Thursday, September 15, 2011

Cobra, AS ALWAYS, has some good stat's in his report last night, http://cobrasmarketview.blogspot.com/, I'd like to add my OWN stat's, and two cents worth.
One of my favorite books is Larry Connors "How Markets Work", in which he went over all the stat's from 1950 in the "Markets", and gave the ODD's of a market going UP or DOWN, based on a number of parameters, etc etc etc, blah blah blah blah. By the way, my edition is from 2004, so the, STAT's, may have changed since then.
One of his favorite stat's is a market that goes UP, or, DOWN, three to five days in a row, in fact one of his favorite "Strategies", is using a 2 RSI in conjunction with a market that has gone UP, or DOWN, three to five days in a row, and sell or buy based on the over bought over sold readings on that RSI, again, etc etc etc, blah blah blah! What cracks me up here, is that he ACTUALLY got that strategy from the KING of Strat's, BZ, http://bzbtrader.blogspot.com/, Bob always said he LIKES Larry, but I always got the impression he was a little miffed that Larry never mentioned where he GOT the Strategy, hahahahaha, wad ever, I BELIEVE Bob of course!
ANYWAY, the BASE LINE of all the Strategies is the 200 DMA, which I have on that chart, along with the 50 DMA, mainly to show the infamous "Death Cross" we've had. The "concept" is that after a move in one direction of three to five STRAIGHT days, the odd's favor you buying or shorting, based on whether we are ABOVE or BELOW the 200 DMA, IE, you BUY, when we are ABOVE the 200 DMA, after you get a pull back of three to five straight days, and you SHORT, when we are BELOW the 200 DMA, after we get a three to five day rally. By the way, and some thing that Larry never mentions, BZ's Strat's are mostly based on exiting the trades when you finish like higher, or lower, depending on the trade, than the previous two to nine days, IE he doesn't have a PRICE exit, he has a TIME exit, and he run's the results based on the optimized time in the testing results.
ANYWAY, again, I only mention this because I've high lighted the three to five day rallies on that chart since we started the fall from grace in July, and got under the 200 DMA. The last one we had, in late August, was actually four days, but the fourth day was a gap up, narrow range, hanging man type of doji candle, and led to a quick three day 7.3% dump.
I bring all this up because, of course, we've had a three day rally off the bottom, AND, we are gapping up this morning, AGAIN, just like that last rally in August. Now, I'm NOT saying the market is going to go DOWN today, or tomorrow, or EVER for that matter, I'm just saying that the stat's, AS LONG AS WE ARE UNDER THE 200 DMA, favor this rally FAILING, just like the prior ones.
Now, markets ALWAYS go HIGHER (or doooooooooo they, hahahahaha), and the last time we were under the 200 DMA was last year in the May to August time frame. The way we broke that sequence (besides the OBVIOUS FED and Government intervention of course) was we got a series of FIVE day rallies, followed by sharp pull backs, followed by huge gap ups, followed by sharp pull backs, etc etc etc, IE, it looked a HELL OF A LOT, like what we have now. The main difference, was that we were not as far BELOW the 200 DMA as we are now, and we didn't get a month and a half fairly tight consolidation like we've had lately, meaning, TO ME, that this thing currently looks like a DUMP, then a consolidation, which makes it a CONTINUATION PATTERN, IE, we DUMP, consolidate, and then continue in the direction of the prior move, which was DOWN! BUT, I've been wrong before, OFTEN, and with the massive manipulation we have, they could easily drag us, kicking and screaming, higher, sigh!
Look, my main point, is that for LONGER term "Inwestors", I wouldn't even, REMOTELY, consider getting married to a POSITION, until we get back above, and HOLD above, that 200 DMA, your opening yourself up to the possibility of huge draw downs, and there's always the remote possibility that we go into another Bear market, but that won't happen unless we break under the lows of this sequence, that being under $112. The very FIRST thing we have to do, is get back above the 50 DMA, which currently resides at about $123, and I'll tell you what, the last two Bear Markets started when we dumped, like we did out of July, we had the death cross, like we have now, then we rallied back up to the under side of the 50 DMA, and FAILED, and started back down, heading into the depths of hell, so just because we rally up to that MA, doesn't mean it's OVER, hell, it, COULD, just be starting!
Let me point out one more little sweet heart sequence, from last year:

We had four, count'em, FOUR, FALSE, break outs above the 200 DMA, before we FINALLY made the move higher!
I bring this up, because, of course, we aren't even CLOSE to the 200 DMA, YET, so all the action isn't really going to start, until we get back to it, hahahahahahaha!
Sigh, I figure the next month and a half is going to be really, aaaahhhhhh, eeeeerrrrrr, interesting, and if I had half a brain in my head, I'd leave, NOW, and not come back until November, but, sigh, nobody ever accused me of being very bright.

PS: 6:45AM: We had a BIG dump in the futures, when, SURPRISE, we had a huge JUMP in the weekly UN-employment numbers, AND, the Empire NON-Manufacturing index came in WAY LOWER than, "EXPECTED", hahahahahaha, "EXPECTED", by whom?? you ask, well, the ANAL-LIST of course!
Wad ever, we are still HIGHER than yesterday's close, but gaining on it, eeeeerrrrrrr, LOSING, on it rapidly. On a side note, I actually heard one of those ANAL-LIST on bubblevision yesterday say that the market was in for a HUGE surprise when the Empire index was going to come in MUCH HIGHER than expected this morning, hahahahahaha, FRICKING ROACH'S!!! Yea, it's a HUGE surprise all right, sigh, wad ever, it's not so much than it wasn't as POSITIVE as "THEY" expected, the damn thing was not only NEGATIVE, but MORE NEGATIVE than last month, -8.8 vs -7.7 last month. Sigh, we aren't in a recession, IT'S A DEPRESSION I TELL YA!!!!!!!!
ANYWAY, that's not what I wanted to post script about, we had some FUN stuff this morning to, the most hilarious being this, EARNINGS EXPECTATIONS ARE STARTING TO FALL, over at the Pragmatic Capitalist. This, of course, is the, TYPICAL, ANAL-LIST bull shit, as they LOWER expectations heading into earnings season, and then, two weeks later, when the company magically BEAT's those LOWERED "expectations", the ANAL-LIST yell and scream, YEAAAAAAAAAAAA, and raise "Expectations" for the, FUTURE, and try to suck you into buying the piece of shit at higher prices, after their OWN firm brought millions of shares at LOWER PRICES when the stock dumped on the LOWERED "expectations"!!! Did I explain that right?? Probably not, wad ever, IT'S BULL SHIT!!
The other one is this, UBS ROGUE Trader Held in London, hahahahahahahaha!!!!!!! Another one of those NASTY ROGUE TRADER's, this time they LOST 2 BILLION, hahahahahaha, is UBS TRYING TO TELL ME THEY DON'T HAVE ANY CHECKS AND BALANCES IN PLACE IN THEIR STINKING OUTFIT!!!!???? LA DE DA!!! WE JUST GIVE SOME INDIVIDUAL TWO BILLION DOLLARS TO BLOW, AND SAY SPEND IT ON WHAT EVER YOU WANT!!!
YEAAAAAAAAAA, RIIIIIIIIIIIGGGGGGGHHHHHHHHHTTTTTTTT!!! This start's right at the TOP, I don't give a damn what they say.  

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