As predicted, this morning
the Bureau of Labor Statistics (BLS) issued the November unemployment report and
it was a lot higher than the consensus figure (533,000 vs 325,000). In the process they revised the September and
October unemployment up another 199,000 jobs lost. Also as predicted the market fell on the
opening and continued to fall for a while (until 10:45 am) and then started to
rise.
Over the past few weeks
I’ve been asked on several occasions what I expect will happen at a predicted
impulse time. For the vast majority of
cases I don’t have a clue. I just hope
that market action will provide a strong indication of its direction at or near
the predicted impulse date/time. As an
example, here’s what I did today.
Since I predicted an
impulse event for 12:30 pm I was watching the S&P carefully. Between noon and 12:30 the S&P tried to
breach the 835 area (see blue line on attached chart). When the S&P fell exactly 2 points
between 12:30 and 12:31, I figured this was the start of an impulse move and
bought the S&P UltraShort ETF, SDS.
I got somewhat of a lousy fill at 99.22, but that’s trading. As you all know by now, the S&P didn’t
keep falling; it instead rallied back to the 835 area and broke. I was lucky to sell my SDS at 97.88. As with many breakouts support becomes
resistance or, as in this instance, resistance (the 835 area) became
support. So I waited to make sure that
this wasn’t a false breakout, whereupon I bought the S&P UltraLong ETF
SSO. I got filled at 23.30 and rode the
rally until late in the trading session.
All along I knew I didn’t want to hold this position over the weekend so
about 3:40 pm I started looking to exit.
Since at this point exiting the trade was more important than price I
placed an order to sell with a very loose limit. I got filled above the limit at
24.99.
Last night I emailed
impulse dates for three groups of indices.
The date I consider the most important is December 23, which is the
predicted date for the SP-500, DJIA, and the SP-100. I say most important, because the impulse
predictions for the large caps have been remarkably accurate lately.
With the massive losses
suffered by most everyone this year, I expect lots of year-end tax selling and
portfolio shuffling. As a result one
can anticipate continued high volatility for the rest of
December.
From: plieber@xxxxxxxxxxxxxx
To: realtraders@xxxxxxxxxxxxxxx
Subject: RE: [RT] Ready to turn?
Date: Thu, 4 Dec 2008 15:00:35 -0500
Tomorrow at 8:30 am November unemployment figures will be released and the consensus is a loss of 325,000 more jobs. This, I assume, is the number the market has factored in already. It seems like every economic forecast the Fed has made lately has been more optimistic than the actual reported numbers. Given that fact it seems likely that the actual report will exceed 325k. If that happens the market, if it follows past scripts, will open lower tomorrow morning, which then will be followed by a slight rally.
To: realtraders@xxxxxxxxxxxxxxx
From: roncer@xxxxxxxxxxxxx
Date: Thu, 4 Dec 2008 11:09:16 -0500
Subject: [RT] Ready to turn?
Ben,
I am looking for a turning point today or early tomorrow. What do think, is ready to move lower?
Ron
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