Sharp ride down today, but by the end of the day the Buy line ticked up from a decline towards zero (happened at the very end of day). Also, the 30 minute V Stoch bottomed around mid morning and then started a bullish divergence against prices for the rest of the day. 5 minute V Stoch also showed bullish divergences. If anything the market is due a bounce after a strong move down like today's, plus we've had a pattern for a few months of "ramp up Monday". Went long ES about 15 minutes before the close but hedged the position with ES June 1125 Puts. I really dislike hedging with options, but the situation in Europe is a real wild card and all the technical analysis in the world may be useless in the face of major events that could transpire over the weekend. It's entirely possible to see a major gap down on the open Sunday PM that opens below any stop loss that might be in place, so options are a choice that gives the downside protection normally provided by a stop loss and avoids the risk of a gap opening below a stop loss.
On the Ellliott count it looks like door #2 at the moment, i.e. 5 waves up complete at Thursday's highs to end a wave 1, with today's selling being part or all of a wave 2 correction. Pretty bearish statistics for today's action, on the NYSE decliners over advancers by 7:1 and down volume over up volume by almost 23:1, so that combined with international news makes this interpretation kind of dubious. We'll know the answer eventually of course, meanwhile it sure is interesting.
Al, I have been thinking about that 'X' wave scenario that you brought out earlier this week.
ReplyDeleteYou know how sometimes we have to look at another chart to help interpret our current chart. For that purpose, I use the Toronto 300 Composite Index. Why, because it represents more companies than the Dow 30 and somewhat closer to S&P 500. Most importantly, it is comprised of Natural resource compannies that closely track the demand in a world economy. To make a long story short, the top of TSX in 2008 was 15,154. Clearly 3754 points above the year 2000 high of 11400. Way too high for an 'X' wave formation on the TSX. The TSX has shown much more strength than it's US counterpart. The foreward advance could be a leading indicator to the U.S. markets considering that the next advance may be a commodities driven economy. Here is a chart - enter ALL Data in the Time Frame to see back 10+ years.
http://cxa.marketwatch.com/TSX/en/Market/intchart.aspx?symb=CA%3aISPTX
Just an opinion, these Elliott Waves are not obvious.
out of my 6000 TZA @ 6.48 : paid 5.88 last week. +.60
ReplyDeleteTony been buried with apple biz stuff today, glad you booked a profit on TZA, looks like up from here for a while - Buy line on Buy/Sell Vindicator ticked down this AM and then back up this PM which is 2nd buy signal in as many days
ReplyDeleteTony been buried with apple biz stuff today, glad you booked a profit on TZA, looks like up from here for a while - Buy line on Buy/Sell Vindicator ticked down this AM and then back up this PM which is 2nd buy signal in as many days
ReplyDelete