This page has been archived and commenting is disabled.
It's Weak, But It's Not That Weak Yet
Submitted by Nic Lenoir of ICAP
Bears I talk to this morning have a bit of a spring in their step this morning. Certainly it's not everyday the market sells-off and spends more than a handful hours in negative territories. Here are a few charts that show that the next few hours will be key / 10 ticks will be key.
We need a daily close below 1,130 in S&P futures to confirm weakness. As the charts show, Dax is on support here and need to accelerate lower in order to break the recent uptrend. Similarly, EURUSD and AUDUSD are both weaker today yet still not threatening the uptrend.
As I type the S&P is breaking below 1,130: If we close below this key level I think the odds of a significant bear move having begun will be quite high.
As stated last week: it begins and it ends with the USD. Long after almost everybody understood this, investment banks have been pushing that liquidity is the main catalyst for risk assets and are now trampling each other with quantitative easing projections. This will be the object of a later update as several books could be written on the topic in order to paint the overall picture.
Good luck trading,
Nic
»
- 7581 reads
- Printer-friendly version
- Send to friend
- advertisements -
None of this matters.
Today isn't a POMO day, therefore the "market" is lower.
Sadly true.
POMO is a self-fulfilling prophecy. Once the market loses confidence in it nothing will stop this this from falling.
Absolutely. Last POMO day went red. M3 is still contracting despite monetization of OTC bombs. Banksters can't control the beast when it fights against them, only when it wants to be seduced.
We bottomed. Here comes the melt up.
Volume is very light. US Gov can't even sell their GM shares in this meltup, IPO's are being reconsidered the world over, bond sales being suspended, etc.
Price displayed on the screen is only showing the transactions of the few remaining market participants. The vast majority of market actors have sit this one out, despite the rise. The defeat of a few premature short sellers is not indicative of the power of the sleeping mob of and coming PANIC for DOLLARS!
Thanks as ever Nic
back to back pomo days tomorrow and wednesday according to nyfed website.
somehow i think today's venture down might be short-lived.
Why a human trader wouldn't try to front-run the guaranteed rallies of tomorrow and Wednesday is beyond me. S&P 1135.55 as I type.
Depending on something that is fundamentally undependable is a quick way to the poorhouse. Most people would rather just get out, and have.
I wouldn't touch this market with a 10 foot pole. You never know when the dam is going to break, and it's looking awfully leaky now.
i think they finally caught on to that the last time. the market was bid way up pre-market and then they pulled the rug out from under.
makes me think tomorrow market will be up but let's see if they frontrun it down on wednesday.
Well we'll see. The NYFed sees the same charts we see. I can't imagine they're just going to let it roll over and give back all of the ill-begotten gains from the past month.
true. these down days really wreak havoc on my miners though - licking some wounds today.
Totally agree TF. The FED probably has the equivalent of NORAD for charts and technical analysts.
POMO trumps technicals. Intervention trumps technicals. QE 1, 2, 3, 4.......trumps technicals.
Intervention and the constant implied advent of QE is the primary and dominant fundamental.
Period.
It is very tempting to short, but until the FED is out of the picture there is the risk this market may run higher.
No one knows, but the FED knows.
Nice tight channel grinding up off the 1131 low on the SPX ...
Can't they even wait until turn around Tuesday?
Bears who still have any teeth are now conditioned to grab a few berries and cover.
dan norcini's saying hui 520 will free mining stocks.
To be fair, not every POMO day is a green rampjob to the moon. I think it is evenly split at this point based on the daily close.
We aren't out of the woods yet, would like to see some new lows before we close today. As we know, a 100 point pop isn't out of the realm of possibility in the new 'normal'.
short /es from 1142, i hope i haven't given up 5 points already, but i think we head lower after the 2 o'clock pump.
out at 1128, no need to be a pig, oink,oink
Get down, get down..
http://www.youtube.com/watch?v=PZUb1Ix2HHs&feature=related
Banks barely sold off all day.
Especially Citigroup, the HFT favorite.
And VISA and Mastercard have barely moved, although the shorts are all over these.
Agree or not, like it or not, Robot has been calling this market correctly since the 'fix' at the close Tuesday, August 31.....close shorts and get long.
Dow up 750/800 points, Euro up 1000 pips, Aud up 800/900 pips.......
Trading is simple; being on the right side of price discovery.
Thank you for your posts, RobotTrader.
And, unless I missed something there is no soliciting, just consistently reliable trading information posted numerous times a day.
Yep... IYR is solidly in the green. Its a sure sign that the ES will retest 1150 or so. IYR will lead this market lower. Any day now.
American Express has moved.
Stoploss carnage is getting closer......
I like days (today not one) where the 22 year-old phd's try to get all three markets (DJIA, S&P, NASDAQ) closed in that +1:-1 range. No, not every day is a POMO day (lol).
Brazilian market went fully retarded today...
Gave up from my good short trade and just went long and retarded also. And I'm winning doing the wrong thing again...
Dollar up and no POMO = Stock market down.
REITs are also unfazed today.
But that's because of another "flight to quality" back into bonds.
Even the "worst of the worst" fixed income ETF's are making new highs today, like this California Muni Bond lotto ball:
That is a fuunny chart. I'm stunned.
Fuck this market. Everyone and their mama is saying it's going to screem higher, well I'm on the other side of that. You cannot parabolically blow off forever and ever and ever. This entire rally was built on a no volume fed dry hump, market sreaming higher on bad news. I'm not buying it. We have a mortgage fraud story thats just about to get legs and an earnings season that in my opinion is going to be less than stellar.
This whole QE 2.0, November 3rd thing is over rated. We're going to reach a point where QE is acutally percieved as negative rather than positive. The jig is up and the fed games are known.
It's time we pick up 300 handles of levered downside on the ES.
Fuck Ben "Helicopter Ass Hat" Bernanke and fuck the fed.
The games cannot continue indefitely. Thats right, I'm going up against the central bankers boys....short as a mother fucker @ 1142.
I'll keep my fingers crossed for ya, jbc, but I've got a feeling that your nuts are going to be in a vise all month...kind of a buy the rumor, sell the news type of thing. Painful, 1.5%, weekly rampjob rallies all the way to Halloween.
It's almost too clear of a picture. New congress nov 2nd. Crash the system shortly after. The fed won't be audited in december.
But what I can't figure out is if the plan is giong to get chucked out the window by force and the system crashed before elections.
jbc -
I agree with your sentiments... The Fraud... errr - Fed Reserve controls the markets and will manipulate them as long as they desire or until some event transpires that they can overcome... We've seen them fail before (the 2008 crash), and they will fail this time as well, we just can predict the timing or the extent... I knew something was smelly last year and it has continued unabated... So if you are a trader, either trade what you see or get out and go to something else... For me, I no longer trade the ES or the YM, but have gon on to the Ags (Beans, Wheat, Corn, Cattle,etc.)... No currencies nor other financials since the central banks around the world are engaged in an all out currency war and are manipulating the financial market without shame.
+3
Also jbc,
The ES has traded between 1.5 and 2 Std Dev's below the mean for most of the morning... If you see the melt up taking in back to the mean later in the day, there's a better than average chance that it will trade up to + 1 to 2 sdev or the 1140 to 1145 range...
I'm just sayin' stay nimble...
I'm with ya' JBC let's see what happens!
agree but careful there, jbc.
they can prop up a phony market with phony stimulus for some time - but what is real is when they take your money from you. even if it is just fiat - it hurts.
gotta buy me some gold. well, silver in my case - poor man's gold and all...
China rebuffs EU call for rapid yuan appreciationAnyone notice that the last POMO day was actually red! Shock horror. Not helped by the Fed tendering at the long end of the curve which shows just how attached people are to yield; any yield; any yield!
Just an observation but I have been a ZH follower for some months now and massively impressed with Tyler and Co's output; an amazing resource for people who know intuitivley that all is very much not right with the world and are grateful for the facts to back that up. Equally amazed at the number of people who I have sent here who think ZH talks out of its arse! Slow burn in progress I guess so keep up the good work guys...and bitchez!!
Chart: SPX
Weaker.
http://99ercharts.blogspot.com/2010/10/spx_04.html
Nic's call for a top ranging 1155-1164 was kissed on 9/30, nice work.
Retail and insiders pulling a few billion's out every week seems to match B.Sack's efforts tit for tat, perhaps that's why the market is soft here.
Agree on the 1155. Friend told me look at it, as well as saw a few posts on here about it. Lets hope it 'holds' :)
Can the Liberal egghead beaurocrats keep the markets pumped up through Nov.2?
AC
well, wouldn't bet much that they won't.
i am short 3 units from friday and 4 more units today. looking to get past the Tuesday POMO and into "ADP Non-Farm Employment Change" on Wednesday in order to build the short position further. Stops are relatively medium-tight.
bearish engulfing pattern on the daily chart.
if the fundamental news comes in bearish on Wednesday, and ES agrees by selling off, then i'll look to frontrun a potentially bearish number on Friday by adding further to the short position.
Friday could be a big day for bears:
CAD Unemployment
US Unemployment
US Non-Farm Employment Change
The adp might give you a little downside action but I wouldn't count on Friday's numbers being anything but above expectations - Tyler & co have proved again and again how fixed the unemployment rate is
good point. ...call it wishful trading.
WASHINGTON — As the Obama administration escalates its battle with Chinese leaders over the artificially low value of China’s currency, a growing number of countries are retreating from some free-market rules that have guided international trade in recent decades and have started playing by Chinese rules.
http://www.nytimes.com/2010/10/04/world/04currency.html?_r=1&ref=world
Chart: ES
Weaker.
http://99ercharts.blogspot.com/2010/10/es_4005.html
cheers. its going to take a bit of muscle to get back up through 1141. could the bulls be taking a breather?
The bulls ran out of gas and are about to look down.
As others have pointed out,TA is useless in markets like this.Just throw the charts and all the TA books and theories out of the window - they only apply to efficient markets that are not manipulated by governments or central banks.The actions of investors at the moment is purely dependant on the continued supply of liquidity by central banks and the forex markets,technical or fundamental analysis simply do not come in to it.
i used an abbreviated elliot wave. when it started the 5th count up from the open. then got lucky, going short since march 09 has been a very dangerous undertaking. head-fakes, head and shoulders and bear-flags breaking up etc. etc.
i look at it more as a "commando raid" than an investment.
Sentiment indicators have called all the previous minor reversals in this bear flag continuation. Not all TA is based on trend lines and patterns. :)
Even the bears are surrendering. Many sentiment indicators are at positive extremes.
POMO and the markets: Greenspan used to keep an eye on the "wealth effect" of the economy.
Housing equity, money markets, & market equities and investments the third leg. Housing is trashed and nil savings are being debased & spent (to survive) or held tightly.
POMOing the market seems like a ploy by the Fed to keep one leg of the stool propped up so people have a place to go besides gold. Can't last.
Trap.
"As I type the S&P is breaking below 1,130: If we close below this key level I think the odds of a significant bear move having begun will be quite high"
I'm not sure Nick, but I think you already kinda answered the question as to where they will park the index before closing. As per always it will be on the sweet spot.
LMAO
Nic, you could add the weakness of the financial group vs the market to your bearish senario. Fin. CDS has trailed the CDS index and the equity clearly has diverged from the SPX in the last three weeks. Love to know what you think:
Stock Market Strategy: Financial Sector Flashes Warning / Reduce Risk, Increase Diligence @ http://rosenthalcapital.com/blog/2010/09/stock-market-strategy-financial-sector-flashes-warning-reduce-riskincrease-diligence/
Al always, enjoy Nic's comments. Just do not understand the shorting on the board, has not worked for a long time and almost always when I try it I get hosed. Just stay with gold, silver, miners, trade around them, always have cash and buy physical on dips. That will work until......we are way down the road.
Agree it is all a farce but until they put benny in jail not gonna change. I mean, look at all the fraud in loan docs all over the news, lying theiving banksters, and FAZ is up 15 cents.
As corrupt as can be.....No shorts.