Recently i have been chatting to a few traders many of whom dismiss fib numbers as
” something on the chart that doesn’t move allowing you feel better ” . Humm… I don’t know enough about Fibonacci numbers and the wiki article doesn’t really shed any light on the subject but I was playing around with fib lines today and noticed
Will this rally be commodity driven ?
I recall that while oil was still in an uptrend and the ” pundits ” of this world were laughing at Schiff as investors went to their deaths in the financials Oil companies were silently beginning a downtrend ahead of oil and the market. Oil is showing signs of bottoming and check out this chart of Exxon.
XOM Up 25 %
Has anybody noticed that in the last month it has double bottomed and is up by 25% of its lows ? The pattern isnt clear you can look at it as a head and shoulders or you can look at as an asecending triangle proudly on top of the mast. Its also above its 20 period MA ( acting as support ) and its 50 period MA. It may or may not have far to run but I dont wonder if the fabled smart money has been accumulating this stock ahead of a rally in oil ? Take a look at DIG , there might be another ” flush ” as the market makers shake the tree a little more but theres a very postive divergence on its MACD and volume too… Im simply suggesting the wave 5 of 3 may not be the huge move to the downside the uber bears are praying for, if they just got short. Googles wave 5 is possible complete and there are signs of hope for the bulls in RIMM.
As far as im concerned its too late to be looking for heavy shorts as a smaller degree wave 5 can fail and as another trader put it ” you dont want to be at the ” short ” party when the cops turn up this thing will explode and one of these rallies will stick.
While my long term outlook is bearish in the short term I will be looking for long positions to hold over the next few weeks. Of course that doesnt mean I will be long in the morning but I want to become more neutral and in the very short term manage risk through smaller positions. This market does have to prove itself to me , so , no i havent lost my marbles. 
Why on earth are they grilling hedge fund managers. They were the really smart money.A lot of deals were doomed from the start
If you have a few minutes to spare this read on MER from the New york times is interesting. How the Thundering Herd Faltered and Fell. We too have the right to call ourselves smart money.
As we chop around in this 4th wave ( pause in the downtrend ) on the SP the dollar has been pretty much moving inverse with the markets. It is my belief however that we will soon see a resumption of trend in the dollar and I intend to trade it. The fall in the market has increased demand for dollars and its clear the ECB is going to keep cutting and potentially more agressively as we start to consider deflation.
The Icelanders have been the butt of jokes on daytime tv and even ( somewhat distastefully ) of prominent politicians but I am glad we are somewhat more protected .. right ?
” There you see the Iceland of today – the victim of an economic 9/11 and one of the very few places in the world where the words “financial meltdown” can be used without fear of exaggeration ”
This is linked in my last post , but in case you missed it check out whats happening in the credit market.
There were no buyers
What happened this evening ? There were no buyers , it didnt take many sellers to drive this market down. A chart of the futures contract of the spx as opposed to the SPX itself. The futures traders set the tone .. right ? I have noted triangles to be prevelant in multiple timeframes from 1, 5 and 15 minute charts over the last days , in EW terms those are called fractals. Just a thought.
Link of the hour:
This market has given me no reason to be long. But I welcome a rally because its always easier to short at the top of a candle as oppossed to the bottom
Its all a bit too neat , this was my thoughts when my head stopped spinning , for me today was frantic, i got sucked in short but quickly reversed and went long on the SPX.
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Taking stock of the eminis action we seem to have entered a symetrical triangle from below. Measuring it out takes us to 883. Assuming 75% odds for continuation from the direction of entry. This is a 5 minute chart with 2 days of data. The entry has been rather “flat” though so im cautious for the bulls here.
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