When this market exceeded my 1369 projection estimate from last Friday I looked around and my calendar and realized why were even more bullish than expected. The market follows the Taylor sequence which was discovered back in the 30's and 40's. It trends in sequences of 3 days with a variation of 4-5 to knock out the amateurs and stops/alogos . It mostly just travels in sequences of 3 and 5 in recent years. But, the big reason for the falling VIX and high complacency is the fed meeting coming up at the end of the month with a rumor going around about QE3 as soon as July 31's. http://www.federalreserve.gov/whatsnext.htm While I don't think it will be announced, there is also the Jackson Hole Consortium in August which will give investors hope if there is no announcement at the end of the month. So, bottom line is... Rally cycles will be "logicalized" and rumors will be spread about QE3. While sell cycles will be "logicalized" driven by EU fears. The more powerful influence on supply/demand from here until Jackson Hole is the threat of QE3 to short positions and the optimism of the longs. If QE3 does come through I expect this S&P to just about lock limit up, followthough rally for a few days... Consolidate through a around a 5-7 day weak sell cycle then march upward toward 1500. Everyone has gotten so used to what happens when QE occurs that the market may just have an upward crash as the bears mass panic in fear of being driven 200-300 handles underwater. The worse the economic data is and the more depressed Bernanke sounds about the economy the more bullish the market will be. Because expectations of QE3 will rise.
Your observation is hardly innovative and probably too complicated. How the hell do you make any of that analysis actionable?
Blah, blah, blah. You are the ET king of hindsight. Post a call BEFORE a big move for once instead of trying to explain it after it happens. Douchebag.
Who cares why the market is doing what it's doing. Do your analysis! Step right up and place your bets!
Yea, good plan... About tired of these dipsh*ts on ET... Lightened up on my short positions a few minutes ago as we approach 1363.79. I kinda got trapped taking five handles of heat before this weeks swing went in my favor.
Except when it doesn't. Like as recent as May, where stocks fell sharply for 13 days, with only two days of fractional gains between losses. Or in January of this year, where it did the same thing for 16 days, only it was gaining almost every day. There are enough months like that to ruin any simple "3-to-5 day cycle" or "3-to-5 day pullback" system. If I'm wrong, prove it.
The market was in correction then. Even CNBC will tell you when the market is in correction so you can avoid it... Everyone knows when we have a major range breakdown.
Thanks. So next time the market falls for 3 straight days, I'll just turn on CNBC and see if it's a real correction or a "buyable pullback." Didn't know it was so simple. Or better yet...how about you make live calls and tell the world each day when we're in a real correction, real rally or just range trading? That would be fun...
"I kinda got trapped taking five handles of heat before this weeks swing went in my favor." OK you sold a trend line and it broke out instead of falling and there was bad news out of Europe and it went back in your favor. How were you trapped? You mean you can't get out if it kept going another ten handles against you? Or you mean all your trades go in your favor no heat because your a professional and this time that naughty market gave you a scare? Also what are amateurs? Someone who has a trade with a stop loss that gets hit? There is no way a ego as big as yours makes money trading.