3 push pattern

To clarify based on some questions I received, unless specified, all my point levels are based on ES, which is the tick of futures of S&P 500 (the tick is SPX). There are bunch of materials on the relationship between cash index and futures. The difference is mainly due to dividends and time value.
Here is my simplified explanation. ES futures are quarterly. At the beginning of the quarter, the current ES is about 5 points lower than SPX. During the quarter, the difference gets smaller. At the futures expiration, they equal to each other.

I guess I get what I am asking for. In last post, I showed my setup of the 3 push pattern and mentioned my target of ES 1365-70 ares.

Friday morning, the chart looked like this.

I was in a hurry. I didn't have chance to mark my chart, because I was buying the dip. I told 1 friend

I was not far off again. I exit ES longs at 1382.5 around 11:00 and happily took the rest of the day off. ES actually went to 1388, slightly higher than my mid-1380 target then head down to 1372.

My chart above actually tells my trading plan. I still have some calls. I think the recovery will take a while. I guess ES may test 1400 to confirm the break-down. That could be a good chance to exit long and go short again.

(nothing) lots to say - updated

As I said the street favors Romney. They didn't get their candy this time. As usual they put on the drama now. Somebody is calling bottom. I am conservative this time. I think the battle around neckline SPX 1400 is far from over. Volatility is heading up. I expect it to go even higher.

(1 of my readers don't trade equity. I guess he can handle Bond well. :D Me nice enough to translate my expectation into plain English:
This means I guess index won't move too much, but will be very volatile like yesterday. Intra-day range will be bigger.)

It's the best time for trading. If you don't like trade, then think about reduce your exposure and just wait on the side.

(to add charts)

This is not a typical flag, as the correction took too long and too flat. However, it is a rectangle correction. The next movement is always powerful. If I have to guess the points, I am targeting ES 1365-1370 area, which is 1370ish SPX.

I discussed weekly RSI with a friend HD. I believe it is not oversold yet. We still have room to go down.

Pattern-wise, this is the 3 push pattern I am expecting. I think there will be 3 pushes to the down side, but it does not mean it could be only 3. Anyway my bias is to the down side.

Add: 
My friend CR sent me this link. It is on the Hindenburg Omen I discussed a while ago. Th author says Hindenburg Omen is about to issue the first signal. What to expect?

Here's how it works:

1. Once an initial signal has been issued, a second signal (the 'confirming signal') must be attained within 36 days [Dr. Robert McHugh].  That confirming signal could happen the next day or the next week.

2. When the "confirmed HO signal" has been issued it is valid for 30 trading days [Jim Meikka, creator of the HO].

3. Once an official HO signal has been issued in accordance with the two rules above, the odds of various corrections occurring are as follows, according to the records of Dr. Robert McHugh. These are not predictions nor speculative guesswork. They are a cast in stone record of what has happened in the past.


here's how it breaks down based on past performance:

Major Crash - 27% probability
Selling panic of at least 10-15% - 39% probability
Sharp decline of at least 8-10% - 54% probability
Meaningful decline of at least 5-8% - 77% probability
Mild decline of at least 2-5% - 92% probability
The HO signal is an outright miss - 7.7% probability (one out of 13 times)


Here comes Ron Walker and his famous BPI

10/30 Waiting Mode

It is hard to judge what's going on at this moment. My reading on 10/22 is not a good one. I thought it was a double bottom which may result in a rebound. Unfortunately, market went down, with no obvious reason. Now we have 2 scenario.
1) The Pattern I pointed out in 10/11 post is still in play. SPX may find support in sub-1400 level, then rebound to 1450 level 1 more time.
2) The pattern was completed on 10/12 because the rebound to SPX 1465 then reverse down was too big to be considered as a sub-movement.

I think the bottom line is we are bottoming. Sub-1400 level is a much better support. As I pointed out at Dino's, if no more selling pressure, ES will do some mild recovery since Friday afternoon. Actually, ES made another double bottom at 1393-1394 level during Monday global session, which roughly equals to 1398-1399 SPX.
I expect a revisit of the overhead trend line which is declining, then we crash into the year end.

Market Reading 10/23/2012

My reading om 10/22/2012 is wrong. Don't take action for now.

Market Reading 10/22/2012

Did I say I m going to make a new post? Me getting lazy recently. As I mentioned in my intraday charts, I see somebody defending the 1416 low.

If you study the volume profile on the right and the better volume on the bottom, you will see lots of buying climax up.

So far I read the tape as retest then regain support at ES 1416. On SPX it is slightly different, because last 1416 was after regular trading hour. On that day, SPX low was at 1425 then closed at 1428. Today we touched 1420 then rebound to 1433. I don’t know how to interpret the difference. I tend to ignore SPX which is the cash index, but follow ES which is the SPX futures traded clock around.

It is an Adam-Adam double bottom pattern. I expect a rally in the next couple days. My plan is to trade to the trend line. I add longs when I cut the chart above.

How high can SPX go? According to Bulkowski’s book, calculated target is around 1490ish. My own measurement is 1470s. The reason is the last spike is too big, unreasonably big. Can it go higher? Can it take out the 1475 peak? Yes maybe. In this dumb bull market, anything could happen. I still feel we are close to the end of the dumb rally from 2009. End of 2012 will be messy even if it is not the end of the world. :D

couple interesting charts

all from internet.

According to this chart, equity used to peak in late September during election year. so far we are not far off this year. Let's how it goes this time.

Below is the daily chart for Nasdaq which usually is a leading indicator. It is pretty self-explanatory.

me is back

I am back into normal which is not as exciting as I expect. :D
As I said 100 times, the market is full of government manipulation. I don't see any real improvement worldwide. THEY are busy painting here, covering there. Between jobs, the market may drop a little. Here is a moment.
On weekly scale, the rally we are currently in started last Oct. We experienced 2 major corrections. Both of them are close to 61.8%. If we correct 61.8% this time, it may be in 1350s.

Daily chart is in trouble as well. The current support is around 1420-1430 area, defined by last high of 1420 and last retracement of 1430. Fork and channel and MA all park at the same area.

Here is my projection based on hourly chart. We will lose the support and test sub 1400 level which is the real thing. Then in early Nov, they will push it higher to maybe 1450s. After all the hyper is gone, it's time to do gravity check.