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There is a Reason You Don't Take Hot Air Balloons Up 3 Miles

Recs

35

August 11, 2009 – Comments (9)

Reposted from my other blog: http://marketthoughtsandanalysis.blogspot.com/2009/08/there-is-reason-you-dont-take-hot-air.html 

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It's not that they can't fly that high (they can. And *much* higher), it is because the passengers start freezing and getting hypoxia that far up (just ask the unfortunate Italian balloonists who discovered this in the early 1800s). And this rally would have gladly continued up on Wall Streets hot air, but some investors started passing out in the rarefied air of 1020 on the SPX.

.... continued in the Comments section ....

9 Comments – Post Your Own

#1) On August 11, 2009 at 5:33 PM, binve (< 20) wrote:




The market looks finally ready to take a breather before the next burst of hot air.

Here is my current micro count. It is basically Daneric's count from a few days ago. I think the triangle still works because the move down from 1020 as the E leg looks like an double zigzag so far. Notice the note about the Fed Meeting. I think the market is "expecting", uhh """"good news"""" (I had to quadruple quote that one) :)



Either way, the old Rock'em Sock'em Robots have successfully beat down several trend lines :)



Here is my Trading Chart / Near Term Projection for how Wave B *could* play out



The SPX is not only out of the channel now, but has now closed below several important 30 minute MAs that have served as support all through the rally from 869.



NDX still looks very anemic, closing below lots of channels with failed retests, and *not* making new highs after Aug 4.



Here is a count of XLF. I am just showing because Wave 4 (orange) looks ready to bottom tomorrow. Refer to my Fed comment above. I think Financials will get the biggest boost out of whatever announcement comes tomorrow.



Dollar is still rallying. I think equities will generally trade lower the next 3 weeks as the Dollar trades up.



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 August 11, 2009 at 6:28 PM, IIcx (< 20) wrote:

Great charts binve - Thanks!

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#3) On August 11, 2009 at 7:30 PM, IIcx (< 20) wrote:

081109_SPX

Larger Version

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#4) On August 11, 2009 at 9:37 PM, alexpaz (28.84) wrote:

Binve, I'm in the same bear camp or should I say prison...I am trading the down wave with EDC puts. dollar up + equities down = double whammy! EEM is trading in a tight downward channel. I will try to post my trading charts in the CIL tommorow. Thanks for your work buddy :)

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#5) On August 11, 2009 at 9:46 PM, goldminingXpert (29.34) wrote:

But goldman sachs has oxygen tanks, we'll be fine. Oh wait, they're throwing the poor retail investors overboard. Oh snap! Too bad. I'll sleep well knowing they'll get their bonuses. Who cares about the little guy anyway?

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#6) On August 12, 2009 at 12:06 AM, binve (< 20) wrote:

IIcx, Thanks! and thanks for the chart!

alexpaz, Thanks man! Look forward to the charts!

goldminingXpert, Hey GMX,

But goldman sachs has oxygen tanks, we'll be fine. Oh wait, they're throwing the poor retail investors overboard. Oh snap! Too bad. I'll sleep well knowing they'll get their bonuses. Who cares about the little guy anyway?

LOL! This was one of the best sarcastic / jaded paragraphs I have read in awhile (and yes, I mean that as a compliment). Couldn't agree more :).

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#7) On August 12, 2009 at 12:03 PM, mustbepatient (29.29) wrote:

I'm thinking the opposite at the moment - everything I see suggests traders positioning themselves for markets to go up after FOMC, so it probably goes down starting this afternoon and continue next week into options expiration.  I think the indices will make new highs in Sep/Oct but it won't seem like new highs for a lot of retail investors because breadth will be much weaker.

My stop on my shorts is simple - QQQQ is close to a new high and if it makes it, I'm out.

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#8) On August 17, 2009 at 11:46 AM, madcowmonkey (< 20) wrote:

Did the USD really kick this off:) No way! It was almost too easy to see this time around.

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#9) On August 19, 2009 at 7:45 PM, IIcx (< 20) wrote:

SPX_081909
Larger Version

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