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Key Chart Inflection Points
Main charts to keep an eye on over the next week, via Goldman Sachs, which sucks at predicting GDP but is good at providing "market color." Remember: when in doubt use cephalopod reverse psychology.
EURUSD ST - Corrects lower, but underlying trend looks intact as long as above 1.4480-1.4448. The 55-dma should also be good support at 1.4587.
EURUSD Seasonality - November-December tends to be a postive period. Over the past decade the market has closed up 8 times and down only 2 over this period, just something to keep in mind.
USD index - Consolidating above the 76.4 of the bounce from the March '09 lows. This is an important level so we are watching very closely for any signs of a base. 55-dma at 77.00 critical.
Oil - Bounces from above the pivot region 75.27-73.38. The break looks intact with chances of a test of the 89.84-90.51 resistance region still in place at this stage.
Gold - Corrects but holds support around 1,030. The target of the triangle break hasn't been met as yet.
S&P - 1,051-1,045 looks the pivot to watch for now. The market made only a very marginal close below on Wednesday. For now too early to say this is more than a correction.
USDJPY - Consolidating following initial bounce from the 7th October lows. The signs of a base developing remain for now, but it needs yield support.
U.S. 2-year yields - Continuing to watch developments here very closely. 1.03-1.07% looks the most important pivot to watch. Above there 1.38-1.45%.
Nikkei - Looks the weakest of the G10 markets. Has moved to initial support of the H&S top neckline, but overall looks very heavy.
Japanese 10-year yields - Breaking higher with the curve steepening. The 10s2s curve in Japan looks like it can run to the '04 highs at 162 basis points 10s over 2s.
EURSEK/EURNOK - Correct higher but hold the right levels for now. Overall still look heavy at this point.
AUDUSD - Corrects within broader uptrend. Pivots on the dowsndie 0.8858 then 0.8730-0.8726.
AUDNZD - Looking increasingly bullish. Now on track for a bullish engulfing week in addition to the bullish weekly reversal against the lows. Back to the April highs at 1.2938?
NZDUSD - 55-dma a very clear pivot here. The market has been above on a close basis since 17th March. Stands at 0.7123. Close below would leave the 200-dma currently at 0.6224.
USDINR - Correction done? Today (Thursday) the market has posted a very agressive shooting star (blow out) pattern against the high of the correction. Structurally still looks heavy.
INRJPY - Interesting way to be short-JPY? 76.4 retrace against the all time low form January. Overall looks bullish.
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I am SURPRISED that you folks did not get the FACT that GS pulled a fast one on all of us.
What happens when an important figure surprises us? A massive ramp up follows.
From here on, most of the forecast of bastards at GS would be numbers musch less than what is expected. That is the only way to surprise yourself and give the train fuel to keep going.
Thanks for understanding the psychos. It is all psychology. Fuzzed figures and fuzzy logic. Cheers
Let's be clear here, GS only pulled a fast one on you if you listen to GS. I think they're smart but I ignore most of what they put out because I don't have a multi billion dollar hedge fund, so why would the give me multi billion dollar hedge fund privy advice?
To the article:
There seem to be some inconsistencies in thought patterns here, either not assembled by one person or the person is sending mixed messages. For example they site the ability of the dollar to rally but then assume Oil, SP500 and AUD are all strong. That makes no sense, either you have a stronger dollar or you have all other asset prices rise reflecting a weaker dollar. I'm not sure it would be possible to have both (stronger dollar/asset prices) at the current juncture.
GS is blowing some smoke again, and I think they're selling their book on oil and assets and will soon be rolling into dollars/cash.
Well, at least they mentioned my fav currency pair, the sockie nockie!
what the heck happened to the font?
Has anyone else noticed that Yahoo! Tech Ticker has been highlighting the same articles/content the day after ZeroHedge initially posts the same article?
I guess Yahoo is just another, unoriginal, MSM outlet that can't come up with their own ideas?
Tyler, did someone get ahold of your handle or are you moonlighting?
http://planetpov.com/author/tyler-durden/
Yesterday said that one should not bet against Goldman's Hatzius in the following paragraph:
Ah yes, inventory, inventory, inventory... The little deux ex machina that almost could... Until Hatzius sprays some serious water in your face. And take the other side on any Hatzius bet at your own peril. Seriously. You don't even want to know what the Stardust line is on Hatzius being wrong on this one. Although if you get the counter trifecta, you could be the proud owner of $90 trillion of in the money interest rate swaps (good luck, sucka).
Which is it?
Cephalopod?
It's the metaphor of a distant past.
More like nanopod.
Tiny yet far reaching.
Great synopsis of the comprehensive technical picture Tyler. With everybody acting all Kudlow and seemingly popping Dom in anticipation of fresh equity highs to come, there is a glaring disparity between the character of price action within the SPY and the ESZ09 (S&P 500 futures), which is the actual market that matters once Joe the Plumber changes his satellite dish from CNBC to the World Series. And just as you have repeatedly highlighted, volume continues to run significantly higher on down days; SPY volume today was only 79.64% of yesterday.
So long as 1058.75 is held overnight on the ESZ09, we could see a retest of 1063.25 in short order, while a print of 1063.75 would quickly target an open range interface between 1066.25 and 1066.50. There is a very firm downtrend line that connects from 10/23 and 10/26 which is at 1064 right now and will reach c. 1062.25 by noon. Any break of 1058.75 ought quickly test a very wide lateral band of support at 1057 flat.
Simple fib retracement levels of yesterday's tweezer bottom candlestick pattern on the daily include: 1057.69 (76.4%); 1053.78 (61.8%); 1050.63 (50%); and 1047.47 (38.2%); where a close over 1063.25 would likely set up for a push into resistance at 1075.25.
ESZ09: 34 minute interval period, shooting star at 1:30 alongside many indicators that registered sell signals suggested that a test of 1057 flat was in short order with further support then at 1054.25 and a confluence of very firm support surrounding 1052.
Whether you are biased to the upside or the downside there is a simple diagonal triangle pattern clearly shaping up that will force price action to continually consolidate within its bounds; in the process, allowing various measures of cyclic activity, momentum and trend to "reset" themselves in anticipation of a breakout in either direction. If you are a bull, you would much rather see price simply drop into the 1052 -1054 open range interface asap where there is a confluence of support, to simply 'get it out of the way', form a bull flag pattern and sow the seeds for another rally toward 1064 / 67 and then 1075.25 with shorts who came late to the party. If you are a bear, you should be rooting for the continued development of an A-B-C-D-E (each subdividing into a-b-c's themselves) contracting dynamite triangle because such patterns, termed continuation by nature, plot predominantly during wave 4's; whereby price would be expected to shatter down and out toward 1020 in a very impulsive initial thrust.
The bottom line is that while such overnight action is typically only scalpable it does help provide a structural framework for price action into the open of Globex and ultimately the cash session.
Technically speaking the S&P looks weak. Oil service is the only sector that still looks quite strong to me, and even that is not too far from breaking trend. The trend has not changed though, we still need to make new swing lows before I'm going short. At a break below 1040 I'll get the confidence to short the market aggressively for a quick trade.
I use Ehler's Mama/Fama cross as my trend gauge, and it is not far away from a breakdown in the dailies. However, for the major swings I find this works better with a weekly confirmation of the dailies, and the weekly chart breakdown in MF does not look to occur before the 975 level. So although there might be a decent short term break in the making, the major trend is still up.
ES 10946 trying to put in a stunt low right now at 1056 at the exact point where a baby 4 of 3 was at 12:25 today. Personally do not trust it much but have registered some seriously positive divergences across several very short-term momentum indicators.
Two very simple things to look for in ESZ09 price action that would nullify a bearish profile and suggest neutral / bullish intent: 1) a 10946 share bar to the upside that exhibits at least a 1.75 point high-low range along would perk my ears up; 2) a break back above broken uptrend lines that are currently at 1063 .. without such, the profile remains distributive and points to 1054-1052. Nimble, aggressive traders looking to enter short positions should remain on alert for negative divergences on any move that fails to eclipse either 1059.75 or 1061.50. 1057-1057.25 remains a pivot line of demarcation that is worth 5 points of risk to both bulls and bears alike as a dynamite triangle continues to develop.
Oil - Bounces from above the pivot region 75.27-73.38. The break looks intact withchances of a test of the 89.84-90.51 resistance region still in place at this stage.
Thursday, October 29, 2009Saudis drop WTI oil contract
http://www.nakedcapitalism.com/2009/10/saudis-drop-wti-oil-contract.html
Cool , now no restrictions on positions . Booya Booya Oil to the moon .
TYLER / Whoever compiled the above levels and instruments, it is very well placed. Good work...
The hedge funds killed the commodity exchages last couple of years. To get around the restrictions on speculative postitions on the commodity exchanges the hedge funds bought some physical storage facililities for many Ag and non-Ag commodities so they could take bigger positions and thereby game the markets so that legitimate hedgers were subjected to never ending margin calls.
First they blew up the Ag complex, then oil.
Why would farmers, grain elevators or the Saudis want to operate in these rigged markets?
There was an interesting clip this morning on BBC4. "A book documenting the economics of World War I and the Great Depression has won the Business Book of the Year Award 2009. Author Liaquat Ahamed was awarded the Financial Times Goldman Sachs award for his book Lords of Finance. Mr Ahamad discusses his book and its appeal in the current recession."
Listen to clip 0844.
Sorry - missed clip:
http://news.bbc.co.uk/today/hi/today/newsid_8333000/8333228.stm
By Martin Feldstein
Published: October 29 2009
http://www.ft.com/cms/s/0/fd4b4852-c4db-11de-8d54-00144feab49a.html
the key point of the article
55th 10946 bar from the high of 1064 at 15:07 and the real body of the candle is flirting with lateral support from the closing low at 1056.50 from 4:17; 34 minute inteval period from the same point will close at exactly 10:34. Elite Oscillator is confirming a negative divergence here and suggests minor new lows are fast approaching right now BUT because of the proximity to the open of the cash, such minor signals should be confirmed with a close below support so as to prevent being burnt on a simple stop run
Support, resistance, turning points, price action, etc...
Those are among the things to watch when buying and selling in a market.
But the Propagnada indicator tells me the push higher (stocks) is on again with the AP pumping from the White House with stories about how 650,000 jobs were created or saved in a new stimulus report and the positive spin they put on the Personal Income and Spending numbers.
PMI and Michigan "Sediment" should send us to the moon.
1054 grabbed and 1061 trendline kissed before yet another drip lower; how random! Minimal subdivisions have now been met. Elite Oscillator flashed buy signal on 9:59 at 1054 alongside pos divergences .. candles must close over 1056.25 to target the downward sloping trendline yet again at 1060. There is no confirmation of any high probability trade setup here outside of a bilateral buy-stop over the upper rez range above 1061 now .. Cycle Bottom Oscillator is plotted a very weak signal on the 34 minute that still has 13 minutes left to its close, while the 10946 share just completed a double sell signal .. dynamite triangle detailed throughout the night is still in full effect and price action continues to consolidate within its borders. Does this seem random and out of left field or might there be something behind this technical analysis stuff ?
Stay alert to the appearance of any back to back hammers, upside tasuki gaps or a trio of similarly bullish candlesticks such as a three white soldiers on the 2 or 5 minute for an initial signal of a shift within the underlying character of price action, as it continues to bounce ever-tighter in a narrowing downward channel whose extreme borders now surround 1058 and 1052. Ever consolidating price action now should being plotting positive divergences even if price makes a new low before attempting to reverse higher. Nimble, aggressive traders can continue to scalp these moves into trendline rez but for those trading above the tick or 2 minute, wait for a clear initial 15 min candle that neutralizes bearish intent after new lows happen very soon in the next few minutes. For an extensively detailed technical look into the extreme internal market readings registered this past Wednesday, visit http://fibozachi.com/technicians-corner/95-extreme-market-internal-readi... and remain on the lookout this weekend for a large update to the post cited above on ZH. As I take off for a meeting would simply like to say that it is both a personal and professional honor to have the opportunity to share our work amongst the brilliant and unparalleled minds that have been compiled together on this groundbreaking site.
This is some serious mumbo-jumbo. The summation of your first in this series of posts is basically, the market could go up, or it could go down.
hey cool analysis.
reminds me of something else ...
http://www.zerohedge.com/forum/market-outlook-0