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Muck's Model


muck
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I can't confirm this right now since I'm at work and can't pull up my charts but a friend just told me the euro printed a bearish engulfing candlestick on the weekly chart. There's been a near perfect negative correlation between Euro and USD - this would indicate further selling in the Euro and therefore buying in the USD. There's also a nearly perfect positive correlation between the Euro and stocks - again, this would indicate further selling in stocks. This is a discussion thread, so don't hate on me for making general market observations.

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Barring something unusual (like a new intra-week high or low), if the S&P500 closes tomorrow in between 1252 and 1270, we'll be long a "+2"; otherwise, we'll be in cash next week. Today, it closed at 1239.70.

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If the market really rallies and closes above 1257, we're going to keep the +2 position for next week. If below 1256, we're in cash for next week.

Well it is options exp tomorrow and anything can happen but I'd be shocked if we rallied and closed above 1246. I've been short since 1281 and holding strong.

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The 3rd wave is in full effect, folks. Believe me when I say this market is doomed over the next 5-10 years. It won't go straight down, it never does, but it's going to go down fast and hard (that's what she said) and the rallies in between will be strong enough to convince the majority of traders that the worst is over - the wors will not be over unfortunately. Rinse and repeat all the way down to S&P 300 which should bottom in the next 5-10 years.

 

I would not be surprised at all if we're at the 1074 OCT 4 lows by next week sometime. That's not a "call" per se, really just a reiteration of how fast I think this market will breakdown. As I mentioned a few posts above, I've been short since 1281 on the ES (S&P futures) and I'm holding it until I see signs of a sustainable relief bounce which may not come anytime soon since most traders/investors have been programmed to "buy the dips".

 

Best of luck to all.

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Staying in cash for next week.

 

Can you elaborate why? Is it because of expiration Friday, or the realization that the EU summit wasn't as productive as the market first perceived? Or is it based on more technical analysis?

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Can you elaborate why? Is it because of expiration Friday, or the realization that the EU summit wasn't as productive as the market first perceived? Or is it based on more technical analysis?

 

I think it is due to full acceptance of Brent's predictions and the end of civilization.

 

But that is just a guess . . . :wacko:

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Can you elaborate why? Is it because of expiration Friday, or the realization that the EU summit wasn't as productive as the market first perceived? Or is it based on more technical analysis?

 

None of the above.

 

We still look at bond yields, dividend yields, PE ratios, market prices, and relationships between all of these things. So, some fundamentals and some technicals.

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FYI --- I just caught a data-entry error from last week. As a result, we just went long this morning.

 

Not that this would impact anyones' decisions, I just thought I'd let everyone know. Caveat emptor.

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Barring a really big run up or down prior to the close, it looks like if we close above 1259, we're long 1x, if we close below 1259, we're in cash.

 

I'll try to chime in before the close w/ a final answer.

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