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Posts: 4,419
Reply with quote  #1 
2013-09-19 15:59:54 [Message] fib_1618 -> Chat: good day
2013-09-19 15:59:58 [Message] fib_1618 -> Chat: how is everyone?
2013-09-19 16:05:16 [Message] fib_1618 -> Chat: Hi's it going?
2013-09-19 16:05:43 [Message] bylo -> Chat: going well thanks, you doing OK?
2013-09-19 16:05:49 [Message] fib_1618 -> Chat: fine and dandy
2013-09-19 16:05:57 [Message] fib_1618 -> Chat: are you finding the chats useful?
2013-09-19 16:07:01 [Message] bylo -> Chat: yep very much so.  got a couple of questions about how you project some things, will probably send you an email when I can articulate them the best
2013-09-19 16:07:17 [Message] fib_1618 -> Chat: this is as good as time as any
2013-09-19 16:07:19 [Message] fib_1618 -> Chat: ask away
2013-09-19 16:09:10 [Message] bylo -> Chat: last week in the small caps, I believe, that they either needed to make a go by Monday or they would probably drop by 50 points or so before making another push higher.  I looked at the charts but couldn't see it.  It was a great call, just couldn't see what you were looking at vs the other charts.
2013-09-19 16:09:37 [Message] fib_1618 -> Chat: much of what we cover here has a lot to do with physics
2013-09-19 16:09:52 [Message] fib_1618 -> Chat: let's do this
2013-09-19 16:09:56 [Message] bylo -> Chat: I can study the transcripts and get you a more specific question if needed.
2013-09-19 16:10:02 [Message] fib_1618 -> Chat: you could
2013-09-19 16:10:14 [Message] fib_1618 -> Chat: but this is exactly what the chat is for
2013-09-19 16:10:16 [Message] fib_1618 -> Chat: and besides
2013-09-19 16:10:39 [Message] fib_1618 -> Chat: there probably won't be much more that we can add today that hasn't already been said over the last two days
2013-09-19 16:10:42 [Message] fib_1618 -> Chat: let's go to DP
2013-09-19 16:10:47 [Message] fib_1618 -> Chat: and go directly to the SML chart
2013-09-19 16:11:07 [Message] fib_1618 -> Chat: better yet
2013-09-19 16:11:20 [Message] fib_1618 -> Chat: lets go the the Composite NYSE McClellan breadth chart
2013-09-19 16:11:37 [Message] fib_1618 -> Chat: where we have a definitive structure to work with
2013-09-19 16:11:53 [Message] bylo -> Chat: wait I was wrong, it was the mid caps you said may have to take a trip back to 1200
2013-09-19 16:11:59 [Message] fib_1618 -> Chat: yes
2013-09-19 16:12:07 [Message] fib_1618 -> Chat: but I understand the idea of your question
2013-09-19 16:12:25 [Message] bylo -> Chat: before making a push higher if they didn't take off before Monday of this week
2013-09-19 16:12:35 [Message] fib_1618 -> Chat: let's start from the beginning and work our way through
2013-09-19 16:12:51 [Message] bylo -> Chat: OK
2013-09-19 16:13:07 [Message] fib_1618 -> Chat: the McClellan Oscillator measures the speed of which money flow is moving into or out of the market on a short term TRENDING basis
2013-09-19 16:13:34 [Message] fib_1618 -> Chat: the McClellan Summation Index does the same thing by on an intermediate term TRENDING basis
2013-09-19 16:13:43 [Message] fib_1618 -> Chat: as with all measurements of trend
2013-09-19 16:14:15 [Message] fib_1618 -> Chat: we usually see losses in the momentum compared to what was actually created in order for prices to trend in these same direction
2013-09-19 16:14:21 [Message] fib_1618 -> Chat: the broader premise being
2013-09-19 16:14:34 [Message] fib_1618 -> Chat: that breadth (or money) leads the direction of price
2013-09-19 16:14:59 [Message] fib_1618 -> Chat: because of this
2013-09-19 16:15:12 [Message] fib_1618 -> Chat: when we get divergences in a tool such as the MCO
2013-09-19 16:15:21 [Message] bylo -> Chat: I'm with ya
2013-09-19 16:15:58 [Message] fib_1618 -> Chat: these are points in which the prevailing trend of money flow begins to decrease to a level in which prices begin to "starve" from not having the fuel to continue the journey
2013-09-19 16:16:07 [Message] fib_1618 -> Chat: now...
2013-09-19 16:16:19 [Message] fib_1618 -> Chat: if we look at the McClellan Oscillator on the NYSE Composite
2013-09-19 16:17:00 [Message] fib_1618 -> Chat: we see that in mid July it had a point of exhaustion in what ever fuel there was to move prices forward
2013-09-19 16:17:28 [Message] fib_1618 -> Chat: very much like your keeping your foot on the accelerator pedal and then taking it off once you've reached a preferred speed
2013-09-19 16:17:51 [Message] fib_1618 -> Chat: so when you look at these peaks in the MCO
2013-09-19 16:18:30 [Message] fib_1618 -> Chat: you will also notice that the price pattern itself does continue to move forward based on the initial thrust of this same momentum created by your punching the engine earlier
2013-09-19 16:18:49 [Message] fib_1618 -> Chat: but you wanted to give a little gas going into the top
2013-09-19 16:18:57 [Message] fib_1618 -> Chat: and this caused our first point of divergence
2013-09-19 16:19:33 [Message] fib_1618 -> Chat: this divergence point then is the level in which you will need to show greater acceleration to actual move beyond what you were only able to get on the first go round
2013-09-19 16:20:02 [Message] fib_1618 -> Chat: this is why it was important last week for the MCO to move to a higher point above this same divergent level for prices to actually move above their prior price highs
2013-09-19 16:20:07 [Message] fib_1618 -> Chat: so far so good?
2013-09-19 16:20:34 [Message] bylo -> Chat: very well explained, I can see it on the charts
2013-09-19 16:20:38 [Message] fib_1618 -> Chat: OK...
2013-09-19 16:20:44 [Message] fib_1618 -> Chat: let's take then one step deeper
2013-09-19 16:21:01 [Message] fib_1618 -> Chat: you will then notice that we basically ran out of fuel in the tank
2013-09-19 16:21:05 [Message] fib_1618 -> Chat: this case
2013-09-19 16:21:22 [Message] fib_1618 -> Chat: we suddenly noticed that the needle was on empty
2013-09-19 16:21:34 [Message] fib_1618 -> Chat: and so we allowed ourselves to continue to move forward
2013-09-19 16:22:08 [Message] fib_1618 -> Chat: but the degree of amplitude began to slow as it would happen when you decide to no longer hit the gas pedal and you start to coast
2013-09-19 16:22:17 [Message] fib_1618 -> Chat: but you're STILL moving forward
2013-09-19 16:22:35 [Message] fib_1618 -> Chat: and you can see this in the price pattern as it maintained sideways movement but also its upward bias
2013-09-19 16:22:50 [Message] fib_1618 -> Chat: until more fuel was to be added then
2013-09-19 16:23:06 [Message] fib_1618 -> Chat: it wasn't going to move much beyond our first divergent high point
2013-09-19 16:23:13 [Message] fib_1618 -> Chat: now here's the fun part
2013-09-19 16:23:27 [Message] fib_1618 -> Chat: as we see the MCO then declined to around the zero line
2013-09-19 16:23:55 [Message] fib_1618 -> Chat: tried to hit the pedal to move forward but nothing was there (blip point in the decline)
2013-09-19 16:24:16 [Message] fib_1618 -> Chat: and we then moved below the zero line indicating that the fuel to move forward had actually exhausted itself
2013-09-19 16:24:30 [Message] fib_1618 -> Chat: and that no further forward motion in prices was to occur
2013-09-19 16:24:41 [Message] fib_1618 -> Chat: and we then stared to decay
2013-09-19 16:24:55 [Message] fib_1618 -> Chat: we went below the MCO zero line
2013-09-19 16:25:16 [Message] fib_1618 -> Chat: and tried then to desperately find some way to continue the journey (the snapback to the zero line)
2013-09-19 16:25:24 [Message] fib_1618 -> Chat: but there wasn't anything there in the tank to do so
2013-09-19 16:25:26 [Message] fib_1618 -> Chat: and down we went
2013-09-19 16:26:04 [Message] fib_1618 -> Chat: with that final desperate try allowing a breakdown in the direction of prices
2013-09-19 16:26:36 [Message] fib_1618 -> Chat: it was because of this that it was important for the our turning things around that this same desperate point needed to be violated
2013-09-19 16:26:53 [Message] fib_1618 -> Chat: in order for prices to again "challenge" this same high point in prices
2013-09-19 16:27:07 [Message] fib_1618 -> Chat: and with it
2013-09-19 16:27:13 [Message] fib_1618 -> Chat: as you followed along
2013-09-19 16:27:31 [Message] fib_1618 -> Chat: it was even more important that we showed texture to allow this to happen
2013-09-19 16:27:48 [Message] fib_1618 -> Chat: as to provide a foundation in which to build on and then be able to actually move beyond this "point of desperation"
2013-09-19 16:28:04 [Message] fib_1618 -> Chat: so the more bottoms above bottoms you have
2013-09-19 16:28:23 [Message] fib_1618 -> Chat: the increasing amount of safety nets you have to keep you from falling off the ladder
2013-09-19 16:28:51 [Message] fib_1618 -> Chat: and you saw how this all worked out on a chat by chat basis
2013-09-19 16:29:13 [Message] fib_1618 -> Chat: now...
2013-09-19 16:29:22 [Message] bylo -> Chat: understood, like having a nice amount of price support lines when trading on price only
2013-09-19 16:29:31 [Message] fib_1618 -> Chat: if we didn't have this texture supporting the bulls attempt to succeed
2013-09-19 16:29:44 [Message] fib_1618 -> Chat: than any move above this zero line resistance point MCO would had given us a rally failure in prices
2013-09-19 16:29:52 [Message] fib_1618 -> Chat: correct
2013-09-19 16:29:54 [Message] fib_1618 -> Chat: or better yet
2013-09-19 16:30:01 [Message] fib_1618 -> Chat: you build a series of foundations or floors below you
2013-09-19 16:30:18 [Message] fib_1618 -> Chat: and then build upon this so that anything you construct above it will find support
2013-09-19 16:30:22 [Message] fib_1618 -> Chat: again
2013-09-19 16:30:35 [Message] fib_1618 -> Chat: the basis here is that the stock market is ALWAYS in a bear market
2013-09-19 16:31:00 [Message] fib_1618 -> Chat: it can only move higher if there is enough underlying strength (support) in the trend of money flow to offset this same default
2013-09-19 16:31:10 [Message] fib_1618 -> Chat: that's why when money is taken away
2013-09-19 16:31:16 [Message] fib_1618 -> Chat: and monetary support is nil
2013-09-19 16:31:19 [Message] fib_1618 -> Chat: prices can decline quickly or even crash
2013-09-19 16:31:43 [Message] fib_1618 -> Chat: as the pattern attempts to fill the vacuum created by this lack of foundation
2013-09-19 16:31:46 [Message] fib_1618 -> Chat: sort of like
2013-09-19 16:32:27 [Message] fib_1618 -> Chat: Wyle E. Coyote running after the Road Runner and finding no ground support below him as he races forward off a cliff
2013-09-19 16:32:41 [Message] fib_1618 -> Chat: and down he goes
2013-09-19 16:32:56 [Message] fib_1618 -> Chat: so there must be enough liquidity in order for prices to first stabilize
2013-09-19 16:33:24 [Message] fib_1618 -> Chat: and then even more than that to create a trending sequence against this overwhelming default of moving lower
2013-09-19 16:33:34 [Message] fib_1618 -> Chat: now...
2013-09-19 16:33:38 [Message] fib_1618 -> Chat: projections
2013-09-19 16:34:32 [Message] fib_1618 -> Chat: this simple idea then allows us to give solid forecasts of what the expectation would be given these breaks of what were previous areas of decay or improvement
2013-09-19 16:34:36 [Message] fib_1618 -> Chat: for example
2013-09-19 16:35:21 [Message] fib_1618 -> Chat: moving above the MCO zero line in this case then allowed the idea that there was enough fuel available to at least challenge the previous price high point created before the break down
2013-09-19 16:36:08 [Message] fib_1618 -> Chat: with the blip area providing a much more confident forecast of not only challenging the old highs
2013-09-19 16:36:15 [Message] fib_1618 -> Chat: but possible piercing above them
2013-09-19 16:36:30 [Message] fib_1618 -> Chat: but that's all that could be done
2013-09-19 16:36:46 [Message] fib_1618 -> Chat: for until the first divergent point is actually taken out on the MCO
2013-09-19 16:37:05 [Message] fib_1618 -> Chat: prices will not be able to STAY above any piercings of this same objective
2013-09-19 16:37:22 [Message] fib_1618 -> Chat: so this is why it was important for the buyers to keep the pressure on
2013-09-19 16:37:24 [Message] fib_1618 -> Chat: otherwise
2013-09-19 16:37:35 [Message] fib_1618 -> Chat: we would had continued to be in a trading range
2013-09-19 16:37:57 [Message] fib_1618 -> Chat: and this larger idea of a trading range is "brought to you by" the MCSUM
2013-09-19 16:38:13 [Message] fib_1618 -> Chat: which provides us with this same information but on an intermediate term time frame
2013-09-19 16:38:19 [Message] fib_1618 -> Chat: that of which
2013-09-19 16:38:33 [Message] fib_1618 -> Chat: you'll see daily patterns form from its indications
2013-09-19 16:38:38 [Message] fib_1618 -> Chat: trading ranges
2013-09-19 16:38:40 [Message] fib_1618 -> Chat: triangles
2013-09-19 16:38:46 [Message] fib_1618 -> Chat: double tops
2013-09-19 16:38:48 [Message] fib_1618 -> Chat: wedges
2013-09-19 16:39:19 [Message] fib_1618 -> Chat: all of these classic chart patterns can only be created by the rise and fall of money flow on a multi week basis
2013-09-19 16:39:30 [Message] fib_1618 -> Chat: money is volume
2013-09-19 16:39:36 [Message] fib_1618 -> Chat: and volume is money
2013-09-19 16:39:39 [Message] fib_1618 -> Chat: [smile]
2013-09-19 16:39:58 [Message] fib_1618 -> Chat: so you need both breadth and volume working together to create a trend
2013-09-19 16:40:11 [Message] fib_1618 -> Chat: if one is positive, and the other negative
2013-09-19 16:40:15 [Message] fib_1618 -> Chat: prices can only chop
2013-09-19 16:40:26 [Message] fib_1618 -> Chat: it's really as simple as that
2013-09-19 16:40:30 [Message] fib_1618 -> Chat: this is why
2013-09-19 16:40:45 [Message] fib_1618 -> Chat: trends happen only 20% of the time over the short term time frame
2013-09-19 16:40:49 [Message] fib_1618 -> Chat: that of 4-6 weeks
2013-09-19 16:40:56 [Message] fib_1618 -> Chat: which also means
2013-09-19 16:41:09 [Message] fib_1618 -> Chat: that 80% of the time the market is in a corrective sequence
2013-09-19 16:41:37 [Message] fib_1618 -> Chat: how this affects patterns on a daily basis then becomes a little bit easier to understand
2013-09-19 16:41:55 [Message] fib_1618 -> Chat: for if the MCO components are positive, but the MCO is negative, then you know that we're likely to chop on a short term basis
2013-09-19 16:42:14 [Message] fib_1618 -> Chat: which could be for a 2-4 week period
2013-09-19 16:42:27 [Message] fib_1618 -> Chat: if the components and the MCO are both negative
2013-09-19 16:42:31 [Message] fib_1618 -> Chat: but the MCSUM is positive
2013-09-19 16:42:51 [Message] fib_1618 -> Chat: then you'll know that we're likely to chop on an intermediate term basis
2013-09-19 16:42:55 [Message] fib_1618 -> Chat: that of 4-8 weeks
2013-09-19 16:43:05 [Message] fib_1618 -> Chat: I'm giving general terms here in order to make some analytical sense
2013-09-19 16:43:24 [Message] fib_1618 -> Chat: so when is the market able to trend?
2013-09-19 16:43:40 [Message] fib_1618 -> Chat: when we see the components, the MCO and the MCSUM all on one side of their zero lines
2013-09-19 16:43:42 [Message] bylo -> Chat: when all are either positive or all negative
2013-09-19 16:43:45 [Message] fib_1618 -> Chat: there you go
2013-09-19 16:43:51 [Message] fib_1618 -> Chat: no magic here
2013-09-19 16:43:55 [Message] fib_1618 -> Chat: no voodoo
2013-09-19 16:44:09 [Message] fib_1618 -> Chat: but so simple that most can't believe it can be
2013-09-19 16:44:20 [Message] fib_1618 -> Chat: of course
2013-09-19 16:44:45 [Message] fib_1618 -> Chat: we're also dealing with two the of the very best tools out there that allow us to measure money on two different time scales to help understand why and when these kinds of things can happen
2013-09-19 16:45:01 [Message] fib_1618 -> Chat: and when we combine this information with good old fashioned reasoning
2013-09-19 16:45:08 [Message] fib_1618 -> Chat: more times than not
2013-09-19 16:45:13 [Message] fib_1618 -> Chat: when all is said and done
2013-09-19 16:45:33 [Message] fib_1618 -> Chat: you will have called the outcome pretty much before anyone had a chance to even think about what could be done
2013-09-19 16:45:41 [Message] fib_1618 -> Chat: look at the August bottom
2013-09-19 16:45:46 [Message] fib_1618 -> Chat: lots of bearishness there
2013-09-19 16:45:51 [Message] fib_1618 -> Chat: calls for crashes
2013-09-19 16:45:54 [Message] fib_1618 -> Chat: and major tops
2013-09-19 16:46:06 [Message] fib_1618 -> Chat: but in here we were looking for the develpment of a price bottom
2013-09-19 16:46:19 [Message] fib_1618 -> Chat: that we know that when the MCO gets over the -100 level
2013-09-19 16:46:24 [Message] fib_1618 -> Chat: this is not a sign of a negative kick off
2013-09-19 16:46:39 [Message] fib_1618 -> Chat: it's a sigh of acute capitulation
2013-09-19 16:46:46 [Message] fib_1618 -> Chat: that readings like that create important price bottoms
2013-09-19 16:47:02 [Message] fib_1618 -> Chat: all we needed then was for a divergent bottom (loss of momentum created by the expansion of money moving OUT of the market)
2013-09-19 16:47:07 [Message] fib_1618 -> Chat: and then another one to build on that
2013-09-19 16:47:11 [Message] fib_1618 -> Chat: and then another
2013-09-19 16:47:26 [Message] fib_1618 -> Chat: and just like you see in the textbooks
2013-09-19 16:47:31 [Message] fib_1618 -> Chat: as prices continued to sell off
2013-09-19 16:47:53 [Message] fib_1618 -> Chat: the momentum of this same selling continued to decrease in its amplitude
2013-09-19 16:48:04 [Message] fib_1618 -> Chat: and why divergence works more times than not
2013-09-19 16:48:15 [Message] fib_1618 -> Chat: what many have problems with though
2013-09-19 16:48:37 [Message] fib_1618 -> Chat: is that they don't fully understand the indicator that they choose to use to measure such divergences
2013-09-19 16:48:47 [Message] fib_1618 -> Chat: not only by its usage
2013-09-19 16:48:59 [Message] fib_1618 -> Chat: but by the math behind what it's trying to measure
2013-09-19 16:49:02 [Message] fib_1618 -> Chat: of course
2013-09-19 16:49:27 [Message] fib_1618 -> Chat: much of this is to be blamed on taking the easy way out and buying a piece of software and not doing any kind of due diligence in this area
2013-09-19 16:49:56 [Message] fib_1618 -> Chat: but those who have used a number 2 pencil and 10 square per inch graph paper every day to chart the market
2013-09-19 16:50:13 [Message] fib_1618 -> Chat: and used a calculator to come up with the numbers each day in the MCO and MCSUM
2013-09-19 16:50:17 [Message] fib_1618 -> Chat: don't understand this
2013-09-19 16:50:33 [Message] fib_1618 -> Chat: oh...back to price projections
2013-09-19 16:50:58 [Message] fib_1618 -> Chat: once you then move above the point in which prices are then allowed to move beyond your extreme point in the pattern
2013-09-19 16:51:01 [Message] fib_1618 -> Chat: (remember this works whether you're moving higher or lower)
2013-09-19 16:51:49 [Message] fib_1618 -> Chat: you then use historic price information to project what the next likely area will be for prices to find an area of price support or resistance
2013-09-19 16:52:27 [Message] fib_1618 -> Chat: with further consideration of the proximity of where you are in the pattern to this same price zone, you can then extend a likely target
2013-09-19 16:52:36 [Message] fib_1618 -> Chat: now...
2013-09-19 16:52:42 [Message] fib_1618 -> Chat: currently we have a slight problem
2013-09-19 16:53:04 [Message] fib_1618 -> Chat: because being at new all time highs you have to kind of look at other pieces of history to come up with this same target objective
2013-09-19 16:53:15 [Message] fib_1618 -> Chat: this is why when we talked about the 1825 level for the SPX last week
2013-09-19 16:53:38 [Message] fib_1618 -> Chat: this was based more on the idea that if the energy created back in November of last year gave us "this much"
2013-09-19 16:54:06 [Message] fib_1618 -> Chat: that this same energy coefficient should probably give us about "that much" this time around as well
2013-09-19 16:54:57 [Message] fib_1618 -> Chat: this is why we have to continuously monitor the rhythm of the market to see if it can, in fact, reach such objectives given by, what you can call, the raw source given with this kind of analysis
2013-09-19 16:55:09 [Message] fib_1618 -> Chat: you can also use basic chart pattern objectives as well to help you out
2013-09-19 16:55:53 [Message] fib_1618 -> Chat: head and shoulders...triangles...wedges...W and M formations
2013-09-19 16:55:55 [Message] fib_1618 -> Chat: and on and on
2013-09-19 16:56:05 [Message] fib_1618 -> Chat: like we like to say in here
2013-09-19 16:56:23 [Message] fib_1618 -> Chat: the bottom line in all this is that it MUST all work together to achieve a common goal
2013-09-19 16:56:40 [Message] fib_1618 -> Chat: everything MUST compliment breadth and volume
2013-09-19 16:56:45 [Message] fib_1618 -> Chat: if it doesn't
2013-09-19 16:56:54 [Message] fib_1618 -> Chat: then your targets are not likely to be reached
2013-09-19 16:56:56 [Message] fib_1618 -> Chat: good example
2013-09-19 16:57:01 [Message] fib_1618 -> Chat: people who use Elliott
2013-09-19 16:57:10 [Message] fib_1618 -> Chat: if you have breadth and volume making new extremes in their short term trend
2013-09-19 16:57:22 [Message] fib_1618 -> Chat: then the idea of B wave can't be a good one
2013-09-19 16:57:54 [Message] fib_1618 -> Chat: additionally, if you only see a trickle of money coming in after a trending declining price structure
2013-09-19 16:58:07 [Message] fib_1618 -> Chat: you're not likely to see a .618 retracement as you are a .382
2013-09-19 16:58:20 [Message] fib_1618 -> Chat: compliments
2013-09-19 16:58:40 [Message] fib_1618 -> Chat: anyway...did I answer your question...any follow up?
2013-09-19 16:59:01 [Message] fib_1618 -> Chat: (or did I put you to sleep [smile] )
2013-09-19 16:59:25 [Message] bylo -> Chat: yeah a lot of interesting stuff.  Gonna print this out and walk through it with the charts.  Thanks
2013-09-19 16:59:34 [Message] fib_1618 -> Chat: not a problem
2013-09-19 16:59:36 [Message] fib_1618 -> Chat: remember
2013-09-19 16:59:46 [Message] fib_1618 -> Chat: a lot of this is just repetition
2013-09-19 16:59:51 [Message] fib_1618 -> Chat: but what I try to do
2013-09-19 17:00:03 [Message] fib_1618 -> Chat: is to give analogies that make better sense
2013-09-19 17:00:30 [Message] fib_1618 -> Chat: and then you begin to understand why prices exploded yesterday just as we thought they would
2013-09-19 17:01:00 [Message] fib_1618 -> Chat: what you'll find here
2013-09-19 17:01:01 [Message] bylo -> Chat: quick question about right now in the charts.  If we do not make any higher highs in the MCO in the next few weeks, price should still at least hold or may rise until momentum gives out, is that correct?
2013-09-19 17:01:20 [Message] fib_1618 -> Chat: is that we have a lot of people who have participated in these chats for many years and do so because breadth analysis works
2013-09-19 17:01:42 [Message] fib_1618 -> Chat: you have two dichotomies working here
2013-09-19 17:01:47 [Message] fib_1618 -> Chat: you have the short term trend of money
2013-09-19 17:01:52 [Message] fib_1618 -> Chat: and you have the intermediate term
2013-09-19 17:02:25 [Message] fib_1618 -> Chat: the job of the short term is to fill the bathtub high enough to where prices will be able to float on the surface without having the chance of going down the drain
2013-09-19 17:02:43 [Message] fib_1618 -> Chat: so the longer the MCO stays above the zero line
2013-09-19 17:02:50 [Message] fib_1618 -> Chat: the higher the water line of the bath tub
2013-09-19 17:02:56 [Message] fib_1618 -> Chat: and why
2013-09-19 17:03:03 [Message] fib_1618 -> Chat: prices can only float on the surface
2013-09-19 17:03:18 [Message] fib_1618 -> Chat: and when trying to force the issue below the surface
2013-09-19 17:03:44 [Message] fib_1618 -> Chat: it doesn't last very long as it's trying to move back to the surface because of displacement
2013-09-19 17:03:50 [Message] fib_1618 -> Chat: an analogy I like to refer to is that it's like trying to keep a basketball below the surface of a swimming pool in the deep end
2013-09-19 17:04:20 [Message] fib_1618 -> Chat: as long as you apply constant pressure to it
2013-09-19 17:04:27 [Message] fib_1618 -> Chat: the ball will stay down
2013-09-19 17:04:35 [Message] fib_1618 -> Chat: but at the same time, it will fight you in the other direction
2013-09-19 17:05:09 [Message] fib_1618 -> Chat: this is why most of the declines we see when market has rallied a bit become shorter and shallower the higher the MCSUM is (equal and opposite during declining sequences)
2013-09-19 17:05:19 [Message] fib_1618 -> Chat: and once the bears run out of sellers
2013-09-19 17:05:24 [Message] fib_1618 -> Chat: WHOOSH
2013-09-19 17:05:34 [Message] bylo -> Chat: nice.  understood
2013-09-19 17:05:35 [Message] fib_1618 -> Chat: the basketball moves back above the water line
2013-09-19 17:05:49 [Message] fib_1618 -> Chat: and then even well above it as this compression is released
2013-09-19 17:05:58 [Message] fib_1618 -> Chat: it's all physics
2013-09-19 17:06:02 [Message] fib_1618 -> Chat: this is why in the past
2013-09-19 17:06:43 [Message] fib_1618 -> Chat: when you see someone make a post or comment that we're at a top
2013-09-19 17:06:53 [Message] fib_1618 -> Chat: that it's literally impossible to have one under such conditions
2013-09-19 17:06:57 [Message] fib_1618 -> Chat: no less a crash
2013-09-19 17:07:15 [Message] fib_1618 -> Chat: because until the pool is drained enough to where the ball can stay under water
2013-09-19 17:07:30 [Message] fib_1618 -> Chat: there's just too much "liquid-ity" for something like this to actually happen
2013-09-19 17:07:44 [Message] fib_1618 -> Chat: yes, sometimes news events can provide that necessary "thumb on the scale" to say that this is not "always" true
2013-09-19 17:08:26 [Message] fib_1618 -> Chat: but once this news events subsides...
2013-09-19 17:08:29 [Message] fib_1618 -> Chat: what usually happens?
2013-09-19 17:08:52 [Message] fib_1618 -> Chat: the market moves in the direction in which money is providing a foundation
2013-09-19 17:09:01 [Message] fib_1618 -> Chat: the latest time this happened as an example
2013-09-19 17:09:06 [Message] fib_1618 -> Chat: earlier this month with Syria
2013-09-19 17:09:19 [Message] fib_1618 -> Chat: so many reasons to be bearish
2013-09-19 17:09:23 [Message] fib_1618 -> Chat: but meanwhile
2013-09-19 17:09:29 [Message] fib_1618 -> Chat: underneath the surface
2013-09-19 17:09:41 [Message] fib_1618 -> Chat: we were seeing a different story, weren't we?
2013-09-19 17:09:47 [Message] fib_1618 -> Chat: and up we went
2013-09-19 17:10:10 [Message] fib_1618 -> Chat: things like Syria, Greece and other distractions
2013-09-19 17:10:43 [Message] fib_1618 -> Chat: are the very reasons why ALL of us eventually sought out technical analysis because fundamentals sure weren't doing the trick
2013-09-19 17:11:03 [Message] fib_1618 -> Chat: or when you buy stock only to see the market top
2013-09-19 17:11:05 [Message] fib_1618 -> Chat: or worse yet
2013-09-19 17:11:22 [Message] fib_1618 -> Chat: selling your stock positions and the market then turning around
2013-09-19 17:11:24 [Message] fib_1618 -> Chat: as if to say
2013-09-19 17:11:37 [Message] fib_1618 -> Chat: "HEY - Dave is out of the market...NOW we can rally!!"
2013-09-19 17:12:05 [Message] bylo -> Chat: been there!
2013-09-19 17:12:14 [Message] fib_1618 -> Chat: OK...any other thoughts, questions, or should we just take a quick look around??
2013-09-19 17:13:33 [Message] fib_1618 -> Chat: taking a quick look around then
2013-09-19 17:14:04 [Message] fib_1618 -> Chat: and we see that the NASDAQ and NDX breadth MCO's are the only two indices that are showing a lack of follow through currently
2013-09-19 17:14:31 [Message] fib_1618 -> Chat: but until we break below last weeks lows
2013-09-19 17:14:51 [Message] fib_1618 -> Chat: we'll consider this the beginning of a complex bullish pattern above the MCO zero line given that all of the other MCO's have either moved to higher highs, or have taken out their first reaction high after July peaks
2013-09-19 17:15:38 [Message] fib_1618 -> Chat: let's check the volume McClellan's
2013-09-19 17:16:03 [Message] fib_1618 -> Chat: and we kind of a mixed picture there
2013-09-19 17:16:14 [Message] fib_1618 -> Chat: with the NASDAQ volume MCO showing a lower high
2013-09-19 17:16:20 [Message] fib_1618 -> Chat: but the NDX volume MCO showing a higher high
2013-09-19 17:16:24 [Message] fib_1618 -> Chat: over all then
2013-09-19 17:16:46 [Message] fib_1618 -> Chat: we are seeing a reduction of money moving into the larger NASDAQ marketplace
2013-09-19 17:17:01 [Message] fib_1618 -> Chat: but the top 100 continue to benefit from this latest advance
2013-09-19 17:18:58 [Message] fib_1618 -> Chat: so keep on keeping on with the QQQ's for now [smile]
2013-09-19 17:19:31 [Message] fib_1618 -> Chat: we also see a lack of follow through on the SML volume MCO as well
2013-09-19 17:19:42 [Message] fib_1618 -> Chat: but everything else looks hunky dory
2013-09-19 17:20:21 [Message] fib_1618 -> Chat: CVI's are pausing
2013-09-19 17:20:39 [Message] fib_1618 -> Chat: STVO's and VTO's will now begin to stall
2013-09-19 17:20:41 [Message] fib_1618 -> Chat: so far then
2013-09-19 17:21:02 [Message] fib_1618 -> Chat: our blueprint of new highs on Wednesday, followed by chop into OPEX, is working out nicely
2013-09-19 17:21:24 [Message] fib_1618 -> Chat: NYSE TRIN at 1.32
2013-09-19 17:21:36 [Message] fib_1618 -> Chat: Open 10 at .88
2013-09-19 17:21:45 [Message] fib_1618 -> Chat: so we're back to neutral in one trading day
2013-09-19 17:21:46 [Message] fib_1618 -> Chat: not bad
2013-09-19 17:21:54 [Message] fib_1618 -> Chat: we call that..."correcting on the fly"
2013-09-19 17:22:09 [Message] fib_1618 -> Chat: NASDAQ TRIN at .63
2013-09-19 17:22:26 [Message] fib_1618 -> Chat: Open 10 still "overbought" at .79
2013-09-19 17:22:38 [Message] fib_1618 -> Chat: TM TRIN at .75
2013-09-19 17:22:42 [Message] fib_1618 -> Chat: Open 10 at .85
2013-09-19 17:23:08 [Message] fib_1618 -> Chat: new closing highs today in the NASDAQ and NDX
2013-09-19 17:23:15 [Message] fib_1618 -> Chat: while the rest of the price patterns saw a pause to refresh
2013-09-19 17:23:22 [Message] fib_1618 -> Chat: what we'll probably see here
2013-09-19 17:23:31 [Message] fib_1618 -> Chat: is something very similar to last Friday and Monday
2013-09-19 17:23:35 [Message] fib_1618 -> Chat: a two day pause
2013-09-19 17:23:44 [Message] fib_1618 -> Chat: and then a resumption higher by next Tuesday
2013-09-19 17:24:20 [Message] fib_1618 -> Chat: let me take a quick peak at the sector charts
2013-09-19 17:24:37 [Message] fib_1618 -> Chat: and see which areas we can work with over the weekend over at DP
2013-09-19 17:24:38 [Message] fib_1618 -> Chat: remember
2013-09-19 17:25:00 [Message] fib_1618 -> Chat: DP has a ton of information on those issues that are strongest and weakest in their respective trading basket
2013-09-19 17:25:18 [Message] fib_1618 -> Chat: you find this on the Main Menu, under the "Chart Books" tab
2013-09-19 17:25:59 [Message] fib_1618 -> Chat: Biotech
2013-09-19 17:26:18 [Message] fib_1618 -> Chat: Emerging markets are doing well again
2013-09-19 17:26:19 [Message] fib_1618 -> Chat: BIK
2013-09-19 17:26:44 [Message] fib_1618 -> Chat: remember those EMA compression points we were talking about 2 weeks ago? [smile]
2013-09-19 17:26:55 [Message] fib_1618 -> Chat: China
2013-09-19 17:27:14 [Message] fib_1618 -> Chat: XLY
2013-09-19 17:27:42 [Message] fib_1618 -> Chat: the Euro is looking bullish again
2013-09-19 17:28:23 [Message] fib_1618 -> Chat: both the INDU and TRANS are at all time highs
2013-09-19 17:28:31 [Message] fib_1618 -> Chat: for you Dow Theorists out there [smile]
2013-09-19 17:29:03 [Message] fib_1618 -> Chat: Energy stocks
2013-09-19 17:29:15 [Message] fib_1618 -> Chat: EFA
2013-09-19 17:29:41 [Message] fib_1618 -> Chat: heath care
2013-09-19 17:29:52 [Message] fib_1618 -> Chat: the housing index is back into a bullish configuration
2013-09-19 17:30:23 [Message] fib_1618 -> Chat: home construction should be on the watch's at a compression point
2013-09-19 17:30:43 [Message] fib_1618 -> Chat: industrial stocks
2013-09-19 17:31:37 [Message] fib_1618 -> Chat: REITS are still underwater...stay away for now
2013-09-19 17:32:30 [Message] fib_1618 -> Chat: still don't like the precious metals here
2013-09-19 17:32:34 [Message] fib_1618 -> Chat: be careful
2013-09-19 17:33:46 [Message] fib_1618 -> Chat: Brazil is back on the watch list
2013-09-19 17:33:57 [Message] fib_1618 -> Chat: per our conversation on Apple yesterday and EMA's
2013-09-19 17:34:19 [Message] fib_1618 -> Chat: note how EWZ moved back above its 200 day EMA with a huge volume spike, and it should now test this same line for support
2013-09-19 17:34:25 [Message] fib_1618 -> Chat: what did Apple do today anyway?
2013-09-19 17:34:50 [Message] fib_1618 -> Chat: closed above $470
2013-09-19 17:35:01 [Message] fib_1618 -> Chat: while daily volume was OK
2013-09-19 17:35:17 [Message] fib_1618 -> Chat: we'll watch how it reacts over the next day or so
2013-09-19 17:36:17 [Message] fib_1618 -> Chat: and see if the 50 and 200 day EMA's provide the strong support that will be needed for the eventual kick off to the upside
2013-09-19 17:36:48 [Message] fib_1618 -> Chat: EEM now up 20% in two weeks
2013-09-19 17:37:03 [Message] fib_1618 -> Chat: Europe remains strong
2013-09-19 17:37:08 [Message] fib_1618 -> Chat: France doing well
2013-09-19 17:38:01 [Message] fib_1618 -> Chat: check ILF and the daily volume/EMA interchange between the two over the last two weeks
2013-09-19 17:38:07 [Message] fib_1618 -> Chat: classic rally mode there
2013-09-19 17:38:46 [Message] fib_1618 -> Chat: wow...pretty much all the world markets had a great day on Wednesday
2013-09-19 17:39:55 [Message] fib_1618 -> Chat: no panic at all with the TED Spreads and Libor rates
2013-09-19 17:40:08 [Message] fib_1618 -> Chat: wow
2013-09-19 17:40:16 [Message] fib_1618 -> Chat: what a big down day in short term rates yesterday
2013-09-19 17:40:43 [Message] fib_1618 -> Chat: in the 10 year as well
2013-09-19 17:40:56 [Message] fib_1618 -> Chat: longer term rates remain range bound for now
2013-09-19 17:41:35 [Message] fib_1618 -> Chat: Airlines still doing well
2013-09-19 17:41:41 [Message] fib_1618 -> Chat: oh - I downloaded the new iOS7 for my Apple phone today
2013-09-19 17:42:01 [Message] fib_1618 -> Chat: took about an hour
2013-09-19 17:42:15 [Message] fib_1618 -> Chat: make sure you back everything up in iTunes before you update
2013-09-19 17:42:46 [Message] fib_1618 -> Chat: the interface is different...but it's nice
2013-09-19 17:43:02 [Message] fib_1618 -> Chat: chemicals
2013-09-19 17:43:08 [Message] fib_1618 -> Chat: another oil based product
2013-09-19 17:43:36 [Message] fib_1618 -> Chat: computer software is doing fine
2013-09-19 17:43:45 [Message] fib_1618 -> Chat: but the rest of tech is basically moving sideways for now
2013-09-19 17:44:08 [Message] fib_1618 -> Chat: defense stocks continue to climb
2013-09-19 17:45:09 [Message] fib_1618 -> Chat: and that's about it
2013-09-19 17:45:21 [Message] fib_1618 -> Chat: anything else?
2013-09-19 17:45:34 [Message] bylo -> Chat: Thanks for the help
2013-09-19 17:45:43 [Message] fib_1618 -> Chat: remember that we have chat next week on Wednesday and Thursday
2013-09-19 17:45:47 [Message] fib_1618 -> Chat: there will be no Tuesday chat
2013-09-19 17:45:56 [Message] fib_1618 -> Chat: not a problem
2013-09-19 17:46:07 [Message] fib_1618 -> Chat: it's important to ask questions
2013-09-19 17:46:12 [Message] fib_1618 -> Chat: of anyone in this business
2013-09-19 17:46:17 [Message] fib_1618 -> Chat: if they know their stuff
2013-09-19 17:46:25 [Message] fib_1618 -> Chat: they will always be happy to share information with you
2013-09-19 17:46:53 [Message] bylo -> Chat: Will do
2013-09-19 17:46:57 [Message] fib_1618 -> Chat: the war we play is not with our fellow traders
2013-09-19 17:47:00 [Message] fib_1618 -> Chat: it's with the market
2013-09-19 17:47:16 [Message] fib_1618 -> Chat: this is our objective
2013-09-19 17:47:22 [Message] fib_1618 -> Chat: to beat it at its own game
2013-09-19 17:47:26 [Message] fib_1618 -> Chat: and do it consistently
2013-09-19 17:48:04 [Message] fib_1618 -> Chat: OK...if there's nothing else
2013-09-19 17:48:20 [Message] fib_1618 -> Chat: I'm going to take off and do some "other work"
2013-09-19 17:48:24 [Message] fib_1618 -> Chat: everyone have a great weekend
2013-09-19 17:48:33 [Message] fib_1618 -> Chat: and we'll see how things are going next Wednesday
2013-09-19 17:48:35 [Message] fib_1618 -> Chat: good night

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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

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