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Could It Go All The Way?
From Nic Lenoir
After successfully pinning the 2% move in the DXY, the question everyone is asking themselves is: is this a trend change or just a bump on the road?
Technically, nothing indicates in AUDUSD or S&P for now that it cannot be a trend change. The Shanghai composite index remains stuck against resistance, we still have in place the VIX signal dated October 13 which usually precedes a top in price by between 5 and 10 business days, and the Nikkei has failed so far to take out the 9,750 resistance which would call for at least 3% further upside. Looking at the price action more closely, we can see on the S&P 10-minute and AUDUSD 60-minute charts that we possibly have a 1)-2)-i)-ii) Elliott formation. What does it mean? Well it means if 0.9850 on AUDUSD and 1,175 in S&P future are not bypassed there is a distinct chance we accelerate to the downside, and if that is the case the market will go bypass 1,129 and dip much lower from here. Full disclosure long term I am VERY bearish, the key is to find the timing when Keneysian policies breakdown.
On the flip side, none of the commodities I follow have put on a major candlestick reversal pattern. As you know I believe we are relieving the spring of 2008: commodities are through the roof as money flees the US when investor realize there isn't much upside there, the economic cycle has rolled over, decoupling is all the rage, and BRICS can only grow by 7% or more in the next 10 years. The top back then for those who remember was marked by soft commodities turning first, with Corn (see 2008 chart attached) putting a major gap breakout to the downside. If I had seen such pattern in any of the softs I track I would feel a lot more comfortable but I have not. By the same token given the world has been deleveraging and hot money is probably a bit more cautious than it was in 2008 (though not much, people not only make mistakes they make them several times) so in that sense it could be understandable not to reach the same level of mania and therefore not see the same dramatic reversals. The other thing is that in terms of price action the DAX is a bit unclear as to whether it has finished its last impulse. On the way up the S&P future is very hard to read technically as it is purely liquidity driven and the fractal aspects of the wave structure are murky to say the least. The DAX however tends to be more disciplined and is therefore a good ally when trying to make sense of the wave structure to determine the road ahead. The 10-minute chart attached shows two possible alternate counts: one in which we had an abbreviated 5th wave up and we are now in a more significant correction that will take us back quite a bit lower from here, the other in which we have one last push up before rolling over for a more significant bearish move.
We shall know soon which it is, S&P futures are sitting on the 61.8% retracement of possible i) and the key 0.9819/0.9845 resistance area for AUDUSD is not too far ahead. Tactically it is a good spot to be short risk, knowing that if any of the levels indicated above in AUDUSD or S&P future break we will have a final push up before the reversal and a tight stop is in order to save powder for the bigger game.
Good luck trading,
Nic
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argento pingonas!!!
http://1.bp.blogspot.com/_-NsKdPkdAEc/TEK472NdTMI/AAAAAAAAAYk/lf0abZPN9X...
Commie!
Charts
Bearish here too.
SPX http://99ercharts.blogspot.com/2010/10/spx_20.html
EURUSD http://99ercharts.blogspot.com/2010/10/eurusd.html
More... http://www.zerohedge.com/forum/99er-charts
Full disclosure long term I am VERY bearish, the key is to find the timing when Keneysian policies breakdown.<<<
Breakdown of the Keynesian policies?? Are you kidding me? Not according to Bill Miller of Legg Mason. Stocks are cheap. Its a great time to buy financials. Our debt situation now is better than what it was after WW2. Average stock market return next 10 years will be over 10 percent per annum. Stock market 20,000 here we come. Buy stocks, buy stocks, buy stocks bitchez......
Full disclosure long term I am VERY bearish, the key is to find the timing when Keneysian policies breakdown.<<<
Breakdown of the Keynesian policies?? Are you kidding me? Not according to Bill Miller of Legg Mason. Stocks are cheap. Its a great time to buy financials. Our debt situation now is better than what it was after WW2. Average stock market return next 10 years will be over 10 percent per annum. Stock market 20,000 here we come. Buy stocks, buy stocks, buy stocks bitchez......
Didn't you go "all in" at 1550 on the S&P?
I see nothing to change the core scenario discussed here for months. Long PMs, short USD (which is the same thing); long resource based assets, short financial assets. Timing remains everyone's problem. Not to mention a continued belief in the fallacies of the past re fundamentals by the biggest players in the markets. If you want to play the momentum game, and step into Mr. Market's casino, go ahead. Just don't bitch about losses...
If the FED reverses its policey and openly bids up Gold it will drive Dollars into Gold and cause a commodity crash of huge proportions and reverse the wealth transfer to BRICs and others.
It will also court the political favour of Gold zealots and preserve its political credibility which is under extreme attack.
This is of course dependent on the fact that the USA has the gold they say they have.
No problema. We got the gold. Yep. 6000 tons of gold plated tungsten bars.
the 100 mills or the 500 mills? Because that means there is still gold on it :)
The FED has the gold as $42.20/ounce on its books. They figure if they swap prure cold for tungsten/gold the can "adjust" the value down to agree with their accounting. The smartest guys in the room at the FED, when presented with the dilema of $1300 gold but with book values at $42.20, got the old bean churining....
Cool if they have it, bummer if you have to buy it to break even :)
Maybe the Fed has the tungsten-plated gold bars valued at $42.20/ounce on its books because that is near what gold plated tungesten is worth?
No, we have 8100 tons,and we're Borrowing Germanys 6000 Metric tons, that's in the NYC Vaults, so we have 14k+metric tons.
USA is the GOLD holder of last resort.
One last move up before a bearish pattern, blah blah blah.
This never happens. I've lost alot of dough waiting for it. They were in the process yesterday of jamming the market up to green when they were apparently caught unawares by the putback thing. Look for 'them' to get back to it today. Patterns are meaningless. I see a dick and balls pattern emerging.
Conversly, I see a large 44D and camel toe pattern in full bloom.
OOPs. I was on the SEC website.
They are both there, in what they call a tranny chart. It's both bullish AND bearish!
The best of both worlds, if you will.
I LOL'd. I really did.
Tyler,
There is still the Elliot wave projection that shows a short term dip on the dow to 10700 followed by a spike to above 12000!
It might be a cointoss, but with every coin toss you get a 50/50 chance ;)
http://www.marketoracle.co.uk/images/2010/Oct/Dow-elliott-wave-projection.gif
So I'm waiting for 10600 before I start putting in sell orders. And I'll never sell my BAC's with a loss, that event is just to Big To Happen, a BTH so to speak ;)
$100 Bill/Mo. could help Elliot along. Should you short the fed going long? Not me.
So many have tried, so many lost their pants* doing so.
DEJA VUE 101!!
Lack of "stickiness" in the DXY's rally from yesterday is very troubling for any reversal here. Yesterday appears to be the blip and not a wholesale change of direction. Lower DXY close here very bullish gold.
"The FED can remain irrational longer than YOU can stay solvent..."
Seriously; do fundamentals matter a whit any more? Is this all just so much bloviating? Have Kondratiev and Elliot's legacies finally breathed their last? I was a doom-and-gloom sudden crash-er. And I was fine with that. Now I am gradually buying into a slow and cancerous, long, dragged-out, pathetic, de-composing, rotting, entropic, decades-long, uneventful sickness that ends in voluntary socialism.
Humans, including me, are so effing pathetic.
Should it not be:
"The FED can remain criminal longer than YOU can stay solvent.."
Criminal?
They'll just need to introduce something like a Patriot Act II and before you know it, they'll get medals for everything they do did done.
I would be more than happy to award them some metal.
As for the markets, there is nothing that matters but the Fed.
As for doom and gloom, come on ZHer's, even the airlines are posting profits in the 2007 range. How exactly can things be bad for corporations and the airlines of all entities are posting profits?
He could...go..all..the way...TOUCHDOWN!!
Thanks Nic!
I appreciate technicians who purport a position rather than just tell me what the markets have done.
Happy trading to all!
Delta had good earnings, revenue and traffic growth. With some more good earnings, uncle sugar may pull the punchbowl? Or at least close the bar excpet for a few friends.
However to hit inflation targets against dropping housing they may beef up commodities?
Or not?
Seems like some directional cracks are emerging.
http://www.bbc.co.uk/news/uk-politics-11579979
Bankrupt Britain, austerity in action ( I think )
Can you say civil unrest hits Britain? I knew you could.
Actually with a welfare ponce on nearly every street earning as much as someone out there busting their nut to get by, I think £7bn in welfare cuts will be welcomed with open arms by the working part of the populace. There's also a lot of statements that on the surface at least respond wonderfully to popular demands by the tabloids and their readerships, so I think a lot of this will be well received. At first anyway.
Yes, those 500k Public Sector jobs, will bring them to march and throw Tea & Biscuits at the PoPo's.
Wait till this hits, they won't be throwing tea or biscuits.
http://www.redstate.com/laborunionreport/2010/10/19/armageddon-what-democrats-are-hiding-why-they-are-really-scared/
I cannot beleive that Tyler is actually using Elliott Wave. Even Bob Prechters organization is incapable of short or intermediate term forcasting. They have been calling for this big wave 3 down at least since March. They were wrong on the July rally by 2-3 weeks and have been wrong on this rally by 5 weeks. One could go broke relying on their analysis. Their research is great and long term they may be right but don't trade on their long or short term forecast as they just change the wave count if the market doesn't do what they expect. Short and intermediate term they can't forecast any better than the rest of us.
Sorry this was Nic not Tyler.
Around here, the name Robert Prechter causes many warm fuzzy feelings.
Anybody remember the Hindenburg omens?
How did that play out...
http://www.marketoracle.co.uk/images/2010/Oct/hindenberg-crash-omen.gif
not exactly what it was supposed to be...
To be fair there is a time interval assigned to that which still leaves the indicator active...something like +/- 3 months...someone on here may know the exact number.
I dont have any major reversal sign on my setup yet, my only confirmed reversal is with the aussie...everything else, Vix, s&p, dax, crb, euro, oil all very much still hanging in there. Have got a confirmed short term reversal in gold though...ohhh controversial.
To many interventions from unknown players to forecast
TAnalysis would have to be somewhat dubious in markets that are arteficial unelss it is analysing the behaviour of the fakers.
I'm not going to get too interested in the short side until the end of the current POMO list on 11/8. Until then, buy aapl and enjoy the autumn.
Technicals are worthless when Ben, and only Ben, know whats coming. I agree with Turd - POMO still rules the day. Except for this, "POMO forever" isn't an option, all sarcasm aside, with HFT, retail gone baby gone, paper thin volumes, insider selling....it all comes back to TD's passing of "bucket of exploding feces" among fewer and fewer bull buddies - then somebody decides its time to leave the party. But hey, maybe I'm just hopeful 'cause I'm a VIX guy.
Somebody just thanked JPM for shorting the death out of gold. Sudden $7 errection.
Chart: SPX
Updated. Down channel?
http://99ercharts.blogspot.com/2010/10/spx_8046.html
Gee, I guess that dollar rally didn't last too long.
What does Elliot say about USD/CAD?
Let me tell you: nothing!
When governments & speculators decide the same thing, no amount of Elliot Waving can do anything.
And there you go.
The helicopters aren't coming!
The deflationists are right, no helicopters are coming. They are using B-52 bombers instead.
Buy on POMO, sell on the days in between. Simples.
Interesting divergence between SP-500 and the Russell 2000. SP-500 has cleared mid-May highs, RUT-X has not. Similar to Oct. 2007.
Also have had several small cap stocks tripping trailing stops this morning against a ramping lrg cap mkt.
Thanks for taking the time to discuss this, I feel strongly about it and love learning more on this topic.
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