03/02/2012 Intraday Watering

[SWalsh]

I believe we are starting to see the complete domination of machines AND what they do. Nothing is all that sophisticated in one of their endeavors. Primarily, they jump in front of orders millions of times a day. The other aspect appears to be quite simple, and not automated, from having watched this now for almost six months:

1- they look at trendlines
2- they look at levels where, in wave terms, C=A, or what Cobra calls a measured move.

This is preventing not only 300-500 point declines, but it is preventing even a 100 point decline unless it begins later in the day as they enter and leave each day flat. IOW, after 3:15-3:30 they will not prevent some fund dumping a good deal of its position. In fact, they will front-run it in all likelihood.


In these chart, it a fait accompli that this drop had to occur as the machines sold the upper trendline and then likely added when it was seen to be valid. Once one side of the channel or triangle was traded, the other side is where it is going in the overwhelming number of occurrences. They have the market locked in and the ONLY thing that appears to change that is a news item that makes them throw the off switch.

The public is loaded with stock. So if we begin a volume heavy decline they will not play. But those days are very rare. So just from a trading POV one really should not look for them. Too many machines are trading for 1/10th of a penny and absent overwhelming volume, they keep it locked in a range. They are not traders in the sense that many of us considered ourselves. They are bean counters. And yes they are parasites. But the signal was given by the SEC with no requirements/rules to prevent up to 42,000 quotes (the max that has been seen) stuffed per second, that they may continue. I can only imagine the lobbying power they have utilized to keep this going.

[TWT]

ES Globex: If something bearish is in progress price has to remain below 1369

If 1369 is recovered then maybe the pullback has been just another buying the dip "arrangement"

[Tabby]

ES Globex: If something bearish is in progress price has to remain below 1369

If 1369 is recovered then maybe the pullback has been just another buying the dip "arrangement"

Old saying;
"Take you to river and bring you back thirsty."

[jarbo456]

does anyone find it extremely questionable that Wynn filed the WRONG 8-k? an 8-k which indicated it had closed a land deal, bullish for the stocks.

i mean, come on! are you telling me that your CFO, CEO, and managing finance directors filed an 8-K that highlighted a potentially bullish item by accident?

They know how to be in the news. Simple. GLTA jimme

not just news...the stock jumped 6% and retained 6% into the cash market...

[taggard]

Cobra, do you think the trend has changed?

too early to say.

maybe for future reference 3 ideas. (1) isolate time frame you are discussing--we can have a trend break in one and not in another. (2) in whatever frame you are talking about--look for a confirm of some sort--usually a test of that trend from either below or above depending on the direction of the break. prior to this confirming pattern it's for cobra or anyone else to say anything short and absolute. (3) finally to make things more fun the market/market makers/and machine trading is set up to hit areas most humans tend to put stops. so ideally when you see a trend break or a confirming pattern you have a feeling for the level of intensity (using price bar patterns and/or volume and/or some form of advancing vs declining and/or high lows). this last point more an issue on daily weekly etc.

as an aside people are pretty excited--partly it's been a long grind for those looking for a break--and partly it's friday. towards the end of the day and monday will be interesting. in bullish movements you often see people try to buy fridays and sell mondays. if this changes obviously it doesn't mean everything is different--but it is interesting. second using the 8+ up weeks in qqq (we are on week 9) usually the following week is as high or higher than the last up week. (or put another way if we go down today will we bounce one more time mon-tue and then finally get some sort of sell to the daily 20 ema or at least close in qqq and perhaps to or just under the 20 ema daily in spy?

generally the hypervigilance directed at the trend change idea--has been expensive for many traders. it's totally understandable yet not required. what about turning that one step the other way in a trend and directing that hypervigilance at the trend continuing so that one is wrong for sure on purpose in a calculated manner. in short while justified from one perspective--the approach is totally wrong from another. indicating a divergence between what we are observing--and what is actually there. try as we might--it's very tricky to overcome our internal bias often created by experience that actually worked in the past. yet just looking honestly at the screen with "beginners eyes" to offset all this experience can be a handy exercise. one study about 1-2 years back showed that the only (tested) idea to improve trading was to force the trader (prior to taking the position) to make a case for the inverse position. traders hated this--but it seemed to improve the trades. so more cognitive dissonance

good luck with your trading to all

[jimme]

careful... break below 1365, we could accelerate...

here is my short term, 137 is the line for me to see it as new trend is born. (talk about new star see the new chick on CNBC? hot, I didn't watch CNBC for years, might have to tune back on, Bloomberge girls are still best.

There is huge support at LL 1367 and a major upchannel line at 1362. You are in time to buy the dip. Carry on and good luck to all. jimme

[BullBear52x]

Line in the sand, this is third try today. LOD is closing in, me thinks

[btran874]

For all you wavers out there, COMP is much cleaner to look at and easy on the eyes at the moment. SPX and INDU right now is a mess to count.

[Cobra]

I consider the mini rebound target has been met. maintain the plan.

[Cobra]

resistance, maintain the plan.

[jarbo456]

resistance, maintain the plan.

just out of curiosity, why do all of your zz ending diagonals end up?

[Richarab]

resistance, maintain the plan.

just out of curiosity, why do all of your zz ending diagonals end up?

wrong. the usually end down! only recently pointing up..

[Denali92]

RUT hit an important level 800 - the Jan highs and 40 day MA and has bounced nicely.....

Unless the SPX catches up in a BIG way - the Low for the day is in on the RUT - but next week could be VERY interesting..... as we are starting to follow some of the post QE rally breakdowns in the RUT - the question is 'Will the others follow?

They should, but maybe not till early next week....

-D

[BullBear52x]

Financial is key, I'll pay attention here at 5 dma. there will be big fight here so that mean confusing closing point for the weekend warriors

[Cobra]

rebound is strong, probably need a new plan. but I believe it'll revisit the low first (may be higher low of course), then I'll update my plan accordingly.

[Mr. BachNut]

Remarkably, my short trade is still alive. Still trapped but alive after three weeks.
The level of the McClellan Oscillator and the trend in the summation index continue to support the original setup.
However, the rate of change in the summation index is too low indicating a trendless market.
In a trendless market, existing trades under this setup are held until stopped out or until favorable trending emerges to make them profitable.
So, it's basically a crap shoot at this point. It is surprising though, given the amount of time and energy expended, that the bulls have not driven the stop stake through this trade's heart.
Maybe next week.
Unfortunately, I shorted the SPY and not IWM as IWM would be in the black now. Have to consider index selection for future trades.
Also unfortunately, I think bears have a lot of work to do before getting to serious sell stop territory. Just a guess, but bulls probably have a cushion to about SPY 135.50 before they get stressed.

[tigerwang9999]

who is interested in buying TVIX at these levels? any comments??

[Harapa]

Looks like algos are in bed with Tom DeMark. TD Trend line breakdown target for IWM is $79.95.

LOD 79.84. But IWM doesn't look good. Could be a back test of broken trend lines?

[BullBear52x]

a retest 5dma on SPY, bears sell the RIP spot

[Richarab]

who is interested in buying TVIX at these levels? any comments??

not me. and i love trader vix