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With Major Trendline Broken, Will Short-Term Support Hold?
The past week has seen a material break from the long-term support ever since the March lows. After peaking a short week ago, the market has found it impossible to rally on even the "great news" of earnings beats and on what is supposed to be a Bernanke reconfirmation today (should this "given" not transpire, or if even a vote delay is proposed, we hope everyone has an assortment of puts to hedge the fall).
The more relevant question from a short-term trading exposure is whether the buying programs that emerge on every low-volume lull after a major selloff will be capable to sustain the increasingly shaky upward trajectory. As the chart below shows, the most recent resistance at 108 on the SPY has been tested from the top twice following today, counting the just experienced bounce. Should the general drift carry the market marginally lower, the third retest will likely push the broader market to a much lower support, most likely in the 1,010 range.
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The market has been acting toppy since early December. Manipulation aside, I don't see much to drive it higher short term. Whether this is consolidation or correction only time will tell, but the pattern does not look good for bulls that is for sure.
As for manipulation I think too many people are snooping around and the PPT has been laying low. That may be one reason why we have entered a low volume correction phase. Should volume increase to the downside I am guessing we could see a 200 pt. pull back on the SnP by March - if not sooner.
Possibly the gov't attacks on Wall Street has
diminished the zeal of the PPT.
You'll get a GDP bounce tomorrow as long as the number comes in above 4%.
I think that the bounce will be more connected to technically oversold conditions than to any news event. To me, it seems that they try to make news based around technicals, but that the market doesn't really rally in a broad sense around any specific news event.
I think that sometimes the news is given as the excuse for rally, but there has been really bad news since March, and it never caused a drop.
Now there's good news and we see the technical break downward.
I believe more in technicals than news, except for sometimes in individual stocks or sectors.
No doubt. We are seriously oversold and today's bounce in GS and JPM was weak as all hell. Of course we have a full night of things to go bump and boom so I guess we'll just have to wait until 0830 to find out what kind of fun we are going to have.
great look, TD. thanks for it, sir.
ES & GC price action, while not in virtual lockstep, is marching to same tune here and the nominal numerals of each are kinda interesting ~ 1104 minor Gann angle line & 1073.xx weekly inflections prints of bearish demarcation.
Lets see.
Should the markets begin to find a fair price value orrrrr
Should the only people left trading "GS, GS, JPM & C" use this oppurtunity to cause a short squeeze courteousy of their fresh pallets from the Fed. I vote B since this is the only way they have been able to make profits in the past year since it is not coming from lending and they have access to inside information and bears lack the courage to stand tall after the recent abuse.
Fair value is two traders coming together and saying I'll sell you ABC at $20.50, trader 2 agrees.
Mark Hanes is STILL calculating fair value...
I vote also B.
But what is, when GS and JPM has change the side?
Maybe they sold the crap in 12/09-01/10, there was
a lot of upgrates at this time.
C is sure on the wrong side ( april 09 C market tip
go short banks )
John McCloy
"they have been able to make profits in the past year since it is not coming from lending and they have access to inside information "
The inside information they have is: No recovery,
less money, everybody was long.
Now they shorting aiginst the herd, lol.
Using Fibonacci retracement levels, the current downtrend should take us to about 1040. After that, one should expect a bounce, with parabolae, to take us back up to the 1155-1180 level.
When it sinks in that the stimulus hasn't done anything and political in-fighting becomes the order of the day (again...), the S and P will come off its highs like the down-rail of a kid's roller-coaster- nice and smooth, but hardly frightening- until the complete retracement past 666 to ~480 comes due.
Plenty of opportunities for nimble traders to work their magic. In case you haven't heard, buy-and-hold is dead as a doornail.
Pity the poor seniors who will get crushed in this move.
I'm down for this.
Twin Fib levels (50%, 160%) at s&p 1010 in addition to the 200 dma. It could turn at 1045-49, especially if the PPT gets nervous and starts buying the next round of futures. Either way, the fifth leg (is this really a secular bull market???) would likely take us up to 1230-35 where severe resistance would kick in from pre-Lehman levels, the 61.8% Fib, and the 200 week moving average. At that point, the market would likely correct 3 legs down but hold above 3/09 levels.
For it to break below 666, we would have to be in a cyclical bull with only 3 waves to the upside and 5 down. In that case, we could bounce then break below 1010-15, then bounce and break below 880 before testing, and failing, the 666 lows.
But I have been known to be wrong before!
;-)
(duplicate)
I agree with everything, except that I see the ultimate downward target around 1007!
I don't think that we'll reverse off of 1040ish if we break the 1080 level.
Of course, we all have opinions!
Have a nice day!
Long term we're doomed, as Faber would say. Short-term where would we put our money? Overvalued bonds, overvalued stocks, or overvalued government debt? Or go short on all three and have the Friday ramp job eliminate our savings?
to KISS (& compliant), why not roll 3-months and have:
(1) gained a healthy 'return' on your "money" over the past 1/3/5/8/13 years; while also
(2) enjoying safety of principal.
@fibo
What's your wave count? I assume we're in P3 and headed for a 38% retrace on minute [ii]. Thoughts?
Well said.
Farmland.
I say this sadly...
Low volume sell off today = money being pulled out for the purposes of fueling a "the market loves Ben's reconfirmation!" fake-rally.
Theatre.
My thoughts all day. Of course, selling off on 'good news' is the way any real down draft starts. And even 'master' politicans like Barry O can be confounded by the Market.
I'd suggest ya'll go out and get real jobs doing something productive instead of trying to squeeze the last drop of spoiled blood out of a rotting corpse. There aint nothing left to be had, the vampires got there first. Caspice?
The corpse is still standing and needs to fall. When it falls, "wealth" will be transferred to those that are short. The trick will be to liquidate the short and get your "money" out before the financial system locks up.
+10. Exactly.
+ 100
and you have to resist, in a bounce back, the sirene
calls from wall street, buy buy buy.
Tellin' it like it is!! Where are the stars. I'm given' NV 5***** and a big thumbs up LOL!
The range on the s&P is now 2090 to 1032. At the same time the market is now at its most oversold since march. Smells a little like a beartrap. I'm a bear, and I'm skeptical.
Has anyone heard of any big names lowering their GDP estimates? There are plenty of negatives weighing on the market, but I find myself wondering if this bleed also has something to do with determinations that we'll undershoot Friday's GDP estimates [too].
GS + JPM
"FIRE in the hole!"
Turning and turning in the widening gyre
The falcon cannot hear the falconer:
Things fall apart; the centre cannot hold;
Mere anarchy is loosed upon the world...
http://www.potw.org/archive/potw351.htmlAs it will be in the future, it was at the birth of Man
There are only four things certain since Social Progress began.
That the Dog returns to his Vomit and the Sow returns to her Mire,
And the burnt Fool's bandaged finger goes wabbling back to the Fire;
And that after this is accomplished, and the brave new world begins
When all men are paid for existing and no man must pay for his sins,
As surely as Water will wet us, as surely as Fire will burn,
The Gods of the Copybook Headings with terror and slaughter return!
http://www.kipling.org.uk/poems_copybook.htm
That All is not Gold that Glitters, and Two and Two make Four"
Before you've had too much...
Come back in focus again...
The walls abandon shape...
They've got a Cheshire cat grin...
Before the animal noises...
Before you're comatose...
Before you run away from me...
Before you're lost between the notes...
Words are a sawed off shotgun...
Come on and let it out...
Come on and let it out...
Come on and let it out...
Come on and let it out...
"And that after this is accomplished, the brave new world begins
When every man must pay for his sins and no man is paid for existing "
http://www.youtube.com/watch?v=E-RllNyZt90J
redraw the trendline under today's low
LOL, don't you understand technical analysis?
:+)=)
Interesting follow up(TD got tired from publishing those comparative graphs,so I am just trying to help here)
Mar 98
SPY=$109.94
DXY=101.37
today
SPY=$108.66
DXY=78.86
So our spyder is actually worth $84 today in 1998 dollars.So those so called"long term investors",gave corporations and Wall St $24 for every $109 invested in the S&P. Now I call that the "best investment scheme" in the world.Of course,that doesn't mean that there was no beneficiary. Why,Mr. Fuld and Mr Mazzerella made hundreds of millions during that time,and so are most of the corporate executives and Wall streeters...
I am having doubts too whether the current drop is complete yet or not. The A/D ratio does not seem very supportive and, looking at a six month chart, 1040 or 1012 are still possibilities I think. Also a correction to 1012 would mirror gold's first leg down (12%).
Been watching the vix today. Fairly strange action here. AT one point Dow down 120 and vix barely budging? Can anyone provide some info on why that would happen?
Thanks,
I am certainly no expert, but I'll try to reason this out.
There's simply no wild fluctuations both ways to make volatility higher. Back when VIX was at all time highs, the market would be down 800 one day, and up 300 something the next. Now it's like down 150-200, and up 40 or so. The swings aren't as large, and neither is the volatility.
I think that the volatility just tracks the swings in both directions more than it tracks the magnitude of a one direction move.
If the market continues downward steadily, I suspect that the VIX will fall, because there's no upside occuring at the same time as the downward progression.
In other words, I think that it's because the VIX just measures the number of directional changes and the magnitude, not upward or downward moves as a whole.
I hope that that makes sense! (And I hope that that's right!) LOL
Have a nice day!
Why did Obama mention Black Tuesday and "market crashed" in his speech last night?
Because he is sending a message to the initiated, just like he did back in March 2009 when he said during a meeting with Gordon Brown that "buying stocks is potentially a good deal if you've got a long term perspective".
Think of Obama as the black EF Hutton.
Seen too many shit stocks fall below trendline support (IYR components) and then rally up under them using the rising trendline as overhead resistance to believe that this is "it."
Looking more for March or whenever at least the UST auctions start to look sketchy.
That said, oil and gold seem to be signaling deflation and price drops
Under 10K on the DJIA tomorrow.....news being sold.
Those with short-term investment horizons apparently also have short memories. I am talking specifically about the hypothesis percolating here that this market is "technically oversold": do you remember last year right around this time, when the slide started to gather steam? There were plenty of points when people were saying how we are "due for a bounce" after a couple of days of steep losses only to see another loss or a flat day thereafter. And so it continued until March 6. All of these technical indicators, support levels, etc. were (and still are) worth exactly shit. The market might bounce up from here and bounce so high that the shorts will be squeezed harder than an orange in a Tropicana plant (it's happened before) OR it might keep going down into the proverbial tubes until every long out there will find it painful to sit down (it's happened before too).
Stop formulating these silly theories that supposedly predict market behavior. Also, stop thinking that you can out-wit and out-quick silicon. Leave the casino to the fat-fingered geniuses at the Goldman Squids and their HFT tentacles. Let the machines trade with each other for 2 or 5 or 10 years - let's see where they end up.
+1
Neophiliac...over the past week, I have used technical levels and the market hit them EXACTLY TWICE...first the drop to 1090 on 1/22, then I said we need to break 1083...we did not but bounced EXACTLY off 1083 on 1/27. Both those levels I deduced on JANUARY 14th. So here's my take, we need to close firmly above 1115 to resume the rally, but I suspect we'll break down and test 1030ish.
Today's action in stocks was very bearish. Stocks are being distributed. Betweeen March and November, during each pull back, stocks were accumulated by the smart money. Now, stocks are being distributed, even on pull backs like today. Lower prices ahead.
What gives , doesn't the all seeing market ( GS ) price in everything that will happen 6 months hence . So we get a little less GDP than the "market" "planned" it to be . Market is dropping in advance of wrong calculations by the all seeing eye of GS . Enjoy the ride . GDP less than 4%