Oct

13

veltSP ideal downside target of the entire Elliott Flat Correction from 2007 record of 1587 lies near 2002 low of 768. My feeling is that lack of clear technical indications and overall regulatory uncertainty will combine to reduce trader activity and directional movement. Subsequent chart action will likely become more grinding, thus eating into implied volatility. In the interim, one should take count of the entire crashing wave as it developed since the "mother of all short-squeezes" on Sep18-19.

Intraday chart of E-mini dissects the waves of the ensuing three-week fall: we have entered wave 4 consolidation, which should retrace toward 966 or max.1006 rally objective. Note previous four rally attempts: each squashed by size offers in Globex order books at precise 38.2% retracement levels. By the way, most of those "timely size orders" came in similar suspicious pattern: "insider" short-covering commenced off of 9/24, 9/29, 10/6, 10/8 lows; followed by bullish announcements of unprecedented government actions - and then stonewalled by the 38.2%-retracement size offer! Following tremendous short term oversold, the pattern was tellingly modified this Friday: to offer only 50% bounce after US pit open, and then a 61.8% bounce near pit close!


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21 Comments so far

  1. Rocky Humbert on October 13, 2008 8:12 pm

    Upon reading Anatoly’s post, only one thought comes to mind:

    “Beware the Jabberwock, my son!
    The jaws that bite, the claws that catch!
    Beware the Jubjub bird and shun
    The frumious Bandersnatch!”

  2. Anonymous on October 13, 2008 9:32 pm

    It reminds of John Lennon’s “The Faulty Bagnose”

    The Mungle pilgriffs far awoy
    Religeorge too thee worled.
    Sam fells on the waysock-side
    And somforbe on a gurled,
    With all her faulty bagnose!

  3. George Parkanyi on October 13, 2008 10:57 pm

    Anatoly,

    What do you make of the drop in open interest from the peaks this year?

    Soybeans 50%
    Corn 33%
    Chicago Wheat 40%

    Was buying into the CME a bad move? 

    Cheers,
    George

  4. the boy on October 14, 2008 4:50 am

    The thought that comes to my mind:

    Why didn't I become a broker, when there are so many people like this willing to part with money…

  5. Rocky Humbert on October 14, 2008 7:49 am

    Anatoly — a correction and suggestion: The markets are closed on Saturdays, Sundays, and roughly a dozen holidays each year. Your vigil has lasted only 137,000 hours — not the 200,000 hours which you claim. You probably thought your Internet connection was down. It wasn't. The markets were closed. My advice: Please take a shower.

  6. Anatoly Veltman on October 14, 2008 8:07 am

    Verses are hot, the boy, but I'm still waiting to hear how you derive daily C.O.T.

  7. Anatoly Veltman on October 14, 2008 12:55 pm

    For reader benefit, although not a major point…

    There are markets that trade on Saturday. In late eighties and in the nineties, I was one of the market-makers in Gold and currencies on that day of the week. There are markets that trade on Sundays: well known to this website.

    Over the years, I've found that easier money was in fact made during US market holidays. Most of the huge participants habitually neglected thin markets, leaving plenty on the plate for smaller nimbler discretionary players who understood the mechanics of arbitrage and all available execution vehicles…

  8. the boy on October 15, 2008 7:25 am

    I'm sure you are waiting for that, O large volume trading man. But unfortunately the time and money I spent on figuring this out prevents me from giving it to you for free. Maybe spend only 8740 hours this year trading your big size and take the extra 20 to do research and the key will be yours.

  9. Anatoly Veltman on October 15, 2008 3:28 pm

    the boy, no one can prevent your type of behavior. I try to post real-time ideas here and encourage relevant discussion. Do not post deliberately misleading info.

  10. Adam on October 15, 2008 8:38 pm

    Anatoly since you insist you are adding value here let's take your post and your boast (that you provide real time trading ideas) and deconstruct them…

    First let's note your post was dated October 13th 2008 if memory serves in the afternoon / evening. Since then the S & P is down ~110 points closing today at 907. Ignoring all of the descriptive elements in your post you made two claims "Subsequent chart action will likely become more grinding, thus eating into implied volatility." & consolidation between 966 & 1006. At least in the two days that have followed your post you are demonstrably wrong. This is also after Mr Skeptical backed you into a corner in the "Why? I just don't know…" post and you committed to a level of 1000-1011.

    I would also add as a general comment that your prose is jargon heavy and laden with descriptive and retrospective commentary, exactly what Victor and Laurel have previously counseled against. Picking random chart points that happen to correlate to 38% / 50% / 62% is exactly what I come to Daily Speculations to avoid… seeing patterns where none exist.

    Add in the fact that you are a contributor to a $79 monthly stock picking tout service that advertises peak oil and you are a representative of everything the contributors here used to stand against.

  11. Anatoly Veltman on October 15, 2008 8:58 pm

    Everything you just wrote is upside down. Before I explain — sorry, you're Adam who?

  12. the boy on October 16, 2008 7:34 am

    Please refer to Vic's first book when he writes about the many methods of a scam master. They are showing up here one by one by our Internet tout guru.

  13. the boy on October 16, 2008 7:39 am

    Adam, I don't know how you can say what you have said. To interpret what the Guru says with his real time ideas is certainly not possible since there are no specific ideas. Merely a hodgepodge of half ideas that can certainly be pointed back to at some point in time no matter what happens with the typical "I told you so." This is the mantra of the tech guru, always has been and will be. My only question is: what is it doing on Daily Spec?

  14. Rocky Humbert on October 16, 2008 12:37 pm

    Instead of deconstructing Anatoly’s jibberish, I suggest that we all start thinking about whether the dramatic decline in energy and food prices is bullish or bearish for certain equities from here….

    Back in July/August, (as SpecList readers know), I entered a structural short in energy and industrials, and despite Anatoly’s chiding, have stayed with that position for fundamental and technical reasons. I’m covering a few shorts now, because we are approaching prices that should reduce future marginal supply.

    That said, the psychological and real effects of sub-$2.50 gasoline will manifest themselves … going into the Christmas shopping season….

    Does anyone have any insights on this subject?

    [Anatoly’s opinion is not invited …as he claims to be chained to his computer screen, and thus has not seen the inside of a Target store for twenty years…]

  15. Anatoly Veltman on October 16, 2008 2:22 pm

    Not entirely, Rocky. I stepped out for lunch today and listened to Prof. Nouriel Roubini's keynote at the Algo Trading 2008 Conference. Very professional fellow; his outlook remains dim. He thoroughly explained why and in what areas the current crisis will manifest in issues not seen since the Great Depression.I could provide detail to help understanding all of this SP futures story month-to-date; but it's hard to sort out all this nonsense on behalf of anonymous posters. It's time for all these guys (or guy) to come clean with their identity.

  16. David Whitesel on October 19, 2008 11:50 am

    For all those who didnt get to partake of Mr Roubini’s output at the trading conference, you can review a q&A held between him and charlie rose here;
    http://www.charlierose.com/shows/2008/10/14/3/a-conversation-with-nouriel-roubini

    mr r is now elevated to spokeperson for hierarchal output, he has become a mouthpiece for one of the prevailing templates bieng played out. For this he’ll enjoy several years of notoriety, and maybe he will publish some new paper awarding him some future nobel prize, like the one recently issued to the columnist.

    ro/rs=cf

  17. Anatoly Veltman on October 19, 2008 7:08 pm

    Great link, David!

    Roubini’s live presentation was close to an hour, and delivered at considerably more rapid pace. I was positively surprised, as majority of his arguments were on solid macroeconomic footing, with good understanding of US and international economic and investment banking realities. I think the title (under which he is usually introduced) of professor at Stern - results in lowered expectations… I’d say he’s got one up on many a Chief Brokerage House economist, and is certainly qualified to run strategy at most macro hedge funds.

    I was only sorry he ran overtime, and that announced questions were not up to par at that venue - where audience had little discretionary market experience. I had four questions that stayed un-announced (to try to pin him down to particular stock market, interest rate, currency and gold ranges); but Roubini was rushing to his next engagement. I’d enjoy another Q&A opportunity with him - so should anyone hear of his next appearance…

  18. David Whitesel on October 20, 2008 7:47 am

    Glad to be of service, Anatoly! What is your view of Krugman's Nobel? Here is an encapsulation of one of its premises: Krugman's idea was that if two countries were alike but one had a larger population, real wages would be somewhat higher in the more populous country because companies there could make better use of economies of scale, creating a greater diversity of goods, lower prices, or both.

  19. Anatoly Veltman on October 20, 2008 8:16 am

    Surely David, I wouldn’t go over-analyzing it, if I were shooting for next Nobel. I can’t put a quick hole into this one

  20. David Whitesel on October 20, 2008 8:57 am

    Surely a man of macroeconomic strength…..could at least make an attempt. too make it easy, start with Bahamas vs. cuba.

  21. Anatoly Veltman on October 20, 2008 9:24 am

    No pro (here, Krugman) deserves cheap shots.

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