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Public blog posts only as education and entertainment. private membership market updates reflect my view and analysis of the market. The information contained on this website and from any communication related to the author’s blog and charts is for information purposes only. The chart analysis and the market comments do not hold out as providing any financial, legal, investment, or other advice. In addition, no suggestion or advice is offered regarding the nature, profitability, suitability, sustainability of any particular trading practice or investment strategy. The materials on this website do not constitute offer or advice and you should not rely on the information here to make or refrain from making any decision or take or refrain from taking any action. It is up to the visitors to make their own decisions, or to consult with a registered professional financial advisor. And i absolutely discourage trading options.

Sunday, August 29, 2010

some evidences of up cycle has started on 8/27/2010

1). Ichimoku clouds has turned green, an indication of coming strength.

2). $VIX often leads, already broke the trend. $spx triangle target calculation meets my target price of 1150 issued Aug 26, 2010.
both vix upside & spx downside price met my price target issued on Aug 11, 2010:

3). Both elliott wave relativity and pitch forks pattern match Mar 6, 2009 spx 666 bottom.

i agree with people that "Crashes are never predicted".
BUT i have developed a crash system can pre-warn, and know what kind of setup condition and crash window it must meet for a crash to be realized. i have back tested this crash system against all major crashes, including 1929, 1987, y2k nasdaq, nikkei 1980, 2008, even 911. it can not know far beforehand, but these setup condition must meet for a crash to occur. for the flash crash, i didn't pay too much attention. but 2 hours before it occured, i suddenly "woke up" and saw the potential crash approaching, and notified friends.
i have done a statistic of all past crashes, a crash must occur around 10 (+-2) days after the secondary top window, after that it's no longer a valid setup. and they all must satisfy with the 6 technical setup (very strick) i developed. i can not know if it would crash or not, but a crash must meet these conditions. i can only watch its reaction to the crash line seup. it it pass beyoud and don't come back, a crash is imminent. in the past, it has longer reaction time to prepare. but now it only has around 2 hours to react. even if a crash doesn't occur, these setup condition can also be used as an extreme weakness warning system for the next 10 days or so.
AND, on a contrarian most important tradable point is if the market turn away from the crash line, it almost ensure strong rally coming for a while. recent examples are Jul 8 2009, Feb 5, 2010, Jul 1, 2010. they have all met the crash setup, but got rejected before the crash line.
And here since Aug 9 seconday top, it has met all the crash setup condition. but after it passes the crash window time, and the last crash line is too far below, it almost ensures a crash will not occur, and this setup is best served as an extreme weakness system (already passed away). And now it got rejected at the secondary crash line (spx 1040). Then this condition according to my experience, will turn into a strong rally. Here this crash setup has been reset, and have to wait for the coming strong rally petered out, and will take quite a while.
This crash / extreme weakness / reject rally system is developed by my own, i have very confidence on it, and it's back tested against most past major occurances.

there are lots talks about here as wave 3 of 3 down. if true, should be in some kind of crash situation. a wave 3 of 3 down w/o a crash of some kind is not a wave 3 of 3. According to my crash system, it's not at all at this period of time. also for a wave 3 of 3 down, it should never have daily green clouds of Ichimoku. another big problem with traditional elliott wave is not incorporated with time element, hence not relaible, and best as a price reactor. any system without time element, imho, is like a person walking blindly. in the life, in the universe, there is no activity is without time element, unless it's not a live one. today i have invented a green/red cycle to incorporated into the elliott wave relativity system, back tested some years.

i did a detailed statistic on the AAII sentiment, as the chart/ table shown above. seems like this coming rally has a ways to go on both time and price before it exhausted.
still working on a newly invented pitch fork incorporated with time cycle matrix.

i am ABSOLUTELY NOT a bull market adopter, i still see this as an unfinished business for the bear countertrend rally.
my comment reply policy is on the top, just below the blog title.