I thought I might try something different here, and see how it goes. It's quite difficult for me to post a lot to the various topics, especially with charts, since the method I use for posting charts is very cumbersome. Some charts can take me a half hour or more to put together. Since the charts I use for posting are not my 'working' charts, this work is duplicative.

I have various ideas and thoughts here and there about different things, and if I have a 'central clearing area' where I can just put out a sentence or two, pointing to something without doing the work, the members can do what assessment and analysis they want with the ideas, and post charts if they want, preferably to the respective areas they have for that topic. This way it would leave this topic more 'clean'. If you have a question or comment on what I was pointing out you could post that in here.

Let me know if you have any thoughts on this, or anything you think would be helpful/useful. Keep in mind I am not going to just tell you all my best setups in advance, especially if I plan to trade them, as that is not 'what I do' in here, or anywhere. I want to point out things that may need some work, and might go unnoticed otherwise, or are just of interest.

Just unreal. I'll do some follow up thoughts since this last post. The ES did give a trigger in the aftermarket action, and rose 38.50 points before the open, and some 29.50 since the trigger I got. But the reaction on the open was clear, and the ABCD that hit the 1.000 price projection within one tick at 11:47 AM was the final nail in the coffin. This was clearly a case of the price action speaking loud and clear, and it was saying down. We had some great discussion all day in the chat room on the seemingly endless setups for the short side.

Now, with another new high in the VIX and the breadth lopsidedly saying this should be bouncing, am I thinking it might be close like I was yesterday? Well, I'm aware of the 'oversold' condition here, and the key areas this is all hitting in to, but I just blinked and saw the YM futures down now -246. The Nikkei and Australia look to be melting down. I am now leaning a lot more towards a bigger climax, like we melt down tomorrow, maybe even hit the breakers, and if it can't bounce and closes weak, we have a 'Black Monday', and that short-term climaxes it.

It's really hard to say how much more mutual fund and hedge fund redemptions may be out there. It's also tough to gauge what the government may do next, any of which might start a fierce rally. I was as close to 100% sure that they would ban all short sales of all stocks after the close today, I'm kind of stunned they didn't. I wouldn't be surprised if we keep selling hard if they don't shut the markets down. Russia, Indonesia, and Iceland have.

Keep in mind, the action is dynamic, and I am quick to change my premises based on what I see second by second as things unfold. So, I'm saying straight up I have no idea if 'this is it' or not. It's at best a fun game to play to say what I think the odds are of this or that. If it is going down, I'm looking for short setups, if it is going up, I'm looking for long setups. That's really all I need to know. It will turn at some point and a fierce rally will ensue, but from where it will start I haven't a clue. I really don't have anything left after this until we get to those '02 bottoms, which could happen soon if we do melt down a bit more.

I will say one thing. I was just looking at long-term charts for the European, South American, and Asian markets, and they look like they have a long ways to fall. Look at Brasil on a 15 or 20-year chart. It looks like it hasn't even went down, yet they are 'crushed'. Many markets look like they have barely even corrected. If we are in a global deflationary scenario, and the two decade long credit bubble is truly deflating, this, like Japan, should run for a long time, and just keep grinding down.

Any climax here would then just be one of many bottoms that will form on the way down. They may be nice, big percentage bounces that will likely be highly tradable, but they won't be 'the' bottom they will brag about on TV, and they will roll over and right back to new lows again and again. Anyway, just some thoughts, as I wait for a monster move from here in either direction...

Well, I was thinking today what if there aren't any buyers left? Is this the scenario we may run into?
What transpired in the last hour today showed me that right now there doesn't seem to be such a thing as an 'oversold' condition.

Well, there was a guy on CNBC, and he was saying that if this was a 'normal' scenario, then we are grossly oversold and due for an immediate bounce. But if this a truly historic time, something like 1929 or worse (who's to say 1929 will always be the worst? Records are 'meant to be broken', they say), then those indicators are not near extremes. He mentioned how the '87 crash VIX was in the 160 range (172.79 by Worden data), and we hit 60 today. So, if the times are extraordinary, it could get a lot more 'oversold'. That's why I like to trade with the trend, because oversold can get a lot more oversold. It's likely that this thing will bounce viciously when the sellers are exhausted, but we simply have no precedent for this, so when that will be is tough to say. You'll know it real quick, though, I think, once it starts. I think the best thing in the world for the market is if that started from below the '02 lows, but when does the market, or anything, do what is best for it?

Well, it's going to be interesting, with the DOW futures down just about 400 now... I can't believe any selling at all and we are trading in the seven thousands already.

Hmmm, they are a little slower than I expected, but I just heard they are putting together another new shorting ban, to take effect some time today, as soon as they get it pushed through. I still think the best solution is to just make it illegal for anything to go down. Just make a new law that says you can only sell at an equal or higher price than you paid, forever. Problem solved. No more downside. I just can't believe this...

Hmmm, ES down another 14 or so after the close. I have an idea I'm just going to toss out there, in case it happens, I wanted to 'get it on the record' that I had a feeling about it.

I suspect we may get the 'meltdown' tomorrow. Brasil had to shut down today, and I think I heard Russia did again, too. I think one of three things is likely to happen tomorrow.

1) We 'hit the breakers' on the NYSE, which is 1,100, then 2,200, then a final closure for the day at 3,350.

2) The gov comes in tonight or in the early AM with yet another hokey bail out twist (another 50 or 100 basis points?). When they do this, it creates a monster pop, which so far, has been given back every time shortly afterwards. This time, though, we haven't given it all back yet, so another scheme in here may not be effective, or may produce the opposite effect. But, that's one thing that could push it back up and change the game for now.

3) El Presidente comes in, declares he has some power (or Shifty Paulson, working with El Presidente) to shut it down, and they close it down before the full breakers are hit. I can't imagine them seeing it down 3,200 on the day (or even close) and just sitting there. I suspect something decisive way before that.

Of the above three scenarios I think the third is the most likely. Now, could it snap back up, even hard? Yep. Might we be up 1,500 tomorrow? Sure. Might we just be up a few hundred? All of these are possible, and many more possibilities. I just think we are on the edge of something, based on the price action. The negative feedback loop of selling (that is, deleveraging trillions and trillions and trillions, in my opinion) has to run its course, and it may take this a lot lower. Who knows. I've never seen anything like this.

I do think this is the best trading I have ever seen, and ever will see, but I don't think it will last. I think once this is done, we may have just slow, grinding, low volatility action for perhaps even a generation. Let's hope I'm wrong. Let's hope this is all going to settle out in here somewhere, or wherever, and the markets are still exciting so we can all use our tools and have a lot of fun. We'll see.

Okay, as I wrap this up, I see old Shifty will be talking in an hour, and the futures, which just came back on line, are jumping up nicely, almost 8 off the lows. Maybe things will be just fine...

Oops, futures rolled right over and are now off ES -19 now.

I really think it's all over. They are running out of ammo. The economical landscape in this world will change (is changing) like we have never experienced before. I hope the outcome will be good....

So, the main areas I am watching on the DOW are the 1.128 and 1.272 external retracements off the bull run. Hmmm, 5200 and 6300? Although the bottom may be well above that (heck, maybe it's in right now), my biggest concern is if one of those areas only bounces it, and then down it goes, a la Japan.

Nope, not even close to a meltdown. VIX hit another high, they had it down well over 300, and they couldn't do anything more with it. It hit the .886 of the entire pop up, and the rest was history, straight up almost 800 points. Kind of cool, I guess. For those that haven't noticed this, do the retracement for the entire bull market. The monster almost 23% jump in the INDU and S&P was right off the .886. Notice, too, before it finally got going, on say a 5-minute chart, the quick .886 retests. And now this huge pop right off the .886, for the classic 'test' all the talking heads will be bragging on all day now. Hmmm, three .886's here. Maybe it is the bottom. I have no idea, but if it is, it's quite a feather in my cap.

Notice all the ABCD's here, at key lines. And this was the Thursday before options expiration, which may account for the ramp, especially if hedge funds wanted to book some cash. Now, with tomorrow being Friday, and GOOG reporting 'blowout' earnings (as well as all the other reports after the bell looking pretty good), but the futures not exploding up on that, will these ABCD's hold as the redeemers return, or will they get super-blown out as they show themselves to be 'wave 3's'? We'll have to see. It sure is exciting, one way or the other. Look at that over 800 point range today. Is this something for trading, or what? Amazing, too, how bad the economic reports were for today, and how little they cared. So, are we up 1,000 tomorrow, or down 1,000? :-)

I think the second chart is particularly telling. I agree with the conclusion, this market is nothing more than Euro-yen carry trade on, Euro-yen carry trade off. No balance, no participation, no depth, as I discussed in my last monthly commentary, just leverage/deleverage, risk on/risk off, and that's it. Skynet is totally sentient. How long, like in the movie, until the machines decide to vaporize the useless humans?

http://www.zerohedge.com/article/tale-two-decouplings