Looking at a daily of the sp-500. In June it bounced off of 1490 a couple of times. Looked like a double bottom. That is right about where we are at this very second. Maybe the support will be here?
>Yes, it might take a little time to pull out of this one if it closes any lower.
On the bearish side breadth rolled over to new lows. An ES close under 1490 or so points down to the weekly trend line (right now near 1459).
Ten to fifteen more points left, before the SPX consolidates just above 1480, at which point the cycle is complete and the catapult run toward recent highs begins… per my prior posts. Does it begin Fri (tomorrow) or Wed of next week? That depends on how quickly consoidating takes place and breadth settles down. I’m vying more for next week at this point, but it’s too early in the day to tell. What wonderful trading opportunities!
Why 1480? I don’t see a thing there aside from the “50%” retracement
level. If it closes under 1490 I expect a 1460 will be tested.
Sam I was just drawing a line from 6-7 to 6-26. Pretty much a strait line. It bounced off of those areas twice. Right now at 1484 it has basicly gone through on heavy volume.
The index is now chugging up and away from 1480, but I believe another retest of 1480 is highly likely (but not mandatory) before commencing the powerful catapult run toward 1520 again.
Richard,
Are you channeling Lew? I was asking why Lew said 1480.
Actually, if you read my posts from yesterday and today, I mention the
lows from June:
"Support easily viewed on the weekly (Feb. highs / June lows) is 1492-93."
So, yeah, I understand the logic of the 1490 area.
The moment of truth has arrived for the SPX… having played 1480 as predicted (with most of the volume taking place above 1480), chugging up to 1489 and then (currently) retesting the [above] 1480 range. If the 1480 point is substantially penetrated (with increasing volume), then we’re heading for yet a new low. On the other hand, if the index simply consolidates around this range, then the catapult run toward 1520 is imminent.
Why 1480?
Looks like we are heading down further yet…
Volume clusters and offsets, using a predictive curve. We’re actively below 1480 at this point, with a recovery swing toward it under way. If it fails, the downward market will continue. If it succeeds, consolidation will vascillate in the 1480 range before the big jump (by Wed or sooner).
SPX heading up as we speak (1485+)… not enough consolidation at the main volume cluster point of 1480 (now recomputed as 1479.75), which means this particular rally attempt may fail prematurely. If it does, another retest of lows (this time pivoting at 1479.75) will follow giving rise to a reconsolidation which resets the market in anticipation of the real swing up (still looking at Wed or sooner).
What happened? Your systems equity curve took a plunge. Markets are closed. Didn’t recover…Seems like you didn’t believe Frank’s and my assessment of the market? or market went one way against your expectations for a rebound?
funny, your systems have had more plunges than a yo-yo.
You need to take a long-range viewpoint. It isn’t so bad looking at the closed-equity curve which does present a long-range view point. If one is concerned to evaluate a man’s course, one must keep in mind the human time scale. Virtue does not promise instant value. If what you want is success TODAY - in work, politics, in any field including trading; if you demand peace, love, wealth, or any other such value NOW, without effort or the enactment of means across time; then nothing will give it to you (and you will soon give up your goal with a sigh or a curse, as the rebels of the 1960s did). “Practicality” in this usage is an invalid concept. The NOW disease is prevalent today only because every inkling of a conceptual mode of existence has been bred out of the public.
…what the?
Are you joking? A quick runup on count of heavy volume declines by the major averages is most always a precursor to a correction. Last Monday (prior week) the Nasdaq distributed (although mild). Then Wednesday the DJIA/SPX distributed, however mild.
The fight back up on Thursday came on lighter volume (not a good sign). And last Friday’s heavy volume descent - coupled with the breakdown of institutional favorites and we dangled from the edge.
Not to mention the numerous heavy days of selling leading up to June, volatilite jumps to new highs, and the subtle breaking down of market leading stocks!
That with the less than one month (quite unusual) correction last March and the recent “blips” down in June - before again going to new highs and well…this time has come.
You see, what held up this market up till now were GOOG, RIMM, AAPL and a host of market leading stocks (strong fundamentals, strong relative strength, institutional sponsorship, etc.) that barely budged with these volatile swings down (pre-June to recent).
Now they are mostly technically suspect (compared to before) - AND WE ARE DUE. Corrections (declines greater than 10%) are actually a good thing, since they “wring out the froth” in the market and allow for - once again - substantial gains to be made (as you’ve been seeing on C2 since last August.
Hopefully you have locked in gains and reduced margin exposure up to this point, since there WILL BE A LOT OF WORK AHEAD for this market to right itself once again. (And it won’t happen overnight…think 2-3 months).
I only wish I had the time to read this thread the last few days and give you the heads up, Richard.
Just look at the magnitude of the recent down days. The recent ones (May-June) were bad enough. And the (fear factor) “Vix” and “Vxn” volatility indexes - that spike during corrections - are as high as last summer now!
So add Monday’s heavy distribution (volume was higher than Friday’s - which was options expiry) for the market indexes and of course there really was no support for today.
Now the SPX/DJIA/NASDAQ/RUT/MID/SOXX/SML are all not just a few percentage points off the highs - we are headed into 10%+ territory and most all stocks will go by way of the market.
Trust me, I know…half my 20% drawdown was due to stupid mental mistakes and at this point being stopped out with 10% decline from highs to fund is REALLY REASONABLE. Fortunately the other 10% is quickly being made up via WOTM (way-out-the-money) index spreads - which can be used to capitalize (in a long fund) during corrections.
But believe me…if you avoid losses after ramping up 50-75% gains in 6 months when a correction does hit - you will then be best poised to once again ramp up (off the bottom) another hefty advance.
If you (or your vendor) don’t, well…you go NOWHERE.
Gilbert
Sam my original post said 1490. I did that post at 11:52 am today. Looks like we went through that. I think I am gratefull I was out most of the day. I was thinking on spending the money I lost today O:). Don’t we have to have a bounce somewhere here?
Howard - Please explain yourself clearly and thoroughly, and I will answer. There seem to be incongruities in your compound question to me, most likely due to not understanding the reporting limitations of C2 when it comes to trading option spreads. Also, what does the SPX (which you, Frank and I were discussing) have to do with the the RUT (which is my current options spread trade in Live Long and Prosper). Are you really aware of what you’re saying?
…what the? Are you joking? A quick runup on count of heavy volume declines by the major averages is most always a precursor to a correction.
To answer your question… no, I’m not joking. The SPX played out per prediction, and I’ve closed out $4,100 in ES futures profits today, all in swing day-trades. I’m not interested in what stocks did last month, nor what they’ll do next month… I’m only interested in the short-term (intra-day and a few days out) window. It’s what makes me money on an almost daily basis.
Howard:
Let’s see… Live Long and Prosper started with $100,000. It currently has $100,000 invested, and $8,000 in cash reserves. The current trade pair is reported as a ($6,600) loss. Let’s take a look at that trade pair:
To be executed as a 30 cent credit spread:
BTO 100 .RUTTT (RUT.XO Aug 700 PUT) @ 1.05
STO 100 .RUTTB (RUT.XO Aug 710 PUT) @ 1.20
Unfortunately, C2 has no way of handling a spread trade. Look at the charts for the option pair… the spread was as high as 65 cents. Thus, my 30 cent credit spread would have easily executed (and did, in my various 401k/IRA accounts). Instead, C2 does the individual legs at market, giving me a 15 cent spread. So let’s just live with that 15 cent spread for now, and look at the trade…
There’s $1,500 in income from this trade (at the C2 price), which is determined at the time I place the trade according to the spread I choose. Unless RUT hits 710 or below, I get the full $1,500 from this trade. There is no “intermediate draw-down” - as the instruments cannot be called unless in-the-money!
At the conservative “30 cent spread” (remember… spread was as high as 60+ cents), when executed by a brokerage capable of handling spread orders, there’s realistically $3,000 profit from this trade, and no draw-down unless the the 710 strike is hit.
Please explain to me upon what factual basis you’ve concluded that my system is performing poorly.
