It is just starting to feel like it is more and more unlikely they will be able to put Humpty Dumpty back together again after he fell off the wall and got smashed to bits. As I've said elsewhere, even if that was the bottom today, as Doug Cass, Larry P., and a slew of others say, the economy and our currencies will be dealing with this for years and years, even decades, I think.

The point of this post is to just mention one thing, even if it isn't all that useful for trading, except maybe as a heads up. Here's what I am thinking. This thing needs to bounce. If they keep selling it, steady, 100, 200, 300 points a day, with little bounce, there are a few that may happen. One is they just keep selling it until it gets to the end of the sellers. This can happen, slow and steady, but I think it is a low probability scenario.

Next, they could bounce it, like yesterday, every few days, until they finish. This seems like a moderate possibility. What I am concerned about, if that is the right phrase, is if they can't bounce it soon it may 'break the channel in the direction of the trend', as I have shown to my mentor students. This could cause a rapid drop and capitulation climax, either the final one, or one that may last for some time.

The issue is that it could, possibly, take off 1,000 or even 1,500 Dow points if that happened. Usually that type of thing happens on some news, but it may not need it if they keep selling this and it can't bounce to make the trend 'healthy'. If this climax did happen, like we have seen in other cases, it may immediately bounce off the low as much as the drop, perhaps 1,000 points. So, theoretically, someone may come home from work, see the Dow unchanged for the day, and not realize it traveled 2,000 points during the day.

I just want to get it across that this thing is showing the type of behavior I see right before such an event. This layout looks and 'feels' about the same on a tick chart as a 60-minute chart, or a daily chart, to me. It's just a way it all sets up, and this has it. As I said before, from a management style perspective, for me, I'd rather give back a chunk on some remaining puts here than have them closed out and miss what might unfold. That's just my own point of view. Hopefully, we won't have to see this, and we can just keep enjoying the high, but not insane, trading volatility we have in here. Regardless of what transpires, I've laid it out so you can be looking for it just in case...

The call for at least a short term bottom might be supported by Roofer's 'The Trade' setup:



It's consistence doesn't cease to amaze me. Here is an example from a day earlier:

Yes, I did see that. My thinking, too, was if that doesn't hold...

The question I always ask myself is: "Who in the world would want to buy any of this crap?"

You'd be amazed at how they are lining up to buy this crap. If not, we'd be in freefall. But, yes, I'd love to know just who these people are. Your 'Mutual Fund' $$ at work, I guess. Pensions and many others who must be fully invested, no matter what.

I think they are all averaging down. To quote one of the traders from Market Wizards "Losers average losers..."

Well, if they want to buy this could be Wave 2