GOLDMAN IS STILL THE PROXY

I like $GS as a market proxy here. It’s already swept its August low, rejected it, and is showing positive divergences against the market at the turning points in the last two days as discussed in After Hours with Option Addict last night.

Right now the question is “to flush, or not to flush.” It’s a good idea to start nibbling if you haven’t already. I started some buying on Monday, and will continue to do so into weakness. It occurred to me last night that with many bulls watching the lows, the biggest pain trade right now is for the market to have already hit its low, with everyone still waiting for it. Most analogues call for a final breakdown, but remember, those lows were not levels that any human traded…which may need to be taken into consideration here. Starting small commits you to the process, and last night when futures were ripping, there was a sense of grief and regret that many were still sitting there waiting to buy and thought they had missed it. If you’ve felt that, try a little into a move lower today/tomorrow.

I had also mentioned that after the Fed, we’d see many folks rushing into the bear camp. Most experts are already there, but take a look at the September ending AAII survey. 40%!

On the day, I am focused on the following:

The USD/JPY needs to hold its lows.

Divergences. Same instruments…$IBB, $EEM, $FXI, $NYMO, etc that we watched work earlier in the week.

$GS

Breadth/Initiative buyers

I will be doing another round of buying into further weakness today, if all above conditions are met.

OA

We’re getting close. Let me be brief here:

From last night….

Ultimately, I still think there is another move lower to trade, but tying this out and getting thoughts out is helping calm my nerves a little.

With any luck, today should look like yesterday, leaving tails in either direction. If history rhymes, there ought to be one last come to Jesus moment in stocks. When that happens, and things remain divergent, the knights will be summoned to protect and uphold this trend.

The Yen is not confirming this move, there are no breadth extremes, and my market proxy $GS is trending off the open. Let them flush here and wait for your knights to initiate some real buying.

OA

PAIN TRADE DEVELOPING HERE TONIGHT. STOCKTOBER?

Fear Of Missing Out.

That’s been gnawing at me all day today. Can’t shake it, even as I watch this thing climb, with none of my other indicators supporting it.

If this were it, USD/JPY would be breaking out too. Breadth would be expanding.

Bears are all engaged down here, which makes the pain trade up. Bulls that are waiting for the lows and don’t get them = pain up. I’m hung up on the test or breach of the lows, but perhaps I shouldn’t be? Here’s why…

The low prints in most instruments back on 8/24 we’re not prices that anyone really had access to. By the time most of the computers soaked up all the great sale prices, most instruments were significantly off the lows. Take a look at the profile…you can’t even see volume printed there.

I’ve already started buying a bit this week, but not enough if we rip higher. Ultimately, I still think there is another move lower to trade, but tying this out and getting thoughts out is helping calm my nerves a little.

What say you? We already bottomed? Or we trade lower from here?

Jack Dorsey to be the newly appointed CEO for $TWTR?

The stock is trading lower than it was after the news hit, but I am considering an add to this already underwater LT holding.

Anyone else doing anything with $TWTR here on this news?

From the open…

The bulls need to nod here, and let this one go. I knew with an hour to go prior to the close and the twitter heckling at the lows, that the pain trade would be up today. This isn’t it yet, but shit, I would be nervous being short down here.

On the day, RUT non confirmation, Yen non-confirmation, breadth non-confirmation. I’d like to see a repeat of yesterday to be honest and this shit is a wrap tomorrow.

In short, hoping this is the start of the last “uh-oh” move.

With any luck, today should look like yesterday, leaving tails in either direction. If history rhymes, there ought to be one last come to Jesus moment in stocks. When that happens, and things remain divergent, the knights will be summoned to protect and uphold this trend.

Start planning immediately.

OA