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Strategies & Market Trends : P&S and STO Death Blow's -- Ignore unavailable to you. Want to Upgrade?

To: ajtj99 who wrote (24316)	1/15/2003 4:12:34 PM
From: herry iball	Read Replies (1) \| Respond to of 30712

AJ....I have to disagree about your statement... the big honkin' divergence on SPX daily from Nov - Dec highs was a great sign to go short....and the divergence was 'fulfilled' by the downdraft to Dec 31 lows: share.esignal.com Since then, I have no divergences on the daily, but there have been some on the 60 Minute: share.esignal.com First divergence sold off to the 50ema, second selloff in progress, but broke below 50ema, and Blau Oscillator broke below centerline this time. Although I don't see Mish's divergences all over the place, I do think that the risk-to-reward is best served by noting and respecting them. Also note that there is a divergence on the depth of the selloff, with price making a higher low and Stochastic making a lower low. Theoretically, this divergence too should lead to deeper selloff (especially in the light of the 50ma break and Blau centerline break)....but it'sa ka-RAY-zee market, so who can say. Frankly, there's the possibility of a POSITIVE divergence building on the SPX daily, but this current selloff (and bounce) will be the key...

To: ajtj99 who wrote (24316)	1/15/2003 4:13:59 PM
From: mishedlo	Respond to of 30712

Mish, the bearish divergences have been there for 2-months. We've had one mostly down day and everyone is ready to call an end to the uptrend. All I'm saying is that's a bit premature in light of the underlying rising support. When I looked at Max pain a week ago, I saw 8600 Dow, 900 SPX, and QQQ 26 as possible Max Pain points. It appears we might get close. However, if we do get there, we will kill the uptrend off the 12-31 lows and possibly point the market down from here. Bearish divergences for 2 months??? Well for one of those months, we dropped for an entire month did we not? We actually had positive divergences right at the end of the month. Declining volume on the selloffs, TRIN and TRINQ below 1 for a few days even though we sold off. So I disagree. WE had bearish divergences right at the top. Big time. We had bullish divergences for a week and rose near the DEc bottom. They turned neutral and we stil rose, now they are bearish. As for when people will call an end to the uptrend: My guess is 860 on the spoos and at that time we will probably rise 40 points and test 900 again, just as everyone will be looking down, and stopped out of their longs. That is exactly how this market is playing right now, and the only one who seems to get it is Jeffery. Congrats to Jeffery on superb trading of the spoos. M

To: ajtj99 who wrote (24316)	1/15/2003 7:25:35 PM
From: mishedlo	Respond to of 30712

From Brian on SI Today was a reversal day, and the Elliott Wave count is clearer than it has been for about a week. The highest probable count has Monday's highs of 935 as the end of minor Wave 2 from the December 31 lows. This was just shy of the 78.6% Fib. retracement of Wave 1 (from 954.3 to 869.5) which was at 936. If that is the case, then the rally made a nice A-B-C move up – all with clear subdivisions. The market since 935 has also been clear in terms of wave counting. The 60-min chart midway down the page shows the short term count: stockcharts.com There is the possibility of this decline being a Wave B of a larger A-B-C rally (where we just completed wave a). I would say the likelihood of this is low, as the state of most the sentiment indicators are already very optimistic (put/call, VIX). The market indicators like the BP chart barely moved with this rally, and there are lots of negative divergences in the S&P charts. All in all, this seems to have been a typical wave 2 rally. A conservative short position would be to wait until for the S&P traced out 5 waves down over the next week or so and then corrected up to a Fib. level. Shorting on corrections with a stop above the last Fib. level is a nice low-risk position to take. This looks like the classic setup before a Wave 3 decline. It will be very interesting to see how it all unfolds over the next few months. All the Best, Brian