Uptrend's Account Talk

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airlift said:
Uptrend,

Thanks for posting. I don't know what QE means, so I quoted and the paragraph below. Please help me understand QE? Thanks.

"Entered short today via September SSO 32 puts at 2.25. My reasoning is that the FED givith and the FED taketh. The BDI index rolled over this week. The Chinese are done buying commodities at least thats what the BDI says. 2nd I believe this rally in the dollar is for real and will last more than 1 or 2 sessions. Crude Oil traded sideways all week and there are cracks in the limestone foundation. Last we get the FED this week and I think the dollar rallies as the US will be the first to exit QE as may be hinted at the FED mtg. I think the correction started this afternoon target 870."
Click to expand...

I believe he means Quantitative Easing.

http://en.wikipedia.org/wiki/Quantitative_easing
 
Thanks CH! QE This is an excellent search and link (I re-read it now). But what is that? Is it a concerted effort among central bankers and Financial moguls to do something? What impact can we expect short or longer term? Was it Australia who yesterday announced that they already started or will start hiking rates?
 
I see the Fed has been printing money and pumping up the money supply last week by buying bonds to finance US debt for the portion (about 4 billion) that primary dealers could not sell at auction. This is called monetizing the debt, and as such is a form of QE. The Fed needs to stop this practice if they suspect deflation is slowing. Secondly, lets see if the Fed hints at a possible rate hike (it may be too early yet).

Karl Denneninger, the ticker guy, had a video blog about this monetizing practice a few days ago. Here is the link.

http://market-ticker.denninger.net/archives/2009/08/06.html
 
Well traders - I have read a lot this weekend, and viewed all kinds of technical analysis - and I still don't know whether to call this market a bull or a bear. It acts like a bull, but we still could be in a counter trend rally or B of a ABC bear market. Oh, I know there are those such as IYB of traders talk who have reversed and are calling the start of a new bull market. I am not so sure, but here is what my analysis suggests for the next month or so. See chart:

View attachment 6651

This is the hourly of the SPX You can see the market broke below the trendline (in red) last Wednesday in the second hour of trading. The market has since backtested the broken trendline twice. To get above the market must also break the 38.2% fibonacci. Now this rally since July 15 has had only two very small pullbacks of 13 and 16 points. Based on the principle of symmetry, this up move off the lows is unfolding as a ABC pattern. In the rise from 666 to 955 there were several pullbacks in the 50 point range, of the the A wave. The B wave was from 955 to 869. The C wave is unfolding now, but without a similar pullback. So, IMO the chances are high for a deeper pullback. From 1018 on last Friday, assuming a 50 point pullback targets the low at 969 that I have marked with green on the chart.

Now, based on a fibonacci relationship of the A wave off the lows 955-666 = 289, we see the following possibilities for an upside target for wave C underway: 38.2 = 869 + 110 = 979 (surpassed), 50.0 = 869 + 145 = 1014 (surpassed) and 61.8 = 869 +179 = 1048 (in play).

Now, if a 50 point pullback happens, then a rise from 969 to 1048 = 72 points or 72/969 = +7.4%

Thats all I see. I don't see a bull market yet. Just a completion of a counter trend rally unfolding in a ABC pattern. Even if a bull market has started, we would then be in a 1 2 3 4 5 pattern off the lows and in the 3 primary wave, and so when it is over, the market would retrace somewhere between about 8-15% before advancing in wave 5. So, whether bull or bear, you must expect a pullback soon. Happy trading.
 
1048 is very close to the 1042 I called a couple weeks ago, based on TD DeMark and ADX/ATR weekly calculations. No timeline for hitting the 1042, but we have to add 8 more up weeks each greater than 2 weeks prior closing prices before we get there-IF we do. hitting 1042 under that countdown would be the DeMark sell signal. I'm willing to wager small amounts to see if we actually get there.
 
The SPX broke the 200 EMA coming in a 998.11, and now can run and down and challenge the 992, 983 and 969 lows. The MACD is still above the 0 line by not by much (0.34). If it falls below, then more downside. I am looking for a reversal off 969 that may occur in the next several days. This meets the symmetry target I explained in an earlier post.
 
Good Morning to more bad news. The retail sales came in worse than expected today. Look at this:

Released on 8/13/2009 8:30:00 AM For July, 2009 PriorConsensusConsensus RangeActualRetail Sales - M/M change0.6 %0.8 %0.4 % to 1.6 %-0.1 %Retail Sales less autos - M/M change0.3 %0.1 %-0.6 % to 1.2 %-0.6 %

New initial jobless claims came in worse than expected:


Released on 8/13/2009 8:30:00 AM For wk8/8, 2009 PriorConsensusConsensus RangeActualNew Claims - Level550 K543 K535 K to 550 K558 K

http://www.bloomberg.com/markets/ecalendar/index.html


The market is putting in a lower high today. I stand by the Aug 21 or before turn date. IMO , not much good news to spark any more upside. We are toast. Line up some short positions.
 
Markets turning Red Watch spx 992. When it breaks, it is off to the races on the downside. Who knows - that might be today.
 
Should the market break spx 992.43 today, then downside is to the 969 area. Either low could be a short term reversal point. We shall see.
 
A drive by - Hi !

Always a pleasure to drop in.

Your ativar is great too... it's nice you can be level headed and still have a good sense of humor
 
Pretty typical today for options week to go against the trend.

SPX 979 support area held so far today. I am still looking for lower levels, before I get back in. I like Toms idea of retesting the breakout of the spx inverse head and shoulders coming in at around 948. If we are in a new bull market then this area will hold. A principal of markets is that they retest a large percentage of the time. If we are still in a bear market then we should blow by this area, as we head down now or later. I am thinking a possible scenario is that that the effect of the stimulus and housing bottoming will casue the markets to trade sideways with a weak upside after we correct to somewhere between spx 948 and 969. Then the markets take off and go back and retest the broken trendline to the upside, but because we moved in time, the price target will then be coming in the spx 1060 area. Then in 1-2 months when the stimulus wears off, we retest the lows.
 
A reason I think the sell-off might be limited is because gold is down today. That is understandable when the dollar is up, but with the large sell candle in the first hour, should have caused gold to move up past the asset allocation readjustment difference of a higher US dollar. So this tells me that there is either speculation of more USD gain or market upside. Otherwide gold should have make a big jump.
 
Sell is flashing all over the charts.

In the next day or 2, we might get a backtest of spx 992. Don't be fooled - that is resistance and should hold. Good place to take a short, like SDS.

I am now looking for the next battle at the spx 945-948 area in the next few days. This is the inverse H&S breakout area where the major trendline is located coming up from the March lows. If this holds the market will bounce up.

However, due to the awakening of the VIX today with a higher high and up against the top of the longterm (9 month) bullish falling wedge, it will probably break out. When the VIX breaks out, a jump to 40 will occur and the market will tank.
​
 
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