I DON'T KNOW HOW TO RESPOND TO COMMENTS!!!!

I feel terrible that I haven't responded to comments from the blog. Please email me @ geno369@yahoo.com with your specific question and I'll either respond back or create a blog post addressing your question. Once again, I apologize!!!

Jim Genosky

The $4 Trillion Campaign

I trade US Equities as well as Forex, so I feel I can see where  there is manipulation in the system. To be honest, there is absolutely ZERO manipulation in US securities, although the FEAR BLOGS will have you believe so. However, there is manipulation in the FX forum that can carry over to US Equities.

I will dive into the post in more detail in the future, but for the time being, just realize that Japan enters into the FX market quite often trying to boost their holdings. This can be seen by swift 50-200 pip gains/losses per currency. This weighs on the RISK ON/RISK OFF environment that effects all market participants.

I recently heard Jim Cramer talk about how useless the risk environment is, and I TOTALLY disagree. I can trade US Equities by watching the AUD/USD...PERIOD!!! Actually, one of my proprietary indicators measures all risk currencies and I play US Equities based on that! To trade a risk indicator in US Equities!!!! And Cramer says it's useless???

Who Could've Called It?

Apparently the markets have reversed course, once again when the bears were waiting for the elusive 3 of 3 of 3 of 3, etc. down. Who could've called it? I believe I did once again, although a tad early. I bought SSO at 49.25 and I bought UCO at 37.80, almost where it was announced that we were releasing reserves. I told my brother that releasing those reserves would mark a short term botttom within two days, and I seem correct in that rhetoric.

I'm already lightening my load on long positions because we need to listen to the bears, and sometimes the market panders, hahaaa (pandas, panda bear?), to the bears, to keep them in the market. Remember, someone has the other side of your trade!!!

I sold UCO for 13% (in three days) and I sold all of my SSO. I have now entered short term SPY puts. Why? I locked in good profits since oil dropped below 91, which was my target, and the SSO was an okay trade, meaning I didn't lose money.

There is still a chance we get a low under 1258, although I posted before I only give it 15% odds. The Wilshire already reached wave 1 zone, but until the majors DJIA and S&P do, I'm not getting bullish complacent. We all know that the market drops much faster than it inclines.

Anyway, I'm going on vacation tonight with 10 contracts of SPY 130 puts under my belt. I'll be back Tuesday, perhaps, after a nice long weekend of fishing. Remember, it's not only about making money, you still have to live life!!

The VIX - Mystery Solved

The VIX is meant to measure fear in the market. When the VIX reaches extreme levels the bears are in control, when it drops to lower levels it measures complacency which generally is a bullish market. Looking at a weekly chart of the VIX gives me many answers. First of all, the bulls are not yet in control of this rally. This leads me to believe that A. There is MUCH more upside yet to come, or B. this is a bear market rally with lower lows yet to come.

My analysis on other aspects has told me the 2009 lows are in place, therefore I have to resort to option A. The following chart has it's own annotations, so I fail to see the need to repeat them here. I expect the VIX to make a new "Green Zone".

Does Elliott Wave Theory Give You Something to Trade?

The short answer, which I'm sure you weren't expecting from me, is HELL TO THE NO! There is no 3-5-3-5-3-5- whatever count imaginable that could make me trade off of it. BUT EWT is based on market participants and "thinking", which I can get behind. EWT theory is NOT a useless tool, and I hope I've shown that by using it PROPERLY! It's when people try to count waves without using other information available to make a rational choice that it becomes USELESS. I know people who use EW and I know of people who use EW PROPERLY! The latter are usually the ones bucking the trend and mostly correct. If you would like to know how to use EW PROPERLY!!!! Let me know. But don't bash EW because some people disregard rules and suck at it!

Trend: Update

So did we get the confirmations I was looking for this morning? We sure did.

First chart:

Both trendlines breached. I'm disappointed it didn't make it over the white horizontal line though.

Second Chart:

Yellow crossed above white, a bull trend signal.

Third Chart:

SP-500 Hourly and current count.

I would place the odds at 85% that a bottom is in.

Best of luck!

Jim Genosky

Trend

I have been watching my favorite two charts for confirmation that the bear trend is over, and neither have confirmed this yet. If the bulls can hold onto the gap up this morning we may get confirmation.

Here's the first chart:

In this chart we want the red line to break above both white downtrend lines. Then a sustained move above the top horizontal white line would be a sustained bull market.

In this chart we need the yellow line to cross above the white line. Right now both lines are at a zero value, meaning bearish. A cross is the first buy signal where I'll unload a 50% lonf position. Once the yellow line goes above the horizontal green line I'll unload my final 25% long position.

Best of luck to ya'll!

Gold: Waiting on a Correction

I am long term bullish on gold. Gold has broken out of it's base channel and I believe it will soon drop down to retest that channel before going to new all-time highs. This channel is drawn off the 1980 top.

I would love for Gold to fall back to the 1230 area before going fully invested into it. Right now we wait patiently for the pullback to occur. Until then I am not buying gold.

Is Copper Trying to Tell Me Something? ALSO BULL/BEAR ALT. COUNT

Looks to me that Copper may have already bottomed, or maybe just put in another X wave before the final Z wave down. Either way, this is telling me to be cautious about getting heavily into bear mentality. Copper so far made it's bottom on May 11th, over a month ago. In my opinion copper better start selling off and break the previous low or we're going to see one hell of a short squeeze on the bears in the near future.

Additionally, I was looking for a count that would throw off both the bulls and bears, and came up with a beautiful idea that would scorch the bears one last time, then kill the bulls. Check the green count in this daily chart.

From my research I've learned that wave 3 is less than wave 1 in under 5% of the cases, so I'm not giving this too much credence, but I'll sure be watching it!!!

Drop Into June Is A Long Term Bullish Signal

Since December 2010 I've been saying we should see an incline followed by a drop into mid-June 2011. It seems we are getting that drop currently. Targets for this drop were 1273, 1250 and 1220. On Friday I bought my first batch of SSO which is a 2x SP-500 ETF. The bears will say we're in wave 1 of P3 down, I say when will they give up?? Listening to Prechter would've lost you nearly 30%. Listening to the P3 crowd is NOT working. The support level for the SP-500 in 2011 is 920. THERE WILL NOT BE A NEW LOW MADE UNDER 666.

A yearly closing over 1220 in 2010 was a bullish signal. This bull market should last until late 2014 or early 2015. This should be the greatest appreciation of your wealth since the 2009 low. If you choose to try and short the market and not receive this gift that's up to you. I'm scaling into long term long positions for my IRA and my trading account.

On a side note, the Australian Dollar should also aprreciate during this timeframe. I have a bank account holding AUD. I sold half of my AUD when it reached 1.10 v. the US Dollar. I'm now rolling that half position into gold and holding the other half in AUD. I will sell that position when AUD/USD is at 1.76.

Here's my long term chart with annotations

NOTE ANNOTATION IN LOWER LEFT CORNER!


And here's my weekly cycle chart

It's Time To Buy

I apologize for my absence as of late, I've been dealing with some family issues. People are becoming extremely bearish as of late and that has me in the buying mood. Looking over a few charts tonight made me turn even more bullish near term. At least we can catch a sizable correction to the upside if not an entire bull move. The first chart getting me in the buying mood is that of the McClellan Summation Index. It recently broke below my bull support line, but is in an area where it has reversed some more.

You will also notice that the SI is coming to another bull support zone of the downtrending white line. This has me near term bullish.

Another reason I'm getting bullish is because of the inverse correlation of the USD and the equity markets. I believe the US Dollar put in a 4th wave up and is now in a 5th wave down.

The chart shows the dollar breaking back down under the 1-3 channel line drawn off the 2. If the inverse correlation holds the equity markets should soon reverse course.

Finally, my current wave count has either 5 waves down ending C of Y in an ending diagonal yesterday, or 1 more low coming to end wave C down. If we get a new low around 1280 it would be the latter of the counts. My bearish count is also looking for a wave 2 retracement upward. When a bull and bear count align in such fashion (both looking for upside) it's a good risk/reward situation in my book.

Today also gave me an hourly buy signal according to my ADX, which means a low is either at hand or within reach. I went long on the wedge break today and will add to my long position on new lows.

Thanks for reading.

geno0010

The

Trader