The time for PULLBACKS is long gone.... The time for a decent CORRECTION is expired... So, what's left? MARKET CRASH!!! Just need an initial TRIGGER to set things in motion.. It was not IRAQ, Not ISIS, No ISREAL, Not RUSSIA/UKRAINE... Not FED statement. Can it be SCOTLAND OR BABA IPO? or Is it going to be end of QE jitters? Will have to wait and see...
"better cover your put short positions tomorrow" You've no idea what you're talking about... If he were short put s, it means he is essentially LONG the market. You meant to say " Close you puts (a.k.a sell them) Also, this could been a hedge or protections and he might have sold calls to cover his cost. You think you know more than somebody who made & managing billions?
This pattern has been in development since late last year... If Russell had to make a new high, it has the best chance in early July. It failed, then it tried the 1180 level in early Sep and failed. Every body knows if they let Russell fall below it's 200 DMA then 1070/1080 level will not hold this time around. once the selling starts there is not stopping until 1000., But eventually can fall to 850-870 level (First real strong support, 2007 highs)
When the DC happens... the sell-off would be epic. I don't think it can be stopped this time around unless the SCOTS vote "No" and BABA IPO is a huge success. Other than end of Q3 WD, there is no real upside catalyst until earnings... but a lot of headline risk.
On the flip-side...
It could run up and make an intraday reversal tomorrow or just turn out to a runaway gap and keep moving higher. I just think there is more downside risk than upside potential. All the good news is already priced in and the stock has doubled since June.
The last earnings gap was def. a Runaway gap and it rewarded the longs very well in the following weeks. Will this be another one or will it be the dreaded "Exhaustion Gap" that generally accounts for trend reversal in most cases. How will we know?
If the Gap closes in next 3-5 trading days then there is good chance that this was buyer exhaustion. It moved under the opening price of 45.86 and pretty much stayed that way all day and closed below it. A lot different price action as compared to the last gap up.
One other possibility is an Island reversal, where the stock can gap down tomorrow and never close that gap ( Although, this is very unlikely unless some terrible Scotland votes prelim results come out and they lean toward 'Yes') But, if were to happen then the reversal would be be powerful and expect at least a 20%-30% decline in the coming weeks.
Chinese stimulus is a drop in a bucket and is worth about $ 80B. But, What does it tell you about the world's second biggest economy? Global deflation is real and here to stay... I think there will be massive short covering and longs exiting tomorrow. We will see why way the dust settles. As bullish as you are... If I were you, I would think of stock replacement. Sell stock, buy Jan-15 or Apr-15 calls to play the upside.
I think the 2X rule works really good with MOMO stocks.
What is the 2X rule you ask? Stocks that are run up crazy by MOMO players come down 2X faster and harder...So, if tomorrow is the top then X should fall @ twice the velocity that it went up. Potentially to close the earnings gap... Of course! the broader market should co-operate as well.
The 161K is all trades that occurred after 4 PM EST. It includes BOC trades @ 41.41. My point was the PPS appreciation Between 3:02 PM EST to 3:19 PM EST (41.41-44.80) was on a volume of 17K shares. Even if you consider all the shares that were bought after the price jump it is a total volume of 93.5 K shares and the biggest lots were 10K@ 44.15 and 7.7K@44.03, both of which were sold at the BID (Which to me tells a Short or a Long dump)
"it will also be the day all shrewd hedge funds sell out their massive gains"
Why not? After all EOQ is in 2 weeks and why not lock in profits?
So, they draft the statement first and then meet? Isn't the statement supposed to be the summary of the meeting's outcome.
Summary of the news:
1) Decision by U. S. Steel to not proceed with an expansion at its iron ore pellet operations in Keewatin, Minn.
2) Decision by U. S. Steel to forgo further development and construction of the carbon alloy facilities at Gary Works in Gary, Ind.;
3) Unanimous decision by the board of directors of its Canadian subsidiary, U. S. Steel Canada Inc., to apply for relief for U. S. Steel Canada, Inc. from its creditors pursuant to Canada's Companies' Creditors Arrangement Act (CCAA).
They are cancelling 2 expansion projects and filing for BK protection for their Canadian unit. If the demand picture is that good then why stop the expansion? just wondering...
X literally went up from the the closing price of 41.41 to AH high of 44.80 with a measly volume of 17 K shares. All retail purchases and not a single institutional lot. 8% upside move on low volume? We will have just wait and see how the BIG money reacts to the news tomorrow...
Let me take a short at it
(1) Will this last much longer?
Maybe another blow off top, 2030-2080 (Extreme case, if FED continues to be dovish, Scotland votes "No", Alibaba IPO turns out to be a huge success) and this will end with a thud and a violent correction.
(2) If not, what will be the catalyst? How will you know?
The same as the above, but will the opposite turn of events.
(3) With QE scheduled to end past October, and Fed hawks possibly getting ready to take flight, at least with their language, what is the probability that this dip is the start of something lower, a bear market even? If not, why not?
All prior QEs have ended with a huge sell-off and I don't see why this one should be different. In fact the sell-off following should be bigger and nastier
(4) Since the market is being heavily influenced, to say the least, wouldn't they change course at some point and make money on the other side of the trade?
As per EW theory, I would expect a 70% to 80% decline in the S&P by 2016 (Next 15-24 months)
Just read on a stocktwits link: Sounds about right...
"The economy kind of stinks still, but it’s gotten a little tiny bit better. But we changed our statement a little tiny bit in order to communicate the fact that our views have also changed a little tiny bit. But in reality nothing has changed all that much….”
In essence, the bond market has had this wrong all along. Predictions about rate hikes will be headline news tomorrow and Wednesday and dozens of talking heads will fill up space debating this. Ignore them. Wednesday’s statement will say nothing new and any over analysis will be largely meaningless. We’re just not at a point in the cycle where the Fed can realistically raise rates….
How is adding more capacity a bullish factor for prices? More production when less demand = Margin compression...
Once it breaks the 20 DMA then free fall to 50 DMA. If it gets there the GAP will act as a magnet. Unless, it makes a new high, the bearish play is very much alive... MACD, RSI and other indicators have been bearish for a while... I think X will trace out ABC decline as it completed it's 5 wave advance since it bottomed around $16.
The same shorts will drive X lower once there is technical weakness. It has already started, just need to break the rising 20 DMA with volume then free fall to $34 ish level.