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Guest Post: Put Your Helmet On, It's On
From Nic Lenoir of ICAP
Well I did say we were awful close to the top the other day with AUDUSD running into a strong resistance at 0.9185 and forcing an ending triangle and the first of a cluster of resistances for S&P at 1,126. We saw that level and not much more.
Here I see one remote possibility of one last push higher if I made a mistake on my count (see S&P 10 minute chart) but if, as you certainly did, have started building shorts at 1,126: keep them on. A break of 1,101 is the acceleration level for the future.
Meanwhile the Dax has not seen so much bearish divergence since the tops of 2007, the Nasdaq is right turning right here to form a text book right shoulder of a massive H&S which I expect to break for good. The 30 minute chart shows that MACD and RSI indicate strong bearish divergence for the Nasdaq also.
This technical set-up comes on the back of weak data which makes the argument even more compelling. My only worry is that too many people might be bearish and European banks are reportedly being floodeed with cash. We have seen names who were down to begging for puttable liquidity a few weeks ago get hit with more than they need in 3M cash. That being said it could be the last insult with all the money fund managers piling in into a capitulating market. I don't have one penny in money funds so I won't lose sleep on this one.
If the USD turns it will dry up liquidity in no time and make this seamingly cozy environment in credit turn sour faster than milk in Dallas these days.
Good luck trading!
Nic
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If the USD turns it will dry up liquidity in no time and make this seamingly cozy environment in credit turn sour faster than milk in Dallas these days.
Time for some DOW yoghurt? Churn the bulltards.
Just curious Nick, but what about your 10,600 for the Nikki? (if I remember correctly, that was a call, right?)
Clarifications are always welcome.
Smokey: Why you not goin' to work?
Craig: I got fired yesterday.
Smokey: No shit? I thought you had the day off yesterday.
Craig: I did. I went in to pick up my check, came home, my supervisor called me about four o'clock, told me he got me on tape stealing boxes.
Smokey: The fuck you stealing boxes for? What you trying to build, a clubhouse?
Happy jobless Friday y'all :)
http://www.youtube.com/view_play_list?p=33135E8E214454B3
Isn't it also "Bank Closure Friday" today?
Haven't heard about that one in a while.
Happens every Friday. Where have you been?
poifect....got my helmet ON and God's sending rain! woot, woot!
Marge: Mr. Burns called and said if you don't come in on Friday, don't bother coming in on Monday...
Homer: Woo-hoo! Four day weekend!
Classic.
thanks for the giggle
Every time I read about gold here I think of "King Homer" from episode 319, encrusted with jewels and 14k gold.
Excellent.
Cuz it's Friday... You ain't got no job... And you ain't got shit to do...
The day in asia looks totally weird. Everything has moved in such a narrow channel.
http://finance.yahoo.com/intlindices?e=asia
I have never seen anything like this.
Like local factors do not matter anymore.
All together now...if the USD turns... ominous indeed.
I'd stay on the sidelines the next 2-3 days. We are, after all, in a nuclear window.
ORI
http://aadivaahan.wordpress.com
Monday's huge gap filled (w/ mini spike on VIX) - time to push higher again.
Nice post Nic.
Downside target for that H&S would be 30% down from here. I am salivating, being mighty short right now!
Chairman is working on banning the rise of dollar.
"My only worry is that too many people might be bearish and European banks are reportedly being floodeed with cash."
I suppose the US government is a flash in the pan and nothing to be concerned with? It's on alright...and you best bring more than a hard hat. They bring money bombs that would have made the Weimar Republic blush. I can't beleive anyone could be "bearish" against those guns.
Long: blood shitting medication.
Nic, you have my total respect.
Interesting juxtaposition between the above observation and the following ZH statement from earlier post today re the spike in Euribor:
Good observation, but think both might be right actually. They get 100% on Greek bonds at the same time as no bank wants to lend to another bank. Inter-bank lending is monopolised by ECB.
Dollar down AND Dow/Nasdaq down... this is bad for those holding paper promises.
We've traversed into the end of plausible denial. We're going to enter a bumpy time.
Caviar, I agree. I like the way you put that.
The end of plausible deniability.
On the other hand though, plausibility is a moving target.
It's what is tweaked through media.
ORI
http://aadivaahan.wordpress.com
No joke, our pain threshold wil really be put to the test now... Like right now: ES 1104, and then we'll probably have a long countertrend...
Oh regional,
Does that mean we have a NEW Gv't Agency?.
PDPT?....sounds like a Bawney Fwank Committee.
Hah, PDPT, sounds like to me it already exists, in everything else but name!
ORI
http://aadivaahan.wordpress.com
I believe Bette Davis said it best:
http://www.youtube.com/watch?v=XypVcv77WBU
Sell those Euros At .85! SOLD, SOLD!!
"Turn those machines back on, get in there and sell, sell".
If the FOMC minutes confirm any new monetary easing, I very much doubt it's gonna "be on" on monday.
Re AUDUSD, check this out
http://www.stgeorge.com.au/corporate-business/report-centre/aussie-dollar-outlook
As previously mentioned, if the Aussie could not make par in the best of times (booming exports, rising interest rates, low unemployment), then it's very unlikely it will this time. I personally think it has a couple of pennies left in it before it heads back to the low to mid 80's. Target 93-94 cents within 2 weeks.
Nic, what is your take on Tuesday's FOMC meeting, and at the possibility that QE2 won't be announced? It looks like the market has priced in QE2 in the past 2 weeks, with weaker USD, stronger commodities, and surging equities market. If QE2 doesn't come to fruition, one would assume these trends will sharply reverse, possibly leading to a major one day crash?
One of the best posts of the day, we can trade it - 27 comments.
A post about war in the middle east- 300 comments spewing hate.
DUBAI, United Arab Emirates – An explosive-laden dinghy had struck a Japanese oil tanker in the Persian Gulf last month, the Emirati state news agency said Friday, in the first official confirmation that the incident was an attack.
http://news.yahoo.com/s/ap/tanker_explosion
But but but.........
I thought that was an earthquake. They SAID is was an earthquake. They said it. I mean, it must have been an earthquake because they said it was an earthquake. And they said it with a straight face. So it must be true.
It must.
the air is gonna' come out of the tire.
if they do announce QE 2 it, at this point, its priced in. must be a hiroshima sized money bomb. anything less and the market will sell the news.
Sure everyone see the rising wedge. Get with the program, we will either jam up into the close today or gap open Sunday evening with the famous stock index futures float higher.
Nic is bearish again..How convenient. Weren't you bullish last week? Make up your damn mind.
They're not door numbers buddy .....
I live in Dallas, I'm having to water cool my CPU and GPU it's 107 today. This is not such a big thing for us Texans, sure do feel for the folks up north not use to this heat.
Had my highest electric bill in this new home, $400.23 to cool 2878sq feet.
Good luck to TXU or whomever (I know ya'll have retail choice over there) on collecting these bills.
QE doesn't do anything, and stimulus is politically impossible. Nothing left...well, almost nothing...when you really need a fix, you start tearing off the sofa cushions, going through old jackets in the closet, looking under all the furniture...
Brother, would you kindly invest in a 30 year bond at....gulp....2%? 1%? Flat, flatter, flattest. The real zero bound.
The Galactic Barrier dead ahead, sir!
RED ALERT
Or as The Replacements sang up here in Minneapolis all those years ago (isn't this 1983 now?)
Red light
Red light
RUN IT
You people worry too much. Commander Zero ain't gonna let this stock market go down. He's got an election to steal this November and some dinky Fed Chairman ain't gonna get in his way. $5 trillion stimulus coming up!!
Fred,
The "A TEAM", is gonna pump 800 Billion into bailing out underwater home owners, end arounding Congress..(that's why they took ownership of F & F.
If they add MORE to that, better have all your USD's exchanged, and a survival kit ready to roll.
T Bills, and Bonds will be cashed out to anyone who will take them.
Still think the Reds would be smart to cash out, and BUY cheap US Real estate with their stash O cash.........the Nips also.
NOW
There are certainly a lot of details like that to take into consideration.I read and understand the entire article and I really enjoyed it to be honest.
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