People get all wrapped up in the pyrotechnics of TA, so to simplify things a touch, we have the McClellan Oscillator and Summation Indexes which will tell us when the downtrend that has just recently started, will in fact end. To get to the point quickly, so as to be as clear as possible, the downtrend doesn't EVER end until the readings on these two Indexes actually bottom in severely negative territory and then actually tick up. From the looks of the current graph, that could take awhile. A nice stroll over the mountains, a weekend jaunt to Staadt or Banf would be in order, to pass the time and keep the powder dry for closing shorts that are now underway and will need time to resolve on their own. The biggest mistake that can be made in trading now, is to close these short positions too early and then not be able to scramble back into them later on. Patience, patience, and more patience. It is the meat of investing. [more]
In an earlier post I wrote reporting Prechter's move to 200% Short, also including a very vain attempt at 'guessing the alibi'. This is one of my favorite market pastimes, so naturally I wanted to share the experience with my friends here at CAPS. I am pleased to report that we were all wrong in our guesses at the Alibi, but all exactly correct on our predicted outcomes. It turns out the Alibi is ..... (drum roll, and hushed wisper, as if the moderator on 'Password') ..... Dubai. [more]
Today, around noontime, Robert Prechter announced he has moved to a 200% position short. Here's the link to the article, it's pretty self explanatory. [more]
The current Divergence in the NYSE Composite Index and the McClellan Summation Index and the McClellan Oscillator have now hit "Legendary" status in my book, and I am currently looking for the kind of 'reflexivity reaction' in the NYSE which George Soros commonly sites as one of his favorite trading setups and situations. The basic hypothesis of this theory is that markets wander off in directions which then require steep and swift movements in price, which then resolve the dilemma. It is a very delicate way of saying in numbers how far off track markets are wondering. [more]
Trade executions at CAPS are clearly vintage 1975. I have had three trades pending for the last hour and a half and none of them have traded...at least according to CAPS. Two of the three trades are closes on short positions, DSX and PGPDR.PK. The other trade is a new short on GMCR, and even though the stock has traded 6.5 million shares, CAPS can't seem to get the handle on the execution for the past hour. I haven't traded like this since...well, at least 1975. [more]
Macy's is down 8 1/4 percent today to 17.85, or thereabouts, on heavy profit taking. I checked all of the usual suspects for news and commentary, but apparently the decline has caught both Corporate and the Financial Press by surprise, and they simply haven't had time to invent the obligatory market alibi in time to ward off additional selling. There is a rather tight horizontal neckline here at 17.85, but considering this stock was at 5-6 in March, that's a very hefty rally that's occurred without a correction. Furthermore, on the wavecount, this would be the 3rd wave down going back to the most recent high at $20.72. [more]
It is already 10 AM and I am still looking at yesterday's scores, prices and updates at CAPS. This reminds me of the old days of trading when you had to wait up to an hour to receive your trade confirmations. I hadn't realized it was still 1975 at CAPS. Is anyone else having this update problem, or is it just me? CAPS is rewarding the best trading systems from 1975.
With President Obama calling for an additional 34,000 troops in Afghanistan, Goldman Sach's CEO Lloyd Blankfein has decided to answer The President's call and redeploy his army of employees to the battlefields of Afghanistan. "We don't need them anyway, all they do is come in early to turn on the HFT Machines and drink coffee all day long." In a widely published article in which Blankfein claims that Goldman Sach's is doing 'God's work', the 'renegadeie' CEO has decided that it is time for Goldman Sachs to instead spend it's Bonus Money on new tank tops and speedos for the troops they will be sending from amongst their own ranks. Rumor has it that Goldie Hawn (Private Benjamin) will be in charge of all of the arrangements, including the selection of fashion designers for the Troop's ensemble (Versace is rumoured to have the inside line, but Victoria's Secret is campaigning on the BUY American pitch and may have a chance as well). In addition to the battle fatigues, the Goldman Sach's Battalion will be armed with pez dispensers, that while appearing to be delicious candies, are instead a deadly mix of week old brie cheese covered in chocolate, a perfect recipe to defeat the battle hardened Talibani Soldier, who at this point will eat practically anything. [more]