One being Art Cashin’s, floor director of UBS. The tell tale call of this bear trap [which i fell into, and would have made a lot of money both Thursday and Friday IF I had SOLD], was Mr Cashin acting almost smug of how he choreographed the whole thing, with the test of 740 on the S and P Thursday, the big mid-day reversal [and on a Thursday! He loves Thursday!]. And even more Friday, with the magic 50% retracement [--kudos hit exactly where he said at 770 and started to rally], and then off to a 30% rally lasting months…

Except… down 400+

He seemed like a salt of the earth guy that didn’t take himself too seriously, but that was not the guy on CNBC—and the market, as it loves to do, proved his arrogance wrong…

Quote: “How could I have been so naive to have believed the experts” JFK, after the Bay of Pigs

Ah, sorry I didn’t recognize the sarcasm. Good luck and trading.

Second comment is that these late day rallies remind me of a bunch of ants trying to rebuild their hill on a sinking iceberg. We’re going down to 725 +/- 25, so the more the ants trade here, the longer it will take to get there.

Anyone see the weekly / monthly charts? Have you ever seen such strong momentum in your lives?

Forget trying to stop a moving train… this one is a moving planet. Unless you’re God, I’d get out of the way until you see some friendlier longer-term candles. Otherwise, you’re liable to get sliced and diced with that sharp knife.

Sorry I couldn’t respond earlier.

You may certainly be right – after all, I am only expressing my opinion based on the facts I see and my interpretation of them.

What I saw in the data, though, is that as a nation we succumbed to the lure of “something for nothing”, the too-good-t0-be-true scenario of living the life of Riley inside our retirement account. We didn’t have to save – we could simply buy property, the bigger the better, and watch our values soar. We did this so well as a nation we ended with a 0% saving rate.

What I see is the past 6-8 years of economic growth based on non-sustainable debt production. MEW and credit card debt – not wage growth – provided the bulk of economic growth. It turns out nearly all of that growth was Ponzi growth that cannot be reproduced. Ergo, the debt load created must contract.
There is no mechanism to service it.

Things are not horrid at the moment – agreed. But what I am saying – even if things never get horrid – it will be many years before things are anywhere near where they were just a couple year ago.

Agree with you. Sometimes sarcasm doesn’t come across well in writing.

I must say this is as confusing a moment as I’ve had all year long as a technical trader. I’ve been studying the various models all day and all evening and I’ve reached the conclusion that I cannot be in this market until I get more price action.

Unfortunately for bulls I only see three degrees of bearishness at this point (although there’s always a dim light on at the end of the tunnel at this low of level):

In order of most bullish to most depressingly bearish:

1) sharp rally to 945 – 1020 zone to complete a fairly major fourth wave of whipsaw congestion that will be followed by a marginally lower low in the high 700’s-800 level. This will be followed by at least a few months of good bear market correction.

2) the larger degree fourth wave concluded at 1007 and we are in the midst of some kind of ‘irregular’ fifth wave that will resemble a ‘falling wedge.’ This move will finish around 768 level and it will be a very choppy grinding motion down. When this move to 768 level is finished it will trigger a ROBUST Spring time rally.

3) from 1007 we are in the midst of a fairly major unfolding five wave move down that began with 1-2 from 1007 to 900, and then another 1 – 2 from 953 to 818. This means that we’re about to really come apart….a vertical move down is imminent and we’re ultimately heading for the 600 level, the 61.8% retracement of the ENTIRE S&P500 lifetime. The 604 level would be the 2.618 extension of the major first wave. In terms of classical charting: this channel looks very much like a downward sloping pennant or maybe descending triangle. If the lower levels get snapped, then it looks like it could move to low 600’s from a purely Classical chart pattern type view.

Given the extreme amount of pessimism and anxiety that currently exists, it’s very difficult for me to see how Option #3 can come true. However, there’s plenty of technical evidence that suggests that it’s more than a remote possibility. As bearish as I’ve been ALL YEAR long, I really hope that a move to 600 doesn’t come true.

- AT

This isn’t a double/tripple bottom. The lows were lower and broken on S&P and NASD.
The fact that people got lucky (and there is nothing wrong with that) and caught the bounce up
after the low doesn’t invalidate that. Some of the technical guys will now start looking at
those new lows as the new support.

At this point, I’m waiting for the new pattern.

Enter the day after the S&P begins the day down 3%. Then, by lunch it’s up 3%. Then it’s back down and up 4%. Then, by the close it’s down 5%.

Then…and this is the most important part: Come to Big Picture and look for the Comment Section on that day’s action. If there’s only 1 maybe 2 comments…none of which regale you with the important echnical levels or where we’ll be in 3 months time….you will know it’s because the stellar trading geniuses at Big Picture got obliterated….it is then that you should start buying.