If we see a broader sell-off going in to the close then it is possible for the gap fill today (20% chance). I would be more interested in HSBC China PMI coming out to-night. It if lower than 49.5 then expect X to gap down 10% or so... Not to mention that SLX, AKS and some other steel names have already cracked. X will play catch-up real fast...
But, if the markets rally in to the close than it would be interesting to see if X can rally or flat-line. But, the bigger picture here is if the gap fills then this confirms the "Exhaustion gap" theory and a very high chance of trend reversal...
You forgot to mention that all the commodities are being taken to woodshed on global growth weakness and dollar strength, but apparently STEEL industry is a tech. area now. At least that is how it has been trading... Esp. X, when all it's peers including the SLX are moving lower fast... I'm waiting to see what numbers come out of China to-nite?
Existing home sales below expectations... Surprise !! Surprise!! The wedge is getting real tight here and $RUT just put in the death-cross intra-day...
Will they magically make it bounce in to the close or will reality finally have some say in it? Will have to wait and see...
Date: Monday, September 22
Expected: CNY HSBC Manufacturing PMI 50.0
Expecting 50% (Guess, how convenient for the analysts that lowered their numbers from 53.5 to 50 in just one month) and the markets are not least bit worried and if the numbers come north of 50 then they would rally on the pre-text china is booming again. Are people forgetting that under 50% is supposed be contraction and doesn't bode well with an economy that is supposed to grow @ 7.5%!!!
Well... again WS does not work based on reality or real numbers anymore! My bad :)
These clowns (Analysts) have no clue (With a few exceptions) or integrity. They just pander to their clients, who front run their calls. What exactly made X more valuable in 2 months? WS perception and BIG money looking for performance... In a way, the high short interest is a good thing cuz somebody has to put up a fight, although the BEARS have lost in the near term... let us not forget that X is a long term down trend and is down from $180 (BEARs have been right for a long time and will be right again)
Most people on this board don't get that cheaper iron-ore doesn't help X (As they generate their own and don't buy much from the market) Also, what does the falling prices of iron-ore tell you about the demand? looks at coal... it is tanking big time. So, the 2 core materials used for making STEEL (iron-ore & coal) are at multi-year lows and STEEL (and related stocks) at multi-year highs???
Not to mention that Russell just put in a Death-cross intraday (50 DMA crossed below 200 DMA). It has happened only twice since 2009 and both at the end of QE1 & QE2 and followed by big market sell-offs
You can look 45-47 at several ways and still looks like at least an inter-mediate top. Why?
1) Cup and Handle formation from 2011. We are at the top and formation of the handle will take it lower.
2) Inverse- H&S break out (End of July gap up) the measured move is 1X from the Head to the neck line. Give or take is about $15. Head = ~$15, Neckline = ~$30, Measured move = ~$45 (Target hit)
3) Fib 61.8% retracement from Feb-2011 levels.
4) Fib 50% retracement from Apr-2010 levels.
The only people pumping this and supporting these levels are the clients of the firms that recently upgraded the stock to ridiculous levels. Although, they have been stealthy, distributing the stock since the recent pop. Retail will be holding the bag again if they don't sell along with the big money!
There are 4 types of gaps, but these 2 are of relevance to X.
A much larger decline is looming in the whole stock market that could wipe out 70%-80% by 2016 as per EWT. I'll be playing that aggressively via PUTS once it unfolds...
Watch China HSBC PMI in ~90 mins from now. Expected = 50 and anything lower (means contraction) should dictate the price action tomorrow. The market is very vulnerable this week as per Ichimoku cloud analysis and if the BEARS want to sink their teeth... Now is the time!
Step 1) Break 50 DMA
Step 2) Break 1950-1955
Step-3) Break 1900/200 DMA
Step-4) Nothing much to do... Free fall to 1575-1650 area (Depends on where the trend line running from Mar-2009 lows though Oct-2011 lows runs)
Step-5) Will get a big bounce (1750-1850) to carry up to form a lower high and then the bear market begins.
This is within the broader ABC that has been in play since 2000 (When the secular BULL ended)
Wave A: ( 2000-2009)
ABC within that period:
A = 1552-775
B = 775-1565
C = 1565-666
Wave B: ( 2009-2014)
The whole of current BULL market from 2009 lows can be looked as once big corrective ABC wave.
ABC within that period:
A = 666-1370
C= 1075-2019 (If it holds)
Wave C: (2014-2020-22)
This will be an impulse Wave-C that will wipe out (70%-80%+) of the current market, which bring S&P to 600/400 or lower and the bulk of this decline should happen in the next 12-24 months. Depends of how vicious the fall will be...
Of course! After the carnage is done there will be a multi-generational investment opportunity that could be huge!!!
The secular BULL that ended in 2000 started in the 1932 (Wave-5 of the previous EW that dates back to the 1800's)
I would stay away from CLF and any COAL names for now. They are in a strong downtrend and making lower lows on heavy volume. They might get interim bounces, but no trend reversal yet. CLF will prob. test it's 2009 lows of 11.80 first... Most commodity stocks broke their 2008-09 lows, CLF might do the same. Can you believe that these borrowed 200 M for share buybacks when they have a huge debt to replay?
Will they fade the upside move (If the futures turn green) tomorrow? Will have to wait and see...
Commodities are doing the ABC after Wave-5 wave ramp up in 2007-08.
Wave-A: 2008-09 decline.
Wave-B: The bounce you saw in 2010-11
Wave-C: We might be entering Wave-5 of this C wave (You might get a decent bounce once this is complete)
You max upside target at this point can be 44.73 (38.2% retracement ) or 45.09 (50% retracement )
Also there is down Gap Sept-22-2014 44.9 to 44.87 to be filled. but once that is done then the next move down should fill the gap.
Looks at the feeble volume today, a typical for retracements. If the downside volume increases then that would be another tell.
When the whole world is falling apart, including all the commodities, precious metals, oil etc...
Global deflation is real and is here to stay! Are you waiting for more dismal domestic news on the Home & Auto front? They are trying to hold it up on a broader sell-off... Just wait until the technicals break down. They will sell it like there is no tomorrow...
It is funny how X has been acting like an inverse leverages RTF on down days... I can see $$ hiding in AAPL, GOOG, MSFT, HD, Banks... etc. but, seriously X?
50 DMA will not hold this time around. A date with 200 DMA is set (She has been waiting for a long time and very #$%$ too)
These MB are only for small time retail investors/traders like us. I've been in game long enough to see through WS BS & gimmicks... I was just warning the average retail long that the rug could be pulled and they will be left holding the bag. I couldn't care less if I was taking $$$ from BIG money (Actually, that would be awesome)
If I'm wrong, retail longs can make another $5 or $10? All the positive news, earnings and upgrades are priced in... What exactly do you think will propel the stock higher? Esp. if the broader market falters... Just a matter of time that this market will be "Sell first, ask questions later" With 3 QEs and esp. the last one being in place for 2 years, people have forgotten what vicious sell-offs look like... Just go back to 2011 (July-Aug) X chart and see it fall from mid 40's to 28 in 8-10 trading sessions.