Tuesday, October 13, 2009

Tuesday afternoon

I know there has been a relative dearth of posts here lately, but personal entanglements and dramas have just sapped my energy. Let's try to quickly and simply bring everything up to date.

The S&P futures are up about 9 points after hours Tuesday, suggesting a 100 point DJIA gap-up tomorrow, if those gains hold through the Asian markets tonight:

Below a Daily chart of the SPX:

The Daily Buy Signal of one week ago is still in force. Nonetheless, I still think this is a major top that will end badly. But we trade the trend, not the forecast. With that False Bar Stochastic shown above and the after-hours romp up in the S&P futures, tomorrow looks to be starting out strong, but how it finishes will be a much better heads-up.

There are some that are pointing out a massive carry trade bet on the falling dollar and that if and when the dollar turns up, the unwinding of that bet will be the catalyst for a global meltdown. Something to keep an eye on, so I'm watching the US Dollar and the Shanghai Index for clues to when this all falls apart.



Anonymous said...

USD bears seem triumphant...See new lows


Fundamental reality is being cast aside...

Anonymous said...

Hi Allan,

Bam Investor has just published their Investor Blog that is similar to your comments: "What that implies, is that once the US dollar Index starts to rally sharply–and we think that will occur this week–the simple “mechanical” unwinding of these trades will be sufficient to cause bull markets to collapse while simultaneously causing bear markets to sky-rocket. By “mechanical” we simply mean that market participants need not want to buy or sell for fundamental or personal preference reasons, they’ll eventually be forced to buy or sell during the unwinding phase."


Anonymous said...

Shanghai index is trying to get above 3000 mark again today. Based on the past few days momentum, the rebounce might get over 3067, the recent peak. If get above it, we might see more powerful rally in China.

Have been waiting for the market to crash like BAM expected, but so far fruitless.


Anonymous said...


you really need to man-up and quit this slobbering about x-girlfriends.

"Without the Way,
there is no going,
Without the Truth,
there is no knowing,
Without the Life,
there is no living."

- Thomas à Kempis (1380-1471)

Anonymous said...

....dont listen to him Allan,I slobber over past girlfriends too .


Ok,You said,and rightly so, that we want to trade the trend not the forecast.
I agree. and something I always have to remember because my own habitual tendency is to focus heavily on forecasting analysis.
Its hard not to do as an elliott wave counter. Youre not just watching the current wave but also trying to define the wave so you can anticipate the next completion and reversal.
But What IF the 'trend' that we are in is going to give us 5 waves going up.what would that look like?

What was the last primary wave up,which finished 3rd week of september?
Was it a wave 3 of 5 up, completed? or a subwave c of (a-b-c),i.e. a wave 2 of 5 down completed ?

Right now it appears too soon to know.
I am watching out for the big crash down now,but I am also 'seeing' the early stage of a 'wave 4' of 5 UP .
and looking for 5 sub waves to play out as wave 4. (a-b-c-d-e)

which currently would place the count at sub wave b.(would be completing now)

The foreboding view down you are waiting for,in this{alternate count} (wave 4 )scenario ,would stop in the (s+p 500) 1020-1000 area, as (subwave c completed) and reverse back up to the 1070 area. becoming subwave d....followed by 'e' back down and Holding at the 1000 area,reverses to begin wave 5 of 5 up. target 1160-1200 area.

From the engineering perspective of a 'rigged' game this is the scenario I would expect to see play out. wave 4 holding up at 1000.wave 5 to 1170 and into the new year.

S+P 500 Holding up at 1020-1000 area....TWO MORE TIMES. between now and november 18.

Anonymous said...

It is simple. The market is the next "bailout." Since there is no way to fund another global bailout Bam, Ben and Tim along with all the bankers decided the cheapest easiest way to save the financial world would be to "rally the markets." Hoping for new lows is almost the same thing as hoping for a Nuclear War. BTW Bam told us to buy the market on March 17th 2009. He clearly stated "this is a good time to buy stocks."

Anonymous said...

Another long crash wait ahead for you Alan, the Shanghai Index will be making the move up over the 3500in the months to come.

Anonymous said...

If the market is going to have another sizable wave UP,it first has to make a (wave 4) correction down....one that looks more meaningful over a longer time frame than the 10 day drop at the end of september to 1020.(s+p)
the only way to see(count) another rally wave up,is by first calling the july to sept 22 wave as a wave 3 of 5 up.
which then follows the current action as wave 4,ongoing, probably zig zag,sideways,in a range ...that ,so far, would suggest 1070 top and 1000 bottom.
It ought to stretch out for at least a whole month or even two....followed by the wave 5 UP.
This kind of movement would be a 'normal' 5 wave action.

But Watch Out for the market movement playing out in the next few days....as it's been going up...it 'should' peak now in the 1070 area,and reverse ,folowing the zig zag pattern... with at least a completion of an 'a-b-c' correction....but maybe stretch out to an 'a-b-c-d-e' completion.

IF the market does not reverse soon for the short trip back to the bottom of the range,but rather, continues to blast upward,breaking thru the 1070 top line, this fast ....I would consider this to be a grave warning of a 'bubble' inflating in parabolic manner,at a time when it shouldnt...and when it gets exhausted at whatever bubble top it reaches....in the span of the coming week,if it only takes a week...I would be very fearful of an impending collapse triggering from this high point.

It would not be a good thing for the markets to soar upward right now .this is a time for a 'wave 4' correction.
A soaring upward market would feel to me like a set up for a big crash .
It will take an engineering feat of powerful manipulation for the government to stick save a hold at 1000 if the market bubble crashes down from 1100 or higher in the coming days.
a small correction subwave now,back down to the 1025 area would be a 'healthy' movement for a wave 4 .

T said...

Hey Allan, can you post your recommendations for 'shorting' vehicles to play. or where I can find it on your blog site,or other reference sources.
I know of the basics,the inverse etf's...are they the best ways to short the market? are there some that you like better than others?
thanks ,T