Saturday, June 26, 2010

Re: Market Manipulation

I tend not to believe in manipulation until I see it, because if it could be proven that the free market was no longer free, but being manipulated; no long term investor, in their right mind would continue to invest in it, but I've been seeing some things in the charts, and from the media over the past few years, some of which can't otherwise be explained away, nor should they be ignored.
1. The $VIX selling off methodically & un-naturally - from the Christmas Holiday of 08 through May of 09; during a time when the market would have normally been covering it's back - buying put protection. We also saw the $SPX rally over the same period, on low volume, and with no normal standard Fibonacci retracement, while CNBC pundits' continue to argue - all day long - that 10% corrections are all that are required in a "Bull Market", while 10% is merely a pullback.

2. I witnessed the China Chart $CZH paint all zeros over-night, and then reverse course (short term bullish); this was just before china released it's latest manufacturing numbers, soon after Hillary Clinton and Tim Geithner were seen visiting China. This was the same day Jim Cramer - of Mad Money fame - pumped Exxon Mobil, and China. Telling his fans that a "soft landing" in China was a buy, although up to this point he had recommend holding any china stocks - other than BIDU.

3. The financials ($DJUSFN), the $SPX chart tends to hold up better than the $INDU, and tech ($DJUSTC) (when normally tech leads the market). I've also seen CNBC repeatedly tell their audience, that traders "watch the $SPX, not the $INDU".

4. We also recently witnessed the media's poor attempt at damage control when the market finally did reverse course - on the day of the so called "flash crash". Markets have crashed throughout history, yet they want us to believe than some sort of technical glitch, or electronic markets is to blame for this latest downturn, while there is no evidence to support such a claim.

It's a well known fact that NBC is owed by GE, who is part of the current administrations economic dream team, so much of the above can easily be explained by a carefully coordinated conspiracy, perpetrated against the American people, by the corporate/government/media complex, in order to keep the public hopes up. They know as well as I, that recovery isn't possible unless public sentiment turns positive, and if capitalism fails, they all lose their jobs, including the politicians. When people get hungry; there will be social unrest, and governments will fall, as we see this already happening in Greece. These are the green shoots I believe we need to pay attention to. I don't hope for a terrible outcome, but I also know that markets will correct, and that manipulation can do nothing to prevent it. Risk will be priced in, and with over $100 Trillion in outstanding U.S. liabilities, we are a bankrupt nation.

Granted: Most of the above may also be explained by herd mentality, but there are other things which can't.

Case in point: The REIT: Annal Capital Management (NLY): I have the chart posted on on my blog, and in my public charts. Yesterday I saw the predicted "island reversal" with my own eyes, but when I loaded it into my ticker I was surprised to see NLY up. I checked the chart again a few minutes later, and the candle had clearly gapped-down - below the island formation - and was slowly rising. I was busy charting Friday morning, so I figured there must be some simple explanation, and didn't think much more about it, but when I looked at the chart later that evening; the candle I had seen earlier in the morning, is now grouped together with the others at the top, just as the zeros painting on the china chart, and gaps down on the $VIX, are no where to be found.

Today: Yahoo charts show the NLY gap down on Friday, but yahoo ticker shows the stock ended up at the end of the day, as well as after hours. yahoo "profile" information: Index Membership: N/A

Here's the screen shot:


And here's the screenshot from my public charts (daily candles) Index NYSE:
NLY - Daily Candlesticks: "

via StockCharts.com
"

If I'm missing something here; please respond here, or contract me though my public charts link.

I'll cover next weeks game plan, in a separate post, so check back later this weekend, or before Monday's open.

Tuesday, June 15, 2010

Trading the "double dip"

It's all coming back to me now


I vividly recall the massive short squeezes, followed by 1000 point market drops; that shook most of us - leveraged ETF swing traders - out on both sides of the trade... left bleeding, and watching our tickers in shock, as the trade that got away from us plays out right before our eyes; afraid to chase it; wondering where we went wrong, but nobody had ever attempted to trade a monster like this one, and we were fools to believe we could get our heads around it. 

But this time will be different 

Waiting for that big wave. I hope to catch many more moves this time, but when the bottom comes in, let there be no second guessing, because 2X - 3X ETF's can lose 1% per minute, once the larger trend changes. I recommend that nobody in their right mind trade these things, so are you still with me!?

Predicting it is easy; trading it is the difficult part. 

The best we can do it to follow the big fishes, in who's wake we swim in. These are the Wall Street-Smart billionaires, who sell the bubbles at about the same time most small fish get caught-up in the excitement. "You're gonna wait too fat boy!" 
Once a generation their sights set on making "Mad Money", in stocks, real-state, tech, china, or tulip bulbs, you know it's time to sell. When all hope is lost someone will be left to pick up the pieces. 

We are the market timers.

Saturday, June 12, 2010

Welcome to the elliottwavehound.com public blog!

This is my first blog, started in 2008.
 
I'm exited to have more room to write here! There are times when I feel the need better explain what I'm seeing in the charts, and list a number of possible outcomes, and I was unable to adequately do so,within the limited space stockcharts.com allows.


For some time I had been bouncing around the idea of adding a live chat room here - but on several test runs chat proved to be too distracting, and contrary to popular belief, it is better to trade alone. 

Herd mentality is a dangerous thing; It's what caused the biggest boom in recorded history to end in a bust that may continue to play out for several more years/decades. It keeps many perma-bulls clinging to the belief that the economy is in recovery, where there is none.


The charts speak for themselves, while emotion (the traders worse enemy) tends to feed on itself. The one benefit of live chat, would be the ability to announce a bottom/top in real time, but only in a live trading (room) situation.