binve (< 20)

37 Comments – Post Your Own

#1) On July 30, 2009 at 7:38 PM, binve (< 20) wrote:

Technicals

Medium and Short Term Count for the SPX:

- July 28 -
From Thursday to Today, I think I called the top 3 times. LOL! But as you can see from the price action, it basically went nowhere. I think it reached the peak it needed to on Thursday, and the last 4 trading days just extended the action sideways to make it the proper duration for A (this was in retrospect a very fast run up for a minor wave, so a little sideways action seems necessary. Hindsight is 20/20 I guess. :) But a good lesson for future runs). So the 5th wave did end up morphing into an ending diagonal. I think columbia was the first to identify this final diagonal. Nice job col!

As I watch SPX, INDU, COMPQ, and RUT there are a lot of compelling aspects to this 5th wave diagonal. The C wave (most confusing) was the one that become very complex and extended. This is analytically pleasing as the C waves in diagonals / triangles are typically the most complex. Also there was a E wave overshoot on the NASDAQ, which made a higher high. As the Nasdaq / tech has been leading this rally of late, it makes sense it would make one last rally to finish of minor A, making a higher high and not a failed / stunted diagonal.

Also you will see in the charts below (on the SPY chart in particualar) I am drawing wedge-ish trendlines around P2. This was an idea that I borrowed heavily from Daneric. His website is at: http://danericselliottwaves.blogspot.com/. Please check out his site. Phenomenal work! Good logic and counts!

- July 30 -
Well, make this the 4th time. Jeez :) So what was a top, instead became Wave 4 consolidation. Very much like what happened on a larger scale in late May / early June. In fact a similar thing happened - topping into consolidation. Breakout, churning for awhile, and then one last small breakout and then a definitive breakdown. That was almost a mirror for this rally. Then last week was topping that turned into consolidation, then a breakout, then churning. Actually, we did not get the last small breakout. Which is why I have the alternate counts below. Something still smells a bit fishy with the count. 985 was resistance, not it is support. We need to break down definitively through that level for the top to be in. There is a risk tomorrow morning that we bounce off 985 and make a run to 1000 (psychological resistance) or 1007 (Nov 2008 resistance) before A is done. Just something to be aware of. Thanks to cabot and geno whose counts have been among the cleanest for this rally!

First is the unencumbered count, so you can see it cleanly



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Next are some longer term trendline and trading charts. I use Elliot Wave, Fib Retrace and Fib Fans, Support / Resistance, Trendlines and Channels, and Indicators, Volume, etc. Lots different views on the data to try to get a picture of what is going on. Some of this work and charts I have had for a long time, but some is also recent. We have regular chart brainstorming sessions on the CIL, and this helps to make better charts for all involved! Including GV, AC, Col, Russ, Cabot, geno, dan, IIcx, crystlz, Flame, Sal, Port, etc. (sorry for missing anybody!). You are welcome to stop by and join in or just listen!



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Here are the shorter term and micro counts. Move looks complete for Wave A (... how many times have I said that ... :) ). But we are seeing bearish divergences on the indicators to help signal an end of the move. Even with the move today, bearish divergences are intact and getting more, well, bearish :)



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Sectors and US Dollar:

July 23: The dollar is the key item to watch here. The weak dollar has fueled this equity rally. But as soon as the dollar rallies for a little while (DISCLAIMER: I am *NOT* a Dollar Bull, and think it is doomed long term. I am talking about short term technicals here), this overdone leg of the rally will stop. The dollar bounced of weak support 3 times this past week, then bounced hard of stronger support. It recaptured the next support line back up. On 30 min terms, the dollar looks to be putting in a pretty convincing short term bottom.

July 28: The USDX bounced of 78.40 (78.36) twice this week and bounced back up both times. There were 4 attempts to break below 78.60, where it could no stay there. UUP has a positive MACD cross on a 30 minute chart with plenty of bullish divergence, and 3 day MA has turned up. I think the dollar has put in it short term bottom and will be trading higher from here for the next several days / couple weeks.

July 30: Rally continues. There was some weakness overnight (fueling the last rally today) and it is still be between two support level and pulling away from the lower one.



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The sectors have looked strong all through the rally, but the last couple of days have started to show weakness.



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Please feel free to comment, disagree, discuss. And even if you don’t agree with my conclusions, please rec if you appreciate the effort or the explanation of my thoughts, even if you use them draw different conclusions than mine.

The binv standard disclaimer: This in no way constitutes investing advice. All of these opinions are my own and I am simply sharing them. I am not trying to convince anybody to do anything with their money. I am simply offering up ideas for the sake of discussion. As always, everybody is expected to do their own due diligence and to ulimately be comfortable with their own investing decisions.

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#2) On July 30, 2009 at 8:12 PM, nuf2bdangrus (< 20) wrote:

The public is dying to get back in...now that the excitment is everywhere.  That's sign one the end is near.  Today's reversal was another sign.  Yes, I started shorting at 950, so I'm in the red on a number of shorts, so I'm talking my book.  After hours,  cash for clunkers killed.  BTW< this market is overbought.  DOesn't mean it can't remain such.  But the uber bulls are gushing everywhere because everything always goes up.  that leads to carelesness.  There are red flags everywhere, the market chooses to ignore them.  They won't go away.  The time will come when the smart $ leaves the table, it may have done such today.  The dumb $ still plows in.  The end is near.  There is WAY too much exhuberance.  BAd news?  buy buy buy.

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#3) On July 30, 2009 at 8:13 PM, kaskoosek (97.72) wrote:

Binve 

 

Thanks always for all your work, but I have some thing to say.

 

I do not trust TA anymore. It is a failure.

 

One of the best TA guys GV, has failed miserably in calling the top at 880. I take everything with a huge grain of salt. 

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#4) On July 30, 2009 at 8:42 PM, StopLaughing (< 20) wrote:

When we get to 1150 we will simply be as low as a regular recession. That is about where Lehman's failure started the liquidity crisis.

Everything below that is panic caused by the liquidity crisis. That is a lot of damage but 1150 could be what might have been with out the liquidity crisis.

Tomorrow will stall or kick the market for a while. A good GDP number will rock it. Since Gov spending increases GDP (accounting trick) the number may be good.

 

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#5) On July 30, 2009 at 8:52 PM, dragonLZ (99.34) wrote:

OK, I'm raising my hand (and I stopped reading your post after first 3 sentences).

The market just started going up (I mean when you look at it as just a beginning of a new bull market, which you should).

p.s. Did I mention: A huge new bull market?

p.s.2 There will be a slight correction soon, buy nothing major. It will just be another great opportunity to load up on good stocks.

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#6) On July 30, 2009 at 9:02 PM, awallejr (80.13) wrote:

Alot of hard effort put in there Binve, rec for that, tho I still can't imagine your 5 year initial prediction of S&P 400 ultimate bottom happening.  But then again  who the heck really knows.

Taking bets on tomorrow's GDP.  I predict -1.8.

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#7) On July 30, 2009 at 9:26 PM, starbucks4ever (99.56) wrote:

2.2% 

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#8) On July 30, 2009 at 10:00 PM, FreundInvesting (30.05) wrote:

-2.1%

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#9) On July 30, 2009 at 10:06 PM, isusan (< 20) wrote:

Hand not raised, but :)  ...your posts are among the best I've read here. Thanks for all the time & effort you put in them, Binve!

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#10) On July 30, 2009 at 10:10 PM, sohumtrader (49.84) wrote:

-5%

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#11) On July 30, 2009 at 11:11 PM, binve (< 20) wrote:

nuf2bdangrus, Thanks man. Yeah, FWIW, I think we will get a pullback to at least 950 in the next 3-4 weeks. I was all cash a couple of weeks ago (after a failed shorting attempt) and went 10% short at 975. I add to it once we break back down through 985 to confirm that the A wave is done and we are in a B wave correction.

kaskoosek, Thanks man, I appreciate that. And I can certainly understand your point of view. This correction has thrown me for a loop as it had many others. I thought it was going to be a more traditional zigzag that played in the Head and Shoulders setup. I had projection that even called the H&S before it happened. But the setup never materialized and instead we are in a triple zigzag (which we were all along, but was not obvious to me. However, it was obvious and called correctly by others months ago). But taking my analysis, or anybody's analysis with a huge grain of salt is warranted. Heck, I even take my own analysis with a huge grain of salt (I make mistakes myself and I acknowledge that). :)

StopLaughing , Fair enought man. FWIW I think 1150 is not an unreasonable target (I put odds on P2 ending around 1050-1100 myself). Past that, things will get interesting.

dragonLZ, LOL! No worries, I don't hold it against you. :) I agree with you that there will be a small correction here (not a crash) for the next few weeks. I also agree with you that we will head higher than we are now over the next couple of months (my target is 1050-1100 into Sept/Oct). But I disagree on the call that this is part of a huge bull market move. Just my take. But I have been wrong before, and I certainly will be wrong again in the future.

awallejr, Hey man! Thanks, I appreciate that. I know we don't agree on the long term, but I also acknowledge that my projection is simply a guess :)

I think -1.8 is a good guess. Mine would be -2.7%. I have a good feeling :)

zloj , +2.2% or -2.2% ?

FreundInvesting, Not bad :)

isusan, Thanks susan!! I really appreciate that :)

sohumtrader, That's the spirit!! :).

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#12) On July 30, 2009 at 11:41 PM, mistermiranga (87.57) wrote:

binv - you will be happy to hear that I closed a huge chunk of my shorts today and might just shut the rest down tomorrow. why should you be happy? because my capitulating will signify the top that you are calling for...

I acknowledge my defeat but will try to look forward. 

Fundamentally I remain bearish but will try to remain more neutral in the interest of not losing my other arm.  

I still think there is time to get on the long side of some short squeezes...suggestions anyone? ; )

thanks for taking time to post... 

 

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#13) On July 30, 2009 at 11:54 PM, portefeuille (99.78) wrote:

Fundamentally I remain bearish but will try to remain more neutral in the interest of not losing my other arm.  

 

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#14) On July 31, 2009 at 12:18 AM, dragonLZ (99.34) wrote:

Today's late afternoon pullback did scare me a little bit, but after a very long discussion with myself (p.s. myself is very bullish), here is what I concluded:

Based on my research, the companies that jump a lot on the day they announce their earnings, usually fell a day (or two) before. Why? Because people think news is gonna be bad, and then, what happens on the day the earnings come out...? Surprise and big jump.

Now, GDP is just like an earnings announcement, not for a company, but for the whole country.

So, I came to a conclusion that todays pullback was just a result of people taking profits because they are expecting bad news tomorrow.

What happens next...? You got it. Surprise and big jump.

p.s.

binve, See, you don't need a bunch of charts to make your point... :)  

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#15) On July 31, 2009 at 12:41 AM, awallejr (80.13) wrote:

I think -1.8 is a good guess. Mine would be -2.7%. I have a good feeling :)

LOL, ah the opposite ends of a magnet heheh.

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#16) On July 31, 2009 at 1:03 AM, mistermiranga (87.57) wrote:

porte- "no more tuna on toast"

 

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#17) On July 31, 2009 at 7:14 AM, binve (< 20) wrote:

mistermiranga, LOL! Sorry man :(, but thanks for taking one for the team! Yeah, during the late May breakout after those weeks of consolidation, I covered near the top. But after the trend change, I immediately got back in (short). I am thinking the same thing here. I am 90% cash (small 10% short position) and I will add to it when we break back though 985 definitively (old resistance / new support). I won't be aggressive on this short, I think a move to 950 is likely, past that I think is a gamble. In about 2-3 weeks after this correction has run most of its course, I will begin scaling into longs in prep for Wave C up. Rough plan at this point. Thanks man!

portefeuille, LOL! ... uhh, thanks for the graphic interpretation of the metaphor used in the previous comment.

AnAmateur Language bro! ... but I can empathise with your sentiment :)

dragonLZ, In a twisted way, I see your logic. I was joking with my friends yesterday that Obamas comments yesterday reversed the poplular Wall St. expression so that it now goes like "sell the rumor, buy the news" for the GDP report. That is why I show my alternate count. The sell off was powerful enough that we *should* be in a new wave down. However, based on the "fishy-ness" of it, and the fact that we closed just above major support, I would not be surprised by a bounce off 985 and then a run up to 1000. I think we will close down today (just my take) as I think the rally is done in the short term (Wave A done, or will be done this morning).

LOL! And yes, I don't need the charts to say that :) But you have to admit, they are pretty :)

awallejr, LOL! I guess we always seem to be :), but at least we can have a polite, friendly even, discussion about it! Thanks man :)

mistermiranga, One of my most favorite Seinfeld episodes!! I admit, I have been feeling a bit like George lately :).

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#18) On July 31, 2009 at 10:35 AM, madcowmonkey (< 20) wrote:

comment 13, I totally want to get spanked in a sword fight by a blonde that just killed 500 of my homies. Just goes to show how bad ninjas are wearing suits.

binve - yes, I don't need the charts to say that :) But you have to admit, they are pretty :)

well said friend.

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#19) On August 01, 2009 at 12:05 PM, binve (< 20) wrote:

madcowmonkey, Thanks man :)

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#20) On August 01, 2009 at 3:29 PM, CosmosShiva (< 20) wrote:

Binve,

   Great blog,  I count those waves slightly different but who cares?  I'm not investing buy and hold.  My time frame for long term is 30 days at most.  I read the indicators as up for this next week and from there I will evaluate as the market plays out.  For the short term (week) I am a bull, for anything longer I am a "wait and see". 

   The benefit that I get from the TA is not from knowing the top or the bottom but from knowing the trend and spotting a trend reversal.  I don't care if I buy at the bottom and sell at the top, My only concern is, are my trades profitable.  Basically, my point of view is  to trade the market that I have today because if I wait until I think we have made a top or a bottom I will miss out on all the profit to be made on the way up or down. 

     Your blogs are alway appreciated,

     Maria      

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#21) On August 01, 2009 at 5:15 PM, binve (< 20) wrote:

CosmosShiva, Hey Maria! Thanks :) I really do appreciate that.

I can very much understand your viewpoint. I admit that I have a somewhat (seemingly) conflicted approach. I am a big picture investor. I always have been. I have a macroeconomic bent, I am very intersted in monteary policy, movement of major asset classes, etc. But I am also a trader. So I look at the monthly charts as well as the 1 minute charts. Sometimes I am good at keeping all the perspectives divorced inside my head, sometimes I am not so good :)

But I very much appreciate this perspective from you.

I don't care if I buy at the bottom and sell at the top, My only concern is, are my trades profitable.  Basically, my point of view is  to trade the market that I have today because if I wait until I think we have made a top or a bottom I will miss out on all the profit to be made on the way up or down. 

Very healthy attitude for a trader's mindset. I think that way too for my trades. However I do fully admit that I could do a better job :)

Thanks!!..

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#22) On August 01, 2009 at 7:22 PM, binve (< 20) wrote:

**UPDATE**

After a rather frustraing day on Friday (just like Thursday), the price action gave no clue to the wave count. Top of A might not be done yet, or we might be in the start of B. We are in limbo, pure and simple. 

Frustrating. 

And becuase it is so frustrating, I tend to think we are still correcting (i.e. in 4 of 5 of A). I tend to side with the genometer on this one :)

Daneric has a very good count for the A is done, start of B count here. Below I am showing the 4 of 5 of A count. FWIW, I think we are still correcting based on the Wave 3 of 5 of A retrace level, the alternation within Wave 5, the 2-4 trendline touch, and the pattern replication (fractal) between all of Wave A and Wave 5 of A.

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#23) On August 01, 2009 at 7:23 PM, binve (< 20) wrote:

Sorry, that link to Daneric's count is here

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#24) On August 03, 2009 at 10:46 AM, binve (< 20) wrote:

**UPDATE and TRADE ALERT**

Going short another 10% (now 80% cash, 20% short). A finally looks done. I think we have an ending diagonal. Here is my preferred count.

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#25) On August 03, 2009 at 11:00 AM, IIcx (< 20) wrote:

NO, please don't stop - your exercise is far more insightful then reading over a bunch of unsubstantiated opinions.

Suggestion though, you might want to prune the post with some more links. It's getting pretty wordy for this average Joe.

Are we still in a channel 3rd wave up or do you feel the sideways activity last month was wave 4 followed by this wave 5 spike?

Thanks as always, IIcx 

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#26) On August 03, 2009 at 11:02 AM, sohumtrader (49.84) wrote:

binve, I am at the point where I am about to cover my shorts completely, may be that is the sign that this up move is over. I won't cover it would still go higher, if i would market would come down.

 

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#27) On August 03, 2009 at 11:35 AM, Tacomatight (62.42) wrote:

Hey just wanted to say thanks for this awesome piece of work. I don't want to call it a post because it is so much more. I also appreciate your humility in some of your calls. I disagree with your technical based analysis but who cares what I think. Just really impressed with your work and wanted to say thanks a lot!

Alot of the d-bags on this site who sit in the public library and abuse their library cards could learn a great deal from you if they weren't so preoccupied with the latest conspiracy theory about world melt-down.

Thanks again man.

 

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#28) On August 03, 2009 at 11:53 AM, IIcx (< 20) wrote:

We could still be in Wave 1?

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#29) On August 03, 2009 at 4:49 PM, binve (< 20) wrote:

... Take 6? LOL!

Swing and a miss, another curveball. I do think we have an ending diagonal, but the one I show above in comment 24 is a fakeout. It is only a diagonal on SPX and INDU, not RUT, COMPQ, and NDX. However, the rest of the day did turn out to be a diagonal for all 5 indices. Here is my count of the diagonal for NDX and SPX

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Now a few interesting observations. SPX makes a new high (past 1000, and the previous high from Thursday). However NDX (the "leader") does *not*. It did not beat the high from Thursday. And so I don't really buy it. I think NDX and COMPQ *want* to make news highs to finish off Wave A. And all of these undershoot are unsatisfying and don't make sense. Unless we get a gap up for an overshoot tomorrow (my $0.02). .

So let me continue with the interesting observations:

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Notice the replication in the Wave 5s on each level down. Here is what I see:

Look at the shape of the rally since July 9
For All Wave A : Small 1-2, large extended 3, then a long drawn out 4, then a sharp 5 up.
For Orange 5: Same shape with a nearly identical count type
For Green 5 in Orange 5: Same shape (even though count is a diagonal)
For the Black E (equivalent to 5): Would call for a spike up as an end to complete the pattern.

Just saying the pattern keeps repeating on the 5th wave one level down. And an gap-open / overhoot tomorrow to 1007 would complete the pattern very nicely..

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#30) On August 03, 2009 at 5:13 PM, binve (< 20) wrote:

IIcx, Thanks man :) ... but ....

your exercise is far more insightful then reading over a bunch of unsubstantiated opinions.

LOL!, all my stuff is nothing but unsubstantiated opinions :) But I appreciate it anyways :)

As far as all of the "stuff" in the post. I have been pruning it back periodically, but I like keeping all the links in and some of the background because it is very relevant, and especially to someone who has never read my work before

Regarding your chart. I agree it is a possible count. But I don't like as my preferred for the main reason that 3 is the "slowest" impulse wave in the move. It terms of points per day, the absence of a really long / strong impulsive move, basically everything that we look for in a wave 3 is not there. That is a huge flag to me it is not a Wave 3. 

I actually (you might recall) had a preferred count when I had a 5 wave count from March 9 (666) to June 11 (956). There were always problems with it, even though it technically works. In retropspect, the move is much better and cleanly explained with a double zigzag. Just my take from staring at these charts :)

Thanks IIcx, I really to appreciate the support and all the ideas! Keep em coming! The more counts we share, the more we all iterate on the "right" count :)

sohumtrader, LOL! I know the feeling man. But I wouldn't be adding to my shorts here if I didn't believe the move is done or nearly done. I think the risk/reward favors shorts over longs at this moment. That will change in the next several weeks, but not here, just MO . Thanks :)

Tacomatight, Thanks, I really appreciate that!! Yeah, no worries on me being humble. This market has humbled me enough times already :)

Also no worries on disagreement with my TA. We all have different opinions! And the the bulls have been right more often than not than us bears lately :)

Yeah, I am not big into meltdown theories. I think we have a lot of pain to come in the market for several years, but that will be as America rebuilds and retools. It is painful, yes, but necessary. But at no point have I or will I lose faith in the work-ethic and "brass tacks" attitude of America. We have put off taking our medicine for a long time, but it will eventually make us better and stronger. Which I why I continue to be optimistic for the future on the very long term horizon. Just not the intermediate horizon.

Thanks for the comments!.

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#31) On August 03, 2009 at 5:48 PM, portefeuille (99.78) wrote:

yeeeaaahhhh, the NDX made binve's short list.

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#32) On August 03, 2009 at 5:51 PM, binve (< 20) wrote:

LOL! thanks to you port :)

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#33) On August 03, 2009 at 5:52 PM, portefeuille (99.78) wrote:

(I meant shortlist like in Booker prize shortlist, not a list of stuff to short ...)

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#34) On August 03, 2009 at 5:55 PM, binve (< 20) wrote:

LOL!!!! I knew what you were getting at, but the other interpretation is very funny too :)

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#35) On August 04, 2009 at 1:16 PM, binve (< 20) wrote:

*** UPDATE and TRADE ALERT ***

Going short another 10% here (70% cash, 30% short). See comment #29 above for my previous thoughts.

I am calling the top for Wave A.... for the 8th time ... LOL! This rally has put in every extension in the book. Even the ending diagonal had an ending diagonal!!!. But I think it is done.

SPX, RUT, COMPQ, INDU *and* NDX all made new highs today and overshot their ending diagonals. I am satisfied with this. Here are the counts:

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#36) On August 04, 2009 at 1:37 PM, portefeuille (99.78) wrote:

... or it just keeps going for a while ...

 

update of a chart I posted in comment #45 here.

 

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#37) On August 04, 2009 at 5:00 PM, dragonLZ (99.34) wrote:

Have these charts ever made anyone any money?

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