I expected the 1030 level to hold but instead the market has dropped substantially lower. So I sold my 1 unit long at 1023. Right now it looks like the market will break yesterday's low, dropping into the 980-90 zone before it can try to rally once more.
20 comments:
Carl,
I have a feeling the FED will do an emergency rate cut like Australia did, maybe not 1pt, but increments of .50pts could be in the cards! I cannot see them letting these markets free fall like this, without them doing anything!
ex
Carl,
If this is Wave 5 of 5, we will go much lower than 980.
Ex, You bought yesterday. Are you still long?
Looks to me like the EW structure of this wave is almost done. We may have a 5th wave failure, or it may go just beyond yesterday's low.
Greg
This wouldn't help...
Carl, didn't you used to be a swing trader ?
Because, if you really want day trade, you should forget you bias...
On the other hand, this is a very bad market...meaning that long and short are getting hurt the same way...some are lucky, most not...this is panic, i agree...but there are reasons to really panic...
take a break and re-analyse things form the begining
Good luck
Balsamo
PS : things are really bad in Europe...and there are loads of shoes waiting to be dropped...
The Fed is doing a LOT. Paying interest on deposits in their accts, going directly into commercial paper market. The problem is that the Quant selling says, "F*** You" to the Fed at every turn. Their algorithms don't (yet?) include these adjustments.
Effective Fed Funds rate has been consistently below 1%.
Of interest: NOBODY is saying, "Don't fight the Fed." Historically, it pays to fight the Fed for a while...but then it DOESN'T...in spades. The Fed will get what it wants. It just takes a while.
Of interest: VIX has been above 50 twice before: Oct '87, Jul. '02. SPX was 24% higher in both cases 1 year after initial 50+ reading. And 45-46% higher in both cases 2.5 years after inital 50+ reading.
Carl
As a day trade I agree with you, you were just early.
Hasn't the Fed done enough? The Fed has been complicit in lying about the fundamental strength of the economy for the past year. This problem is in its infancy..the Fed better wake up and realize exactly what stage of this crisis we are in at the moment. The Fed is running the risk of becoming totally impotent and then all hope will be lost and everyone will get the capitulation and the bottom that they expect.
Greg,
i am still long on all 3 trades here are my entries again... i am not a day trader like Carl, i am more of a swing trader and will double down from time to time, but do your own DD... Good Luck
SSO=39
DDM=43
QLD=40
I agree with Carl that we are ready for a Bull market and I am a big Fib believer... All 3 indices have retraced 62% of the up move... So the question that comes to mind is, are we better 6yrs ago, or worse? If we are worse than DOW should go down to 5K... Is that possible, sure, but will the FED let that happen, prolly not! JMHO
ex
Im not trying to time a bottom, because that is unheard of, but i want to position myself for the next Bull market... Dont forget the market usually discounts 6-9mths out... so when the market starts to rally the will be looking ahead to the 2nd qtr of 2009... i think with all that is going on, the economy should start its recovery by then, but then again, im not an economist!
ex
Eurozone has a way to go
Gotta go with ex on this, here comes a rate cut, a moderate bounce and everyone sells into the rally and then the next leg down. Maybe that's capitulation, maybe not. I know that crashes are low probability events but it looks like we could be experiencing a once in a generation event. I actually think this is going to turn into a very long rounded bottom before we come out on the other side. Wish I didn't see it that way because I think outside of traders who may be nimble enough to work around the markets, the average 401k holder, the middle class is going to see a long rough road.
LJW
I expect the FED to cut rates tomorrow that is my prediction... They cannot wait around and let the markets bleed!
They have to act now and cut 1pt rate so the market shoots up 1000pts!
JMHO
ex
Carl your commentator mostly are bullish and agreeing with you, even the ones that insult you often is bullish mentioning mentioning aussie rate cut etc. This cannot be good for bull is it?
"Effective Fed Funds rate has been consistently below 1%."
No, the effective Fed Funds rate dipped below one percent for one day in all of this. It was 1.96 percent on Monday, and will be well ABOVE two percent today.
"VIX has been above 50 twice before: Oct '87, Jul. '02."
No, again. In July of 2002, the VIX peaked at 48.46 in July 24th. Bloomberg's data only goes back the the beginning of 1990, so I don't know about 1987.
in 1987 vix which is now vxo hit 175 ( no typo there ) the 10 day moving avergage on the daily trin is still Not giving an oversold reading on this market .
next cycle low is oct 14 17th and if that fails to produce an oversold reading then we are going to the 2002 lows or lower into dec 5 2008 . carl you should go back
and re read some of your own work
ill give you some credit for the work you did , yet once stopped posting lindsays work your own
work began to fail . your mistake was in not trusting your own work and then fighting the trend all the way down into today . admitting your wrong in the big picture takes guts , i realise you have menntioned it from time to time that you didnt see it coming
but truth is your work did see it coming . you failed to trust your own work and adopt the stradegy that your own work told you .
we all do this from time to time how ever i find it a bit ironic that you continue to fight it
we have several bearish cycles right now in effect .
oct 14th 17th a low nov 12 a high
then nov 28 to dec 5 another low
then a larger bullish cycle into june 2009 .there is still more damage available if these consecutive bearish cycles coontinue , the nov 12 to nov 28
is very strong as is the one right now into oct 14th 17th . the best
trade is just holding light shorts and letting everything run its course into dec 5 2008
welcome yom kippur with a thud is my take . this market has broken
badly to the downside and there is nothing giving a buy side bias at this point untill we get an oversold reading on the 10 day trin .
joe
Nice blog. SP500 should trade 1250 before 750.
www.marketkarma.blogspot.com
kindest
rgds,
MK
Hi Carl,
I reinstated my short yesterday at 1054.00, but the market hit a low of 965.00 overnight. I covered my short position and went long at 985.00.
I still have no buy signal yet, but my model is now telling me we have reached another area of meaningful support, therefore we should see a rally of sorts here.
Thanks.
Kindest regards,
PM
My dear PM:
The time stamp on your post says 7:10 am EDT.
At that time the e-minis were trading at 1028.
They last traded at 985 at 6:15 am. I am afraid I can't give you credit for a 985 fill.
Any trade reported on this blog has to be reported within a few minutes of the fill or has to be announced in advance as a limit order.
Carl,
My hats off to you for keeping track of peoples realtime trades and when they post and when they filled...
I know I have bashed you in the past with insults, but I must say you run a good clean blog!
I like the way your run your blog and keep it as close to real time as possible!
Congrats!
ex
Hi Carl,
Very good, I understand and that's certainly not a problem, I do take care of other things before running to your blog to post, as I did again just now. Regardless, I did also reverse back to the short side at 1020.00 but don't need your "credit" on my trades, I merely wanted to let you know what I'm trading." I will still continue posting to you, with your permission. Considering all the previous timely posts to your blog, I don't have a problem with being late today due to other distractions.
Thanks.
Kindest regards,
PM
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