ES Fibs 2-29

These are all Extension Fibs.

CL Short Term Fib 2-29

From The Blast Up on 2-23

Think Oil May Be Recognizing Long Term Fibs?

Retrace from May Highs to October Lows, Extension From December Lows to Jan Highs to Feb Lows.

CL Air Pockets 2-29

Thickest support lies at 106.25 with thick support down to 105.80 with an air pocket between there and 105.39.  Decent support from there down to 104.78 where it turns into nothing but air between there and 103.78.  To the upside, Thinning decreasing resistance from 106.33 to 107.78 with the real air pockets between  107.04 and 107.30, and 107.49 and 107.70.  From there increasing resistance to a peak at 108.55 with decreasing resistance from there to the last air pocket which lies between 109.25 and 109.55.

EC At Some Pretty Big Long Term Fibs Here

EC Marched right up to the 38.2 smaller weekly retrace and now hangs (literally  as I write this its at 1.3440), on the bigger 50% retrace.  And as you can see from the chart has moved in a range sitting right between the two, not at all uncommon as the two magnets pull form different directions.  So obviously one of them will win question becomes is our next really big level 1.3632 or 1.3248.  But odds are at these kind of long term fibs we are gonna get a big ass down.  When it breaks which ever way it does will be your signal and its gonna be hard and fast.  And dont think 1.3000 is out of the question.

ES Morning Fibs 2-28

We are running out of retracement fibs (red) so the one shown is from yesterday's lows to the globex highs so far.  The 1371.25 100% extension is where this thing was headed all day and I figured the Europeans would get us there and they did.  137.21 is still the biggest number on the board and the biggest magnet.  With help from the euro I had hoped the overnight might touch the 127% at 1376.18 but was a tall order.

The machines have done their job to get us to 1371.25 and we will see if they have the gunpowder to get us to the next one with such a big magnet at 1367.21.

Where Are The Sink Holes

Let me begin by saying that finding tops is tricky business. Generally when we have a run like this the ground is new. Sometimes uncharted. Extension fibs may be all you have or key levels from months or even years back. When it comes it will be at an extension fib with all likelihood and you will know it well after we are there. Things move slow and its hard to chart the road the first time around. So picking the TOPS is tough business. Working your way down however gets just a little easier. We have charted that road on the way up so we know some things. I often refer to speed bumps, ceilings, and floors. Speed-bumps refer to fibs which create minor pauses in action. The machines all know where they are and if you have the time to chart them you do too. Walls and ceilings are places where there are MAJOR fibs, volume support or stacks of fibs. I want to add another term to the mix, "Sink Holes".

I did some research to see where this thing may go to if and when we ever do get a pullback. I found some very interesting things and would be worth keeping this handy. Using volume per price tick interval. We have one hell of an air pocket and I mean virtually air between 1334.25 and 1323.75 Write that one down. That gap may fall with 1 trade when or if it comes. So where is support and where are the holes. ESH12 only.

For the purposes of this study I am using intervals that have at least 125,000 contracts traded as decent levels of support with real strong support comming with intervals which have 250,000 contracts traded. The highest tick on the board is 1308.00.

From here working our way down.

1. 1360.00. We have a average size hole from here at 1362.50 to that spot with strong support for 3 bars from 1359.00-1359.50.
2. 1359-1354.50 offers decent support down to the next hole which is 1354.25 to 1350.25. If 1354.25 fails it could be a short fast trip to 1350.25.
3. 1349.00 offers the greatest support within that grouping from 1360.00 at 275,000 contracts traded.
4. There is s slight pocket between 1349.00 and 1346.25 where major support begins, with the highest support at 1345.00. Plenty of decent support from there to 1338.00 but this is where it gets interesting.
5. 1336. Keep that number close at hand. Each tick BELOW it has much less volume. And it happens fast. 1334.25 is a cliff depending the momentum at hand should we get there. In reality the cliff could start a couple of ticks higher. What created the hole? Friday February 3rd. The explosion off of the astronomical unemployment report. We never looked back.
6. To give you an idea about how big that hole really is here is a sample from some of the ticks in that grouping.  1333.75 61K - 1333.50 51K - 1333.25 36K - 1333.00 25k - 1332.75 21k - 1332.50 23k - 1332.25 18k - 1332.00 13k - 1331.75 6k - 1331.50 4k - 1331.25 3k - 1331.00 6k - 1330.75 2k - 1330.50 3k - 1330.25 - 625 contracts That's not a typo. This tick may as well be invisible. Gulp. - 1330.00 2k - 1329.75 2k - 1329.50 4k - 1329.25 11k - 1329.00 6k - 1328.75 3k - 1328.50 5k - 1328.25 7k - 1328.00 7k - 1327.75 14k - 1327.50 22k - 1327.25 25k

The entire 6.75 handle range above traded less than say the single tick of 1310.25.

And so forth and so on with the first sign of decent support at 1323.75 and the first sign if stronger support at 1323.00. The point is this. Things happen. Maybe we meander down there at some point. Maybe we never do and we just keep going up. Or maybe we have an event trade. To me that's the real reason to know this. Where is the air. Maybe you use fibs, maybe you use macd or stoch. Perhaps they turn up in toward the end of a flash trade or just if we ease down there but if we get there your indicators will probably be worthless. We ease down there or we gap down to those levels and maybe you are looking at a 261 fib extension saying this thing is overdone and macd and stoch has just turned up. Bingo, Im gonna hit this one just right. So you buy thinking you just bought the bottom and by all indications you would have. It moves up 4 ticks as it certainly can at a fib that big and it looks like you just hit the jackpot. Problem being there is a sink hole right under your fib. We have a lot of those in East Tennessee. There not pretty and you cant always see them when they are covered with brush and sticks. Look in one and you may find the bones of a wild hog, or a used tire and some PBR beer cans from the 70's. They stink of rotten debris. Im being graphic so you will remember the sink hole that exists. Buy at the edge of that sink hole and you may find yourself down 10 handles before you can even write down what you just traded. It could be that fast. I have seen it. Ive been around long enough to have lost 10 handles in a flash, actually it was 13, and I was lucky, it could have been 18 had I not acted quickly.

Another theoretical. Who knows where the top is I honestly do not this thing may go 100 more handles for all I know. But if you make the assumption we have a temporary high in place which is saying a lot guess where the 38 retrace fib is for 2012 lows and highs? Near the bottom of the hole at 1327.75 but not AT the bottom. If we had a high in right now and people started buying again at the 38.2 fib odds are there is not enough meat to support that fib. The meat is 4 handles lower. Know where the hole is. Realistically we could only be 1 solid down day from that hole.  Why did we drop the last 5 handles Wednesday from 1355 to 1350.25 besides the fact that we had a big fib at 1350.25? Because their was a hole between 1355 and 1350.25. There was no meat on the bone until we got to 1350.25.  It was the easiest trade of the day.

We all look at charts all day long. They all look alike after time. Ticks all LOOK the same but they are not all CREATED equal and I have the sink holes written down on a sticky note on the side of my computer as well as lines on my chart with the words "sink hole" next to them so that I under no circumstances forget them. And should we approach that level I will not be long regardless of what the fibs say. And its my dream we sit on the edge long enough for me to go short for a dream trade.

Now for the good news there is an absolute PILE of major support in these key areas besides the ones mentioned earlier:

1. Good support begins around the 50% retrace at 1313.00 and steadily increases to the maximum support on the board at 1308-1309. Those 4 price ticks average almost 486k in contracts and I would assume it will be a big stopping point for downward pressure assuming we ever go down.
2. Below that it gets thin from 1301.75 to 1288.50 with the next real big support at 1275.50

Having said all of that these numbers are levels that you should keep handy. I will update them occasionally but please be aware of the minor and MAJOR hole we have sitting below us. I am a subscribed member of a site called MrTopStep. Its leader Eubie Eubanks often uses the term "Knock, Knock, is anybody home" to signify buying or selling interest at certain levels. We have some levels here where there could be nobody home and one where there may not even be a house standing with a door.  All of this may be useless if we never get there and who knows maybe we never do, but IF we do you will know where to be very very careful.

I hope this makes you aware of a couple of those levels and at worst case you avoid loosing money there and at best case you make money there. If so I happily accept Happy Meals and Grey Goose. LOL.

CL Fibs 2-23

Once Again if I wanted to put all of the fibs on this chart it would be a wreck.  So the more prominent ones are listed.  Side note as you know I use volume charts instead of time for analysis.  We are in almost uncharted water for high volume bars on CL which is to say its super strong.  The few times we have seen these readings in the past they have led to 4, 6, 8, and 11 drops in CL.  Not saying it does it here but gulp!!

ES Morning Fibs 2-23

Basically when you have patterns develop like this the fibs become a mess.  If I were to put them all on here it would look like the mess that it is so here are the prominent ones in play.

ES VS INX

I have had several people contact me as to the reasoning for the outcry I had to sell short the 1367.21, with the call to cover at 1353.30.  It brings to light the ongoing debate why I use continuous contract on tradestation vs the true cash, seeing that continuous contract just doesn't make much sense.  I wouldn't disagree but I can tell you that for some reason it just does on this one.  As you can see from the two charts INX did not signal a sell at 1367.21 and @ES did with a price target on the pullback at 1353.30.  We never closed above 1367.21 on the daily and the low tick for the day yesterday was 1353.25.  INX gave no indication of either move its somewhat lost in space here looking for a pullback to 1352.18 but with no clear upper fib to have sold off of.  I could take either side of that debate.  @ES sloppy?  Maybe.  INX clearer, probably, but I tend to do what works and I keep an eye on both.

I have attached both charts for illustration.

EC Prominent Fibs Morning 2-23

127% was a gift short.

ES Morning Fibs 2-16

The Biggest Number on the board is clearly 1334.78 and was the logical magnet for this slide down.  Its the 23.6 retrace for the entire run up since the beginning of the year.  Its no surprise that when we pull back its a first logical stop.

ES Morning Fibs 2-14 Happy Valentines

1351.40 The Biggest on the Board.

Weekly ES Cause for Concern? A Crossroads?

Fib Speed Resistance Fan 50%  and Fib Time Extension Lines at 161.8 this week?

ES Midday Fibs 2-9

If your wondering if its a fib game look at the white line and the low.

ES Morning Fibs 2-9

ES End Of Day Fibs 2-8

ES End Of Day Fibs 2-8

ES Fibs 11am 2-8

ES Morning Fibs 2-8

Off Subject-Look for the Breadcrumbs.....

I wanted to take a moment and relay a story about something that happened to me last night.  It kind of brought things back into reality.  A person can sit and stare at charts everyday and loose track of the small things that are real and important.

Yesterday was a tight trading range.  We have had a lot of those lately.  No movement, no volatility.  Struggle hours upon hours to try and get a point or two.  Brutal.  So what I did was stay at the office and comb over charts until 10pm.  If I could just tweak this or tweak that then just maybe.  In East Tennessee we call that picking fly shit out of pepper.  Anyway, I think you get the point.

So when I left the office I stopped by McDonald's.  Not my general happy meal but the whole gig.  Big Mac, fries coffee, the full course.  It was cold outside, very cold.  Upon approaching the door I was asked by a rather ragged older man, 70ish, if I might spare some loose change.  He was well spoken.  Carried a cane and a small bag.  Somewhat bothered I replied  "I don't know, just give me a minute", basically wanting to avoid the entire conversation.  Once inside I ordered.  As I stood there that small voice inside me started nagging  "Really man?.  Are you kidding me?  One tick, one contract =$12.50 in profit?.  It bothered me enough that I stepped outside and gave the man a $10 and asked him what his deal was.  He informed me graciously that he had been homeless for about 9 years and that he appreciated the money as he smiled.   I rushed back inside to eat.  The longer I sat there the worse I felt.  Had I done the right thing.  Had I done enough.  Had I done anything really at all.  Or had I just done the easy thing to make the whole situation go away.  The answer came to me and it was a big fat no.  I finished my burger and hurried outside.  He was gone.

Small town America is dead at 10:30.  Kingsport is no exception and the thought of this old man sleeping under a bridge somewhere just overwhelmed me.  It snapped me out of the oblivious stupor in which we of means may fall into from time to time. Where could he have gone, for God sakes he had a cane.  I proceeded to drive up and down Stone Drive in both directions scanning both directions, pulling into parking lots, checking behind dumpsters.  To no avail I drove around for over an hour.

I called my oldest Daughter currently a freshman at UT.  I told her the story.  How I was disappointed in myself.  I had been given an opportunity and I had approached it half heartedly and it slipped away.  I told her I was upset and I encouraged her to always be on the lookout for the small things in life that can help her fellow man in a real way.  I had been given that chance and had failed.  Slowly I turned off off Stone drive to begin my rather somber trip to my home.  On the way there I glanced of to my right only  to see a figure, scarf and hat, cane and old jacket next to a dumpster just behind O'Charlys.  My heart pounded and my blood rushed.  IT WAS HIM!!!!.  I whipped the Tahoe around, came to a screeching halt next to him rolled down the window and said, "Get in".  He remembered me, asked no questions but shuffled over and got in.  I asked him what his deal was and where he would be staying for the night.  He had raised about $30 at McDonald's but not quite enough to get a room.  His plans were to walk first to the hospital waiting room,  stay there until they ran him out, and his experience had showed him he could then hit Waffle House for about 2 hours so long as he was drinking coffee.  From there it would be a park bench.  No sleep tonight, too cold.  Better off staying on the move.

With that I took him to one of our local Motels.  Got him a room for the night.  From there I went by the ATM and got him some "walking around money" as my father used to put it.  We drank a lot of coffee and talked.  Ray was his name.  He had no family.  Had never been married.  Had never driven a car.  He began to tell me his history and the odd thing was that he knew every date and time to the minute.  His mother had died on March 24th, 6:09 AM.  He had lived at such and such a place from the 18th of September 1988 until they made him leave on the 23rd of April the following year.  I can barely remember what I had for lunch today.  He told me various stories of the times he had been given money and the times he had found money, including once when he say a $20 in a storm drain and worked 3 hours finding the right stick to retrieve it in Charlotte NC.  We laughed a lot.  Ray was on his way to Crossville, Tennessee, where there is a mission which is one of the more acclaimed in the country.  He had been raising enough money to take a bus from town to town.  Kingsport was just the next stop where the money ran out.  After an hour or so with Ray I finally realized that he was Autistic.  One of the kindest people I have ever met, and one of those who just fell through the cracks here in this country.

I dropped him off at his Motel, slapped him on the back and told him it was great to have met him and wished him luck and hoped he liked Crossville.  He smiled big and said he appreciated what I did and that he wished me luck too in whatever it is that I do.  He shuffled into his room, and caught the first bus to Crossville this morning.

It goes by many names.  Religion, Spirituality, Ying Yang, Laws of the Universe, or Karma.   But whatever you know it as, fate will from time to time give us a breadcrumb trail to whats real,  with hopes that we have enough sense to follow it.

Ray gave me a lot more last night than I gave him.

ES Midday Fibs 2-7

With New Extensions

ES Morning Fibs 2-7

ES End of Day Fibs 2-6

What a lackluster day but even in a nowhere range the fibs still were the deal.

ES Midday Fibs ES 2-6

GC Fibs 2-6

As for now GC rests just below one of the two biggest fibs on the chart, 1738.25.  Gold has been somwhat of a mess as far as the fibs go.  They are everywhere.  But the two biggest are 1738.25 and 1692.38.  A move through 1733.61 finds its next level of fib support at 1718.05, then 1714.36, 1703.02 and finally at the biggie, 1692.38.

To the high side 1738.25 Big. 1739.88, 1752.18, 1757.87 and finally 1764.21.  If this move is in fact bearish, then look for 1692.38 to show up in the picture soon.

CL Mid Range Fibs 2-3

CL Punched through a band Friday afternoon at 98.  Its paid the price since falling to the two Fibs at 97.18 and 97.18.   The Biggest Fib on the board is 96.24.  A big Retrace fib 50%.  Support sits at 97.19  97.10 96.24, 95.50 and 95.26.  Resistance sits at 96.41, 99.76 and 99.70.

ES Big Fib Overview 02/05

Well here we are at what seems like a never ending rise  Each day brings gentle rises and as we saw Friday some big sudden ones too.  However it is rare that we get to bring into play BIG fibs.  I define Big as something that takes years to develop.  The last truly BIG fib we got to play with was 1187.35.  It had the proud distinction of being the 61.8 retracement fib from the landslide from October 07-March 09.  When we broke it in August the next stop was of course the 50% fib from the same series 1076.88.  Between August we bounced in between the two through October.  The 50% held as did the 61.8 which launched us into our current move.

So here we are now at the biggest fib of all in my mind.  The 78.6 from the same big slide, being 1344.64.  Write that one down.  Its that big.  Its enormous.  And its not the first time we have been here.  In May 11 we got there.  The world was good.  Since July the previous year we had ground our way up.  On Monday the 2nd of May we actually busted through it to 1556.50 or 12 handles past bud couldn't close there.  The next pass failed on July 8th.  One more feeble attempt on July 22nd came up short and the writing was on the wall. The next move was to 1065 a drop of 371 handles.  Ouch.

I guess the world is good again. And its promising that we have naturally worked back off of the 50% and the 61.8 to get here again.  Money is flowing.  Endlessly it seems.  QE in full force.  Bonds and Vix at lows so it should surprise nobody we got here again.  The question is what from here.  What are the Fibs that make sense as speed bumps, floors and ceilings.  So we should examine what the biggest fibs on the board are and use them as markers.  

As I said earlier write this one down.  1344.64/78.4%/R.  There is no bigger fib in our future.  Now on the low side and I will work my way down.  1324.05/78.4%/R from the same big move that created our 1344.64.  1319.75/100%E/NovL/DecH/DecL.  1278.48 and 1272.29.  I list the two together because they are close in price and both 61.8E from the July and December Extensions.  To be quite honest I am surprised we have not seen them again yet, but I'm not convinced we wont and with a slide I see them as our first real support level.  Above us on the high side and I would encourage you to write these down in red somewhere.  If we have a punch outside a band and it corresponds to one of the upper extension fibs you have a high chance of seeing a reversal at that spot so be on the lookout at these:  1353.30/127%E/NovL/DecH/DecL.  An even bigger number above is 1363.00.  Big.  Really BIG.  1363.00/100%E/OctL/OctH/NovL.  Lastly 1367.21/138.2%E/NovL/DecH/DecL.  Honestly we do not hit another long term fib as it stands now until we see 1396.54.

Its hard for me to think that 1344.64 gets dealt with so easily, but if your in the camp that is bullish your top or at least a temporary one is likely to come at 1344.64, 1353.30,1363.00 or 1367.21, with your support being at least for now at 1324.05,1319.75 and the two together at 1278.48 and 1272.29.

Gold Fibs Since the Fall Down

So what does this mess of fibs suggests?  Well let me put it this way.  I am a subscriber to several sites.  Many have useful information, priceless in some cases for ironing out POSSIBLE outcomes.  Key work being possible and they most all read like this, it is possible that it goes up or its possible that it goes down but are hesitant to make calls.  I can tell you absolutely what the fibs suggest here. I get asked sometimes how this fits in to the Elliot wave count.  To be honest I know little about EW and its very subjective but always works once you can get the count after its all over.  Fibs however do work.  They are not subjective.  They require no interpretation and key intersections of long term fibs are always the biggest number on the board and when we get the chance to get close to them they become powerful magnets as the machines gravitate to them.  So with that in mind here is what is likely to happen to gold and the set up is just about perfect in the fib world.  First of all 1770.50 is in the bag.  Gonna happen.  May as well write it down.  Look for it to hang around there on and off with spill slightly over that level and then go back and retest 1714 to build support again for the eventual blast up. From there the machines will crawl around that level and with a blast take us up to the biggest fib on the board, 1784.12.  Write that one down please if you have ever written down a number in your life.  Its the set up for the dream fib trade and I mean dream as in dream money.  Especially if the following happens.

Gold charts are generally viewed on time charts.  As you know I am not a fan of time charts.  Volume charts mean so much more.  A time bar may have 20 contracts or 1,000 contracts and which time bar means more?  Volume bars evens things out.  All bars mean the same.  So with gold what do the volume bars mean?  Gold has a tendency to make dramatic turns between 950,000 and 1,000,000 contracts traded.  Some of the most drastic turns in gold happen in this range.  So here is the dream setup.  If, more likely WHEN we get to 1784.12 look for one thing.  Does that number coincide with the previous 10, 100k bars being up off of a low of some kind.  In other words did it break out of a range of the 1714 or 1770.50 to GET THERE. If it has then you have your set up.  Plain and simple and unless some underlying news story blasts it higher the chess board is set up perfectly at least in the fib world.  Its a short.  Will it be easy no.  Gold will look like its going to the moon but its not.  At least not yet.  The reversal off that 950,000-1,000,000 contracts if its even close is going to be a rip your face off move.  It is 75% of the time and I like those odds. Gold is easier to predict than most.  Where does it go off that move.  Well as the chart suggest its going to be a hard ride down but do not look at the ride down in TIME it will give you a head fake which will cost you money.  Look at it in 50k or 100k volume bars.  First pause on the way down of course 1770.50  A head fake move and more will buy back in but here is where the dream trade really takes hold.  The next elevator down is is to (gulp), 1714 and once again do not look at time look at volume bars.  That level will fall hard the hardest of the fibs.  It will be air.  Look for a little head fake there again as the computers program buying comes back in but after that wears thin we will eventually go right to the 1692 having traded 1,000,000 shares to get there after the break down.  There may be a touch of spill on all of these moves but do not let that keep you out of the trade.  1692 will be a short term low with clearly a move back to 1714 in the bag but the real trade here is that short there at 1784.12, all the rest of it is more like scalps between the fibs.  75% odds of a 92 point swing in gold over 1,000,000 contracts.  I like the risk reward on that one.  But again I caution you, when the slide starts do NOT look at that chart in time intervals.  Time will say buy volume bars will say we are not there yet so avoid the prospect of buying again until you have seen 1,000,000 contracts traded between 1784.12 and 1692.  

Is This Party Over Too?

08 Collapse Party Over

2/3 End of Day Fibs

2/3 Midday Fibs

2/3 Pre-Market Fibs