Thursday, March 24, 2011

Bulls Making a Run - but on No Volume

The bulls are still making a go at pushing this market higher and have obviously been successful doing so the past few days.  Today the S&P did not break below my key level I mentioned yesterday at 1284.05, so I remain neutral.  The series of higher highs and higher lows remains intact therefore so does the uptrend.

Despite the bulls seeming to be in full control of this market according to the price action, they are doing it on very light volume, and almost every day the market moves higher while volume moves lower.  This diverging behavior is bearish and suggests the market will give way to a big downside move once volume re-enters the market.  Now tomorrow is a Friday so I doubt we'll get a lot of volume then, so the market may float higher to fill the gap at 1320 which I mention in the below paragraph.  But be aware of any news data that may hit the wires tonight and early tomorrow morning.  Despite it being a Friday, this market is poised to fall hard once volume re-enters the market and a big news event will probably bring that volume in whether it's Friday or not.  Coming below 1284.05 would instill great confidence that a top is in, and/or big volume with a sharp move lower would do so as well.  But until then, I'm waiting on the sidelines.

The bulls are making a strong charge to push the market higher with a convincing day to the upside so far today.  There's an open gap at 1320 the S&P MAY work its way toward closing before topping.  The current wave is a ((c)) of Y of (Y) which would explain the strength today since C waves are similar to 3rd waves in strength.  With no signs of a top and reversal, I don't want to get in this market's way right now.  But I'll keep my eye open for reversal signs near that gap level at 1320 and/or a big reversal sometime today as well.

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The euro surged higher with stocks this morning, failing to complete a clear impulsive decline.  Yet the british pound has completed an impulsive decline vs the USD.  So it's possible the pound has topped and reversed while the euro needs to make one more small high before topping.  I'm short the euro right now but the british pound looks good getting short if we get a big bounce from this 5 wave decline soon.  Either way, I'm looking to get long the USD (short the GBP or EUR) when opportunity arises.



dave427 said...

Todd - From and Elliott Wave viewpoint, how is Fed market "manipulation" addressed? I mean, does EW theory - essentially that public sentiment occurs in either positive or negative mood wave and results in herding instincts and movements - allow for, or even work when the market is "moved" by huge monetary actions? Do those huge monetary actions also represent a form of herding, or are they wildcats as far as EW goes? Seems that for the last year, P3 is "imminent" only to be postponed again and again by something, and I wonder if it's the Fed's actions . . . . .

I enjoy your analysis - keep it up! :)

dave427 said...

Thanks. The cattle analogy is a good one.

eunsuh said...

Hey Todd!! Thanks for the summaries. Congrats! They put your article (yesterdays) up on the Before Its News website...and it held the number one spot for most of this morning.

Not much to say especially in light of the AH ramp job on the ES futures. I ignore the rumors or news that typically follows these types of events. I saw the comment whether EWA is appropriate in light of intervention. I think the intervention has been going on for a long long time. Its just much more blatant in todays world of "anything goes" which just demonstrate the desperateness of our leaders.

I think the entire ballgame is rigged. In fact, I think most professional sports are rigged. But that's another discussion. Take a look at TRID. They drive the price down 40% in three weeks on no news. The stock is already down 95% from its high. Then today they come out with a fluff article that sends the stock soaring 25%. Checking insider transaction, a lot of them boyz got on board in late January and February. And of course they bled the stock yesterday right before the turn. All the while, they know of the impending news.

In my mind its nothing more than a very sophisticated casino that is hotwired to the insiders. The manipulation (most of it obviously illegal) is beyond comprehension and blatant. You would need an army of SEC auditors and investigators to deal with it. But, of course, we know all about the SEC and its objectives.

I'm 95% liquidated from this market. I am finalizing my liquidations. Many other important things to come completely unrelated to the markets, financials or the myraid of other ponzi schemes we voluntarily commit ourselves to each day. It'll be game over soon enough and the scary part is they can fold up the circus tents and leave ya high and dry, and you'll have zero recourse. Its their party after all.

Its been my hope that more people would understand what is happening in the world, and choose not to participate in "the games" anymore. It is us that keep the game alive...until like I say....they fold up the circus tents and leave town. Good ruck!$TNX&p=W&yr=20&mn=0&dy=0&id=p45117965910&a=227268861&r=8798&cmd=print

PrincipleAnalysis_Blogspot_Com said...

Nice! Yeah, I just linked up with Before It's News a week or so ago.....pretty cool operation and website idea they have. We'll see where it goes. Thanks for pointing out my post on the top spot! It must have been the catchy title......too bad the market rallied today though, lol.

Yes, the game is rigged in essence, but we can still profit by piggy-backing on those who are "in the know". And as for the SEC, I'm not sure why they still exist after the 2007-2009 meltdown and especially Madoff. They are comprised of too many lawyers and a bunch of underpaid financial analysts who make a fraction of what the people they audit make. Many of the SEC employees want jobs on Wall Street so they can get a pay raise from $80k a year to $500k a year. Makes sense to me. But how are the SEC folks supposed to be honest and objective if they're auditing people with whom they want to work for??? I thought they'd just eliminate the SEC altogether after 2007 and Madoff and just have the Justice Department handle securities fraud, but I was wrong.

By the way, the tsunami footage in that video you attached is insane. Wow.


TAfool said...

A while back you said to let you know when I went short. Well, I haven't yet but I'm eyeing 1384 to 1396 to take the turn and here's why:
daily chart (for the overall view):
and the 4hr close up chart:

Long time daily reader.

PrincipleAnalysis_Blogspot_Com said...

Hey, good to hear from you again TA! I admire your discipline to wait this thing out. I wasn't as wise as you. Looks like you still think there's some pretty sizeable upside before a top. Let me know when you get short! Want to see how this whole thing is going to turn out.


Intrinsic said...

I think the ECB will raise the rate once, however it is diffcult to argue that a series of rate hikes will follow given the current market environment.