Trading Blogers

Day trading predictions… no matter how often you get them right, they get you once in a while. My gap down prediction was one of them. br /br /I posted many long term charts from DJI to OEX to SPX to COMPQ. Nothing has changed. ES is currently up 10, near yesterday’s high. Larger time frames always dominate shorter time frames, therefore span style=”font-weight:bold;”market will not be able to sustain these levels/span in regular hours as most of the indices pushing through multi-decade trendlines. Their reliability is quite proportional with their lifespan.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-3420310828747554218?l=xtrends.blogspot.com’//div

Like I predicted in my previous post, SPX spiked after the FED announcement and rinsed 04/17/09 high then reversed to the downside. There will be follow through tomorrow. br /br /Also since SPY was unable to close below the trend line at 86.9 (which was tested and held near the close), SPY will gap below 86.9 tomorrow and gap should not get filled. br /br /br /As stated before, this was the best ST scenario for the bears as it fits in bearish intermediate term picture quite well. br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfi1i_ZVe6I/AAAAAAAABnI/23YsVA4iH_E/s1600-h/DC_Capital_02+Apr.+29+16.08.gif”img style=”cursor:pointer; cursor:hand;width: 400px; height: 183px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/Sfi1i_ZVe6I/AAAAAAAABnI/23YsVA4iH_E/s400/DC_Capital_02+Apr.+29+16.08.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5330209771730860962″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-1168008327304776863?l=xtrends.blogspot.com’//div

Fed rally I predicted in a href=”http://xtrends.blogspot.com/2009/04/another-distribution-day.html”my previous post/a came before the announcement so expect a reversal very soon. This will mark an important swing top going forward. br /br /Watch those stops above 875, they may momentarily be run after the announcement.br /br /br /Based on the following chart , SPY needs to pull back below the green trend line again. For this to happen today, we should sell off into the close. So my guess is watch the stops above 875, once they are hit, look out below. br /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfiHCXJeWNI/AAAAAAAABnA/9yjLcVJ0kkQ/s1600-h/DC_Capital_01+Apr.+29+12.56.gif”img style=”cursor:pointer; cursor:hand;width: 345px; height: 255px;” src=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfiHCXJeWNI/AAAAAAAABnA/9yjLcVJ0kkQ/s400/DC_Capital_01+Apr.+29+12.56.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5330158633636223186″ //abr /br /Edit at 2:00EST :br /br /SPX marginally broke above 04/17/09 OPEX top. We may not get a FED spike after the announcement. Be careful.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-7645270019650584804?l=xtrends.blogspot.com’//div

Tomorrow is Fed day… It is gonna be boring till 2:15br /br /Considering the big picture that suggests a multi-day sell off as a start for the impending intermediate term downtrend, my best guess is we gonna rally after the Fed to reverse next day. Because Fed pattern suggests a reversal after the Fed day or the day after. br /br /If we sell off, it wouldn’t fit quite well in the big picture as the sell off should lead to a multi-day rally that will distort the intermediate term structure. br /br /But in case we sell off, it will have to be a severe and sharp, like we test 810 or something because this sell off on Fed day will likely be followed by a reversal that will start a multi-day rally. Again, considering the big picture, this rally must stop around 875-880. Therefore any sell off on the Fed day must be deep to make enough room for the next possible rally that should die around 875. br /br /Staying massively short from 865…br /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfdtkjzXtJI/AAAAAAAABm4/8vuboStlXTs/s1600-h/DC_Capital_02+Apr.+28+16.41.gif”img style=”cursor:pointer; cursor:hand;width: 382px; height: 253px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfdtkjzXtJI/AAAAAAAABm4/8vuboStlXTs/s400/DC_Capital_02+Apr.+28+16.41.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329849158869693586″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-4246831355230840730?l=xtrends.blogspot.com’//div

SPY didn’t open below 84.55 and naturally the gap got filled. But it is now compressed between green and black TLs. All looking well within the grand schema of the topping process.br /br /A daily close near 84.6 will confirm a downside acceleration for coming days…br /br /On the upside its very limited… As multi-decade trends are pressing on many major and sectoral indices….implying an average of 40% drop in a year or so …br /br /These are precious days, shorting the pops to built an IT position before they ran out of money (only 110B left) will soon be proven another epic xTrends tradebr /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/Sfctv9YVOeI/AAAAAAAABmw/IIhbf58Eo9w/s1600-h/DC_Capital_01+Apr.+28+12.12.gif”img style=”cursor:pointer; cursor:hand;width: 288px; height: 237px;” src=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/Sfctv9YVOeI/AAAAAAAABmw/IIhbf58Eo9w/s400/DC_Capital_01+Apr.+28+12.12.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329778985969990114″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-2264388445788934951?l=xtrends.blogspot.com’//div

We got the shooting star which was foretold by green TL intraday.br /br /In this episode, you should watch the next level defined by the black xT which passes through approximately 84.55 – 84.45 area. br /br /IF SPY opens below this area, it should trigger a serious sell off from the get go. br /br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfaHVgs8a1I/AAAAAAAABmo/wmFhTG5JRFc/s1600-h/DC_Capital.GIF”img style=”cursor:pointer; cursor:hand;width: 400px; height: 261px;” src=”http://3.bp.blogspot.com/_ZdctlOEsqMQ/SfaHVgs8a1I/AAAAAAAABmo/wmFhTG5JRFc/s400/DC_Capital.GIF” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329596012665006930″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-1595771809252838863?l=xtrends.blogspot.com’//div

Bulls couldn’t surprise me today…br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://4.bp.blogspot.com/_ZdctlOEsqMQ/SfYYzEZPFhI/AAAAAAAABmg/bXYVOpw71B0/s1600-h/untitled.JPG”img style=”cursor:pointer; cursor:hand;width: 400px; height: 194px;” src=”http://4.bp.blogspot.com/_ZdctlOEsqMQ/SfYYzEZPFhI/AAAAAAAABmg/bXYVOpw71B0/s400/untitled.JPG” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329474474671543826″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-7062022640878076065?l=xtrends.blogspot.com’//div

When the trained crowd gets this greedy, tops take longer but firmer… br /br /Regarding today, it wouldn’t look so pretty when this turn into a a href=”http://stockcharts.com/school/doku.php?id=chart_school:chart_analysis:candlestick_bearish_#shooting_star”shooting star/a , would it?br /br /This is the most likely scenario since it opened below the TL, it should close below the TL today. br /br /Surprise me bulls. br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://4.bp.blogspot.com/_ZdctlOEsqMQ/SfXVDvQiu9I/AAAAAAAABmY/nOr9GR4_5rI/s1600-h/DC_Capital_01+Apr.+27+11.21.gif”img style=”cursor:pointer; cursor:hand;width: 377px; height: 327px;” src=”http://4.bp.blogspot.com/_ZdctlOEsqMQ/SfXVDvQiu9I/AAAAAAAABmY/nOr9GR4_5rI/s400/DC_Capital_01+Apr.+27+11.21.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329399994265025490″ //adiv class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-5349394451327400528?l=xtrends.blogspot.com’//div

Two days ago, I wanted to highlight the discipline I have been following and why I do it. I think there is going to be a real life example to explain it better today.br /br /Take a look at the following chart again.br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfWkWIGOzlI/AAAAAAAABmI/GTXtyNe4fRQ/s1600-h/DC_Capital_03+Apr.+26+21.29.gif”img style=”cursor:pointer; cursor:hand;width: 400px; height: 227px;” src=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfWkWIGOzlI/AAAAAAAABmI/GTXtyNe4fRQ/s400/DC_Capital_03+Apr.+26+21.29.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5329346434100547154″ //abr /br /If the market opens at where futures are now, SPY will gap below that green trend line and trap a bunch of traders who thought we were breaking out on Friday. br /br /Big picture, larger time frames, micromanaging, sticking with the strong possibilities while taking advantage of small moves… These eventually let you capitalize on the large moves. br /br /Some people confuses micromanaging with day trading, some doesn’t understand it at all. Micromanaging is a way to optimize your average price. If your system predicts a range bound market which will soon lead to a directional trending market, you take advantage of this congestion within the range to optimize your entry prices of your portfolio which you built for the next big trend. You do this by closing a portion of your position when the market goes in the opposite direction in small time frames then reopen the same position at better prices. br /br /Why I was trading on the short side around this area? Why Sol shorted a bunch despite he knew they looked like breakouts. Why I said big surprise will soon be on the downside? Because larger time frames always dominate smaller time frames. Longer xTrends always dominate shorter xTrends. When the market pushes through some steal wall like this one under some certain conditions, it gets rejected like a ball bouncing off a stiff surface.br /br /a href=”http://finance.yahoo.com/news/World-Bank-Economic-crisis-apf-15036373.html?sec=topStoriespos=6asset=ccode=”World Bank: Economic crisis turning into calamity/abr /br /I wish best of luck to those who bought Friday’s fakeout.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-6554624382874716561?l=xtrends.blogspot.com’//div

Do you remember a href=”http://xtrends.blogspot.com/2008/08/introducing-p-index.html”this custom index/a I created back in August 2008 which a href=”http://xtrends.blogspot.com/2008/09/are-you-scared-to-short-bear-sectors.html”helped me to capture the crash/a. br /br /The following chart belongs to the new version of that index. This modified P-Index contains an additional sector and all of its coefficients are adjusted accordingly. br /br /a onblur=”try {parent.deselectBloggerImageGracefully();} catch(e) {}” href=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfPjNChEfjI/AAAAAAAABl4/2PjOh42KlOk/s1600-h/DC_Capital_14+Apr.+26+00.08.gif”img style=”cursor:pointer; cursor:hand;width: 400px; height: 262px;” src=”http://2.bp.blogspot.com/_ZdctlOEsqMQ/SfPjNChEfjI/AAAAAAAABl4/2PjOh42KlOk/s400/DC_Capital_14+Apr.+26+00.08.gif” border=”0″ alt=”"id=”BLOGGER_PHOTO_ID_5328852597262810674″ //abr /br /I have been following this new index for the last few weeks and it was another reason I called 850 area intermediate top. It doesn’t matter whether SP overshoots 10 or 20 points above 850, we are forming an important intermediate term top here… br /br / The last two weeks were gift for me, I was able to optimize my positions for the next leg down that will likely end 40% below where SP is today. of course this will be obvious to the masses in coming months once SPX takes out 720.div class=”blogger-post-footer”img width=’1′ height=’1′ src=’http://res1.blogblog.com/tracker/2192317321691025209-8351321315216183335?l=xtrends.blogspot.com’//div