Good morning. Happy Thursday.
Somber times in tech land as the world learned of Steve Jobs passing. In modern times he had no equal. If you judge a man by the number of lives he touched or as Warren Buffett says, the number of people who love you, Jobs stands alone. The response in the media and on the internet is a response reserved for presidents. His name goes next to Edison in the history books as a brilliant creator, innovator, visionary, business leader and entrepreneur. When he stepped down from his CEO post, we knew this day probably wasn’t far off, but it’s still a shock. He will be missed.
The Asian/Pacific markets closed mostly up. Hong Kong gained better than 5%. Indonesia more than 4%. And Australia more than 3%. Europe is currently up across-the-board. Austria is up more than 3% and France is up more than 2%. Futures here in the States suggest a positive open for the cash market.
Sentiment has shifted the last day (plus 45 minutes). The overall trend is down. The intermediate term trend is either down or neutral (I say down because over the last 5 weeks, the indexes have made a couple lower highs and lower lows). The short term is up. As of today’s open, the S&P will be about 75 points off its low. This is the 5th 75-point rally in the last two months, so it should not be a surprise. Big bounces occur within downtrends, and in fact the single biggest up days occur within downtrends. You must plan for these moves. A shorter term trades exits and looks to re-enter. A longer term trader can hold short with a loose stop. Neither is inherently right or wrong, but there is a best practice for your personally. And whatever you do, be consistent. He who wavers back and forth loses in this business. He who keeps things simple and is painfully consistent wins – or at least has much higher odds of winning.
I am in wait-and-see mode. Right now this bounce is no different than the four that preceded it. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Oct 6)”
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Well said, Jason.
I see SPX is testing the lower end of my 1148-1165 target area. I’ll be interested to see if support develops in the 1120-1132 area. EW analysis since 1075 is unclear (at least to me)so I view this rally as corrective and unfolding in some sort of 3 wave pattern.
The problem for me is that today’s intraday high could be interpreted as “that’s all there is” or, we could see a pullback followed by higher prices. I’m leaning on other technical indicators to help clarify things, e.g. daily MACD & RSI. Since I’m already short at lower levels, I’m not anxious to play hero and try to pick a top to this rally. I’d rather see some confirmation that this rally may have ended before putting on the last 1/3 of a full short position.
I’d like to share another thought that may invite some comment.
As I look at this week’s weekly candlestick pattern developing, the long “stick” off the weekly bottom thus far is evident on all the U.S. indexes. I notice that the strongest index (NDX) has held its AUG low. You would think that, in addtion to the bearish sentiment, this would seem to indicate that this rally from this week’s low should have room to move higher, perhaps to the 50 week EMA in SPX at 1188ish, for example. And I see, as I complete this comment, that SPX is making new intraday highs.
I agree, it’s going to test 1160 then drop and look for support around 1120, but being that tomorrow is Friday I’m not sure what today will bring. My gut says it’ll charge past 1160 today.
we started wave 1 down at late july highs and finished that impulsive move early august lows
we have since been in a choppy,sideways corrective,overlaping,time phase,that some call wave 2 and suitable only for daytraders
we have just had a false break low ,that dont hold in bear markets–ie this is another dead cat bounce
using gann we go to the aug low and plot out a 60 day up–next fri /mon pos tues
now lets get real–the big insto hedgies and central banks needed to trap those stupid alpha long only mutual pensioner funds long into the market
they are prob fully invested now in usa and europe
so no xmas rally just the start of massive wave 3 –stright through 999 on way to spx 666
im going back to sleep–im not ready to short those bulls yet
Are you saying, within the next 60 days, we’ll test the August low then go up with a Santa sell off?
We tested the August low on 10/4 and I agree with PeteM, it looks bullish.
maybe its the way im saying it –i dont know
but wave 2 sideways junk ends tomorrow /mon or tues
then a impulsive wave 3 down to finish beg december /xmas
ie a 60 day cycle down
so spx 1188 by fri /mon /tues then crash would be good
now of course i never said any of that–it was grizelly my bear that told me
im going back to sleep—good nite
What’s up with the Airline Industry?
#8 It is being reported that approximately 240 pilots for American Airlines have retired in the last two months alone. All of those pilots are retiring so that they can shield their pensions from the upcoming bankruptcy filing.
#9 Nearly the entire airline industry got hit really hard on Monday. Shares of United Continental, U.S. Airways and Delta were all down more than 10 percent.
Thanks for yesterday’s kudo Howard.
See you guys tomorrow
it was those nice insto bank/hedgies ,closing out their shorts,thus causing a s cover and bringing in the sucker money out of bonds–ie pensioner mutuals –and that was the false break low–but look at any index bear trend—its full of false break lows –but those lows dont hold and are soon crashed threw
Jason: I’d add, make entry and exit rules the same and treat stops as health insurance. The only way to collect on health insurance is to be sick and who wants to be sick? I focus on reversals. That’s what I meant about making entry and exit rules the same. This also causes me to be proactive about exits. I do use stops, health insurance, but I try to keep my trade healthy so I don’t have to file and collect.
It seems that Daddy Paul nailed the big bounce almost to the day (see Oct 3) He’s even saying ‘bottom’ and maybe it is for quite a while yet. It’s an exciting (frustrating) market either way.
Can you imagine how well he’s doing right now after going all-in at 1080-ish? Wow. 😀
Daddy Paul says:
October 3, 2011 at 9:07 pm
Jason
I am calling a bottom here. For a few weeks the market was not acting normally just as it acted six weeks before 911. I wrote formulas to pick a bottom in 2000 and i am still using them today! My bottom feeding models tell me today or tomorrow will be the bottom. The one show stopper is if we do get a gap up in the open and the gap up breaks down then all bets are off. If we get a gap down I am all in!
LONG
Reply
In the last hour of U.S. trading, we are at an interesting juncture. If we break down here, the intensity of the drop may hint as to whether this rally has ended. An orderly pullback would imply support between SPX 1135-1140, in my opinion, and then at least a retest of today’s high at minimum, with a strong probability of a test of the 50 day ema at 1188ish.
AussieJS & I disagree on the wave structure thus far to the downside. I see 3 wave structures occurring while he sees 5 waves. Either way, we should get to SPX 1000. I see that as a stopping point followed by a good rally, while he sees little support on the way more directly to 666. As I said, either way, I want to be short and we’ll see what happens at 1000, if and when we get there. As to 666, if we see it, I would think it will take until 2013/2014.
PeteM
I am looking to see if 1165 holds. It has been trying to break it late and if it can’t then it should break down. If it holds around these levels today 1162 it will make a run at it tomorrow. Then we will see if 1188 or 1140 is the next target
One further to note. FTSE is on very overbought conditions on the 60 min chart and is due for a pull back. I agree with AussieJS that it is a indicator of the market. However, the DJIA has further to go so it is a very interesting conjuntion at this time. DAX FTSE all want a pull back but the DJIA and SPY wanting to go further
here is a question–
with london doing another QE2
with all the trillions of debt world wide,leveraged at least 10 times and far outstipping the money supply
HOW IS IT ALL GOING TO GET PAYED BACK