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Markets fall 7% this week

post #1 of 147
Thread Starter 
imo the way things are building I am expecting a 7% loss in the major indexes By the end of next week. Call em crazy and eprhaps I am wrong. I got 50/50 chance either way really. I expect Monday to be a scary 100-200 points down in futures causing a ruckus. Tuesday will gap down but fly our of the gates with unsurprised luster. We will go green but 30-50 points then fall and close at lows, the rest of the week will become even more dismal as we break down over 500 points on the dow causing longtime bulls to rethink their positions. As these positions get liquidated all ruckus will begin to come through. The big hands are already planning this change in momentum.

All views are ideas are welcome, perhaps even substantiated my graphic evidence of your beliefs. I hope this turns into a good quality conversation for the weekend and Mondays future only day. Please post charts and ideas. NO bashing for the simple art of bashing but put some pen to paper and give reasons for your diabolical info.

Here is some of my reasoning.

Yes big chart omg my laptop will die, too bad so sad i am not shrinking it.


First from my methods 80% of the time i tend to see a buildup of persay "smart" money into a move. With last weeks fall then low volume death sideways and then Fridays "stop" run. This is how I am left feeling.

The amrket makers ect were definetly absent from last weeks action toehr then teh move down. Positions short were built long before last week and Tuesdays selloff IMO was a result of we are all gonna have a short week lets pound this thing down so we can go on vacation with our shorts and relax knowing things cant get to out of control.

Big players have an average short position currently in the 1028-1035 area. Typical want for action is 20 point then 50 points respectably.

so say a 1032 average price point short.

1032-20= 1012

1032-50= 982

We never hit this area. Even Fridays bogus rally was pre planned by large institutions. We rose due to bears backing off and letting price rise not bulls coming in in force which is obvious by delta calculations.

again all views are welcome and please at least type why u feel a way, charts are even better
post #2 of 147
Great analysis timmy. I do have some questions though.

"We rose due to bears backing off and letting price rise not bulls coming in in force which is obvious by delta calculations."

What do you mean by that?

If we are indeed facing a 7% drop then I'll be a happy man
post #3 of 147
Markets are closed Monday
post #4 of 147
Thread Starter 
Quote:
Originally Posted by mxdave View Post
Markets are closed Monday
Not futures, if you remember to the fall before that 700 point down day was on a futures fall
post #5 of 147
I agree the correction is coming.Head and shoulders pattern developing SP to 978

http://thechartpatterntrader.com/index.php
post #6 of 147
Thread Starter 
Quote:
Originally Posted by JLC View Post
Great analysis timmy. I do have some questions though.

"We rose due to bears backing off and letting price rise not bulls coming in in force which is obvious by delta calculations."

What do you mean by that?

If we are indeed facing a 7% drop then I'll be a happy man
Well in my watching for months now I tend to see a buildup of potions. We hit a low of 991 and then we closed Friday at 1014. That's a sizable move but if you look at the lower indicator it didn't rise much. I mean yeah it moved up but not as much as it should have. Prices could def go to 1035 again next week but imo the stone has been engraved for a 950 move. It is imo the following

1) At 978 inventory was built long, at 1014 that inventory got removed or became neutral. Some longs initiated buying that brought us to the 1014 level. But why would longs from 978 take profits at 1000 area,?? We actually neutralized longs on Tuesday. I lost some data on my end so my ending numbers should actually be lower then my chart suggests.

2) the prior moves and most moves show a large buildup befor the move occurs. Fridays move was not on built up smart money inventory imo. It was on retail and small traders moving a illiquid market up. Basically low volume longs, With bears staying on sidelines.

3) The bears did not try to defend or drive price lower. why?? Because come next week they arent concerned. They drove price down on Tuesday so they could then go on vacation. They are concerned something would occur wither last week or the coming weeks. Concerned enough that even on Tuesday it scared longs out of positions held at 978's.

Shown on this chart. Not mine but a friends. I am missing some data i haven't rebuilt yet, but his does not. Shows how the 978 longs have totally removed positions and even after doing the math on Fridays close level we are still below those entries even with price at 1014.

post #7 of 147
Thread Starter 
Come on bulls give us some hope here lets start a great discussion with charts ect
post #8 of 147
Hmm, Ill take the other side of that trade

Everybody and their uncle is waiting for 970-950 so they can load up for the end of year rally. If everybody is thinking the same, then somebody is not thinking.

However, we saw the same mentality with gold, and yet gold is climbing away to $1000, so I guess at times the crowds can be right!
post #9 of 147
Thread Starter 
So get this as a opinion of my thinking.

1) shorts were built at 1032 area, they then used Tuesday as a test. To drive price down to build larger positions. It reacted very well. Knowing teh positions would be safe for teh rest of the week. They were able to leave (vacation) and allow price to come back up on weak volume. But since it was driven down there was no risk of not being in the money still. Sunday into Monday can be used to gain better traction short at better prices. Or it can be used to pummel the market. They are waiting for a reason good enough to kill things. Tuesday they were able to make it fall hard with no news ect to back it. Think of what they can do when a reason forms?? 700 points in a week will be nothing. When looking at my analysis you have to use a more mental picture of what is occurring. Price is irrelevant. Inventory means everything. You will see on that chart where inventory was defended short or long at different prices. With the support at 978 gone now. price could fall to 950 easily. IMO of course.
post #10 of 147
Thread Starter 
Quote:
Originally Posted by StockJock-e View Post
Hmm, Ill take the other side of that trade

Everybody and their uncle is waiting for 970-950 so they can load up for the end of year rally. If everybody is thinking the same, then somebody is not thinking.

However, we saw the same mentality with gold, and yet gold is climbing away to $1000, so I guess at times the crowds can be right!
See now this is getting fun
post #11 of 147
Timmy , your timing is off believe me. Not yet by a long shot..
post #12 of 147
I think we're heading up from here but I wish you the best Timmy
post #13 of 147
Quote:
Originally Posted by timmyb199 View Post
So get this as a opinion of my thinking.

1) shorts were built at 1032 area, they then used Tuesday as a test. To drive price down to build larger positions. It reacted very well. Knowing teh positions would be safe for teh rest of the week. They were able to leave (vacation) and allow price to come back up on weak volume. But since it was driven down there was no risk of not being in the money still. Sunday into Monday can be used to gain better traction short at better prices. Or it can be used to pummel the market. They are waiting for a reason good enough to kill things. Tuesday they were able to make it fall hard with no news ect to back it. Think of what they can do when a reason forms?? 700 points in a week will be nothing. When looking at my analysis you have to use a more mental picture of what is occurring. Price is irrelevant. Inventory means everything. You will see on that chart where inventory was defended short or long at different prices. With the support at 978 gone now. price could fall to 950 easily. IMO of course.
That makes a lot of sense and if it holds true then next week will surely see some red ink. What Stockjock-e mentioned also holds true. But then again, there are a lot of buyers waiting to get in on the dip that isn't here yet. If the price goes on a rally mode and these buyers at dip realize that it's never going to come, then they are going to chase and we will most likely push new high. However, if the price fails to rally and what timmy said presents itself, then these dip buyers are going to take a hit and when they stop their losses it will further the decline even more. It's been going around but we truly are at a critical point where the victor of this tug of war will determine market direction for the next few weeks of trading session.

With all that said though, sentiment still seems neutral to me as I still see bulls wanting new high and bears calling top. Contrarian indicator, however, is mostly bearish overall. I am speculating a head and shoulder formation on the SPX so my stance is still bearish as I think we have either completed a right shoulder during Fridays session or we are still on the way down to neckline to complete the head. Momentum is also pointing to the down side.
post #14 of 147
They mentioned on options action or FM on Friday about the VIX always having a single 1 day super spike toward the end of the year, a 50% move they mentioned that we haven't seen yet. It wouldn't be unrealistic to see something like this given a futures crash or a massive selloff through some very critical support levels.

Let me take the opposite of the trade here:

Remember the entire run up when we'd have VERY low volume pullbacks, or almost sideways churning on low volume before more volume would come in and buy? What happened Tuesday? HUGE volume on the selloff, and the rest of the week just putted along on weak volume. I read someone mention that this was a lack of distribution and that it was bullish, but then again you could have said the same thing on those weak volume pullbacks on the way up. The volume was VERY convincing on Tuesday, and it just seems like the eye of the storm is passing over at the moment where those few village idiots wander outside because they think the storm has passed. Obviously anything can happen and we can go up from here, but most of the names I watch and play were all down HUGE Tuesday and have wedged up significantly on very bearish diverging volume.
post #15 of 147
Quote:
Originally Posted by REI_Chris View Post
They mentioned on options action or FM on Friday about the VIX always having a single 1 day super spike toward the end of the year, a 50% move they mentioned that we haven't seen yet. It wouldn't be unrealistic to see something like this given a futures crash or a massive selloff through some very critical support levels.

Let me take the opposite of the trade here:

Remember the entire run up when we'd have VERY low volume pullbacks, or almost sideways churning on low volume before more volume would come in and buy? What happened Tuesday? HUGE volume on the selloff, and the rest of the week just putted along on weak volume. I read someone mention that this was a lack of distribution and that it was bullish, but then again you could have said the same thing on those weak volume pullbacks on the way up. The volume was VERY convincing on Tuesday, and it just seems like the eye of the storm is passing over at the moment where those few village idiots wander outside because they think the storm has passed. Obviously anything can happen and we can go up from here, but most of the names I watch and play were all down HUGE Tuesday and have wedged up significantly on very bearish diverging volume.
x2 A lot of companies are setting up bearish rising wedge coupled with bearish divergence. Friday could've quite possibly been a bull trap. The sell-off volume during Tuesday was too convincing to be ignored.
post #16 of 147
60% chance the sky will fall next week.

Bring an umbrella.

:P
post #17 of 147
100% chance that the sun rises tomorrow.
post #18 of 147
Thread Starter 
Quote:
Originally Posted by JLC View Post
x2 A lot of companies are setting up bearish rising wedge coupled with bearish divergence. Friday could've quite possibly been a bull trap. The sell-off volume during Tuesday was too convincing to be ignored.
LOL now see this is the kinda adult conversations i was looking for, hell in 16 posts the thread has not even got sidetracked yet. GOOD JOB PEOPLE
post #19 of 147
Well the month did close with a doji ... as always a candlestick without confirmation is useless but it just speaks possibility.



The financial sector led this market during the past few months so taking a look at XLF, it would appear price broke out to the downside from the bearish wedge and attempting to retest the wedge again forming a possible head and shouder. What I want to note is the possibility of distribution in place already ...

post #20 of 147
Lets not underestimate the G-20 meeting and it's effects to the markets.

Art Cashin has an opinion on this check it out.

http://www.cnbc.com/id/32689810
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