Luna $ Ticks

September 26, 2008

No More Bets

Filed under: Trading SPX SPY — moontrader @ 4:29 pm

The roulette is spinning and will continue to do so through the weekend. Although we’re living the most critical days in the American economy in the last decades, that’s how if feels: a casino. TV’s, newspapers, blogs, forums, personal conversations. There’s a huge divergence on whether the Congress will pass the plan or not and players are placing their bets based purely on speculations. A new turn in the story comes every other hour and the pendulum keeps swinging while the markets bounce up and down. However, there seems to be an overall feeling between economy experts that this plan won’t do any good to the US. With so many bad news, from banks falling like ripped apples from a tree – just look at the FDIC failed banks list – to growing unemployment rates, it’s at least strange that stocks went up today. Towards the end of the day, the discussions where basically whether to hold or not a position during the weekend, long or short. Some believe the markets will rally with the “approval” of the plan, and then tank. Others feel the markets will tank even with the “approval.” And there are those who think the plan won’t be approved and the markets will tank. At the end, everybody thinks the markets will tank. I mean, everybody except Paulson, Bernanke and Bush, the boss. And, as weird as it can be, my charts today show something like a neutral scenario:

As you can see, Stochastics is up and close to the Zero line, while MACD is now giving a buy signal but still in negative territory. On the other hand, SPY closed again below the 3 DMA’s: notice how precisely it touched DMA’s 3×3 and 7×5. Notice also that, despite the positive close, VIX went up:

What a crazy day, no? For a conservative player, the best thing to do would be to stay in cash. Or play just a little like I’m doing. My “bet” (I refuse to call this a trade) is to the downside and since I’m all options and no futures, my loss is capped. In case you ask, what am I basing my “bet” on, my answer is: my date projections. Here’s a chart I posted a couple of days ago (it’s not updated):

They don’t work every time, but when they do, they are just great. Tops can project bottoms and that’s what I believe will happen. The proportions make a perfect spiral in time (those familiar with Fibonacci numbers know what a perfect spiral is) and next week will be… its vortex.



  1. Look at the SPX on 9/5 the Friday before FRE/FNM bail out. Compare it to the candle today. They both look identical in height, price action etc. Also on 9/5 the market was deep in the red, only to crawl back like it did today. And on Monday 9/8 we had the huge gap, retace and then a close higher. And on Tue 9/9, the gains + some were all given back. Will the coming week be the same, to fit your timing model?

    I guess we will see next week!

    Comment by bullnbear87 — September 26, 2008 @ 4:43 pm | Reply

  2. I know about you thanks to Tim Knight. You write very thoughtful posts and this newbie is very glad to have found you.

    Comment by Gemma Star — September 26, 2008 @ 10:20 pm | Reply

  3. Hey Gemma, thanks for passing by and welcome.

    Comment by moontrader — September 27, 2008 @ 10:48 pm | Reply

  4. Bullnbear, first of all welcome. I’m actually expecting a sharper movement than the one you’re referring to. We have 4 days in my window for that to happen, but, as I said, the scenario on Friday’s closing is quite neutral. Let’s see if the downtrend resumes stronger on Monday.

    Comment by moontrader — September 27, 2008 @ 10:51 pm | Reply

  5. I think we tank this week and get a deep V before flattening out much lower.

    Comment by sizzler — September 28, 2008 @ 8:24 pm | Reply

  6. Panics showed that they almost always occur on a Cardinal Moon. While 1929 and 1987 style Panics are rare, smaller versions of the same phenomena occurs quite frequently.

    Sept 29th – new moon in Libra (Cardinal Moon)

    Comment by Fork_Master_Serg — September 29, 2008 @ 4:03 am | Reply

  7. My guess is that we’re gonna see the bottom between today and tomorrow.

    Comment by moontrader — September 29, 2008 @ 6:37 am | Reply

  8. my cycles points to tomorrow’s passing!
    I love Panic Cardinal Moons! :))

    Comment by Fork_Master_Serg — September 29, 2008 @ 1:33 pm | Reply

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