For example, many will remember the May-July 2009 Head and Shoulders failed pattern. Traders questioned the Head and Shoulders top during February to July this year, but unlike 2009, the bearish 2011 H&S pattern did complete and follow through this time in 2011.
This is 2011, not 2008, and the similarity can be useful for a period of time, but ultimately each should be treated as a unique situation.
While the current trading pattern in 2011 mimics 2008, the difference this time shows up in the cycles, and it shows in the sentiments. I remember 2008 clearly, and there were not many bears in the summer of 2008. Since summer 2011, bearish sentiments have built up quite high.
The 2008 pattern also reminds that bear market rallies can be deceptively sharp.
Daily
The following is the 2008 Crash.
3day Chart
Tom Demark talks about this 2008 comparison in the following video. He also brings up a number of interesting points about this rally.
ReplyDeletehttp://www.bloomberg.com/video/78373296/
Notice in 2011 the mkt rallied faster up from the blue arrow. If the pattern continues does this mean it could drop to the green arrow faster as well. Just a thought...
SC,,,,,,,,,,,,,
ReplyDeleteYou bring up some very credible thoughts....it is impossible in my experience to try to mirror any one year and refer to it as the active cycle. Most do that, as they identify it at the time they are trading only for it to divert and leave them in a massive drawdown if not flat out loss after the fear sets in and they figure out they have lost their place! Almost all cycle startups rap their brain around this as they really do not understand how the master cycle comes into play! Astro guys to the same with planets trying to identify the same planet of years back, only for it to become the minor this year instead of the major! We will see that in this correction as the buy and holds sit through their drawdown! In my work I do not disagree with this correction but I do with the time in the correction! Good trading to all and watch the price once Fri’s high comes out! joed
Gabe ... where do you see us going this upcoming week?
ReplyDeleteup or down?
Does this scenario fit with your timing Gabe:
ReplyDelete-good sized pullback next week.
-then rally higher in Nov. Around Nov 3rd and also Nov 14th look very bullish to me.
-top out in Nov and then we see the deep correction in Dec and Jan.
-Rally hard from that bottom.
Sc..............
ReplyDeleteLOL........pretty much, except for your wording of DEEP (not sure what u mean by DEEP) and Jan reference! Good trading! joed
My cycles say we are likely mirroring the 1998 and 1966 patterns. I have my next cycle peak hitting early November with another high hitting early January. The 1998 cycle low was hit on Oct 3rd and has been good for 164 handles straight up.
ReplyDeleteThe day after October option expiration has been positive every year for the past 14 years, however, I am expecting weakness this week to set up another buy into early November.
Ok, thanks. I'll show some better short term charts next. The date for the next low that lines up best for me is Oct 31 or Nov 1. Happy Halloween! lol.
ReplyDeleteFor me looks positive around Nov 3rd and also around Nov 14th.
ReplyDeleteI was asked privately about "buy and hold" or swing trading! I believe this 240 min chart tells the story but in the end it has to do with traders personality! I am a swing trader and my auto system I developed is a mix of both!Good trading! joed
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Gabe
ReplyDeleteDoes this mean you got out or are getting out and going short after 43 points profit?
Thai..........
ReplyDeleteIf you look at my last post..........
"I am flat these markets stalking into these areas of interest of price and time. Good trading! joed"
And my last Dow posted chart you will see where I am ..............I am now stalking the short side! Good trading! joed
EMINI NIGHT
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Aloha Thai,
ReplyDeleteAre you still with Sol's Xsetups trading club? Still holding long from spx 1211. Can't wait to go short but still don't have a sell yet on my stuff. Best to everyone tomorrow.
Time is more important than price comes to mind...
ReplyDeletedollar hit support from 2008 at 76. if we are playing out the same fractal this is our low.
ReplyDeleteJason Lee,
ReplyDelete"Can't wait to go short..."
My question is why? You are doing great with your longs. But I guess it will "feel" better to be short
The strength of this market continues to amaze. Out TNA hedge, close to A=C on prop indicator....still holding short with the rest of the lemmings.
ReplyDeleteGabe - Do you have any time fibs that are coming in to play, soooooon? Thanks for your contribution to this board.
1250 = 2500 / 2
ReplyDelete2500 = 50^2
ES hit a natural square/2 ?
completion of the rise from Oct 4 ?
Timer, it seems like too many bears are loosing patience, perhaps market will push it all the way to 200DMA at 1275 just for fun and bleed premature bears completely. There is still time..
ReplyDeleteShort at SPX 1252.
ReplyDeleteEMINI .................
ReplyDeletehttp://imageshack.us/photo/my-images/84/clipboard02p.gif/
Gabe
ReplyDeleteDoes that mean you are short at 1252?
Thai.........
ReplyDeleteI am showing charts when points of opportunity arise .........it really isn't important if I a m short! But yes I am ....but my stule is to turn day trade entry's of mine into swing trades in the direction I am stalking!
ABQ........
Refer to the Dow cycle chart I posted! Good trading! joed
Gabe, its important to others who try and learn from you, and understand your trading style! I too am short, but unsure where to cut my losses if the SPX takes off, etc....
ReplyDeleteSo, in laymens terms, what do you see for the spx tomorrow? Timing cycles?
Blog was awful quiet today.
ReplyDeleteSC...what are you looking at for tomorrow and the rest of the week?
ss76
ReplyDeleteThere absolutely nothing you will learn by me telling you what I see for tomorrow...you are just kidding yourself! AND to enter a trade and make a statement that you do not know where to place your stop is crazy, I can't even imagine that! I had this same conversation with a young man today........"most need to stop trading and spend their money on learning and knowledge rather then donations to the market ............for ir won't be long before they have neither"! Good trading! joed
“KNOW THE GEOMETRY AND YOU WILL KNOW YOUR TRADE”
Well, how about some banter then. I figure my stop should be placed at 1260, cause I think if the neckline from the previous head and shoulders is breached, then likely ES will head to 1275. However I look at the 1258 as moderate resistance so thinking a pullback should at worst happen from there, even though I went short today thinking 2 days of risk on means we should have a risk off day tomorrow...
ReplyDeleteWhat happened to the crash?
ReplyDeleteI guess that is my point. That seems to be forgotten about. The SPX according to these time cycles should have crashed by this point, but hasn't. Not to say it won't though which I'm thinking is definitely coming, just hope I'm not in too early....
ReplyDeleteItalian cabinet in disarray, talk of Spain not meeting its debt obligations, EU disappointment potential, France and/or US credit rating being downgraded, I could go on and on.....whoever thinks the SPX will take out new highs this year, in my opinion is on another planet.
That said, its hard to argue with the momentum
ss76
ReplyDeleteOk......you have your thought! I trade more like Gann did........I put in day trade setups when I am stalking a swing trade! BUT as Gann did I get it to break even and if I am stopped out I will look again! When I am trading large positions I do not care about re entering...........I only care about keeping losses small and letting a move run once I catch it! Good trading! joed
I mentioned that the day after October option expiration has been positive every year for the past 14 years. Make that 15 after today...I still see weakness this week to set up another buy into early November and then new highs coming by January.
ReplyDeleteMy cycles have now profited over 500 points from July 22nd peak to Aug 9th thru Oct 3rd cycle lows..
THanks Gabe, I get ya.
ReplyDeleteZigZag, so you see weakness this week, but do you have price targets? For example, do you see ES hitting 1275 before the weakness sets in? Of course no one can be sure, but looking at the SPY on stock charts suggests its almost overbought on the RSI, and its 1 point under its 200MA so I think watching that is important tomorrow...
TNA SEMI AUTO SYSTEM
ReplyDeleteHere is a look at what can be done..........this is my auto system! You can see the trades and the % return! Good trading! joed
http://imageshack.us/photo/my-images/836/clipboard02ap.gif/
http://imageshack.us/photo/my-images/690/clipboard02ap2.gif/
trakktrader80@yahoo.com
Great commentary...thanks for the posts, especially ZZ & Gabe. It is inspiring to find successful traders, especially ones who will post their successes/trades. Possibly this blog will evolve in to something where we can learn from one another's systems/style of trading? I know a lot of traders are lost and bewildered in this environment, and would fork out a nominal fee to learn a system of consistency. Just spitballing! Particularly, for myself, I have high interest in learning the time factor in relation to cycles. Who cares if you know where the market is going, if it takes months to get there. With options/leverage ETFs, the time decay eliminates your potential profit by the time the cycle hits. Apologize for the long post....
ReplyDeleteETFABQTrader@gmail.com
ABQ
ReplyDelete"Who cares if you know where the market is going, if it takes months to get there. With options/leverage ETFs, the time decay eliminates your potential profit by the time the cycle hits"
Most insightful thing I have read here...............when you realize your trading hole, you have to plug each one before you can move on! Good trading! joed
“I DOUBT ANYONE LEARNS UNTIL THEY UNDERSTAND THE WEAKNESSES OF THEIR OWN TRADING, UNTIL THEN THEY ARE BUSY DEFENDING THEM”
Nice call Gabe!
ReplyDeleteEMINI 10/25
ReplyDeletehttp://imageshack.us/photo/my-images/844/emini1025.gif/
SC, you earlier suggested top for metals around oct 21-24. Do you think this pop might be it? Is your timing still valid?
ReplyDeleteGOLD DAILY
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Seems to me Gold should have more upside here. Oct 31 and Nov 1 is the next possible turn date I see.
ReplyDeleteWord from the conspiracy world is that the computer market rigging programs that have controlled the gold and silver markets since they were invented by Alan Greenspan in the 1970's...
ReplyDeleteHAVE BEEN TURNED OFF!
This is coming from Benjamin Fulford and others but if it is true we are about to see the REAL Fair Market Value of gold and silver for the first time in 40 years!
Buckle up for massive volatility never before seen in our electronic, computer based virtual world of PHANTOM ASSETS.
I will be releasing Part 2 of my Silver Summit speech that deals with the origins of computer market rigging and silver derivatives sometime this week...NICE TIMING :-)
Stay strong....Stay in Physical in your possession.
Our little Road is about to get very BUMPY.
Bix Weir
www.RoadtoRoota.com
Dont you guys think that we should be more communicaye when market is doig opposite of what we expect?
ReplyDeleteJust thought
GOLD 240
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“ANYONE CAN THROW DARTS, BUT FEW CAN HOLD WATER WHEN THEIR AIM IS OFF”
At least some cooling off today. Sideways shuffle could continue, but I think selling pressure into Oct 31/Nov 1.
ReplyDeleteEMINI 3 MIN FOLLOW UP..........
ReplyDeletehttp://imageshack.us/photo/my-images/805/emini3mina.gif/
http://www.freestockcharts.com?emailChartID=0516dc6d-44dd-4f27-a271-85569ce0c4f2
ReplyDelete