RIMM wave count

I said $40 was big weeks ago.  I didn’t know that it had potential to be this big.  Something to watch … $30 is a nice level too if the failed 5th diagonal doesn’t hold.

9:21 AM

QQQQ update

I wouldn’t discount the expanding diagonal here.  I would expect there to be some wrinkle in the pattern.  Sentiment has been god-awful for a while.  The AAII poll doesn’t correlate perfectly with market behavior because what people say on a poll doesn’t necessarily mean their money is where their mouth is.  It has been mostly negative for a while, though, so has the Investor’s intelligence poll.  The VIX just hit previous highs @ 80, so some expensive put options premiums have been sold in the last month or so.

8:50 AM

* don’t forget, there is an RSS feed on the right column to add to your aggregator.

Terminal pattern still in effect?

I’ve never seen so many people convinced that the market will crash in such oversold conditions!  It is a given that anything can happen; never before seen market behaviour creates unforseeable situations, but the market still has to follow the rules of supply and demand.  If we run out of sellers and fear crescendos, then a rally is inevitable. I don’t think the terminal W5 pattern is out of the picture.  Possible W3 of 5 ended a little later than expected, but I think we’re in W4 now, I’d like to see it enter the W2 zone for overlap.  I will post a count on the NASDAQ tomorrow.

Here’s a quick tour of the big movers:

BIDU – approaching previous support\resistance @ ~$100

CME – approaching big levels @ $140-150 and extremely oversold

GLW – Already rallying off $7.30 level, looking at a historical chart you can see why that level might hold for a bit.

DECK – Bounced off big #’s @ $45-50

FSLR – approaching nice level @ ~$75

RIMM – hummed of ~$40 again, $30 looks important also

X – already bounced off big level near $21

My strategy involves shorting into those levels and taking longs off those levels when a wave count and indicators confirm.  As always, stop loss keeps me from getting bruised up too bad

Happy trading!

9:09 PM

$SPX

3 of 5 on that terminal W5 probably ended this morning…. BIDU headed to noted price levels.  On FSLR 5 down heading to $75 area.  2.3 Bears\Bulls ratio on the AAII poll, was 1.6 for Investor’s Intelligence poll (on Nov. 11th), probably lower now. Looking good for this terminal pattern, we’ll keep watching.

11:53 AM

Market update

This is the type of market that drops until you’re sick of it and then produces quick rallies that materialize instantaneously.  The $130 level on BIDU was merely a pivot on the way down.  I use targets areas as profit taking areas, and will only take a new trade off that selected area IF price action appears to corroborate AND I have a tight stop in.  As far as BIDU is concerned, I wouldn’t chase this short, but it should head to the $90-100 level eventually.  I would want some shorter term indications to point overbought before trying to short.  Here’s my short term best guess on the SP mini right now.  Working on terminal pattern W5, once completed (should take a few weeks) sentiment should be nasty, and we should hear more trash talking about Paulson and Bernake.

12:23 PM

Watching BIDU

I had no idea 130-135 would come so quickly! It may need to stabilize for a bit if there is going to be a rally.  I’ve cashed out on the puts, might try to catch an inevitable bouce off this area if possible.

11:36 AM

QQQQ

It appears we’re in a 5th wave right ending diagonal right now.  The 4th wave was a flat ending on 11/04, and right now I think 2 of 5 is in progress.  This means we may have some days sideways as chop, in the process of grinding lower.

9:48 AM

BIDU

Last month’s wave count has accurately described BIDU’s action to this point.  We were expecting a choppy C-wave down diagonal to the $165-175 area.  Here’s what I’m looking at, BIDU may be retesting that $165 support this morning, but it has to support quickly for this to play out.  Otherwise the $130-$135 level may be the ultimate end of this C wave, its also where C=A.

9:35 AM

*9:43: yeah didn’t think so, we already rallied out of that 165-175 zone, and its not respecting the level this morning.

outcomes

I find it ironic that the triangle that everyone was looking for in the last month never even materialized.  The triangle is an example of how the evolution of pattern recognition has changed the very patterns we are trying to recognize.  This is similar to the study of sub-atomic phenomena, where observation of the outcome changes the outcome.  I have been busy lately, and unable to post as much as I would like.  But I should be back at it again next week.  The BIDU count posted last month worked to the T, and now I will reassess since my 165-175 price level was hit.

11:48AM

Sucker’s rally?!

I’m glad I was waiting on BIDU to retrace, it looks like it will now drop to the $165-$175 target area.