I can't stand the new format for blogspot. But I have no way of changing it. To view the charts larger, I am clicking on the view tab in internet explorer and clicking on zoom. Then making it 200% to read the chart notes. G-
They giveth and they taketh away!! If you don't like what the tape did today, wait until tomorrow, it will probably go your way. They are being fair to both sides, as long as you time your entries and exits accordingly. The greedy traders are the ones saying "get me your most expensive bottle of champagne" one day-and then "Asti Spumante is fine tonight".
Do I want to be in "the big one"? Absolutely I do!! But trying to figure out when the "big one" is going to hit is the hard part. What looked like outright bearishness today, could be an all out bulls attack tomorrow. But things are starting to line up for my D-Date zone and I do believe we will be in on the trade when we see the markets collapse and not try and bounce.
But until then, I am fine with taking the singles and doubles and sleeping at night. So far, the timing systems have kept us true and safe. That is one of the reasons I started layering out of our short positions today.
The short term timing system is sniffing for a short term low soon, as it is showing us an inverted buy signal. The inverted sell signal took a little while to kick in, but the almost 3% drop today on IWM was worth the wait-even if we had a little stress with 2 of the positions we entered. The other 2 gave us little stress and were huge option winners for us.
Our entries on IWM were: Friday 70.85-Monday 71.85/73 and 73.25. That has us averaged in around 72.35. Being we closed (2) 1/4 positions today with some nice profits, we now have some powder to average back in if they decide to bounce it some tomorrow. If they continue the drop, we will continue to scale out of the rest of the short positions and then wait for a bounce to do it all over again.
We have had consistent singles and doubles since the first week in August when I implemented the timing systems into our trades. I am going to be early on some trade entries and early on some exits, but the system has given us consistent returns. To me, that is what matters. But don't get me wrong, watching our long trade on IWM from 60.50 go straight up to my 73/74 target hurt and it hurt bad. But we have made some profits trading the short side, even if it has been swimming up stream.
When looking at what the short term timing systems are telling me, I am expecting a bounce that fails and then another lower low. We will be looking to lock in profits during that drop.
Look to scale out of the IWM puts and tza when IWM hits the following targets. 70.67 and 70.10. That should give us some real nice gains and 2we should get some buy signals as we approach those targets. I will most likely just wait for the bounce to start shorting again. I just think there is too much out there that can happen as we sleep and we wake up to the futures down a few hundred points. G-
We got the expected pull back from yesterday's divergences and sell signals on many of our timing charts. Is this the start of a larger pull back? It would make perfect sense if it was, but there are some wild cards out there that we have to be aware of.
First off, we have options expiration on Friday and if the spx closes at 1190, it would be the max pain-70 for IWM. Those levels are not that far below/above, so chances that we see some see-saw movement and end near these levels on Friday would make sense.
The street also seems hell bent on the awaited European bailout package that is set for this weekend. We could see a lot of volume and not a lot of price action as the bears looking to cover ahead of the announcement get washed out by the bulls looking to sell ahead of the announcement.
The timing systems are giving some mixed signals, as the shorter term system is looking for some type of bounce, but the longer term system is still pointing towards more work is needed on the downside.
I think the safest way to trade this market is looking short term for right now. Don't look for the home runs and accept that you will miss a move at some point. But missing a portion of a move is much better than swinging for a home run and finding yourself deep in the red on a trade that was an easy double or even a triple.
Mr. Market has been very fair to both sides, if you are not looking for a home run. It has been giving both sides singles-doubles and even triples on a daily basis. Sometimes even a triple for both sides in just 2 days, like Monday and Tuesday.
I am going to continue to trade the squiggles for now and I understand 100% that not everyone can be at their computer all day to trade these squiggles. I wish I had a better idea as to when the larger move down will take place, but this is a very psychotic market right now.
I still believe we are going to be at the least testing the lows from yesterday. If they break that support, then we should see 1170/1150 pretty quickly. G-
How much money could you have made since 9/22?
These are the e-mails that were sent to members dating back to 9/22. The chart shows what IWM did from the calls. We did NOT ride the trades out to the fullest, but you will get an idea for our feel for the market direction by looking at the e-mails and charts.
From: Marketspath [mailto:gary.dean@marketspath.com]
Sent: Thursday, September 22, 2011 2:00 PM
To: Marketspath
Subject: 15's timing system inverted
Hi Everyone,
If you took the short from the "not sure if that was it" e-mail, we have to be a little careful. I am not sure anyone will try and be a hero today and buy this market, but the 15 minute timing system is inverted and the 60 minute is showing some divergences.
The daily is still in a solid sell and they most likely won't try and rally this market until it starts to turn higher or show a divergence. But with the only way that will happen is if we get some type of rally or bounce.
With the 15 running inverted (it is on a buy as the markets are declining) and the 60 showing a big divergence, they may try to kick the bounce off in overnight trading. Another push to new lows will definitely show us 5 waves down and I would place a wave (1) there.
It actually lines up with what the timing systems are showing, being once we complete this 5th wave of (1) down, we should see a sharp wave 2 rally. I am thinking we could see iwm run as high as 67 and maybe even stretch for the 68/69 levels.
Now I am not saying to close all shorts and go long-I am just telling you what the warning signs that are being sent out from the timing systems. Do NOT be greedy down here on the short side. At the minimum, please place stops at your entry. After the wave 2 completes, we should have a wave 3 on deck, which should take the spx to the 1050-1020-980 area. G-
They are stretching this wave 3 out as far as they can right now and I am starting to see signs of fatigue as well as some major resistance areas that I believe bulls will lock in profits and bears will defend.
We can start building a short position with 1/2 a position if you see iwm get into the 69.20-69.50 zone. I am putting a zone instead of a entry target, as I have missed too many entries having an exact entry target. The pivot is 69.27 and 69.47. If we see them blast through those levels, the next pivot I will WATCH to add to the position would be 69.85. Above that, we would have to wait for 71.25.
Can they blast IWM straight to the 71 area from 63.50 in just 3 days without a breather? Yes they can, but it will just open the door for a much sharper move to the downside. If you are a conservative trader, you sit this trade out and wait for iwm to pull back to the 67.70ish area to start in on the long side.
So I am thinking this will be a very fast trade, maybe a day or so and then I will have no issues with looking long again. After the next push to new highs, I believe a mini swing trade on the short side will be in the cards followed by a mini swing trade on the long side. Can you say V-O-L-A-T-I-L-I-T-Y? We are about to see it again. G-
(we closed our short way too early on this trade-but didn't go long at 67.50)
Now we switch to the long side-They don't all work out!!
-----Original Message-----
From: Marketspath [mailto:gary.dean@marketspath.com]
Sent: Wednesday, September 28, 2011 4:04 PM
To: Premium Members
Subject: Things are lining up here
OK, we have an inverted buy signal on the 15's, the 60 are now deeply oversold and the new timing system is now in the buy zone. There is a pretty good chance that they may try to take IWM to the 64.70 area before they try and push us higher, but we are at a support level.
The daily is still on a buy (barely) and the stochastic are just starting to roll over. That is what has me thinking they may try for 64.70ish at some point.
But I am going to take 1/2 of the IWM October 67 calls right here and wait to see if we can get 64.70ish in the morning to fill the trade. G-
I want to give this a little room and not try and trade the squiggles, but I am not going to loose money on a winning trade. I am placing a stop at my entry for the long side trade 1/2 position. G-
I am going to buy 1/2 position IWM 63 October calls and or tna. The tick chart on the daily is showing a buy signal not seen since the launch of qe2. Things still are not lining up with this drop and we have a clear 5 wave move down on IWM from the daily charts-with bullish divergences and a wolfewave pattern pointing to the 72 area. There is also a channel that IWM is at the bottom of it and if going to head to the top, has a target in the 67 area. If we finished wave (1) down, that target actually makes sense from the 86 high.
There is a chance we are just doing a wave 4 of the wave 5 down, but we should get a bump up here and the timing systems are still telling me to look up, not down. I am using my regular size trade for this and will leave the 1/2 position of the smaller trade open for now. This is a little risky, but I believe less risky than the entry from Friday. G-
We didn't ride the netire move up-but look at thge IWM chart below-not a bad call!!
Hi Everyone, Notes are in the charts. Today seemed like a well orchestrated short squeeze. I guess there were just too many bears that were banking on the same exact wave count, which was the move off the lows being a wave 2 up. There was/.is not a single impulsive move up from the lows and that definitely seemed like the correct count and it has paid off trading the wave 2 up count.
Everything seemed like it was going as planned for the bears, but when the algos triggered the buy program that blasted all of the indexes through the 78% resistance pivot, where typically wave 2 reverse and has proven the reversal area for the last few rally attempts, shorts started scrambling. Once the last of the shorts were out, the spx futures (es) dropped almost 20 points into the close and after hours.
The wave count is anything but easy to figure out and now the algos can take the indexes whichever way they want and have it fit some type of wave count. I mentioned in the afternoon notes that there was a chance we could still be making a wave 2, but it would be a wave 2 flat. That count could still be in play, but we would have to give it not as much weight as far as playing out right now. If that is the wave count in play, it would catch both the bulls and bears by surprise.
There are some things that I am still trying to figure out here and that has to do with how this market will react if next Wednesday comes and goes and Ben does not launch qe3/twist. The way I am looking at this, if the spx is anywhere near 1200 and oil is anywhere near 90, the fed will not launch qe3/twist. Why would they throw out their wild card if they were trading at those levels. I believe they would have much more to lose than gain if oil was near 90 and they launched any type of qe.
I am reading and hearing all over the place that the market is going to go on a tear because the europe crisis may be on the back burner for now. Let's assume that is indeed the case, does that change our current economic conditions? Should the spx be trading in the 1200-1300's if our economy is not supporting those levels? In the past, the economy didn't matter because the street had qe to run with and it was a risk on environment. But with the spx/oil at these levels, qe looks less and less likely come next Wednesday and that leaves money managers with a decision-should I buy the markets at these levels as our economy is shrinking without the back stop of qe? Just something to think about. G-
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