Once a month or so, I get crushed. Today was that day.
1. Ben said that he does not see evidence of a bubble in the US - anywhere.
2. Ben sees no issue with banks having both security investment divisions and traditional lending divisions - in fact, it is good and he will continue to supply liquidity.
3. Ben still wonders what is the value of the toxic assets. (and jokes)
4. Ben will keep interest rates near zero for a long, long time.
5. Ben thinks jobless recoveries are the norm and to be expected.
6. Ben will sacrifice the dollar without concern.
It was an ugly day and I do not like the technicals.
- We set a new high.
- We are back firmly in the main up channel
- 1120 is a reasonable target
I see only a few reasons to be short into tomorrow:
- 20p MA has crossed down through the 50p MA on the 5 minute.
- Price failed to penetrate the lower trend line on the up channel on the hourly
- RSI continues to diverge on all charts
Sorry no illustrations today - I'm too beat up right now! Perhaps later after I get my strength back.
Cheers.
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14 comments:
David , sorry to hear you got ugly today , we all know that happens.
and it sucks
I set up Friday heavy long and got stopped out on the in day turn, Siii
The ES last night made it clear this was a wave 5 up , and not wave 3 down as we had hoped.
Now we have to hope this is the last trip to the top of the trend line :)
I think BEN sucks to .
Better Days for us are a coming , coming soon .
Hey Payline,
Though it was not my worst day of trading, it was in the top 3. I did my very best to mitigate the damage through the close and should be grateful.
I have been looking at the charts more carefully and do think that the hourly is encouraging for shorts. I also think you are correct regarding wave 5.
We will see tomorrow!
David
Friday I was hoping , the day I asked if it was a cup and handle was Wave 4, (11/10) ,That would of made last weds high wave 5 , The down trend line mad that look good ,
Tricky Tricky Tricky .
There are 2 waves down from todays high , ( on the hourly ) well one down and on corrective up,
Likly and A and B , but even better is they are little Wave 1 and Wave 2 .
at the least , I hope 5 has had its run, tomorrow will tell.
My Best , thanks for all your help as always .
David - I appreciate your willingness to admit to the bad days. I was on the wrong side today as well, but fortunately my exposure was relatively low. I was creeped out on Friday afternoon because the signals that I follow were oscillating between buys & sells very late into the trading day. "Ben speeches" don't help either, but it does look like a down day tommorrow.
Hey Attitude,
Tough days are part of the game - though I dislike it when my mistakes compound the effect. I was too confident in a double top formation and should have covered as soon as it failed.
I re-opened a short line on the ES tonight. Torn between scalping a couple points and letting it ride overnight with a looser stop.
Will see how (if) it approaches 110325.
Cheers.
hey david.. same here.. brutal day.. these gap ups are a sneaky way of forcing the market up.. believe it or not i'm also short - i'm usually on fas/faz so seeing fas give up all of today's gains in the last hour was enough of a glimmer to hang on to what shorts i have left.. weird day..
Hey Devon,
The fact that financials have not matched their highs for the year is a very good (bearish) indicator.
Whitney didn't hurt matters either!
Cheers.
THE GAME
An excellent anaysis that I happen to believe is very spot on will follow my monologue along with an ending comment from Immred. Analyze is a veteran from the SKF war days and was kind enough to provide a comment that gives a very nice summary of what you are dealing with trying to trade this market. Think very carefully about what he says then decide your own strategy.
Let me weigh in on the complexity of the real trading model that everyone and his cousin is trying to contend with. I made reference to a sector rotation model that I trade to months ago on the SKF board, and also stated I had to juniorize some of the prior charts I posted on another site. That being said, let me explain to you how the GS algo program works, and why you achieve less than expected results if you follow free TA blogs.
The limitation of any analysis that you see from some of the most popular blogs of former SKF members is that they treat the market as a static entity that can be assessed either through EW or other means.
The problem inherent to how they analyze this, is that the quant programs run by GS are not based on a point in time system, instead they run under a sector rotation model, and the quant programs also have an algorithm they run through to sweep up through timeframes starting at the lower, and moving through to resolve at weekly timeframes. To you from a trading perspective it would appear like a "wheel within a wheel" model where the action in a given position does not ebb and flow as you would expect, and you have a "WTF" moment once one of the algo waves completes and abandones your sector position to move on to its next target. That is why if you hold an individual position you will have a period of stability, followed by a wave of action, then technicals seem to come back into line after the wave ends. You may notice this if you trade multiple positions across sectors, there is an ebb and flow to what occurs. What was a great short position a couple days ago (X, POT)now has upward momentum as the quant programs rotate. Fundamentals are irrelevant, actually so is TA unless you understand how this system works. The GS algo programs have an inherent limitation that shows up in some stages - I posted a few days ago giving specific SPY values that had to be adhered to, I did that because I knew what their model had to resolve to. When they break away from this, they are able to once more apply their rotation model. It is not by chance that when currencies enter basing patterns that normal TA "seems" to make sense, only to be thrown out the window once a down/up trend can be re-established in USD versus other currencies. I agree with Kli, you are either trading gold-related positions, or are a target in waiting for the quants. If you do not have enough TA to contend with this type of quant model, good luck out there, you will need it. - Analyze.
credit to
http://kliguy38depression2news.blogspot.com/
Thanks CBS,
Read this post last week. As a software developer I am always interested in theories regarding GS (and other firms) trading algos. Experience tells me not to be too distracted by the legend. In the end, the market discounts it all.
Cheers.
david o,
i feel your pain. check this out:
http://slopeofhope.com/2009/11/so-what-do-you-do.html
it's been tough.
cheers,
ds
Dave et all
Thanks again for posting the real world.
My shorts are hurting too, however long Gold and no full positions keep me alive.
Meredith, Cashin, Rosey, are they all wrong, or are we too impatient?
Sorry to here it about today.
We could get one more push higher to wave 5 up. Then our primary wave three down should start
Global stimulus + carry trade is propping up the market.
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