Timing Market Turns

[W. B. Busin]

Quote from optioncoach:

You still have me lost, you are predicting a drop in the SPX from 1214 now to 1091 in OCT???????

The dates are predicted but the price is a projection/calculated. I have emphasized the words to focus on in the text below from prior posts.

To be clear, I'm not just throwing stuff out as vague generalities. I choose my words carefully.

Yes, SPX could easily get down to 1090 s ... the 1060 level of August 2004 is also in play.

There are numerous levels in between 1200 and those.

Here is the what traders may not recognize, sentiment is now hugely bearish, normally a contrary indicator (except when it's exactly correct). When it is correct, 'you know what' hits the fan and markets break hard.

It's my opinion the sentiment is correct at this time. 'Petrol on the fire' correctness.

As to the extreme low projection numbers, I dearly hope I'm wrong.

This journal is just a convenient way for me to keep a log of the results of my work.

Use anything you want or ignore it totally. I'm still learning even though I've been at this investing/trading thing for over 40 years.

I still enjoy it too.

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Quoted from previous posts:

Low projection <b>extreme</b> SPX 1090

The last portion of this correction should begin today, Monday the 3rd of October, 2005.

The coming down move may rival the fear of 1987... may, not for sure.

<b>If</b> 1091 spx is broken, before a bounce in mid-month, that would raise grave concerns about the October 24th low, and where it could stop.

SPX 1036 would be the next support level.

 

[El OchoCinco]

You still are just throwing words around. I could easily say the SPX could go to 500 as well based on levels in the early 1990s or such. But you are stating that we could lose more than 100 points in 3 weeks without any factual analysis. It is one thing to wave your hands and say the SPX could lose 10% in three weeks, it is another to back it up with a realistic reason. What do you see that has you so scared that the market will drop MORE THAN IT DID in 1987 crash?

 

[fstrader]

I'd say your off to a good start. I was thinking about this post as I traded in some longs for shorts today.

What tools do you use to come up with your analysis?

 

[W. B. Busin]

Quote from fstrader:

I'd say your off to a good start. I was thinking about this post as I traded in some longs for shorts today.

What tools do you use to come up with your analysis?

HI fstrader,

I've long been a totally Technical investor/trader.

Traditional tools found in most sw packs

diverging indications from those tools, combined with not needing to trade gives me an edge in waiting for my perfect set of conditions.

everybody has different tolerances and things that work for them.

mine are tweaked for different market climates, such as tops, bottoms, ranges, trending up and trending down, etc.

I hope that the extremes don't happen but October can be a bloody hell. That's why I spent years trying to find a timing system that would give another edge.

So that a date becomes the focus when it's uncertain to me what is actually going on before the posting of that date's market action. If the date and the set of conditions on that date appear to be sympathetic, I'll take one of the trade strategies in my plan.

A plan and some risk assessment/bet size makes for good entry executions and exits. It doesn't require me to sit at the computer sweating out a trade.

The weak action of the recent few weeks has had me frowning at the screen almost daily. It's as if Edgar Allen Poe was scripting the buys and sells, eh.

Accordingly, I always seem to begin inquiry with a trading question about what is the worst that could happen by the next timing locus date.

That eases the brain cramp when things ease off a pinch in the meantime. But this instance had me a tick more concerned than I've been for a few years.

Crashes don't start at or near highs, they evolve at lows, and then keep going lower. July and September 2001 mini crashes are compatible with that scenario. I'm hoping we don't repeat that kind of drop in this case.

It would be queer to see it if this correction from Jan '05 is a 4th wave, but it does have an expanding look to it.

If you have volume data for the essenpee 100, one might gaze at the on balance volume- obv is crude but it's truthful mathematics which is useful for starting points.

Noting that no major support was taken out on broad indexes, the essenpee 100 is closer than any others. It still has a lot to prove to the lower levels, but it has a leading jump on the rest.

Hope that the above is assistance to understanding how I view what I'm seeing, and not confusing you.

 

[W. B. Busin]

Quote from optioncoach:

You still are just throwing words around. I could easily say the SPX could go to 500 as well based on levels in the early 1990s or such. But you are stating that we could lose more than 100 points in 3 weeks without any factual analysis. It is one thing to wave your hands and say the SPX could lose 10% in three weeks, it is another to back it up with a realistic reason. What do you see that has you so scared that the market will drop MORE THAN IT DID in 1987 crash?

First, I'm not scared. I don't like the psychological effects that occur from market crashes. I always want the best for people. Declines and long corrections are excellent tonics for markets. Crashes indicate to the uninformed that the system is not safe. That becomes a public attitude that affects economies and entrepreneurs large and small.

If you want facts from me, then perhaps my simple set of facts are too superfluous for your trading style. The facts are all on your screen. We all peer through the glass and see different things.

If my explicit words don't get through, then okay. I'd suggest either waiting to see if I'm right or wrong, or just ignore me. I don't want to hinder anyone's trading psyche.

I thought these journal postings were like talking to yourself, but I'm certainly wrong about that! So I could be wrong about the market too.

One of my favorite expressions about my own market analysis is, "I'll see it when I believe it." When I finally believe something impossible is possible, then that moment changes the way I look forward to scripting a general scenario.

It is amazingly similar to playing golf. Try to hit where you want but also see what you want to avoid or what to capitalize on. Then as it unfolds, one adjusts the strategy for the next golf swing to fit the result of the previous golf swing.

I see that you trade spreads. That is a safe way to extract money from the market. So I wish you good trading there.

 

[El OchoCinco]

I am not challenging you, I am asking an honest question as I like to hear different opinions. I am not saying we are in a roaring bull market but to call for catastrophic collapse, you must see something more than high oil and such. Even after 9/11 and 1987 we did not drop as much as you said so I am just curious as to what is worse than 1987 situation or a major terrorist attack on U.S. soil?

Quote from W. B. Busin:

First, I'm not scared. I don't like the psychological effects that occur from market crashes. I always want the best for people. Declines and long corrections are excellent tonics for markets. Crashes indicate to the uninformed that the system is not safe. That becomes a public attitude that affects economies and entrepreneurs large and small.

If you want facts from me, then perhaps my simple set of facts are too superfluous for your trading style. The facts are all on your screen. We all peer through the glass and see different things.

If my explicit words don't get through, then okay. I'd suggest either waiting to see if I'm right or wrong, or just ignore me. I don't want to hinder anyone's trading psyche.

I thought these journal postings were like talking to yourself, but I'm certainly wrong about that! So I could be wrong about the market too.

One of my favorite expressions about my own market analysis is, "I'll see it when I believe it." When I finally believe something impossible is possible, then that moment changes the way I look forward to scripting a general scenario.

It is amazingly similar to playing golf. Try to hit where you want but also see what you want to avoid or what to capitalize on. Then as it unfolds, one adjusts the strategy for the next golf swing to fit the result of the previous golf swing.

I see that you trade spreads. That is a safe way to extract money from the market. So I wish you good trading there.

 

[W. B. Busin]

Quote from optioncoach:

I am not challenging you, I am asking an honest question as I like to hear different opinions. I am not saying we are in a roaring bull market but to call for catastrophic collapse, you must see something more than high oil and such. Even after 9/11 and 1987 we did not drop as much as you said so I am just curious as to what is worse than 1987 situation or a major terrorist attack on U.S. soil?

sincerely, you are reading way too much into what I have written.

What I see is only potential, not absolute. The market does what it wants and should do.

I simply look for potential.

 

[W. B. Busin]

As stated earlier, I still see the decline stopping shortly after noon tomorrow, Friday, October 7th.

It seems unlikely that we will reach as low as SPX 1165 today but SPX 1179 could provide support for an intraday low at the close.

Good trading and God bless.

WB

 

[W. B. Busin]

An organized decline and a short covering move up near the close masks the underlying bearish orientation of the broad markets.

Beginning at the noon hour tomorrow, I expect to see a turn upwards. This turn should last at least until 3 p.m. on Tuesday and possibly with a final move on Wednesday.

The programme or system accounts for a strong bounce in these next few days. If tomorrow's SPX pre-noon (EDT) low does not take down today's low, I would expect a more modest bounce.

SPX 1179 is still the subsequent trough level to test. The critical line to cross and hold below is SPX 1165.

Successfully testing and closing above the lowest up trendline (origin- March 2003 low), is a positive sign for the longer term, weekly perspective. The lowest support level hovers at SPX 900.

If I and the programme are in total error (it is possible!):

1. The SPX and Dow will within days (3-5) recover the early September highs at 1243 and 10,702 respectively. Without much pause in momentum, both will quickly surge to new highs by month's end.

2. The SPX 1165 +/-, closing price, will hold like Gibraltar, though it may be attacked several times.

Good trading and God bless.

WB

 

[W. B. Busin]

The indexes and futures have meandered this morning instead of continuing to rally. We expect at least a return to SPX 1191, or lower, and back to 1195 in the e-mini.

In our opinion the meandering has pushed the time locus out a bit further than 12:30 p.m. It appears that the structure is incomplete toward the intended lows. We expect it is quite likely to move later today toward the previously forecast support levels for this third part of the decline from September 12th.

A slightly higher intraday high is expected, toward the maximum SPX 1210-12 level, before the final move down into a time locus for a turn. Our stops are now just above that level.

I will update near 1:30 p.m., or sooner.