In a bear trend…
Sell high, cover low
OR if you must
Sell low, cover lower.

Ideally short a bear rally to major resistance with a stop at just above that resistance cluster.
OR
Short a breakdown of major support with a stop at just above that support cluster.

In a bull trend…
Buy low, sell high
OR if you must
Buy high, sell higher.

Ideally buy a correction to major support with a stop at just below that support cluster.
OR
Buy a breakout of major resistance with a stop at just below that resistance cluster.

It really is that simple chart wise. We as humans muck it up with getting fancy, looking at the noisy timeframes and trying to out think the market and/or looking for a single level rather than a cluster. If you’re looking for magical levels and there are none. Trade the market structure and you’ll have a clear path as to where your trades should unfold. This technique will also give you the knowledge of risk/reward ratios before you ever risk a dollar of your cash. As for if the clusters work or not…that’s up to the market.

Other thoughts…
Trade with the broad trend to up your odds of a profitable trade.
Keep in mind the S&R clusters given this volatility cover massive ground. This is why I’m cash and not trading futures, I cannot afford a proper stop in this environment. Be smart enough to know what your limitations are both mentally and financially!

Good luck

I want to take this discussion to a WHOLE NEW LEVEL. It’s just sad that TB is withering and wilting. HELP me out here folks!

As a preface, derivatives are one of the biggest components of this exponential bubble…in fact they will probably be at the root of the demise of trading as we know it. The speed at which they have grown the money supply and shifted “wealth” is staggering. The extreme greed involved is likely to collapse this economy one day.

Anyhow, the topic at hand was where did that wealth go???
The big money cashed out on top which guaranteed the money supply from that vehicle would shrink. They took their profits and hold it in cash it would seem. Don’t believe for 1 second that their profit was lost…the big boys are too smart and controlling for that to happen. The game is rigged…flat out. That’s why everything is sinking…liquidation and removal of investments + profits, now leaving the rest of us with reduced profit, no profit or even losses putting us in the red. Anyone with a 401k can attest to the damages taking place.

There was a true reduction of money supply…but it wasn’t damaging to the real big players because they got out with massive profits. The damage as always is felt by the middle class and other working class citizens. We carry the load on our shoulders and suffer the losses so the fat cats can live lavish.

So I guess what I’m saying is “money supply” and profit are 2 different things. The markets money supply was greatly diminished but there was absolute profit taken and booked…in massive amounts. OIL, GOLD, SILVER, DOW…all had biiiiig profits at stake and all were liquidated. Big volume up high shows the profit was taken in droves. Think of a chart…big volume starting a bull and big volume ending it…what goes on in between is mostly retail and insignificant in relation to the big boys profit (though they do flip and keep the ball rolling). Ask yourself if you created the 2003 bottom and sold at the end of last year in MASSIVE amounts of volume…what would your profits be?

In fact I’ll go a step further…the bear market though driven by fundamental damage was triggered by liquidation popping the bull bubble. The selling of holdings for EXTREME profits is what essentially caused the bear. Bull markets start when massive amounts of money come into the market, and the bear market begins when that money is removed. The reason for removal with profit though is always a fundamental one if you think about it. They cause the markets to soar knocking things all out of wack valuation wise…THEY CREATE THE FUNDAMENTAL ISSUES. This ensures a constant cycle of boom and bust. They continue the cycle causing an exponential bubble as they re-invest base capital along with their big profits each time. Look at a lifetime DJI chart below. I prefer NON LOG because it really illustrates the exponential aspect to a greater degree.

It’s tough to grasp overall, especially because people in general don’t like to think about the markets as a ponzi scheme…but they essentially are, and a VERY lopsided one. One that we are told to count on to retire…and to invest in all throughout our careers. All along with the expectation it will continue to appreciate and make us rich by the time we retire. It’s up to people to learn about this stuff themselves and then trade/invest WITH the pros to ensure they don’t fall into the trap. Do NOT just dump into the 401k blindly and expect everything to work out allowing you retire worry free! After all it’s YOUR retirement not anybody elses…manage your nest egg accordingly.

…Random thought…
Deflation in relation to housing value is another can of worms. That artificially inflated portion of the money supply WAS lost. Still somehow the lending execs cashed out with handsome rewards…bastards.

…Back to the scheduled program…
Now the fact is they usually shift profit into hard assets after they liquidate in the paper markets. Here they seem to be liquidating EVERYTHING at the same time…which makes me wonder how big of an event this is going to be when all is said and done.

My main question is where is that profit going as the money doesn’t just evaporate. Did they raise the cash to pay their credit swap defaults (one thought as to why they need cash so badly). Who benefits by that exchange if it is in fact where the cash is going. And again were is that money going in the end, and when? When and where they put that money will be the next boom. Look for signs of their re-investing and follow their lead. This is a GREAT time to be looking for a new turning point in the markets, if you know what to look for.

From:

http://www.tradersbase.com/forum/trading-psychology-money-management/814-where-did-all-wealth-go.html

Please feel free to sign up and discuss this further with me.

This is all crashing due to institutional liquidation so they can raise cash as Timmy and I talked about last night. Cash to cover their a$$es, not to buy back in…like he said to me.
It’s going to end up more about who is NO LONGER in the market more than the shorts or what retail thinks. Suck enough liquidity out of the market and this is what you get…a hard and paper asset drain. Now imagine what will happen if/when the early and late majority of baby boomers pull their funds for retirement.

Now the unknown with the graphic above is how this removal of money supply will effect the paradigm. The above represents a more less fixed axis, but when something like fictional money supply is changing this dramatically the above is somewhat flawed. 2 things are moving at once essentially, the bellcurve is no longer on a fixed axis. What WAS is NO LONGER, as this is a fundamental shift. This drain is going to remove much of the “money supply” in this country and in turn globally. There will be more damage to come from companies closing or tightening up, job loss etc… I’m praying for a bounce so I can short and ride the wave. This has been a life lesson and this indeed will be in history books in the future. This is a BIG deal!

IMO they simply cannot hyper inflate to offset the amounts damage we have seen and have yet to see. I’d like them to slow down and trickle help in rather than fuel panic and use all their lifelines at once. This should be a slow recovery…VERY slow.

Stay safe and with the trend IMO.

http://www.tradersbase.com/forum/general-discussion-misc/812-more-vids-fractional-lending.html

Set aside the 50-60 minutes and watch these videos!!! Pass these on so more people can wake up to the reality of this economy we live in, or should I say that we are trapped by? The economy is NOT sustainable in the US nor globally and there will be a major earth shattering collapse at some point. This may or may not be the time but it’s going to be in my lifetime I bet (hope I’m wrong about the timing)! This could very well be it as we ARE in a global meltdown, this is not just a US issue currently.

The term inflation is tossed around too much…inflation does NOT do this issue justice. So let’s say 3% is our annual inflation right? You picture a diagonal line drifting up a bit each year right? Well it’s 3% of an exponential, ever increasing bubble, it’s not an arbitrary 3%. What does that mean in numbers…my simple mind can’t count that high and I think if you had the whole US population use all their fingers and toes to count it out we still would come up short. Yeah…it’s that big!

This is not Debbie Downer calling…its a REALITY check! Some may want to crawl back in their bubble of “homeland” security and pretend the issue isn’t real or that I’m a wacko. That’s fine and dandy by me…just watch the videos so you can recognize what went wrong when the $hit really hits the fan…assuming this isn’t the fan hitter right now.

We envy the “wealthy” so much that’s all people talk about and emulate. Those people are paper wealthy, look how fragile their precious “wealth” is. We just saw many, MANY “TRILLIONS” wiped off the face of the planet in less than a year. Hell in the past week even. That’s a drop in the hat compared to what could happen when this thing finally implodes. It’s simply not real money..that’s why I’ve called the US the most impressive empire built on lies before.

They could have bought us some more time by letting things correct, slowing down and not doing a “bailout” so quickly. But greed has a choke hold on people and no doubt they fear that if people panic too much they will cause the implosion well before the wealthy can make even more money off the middle class. This is why I don’t think this will be the big one myself. The fed is doing anything they can to prop the banks up and allow the game to continue. They are going to inflate the USD to worthless and then we will have to see a shift to a new currency. Ask yourself just one question…does your dollar go as far as it did even a year ago? Picture 5 years ago if you can remember that far back…10 years. Get it, we are in an ever INFLATING environment and there are 2 scenarios. They can allow it to go through a DEflationary period which will delay the inevitable but give us more time or they can hyper inflate which will speed up the coming demise that much quicker. Bailout says it all…they are looking to hyper inflate the debt out of existence. I won’t go beyond that because most will probably think I’m nuts. There are many more conspiracy theories about what that next currency will be…I’ll be looking at ammo as currency I think.

Money supply - Wikipedia, the free encyclopedia
Here is a great link for economists terms like what is the “money supply” and some other good information. I love wikipedia!

Economy of the United States - Wikipedia, the free encyclopedia
Wiki for the US economic data.

Take NOTHING for granted or as a “guarantee”. Enron had pensions right…how did that end up working for those poor souls? Social Security is a government “promise” not a contractual obligation. Keep that under your hat and don’t be surprised if they break yet another promise. Roth IRA’s are tax free gains right…well yes as long as the “promise” holds up, but it’s not a contractual obligation technically. That could very well change and you could see people’s nest eggs further erode or implode.

Back in 2005 for every $1 we added to our GDP we added $4 of indebtedness. To pay off our national debt we need each family to cough up about $150,000 and that’s before the effects of the bailout hit. We all have $150k saved up right? NO? You mean to tell me the average person in the US lives paycheck to paycheck with almost no, or NO savings??? But this is a very wealthy empire we live in…how can that be? Because Middle Class supports both the wealthy and the poor. Incredibly lopsided wealth distribution is another major issue but that’s a whole other rant honestly.

Just open your mind and for a moment be free from the news and lines of crap we’re fed every minute of every day of every week of …….
If you wish to return under that rock afterwards and pretend everything will fix itself and there is no underlying issue that’s your prerogative. That’s how America go this far out of wack in the first place though…complacency and turning a deaf ear.

There’s no harm in being prepared for the worst, but there is EVERYTHING to be gained.

Be open minded and wise,
MC

Clean TA…simple is best IMO. Chart speaks for itself as far as I’m concerned.

This is uncharted territory/circumstance. Nobody has a crystal ball so all I can do is give my 2 cents.

Now that said I can begin to make a bull case but I’ll let the chart speak for itself because there more bear$hit on the chart than bull$hit.

Of course the last candle is 1 week in and hasn’t printed so we can sort of rule that out, although it HAS made a new low so don’t totally discard it. Macd histo has NO divergence in this monthly timeframe. In fact it’s just straight down with no flinching. Also there is room to move down to fully test support. I’d put absolute make or break support in the mid-high 9700’s myself. That’s all the bear case, added to the current trend you have a strong case for continuation down.

As for the bullish side it’s mainly the fact that there was buying pressure on both the last tests of the channel lows. BUT buying pressure does not equal a reversal 9/10 times. If we slide to lows at/or above that support on dried up volume with histo divergence that would show me the selling pressure has dried up. The fact that there was heavy buying pressure doesn’t discount the fact that for every buyer there was a seller. The selling pressure though somewhat offset was undeniable and panic like that won’t likely turn on a dime.

Big volume is a warning sign of a possible flush though most often there is more price action left where the market probes further for buying/selling pressure (unfinished business). I have yet to see a convincing case of bottoming action. I’m pretty fond of this setup…If we were in a bull trend and I saw the reverse action I just described I’d say look out below…in fact this was how I picked the 14k top on the Dow a year ago.

People are on edge…based on my Volume Based Price chart put yourself in the auction along with the majority of the volume in this range. What would you feel if you just had 4 years of profits turn even or slightly red?

Still a bear bias for me, won’t effect my daytrades though thank god.

I gave warning on a possible silver short setup on the 18th and then on the 25th I gave confirmation. I just had to go back and toot the ole horn because I got alot of flack from the silver bulls.

It’s a disturbing lopsided image to me how we rose so exponentially with no retrace. From the breakout in the early 80’s there has been no real looking back which is not healthy. We had Y2K which was a slight balance period and was treated like the end of the world when it was just a minor blip in the big picture. I almost drew a mid channel line in but it really would blur the reality of this market. And the longer they prop us up here the further and harder the fall will eventually be IMO.

Def keep in mind that this years candle isn’t said and done with. So a yearly chart now is a tad premature. But at some point the market has to come down and probe the channel, it can’t go up exponentially forever fellas. If they prop it up and continue the bubble look to Y2K levels for support and if those fail we will have a Hinderburg type of market bursting.

Not doom n’ gloom, well maybe it is…sort of. If we see coiling or rejection candles at the top of this channel or a break of Y2K lows we know we are in for deep $hit. There will be a massive bear cycle, some estimate it to be 10-12 years long. So we won’t just drop to the base of the channel overnight but at some point I do imagine price action will drive it there.

Good luck boys n’ girls.