04/18/2012 Live Update

[KENA]

Update and an explanation in regard to application of ellipses/circles

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Do I read this right that today we move up and tomorrow we go dn..I have a hard time determining the direction. Thanks

[TWT]

SPX : Follow up of the short-term EWP

[Al_Dente]

Is this odd (???)
How often do you see red elder bars on upticks?
15 min

[stucap]

Is this odd (???)
How often do you see red elder bars on upticks?
15 min

418fifteen.png

market just keeps pushing up....it doesn't need a reason to do so...nor does it need to look pretty.

[Al_Dente]

Is this odd (???)
How often do you see red elder bars on upticks?
15 min

418fifteen.png

market just keeps pushing up....it doesn't need a reason to do so...nor does it need to look pretty.

Stu what do u think of spy making little higher highs, higher lows
While eur/usd makes lower highs, lower lows ??
Just past couple days (?)

[stucap]

Is this odd (???)
How often do you see red elder bars on upticks?
15 min

418fifteen.png

market just keeps pushing up....it doesn't need a reason to do so...nor does it need to look pretty.

Stu what do u think of spy making little higher highs, higher lows
While eur/usd makes lower highs, lower lows ??
Just past couple days (?)

bots don't care about no stinkin' currency. buy the dip, buy the rip, just buy it.

more seriously, eur/usd has been holding suport. regardless of the "noise", as long as it holds support, buy buy buy.

that said, i've been to a few heavy hitter conferences lately and they all hint that the EU may try and bring the Euro back to parity so that exports increase, etc. but not likely until after the election as Obamarama holds all the cards.

[TraderGirl]

spx...?

[stucap]

spx...?

Must fill gap. Sometimes I don't know why we bother to fight the bots anyway. They always get their bogey.

[jarbo456]

totally subjective, but it looks like distribution to me. bid up, then sell off.

[stucap]

totally subjective, but it looks like distribution to me. bid up, then sell off.

a bunch of selling here but no real downward pressure. 1382 ES must crack with gusto for bears to have a chance.

[Cobra]

not a good looking bar, but volume surge, so hopefully a rebound here. I'm neutral.

[TraderGirl]

spx...

[Cobra]

aapl update: http://stockcharts.com/public/1684859/c ... /260183775;

[Petsamo]

Did somebody give bad news ?

[TraderGirl]

uvxy..

[lcgllc]

IBM 50day should be fun for algos and stop loss junkies...in 5, 4, 3, 2,...

[Al_Dente]

PAGING SB73

[Cobra]

qqq and iwm have already made a lower low.

[taggard]

more seriously, eur/usd has been holding suport. regardless of the "noise", as long as it holds support, buy buy buy. that said, i've been to a few heavy hitter conferences lately and they all hint that the EU may try and bring the Euro back to parity so that exports increase, etc. but not likely until after the election as Obamarama holds all the cards.

Not focused exactly on this comment but the general point the writer makes. remember the problem with risk modeling--you have a perceived bell curve with "flat parts" or tails on each end. the object is to discount the tails (because of the lower chances of the events happening) and focus on the bell part. And of course this is egg-xactly what leads to disaster over and over.

Ignoring the math for a second lets go to the rowboat model. if everyone in a row boat stands on one side--the rowboat flips over and sinks. this is a nice visual emotional take on the whole risk modeling thing. What's key is that the perception of the event having to happen or being super likely to happen is what causes the disaster. Because all short term actions are taken with the same outcome in mind--it often never happens.

what we have right now is everyone staying everything hinges on the election and that somehow obama is running things. or that the fed is running things. or that the euro banks are running things. and in all cases that this means tons more liquidity and hence the markets strength. ("nothing can go wrong because (fill in the blank)")

i would urge at least 3 considerations. (1) history shows that no central bank or treasury can beat reality forever. is this different this time or not? (i don't think so but i could be wrong) (2) the market always discounts in front of events. does this imply that if everyone and his dog says --ou have to be long into the election (with in theory a known outcome since it seems obama has a strong lead on everyone) the problem will in fact be before the election--BECAUSE OF THE ROWBOAT THEORY ABOVE. (it's not what people believe--it's the disproportionately large confluence of belief which messes up risk analysis and always causes an unfortunate outcome at some point) (3) the fact that the market tends to discount prior to event being widely known or at least "believed in".

am i saying we cannot go higher on the "dude it has to go up into the election"? no i actually have no clue what is going to happen--and rarely do--all i can do is watch the action. i would love a move to 15000-1600 spx into the election or say by july aug as all smart players get in front of the event (ideally on the illusion that "spain is not a problem" and "we have to go up into the election".

All i am suggesting is that the rowboat is getting very unbalanced and assuming we hold the current decline to something reasonable--they will all be sure we have to go up forever and that likely will be about the time the water starts displacing people on the dense side of the row boat. at this point if you are on the other side--check your cell phone or camera so that you can take pictures at the start of the event--and try to locate a life preserver (nobody will want them and you can buy 2-3 cheap) just in case "tail risk gets their ass".

as an aside a great story on the sinking of the titanic where they told all the men to go to one area of the boat and the woman to the other. this guy's grandfather was one of two guys who stayed with the women. all women and children boarded first. and there was more than enough room so the two guys got in a boat with the gals. meanwhile on the other spot some large percent dudes wound up doing the "going down with the ship thing" due to (not enough room for dudes) . ..

yeah following common belief systems.

you can never be sure about all this--but you can simply note how many times you see "the idea"--when it is ubiquitous XTREAM CAUTION IS ADVISED IN TERMS OF ACCEPTING IT.

the end of this bear market is likely linked to some sort of "loss of confidence" in central banks and political solutions. at that moment the belief will invert from where it is here (that it cannot happen because of central banks and political stuff) and we may finally be on the road to (john woo? "a better tomorrow")

good luck with your trading everyone

[TraderGirl]

This is what DX looks like to me, looking for another spike up....