wide open at today's close.

Re: Neely - you can't do what he says, but you can try to see what he sees.

mlomker said...

I have GTC sell stop in place for 805.25 so if we gap at least I'll have a half position.

Anonymous said...

Allan,

Can you talk about your 30 min trend chart? It looks like you have a MACD and CCI on it, but I don't know what the other indicator is with the red/blue dots.

Thanks

Anonymous said...

Mike, I agree with your overall count -- 1 of 3 of 5 was a clear 5 wave decline, pointing the way of the trend -- down.

I have a hunch SPX is still in 2 of 3 of 5.

I suspect 2 will last a bit longer, and 2 is still retracing 1 of 3 of 5, so I see resistance at 849/853 which is the 61.8%/66.6% retracement 1 of 3 of 5.

I don't think the downtrend is strong. Likely, it will fall and I still have my Dow target of 6800 to 7187, but I expect deep retracements of 61.8%/ 66.6% as the market zigs and zags lower.

Alex

mlomker said...

Alex, it is certainly possible that the wave down near Friday's close was actually an oversized B wave (in response to the crazy A we had out of that last low). That would suggest that B will complete on the shortened day on Monday, then we can head up in C on Tuesday.

To be frank, I'd much rather go short at 849 than down here. Going up there would also touch the top of the trendline one more time and that would 'look' good.

Here's a pic:
http://mlomker.typepad.com/.a/6a00d83452e54d69e201116860b4d6970c-pi

Anonymous said...

I hope you all eat **** and die.

Anonymous said...

Technically speaking we've all already eaten sh!t (mushrooms amongst a few items) and we will all eventually die too. So thank you, please enjoy eating some sh!t yourself and your lame inevitable death.

:)

-PSU Eric