04/18/2012 Live Update

[MrMiyagi]

I think the market's bounce is done and over. Next stop:1340 and lower.

[wayne0708]

I think the market's bounce is done and over. Next stop:1340 and lower.

So many has said this many times before. What makes you different than others

[stucap]

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

Excellent analysis --- Generally when I post bullish notes here, it's mostly sarcasm --- I'm a very wounded bear.

[MrMiyagi]

I think the market's bounce is done and over. Next stop:1340 and lower.

So many has said this many times before. What makes you different than others

I am Mr Miyagi and I invented The Crane.

[stucap]

I think the market's bounce is done and over. Next stop:1340 and lower.

So many has said this many times before. What makes you different than others

I am Mr Miyagi and I invented The Crane.

That's seriously as valid a justification as any!

[Cobra]

bouncing from OR low, looks encouraging. aapl looks like a bull flag.

[MrMiyagi]

I am Mr Miyagi and I invented The Crane.

That's seriously as valid a justification as any!

These days it is as good as saying "I read it in tea leaves", "A friend of a friend who is a friend of a broker told me".
But at least I can Crane them.

[fehro]

trendlines... 6 day bear flag? or retest of a triangle?

[Jack]

Cobra,

Thanks for your great work on Apple.

What is target of bull flag breakout on apple? 620 or 630?

[Cobra]

the perfect text book route. for fun only, I hope so but don't believe it, just if I'm right, then I'll jump out to brag "told you so".

[Cobra]

Cobra,

Thanks for your great work on Apple.

What is target of bull flag breakout on apple? 620 or 630?

aapl target can be measured like this. I don't believe 100% target though, but 61.8% is possible.

[lcgllc]

phew, Eurozone closed...no US Managers can get back to what they do best, ignore Euro contagion risk until its too late...risk on into the completely rigged Sapinish 10y auction

[Mr. T]

I think the market's bounce is done and over. Next stop:1340 and lower.

So many has said this many times before. What makes you different than others

I am Mr Miyagi and I invented The Crane.

That's seriously as valid a justification as any!

The real justification is Pat Morita is dead - and yet Miyagi still posts!!!!!
Either he's a ghost with supernatural knowledge and power, or Morita faked his death so he wouldn't have to pay taxes on all that profit!!
Whichever way you look at it = Miyagi's a buy.

[Cobra]

symmetrical triangle? I have no idea, just for fun.

[MrMiyagi]

The real justification is Pat Morita is dead - and yet Miyagi still posts!!!!!
Either he's a ghost with supernatural knowledge and power, or Morita faked his death so he wouldn't have to pay taxes on all that profit!!
Whichever way you look at it = Miyagi's a buy.

Shhhhh... don't want the Okinawa Tax Office to track me down Mr T!
I pity the fool who don't Crane.

[Jcantrade]

This is my first post.

[Jcantrade]

I saw some negative comments in yesterday’s trading signals. I feel it’s unfair to corbra. I’ve been reading his blog since 2010. Now I'm addicted to reading it everyday. I have a lot of respect to his work.

Don’t we all wish we had had predicted yesterday’s big move up? On Monday, though the intraday move was bearish, there was a large inflow eod to spy, and rsp, xmi and nyud all closed positive while spy closed red. All these gave a smell of bear trap.

I am nowhere close to a TA expert, so I could see why people can be frustrated sometimes trying to understand corbra’s analysis. In addition to corbra’s view, I would recommend these people to read two other sites: one is http://danericselliottwaves.blogspot.com/, with great EW perspective. I regularly read this site to complement corbra’s analysis. The other one is http://daytradingsignal.kukool.com/. This site publishes some experienced traders’ trades in real time. If you don’t know much TA, you can follow these trades (read what they do on their site before you decide) while learning.

[TWT]

SPX: If price is unfolding a triangle then we could have the wave (C)

[Al_Dente]

I saw some negative comments in yesterday’s trading signals. I feel it’s unfair to corbra. I’ve been reading his blog since 2010. Now I'm addicted to reading it everyday. I have a lot of respect to his work.....

TO OUR NEW FRIEND Jcantrade
Willkommen
Bienvenue
Welcome
http://www.youtube.com/watch?v=Ifcfki-7 ... re=related

[Jcantrade]

I saw some negative comments in yesterday’s trading signals. I feel it’s unfair to corbra. I’ve been reading his blog since 2010. Now I'm addicted to reading it everyday. I have a lot of respect to his work.....

TO OUR NEW FRIEND Jcantrade
Willkommen
Bienvenue
Welcome
http://www.youtube.com/watch?v=Ifcfki-7 ... re=related

Thanks, Al_Dente. Always enjoyed your posts.