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Dead Cat Bounce In Progress; Key Resistance Reached

Tyler Durden's picture


By Nic Lenoir of ICAP

The one market that has not played long too much with the overall risk picture is the FX market. We had highlighted the EURUSD triangle the other day, there is a similar one short term in the Dollar Index. More importantly, we see on a weekly chart that the DXY is shaping a monster inverted H&S, the same pattern we have advocated playing when we recommended buying USDCLP at 505/510. The key lesson from the 90s is that the USD rally killed Asia. With China supposedly the growth engine of the world and a peaking ISM cycle in the US, this is not good news for the global economy.

S&P futures have tested the key resistance this morning around 1,105. We have been highlighting the 1,107/1,113 resistance zone for some time now. A break above is resolutely bullish, but as long as we remain below we could still be in a very bearish formation. On the downside watch 1,067/1,065 as the key support. Below that level the market will go test 1,017 at the very minimum. It is interesting to notice that the Nikkei has triggered the inverted H&S we pointed out the other day. Yet given the prime minister resignation and subsequent Yen weakness, the Nikkei move could be a simple knee jerk reaction to the weaker currency that favors Japanese exports. AUDUSD has not confirmed the break and is still below the 0.8575 resistance. A break past this resistance opens up the way towards 0.89 where all the moving averages have just posted a bearish cross and that type of level is sometimes retested before further downside. If the USD keeps strengthening and EURUSD closes tonight below support however, which is likely given that DXY is breaking out of its triangle bypassing 87.10 as I type, we could see risk come back under selling pressure.

Big picture I remain a convinced equity bear, but we are interestingly at cross-roads here. Which ever way we exit the 1,067/1,113 band will probably turn out to be a very sizable move. If we break to the upside we have the DXY most likely rejecting the inverted H&S at 88.35 and pulling back lower, with AUDUSD breaking north towards 0.89. To the downside EUR will probably get sold very aggressively and DXY will be VERY VERY strong.

The only alternative scenario would be one of strong US equities with weak commodities and Emerging Market stocks. While I favor US equities to outperform their emerging counterparts in a deleveraging environment, it still seems a stretch to have them move in opposite direction. It seems to me inevitable, even if we rally past the 1,113 resistance and wind up making new highs in S&P futures, that deflationary forces will catch up with us. This is a balance sheet contraction environment, debt has overall been only marginally reduced so far and we have a lot more to go to restore some balance in the system. This environment will prove extremely deflationary and since a lot of balance sheets need to be funded in USD it is completely part of the strong USD theme we have been pushing foward since early 2008.

All eyes are on the NFP number coming out tomorrow. I personally believe that the number will match or beat expectations. HOWEVER the jury it out regarding the relevance of a number propped up by a birth-death model and census hiring. This week Citi Financial announced it was closing multiple branches and HP is going to reorganize 6,000 jobs and terminate an additional 3,000. Jobless claims are also not really painting that cheerful a picture, and neither did ADP earlier today. That's right even HP is still not done cutting jobs even though the stock is still up almost 100% from last March's lows and I am sure analysts are trampling each other to upgrade the price target. My macro view is that the global economy is imbalanced and too many jobs in the US are services which only thrive when the stock market is booming and the wealthy spends lavishly (do you seriously need a massage and a beer brought by someone you tip $20 every time you get a haircut?). Since we no longer have the possibility to run our economy on credit, we have reached the tipping point where we need real jobs to support growth otherwise without a strong middle class spending will drop and to make matters worse people will rely on asset sales to support whatever spending they still engage in as the political capital to use federal funds to maintain the economy afloat vanishes.

While tactically we will stick tactically to the 1,067/1,113 game plan, I don't think that there are any outsized returns coming any time soon playing the market from the long side.

Good luck trading,



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Thu, 06/03/2010 - 14:02 | 392308 Mako
Mako's picture

Possible inverse H&S there on the ST chart.

S&P ever breaks 660 and holds below for 3 days, get in your car and head out of the city.

Thu, 06/03/2010 - 14:02 | 392310 BlackBeard
BlackBeard's picture


Thu, 06/03/2010 - 14:04 | 392316 ZerOhead
ZerOhead's picture

A dead dog bounces too you know Ty.

Thu, 06/03/2010 - 15:25 | 392491 Cognitive Dissonance
Cognitive Dissonance's picture

I read the headline and immediately though of you and cougar. You'd think Tyler and company would be more sensitive to our feline readers. I expected to see some fur flying when I clicked the title to read the comments. :>)

Thu, 06/03/2010 - 14:04 | 392317 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Today is down right ugly.  I would not be surprised if we flash crashed.  Then again, I will never be again surprised by flash crashes.  One a week from here on out seems likely, even in the case of a hyperinflation.

"The Dow gained 300 points today, but during that route, 100 points were vaporized in a matter of minutes.  No one really minds though, as long as the numbers get bigger.  Go numbers go!" -Steve LiesMan

Thu, 06/03/2010 - 17:58 | 392791 JohnG
JohnG's picture

Welcome to the new normal.

Thu, 06/03/2010 - 18:04 | 392809 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

It has a ring to it. 




Thu, 06/03/2010 - 14:04 | 392320 Mitchman
Mitchman's picture

As usual, one of the best analyses on the scene.  Thank you.  I also think we have a long ride down.

Thu, 06/03/2010 - 14:09 | 392329 Trichy
Trichy's picture

S&P is still valued on the LBO model. There will not be any more LBO's. That itself will bring it down to march levels.

Does anyone know why Ben started buying at 666.

Thu, 06/03/2010 - 14:16 | 392342 Turd Ferguson
Turd Ferguson's picture

Because he is sprung from the loins of Lucifer. It is his lucky number. 

Thu, 06/03/2010 - 14:47 | 392422 knukles
knukles's picture

Paraphilia hydroceleus.

Thu, 06/03/2010 - 15:30 | 392509 Cognitive Dissonance
Cognitive Dissonance's picture

I had to look this one up. Once I stopped laughing I had to congratulate you on your genius. :>)

I'm not telling. Everyone needs to do their own research.

Thu, 06/03/2010 - 15:42 | 392543 knukles
knukles's picture

Likewise, Chapter One

Thu, 06/03/2010 - 19:50 | 392538 SMG
SMG's picture

I think it was just a way the aristocracy at the top of the pyramid, lets we who are paying attention know, that they are in charge and can flaunt their power.  666 is one of their sacred numbers.  Also if they put a hidden symbol out there, they believe it holds power over the people who don't know what it means. 

Thu, 06/03/2010 - 19:48 | 393060 Kayman
Kayman's picture

Coffee breaks over, back on your heads.

Thu, 06/03/2010 - 14:12 | 392333 Hephasteus
Hephasteus's picture

I wouldn't worry about those 6000 hp jobs. HP hasn't made anything but crap for 10 years. I'd worry about the million city jobs getting cut this month. Out of work police are the best criminals on the planet. With a near perfect blend of gang banger and careful planning criminal.

Thu, 06/03/2010 - 14:21 | 392359 LeBalance
LeBalance's picture

lol: "is it the police, honey?" "no, its the Ex-police!"

No one expects the Spanish Inquisition!

Thu, 06/03/2010 - 14:34 | 392390 Fred Hayek
Fred Hayek's picture

Of course not!  Surprise is their greatest weapon . . . along with ruthlessness.  One of their two greatest weapons!

Thu, 06/03/2010 - 14:57 | 392437 sumo
sumo's picture

Prepare ... the comfy chair!

Thu, 06/03/2010 - 14:59 | 392442 crosey
crosey's picture

ya beat me to it!

Thu, 06/03/2010 - 14:58 | 392441 crosey
crosey's picture

Bring out the comfy chair!

Thu, 06/03/2010 - 15:14 | 392470 Cursive
Cursive's picture


OMG.  You have seriously just created the next Big Idea for an FX/HBO/Showtime/ AMC/TNT series.  A group of laid-off policemen turn to a life of crime and violence.  Goodfellas meets Southland/Hill Street Blues.  I would watch this in a heart beat.

Thu, 06/03/2010 - 15:32 | 392518 Cognitive Dissonance
Cognitive Dissonance's picture

Can I write the screenplay?

Thu, 06/03/2010 - 15:41 | 392537 thesapein
thesapein's picture

Could you work in a theme of good cops vs bad cops, except I'm not sure if the employed or laid off cops would be worse? I kind of like the idea of the retired cops going good.

Thu, 06/03/2010 - 15:57 | 392584 Cursive
Cursive's picture

Oh hell.  The whole thing is rife with moral poundering.  The inner conflict of the idealistic unemployed fence rider who so desperately wants to support his young wife and child but his moral upbringing leads him to initially reject his rogue older partner's criminal schemes.  But the rogue partner's schemes gain credance with each passing day that the young idealist's hopes for another job are dashed. The ying and yang of it all with the backdrop of a new urban's so juicy.

Thu, 06/03/2010 - 15:54 | 392578 Brett in Manhattan
Brett in Manhattan's picture

It's actually a good idea for a movie. "Falling Down" except with a cop instead of a white collar guy.

Thu, 06/03/2010 - 16:24 | 392642 Ragnar D
Ragnar D's picture

It's called "The Shield" and it's awesome.  They just aren't laid off.

Thu, 06/03/2010 - 18:44 | 392910 reading
reading's picture

I was thinking the same thing...the best criminals out there are the employed cops.

Fri, 06/04/2010 - 01:05 | 393802 Tapeworm
Tapeworm's picture

GATA have cash for buzz cuts and steroids.

 BTW, do all cop shops have explicit contracts that forbid drug testing for the guys in blue?

 The locals here are either lardasses or bulked up like the Hulk. The attitudes vary with the body styling.

Thu, 06/03/2010 - 19:08 | 392971 Johnny Bravo
Johnny Bravo's picture

The more out of work police, the better!

They've never done anything for me, except for try to pull me over for speeding and eat donuts.

Every time I go hang out at my friends cigar shop, there's always like six of them sitting around instead of working or helping people. 

So why should six people get paid to sit around and do nothing?  I ask the same question every time I'm on campus!

Thu, 06/03/2010 - 21:31 | 393172 ColonelCooper
ColonelCooper's picture

You know,  I always leave you be when you troll the gold posts.  I think your only interest in them is kind of mean spirited and fucked up, but at least you present facts (as you see them) to back up your position.  Fair enough.

But lay off the cops douchebag.  The only reason you KNOW they're anywhere is because they're in fucking uniforms.  Can't they have hangouts too?  Or are they supposed to put their asses on the line for you 24-7 with no breaks ever? 

Plus...I got news for ya... Don't speed and they won't pull you over.  For two seconds, just try to contemplate the idea that you're wrong, and Gordon Gekko and Mako are much closer to hitting the nail on the head. 

You'll wish you knew a cop.  Douche.

Disclaimer:  I am not in, nor am I related to anybody in law enforcement .

Fri, 06/04/2010 - 01:14 | 393817 Tapeworm
Tapeworm's picture

the airwaves are clogged with threats from the goomint cops that they will fine your sorry ass big if you are seen without a seatbelt. I make it a point to look at cops in their cars to survey their use of seatbelts. My informal assay is that less than one in ten of the cops wear the restraints when on duty.


Thu, 06/03/2010 - 14:14 | 392337 jory
jory's picture

We aren't going to the March 09 lows.  That's just plain silly.  Nordstrom was at $7 and it's now at $38.  ZH readers are bizarre.  

Thu, 06/03/2010 - 14:17 | 392346 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Thanks Jory.  Thank you for reminding us of the leading indicator, Nordstroms.  Move along everybody.  Move along, and go buy your over priced pajamas now.

Thu, 06/03/2010 - 14:17 | 392347 chet
chet's picture

Yeah, that could "never happen".  Except it did.  Last year.

Thu, 06/03/2010 - 14:17 | 392348 ratava
ratava's picture

print this one out

Thu, 06/03/2010 - 14:18 | 392350 Trichy
Trichy's picture

At that point the US still had a, although dysfunctional, banking system.

Thu, 06/03/2010 - 16:51 | 392690 DosZap
DosZap's picture

"INTO THE ABYSS"..speaking of Dysfunctional Systems.

.........don't know this dude, but the charts are Fed.Interesting, if Depressing( reality) read.

Nothing we haven't already figured out........or, at least contemplated.

On a side note, caught a blurb, BHO spending 5B a day,3x's more than GW did.

Thu, 06/03/2010 - 19:15 | 392989 Johnny Bravo
Johnny Bravo's picture

If Barack Obama was spending 5B a day, that would be less than 2 trillion dollars in the federal budget, which is much less than GWB spent.

By doing math, you can see that 5 X 365 = 1825 billion, or 1.825 trillion.

George W Bush's last budget was 3.1 trillion.

1.  The person that posted that obviously doesn't know anything.
2.  Conservatives suck balls at doing math before lying to look like they're right when they're lying.
3.  I'm SURE BHO is spending more than 5 billion a day, or 1.825 trillion a year.
4.  The only reason BHO's deficits are so high is because tax revenue is down significantly.

Thu, 06/03/2010 - 19:18 | 392999 Johnny Bravo
Johnny Bravo's picture

And I just know some Glenn Beck mouth breather is going to go "But 2009 was Obama's budget year, you moron!"

Federal budgets are always a year in advance, and federal budgets run from October to October.  2009 was Bush's last budget, even though it was paid out in 2008.
It's called "accounting."

Thu, 06/03/2010 - 19:50 | 393071 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

BAM sets military spending records.  No big deal though, all Fem Dems do. 

Examples, because I know you will want them.  Carter raised military spending to records.  Clinton raised military spending to records.  Barry did too.  Sure, Dubya was a war monger, but we knew that!  Stupid Fem Dems are sitting in their forclosed houses watching their ipads going, "Obaaaaama is going to end the war soon.  I believe, do you believe?  Have hope, and shit in my hand."  Fem Dems are shit hoarders; they hoard their shit.

Thu, 06/03/2010 - 20:26 | 393199 ColonelCooper
ColonelCooper's picture

"4. The only reason BHO's deficits are so high is because tax revenue is down significantly"

I used to just think you were a nuisance troll who got off on irritating everybody around you.  Kind of like a shitfly.

After that post, I officially HATE you with every fiber of my being.  Not only that, but that statement has officially branded you as a STUPID FUCK 'til eternity.

Okay people, the troll is fed.  Nothing to see here.

Thu, 06/03/2010 - 15:21 | 392480 Cursive
Cursive's picture

I could see that it wouldn't fall below $7 next year, as long as they have an equity raise or convert the debt.  With the way things are headed, JWN will be lucky to avoid a merger of equals to stay afloat in a couple of years.  Why don't you go talk to some WMT (20% of all retail) executives to get a feel for how healthy our economy is.

Or ask AEP why they still have massive idle capacity.

Thu, 06/03/2010 - 16:17 | 392625 homersimpson
homersimpson's picture

"That's just plain silly." Yea - as silly as those same fools who kept saying real estate always goes up...

Thu, 06/03/2010 - 14:15 | 392340 Turd Ferguson
Turd Ferguson's picture

The DXY chart is a perfect example of why I hate TA.

The author arbitrarily draws a trend line and then claims his line is some kind of support/resistance.

I could draw my own line and make my own claims. What a joke.

Thu, 06/03/2010 - 14:24 | 392362 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Maybe thats why she got fired, because Citi hates TA.

Thu, 06/03/2010 - 14:31 | 392384 Turd Ferguson
Turd Ferguson's picture


I'd like to nail her every which way to Sunday!

Thu, 06/03/2010 - 15:49 | 392563 Lndmvr
Lndmvr's picture

Would'nt want to piss 'er off tho.

Thu, 06/03/2010 - 17:11 | 392723 RockyRacoon
RockyRacoon's picture

...33-year-old single mother from Puerto Rico...

You might want to check with her ex old man first.  You know the story: Somebody, somewhere is tired of putting up with her shit.

Thu, 06/03/2010 - 19:12 | 392984 trav7777
trav7777's picture

He said he wanted to nail her, not keep her.

Fri, 06/04/2010 - 00:17 | 393739 RichardENixon
RichardENixon's picture

I'm looking for one who turns into a pizza after you finish.

Thu, 06/03/2010 - 17:31 | 392743 PeterB
PeterB's picture

The DXY chart might soon be the reason you hate gold too!

Thu, 06/03/2010 - 14:19 | 392353 silvertrain
silvertrain's picture

Nothing is going to happen until 3:30-4:00    That has become the white flag lap lately it seems..

Thu, 06/03/2010 - 14:20 | 392355 jkruffin
jkruffin's picture

Any moment now, expect FED intervention in EURO to push it back up to the 1.23 level   its like clockwork,  plus GS saying short to 1.19  means go long EURO.  They just gave you the clue the FED is about to step in

Thu, 06/03/2010 - 14:21 | 392357 Rusty_Shackleford
Rusty_Shackleford's picture

In regards to census workers, I'm sure most of you have seen this particular story out there, however, if not, it's worth a look when considering census "hirings".

Thu, 06/03/2010 - 14:50 | 392375 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Who stole the cookie from the cookie jar?  Not me!  Then who?  Obama!  Thats Who!  Obama stole the cookie from the cookie jar!  Not me!  Then who?  Biden!!!!!  Thats who!  Biden stole the cookie from the cookie jar!  Not me!  Then who?  Rham, thats who!  Rham stole the cookie from the cookie jar.....

Thu, 06/03/2010 - 15:00 | 392444 LeBalance
LeBalance's picture

"It's not the people who vote that count. It's the people who count the votes."

(Josef Stalin)

and RS sez: Complete and Utter Lawlessness (to paraphrase).

Thu, 06/03/2010 - 16:56 | 392700 DosZap
DosZap's picture

This is like the US Gv't, requiring ALL Puerto Rican's  to get NEW Birth Certs...........because,illegals are stealing their identities, and having fake I D's made.............LOL

Lemme see???.how many voters...........Uhmmmmmmmmmmmm.

Chicago,Chicago, what a wunnerful town!!!!!!!!!

Thu, 06/03/2010 - 14:30 | 392379 CapTool
Thu, 06/03/2010 - 14:31 | 392385 doublethink
doublethink's picture


Black (Oily) Swan


Check out this simulation of Deepwater Horizon's gusher as it heads up the US east coast and on into the Atlantic. Goodbye summer season for the Eastern Seaboard.



Thu, 06/03/2010 - 17:00 | 392706 DosZap
DosZap's picture

Seems we are TOO Intelligent( Absolutely we will not do this, current admins retort) to do what the Soviets did, to stop these issues..........the simplicty of it must confuZe Dem.........

So, we continue to allow millions to flow, thru December............

Yep, makes sense.

Thu, 06/03/2010 - 17:00 | 392708 Broker NotBroke
Broker NotBroke's picture

And RIG bottomed out at $47 a share yesterday, finished up at $51.11 today. The hell is going on?

Thu, 06/03/2010 - 14:33 | 392388 Let them all fail
Let them all fail's picture

So while I like this analysis, basically if the market goes up buy and if it goes down sell, seems a little simplistic (outside of the FX correlations) that this technical analysis should be so exact, we've seen prices just breaking through technical strongholds only to revert back the other way - who here trades based solely on this method?

Thu, 06/03/2010 - 14:34 | 392392 Caviar Emptor
Caviar Emptor's picture

"Since we no longer have the possibility to run our economy on credit, we have reached the tipping point where we need real jobs to support growth"

Agree. We've no gonne through 3 incarnations of a fantasy economy, called something else each time, roughly corresponding to successive presidential regimes. Each so-called Miracle Grow economic model was going to be self-sustaning and guaranteed to produce high paying jobs. All the while dismantling America's industrial might thorugh outsourcing.

In the early 1980s we were told The Service Economy had arrived. The plan could not fail as we would all count beans for one another and serve burgers to each other. That ended with the S&L crisis and the jobless recovery of 1991-1994. Next we were sold on The Entrepreneurial Economy: the perfect outsourcing rationalization! No more large corporations or economies of scale, we would all be selling each other stuff from the attic on EBay and devising cool retro gift baskets sold online. That all ended with the bubble's demise and the jobless recovery of 2002-4.  The next incarnation was The Ownership Society where we would all be flipping each other condos for a living. That ended too. 

So what new proposal is on the table for a self-sustaining economy? Is there a plan? Well it's only embryonic for now, but gradually team Obama is sellling the country on The Green Society. We'll have bombastic speeches telling us that we can sustain ourselves by composting each other's septic residue, running in each other's hamster cages and jumpstarting each other's hybrids. Self-sustaining? Not. There is no plan.

Thu, 06/03/2010 - 14:54 | 392435 knukles
knukles's picture

Staying a couple of steps in front of the sheriff, what will they try to foist on us when they quit pretending everything's sustainable? 

Thu, 06/03/2010 - 15:12 | 392465 Caviar Emptor
Caviar Emptor's picture

If we actually have deflation and press the reset button, then the government wouldn't have to "engineer" an economy. The forces of supply/demand, necessity and ingenuity would takeover. Then who knows? Moon colonies?? 

Thu, 06/03/2010 - 19:49 | 393069 StychoKiller
StychoKiller's picture

Is the surface of a planet the right place for an expanding
technological civilization?

Thu, 06/03/2010 - 20:32 | 393224 ColonelCooper
ColonelCooper's picture

I believe that's when we start farming collectively.  ie. - those who are childless work supervised under gunpoint, and those with children work unsupervised while their children are "watched" for them.

Fri, 06/04/2010 - 11:02 | 394653 Rusty_Shackleford
Rusty_Shackleford's picture


"The manner of bubble isn't important—just as long as it creates a hugely overvalued market based on nothing more than whimsical fantasy and saddled with the potential for a long-term accrual of debts that will never be paid back, thereby unleashing a ripple effect that will take nearly a decade to correct."

Thu, 06/03/2010 - 14:39 | 392400 bingaling
bingaling's picture

Like always volume disappears and the pumping begins -also people are probably a bit nervous about tomorrows emplmnt report and dont want to deal with a bad piece of propaganda . Dow 10250 should be a good indicator if this is a dead cat bounce or ppt.

Thu, 06/03/2010 - 14:37 | 392402 williambanzai7
williambanzai7's picture

Hi ho hi ho we're jobless recovery jerks...

Thu, 06/03/2010 - 14:40 | 392409 doublethink
doublethink's picture

[Off Topic] RIP

Israelis shot an American activist four times in the head and once in the chest.

Thu, 06/03/2010 - 14:53 | 392433 Ripped Chunk
Ripped Chunk's picture

The Israelis never discriminate with their hate. That is one thing that some (you folks that are into hate) have to admire about them.

They hate with an amazing level of ferociousness and intensity. It is time to slap these hate mongering bitches down.

Are you listening Obama?????


Thu, 06/03/2010 - 19:22 | 393005 trav7777
trav7777's picture

who was it who said that jews straight out hate?  Some jew said that, don't recall who.  Even Ariel Sharon said jews can barely stand to live with each other.  Squabbling, hyperaggressive tribe...

Thu, 06/03/2010 - 14:58 | 392439 PeterSchump
PeterSchump's picture

Buy on the rumor. Sell on the news.

Thu, 06/03/2010 - 15:18 | 392476 Carl Spackler
Carl Spackler's picture

The activist probably had it coming.

Anyone who masquerades as a "peace activist," seeks to defy a navy and then attacks a commando is asking to get shot.

Maybe, the guy was John Walker Lindh's relative, and the world is a safer place now.

Thu, 06/03/2010 - 15:28 | 392500 weimdog
weimdog's picture

His folks were Turks and he only spent the first 2 years of his life in the US. Technically a US citizen, but come on...His brother was interviewed and said his family was proud that he achieved martyrdom.

Thu, 06/03/2010 - 16:10 | 392610 SRV - ES339
SRV - ES339's picture

Thanks for the information... he was probably just some "virgin loving" Muslim kid ... so why is everyone getting so bent out of shape?

Thu, 06/03/2010 - 16:24 | 392640 Brett in Manhattan
Brett in Manhattan's picture

Didn't you get the news? The horde of wild leftists that descended on this site earlier this week packed up their tents and moved on.

Thu, 06/03/2010 - 14:40 | 392410 Roi
Roi's picture

I'm really an amateur, but I just noticed something


Check the intraday goldprice in dollar, then check the price in EUR, SEK, AUD and CAD. What does this mean exactly? Could it really be coincidental that those currencies fell equally much as the gold price, or is it some wierd kind carrytrade to buy US stocks?

Thu, 06/03/2010 - 15:03 | 392450 Gubbmint Cheese
Gubbmint Cheese's picture

I find it so funny that we pay attention to technical levels like its supposed to mean something or matter. I think any person with an ounce of critical thinking ability (which is why most people find their way to ZH) knows, or at the very least has the suspicion that this market is being artifically manipulated. Maybe its not `every day` but its enough to have the thing run up massively on bad news, no news and good news.

It seems to me this game will continue until either a) the Fed is able to hold the collapse off until such a time that organic (private) growth starts up again (this seems highly unlikely in my mind)


b) no matter how hard they try.. financial gravity finally kicks in.. and it all comes down - in which case reality hits hard.. and the markets get monkeyhammered.


In the meantime.. the games (absent fundamentals) continue. As such, (to me) numbers and levels like 1065, or 1090, or 1220 mean SFA.

You can`t hide terminal cancer forever.



Thu, 06/03/2010 - 15:36 | 392524 taraxias
taraxias's picture



It's the chicken entrail crowd who think that you can get rich sitting in your living room with a laptop trading on TA. This crowd unfortunately are the ones that are still feeding the beast and will continue to do so until they wake up one morning and discover they've gone bust. 

Thu, 06/03/2010 - 16:01 | 392591 Treeplanter
Treeplanter's picture

The technicals work a lot better when the volume is high and the trade no dominated by the Fed and its big bank agents.  Yet so many times these charts work anyway.  The Dow and SP made 52 week top formations and fell below the major indicator, then took the elevator down.  Now we are watching a cup and handle in gold and a head and shoulders for the stock markets.  Some technical formations may be more  than others.

Thu, 06/03/2010 - 16:30 | 392651 Brett in Manhattan
Brett in Manhattan's picture

It doesn't matter if it's a cup with a handle, a head and shoulders or a Beyonce's Ass.

The bottom line is that anything which causes a large number of outside traders to act one way or another can be exploited by insiders at the exchange who can see the orders coming in.

Trading on chart formations is like playing poker with your cards face up.

Thu, 06/03/2010 - 17:13 | 392725 DosZap
DosZap's picture


"It seems to me this game will continue until either a) the Fed is able to hold the collapse off until such a time that organic (private) growth starts up again (this seems highly unlikely in my mind)".

Impossible, regardless of what the GDP went to,or if all the currently 30+ million Americans went back to work tommorrow,  the current debt level are totally userviceable............we are WAY BEYOND the ability to service the debt, no MATTER what the economy does.

As Mr/Jim say's, "QE to Infinity",or until the world awakens and stops taking FRN's.

Thu, 06/03/2010 - 15:07 | 392455 primefool
primefool's picture

There will be no recovery - only an inexorably slide towards third world status - unless

1.  Scrap the current dog vomit called the tax code. Sheeple that are forced to fill out 30 pages of undecipherable crap to pay their 22.53 cents of tax - are not sheeple that are going to be productive.

2. Enforce property rights. A million sheeple living rent free and mortgage payment free - totally free - just sends a bad bad message to all the other sheeple.

3. Gut the banking system and create narrow banks that will be required by law to only hold T-Bills on the asset side and provide checking , ATM and other services for a modest fee.

4. All other lending, investing etc - should be done by Investment Entities that can tap markets for financing etc. Zero govt support should be provided to these entities. On the other hand brutally draconian harsh measures should be employed on Investment Entities that misbehave.

All this wont happen. So we'll look like Indonesia or worse in short order.

Thu, 06/03/2010 - 15:15 | 392457 John McCloy
John McCloy's picture

 Now that Wall Street knows the jobs number and the markets are still not exploding that should be very indicative as to where this market is going. They did however get a few future dip buyers ready to throw money into a hole when we go below 10k once again.

Thu, 06/03/2010 - 15:14 | 392461 hambone
hambone's picture

Mighty strange Euro game being played -

The Euro moved down .12 cents against dollar and market lost about 1000 dow points.  Now a minor move of .005 cents (up/down) sends the market gyrating by hundreds of points.  Seems all out of proportion?  Anytime we approach a new Euro low market swoons and then reignites as we pull off it...all for a .005 move?  Thoughts on the seemingly instable nature of this game?  EUR/JPY Carry trade?

Thu, 06/03/2010 - 15:37 | 392527 tmftdoyle
tmftdoyle's picture

dont forget the gulf coast clean-up impact on the number.

Thu, 06/03/2010 - 17:36 | 392754 PeterB
PeterB's picture

Good observsation.

Thu, 06/03/2010 - 15:42 | 392541 bank guy in Brussels
bank guy in Brussels's picture

Tyler, PLEASE avoid that horrendously offensive phrase 'dead cat bounce'. It is very hurtful to many of us.

Tyler, in the next life you will be re-incarnated as an animal - if you are very lucky in your good behaviour, you will come back as a cat - but every time you published this ugly phrase, will haunt you.

Be nice about animals. Rewards will be yours in both this life and the next one.

Thu, 06/03/2010 - 19:24 | 393010 trav7777
trav7777's picture

It's a DEAD do you know it didn't already die of old age??

Dead anything is dead, just an inanimate object

Thu, 06/03/2010 - 19:56 | 393088 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

You are joking right?  Cupcheck yourself please, before I do it for you.  You will not see the field otherwise.


I am waiting.................................

The game is about to start c'mon.........................

Ok, Master Bates, you are playing second.  Bank guy, you will man the bench.  And the cooler needs more water.

Thu, 06/03/2010 - 20:41 | 393240 ColonelCooper
ColonelCooper's picture

Hey Bank Guy, aka PETA chick:

Either you forgot to shit off the sarcasm button or you are a little oversensitive.

I grew up on a farm.  We had cats EVERYWHERE.  Have a barn cat or two, and the next thing you know, you have fifty.  Not a hard problem to fix.  Put a pie plate of milk out for them and you can knock off ten or twelve with one shot of #8.  As a kid we actually used to make up games to play with frozen dead cats.  Just give me the nod, and I'll tell you some stories.

Thu, 06/03/2010 - 21:15 | 393323 jory
jory's picture

If I met you, I make you feel what you did to those cats except you wouldn't get the benefit of a quick death.

Thu, 06/03/2010 - 16:23 | 392639 dcb
dcb's picture

I get 11.68 on spy as a target on my charts. I can't put them on line buy would be happy to do so.

Thu, 06/03/2010 - 16:37 | 392670 Rick64
Rick64's picture


Good job. Nice analysis as usual.

Thu, 06/03/2010 - 17:01 | 392711 johngaltfla
johngaltfla's picture

This sucker is going to fall like BP's popularity.

And stock price. What a great technical set up from the 1100ish area to retrace back to 1044.

Thu, 06/03/2010 - 19:51 | 393077 Water
Water's picture

Tyler...thank you!

Do NOT follow this link or you will be banned from the site!