Futures seem to Suggest a Crash This Week BOT Short at the Open Tuesday

The Futures trading today and the action overseas seems to suggest the markets will crash this week.  The market appears to have completed a bearish rising flag formation.  This should mean a renewed move down somewhat equal in length to the initial move in early August 2011.

The BOT Long signal I had sent out was an attempt at identifying a breakout from the symmetrical triangle and a back test to the support of the triangle.  This appears to be a false pattern since now the symmetrical triangle will turn into a busted pattern setup. So we should see hard down prices all this week.

The monthly tape seems to be overtaking the weekly tape at this point.  We had a hammer reversal on the weekly last week and the monthly is not in full crash mode.  So it would seem the worst of the decline should occur over the next two weeks.

The monthly bear signal is the one that seems to be ruling the court.  The recent volatility we saw over the last few weeks is simply price moving against the trend.  The monthlies are the dominant power at this point that continue to suggest ‘buy and hold’ to the downside is the proper approach.

Of course at some point that will stop working, probably when RSI gets oversold enough.

Posted in SP500
9 comments on “Futures seem to Suggest a Crash This Week BOT Short at the Open Tuesday
  1. Geoff says:

    i honestly thought you had “packed it in” and were stopping the blog. your calls have been so horrifically wrong. your last call / last post on Monday Aug 29 at Bot Long at 1201. So if you Buy Short at open tomorrow Tues Sept 8, your followers (if any left) may be buying short at 1140 or so. you can not possibly be investing your own money as you “recommend”

    my suggestion – – – get an honest job. really and seriously.

    as i commented months before, your calls are like a squash player (or racket ball player) who runs to hit the ball where the ball landed “now” rather than mentally anticipating where the ball will be when it ricochets off the wall “now”. those types of “now” players are relatively rare, but they exist and they never never never win. somehow they lack the mental eye / brain co-ordination to attempt to work out the path of probable trajectory.

    do you get paid some small sum, by each of your advertisers, each time one of your followers clicks on your blog, e.g. elliottwave? and potentially a much larger sum if the follower actually clicks on one of your advertisers ad? i am guessing that that can be your only justification for keeping this thing going.

    i think you (or some one) genuinely has an interest in the market, but golly has this site been unbelievably wrong, at almost every turn.

  2. Neal says:

    I took the time to respond to Tom’s August 26th posting titled “DRAMATIC SHORT TERM CHANGE IN MARKET OPINION”, and I’m going to repeat it here:
    “Tom, why are you shocked by the bullish development? Since 1995 the VIX has closed over 40 just 6 times. In all but one of those cases the market was on average 6% higher within 90 days. How about this statistic: since 1960 (and including the recent smack down in August 2011) the S & P has fallen 11% or more just 5 times. IN EACH OF THESE 5 INSTANCES the S & P then gained an average of 9% in the following 90 days!!!
    Moreover, since 1987 we have a new “bull;ish” outside force , the Plunge Protection Team. When in operation you’ll notice how the Team jackasses up the markets by the end of the trading day, even after substantial intra-day swoons. The Team uses heavy futures index buying for fuel and the corpses of short sellers for kindling. My point is that while it might feel like “beating the system” the take some winnings on the short side against the banksters, the truth is as a long term strategy, it is truly financial suicide.
    There have been studies done on financial computer trading systems. They all conclude that in the long run they will blow up. Exhibit A: the super complext system of Long Term Capital Managment in the late 90’s, leading to a government bailout. The pattern is that a system may work for a while, but then it will become a crowded trade, and shortly thereafter in flies the black swan. In a heartbeat the little trader with the program runs out of chips and goes bust. My free advice: the casino whether in Las Vegas, the Jersey shore, or Wall Street, always wins. If you guys are trying to win with the odds so heavily stacked against you, you’ll need more than good luck– you’ll need a miracle.
    In my humble opinion, before I migrate from this website, I believe that some people who are bound and determined to trade have a problem in accepting this Brave New World of ever more powerfully manipulated markets. Many apparently believe they have the ammo to fight against the big boys. The big boys who run their computers from the floor of the exchange itself so they can see your orders in advance and front run you and squeeze your short positions. And if this weren’t bad enough, you would-be traders have to deal with ETF’s and hedge funds with virtually unlimited amount of “other people’s money” further distorting the markets.
    I’d like to hear from you Geoff, before I say adios for good.

  3. D.B Aby says:

    Geoff, you’re being hard on Tom. If you analyze his blog, yes its quickly evident where the revenue comes from.

    There is a saying in poker….don’t tap on the glass. I learn a ton from watching this blog. And from watching your comments on every second blog post. I want both you and Tom to keep at it twice a week for the next 10 weeks as we test 940.

  4. Geoff says:

    i believe that an “investor” as opposed to a trader can possibly divine major themes that will carry on for years, e.g. the demographics / baby boomers of the USA represent a headwind to future consumption, or resources like copper and oil and gold exist in limited quantities and are getting more difficult to find / extract.

    i believe that if an investor can correctly identify these macro themes and provided that said investor does not become imprudently leveraged / greedy, that such investor can, – – – over the long term – – – be a winner.

    i think a good examples of this general type of investing, as opposed to trading, is Warren Buffet or the late Sir John Templeton, to name but a very few.

  5. Neal says:

    I appreciate your response. I may have the same motivation as you for following this blog, to get a better handle on the frantic trader’s mentality. Here’s a parting bit of free advice: look at HIGH YIELD, in both equities and bonds. At this point there is severe mispricing due to ludicrous misinformation, especially dished out by the rating agencies– some very attractive bargains, providing 1) you have a 3-5 year time frame. 2) you can read a balance sheet in detail 3) you can handle a short-term 20% drawdown while collecting your fat checks.

  6. ed says:

    Dollar is breaking out. I have been waiting for this as I believe stocks, gold, silver, and commodities will start to tank. This will shake many out of their gold and silver only to have the government eventually devalue the uncontrollable rising dollar and burn those who dumped their gold

  7. Geoff says:

    this blog site can not possibly represent a “real” trader – – – if so, he / she would have long ago lost all their money

  8. steve says:

    If one draws a parallel channel using recent two highs and recent two lows, we are at the bottom of the channel. Also today was a bottoming tail. So my expectation is for us to be going up from here, until the danger zone (which is close to the top of the parallel channel).

    This is very short term (daily chart).


  9. Tom says:

    This site has and continues to make amazing turning point calls on the market that have caught the BIG MOVES.

    This site has made less and perfect calls on the high volatility after the major turning point calls were already made.

    Those are the facts.

    BOT has caught the biggest turns in the market since 2009 with amazing accuracy. The volatile moves in congestion areas after the major calls have proved difficult to time.

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