Some Type of Low is In

I think we have a bottom for now.  I am seeing volume reversal signals on VXX and the SPY.  We hit a volume blow out yesterday and we should head higher from here or at least bounce a bit.

Fear turns into greed very quickly.

There will eventually be another huge shorting opportunity down the road.. but not now…

Posted in SP500
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8 comments on “Some Type of Low is In
  1. Max says:

    Oh come on we might see a deeper bottom already this week. Tomorrow remaining dip buyers will be suckered in, completing a perfect setup for a CRASH.

  2. Neal says:

    Tom: 500 Dow points tacked on in the last hour of Tuesday’s session! Hardly an accident. The forensic evidence finds the Plunge Protection Team’s fingerprints all over the corpses of the short sellers. And now that the shorts have been punished for their defiance and put out of their misery, they will be thrown into a barbeque pit for the banksters banquet. I’d love to hear their conversations this evening in Greenwich CT, the epicenter of the hedge fund banksters. They appreciate you short sellers as an appetizer to their rallies. The kindling they use to cook you is free banknotes courtesy of the Fed. My point being: do you really think you can game this action consistently and profitably over the years? Or before you make yourself crazy trying to predict the timing of their moves??

  3. JR says:

    Covered my shorts early this AM (9:32:34), had a big profit in ITMN and decided to protect it, that was when the market was up around 100 points and my intuition picked up. Went long F and Kraft (3:18:24,29,34,36) after the market bounced up and down and then up. I got in F at $10.69. I expect F to reach at least 12. it is down from 18.50s so 12 should be easy and Kraft at least 38, its spin off would justify 42-28.
    Tom: do you have a # on the $SPX for the next leg up?
    For those who doubt that the little guy can make it in this market, I should remind, that it was the little critters that survived when the giant dinosaurs perished!

  4. JR says:

    Kraft that is 42-48.

  5. JR says:

    added note: For those who are interested in my EW read. Bounce is similar to October 2008 when you had a fake on the up side that lasted about a week.
    EW predicts the same thing for this bounce topping around $SPX 1200. Also the McClellan Oscillator should hit the zero line about the same time. It is -75 now and was showing very over sold.
    So the little critter is looking to exit from the upside in just a very few days.

  6. Tom says:

    This chart by Peter Brandt seems to be the most appropriate.

    I think we really need to focus on the possibility as he suggests that this is a broadening top formation which still has the potential to be extremely bearish.

    It could set up a huge huge decline into September.

    http://peterlbrandt.com/wp-content/uploads/2011/08/8.9NQUdaily.jpg

    Please see my previous post of the chart of ‘Air Reduction’ for an example of how it might play out.

    I am scratching my head thinking how this pattern could fail or not be bearish anymore…

    I am wondering how many days we could actually bounce higher.

    I see MAX upside on the QQQ at 56.

    56 is potentially a dream re short level on the QQQ but am still studying it.

    I guess the question we have to ask ourselves is, why or how on earth are we going to start a new bull trend here in Mid August ? We have September coming up..

    Market lows are usually made in October. Not Mid August..

  7. ed says:

    We bounced off the 38% Fib today with a bullish Piercing Line candle pattern. Looks like we will rebound to the long term trend line at around 1275-80 and then kiss it good bye to the downdside

  8. Geoff says:

    A single day doesn’t make an intermediate trend. I am wondering what the Arms/ Trin told us on Monday (8-Aug). The market settled at the bottom, down 600+ points: there were only 39 advancing issues and 3028 declining issues – – yet the Arms/Trin for the day was an incredible 1.04 which is not the least bit bearish! The 10 day moving average of Trin on that day was only 1.80 which is bearish but definitely not obscenely bearish.

    Doug Kass said on “Fast Money” last night that the Monday close was the low for 2011. He said he was all out buying on Monday and yesterday.

    A continuation of yesterdays surge seems “logical”, but Monday’s Arms reading and AD give me pause. As posted on zerohedge, i feel like the deer in the headlights of the oncoming vehicle.

    I am hedged with both longs and shorts now. But if i was to place probabilities, i would say 60% continue down and 40% we continue to go higher. I think continuing down hard would genuinely create panic and fear and would be very ugly. Too many people are saying this is NOT 2008 revisited, but the world has hardly solved any of the problems from 3 years ago – – in fact our problems are compounded now by the astounding debt taken on.

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