Saturday, March 03, 2007

 

The Big Picture - Nasdaq



Alright fuckers. Some of you have been complaining that Fly seemingly uses no technical analysis to aid his trading. In fact, I do believe Fly feels that technical analysis is for the mentally impaired. I don't argue with him as his "calculator brain" is beyond my levels of comprehension.

So, I don't know whether it is to quell you complainers out there, or whether he wants me to make an ass of myself on his blog so he can subsequently fire me and remove any hope I've ever had about having a few "mexican illegals" spruce up my yard for Spring, but Fly has agreed to allow me to post some charts and stuff.

I want to start with the Nasdaq. I think you've got to look at the big picture here.


A historical perspective is important to consider. Lets compare the start of our current correction with the correction that begain last May. Both sell-offs went quickly outside of the Bollinger Bands. In May, it took 6 days of sell-off before the Comp. moved back within the bands.

Volume on the May sell-off was above average, but not huge. Volume the past 4 days of this sell-off has been monumental. Because of the volume, I believe this move could be more powerful than in May.

There is an area of congestion between 2325-2350 that is likely to act as either the 1st. support or a speedbump to the current fall. It helps that the 38.2% Fib. level is right at that level as well. The 2nd area to pay attention to is the 2275-2300 level. That area will have the 200 day SMA and 50% retracement levels to contend with. Finally, the 61.8% retracement level at ~2210 stands a good chance of being touched, as every correction since 2004 has come very near or has breached this level before resuming the uptrend.

So what to do? This event, based on the volume and the spectacular performance of the Dow and Nasdaq on Blue Tuesday, will continue for some time. Don't fool yourself into thinking this will be over in a few days. It is clear from the chart that the Slow Stochastics can give entry signals for those who want to try and play the bounces. If you want to be long the bounce, just remember the spikes will be sold. You could also wait for the bounce, and then add to existing short positions. If history is any guide, the 20 day SMA should be a good place to sell your longs or add to your shorts.

Sometime soon, everyone will be talking about looking for a bottom. Keep in mind that in the past 4 years, every corrective phase has had two or three spikes up and back down before the actual bottom was in. Rather than trying to identify the bottom as it happens, it is more important to preserve your capital and your confidence so you can participate in grabbing a big bite out of the next run-up.

Comments:
Fly? Is that you? Okay, the first two paragraphs were definitely Fly.

Whoever did the tech analysis (Fly's servant), thanks. A little too technical for me, but the bottom line is understood...

Preserved capital + preserved confidence = future money.
 
Woodshedder!

Is this like "The Apprentice" and The Fly is, in reality, The Donald? HAHAHAHA

I wish you much success in your new weekend postion! Just make sure not to get within spitting distance from him. Rumor has it that Mr. Fly regurgitated on his prior Apprentice, and the poor guy was never seen again! ;)

btw, I am impressed with your post! Keep up the great work! ;)
 
MMX:

I am sick of your gayness. You are banned, hatfucker.

By no means is this a democracy.
 
Good post.
 
Barring a fucking Asian meltdown, we are in a normal correction.

Undoubtedly, we will soon have great buying opportunities.

However, with my money, for now, I am long FXY and short Semi's.
 
Good post. I think I get it....

BTW,

MMX deserves the boot. Good riddance MFKR.
 
I'm not really sure there can be an Asian Meltdown. With the summer 2008 Olympics in China, i don't think the Asians are going to put down their shovels and hammers anytime soon.

http://en.beijing2008.cn/71/21/article214022171.shtml
 
Good Job Woodshedder. I think fly should step aside and let you run things for awhile.
 
Woodyboy, posting charts is the height of gayness. do you have any money left after this decline or are you now holding down a 2nd job?

more important, does Denny's International know about you handing out resumes to work the drive thru night shift at McDick's?
 
Nice observations, thanks for sharing. Preserving mental capital is key.

My only question: is Fly's calculator brain solar powered?
 
Shortdabull, aren't you the guy who bought one call earlier this week? That order was probably rejected when you didn't even have enough capital to cover the commission.
 
The one call I did buy this week more then paid for the access to your mothers vagina on friday night.
 
In all future posts plese refer to the fly as "The Fly" NOT just "fly". "The Fly" is better and commands respect from poor people everywhere.
 
"In all future posts plese refer to the fly as "The Fly" NOT just "fly". "The Fly" is better and commands respect from poor people everywhere."

I agree.

Poor people from across the world should respect those with more money and superior genes.
 
Oh! btw, Woodshedder,

Do you think you could persuade The Fly to use the "labels" that come with the blogger now?

I was trying to find a post of his on a stock, and spent 2 hours of my valuable time F'n looking for the thing. Damn! And you know, Woodshedder, how I hate to get frustrated...

;)
 
Goddess, The Fly does not take kindly to suggestions such as you have mentioned. He is stuck in his ways much like an elderly man living in a seniors home.
 
Enjoyed reading the techinicals. Any opinions on Greenspans statement that a recession is possible by the end of the year? I am probably one of the few who has a negative opinion on him. I do know however that the market will discount any recession 6-9 months before it begins so it is possible especially if oil starts to gain traction. I believe that we are in the middle of a correction and not the beginning of a bear market. A bear market usually bgins with a long drawn out selloff. Sharp pullbacks are normal in a bull run just like sharp upside snapbacks are normal in a bear market.
Keep up the techincals Woodshedder and you too may be able to afford lawn people who are Boarder Challenged (illegal aliens).
 
Thanks for the good comments everyone. Let's see, in order of posting:

Gio- The Fly didn't write any of that. He doesn't have time for such peasantry on the weekends.

TG- Yes, that makes me the apprentice. I just hope The Fly's hair is better than The Donald's. And if that Omarosa shows up, I'm outta here.

Mde- I have no desire to run things around here. The Fly does a damn fine job, imo. Besides, I have my own blog to fill with my own asshatery.

Shortda- you pussed out on your blog, you one hit wonder!

Mdawsz- I'm going to your site after this, and my link on your blogroll damn well better say "Chinballs."

Broker J- duly noted.

TG- I have no pull here in regards to the labels.
 
"The Fly's" blog will never cheapen itself with such backward things, such as labels or other "widgets."

The content on this retarded site is so valuable, it should take 3 hours to find articles.

Once you find that article, you will understand what I have been trying to tell you all along.

Which is, don't be an asshat.

Back to fine dining and my weekly egg throwing contest from an undisclosed penthouse apartment in NYC.
 
mdawsz,

Thank you for reminding me to check in on my SRZ. ;)
 
Mr. Fly,

I am not one to normally make predictions, but I do love to bet. And right here and now, I will bet you 10k and a case of HANS that you start using labels within 6 months. Are you Musca domestica enough to take me up on that?

In the meantime, I am having my imaginary Intern write up an Invoice for the 3 hrs. x the # of different tickers I have spent here searching for a past post, and will be submitting it forthwith.

Oh.... I almost forgot! About the BBQ your wife invited me to tomorrow at your place. She didn't mention what I should bring. Would you be a dear and ask her to give me a call? I know how she adores my coleslaw and I don't mind making that again.

:)
 
Oh! For cryin' out loud!

Who screwed up my name on the 2 posts above????
 
Howard--

Sorry bud. If I were to do talk radio, I'd have to quit my day job and file for welfare.

Being that my wife is used to fur coats and shiny jewelry, I doubt she would approve.
 
Asian markets open down again. Just sayin'
 
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