Wednesday, April 29, 2009

Sell signal nearly confirmed....

Let me just say how disappointed I am in the bulls. They were able to push the ES to 879.25 after the Fed announcement. I put in a limit order shortly afterwards to short at 879. My price got touched w/o a fill. Then I had a dentist appointment. And while I was going through all the hassles of a cleaning, I thought well at least the bulls will push this back up to my 880/881 target before rolling over and I'll get filled. Did they? Nope. So I was left flat on the day. Very sad indeed.

Well, to the charts. On a 30 min timeframe, my trusty sell indicator gave off a signal. It would be more reliable if we had closed below 868, but we did get a piercing and a close of 869 is pretty close. When you put the signal in context of the following:
- no new high on xlf, aapl, gs
- a close below the previous intraday high
- 1-2 points from my exhaustion target
I think we have a case for the real 'B' wave to begin. Should we open below ES 860, then that should be all we need to push this baby down. A close below ES 842 will actually shift the overall market bias to bearish for the first time in this rally. I know a lot of people are thinking for a shallow retracement. I actually think we will bounce in the 780 zone but go down deeper. I think there are too many bears ready to become bulls at that zone and the market will make them pay twice. The bulls that had easy money will also pay hard as they give back most of their gains and think twice about the next rally, which will likely head to the 1000-1100 zone over the next several months.

As for my positions, I'm sitting on some real losers right now IWM 38/40 puts and aapl 115 puts. I'm pretty confident if this thing gets going that my aapl puts should be very nice winners (as I did add near today's high). I'm hoping that the down move will be swift enough to get me some green on my IWM 40 puts and maybe breakeven on my 38 puts. Well, that is the way the game is played.


  1. Hello Rich...Tom in Wilm...I have 902.95 as top for what it is worth...then first stop down at 804ish; back to 850; then the larger move down to hit 750 in Aug/Sept time frame. This Rising Wedge that is forming, also formed back in Oct-Dec in 2002 on the SPX. It came close to the 200mva...just as we are getting close this week.

  2. Rich if it makes you feel better I had a limit order to sell at 879.5 since last night and I missed the move by a tick. I feel your pain.

  3. Used $SPX cash instead of ES to enter short. Used SDS since SPY hard to borrow. I noticed that ES is about 3 points discounted to cash $spx. Not sure why. But SPX did hit 882 .

    That zone might be tested again.

    Thanks for your charts

  4. You'll get your chance again tomorrow. FWIW, there is a 121 TD CIT on Tuesday.

  5. Futures look like they may give me a 2nd chance afterall.

    Howtotrade - my #s were 884/885 for SPX and were 880/881 for ES.

  6. Hi Rich,

    Have a look at this site.

    Hope you will find it useful.


  7. Rich - 881/882 on SPX was the FIB .236 RT to 1576 high. in 2002 954 was the FIB .236 RT to 1556 highs. Should in theory be top of WAVE 1. on the monthly charts.

  8. Bullshit!

    It's gone already HowToTrade. Do you have live charts?


  9. kidflare-hate to disagree but I think not. The market topped today, and should gap down tomorrow. Next stop should be 820-830 area.

    Pedram - looks like we were smiled upon afterall!

    RT - do you use the service? I'm not familiar with it, but I'm always interested to hear other people's experience. Drop me an email: