RECAP OF THE WEEK

Starting last week, we talked only about the pain trade being up. Up into, and post Fed. Nailed it.

In fact, on the big rally we had on the 15th, I recall saying…

This was the first rally in weeks that I saw pretty much everyone pass over. Not much buying activity into this. If anything, I am being told all of the great prices I could short the market at here.

I would wager that if I polled all of you, none of you would think that this could continue into tomorrow.

Market kept going…I then said…

“For the day, I think we all ought to really ponder what the worst case scenario is here, for everybody. Set your biases and differences aside, even though you are pissed that literally everything is rallying today…and tell me what is the scenario in the next 48 hours that hurts everyone?”

Later that day, I warned we’d get squeezy….and then blogged this the morning ahead of the Fed…

http://ibankcoin.com/option_addict/2015/09/17/well-joe-whats-your-next-move/

A snippet of that post…

As I mentioned, the pain trade here is up. Today’s move will pop folks in at awful prices, and will trigger some short covering. Play it at your discretion, but nearly all the models we’ve run in After Hours with Option Addict suggest a move lower a week from now is highly likely.

My final thoughts last week going into the weekend…

What you just saw was exactly what needed to happen. We were up pretty good on the day, and into that strength we saw more breadth stats that have not been seen since 8/8/2011.

In that move, you triggered some big short covering and got longs involved too high.

The $NYMO was as high as 76 (that I saw) and as Fly mentioned, Exodus printed overbought yesterday.

Cool off on the longs for a bit. If you are in cash, start buying in about three weeks from now.

We talked about some chop for this week, but only got one day of it before sliding lower.

We made it through financial armageddon Wednesday, and after which I blogged about an important step in the process of finalizing all of this mess here. An excerpt…

HOWEVER, to effectively get out of this shit stage of market mispricings for the longer term, we are going to need to set out a trap. Two of them, actually.

This week has worn down bulls, and it’s only Wednesday. To really KO them, you’ve gotta give them a good trap around here. Perhaps a gap down and strong reversal, or a real strong trend day here in the next day or two. Once that happens, you’ll drag in a lot of tired and worn out bulls. Best case scenario from there is to see that rally faded hard the following day, and for the market to trade lower over the next few days…closer to or beyond 1900. By doing this you’ll kill a lot of the remaining bulls and force bears to participate from lower prices.

The same scenario played out in 1998, naturally…

I called out yesterday as the reversal day about 45 minutes after the open…and here we are with a gap up and fade going into the weekend.

On the day I hope we see a small late day push to make you feel great about going long into the weekend. Then I hope we gap the fuck lower on Monday to get this all over with next week.

If anything I have written was unclear, I apologize. I’ve tried to blog more about movements on the horizion rather than just making observations in real time. In choppy ranges like this, the moment you’ve found comfort to make a call, is the exact moment you are on display in front of all to be wrong.

Think of this market as a mechanism that is out to break everyone and it starts to become a little more clear.

After the final blow next week, I doubt we’ll speak of market direction for a very long time.

Big thanks to bottom feeder, but here’s an updated look at the 98/15 comparison…

OA

Don’t go getting carried away here. Today was reversal day as I warned you at the open this morning.

The objective was met. Scatter the shorts, and suck in some tired longs. What a monster reversal.

Now that the chatter has shifted to how high the market will go, you must realize that the first of my last two traps has been set today. It all happened during market hours too, meaning everyone had a chance to participate.

If my plans go accordingly, you’ll find that one more nasty ass trap awaits.

When I nail all of this market action down, you are required to attend the upcoming conference, because the year end game plan is spectacular. You will be tempted to quit your fucking job and trade with me full time after you have fully embraced what lies ahead.

Like us on the Facedbook too, lol.

Have a good night.

OA

As discussed last night, this is the opportunity to draw in some bulls, and force out a few shorts if we reverse this move lower today. We’ve rounded out some lows intraday, but there has to be a little more speed here to the upside to draw buyers in.

Everyone is in agreement that this rally, if it materializes, needs to be shorted. And you should, as next week we’ll teter on and probably sweep the lows.

Here is the mother of all head and shoulder patterns developing, and a leg sweep here is the show that we’ve all been waiting for.

It happens next week.

Guess what? The market will open tomorrow. Unless of course some crazy shit happens at 9:23 tonight, then I think we’ve made it through financial armageddon.

At the end of last week I warned to stop chasing the market up into the Fed. We talked about waiting for some downside first, and a little time to pass before dipping a toe in. Well, we’re at a much better spot to do this now that the market has bitch-slapped late buyers, and welcomed in some sellers.

HOWEVER, to effectively get out of this shit stage of market mispricings for the longer term, we are going to need to set out a trap. Two of them, actually.

This week has worn down bulls, and it’s only Wednesday. To really KO them, you’ve gotta give them a good trap around here. Perhaps a gap down and strong reversal, or a real strong trend day here in the next day or two. Once that happens, you’ll drag in a lot of tired and worn out bulls. Best case scenario from there is to see that rally faded hard the following day, and for the market to trade lower over the next few days…closer to or beyond 1900. By doing this you’ll kill a lot of the remaining bulls and force bears to participate from lower prices.

The same scenario played out in 1998, naturally…

If you like, or even dislike these posts, LIKE US on the FacedBook.

OA

I apologize for the infrequency in which I blogged today. I don’t get great reception from the bunker.

I stopped out of my Gold short at breakeven, I was stopped out of $UWTI for a loss, and am currently long NQ with a dwindling 20 point gain on a week where I am about 50 points in the hole-io.

It’s dead. It’s quiet. Nobody is having any fun.

At this point, bring on the end of the world. This shit sucks.

OA

Disclaimer: I’m bullish tho.

The preparations have been made. I went grocery shopping, grabbed some ammunition, boiled a drum of water, and told all the people in my life that I don’t like how much I fucking hate them earlier today via text message. Let’s do this.

Tomorrow is the day of financial and societal reckoning.

I would hope that in all of this, we can leave polite comments in the comments section tonight and tomorrow. I’ve enjoyed most of you, and think you are potential leaders in the upcoming millennium, given your fierce competitive nature and resilience participating in the unwinding of financial markets.

Godspeed all, I hope you find peaceful rest this evening.

OA